Most of the services are used by mobile operators, district heating copmanies and water supply companies as well as collector companies, says the Chairman of the Sofia Arbitration Court Dragomir Zhelyazkov

INTERVIEW: Arbitration court resolves any dispute within 6 months and much cheaper than civil court.

Author: Samuil Dimitrov, newspaper “Sega”- Issue 4782 (205) 03 September 2013

Dragomir Zhelyazkov was born in Burgas in 1978. He graduated in law at the Sofia University "St. Kliment Ohridski". In the period 2005-2010 he worked as a legal consultant. From 2011 to 2013 he is an adviser to the former Minister of Finance Simeon Djankov's political office, then is the head of the Cabinet of the Minister of Social Affairs Deyana Kostadinova. Since July 2013 he has been Chairman of the Sofia Arbitration Court at the “Legal Assistance and Mediation Association” non profit organization..

- Mr. Zhelyazkov, the arbitration is not very popular in Bulgaria. This is also reflected in the fact that hundreds of thousands of cases are brought to ordinary courts each year to resolve any disputes. In this sense, what is the advantage of arbitration before traditional civil case?

- First, I have to say that this is a court, but a kind of contractual court. I.e. the parties may agree that all disputes between them will be settled in the relevant arbitration instead of in the civil court. I say that, because there are a few arbitration courts in Bulgaria and it has to be agreed which one will be used.

Arbitration is really not so popular yet. I deeply believe, that his future belongs to him. In favor of this statement, we can point to many things. The main thing is that in Western Europe and in much of the world, arbitration courts are much more popular and businesses generally prefer them to a great extent. It goes to that, in more developed countries, the arbitration courts are no less burdened than the civil court. I give you an example - the London arbitration court is moving at the promptitude of the Royal Court. Not for any other reason, only because of the great interest. The Arbitration Court is an excellent alternative to civil courts in civil and commercial matters. This is the trend on a global and European scale, such will be the case in Bulgaria. There are already the first steps in this direction.

- Is it obligatory in a contract to have a clause suggesting arbitration, or may be used without such a condition?

- The common case is to have such a clause. It can be both in the main contract and in subsequent annexes. It may be in the business correspondence between the parties, provided it is signed by both parties. It may even be in the invoices issued, it may be in any written document, provided it is signed by both defendants. It does not necessarily mean that this document is a contract, an agreement or whatever it is, provided the will is objectively in writing and with the signatures of both parties. This is enough to be able to take advantage of this opportunity.

There are many contracts that are not formal, i.e. we do not necessarily sign contracts for many things - for example, if you do some service for me and you issue me an invoice or other document, we do not need to have a contract signed but the deal has actually done, its real. And if I have any claim, the invoice itself should be given this opportunity. An invoice can not lead to a revision of the entire contract, but it can record everything - that any disputes about this delivery or service will be settled in arbitration court.

- What follows from now on?

- The mass case is by arbitration clause in a written document. There are also two other hypotheses in which arbitration proceedings are admissible and possible. The first is if the plaintiff filed of statement ofclaim and the defendant agreed that the case will be hearing by arbitration court. I.e. they do not have an arbitration clause, but when it comes to a case they have one will. The third hypothesis is when the plaintiff filed a case in the arbitration court and the defendant didn’t make objection against the claim within the deadline for responding to the claim.

- Silent agreement?

- Yeah, someway. This means that he accepts the trial at the arbitration court.

- How are the arbitrators chosen?

- There are two options. Disputes can be resolved in two configurations. First, an arbitrator in small-law cases, in quick proceedings, is usually dealt with by one arbitrator. It is possible for the parties to indicate it even in advance, if they have a signed contract and a clause, they can say that the arbitrator will be specific. However, when there is more complexity or the contract is recorded, the case is decided by a composition of three arbitrators. Each of the parties  name an arbitrator and  the Cairman of the Arbitration court appoints the chief of the Decision making authority, as well as his/her deputy. These are the two options.

- Is the unilateral will of both parties to resolve the dispute through arbitration means that both sides are ready to rebate?

- No, the dispute has a substantive legal part, which is the subject of the dispute. The other part is procedural or legal. One has nothing to do with the other. Once there is a dispute, each party holds on to its own, considers it right, and to receive or not to give anything. It is good to distinguish between the arbitration court and mediation or reconciliation. A dispute can be resolved through negotiations, where there may be concessions. Arbitration is a dispute where it goes like a dispute. A settlement is possible at any moment.

- How long does a court proceedings last approximately?

- Normally between 2 and 6 months, depending on the complexity of the case. Here we open the question of the biggest advantage of arbitration. That's the promptitude. The practice shows that the main problem of the Bulgarian judicial system is the promptitude. This is not a problem of our system only, but of anywhere in the world. In general, wherever we ask businesses in developed countries, the answer is the same: "Courts are too slow." In Bulgaria we talk about difference in times. Even if we only speak of one instance in the busiest courts - the Sofia civil courts, the arbitration surpasses them at times. And when we talk about three instances, you know what that means. In practice, there is only one instance and our tariff is lower than that of the civil court. Assuming that in the state court the fee is 4% of the material interest, we have a scale, there is no fixed percent. An interest of BGN 5 to 10 thousand is a different amount, from 50 to 100 thousand leva and etc.

- How many cases are there at the moment?

- By the six months are just over 36 thousand, which makes us the largest arbitration court in Bulgaria in number of cases.

- What are the cases?

- Most often our services are used by companies that have money to collect. These are mobile operators, district heating companies, energy suppliers, water supply companies, etc. Our other service users are leasing companies. They need a title to start a lawsuit and see in the arbitration a perfect alternative within a month or two to get a writ of execution and to take action against the debtor.

- Mobile operators had the habit of transferring their obligations to collecting companies, that act quite harshly.

- These companies also use our services.

- Does this mean that the practice of annoying phone calls to debtors, threats, etc, ends?

- I think threatening time has long passed. There are certainly no calls, but people are already aware that there is no way anyone can beat them for $ 20. Arbitration helps - they have been gathering out-of-court with threats or through a case. The focus was on the cheaper way- calls and letters. When there is arbitration proceedings, which are several times faster, disputes are resolved in this way.

- How are the debtors informed of these cases?

- They have to give consent or not to object...

- Does this mean, that this is a new way for companies to win a case without the consumer ever knowing that there was one?

 

- There's no way this can happen. The arbitration court acts like any other - there are period in which everyone can take protection, and most importantly, a notification is run for each procedural action. They are like summon, and we are the only arbitrator who has summons. There are currently 64, which is a serious arsenal, we will soon become 90. We have responsible in all regions of the country. The use of arbitration does not mean that the  claimant wants a proceeding to develop quietly. We do not allow it. Evidence to this is that the few cases in which an claim for revocation of a arbitration decision was filed in the Supreme Court of Cassation, which is the only way to cancel decision. We did not have cases where the Supreme Court had cancel a decision because of unsuccessful procedures.