SOME QUESTIONS ABOUT INTERNATIONAL DISTRIBUTION

Today's article is prompted by a recurring issue we encounter not only in our office. We often face the following situation. A Bulgarian company agrees with a foreign company to distribute (most often) goods and products of the foreign company in Bulgaria. In most cases, the foreign company sends (usually via email) an authorization letter, recognizing the rights of the Bulgarian company as their exclusive distributor for a certain territory (the prevalent practice is for this territory to be Bulgaria or Eastern Europe). And so the distributor distributes the goods and products of the foreign company, the company is satisfied until the two parties involved in the distribution agreement clash over one of the issues listed below:
1. Disputes regarding warranty service;
2. Disputes regarding the foreign company contracting with another Bulgarian distributor to be exclusive;
3. Disputes about delivery prices;
4. Disputes about whether the Bulgarian company is a buyer or a distributor, which directly relates to compliance with warranty periods for defective goods from the supplier;
5. Disputes about whether the goods returned due to quality defect should be paid for or not, whether they should be replaced with others, etc.
The first question that arises is “What can you do in this situation?”
First, keep copies of correspondence with your supplier because any self-respecting court would take email correspondence into consideration, even if it doesn't accept it as 100% evidence.
Keep copies of invoices and read carefully whether it is stated anywhere on the invoice that your transactions with this company are concluded under general terms or not.
Check if there is a copy of such general terms on the back of the invoices sent to you. If not, look at your supplier's website and see if the general terms are listed anywhere on it.
Check any old correspondence to see if general terms were ever sent to you on any occasion.
Why do you need all this?
General terms have the force of a contract, and if you've paid an invoice that explicitly states it is for a delivery concluded under general terms, it means you have tacitly accepted the general terms. There is one exception to this rule – if general terms were not provided to you and such cannot be found in publicly accessible places, like the website of the foreign company, for example.
It is crucial to familiarize yourself with the content of the general terms if they have been provided to you because they contain information such as under what conditions warranties and warranty service apply, when and if you can return goods with an expiring shelf life to the supplier and make claims, if disputes arise, how they should be resolved, according to which rules and by whom. The latter is very important. If the country where your supplier is located is an EU member, European regulations, specifically RIM 1 and Brussels 2a, will apply. If the general terms exercise autonomy of will, they will outline before which court your disputes with your supplier are to be resolved and which law is to be applied (Bulgarian, German, English, or other). This, in turn, can guide you (and your lawyers) on how to defend yourself during a potential court case.
The second question that arises is “What can you expect?”
Expectations depend on the future development of the situation. Generally, there are 3 options: 1) resolving it via emails, letters, explanations, possibly visits; 2) receiving a European payment order, or 3) being sued.
Finally, but not least, what can you do if you don't reach an agreement with your supplier?
In case you are sued, closely monitor before which court the case is filed, and if it is not before a Bulgarian court, check your general terms. If you don't have general terms, but your foreign supplier refers to them, point it out immediately. If the case is before a foreign court, be sure to object to jurisdiction, object to the manner of service, the language of service, and similar. It's best to consult with a lawyer specializing in international private law.
If your supplier is a company registered in the EU, you might receive a European payment order, which is in accordance with Regulation 1896/2006. The text of the Regulation can be found here: http://vestaconsult.do.am/forum/13-572-1
Following the regulation's text, the forms are attached, along with instructions for filling them out. They are absolutely identical across all languages in terms of template, form, and content. So, if you receive such a form in a language you don't understand, refer to the Bulgarian form and you will find it easier to understand based on the content. Be sure to have someone who speaks the language EXCELLENTLY translate it for you just in case. Keep in mind that the terms are often commercial and legal, and excellent language proficiency, along with specialized knowledge in these spheres, is very important for the accuracy and adequacy of the translation you expect to receive. Together with the European payment order, there is also a form for an objection. It's best to refuse to accept the payment order if served in a foreign language immediately on that basis. With the order, you should receive an attachment with a form for refusal to accept based on the fact that you do not understand and do not speak the language in which the order is served.
Once you have received it and familiarized yourself with its content, you can answer the following questions:
1. What obligation is described in it and do you owe it? If you do owe it, what deadline is set for you to pay voluntarily before the situation becomes more complicated for you.
2. If you do not owe these amounts, you may object within 30 days of receiving the order. The objection form is attached to the order itself, and you can also find it in the forms attached to the Regulation from the link above. You can send the objection by mail or courier to the court that issued the order. Somewhere in the order, the court and its address should be listed. What happens if you miss the deadline to object? – Then the order becomes mandatory for execution, regardless of whether you owe the money or not, and forced execution will be implemented if you do not pay voluntarily.
3. Look to see if it is marked in the order that, if you object, a lawsuit will be filed. If yes - then you will need to prepare all necessary evidence and materials for a possible future case (to prove that your creditor's obligation claim is unfounded and not owed) and be prepared for a summons for such. It would be good to come up with a strategy on how to prepare your future defense. If it is not marked, then with the objection against the European payment order, you have stopped future claims against you for this obligation for now.

I hope I have been helpful!