Arbitration

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

No; Romania has not transposed the UNCITRAL Model Law into national law. The provisions with respect to arbitration are contained within the Civil Procedure Code, which does not follow the Model Law.

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The arbitration agreement must be concluded in writing, otherwise it is deemed to be null. The condition of the written form is considered fulfilled when the referral to arbitration was agreed following an exchange of correspondence, notwithstanding its form, or exchange of procedural deeds. If the arbitration agreement refers to a dispute regarding the transfer of a right to immovable property or regarding the constitution of other real rights over immovable property, then the arbitration agreement has to be concluded in a notarised authentic form under the absolute nullity sanction.

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

In such a situation, three arbitrators will be appointed, one by each party and the third arbitrator – the chair – will be appointed by the other two arbitrators.

An arbitrator may be challenged in cases of incompatibility, namely in case he or she finds him or herself in one of the situations of incompatibility provided for judges in the Romanian Civil Procedure Code (for example, the arbitrator previously expressed his or her opinion in relation to the solution in the dispute he or she was appointed to settle; there are circumstances that justify the doubt that he or she, his or her spouse, ancestors or descendants have a benefit related to the dispute; his or her spouse or previous spouse is related (at a maximum, to the fourth degree) with one of the parties, etc) or for the following reasons that cast a doubt on the arbitrator’s independence and impartiality:

  • he or she does not meet the qualifications or other requirements regarding arbitrators provided in the arbitration agreement;
  • a legal person whose shareholder the arbitrator is or in whose governing bodies the arbitrator is bears an interest in the case;
  • the arbitrator has employment relations or direct trade links with one of the parties, with a company controlled by one party or that is placed under common control with the latter; or
  • the arbitrator has provided consultancy to one of the parties, assisted or represented one of the parties or testified in one of the earlier stages of the case.

 

The challenge request must be filed within 10 days from the moment that the party was informed of the appointment of the arbitrator or from the moment that the cause for challenge occurred.

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

Under Romanian arbitration law, any natural person with full capacity to exercise his or her rights may act as an arbitrator, without any other criteria needing to be met (eg, citizenship, as the previous rules stipulated, or certain qualifications).

If the parties agree to arbitrate under the purview of the Bucharest Court of International Commercial Arbitration (CICA), they must check the specific requirements set out in the regulations of this arbitral institution. For arbitral disputes initiated after 1 January 2018 under the purview of CICA, the new rules entered into force on 1 January 2018 apply.

The list of arbitrators of CICA comprises reputed professors of law and lawyers with a high degree of experience in various areas of law, including niche areas of law. Thus, the pool of candidates meets the needs for the majority of complex arbitral disputes.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

Under Romanian law, provided that the arbitration clause is valid, the parties are free to determine the procedural laws applicable to the arbitral proceedings or may entrust such choice to the arbitral tribunal. 

However, there are some limitations as to the parties’ freedom to determine the procedural rules applicable. In this respect, the law provides the fact that the rules chosen by the parties must observe the fundamental principles of civil procedure, namely:

  • no arbitrator can refuse to judge arguing that the law does not provide for the specific case at hand or is unclear or incomplete;
  • the arbitral proceedings must be conducted in such a manner to ensure equality of parties and that they are treated in an equal and nondiscriminatory manner;
  • the parties are free to dispose of their rights (by waiving them, acknowledging the other party’s claims, etc) and can choose to initiate or not the arbitral proceedings;
  • the object and limits of the arbitral proceedings are to be determined by the parties’ claims and defences;
  • the parties are obliged to oversee the obligations and deadlines imposed by the arbitral tribunal and to substantiate or prove their claims and defences, thus ensuring that the procedures are conducted in a timely manner;
  • the parties must exercise their procedural rights in good faith, so as not to adversely affect the procedural rights of the other party;
  • each party has a right to defence and is allowed to participate in any and all phases of the proceedings, have access to the case file, request evidence and present its oral and written pleadings;
  • the arbitral proceedings must be conducted in an adversarial manner and ensure that all aspects presented during the proceedings are subject to comments or arguments from both parties;
  • the arbitral proceedings must be conducted in an oral manner, except for the situation where the parties have expressly requested that judgment be based solely on the written submissions and evidence on file;
  • the evidence must be administered before the arbitral tribunal, except for situations where the parties have decided otherwise;
  • the arbitral tribunal vested with the resolution of the case cannot be replaced during the proceedings except for limited situations and in accordance with the law; and
  • the arbitral tribunal must decide the case in accordance with the legal provisions applicable and must endeavour to establish the truth in the case, based on the parties’ pleadings and evidence administered.
Court intervention

On what grounds can the court intervene during an arbitration?

The court has a limited role with regard to an ongoing arbitration case. As a matter of principle, a court (namely the tribunal whose jurisdiction covers the seat of the arbitration), may intervene to remove impediments that occurred in the organisation and development of the arbitration proceedings or to fulfil particular duties belonging to courts; for example, following the request of one of the parties, the court may order precautionary or provisional measures regarding the object of arbitration, ascertain various circumstances of fact, or intervene in the selection of arbitrators by appointing an arbitrator (when the party who should appoint him or her fails to cooperate) or the presiding arbitrator (chairperson) if the parties do not agree on the appointment of the sole arbitrator or in the case of a three-panel arbitral tribunal when the two arbitrators do not agree on whom should they appoint as presiding arbitrator.

Interim relief

Do arbitrators have powers to grant interim relief?

The arbitral tribunal has the power to grant interim relief by ordering precautionary or provisional measures or ascertaining various circumstances of fact, and if the parties do not obey those orders, there is the possibility to request the intervention of the court.

Award

When and in what form must the award be delivered?

If the parties do not agree otherwise, the arbitral tribunal must render its award within six months of its constitution, under the sanction of caducity of the arbitration (that is, the expiry or nullity of the arbitration proceedings following the lapse of the time allowed for its settlement). The party who intends to invoke such sanction if the arbitration term is not observed must indicate so in writing at the first hearing, or else the caducity sanction will not be applied.

The award must be delivered in a written form, which must be communicated to all the parties involved within one month of its issuance.

Appeal

On what grounds can an award be appealed to the court?

The grounds for setting aside an arbitral award are limited to the following: 

  • the dispute is not arbitrable;
  • the arbitral tribunal was vested in the lack of an arbitration agreement or under a null and void or ineffective agreement;
  • the arbitral tribunal was not constituted in accordance with the arbitration agreement;
  • the party was not present at the hearing and the summoning proceedings were not legally fulfilled;
  • the award was rendered outside the six-month deadline for arbitrage, although one of the parties raised the time limitation objection and the parties refused to continue the proceedings (caducity of the arbitral tribunal);
  • the arbitral tribunal ruled on aspects that had not been requested for or granted more than requested (ultra petita);
  • the award does not include the relief granted and the reasoning, does not indicate the date and place of the arbitral seat, or it is not signed by the arbitrators;
  • the award is contrary to the public policy, good moral conduct or mandatory provisions of Romanian law; and
  • following the date the award was rendered the Romanian Constitutional Court declares as unconstitutional the law, the ordinance or any legal provisions part of a law or ordinance related to the arbitration. 

 

The court decision rendered following a setting-aside claim can also be further appealed before the superior court of law for formal reasons.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Domestic awards can be enforced in the same manner as court decisions. Foreign awards must first follow a special procedure for recognition and enforcement, with the observance of certain formal conditions similar to those provided by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, including situations in which recognition and enforcement are denied.

Enforcement procedures have not been affected by changes in the political landscape.

Costs

Can a successful party recover its costs?

Yes; assuming there is no agreement between the parties regarding the costs incurred, the winning party can recover its costs on the condition that it requests and proves such costs. The arbitral tribunal will include the order for the defendant to pay those costs within the arbitral award.

The court has the power to order the losing party to cover several types of costs incurred by the winning party, including judicial taxes, experts’ fee, lawyers’ fees and other expenses incurred in relation to the court proceedings (eg, travel expenses). The court has the ability to limit the amount of the prevailing party’s attorneys’ fees by taking into account the difficulty of the litigation, the actual amount of work required from the attorneys and other similar elements. If a claim is only partly admitted, the court may order the costs to be shared (ie, each party will cover their own costs).

Law stated date

Correct on

Give the date on which the above content is accurate.

9 April 2020