Bulgaria became one of the few (if not the only) jurisdictions worldwide whose arbitration legislation is based on the UNCITRAL Model Law on Arbitration and where this ground cannot be used in practice.

This is the result of the amendments introduced in Bulgarian civil procedure and arbitration laws at the beginning of 2017. The reform aimed to ensure a high level of consumer protection by excluding consumer disputes from the scope of arbitration. This in general may be a positive step towards the limitation of abusive practices.

However, the new rules contain some contradictory solutions. One of them is the abolishment of the public policy as a legal ground for setting aside arbitral awards rendered in Bulgaria. The authors of the reform were silent regarding this particular amendment and the general public is still wondering “Why did it happen? Was it a mistake or a deliberate restriction aiming to ensure no one knows what?”.

Our arbitration experts Metodi Baykushev and Martin Zahariev, PhD analyze the amendments in their latest article, arguing that the abolishment of the “public policy ground” contradicts fundamental principles and rights of Bulgarian law which ultimately renders it unconstitutional.

They suggest the possible defense strategy for a party which has lost an arbitration case in Bulgaria and the award violates the basic notions of the rule of law in Bulgaria.

Read the full article “The Revocation of the Contradiction with Public Policy as a Ground for Setting Aside Arbitral Awards under the International Commercial Arbitration Act is Unconstitutional” (in Bulgarian), published by Commercial and Contract Law Magazine, Book 6/2018, Trud i Pravo, here.