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If you are planning to settle a commercial dispute by arbitration in Bulgaria, then you are not mistaken with jurisdiction - the country is considered favorable for resolving both internal and cross-border conflicts.

The arbitration legislation in the Republic of Bulgaria is based on the European UNCITRAL, the New York and European Conventions. In the field of international investment law, the country is a signatory to the ICSID Convention and the Energy Charter, and has signed over 70 bilateral investment agreements.

Investment protection

Investment protection agreements are based on the principles of dealing with foreign investors that are common to various agreements and thus create a single, largely unified international investment regime. In Bulgaria, agreements provide foreign investors, as a general rule, with certain substantive protective rights aimed at ensuring the security of investments. This can, for example, be expressed in the provision of treatment equivalent to the national one, the most favored nation treatment, protection against gratuitous expropriations, fair and equitable treatment, and in ensuring the freedom of movement of capital and profit. 

Most agreements provide that investors can defend these rights in the framework of international arbitration procedures, including directly against the host state. In general, investment protection treaties aim to create institutions and institutions that enable increased investment and economic development.

Initiate arbitration in Bulgaria: scope and structure 

International arbitration process in Bulgaria takes place in the same institutions as domestic ones. Arbitration in Bulgaria is considered international if one or all of its parties are registered outside the state.

National legislation applies both in the settlement of disputes through institutional arbitration in Bulgaria and in the resolution of commercial claims in Bulgaria through ad hoc arbitration. This ADR method is used by individuals, government or public organizations that have entered into arbitration agreements. 

Settlement of arbitration disputes in Bulgaria

Bulgaria is a fairly pro-arbitration jurisdiction where you can be sure that the rights of the parties will not be violated. Meanwhile, there are a number of cases where dispute settlement through arbitration is not possible.

The settlement of a business dispute through arbitration in Bulgaria is impossible in the following cases:

  • conflicts over real estate rights (note: lease agreements are arbitrable);
  • labor disputes, however, a clause should be made that cases under corporate governance contracts are subject to arbitration;
  • public legal conflicts, such as disputes over the limits of the exercise of emergency powers at the national level, control over regulation in especially valuable areas of common interest, for example, in the field of energy supply, control over substances harmful to health, etc;
  • certain types of conflicts in relation to company insolvency;
  • consumer rights protection;
  • concession agreements without cross-border interests (according to EU legislation);
  • some other.

NOTE: If you are interested to resolve an international dispute in Bulgaria using arbitration, you should take state courts are not allowed to intervene in the arbitration process if:

  • temporary measures are introduced for the arbitration case;
  • assistance to the arbitration court in the collection of evidence in the case;
  • in the course of recognition and enforcement of foreign arbitral awards.

Where to arbitrate in Bulgaria

Commercial disputes in the Republic of Bulgaria can be settled in dozens of different arbitration institutions, including specialized ones. The best known is the Bulgarian Arbitration Court, which has significant experience in resolving business claims in a number of specific sectors. So, if you need to resolve a dispute in the field of construction, loan agreements, agriculture, government procurement or the IT sector, you are advised to consider this institution first.

The peculiarity of this institution is its advanced technical equipment, which allows for online document flow. It has also introduced secure access for participants in the process to all necessary documents through the website. This is especially valuable during the pandemic. Here you can also order the services of a mediator in an international dispute resolution in Bulgaria.

Final word

The Republic of Bulgaria is one of the leading platforms for arbitration in Eastern Europe, where a business dispute can be resolved quickly and efficiently. If you need more information, we offer you personal advice on the resolution of international disputes by arbitration in Bulgaria. To contact the IQ Decision UK experts please fill out the short form below.