Legal Effects of the Local Arbitration Judgment – Disadvantages of the Bulgarian Legal Order and the Recent Steps for Overcoming Them Cover Image

Правните последици на местното арбитражно решение – недостатъци в правния режим у нас и последните стъпки за преодоляването им
Legal Effects of the Local Arbitration Judgment – Disadvantages of the Bulgarian Legal Order and the Recent Steps for Overcoming Them

Author(s): Margarita Zlatareva
Subject(s): Law, Constitution, Jurisprudence, Civil Law, Commercial Law
Published by: Нов български университет
Keywords: Arbitration; Form of Arbitration Agreement; Recognition and Execution of Local Arbitration Judgment
Summary/Abstract: This article analyzes the reasons for the mistrust of the arbitration’s activity and discusses the latest legislative amendments in the field – in the Civil Procedure Code (CPC) and the International Commercial Arbitration Act (ICAC), promulgated in the State Gazette, issue 8 of 24 Jan 2017. Firstly, it concludes that in the national source the form has been determined too widely, liberally and with an option for broad interpretation. The latest amendments to Article 7 para 3 ICAC that enlist the procedural actions of the defendant in the arbitration proceedings and satisfy the conditions for a valid arbitration agreement, practically make the framework narrower. The articles suggests that the requirements to the form of the arbitration agreement need to be more restrictive and that some optional forms, such as any “other” communication between the parties or a defendant’s consent by conduct need to be removed. Such conclusion is backed up by a comparative legal analysis of German and Austrian legislation. Secondly, the article comments on the narrowing of the scope of disputes admissible for consideration by arbitration in last amendment of Article 19 para 1 CPC that has taken out of the scope of arbitration agreements all disputes with consumers. As such arbitration judgment needs be declared null and void as it has been made on a dispute that cannot be subject to arbitration the article raises the question about the authority competent to declare it null and void. In principle this could be a civil action to the Supreme Court of Cassation. However, is it possible for the court competent to issue a writ of execution to declare incidentally such arbitration judgment null and void and to refuse the execution writ? The conclusion is that this is a check in the substance of the judgment that would functionally change the proceedings for issuing an execution of writ. Thirdly, the articles points out as a risk in the arbitration proceedings the direct effect of the local arbitration judgment similarly to the effects of the court judgment. Our law does not provide for court’s recognition of local arbitration judgment. However the author finds it necessary for the law to provide for such a court’s “sanction” mostly in the authority of the state (judicial) power to allow for the legal effects of the arbitration judgments only if ther comply with the ordre public that is the state legal order. The latest amendment of Article 47 ICAC removes the possibility for ordre public compliance check by the Supreme Court of Cassation. Such check is not provided in the proceedings for issuing a writ of execution as well. Given the liberal method of creating instutional arbitration courts and/or the lack of criteria for selection of arbitrators it is possible for many arbitration judgments to be made contrary to the principles of equality nd fairness that are fundamental for any administration of justice. The risks of the direct effect of local arbitration judgment could be overcome if the proceedings for issuing a writ of execution include a check of the minimum requirements for the debtor to be notified.