Advanced search

2. Average Dispute Resolution Mechanism

Most of the Treaties provide for three potential institutions a dispute between a foreign investor and the host-state (Bulgaria) could be referred to:

•          ad-hoc arbitration;

•          International Centre for Settlement of Investment Disputes (ICSID);

•          the competent national (Bulgarian) courts/ arbitration.


The different Treaties provide for a number of potential combinations of these institutions. Few of the Treaties admit only the jurisdiction of the national courts or refer all disputes directly to arbitration ad-hoc. Some of the Treaties grant to the investor the possibility to choose upon its own discretion the institution to which to refer the dispute. The majority of the Treaties, however, provide for a differentiation of the procedure and institution disputes should be referred to depending on the nature of the dispute itself.


The most frequently stipulated mechanism involves:

•          Ad-hoc or ICSID arbitration for disputes concerning nationalization or expropriation of investments / property and especially due compensations as well as concerning repatriation (transfer) of investments income, profit and other related funds;

•          Jurisdiction of national (Bulgarian) courts in all remaining cases.

However, any investor considering the possibilities to protect its interests in an investment dispute should in any case thoroughly examine the provisions of the particular Treaty between its country and Bulgaria.