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1. ARBITRATION

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"), and applies to all commercial disputes with the exception of disputes for property rights or possession over real estate, rights under an employment agreement or maintenance obligations, which all fall within the jurisdiction 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 is also applicable to domestic arbitration, i.e., to disputes where all involved parties have their domicile or seat in Bulgaria.

The oldest and most reputable arbitral institution in Bulgaria is the Arbitration Court at the Bulgarian Chamber of Commerce and Industry ("BCCI"), established in 1897. The Arbitration Court resolves commercial disputes, irrespective of whether the seat or domicile of one or both parties is in the Republic of 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, one for international arbitrations with only Bulgarian arbitrators and one for international arbitrations including foreign arbitrators). The last amendments to the rules for arbitration proceedings were enacted on 1 January 2017.

The parties to a dispute, or a potential dispute, can agree to settle their disputes through arbitration by concluding an arbitration agreement. The arbitration agreement should be in writing or evidenced through a written communication between the parties. The arbitration agreement may be included as a provision in a contract between the parties, in which case it shall be considered independent of the other terms of the contract, or as a separate agreement. An arbitration agreement is also considered to exist if the respondent takes part in the arbitration proceedings without challenging the jurisdiction of the arbitral tribunal, 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 sole arbitrator or of three arbitrators. The parties are free to agree upon the procedure for selecting the arbitrator(s), the procedural rules to be followed, the seat of arbitration and the language or languages of the arbitral proceedings.

Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of one of the parties, order the other party to take appropriate measures for securing the rights of the petitioner. When ordering such measures, the arbitral tribunal may order the claimant to deposit a security (Section 21 ICAA). However, if a party refuses to cooperate, the interim measures granted by an arbitral tribunal are not enforceable and assistance from the state courts must be requested.

Arbitral tribunals may not order any interlocutory relief or provisional measures on a person or entity who is not a party to the arbitration agreement (e.g., to protect evidence). Such assistance may only be provided by the state courts. Only measures granted by the state courts are enforceable. Only Bulgarian courts have 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 arbitration seated in Bulgaria can be challenged before the Supreme Court of Cassation (set-aside procedure) only under 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 void pursuant 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 arbitration proceedings 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 the subject matter of the dispute;

-the composition of the arbitral tribunal or the arbitration proceedings did not conform with the parties' 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 awards may be issued by Sofia City Court or the competent district court.

2. ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

Regarding the enforcement of foreign arbitral awards, Bulgaria is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, with the reservations that the Convention will only be applied to the recognition and enforcement of awards made in the territory of another contracting state, and with regards to those made in the territory of non-contracting states the Convention will only be applied to the extent to which those states grant reciprocal treatment. Bulgaria is also a party to the 1961 European Convention on International Commercial Arbitration.

PROCEDURE AND ASSUMPTIONS

TYPE OF PROCEEDINGS

PRACTICE TIPS

Approximate Duration

Arbitration Proceedings

The procedural costs depend on the arbitration court and its fee schedule, the parties' agreement, and the complexity and interest of the case. The arbitration institutions distinguish between domestic and international arbitration cases.



Determined in the same way as in standard civil 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.

Document Production

Approximate Costs

PROCEDURAL COSTS

ATTORNEYS’ FEES (NET)

Limited.

Approximate Duration

For enforcement of awards under the New York Convention, the creditor must provide the court with the authenticated original award or a duly certified copy thereof and the original of the arbitration agreement or a duly certified copy thereof.

Enforcement of Foreign Arbitral Awards

Approximate Costs

COURT FEES

ATTORNEYS’ FEES (NET)

Application for recognition/enforcement: BGN 50 (approx. EUR 25).

Attorneys' Fees are calculated as in standard civil procedures.

The duration of execution proceedings depends mainly on whether the debtor has executable assets and whether execution measures are opposed by the debtor.

1 to 2 months until a decision on recognition and 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

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OLEG TEMNIKOV

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