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BULGARIA LAW ON INTERNATIONAL COMMERCIAL ARBITRATION
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
26.05.1998 and in No 38 of 17.04.2001)
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. |
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(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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