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New amendments to the Civil Procedure Code – no arbitration for consumer disputes and european account preservation order procedure

The latest amendments to the Civil Procedure Code were promulgated by the 43rd National Assembly in the State Gazette, Issue No. 3 from 24th January 2017 and Issue No. 13 from 7th February 2017.

The first group of amendments refers to the possibility of resolving disputes by an arbitration court and reducing legal fees in legal proceedings.

According to the new version of Article 19 of the Civil Procedure Code (CPC), the disputes on which one of the parties is a consumer cannot be dealt with by arbitration – only the state courts are competent. By “consumer” the legislator refers to “any natural person who acquires goods or uses services not intended to engage in commercial or professional activity and any natural person who, as a party to a contract under this law, performs activity outside his trade or professional activity.“

Substantial amendments were made in Article 78, paragraph 8 of the CPC, regulating the due remuneration for legal advisers representing sole traders and legal entities. Until now, they were entitled to remuneration at the minimum rate provided in the lawyer’s tariff (from three hundred BGN to several hundred thousand BGN, depending on the material interest of the case). After the amendments, their fees were significantly reduced by being equated to the maximum amount determined by the order of Art. 37 of the Legal Aid Law, or in the most general case – for protection in cases with a fixed amount of interest the remuneration will be from 100 to 450 BGN.

There is an important amendment in Article 405, paragraph 3 of the Civil Procedure Code, according to which the application for the issuing of a writ of execution on the basis of an arbitration decision will be submitted to the district court in the area of which the debtor’s permanent address or registered office is located. Until the entry into force of the amendments, the sole court competent to issue a writ of execution after arbitration proceedings was the Sofia City Court.

The second group of amendments concerns the creation of a completely new procedure for the issuance of a European bank account preservation order. The supplements were adopted in connection with the implementation of Regulation (EU) № 655/2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters, which entered into force on 18th January 2017.

The existence of a cross-border case occurs when the creditor is domiciled in one Member State of the European Union and the court and the bank account subject to preservation are located in another Member State or when the court examining the application for a preservation order is in one Member State, and the bank account subject to the preservation order is in another Member State.

A court of competent jurisdiction to issue an European account preservation order is intended to be the first instance court which will hear the case on the substance, if the issue of the order is requested before filling the claim /securing a future claim/. In accordance with the requirements of the Regulation, the possibility to request the issuance of a European account preservation order is provided in any stage of the case, including in the context of cassation proceedings. In the latter case, the order will be issued by the appellate court.

 

author: Vesela Velinova, attorney-at-law

Member of “Velinov and partners” Consulting House

Posted in Uncategorized