Effective 1 August 2025, Bulgaria introduced significant amendments to its arbitration law, retitled from the International Commercial Arbitration Act (ICAA) to the broader Arbitration Act (AA). While the reform includes two welcome developments – the reinstatement of public policy as a ground for setting aside of arbitral awards and the removal of burdensome formalities in the enforcement of foreign awards – most changes raise substantial concerns about the autonomy and practical viability of arbitration proceedings seated in Bulgaria. Here is a summary of the most substantial amendments, concerning international commercial arbitration.

I. Mandatory Registration of Arbitration Proceedings in the “Registry of Arbitrations” – а New Bureaucratic Layer

A central feature of the reform is the mandatory registration not only of all Bulgarian arbitration institutions, but also of all arbitral proceedings seated in Bulgaria in an official online based Registry of Arbitrations (“the Registry’’) maintained by the Ministry of Justice. The new registration obligations apply to the following proceedings, initiated on/following 1 August 2025:

• All arbitrations administered by foreign arbitral institutions, where the seat (place) of arbitration is in Bulgaria
• All ad hoc arbitrations, seated in Bulgaria.

The following information regarding the arbitral proceedings must be registered:

• Date of submission of the request for arbitration
• Names and addresses of the parties
• Names, professions, and contact details of the arbitrators
• For institutional cases: name, legal identification data, and registered seat of the administering institution
• Date and reference number of the arbitral award (once issued)

The following key documents must be submitted to the Registry:

• Request for arbitration;
• Reply to the request for arbitration;
• hearing notices and information on the dates and means of conducting scheduled upcoming hearings
• the award itself.

All information will be treated in accordance with the GDPR and the Bulgarian Data Protection Act.

According to the amendments, the register is public solely in relation to two categories of information:

• The names and professional backgrounds of arbitrators affiliated with the listed arbitration institutions
• The names of the arbitration institutions themselves

All other data and documents recorded in the register will be accessible only to a narrowly defined group of officials: the Minister of Justice, officials responsible for maintaining the register, the Inspectorate to the Minister of Justice (under the Judiciary Act), and the state courts.

The obligation to register the above information lies with the presiding arbitrator. They must file an application for registration within 7 days of constitution of the tribunal/of occurrence of each respective event, subject of registration.

In case of any irregularities in the registration application, the Ministry of Justice may give instructions that must be implemented within 7 days of their service. The Ministry is authorized to deny registration by a reasoned order which is subject to judicial appeal.

Detailed rules on registration, including the fees for registration will be elaborated in an Ordinance by the Ministry of Justice, yet to be issued. The Ordinance must be adopted, and the Register established, within four months of the amendments’ promulgation – that is, by approximately 1 December 2025. However, this deadline is indicative rather than binding and may be subject to significant delay in practice.

Thе registration obligations aim to enhance transparency and combat misuse of arbitral procedures and fake arbitrations. However, they also place a substantial administrative burden on arbitrators and arbitral institutions, who are not expected to be accustomed to domestic formalities under Bulgarian law.

It is also important to note that arbitrators and tribunals are not allowed to issue any awards (including on currently pending arbitrations) before the registration is completed. This rule could cause significant delay, because currently it is uncertain whether the register will be created by the Ministry of Justice and start working within the initially set 4-month period.

II. Nullity of the Award for Failure to Register

According to art. 47, Para 2 of the AA, an arbitral award is null and void, if it is issued by an arbitration institution/arbitrator not registered in the Registry. Nullity of the arbitral award could be declared: 

• Upon a declaratory claim, filed by a party to the dispute/its successor before the Bulgarian Supreme Court of Cassation without any time limitation;
• Ex officio by the Supreme Court of Cassation, when the latter rules on a claim for setting aside an arbitral award.

This is perhaps the most controversial amendment. While intended as a safeguard against abuse, this unproportionate sanction may have far-reaching implications:

• It introduces a domestic procedural formality as a prerequisite for the validity of an award, potentially clashing with the principle of finality that underpins international arbitration
• Foreign institutions/ad hoc arbitrations and arbitrators in general may inadvertently fall afoul of the registration rules due to unfamiliarity with Bulgarian law
• The rule risks creating uncertainty for award creditors and complicating the enforceability of awards.

III. Staying Enforcement of Awards Without Guarantee Payment – а Controversial Expansion of Judicial Discretion in Stays of Enforcement

The amendment to Article 48 of the Arbitration Act introduces a notable – and arguably problematic – shift in the legal regime governing the stay of enforcement of arbitral awards pending setting aside proceedings. While the previous version of the provision required a mandatory security (guarantee payment) in the amount of the interest pursued through setting aside, the new wording grants the Supreme Court of Cassation broad discretion to suspend enforcement without requiring any security, provided that “compelling written evidence” of grounds for setting aside is presented.

In stark contrast with the established standards (e.g. Art. 36, Para. 2 of the UNCITRAL Model Law), this change effectively places the decision entirely in the hands of the Supreme Court of Cassation. As there are no objective criteria for what constitutes “compelling” evidence, the amendment creates room for inconsistent or unpredictable judicial practice. The removal of the security requirement – traditionally seen as a safeguard against abuse of setting aside proceedings – raises concerns about potential delays and misuse, particularly in high-stakes commercial disputes. Moreover, while the amendment preserves the validity of interim measures and enforcement actions carried out before the stay, the uncertainty introduced by this discretionary standard may undermine the finality and enforceability of arbitral awards.

IV. New Rules with regard to Serving of the Request for Arbitration and Other Procedural Documents

The amended Article 32 of the Arbitration Act provides for significant changes of the rules with regard to serving of the request for arbitration.

The request for arbitration can now be served to parties on the territory of Bulgaria only through licensed postal or courier operator or through a bailiff or a notary.

Serving of documents related to the arbitration by email is possible only in case that the respective party (addressee) explicitly requests in writing such manner of serving. For the respondent this is possible only after a hard copy of the request for arbitration has been served by some of the other allowed means.

Such approach is in contradiction to the broadly established practice in international commercial arbitrations to serve the request for arbitration to the respondent (and other procedural documents) only by email.

More importantly, if the serving of the request for arbitration or the notification for the first hearing is unsuccessful, the arbitration proceedings could be terminated. In this case the claimant could refer the dispute to the state courts.  

Although Art. 32, Para 4 and 5 provide for some measures against bad faith behavior of respondents (e.g., the papers will be considered duly served if the respondent entity cannot be found at its registered address or the correspondence address provided in the contract; if the respondent fails to receive the papers after it has been duly invited or if the respondent refuses to receive the papers), these rules might not be enough to cover all possible practical cases of respondents intentionally avoiding the serving. Also, such rules do not apply to individuals.

This amendment is very controversial, because it creates a risk that a respondent acting in bad faith could obstruct the arbitral proceedings simply by avoiding proper receipt of the request for arbitration. In such case the claimant might be forced to refer the dispute to the state courts, despite the valid arbitration agreement.

V. Two Positive Developments

Amid the broader tightening of procedural requirements, two notable amendments should be welcomed by arbitration users and practitioners:

1. Public Policy Restored as a Ground for setting aside

Article 47 of the Arbitration Act now explicitly lists contradiction with public policy as a ground for setting aside an arbitral award. This ground was repealed in 2017, although identical ground for refusal of recognition and enforcement of foreign awards is explicitly provided in the New York Convention. Its reinstatement aligns the Bulgarian framework more closely with international standards, including Article 34 of the UNCITRAL Model Law and Article V of the New York Convention.

2. Some Simplifications in the Enforcement proceedings

Art. 51, Para. 3 of the ICAA was repealed. This provision made references to the requirements for enforcement of foreign state court judgments under articles 118–122 of the Bulgarian Code of Private International Law (CPIL) with regard to the procedure for recognition and enforcement of foreign arbitral awards. This had led to case-law of the state courts, requiring:

• Notarial certification of arbitrators’ signatures on the award.
• Apostille or legalization of the notarial certification of the signatures on the arbitral award.
• Submission of a certificate that the award is in force and binding, issued by the arbitral institution or the tribunal.

These requirements were inconsistent with Article IV of the New York Convention, which does not demand such formalities. By removing the internal legal cross-reference, the amendment now should facilitate a more Convention-compliant procedure: foreign awards may be recognized and enforced based on a certified copy of the award and the arbitration agreement, along with a certified translation when necessary. However, this is yet to be confirmed by the future case-law.

This change brings much-needed clarity and removes a procedural bottleneck that had previously generated burdensome formal requirements.

VI. Conclusion

Bulgaria’s 2025 amendments to the Arbitration Act represent a complex recalibration of its arbitral legal framework. The reintroduction of public policy as a ground for setting aside and the simplification of some aspects of the enforcement of foreign awards both mark progress.

At the same time, the new registration requirement for arbitration proceedings seated in Bulgaria, paired with the severe consequence of award invalidity and the expansion of the Supreme Court of Cassation’s judicial discretion in stays of enforcement raise legitimate concerns. They risk overregulating a field where party autonomy, confidentiality, and procedural efficiency have traditionally played a central role.

Foreign arbitral institutions and arbitrators handling cases with a Bulgarian seat should be aware of these new obligations and adjust their internal processes accordingly. Whether Bulgaria’s efforts will strike the right balance between transparency and flexibility remains to be seen. Ongoing dialogue and measured judicial interpretation will be essential to ensuring that these reforms enhance, rather than hinder, Bulgaria’s standing as an arbitration seat.

Author: Asen Stefanov, Pencho Stanchev