In February 2023, an amendment to the Bulgarian Civil Procedural Code introducing obligatory mediation in civil and commercial court proceedings for certain claims was introduced and officially published in the State Gazette. Bulgaria's courts will be obliged to apply the new procedural rules on 1 July 2024. Until then, the courts are only obliged to encourage parties to carry out mediation.
Carrying out mediation will be obligatory only in the following situations where there is a claim or request:
• for apportionment of the use of a co-owned thing under the Ownership Act;
• for monetary receivables arising from co-ownership under the Ownership Act;
• for partition under the Ownership Act in the partition proceeding;
• under the Condominium Ownership Management Act;
• for full payment of the share value upon termination of the participation in a limited liability company under the Commerce Act;
• for liability of a managing director or controller of a limited liability company for damages caused to the company under the Commerce Act.
In other cases explicitly stated in the Civil Procedural Code, the court has the discretion to oblige the parties to carry out mediation. In a limited number of situations, however, the court will not be allowed to oblige parties to carry out mediation such as when the mediation process is precluded by law for the type of dispute concerned; the first communication in the case has not been served on the respondent personally or through another person; or the respondent admits the claim.
It will be possible to carry out mediation at any moment during the pending court case in the first or in the second (appealing) instance. If the parties agree on mediation in the second instance, the court may postpone or suspend the proceeding upon mutual consent of the parties. The parties will be obliged to participate in a mediation within the pending court proceeding only once.
The mediation process must be conducted within a period set by the court, which may not be longer than two months after communication to the parties. Where an agreement has been reached in the mediation process, depending on the content of the said agreement, the case will be dismissed or the court must prove the settlement within seven days after the submission of the application to the court. If no agreement is reached or the settlement as approved refers to only part of the action, the court will proceed with examination of the case for the remaining part.
Benefits of mediation
Upon conclusion of the case with a settlement, half of the paid state fee must be refunded to the plaintiff. In the cases where the settlement results from an agreement concluded in a mediation process or where the proceeding in the case has been terminated owing to a withdrawal or abandonment of the action as a result of any such agreement, 75% of the paid state fee must be refunded to the plaintiff.
The costs in a mediation process, which is conducted within the statutory limits between one to three hours, should be paid by the budget of the court.
For more information on the procedures for obligatory mediation and the impact of these new procedural rules on on-going and future court claims in Bulgaria, contact your CMS client partner or local CMS expert Antonia Kehayova.
Counsel, CMS Sofia