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© New Balkans Law Office 2017

New Balkans Law Office: Bulgarian Lawyers

Single Arbitrator panels at the Bulgarian Chamber of Commerce and Industry Arbitration Court

New Balkans Law Office often advises its clients to include an Arbitration Clause in their contracts, as when it comes to dispute resolution, the arbitration proceedings generally provide more flexibility, save time and could save additional costs. In contexts where one of the parties is  We often rely on the services provided by the Arbitration Court of the Bulgarian Chamber of Commerce and Industry (the “BCCI AC”) under their Arbitration Rules (and using a Bulgarian-based arbitration tribunal is often the main possibility when it comes to relationships involving a Bulgarian party).

The default in the Rules is that BCCI AC arbitration panels will consist of 3 arbitrators. However, Section IV of the Rules provides the option of nominating a single arbitrator to resolve the dispute.

Using one Arbitrator only is usually faster as matter of the time required for the dispute to be decided, compared to three-arbitrator panels, due to the coordination problems that the latter experience which do not affect the single arbitrator panels.

Using a single Arbitrator is also cheaper, as under the Rules, in such cases only 50% of the arbitration fee is payable.

Nominating a single Arbitrator under the Rules requires the consent of the both parties. This consent can be negotiated upfront.

This can occur either at the time of agreeing the arbitration clause and then can be included in it, or agreed ad hoc between the parties before proceedings start or shortly after. The Chairman of the BCCI AC could also propose this to the parties of his own initiative, but the latter rarely occurs in practice.

Alternatively, when filing its claim, the Claimant can apply to the BCCI AC to nominate a single arbitrator. If this had not been previously agreed between the Claimant and the Respondent, the AC secretariat would notify the Respondent and request it to confirm or reject the proposal. Where the Respondent agrees, it must agree with the nominated Arbitrator or suggest another and ultimately an Arbitrator must either be agreed or appointed by the AC.

Since on filing its claim, the Claimant would have been required to pre-pay the full fee due as if three Arbitrators would have been empanelled in order for the claim to be processed, the fee is reduced to 50% and the overpayment refunded at this point.

We generally recommend a single arbitrator for any relatively low in size potential disputes. Where your potential disputes are likely to be very complex or the size of the claim is likely to be significant, clients typically prefer to keep to the usual three-arbitrators adjudication panels.



New Crude Oil and Petroleum Products Reserves Act; Changes to Director Qualifications Requirements

A new Crude Oil and Petroleum Products Reserves Act (“COPPRA”) was promulgated in the State Gazette (Issue 15 of 15 February 2013) entering into effect on 15 February 2013. It revokes a previous piece of legislation: the Crude Oil and Petroleum Products Mandatory Reserves Act, which had been in effect since 2003.
COPPRA implements the requirements and provision of Council Directive 2009/119/EC imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products (the “Directive”). The Directive, in its turn, reformed the prior EU law regulating energy reserves.
COPPRA aims to ensure a high level of security of oil supply in Bulgaria and ultimately is part of a broader effort for a security of energy supply in the European Community. To do so, it aims to impose reliable and transparent mechanisms in the market for crude and petroleum products, and to mandate the maintenance of minimum stocks of crude and/or petroleum products as well as putting in place procedures to deal with serious shortages. In this respect, COPPRA alters the legal position of a range of companies involved in oil and petroleum products’ production, importation and trade.
New Balkans Law Office will be very happy to advise participants in this marketplace on the overall compliance regime and on the details of the new requirements.


Effect on broader Bulgarian company law


However COPPRA’s Transitional Provisions also amend provisions of the Commerce Act concerning statutory declarations of fitness required to be made by all appointees to the managing and controlling bodies of Bulgarian limited liability and joint-stock companies.
Under the new provisions, where a natural person has been the managing director or a member of a managing or controlling body of a company (eg, its Board of Directors or Supervisory Board, where one is in place), and where the company has breached its obligations under COPPRA, and such a breach has been established by a verdict which has come into force, he or she would be disqualified from being appointed as a director or member of the managing and/or controlling bodies of a Bulgarian limited liability companies and/or joint-stock company.
In practical terms, one of the effects of this amendment is to make it necessary for natural persons proposed to be registered as directors or board members of Bulgarian companies to make an additional statutory declaration of compliance at the time of registration.
Should you require any further information or clarifications on the issues discussed above and on how they might affect the business or investment you are carrying on in Bulgaria, please do not hesitate to contact us.



Bulgaria to revise its renewables law

The Bulgarian Parliament has started reviewing the Energy from Renewable Sources Act (“ERSA”).
Several key amendments, relevant to the photovoltaic solar sector are introduced. We focus on two: the introduction of a fixed FiT level for the life of each Power Purchase Agreement and an attempt to introduce predictability in the capacity available for grid connections by agreeing detailed plans at the beginning of each 1 year period.
We find that the approach of having a fixed price/FiT level for the life of each agreement or 25 years (whichever is the shorter) is superior to the existing approach to pricing and contributes to certainty;
We would expect that there is a substantial risk that authorities and the Regional Electricity Distributors (REDs) would experience uncertainty as to the legal position in advance of the coming into effect of the new legislation and would lose enthusiasm in implementing the existing position – we would strongly urge that the Bill contains an express statement (of the obvious point) that the applicable regime remains in place until a named future date;
As regards one of the other major innovations — the introduction of a system of advance planning of the available capacity, we find this on the whole positive but would caution as follows:
a) a flattening of the decision-making structure may be preferable;
b) a greater clarity and spelling out of procedure as to the planning process would be needed at the level of implementing regulations under the Statute (and no doubt is being planned);
c) an express obligation for REDs and SCEWR/NEC to make public specific data (eg, access maps by capacity and levels of connectible voltage) (eg, via the web as well as their offices) may be recommended;
d) mechanisms for private as well as private enforcement (carefully considered and agreed for their practicability with stakeholders) would be highly desirable.



Recent work:

Enterprise building leasing for Heitman fund

NBLO advised the investment fund Heitman European Property III on the leasing to various blue chip clients of its Enterprise building which consists of 5,200 m2 of GLA of Class A office space. NBLO went on to provide ongoing legal services to the Fund concerning these leases.

© New Balkans Law Office 2017