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Advising on an LCIA claim

Suppliers with less bargaining power often accede to arbitration (or adjudication) clauses which make bringing or defending a claim prohibitively expensive.

In such cases, it is especially important when acting for the potential claimant (and subject to the overall viability of the claim), to offer a cost-effective solution to allow the claim to get off the ground. This may include assessing whether the arbitration clause is likely to be found effective or pathological, and whether it may be permissible and advisable to launch court proceedings instead (which can often be more economical especially in their early phases).

It is also helpful to be able to rely on advice which is simultaneously excellent in relation to both the jurisdiction in which enforcement is likely to be sought (e.g., Bulgaria) and the jurisdiction whose governing law the parties have agreed to apply.

We recently acted for a potential claimant in such a situation alongside their existing Bulgarian counsel to advise on the interplay of the arbitration rules of the London Court of International Arbitration (LCIA) and Bulgarian law and on the mechanics and prospects of a claim. We regularly and successfully collaborate with clients’ existing counsel to achieve the best results for such clients.

An ~€1M claim on behalf of real estate consultants

NBLO’s dispute resolution lawyers represented UK-based real estate consultants who had structured a € 40-million-worth commercial property project on the Bulgarian Black Sea coast.  In breach of an applicable contractual obligation, the consultants had not been paid the agreed success fees for their services. The then director of the defaulting party had been tragically shot dead in the meantime.

Following a hotly contested first instance, with below-the-belt attempts by the other side (the least untypical perhaps being the claim that the contract had been a forgery and a trial-within-a-trial on the issue), our team succeeded in obtaining a judgment at first instance.  The parties were then able to achieve a significant settlement.

The key skills we were able to bring to bear in providing a solution included searching for solutions across the problem domain; appropriately involving representatives of Bulgaria’s EU partner member-states to buttress judicial independence; and resourcefully dealing with heterodox approaches by our judicial opponents.

Stopping the improper use of insolvency proceedings

A client of our dispute resolution team (led by Kamen Shoylev and Yordan Neshkov) was recently the subject of an indirect claim by a Bulgarian bank with which this client has been engaged in a multi-stage dispute. Unusually, the bank acted through a vehicle registered in an African state, which made an unfounded claim in the tens of millions of euros against our client and sought the commencement of judicial insolvency proceedings against this client. The offshore vehicle was chosen to isolate the bank from liability and create certain evidential difficulties for our client's representation.

NBLO succeeded in terminating the insolvency proceedings, with direct loss fully awarded to our client. A second claim to recover our client's indirect losses is currently under way.

Where targeted in this way through insolvency proceedings, a company may be prevented from trading properly (e.g., by suffering restrictions on its financing or being unable to participate in public procurement).

Through our considerable experience in insolvency litigation, both entirely domestic and where there are European and cross-border elements, we are ideally placed to assist clients in resisting such attacks and recovering the real and considerable losses that may be suffered.

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.

Filter AS

We have been providing day-to-day corporate and commercial advice to the Bulgarian subsidiary of Filter AS, an Estonian joint-stock company with operations across Central and Eastern Europe. Recently, we have supported the management team of the company in preparing and submitting its bid in a public procurement project financed by the European Bank for Reconstruction and Development.

Real Estate Projects

We have carried out significant legal advisory work for a group of Israeli investors owning more than fifteen big real estate projects in Bulgaria. We have provided complex legal advice related to the restructuring of the loan facilities of the local subsidiaries provided by an Austrian-based financial institution.

Überbloc (a shari’a-compliant CEE investments advisory boutique)

We have advised Überbloc and indirectly certain of its clients (family offices and/or pension trustee professionals) on certain transactions our client was responsible for structuring. Our consultations focused on the creation of tax-efficient pension and non-pension related structures and on the corporate reorganisation of existing investments through Bulgarian companies.

Balkanstroy: entry to the UK market

We represented Balkanstroy in the UK, creating a local trading subsidiary involved in the marketing and sales of real estate held by Balkanstroy and companies in its group, and in ensuring its compliance with UK employment, tax, landlord and tenant and regulatory issues. We also defended the subsidiary in the matter of a trade mark breach suit threat brought by a UK TM holder represented by a well-reputed UK law firm.

Acting for The Walt Disney Company in a dispute

TWDC is a global media player whose TV channels are distributed, inter alia, to Bulgarian viewers. NBLO assisted TWDC’s London office and TWDC’s English counsel in a dispute with a Bulgarian media sales agent which had withheld substantial sales revenue from our client in breach of contract. The dispute was governed by English law but involved substantial Bulgarian law issues relating to insolvency, civil procedure (including in particular enforcement, interim relief, issues of corporate capacity and private international law.

Logica plc, now part of CGI, a consultancy & outsourcing business

NBLO has provided broad support to Logica’s CEE regional head office, including on the validity of certain commercial agreements and proposed agreements and on effecting various company secretarial actions. Our commercial work for this client is representative of our time-sensitive non-contentious practice. The firm’s emphasis on an integrated cross-jurisdictional approach and dual-qualified staff have also proven valuable in dealing with the need for valid certification by senior UK-based directors and the resignation of other UK-based individual directors who were no longer available and/or willing to execute documentation.

Acting as a Bulgarian law expert in the context of a FIDIC Dispute Adjudication Board

NBLO acted as Bulgarian law experts to a Dispute Adjudication Board constituted under the terms of a FIDIC modelled construction works agreement between the Bulgarian government and a continental Europe-based general contractor. Advised in detail and in successive iterations in relation to the Bulgarian law questions raised by the DAB at the summary of issues stage as well as at the reply and comments stages. Of particular importance to the DAB was the ability of NBLO lawyers to advise on the distinctions between Bulgarian law principles and proximate English and Swiss law concepts in the law of contract as well as to advise on the direct effect and direct applicability of certain European Commission legislation as a matter of Bulgarian law.

Austrian telecommunications operator’ Bulgarian operations

Members of our team advised the largest Austrian mobile telecom operator on various aspects of their operations in Bulgaria:

  • assisting the client in an authorization procedure before the Bulgarian telecommunications regulator;
  • regulatory and commercial aspects of the group’s cash pooling system;
  • advising the client on a complex debt/equity swap transaction;
  • providing on-going legal advice and assistance with regard to corporate matters.

AFI Europe group - ongoing legal support

In 2012 NBLO has continued to provide a full range of legal advice to its long-term client AFI Europe NV and its seven subsidiaries in Bulgaria. Our advice has ranged over a variety of issues – from day-to-day corporate governance and company secretarial work, to complex corporate transactions and banking and financing matters. We have also carried out two due diligence projects on behalf of AFI Israel Properties Ltd. in view of the contemplated public offering of the company on the Israeli Stock Exchange.

Železárni Veselí

We have provided full legal support to the establishment and local operations of the Czech-headquartered steel holding company Železárny Veselí. We have acted on behalf of the client on the following major assignments:

  • Incorporating the joint venture structure of four Bulgarian companies in which the Czech investor holds 76% of the share capital
  • Drafting the agreements required for the operation of four photovoltaic power plants with a total capacity of 20 MWp
  • Representing the borrower on the financing of the four Bulgarian companies by a Slovak bank
  • Providing litigation advice on the feasibility of challenging the recently-introduced access fee for photovoltaic power plants in the country.

Sale of licences for EMMIS Communication

NBLO provides a multitude of legal services to USA media company EMMIS Communications which has several operations in the radio broadcasting, television broadcasting and magazine publishing markets. Specifically in Bulgaria, the company currently runs one of the largest radio station networks which includes such popular stations as FM Plus, Fresh FM, and Star FM. NBLO has fostered a close relationship with the company. NBLO handled all legal matters arising from the sale of their various licences and continues to provide commercial advice in this area as well as general corporate law advice on their Bulgarian operations.

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.

Joint venture structuring advice for Gama Enerji

NBLO provided joint venture structuring advice to Gama Enerji A.S., the energy investment subsidiary of GE operating in Turkey, Ireland and the Middle East in connection with a contemplated solar photovoltaic investment in Bulgaria.

Privatisation of major Macedonian power generator for Unit International SA

NBLO advised Unit International S.A., a Turkish multinational, on their involvement in the privatisation of a Macedonian power generator. We provided a range of legal services to the client concerning joint venture structuring with the focus being on advising as to the exact form of the acquisition vehicle.

How may we help you?

We’re here to help you resolve your Bulgarian legal matters in a timely and cost effective manner. For more details about our Bulgarian Legal services, please contact:

Nevena Bekyarova

© New Balkans Law Office 2017