Contents
Article 455
A bill of exchange shall contain:
1. the title "bill of exchange" in the text of the document in the language in which the document has been written;
2. unconditional order to pay a certain sum of money;
3. name of the person who must pay (drawee);
4. maturity;
5. place of payment;
6. name of the person to whom or to whose order the sum must be paid (payee);
7. date and place of issue;
8. signature of the drawer.
Incomplete contents
Article 456
(1) A document which does not contain any of the requisites listed in Article 455, shall not be a bill of exchange, except for the cases specified in the paragraphs below.
(2) A bill of exchange in which no maturity has been specified, shall be deemed payable on demand.
(3) A bill of exchange in which no place of payment has been specified, shall be deemed payable at the place indicated next to the name of the drawee, which shall be assumed to be the place of residence of the drawee.
(4) A bill of exchange in which no place of issue has been indicated, shall be considered to be issued at the place indicated next to the name of the drawer.
Bill of exchange to the order of the drawer and against the drawer
Article 457
A bill of exchange may be issued to the order of the drawer himself, as well as against the drawer.
Place of payment
Article 458
(1) A bill of exchange may be payable at the place of residence of a third party, at the place of residence of the drawee, or at another place.
(2) Where the drawer has specified in the bill of exchange a place of payment other than the place of residence of the drawee, without indicating a third party with whom the payment is to be effected, the drawee may determine this third party upon acceptance. It shall be assumed, unless otherwise agreed, that the drawee has undertaken to pay personally at the place of payment specified in the bill of exchange.
(3) Where a bill of exchange is payable at the place of residence of the drawee, he may indicate upon acceptance an address within the same locality where the payment is to be effected.
Obligation for interest
Article 459
(1) In a bill of exchange payable on demand or within a certain term after presentation, the drawer may undertake an obligation for interest on the amount. In the case of any other bill of exchange such an obligation shall be considered null and void.
(2) The amount of the interest must be indicated in the bill of exchange.
(3) Interest shall be charged as from the date of issue of the bill of exchange, unless another date has been specified.
Differences in the sum
Article 460
(1) Where the sum has been written in the bill of exchange in figures and in words, in the case of difference the sum written in words shall be valid.
(2) Where the sum has been written in the bill of exchange several times in words or in figures, in the case of difference the smallest sum shall be valid.
Validity of signatures
Article 461
Should a bill of exchange bear signatures of persons who may not undertake obligations under a bill of exchange, false signatures, signatures of non-existent persons or signatures which, for some other reason, may not bind the persons who have signed or on behalf of whom the bill of exchange has been signed, the obligations of the other persons who have signed shall be valid.
Signature without authorization
Article 462
A person who signs a bill of exchange as an agent without having such authority, or who exceeds his authority by doing so, shall be personally liable under the bill of exchange, and should he pay, he shall have the same rights as would have the represented person.
Liability of the drawer
Article 463
(1) The drawer shall be liable for the acceptance and payment of a bill of exchange.
(2) The drawer may be relieved of liability for acceptance, but he may not be relieved from liability for payment.
Blank bill of exchange
Article 464
If a bill of exchange, which has not been filled in at issue, is filled in not as agreed, the default on the agreed may not be counterposed against the bearer unless he has acquired the bill of exchange through abuse of authority or gross negligence.
Objections of debtors
Article 465
Debtors under a bill of exchange may not use against the bearer objections based on their personal relationship with the drawer or with some of the former bearers, unless the bearer did not act in good faith in acquiring the bill of exchange.

Section II
Endorsement

Transfer of a bill of exchange
Article 466
(1) Any bill of exchange, even where not explicitly issued to order, may be transferred by endorsement.
(2) Where the drawer has written in the bill of exchange the words "not to order" or another phrase of equivalent meaning, the bill of exchange shall be transferred under the procedure for transfer of receivables.
(3) A bill of exchange may be endorsed to the drawee, the drawer or any other person who has undertaken obligations under the bill of exchange. Such persons may again endorse the bill of exchange.
Qualifications
Article 467
(1) An endorsement may not be conditional.
(2) A partial endorsement shall be null and void.
(3) An endorsement to the bearer shall have the same effect as a blank endorsement.
Form
Article 468
(1) The endorsement must be written on the bill of exchange or on a sheet of paper attached thereto (allonge). Is must be signed by the endorser.
(2) The endorsement need not specify the person in whose favour it was made, or it may contain only the signature of the endorser (blank endorsement). In order to be valid, a blank endorsement must be written on the back of the bill of exchange or the allonge.
Effect
Article 469
(1) An endorsement shall transfer all the rights under a bill of exchange.
(2) In the case of a blank endorsement, the bearer may:
1. fill in the blank space with his own name or the name of another person;
2. make a blank endorsement on the bill of exchange;
3. deliver the bill of exchange to another person, without filling in the blank space and without endorsing it.
Liability of the endorser
Article 470
(1) The endorser shall be liable for the acceptance and payment of the bill of exchange, unless otherwise agreed.
(2) An endorser may prohibit further endorsement. In such case he shall not be liable before the persons to whom the bill of exchange has been endorsed subsequently.
Bearer
Article 471
(1) The holder of a bill of exchange shall be deemed the legitimate bearer, provided his right ensues from the continuous order of endorsements, even where the last endorsement has been a blank endorsement. Crossed out endorsements shall be considered non-existent. Where a blank endorsement is followed by another endorsement, it shall be deemed that the signatory has acquired the bill of exchange by the blank endorsement.
(2) Where a person has been deprived of possession of the bill of exchange in any way, the bearer, who shall ascertain his right pursuant to para 1, shall not be obliged to deliver it, unless where it was acquired in bad faith or by gross negligence.
Endorsement by authorization
Article 472
(1) In the case of endorsement with provision "to be received", "for collection", "by authorization" or another phrase to the meaning of authorization, the bearer may exercise all the rights on the bill of exchange, but he may transfer it only with endorsement by authorization. In such case the persons liable may use against the bearer only the objections they could counterpose against the endorser.
(2) The authorization contained in an endorsement by authorization shall not be terminated upon the death or the legal disability of the authorizing person.
Endorsement for security
Article 473
(1) In the case of endorsement with provision "for guarantee", "for pledge" or another phrase with the meaning of security, the bearer may exercise all the rights on the bill of exchange, but he may transfer it only with endorsement by authorization.
(2) Debtors may not put against the bearer objections based on their personal relationship with the endorser, unless the bearer has acted in bad faith in acquiring the bill of exchange.
Endorsement after maturity or protest
Article 474
(1) An endorsement made after maturity shall have the same effect as an endorsement made before that. An endorsement made after the protest, due to default of payment or after expiration of the term for protest, shall have the effect of the transfer of a receivable.
(2) It shall be assumed, until proven to the contrary, that an endorsement without a date has been made before expiration of the term for protest.

Section III
Acceptance

Presentation for acceptance
Article 475
A bill of exchange may be presented to the drawee for acceptance at his place of residence by the bearer or the holder before maturity.
Instruction or prohibition for presentation
Article 476
(1) The drawer may prescribe in the bill of exchange that it should be presented for acceptance, and also to specify a term for that. He may prescribe that the bill of exchange should not be presented for acceptance before a specified term.
(2) The drawer may prohibit in the bill of exchange its presentation for acceptance, unless it is payable by a third party or at a place other than the place of residence of the drawee, or if it is payable within a specified term after the presentation.
(3) Each endorser may prescribe that the bill of exchange be presented for acceptance, as well as to specify a term therefore, unless the drawer has prohibited presentation for acceptance.
Deadline for Claims
Article 477
(1) A bill of exchange payable within a certain period after presentation must be presented for acceptance within one year of its issue. The drawer may reduce or extend that term.
(2) The terms under para 1 may be reduced by the endorsers.
Secondary presentation
Article 478
(1) Upon presentation, the drawee may request that the bill of exchange be presented to him again on the next day. The interested parties may not object that such a request has not been satisfied, unless it has been indicated in the protest.
(2) The bearer shall not be obliged to deliver to the drawee the bill of exchange which was presented for acceptance.
Form of acceptance
Article 479
(1) The acceptance shall be written on the bill of exchange with the word "accepted", or with another word of equivalent meaning, and shall be signed by the drawee. The signature of the drawee on the face of the bill of exchange shall be considered acceptance.
(2) Where the bill of exchange is payable within a certain term following the presentation, or if it should be presented for acceptance within a specified term by virtue of a special provision, the acceptance must indicate the date on which this was done, unless the bearer requires the date of presentation to be indicated. If there is no date indicated, in order to preserve his recourse actions against the endorsers and the drawer, the bearer must ascertain the lack of date by protest.
Unconditional acceptance
Article 480
(1) Acceptance may not be effected under condition.
(2) The drawee may limit the acceptance to part of the sum.
(3) Any other modification of the contents of the bill of exchange upon its acceptance shall be considered rejection of acceptance, but the drawee shall be liable in compliance with the conditions of his acceptance.
Effect of acceptance
Article 481
(1) Upon acceptance the drawee undertakes to pay the bill on maturity.
(2) In case of default of payment the bearer, even where he is the drawer, shall have an action against the drawee pursuant to Articles 505 and 506.
Repeal of acceptance
Article 482
(1) If the drawee who has accepted the bill of exchange has crossed out the acceptance before return of the bill, the acceptance shall be considered repealed. It shall be assumed, until proven to the contrary, that the crossing out has been effected before the return of the bill of exchange.
(2) Where the drawee has notified in writing the bearer or some of the persons who have signed the bill of exchange of the acceptance, he shall be liable before them in accordance with the conditions of acceptance.

Section IV
Bill of exchange guarantee

Definition
Article 483
The payment of a bill of exchange may be secured entirely or in part through a guarantee. The guarantee may be given by a third party or by a person whose signature has already been put on the bill of exchange.
Form
Article 484
(1) The guarantee shall be put on the bill of exchange or on the allonge. It shall be expressed by the words "as guarantee" or another phrase of equivalent meaning, and must be signed by the guarantor.
(2) The signature on the face of the bill of exchange shall be considered a guarantee, unless it is the signature of the drawee or the drawer.
(3) Where the guarantor has not indicated for whom he guarantees, it shall be considered that the guarantee is for the drawer.
Liability of the guarantor
Article 485
(1) The guarantor shall be liable in the same way as the person for whom he has guaranteed.
(2) The obligation of the guarantor shall be valid also where the obligation for which it has been undertaken is not valid for any reason whatsoever, except for defect in the form.
(3) The guarantor who has paid the bill of exchange shall assume the rights under it against the person for whom he has provided the guarantee, and against all persons liable to that person under the bill of exchange.

Section V
Maturity

Manner of determination
Article 486
(1) The maturity of a bill of exchange may be:
1. upon presentation;
2. after a certain term after the presentation;
3. after a certain term after the issue;
4. on a certain date.
(2) A bill of exchange issued with maturity specified in some other way or by subsequent maturity, shall be null and void.
Sight bill of exchange
Article 487
(1) A sight bill of exchange shall be payable upon presentation. It must be presented for payment within one year following its issue. The drawer may specify a shorter or a longer term. The endorsers may reduce the terms for presentation.
(2) If the drawer notes down that the sight bill of exchange should not be presented for payment before a specified date, the term for presentation shall commence as from that date.
Usance bill of exchange
Article 488
(1) Maturity of a usance bill of exchange shall be determined as from the date of acceptance or as from the date of protest.
(2) Where no protest exists, it shall be considered that the acceptance without indication of date has been made by the drawee on the last date of the term for presentation for acceptance.
Interpretation of terms
Article 489
(1) Maturity of a bill of exchange payable one or several months after its issue or presentation, shall be on the respective day of the month for effect of the payment. If there is no such day of that month, maturity shall fall on the last day of the month.
(2) Where maturity has been set in the beginning, in the middle or at the end of the month, these phrases shall be understood to mean the first, the fifteenth or the last day of the month.
(3) The phrase "half month" shall be understood to mean a term of fifteen days.
Applicable calendar
Article 490
(1) Where the bill of exchange is payable on a specific date at a place where the calendar is different from that at the place of issue, maturity shall be determined in accordance with the calendar at the place of payment.
(2) Where a bill of exchange, issued and payable at places with different calendars, is payable within a set term after the issue, the date of issue and maturity shall be determined by the calendar at the place of payment.
(3) The terms for presentation of the bill of exchange shall be calculated pursuant to the rules of paras 1 and 2.
(4) Paras 1, 2 and 3 shall not apply if something else follows from a provision in the bill of exchange or from its contents.

Section VI
Payment

Term for presentation for payment
Article 491
A bill of exchange payable on a certain day or within a specified term after its issue or presentation, must be presented for payment on maturity or on one the next two working days.
Indication of payment
Article 492
(1) Upon payment the drawee may request the bearer to surrender to him the bill of exchange and to indicate thereon that it has been paid.
(2) The bearer may not reject partial payment.
(3) In the case of partial payment the drawee may request the payment to be indicated on the bill of exchange and receipt to that effect to be issued to him.
Payment before and on maturity date
Article 493
(1) The bearer shall not be obliged to accept payment of the bill of exchange before maturity date.
(2) A drawee who pays before maturity date shall pay on his own risk.
(3) A person who pays on maturity date shall be relieved from his obligation, unless he has acted with gross negligence. He shall be obliged to verify the correct order of endorsements, but not the signatures of the endorsers.
Currency of payment
Article 494
(1) Where the sum of the bill of exchange has been quoted in currency which has no exchange rate at the place of payment, the amount may be paid in local currency according to its value as on maturity. Where the debtor is in delay, the bearer may by his own choice request the sum under the bill of exchange to be paid in local currency at the exchange rate on maturity or as of the date of payment.
(2) The exchange rate of the foreign currency shall be determined in accordance with commercial custom at the place of payment. However, the drawer may set in the bill of exchange the rate at which the amount should be calculated.
(3) Paras 1 and 2 shall not apply if the drawer has stipulated that payment should be effected in a specified currency.
(4) Where a bill of exchange is payable in a currency which has the same name but different values in the country of issue and the country of payment, the bill of exchange shall be assumed to be paid in the currency of the country of payment.
Deposit of the amount
Article 495
Where the bill of exchange is not presented for payment within the term under Article 491, the debtor may deposit the amount with a bank, at the risk and the expenses of the bearer.

Section VII
Protest

Types of protest
Article 496
A refusal of acceptance or payment must be ascertained by protest due to default on acceptance or default on payment.
Protest to default on acceptance
Article 497
(1) A protest due to default on acceptance must be made within the terms specified for presentation for acceptance. If in the case stipulated under Article 478, para 1, the first presentation has been effected on the last date of the term, the protest may be effected on the next date.
(2) The protest on default of acceptance shall relieve the bearer from presentation of the bill of exchange for payment, and also from protest due to default on payment.
Protest to default on payment
Article 498
A protest to default on payment of a bill of exchange payable on a certain date or within a certain term after the issue or after the presentation, must be made on one of the two business days after the date specified for payment. If the bill of exchange is payable upon presentation, the protest must be made within the terms under Article 497, para (1).
Notification for default on acceptance or default on payment
Article 499
(1) The bearer should notify his immediate endorser and the drawer for the default on acceptance and the default on payment within four business days following the date of protest, and in the case of provision "sans frais" - after the date of presentation. Each endorser shall be obliged within two business days following the date of receipt of notification to notify his immediate endorser thereof, indicating the names and addresses of those who have made the preceding notifications, up to the drawer. Time periods shall run from the date of receipt of the preceding notification.
(2) Where pursuant to para 1 notification was made to a person who signed the bill of exchange, it must be made within the same term also to his guarantor.
(3) Where an endorser has not indicated his address or has done so illegibly, the notification must be made to the endorser preceding him.
(4) A notification may also be effected by return of the bill of exchange. The person obliged to make notification must prove that he has done so within the specified term.
(5) A person who fails to make the notification within the time periods specified in paras 1 - 4, shall be liable for damages to the amount of the sum under the bill of exchange.
Relief from protest
Article 500
(1) The drawer, as well as any endorser or guarantor through a provision "sans frais", "sans protest" or a phrase of equivalent meaning signed on the bill of exchange, may relieve the bearer from making a protest to default on acceptance or default on payment, in order to lodge his recourse actions.
(2) The provision of para 1 shall not relieve the bearer from the obligation to present the bill of exchange in due time and to make the relevant notifications. The burden of proof that the above time periods have not been observed shall be on the person referring to such a circumstance.
(3) The provision stipulated by the drawer shall have effect in respect of all persons who have signed the bill of exchange. A provision written by an endorser or a guarantor shall have effect only in respect of himself. Where despite the provision written by the drawer the bearer lodges a protest, the expenses shall be on his account, and where the provision has been written by an endorser or a guarantor, all persons who have signed shall be liable for the expenses.
Making a protest
Article 501
A protest shall be made upon a request in writing from the bearer by the notary public at the place of payment or acceptance.
Contents of the protest
Article 502
(1) A protest shall contain:
1. a full transcript of the document with all endorsements and notes;
2. the names of the persons in favour of whom and against whom the protest is being made;
3. the inquiry to the person against whom the protest is made, the response given or a note that the person has not responded or could not be found;
4. in the case of acceptance or payment through an intermediary - indication of by whom, for whom and how it has been given;
5. place and date of the protest;
6. signature and stamp of the notary public.
(2) The making of the protest shall be indicated on the document.
Protest against several persons
Article 503
Where acceptance or payment of a bill of exchange, a promissory note or a cheque are to be requested from several persons, one protest against all persons may be made.
Entry of protest
Article 504
(1) The notary public must enter in the register the contents of the protest thus made and issue transcripts to the interested parties.
(2) The original of the protest shall be delivered to the bearer.

Section VIII
Recourse actions

Grounds
Article 505
(1) Where a bill of exchange has not been paid on maturity, the bearer may bring recourse actions against the endorsers, the drawer and the other liable persons.
(2) additionally recourse actions may be brought before maturity, provided:
1. the drawee rejects acceptance of the bill of exchange, entirely or in part;
2. bankruptcy proceedings have been instigated against the drawee, notwithstanding whether he has accepted the bill of exchange or not;
3. the drawee has discontinued his payments or the compulsory execution on his property has provided no result;
4. bankruptcy proceedings have been instigated against the drawer of the bill of exchange whose acceptance was refused.
Subject of the recourse action
Article 506
(1) The bearer shall be entitled to claim from the persons against whom he has brought the recourse action:
1. the sum under the bill of exchange which has not been accepted or has not been paid, together with interest if so agreed;
2. interest due by operation of law as from maturity date;
3. expenses related to the protest, the notifications made and other expenses;
4. commission which, unless otherwise agreed, shall amount to one third of one percent of the sum under the bill of exchange, and which may not exceed that amount.
(2) Where the recourse action has been brought before maturity, the interest from the date of bringing the recourse action to maturity to the amount of the official discount rate of the central bank at the place of residence of the bearer shall be deducted from the sum of the bill of exchange.
Action of the debtor who has paid
Article 507
A person who has paid the bill of exchange may claim from the persons obliged before him:
1. the amount he has paid;
2. interest due by operation of law on the amount paid as from the date of payment;
3. the costs incurred;
4. commission pursuant to Article 506, para 1, Item 4.
Delivery of the bill of exchange against payment
Article 508
(1) Each of the persons liable under the bill of exchange, against whom a recourse action has been brought or may be brought, shall be entitled to request that upon payment the bill of exchange be delivered to him together with the protest, and that a receipt be issued.
(2) Each endorser who has paid the bill of exchange may cross out his endorsement and the endorsements of the subsequent endorsers.
Recourse action after partial acceptance
Article 509
If a recourse action has been brought after partial acceptance, the person who has paid the amount for which the bill of exchange has not been accepted, may request the payment made to be noted on the bill and a receipt to be issued to him. The bearer must also deliver to him a certified transcript of the bill of exchange and the protest, so that the person who has paid may bring subsequent recourse actions.
Recourse action upon discontinuance of payments
Article 510
If a drawee has discontinued his payments, notwithstanding whether he has accepted the bill of exchange, as well as if a compulsory execution against him proves without result, the bearer shall be entitled to bring a recourse action after presentation of the bill of exchange for payment to the drawer and after making a protest.
Recourse action in the case of bankruptcy
Article 511
(1) If bankruptcy proceedings have been instigated against the drawee, notwithstanding whether he has accepted the bill of exchange, as well as in cases of instigated bankruptcy proceedings against the drawer of a bill of exchange which is not subject to acceptance, the decision for instigating bankruptcy proceedings shall be sufficient grounds for the bearer to bring his recourse action.
(2) If bankruptcy proceedings have been instigated against a drawee, notwithstanding whether he has accepted the bill of exchange, or against the drawer of the bill of exchange whose acceptance has been refused, a court decision shall be required additionally.
Recourse bill of exchange
Article 512
(1) Whoever is entitled to a recourse action may exercise it by issuing against some of the persons liable before him a new bill of exchange (recourse bill of exchange), which shall be a sight bill of exchange and shall be payable at the place of residence of that person, unless otherwise agreed.
(2) The recourse bill of exchange shall cover further to the amounts under Articles 506 and 507 also other expenses.
(3) Where the recourse bill of exchange has been issued to bearer, the amount shall be determined according to the rate of the sight bill of exchange issued at the place of payment of the initial bill of exchange, and payable at the place of residence of the preceding endorser.
(4) If the recourse bill of exchange has been issued by an endorser, its sum shall be determined according to the rate of the sight bill of exchange, issued at the place of residence of the drawer of the recourse bill of exchange, and payable at the place of residence of the preceding endorser.
Joint and several liability
Article 513
(1) The persons who have issued, accepted and endorsed the bill of exchange, or who have provided a guarantee, shall be liable jointly and severally before the bearer.
(2) The bearer may bring his actions against all persons liable under the bill of exchange, jointly or severally, without taking in consideration the order in which they have become liable. Entitled to the same right shall be any liable person who has paid the bill of exchange, in respect of persons who have become liable before him.
(3) The bearer who has brought an action against one of the debtors under the bill of exchange, shall not forfeit his rights against the other debtors, including those who have signed after the one against whom he has brought the action.
Omission of terms
Article 514
(1) The bearer shall forfeit his rights against the endorsers, the drawer and the other liable persons, with the exception of the drawee, if he misses the terms:
1. for presentation of the sight bill of exchange or the usance bill of exchange;
2. for making a protest due to default on acceptance or on payment;
3. for presentation for payment under a "sans frais" provision.
(2) If the bearer misses the term specified by the drawer for presentation of the bill of exchange for acceptance, he shall forfeit his right to recourse for default on acceptance and on payment, unless it ensues from the contents of the bill of exchange that the drawer wanted to exclude only the liability for acceptance.
(3) Where the provision with a term for presentation is included in an endorsement, only the endorser may refer to it.
Force majeure
Article 515
(1) Where the presentation of the bill of exchange or the lodging of a protest within the specified time periods are prevented by force majeure, the time periods shall be extended, respectively.
(2) The bearer shall be obliged to notify forthwith his immediate endorser of the force majeure, and to note that notification on the bill of exchange or the allonge, indicating the place, date and signing there under, as well as to meet his obligations pursuant to Article 499.
(3) After termination of the force majeure, the bearer must immediately present the bill of exchange for acceptance or payment, and lodge a protest, if necessary.
(4) If the force majeure continues for more than thirty days after maturity, a recourse action may be brought without need for presentation or protest.
(5) For a sight bill of exchange or a usance bill of exchange, the thirty day period shall commence from the date on which the bearer has informed his immediate endorser. This notification may be effected before expiration of the period for presentation. In the case of a usance bill of exchange, the thirty day time period shall be extended by the time period specified in the bill of exchange after presentation.
(6) Circumstances relevant to the person of the bearer, or to the person to whom he has assigned the presentation of the bill of exchange or the effecting of the protest, shall not be deemed force majeure.

Section IX
Brokerage

Broker
Article 516
(1) The drawer, the endorser or the guarantor may appoint one person - a broker - who where necessary may accept the bill of exchange or pay.
(2) A broker may be any third party and any person liable under the bill of exchange, except the drawee who has already accepted it.
(3) The broker shall be obliged to notify within two business days the person for whom he has been operating. If the broker fails to meet this term he shall be held liable for damages to the amount of the sum of the bill of exchange.
(4) In the cases under paras 2 and 3 the bill of exchange may be accepted or paid for honour by a broker acting for some of the debtors under the bill of exchange against whom a recourse action could be brought.
Acceptance
Article 517
(1) Acceptance through a broker shall be allowed in all cases where before maturity the bearer may bring his recourse action, except where the presentation of the bill of exchange for acceptance has been prohibited.
(2) Where a person has been indicated in the bill of exchange for the purpose of acceptance or payment in case of necessity, the bearer may bring his recourse action before maturity against the person who has added the address, as well as against the persons who have signed after him, only if he has presented the bill of exchange to the person indicated at that address, and has ascertained the rejection by that person by means of a protest.
(3) Except for the cases under para 2 the bearer may refuse acceptance through a broker. If he accepts the brokerage, he shall forfeit the recourse he had before maturity against the person for whom acceptance has been effected, and against those who have signed after him.
Form
Article 518
The acceptance through a broker shall be noted on the bill of exchange and shall be signed by the broker. If the broker does not indicate for whom the acceptance was made, it shall be assumed to be for the drawer.
Liability of the broker
Article 519
(1) A broker who has accepted the bill of exchange shall be liable in respect of the bearer and the persons who have signed after the person for whom the brokerage has been effected, in the same way as him.
(2) Notwithstanding the acceptance through a broker, the person for whom it has been effected, and the persons liable before him, may request from the bearer, against payment of the amount under Article 506, delivery of the bill of exchange, the protest and the receipt.
Payment
Article 520
(1) Payment through broker shall be allowed where the bearer may lodge his recourse on maturity date or before maturity.
(2) The payment should be for the whole sum owed by the person for whom the brokerage has been effected, and should be done not later than on the date after expiration of the term for protest due to default on payment.
Presentation and protest
Article 521
(1) If the bill of exchange has been accepted for honour by a person with a place of residence at the place of payment, or if a person with a place of residence at the same place has been specified for payment in case of necessity, the bearer should present the bill of exchange to those persons not later than on the date following the date of expiration of the term for protest due to default on payment, and if necessary - to make such protest.
(2) If the protest has not been made in due time, the person who has specified the address for payment in case of necessity, or for whom the bill of exchange has been accepted for honour, as well as those who have signed after him, shall be relieved of their obligation.
Consequences from refusal of the bearer
Article 522
A bearer who refuses to accept payment through a broker shall forfeit his recourse action against those who would be relieved from their obligation due to the brokerage.
Ascertainment of payment
Article 523
(1) Payment through a broker shall be ascertained by a receipt on the bill of exchange, indicating for whom it has been paid, and if there is no such indication it shall be assumed that payment has been effected for the drawer.
(2) The bill of exchange and the protest shall be delivered to the broker who has paid.
Rights of the broker
Article 524
(1) The broker who has paid shall acquire the rights under the bill of exchange against the person for whom he has paid, and against the persons liable to him under the bill of exchange. He may not endorse the bill of exchange.
(2) The persons who have signed the bill of exchange after the person for whom it has been paid, shall be relieved of their obligation.
(3) Where several persons have offered payment through a broker, priority should be given to the broker whose payment would relieve the highest number of debtors under the bill of exchange. The person who has paid contrary to the preceding sentence, being of knowledge of the circumstances, shall forfeit his recourse action against the persons who would have been relieved.

Section X
Set of copies and transcripts

Issue of equivalent copies
Article 525
(1) The bill of exchange may be issued in several equivalent copies. They should be numbered in the text, and where this has not been done each copy shall be considered a separate bill of exchange.
(2) Where it has not been stated in the bill of exchange that it has been issued in one copy, each bearer may request the issue of more copies on his own account, up to the drawer. The endorsers must reproduce their endorsements on the new copies.
Payment under one of the copies
Article 526
(1) The payment under one of the copies shall relieve all liable persons even without special provision therefore. However, the drawee shall be liable under all accepted copies which have not been returned to him.
(2) An endorser who has transferred the copies to different persons, as well as the subsequent endorsers, shall be liable under all copies signed by them, if they have not been returned to them.
Forwarding of a copy for acceptance
Article 527
(1) A person who has forwarded one of the copies for acceptance must indicate in the remaining copies the name of the person who holds the forwarded copy. This person shall be obliged to deliver it to the bearer of another copy who has established himself as such.
(2) Should delivery be rejected, the bearer may bring his recourse action, ascertaining by protest that:
1. the copy forwarded for acceptance has not been delivered to him upon request;
2. the acceptance or payment could not have been effected on the basis of another copy.
Transcripts
Article 528
(1) All bearers of a bill of exchange shall be entitled to make transcripts.
(2) A transcript should reproduce exactly the original with the endorsements and all other notes thereon, and to indicate the end of the transcript.
(3) A guarantee may be given on a transcript and it may be endorsed. A transcript shall have effect against persons who have put their signatures on the bill of exchange before the transcript, only if presented together with the original.
Original and transcripts
Article 529
(1) A transcript shall indicate the holder of the original, who shall be obliged to deliver it to the bearer of the transcript who has established himself as such.
(2) Should the holder refuse to deliver the original, the bearer may exercise his recourse rights against the endorsers and the guarantors under the transcript, after ascertaining by protest that the original has not been delivered to him.
(3) If the original contains the provision "valid hereafter shall be only endorsements on the transcript" after the last endorsement before making of the transcript, or a phrase of equivalent meaning, any endorsement written thereafter on the original shall be invalid.

Section XI
Amendments

Effect of amendments
Article 530
In case of amendments to the text of the bill of exchange, the persons who have signed after the amendments shall be liable under the provisions of the text amended, and those who have signed before the amendments shall be liable pursuant to the initial text.

Section XII
Limitation

Limitation periods
Article 531
(1) Actions against the drawee under the bill of exchange shall expire by limitation after three years following maturity.
(2) Actions of the bearer against the endorsers and against the drawer shall expire by limitation after one year from the date of the duly made protest or from maturity, provided the bill of exchange contains the provision "sans frais".
(3) Actions of the endorsers Among themselves and against the drawer shall expire by limitation after six months from the date on which the endorser has paid the bill of exchange, or from the date on which an action was brought against him.
Interruption of limitation
Article 532
The limitation shall be interrupted only with respect of the person against whom an act has been carried out.
Prohibition for extension of time periods
Article 533
The time periods established under this Act for obligations under bills of exchange may not be extended.
Section XIII
Unmerited gain

Action on grounds of unmerited gain
Article 534
(1) Where the bearer of a bill of exchange, a promissory note or a cheque forfeits the right to an action under them due to expiration by limitation or non-performance of the necessary acts for retaining the rights there under, he may claim from the drawer or the drawee the sum which they have gained to his detriment.
(2) The action under para 1 shall expire by limitation after three years. This term shall commence from the date of forfeiture of the actions under the bill of exchange, the promissory note or the cheque.
CHAPTER THIRTY-ONE
PROMISSORY NOTE

Contents
Article 535
A promissory note shall contain:
1. the title "promissory note" in the text of the document in the language in which the document has been written;
2. unconditional promise for payment of a certain sum of money;
3. maturity;
4. place of payment;
5. name of the person to whom or to whose order the sum must be paid;
6. date and place of issue;
7. signature of the drawer.
Incomplete contents
Article 536
(1) A document which does not contain some of the requisites listed under Article 535, shall not be promissory note, except for the cases specified under paras 2, 3 and 4.
(2) A promissory note in which no maturity date has been indicated shall be considered payable upon presentation.
(3) The place of issue shall be assumed to be the place of payment and place of residence of the drawer, unless otherwise agreed.
(4) A promissory note in which no place of issue has been indicated, shall be assumed issued at the place indicated next to the name of the drawer.
Reference to the provisions on the bill of exchange
Article 537
The provisions on the bill of exchange shall apply mutatis mutandis, inasmuch as compatible to its nature, to the promissory note.
Obligations of the drawer
Article 538
(1) The drawer of a promissory note shall be liable in the same way as the drawee of the bill of exchange.
(2) A promissory note payable within a certain time period following the presentation, must be presented to the drawer pursuant to the terms under Article 477. The drawer shall certify on the document its presentation, write the date and put his signature. The time period after the presentation shall commence from the date certified by the drawer on the note. The refusal of the drawer to certify the presentation or to write the date shall be ascertained by protest pursuant to Article 496, the date of which shall be considered the beginning of the time period after presentation.
CHAPTER THIRTY-TWO
CHEQUE
Section I
Issue and form

Contents
Article 539
A cheque shall contain:
1. the title "cheque" in the text of the document in the language in which the document has been written;
2. unconditional order for payment of a certain sum of money;
3. name of the person, who should pay (drawee);
4. date and place of issue;
5. place of payment;
6. signature of the drawer.
Incomplete contents
Article 540
(1) A document which does not contain some of the requisites indicated under Article 539, shall not be a cheque, except in the cases, specified in paras 2, 3 and 4.
(2) A cheque in which no place of payment has been indicated, shall be considered payable at the place indicated next to the name of the drawee. Where there are several places indicated, the cheque shall be payable only at the first place indicated.
(3) If no other place has been indicated, a cheque shall be paid at the place of domicile of the drawee.
(4) A cheque in which the place of issue has not been indicated, shall be considered issued at the place indicated next to the name of the drawer.
Issue
Article 541
(1) A cheque payable in the Republic of Bulgaria may be issued only against a bank.
(2) The drawer of the cheque must have coverage with the drawee.
(3) The drawee shall be obliged to pay the cheque to the amount of coverage, if he has explicit or tacit agreement with the drawer.
(4) A cheque shall be valid even where the provisions of paras 2 and 3 have not been complied to.
Invalidity of acceptance
Article 542
A cheque shall not be subject to acceptance. A note of acceptance on the cheque shall be invalid.
Types of cheques
Article 543
(1) A cheque may be issued:
1. to a certain person with or without explicit provision "to order";
2. to a certain person with provision "not to order" or another equivalent provision;
3. to bearer.
(2) A cheque in favour of a certain person with provision "or to bearer" or another phrase of equivalent meaning, shall have the same effect as a cheque to bearer.
(3) A cheque in which the name of the person in whose favour it has been issued is not indicated, shall be deemed a cheque to bearer.
Cheque to the order of the drawer or against the drawer
Article 544
(1) A cheque may be issued to the drawer or to his order.
(2) A cheque may not be drawn on the drawer, except where issued between different branches of a merchant.
Inapplicability of interest
Article 545
A provision for interest included in a cheque shall be invalid.
Cheque payable with a third party
Article 546
A cheque may be payable with a third party at the domicile of the drawee or at another place only if the third party is a bank.
Liability of the drawer
Article 547
The drawer shall be liable for payment of the cheque. Any provision relieving him from liability shall be invalid.
Section II
Endorsement

Requirements to the endorsement
Article 548
The provisions on endorsement of bills of exchange shall apply to the cheque, with the following exceptions:
1. the endorsement of the drawee shall be invalid;
2. the endorsement in favour of the drawee shall only have the effect of a receipt, except where the endorsement has been made between different branches of a merchant.
Endorsement on a cheque to bearer
Article 549
The endorsement on a cheque to bearer shall make the endorser liable pursuant to the rules for recourse. Such an endorsement shall not transform the cheque into a cheque to order.
Prohibition for guarantee by the drawee
Article 550
The drawee may not be guarantor on a cheque.
Section III
Payment

Payment on demand
Article 551
(1) A cheque shall be payable always on demand. Any provision to the contrary shall be invalid.
(2) A cheque presented for payment before the date indicated as date of issue, shall be payable on the date of presentation.
Deadline for Claims
Article 552
A cheque must be presented for payment within eight days following the date of its issue.
Withdrawal
Article 553
(1) A cheque may be withdrawn by the drawer after expiration of the term for presentation.
(2) Where a cheque has not been withdrawn, the drawee may pay it after the expiration of the term for presentation as well.
Death or legal disability of the drawer
Article 554
The death or legal disability of the drawer occurring after the issue, shall not affect the effect of the cheque.
Section IV
Crossed cheque and cheque directed to account

Crossed cheque
Article 555
(1) The drawer and the bearer of a cheque may cross it with the effect described in Article 556.
(2) The crossing shall be done with two parallel lines on the face.
(3) The crossing may be general or special. The crossing shall be general where it does not contain any provision between the two lines, or contains the provision "bank" or another phrase of equivalent meaning. The crossing shall be special if the name of a bank is written between the two lines.
(4) A general crossing may be transformed into special, but a special crossing may not be transformed into general.
Effect of a crossed cheque
Article 556
(1) A cheque with general crossing may be paid only to a bank or to a customer of the drawee.
(2) A cheque with special crossing may be paid only to the bank indicated or should that bank be the drawee to its customer. The bank indicated may assign the receiving of the sum under the cheque to another bank.
(3) A cheque may have only one special crossing. Two special crossing are allowed only where one of them is for payment through a clearing house. A cheque which is not in compliance with this provision, may not be paid.
(4) A drawee who violates the requirements of paras 1, 2 and 3 shall be liable for damages to the amount of the sum under the cheque.
Cheque directed to an account
Article 557
(1) The drawer and the bearer of a cheque may prohibit its payment in cash by writing on the face of the cheque the provision "account payee" or another phrase of equivalent meaning.
(2) In the case under para (1) the payment can be effected only to an account. In the case where the account has been indicated as well, the drawee may transfer the sum only to the indicated account. The indication of the account may be done by the drawer and by any holder of the cheque who has established his identity as such.
(3) The crossing out of the provision "account payee" shall be null and void.
(4) A drawee who has paid in violation of paras 1, 2 and 3 shall be liable for damages to the amount of the sum under the cheque.
Section V
Recourse due to default on payment

Grounds
Article 558
The bearer may bring his recourse actions against the endorsers, the drawer and the other liable persons, where the refusal to pay has been ascertained by:
1. protest;
2. declaration of the drawee written on the cheque with indication of the date of presentation;
3. dated declaration of the clearing house that the cheque has been presented in due time and has not been paid.
Term for protest
Article 559
(1) The protest must be made before expiration of the term for presentation.
(2) If presentation is made on the last date of the term, the protest must be done on the next business day.
Section VI
Set of copies

Issue of equivalent copies
Article 560
In addition to the cheques to bearer, each cheque issued in one country and payable in another may be issued in several equivalent copies. Where a cheque has been issued in several copies, they should be numbered in the text itself, and where this has not been done each copy shall be considered a separate cheque.
Section VII
Limitation

Limitation periods
Article 561
(1) Recourse actions of the bearer against the endorsers, the drawer and the guarantors on the cheque shall expire by limitation after six months from the date of presentation or from the date of expiration of the term for presentation.
(2) Recourse actions of the endorser against all persons liable before him shall expire by limitation after six months from the date on which he has paid the cheque, or from the date where a claim has been lodged against him.
Section VIII
Special provision

Reference
Article 562
The provisions on the bill of exchange shall apply, inasmuch as compatible to its nature, to the cheque.
CHAPTER THIRTY-THREE
APPLICABLE LAW ON BILL OF EXCHANGE, PROMISSORY NOTE AND CHEQUE

Capacity
Article 563
(1) The capacity of a person to undertake obligations under a bill of exchange, a promissory note or a cheque, shall be determined by its national law. Where this law declares the law of another country to be applicable law, the law of that country shall apply.
(2) A person who does not possess the capacity referred to in para 1, shall be considered liable if his signature has been put in a country the law of which recognizes him as capable person.
Form and contents
Article 564
(1) The form and contents of a bill of exchange, a promissory note and a cheque shall be determined pursuant to the law of the place of their signature. For a cheque the observance of the form and contents pursuant to the law of the place of payment shall be sufficient.
(2) Where a bill of exchange, a promissory note or a cheque are not valid, but are in compliance with the law of the country where a subsequent obligation has been undertaken, they shall be valid.
Obligation
Article 565
(1) The obligation of the drawee under a bill of exchange and of the drawer of a promissory note shall be determined by the law of the place of payment.
(2) The obligation of the other persons who have signed shall be determined by the law of the place where the signatures have been put.
Time periods for bringing recourse actions
Article 566
The time periods for recourse for persons who have signed shall be determined by the law of the place of issue of the document.
Acquisition of receivable by the bearer
Article 567
The law of the place of issue of a bill of exchange or a promissory note shall determine whether the bearer acquires the receivable in view of which they have been issued.
Partial acceptance
Article 568
The right of the drawee to effect partial acceptance of a bill of exchange or a promissory note and the obligation of the bearer to accept partial payment shall be determined by the law of the place of payment.
Protest
Article 569
The form and terms for protest, as well as of other acts necessary for the exercise or retaining of rights under a bill of exchange, a promissory note and a cheque, shall be determined by the law of the place where the respective acts must be undertaken.
Loss and theft
Article 570
The acts that must be undertaken in the case of loss or theft of a bill of exchange, a promissory note or a cheque, shall be determined by the law of the place of payment.
Payer of a cheque
Article 571
Persons on whom a cheque may be drawn shall be determined by the law of the place of payment. Where pursuant to that law a cheque is not valid in view of the capacity of the person on whom it has been drawn, the obligations ensuing from signatures put in other countries, the laws of which contain such provisions, shall be valid.
Application of the law of the place of payment
Article 572
Determined pursuant to the law of the place of payment of a cheque shall be:
1. whether it should be issued to presentation, or it could also be within a certain term after presentation, as well as what shall be the consequences of presentation on a later date;
2. time limit for presentation;
3. the possibility a cheque to be accepted, confirmed or advised, as well as the effect of such notes;
4. the possibility a cheque to be crossed or with provision "account payee" or another phrase of equivalent meaning, and the consequences thereof;
5. the right of the drawer to cancel a cheque or to object to its payment.
CHAPTER THIRTY-FOUR
DEPOSIT IN PUBLIC WAREHOUSE

Definition
Article 573
Under a contract for deposit in a public warehouse the depositary accepts goods, in return for consideration, with an obligation to keep and return them to the depositor or the person authorized to receive them.
Form
Article 574
(1) A contract for deposit in a public warehouse shall be concluded in writing and shall be entered in warehouse register.
(2) The depositary shall keep a warehouse register where he shall enter the contract. An entry shall be made pursuant to a procedure specified in Regulation to be approved by the Minister of Justice.
Obligations of the depositary
Article 575
(1) A depositary shall be obliged to provide access of the depositor to the goods during the working hours of the warehouse, in order to inspect them, to take samples from them and, with the permission of the depositary, to undertake acts for the maintenance, packing, sorting, separating of the goods and other similar acts.
(2) The depositary may combine fungibles deposited in the warehouse with other of the same type and quality, unless otherwise agreed.
(3) Where obvious transformations have occurred in the goods, which give grounds for fears that the goods may be damaged, the depositary must immediately notify the person authorized to receive them, and where no such person is known, the depositor.
(4) The depositary shall be obliged to insure the deposited goods on behalf of and on the account of the depositor for the value declared thereby, against fire, flood and earthquake, unless they have already been insured or the depositor objects to the insurance. Upon request from the depositor the depositary shall be obliged to insure the deposited goods against other risks as well.
Obligations of the depositor
Article 576
(1) Upon conclusion of the contract the depositor shall be obliged to provide the information required for the safekeeping of the goods.
(2) The consideration shall be paid at the end of each calendar quarter or upon return of the goods, unless otherwise agreed.
Warehouse warrant
Article 577
(1) The depositary shall issue a warehouse warrant upon request from the depositor.
(2) The warehouse warrant shall be issued on the basis of the warehouse register and shall comprise a goods note and a pledge note. The two parts of the warehouse warrant shall contain:
1. indication of the public warehouse and the sequence number under the warehouse register;
2. name and address of the depositor;
3. type and quantity of goods and whether they may be mixed with other goods;
4. time period for keeping the goods;
5. statement by the depositary that he shall deliver the goods as agreed;
6. acts to be undertaken by the depositary for preservation of the goods;
7. information whether the goods are insured, with whom, for what sum insured, against what risks and for what premium;
8. amount of remuneration due and unpaid expenses prior to the issue of the warrant;
9. amount of ullage, except where the goods have been accepted by numbers;
10. place and date of issue of the warrant;
11. signatures of the depositor and the depositary.
(3) The depositor, as well as any legitimate holder of the warehouse warrant, ascertained by a continuous sequence of the endorsements, shall be entitled to request the issuing of warehouse warrants for separate parts of the goods in return for the warehouse warrant for the total. Such warehouse warrants shall have the date of the initial warehouse warrant.
(4) The depositary may refuse to issue warehouse warrant on the grounds of good reasons or if the depositor is in default on payment of due remunerations and expenses.
Transfer of warehouse warrant
Article 578
(1) The warehouse warrant may be transferred by dated endorsement on the back of the goods note and the pledge note.
(2) The rules of Articles 466 - 470 and of Article 474 shall also apply to the warehouse warrant.
(3) An endorsement on the pledge note only shall constitute a right of pledge on the goods deposited in favour of the endorsee. The first endorsement should contain the amount of the loan secured, the interest and maturity, as well as the name and address of the creditor. The pledge may be counterposed against the endorsers of the goods note and shall be entered in the warehouse register. The first endorsee shall be obliged to request those data to be entered in the goods note and in the warehouse register.
(4) The transfer of only the goods note or only the pledge note shall be effected by dated endorsement on the respective part of the warehouse warrant.
(5) The legitimate holder only of the goods note, ascertained by the continuous sequence of endorsements, shall be entitled to receive the deposited goods even before maturity of the loan secured by pledge of the goods. In such case he shall be obliged to pay to the depositary the amount of the loan with interest as of the date of payment, to an amount specified in the warehouse register. Where the interest has been prepaid, it shall be deducted for the period from the date of payment to maturity.
Presentation of the pledge note
Article 579
The holder of the pledge note who is established through the continuous sequence of endorsements shall present it upon maturity to the debtor for payment, or where the debtor is not known, to the depositor. The note shall be presented for payment at the public warehouse. In such cases the provisions of Articles 505 and 507 shall apply.
Protest, compulsory execution and indemnification
Article 580
(1) The default on payment of the amount under the note shall be ascertained by protest against the debtor under the pledge note, and where he is not known, against the depositor. In such case Articles 496 and 498 shall apply mutatis mutandis.
(2) If his claim is not satisfied from the sale of the goods, the creditor under the pledge note may direct the execution against the debtor, the endorsers and the persons who have endorsed the goods note after establishment of the pledge, who shall be liable jointly and severally.
(3) (Amended, SG No. 70/1998) Where the creditor under the pledge note fails to make the protest within the specified time period, or if he fails to sell the goods within twenty days from the date of protest, he shall forfeit the recourse action against the endorsers under the pledge note, but shall retain his action against the debtor and the endorsers of the goods note.
(4) The endorser of the goods note who has paid under the pledge note shall be entitled to an action for the sum paid, the interest and the expenses, against the debtor and the preceding endorsers under the goods note, who shall be liable jointly and severally. The action against the endorsers shall expire by limitation after six months from the date of payment of the debt, and that against the debtor, after three years.
Invalidation of destroyed or lost warehouse warrant
Article 581
(1) (Amended, SG No. 59/2007) A destroyed or lost warehouse warrant shall be invalidated pursuant to Article 560 et seq. of the Code of Civil Procedure .
(2) Following the institution of proceedings for invalidation, the owner of the destroyed or lost warehouse warrant may request from the depositary the issue of a duplicate copy, by providing sufficient guarantee. Where the depositary does not agree with the amount of the guarantee, it shall be determined by the court of first instance.
(3) Should the destroyed or lost warrant be invalidated, the guarantee deposited pursuant to para 2 shall be returned.
Return of deposited goods
Article 582
(1) The goods deposited shall be returned to the depositor, or where a warehouse warrant has been issued, to the holder of the warrant who is established through the continuous sequence of endorsements, against submission of the warrant. The return of the goods shall be effected at the warehouse where they have been deposited, and shall be noted down on the warehouse warrant. The warrant shall be signed by the person receiving.
(2) Where several persons have been authorized to receive the goods and it has not been ascertained what part of the goods should be received by whom, or where the goods are indivisible, in the case of disagreement between the above the depositary shall be entitled, upon expiration of the term, to sell the goods and to deposit the amount received in a bank in their name.
(3) Where fungibles have been deposited, the holder of a goods note may receive part of them by paying to the creditor or depositing to his account the respective part of the amount receivable for which the pledge note was issued, together with interest and expenses.
(4) Ullage of the goods shall be deducted to the amount agreed or provided by operation of law.
Right to pledge
Article 583
The depositary shall be entitled to a pledge for the goods deposited in order to secure his claims.
Termination
Article 584
The depositary may request the depositor to take part of the goods after the expiration of the agreed term, or where no term has been agreed, three months following the deposit of the goods.
Early termination
Article 585
(1) Where the goods deposited are threatened by damage or where they may damage other goods, as well as where there are other good reasons for termination of the contract, the depositary may terminate the contract and demand that the goods are received immediately by the last endorsee, and where he is not known - by the depositor.
(2) If the goods are not received, the depositary shall be entitled to sell them under the procedure set forth under Article 328, para 1, Item 2, after written notification to the legitimate holder to receive them, or where he is not known, to the depositor, and satisfy himself from the sale price for his claim under the contract for deposit. The depositary shall deposit the difference to the account of the creditor under the pledge note.
(3) If the goods are perishable, the provision of Article 328, para 1, Item 3, shall apply.
Limitation
Article 586
(1) An action for damages against the depositary shall expire by a one-year limitation. The limitation period shall commence from the date of return of the deposited item. Where the deposited item has not been returned, the limitation period shall commence from the date on which it should have been returned, and if the item has been destroyed - from the date of coming of knowledge thereof.
(2) Where the loss, damage, destruction or delayed return of the item have been caused intentionally by the depositary, the limitation period shall be three years.
CHAPTER THIRTY-FIVE
LICENCE CONTRACT

Definition and form
Article 587
(1) (Amended and supplemented, SG No. 81/1999) Under a licence contract the owner of a right over an invention, utility model, industrial design, mark, topology of integrate circuits or know-how, who shall be termed licensor, shall grant for compensation, entirely or in part, the use thereof to the licensee.
(2) The licence contract shall be made out in writing.
Ceding of right to application
Article 588
(Repealed, SG No. 81/1999)
Territorial coverage of licence
Article 589
It shall be assumed, unless otherwise agreed under the licence contract, that the licence has been granted for use on the territory of the Republic of Bulgaria.
Registration of the contract
Article 590
The licence contract shall be entered in a register of the Patent Office. It shall be effective vis-а-vis third parties after the registration.
Providing use
Article 591
The licensor shall be bound to ensure to the licensee peaceful and undisturbed use of the rights granted, as well as protection against claims by third parties.
Information and assistance
Article 592
The licensor shall be bound to provide the licensee with the information as agreed and to render assistance for use of the subject of the licence.
Obligation for confidentiality
Article 593
The licensee shall be bound to keep in secret the information about an unpatented invention, utility model or know-how, which he has been granted the right to use.
License of a mark
(Title amended, SG 81/1999)
Article 594
(1) (Amended, SG No. 81/1999) In the case of licence of a mark the licensee shall be bound to ensure the quality of goods in compliance with the trade mark which has become known to users before conclusion of the contract.
(2) (Amended, SG No. 81/1999) The licensee shall be bound to put the mark on the goods for which the licence has been granted thereto.
Remuneration
Article 595
(1) Where the compensation has been agreed to be in accordance with the magnitude of use of the subject of a licence, the licensee shall be bound to inform the licensor about that magnitude of use within the agreed time periods.
(2) Compensation shall be due for the expired calendar year, unless otherwise agreed.
Contract for sub-licence
Article 596
(1) Under a contract for sub-licence the licensee of an exclusive licence may grant to another person the right to use the subject of the licence.
(2) The right for granting pursuant to para 1 may be excluded by the licence contract, or a provision requiring the consent of the licensor may be stipulated. The consent may be refused only on the grounds of good reasons.
Rights of the licensor in respect of a of sub-licence
Article 597
The licensor may demand from the sub-licencee the compensation which at the time of demand he owes to his licensor.
Termination with advance notice
Article 598
(1) A licence contract concluded for an unlimited term may be terminated by one of the parties with advance notice.
(2) Where the term for advance notice has not been specified in the contract, it shall be deemed to be six months, but the licensor may not terminate the contract before the expiration of the first year of its validity.
Extension of the contract by tacit agreement
Article 599
Where after the expiration of the contract term the licensee continues to use the subject of licence with the knowledge of the licensor and without objections there from, the contract shall be deemed extended to the term provided by law for its protection.
CHAPTER THIRTY-SIX
CONTRACT FOR COMMODITY CONTROL

Definition
Article 600
Under a contract for commodity control the controller shall undertake, for compensation and by use of special knowledge, to make unbiased comparison between the required and the actual state, or to establish only the state of a commodity or service. The controller shall issue a certificate for his findings.
Obligations of the controller
Article 601
(1) The control should be effected of a magnitude and manner provided by a law or in the contract, and where nothing has been specified of the ordinary magnitude and manner at the location of the subject of control.
(2) Where the contract provides for keeping a sample, the controller shall be obliged to keep it at his seat for not less than six months after receipt thereof.
Invalid provision
Article 602
Invalid shall be a provision for obligations of the controller which could affect his impartiality.
Obligations of the principal
Article 603
(1) The principal shall be obliged to provide the controller with access to the subject of control and to render him assistance in carrying out his duties.
(2) Where the amount of compensation has not been specified, the principal shall owe the ordinary compensation.
Limitation
Article 604
The right to an action for claims under a contract for commodity control shall expire by limitation after one year.
CHAPTER THIRTY-SEVEN
CONTRACT FOR RENT OF SAFE DEPOSIT BOX
(New, SG No. 59/2006)

Definition
Article 605
(Repealed, SG No. 19/2003, new, SG No. 59/2006)
(1) By the contract of rent of safe deposit box the lessor grants to the lessee for a fixed term against a fee the use of a safe deposit box in secured premises. The safe deposit box shall be used for safeguarding of valuables and securities, other items and documents. Only the lessee shall have access to the safe deposit box.
(2) The contract for rent of safe deposit box may be with declared or undeclared content of the deposited items before the lessor.
(3) The lessor shall not have the right to possess a copy of the key of the safe deposit box delivered to the lessee.
Forbidden items
Article 606
(Repealed, SG No. 19/2003, new, SG No. 59/2006)
(1) No items threatening the security of the safe deposit box and the lessor as well as items the acceptance of which is prohibited by law may be put in the safe deposit box.
(2) The lessor shall control in appropriate manner compliance with the requirements of paragraph 1 without detecting the content of the deposited items where it is not declared.
(3) On failure to fulfil the obligation under paragraph 1 the lessor may break the contract immediately.
Rights of the lessor upon non-payment
Article 606a
(Repealed, SG No. 19/2003, new, SG No. 59/2006)
(1) Upon breaking of a contract due to non-payment of the agreed fee, the lessor may demand opening and ascertainment of the content of the safe deposit box in the presence of a notary public. Items found in the safe shall remain with the lessor for safeguarding and compensation for the expenses and a fee shall be due to the latter.
(2) For its receivables under the contract the lessor shall have the right to retain the deposited items in the safe deposit box.
Special provision
Article 606b
(Repealed, SG No. 19/2003)
Validity of contract
Article 606c
(Repealed, SG No. 19/2003)
Form of contract
Article 606d
(Repealed, SG No. 19/2003)
Mandatory provisions of Bulgarian law
Article 606e
(Repealed, SG No. 19/2003)
Subsidiary provision
Article 606f
(Repealed, SG No. 19/2003)
PART FOUR
BANKRUPTCY
(New, SG No. 63/1994)
CHAPTER THIRTY-EIGHT
GENERAL

(Previous Chapter 34, SG No. 83/1996)
Section I
General Provisions

Objective of Proceedings
Article 607
(1) Bankruptcy proceedings shall be aimed at providing fair satisfaction of creditors and opportunities for reorganisation of debtor's enterprise.
(2) Bankruptcy proceedings shall take into consideration the interests of the creditors, the debtor and his employees.
Grounds for Initiating Bankruptcy Proceedings
Article 607a
(New, SG, No. 70/1998)
(1) Bankruptcy proceedings shall be instituted for merchants who are insolvent.
(2) In addition to cases of insolvency, bankruptcy proceedings shall be instituted also in the case of an over-indebtedness of a limited liability company, a joint-stock company, or a public partnership limited by shares.
Insolvency
Article 608
(Amended and supplemented, SG, No. 70/1998; amended, SG
No. 84/2000, No. 58/2003, No. 38/2006)
(1) Insolvent shall be deemed a merchant which is unable to meet a money obligation due under a commercial transaction, or a public law obligation to the state or municipalities related to its commercial activity.
(2) Insolvency shall be presumed where the debtor has failed to perform.
(3) Insolvency may also be in evidence in cases where the debtor has paid up or is in a position to pay up, wholly or in part, only the claims of certain creditors.
Concealed Partnership
Article 609
Bankruptcy proceedings shall be instituted also for persons who conceal commercial activity through insolvent debtors.
Instituting Bankruptcy Proceedings for Partner with Unlimited Liability
Article 610
(Amended, SG No. 70/1998)
Concurrently with instituting bankruptcy proceedings for a commercial company, bankruptcy proceedings shall be considered instituted also for any unlimited liability partners therein.
Instituting Bankruptcy Proceedings Upon Death or Deletion of Sole
Proprietor or for a Company in Liquidation
(Title amended, SG 70/1998)
Article 611
(1) (Amended, SG 70/1998) Bankruptcy proceedings shall also be instituted for deceased sole proprietors or sole proprietors deleted from the Commercial Register provided prior to the death or the deletion thereof, respectively, they have been insolvent.
(2) (New, SG No. 70/1998) Bankruptcy proceedings shall also be instituted for deceased partners with unlimited liability, or for unlimited liability partners deleted from the Commercial Register.
(3) (Renumbered from Paragraph 2, SG No 70/1998) Bankruptcy proceedings shall also be instituted for insolvent companies in liquidation.
(4) (Renumbered from Paragraph 3, SG No 70/1998) For cases such as under paras 1 and 2 the request to institute bankruptcy proceedings may be submitted within one year following the death, or the deletion from the Commercial Register, respectively.
Inapplicability of Bankruptcy
Article 612
(1) (Previous Article 612, amended, SG No 42/1996, amended, SG Nos. 70/1998, 84/2000) No bankruptcy proceedings shall be instituted for public enterprise merchants exercising a state monopoly or established by a special law.
(2) (New, SG No. 42/1996, amended and supplemented, SG No. 70/1998) The bankruptcy proceedings for banks and insurers shall be performed under terms and procedures settled by a separate act. The provisions of this section shall apply to the extent that the separate act does not provide otherwise.
(3) (New, SG No. 70/1998) Relations pertaining to the insolvency of a public enterprise merchant exercising a state monopoly or established under a separate act shall be regulated by a separate act.
Court of Jurisdiction
Article 613
(Amended, SG, No. 38/2006)
The court of jurisdiction over bankruptcy shall be the district courts where the seat of the merchant was located towards the time of filing the motion of institution of bankruptcy proceedings.
Appealing Regional Court Decisions and Determinations
Article 613a
(New, SG, No. 70/1998; amended SG, No. 64 1999, No. 84/2000,
No. 58/2003)
(1) (Amended, SG, No. 38/2006, amended, SG No. 59/2007) Decisions ruled by regional courts and determinations pursuant to Article 630, paragraphs (1) and (2), Articles 631, 632 and 701, Article 705, paragraph (2), Article 709, paragraph (1), Articles 710, 735, 744 and Article 755, paragraph (2) shall be subject to appeal according to the standard procedure established by of the Code of Civil Procedure.
(2) (Amended, SG, No. 38/2006) Decisions as per Art. 630 and art. 632 can be appealed against by third parties who have claims arising from an effective court judgment or an effective ruling establishing a public law obligation.
(3) (New, SG, No. 38/2006, amended, SG No. 59/2007) Outside the cases referred to in paragraph (1), rulings of regional courts in bankruptcy proceedings shall be subject to appeal only before the competent appellate court following the rules set out in Chapter Twenty "Intermediate Appellate Review" of the Code of Civil Procedure.
(4) (Renumbered from paragraph 3, SG, No. 38/2006) The court shall institute the case on the date of serving the petition or not later than the following working day and rule within 14 days from the date of the session at which hearings on the case are completed.
Cassation Appeal
Article 613b
(New, SG No. 84/2000; Repealed, SG No. 58/2003)
Bankruptcy Estate
Article 614
(1) The bankruptcy estate shall comprise:
1. property rights of the debtor as of the date of the ruling to institute bankruptcy proceedings;
2. property rights of the debtor acquired after the date of ruling to institute bankruptcy proceedings.
(2) (Amended, SG No. 70/1998, SG No. 58/2003) The property of the sole proprietor debtor shall also include one half of the rights on chattels and money deposits that are joint matrimonial property.
(3) (New, SG No. 70/1998) The property of the partner with unlimited liability shall also include one half of the chattels, rights on chattels and money deposits that are joint matrimonial property.
(4) (Renumbered from Paragraph 3, supplemented, SG No. 70/1998) Properties of the debtor and the unlimited liability partner not subject to forfeit shall not be included in the bankruptcy estate.
Nullity of Termination of Joint Matrimonial Property
Article 615
(Amended, SG, No. 70/1998)
Termination or division of joint matrimonial property, as well as settlement for a larger share, shall be null and void in respect to the bankruptcy estate, should they have been effected within six months prior to the initial date of the insolvency, till the termination of bankruptcy proceedings.
Bankruptcy Creditors
Article 616
(1) (Amended, SG, No. 38/2006) The bankruptcy estate shall be used to satisfy all creditors of the debtor for commercial and non-commercial receivables.
(2) Satisfied only after the full satisfaction of the other creditors shall be clams ensuing from:
1. interest determined by operation of law or by the contract on unsecured claims, due after the date of ruling to institute bankruptcy proceedings;
2. (supplemented, SG, No. 38/2006) credits extended to the debtor by partners or shareholders;
3. gratuitous transaction.
4. (new, SG, No. 38/2006) expenses accrued by creditors in pertinence to their participation in bankruptcy proceedings, except for expenses under Art. 629b.
(3) Foreign creditors shall have equal rights with domestic creditors in bankruptcy proceedings.
Due Obligations
Article 617
(1) All obligations of the debtor in cash or in kind shall be considered due as from the date of ruling for declaration of bankruptcy.
(2) (Amended, SG No. 84/2000) Obligations in kind shall be transformed into obligations in cash at the respective market value as of the date of ruling for institution of bankruptcy proceedings.
Retention of Securities
Article 618
(1) In the course of bankruptcy proceedings creditors shall retain their rights on securities provided.
(2) (Repealed, SG No. 70/1998).
Summons and notices in bankruptcy proceedings
(Heading amended, SG, No. 38/2006)
Article 619
(1) (Amended, SG No. 84/2000) During the bankruptcy proceedings, the debtor shall be summoned at its management address, and the creditors - party to the proceedings, at registered addresses in the country. Where they have changed address without informing thereof the court of jurisdiction over the bankruptcy, all summonses and papers shall be attached to the case file and considered duly delivered.
(2) (Amended, SG, No. 38/2006) Creditors with registered address abroad and without address in Bulgaria shall supply a legal address within this country. If no such has been supplied, the summons shall be submitted for posting in the Commercial register.
(3) (New, SG No. 84/2000; amended, SG, No. 38/2006) After instituting bankruptcy proceedings, in the case of acts which are not subject to promulgation in the State Gazette pursuant to this Act or announcement according to the Code of Civil Procedure and which are not subject to appeal, the creditors shall be considered informed thereof with the entering of an announcement of the respective act in the book referred to in article 634c, paragraph 1.
(4) (New, SG No. 58/2003; amended, SG, No. 38/2006) In cases where this Act provides for summoning through the Commercial Register, the invitation, announcement or summons must be posted therein not later than 7 days prior to the meeting or session, as the case may be.
Fees and Expenses
Article 620
(1) (Amended and supplemented, SG No. 70/1998) No preliminary state fees shall be collected upon filing the application to institute bankruptcy proceedings by the debtor. Such fees shall be collected from the bankruptcy estate prior to distribution of the assets.
(2) (New, SG No. 70/1998; supplemented, SG No. 84/2000) Where the application to institute bankruptcy proceedings has been filed by a creditor and in adding a creditor, the state fee shall be collected from the creditor, respectively the added creditor.
(3) (New, SG No. 70/1998) Upon the institution of bankruptcy proceedings, any expenses shall be collected from the bankruptcy estate. For this purpose, the court may allow the trustee in bankruptcy to perform a disposal under Article 658, para 1, Item 8.
(4) (New, SG No. 70/1998) Unless the reorganisation plan approved by the court under Article 705 provides otherwise, with its decision under Article 707 the court shall sentence the debtor to pay the state fee due and any expenses incurred.
(5) (Renumbered from Paragraph 2, SG No. 70/1998, amended, No. 84/2000) For court actions instituted to complement the bankruptcy estate and actions to repeal, state fees shall not be collected in advance.
(6) (Renumbered from Paragraph 3, supplemented, SG No. 70/1998; amended, SG, No. 38/2006) No stamp duties shall be collected for entry in the Commercial Register of circumstances related to bankruptcy, as well as for entry and deletion of an attachment under Article 630, para 1, Item 4 and of a general attachment.
Subsidiary Application
Article 621
Inasmuch as this Part contains no special provisions, the respective provisions of the Code of Civil Procedure shall apply.
Special rules governing bankruptcy proceedings
Article 621a
(New, SG, No. 38/2006)
(1) In addition to the rules set forth in this section, the following special procedural rules shall also apply in bankruptcy proceedings:
1. The jurisdiction as defined by law for bankruptcy proceedings cannot be amended through an agreement between the participating parties;
2. The court cannot, of its own accord, establish facts or gather evidence as may be of significance for its judgments or rulings.
(2) In addition to the claims defined as per this section, the following shall also be subject to the jurisdiction of the bankruptcy court, without the possibility for its jurisdiction to be amended through an agreement between the participating parties:
1. claims against the trustee in bankruptcy as per Art. 663, paragraphs (2) ?
2. claims defined as per Art. 646 or Art. 647.
(3) The provisions of the Code of Civil Procedure regarding the following shall not apply to bankruptcy proceedings:
1. suspension of proceedings by mutual consent of the parties;
2. withdrawal or cancellation of a creditor's motion for initiation of bankruptcy proceedings after a judgment is passed as per art. 630, paragraph (1) or (2), or Art. 632;
3. withdrawal or cancellation of a claim filed by a trustee in bankruptcy or creditor in accordance with Art. 645, paragraph (3), Art. 646 or Art. 647.
Section II
Recordation and announcement

(Title amended, SG 38/2006)
Recordation of court judgments
Article 622
(Supplemented, SG. No. 70/1998, No. 84/2000;
amended, SG, No. 38/2006)
Court rulings pursuant to Article 272a, para 1, Articles 630, 632, 641, Article 705 para 2, Article 707, Article 709, para 1, Article 710, Article 713, para 2, Article 735 and Article 744, para 1, shall be recorded in the Commercial Register.
Recordation of data about the trustee in bankruptcy and the
supervisory body
Article 623
(1) (Supplemented, SG No. 70/1998, previous Article 623, amended, SG No. 58/2003; amended, SG, No. 38/2006) The name, telephone number, the address and the e-mail address of the nominated trustee in bankruptcy or the temporary trustee in bankruptcy, and, in cases under Article 707, para 1, of the appointed members of the supervisory body, shall be recorded in the Commercial Register.
(2) Also subject to recordation in the Commercial Register shall be any changes in circumstances as per paragraph (1).
Submission of court rulings for recordation
Article 624
(Amended, SG, No. 70/1998, No. 38/2006)
The court shall be obliged to submit for recordation in the Commercial Register transcripts of the court acts pursuant to Articles 622 and 623 on the day of the ruling thereof, or on the following business day at the latest.
CHAPTER THIRTY-NINE
INSTITUTING BANKRUPTCY PROCEEDINGS

(Previous Chapter 35, SG No. 83/1996)
Section I
Start of Proceedings

Instituting Proceedings
Article 625
(Supplemented, SG, No. 70/1998; amended, SG, No. 84/2000; amended and
supplemented, SG, No. 38/2006)
Bankruptcy proceedings shall be instituted pursuant to an application in writing submitted to the court by the debtor, respectively by the liquidator or the debtor's creditors under a commercial transaction, and by the Government Claims Agency, for a public obligation to the state or municipalities related to the commercial activity of the debtor.
Obligation for Declaration
Article 626
(1) (Supplemented, SG No. 84/2000; amended, SG, No. 38/2006) Any debtor who becomes insolvent or excessively indebted shall be obliged to request within 30 days institution of bankruptcy proceedings.
(2) (Supplemented, SG No. 84/2000; amended, SG, No. 38/2006) The application pursuant to para 1 shall be submitted by the debtor, his heir, the managing body, respectively liquidator, of a company or a partner with unlimited liability.
(3) Procurators shall be obliged to inform merchants in writing within 7 days about the insolvency.
(4) Should the application be submitted by an agent, explicit power of attorney shall be required.
Liability
Article 627
Should persons fail observe their obligation for declaration pursuant to Article 626, para 2, they shall be liable jointly and severally before creditors for damages caused by such delay.
Attachments to the Petition
Article 628
(1) (Supplemented, SG No. 84/2000) Debtors, respectively liquidators, shall attach to the application:
1. a transcript of the last certified by certified public accountant annual financial report and balance sheet as of the date of submission of application, provided the merchant is obliged by law to prepare such documents;
2. inventory and evaluation of assets and liabilities as of the date of submission of application;
3. list of creditors, indicating the addresses, types, amounts and securities for claims thereof;
4. inventory of personal properties and properties that are joint matrimonial property - for sole proprietors and partners with unlimited liability.
(2) Creditors shall present with their application the evidence in writing and indicate any other evidence for the debtor's insolvency.
(3) (New, SG No. 103/1999, amended, SG No. 105/2005) With their applications, debtors or creditors must attach evidence under Art. 78, para 2 of the Tax and Social Insurance Procedure Code .
(4) (Renumbered from Paragraph 3, SG No. 103/1999, supplemented, No. 84/2000) With their applications, debtors or creditors may also propose a plan pursuant to Article 696, or specify a person meeting the requirements under article 655, para2, which the court shall appoint as an temporary trustee in bankruptcy in the case of institution of bankruptcy proceedings.
Limitation in the submission of the application
Article 628a
(New, SG, No. 38/2006)
(1) The filing by a creditor of an application (motion) for instituting bankruptcy proceedings constitutes an interruption of the statues of limitation of the claim in respect of which the applicant filed the application as per Art. 625. Such limitation shall not expire for the duration of the bankruptcy proceedings.
(2) For added creditors in accordance with Art. 629, the rules as per paragraph (1) shall apply from the moment of submission of the application for adding a creditor.
(3) If an application for instituting bankruptcy proceedings is rejected by an effective court ruling, the statute of limitation shall not be deemed to be interrupted. The validity of the suspension of limitation shall remain.
Consideration of Petition
Article 629
(1) (Amended, SG No. 84/2000) Petitions to institute bankruptcy proceedings, submitted by debtors, respectively liquidators, shall be considered immediately by the court in camera.
(2) (Supplemented, SG No. 70/1998) Petitions to institute bankruptcy proceedings, submitted by creditors, shall be considered by the court in camera summoning the debtor and the petitioner, within 14 days at the latest.
(3) (New, SG No. 70/1998, repealed, new, No. 84/2000) By the end of the first session on a court case initiated by a creditor, other creditors may be added in the proceedings, objections may be raised and written evidence may be submitted.
(4) (New, SG No. 103/1999) The court shall be obliged to apply the rules set out in the preceding paragraphs provided the petition to institute bankruptcy proceedings meets all requirements set out in Article 628.
(5) (New, SG No. 84/2000) The court shall institute the action on the day the petition is filed and rule on the action no later than 3 months following the institution of the action.
Preliminary Security Measures
Article 629a
(New, SG, No. 70/1998)
(1) (Supplemented, SG, No. 38/2006) Prior to the ruling on the application to institute bankruptcy proceedings, if so required for the purposes of protecting the debtor property, upon a creditor's request, or ex officio, the bankruptcy court may:
1. appoint a temporary trustee in bankruptcy having the authorities under Article 635, para 1;
2. allow the measures under Article 630, para 1, Item 4;
3. rule suspension of executionary court actions against the property of the debtor, except for executionary court actions instituted under the State Claims Collection Act;
4. allow the measures under Article 642;
5. impose the measures stipulated in Article 650.
(2) Where the request to impose the measures under para 1 is filed by a creditor, the court shall impose those if:
1. the creditor's request is supported by convincing written evidence; or
2. a surety, in the amount established by the court, is provided to compensate the debtor for any damages incurred, in case it is not found to be insolvent, or over-indebted, respectively.
(3) The court may obligate the creditor to provide surety also in the cases under para 2 Item 1.
(4) Security measures imposed shall benefit all creditors in the bankruptcy.
(5) The court may rescind the security measures imposed if the continuance thereof is not required for the purposes of achieving the goals of the surety.
(6) The determination as to ruling the measures under para 1 shall be announced to the person with respect to which the measures are imposed, and to the person that has requested the imposition thereof. The determination may be appealed within 7 days following receipt of the notification.
(7) The determination regarding an adjudication of measures under para 1 shall be subject to immediate execution. Its appeal shall not suspend its execution.
(8) Security measures shall be presumed rescinded when, under a decision which has become effective, the application to institute bankruptcy proceedings is rejected.
(9) Security measures imposed shall be effective until the date of the decision to institute bankruptcy proceedings. As of that date, their effect shall be replaced by the effect of the decision to institute bankruptcy proceedings, and by the effect of the measures ruled pursuant to Article 630, para 1, subpara 4, The court may rule new security measures and continue the effectiveness of measures imposed pursuant to this Article.
Institution of bankruptcy proceedings in the absence of property
as may be used for covering the initial expenses
Article 629b
(New, SG, No. 38/2006)
(1) When the available property of the debtor does not suffice to cover the initial expenses, the court may determine the amount that shall be prepaid within a time limit set by the court by the persons as per Art. 625 or by another creditor, for the purpose of instituting the bankruptcy procedure. The court ruling shall not be subject to appeal or enforcement, but it shall define the consequences as per Art. 632, par. (1), in case where the amount is not prepaid within the set time limit.
(2) The initial expenses shall be determined by the court depending on the current compensation of the temporary trustee in bankruptcy, and the estimated expenses pertinent to the bankruptcy proceedings.
(3) Where the debtor is a personal company, the court shall rule on the prepayment as per par. (1), after taking into consideration also the property of the partners of unlimited liability.
Section II
Issue of a Ruling

Ruling on Institution of Bankruptcy Proceedings
Article 630
(1) (Supplemented, SG No. 70/1998) Where the court has established insolvency or over-indebtedness, as the case may be, by its ruling it shall:
1. (supplemented, SG No. 70/1998) declare the insolvency or over-indebtedness, as the case may be, and determine the initial date thereof;
2. institute bankruptcy proceedings;
3. appoint a temporary trustee in bankruptcy;
4. allow for provision of security by means of imposing attachment or other security measures.
5. fix a date for the first meeting of creditors, not later than one month following the issue of the ruling.
(2) (Amended, SG Nos. 70/1998, 84/2000, supplemented, SG No. 58/2003) Where it is obvious that further continuance of the activity could damage the bankruptcy estate, the court may, upon request by the debtor, respectively the liquidator, the trustee in bankruptcy, the Government Claims Agency or creditor, declare the debtor bankrupt and terminate his activity concurrently with the ruling to institute bankruptcy proceedings or later but before the time period for proposing a plan as referred to in Article 696 has expired.
(3) The ruling on instituting bankruptcy proceedings shall be effective in respect of all.
Ruling to Reject the Application
Article 631
The court shall reject the application, should it establish that the debtor's distress is temporary and that he disposes of sufficient assets to cover the obligations, safeguarding the creditors' interests.
Indemnity
Article 631a
(New, SG, No. 58/2003)
(1) Where, under a decision that has come into force, a creditor's petition to institute bankruptcy proceedings has been rejected, the debtor, be they a natural or a legal person, shall be entitled to indemnification if the creditor has acted with intent or grave negligence.
(2) Indemnity shall be due for all property and non-property damages which are the direct and immediate consequence of the harm. It can be payable as a one-time payment or in periodic instalments.
(3) If the debtor has contributed for the occurrence of damages, the indemnity can be reduced.
(4) Indemnity for non-property damages shall be determined by the court by an equity judgment.
(5) If the petition to institute bankruptcy proceedings has been filed by several creditors, they shall be held liable jointly and severally.
Ruling to Terminate Proceedings
Article 632
(Amended, SG, No. 38/2006)
(1) Where the available property is not sufficient for covering the initial expenses and/or such expenses are not prepaid in accordance with the procedure as per Art. 629b, the court shall declare the insolvency, resp. the over-indebtedness; shall set its initial date, shall institute bankruptcy proceedings, shall allow securing of the debt through the imposition of distraint or prohibition or other security measures; shall decree the termination of activities of the enterprise, shall declare the debtor bankrupt and shall close proceedings. In such a case, the court shall not decree the deletion of the merchant from the Commercial Register.
(2) Suspended bankruptcy proceedings can be resumed within one year from the recordation of the court ruling as per par. (1), upon the request of the debtor or a creditor. Resumption of proceedings shall be allowed if the requesting party can prove that sufficient property is available or if said party would deposit the required amount for prepayment of the initial expenses as per Art. 629b.
(3) In case of a resumption of proceedings, the period for presentation of claims shall commence as from the moment of recordation of the ruling as per par. (2).
(4) If within the time limit as per par. (2) no resumption of proceedings is requested, the court shall terminate the bankruptcy proceedings and shall order the deletion of the debtor from the Commercial Register.
(5) The provisions of pars. (1) through (4) shall also apply in cases where it is established, in the course of bankruptcy proceedings, that the available property of the debtor does not suffice to cover all expenses pertinent to the bankruptcy proceedings.
Refunding of prepaid sums
Article 632a
(New, SG, No. 38/2006)
The prepaid amounts as per Art. 629b and 632 shall be refunded to the respective payer provided that the bankruptcy estate has increased sufficiently.
Appeal of Rulings
Article 633
(Amended, SG, No. 38/2006)
(1) Rulings as per Articles 630 and 632 may be appealed within 7 days as from the date of recordation thereof in the Commercial Register.
(2) The decision whereby the request as per art. 625 is rejected shall be subject to appeal within 7 days from the date of the announcement in accordance with the Code of Civil Procedure.
Immediate Execution
Article 634
Rulings pursuant to Article 630 shall be implemented immediately.
CHAPTER FORTY
EFFECT OF RULING ON INSTITUTION
OF BANKRUPTCY PROCEEDINGS

(Previous Chapter 36, SG No. 83/1996)
Date of Institution of Bankruptcy Proceedings
Article 634a
(New, SG, No. 70/1998)
Bankruptcy proceedings shall be deemed instituted as of the date of the decision under Article 630. In case actions under Article 635, Article 636, para 1, Articles 637, 638 and 646 have been performed prior to this date, they shall be presumed as effected upon the institution of the bankruptcy proceedings.
Court Rulings on Petitions in Bankruptcy Proceedings
Article 634b
(1) (New, SG, No. 84/2000) (1) The court shall make its ruling within 3 days upon the application of a party in the proceedings, unless another period is provided for in this part. Should the act of the court's ruling be subject to appeal, the appellate court shall make a ruling within 7 days of receiving the appeal and shall give obligatory instructions.
(2) In case of absence of the judge hearing the case, the president of the court of jurisdiction over bankruptcy shall nominate another judge to hear the case during the absence.
(3) The judge hearing the case shall immediately rule on a request for challenge. A resolution rejecting the challenge shall be subject to appeal before the president of the appellate court, who shall make a ruling within 3 days of receiving the appeal.
Announcement of the Court Acts
Article 634c
(New, SG, No. 84/2000)
(1) (Supplemented, SG, No. 38/2006) The actions of the debtor, the creditors, the committee of creditors, the meeting of creditors, the trustee in bankruptcy and the court acts on bankruptcy shall be entered in a separate book which shall be public and available in the chancery of the court of jurisdiction over bankruptcy. The rulings and resolutions of the first instance court of appeal and the cassation court on appeals against the acts of the court of jurisdiction over bankruptcy shall also be entered in the same book. The book may be kept and stored in electronic format.
(2) (Amended, SG No. 104/2007) Communications of the appealable court judgments, with the exception of the ruling referred to in Article 729 (1), shall be transmitted to the interested parties according to the procedure established by the Code of Civil Procedure.
(3) (New, SG No 31/2005) If the debtor is an operator or participant in a payment system recorded in a register of the Bulgarian National Bank, simultaneously with the rendition of the judgment on institution of bankruptcy proceedings under Article 630 herein, the court shall notify the Bulgarian National Bank of the institution of bankruptcy proceedings by means of transmitting the judgment to the Bulgarian National Bank.
(3) (New, SG No 31/2005) If the debtor is an operator or participant in a securities settlement system, the court shall notify the Central Depository of the institution of bankruptcy proceedings by means of transmitting the judgment to the Central Depository of securities.
Notice of the Bankruptcy Proceedings to the Company
Case of the Debtor
Article 634d
(New, SG No. 84/2000; supplemented, SG, No. 58/2003; repealed,
SG No. 38/2006)
Restriction of Rights of Insolvent Debtor
Article 635
(1) (Supplemented, SG No. 84/2000) Upon institution of bankruptcy proceedings, or in the cases under article 629a, the debtor shall continue his activities under the supervision of the trustee in bankruptcy. He may conclude new transactions with preliminary approval of the trustee in bankruptcy only, and in compliance with the measures, determined by the ruling on institution of bankruptcy proceedings or by the determination pursuant to article 629a.
(2) The court may deprive the debtor of the right to manage and dispose of his assets and to grant this right to the trustee in bankruptcy, should it establish that by his actions the debtor jeopardises the interests of creditors.
(3) (New, SG, No. 38/2006) In bankruptcy proceedings, as well as in proceedings as per Art. 621a, par. (2), Arts. 649 ?
Performance of Money Obligations
Article 636
(1) (Amended, SG, No. 38/2006) The performance of obligations to the debtor shall be taken over by the trustee in bankruptcy as from the date of recordation of the ruling on institution of bankruptcy proceedings.
(2) (Amended, SG No. 70/1998, No. 38/2006) The performance made to the debtor after the initial date of institution of the bankruptcy proceedings but prior to the recordation shall be deemed valid, if the performer was unaware of the initiation of proceedings, or even where the performer was aware thereof, provided the given has been included into the bankruptcy estate. Bona fide action shall be presumed unless proven otherwise.
Suspension of Court Proceedings
Article 637
(1) (Supplemented, SG Nos. 84/2000, 58/2003) Upon institution of bankruptcy proceedings, court and arbitration proceedings under civil and commercial cases against the debtor, with the exception of labour disputes on money claims shall be suspended. This provision shall not apply if as of the date of institution of bankruptcy proceedings on another case, where the debtor is a defendant, the court has accepted for joint consideration a counterclaim or an objection for offset submitted by the debtor.
(2) (Amended, SG No. 70/1998, No. 38/2006) Suspended proceedings shall be terminated, provided the claim is allowed, under the terms of Article 693.
(3) (New, SG No. 70/1998) Proceedings suspended pursuant to para 1 shall be resumed and continue with the participation of
1. the trustee in bankruptcy and the creditor, should the claim be not included in the list of dues received by the trustee in bankruptcy, or in the list approved by the court under Article 692;
2. (amended, SG, No. 38/2006) the trustee in bankruptcy, the creditor and the person having filed a protestation, should the claim be included in the list of dues received by the trustee in bankruptcy but a protestation against it has been made under the terms of Article 692, para 3.
(4) (New, SG No. 70/1998) The decision ruled under para 3 be legally binding in establishing the relations among the debtor, the trustee in bankruptcy and all creditors in the bankruptcy.
(5) (New, SG No. 58/2003, amended, SG, No. 38/2006) After bankruptcy proceedings have been instituted, it shall not be allowable to institute new court or arbitration proceedings on property claims in civil or commercial cases against the debtor, except in respect of claims for:
1. protection of the rights of third parties who/which are owners of items included in the bankruptcy estate;
2. employment disputes.
Suspension of Execution Proceedings
Article 638
(1) (Supplemented SG No. 103/1999, amended, SG No. 105/2005) Upon institution of bankruptcy proceedings any execution proceedings against assets included in the bankruptcy estate shall be suspended, with the exception of properties under Art. 193 of the Tax and Social Security Procedure Code.
(2) (Amended, SG, No. 38/2006) Where within the period as from the suspension pursuant to para 1 through the date of recordation of the ruling on institution of bankruptcy proceedings payments have been effected to claimants, the moneys paid shall be returned to the bankruptcy estate.
(3) (Amended and supplemented, SG No. 70/1998) Where actions have been undertaken in favour of secured creditors for implementing the surety, the court may allow the proceedings to continue, should there exist a danger of jeopardising the creditor's interests. Any surplus amount received over and above the amount of the surety shall be added to the bankruptcy estate.
(4) (New, SG No. 58/2003, amended, SG No. 105/2005) Suspended proceedings shall be terminated if the claim has been filed and allowed under the terms of Article 693. Any imposed attachments and garnishments shall not be opposable to creditors in the bankruptcy. It shall not be allowable to impose security measures following the procedure of the Code of Civil Procedure or the Tax and Social Insurance Procedure Code with respect to the debtor's property after bankruptcy proceedings have been instituted.
Claims having emerged following on institution
of Bankruptcy Proceedings
(Title amended, SG 38/2006)
Article 639
(1) (Amended, SG No. 38/2006) Creditors of claims that have occurred after the date of the ruling on institution of bankruptcy proceedings shall receive payment on maturity, and where they have not received payment on maturity, shall be satisfied pursuant to the procedure under Article 722, para 1.
(2) (Repealed, SG No. 38/2006) .
Special Cases of Sale
Article 639a
(New SG No 70/1998, repealed, SG No. 84/2000)
Sale of perishable goods
(Title new, SG No. 38/2006)
Article 639b
(1) (Previously Art. 639b, SG, No. 38/2006) The court may allow the trustee in bankruptcy to sell, prior to any cashing determination, any perishable movables and any other property from the bankruptcy estate if so necessary for covering the cost of the bankruptcy proceedings.
(2) (New, SG No. 38/2006) The sale as per par. (1) above shall be effected by the trustee in bankruptcy through direct negotiations.
Cooperation of Debtors
Article 640
(1) (Previous Article 640, SG No. 84/2000) Within 14 days of institution of bankruptcy proceedings, debtors shall be obliged to provide to the court and the trustee in bankruptcy:
1. Adequate information related to the activities of their enterprises and their properties;
2. (amended, SG No. 90/1999, No. 38/2006) list of payments in cash or by means of bank transfer that exceed BGN 1,200 and that have been effected within six months prior to the initial date of insolvency;
3. list of payments effected by the debtor to persons related thereto, for a period of one year prior to the initial date of insolvency;
4. (new, SG No. 38/2006) a list of creditors in accordance with the debtor's books, indicating also the amounts of their claims;
(2) (New, SG No. 58/2003) The debtor shall provide the court or the trustee in bankruptcy information concerning the condition of its property and its commercial activity as of the date of the request, and all documents of relevance to that. Such information and documents shall be provided within 7 days following the written request.
(3) (New, SG No. 84/2000; renumbered from Paragraph 2, supplemented, SG No. 58/2003) Should the debtor fail to fulfil its obligation under paragraph 1, the court shall impose a fine of at least BGN 500 but not exceeding BGN 1000 on the guilty person, while under paragraph 2 the court shall impose a fine ranging from BGN 1000 to 5000 on the guilty person.
Effect of Repeal of Ruling on Institution of Bankruptcy Proceedings
Article 641
(Amended, SG Nos. 84/2000, 58/2003, No. 38/2006)
In case of repeal of the ruling on institution of bankruptcy proceedings, imposed attachments shall be considered removed, the authority of the debtor restored, and the authority of the trustee in bankruptcy, terminated from the time of entering the ruling of the Supreme Court of Appeal in the commercial register.
Security Measures
Article 642
(Supplemented, SG No. 38/2006)
Upon request of the trustee in bankruptcy, the debtor or any creditor, the bankruptcy court may allow measures provided by law, securing the available assets of the debtor.

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