The award


What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?

The award must be in writing and contain reasons. The arbitrators may dispose of the reasons if the parties agree or if the award is on agreed terms.

The award must state the date on which it was rendered and the place of arbitration.

The award must be signed by the arbitrators. If passed with majority, the award need be signed only by the majority of the members; however, in such case the award must state the reasons for the missing signature(s).

The award must be notified to the parties. It is considered notified on the date it is delivered to at least one of the parties. From this moment, the award becomes final, binding and enforceable.

The International Commercial Arbitration Act does not provide for scrutiny of awards, but the rules of certain arbitral institutions provide such procedures.

Awards are not subject to registration with the state courts. Awards are registered with the secretariats of the institutions under the rules of which they have been rendered. A recent legislative change obliged the institutions to keep the files for at least 10 years and the awards, their reasoning and approved settlements, for an indefinite period.

Timeframe for delivery

Are there any time limits on delivery of the award?

The International Commercial Arbitration Act does not set a time limit for rendering an award. However, the parties may agree on a time limit either for rendering the award or for the closure of proceedings. An award rendered after the expiration of the agreed time limit may be set aside on the grounds of Article 47, Item 6 of the International Commercial Arbitration Act (ie, becasue the proceedings are not complyiant with the agreement of the parties).

Some institutional rules contain a time limit for rendering the award, which can be extended by the tribunal.


Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?

The arbitral tribunal may award the same remedies as state courts, including specific performance, liquidated damages, declaratory relief and refrain orders. On notification to the parties, domestic awards are enforceable as court judgments without limitations.

What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?

On request of a party, the tribunal may issue appropriate interim measures. However, the tribunal has no coercive powers and such measures are not enforceable through the courts; therefore, tribunal-ordered interim measures have little practical effect.

On request of a party, either before institution of the arbitration or while the proceedings are pending, the state courts may order interim measures to:

  • protect a party’s rights that are the subject matter of the arbitration; or
  • guarantee effective enforcement of an eventual favourable award.

The courts may issue identical measures to those issued in relation to pending litigation, including attachment of movable or immovable assets or receivables (including freezing bank accounts) or other appropriate measures. These are directly enforceable by bailiffs.


Can interest be awarded?

Bulgarian law distinguishes between interest as a charge for borrowing money and interest as compensation for a delay in payment. Tribunals sitting in Bulgaria may award both types of interest.

At what rate?

Interest is a concept of substantive law; therefore, tribunals may award interest as determined in the applicable law and the contract of the parties.

Regarding interest as a charge for borrowing money, the tribunal will award at the rate agreed between the parties.

Regarding interest as compensation (ie, late payment interest), where Bulgarian law applies and if the parties have not agreed on liquidated damages, the tribunal shall award statutory interest from the date of delay, at the annual rate of the basic interest rate of the Bulgarian National Bank plus 10 points.


Is the award final and binding?

On notification to at least one of the parties, the award becomes final and binding and produces a res judicata effect.

What if there are any mistakes?

On request of a party or on its own initiative, the tribunal may correct computational, spelling or any other factual mistakes. A party may also request interpretation of the award.

A request for correction or interpretation must be made within 60 days of the date of notification of the award. The tribunal will hear the other party and decide on the request in a 30-day period.

The correction or interpretation will become part of the initial award.

The tribunal may further issue additional awards on matters that were not dealt with in the award (ie, infra petita awards).

Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

The parties cannot exclude the power of the state court to review the award.


What is the procedure for challenging awards?

An award may be challenged before the Supreme Court of Cassation on the following grounds:

  • The party was under some incapacity at the time of concluding the arbitration agreement.
  • The arbitration agreement was not concluded or is invalid under the law to which the parties have subjected it or, failing any indication thereon, under Bulgarian law.
  • The party making the application was not given proper notice of the appointment of an arbitrator or the arbitral proceedings or was otherwise unable to present its case.
  • The award:
    • deals with a dispute not contemplated by the terms of the submission to arbitration; or
    • contains decisions on matters beyond the scope of the submission to arbitration.
  • The composition of the arbitral tribunal or arbitral procedure:
    • did not conform with the agreement of the parties, unless such agreement was in conflict with a provision of the International Commercial Arbitration Act from which the parties cannot derogate; or
    • was otherwise not in accordance with the International Commercial Arbitration Act.

Recently, ‘non-arbitrability’ and ‘contradiction to Bulgarian public policy’ as grounds for setting aside an award were abolished. The awards resolving non-arbitrable disputes are now considered null and void and the courts will dismiss requests to issue a writ of execution on the basis of such awards.

A request for setting aside must be made within three months of notification of the award. In case of correction, interpretation or supplementation of the award, this period runs from the day the tribunal issued the additional award.

An award is enforceable regardless of a pending challenge; the Supreme Court of Cassation may suspend the enforcement only if the challenging party provides a guarantee equal in value to the challenged award.

On what grounds can parties appeal an award?

Final awards are not subject to appeal. 


What steps can be taken to enforce the award if there is a failure to comply?

The creditor may seek leave to enforce from the courts.

Can awards be enforced in local courts?

In order to enforce a domestic award, the creditor must apply to the Sofia City Court to issue leave for enforcement (writ of execution). The applicant must produce a copy of the award and evidence that it was served to the debtor. The procedure is ex parte. The court may consider only whether the award is valid on its face (ie, signed and in writing and whether the dispute was arbitrable) and contains enforceable orders against the debtor. The court collects a fee of 0.2% of the awarded amount (however, not less than Lev50).

How enforceable is the award internationally?

There are no statistics on the enforcement of Bulgarian awards abroad. However, considering that Bulgaria is a party to the New York Convention and has adopted the UNCITRAL Model Law (although in the 1985 version), Bulgarian awards should benefit from a facilitated enforcement abroad. 

To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Article 3 of the International Commercial Arbitration Act explicitly provides that a state or state entity may be a party to international commercial arbitration. It follows that it cannot raise an immunity from jurisdiction defence.

State entities, however, benefit from limited immunity from execution: Article 519(1) of the Civil Procedure Code prohibits enforcement of monetary obligations against state entities. However, other types of enforcement (eg, delivery of possession of movable or immovable assets) are generally possible, provided that the assets in question are not exclusive state property.

Are there any other bases on which an award may be challenged, and if so, by what?

There are no other bases on which an award may be challenged. 

How enforceable are foreign arbitral awards in your jurisdiction?

In order to be enforceable in Bulgaria, a foreign award must receive recognition and its enforcement must be permitted by Bulgarian state courts. Enforcement is subject to the provisions of the New York Convention. The creditor must file a claim before the Sofia City Court, the decision of which is subject to appeal before the Sofia Court of Appeal, thence to appeal before the Supreme Court of Cassation. The state fee is Lev50.

The Bulgarian courts have a pro-enforcement attitude and foreign awards are generally recognised and enforced in Bulgaria. 

Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

An award set aside by the courts in the country of origin would be refused recognition and enforcement on the grounds of Article V1(e) of the New York Convention; a Hilmarton or Chromalloy scenario does not appear possible in Bulgaria. Two recent decision confirm this interpretation.