Vasil Raychev, PhD[1]

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

In Part I of the present article, it was stated that there are four 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. The first one—that the proceedings are unilateral—was already indicated and commented, so the remaining three should be examined below.

Secondly, the cases of awarding costs in the court proceedings are exhaustively listed in Art. 78, para. 1-11 of the Civil Procedure Code /CPC/ and the proceedings for the issuance of a writ of execution are not among them. The ruling for the issuance a writ of execution is regulated in Art. 406 of the CPC, but this norm also does not prescribe or allow the ruling to contain a condemnatory disposition or a ruling on the costs claimed by the applicant. It is precisely for this reason that the provision of Art. 406, para. 4 of the CPC expressly establishes that in the proceedings for the issuance of a writ of execution, Art. 247, 250 and 251 of the CPC apply respectively – regarding the correction of a manifest factual error, the complement and the interpretation of the judgement, but not Art. 248 of the CPC, which regulates the complement and the amendment of the judgment in its part on the costs. Therefore, per argumentum a contrario from Art. 78 of the CPC and Art. 406, para. 4 of the CPC, in the proceedings for the issuance of a writ of execution, no costs are awarded. In this regard, arguments could be put forward that a ruling for the issuance of a writ of execution, which contains a condemnatory disposition for costs against the debtor, shall even be declared null and void in this part due to its direct contradiction with mandatory legal norms and the court’s ruling outside its competence, in the absence of such authority.

Thirdly, the party which was ordered to pay a certain amount in the arbitration judgement has already suffered a sanction for the unfoundedness of their submissions, including being ordered to pay the costs in the arbitration proceedings; therefore, its repeated conviction under the same material interest would not only be clearly unlawful but would also contradict fundamental principles of the civil procedure, such as the principle of lawfulness, expressed in the court’s obligation to consider and assess the cases according to the precise meaning of the laws, and when they are incomplete, unclear or contradictory – according to their common sense (Art. 5 of the CPC), and the principle of equality of the parties, including of equal treatment by the court of the parties, expressed in the court’s obligation to apply the law equally to all and not to place one of the parties in a less favorable position than the other (Art. 9 of the CPC).

Fourthly, only if the applicant initiates enforcement proceedings under the writ of execution, the debtor could possibly bear the enforcement costs (Art. 79, para. 1 of the CPC). However, the enforcement begins only when the creditor files an application with the bailiff and presents him with the writ of execution (Art. 426, para. 1 of the CPC), therefore the costs in the independent proceedings for the issuance of a writ of execution preceding the enforcement itself are not considered enforcement costs.

For the sake of completeness, it should be noted that on a general basis in the proceedings for the issuance of a writ of execution, the applicant has the right to be represented by an attorney-at-law (Art. 32, item 1 of the CPC), and according to Art. 7, para. 7 of Regulation № 1 of 09.07.2004 on the minimum amount of attorneys’ fees for defense in the proceedings for the issuance of a writ of execution under the judgements of the local arbitration courts and the agreements concluded before them in arbitration cases, the fee is determined according to the rules for legal representation, defense and assistance in cases with a definite material interest based on half of the amounts claimed. However, as stated, the proceedings for the issuance of a writ of execution are unilateral and their initiation is reduced to the simple submission of a written application to the court, and even if the application is irregular, the court is obliged to ex officio indicate to the applicant in what the irregularity consists and how it can be remedied (Art. 101, para. 1 of the CPC), legal knowledge and qualified defense and assistance are not required for conducting these proceedings, which is why engaging an attorney-at-law in it is a manifestation of “procedural wastefulness” on the part of the applicant and, at the very least, for this reason the costs of the attorney’s fee paid by the applicant shall not be reimbursed.

Given everything stated so far, criticism should be made of the recently emerged court practice, represented by Ruling № 750 of 19.09.2023 on private commercial case № 162/2023 of the Sofia District Court[2], according to which the proceedings for the issuance of a writ of execution under an arbitration judgement were “independent proceedings before a court”, to which the “General rules of Part I of the CPC, according to which the applicant in these proceedings is entitled to costs” were applicable. In the mentioned order, the court even took the liberty to award to the applicant costs for the attorney’s fees paid by them for the proceedings for the issue of a writ of execution in an amount exceeding even the amount of the attorney’s fees awarded to the applicant in the arbitration proceedings themselves. Therefore, if the ruling had entered into force, we would have been confronted with the absurd hypothesis in which, under a ruling for the issuance of a writ of execution, a new ruling for the issuance of a writ of execution should have to be issued for the costs awarded in the first ruling. From this arises the question whether in the new proceedings under Art. 405 of the CPC, the applicant would again be awarded costs, and what about the third, fourth, tenth, etc. proceedings, and in general what are the limits of the liability for costs of the party against whom the issuance of a writ of execution has been requested, and how many times the same party shall pay costs based on the material interest over which it has already been convicted once in the arbitration judgement. It should be noted, however, that the above-cited, obviously incorrect and isolated practice has been overcome, as in its part regarding the costs awarded to the applicant in the proceedings for the issuance of a writ of execution, the mentioned ruling has been invalidated by the final Order № 10 of 08.01.2024 on private commercial appeal case № 1040/2023 of the Sofia Appellate Court[3].

In view of the above, it can be concluded that the applicant in the proceedings for the issuance of a writ of execution under an arbitration judgement shall not be awarded costs. This conclusion arises from the systematic interpretation of the provisions referred to in this article, but in order to avoid misinterpretation of the law and establishment of wrong court practice in the future, it would be appropriate for the legislator to resolve the issue in question de lege ferenda, by creating a new paragraph 12 in Art. 78 of the CPC with the following content: “The applicant in the proceedings for the issuance of a writ of execution shall not be awarded costs”, without the need for an explicit clarification that this rule also applies in the proceedings for the issuance of a writ of execution under an arbitration judgement, which is only a special case but not different proceedings.

[1] Attorney-at-law, PhD in Civil procedure law.
[2] Ruling № 750 of 19.09.2023 on private commercial case № 162/2023 of the Sofia District Court, Commercial Department, Vth commercial formation of first instance.
[3] Order № 10 of 08.01.2024 on private commercial appeal case № 1040/2023 of the Sofia Appellate Court, Commercial Chamber, 5th commercial formation.