Commercial Dispute Proceedings under Articles 365–378 of the Bulgarian Civil Procedure Code

The key feature of the procedure for commercial disputes under the current Bulgarian Civil Procedure Code (CPC) is the two-stage exchange of written pleadings. It is intended to speed up the proceedings by allowing the subject matter of the dispute, the parties’ factual allegations and their requests for evidence to be identified during the preparatory stage.

The defendant has two weeks to file a statement of defence. Its required contents and the matters that are barred if not raised within that period are the same as in ordinary civil proceedings. No later than in the statement of defence, the defendant may object that the dispute should not be heard under the special procedure for commercial disputes. The court may also rule on this issue of its own motion within the same period. An order directing that the case proceed under the ordinary procedure may be challenged by a private appeal. If the court dismisses the defendant’s objection, its ruling is not subject to appeal.

After the time limit for the statement of defence expires, the defendant loses the opportunity to state its position on the claim, raise objections, identify evidence and submit written evidence, unless the omission resulted from special, unforeseeable circumstances. The law does not expressly state that the same preclusion applies to filing a counterclaim, joining a third party as an assisting party, or bringing a recourse claim against that party; this is derived by interpretation. Those rights should therefore be exercised within the time limit for the statement of defence. By contrast, in its additional statement of defence the defendant may bring only an incidental declaratory claim and identify and submit new evidence that it could not have identified and submitted with the original statement of defence.

Article 371 CPC allows the defendant to raise two types of set-off defence: set-off against a disputed claim and set-off against an undisputed claim. The first may be raised until the close of the evidentiary hearing at first instance, where proving it does not require new evidence. The second may be raised until the close of the evidentiary hearing on appeal.

Once the court accepts the defendant’s statement of defence (the law does not impose an express duty on the court to check whether it is procedurally regular), it sends a copy with the attachments to the claimant, who may file an additional statement of claim within two weeks. By that point, it has been finally determined whether the case will follow this procedure, because the defendant’s deadline to object and the court’s deadline to rule on its own motion both expire with the period for the statement of defence. If the defendant filed its statement before the two-week period expired without objecting to the ordinary procedure, it loses the opportunity to request that procedure for the remainder of the period. The court likewise no longer has that opportunity: if the case has not been transferred to the ordinary procedure when the statement of defence is filed, the court must serve it and its attachments on the claimant and inform the claimant of the right to file an additional statement of claim. In that additional statement, the claimant may generally clarify and supplement the original claim within the factual grounds already pleaded—that is, it may rely on other facts forming part of the original grounds without changing those grounds. Within the same period, the claimant may also amend the claim as to its grounds or relief, join a third party as an assisting party and bring a recourse claim against it, bring an incidental declaratory claim, and identify and submit new evidence that could not have been identified and submitted with the original statement of claim. An amendment to the amount of the claim, or a change from a declaratory claim to a claim for an order for performance and vice versa, may be made under the general rules until the close of the evidentiary hearing at first instance.

After accepting the additional statement of claim, the court sends a copy with its attachments to the defendant, who may file an additional statement of defence within two weeks. In it, the defendant must respond to the factual allegations and requests made in the additional statement of claim; it may also bring an incidental declaratory claim and identify and submit new evidence that it could not have identified and submitted with its original statement of defence (Article 373 CPC). The law permits the defendant to bring an incidental declaratory claim at this stage because the claimant may have disputed, in the additional statement of claim, a preliminary legal relationship on which the defendant relied in its statement of defence.

After receiving the additional statement of defence—or after the deadline for filing it expires—the court rules in closed session on the admissibility and procedural regularity of the parties’ requests, their objections, all preliminary issues and their requests for evidence. Unlike ordinary civil proceedings, where preliminary issues are considered at the first hearing and the parties’ factual allegations may also be clarified there, the parties’ positions in commercial-dispute proceedings are clarified during the exchange of pleadings. At the hearing, the court therefore proceeds directly to its oral report, the parties’ submissions on that report and the directions given, an indication of the procedural steps they may take, the collection of admitted evidence and oral argument.

Article 376(1) CPC allows the court to decide that the case can be heard in closed session when all documents have been submitted during the exchange of pleadings and hearing the parties is unnecessary. In that event, the parties are given a period to file written submissions and replies to the opposing party’s submissions; the opposing party’s written submissions are served with an indication of the time limit for filing a written reply. Under Article 376(2), the court also hears and decides the case in closed session when the parties request this. Their request is not binding on the court, although it would normally be taken into account.