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Bulgaria Law On International Commercial Arbitration
(Published in the State Gazette No 60 of 05.08.1988,
amended in No 93 of 02.10.1993, in No 59 of 26.05.2021 and in No 38 of 17.04.2021)

Chapter I

General Provisions

Chapter II

Arbitration Agreement

Chapter III

Composition of Arbitral Tribunal

Chapter IV

Jurisdiction of Arbitral Tribunal

Chapter V

Conduct of Arbitral Proceedings

Chapter VI

Making an Award and Termination of Proceedings

Chapter VII

Setting Aside, Recognition and Enforcement of the Award

 

(New - SG No. 93/1993) Additional Provision

 

(Heading amended - SG No. 93/1993) Transitional and Final Provisions

 

(New ones - SG No. 38/2001) Transitional Provisions

 Chapter I
General Provisions

Art. 1.

(1) (Amended - SG No.93/1993). This Law shall apply to the internatioanal commercial arbitration, based on an arbitration agreement, when the place of arbitration is on the territory of the Republic of Bulgaria.

 

(2) (Amended - SG No.93/1993). The international commercial arbitration shall resolve civil property disputes, arising from foreign trade relations, as well as disputes about filling gaps in a contract or its adaptation to newly arisen circumstances, if the domicile or the seat of at least one of the parties is not in the Republic of Bulgaria.

Art. 2.

(Amended - SG No. 93/1993 and abrogated - SG No.38/2001).

Art. 3.

A party to the international commercial arbitration can be also a state or a state agency.

Art. 4.

The arbitration can be either a permanent institution or an arbitral tribunal, constituted for resolving a particular dispute.

Art. 5.

A party which knows that any provision of this Law from which the party may derogate or any requirement under an arbitration agreement has not been complied with, and yet continues to take part in the arbitration proceedings, without raising an objection immediately or within the time-limit provided for this, shall not base any argument on the non-compliance.

Art. 6.

Court proceedings in connection with an arbitration proceeding shall be admissible only in the cases provided for by this Law.

 
Chapter II
Arbitration Agreement

Art. 7.

(1) An arbitration agreement shall be deemed to be a consent of the parties to submit to arbitration all or certain disputes, which may arise or have arisen between them in respect of a defined contractual or non-contractual legal relation. It can be an arbitration clause in another contract or a separate agreement.

 

(2) The arbitration agreement shall be in writing. An agreement shall be deemed to be in writing if contained in a document, signed by the parties, or in an exchange of letters, telex messages, telegrams or other means of communications.

 

(3) It shall be deemed that an arbitration agreement exists also when the defendant accepts in writing or by a declaration recorded in the minutes of the arbitration hearing that the dispute be heard by an arbitral tribunal or when the defendant participates in the arbitration proceedings without challenging the jurisdiction of the arbitral tribunal.

Art. 8.

(1) Any court, before which a claim related to a dispute is made which is the subject of an arbitration agreement, shall be obliged to terminate the proceedings if the defendant refers on this agreement during the first hearing of the case. In case the court finds that the arbitration agreement is null and void, inoperative or incapable of being applied, the court proceedings shall not be terminated.

 

(2) The arbitration proceedings can be initiated, continued and an award can be made on it despite of the fact that in connection with the same dispute an issue may be pending before a domestic or a foreign-based court.

Art. 9.

Each of the parties to an arbitration agreement can request from a court, before or during the arbitration proceedings, to order provisional remedies or perpetuation of the evidence.

Art. 10.

The provisions of Art. 8, item 1 and of Art. 9 shall apply also when the arbitration agreement provides for arbitration in another country.

 
Chapter III
Composition of Arbitral Tribunal

Art. 11.

(1) The arbitral tribunal can consist of one or more arbitrators whose number shall be determined by the parties. When the parties fail to determine their number, the arbitrators shall be three.

 

(2) (Amended - SG No.93/1993). An arbitrator can be also a person who is not a citizen of the Republic of Bulgaria.

Art. 12.

(1) The parties shall be free to agree upon a procedure for the composition of the arbitral tribunal.

 

(2) Failing such agreement upon the procedure:

  • if the arbitral tribunal consists of three arbitrators, each of the parties shall elect one arbitrator and the two arbitrators shall elect the third arbitrator.
  • if a party fails to elect an arbitrator within the 30 day time-limit from the date of receiving the request of the other partty to do so or if the two arbitrators fail to agree on the choice of a third arbitrator within 30 days from their election, the President of the Bulgarian Chamber of Commerce and Industry shall appoint an arbitrator upon request by one of the parties;
  • if the arbitral tribunal consists of a sole arbitrator and the parties cannot agree on this arbitrator, he shall be appointed by the body mentioned in the preceding item above upon a request by one of the parties.
 

(3) The President of the Bulgarian Chamber of Commerce and Industry when appointing an arbitrator shall have due regard to his qualification, as required by the arbitration agreement of the parties as well as to all circumstances capable of securing the appointment of an independent and impartial arbitrator.

 

(4) The decision of the President of the Bulgarian Chamber of Commerce and Industry according to paragraphs 2 and 3 hereinabove shall be final.

Art. 13.

When a person is nominated to be elected arbitrator, he shall disclose all circumstances which could give rise to justifiable doubts as to his impartiality or independence. The arbitrator shall have such obligation after his appointment as well.

Art. 14.

(1) An arbitrator can be challenged only if circumstances which give rise to substantial doubts of his impartiality or independence exist or if he does not possess the necessary qualification, agreed upon by the parties.

 

(2) A party can challenge an arbitrator, elected by it or with its participation only for reasons of which the parrty has become aware after his election.

Art. 15.

(1) The parties shall be free to agree upon the procedure of challenge. They shall not exclude the implementation of the provisions of Art. 16 below.

 

(2) Failing an agreement, the challenge of an arbitrator can be made not later than 15 days after the party has become aware of the constitution of the arbitral tribunal or after the party has become aware of circumstances providing grounds for the challenge.

 

(3) The request for a challenge shall be made in writing to the arbitration court, pointing out the grounds for the challenge.

 

(4) The arbitration court shall decide on the challenge unless the arbitrator withdraws from office or the other party agrees to the challenge.

Art. 16.

(1) (Amended - SG No. 38/2001) (1) (Amended - SG No. 59/1998). If the arbitration court dismisses the challenge, the challenging party can within seven days from its notification of the dismissal request the Sofia City Court to decide on the challenge. The Sofia City Court shall consider the complaint according to Art. 126b and Art. 126c of the Civil Procedure Code and the court decision shall be final.

 

(2) The arbitral tribunal can proceed to hear the case and make an award irrespective of the challenge and of the complaint pursuant to paragraph 1 hereinabove.

Art. 17.

(1) When an arbitrator becomes unable to perform his functions or fails to act without justifiable reasons, his mandate shall be terminated.

 

(2) (Amended - SG No. 59/1998). If, in the cases mentioned in the preceding paragraph, the arbitrator fails to withdraw from office on his own accord or the parties fail to agree on the termination of his mandate, each of the parties can request the Sofia City Court to resolve the terminartion of the mandate. The decision of the Court shall be final.

Art. 18.

When the mandate of an arbitrator is terminated, another arbitrator shall be elected according to the rules applicable for the election of the arbitrator whose mandate is terminated.

 
Chapter IV
Jurisdiction of Arbitral Tribunal

Art. 19.

(1) The arbitral tribunal shall rule on its own jurisdiction even when it is challenged on the grounds of the non-existence or voidance of the arbitration agreement.

 

(2) The arbitration agreement, incorporated in a contract, shall be independent of other provisions of the contract. The voidance of the contract shall not mean by itself the invalidity of the arbitration agreement, contained therein.

Art. 20.

(1) The challenge of the jurisdiction of the arbitral tribunal shall have to be made with the reply to the request for arbitration at the latest. The .challenge can be made also by the party who elected or participated in the election of an arbitrator.

 

(2) When a matter exceeding the scope of jurisdiction of the arbitral tribunal is raised the challenge of the jurisdiction of the tribunal shall have to be made immediately.

 

(3) The arbitral tribunal can accept also a challenge of jurisdiction, made later, if there is a justifiable reason for the delay.

 

(4) The arbitral tribunal shall decide on the challenge described in the paragraphs hereinabove by a ruling or by an award on the case.

Art. 21.

Unless otherwise agreed upon by the parties, the arbitral tribunal at a request of one of them can order the other party to take suitable interim measures for protection of the rights of the petitioner. When ordering these measures the arbitral tribunal can determine a security to be submitted by the petitioner.

 
Chapter V
Conduct of Arbitral Proceedings

Art. 22.

The parties in the arbitration proceedings shall be equal. The arbitral tribunal shall give each of them the possibility of defending their rights.

Art. 23.

Unless otherwise agreed upon by the parties, the arbitration proceedings shall commence on the day when the defendant receives the request for the dispute to be referred to arbitration.

Art. 24.

The parties can agree upon the procedure to be followed by the arbitral tribunal during the proceedings. Failing such an agreement, the arbitral tribunal shall be free to conduct the proceedings in such a manner as considered appropriate. In both cases the tribunal shall provide the parties with equal possibilities for the defense of their rights.

Art. 25.

The parties shall be free to agree on the place of the arbitration proceedings. Failing such agreement, the place of proceedings shall be determined by the arbitral tribunal, taking into consideration the circumstances related to the case and the convenience of the parties.

Art. 26.

The parties shall be free to agree on the language or languages to be used during the arbitration proceedings. Failing such agreement, the language or languages shall be determined by the arbitral tribunal. It can order any written evidence to be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

Art. 27.

(1) The request for arbitration shall contain the names and addresses of the parties, the facts supporting the claim as well as the remedy sought, while the written reply of the defendant shall contain his standpoints on the components of the claim.

 

(2) The request for arbitration and the reply to it shall be submitted within the time-limit agreed upon by the parties or the one determined by the arbitral tribunal.

 

(3) The parties shall submit together with the request for arbitration and the reply to it their written evidence and indicate other evidence to be submitted at a later date.

Art. 28.

The defendant can lay a counter-claim with the reply to the request for arbitration at the latest.

Art. 29.

During the arbitration proceedings each party can amend or supplement his claim or objection, unless otherwise agreed upon by the parties. The arbitral tribunal can decline acceptance of the requested amendment if considered that the amendment will cause particular difficulties for the other party.

Art. 30.

The parties shall be free to agree upon the dispute to be resolved on written evidence and pleadings only without being summoned to the hearing. The arbitral tribunal can order a hearing with participation of the parties if considered necessary for the rightful settlement of the dispute.

Art. 31.

(1) The parties shall have to be informed in due time about the arbitration hearing or about an inspection and verification of documents, goods or other property, to be undertaken by the arbitral tribunal.

 

(2) The written evidence and statements as well as the reports of experts shall have to be delivered to the parties in due time.

Art. 32.

(1) When the seat, domicile, habitual residence or address of the addressee cannot be found after a diligent inquiry, the notification shall be deemed to have been received if sent by registered letter to the addressee's latest known seat, domicile, habitual residence or address or by any other means providing a record of the attempt for delivery.

 

(2) The notification shall be deemed delivered also when the addressee has refused or has not contacted the post office to receive it if confirmed by the post office.

Art. 33.

The arbitral tribunal shall terminate the proceedings if the claimant fails to fille his request for arbitration within the time-limit agreed upon by the parties or determined by the arbitral tribunal. This provision shall not apply if the failure is due to excusable reasons.

Art. 34.

The arbitral tribunal shall hear the case also if the defendant fails to submit his reply to the request for arbitration. The absence of a reply shall not be treated as an admission of the claim.

Art. 35.

The arbitral tribunal shall continue with the proceedings and shall render an award based on the evidence even if one of the parties or both parties fail to attend the hearing.

Art. 36.

(1) The arbitral tribunal can appoint one or more experts to report to the tribunal for clarification of certain issues that require special knowledge. The tribunal can order the parties to make available to the experts the necessary information or to provide access for the inspection of documents, goods or other property if necessary for the preparation of their reports.

 

(2) The arbitral tribunal, on request of either of the parties or on its own initiative, can order the expert after the delivery of his report to be present at the haring in order to give clarifications. On the request of the parties other experts can be appointed to report on the disputed issue also.

Art. 37.

The arbitral tribunal or the interested party, with the approval of the tribunal, can request a competent court to collect certain evidence necessary for the case. The court shall be bound to fulfill the request according to the provisions of the Civil Procedure Code.

 
Chapter VI
Making an Award and Termination of Proceedings

Art. 38.

(1) The arbitral tribunal shall decide on the dispute applying the law chosen by the parties. Unless agreed upon otherwise, the choice of law shall refer to the substantive law but not to the rules of conflict of laws.

 

(2) If the parties failed to designate the applicable law, the arbitral tribunal shall apply the law designated by the rules of conflict of laws, considered applicable.

 

(3) In all cases the arbitral tribunal shall apply the terms of the contract and shall take into account the trade usages.

 

(4) The arbitration award shall be final, putting an end to the dispute.

Art. 39.

(1) When the arbitrators are more than one, the award shall be made by a decision of the majority, unless otherwise agreed upon by the parties. The arbitrator who disagrees with the award shall submit his dissenting opinion in writing.

 

(2) If a majority decision cannot be reached, the award shall be made by the presiding arbitrator.

Art. 40.

If the parties reach a settlement, the proceedings shall be terminated. The parties can request the arbitral tribunal to reproduce the settlement in an award by consent. Such award shall have the force of an award on the merits of the case.

Art. 41.

(1) Unless the parties agreed upon otherwise, the award shall state the reasons on which it is based or it shall be an award by consent. In any case it shall have to indicate the date and place of arbitration.

 

(2) The award shall be signed by the arbitrator or arbitrators. In arbitration proceedings with more than one arbitrator, the signatures of the majority of the arbitrators shall suffice, provided the signatories have indicated the reason for the missing signature.

 

(3) (Amended - SG 93/1993). The award signed by the arbitrators shall be delivered to the parties. It shall be treated as announced with the delivery to one of the parties. By its delivery it shall enter into force, become binding for the parties and enforceable.

Art. 42.

The arbitral tribunal shall terminate the proceedings by a ruling when:

  • the claimant withdraws his claim, unless the defendant objects thereto and the arbitral tribunal recognizes that the defendant has a legitimate interest in the making of the award;
  • the parties have agreed on the termination of the proceedings;
  • the arbitral tribunal has found that there is a certain obstacle for hearing the case on its merits.

Art. 43.

(1) The arbitral tribunal, upon request of either party or on its own initiative, can correct the award regarding any clerical and computation errors or any evident factual error contained therein. The other party shall be informed about the requested correction by the petitioner or by the arbitral tribunal when the latter is acting on its own initiative.

 

(2) Each party. after notifying the other party, can request an interpretation of the award from the arbitral tribunal.

 

(3) The request for correction or interpretation of the award shall have to be made within 60 days from receiving the award, unless the parties agreed upon another time-/limit. When the arbitral tribunal is acting on its own initiative it shall make the correction within 60 days from rendering the award.

 

(4) The arbitral tribunal shall make the correction or interpretation after hearing the parties or after giving them the possibility to submit their written statements within a time-limit set by the tribunal. It shall decide on the correction or the interpretation within 30 days from the request. The decision on these issues shall be made according to Art. 39 and Art. 41 hereinabove. The correction and the interpretation shall become parts of the award.

Art. 44.

On the request of the parties the arbitral tribunal can render an additional award on claims omitted in the original award. The party requesting the additional award shall notify the other party for the request within 30 days from receiving the award. If the request is grounded the arbitral tribunal shall make the additional award within 60 days, applying the stipulation of Art. 43, paragraph 4, hereinabove.

Art. 45.

The arbitral tribunal can extend the time-limit for the correction, interpretation or supplementaion of the award.

Art. 46.

The mandate of the arbitral tribunal shall terminate with the end of the arbitration proceedings, except in the cases of Art.  43 and Art.  44 hereinabove.

 
Chapter VII
Setting Aside, Recognition and Enforcement of an Award

Art. 47.

(1)The arbitral award can be annulled by the Sofia City Court by way of action if the party requesting the annulment proves any of the following grounds:

  • the party was under state of incapacity at the time of conclusion of the arbitration agreement;
  • no arbitration agreement has been concluded or it is void under the law chosen by the parties or failing such a choice, the agreement is void under this law;
  • (a new one - SG No. 38/2001) the subject of the dispute is not arbitratable or the arbitral award violates the public order of the Republic of Bulgaria;
  • (a former item 3 - SG No. 38/2001) the party has not been duly informed about the appointment of an arbitrator or about the arbitration proceedings or the party was unable to participate in the proceedings due to reasons beyond its control;
  • (a former item 4 - SG No. 38/2001) the award resolved on a dispute not envisaged by the arbitration agreement or contained a decision on issues outside the subject-matter of the dispute;
  • (a former item 5 - SG No. 38/2001) the composition of the arbitral tribunal or the arbitral procedure was not in compliance with the agreement between the parties, except when the agreement is in conflict with imperative provisions of this law, or in the absence of such an agreement - when the provisions of this law were not applied.
 

(2) (Amended - SG No. 93/1993, abrogated - SG No. 38/2001).

Art. 48.

(1) An action for annulment can be brought within 3 months from the day on which the petitioner received the award. When a request for correction, interpretation or supplementation of the award has been made , the time-limit shall begin to run from the day on which the arbitral tribunal ruled on the request.

 

(2) (Amended - SG No. 59/1998 and SG No. 38/2001) The action for annulment shall be heard according to the general procedure for actions and the decision of the Sofia Court of Appeal can be appealed against before the Supreme Court of Cassation.

 

(3) (New - SG No.93/1993 and abrogated - SG No. 38/2001).

Art. 49.

(Abrogated - SG No. 93/1993, new - SG No. 38/2001) If a state court by a decision in force annuls an arbitral award on any of the grounds listed in Art. 47, items 1, 2 and 3, the interested party can file a claim on the dispute before a competent state court, and when the arbitral award has been annulled on any of the grounds of Art. 47, items 4, 5 and 6, the state court shall return the case to the arbitral tribunal for a new hearing. Each party can request the case to be heard by other arbitrators.

Art. 50.

(Abrogated - SG No. 93/1993).

Art. 51.

(Amended - SG No. 93/1993). (1). The Sofia City Court, on application of an interested party, shall issue a writ of execution based on an arbitral award in force. The application shall have been enclosed with the arbitral award and a proof that the award has been delivered to the debtor party of the enforcement.

 

(2) For recognition and enforcement of a foreign-based arbitral award the international treaties to which the Republic of Bulgaria is a party shall apply.

 

(3) (A new one - SG No. 38/2001). The request for recognition and admission of the enforcement of a foreign- arbitral award, if not otherwise stipulated by the international treaty to which the Republic of Bulgaria is a party, shall be made before the Sofia City Court and heard according to the provisions of Art. 305 and Art. 306 respectively of the Civil Procedure Code, excepti of the right of the debtor to lay an objection for paying off the debt.


 
(New - SG No. 93/1993) Additional Provision

� 1.

In Art. 1, paragraphs 1 and 2, Art. 11, paragraph 2, Art. 47, paragraph 2, Art. 49, paragraph 2 and Art. 50, paragraph 2, the words "People's Republic of Bulgaria" shall be replaced by "Republic of Bulgaria".

 
(Heading amended - SG No. 93/1993) Transitional and Final Provisions

� 2.

(a former � 1, amended - SG No. 93/1993). In the Civil Procedure Code (published in Izvestia, No. 12/1953\2, amended and supplemented in No.92/1952, No.89/1953, No.90/1955, No.90/1956, No.90/1958, Nos. 50 and 90/1981; amended in No.99/1981; amended and supplemented - SG No. 1/1963, No. 23/1968, No. 27/1973, No. 89/1976, No. 36/1979, No. 28/1983, No. 41/1985, No. 27/1986, No. 55/1987, No. 60/1988, Nos. 31 and 38/1989, No. 31/1990, No. 62/1991, No. 55/1992, No. 61/1993) in Art. 237, letter "a" and in Art. 242, paragraph 2, the words "the Arbitration Court at the Bulgarian Chamber of Commerce and Industry and the agreements concluded before the Court, when the arbitration shall be mandatory" shall be replaced by "the arbitration courts and the agreements reelated to arbitration cases concluded before these courts".

� 3.

(1) (a new one- SG No.93/1993). (1). (Amended and supplemented - SG No. 38/2001). This law shall apply also to arbitration between parties with domiciles or seats in the Republic of Bulgaria, with the exception of Art. 1, paragraph 2, Art. 10, Art. 11, paragraph 2 (except when a party to the dispute is an enterprise with a dominant foreign participation), Art. 26 and the words "according to the law, chosen by the parties, and in case of absence of a choice of law" of Art. 47, paragraph 1, item 2.

 

(2) In disputes not originating from commercial transactions the appointing body in cases of art,. 12 shall be the Sofia City Court.

 

(3) In arbitration between parties with domiciles or seats in the Republic of Bulgaria the provisions of Art. 38, paragraphs 1 and 2 shall apply only if the legal relationship under the dispute contains such an international component, which according to the Bulgarian private international law requires the application of a foreign law.

� 4.

(a new one- SG No. 93/1993). This law shall apply also to current pending arbitral cases and to awards rendered before the entry into force of this law, provided these awards have not been executed but the time-limit for an action of setting aside of such awards, as set by Art. 48, paragraph 1, shall start running from the day of entry into force of this law.

� 5.

(a new one- SG No. 93/1993). Art. 98 of Decree No. 56 on Economic Activity (piblished - SG No. 4/1989, amended - SG No. 16/1989, amended and supplemented - SG Nos. 38, 39 and 62/1989, SG Nos. 21, 31 and 101/1990, SG Nos. 15 and 23/1991, amended - SG No. 25/1991, SG Nos. 47, 48 and 62/1991, SG No. 60/1992, SG No. 84/1992) shall be abrogated.

� 6.

(a former � 2, amended - SG No. 93/1993). The Minister of Justice shall be authorized for the implementation of this Law.

 
(New ones - SG No. 38/2001) Transitional Provisions

� 7.

Par. 2 of this Law shall apply also to cases pending in front of arbitration tribunals and to complaints to the Sofia City Court.

� 8.

Par. 4 and 5 of this Law shall apply also to arbitration awards already made and to pending cases for their annulment. The plaintiff may move from an action for declaration of the arbitration award null and void to an action for its annulment pursuant to Art. 47, and the new paragraph 3 of Art. 51 shall apply also to pending procedures for recognition and enforcement of foreign arbitration awards.


 




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