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Litigation

Court system

What is the structure of the civil court system?

The Romanian civil court system comprises the following subdivisions: the first court, the Tribunal, the Court of Appeal and High Court of Cassation and Justice. Depending on its nature or size, a claim may be settled in first instance by any of these courts, except for the High Court of Cassation and Justice, which is solely an appeal court (with some exceptions in special matters).

As a rule, from the point of view of the hierarchy of courts, a claim that has been settled in the first instance by the first court will be subject to appeal at the Tribunal and to a second appeal at the Court of Appeal. Similarly, a claim that has been settled in the first instance by the Tribunal will be subject to appeal at the Court of Appeal and to a second appeal at the High Court of Justice. A claim settled in the first court before the Court of Appeal will be subject to (final) appeal at the High Court of Justice. No omission of either of these jurisdictions is acceptable in the course of appeals.

However, following a major modification of the Romanian Civil Procedure Code, which came into force on 15 February 2013 (New Civil Procedure Code), there have been some changes to the civil court system. Previously, any litigation case would normally go through all three degrees of jurisdiction described above. Under the new provisions, most claims will be settled only in the first instance and appeal, that is, in two degrees of jurisdiction; however, if a claim is important enough either by virtue of its nature or size, a second appeal will be open. It should be mentioned that during the transition phase from the former Civil Procedure Code to the New Civil Procedure Code, all the situations described above are possible, depending on the date on which the claim was first filed, with the New Civil Procedure Code applicable to claims filed from 15 February 2013.

There is one judge in the first instance, two judges in appeal and three judges in second appeal, with some exceptions in special matters.

Specialised courts exist in matters such as relations between professionals, insolvency, family and minors. In addition, there are specialised sections within the courts in matters such as labour law, administrative and fiscal law, insolvency, etc.

The New Civil Code of Romania (the New Civil Code), which entered into force as of 1 October 2011, replaced both Romania’s Civil Code of 1864 and the former Commercial Code of Romania of 1887. Consequently, after 2011, in Romania the notion of ‘commercial relation’ no longer exists, its equivalent (with certain differences) being ‘relations between professionals’.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

The Romanian legal system does not include the participation of a jury, neither in civil nor in criminal proceedings.

The judge has an active, inquisitorial role, leading the settlement of the case and the hearings and, if necessary, asking for any clarifications and supplementary information and documents from the parties. A person may become a judge after taking a course at the Magistrates’ National Institute and passing an exam. When graduating from the Magistrates’ National Institute, a person may choose the court (that has openings available) where they want to adjudicate, in the order of their grades (as preference is given by the courts to those with the higher grades).

Limitation issues

What are the time limits for bringing civil claims?

The time limits for bringing civil claims differ, according to the nature of the claim and the subjective right at the basis of the claim. Generally, these limits range from one year to 10 years, the general term being three years.

According to the New Civil Code, in force since 1 October 2011, the parties may contractually agree to suspend time limits. Until the adoption of the New Civil Code, according to the former legal provisions on limitation (which still govern legal relations entered into before 1 October 2011), rules on limitation and its course were imperative and the parties could not derogate from them at their own will, although the law described a small number of cases where limitation could be suspended or interrupted.

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

In particular cases expressly established by the law, preliminary procedures are compulsory. These procedures may consist of mediation, conciliation and inquiries at the notary public, and proof of fulfilment of these procedures will have to be attached to the action submitted to court. In addition, contracting parties may agree that preliminary procedures are to be followed pre-litigation. Other than such legal and contractual preliminary procedures, no pre-action exchange of documents may be considered to be a preliminary step for bringing an action. In Romania, there are no provisions allowing a pre-action disclosure order.

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Civil proceedings commence at the moment of submission of an action or claim in court by the claimant. Following the registration of the action or claim, a preliminary written procedure takes place solely between the court and the claimant during which the court makes sure that the claim complies with all the mandatory conditions regarding its contents and that the claimant has filed all the necessary documents that need to be attached to the claim. Only after the moment when the claim fulfils all formal conditions, the court proceeds to communicate such claim to the defendant and proceeds to the issuance of orders regarding the further requests to be fulfilled by the parties, according to the legal provisions regarding civil procedure.

The caseload is a constant concern for the Romanian judicial system. The high degree of congestion in the courts affects the time in which a case is settled, with the duration provided by the law usually being exceeded. Attempts to reduce the necessary time for adjudicating a dispute have included increasing the number of judges and also the adoption of the New Civil Procedure Code (which entered into force on 15 February 2013), which - as opposed to the previous Civil Procedure Code - provides for a written submissions phase aimed at limiting the period when parties may submit defences and written evidence.

Timetable

What is the typical procedure and timetable for a civil claim?

According to the New Civil Procedure Code, applicable to claims submitted after 15 February 2013, the typical procedure and timetable for a civil claim is as follows: after verifying the fulfilment of the formal conditions of the claim, the judge organises the communication of the claim to the defendant, accompanied by a note obliging the defendant to submit a statement of defence within 25 days from the communication of the claim. If the statement of defence is not submitted in time, the defendant may be unable to propose further evidence in its defence or invoke objections regarding the claim (except for objections of public order).

The submitted statement of defence will thereafter immediately be communicated to the claimant, accompanied by a note obliging them to submit an answer to the statement of defence within 10 days from the communication of the statement of defence.

Within three days of the submission of the answer to the statement of defence, the judge establishes the first court hearing, which will be no later than 60 days from this date. In urgent matters, these terms may be reduced by the judge, according to the circumstances of each matter.

Case management

Can the parties control the procedure and the timetable?

The civil procedure and timetable are established by law. In practice, they are affected by the high degree of congestion in the courts, and the period in which a case is settled tends to be longer than what the law provides.

The parties have very little influence on the development of the case from this point of view, and their intervention is rather limited. The parties’ conduct and diligence in fulfilling their procedural obligations and submitting the necessary documents on time may influence the duration of the case (which may be delayed on purpose), but under the New Civil Procedure Code there are clear deadlines and sanctions for not meeting them, therefore limiting even more the possibility of the parties to influence the procedure and timetable. However, the parties establish the procedural frame (that is, the parties and the object of the claim) and other relevant elements of the trial such as the evidence presented in support of the claim, and such frame directly influences both the procedure and the timetable.

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

The admission and presentation of evidence before the court is an important stage of the civil trial. All documents invoked by a party in support of its claims must be presented to the court and to the other parties in certified copies. Upon the court’s request, the party that submitted a certified copy of a document may be compelled to present the original. Failure to do so may result in the exclusion of the respective document from the body of evidence to the case.

The parties must share all relevant documents. If one of the parties informs the court that an opposing party owns a relevant document, the court may compel the latter to submit the document if the document is conjoint for both parties, if the party that owns it made reference to it or if, according to the law, the party is compelled to submit it.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

There are several types of privileged documents. On the one hand, public authorities and institutions have a right to refuse the submission of documents related to national defence, public safety or diplomatic relations.

On the other hand, all documents that benefit from a confidentiality provision or agreement may only be presented upon the court’s express instruction. The court may refuse to instruct the submission of a document if such submission would breach a legal confidentiality obligation, such as a lawyer’s advice.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

In Romanian civil trials, all evidence is managed by and through the court. It is the court, at the parties’ request, that allows for different types of evidence to be submitted. All exchanges of written evidence between the parties will be done only after the commencement of the trial. In addition, written evidence from witnesses and experts will only count as documents, not as witness statements or expertise. The rule is that all evidence is presented directly in front of the judge and not by intermediary means.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

As a rule, evidence is presented directly to the court. The witness statement is given orally before the judge. Each of the parties has the right to address questions to the witness. The answers to these questions and the statement are written down by the court clerk and signed by the witness. The document thus drafted is attached at the file as a witness statement.

On the other hand, experts give primarily written evidence, in the form of the expertise report that is submitted to the file. However, if the judge requires additional information, the expert may be called in front of the court for an oral statement of clarification.

There also exists the possibility that the administering of evidence is conducted between lawyers without the participation of the court within a deadline set in this respect by the court. In practice, though, this procedure is very rarely used.

Interim remedies

What interim remedies are available?

Search orders are not available in the Romanian civil procedure. Interim remedies are, however, at the parties’ disposal. An interim levy or a freezing injunction may be placed in relation to the debtor’s assets in particular conditions, upon the creditor’s request. This measure freezes the assets of the debtor and prevents him or her from selling them, taking them abroad, etc. The levy may be lifted if the debtor provides a sufficient guarantee that the debt will be paid.

Remedies

What substantive remedies are available?

Both punitive damages and interest are available according to Romanian law. Punitive damages are available in the case of observance of the debtor’s fault. Interest is payable upon request, and its amount is either previously established by the parties or, in the absence of an agreement, the legal interest rate.

Enforcement

What means of enforcement are available?

Any final or otherwise enforceable court decision or order can be enforced with the assistance of an enforcement officer and under the court’s supervision, following the request of the creditor, if the debtor does not willingly obey the dispositions of the court.

Disobeying a court decision or order, aside from the criminal consequences, gives the creditor the right to request the application of enforcement procedures that may consist of the capitalisation of movables and immovables or the garnishment of bank accounts.

Public access

Are court hearings held in public? Are court documents available to the public?

As a rule, court hearings are held in public sessions. In particular cases, the law provides that some types of claims are to be settled only in the presence of the parties. In addition, following a grounded request of a party, the court itself may instruct that hearings are only held in the presence of the parties.

Under the provisions of the New Civil Procedure Code, the trial has been divided into two phases. The administration of evidence and debate of any prior issues necessary for the settlement of the case are now to be held behind closed doors and only in the presence of the parties, and only the closing arguments will be held in public sessions. However, for organisational reasons and owing to a lack of space, at present the applicability of such provisions has been delayed until 1 January 2019.

Court documents are only available to the parties in the trial and their representatives. To study a file, applicants must present an identification document proving their capacity. Under specific conditions provided by the law, members of the press may study court documents.

Costs

Does the court have power to order costs?

The court has the power to order several types of costs, including a stamp fee, bail and an expert’s fee. The stamp fee is determined by law, according to the object and value of the litigation, and the court ensures that the claimant pays it. Payment of bail may be requested in several cases; for example, a request for suspension of the execution of a judgment. According to the New Civil Procedure Code, unless otherwise established by the law, bail will not exceed 20 per cent of the value of the claim or 10,000 lei for claims that cannot be evaluated. The expert’s fee is determined according to the complexity of the case and the amount of work to be completed by the expert. In Romania, there is no provision requiring a claimant to provide security for the defendant’s costs. There are no new rules governing how courts rule on costs.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

The legal provisions regulating the relations between lawyers and clients forbid a pactum de quota litis. However, the parties to the legal assistance contract are free to set any combination of fixed or hourly fees and success fees, the latter being due by the client only if a certain result is reached.

Litigation funding by a third party is not officially provided for within the Civil Procedure Code. Therefore, third-party funding of the proceedings is permitted, according to the principle that in civil proceedings everything that is not interdicted is permitted. However, third-party funding is not frequently used in Romania. The third-party funding will be governed by the agreement concluded between the funder and the beneficiary. Therefore, third-party funding of the proceedings generates private law effects between the third party and the beneficiary but does not affect the procedural frame unless the third party purchases the rights stemming from the claim and becomes a party in the trial. In this case, there are certain cases in which certain third parties cannot purchase the rights stemming from the claim. In the absence of such formal purchase, any understanding between a party of a trial and a third party exceeds the limits of the trial and will be dealt with separately.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

It is possible to sign an insurance policy covering a party’s legal costs, as well as the opponent’s costs, if such a judgment is issued.

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

The concept of class actions is not regulated in Romania. However, several litigants may address the court with a collective claim if their rights stem from the same cause or if there is a close connection between their claims. These elements (same cause, connection) must be justified in front of the court. In addition, class actions may be filed by organisations representing the interests of its members; for example, a trade union can represent its members in a claim with respect to labour rights. There are no new developments regarding class actions.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

The parties can file an appeal against the judgment of the first court. There are different grounds of appeal, depending on the particular conditions of each case. As a rule, all judgments issued in the first court can be appealed, unless otherwise provided by the law, since in Romania the double degree of jurisdiction principle is recognised by the law.

A second appeal is possible against the judgment issued in appeal. In particular cases expressly provided by law, a judgment can only be appealed once. The law enumerates cases eligible for second appeal. Failure to prove the existence of one of these cases may result in the annulment of the second appeal.

The law also provides further means of appeal that are only applicable in particular conditions.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

The recognition and enforcement of foreign judgments is governed either by the Civil Procedure Code or by reciprocal agreements. According to the Civil Procedure Code, foreign judgments are directly recognised in Romania in expressly provided cases. Apart from these cases, foreign judgments are recognised after the fulfilment of several conditions, among them the existence of a reciprocal agreement with the issuing state.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

Obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions is possible, in accordance with the provisions of EC Regulation No. 1206/2001 of 28 May 2001 on cooperation between the courts of the member states in the taking of evidence in civil or commercial matters. The applicable procedure provides that, to obtain evidence, the foreign court must address the Romanian court with a standard request, indicating the procedure step to be fulfilled and all relevant details.

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.

The parties have the right to challenge the appointment of an arbitrator in the same conditions as the challenge of judges (eg, 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 which justify the doubt that he or she, his or her spouse, his or her ancestors or descendants have a benefit related to the dispute, his or her spouse or previous spouse is a relative of maximum the fourth degree with one of the parties, etc). In addition, there are several other situations in which the arbitrator may be challenged as he or she does not possess the qualification agreed by the parties or the arbitrator’s independence and impartiality may be questioned. 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 arbitrable disputes.

Arbitral procedure

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

Provided that the arbitration clause is valid, there are no other substantive legal requirements for the arbitral procedure.

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 may intervene in order to remove impediments occurred in the organisation and development of the arbitration proceedings or in order 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 or it can ascertain various circumstances of fact.

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 such orders there is the possibility to request the intervention of the court, as explained in question 28.

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 and mainly regard formal reasons such as the invalidity of the arbitration clause, wrongful constitution of the arbitral tribunal, non-observance of the six-month arbitration term, lack of signature by all the arbitrators, and infringement of public order, good morals or imperative provisions of the law. 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 such 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. In the event a claim is only partly admitted, the court may order the costs to be shared (ie, each party will cover their own costs).

Alternative dispute resolution

Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

The most commonly used ADR process until recently was conciliation. In the past couple of years, though, mediation has become more popular. However, since mediation is more expensive than conciliation, which is usually organised by the parties themselves or by the assisting attorneys, conciliation remains the more popular procedure. Also, mediation has seen a decline owing to the removal of its mandatory nature in particular cases, following a decision of the Romanian Constitutional Court issued in 2014.

Adjudication is also used, generally in disputes arising from International Federation of Consulting Engineers contracts.

Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

Since August 2014, mediation is no longer compulsory before submitting a claim to court.

If either the law or the contract provides for another type of preliminary procedure, such as adjudication, the courts or tribunals may compel the parties to undergo such procedure.

Miscellaneous

Interesting features

Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

There are some interesting issues, such as the settlement of contradictory judgments, incidents during enforcement procedure and the rules of legal representation, but these require a more technical approach than is required for this publication.