Romania

In Romania, tribunals are the main courts of first instance for most commercial claims, hearing first-instance disputes of at least EUR 40,000 in value. There are approximately 45 tribunals in Romania, located across the country. As a general rule, jurisdiction lies with the tribunal at the defendant’s principal place of business, unless the parties have agreed otherwise. At first instance, cases are heard by a single judge.

Appeals against tribunal judgments are heard by the superior court of appeal. There are 15 courts of appeal across the country. The right to appeal is automatic (no leave is required) and it is not restricted to specific grounds. The appellate court conducts a de novo review and has the power to reassess both the facts and the law (and may even admit new evidence). Appeals are heard by a panel of two judges; if they cannot reach a unanimous decision, a third judge is assigned to resolve the tie.

A second appeal (in Romanian, recurs) may be filed against judgments of the courts of appeal, for specific grounds, such as procedural irregularities or errors of law. Second appeals are heard by the High Court of Cassation and Justice, Romania’s Supreme Court, which does not normally reassess the evidence but focuses on whether the law was correctly applied to the facts established by lower courts. Second appeals are heard by a panel of three judges.

Other commercial cases may be brought in the first instance before first-instance county courts (in Romanian, judecatorii), which are lower in the judicial hierarchy than the tribunals. These courts generally hear lower-value disputes (typically below EUR 40,000) or ancillary matters, such as applications related to the compelled enforcement of judgments.

There is no jury system in the Romanian legal system.

Commercial litigation in Romania is primarily governed by the Civil Procedure Code, which establishes the general framework for the conduct of all civil and commercial proceedings, including jurisdiction, service of process, taking of evidence, conduct of hearings, and appeals.

In addition, certain categories of commercial disputes are governed by special legislation, such as the rules on insolvency and pre-insolvency (Law 85/2014) and those on corporate matters (Companies Law 31/1990).

Under Romanian law, a claimant is generally expected to formally notify the counterparty of its default before commencing litigation. This notice may be sent prior to filing the claim, allowing the counterparty a reasonable period to remedy the default, or it may be made through the statement of claim itself.

In the latter case, if the notification is made within the court filing, the defendant is entitled to perform the obligation within a reasonable period calculated from the date on which the claim is served. If the obligation is fulfilled within this period, the claimant will normally bear all litigation costs.

The principal ADR method used to resolve large commercial disputes in Romania is arbitration. Romania has a well-established arbitration tradition, relied upon by both private companies and state-owned entities, particularly in complex matters. In recent years, there has been a growing preference for domestic arbitration institutions, most notably the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (CCIR).

By contrast, mediation is less frequently used in commercial disputes. However, judges are required to inform the parties about the advantages of mediation as an ADR mechanism during the initial court hearing. Mediation is conducted by an authorised mediator, who must adhere to the principles of neutrality, impartiality and confidentiality. If the parties reach a settlement, the resulting agreement is not automatically enforceable, but it can be confirmed by a court to become binding upon the parties.

There has been a gradual increase in the use of mediation in other areas, particularly consumer protection, where specialised mediation bodies (such as the ADR Centre for the Banking Sector) have reported a growing caseload in recent years.

In Romania, commercial proceedings are typically scheduled through a series of hearings held at intervals of one to two months. This differs from other jurisdictions where hearings are grouped over consecutive days once written submissions are complete.

At first instance, from the date of filing the claim, it generally takes three to six months for the first hearing to be scheduled, depending on the court’s workload. On average, first-instance proceedings in commercial matters take around 12 to 24 months from filing to judgment. This timeframe largely depends on the complexity of the case and the evidence to be examined. If the court appoints experts (e.g. in construction disputes or complex accounting or quantum matters), the proceedings can be significantly prolonged until the expert report is completed.

Appeals are generally resolved more quickly, typically within approximately 12 months, while second appeals (recurs) before the High Court may add another 12 to 18 months.

According to the latest data published by the European Commission for the Efficiency of Justice for Romania (2022 data; see rm.coe.int/romania/1680b1df80), the duration of commercial cases at first instance is below the median among Council of Europe Member States, whereas the duration of appeals and second appeals is above the median.

Romanian civil procedure does not include a broad disclosure stage comparable to that in common law jurisdictions or arbitration and a distinct disclosure stage does not occur in every commercial case.

Instead, parties are required to disclose the documents on which they rely. The claimant must submit the supporting documents together with the statement of claim, and the respondent must do the same with the statement of defence. Evidence that is not filed in the record cannot be taken into account by the court when rendering judgment.

However, the court may, upon request, order a party to produce specific documents, including those that might be unfavourable to its position, provided that the requesting party identifies the document with sufficient precision and demonstrates its relevance. Romanian law does not usually allow for wide-ranging requests, such as those covering entire categories of documents over a period of time.

The decision to order disclosure lies largely within the court’s discretion. In certain situations, however, the court is required to order disclosure, namely, when the document is common to both parties, when the opposing party has referred to it during proceedings, or when the law expressly requires its production.

A request for disclosure will be refused if the document concerns personal matters affecting a person’s dignity or private life, or if its disclosure would breach a legal duty of confidentiality.

If a party fails to comply with a court order to produce a document, the court may presume as proven the facts alleged by the requesting party regarding the document’s contents.

Under Romanian procedural law, witnesses are heard directly in court, without submitting prior written witness statements. The court may order witnesses whose testimony has been approved to attend the hearing, either by issuing a summons or, if necessary, an order to appear (in Romanian, mandat de aducere). If a witness fails to appear, the court may impose a minor administrative fine, but the proceedings will continue in their absence.

Witness examination is conducted through the judge, rather than directly by the parties or their counsel, who do not address the witness directly. The judge may refuse certain questions or ask additional ones as part of their inquisitorial role in Romanian civil procedure.

In practice, witness testimony is less frequently used in commercial litigation in Romania than in common law jurisdictions. This is mainly due to the fact that companies’ officers are not usually heard as witnesses. Therefore, most commercial cases are decided primarily on documentary evidence rather than oral testimony.

The general rule in Romania is that the losing party must reimburse the successful party’s litigation costs, upon the latter’s request. Where a claim is only partially upheld, the court will determine the proportion of costs each party must bear and may also order a set-off of costs between the parties.

Litigation costs include court fees (calculated in commercial cases as a percentage of the value of the claim), expert fees, and lawyers’ fees. In practice, the party claiming reimbursement of lawyers’ fees must prove that the fees were actually paid before the close of proceedings.

With respect to legal fees, courts have broad discretion (including the power to act ex officio) to reduce the amount of recoverable lawyers’ fees where they are manifestly disproportionate to the value or complexity of the case, or to the work performed by counsel, taking into account all relevant circumstances. In recent years, Romanian courts have shown a more restrained approach to such reductions and tend to award a higher proportion of the legal fees claimed.

Any reduction of legal fees in the costs order does not affect the relationship between lawyer and client: counsel’s agreed fees remain payable in full, even if not entirely recovered from the opposing party as part of the costs order.

The main interim remedies available in Romanian commercial litigation are:

• asset seizure (in Romanian, sechestru asigurator);
• garnishment of receivables (in Romanian, poprire asiguratorie); and
• judicial sequestration (in Romanian, sechestru judiciar).

In addition, a number of specific interim measures are available in intellectual property disputes and in disputes concerning commercial vessels.

With respect to asset seizure, the claimant must demonstrate that the debt is due. The claimant will likely be required to post a security deposit (in Romanian, cautiune), which can amount to up to 50% of the claimed sum, depending on whether the debt is documented in writing or not.

Even where the debt is not yet due, seizure may still be ordered where there is a risk that the debtor may evade enforcement, or conceal or dissipate assets, or if the debtor has diminished the guarantees provided to the creditor or has failed to provide promised guarantees (again, subject to the posting of a deposit by the claimant). Asset seizure may cover all movable and immovable assets of the debtor and is enforced by a judicial bailiff.

Garnishment of receivables allows for the attachment of monetary amounts, securities, or other incorporeal movable assets owed to the debtor by a third party, or that will become owed in the future. The same conditions and requirements generally apply as in the case of asset seizure.

A judicial sequestration is usually requested where the dispute concerns property rights over an immovable asset (such as land or buildings). The court may also require the claimant to post a deposit in such cases.

Arbitration is a well-established and widely accepted form of dispute resolution within the Romanian legal community. Romanian courts generally recognise and give effect to arbitration agreements and will decline jurisdiction where a valid arbitration clause exists.

Arbitrability is defined by statute. Under Romanian law, disputes concerning personal status, legal capacity, inheritance, family relations, or rights that cannot be freely disposed of are not arbitrable. The state and public authorities may enter into arbitration agreements only if expressly authorised by law or by an international convention to which Romania is a party. Public legal entities engaged in economic activities may also conclude arbitration agreements unless otherwise restricted by law or their bylaws.

The Romanian arbitration framework is primarily set out in the Civil Procedure Code. While it is not a direct transposition of the UNCITRAL Model Law, the Romanian arbitration framework largely reflects its key principles, including:

• the separability of the arbitration agreement;
• the competence–competence principle;
• the independence and impartiality of arbitrators;
• the parties’ autonomy to appoint arbitrators;
• court intervention in support of arbitration; and
• a restricted scope of judicial review of arbitral awards.

In principle, arbitrators in Romania may grant interim relief during the arbitral proceedings. However, arbitral tribunals lack coercive powers to enforce such measures against a non-complying party. As a result, interim relief is more commonly sought from the competent court, which acts in support of arbitration. Court-ordered interim measures are directly enforceable, offering more effective protection pending the outcome of the arbitration.

In Romania, an arbitral award is not subject to appeal on its merits, but it may be set aside through a specific annulment procedure on a limited number of grounds expressly provided by law. These grounds largely mirror those for refusal of recognition or enforcement under the New York Convention, supplemented by several domestic provisions.

An arbitral award may be set aside where:

• the award breaches public policy, mandatory legal provisions, or good morals;
• the dispute was not arbitrable;
• there was no valid arbitration agreement, or the agreement was void or inoperative;
• the arbitral tribunal was not constituted in accordance with the arbitration agreement;
• a party was absent from the hearing where oral arguments were presented and was not legally summoned;
• the award was rendered after the expiry of the time limit for the arbitration, although at least one party invoked the expiration and the parties did not agree to continue;
• the tribunal ruled on matters not submitted to arbitration or granted more than was requested (ultra petita or plus petita);
• the award lacks essential formal elements, such as the operative part, reasons, date, place, or signatures of the arbitrators; or
• after the award was rendered, the Constitutional Court declared unconstitutional a legal provision whose constitutionality had been challenged by one of the parties in the arbitration.

Romania is a party to the principal international instruments governing the recognition and enforcement of foreign judgments and arbitral awards, including:

• the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards;
• the 2019 Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters;
• the 1965 ICSID Convention; and
• the 1961 Geneva European Convention on International Commercial Arbitration.

As a Member State of the EU, Romania also applies:

• the Brussels I Regulation (Recast) (EU Regulation No. 1215/2012), which governs the recognition and enforcement of judgments rendered in civil and commercial matters between EU Member States; and
• the 2007 Lugano Convention, applicable in relation to Iceland, Switzerland and Norway.

Where the above instruments do not apply, the enforcement of foreign judgments or arbitral awards is governed by the relevant provisions of the Romanian Civil Procedure Code.

Domestic judgments

In domestic commercial matters, any judgment requiring the debtor to pay, perform, or refrain from performing an obligation is generally enforceable. By contrast, judgments granting purely declaratory relief (e.g. a finding that a contract is void without an accompanying order for restitution) cannot be enforced.

Domestic judgments may generally be enforced after the second level of jurisdiction, that is, once the court of appeal has rendered its decision. In practice, however, enforcement usually begins only after the third level of jurisdiction (after the second appeal (recurs) has been resolved). If no appeal is filed within the legal deadline, the judgment becomes final and binding and may be immediately enforced. Although Romanian law allows for provisional enforcement of certain judgments pending appeal, this mechanism is not frequently used in standard commercial disputes.

Judgments from other EU Member States and Lugano Convention states

Under the Brussels I Regulation (Recast) regime (EU Regulation No. 1215/2012), judgments in civil and commercial matters rendered by courts of other EU Member States are directly recognisable and enforceable in Romania, without the need for a domestic recognition/enforcement procedure.

For these purposes, the term “judgment” includes provisional or protective measures issued by a court having jurisdiction over the substance of the dispute, but excludes a provisional, including protective, measure which is ordered by such a court or tribunal without the defendant being summoned to appear, unless the judgment containing the measure is served on the defendant prior to enforcement.

The 2007 Lugano Convention provides for a similar regime in relation to judgments from Iceland, Switzerland and Norway.

Judgments from other states

If the Brussels I Regulation or another international treaty does not apply, enforcement is governed by the Romanian Civil Procedure Code. A foreign judgment may be recognised and enforced in Romania if:

• it is final and binding in the state of origin; and
• there is reciprocity between Romania and the state of the court that issued the judgment regarding the recognition of foreign judgments.

In such cases, the exequatur procedure applies, during which the judgment debtor may oppose recognition or enforcement on limited grounds, including breach of Romanian public policy.

Foreign judgments

With the exception of judgments from other EU Member States or Lugano Convention states, which are directly recognisable and enforceable in Romania, foreign judgments and arbitral awards are subject to domestic recognition and enforcement procedures before Romanian courts.

The process involves filing an application for recognition (exequatur) before a Romanian court, accompanied by an authenticated copy of the foreign judgment and proof that the judgment is final and binding in the state of origin. The Romanian court does not re-examine the merits of the case. Recognition or enforcement may, however, be refused (among other cases) if the judgment is not final, is contrary to Romanian public policy, or is irreconcilable with a prior foreign judgment capable of being recognised in Romania, or if Romanian courts had exclusive jurisdiction over the matter.

Foreign arbitral awards

Recognition and enforcement of foreign arbitral awards are primarily governed by the 1958 New York Convention, to which Romania is a party. The party seeking enforcement must submit the authenticated original award (or a certified copy) and the arbitration agreement. Recognition or enforcement may be refused on the grounds listed in Article V of the New York Convention, such as invalidity of the arbitration agreement, serious breaches of procedural rules, or where the award is not yet binding or has been set aside at the seat of arbitration. In addition, Romanian courts may refuse enforcement if the subject matter is not arbitrable or if enforcement would contravene Romanian public policy. For arbitral awards not covered by the New York Convention, the default rules of the Romanian Civil Procedure Code apply, following a substantially similar procedure.

Once a foreign judgment or arbitral award has been recognised and declared enforceable by a Romanian court, it is treated in the same manner as a domestic judgment. Accordingly, the provisions of the Romanian Civil Procedure Code governing enforcement apply.

If the judgment debtor fails to comply voluntarily, the creditor may initiate compelled enforcement proceedings through a judicial bailiff. The bailiff is authorised to identify and seize the debtor’s assets in Romania, including bank accounts, and movable and immovable property, and to proceed with forced sale or other enforcement measures to satisfy the judgment.

Pending enforcement, the Romanian Civil Procedure Code allows creditors to request seizure of movable assets to prevent the debtor from disposing of or concealing property to secure the creditor’s claim and ensure that assets remain available for subsequent compelled enforcement. If the debtor fails to comply with a payment notice within one day of receiving the enforcement order and summons, the judicial bailiff may seize the debtor’s movable assets for later sale.

Where there is a clear risk that the debtor may remove or conceal assets, the court may order immediate seizure at the same time as it authorises enforcement. Seizure may also extend to assets held by third parties, if it is shown that such assets belong to the debtor. The bailiff verifies that the seized assets remain in place and have not been substituted or degraded and may seize additional assets if necessary to cover the debt.

Proceeding on the assumptions outlined in the Model Answer, would a court in this jurisdiction recognise and enforce the arbitral award under the New York Convention?

In particular:

• Does the award fall within the scope of Article V(1) of the Convention, or would any of the grounds in Article V(1) justify refusal on the assumed facts?
• Is the subject matter of the dispute capable of settlement by arbitration under domestic law for the purposes of Article V(2)(a)?
• Would recognition or enforcement of the award be contrary to public policy within the meaning of Article V(2)(b)?

Response

The enforcement of foreign arbitral awards in Romania is governed primarily by the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. For awards not covered by the Convention, the Romanian Civil Procedure Code applies, which provides substantially similar grounds for recognition and enforcement.

Under the New York Convention, Romanian courts may refuse enforcement if the dispute is not arbitrable under Romanian law, which prescribes as non-arbitrable matters concerning personal status, legal capacity, inheritance, family relations, or rights that cannot be freely disposed of.

A dispute concerning payment of a monetary element of a court judgment will likely not fall within these exclusions and would therefore, in principle, be arbitrable. Romanian law provides that courts supervising enforcement of judgments may themselves clarify or calculate monetary elements such as interest or accessories, but there is no rule excluding such matters from arbitration. Accordingly, an arbitral award limited to confirming or determining payment of a monetary element arising from a prior court judgment should be capable of recognition and enforcement in Romania, provided it does not infringe the res judicata effect of the original judgment.

However, if the arbitral award also imposes a requirement for the debtor to provide security for the award or other interim relief, enforcement might be problematic. Under Romanian law, interim measures ordered by arbitrators are not directly enforceable, and this limitation extends to foreign arbitral awards granting such relief.

In conclusion, an arbitral award confirming the monetary effects of a prior final judgment would likely be enforceable in Romania, whereas it would be more difficult to enforce any security or interim measures included in the award.