LAW OF 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, in No. 38 of 17.04.2001, in No. 46 of 07.05.2002, in No. 102 of 01.11.2002)
Chapter I
General Provisions
Art. 1. (1) (Amended - SG No.93/1993). This Law shall apply to the
international commercial arbitration, based on an arbitration agreement, when
the place of arbitration is on the territory of the
(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
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 arbitrate 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 arbitration tribunal or when the defendant
participates in the arbitration proceedings without challenging the jurisdiction
of the arbitration 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 ˛˛I
Composition of Arbitration Tribunal
Art. 11. (1) The arbitration 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
Art. 12. (1) The parties
shall be free to agree upon a procedure for the formation of the
arbitration tribunal.
(2) In case of a
failure of such an agreement upon
the procedure:
1. if the
arbitration tribunal consists of three arbitrators, each of the parties shall
elect one arbitrator and the two arbitrators shall elect the third arbitrator;
2. if a party
fails to appoint an arbitrator within the period of 30 days from the
date of receiving the request of the other party 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;
3. if the
arbitration 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 consider his qualification, as required by the arbitration agreement of
the parties as well as to all circumstances ensuring 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 herein above shall be
final.
Art. 13. When a person is nominated to be elected as
an arbitrator,
he shall present all circumstances which could rise any 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 party 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 arbitration
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 except for the arbitrator
withdraws from office or the other party agrees to the challenge.
Art. 16. (1) (Amended - SG
No. 38/2001) (1) 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
arbitration 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 termination 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 Arbitration Tribunal
Art. 19. (1) The arbitration tribunal shall rule on its own jurisdiction even
when it is challenged on the grounds of the non-existence or invalidity of the
arbitration agreement.
(2) The
arbitration agreement, incorporated in a contract, shall be independent of
other provisions of the contract. The invalidity 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
arbitration 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 arbitration tribunal is raised the
challenge of the jurisdiction of the tribunal shall have to be made
immediately.
(3) The
arbitration tribunal can accept also a challenge of jurisdiction, made later,
if there is a justifiable reason for the delay.
(4) The
arbitration 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 arbitration 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 arbitration
tribunal can determine a security to be submitted by the petitioner.
Chapter V
Conduct of Arbitration Proceedings
Art. 22. The parties in the
arbitration proceedings shall be equal. The arbitration 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 arbitration tribunal during the proceedings. Failing such an
agreement, the arbitration 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 arbitration 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 arbitration
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
arbitration 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 arbitration 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 arbitration
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 arbitration 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 arbitration
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
residence, 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 arbitration tribunal shall terminate the
proceedings if the claimant fails to file his request for arbitration within
the time-limit agreed upon by the parties or determined by the arbitration
tribunal. This provision shall not apply if the failure is due to excusable
reasons.
Art. 34. The arbitration 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 arbitration 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 arbitration 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
arbitration 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 arbitration 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 arbitration tribunal shall decide on the dispute applying the
law chosen by the parties. Unless agreed upon otherwise, the choice of a 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 arbitration tribunal shall
apply the law designated by the rules of conflict of laws, considered
applicable.
(3) In all cases
the arbitration tribunal shall apply the terms of the contract and shall take
into account the commercial traditions.
(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 arbitration 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) (Added - 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 arbitration tribunal shall terminate the
proceedings by a ruling when:
1. the claimant
withdraws his claim, unless the defendant objects thereto and the arbitration
tribunal recognizes that the defendant has a legitimate interest in the making
of the award;
2. the parties have
agreed on the termination of the proceedings;
3. the arbitration
tribunal has found that there is a certain obstacle for hearing the case on its
merits.
Art. 43. (1) The arbitration 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 arbitration 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 arbitration 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 arbitration tribunal is acting on its own initiative it
shall make the correction within 60 days from rendering the award.
(4) The
arbitration 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 herein. The
correction and the interpretation shall become parts of the award.
Art. 44. On the request of the parties the arbitration
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 arbitration tribunal shall make the additional award within 60
days, applying the stipulation of Art. 43, paragraph 4, herein.
Art. 45. The arbitration tribunal can extend the time-limit
for the correction, interpretation or supplementation of the award.
Art. 46. The mandate of
the arbitration tribunal shall terminate with the end of the arbitration
proceedings, except in the cases of Art. 43 and Art. 44 herein.
Chapter VII
Setting Aside, Recognition and Enforcement of an Award
Art. 47. (Amended – State Gazette, issued 46 dated 2002). The arbitration award
can be annulled by the Supreme Court of Appeal if the party requesting the annulment
proves any of the following grounds:
1. the party was
under state of incapacity at the time of conclusion of the arbitration
agreement;
2. 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;
3. the subject of
the dispute is not subject to arbitration or the arbitration award violates the
public order of the
4. 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;
5. the award
resolves on a dispute not envisaged by the arbitration agreement or contains a
decision on issues not related to the subject of the dispute;
6. the setting up
of the arbitration tribunal or the arbitration 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.
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 arbitration tribunal ruled on the request.
(2) (Amended –
SG, issue 59/1998, amended SG, issued 38/2001, amended SG, issue 46/2002).
Termination of the execution of the arbitration award as a secure
measure
with regard to claims according to Art. 47 is allowed only by the Supreme Court
of Appeal against submitting security amounting to
the interest from annulment of the arbitration appeal.
(3) (New – SG,
issue 93/1993, abrogated – SG, issue 38/2001, new – SG, issue 46/2002). The
amount of the state duty for considering claims as per Art. 47 of this law is
determined in accordance with Art. 54 and 55 of the Civil Procedure Code.
Art. 49. (New - SG No.
38/2001) If a state court by a decision in force annuls an arbitration 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
arbitration 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 arbitration tribunal for
a new hearing. Each party can request the case to be heard by other
arbitrators.
Art. 51. (Amended - SG No.
93/1993) (1) The Sofia City Court on the application of an
interested party, shall issue a writ of execution based on an arbitration award
in force. The application shall have been enclosed with the arbitration 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 arbitration award the
international treaties to which the
(3) (A new one -
SG No. 38/2001). The request for recognition and admission of the enforcement
of a foreign- arbitration 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, except for the right of the debtor to lay an objection for paying off the
debt.
Additional Provisions
§ 1. (New - SG No.
93/1993) 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
Transitional and Final Provisions
(Heading amended - SG No. 93/1993)
§ 2. (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.99/1961; 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
§ 3. (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
(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
§ 4. (a new one- SG No. 93/1993). This law shall apply also to current
pending arbitration 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 (published - 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. (Former § 2, amended - SG No. 93/1993). The Minister of Justice shall
be authorized for the implementation of this Law.
TO THE LAW OF AMENDEMENTS AND ADDITIONS OF THE LAW CONCERNING THE
INTERNATIONAL COMMERCIAL ARBITRATION (PUBLISHED IN SG, ISSUE 46 OF 2002)
§3.
(1) (It is announced to be anti-constitutional in the part
“annulling the imposed secure measures” by RKS
No. 9, issue 102 dated 2002.) Articles 47 and 48 are applied also for the
pending proceedings concerning the annulment of the arbitration awards. In
these cases, within a period of two weeks from enforcing this law, Sofia City
Court terminates the proceedings in front of it and sends the case for hearing
by the Supreme Court of Appeal.
(2) When with regard to the
pending proceedings as per Art. 47 there is an award enacted by the Court of
first or second instance, the proceedings continue in the
usual way.