The Arbitration Court as an Alternative to the State Court Proceedings

  • The Arbitration Court as an Alternative to the State Court Proceedings

     The Arbitration Proceedings offer a quick and effective procedure for the hearing of civil and commercial disputes. The Arbitration Court being a voluntary means of resolution of property disputes which the Parties cannot amicably settle between themselves has established itself as an alternative to the State court proceedings. Object of arbitration proceedings may be any civil or commercial dispute, regardless of whether the registered address or the domicile of one or both parties is in Bulgaria. Arbitration however is not permissible in resolving disputes concerning property rights or possession of immovable property, allowance or rights under employment contracts. The arbitration proceedings are based on an arbitration agreement, i.e. in order for a dispute to be heard at a particular Court of Arbitration, the parties involved must have concluded between themselves an arbitration agreement.

    Arbitral justice is modeled on the legal trial procedure: it begins with the filing of a claim request for arbitration – there can be distinguished claim requests for declaratory, culpable or constitutive judgment. Similar are the difficulties relating to establishing the prerequisites for the proceedings, the type of proceedings, the disposition of importance of the evidence and the types of evidence. The Arbitration Court can be internal or international depending on the seat and domicile of the parties to the dispute. There is an Arbitration Court (AC) to the Bulgarian Chamber of Commerce and Industry (BCCI).

    Compared to the State Court proceedings, the AC distinguishes itself by the following advantages:
    Speed is one of the biggest advantages of arbitration. The dispute is settled in one instance. Cases are usually resolved within 6-9 months.
    Arbitration awards are final and are not subject to appealing to a higher court which is an additional guarantee for a quick resolution of the dispute.
    The final judgment is subject to voluntary execution and is considered to be stable as it can be contested only by way of appeal. The arbitration proceedings are more cost-effective.
    The fees due are not a constant percentage and decrease with the increase of the claim. Expenses for the defense, experts, translators and others are incurred and paid only for one instance.
    By avoiding the assistance of the regular State Courts, the two parties refer the dispute to a non-state justice-administering body, whom they trust. The parties participate in establishing the deciding organ through the election of arbiters. The arbiters have specialized knowledge which ordinary judges may not possess. The dispute is settled under a simplified procedure made known to both parties in advance.
    The parties are entitled to amend and adjust that procedure to the specificity of the dispute. This advantage ensues from the nature of the arbitration agreement.
    The Arbitration proceedings are non-public and confidential, which forestalls deterioration of the relations between the parties. The sitting of the AC is conducted in camera. With commercial disputes there is often the risk of disclosure of facts and circumstances that represent commercial secrets, which can be averted by limiting the publicity under the arbitration proceedings.
    The limitations of the International Jurisdiction applicable for the State Courts do not apply to the Arbitration Court.
    The prevailing party to the agreement can avoid the inconvenience and the expenses that are typically incurred if suing a defendant abroad.

    The possibility that the parties may maintain good business relations between themselves under the arbitration proceedings is bigger than that of the state court proceedings because of the fact that the parties have voluntarily submitted their dispute for arbitration.

    The degree of enforcement of the arbitration award abroad is bigger than in the case of enforcement abroad of the decisions of the court of law as in the former case enforcement is ensured by the New York Convention. Since the decisions of the arbitration court are final, they are not subject to appeal and under the Bulgarian Code of Civil Procedure said final judgments constitute grounds for enforcement. Therefore through this decision it is possible to demand enforcement and serve an execution against the debtor, which will carry the same weight as that of a State Court.

    The Arbitration Court with all its advantages as an alternative method of settling conflicts is getting ever more popular with businesses and individuals because of the opportunity it provides for a quick, cost-effective and timely settlement of disputes.