On 27 January 2017, a bill amending the Bulgarian Civil Procedure Code entered into force (the Bill). Among other things, the Bill does the following: (i) reduces the scope of competences of arbitration courts by excluding consumer disputes from the jurisdiction of arbitration courts with no exceptions, and (ii) sets new requirements for the organisation of activities for the arbitration courts. The primary focus of the Bill is on consumer protection addressing some long-lasting issues with the notorious "pocket arbitration courts" by attempting to limit their authority.
An initial reading of the Bill leads to the conclusion that some, if not all, of the aims of the Bill related to consumer protection will be achieved.
Apart from that, some provisions of the Bill may potentially create difficulties regarding the day-to-day activities of arbitration institutions.
In brief, some of the practical impacts of the Bill are:
- For the first time, qualification criteria for arbitrators are introduced – arbitrators may only be (i) sui juris mature persons, (ii) with acquired higher education, (iii) not convicted for a criminal offence subject to public prosecution, (iv) having at least 8 years of professional experience and (v) high moral character. Because these requirements are too general, they may lead to dubious interpretations. For example, there are no specific criteria for professional experience or the fields in which the arbitrator should be an expert. Further, it is unclear how the experience is to be proven.
- Arbitration courts must keep an archive with all completed cases for ten years after rendering awards. After the 10th year, only award and settlement agreements should be kept. In combination with the obligation to ensure remote access to the court files for the parties, the data keeping requirements aim to ensure transparency and accessibility to the arbitration files. The Inspectorate at the Minister of Justice is authorised to exercise control over arbitration institutions and arbitrators from now on. It can also initiate examinations for compliance with the provisions of the Bulgarian International Commercial Arbitration Act. However, it remains unclear whether, and if applied, how the controlling functions will be applicable to international arbitration institutions or arbitrators.
The Bill also provides that current pending arbitration proceedings under nonarbitrable disputes should be terminated with immediate effect. However, the Bill does not shed light as to the effect of such termination in terms of already paid fees and/or the fact that the proceedings were initiated based on mutual consent of the parties. It remains to be seen how the above issues will be addressed in practice.