International Commercial Arbitration in Romania: Legal Framework and Practical Aspects

Introduction

International commercial arbitration is today the predominant mechanism for resolving cross-border disputes between commercial parties. In a globalised economy where business relationships regularly transcend the borders of any single state, economic operators require a flexible, efficient, and predictable legal framework for resolving the disputes that may arise from the performance of international contracts.

Romania has made significant strides over recent decades in aligning its legislative framework with international standards on arbitration. The reform of the Code of Civil Procedure in 2013, combined with the ratification of the principal international instruments, has transformed Romania into an arbitration-friendly jurisdiction, capable of providing the necessary guarantees to both foreign investors and Romanian commercial entities engaged in international trade.

From a practitioner's perspective, international commercial arbitration requires not only knowledge of the regulatory framework but also familiarity with the practice of arbitral institutions, the techniques for drafting arbitration clauses, and the mechanisms for the recognition and enforcement of arbitral awards. The experience I gained through three participations in the Willem C. Vis International Commercial Arbitration Moot in Vienna has given me a direct understanding of the complexity of these proceedings and of the interplay between domestic law and uniform international norms.

This article aims to analyse the principal coordinates of international commercial arbitration as regulated under Romanian law, while also providing practical reference points for litigants and practitioners interested in this alternative dispute resolution mechanism.

Legislative Framework

Book IV of the Code of Civil Procedure

The primary seat of arbitration law in Romania is found in Book IV of the Code of Civil Procedure (Law No. 134/2010), entitled "On Arbitration." It comprises two distinct titles: Title I, which regulates domestic arbitration, and Title II, dedicated to international arbitration and the effects of foreign arbitral awards.

Title II of Book IV, which is of particular interest here, contains special provisions regarding international arbitration seated in Romania (Articles 1111-1132 CPC), as well as rules on the recognition and enforcement of foreign arbitral awards (Articles 1133-1137 CPC). These provisions are supplemented, pursuant to Article 1111(2) CPC, by the rules applicable to domestic arbitration, insofar as they do not conflict with the special norms or the international nature of the arbitration.

An important characteristic of the Romanian regulation is the definition of international arbitration by reference to foreign elements: under Article 1111(1) CPC, an arbitration is international when it arises from a private law relationship with a foreign element. This broad definition allows a wide range of cross-border commercial disputes to be classified as international arbitration.

The New York Convention of 1958

Romania acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted in New York on 10 June 1958, by Decree No. 186/1961. This convention, considered the cornerstone of international commercial arbitration, establishes a favourable regime for the recognition and enforcement of arbitral awards rendered in the territory of another contracting state.

The New York Convention enshrines the principle that contracting states shall recognise the validity of arbitration agreements and undertake to recognise and enforce foreign arbitral awards, with refusal being possible only in the cases exhaustively listed in Article V of the Convention. These grounds for refusal relate, among others, to: the incapacity of the parties or invalidity of the arbitration agreement, violation of the right to be heard, the award dealing with matters beyond the scope of the arbitration agreement, irregularity in the constitution of the arbitral tribunal, the award not yet being binding, as well as contravention of the public policy of the requested state.

For Romania, the application of the New York Convention is of particular importance in the context of the growing investment and trade flows with partners from Convention member states. In practice, an arbitral award rendered in any of the more than 170 states parties to the Convention may be recognised and enforced in Romania, subject to the verification of the conditions provided by the Convention.

The UNCITRAL Model Law

Although Romania has not formally adopted the UNCITRAL Model Law on International Commercial Arbitration (1985, revised in 2006), the provisions of Book IV of the Code of Civil Procedure have been substantially influenced by its principles. The Romanian legislator has incorporated numerous solutions from the Model Law, such as the principle of competence-competence (the arbitral tribunal's power to rule on its own jurisdiction), the separability of the arbitration clause from the main contract, and the standards concerning the independence and impartiality of arbitrators.

The influence of the UNCITRAL Model Law is also felt in the regulation of provisional and conservatory measures that the arbitral tribunal may order, as well as in the limitation of judicial review of arbitral awards to the grounds strictly provided by law.

The Arbitration Agreement and the Arbitration Clause

The fundamental element of any arbitration is the arbitration agreement, which may take two forms: the arbitration clause (included in the main contract, by which the parties undertake in advance to submit potential disputes to arbitration) and the submission agreement or compromis (a separate agreement concluded after the dispute has arisen).

Validity Requirements

Under Article 1113 CPC, an international arbitration agreement must be concluded in writing. The written form requirement is satisfied not only by the signing of a single document but also by an exchange of letters, telexes, telegrams, or other means of telecommunication that permit proof of the agreement to be established, including electronic means.

The validity of the arbitration clause does not depend on the validity of the main contract in which it is inserted — this is the consequence of the principle of separability (autonomy) of the arbitration clause, enshrined in Article 1112 CPC. Thus, even if the main contract is void, the arbitration clause may remain valid, and the arbitral tribunal has jurisdiction to rule on such nullity.

Practical Recommendations for Drafting the Arbitration Clause

Drafting an effective arbitration clause requires careful attention to several essential elements:

Designation of the arbitral institution or indication that the arbitration will be ad hoc

Seat of arbitration, which determines the applicable procedural law (lex arbitri)

Language of the proceedings, a particularly relevant aspect in international disputes

Number of arbitrators (usually one or three)

Law applicable to the merits of the dispute, which may differ from the lex arbitri

Applicable procedural rules, by reference to institutional rules or by mutual agreement

A defective arbitration clause — vague, contradictory, or incomplete — can generate additional disputes regarding the very jurisdiction of the arbitral tribunal and may compromise the efficiency of the entire mechanism. From the experience gained in arbitration competitions, including at the Vis Moot in Vienna, I can confirm that a precisely drafted arbitration clause is the foundation of any successful arbitral proceeding.

The Arbitral Procedure

Constitution of the Arbitral Tribunal

The arbitral procedure begins with the constitution of the arbitral tribunal. In international arbitration seated in Romania, the parties enjoy broad freedom in the selection of arbitrators, subject to the independence and impartiality requirements established by law.

Under Article 1114 CPC, arbitrators must be independent and impartial. Any circumstance likely to give rise to doubts as to the independence or impartiality of an arbitrator must be disclosed by the arbitrator from the moment of appointment and throughout the proceedings. The parties may challenge arbitrators under the conditions provided by the applicable arbitration rules or, in the absence thereof, under the conditions established by the Code of Civil Procedure.

In institutional arbitration, the constitution of the arbitral tribunal follows the rules of the respective institution. For example, under the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (CCIR), the appointment procedure follows that institution's Rules of Arbitral Procedure.

Conduct of the Proceedings

A cardinal principle of arbitral procedure is the equal treatment of the parties and the assurance of each party's right to present its case. This principle, set out in Article 1120 CPC, has the value of a mandatory norm, and its non-observance may constitute a ground for annulment of the arbitral award.

The arbitral procedure is characterised by flexibility. The parties may agree on the applicable procedural rules, and in the absence of such agreement, the arbitral tribunal determines the procedure to be followed, while respecting the aforementioned principles. This flexibility allows the procedure to be adapted to the specific features of each dispute, which constitutes one of the major advantages of arbitration over state court litigation.

The main stages of the arbitral procedure include:

Filing the request for arbitration and the statement of defence

The procedural organisation phase (first procedural hearing, establishment of the procedural timetable)

The evidentiary phase (administration of evidence, including documents, witness testimony, expert evidence)

Oral submissions (hearings on the merits)

Deliberation and rendering of the award

Provisional and Conservatory Measures

The arbitral tribunal may order, at the request of one of the parties, provisional or conservatory measures pursuant to Article 1121 CPC. Such measures may include ordering a party to maintain the status quo, to take certain measures to prevent imminent harm, or to provide security. State courts also remain competent to grant such measures, their jurisdiction not being excluded by the existence of the arbitration agreement.

The Arbitral Award

Form and Content of the Award

The arbitral award rendered in an international arbitration seated in Romania must be made in writing and signed by the arbitrators. It must contain reasons, unless the parties have agreed otherwise. The award produces effects analogous to a final court judgment and has res judicata authority.

Under Article 1122 CPC, the arbitral award must contain: the composition of the arbitral tribunal, the seat of arbitration, the identifying data of the parties, the subject matter of the dispute, the reasoning in fact and in law, the operative part, the date and place of rendering, and the signatures of the arbitrators.

The Action for Annulment

An arbitral award rendered in an international arbitration seated in Romania may be set aside by an action for annulment brought before the court of appeal in whose jurisdiction the arbitration took place. The grounds for annulment are exhaustively listed in Article 1123 CPC and include:

Absence of a valid arbitration agreement

Irregular constitution of the arbitral tribunal

The award exceeding the scope of the arbitration agreement

Violation of the right to be heard and of the adversarial principle

Contrariety of the award with the public policy of private international law of the Romanian state

Non-compliance with the formal requirements for the award

It is important to emphasise that the court does not re-examine the merits of the dispute in the annulment proceedings. Judicial review is strictly limited to verifying the grounds for annulment provided by law, which guarantees respect for the finality of the arbitral process.

Recognition and Enforcement of Foreign Arbitral Awards

Applicable Legal Framework

The recognition and enforcement in Romania of arbitral awards rendered abroad is carried out pursuant to the New York Convention of 1958, supplemented by the provisions of Articles 1133-1137 CPC. The procedure requires filing an application with the tribunal in whose jurisdiction the debtor's domicile or registered office is located or, subsidiarily, with the Bucharest Tribunal.

Conditions and Grounds for Refusal

The applicant must present the original or a certified copy of the arbitral award, as well as the original or a certified copy of the arbitration agreement. The court may refuse recognition and enforcement only on the grounds provided by Article V of the New York Convention, which include:

Incapacity of the parties or invalidity of the arbitration agreement under the applicable law

Violation of the right to be heard (the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings)

The award deals with a difference not contemplated by or falling outside the terms of the arbitration agreement

The constitution of the arbitral tribunal or the arbitral procedure was not in accordance with the parties' agreement or with the law of the country where arbitration took place

The award has not yet become binding or has been set aside or suspended

The subject matter of the dispute is not capable of settlement by arbitration under the law of the requested state

Recognition or enforcement would be contrary to the public policy of the requested state

In practice, Romanian courts apply the New York Convention in a manner favourable to enforcement, in line with the general trend at the international level. The success rate of exequatur applications is high, and the grounds for refusal are interpreted restrictively.

Advantages of International Commercial Arbitration

International commercial arbitration presents multiple advantages over state court litigation, which explain its popularity in international trade:

Neutrality of the forum. Arbitration allows the parties to avoid the national courts of the other contracting party, choosing a neutral forum and arbitrators with relevant expertise in the targeted commercial field.

Procedural flexibility. The parties can adapt the procedure to the specific needs of the dispute, choosing the procedural rules, language, place, and timetable of the proceedings. This flexibility allows for efficient case management.

Confidentiality. Unlike court proceedings, which are in principle public, arbitral proceedings generally benefit from confidentiality, which is especially important for commercial entities wishing to protect sensitive information.

Expertise of the arbitrators. The parties may appoint arbitrators specialised in the relevant commercial field, which ensures an in-depth understanding of the technical and legal aspects of the dispute.

International enforceability. Thanks to the New York Convention, arbitral awards benefit from a recognition and enforcement regime that is far more favourable than that of court judgments, across more than 170 states.

Speed. Although complex arbitrations may take time, in general, the arbitral process is faster than court proceedings, particularly in jurisdictions with overburdened courts.

Finality of the award. The arbitral award is final and binding, with available remedies limited to the grounds strictly prescribed by law, thereby ensuring legal certainty for the parties.

Conclusion

International commercial arbitration represents an essential legal instrument for resolving cross-border disputes in the contemporary business environment. Romania possesses a modern legislative framework aligned with international standards, offering the necessary guarantees for the conduct of fair and efficient arbitral proceedings.

The complexity of this field — from drafting the arbitration clause to enforcing the arbitral award in a foreign jurisdiction — requires specialised legal assistance. Thorough knowledge of domestic law, combined with an understanding of international mechanisms and the practice of arbitral institutions, is indispensable for protecting the interests of parties involved in international commercial arbitration.

If you require legal assistance regarding international commercial arbitration — whether it involves drafting an arbitration clause, representation in arbitral proceedings, or the enforcement of a foreign arbitral award in Romania — I invite you to contact me for a consultation. The experience gained in the field of commercial arbitration, including training through the Vis Moot competition in Vienna, allows me to offer solutions tailored to the specific features of each case.