Arbitration in Romania has been regulated since 1865 by the provisions on arbitration contained in the fourth book (Articles 340–371) of the Romanian Civil Procedure Code (“CPC”). Subject to various amendments, these provisions are still in force. In Romanian practice, references to Articles of the CPC including a superscript number are to Articles inserted into the CPC by way of amendment. During the communist era, they were applied only to international trade disputes.

In 1953, the International Court of Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (the “International Arbitration Court”) was established. During the communist era, the International Arbitration Court settled only international commercial disputes. In 1990, a new law concerning the International Arbitration Court was enacted, enabling this institution also to handle domestic commercial disputes. In 1993, the fourth book of the CPC was substantially amended. The Romanian legal provisions on arbitration now largely follow the principles and the structure of the UNCITRAL Model Law of 1985.

The recognition and enforcement of foreign arbitral awards is comprehensively regulated by Articles 370–370³ CPC and by Law No. 105/1992 on the Settlement of Private International Law Relations. Romania has ratified the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “1958 New York Convention”) and other relevant international conventions and bilateral treaties on arbitration.

Scope of application
The provisions of the fourth book of the CPC constitute a basic framework for all forms of arbitration: they apply to ad hoc arbitration and institutional arbitration; to domestic and international arbitration; and to arbitration at law and ex aequo et bono. The parties may choose to appoint one or more arbitrators or to refer their dispute for resolution to a specialised arbitral institution such as the International Arbitration Court.

General principles
Article 358 CPC expressly stipulates two of the most important principles governing Romanian arbitration:

Fairness:
The parties have to be treated equally by the arbitral tribunal and each party is entitled to a fair hearing.

Right to defence:
The parties must be given full opportunity to present their cases and the arbitral tribunal must hear both sides.

Failure to comply with these principles may render the arbitration award null and void.

In addition, the CPC contains some further mandatory provisions which may also be regarded as stating general principles, including:

Party autonomy:
The parties are free to agree on the procedure to be followed between them in their arbitration agreement; in a subsequent separate written agreement; or by reference to arbitration rules, provided there is no conflict with Romanian public policy and good morals.

Confidentiality:
The appointed arbitrators are liable for damages caused by non-observance of their confidentiality obligation. This obligation to keep the arbitration proceedings confidential represents one of the main differences between arbitration and court litigation, which is governed by the principle of public hearings.

Non-intervention by the courts:
As expressly provided by Article 343³ (1) CPC, the conclusion of an arbitration agreement excludes the jurisdiction of the courts to settle the dispute to which the arbitration agreement relates. The court which would have been competent to determine the dispute if no arbitration agreement had been concluded retains, according to the CPC, jurisdiction in relation to certain matters, (e.g. ordering interim measures, ruling on conflicts of jurisdiction, and other matters referred to in more detail below).

International arbitration
Similar to the approach taken by the arbitration legislation of other Central European countries, the fourth book of the CPC draws a distinction between domestic and international arbitrations, and contains specific provisions in Chapter X (Articles 369–369⁵) of the CPC applicable only to international arbitrations; some of these are mentioned above.

Article 369 CPC defines an arbitration taking place in Romania as international if it arises out of a private law relationship with a foreign element.

Article 369² CPC contains supplemental provisions on the appointment and composition of the arbitral tribunal. If international arbitration proceedings take place in Romania, or pursuant to Romanian law, the arbitral tribunal must be composed of an uneven number of arbitrators. Each party has the right to appoint an equal number of arbitrators. The foreign party may appoint a foreign citizen as arbitrator and the parties may agree that the sole arbitrator, or the chairman of a tribunal consisting of several arbitrators, shall be a citizen of a third state not connected with the dispute.

Article 3693 CPC provides, that in international arbitration, the time limits allowed the parties for certain procedural steps shall be doubled, in particular in relation to:

• acceptance by the arbitrators of their mandate (Article 349 CPC);
• appointment of the chairman of the tribunal by the two party-appointed arbitrators and acceptance by the chairman of his mandate (Article 350 CPC);
• appointment of a sole arbitrator, party-appointed arbitrator or chairman by the court under the default appointment procedures (Article 351 CPC);
• challenge of arbitrators (Article 351² CPC);
• service of the summons for attendance at the arbitration hearing (Article 358³ CPC); and
• requests for an additional award or award of correction (Article 362 CPC).

Formal requirements
Article 340¹ CPC defines an arbitration agreement as an agreement by which one or more persons are appointed by the parties, or otherwise in accordance with the terms of the arbitration agreement, to adjudge a dispute and to make a final and binding decision. It may be in the form of an arbitration clause in a larger contract or in the form of a separate agreement (a submission agreement). In an arbitration clause, the parties agree to settle all and any future disputes arising out of or in connection with the contract which contains the arbitration clause through arbitration proceedings. The arbitration clause shall specify the names of the arbitrators or the method of their appointment (Article 343¹ CPC) (see further below on the content of the arbitration agreement).

In a submission agreement, the parties agree that a dispute which has already arisen between them shall be settled by arbitration. The submission agreement shall specify the subject matter of the dispute and the names of the arbitrators or the method of their appointment; otherwise it is null and void (Article 343² CPC).

Pursuant to Article 343 CPC, an arbitration agreement must be in writing, otherwise it is null and void.

Subject to the rules of Romanian public policy, good morals and the mandatory provisions of the law, the parties may, by the arbitration agreement or by a subsequent written agreement, or by reference to established arbitration rules, make provision for: the composition of the arbitral tribunal; the appointment, challenge and replacement of arbitrators; the time and place of the arbitration proceedings; the procedural norms to be followed by the arbitral tribunal, including a possible preliminary conciliation, payment of the costs of the arbitration as between the parties; the form and content of the award; and any other norms necessary for the proper conduct of the arbitration (Article 341 (2) CPC). In addition, the parties should also identify the language of the arbitration and the substantive law applicable to the merits of their dispute in their arbitration agreement.

Arbitrability
Pursuant to Article 340 CPC, persons with full legal capacity to exercise their rights may agree to settle patrimonial disputes through arbitration, except for disputes affecting rights which cannot by law be freely alienated. The term “patrimonial disputes” is commonly interpreted as referring to disputes involving a financial interest.

Under Romanian law, contracts may not resolve matters such as the civil status of persons, collective labour conflicts, certain shareholder disputes, annulment of intellectual property rights, or bankruptcy proceedings; accordingly, disputes concerning such legal relationships are not arbitrable.

Separability
Pursuant to Article 343¹ (2) CPC, the validity of the arbitration agreement is treated as independent from the validity of the main agreement in which it has been incorporated. However, certain defects affecting the main contract, such as the legal incapacity of a contracting party, would also affect the validity of an arbitration agreement contained in the main contract.

Constitution of the arbitral tribunal
Pursuant to Article 344 CPC, in domestic arbitrations, any natural person of Romanian nationality and full legal capacity may be an arbitrator.

Article 347 (1) provides that arbitrators shall be appointed, dismissed or replaced in accordance with the terms of the arbitration agreement.

Article 345 (1) CPC provides that the parties are free to agree whether the dispute shall be settled by a sole arbitrator or by two or more arbitrators. In the absence of an agreement by the parties, the arbitral tribunal shall be composed of three arbitrators, one appointed by each party, and the third (who shall be the chairman of the tribunal) appointed by the two party-appointed arbitrators (Article 345 (2) CPC).

The default procedure applicable in the event that the sole arbitrator or the arbitrators were not designated in the arbitration agreement, and no provision was made for the method of their appointment, is set out in Articles 347–348 CPC. The claimant shall in writing invite the other party either to consent to the ap­point­ment of the proposed arbitrator in the case of a sole arbitrator, or to nominate its arbitrator in the case of a tribunal consisting of two or more arbitrators. The notice shall give full details of the proposed sole arbitrator or of the arbitrator appointed by the claimant. The party so notified must respond within ten days of receipt of the notice with its comments on the appointment of the sole arbitrator or with the details of the arbitrator appointed by it, as the case may be.

If there are several claimants and/or respondents, the parties with a common interest shall together appoint an arbitrator (Article 345 (3) CPC).

The International Arbitration Court has a list of 47 Romanian arbitrators and 43 foreign arbitrators. Parties conducting arbitration proceedings under the auspices of the International Arbitration Court can – but are not obliged to – appoint their arbitrator(s) from that list. Recent amendments to the Arbitration Rules of the International Arbitration Court (which entered into force on 18 April 2008) subject the appointment of a non-listed arbitrator to the confirmation of the Committee (“Colegiul”) of the International Arbitration Court.

The proposed arbitrators have to accept (or decline) their appointment in writing and to notify each party of their acceptance within five days of receipt of the appointment proposal (Article 349 CPC). The two party-appointed arbitrators shall appoint the chairman within ten days of the date of the last acceptance (Article 350 CPC). Pursuant to Article 353² CPC, the arbitral tribunal shall be regarded as constituted on the date of acceptance of his mandate by the last arbitrator.

Pursuant to Article 346 CPC, any clause in an arbitration agreement stipulating that one party may appoint an arbitrator instead of the other party, or that one party may have more arbitrators than the other party, shall be null and void. If the parties have agreed that the tribunal shall consist of a sole arbitrator but cannot reach agreement on his appointment, or if a party fails to appoint its arbitrator, or if the party-appointed arbitrators cannot agree on the appointment of the third arbitrator, each party may request pursuant to Article 351 (1) CPC that the competent court make the appointment. The court shall summon the parties and make the appointment within ten days of the petition being submitted; the decision cannot be appealed. The challenge to arbitrators

Arbitrators may be challenged on legal or contractual grounds pursuant to the provisions in Articles 351¹ and 351² CPC in circumstances which give rise to justifiable doubts as to their impartiality or independence, or if they do not fulfil the requirements or do not have the qualifications agreed between the parties in their arbitration agreement for the appointment of an arbitrator. The legal grounds for challenge are the same as for judges and are expressly set out in the CPC. A party may not challenge an arbitrator appointed by it except on grounds which become apparent only after the appointment was made (Article 351¹ (2) CPC).

Pursuant to Article 351¹ (3) CPC, a person who has been invited to act as an arbitrator must disclose all circumstances which could give rise to justifiable doubts as to his impartiality or independence. The arbitrator must also immediately disclose any such circumstances if they arise at any point between the date of his appointment and the conclusion of the arbitration proceedings. In such circumstances, the arbitrator cannot further participate in the decisionmaking of the tribunal unless the parties have been appraised of the relevant circumstances and have informed the arbitrator in writing that they do not intend to challenge him (Article 351¹ (4) CPC).

Article 351² CPC provides that any challenge must be made within ten days of the appointment of the arbitrator or of the occurrence of the circumstances giving rise to justifiable doubts as to his impartiality or independence, as the case may be, and shall be determined by the court. Noncompliance with this time limit may result in the right to challenge the arbitrator or the subsequent award being lost. The parties and the challenged arbitrator must be notified of the challenge. The court’s decision on the challenge shall not be subject to appeal.

The appointment of substitute arbitrators
If the appointment of an arbitrator is terminated (by challenge, resignation, dismissal, death, or for any other reason), a substitute arbitrator shall be appointed in accordance with the same rules as applied to the original appointment of the arbitrator to be replaced (Article 352 CPC), unless a substitute arbitrator has been named in the arbitration agreement.

Arbitrators’ immunity
One of the most important differences between a court judge and an arbitrator is that the arbitrator may be liable for damages pursuant to Article 353 CPC, if he:

• resigns from his office without good reason after having accepted appointment as an arbitrator;
• fails without good reason to participate in the hearings and deliberations of the tribunal or to issue the award within the timeframe established by the arbitration agreement or by law;
• does not observe his confidentiality obligation and discloses information obtained by him in his capacity as arbitrator without the approval of the parties; or
• is otherwise in material breach of his obligations.

Pursuant to Article 353¹ CPC, in the case of institutional arbitrations, the court’s powers in relation to the appointment, challenge or replacement of arbitrators shall be exercised by the relevant institution, unless the institutional rules provide otherwise. This provision reduces court involvement in institutional arbitration proceedings where the applicable arbitration rules contain adequate provisions for resolving such matters.

Arbitrators’ fees and expenses
The definition of arbitration expenses, and the question of how these expenses shall be allocated between the parties in the award and paid, is dealt with further below.

However, Article 359¹ CPC authorises the arbitral tribunal to make a provisional assessment of the amount of the arbitrators’ fees at the outset of the arbitration and to order the parties to deposit that sum in equal amounts. The arbitral tribunal may also order such a deposit to be paid by the parties jointly and severally. Likewise, the arbitral tribunal may order the parties to pay other arbitral expenses in advance (Article 359¹ (4) CPC). If the respondent fails to pay the required deposit within the time limit established by the arbitral tribunal, the claimant shall pay the whole deposit and the arbitral tribunal shall subsequently establish in its award the amount of the fees due to the arbitrator (and of any other expenses) and how this amount is to be borne by the parties (Article 359¹ (3) CPC).

In any event, Article 359² CPC clarifies that the arbitral tribunal shall not proceed with the arbitration until the deposits or advance payments requested have been made.

Article 359³ CPC gives either party the right to request the competent court to review the measures ordered by the tribunal and to establish the amount of the arbitrators’ fees and of any deposit, advance, etc.

The arbitrators’ fees shall be paid after the arbitration award has been ­communicated to the parties. If arbitration proceedings are commenced but do not proceed to the making of an award, the arbitrators’ fees shall be reduced accordingly (Article 359⁴ CPC). Where the arbitral tribunal has ordered payment of a deposit on account of arbitration expenses, Article 3595 CPC requires that the amount of such expenses (and any surplus or deficit) shall subsequently be regulated in the arbitration award, and be paid before the award is communicated to the parties or deposited with the court.

Article 359⁶ CPC clarifies that in institutional arbitration proceedings, the arbitrators’ fees and expenses shall be established and paid in accordance with the rules of the relevant arbitration institution (see further below).

Competence to rule on its own jurisdiction
Article 343³ (2) CPC gives the arbitral tribunal jurisdiction to rule on its own jurisdiction. At the outset of the arbitration proceedings, the arbitral tribunal examines its jurisdiction to determine the dispute between the parties and may issue an interim award on jurisdiction. Such an award may only be challenged before the courts together with the final decision of the arbitral tribunal.

Power to order interim measures
The arbitral tribunal has jurisdiction to order interim or protective measures during the arbitration. If the parties do not voluntarily comply with such measures, they may be enforced with the permission of the court (Article 358⁹ CPC).

Commencement of arbitration
The arbitral proceedings commence when the claimant serves on the respondent and on each of the arbitrators a copy of his written Statement of Claim together with copies of the relevant documents on which he relies as evidence in support of his claim (Articles 355 and 356 CPC).

Applicable procedural rules
The arbitral tribunal shall conduct the proceedings:

• on the basis of the rules set out in the arbitration agreement concluded between the parties (subject to mandatory provisions of public policy and good morals) (Article 341 (1) and (2) CPC);
• if the parties have not agreed the procedure to be followed, at its procedural discretion (Article 341 (3) CPC); or
• if the tribunal does not establish any procedural norms, in accordance with the optional procedural rules for the conduct of arbitration proceedings in the provisions of the fourth book of the CPC (Article 341 (4) CPC) (see further below).

In practice, parties frequently provide in their arbitration agreement for their disputes to be resolved by arbitration before the International Arbitration Court, in accordance with one of its sets of procedural rules. Article 341¹ CPC expressly provides that the parties may agree that the arbitration be organised by such a permanent arbitration institution. If the parties submit their arbitration to the new Arbitration Rules of the International Arbitration Court, the arbitral tribunal will be obliged to draw up a document defining its Terms of Reference (“Act de planificare”), as under Article 18 of the Arbitration Rules of the ICC in Paris.

Place of arbitration and language of proceedings
The parties are free to agree the place of arbitration. Failing such an agreement, the arbitral tribunal determines the place of arbitration (Article 354 CPC). In international arbitration, the parties may stipulate in their agreement that the proceedings shall take place in Romania or in another country (Article 369¹ (1) CPC).

Domestic arbitration proceedings shall be conducted in the Romanian language. In relation to international arbitration proceedings, Article 369⁴ CPC provides that the language of the proceedings shall be that chosen by the parties in their arbitration agreement, or, in the absence of a contractual choice or any subsequent agreement, in the language of the contract giving rise to the dispute (or in another international language chosen by the arbitral tribunal). The arbitral tribunal shall arrange for the services of a translator at the request of a party who is not familiar with the language of the proceedings, at that party’s expense. The parties are free to use their own translators for the purposes of the proceedings.

Submissions
The requirements as to the content of the written Statement of Claim are set out in Article 355 CPC. This must contain:

• the name, domicile or residence of the parties; or, in the case of legal persons, their name and seat as well as their company registration number, telephone number and bank account;
• the name and capacity of any representatives of the claimant (documentary evidence of such capacity should be attached to the Statement of Claim);
• reference to the arbitration agreement or the submission agreement (copies of the main agreement containing the arbitration agreement or of the submission agreement should also be attached to the Statement of Claim);
• the subject matter and value of the claim and of the calculation by which that value was determined;
• the factual and legal grounds and the evidence on which the claim is based;
• the names and places of residence of the members of the arbitral tribunal; and
• the signature of the claimant.

Within 30 days of receipt of a copy of the Statement of Claim, the respondent must serve his defence (Article 356¹ CPC). The defence must include:

• any objections with regard to the Statement of Claim;
• the factual and legal reply to the Statement of Claim and the evidence relied upon; and
• other content required of a Statement of Claim by Article 355 CPC.

If the proceedings are delayed because of the respondent’s failure to submit his defence on time, Article 356¹ (3) CPC requires the respondent to pay the costs occasioned by such delay.

After the defence has been filed, additional objections or defences may only be raised until the first hearing (Article 356¹ (2) CPC). If the respondent has counterclaims arising out of the same contractual relationship, he may submit them to the arbitral tribunal together with his defence, but no later than at the first hearing. The counterclaim must meet the same requirements as the statement of claim (Article 357 CPC). Each party may amend its written submissions in the course of the proceedings, but only until the first hearing before the arbitral tribunal.

All statements of case, written documents and other notifications which are submitted to the arbitral tribunal by one party must be copied to the other party. Article 358¹ CPC provides that all communications between the parties and the arbitral tribunal shall be made by registered letter with receipt of delivery or confirmation of receipt. Information may also be transmitted by fax or by any other means of communication that provides evidence of the transmission and of the transmitted text. Documents may also be delivered directly to a party against signature of a receipt.

Oral hearing and written proceedings
Immediately after expiration of the time for filing of the Statement of Defence, the arbitral tribunal shall examine whether the dispute is ready to be heard and, if necessary, order adequate measures for the completion of any outstanding matters (Article 358² (1) CPC). Article 358² (2) CPC requires the tribunal to fix a time for the hearing and to summon the parties once the case is ready to be heard and the file completed. Pursuant to Article 358³ CPC, there shall be an interval of at least 15 days between the date of receipt of the summons by the parties and the date of the hearing. Arbitration hearings are in principle not public.

Pursuant to Article 358⁴ CPC, the parties may participate in the proceedings (and attend the hearing) personally or through a representative. A party which attended or was represented at a hearing shall not be summonsed again to every hearing in the course of arbitral proceedings, but is deemed to have knowledge of the next hearing date by virtue of its attendance at the previous hearing. Hearing dates of which the parties have been informed, or for which summonses have been served, may only be changed for good reasons and if the parties are notified thereof.

No later than at the first hearing, the parties must raise any objections to the existence and validity of the arbitration agreement, the constitution of the arbitral tribunal, the scope of the arbitrator’s jurisdiction, and the conduct of the arbitral proceedings up to that point, unless a shorter time limit has been agreed. Article 358¹² (1) CPC provides that the right to raise such objections may otherwise be lost.

The parties must also present their petitions and any documentary evidence no later than at the first hearing (Article 358¹² (2) CPC). Any evidence which has not been identified by the parties before the first hearing can no longer be invoked in the arbitration proceedings, except in cases where the need for further evidence has resulted from the proceedings, or the additional evidence does not delay the resolution of the dispute (Article 358¹² (3) CPC). Default of a party

Article 358⁵ CPC clarifies that failure by a party to attend a hearing although duly summonsed shall not prevent the progress of the proceedings unless the absent party submits, no later than on the day before the hearing, a request to the arbitral tribunal for adjournment of the hearing on good grounds and notifies the other party thereof. Only one adjournment may be granted.

Either party may request in writing that the dispute be settled in its absence on the basis of the documents filed (Article 358⁶ CPC).

In case both parties do not attend a hearing on the appointed date although duly summonsed, Article 358⁷ CPC provides that the arbitral tribunal shall proceed with the determination of the dispute, except where the parties have requested an adjournment on good grounds. Alternatively, the arbitral tribunal may also postpone the determination of the dispute and summon the parties where their presence at the hearing or the production of evidence is deemed necessary.

Evidence
The rules on evidence are set out in Articles 358¹⁰ and 358¹¹ CPC, but in addition arbitral tribunals frequently apply the rules of the CPC on witness and expert evidence in court proceedings by analogy in arbitration proceedings.

Each party has the burden of proof in relation to the facts on which it bases its claim or defence. In determining the dispute, the arbitral tribunal may request the parties to file written submissions on the claim and the facts of the dispute and may order production of any evidence as provided by the law.

Evidence shall be produced during the sessions of the arbitral tribunal. Witnesses and experts shall be heard without taking an oath. The arbitral tribunal cannot compel witnesses or experts to give evidence but may request the assistance of the courts in taking the required measures. The courts may order witnesses to give evidence and make statements and may impose sanctions for failure to do so. Cross-examination is not normally part of the arbitration procedure in Romania but the parties are entitled to put questions to the opponent’s witnesses through the conduit of the arbitral tribunal. The arbitrators shall evaluate the evidence in accordance with their personal conviction.

The arbitral tribunal may order the use of an expert to clarify certain matters, such as, for example, technical or accounting issues, at the request of any of the parties or ex officio. The expert may request the parties to produce documents or other information and he must take the parties’ statements into account when preparing his report. Experts normally summarise their findings in a written report, which is submitted to the arbitral tribunal and communicated by the arbitral tribunal to the parties. The parties may submit comments and questions on the report prior to the hearing. The expert may be questioned by the parties at the hearing.

Article 358¹³ CPC requires that the arbitral proceedings shall be recorded in the minutes (“incheiere”). Any decision of the arbitral tribunal and the grounds therefore shall be recorded in the minutes. The minutes of each session of the arbitral tribunal shall contain:

• the composition of the arbitral tribunal and the date and place of the session;
• full details of the parties, their representatives and any other person who participated in the proceedings;
• a brief description of the proceedings at that session;
• the requests and arguments of the parties;
• the reasons for any measures ordered;
• the order of the tribunal; and
• the signatures of the arbitrators.

The parties are entitled to review the contents of the minutes and the documents on the file. The arbitral tribunal may amend or complement the minutes of a session by other minutes upon the parties’ request or ex officio. A copy of the minutes of each session shall be served on the parties at their request.

Choice of law
Pursuant to Article 360 (1) CPC, the arbitral tribunal shall make its award on the basis of the provisions of the main contract and the applicable rules of law, taking into consideration the usage of the trade applicable to the dispute. The rules on the law applicable to international contracts are dealt with in Articles 73–85 of Law No. 105 of 1992 on the Settlement of Private International Law Relations.

The arbitral tribunal may only decide a dispute ex aequo et bono if the parties have expressly authorised it to do so (Article 360 (2) CPC).

Decisionmaking by the arbitral tribunal
Article 360¹ (1) CPC requires that in all cases the arbitrators must participate in private deliberations before issuing the final decision, and that such participation be recorded in the award. Article 360¹ (2) CPC permits delivery of the award to be postponed by up to 21 days, provided it is made within the applicable term of the arbitration.

Article 353³ (1) CPC requires that, unless otherwise agreed by the parties, the arbitral tribunal shall make its award within five months of the date of constitution of the tribunal. The parties may agree pursuant to Article 353³ (3) CPC to extend this term, and the term may also be extended by the arbitral tribunal for good reason by up to two months (Article 353³ (4) CPC). In addition, Articles 353³ (2) and (5) CPC set out the circumstances in which the term of the arbitration is extended or suspended automatically as a matter of law. In the circumstances of Article 353³ (6) CPC, the arbitration proceedings may terminate if not resolved within the applicable term.

Where the arbitral tribunal is composed of an uneven number of arbitrators, the award shall be made by a majority of votes. Any dissenting opinion must be recorded in writing and signed by the relevant arbitrator, stating the reasons on which it is based (Article 360² CPC).

Where the arbitral tribunal is composed of an even number of arbitrators, and they do not agree on the decision to be taken, Article 360³ CPC requires that an umpire be appointed in accordance with the terms of the arbitration agreement between the parties, or, in the absence of an agreement, by the competent court. The umpire thus appointed shall accept the decision proposed by one of the arbitrators, which he may amend, or he may render another decision, but only after hearing both parties and following consultation with the other arbitrators.

Form, content and effect of the award
The arbitral award shall be drawn up in writing and shall include:

• the names of the members of the arbitral tribunal and the place and date of the making of the award;
• parties and their addresses (domicile, residence or seat) as well as the full names of the parties’ representatives and of any other person who participated in the arbitration proceedings;
• reference to the arbitration agreement on which the proceedings were based;
• the subject matter of the dispute and a summary of the parties’ cases;
• the de facto and de jure reasons for the award or, in case of an arbitral award made ex aequo et bono, the grounds on which the decision is based;
• the decisions and orders of the arbitral tribunal; and
• the signatures of all arbitrators.

The arbitration award must be notified to the parties within one month after it was made and, at the request of a party, the arbitral tribunal shall issue a certificate of service. Within 20 days of communicating the final award to the parties, the arbitral tribunal shall deposit the file with the competent court, except if the arbitral tribunal was a specialised institution, in which case that institution archives the file.

An arbitral award which has been served on the parties has the same effect as a judicial decision: it is final and binding (Article 363 (3) CPC) and also enforceable (see further below).

Interest
The arbitral tribunal is entitled to award interest. If the underlying agreement between the parties makes provision for payment of contractual late-payment interest, the arbitral tribunal awards interest at the contractually-agreed rate until the date of payment. If no contractual interest has been stipulated, the arbitral tribunal may award interest at the official bank rate of the National Bank of Romania.

Costs
The CPC contains detailed provisions in relation to the arbitration expenses in Articles 359–359⁶ CPC, which have in part already been addressed above.

Arbitration expenses include expenses for:

• the organisation and conduct of the arbitration proceedings;
• taking evidence;
• travel of parties, arbitrators, experts and witnesses; and
• the arbitrators’ fees.

Article 359 CPC provides that such expenses shall be paid by the parties in accordance with their agreement. In the absence of any agreement, they shall be borne by the party which lost the dispute or, if the claimant is only partially successful, by the parties in proportion to their respective success and failure. Unless the parties agree otherwise, the arbitration expenses payable by the losing party do not normally include the legal fees and other costs of representation of the successful party.

Article 359⁶ CPC clarifies that, in institutional arbitration proceedings, the arbitration expenses, including the charges for organising the arbitration and the arbitrators’ fees, shall be established and paid in accordance with the rules of the relevant institution. The International Arbitration Court, for example, has detailed provisions in relation to costs in its arbitration rules and has established a fee schedule.

Article 369⁵ CPC provides that, in international arbitration proceedings, the fees of the arbitrators and their travel expenses shall be borne by the respective parties who appointed them, unless otherwise agreed. In the case of a sole arbitrator or chairman, these expenses shall be shared equally between the parties.

Correction and interpretation of the award
If the arbitral award contains any material errors in the text of the award (e.g. calculation or typographical errors or similar obvious errors which do not change the substance of the award), the arbitral tribunal may correct such errors by an award of correction on its own initiative or at the request of one of the parties made within ten days of receipt of the award (Article 362 (1) CPC).

At the request of one of the parties made within the same time period, the arbitral tribunal may also make an additional award in respect of any claim which was presented to the tribunal but has not been dealt with by the tribunal in its award. The additional award shall be made after summoning the parties (Article 362 (1) CPC). Parties may not be obliged to pay any additional costs in respect of such a correction of the arbitral award or additional award (Article 362 (4) CPC). Pursuant to Article 362 (3) CPC, the additional award or award of correction forms an integral part of the arbitration award.

The CPC does not contain provisions specifically dealing with the interpretation of arbitral awards by the tribunal, but tribunals may arguably accede to applications by a party for clarification of the award by applying the general rules of the CPC accordingly.

Stay of court proceedings
Where a party commences court proceedings in relation to a subject matter covered by an arbitration agreement concluded between the parties, and the other party invokes the arbitration agreement before the court, the court shall determine its jurisdiction (Article 343⁴ (1) CPC).

Pursuant to Article 343⁴ (2) CPC, the court retains jurisdiction to decide the dispute on its merits if it finds that:

• the arbitration agreement is null and void, inoperative or incapable of being performed;
• the respondent has already submitted his defence on the merits (and any counterclaims) without any jurisdictional reservation based on the arbitration agreement; or
• the arbitral tribunal cannot be constituted for reasons which fall within the sphere of responsibility of the respondent.

Otherwise, the court shall declare at the request of one of the parties that it lacks jurisdiction and refer the parties to arbitration (Article 343⁴ (3) CPC). In the case of a conflict of jurisdiction between the arbitral tribunal and the court, the next higher court to that before which the conflict arose shall decide (Article 343⁴ (4) CPC).

Support of arbitration proceedings
Pursuant to Article 342 (1) CPC, any interested party may institute proceedings before the court which, in the absence of the arbitration agreement, would have had jurisdiction to adjudge the merits of the dispute at first instance in order to remove any impediments that might arise in the organisation or conduct of the arbitration. The court shall settle such petitions summarily and as a matter of priority (Article 342 (3) CPC).

Interim protective measures
Before or during the arbitration proceedings, any party may request the court to grant interim injunctions, to order other conservatory or protective measures related to the subject matter of the arbitration (Article 358⁸ (1) CPC), or to establish relevant factual circumstances (i.e. preserve evidence). A copy of the Statement of Claim and of the arbitration agreement must be submitted to the court in support of the petition (Article 358⁸ (2) CPC). The party requesting such measures before the court shall immediately notify the arbitral tribunal once they have been granted (Article 358⁸ (3) CPC).

Challenging the award before the courts
Parties may agree that an award shall be subject to appeal to a second tier arbitral tribunal. However, there is no right to appeal an award to the courts.

According to Article 364 CPC, the arbitral award may only be set aside following a petition for annulment for the following limited reasons:

• the dispute was not arbitrable;
• the arbitral tribunal decided the dispute in the absence of an arbitration agreement or on the basis of a void or inoperative arbitration agreement;
• the arbitral tribunal was not constituted in accordance with the requirements of the arbitration agreement;
• a party was not present when the proceedings took place and the legal requirements of the summonsing procedure were not complied with;
• the arbitration award was rendered after expiry of the five-month arbitration term provided under Article 353³ CPC for making the award;
• the arbitral tribunal decided matters which were not the subject of the claim, failed to decide upon a claim submitted for decision in the request for arbitration, or awarded more than requested;
• the arbitral award did not include the tribunal’s decision or did not give reasons, did not state the date and place where it was made, or was not signed by the arbitrators;
• the decision in the arbitral award included provisions which could not be implemented; or
• the arbitral award was contrary to public policy, good morals or mandatory provisions of the law.

The parties cannot, in the arbitration agreement, waive in advance the right to institute proceedings for the arbitral award to be set aside; such right may only be waived after the arbitral award is made (Article 3641 CPC).

Article 365 (1) CPC provides that jurisdiction for the setting-aside proceedings lies with the court which is immediately superior to the court which would have had jurisdiction to determine the dispute in the absence of the arbitration agreement. Setting-aside proceedings may be instituted within one month of the date of communication of the arbitral award (Article 365 (2) CPC). Pending its substantive decision, the court may, after requiring security in an amount fixed by it, suspend the enforcement of the arbitration award against which setting-aside proceedings have been instituted (Article 365 (3) CPC (as amended)).

The court will decide the request in accordance with the provisions of Article 366 CPC. If the court finds the request justified, it shall set the arbitration award aside and, if the dispute is ready to be determined, it shall make a decision on the merits within the limits of the arbitration agreement. If further evidence is needed before a decision on the merits can be made, the court will request the parties to submit that evidence and make its decision on the merits after the evidence has been submitted.

If the court proceeds to determine the dispute on the merits, the court’s judgment setting aside the arbitration award can only be challenged together with the judgment on the merits. The judgment of the superior court on the setting-aside of the award is subject to further recourse by way of cassation.

Enforcement of domestic arbitration awards
Article 367 CPC clarifies that an arbitration award is binding and shall be complied with by the party against which it was made immediately or within the time limit established in the arbitration award. If necessary, the successful party may apply for leave to enforce the arbitration award (exequatur) pursuant to Article 367¹ CPC. Leave for enforcement shall be granted without a hearing unless there are doubts as to the regularity of the arbitration award, in which case the parties shall be summonsed. Once leave for enforcement of the arbi­tration award has been granted, the award may be enforced in the same way as a court judgment (Article 368 CPC). The award bearing the enforcement formula represents a writ of execution` based on which the party in whose favour it was made may commence the enforcement proceedings.

Recognition and enforcement of foreign arbitration awards
Romania ratified the 1958 New York Convention as early as 1961, and is also a party to the 1961 Geneva Convention and other international arbitration conventions and treaties. If no multilateral or bilateral treaty applies, the procedure for recognition and enforcement of foreign arbitral awards is set out in Articles 370–370³ CPC and Articles 167–177 in Section 4 of Law No. 105/1992 on the Settlement of Private International Law Relations.

Article 370 CPC defines an arbitration award as foreign if it was made in the territory of a foreign State.

Pursuant to Article 370¹ CPC, foreign arbitration awards acquire the force of res judicata in Romania if they are recognised pursuant to Articles 167–172 of Law No. 105/1992. Article 370² CPC provides that a foreign arbitral award which is not complied with voluntarily by the party against which it was made may be enforced in Romania under the provisions of Articles 173–177 of Law No. 105/1992. The provisions of Section 4 of Law No. 105/1992 relate primarily to the effect given to foreign court decisions in Romania but Article 181 clarifies that Articles 167–178 regarding the recognition and enforcement of foreign judicial decisions apply correspondingly also to foreign arbitral awards.

Pursuant to Article 370³ CPC and Article 178 of Law No. 105/1992, foreign arbitral awards made by a competent tribunal have evidential force before the Romanian courts with regard to the facts which they establish without the requirement for formal recognition.

Foreign arbitral awards may be recognised either directly pursuant to an application for recognition or indirectly if they are relied upon in substantive proceedings pending in the Romanian courts (Article 170 (2) of Law No. 105/1992).

Foreign arbitral awards granting interim measures of protection or awards which are only provisionally enforceable cannot be enforced in Romania (Article 173 (2) of Law No. 105/1992).

Conditions for the recognition of a foreign arbitral award
Pursuant to Article 167 of Law No. 105/1992, foreign arbitral awards may be recognised in Romania, provided the following conditions are cumulatively met:

• the arbitral award is final under the national law of the State where it was issued. The award must have been properly notified to the respondent in order to allow him to exercise any available right of appeal against the award; with regard to the procedure for notifications, the principle of locus regit formam actus applies, i.e. the form of notification is governed by the national law of the country where the award was notified (whereas receipt of the notification is governed by the national law of the party to be notified;
• Romania is a party to the 1954 Hague Civil Procedure Convention);
• the tribunal that issued the award must have been competent to determine the case under the national law of the State where the award was issued;
• there is reciprocity regarding the recognition of foreign awards between Romania and the State where the arbitral tribunal that issued the award had its judicial seat; it is not necessary to prove that formal legal or diplomatic reciprocity is granted: the law presumes that reciprocity is granted unless the contrary is shown; and
• in the case of an award made in the absence of the losing party, it is shown that that party was properly notified of the claim and summonsed to the arbitration hearing and was given the opportunity to defend itself against the claim.

Recognition of a foreign arbitral award may be refused in any of the following situations listed in Article 180 of Law No. 105/1992:

• the foreign award is the result of a fraud committed in the foreign proceedings;
• the foreign award violates the public policy of Romanian private international law; Romanian law does not define the concept of public policy, except in respect of certain grounds of exclusive jurisdiction of the Romanian courts: doctrine and jurisprudence have established that, for example, the violation of the right to defence falls under this concept; or
• the dispute was resolved between the same parties by an earlier judgement issued by a Romanian court, or was in the process of being adjudicated by a Romanian court on the date when the claim in the arbitration proceedings was received by the arbitral tribunal.

Recognition of a foreign arbitral award may not be refused for the sole reason that the arbitral tribunal applied another substantive law to the merits of the case than would have been applicable pursuant to the rules of Romanian private international law. An exception to this rule applies if the proceedings concerned the legal status or capacity of a Romanian citizen and application of the foreign law produced a different result than would have been reached under Romanian law.

Quite importantly, Article 169 of Law No. 105/1992 clarifies that, save for a review of the compliance of the foreign arbitral award with the requirements of Articles 167 and 168 of Law No. 105/1992, the Romanian courts may not re-examine the merits of the foreign arbitral award or modify it.

Procedure for recognition of a foreign award
Pursuant to Article 171 of Law No. 105/1992, the request for recognition of a foreign arbitral award must be drawn up in accordance with the requirements of Romanian procedural law and must be accompanied by the following documents:

• a copy of the foreign award;
• proof of its final character;
• a copy of the proof of notification of the summons and the Statement of Claim to a party which was not present before the foreign tribunal, as well as of the award; and
• proof that the foreign award meets all other conditions of Article 167 of Law No. 105/1992.

All documents need to be accompanied by authorised translations and authenticated by the competent authority in the state of the foreign court, by the relevant Romanian consulate, and by the Romanian Ministry of Foreign Affairs (Article 162 of Law No. 105/1992). Romania is a party to the 1961 Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents.

The request for recognition will be resolved in adversarial proceedings, i.e. the respondent will be summonsed and will be allowed to state his defence (but limited strictly to the grounds in Law No. 105/1992 based on which recognition of the foreign arbitral award may be resisted). The request for recognition may be determined without a hearing with the parties if it follows from the arbitral award that the respondent admitted the claim (Article 172 of Law No. 105/1992). The court’s decision on recognition is subject to two tiers of appellate jurisdiction.

Conditions for authorisation of enforcement of a foreign award
In addition to the conditions for the recognition of a foreign arbitral award set out above, Article 174 of Law No. 105/1992 requires that two further conditions be met in order to obtain authorisation to enforce a foreign award:

• the award must be enforceable according to the national law of the State where the award was issued; and
• the right to request enforcement must not be time-barred; the limitation period is three years under Romanian law, but it may be shorter if the national law of the State where the award was made so provides.

Again, as in the case of recognition of a foreign award, the court will not review the merits of the foreign award, save for compliance with the requirements of Articles 167–169 of Law No. 105/1992.

Procedure for enforcement of foreign arbitral awards
The same documents as for a request for recognition of a foreign award must be attached to a request for enforcement. In addition, proof that the award is enforceable must be presented, e.g. in the form of a certificate from the arbitral tribunal confirming enforceability of the award (Article 175 of Law No. 105/1992) (usually, this follows from the final character of the award).

Pursuant to Article 176 of Law No. 105/1992, the respondent will be summonsed and allowed to state his defence, but again not on the merits of the case. For instance, the respondent may contend he has paid after the award was issued. The court’s decision on enforcement is subject to two tiers of appellate jurisdiction.

Once enforcement of the foreign arbitral award in Romania has been authorised, such an award may be enforced in the same way as a domestic award (Article 177 of Law No. 105/1992).

Jurisdiction for applications for court measures in support of the arbitral process generally lies with the court which would have had jurisdiction to determine the merits of the dispute in the absence of a valid and binding arbitration agreement (Article 342 CPC). This includes applications:

• to remove any impediments that may arise in the organisation or conduct of the arbitration (Article 342 CPC);
• to appoint or replace arbitrators (Articles 351, 351² and 352 CPC);
• for interim protective measures (Article 358⁸ CPC);
• for taking of evidence where the attendance of witnesses has to be enforced (Article 35811 CPC);
• to review arbitrators’ fees, deposits, advances or other payments required by the arbitral tribunal (Article 3593 CPC); and
• for leave for enforcement of domestic arbitration awards (Article 367¹ CPC).

The court immediately superior to that identified by Article 342 CPC has jurisdiction for applications for:

• setting-aside of arbitral awards (Article 365 CPC); and
• settling any conflict of jurisdiction between the arbitral tribunal and the court identified by Article 342 CPC (Article 343⁴ CPC).

Jurisdiction for recognition and enforcement of foreign arbitral awards under the provisions of Law No. 105/1992 lies with the county court in the district where the person refusing recognition of the foreign award has its domicile or seat, or where the award is to be enforced (Articles 170 (1) and 173 (1) of Law No. 105/1992).

Arbitration is an increasingly popular method of resolving commercial disputes in Romania and Romanian arbitration law is in line with modern international practice. Added attractions of arbitration are the wide international enforceability of awards; the ability for parties to avoid the often substantial delays encountered in the Romanian courts; and the relative lack of judicial experience in the field of complex commercial disputes.

CMS Cameron McKenna SCA
S-Park, 11–15, Tipografilor Street
B3–B4, 4th Floor
District 1
013714 Bucharest, Romania


Zannis Mavrogordato
T +40 21 40 73-891
F +40 21 40 73-900
E zannis.mavrogordato@cms-cmck.com


Gabriel Sidere
T +40 21 40 73-813
E gabriel.sidere@cms-cmck.com