Arbitration in the Republic of Moldova continues to increase in popularity as an alternative venue to theconventional court system for solving disputes. The Government of the Republic of Moldova seemsdetermined to promote the alternative dispute resolution (ADR) systems as well as to improve theenforcement procedure of foreign arbitral awards.
The existing legislative framework was reviewed and a series of recommendations were issued in order toalign the existing framework to international standards. A practical handbook for arbitration users has beenprepared and distributed. A number of impressive trainings on arbitration proceedings and enforcement offoreign arbitral awards, with the participation of foreign trainers, were provided to judges and arbitrators.Also, the set of guidelines on arbitration agreements, adopted several years ago by the MoldovanSupreme Court of Justice is currently revised in order to clarify certain ambiguous provisions and ensureuniformity in this area.
The Republic of Moldova has rather little experience with alternative methods of dispute solving as the firstpiece of legislation on arbitration dates back to 1994 which is considered to be the year of foundation ofarbitration in Moldova. Also in 1994, the first Moldovan ADR institution, the International CommercialArbitration Court (ICAC) was established under the umbrella of the Chamber of Commerce and Industry ofMoldova and it still remains the country’s main permanent arbitration body. Currently, there are 29 localand 32 international arbitrators on the arbitrators’ list of the ICAC.
The number of arbitration institutions has increased tremendously since 1994. Based on a list published bythe Supreme Court of Justice of Moldova, at present, there are 30 arbitration courts organized undervarious NGOs and associations, 4 of which were registered in the last two years. This list includes alsoseveral specialized arbitration institutions, such as: the International Arbitration Court of the Liquidatorsand Administrators Association of Moldova, the Court of Arbitration of the International Association of AutoTransporters of Moldova, the Arbitration Court Specialized in Industrial Property of the State Agency onIntellectual Property, as well as several arbitration courts in the agricultural sector. Each of these are alsoquite active in their domain. Also, last year the American Chamber of Commerce in Moldova has launchedthe Chisinau International Court of Commercial Arbitration and seems determined to promote thisinstitution as a venue for solving disputes among its members as well as other business in Moldova.
The number of cases resolved via arbitration has also increased substantially during the past severalyears. Thus, according to the records of the Arbitration Court of the Chamber of Commerce and Industryof Moldova, which is still the most active arbitration court in Moldova, in 2010 it registered just 16 cases;while in 2017 it was already 127 cases.
Currently the ADR domain in Moldova is regulated by two main national laws:
-The law on arbitration nr.23/2008 - applicable to domestic arbitration; and
-The law on international commercial arbitration nr.24/2008 - applicable to arbitration with aforeign element (e.g. where one of the parties has its residence in a foreign state; or most of theproperty in dispute are in a foreign state).
Although Moldova has chosen the path of adopting two parallel arbitration laws, one for international andone for domestic arbitration procedures, both of them are in line with the UNCITRAL Model Law onInternational Commercial Arbitration.
Recognition and enforcement of foreign arbitral awards, the challenge of arbitral awards and the issuance ofthe enforcement deed of arbitral awards are regulated by the Civil Procedural Code of the Republic of Moldova.
There are also a number of international conventions applicable in Moldova. The most important are as follows:
-The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10June 1958;
-The European Convention on International Commercial Arbitration, Geneva, 21 April 1961; and
-The Convention on the Settlement of Investment Disputes between States and Nationals of OtherStates (ICSID Convention), Washington,18 March 1965.
A wide range of disputes can be referred to arbitration in Moldova. The Law on international commercialarbitration specifies that the term “commercial” refers to relationships which arise from all kinds ofcommercial relationships, whether contractual or non-contractual. Commercial relations include thefollowing, without limitation: contract of sales and delivery, exchange of goods and services; distributionagreements; commercial agencies and representatives; factoring, leasing, construction of industrialobjects; consulting; business engineering; licensing; investments; financing; banking services; insurance;operating or concession agreements; joint ventures as well as other forms of industrial and commercialcooperation; air, maritime, railway and road transportation of goods and passengers.
There are, however, some exceptions which lie within the exclusive competence of courts of justice whichcannot be resolved by arbitration: disputes related to family law, disputes that arise from housing leaseagreements, including disputes related to validity, formation, termination and qualification of suchagreements and any housing proprietary rights.
Parties are free to appoint arbitrators of any nationality or professional qualifications. Parties in arbitrationproceedings having their seat in Moldova may also be represented by foreign counsel.
In order to be able to refer a dispute to arbitration, it is essential that the parties agree to settle the dispute(whether existing or potential) through arbitration. The agreement by which the parties agree to submit thedispute to arbitration is called an arbitration agreement, it must be established in the written form, failingwhich it will be considered null and void. The arbitration agreement can have either the form of anarbitration clause inserted in the main agreement (compromissory clause) or the form of a separateagreement (compromise). The arbitration agreement can be executed at any time including after thedispute has arisen.
Currently, the state duty for examination of a dispute in courts amounts to 3% of the value of the claim, butdoes not exceed MDL 50,000 (EUR 2,400) for legal entities. The arbitration fees are regressive andusually vary between 1% and 5% of the value of the claim.
Arbitral tribunals may issue interim measures which, if necessary, are enforced by courts of justice.
According to national rules, the arbitral award must be rendered at the latest within 6 (six) months as of theconstitution of the arbitral tribunal unless agreed otherwise by the parties. This is the biggest advantage ofarbitration in Moldova, as court proceedings can last for 2-3 (two to three) years. If the parties settle thedispute during the arbitral proceedings, the arbitrator shall terminate the arbitration and confirm thesettlement in an award. In this case, according to the Rules of ICAC, 50% of the arbitration fee isreimbursed to the respective parties.
An arbitral award may be challenged in court by any party within 3 (three) months of the date of its receipt. TheCode of Civil Procedure expressly provides an exhaustive list of grounds for the annulment of arbitral awards:
-the dispute may not be subject to arbitration proceedings accordingly to the law in force;
-the arbitration agreement is not valid according to the law;
-the arbitral award does not include the operative part and the grounds, place and date ofissuance, or is not signed by the arbitrators;
-the operative part of the arbitral award contains provisions that cannot be executed;
-the constitution of the arbitral tribunal or the arbitral procedure does not comply with thearbitration agreement;
-the interested party was not notified, in the manner prescribed by law, about the nomination orappointment of the arbitrators or about the arbitration proceedings, including the place, date andtime of the hearing, or due to other valid reasons could not be present before the arbitral tribunalto provide evidence;
-the arbitral award decided a dispute not contemplated by the arbitration agreement or not fallingwithin its terms, or the decision contains provisions on matters beyond the scope of thearbitration agreement; or
-the arbitral award violates fundamental principles of Moldovan law or good morals.
Thus, the legal framework in the Republic of Moldova is in line with international provisions and bestpractice. Courts encourage business to use arbitration as an alternative means of dispute resolution and,as shown by statistics, business also welcome arbitration proceedings as these provide lots of advantagesin comparison with court proceedings.
2. ENFORCEMENT OF FOREIGNARBITRAL AWARDS
According to Moldovan legislation; a foreign arbitral award can be recognized and enforced in Moldova if (i) itis issued in conformity with an arbitration agreement on the territory of a foreign state that is party to the 1958New York Convention on Recognition and Enforcement of Foreign Arbitral Awards; (ii) if its recognition andenforcement is governed by an international treaty to which Moldova is a party; or (iii) if the recognition andenforcement is allowed on the basis of reciprocity as regards the effects of foreign arbitral awards. Thecompetence to recognize and enforce foreign arbitral awards lies with the Moldovan courts.
Recognition and enforcement of a foreign arbitral award may be refused by the court only at the request ofthe party against whom it is raised if that party provides evidence to the court that:
-one of the parties to the arbitration agreement has no full capacity to exercise or the arbitrationagreement is not valid under the law to which the parties have subordinated it or, failing that,according to the law of the country in which the judgment was delivered;
-the party against whom the decision is issued has not been properly informed of the designationof the arbitrator or the arbitral proceedings or, for other reasons, has been unable to provide hisor her defence;
-the judgment has been given on a dispute not provided for in the arbitration agreement or whichdoes not fall under the terms of the arbitration agreement, or the ruling contains provisions onmatters that go beyond the limits of the arbitration agreement;
-the formation of the arbitral tribunal or the arbitral proceedings did not comply with the parties'agreement or, in the absence of such an agreement, was not in accordance with the law of thecountry in which the arbitration took place; or
-the arbitral award has not become binding on the parties or has been discontinued, or itsexecution has been suspended by the court or competent authority of the country in or underthe law of which it was pronounced.
Recognition and approval of forced execution of the foreign arbitration award may also be refused if thecourt finds that:
-the subject of the dispute cannot be settled by arbitration under the laws of the Republic ofMoldova; or
-the recognition or approval of the forced execution of the arbitral award is contrary to the publicorder of the Republic of Moldova.
TYPE OF PROCEEDINGS
PROCEDURE AND ASSUMPTIONS
The law confers to the arbitral tribunal the right to determine the admissibility, relevance andimportance of the evidence.
ATTORNEYS’ FEES (NET)
Simple and Complex cases
Hourly fees or a fixed fee and/or a success fee may be agreed upon between the attorneyand the client.
Value of the action
Up to MDL 50,000
From MDL 50,001
to MDL 100,000
From MDL 100,001
to MDL 200,000
From MDL 200,001
to MDL 500,000
From MDL 500,001
to MDL 1,000,000
From MDL 1,000,001
to MDL 2,000,000
Above MDL 2,000,001
5% but not less than USD 500
USD 2,500 + 3% from what is higher than USD 50,000
USD 4,000 + 2% from what is higher than USD 100,000
USD 12,000 + 1% from what is higher than USD 500,000
USD 17,000 + 0,5% from what is higher than USD1,000,000
USD 22,000 + 0,3% from what is higher than USD 2,000,000
3 to 9 months. Decision to be issued within 6 months of the initiation of arbitration at the latest,unless parties agreed otherwise.
Unless the rules of the arbitration institution provide otherwise or the parties provide forsomething different in their agreement, the loser bears the costs.
The amount of arbitration fees depends on whether the dispute is international or local. Thefees are determined by the courts rules. The fees of the Arbitration Court within Chamber ofCommerce and Industry of Moldova are as follows:
Registration Fee – USD 200
Arbitration Fee – in accordance with the table below:
Registration Fee – MDL1000
Arbitration Fee – in accordance with the table below
Value of the action
Up to USD 50,000
From USD 50,001
to USD 100,000
From USD 100,001
to USD 500,000
From USD 500,001
to USD 1,000,000
From USD 1,000,001
to USD 2,000,000
Above USD 2,000,001
3% but not less than MDL1,000
MDL 1,500 + 2,8% from what is higher than MDL 50,000
MDL 3,000 + 2,6% from what is higher than MDL 100,000
MDL 6,000 + 2,4% from what is higher than MDL 200,000
MDL 15000 + 2,2% from what is higher than MDL 500,000
MDL 30,000 + 2% from what is higher than MDL 1,000,000
MDL 60,000 + 1,5% from what is higher than MDL 2,000,000
Enforcement of Foreign Arbitral Awards
ATTORNEYS’ FEES (NET)
Simple and Complex cases
The state fee for the application for recognition and enforcement of foreign arbitral award isMDL 100.
Hourly fees or a fixed fee and/or a success fee may be agreed upon between the
attorney and the client.
Moldovan legislation does not specify any duration. Usually it takes 2-6 months.
The application for recognition and enforcement of a foreign arbitral award in Moldova can besubmitted within 3 years from the date the foreign arbitral award has become binding underthe law of the place of arbitration.
A foreign arbitral award can be recognized and enforced in Moldova if (i) it is issued inconformity with an arbitration agreement on the territory of a foreign state that is party to the1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards; (ii)recognition and enforcement is governed by an international treaty to which Moldova is aparty; or (iii) if it may be recognised and enforced on the basis of reciprocity as regards theeffects of the foreign arbitral award.
The information in this chapter was correct as of 1 January 2018. If you have any questions about the content of this chapter,
or would like further information about arbitration in Moldova, please contact