International Arbitration

The general legal framework for arbitration in Romania resides in the Romanian Civil Procedure Code (RCPC). Articles 541 to 621 regulate domestic arbitration, whereas articles 1111 to 1133 regulate international arbitration.

With regards to the form of the arbitration agreement, RCPC provides that, in order to be valid, an arbitration agreement can only be concluded in writing.

Yes, as anticipated above, Romanian legislation does differentiate between domestic and international arbitration, the latter taking place when the dispute was born from a private law relation that includes a foreign element.

Domestic arbitration, on the other hand, is not specifically defined by law, but can be identified as opposed to the cases when an arbitration is international.

The rules for international arbitration apply if the court is seated in Romania and at least one of the parties did not have at the date of concluding the arbitration agreement its domicile or seat located in Romania.

Romanian provisions on arbitration follow the general principles of the UNICTRAL Model Law without formally adopting it.

No, as a general rule, Romanian arbitration provisions are party-friendly, meaning that, as a rule, the RCPC provisions become applicable only in so far as the parties don't agree otherwise.

Yet, there are some mandatory provisions as well, such as the type of disputes that can be subject to arbitration, the requirement for the arbitration agreement to be concluded in writing, the odd number of arbitrators or the respect owed to some of the fundamental principles of the civil trial set out in the RCPC.

So far there are no official plans to amend the arbitration legislation in Romania.

Yes, Romania is one of the signatory states to the New York Convention, ever since 1961.

Romania has made commercial and reciprocity reservations to the New York Convention, meaning that Romania will apply the Convention only to legal disputes that are considered commercial under the national law.

With regards to the reciprocity reservation, for awards rendered in non-contracting States, Romania will apply the Convention only on the basis of reciprocity established by agreement between Romania and the non-contracting State.

Romania is also a party to the European Convention on International Commercial Arbitration adopted in Geneva on 21 April 1961, ratified by Romania in 1963.

In international arbitration under Romanian law, a dispute is arbitrable if:

• it is of a patrimonial nature;
• it deals with rights the parties may freely dispose of; and
• it falls outside the exclusive jurisdiction of the courts pursuant to the law of the seat of arbitration.

Also, Article 1111 of the RCPC provides that if one of the parties to the arbitration agreement is a state, a state-company or an organization controlled by the state, this party cannot invoke its own legislation in order to contest the arbitrability of a dispute or its capacity to be a party to the arbitration.

For domestic arbitration, there are several more restrictions with regards to the disputes that are arbitrable, namely that such disputes cannot regard the marital status, parties' capacity, inheritance debate, family relations, as well as rights that parties may not dispose of.

Generally, disputes for which the law of the seat has reserved exclusive competence to the state courts are precluded from arbitration. The Romanian courts have exclusive jurisdiction in cases related to, among other things: insolvency procedures, administrative disputes or competition, when challenging decisions by the Competition Council.

The arbitration agreement must have a written form - including electronic means of communication - both in domestic and international arbitration.

Provisions regarding domestic arbitration also require an authentic form for agreements which refer to disputes related to the transfer of a property right or the constitution of a real right over a real estate asset.

Yes, both international and domestic arbitration provisions state that the arbitration agreement's validity is independent to the validity of the main contract.

If there is no agreement between the parties, the seat of the arbitration shall be decided by the arbitral tribunal. As far as the language of the arbitration is concerned, in absence of an agreement between the parties, the language of the arbitration will be that of the main contract, or, otherwise, an international language chosen by the arbitral tribunal.

In the Romanian legislation, the arbitral tribunal has the role of verifying its own competence, during the first hearing. Yet, the parties may also raise an objection to the jurisdiction of the tribunal when the matter is brought before a regular court, usually before any defense on the merits.

Also, a party may raise an objection to the jurisdiction of the tribunal after an award was rendered, by means of setting aside the tribunal award.

Yes. According to Article 579 of the RCPC for domestic arbitration and 1119 of the RCPC for international arbitration, the tribunal has the competence to rule on its jurisdiction.

Article 554 of the RCPC states that if a dispute for which exists an arbitration agreement has been brought before a regular court, said court can verify and rule on its competence only if one of the parties makes such a request.

Also, the RCPC provides that if there is a conflict on competence between a regular court and an arbitral tribunal, the conflict shall be solved by the regular court which is superior to that within the conflict.

A person can be a party to an arbitration agreement provided it respects the general conditions of the civil law for concluding an agreement (ie. having full capacity).

The RCPC provides that, under the penalty of losing their right to act, the parties shall obey certain terms (which are double in the international arbitration, according to Article 1115 of the RCPC) for different procedural acts, such as filing a request to dismiss the arbitrator or filing the statement of defense.

Also, domestic arbitration provisions state that at the first hearing, the parties are obliged to mention in writing whether they understand to invoke the caducity of the arbitration.

As per Article 556 (3) of the RCPC, if there are multiple plaintiffs or multiple defendants, parties which have common interests shall appoint only on arbitrator.

According to Article 1113 (2) of the RCPC, the arbitration agreement is valid if it fulfils the requirements imposed by one of the following laws:

• the law established by the parties;
• the law which governs the subject of the dispute;
• the law applicable to the contract which includes the arbitration agreement;
• the Romanian law.

The tribunal shall apply the substantive law established by the parties or, in absence of such an agreement, the substantive law considered most adequate by the tribunal itself, always considering the common practices and professional rules.

There are not legal provisions regarding the consolidation of arbitrations, but, at least in theory, such a procedure could take place with the parties' consent.

Yes, as per Article 581 additional parties may join an arbitration that has already commenced, provided all parties give their consent. Exceptionally, if a third party intervenes as an accessory to one of the existing party, the consent of all parties is no longer required.

There are no such provisions in the relevant legislation, but as a general rule under civil Romanian law, third parties may not be bound by agreements to which they are not a part of.

The arbitrators are appointed either through the arbitration agreement or as a result of the parties' decision following the signing of the agreement. In absence of such understandings, the parties can ask the court within the seat of the arbitral tribunal to appoint the arbitrators.

Any person with full capacity can be an arbitrator. Yet, there are requirements with regards to the number of arbitrators, which can only be odd. If the parties have not decided upon the number of arbitrators, than the arbitration will pe judged by three arbitrators, two of them appointed by each of the parties and a third, appointed by the first two arbitrators. If there are more plaintiffs or defendants belonging to the same party, said party shall only appoint one arbitrator.

In addition, by means of the arbitration agreement, the parties may agree upon specific requirements to be met by the arbitrators.

Yes, arbitrators can be challenged under the Romanian law, the grounds for challenging an arbitrator being differentiated between domestic and international arbitration provisions.

Thus, under the domestic arbitration, arbitrators can be challenged for the same reasons as a regular judge, as well as if they don't fulfil the qualification requirements set forth in the arbitration agreement, if there are reasons to believe that a legal entity connected to the arbitrator has interest in the case, if there is a professional, direct or indirect, connection between the arbitrator and one of the parties or if the arbitrator assisted one of the parties in the earlier stages of the conflict.

On the other hand, under the international arbitration rules, arbitrators can be challenged in the following situations:

• if they do not have the qualification established by the parties as per the arbitration agreement;
• if there exists a reason for challenging them in accordance to the arbitration procedure rules established by the parties or in absence, by the arbitrators; or
• if the circumstances induce a legitimate doubt with regards to the independence and impartiality of the arbitrator.

In international arbitration, a party can challenge the arbitrator appointed by itself only for grounds which were acknowledged by said party after the appointment.

The arbitrator is replaced in accordance to the provisions existing for its appointment.

There are several duties imposed on arbitrators, such as the need to accept the appointment in writing within 5 days from the moment they receive the appointment proposal. Also, if there is a reason for an arbitrator to be challenged, said arbitrator needs to inform the parties and the other arbitrators prior to accepting the appointment as arbitrator, or, if such reasons appear after the appointment, as soon as the arbitrator acknowledges them.

In addition, as per Article 575 (2) of the RCPC, the arbitrators need to respect the fundamental principles of the civil trial, namely:

• prohibition of denial of justice;
• equal treatment;
• the right to an adversarial trial;
• the right of defense;
• a party-led litigation;
• conducting proceedings in good-faith;
• conducting the procedure orally, unless expressly agreed otherwise by the parties; and
• continuity of the tribunal.

(a) Procedure, including evidence?

Unless the parties have agreed otherwise, the tribunal establishes the procedure by reference to one of the arbitral institutions or to another procedural law at its choice. Regardless of the chosen arbitral procedure, the tribunal has to guarantee the parties' equality and their right to participate in an adversarial trial.

As regards the evidence, according to Article 1118 of the RCPC, the arbitral tribunal has the duty of administering the evidence and assessing it in accordance to its personal beliefs.

(b) Interim relief?

As per Article 1117 of the RCPC, under the international arbitration provisions, the tribunal can order provisional and conservatory measures if one of the parties makes such a request, unless it is provided otherwise in the arbitration agreement. If the party concerned does not voluntarily obey the ordered measures, the arbitral tribunal can ask for support from the competent regular court, in which case, the latter shall apply its own law.

In addition, together with the interim relief, the arbitral tribunal or the court can also order the payment of an adequate bail.

Also, as per the 2018 Arbitration Rules of the Court for International Commercial Arbitration, when applicable, the parties may file a request for conservatory measures even before the arbitral tribunal is constituted.

(c) Parties which do not comply with its orders?

Generally, the arbitral tribunal does not have coercive powers in relation to the parties. Yet, as an example, if all parties, although legally subpoenaed, are absent from the hearing, the court is allowed to solve the dispute anyway, even in the parties' absence.

Also, as concerns the costs, the RCPC provides that the arbitral tribunal can force the parties to pay in advance any amounts needed for organizing the arbitration.

(d) Issuing partial final awards?

According to Article 1121 (4) of the RCPC, the arbitral tribunal can issue partial final awards, unless it is stated otherwise in the arbitration agreement.

(e) The remedies it can grant in a final award?

There are no special limitations on the remedies that can be granted in the final award. The arbitral tribunal can grant the same remedies as a regular court.

(f) Interest?

There are no special provisions regarding interest under the procedural arbitration legislation in Romania. Thus, matters relating to interest shall be tackled in accordance to the substantive national legislation.

If a party does not participate in the arbitration, although it was legally subpoenaed, the arbitration may still continue, unless said party requests the postponement of the hearing, invoking the existence of justified reasons.

No, according to Article 565 of the RCPC, arbitrators will be held liable for the prejudice caused to the parties if:

• after they accept the appointment, they give up this role unjustifiably;
• without a justified reason, they do not participate in the solving of the dispute or they do not render the award within the term established by the law or by the arbitration agreement;
• they disrespect the confidentiality of the arbitration by publishing or divulging information they acknowledged as arbitrators, without the parties' consent;
• they violate their duties in bad faith or with gross negligence.

A Romanian court shall refer parties to arbitration only if one of the parties makes such request, by invoking the arbitration agreement.

Yes, regular courts in the Romanian jurisdiction may intervene in case there are obstacles in the way of organizing the arbitration (ie. for solving preliminary issues). The courts may also solve requests regarding:

• the appointment of arbitrators if the parties don't agree on the matter;
• the challenge of an arbitrator;
• certain measures in case that public authorities refuse to deliver the information requested;
• the verification of arbitral costs.

These powers can be exercised by means of an emergency injunction, without the possibility to appeal the decision.

Although there are no such specific provisions, considering that the regular courts may intervene only at the request of one of the parties, it is reasonable to conclude that the parties can also exclude the court's power by agreement.

Under the international arbitration rules, unless the parties have decided otherwise, the costs for arbitrators are supported by the party who appointed them, whereas for the case when there is only one arbitrator or for the supra-arbitrator, the costs are supported by both parties equally.

A concerns the domestic arbitration, costs are supported as per the arbitration agreement. In absence of such an understanding, the costs are supported by the party who lost the dispute, in full, if the award is admitted entirely, or otherwise, proportionally to what was awarded.

There are no specific provisions in this way.

There are no explicit provisions regarding third-party funding under the Romanian legislation.

The procedure for rendering the arbitral award is the one agreed by the parties. In absence of such an agreement, the award shall be rendered with the vote of the majority of arbitrators and where there is an equal number of votes, the solution which is closest to the one of the supra-arbitrator is preferred. The award must be written, motivated, dated and signed by all arbitrators.

Domestic provisions state that the award must contain the following:

• the names of the arbitrators, the place and the date of the award;
• the name and address of the parties, the name of their counsels and of other persons having attended the hearings;
• a mention of the arbitration agreement;
• the subject of the dispute and a summary of the parties’ arguments;
• the factual and the legal grounds of the award, as well as the reasoning of the decision if the arbitrator solved the dispute in equity;
• the operative part of the award;
• the signatures of all arbitrators and, if case may be, the signature of the assistant arbitrator.

In addition, if the dispute is related to the transfer of immovable property or other real estate rights related to the immovable property, the award has to be authenticated by a public notary or presented before a regular court as well.

The award becomes final and enforceable after it is communicated to the parties.

The award must be produced within maximum 6 months from the date when the arbitral tribunal was appointed, or otherwise, the arbitration is deemed lapsed.

Yes, awards can be enforced in Romania under the same procedure which applies to a decision rendered by a regular court.

An award can be set aside under the Romanian jurisdiction for the following reasons:

• the dispute was not arbitrable;
• the arbitral tribunal has solved the dispute in absence of an arbitration agreement or based on a void or inoperative arbitration agreement;
• the arbitral tribunal has not been appointed in accordance to the arbitration agreement;
• one of the parties was absent during the hearing when there were carried out debates and the summoning procedure was not legally fulfilled;
• the award was rendered after the arbitration term has expired, although at least one of the parties invoked the sunset of the agreement and the parties did not agree to continue the dispute;
• the arbitral tribunal decided on matters that were not subject to the dispute or offered more than what was requested by the parties;
• the arbitral award lacks the operative part of the judgement and the motivation, it does not present the date and place where it was rendered or it is not signed by the arbitrators;
• the arbitral award violates the public order, good behaviour rules or other mandatory legal provisions;
• if, after the award was rendered, the Constitutional Court decided upon the unconstitutional nature of a legal provision which was raised as an exception throughout the arbitration.

Yes, the award can be challenged only within a month from when the award is communicated to the parties. For the last ground for challenging the award, the term is of 3 months from the day that the Constitutional Court Decision was brought to public knowledge.

No, the parties may not give up on the right to challenge an award through the arbitration agreement. This right may be disposed of only after the arbitral award was rendered.

Yes, as per Article 565 letter c) of the RCPC, arbitrators can be held liable if they do no respect the confidentiality of arbitration by publishing or disclosing without the parties' consent, information acknowledged in their capacity as arbitrators.

There are no such exceptions.

Edited by Leon Kopecký and Victoria Pernt.