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.
A win in an insurance exclusion clause dispute at the Supreme Court
NBLO's dispute resolution team, led by Yordan Neshkov, secured a success against a large Bulgarian insurer in a claim brought on behalf of a UK national, who had lost her property in a fire. The insurer had refused to pay out under the insurance, on the grounds that a widely drawn clause in its general terms allegedly excused it from paying whenever there was a breach of building regulations, even if (as was accepted in this case) this breach was invisible externally, could not be discovered through reasonable investigation and was not caused by the insured. NBLO had good reasons to argue that this position was unsupported in the Bulgarian Insurance Code or civil law generally and persuaded the Supreme Cassation Court to back it. This is covered more fully in an article on our website.
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