Vasil Raychev, PhD[1]

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

In the legal theory, it is constantly accepted that the liability for costs is the right of one of the parties to demand and the obligation of the other party to pay the costs to the party in favor of which the court has ruled the judgement[2]. In its interpretative practice, the Supreme Court of Cassation points out that the liability for costs in the civil proceedings is a material legal relationship between the parties in a case and is a no-fault delictual liability for the costs made by the other party in the event of an unfavorable outcome of the case[3]. In the literature from the past century it is stated that, despite being strict and no-fault, the liability for costs is not a liability for damages, as only the liability for abuse of procedural rights (respectively their improper use) is such[4], but I believe that in both cases de lege lata (Art. 3 and Art. 78 of the Civil Procedure Code /CPC/) the liability is delictual, and regarding the liability for costs, the unlawfulness consists in the discrepancy between the legal position claimed by the party who has lost the dispute and the objective one, established by the court and asserted during the proceedings by the successful party. Thus, a conclusion can be drawn that the initial condition for the award of costs to the party is the existence of an opposite party in the same proceedings, i.e., the proceedings being bilateral and having a competitive nature.

The proceedings for the issuance of a writ of execution under an arbitration judgement are unilateral non-competitive private proceedings, which do not reveal significant differences from the proceedings for the issuance of a writ of execution under a judgement issued by the state court, except for two specific features, respectively for two special provisions applicable in them.

The first specific feature can be found in the provision of Art. 51 of the International Commercial Arbitration Act /ICAA/, according to which the writ of execution under the final arbitration judgement is issued at the request of the interested party by the district court in the region where the debtor’s official address or seat is located (derogating from the rule of Art. 405, para. 2 of the CPC, according to which the application for issuance of a writ of execution under an act of the state court shall be filed to the court of first instance which has dealt with the case or the court which has issued the enforcement order, and when the act is subject to immediate execution—to the court which has issued the judgement or the enforcement order), as the arbitration judgement and the proof that it has been served on the debtor are attached to the application. The logic of the legislator is that, the arbitration being a non-state and non-court judicial body, whose judgements are also final and not subject to a judicial review (Art. 38, para. 4 of the ICAA), the check under Art. 406, para. 1 of the CPC, whether the arbitration judgement is formally regular and whether it certifies an enforceable receivable against the debtor shall be made by a more experienced (district) judge.

The second specific feature has found normative expression in the provision of Art. 14 of the Tariff for the State Fees Collected by Courts under the Civil Procedure Code, according to which, upon an application for the issuance of a writ of execution under a judgement of the arbitration courts, a proportional fee of 0.2 percent of the amount for which the writ of execution is requested is collected, but not less than 50 Bulgarian levs /BGL/ (derogating from the general rule of Art. 11 of the Tariff, according to which upon an application for the issuance of a writ of execution, as well as in case of issuance of such ex officio, a simple fee of BGL 5 is collected). By setting such an elevated economic threshold, the legislator has again attempted to limit the cases of improper supply of condemnatory judgements in a single-instance non-court proceedings as the arbitration.

Outside the two above-mentioned specific features, however, the proceedings for the issuance of a writ of execution under an arbitration judgement develop in accordance with the general order and the provisions of Art. 405 et seq. of the CPC apply to them. Therefore, there are no special norms establishing different rules regarding the costs in these private proceedings, and there is no legal basis for concluding that the applicant in these proceedings shall be awarded costs, so four considerations in this regard should be highlighted.

Firstly, the proceedings for the issuing of a writ of execution are unilateral (as the person initiating them is an applicant, not a plaintiff or a claimant), and in these proceedings there is no defendant at all, and the court shall not declare such a party, who, respectively, could also be ordered to pay costs. Therefore, the debtor does not have the right to make an objection under Art. 78, para. 5 of the CPC for excessiveness of the attorney’s fees paid by the applicant for the private proceedings, which is an additional argument in support of the conclusion that subsequently the debtor shall not be ordered to reimburse the applicant for the relevant costs. In addition, the proceedings for the issuance of a writ of execution are not competitive in nature and could become competitive only from the moment when the ruling, which grants or rejects in whole or in part the application for the issuance of a writ of execution, is challenged by a private appeal under Art. 407 of the CPC, and in this case the other party shall be sent a copy of the private appeal and given a deadline for submitting a response (Art. 279 in conjunction with Art. 276, para. 1 of the CPC).

The other three considerations for concluding that the applicant in the proceedings for the issuance of a writ of execution under an arbitration judgement shall not be awarded costs will be pointed out in Part II of the present article, in which the most recent practice of the Bulgarian courts on the issue will also be reviewed in an analytical and critical manner. The problems identified during the in-depth research of the issue could serve as a basis for legislative changes, which in the future would make the court practice consistent and more fair. That is why in the second and final part of the article, some proposals de lege ferenda will be formulated as well.

[1] Attorney-at-law, PhD in Civil procedure law.
[2] Stalev, Z. Bulgarian civil procedure law. Fourth complemented and revised edition. Sofia: SE “Science and Art”, 1988, p. 326.
[3] Interpretative judgement № 1 of 11.12.2018 on interpretative case № 1/2017 of the General Assembly of the Civil Chamber of the Supreme Court of Cassation.
[4] Stalev, Z. Op. cit., p. 327.