International arbitration has been gaining significant ground in Romania for some time now. Its increasing use predominantly results from disputes related to the various infrastructure projects started by the public authorities in Romania with the help of European financing (from pre-adhesion and post-adhesion funds). The contracts concluded for these projects follow the International Federation of Consulting Engineers (FIDIC) General Conditions of Contract, which includes the standard International Chamber of Commerce (ICC) arbitration clause. At one stage, a government decision was issued to regulate the use of the FIDIC General Conditions of Contract.
International arbitration is well-established in Romania, with a more or less constant rise in the number of arbitration cases per year. The majority of these involve construction disputes, but various other contractual disputes are also referred to international arbitration, including energy-related disputes.
Arbitration in Romania has experienced a steady growth since 2014.
An even steadier growth of international arbitration is expected, given that the most frequently used international arbitration institution in Romania, the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (CICA), adopted a new set of rules starting from 1 January 2018 which align to the rules of ICC and other similar institutions, such as the London Court of International Arbitration (LCIA), and which make the arbitral proceedings more flexible for the parties.
International arbitration is currently carried out under the auspices of the ICC, the Vienna International Arbitral Centre (VIAC), the London Court of International Arbitration (LCIA), the Swiss Chamber of Commerce (SCC), but also under those of German and Italian institutions of arbitration (the German Institution of Arbitration (DIS), and the Court of Arbitration attached to the German-Romanian Chamber of Commerce and Industry (AHK), mainly used by German/Italian companies and investors).
The COVID-19 pandemic did not have a major impact on the use of international arbitration or on the course of the proceedings. The written phase of the proceedings carried on as planned; in case the pandemic affected the parties’ possibilities to gather the necessary information and documents, extensions for submitting the memorials were granted, usually following parties’ agreement, while face-to-face hearings were replaced by video conferences.
As mentioned in 1.1 Prevalence of Arbitration, the main sector experiencing international arbitration activity has been and continues to be the construction industry. This trend is due to fact that infrastructure projects started by the public authorities in Romania with the help of European financing are concluded in agreements based on the International Federation of Consulting Engineers (FIDIC) General Conditions of Contract, which includes the standard International Chamber of Commerce (ICC) arbitration clause. At one stage, a government decision was issued to regulate the use of the FIDIC General Conditions of Contract.
There are no particular industries experiencing decreased international arbitration activity in 2020–21 as a result of the COVID-19 pandemic. In fact, the legislatives measures adopted during the pandemic generated new arbitration files.
The most frequently used international arbitration institutions in Romania are (i) the ICC, mostly for international arbitrations seated in Romania or disputes with an international component and (ii) the CICA, mainly for local arbitral disputes.
No new arbitration institutions have been established in Romania in 2020–21.
There are no national courts which only hear disputes related to international or domestic arbitration matters. The national courts intervention is limited to adjudicating claims aimed at removing impediments occurred in organising or during the arbitration (eg, aiding in the process of appointing arbitrators as detailed in 4.3 Court Intervention, challenging arbitrators) or other claims such as issuing interim measures necessary to aid the arbitral proceedings or granting protective measures and interim relief, at the parties’ request, before or during the arbitral proceedings. Such claims are adjudicated by the local tribunal whose jurisdiction covers the seat of the arbitration. National courts – namely the Court of Appeal whose jurisdiction covers the seat of the arbitration – also adjudicate the set-aside proceedings.
The main body of law governing international arbitration is included in the Code of Civil Procedure which came into force on 15 February 2013. Title IV of Book VII (International Arbitration and the Effects of Foreign Arbitral Awards) sets out specific legal provisions regarding international arbitration and the effects of foreign arbitral awards, which are also supplemented with a general set of provisions included in Book IV of the Code of Civil Procedure (On Arbitration); these are applicable to international arbitration whenever the parties have not agreed on certain aspects by means of the arbitration agreement and have not vested the arbitral tribunal with settling those aspects either.
Romania does not have a UNCITRAL Model Law-based legislation. However, the institutions within the newly enacted legislation follow the lines and spirit of UNCITRAL Model Law, but a specific analysis of each provision would have to be performed in order to determine the exact influence of the Model Law.
As the applicable legislation is relatively recent – the new Code of Civil Procedure was enacted on 15 February 2013 – no significant changes have been implemented in regard to international arbitration law and no reforms are expected in the near future. Discussions are ongoing around the need to broaden the scope of arbitrability of disputes. Similarly, the new set of rules of CICA – which align to the rules of ICC and other similar institutions such as LCIA – entered into force starting from 1 January 2018, being applicable to the disputes started after this date under the purview of CICA.
Under Romanian law, a valid arbitration agreement must be concluded in writing. However, the Code of Civil Procedure broadly defines this requirement to include electronic communications or any means of communication establishing the text of the agreement.
As far as other requirements than the form of the contract (such as capacity to conclude agreements, consent, etc), the arbitration is valid provided that it fulfils the validity requirements stipulated under one of the following laws:
A dispute can be referred to international arbitration provided that:
While the procedural rules regulating domestic proceedings may still occasionally raise questions regarding the capacity of public and state-owned bodies to conclude arbitration agreements, no such limitations are imposed in respect of international arbitration. Thus, international arbitration parties may not seek to evade arbitration to which they have previously agreed by invoking internal law provisions that purport to prohibit entering into arbitration agreements.
National courts in Romania recognise arbitration agreements and their effects. As far as it is known, there are no cases of anti-arbitration injunctions or any other similar form of court denial of arbitration agreements.
Provided that the arbitration agreement meets the legal requirements of validity and the dispute is arbitrable, the national courts respect the will of the parties and proclaim that the agreement has the force of law among them.
The national courts usually determine the law governing the arbitration agreement in case they are vested with a dispute in respect of which an arbitral agreement has been concluded and at least one of the parties invokes the existence of the arbitration clause. If the arbitration clause is valid, the national courts decline their jurisdiction to a national arbitration institution or reject the claim as not being of the Romanian state courts’ competence in case the competence belongs to an international institution. If the arbitration clause is null or inoperable, the national courts will retain jurisdiction. To determine the validity of the arbitration clause, the courts need to determine the law governing the arbitration agreement, which is the law chosen by the parties. In the absence of the parties’ agreement in this respect, the courts will apply the provisions of international private law, depending on the object of the agreement, in order to determine the applicable law.
The Code of Civil Procedure expressly provides for the separability of arbitration agreements, to the effect that the validity of the arbitration clause is independent from the validity of the contract comprising it.
Party autonomy to select arbitrators is recognised and well-established in Romania. The parties are free to agree whether disputes should be submitted to a sole arbitrator or an arbitral tribunal and also to select the arbitrators. The Code of Civil Procedure provides for the nullity of the arbitration clause which allows one of the parties privileged participation in the nomination of the arbitrator or which provides a party’s right over the other party to nominate the arbitrator or to have more arbitrators than the other party.
If the parties’ chosen method for selecting arbitrators fails, the Code of Civil Procedure provides that the interested party may request the local courts to appoint the arbitrators.
The new rules of CICA provide that where the parties have not agreed on the procedure for the nomination of the arbitrators or if the procedure failed, the nomination or the appointment of the arbitrators, as the case may be, shall be made as follows.
The Code of Civil Procedure provides that local courts, namely the tribunal whose jurisdiction covers the seat of the arbitration, may intervene in the selection of arbitrators by appointing an arbitrator or the presiding arbitrator only in cases where the parties do not agree on the appointment of the sole arbitrator or a party fails to nominate an arbitrator or in the case of a three-panel arbitral tribunal, when the two arbitrators do not agree on whom they should appoint as presiding arbitrator. The local courts render a decision regarding the appointment of the arbitrators after hearing the parties.
According to the Code of Civil Procedure, the parties may agree on a procedure for challenging the appointment of an arbitrator and replacing the arbitrator either by means of the arbitral agreement or subsequently. In the absence of an agreement, the parties may ask the local courts, namely the tribunal whose jurisdiction covers the seat of the arbitration to issue on the challenge or removal of arbitrators.
Pursuant to the Code of Civil Procedure, the arbitrator may be challenged on the following grounds:
A party may challenge an arbitrator whom it has appointed only for reasons of challenge occurring after the appointment.
Otherwise, for example, if the arbitration agreement provides for institutional arbitration, the rules of the arbitral institution will govern the whole procedure and – in the majority of cases – will cover any issues related to the challenge or replacement of arbitrators.
The rules of CICA provide for similar, yet more detailed, grounds of challenge, as detailed below.
Both under the Code of Civil Procedure and CICA rules, the arbitrator is required to be independent, impartial and to disclose any conflicts of interest.
According to the Code of Civil Procedure, a person aware of a challenging ground regarding himself or herself shall be bound to inform the parties and the other arbitrators before accepting the office of arbitrator, or should such grounds occur after his or her acceptance of the office, as soon as he or she has knowledge of them. In this case, the arbitrator may not participate in the arbitral proceedings unless the parties, apprised thereupon, notify in writing that they do not intend to challenge the arbitrator. Even in this particular case, the arbitrator has the right to refrain from adjudicating the dispute.
In a similar manner, according to the new rules of CICA, within five days from the date when the appointment proposal was communicated to them, the arbitrator shall fill in and sign the statement of acceptance, independence, impartiality and availability, where they shall indicate any circumstances that may give rise to justifiable doubts with respect to their impartiality or independence. An arbitrator shall immediately inform the parties and the other arbitrators in writing if any circumstances that may give rise to justifiable doubts as to the arbitrator’s impartiality or independence arise during the course of the arbitration.
In common with other jurisdictions, Romanian law does not explicitly define these concepts, but merely provides for the general principle, the case law being left to consider these matters on a case-by-case basis, depending on the circumstances of the case.
A dispute can be referred to international arbitration provided that:
Under these circumstances, exempt from arbitration are any disputes which are not of a patrimonial nature, such as civil status litigations, litigations in respect of capacity, inheritance litigations and family litigations, as well as litigations regarding rights that the parties cannot dispose of (for example, in matters of labour and employment litigation where the law expressly provides that a party cannot waive the legal rights established in their favour).
The principle of competence-competence is fully recognised under Romanian arbitration law. Once a dispute has been referred to arbitration, the arbitral tribunal is competent to decide on its own jurisdiction – and will do so even if identical disputes are pending before the courts or other arbitral tribunals, except if the arbitral tribunal finds it appropriate to suspend the proceedings. Further, the arbitral tribunal’s ruling on jurisdiction may not be challenged before the courts during the arbitral proceedings, but only by means of a claim to set aside the arbitral award.
A state court vested with a dispute in respect of which an arbitral agreement has been concluded will check its own competence; if at least one of the parties invokes the existence of the arbitration clause, it will reject the claim as not being of the Romanian state courts’ competence.
The state courts will also adjudicate claims to set aside the final arbitral award which may be grounded on the lack of jurisdiction of the arbitral tribunal rendering the award.
In case the arbitral tribunal in an international arbitration matter will decide it lacks competence to decide on the matter, such a decision shall be subject to a claim to set aside the decision.
The arbitral tribunal’s ruling that it has jurisdiction may not be challenged before the courts during the arbitral proceedings. Such decision may be subject to judicial review by state courts only by means of a claim to set aside the final arbitral award. Therefore, the arbitration law provides no procedural grounds allowing a party to ask the local courts, during the arbitral proceedings, to determine whether an arbitral tribunal has jurisdiction.
Romanian law does not provide for the concepts of deferential or de novo as standards of review. Matters of admissibility and jurisdiction may be addressed by means of a set-aside claim filed against the arbitral award.
A state court vested with a dispute in respect of which an arbitral agreement has been concluded will check its own competence and will declare it lacks competence if at least one of the parties invokes the existence of the arbitration clause. In case of a domestic arbitration, the court will decline its jurisdiction to the arbitral institution mentioned in the arbitration agreement or will reject the claim as not being of the Romanian state courts’ competence in case of ad hoc arbitration. In case of an international arbitration, the court will admit the lack of competence plea and will reject the claim as not being of the Romanian state courts’ competence.
The court will retain its jurisdiction in settling the dispute only in three exceptional situations, namely:
In case none of the three exceptions is applicable, the court will admit the lack of competence plea.
As a rule, Romanian law does not allow for an arbitral tribunal to assume jurisdiction over individuals or entities that are not part of an arbitration agreement.
However, since the entering into force of the Code of Civil Procedure in 2013, a new provision was introduced stating that third parties may take part in arbitral proceedings following the general civil procedure rules on this aspect, but only if such third party and all the parties agree. Only an accessory joinder claim – meaning a third party bearing an interest voluntarily joins an ongoing procedure to support one of the parties’ positions – is admissible, even in the absence of the consent of all the other parties. However, according to the new CICA rules of 2018, even the accessory joinder claim is admissible only in case all the parties agree.
Matters such as the extension of the arbitration clause to non-signatories, either following the direct involvement in the negotiation and/or performance and/or termination of a contract comprising an arbitration clause, which become the doctrine of the "group of companies", or other issues of debate in international arbitration regarding the ambit of the arbitration agreement, are subject to debate according to case law, but are not addressed in any way by Romanian law.
The arbitration law does not distinguish between foreign or domestic third parties – thus, the provisions are applicable for both of them.
During the arbitration proceedings the arbitral tribunal may grant, at the parties’ request, protective (conservatory) measures and interim relief, as well as acknowledge matters of fact, unless the contrary is stipulated in the arbitration agreement. This provision is similar both in the Civil Procedure Code and in the rules of the main arbitration institution (CICA) – however, neither defines, except for protective measures, what types of relief can be awarded on a provisional basis. Despite this, taking into account the general civil procedure rules, as an interim remedy, the interested party may apply for freezing measures on goods, provisional measures or conservatory measures regarding evidence (ie, acknowledgement of matters of fact).
The new rules of CICA in force from 1 January 2018 provide for the possibility of the arbitral tribunal to bifurcate the proceedings and render partial awards as case management techniques aimed at increasing the efficiency of the proceedings by reducing the duration and costs of the arbitration.
The protective measures and interim reliefs are merely recommended for the parties as the award issued by the arbitral tribunal is not enforceable under Romanian law. However, according to Article 1117 of the Civil Procedure Code, the arbitral tribunal can request national courts to enforce the award regarding the protective measures and interim relief measures.
In case the parties do not comply voluntarily with the interim relief rendered by the arbitral tribunal, the arbitral tribunal may request the involvement of the state courts.
The local tribunal whose jurisdiction covers the seat of the arbitration may grant protective measures and interim relief, at the parties’ request, before or during the arbitral proceedings. Since the similar order for protective measures or interim relief issued by the arbitral tribunal is not enforceable under Romanian law, the courts play a significant role in obtaining such measures and are preferred by the parties for the reason that the courts issue enforceable decisions.
Interim Relief in Aid of Foreign-Seated Arbitrations
Under Romanian law, there are no express provisions regarding the possibility of the national courts to grant interim relief in aid of foreign-seated arbitrations. The Code of Civil Procedure only regulates the possibility of granting such relief with respect to arbitration seated in Romania.
However, Book VII of the Civil Procedure Code – International Civil Trial, Article 1075 – provides that national courts are competent to grant interim relief regarding individuals and goods located in Romania at the moment of the request, even if, according to national law, the Romanian courts are not competent to render an award with respect to the merits of the case. Although the legal provisions do not address directly international-seated arbitrations, they can be included in the notion of international civil trial.
The Code of Civil Procedure contains no provisions with respect to emergency arbitrators.
The 2018 CICA Rules enables the parties to resort to an emergency arbitrator when they are in need of interim relief before the constitution of the arbitral tribunal. According to Article 4 of Annex 2 of the CICA Rules, upon receiving the request, the President of the Court will appoint an emergency arbitrator within 48 hours, who will deliver a decision in a maximum of ten days.
The emergency arbitrators can allow the same type of interim relief granted by the constituted arbitral tribunal: freezing measures on goods, provisional measures or conservatory measures regarding evidence (ie, acknowledgement of matters of fact); likewise, the protective measures or interim relief are not enforceable under Romanian law.
As mentioned above, in case the parties do not comply voluntarily with the interim relief rendered by the emergency arbitrator, the emergency arbitrator may request the involvement of the state courts.
The Romanian Civil Procedure Code does not include the concept of security for costs.
Security for costs is an interim measure, although it has never been defined as such, which in practice has been granted only by arbitral tribunals. As far as is known, no Romanian court of law has ever been requested to render a solution on such a measure.
The arbitration procedure is governed by the Code of Civil Procedure, which contains both substantive law provisions and procedural provisions with respect to arbitration.
Pursuant to the Code of Civil Procedure, parties may establish the procedure of arbitration as such or by reference to the set of rules applicable to a particular arbitration institution. The parties may also choose any procedural law to govern the procedure of arbitration. In case the parties fail to establish such a procedure, the arbitral tribunal will do so.
Regardless of the chosen procedure of arbitration, the arbitral tribunal has to guarantee certain fundamental principles such as parties’ equality and their right to be heard.
Romanian law does not provide for any specific procedural steps in respect to filing an arbitration claim.
In order to commence arbitration a party must submit to the arbitral tribunal its written request for arbitration. If the parties have agreed on ad hoc arbitration, the first step is to establish the composition of the arbitral tribunal. If the composition is not stipulated in the arbitration agreement, the party requesting arbitration shall invite the other party in writing to proceed with the procedure to appoint the arbitrators. Where the arbitration is held under the purview of an arbitral institution, the parties shall follow the procedural rules of that institution.
In the majority of cases (including before CICA), the party which wishes to commence arbitration must first file the request for arbitration with the secretariat of the arbitral institution. A fixed filing fee is generally required.
The parties arbitrating under FIDIC rules are undergoing a multi-tier dispute resolution procedure (DAB procedure, 56 days amicable settlement period).
Arbitrators enjoy the powers agreed by the parties (eg, the power to determine the procedural rules applicable in the proceedings), but subject to the limitations provided under the arbitration law, where applicable. Regarding the powers conferred by law, an arbitrator can:
Similarly, the arbitrators’ obligations may be agreed in the arbitration agreement, subject to the limitations imposed by law. Regarding statutory duties, an arbitral tribunal is obliged to determine a dispute within six months of its constitution (although this time limit may be readjusted). Further, the arbitrator has a duty to act impartially and independently and must disclose any circumstances that may prevent him or her from doing so.
There are no particular qualifications or requirements for legal representatives appearing in front of the arbitral tribunal. An authorised legal professional may duly represent a party in arbitration proceedings.
As a rule, the party who files a claim has the obligation to prove it. In general, the parties submit the evidence on which they intend to rely on in limine litis (at the start of the procedure).
The most common means of proof are written records, expert reports, witness statements and cross-examination. All pieces of evidence are of equal value and subject to the court’s evaluation and conviction. According to the traditional rules of evidence within the Civil Procedure Code evidence such as a witness statement or cross-examination is taken directly before the arbitral tribunal at the hearing and the expertise should be of a judicial nature (ie, it is carried out under the legality control of the arbitral tribunal).
However, the rules on evidence are flexible in international arbitration, which makes it possible in procedures such as ad hoc arbitration, under ICC Rules or under the new rules of CICA of 2018 to submit written witness statements and expert reports drafted by party-appointed experts, followed by a cross-examinations of witnesses and experts by the Arbitral Tribunal.
A particular rule in arbitration is that witnesses are not heard under oath, as would happen before a local court. The arbitral tribunal can also order a party to produce certain evidence.
In arbitral proceedings seated in Romania the applicable rules of evidence are those provided by Romanian law as lex loci, namely the Code of Civil Procedure.
As a matter of principle, the rules on evidence are flexible when it comes to international arbitration and thus parties may derogate from them. Parties are allowed to choose means of administering the evidence which are different than the ones provided by the national law (Civil Procedure Code). As such, parties have the possibility to use any type of rules, such as the ICC Rules or the Rules on the Taking of Evidence in International Arbitration adopted by the International Bar Association. The new rules of CICA of 2018 stipulate that the arbitral tribunal, following the parties’ agreement, may apply the Rules on the Taking of Evidence in International Arbitration adopted by the International Bar Association.
The arbitral tribunal does not have any powers to compel the witnesses or experts who refuse to appear before the arbitral tribunal or to apply any sanctions. For any such measures, the parties must file a claim to this effect before the local tribunal whose jurisdiction covers the seat of the arbitration.
The arbitral tribunal can also order a party to produce certain evidence. The arbitral tribunal cannot order the production of documents from non-parties. For example, the arbitral tribunal might request written information to public authorities regarding their documents and actions, but in case the public authority refuses to comply with such a request and submit the information, the parties or the arbitrators have recourse to local courts to request the enforceable court’s order for production of documents.
The local courts might also play a role in acknowledging certain matters of fact prior to or during the arbitration proceedings, such as the state of certain assets, the statement of a certain witness where there is urgency due to the risk the evidence might get lost.
Arbitration is presumed to be confidential – however, the procedural rules established by the Code of Civil Procedure left the matter of confidentiality to the parties’ agreement or choice of institution.
The 2018 CICA Rules of Arbitration name "confidentiality" as one of the core principles of the arbitration procedure (Article 3 (3), 2018 CICA Rules of Arbitration). Unless the parties agree otherwise (in writing), the confidentiality of the arbitral proceedings is protected by the court, its president, management board, and secretariat, by the arbitral tribunal and arbitral assistants, and by all those directly involved in organising the proceedings (Article 4 (1), 2018 CICA Rules of Arbitration).
The 2018 CICA Rules of Arbitration provide that the award may, for scientific or academic purposes, be published in part without revealing the name of the parties or prejudicial data. Also, the case file may be studied for academic purposes, after the award is communicated to the parties, in compliance with the confidentiality obligation.
Article 567 of the Civil Procedure Code stipulates that, unless the parties provided otherwise, the arbitration tribunal must render an award within six months of the constitution of the tribunal for local arbitration and, according to Article 1115, a year with respect to international arbitration.
According to the Code of Civil Procedure, the arbitral award shall be written, reasoned and dated and it shall bear the signatures of all the members of the arbitral tribunal. The provisions of Article 602 and 605 of the Civil Procedure Code stipulate that the delivery of the award can be delayed for a period of 21 days and require for the decision to be communicated to the parties within a month of its delivery.
According to the CICA rules of arbitration, the arbitration award shall be drawn up in writing and shall include:
CICA rules imply for the award to be delivered and drawn up within a month since the debate, a term that can be prolonged by the CICA President, on justified grounds. Also, the award is to be communicated to the parties within three days of its being drawn up.
There is no specific provision in the arbitration law as to the type of remedies available to the parties. Therefore, there is no limitation on the type of remedies that an arbitral tribunal may grant, other than the limitation imposed by the parties’ claims in the sense that the arbitral tribunal can only grant what was requested, regardless of the nature of the claim.
However, to a large extent the admissibility of the remedies depends on the substantive and procedural law applicable to the dispute. For example, if the arbitral tribunal applies Romanian procedural law, it may consider a request for a declaratory judgment (such as acknowledgement of a debt) to be inadmissible to the extent that the claimant has the option to bring a claim to enforce its rights (such as obliging the defendant to pay the debt).
The parties are entitled to recover interest on the principal claim upon such request.
The legal costs of the arbitral proceedings are incumbent on the parties, according to their agreement. In the absence of any such agreement, the legal costs are incumbent on the party who lost the case, proportionally to the admission/rejection of the claim/defence.
With respect to the arbitrators’ fees and expenses, according to the Code of Civil Procedure, unless parties agreed otherwise, each party will bear the costs of its appointed arbitrator, whereas the costs incurred by the sole arbitrator or by the presiding arbitrator are to be equally shared by the parties.
The parties may appeal an arbitral award by means of a set-aside claim, on one of the following grounds:
The request to set aside the arbitral award may be filed within one month of service of the award on the parties, unless the request is grounded on the subsequent issuance of the Constitutional Court, where the time limit is three months after publication of that court’s decision. Certain reasons for setting aside an arbitral award may be deemed waived if they are not raised before the arbitral tribunal at the start of the process (particularly those relating to the jurisdiction and constitution of the arbitral tribunal). A request to set aside is subject to a fixed court fee under the law.
The jurisdiction to settle the set-aside claim belongs to the court of appeal of the county where the arbitration took place. The ruling issued by the court of appeal is subject to a higher appeal.
The parties cannot waive the right of appeal or challenge to an award by agreement before the dispute arises. The Code of Civil Procedure provides that any agreement to the contrary is null and void. The parties may waive the right to appeal only after the award is rendered.
The parties cannot expand the scope of appeal.
Romanian law does not provide for the concepts of deferential or de novo as standards of review.
The merits of the case may be reviewed by the court of appeal subsequent to the admission of a set-aside claim in the following cases: the dispute was non-arbitrable, the arbitration agreement did not exist or was invalid or ineffective, the arbitral award was rendered after expiry of the time limit, even though at least one party submitted its intention to object to the late issuance of the award and the parties opposed the continuation of the proceedings after expiry of the time limit.
In all other cases of set-aside, the court of appeal will refer the litigation to the arbitral tribunal for a new judgment to take place, if at least one of the parties requests it. If not, the court will make a decision on the merits of the case.
Romania ratified the New York Convention in 1961 by means of Decree No 186/1961 which came into force on 24 July 1961.
Romania reserved the right to apply the convention only to:
Furthermore, Romania has signed multiple bilateral conventions with countries including Albania, Algeria, Belgium, Bulgaria, China, Cuba, Czech Republic, France, Greece, Hungary, Italy, Moldova, Mongolia, Montenegro, Morocco, North Korea, Poland, Russia, Serbia, Slovenia, Slovakia, Syria and Tunisia.
Domestic arbitral awards are treated and enforced in the same way as court decisions whereas foreign arbitral awards are subject to recognition and enforcement proceedings before the Romanian courts. As a matter of principle, any foreign arbitral award is recognised and may be enforced in Romania as long as the dispute is arbitrable according to Romanian law and the award does not comprise measures contrary to the public order of Romanian private international law.
In order to be granted the recognition and enforcement of an arbitral award, the parties must comply with certain formal requirements – they must file a request to this effect before a competent court and attach legalised or apostille certified copies of the translated award and arbitration agreement. The court vested with hearing a request for the recognition and enforcement of a foreign arbitral award is prohibited from reviewing the merits of the dispute, its examination being limited to the grounds for refusal of recognition and enforcement, as set out in the Code of Civil Procedure.
The grounds for refusal of recognition and enforcement of the foreign award provided in the code follow those established in the New York Convention, such as the parties did not have the capacity to conclude the arbitration agreement, the arbitration agreement was not valid, the award is in regard to a dispute which was not included in the arbitration agreement or which exceeds the limits set by the arbitration agreement.
As a matter of principle, filing a set-aside claim does not influence in any way the enforcement procedure. In other words, the enforcement procedure may be commenced and continued even if a request to set aside the award was filed. However, following a request thereto, the court may suspend the enforcement of the award challenged with a set-aside claim in case the debtor is about to suffer an imminent and irreparable damage arising from the enforcement (for example, the debtor carries out a public interest activity which would be affected in case the enforcement continues). The enforcement is stayed only until the ruling of the first court is issued.
The courts in Romania have a positive approach to recognition and enforcement of arbitration awards and rarely refuse recognition and enforcement requests – in these cases, refusal is generally caused by procedural non-compliances rather than substantial law infringement, such as public policy grounds.
The Romanian case law is divided with respect to the recognition of partial awards enforcing DAB decisions in FIDIC disputes.
The Code of Civil Procedure refers to public policy in Article 1124, which sets out the legal ground for the public policy exception as follows. The Romanian legislator explicitly adopted the concept of international public policy, which is addressed as the "public order of the Romanian private international law". In regard to the notion of public order of private international law, the Romanian courts overtly approach it as part of the Romanian legal order.
No provision under the Romanian arbitration law addresses class action or group arbitration.
Counsel are subject to strict requirements under Romanian legislation and codes of conduct regarding lawyers’ practice. Regarding arbitrators, there is no specific body of law or rules regarding their ethical obligations.
Third-party funding is not expressly regulated under Romanian law. Therefore, in the absence of any provision to interdict such procedure, third-party funding of the proceedings is permitted.
Although the arbitration law does not exclude the consolidation of arbitral proceedings, it makes no specific provision for it. The traditional view is that the parties’ consent is required for the consolidation of separate arbitral proceedings where the arbitral tribunals are constituted of different arbitration panels. Otherwise, constitution of the arbitral tribunal may be considered to breach the arbitration agreement.
The 2018 CICA Rules provide that any party may request the consolidation of the new proceeding with another existent matter during the request for arbitration or the answer to the statement of defence. The arbitral tribunal might admit the consolidation in case:
In deciding whether to consolidate, the arbitral tribunal shall consult with the parties and may have regard to, inter alia, the stage of the pending arbitration, whether the arbitrations raise common legal or factual issues, as well as the efficiency and expeditiousness of the proceedings.
Under Romanian law, the arbitration agreement and the award may not impose obligations on third parties. Debate is ongoing over the extension of the arbitration agreement to non-signatories – for example, following their direct involvement in the negotiation, performance or termination of a contract containing an arbitration clause – but existing law provides no such remedy. Conventional or legal successors of the signatory are generally bound by the arbitration agreement.
The past 12 months has proved than Romania’s arbitral institutions and actors are perfectly capable of adapting rapidly to the new situation brought about by the COVID-19 pandemic, with all ongoing proceedings being shifted to online, virtual hearings and fully electronic submissions becoming the rule, and in-person encounters and hard copies turning into much-coveted exceptions.
The capacity to avoid almost all disruption to ongoing arbitration cases proved once again that the advantages of this method of alternative dispute resolution (ADR) clearly delineate it from domestic litigation, which was at a standstill for a few months during the early days of the pandemic. It also further helped the business community apprehend that national courts will never have the same rapid pace in adapting to change and crisis, which is bound to boost interest among companies to include arbitration clauses in their commercial agreements or to opt to switch to arbitration.
International arbitration has gained significant ground in Romania over the past 15 years, with a constant increase in its use resulting predominantly from disputes related to the various infrastructure projects started by the public authorities in Romania with the help of European financing (from pre-adhesion and post-adhesion funds). International arbitration in such projects has started based on the standard International Chamber of Commerce (ICC) arbitration clause from the International Federation of Consulting Engineers (FIDIC) General Conditions of Contract, but has further evolved and changed.
In the first stage, in 2011, a government decision was issued to regulate the use of the FIDIC General Conditions of Contract against the particularities of the infrastructure works conducted in Romania, which led to the adoption of a slightly adapted version of the FIDIC Condition of Contract (both in terms of general conditions and particular conditions) which was to be used mandatorily in large transport-infrastructure projects financed from public funds.
Later, in 2018, subsequent legislative amendments were adopted covering a broader category of publicly financed projects subject to public procurement procedures. This led to the replacing of the FIDIC Conditions of Contract by new forms of public procurement contracts that are mandatory for public works. The new conditions of contract bring significant changes to the claims/dispute resolution procedure, including the removal of the Dispute Adjudication Board (DAB) from the contractual mechanism for dispute settlement and the referral of the dispute to the national arbitration court – the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (CICA) as the arbitral institution within the standard arbitration clause, thus replacing the jurisdiction of the ICC International Court of Arbitration (ICC), which was applicable under the former FIDIC-based general conditions.
Besides under the CICA rules, international arbitration disputes in Romania are currently carried out under the auspices of the ICC, the Vienna International Arbitral Centre (VIAC), the London Court of International Arbitration (LCIA), and the Swiss Chamber of Commerce (SCC), but also under German and Italian institutions of arbitration – for example, the German Institution of Arbitration (DIS), the Court of Arbitration attached to the German-Romanian Chamber of Commerce and Industry (AHK), mainly used by German/Italian companies and investors. Romania is also a party to several investor-state disputes, publicly available information showing that to this date Romania has faced 18 International Centre for Settlement of Investment Disputes (ICSID) cases, of which nine are still pending.
This is the context which has allowed both international and domestic arbitration to become well-established in Romania, with a steady-paced growth in numbers of arbitration cases per year.
COVID-19 Challenges Addressed
The COVID-19 pandemic made its mark on international arbitration, which switched to online almost instantaneously, digitalising and virtualising proceedings with astonishing speed.
The most frequently used international arbitration institution, CICA and the tribunals constituted under its auspices, have embraced the recommendations within the ICC Guidance Note on Possible Measures Aimed at Mitigating the Effects of the COVID-19 Pandemic, thus managing to ensure a swift adaptation.
All actors were actively involved in tackling any possible procedural and administrative disruptions in a common effort to ensure efficient and fair arbitral proceedings, which has even led in some cases to parties choosing arbitration over litigation in order to avoid the disruptions caused by the pandemic to the judiciary system (the state of emergency leading to a suspension of almost all pending litigation).
For many years, the main sector experiencing international arbitration activity has been the construction industry, with public infrastructure projects being the least affected by the pandemic. According to unofficial statistics covering the first half of 2021, more than 60% of the existing international and domestic arbitration cases relate to construction disputes. Besides the publicly financed construction infrastructure projects where arbitration is automatically applicable, there is a discernible tendency to resort to arbitration as a preferred method for the settlement of various construction-related disputes, due to its generally accepted advantages.
There are also other industries opting for arbitration in view of settling various contractual disputes – for example, energy, public-private arrangements and transport – but the extent to which resort is made to arbitration is not even close to the level of utilisation in construction-related disputes.
CICA is Gaining Ground
CICA is the most frequently used and important international arbitration institution in Romania. Its 2018 Rules of Arbitration align to the existing rules of the ICC and other similar institutions, and seek to enhance flexibility and efficiency of arbitration in Romania while at the same time sidestepping domestic courts’ formalism. This change has helped maintain the steady growth trend of national and international arbitration before the CICA.
The rules have now been simplified and a series of international standards of best practice have been implemented (emergency arbitrator, fast-track arbitration, bifurcation, partial awards, etc), in response to the needs of those corporate clients most familiar with international arbitration.
Consequently, there is a growing tendency for recourse to the Emergency Arbitrator, an institution which was neither known nor used in Romania before the 2018 revision of the CICA Rules (except for maybe isolated occasions whereby Bucharest was the place of arbitration in an ICC arbitration). The Emergency Arbitrator is provided for under Annex II of the 2018 Rules. The President of CICA decides upon the jurisdiction of CICA and proceeds to appoint an emergency arbitrator within 48 hours of receipt of the application. After two days following his or her appointment, the emergency arbitrator establishes a procedural timetable to be followed by the parties, with a decision being rendered within ten days of his or her designation. One particularity pertains to the impossibility of ex parte proceedings, the request for an emergency arbitrator having been communicated to all the parties in dispute.
Romanian Courts and Arbitration
Following constant engagement in settling arbitration-related disputes, the Romanian courts now have a good grasp of the arbitration concepts and, during the past few years, have started to adopt an increasing pro-arbitration approach.
Moreover, with the new CICA Rules and best practice concepts therein, the domestic courts have started to extend their experience and comprehension beyond the typical claims for enforcement and recognition of foreign arbitral awards, setting aside arbitral awards or requests for interim measures in relation to pending arbitration proceedings, with more and more cases covering emergency arbitrator proceedings. Although there remain some legal debates as to the application of the emergency arbitrator institution, there are good prospects that this concept will be completely assimilated and accepted for what it is – the most suitable tool to aid arbitration users with urgent issues.
Also, the domestic courts’ grasp of complex infrastructure disputes settled through international arbitration proceedings and stemming from publicly financed projects subject to public procurement procedures has notably consolidated following a mid-2018 reform of the contentious administrative and public procurement laws. Such reform has put a stop to previous uncertainty and ruled that all disputes related to execution of these contracts (which have the legal nature of administrative contracts) are to be settled by the commercial/civil sections of the courts. The commercial sections within the tribunals have thus had the possibility to specialise over these past years in understanding complex construction disputes based on the FIDIC Conditions of Contract or variations thereof, which in its turn led to a stabilisation of the related case law and therefore to predictability regarding the potential solutions to be adopted by the domestic courts.
Setting Trends in International Arbitration – Bucharest Arbitration Days (BARD)
Bucharest Arbitration Days (BARD) is an event dedicated to international arbitration and the necessary reforms in the field, first organised in 2019 by CICA. The second BARD edition should have taken place in 2020, but was cancelled as a result of the COVID-19 pandemic and subsequent social restraints.The keyword of BARD 2021 – which took place online – was "reform", with a particular view on construction disputes, which constitute a consistent share of the commercial arbitrations from Romania and other jurisdictions from Eastern Europe.
In her keynote speech, Anna Joubin-Bret, Secretary of the United Nations Commission on International Trade Law and Director, covered the much-talked-about and long-awaited ISDS reform, advocated in a recent lecture by Loukas Mistelis of Queen Mary University of London. Further, an investment arbitration panel and four commercial arbitration panels analysed the hot issues, trends, news, reform and directions concerning infrastructure investment disputes, arbitrability, IBA 2020 Revised Rules on Taking of Evidence, as well as disclosure and conflict of interests. A fifth panel explored the specific problems of building a career in investment arbitration, with a special focus on job opportunities in this field and insight from seven professional paths into international arbitration.
The participation of professionals from all over the world – Bucharest, London, Paris, New York, São Paolo, Dubai, Washington, Stockholm, Florence, Warsaw – confirms that the event was truly an opportunity to join efforts in setting trends in international arbitration.
Young Romanian Arbitrators
A recent development is the launch of a Romanian under-40 arbitration group, the Young Romanian Arbitration Practitioners (YRAP), in June 2021. The YRAP Launch Event was organised under the auspices of Bucharest Arbitration Days 2021, within the exchange of experience under the topic tackling career opportunities in international arbitration.
The group seeks to develop and promote a young community of Romanian international arbitration practitioners in Romania and abroad and to connect with peers and organisations from other jurisdictions. This development follows a global trend, as more and more groups are founded throughout the world by young lawyers practicing in international arbitration.
The latest edition of the GAR 100, published by the prestigious Global Arbitration Review, features four Romanian law firms among the leading international arbitration firms worldwide.
The continuous presence of Romanian law firms in the main legal directories covering international arbitration for almost a decade now is proof that Romania – a major player on the market – is active in setting trends and furthering progress, regardless of the level of adversity experienced.