Arbitration of commercial and civil disputes is regulated by the International Commercial Arbitration Act(promulgated in State Gazette Issue No. 60/5.08.1988, as amended from time to time, "ICAA"), andapplies to all commercial disputes with the exception of disputes for property rights or possession over realestate, rights under an employment agreement or maintenance obligations, which all fall within thejurisdiction of the Bulgarian State Courts, or disputes where consumers are a party to the dispute (i.e.,such disputes are not arbitrable). Despite its name, and with the exception of certain provisions, the Act isalso applicable to domestic arbitration, i.e., to disputes where all involved parties have their domicile orseat in Bulgaria.
The oldest and most reputable arbitral institution in Bulgaria is the Arbitration Court at the BulgarianChamber of Commerce and Industry ("BCCI"), established in 1897. The Arbitration Court resolvescommercial disputes, irrespective of whether the seat or domicile of one or both parties is in the Republicof Bulgaria or abroad. It has its own rules of arbitration which are available in Bulgarian, English, French,Russian and German languages, and maintains three lists of arbitrators (one for domestic arbitrations, onefor international arbitrations with only Bulgarian arbitrators and one for international arbitrations includingforeign arbitrators). The last amendments to the rules for arbitration proceedings were enacted on 1January 2017.
The parties to a dispute, or a potential dispute, can agree to settle their disputes through arbitration byconcluding an arbitration agreement. The arbitration agreement should be in writing or evidenced througha written communication between the parties. The arbitration agreement may be included as a provision ina contract between the parties, in which case it shall be considered independent of the other terms of thecontract, or as a separate agreement. An arbitration agreement is also considered to exist if therespondent takes part in the arbitration proceedings without challenging the jurisdiction of the arbitraltribunal, at the latest with the reply to the statement of claim.
Arbitral Tribunals composed under the Rules for Arbitration of the BCCI, can be composed of a solearbitrator or of three arbitrators. The parties are free to agree upon the procedure for selecting thearbitrator(s), the procedural rules to be followed, the seat of arbitration and the language or languages ofthe arbitral proceedings.
Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of one of the parties, orderthe other party to take appropriate measures for securing the rights of the petitioner. When ordering suchmeasures, the arbitral tribunal may order the claimant to deposit a security (Section 21 ICAA). However, ifa party refuses to cooperate, the interim measures granted by an arbitral tribunal are not enforceable andassistance from the state courts must be requested.
Arbitral tribunals may not order any interlocutory relief or provisional measures on a person or entity who isnot a party to the arbitration agreement (e.g., to protect evidence). Such assistance may only be providedby the state courts. Only measures granted by the state courts are enforceable. Only Bulgarian courtshave the competence to order such interim measures in the territory of Bulgaria.
An arbitral decision and/or award is binding and enforceable. An arbitral award rendered in an arbitrationseated in Bulgaria can be challenged before the Supreme Court of Cassation (set-aside procedure) onlyunder very few grounds, explicitly and imitatively listed in the ICAA. The relevant violations include:
-a party had no legal capacity to act at the time of signing the arbitration agreement;
-the arbitration agreement had not been concluded or it was deemed to be null and voidpursuant to the applicable law chosen by the parties;
-a party has not been duly notified of the appointment of the arbitrator(s), or of the arbitrationproceedings or was not able to participate in the proceedings for reasons beyond its control;
-the award dealt with a dispute beyond the scope of the arbitration agreement or outside thesubject matter of the dispute;
-the composition of the arbitral tribunal or the arbitration proceedings did not conform with theparties' agreement; and
-the subject-matter of the dispute is non-arbitrable.
Once the arbitral award is rendered and has entered into force, a writ for the execution of arbitral awardsmay be issued by Sofia City Court or the competent district court.
2. ENFORCEMENT OF FOREIGNARBITRAL AWARDS
Regarding the enforcement of foreign arbitral awards, Bulgaria is a party to the 1958 New York Conventionon the Recognition and Enforcement of Foreign Arbitral Awards, with the reservations that the Conventionwill only be applied to the recognition and enforcement of awards made in the territory of anothercontracting state, and with regards to those made in the territory of non-contracting states the Conventionwill only be applied to the extent to which those states grant reciprocal treatment. Bulgaria is also a partyto the 1961 European Convention on International Commercial Arbitration.
PROCEDURE AND ASSUMPTIONS
TYPE OF PROCEEDINGS
The procedural costs depend on thearbitration court and its fee schedule, theparties' agreement, and the complexity andinterest of the case. The arbitrationinstitutions distinguish between domesticand international arbitration cases.
Determined in the same way as in standardcivil proceedings.
Costs include the arbitration court fee,costs of experts and attorneys' fees.
The usual duration of arbitration proceedings is between 6 and 18 months.
ATTORNEYS’ FEES (NET)
For enforcement of awards under the NewYork Convention, the creditor must providethe court with the authenticated originalaward or a duly certified copy thereof andthe original of the arbitration agreement or aduly certified copy thereof.
Enforcement of Foreign Arbitral Awards
ATTORNEYS’ FEES (NET)
Application for recognition/enforcement:BGN 50 (approx. EUR 25).
Attorneys' Fees are calculated as instandard civil procedures.
The duration of execution proceedingsdepends mainly on whether the debtor hasexecutable assets and whether executionmeasures are opposed by the debtor.
1 to 2 months until a decision on recognitionand enforcement is rendered in first instance;3 to 6 months if the decision is appealed.
The information in this chapter was correct as of 1 January 2018. If you have any questions about the content of this chapter,
or would like further information about arbitration in Bulgaria, please contact