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Arbitration agreements

Validity

What are the validity requirements for an arbitration agreement?

Under Romanian law, a valid arbitration agreement must be in written form. However, the Code of Civil Procedure sets a broadly construed ‘written form’ requirement for arbitration agreements, to the effect that an agreement to arbitrate may be reached following an exchange of correspondence or an exchange of procedural acts (on or after the commencement of arbitral proceedings). For the purposes of international arbitration, the law provides that the written form of the arbitration agreement can be satisfied by telegram, telex, telecopier, email or by any other means of communication that allows it to be evidenced by text.

The code provides that an arbitration agreement should be authenticated by a notary public if it refers to disputes regarding the transfer of ownership rights and/or other rights over real estate. Non-compliance with this formal requirement leads to the absolute nullity of the arbitration agreement. This legal provision has been heavily criticised since the code entered into force and it is expected to be repealed. This rather peculiar provision does not apply to international arbitration agreements.

As to substantive requirements, under Romanian law the arbitration agreement must fulfil the prerequisites for the valid conclusion of any binding agreement. In addition, the disputes must be arbitrable. For the purpose of international arbitration, as regards the capacity of states and state entities to enter into arbitration agreements, Romanian law and case law follow the approach of the 1961 Geneva Convention, preventing states and state-controlled entities to rely on their own law to defeat a freely concluded arbitration agreement.  

In general, Romanian law opts for flexibility with regard to the substantive requirements of arbitration agreements in international arbitration, by recognising their validity provided that they comply with one of the following laws:

  • the law designated by the parties;
  • the law that governs the subject matter of the dispute;
  • the law governing the contract that contains the arbitration agreement; or
  • Romanian law. 

Enforcement of agreements

How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?

The national courts in Romania recognise and enforce valid arbitration agreements. According to publicly available records, in Romania there have been no successful anti-arbitration injunctions or other similar proceedings suppressing the effects of arbitration agreements.

One particularity is that, according to the Code of Civil Procedure, a court seized of a dispute governed by an arbitration agreement shall decline jurisdiction if at least one of the parties invokes the agreement to arbitrate. However, the court shall maintain jurisdiction if the defendent submits its defence on the merits of the dispute without making any reservations with respect to the arbitration agreement.

Consolidation

Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?

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. 

Choice of law

How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

The arbitral tribunal applies the substantive law designated by the parties. If no law has been designated, the arbitral tribunal applies the law that it considers to be proper based on the merits of the dispute. In all cases, the arbitral tribunal shall take account of trade usage and professional rules. 

An arbitral tribunal may decide ex aequo et bono only if the parties have expressly authorised the arbitral tribunal to do so.

Separability

Are there any provisions on the separability of arbitration agreements?

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 containing it.

Multiparty agreements

Are multiparty agreements recognised?

Multiparty agreements and multiparty arbitrations are generally recognised under the arbitration law. However, the legislation also ensures the privity of the arbitration agreement, to the effect that it is generally limited to the parties alone. Multiparty arbitration is recognised provided that the parties to arbitration are bound by an agreement to arbitrate. As per express legal provisions, the joinder is permitted provided that the third party and all of the parties to arbitration give consent to the joinder. 

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