On 7 July 2016, a new bill on the arbitration of consumer disputes and the establishment of a public registry of arbitration courts was filed. The bill comes in response to the practice in Bulgaria of allowing companies to bring actions against consumers before arbitration courts without first obtaining the customers’ explicit consent.
The proposed changes come after a public discussion on the problem that many consumers, especially customers of major public service providers with monopoly positions, of debt collection companies and easy credit companies, faced unlawfully brought actions in arbitration institutions without their consent. Furthermore, the existing regulations in Bulgaria allow each big company or institution to create an arbitration court and to handle disputes privately.
The proposed bill is an attempt to prevent this practice and to make arbitration institutions and the arbitration procedure more transparent for ordinary citizens. Some of the main changes proposed are:
- Establishment of a public registry of all arbitration institutions in Bulgaria. This registry will be controlled by the Minister of Justice and the Inspectorate to the Minister. Registration with this public register will be required in order for institutions to legally arbitrate. In addition, the bill proposes every party to an arbitration case to have distance access to the file and to make inquiries any time.
- Consumer disputes are to be initially and explicitly defined as non-arbitral. Such disputes may only be arbitrated when the parties have agreed to arbitration after the origin of the dispute.
- Arbitration awards rendered in a consumer dispute shall be deemed null and void ex lege. Having ascertained such nullity the competent court in Sofia shall have the right to reject enforcement of an arbitration award.
- Both Sofia city court in enforcement procedures, or the Supreme Court of Cassation in the court procedure for disaffirmation of an award, will have the right to announce the arbitration award null and void without a time limit.
The public registry will allow any third party or company to check the existing arbitration institutions in Bulgaria and make a reasonable decision as to which to use. We expect the proposed changes to reduce the number of unlawful writs of execution issued on the grounds of null and void arbitration awards.