Arbitration in Romania is governed by the Fourth Book - Domestic Arbitration (Articles 541 – 621) and bythe Seventh Book – International Civil Trials – International Arbitration (Articles 1111-1133) of the New CivilProcedural Code ("NCPC"). An arbitral dispute taking place in Romania is qualified as international if it isbased upon a legal relationship having a foreign element.
The most used institution in Romania is the International Court of Commercial Arbitration attached to theChamber of Commerce and Industry of Romania (“CCIR”). CCIR has its own Rules of Arbitration.
Nevertheless, under the provisions of the NCPC the parties to an arbitration clause or separate arbitrationagreement are free to choose any arbitral institution or arbitration rules they want to be applicable to theirdispute. Under Romanian law, the parties may agree that disputes arising from their contractualrelationships shall be settled by arbitration, indicating, under the sanction of nullity, the method ofappointment of arbitrators. In case of institutionalized arbitration, reference to the arbitration body or itsrules of arbitration shall suffice.
The arbitral agreement shall be concluded either in the form of an arbitration clause, stipulated in the maincontract (such clause is always previous to any arisen dispute), or in the form of a separate agreement(“compromise”), which is concluded at the moment the dispute occurs. Both the arbitration clause and thecompromise must be in writing and signed by the parties.
Generally all disputes involving a patrimonial interest can be submitted to arbitration. Disputes concerningpersonal status, collective labour conflicts, certain shareholder disputes, the annulment of intellectualproperty rights and bankruptcy proceedings cannot be subject to arbitration.
In the arbitration agreement or by subsequent agreement, the parties are free to establish the procedure tobe observed by the arbitral tribunal, the number of arbitrators, and the method used to appoint thearbitrators, including whether the dispute shall be settled by a sole arbitrator or several arbitrators (this isgenerally applicable to ad hoc arbitration as in case of institutionalized arbitration, the rules of theinstitution shall apply). As a general rule, according to the NCPC, if the parties have not specified thenumber of arbitrators, the dispute shall be settled by three arbitrators, one appointed by each party and thethird arbitrator, the chairman, shall be appointed by the other two arbitrators. The parties are also free todecide on the seat and language of arbitration.
If the parties fail to reach an agreement, the arbitral tribunal has the authority to decide upon theprocedural rules that will apply to the arbitration; however, if the parties are unable to reach an agreementand the tribunal is unable to decide, the general provisions stipulated in the NCPC shall apply.
Before or during the arbitral proceedings, any party may request the courts of law to grant precautionaryand provisional measures with regard to the dispute or to ascertain certain factual circumstances (Article585 of the NCPC).
A copy of the request for arbitration and the arbitration clause shall be attached to the application forprecautionary or provisional measures. In case the court grants such measures, the party who applied forsuch measures shall communicate a copy of the decision to the arbitral tribunal.
During the arbitral proceedings, precautionary and provisional measures or measures required for theascertaining of factual circumstances related to the dispute can also be approved by the arbitral tribunal. Incase of resistance, the execution of these measures shall be ordered by the court.
Generally, arbitral awards rendered by tribunals with seat in Romania are enforceable by the courtsthrough judicial bailiffs, in the same manner as other legally binding court judgments. The arbitral awardshall be final and binding, and shall have the same effect as any final decision rendered by a court of law.
Arbitral awards are considered "national" awards when the seat of arbitration was in Romania. If the seatof arbitration was not located in Romania, the arbitral award shall be considered a foreign award and shallbe enforced only after it is recognized by the Romanian courts under a specific procedure.
Arbitral awards may be challenged in ordinary courts. An arbitral award may only be set aside following apetition for annulment based upon one of the following reasons:
-the dispute could not be settled by arbitration;
-the arbitral tribunal settled the disputes in the absence of an arbitration agreement or pursuant toan agreement that is void or inoperative;
-the arbitral tribunal had not been constituted in accordance with the arbitration agreement;
-a party was absent on the date of the hearing and the summoning procedure has not been legallyfulfilled;
-the arbitral award has been rendered after the time for rendering the award has lapsed;
-the arbitral tribunal has decided matters which have not been submitted to arbitration, or hasfailed to decide upon a specific claim;
-the arbitral award failed to include the grounds of the award, the date and place where the awardwas issued, or the award was not signed by the arbitrators;
-the arbitral award violates public order, morals or provisions of the law; or
-if, after the issuance of the arbitral award, the Constitutional Court ruled on a law applied in thedispute to which the arbitral award refers, declaring that the law, the ordinance or a provision ofthe law or ordinance is unconstitutional.
Generally the term for filing a set aside petition is thirty (30) days from the communication of the arbitralaward.
2. ENFORCEMENT OF FOREIGNARBITRAL AWARDS
Arbitral awards which are not deemed to be qualified as a national award in Romania, but have beenrendered in a domestic or international arbitration in a foreign state, are considered foreign arbitral awards.
Foreign arbitral awards can be acknowledged and enforced in Romania by applying the provisionsstipulated in the NCPC.
Foreign arbitral awards which are not willingly performed by those who are obligated to do so may beacknowledged and enforced in Romania if the subject matter of the arbitration may be settled througharbitration and if the award does not contain provisions contrary to private international law public order.
Romania is a party to the 1958 New York Convention on the Recognition and Enforcement of ForeignArbitral Awards ("NY Convention"), with the reservations that the Convention will only be applied to awardsresulting from disputes having a commercial nature according to Romanian legislation; and to therecognition and enforcement of awards made on the territory of another contracting state. With regard toawards made in the territory of non-contracting states, the Convention will only be applied to the extent towhich those states grant reciprocal treatment.
Romania is also a party to the 1961 European Convention on International Commercial Arbitration and the1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals ofOther States, both containing provisions with regard to the recognition and the enforcement of arbitralawards in specific fields.
The enforcement of judicial awards is mainly regulated by the provisions of the NCPC. This legalframework is only supplemented by the international conventions on arbitration. The NCPC chapter on theenforcement of foreign arbitral awards has incorporated the provisions of the NY Convention.
The application for the acknowledgement and enforcement of an arbitral award must be lodged with thetribunal in which the domicile or the registered office of the opposing party is located. In case the competentcourt cannot be identified, the Bucharest Tribunal always has jurisdiction. The application for enforcementmust be accompanied by the arbitral award and by the arbitration agreement, translated into Romanian.
The recognition or the enforcement of the foreign arbitral award shall be denied by the tribunal, if theopposing party proves the existence of the following circumstances:
-the parties did not have the capacity to conclude the arbitration agreement, under theirrespective applicable laws;
-the arbitration agreement was not valid under the law chosen by the parties or, if not applicable,the law of the state where the award was issued;
-the opposing party was not properly informed with regard to the election of the arbitrator(s), thearbitral proceeding or was unable to defend itself in the arbitration;
-the composition of the arbitral tribunal or the arbitral procedure was not carried out according tothe agreement of the parties or, in the lack of such agreement, in accordance to the lex loci;
-the award concerns a dispute excluded from the arbitration agreement or contains provisionsthat exceed the scope of the arbitration agreement. However, matters from the award that maybe subject to arbitration can be separated from the others and enforced; or
-the award has not become binding on the parties yet, was annulled or suspended by acompetent authority from the state of its issuance or in accordance with the law of the state of itsissuance.
The decision on the application for recognition and enforcement of a foreign arbitral award may bechallenged only through an appeal. The foreign arbitral award is recognised in Romania with regard to allfactual circumstances in its content.
The NCPC prohibits the examination on the merits of an arbitral award by the court of recognition.
TYPE OF PROCEEDINGS
PROCEDURE AND ASSUMPTIONS
-The costs of arbitration depend to agreat extent on the amount in dispute,the amount of documents, the numberof witnesses and whether expertopinions are required.
-The arbitrators usually have largediscretion regarding the award of costs.However, in practice the award on costsoften depends on the outcome of thecase. The award of legal fees is usuallynot determined by reference to astatutory tariff.
The usual duration of arbitration proceedings is between 6 months and 1 year.
The procedural costs depend on whether asole-arbitrator or an arbitral tribunal of threemembers is appointed, the complexity of thecase and the administrative charges.
The following two estimates are based onthe procedural costs of the Court ofInternational Commercial Arbitrationattached to the Chamber of Commerce andIndustry.
Assumption: Sole arbitrator appointedand an amount in dispute of EUR1,000,000; Total costs: registration fee: EUR150, administrative fees of EUR 13,300 andfees for a sole arbitrator of EUR 12,900.
Assumption: Sole arbitrator and anamount in dispute of EUR 10,000,000:Registration fee: EUR 150; administrativefees of EUR 42,300 and fees for a solearbitrator of EUR 41,900.
These fees are applicable only for disputesbetween foreign companies, or betweenforeign companies and Romaniancompanies and not to arbitration betweenRomanian companies claiming amounts inEUR. For this last situation, the amounts inEUR must be converted to RON and thefees will be calculated based upon theamount in RON. However, the fees in RONand EUR are rather similar.
Assumption based on an amount indispute of EUR 1,000,000: Review of 100pages of documents; no challenge to thejurisdiction of the arbitral tribunal; twoexchanges of submissions; review ofcorrespondence with arbitral tribunal;assistance with the preparation of 4witnesses; review of 4 written witnessstatements; no experts; preparation of oralhearing and participation; preparation andreview of one post hearing brief. Totalapproximate cost: from EUR 40,000 to
Assumption based on an amount indispute of EUR 10,000,000: Review of1,000 pages of documents; no challenge tothe jurisdiction of the arbitral tribunal; twoexchanges of submissions; review ofcorrespondence with arbitral tribunal;assistance with the preparation of 8witnesses; review of 8 written witnessstatements; document production up to 500pages; preparation and review of expertopinions; preparation of oral hearing andparticipation in an oral hearing; preparationand review of one post hearing brief. Totalapproximate cost: from EUR 60,000 to
ATTORNEYS’ FEES (NET)
ATTORNEYS’ FEES (NET)
Enforcement of Foreign Arbitral Awards
-A translation of the award is alwaysrequired.
-For enforcement of awards under theNew York Convention, the creditor mustprovide the court with the authenticatedoriginal award or a duly certified copythereof and the original of thearbitration agreement or a duly certifiedcopy thereof.
For a declaration of enforceability, court fees are insignificant (EUR 10 – EUR 20).
For the enforcement of the award by a bailiff, there are specific costs.
Application for recognition/enforcement:
Simple case: EUR 1,000 to EUR 1,500
Complex case: EUR 2,000 to EUR 5,000
1 to 3 months until a decision on recognition(if applicable) and enforcement is rendered infirst instance; 3 to 5 months if the decision isappealed.
The duration of execution proceedingsdepends mainly on whether the debtor hasexecutable assets and whether executionmeasures or even enforceability of the foreignjudgment issued in an EU Member State areopposed by the debtor.
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 Romania, please contact