- The last and shortest Chapter Four of the Bulgarian Code of International Private Law (May 2005) is titled: “Conditions and Procedures for Recognition and Admission for Enforcement of Foreign Awards and Other Acts”. It comprises only eight provisions and is relatively straightforward.
- The grave relevance of this chapter is that it sets the terms for the show down of the choice of court and law. The parties may have made a valid choice of foreign law and foreign court and the case may be won abroad BUT it is another saga whether that winning award will be recognized and enforced on Bg territory.
- It should be well noted that recognition and enforcement can be granted not only to foreign courts’ awards but also to acts of foreign institutions that are not courts.
- Art.118 provides an important break off with the previous pattern that every award’s recognition should be decided by a court. Now it has to be decided ad-hoc by the referred institution and only in case of dispute on the condition precedents a recognition case can be lodged with the Sofia city court. What the law does not say is that the ad-hoc unchallenged recognition of a foreign award by a Bulgarian institution does not enjoy the res judicata (would not be legally binding for others) the way a Sofia city court decision on recognition would be. BUT unlike recognition in art. 118 , the admission to enforcement in art. 119 (issuing a court order) is a Sofia city court monopoly- no out-of-court options.
- Chapter Four is NOT the aftermath of a foreign case- it is its starting overriding factor. Throughout a foreign procedure the claimant should be constantly and anxiously aware whether some normal foreign procedure actions or inaction may later turn into traps and ambushes for the enforcement case in Bulgaria. There is not much sense in an off-shore legal victory which is irrelevant for the Bulgarian defendant- provided he has no assets outside Bulgaria. It is for this reason that some Bulgarian defendants are deliberately passive before foreign jurisdictions hoping to turn their restrained behavior into anti-enforcement ambushes. We therefore strongly recommend that any foreign jurisdiction case involving a Bulgarian party should be closely monitored (if not participated as a second opinion counsel) by a Bulgarian professional to watch specifically the recognition/enforcement track which would become relevant after the facts get irreversibly accomplished. This is a cheaper precaution than a bitter end “crowning the deed”. A simple illustration of what we mean is the pattern of some jurisdictions to reject a counter claim in the reasons but not to mention that rejection in the final summing up/disposition of the award- such a technicality invalidates the whole foreign award and recognition and enforcement of the main claim award is rejected on Bg soil due to allegedly incomplete justice process.
- Another important qualification is that Chapter Four (like the rest of the Code) does not apply to issues covered by international treaties- whether bilateral or multilateral. For example Chapter Four would not affect the implementation of the UN/NY 1958 Convention for Recognition and Enforcement of Foreign Arbitration Awards and would not be relevant for Bulgaria’s EU commitments when Accession Treaty enters into force.
September 2005
Braykov’s Legal Office