Arbitration lawsuits before Bulgarian arbitration courts

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Arbitration lawsuits before Bulgarian arbitration courts

Postby Admin » Tue Feb 02, 2016 1:20 pm

Lately we have received many requests by property buyers who have been served with arbitration claims after non-performance of their mortgage contracts, and therefore with the present article we would like to clear your view on some of the local legal procedures on this matter. Bear the following is not a legal advice in any way.
Generally spoken, the arbitration is a method of alternative dispute resolution. It provides an alternative to the usual court process, and basically entitles the parties to choose to settle any disputes that may rise between them, before previously chosen arbitrator or arbitration court. Arbitration courts usually are private court bodies, without any specific requirements towards their formation, membership or skills of the particular arbitrators that hear cases. Once an arbitration lawsuit is initiated, it is heard and decided only on one instance – which avoids the heavy 3-instance civil court procedure in Bulgaria. In other words, decision proclaimed by the Arbitration court cannot be appealed; it enters in force immediately and then an execution warrant could be obtained straight away against the party which lost the arbitration case. In general, very often the claimant can reach a decision and execution warrant in shorter times that if their claim has been lodged at the normal civil court. Therefore in practice, banks or other financial or crediting institutions for example, implement in their business contracts, signed with costumers, the so called “arbitration clause” which entitles the parties in case of eventual dispute, to bring it to particular Arbitration court, instead of civil court. Although sometimes the court tax charged by the Arbitration court is higher than the one paid towards the civil court, ending the lawsuit in one-instance procedure could be better benefit for claimants.
Foreign individuals who live abroad, have arbitration clauses in their Bulgarian contracts could also become a party on arbitration lawsuit in the local arbitration courts here. There is no problem to serve court documents abroad. Also since we joined the EU, the Bulgarian Law enables judgment creditors to obtain European Payment Order against debtors who live abroad, and then to chase collection of their debt plus the made court expenses, directly in the domestic country of the debtor. This is why creditors meets no technical difficulties to sue debtors in Arbitration courts and resp. to reach a court decision , as long as such option has been agreed in the signed loan contracts or purchase contracts. Defendants on arbitration lawsuits have thirty-day deadline to respond to the claim; so if they fail to do so, the lawsuit continues without problems. If you have been served with arbitration papers, then we would like to warn you that it is important to manage your protection on such pending lawsuit against yourself- there is no problem to hire a professional Bulgarian lawyer to represent you on the case. If you need help, contact us on
You should note that the court decision, issued against you by local Arbitration court in Bulgaria /normally this is the Arbitration court at Bulgarian Chamber of Commerce and Industry/ can be used against you even if you reside abroad within the EU, which is due to Bulgaria being part of the EU since 2007. The worst thing to do once you’ve been informed that there is pending arbitration court lawsuit against you would be to sit and say to yourself “I am far from the problem, it does not concern me” - because this is not true. If you have been taken to arbitration court in Bulgaria by local claimant due to non-performance of signed by you contract, and you have just been served with the court papers, then bear you have little time to organize your defense. In most of the cases local corporate bodies /banks for example/ are placing claims against foreign individual for serious amounts that include not only the principal but huge interest, and in some cases plaintiffs are hoping that the foreign individual, being the defendant, to stay passive during the arbitration lawsuit and not to participate in the procedure. Namely not participating in arbitration case against you can be the bigger mistake, because you may lose the case and be sentenced to pay all expenses of the claimant for initiating the arbitration lawsuit. If you need help, contact us on

Bulgariandeals Team

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