This article discusses the procedure for recognising and enforcing foreign arbitral awards in Bulgaria. Considering that foreign arbitral awards are those rendered in the territory of a state other than the one in which recognition and enforcement are sought, an arbitral award qualifies as foreign only if it has not been rendered in the territory of Bulgaria.
The Bulgarian court will be competent to examine a claim for the recognition and enforcement of a foreign arbitral award when a foreign arbitral award has been rendered against a natural person with habitual residence in Bulgaria, or against a legal person that has its registered office, place of effective management, or assets in the Republic of Bulgaria.
The procedure for recognising and enforcing foreign arbitral awards in Bulgaria is regulated by Article 51(4) of the Arbitration Act, which provides that the recognition and enforcement of a foreign arbitral award shall be governed by the international treaties concluded by the Republic of Bulgaria.
In this context, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 applies, as ratified by Bulgaria with the following declaration: “Bulgaria shall apply the Convention on the Recognition and Enforcement of Foreign Arbitral Awards to awards rendered in the territory of a contracting state. Regarding awards rendered in the territory of a non-contracting state, the Convention shall be applied only based on strict reciprocity.
Bulgaria has also ratified the European Convention on International Commercial Arbitration of 196, promulgated in State Gazette No. 54 of 1964.
Bilateral legal assistance treaties concluded by the Republic of Bulgaria shall also apply, where they contain relevant provisions. Where a legal assistance treaty has been concluded between the Republic of Bulgaria and the state in which the arbitral award was rendered, such treaty shall also be applicable.
Competent court:
The claim for the recognition and enforcement of a foreign arbitral award must be brought before the Sofia City Court.
Procedural order:
In these proceedings, the procedural rules applicable in the territory of the Republic of Bulgaria apply. This follows from Article III of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which provides that “Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles.”[1]
In Bulgaria, civil proceedings are governed by the Civil Procedure Code.
Considering the applicable provisions, it follows that the recognition of the binding force of a foreign arbitral award and the granting of its enforcement in the territory of the Republic of Bulgaria are carried out by way of court proceedings – by bringing a claim before the Sofia City Court, with Bulgarian procedural rules being applicable.
Amount of the state fee:
The court fee for applications for the recognition of foreign arbitral awards is 25.56 euros.
Required documents:
The application for recognition and enforcement of a foreign arbitral award must be accompanied by the documents provided for in the New York Convention, as well as those required under the Civil Procedure Code.
Article IV of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) states that: “To obtain the recognition and enforcement, the party applying for the recognition and enforcement shall, at the time of the application, supply:
(a) The duly authenticated original award or a duly certified copy thereof;”
(2) A copy of the arbitral award certified by the arbitral tribunal that rendered it;
(3) If the following documents are not written in the official language of the state where the recognition and enforcement are sought, a translation of that language must be created. The translation must be certified by an official or sworn translator.
According to the applicable procedural rules and court practice, the following must also be submitted:
(4) A certificate issued by the same tribunal confirming that the award has entered into force and has been served on the respondent, together with proof of service;
(5) Evidence that the respondent company has been notified of the arbitral proceedings;
(6) An extract from the Commercial Register for the registration of the claimant company;
(7) A power of attorney, where the application is submitted by a legal representative;
(8) Proof of payment of state fees and costs, where such are due;
(9) Copies of the statement of claim and the annexes to it, according to the number of respondents.
Prohibition on reviewing the merits of the dispute:
In exequatur proceedings, the court may not review the correctness of the foreign arbitral award by readjudicating the dispute already solved by the foreign arbitral tribunal. The purpose of the proceedings is to determine the existence or absence of the potestative right to recognise the legal effects of the foreign arbitral award.
The current legislation in Bulgaria defines the parameters of exequatur proceedings, as in examining the case, the court does not enter into the substance of the dispute resolved by the foreign tribunal. It only verifies whether the submitted award contains any determinations contrary to the laws of the Republic of Bulgaria or to good morals.
Foundation for refusal of recognition and enforcement of foreign arbitral awards in Bulgaria:
Since 1958, the New York Convention has established a uniform regime for the recognition and enforcement of foreign arbitral awards, dividing the grounds for refusing recognition and enforcement into two groups.
The first group includes the grounds that must be invoked by the party objecting to the recognition and enforcement of the foreign arbitral award, as set out in Article V(1) of the Convention, with that party bearing the burden of proof.
The second group consists of the grounds which the court must consider on its own initiative (ex officio), set out in Article V(2) of the Convention.
- 1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:
(a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
(b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
(c) The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
(d) The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
(e) The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.[2]
It is important to note that the court will examine such objections only if they are raised by the respondent within the time limit for submitting the statement of defence.
- 2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
(b) The recognition or enforcement of the award would be contrary to the public policy of that country.[3]
When examining whether the subject matter of the dispute is capable of settlement by arbitration, it must be considered that where the recognition of a foreign arbitral award is sought in the Republic of Bulgaria, Bulgarian law is applicable for determining which disputes are not solved by arbitration. In these cases, Article 19(1) of the Civil Procedure Code is applicable, which excludes from the scope of arbitrable disputes matters concerning violated or threatened personal subjective rights, as well as proprietary disputes relating to real rights or possession over immovable property, claims for maintenance, disputes concerning rights arising from employment relationships, or disputes in which one of the parties is a consumer according to § 13(1) of the Additional Provisions of the Consumer Protection Act.
When examining the issue of a potential conflict between a foreign arbitral award and public policy in Bulgaria, it must be considered that there is no statutory definition of the term “public policy”, and the competent court possesses broad discretionary power to assess whether the recognition and/or the enforcement of a foreign arbitral award will contradict the public policy of the state.
Because of this, there is well-established case law according to which a contradiction with public policy exists in cases of violation of overriding mandatory norms of a public nature, as well as constitutionally established fundamental principles of the legal order, which form the foundations of the state’s legal system, such as the adversarial principle, equality of the parties during the process, the principle of a fair trial and others.
The court will examine the existence of these grounds for refusal relating to the arbitrability of the dispute and the conflict with the public policy in Bulgaria on its own initiative (ex officio) without the need for the respondent to raise an objection in this regard.
Appeal of the court decision:
The judgment issued by the Sofia City Court is subject to appeal before the Appellate Court - Sofia, as well as to a cassation appeal before the Supreme Court.
This article is not intended to provide legal advice and is for informational purposes only. For more information, or if you need legal advice or assistance, feel free to contact the team of LAW OFFICE “BILYANA SIMEONOVA & PARTNERS” on the phone – 00359 889 630 502, or by making an enquiry via email - This email address is being protected from spambots. You need JavaScript enabled to view it..
[1] Article III of the New York Convention
[2] Article V(1) of the New York Convention
[3] Article V(2) of the New York Convention
