New bill Establishes a Public Registry of Arbitral Institutions

On 7 July 2016, a new bill on the arbitration of consumer disputes and the establishment of a public registry of arbitration courts was proposed. The supposed changes come after a public discussion on the problem that many consumers, especially customers of major public service providers (with monopoly positions), of debt collection companies and fast credit companies, faced unlawfully brought actions in arbitration institutions without their consent.

The proposed bill is an attempt to prevent this practice and to make arbitration institutions and the arbitration procedure more transparent for ordinary citizens. Some of the main changes include:

• establishment of a public registry of all arbitration institutions in Bulgaria. Registration will be required in order for institutions to legally arbitrate;
• consumer disputes are to be initially and explicitly defined as non-arbitral. Such disputes may only be arbitrated when the parties have agreed to arbitration after the origin of the dispute;
• arbitration awards rendered in a consumer dispute shall be deemed null and void ex lege. Having ascertained such nullity, the competent court in Sofia shall have the right to reject enforcement of an arbitration award;
• both the Sofia City Court (in enforcement procedures) or the Supreme Court of Cassation (in procedures for disaffirmation of an award) will have the right to announce the arbitration award null and void without a time limit.

The public registry will allow any third party or company to check the existing arbitration institutions in Bulgaria and make a reasonable decision as to which to use. It is expected that the proposed changes will reduce the number of unlawful writs of execution issued on the grounds of null and void arbitration awards.