Aimed at the effective and low-cost enforcement of consumer rights, the Arbitration Board system was established by the Act CLV of 1997 on Consumer Protection. The purpose of the arbitration board is to reach an agreement between an economic organization and a consumer to settle a dispute outside of court, or, should the prior process fail to produce results, to decide on the matter.

It is important to clarify what sourt of petitions can be filed at the arbitration board and which of the 20 arbitration boards functioning in the country (arbitration boards of the 19 municipalities and the capital) consumers should turn to.
 
Consumer disputes that fall within the jurisdiction of the arbitration board and can thus be settled outside of court include:

1. the quality and safety of goods,
2. the application of product liability regulations,
3. the quality of services,
4. the conclusion and performance of contracts.
    
   

Proceedings commence with the submission of a written petition. The petition shall be presented by the consumer to the chairman of the arbitration board. The arbitration board with jurisdiction for the consumer’s permanent or temporary residence shall be responsible for the proceedings. If the consumer does not have a domestic residence, jurisdiction shall be adjusted to his place of accomodation. If the consumer’s residence is abroad, jurisdiction shall be determined by the economic organization involved in the complaint or the organ acting as the representative of such economic organization. Upon the consumer’s request, the petition may also be filed with the arbitration board having jurisdicition over the location where the contract was concluded instead of the competent body.

The prerequisite for commencing arbitration board proceedings is a direct attempt of the consumer to settle the dispute directly with the economic organization involved.
 
The petition to be submitted by the consumer should contain the following:

1. the name and the address of the consumer or the consumer’s place of residence,
2. the name and registered office of the economic organization which is the subject of a complaint,
3. the consumer’s declaration on the fulfillment of the condition that he has attempted to settle the case directly with the economic organization involved,
4. the consumer’s declaration that he has not initiated proceedings in the case with other arbitration boards, and that he has not initiated a mediation process or civil law procedure in the case,
5. the motion for the decision of the board.
    
   

The document, or a copy (extract) of such document that is presented by the consumer in evidence shall be attached to the petition. Should the consumer fail to attach all necessary documents, the chairman of the board shall send the documents back to the consumer within fifteen days from the day it was received by the arbitration board, stating the absence of these documents, and calling upon the consumer to supply the missing documents.
 
For establishing the deadlines, the day when the chairman of the arbitration board receives the complete petition is crucial, as that is considered the commencement of the proceedings.
 
Within 60 days of the commencement of the proceedings, the chairman of the arbitration board shall appoint a hearing, the exact time and date of which he informs the parties and sends them the list of board members as well. Furthermore, the chairman shall send a copy of the petition to the economic organization. The economic organization is obliged to respond in writing within 8 days from receiving the copy of the petition and shall make a statement on the rightfulness of the claim, the circuimstances of the case and whether it subjects itself to the jurisdiction of the arbitration board (submission).
 
Arbitration board proceedings shall be completed within ninety days of receiving the complete petition. If considered necessary, the ninety-day term of proceedings can be extended by thirty days by the chairman of the board. The term of the proceedings ensure a prompt completion of consumer disputes.

Members of the arbitration board are delegated evenly by social organizations providing representation of consumer interests and chambers. The appointment of the arbitration board members shall last three years.
 
The arbitration board shall act in a council of three members. One member of the acting council shall be delegated by the consumer initiating the proceeding or the social organization providing representation of consumer interests, one other member by the economic organization which is the subject of the proceeding from the list of board members. The chairman of the arbitration board is entitled to appoint the chairman of the proceeding concil.
 
If either of the parties fails to exercise the right of delegation, or it is otherwise necessary, the third member of the proceeding council shall be appointed by the chairman. Should the dispute be considered to fall under simple adjudication by the chairman of the board, he can appoint a board member to proceed alone. In such cases however, upon the specific request of both parties, the arbitration board shall act in a council of three members

The council shall terminate the proceedings, if

• the consumer withdraws his petition
• the parties agree on the termination of the proceedings
• continuation of proceedings becomes impossible
• continuation of the proceedings should not be necessary for any reasons whatsoever –including unfounded claims- as so deemed by the council.
   
  

In the proceedings the chairman of the council shall attempt to negotiate an agreement between the parties, which the council shall approve by resolution. If an agreement is not concluded, the proceedings continue. The council shall pass an obligatory resolution, if the claim is established and the economic organization involved in the case has declared that it will accept the decision of the arbitration board as obligatory upon commencement of the proceeding (submission).
 
The resolution of the council shall be a recommendation, if the claim is established and the economic organization involved in the case has stated upon commencement of the proceedings that it does not accept the decision of the council as obligatory, or has not made any declarations regarding the acceptance of the council’s decision.
 
Should the economic organization fail to fulfill the obligatory resolution of the council or the agreement approved by resolution, the consumer may request the court to have a writ of execution attached to the council’s resolution. In this case, court proceedings shall solely mean the initiation of executive proceedings against the economic organization.
 
Recommendations of the council are not enforceable. In the event that the economic organization fails to comply with the council’s recommendation, the possibility of making the case public shall serve as sanction. If the economic organization fails to comply with the resolution, the consumer shall inform the arbitration board in writing, based on which the board shall publish the short description and result of the case.
 
The recommendation can not be published if the overruling of the case was requested at the court having jurisdiction and competency over the case until the court proceeding is brought to a close by a legally binding verdict.
 
Furthermore, the arbitration board can publish the name, the corporate domicile and the involved branch of business of the economic organization in case the economic organization fails to make a declaration, or fails to make a substantive declaration regarding the consumer’s complaint and fails to appear at the hearing of the case and thus hinders the conclusion of an agreement.
 
The obligatory resolution and recommendation of the council is not subject to appeal, however the annulement of the resolution by court can be filed for within fifteen days of receiving the resolution if:

• the composition or the procedure of the council was not in compliance with the provisions of this Act
• the arbitration board did not have jurisdiction over the case
• the petition should have been dismissed without a hearing, as a procedure of an other arbitration board has already been initiated regarding the same claim at an other arbitration board; there is an ongoing court procedure in the case or a legally binding verdict had already been returned in the case.
   
  

Within fifteen days of receiving the recommendation, the economic organization may file for annulment at the competent county court, if the content of the recommendation is not in compliance with the provisions of this Act.