On the Damages Claim Against a Foreign State, Brought Before the Bulgarian Court – Part III

The article focuses on the current legal framework and court practice regarding the topic in Bulgaria.

In Part I of the present article, the damages claim against a foreign state, brought before the Bulgarian court, was considered from a procedural legal point of view, while Part II of the article outlined the first two elements of the factual composition of the delictual liability under Art. 49 of the Obligations and Contracts Act /OCA/ that must be present in order for a claim brought under Art. 18, para. 1, item 3 of the Civil Procedure Code /CPC/ to be well-founded: assigned work, in the course of or in connection with the performance of which the tort has occurred, and unlawful conduct of the performer of the work. In order to complete the review of the claim under consideration from a substantive legal point of view, the other three elements forming this complex factual composition will be indicated and examined below.

The damages, the compensation of which may be sought pursuant to Art. 18, para. 1, item 3 of the CPC, may be both material and non-material. The principle normatively established in Art. 4, para. 1 of the Liability of the State and the Municipalities for Damages Act /LSMDA/ that all material and non-material damages which are a direct and immediate consequence of the tort are subject to compensation shall be applied by analogy in the proceedings with a defendant foreign country. In this regard, it should be borne in mind that even if in these proceedings the claimant has not provided sufficient evidence of the amount of the damages incurred by them, according to Art. 162 of the CPC, when the claim is established in its grounds, but there is insufficient data on its amount, the court shall determine the amount at its own discretion or by considering the conclusion of an expert and shall not reject the claim as unfounded. If compensation for non-pecuniary damages is claimed, in accordance with the general rule of Art. 52 of the OCA, the court shall determine its amount as fairness requires.

The causal link between the unlawful conduct and the damages must be direct—the damages must have occurred precisely as a result of the unlawful conduct of the officials (bodies) of the foreign state and could not have occurred if the relevant officials (bodies) had fulfilled their statutory obligations.

Along with the above-listed elements of the factual composition of the special delictual liability of the foreign state under Art. 18, para. 1, item 3 of the CPC in conjunction with Art. 49 of the OCA, there shall be present one more element, explicitly mentioned in Art. 2c of the LSMDA with regard to the liability of the Bulgarian State for damages resulting from a violation of the EU law—the violation must be sufficiently substantial. The term “sufficiently substantial” has no legal definition, and the presence of this element shall be assessed by the court in each particular case, which is a clear manifestation of the principle of resolving the dispute by inner conviction (Art. 12 of the CPC). Nevertheless, it shall be assumed that the violation is sufficiently substantial whenever any of the fundamental rights of the private legal entity are violated (for example, those proclaimed in the Constitution of the Republic of Bulgaria /CRB/, the European Convention on Human Rights, the Charter of Fundamental Rights of the EU, etc.). When assessing whether the violation is sufficiently significant, the court shall also take into account the amount of the damages (their monetary assessment), since the establishment of the delictual liability has not only a reparative nature in relation to the injured party but also a sanctioning nature in relation to the offender, and in criminal law, if the act is committed on a large scale or on a particularly large scale[1], there is an aggravated crime, which determines a greater degree of public danger of the act and, respectively, a more severe punishment for the perpetrator.

With regard to the claim under Art. 18, para. 1, item 3 of the CPC in conjunction with Art. 49 of the OCA, there is no limitation period for its filing, but it should be borne in mind that the claimed receivable for compensation is prescribed with the general five-year statute of limitations (Art. 110 of the OCA), which, for delictual receivables as a rule, starts from the identification of the perpetrator (Art. 113, para. 3 of the OCA) and therefore, on the considered occasion starts from the date of the occurrence of the damages, insofar as the subject of the liability (foreign country) is initially known. From the date of the occurrence of the damages, the defendant enters into delay, which is why from that date the claimant can also request compensation for the delay in the amount of the legal interest (Art. 86, para. 1, sent. 1 of the OCA in conjunction with Art. 84, para. 3 of the OCA).

Insofar as in the proceedings under Art. 18, para. 1, item 3 of the CPC it is possible for the parties to request the hearing of witnesses and/or experts located in the foreign country, i.e., outside the judicial district of the regional court, whose seat coincides with the seat of the competent court, in the phase of the collection of evidence, it is admissible to collect the requested evidence via video conference pursuant to Art. 156a of the CPC (New – SG, issue 98/2020).

For the sake of completeness, it shall be noted that in the event that the damages claim against a foreign state is granted and the defendant exercises their right to appeal the first-instance judgement, the provision of Art. 84, para. 1, item 1 of the CPC, according to which the state is exempt from paying state fees, will not apply, since the legislator has provided this alleviation only and exclusively for the Bulgarian state, which is why the foreign state will have to pay a state fee for the appeal in the amount of 2% of the value of the claim (Art. 18, para. 1 in conjunction with Art. 1 of the Tariff for the State Fees Collected by Courts under the CPC). The foreign state is also not exempt from the state fees due in the cassation proceedings.

From all that has been stated so far, the conclusion can be made that in the modern global and dynamic world, the claim under Art. 19, para. 1, item 3 of the CPC in conjunction with Art. 49 of the OCA could have broad practical applicability, insofar as it is a procedural legal remedy for defense against tort committed to Bulgarian citizens who live, work, or travel abroad, as well as to Bulgarian legal persons that carry out activities outside the country. The possibility for these private legal entities to seek compensation for the damages caused to them by a foreign state before the Bulgarian court and pursuant to the Bulgarian law ensures the observation of the constitutionally established principles that the Bulgarian citizens residing abroad are under the protection of the Republic of Bulgaria (Art. 25, para. 5 of the CRB) and that the Bulgarian citizens, wherever they are located, have all the rights arising from the Bulgarian legislation (Art. 26, para. 1 of the CRB).

[1] Interpretative judgement № 1 of 30.10.1998 on interpretative criminal case № 1/1998 of the General Assembly of the Criminal Chamber of the Supreme Court of Cassation.