Litigation - Dispute Resolution Methods

Large commercial disputes are settled through either litigation in

court or arbitration. Mediation as an alternative means of resolving
commercial disputes was codified in 2006 and its use is strongly
promoted by the recent amendments to the Code of Civil Procedure
(CCP).

Litigation
The method for dispute resolution most used in Romania is litigation
before courts of law.
Commercial disputes are generally settled by the courts under the
CCP.
The civil court system in mainly adversarial, even if judges have
certain powers beyond the parties pleadings. For example, a judge
can:

Raise any issues related to the violation of public policy.

Qualify the legal nature of a claim or request.
Verify the jurisdiction of the court.
In certain circumstances, order the production of evidence
necessary to settle the case.

The judges must decide on any issue only after hearing the parties
and giving them the opportunity to present their position on all
issues concerned.
The tribunals decisions can be challenged before the competent
court of appeal (first appeal) and then before the High Court of
Cassation and Justice (final appeal).

Arbitration
Arbitration is an alternative method for the settlement of disputes
and is used particularly in the business field. The Code of Civil
Procedure enables the parties to appoint the arbitrators.
The most employed ADR (Alternative Dispute Resolution) method in
Romania is arbitration.
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Almost all commercial contracts of high value contain arbitration

clauses.
The Code of Civil Procedure (CCP) (Codul de procedur civil) is the
main enactment dealing with arbitration. Certain additional rules,
with respect to international arbitration, are contained in Law
105/1992 on Private International Law Relationships (Private
International Law) and in the international conventions ratified by
Romania. Other regulations dealing with arbitration concerns the
organization of arbitral bodies and their arbitration rules. In this
respect, the most important body enacting such rules is the Court of
International Arbitration affiliated to the Romanian Chamber of
Commerce and Industry.
Disputes are settled by arbitration provided that a written arbitral
clause/separate convention between was entered into by the parties.
-

Disputes arisen from internal and international trade relations

Disputes arisen from internal or international patrimonial legal
relationships, other than the commercial ones

Disputes that may not be subject to arbitration:

(i) those concerning the civil status of individuals;
(ii) those concerning assets that are not freely transferable or
disposable;
(iii) disputes in the exclusive jurisdiction of the courts of law (e.g.:
those concerning judicial liquidation, certain disputes in the
intellectual property field, etc).
Ad-Hoc Arbitration
Ad-hoc arbitration is the arbitration organized by the parties based
on the procedural rules tailored by them or the rules of a certain
arbitration institution but which is not administered by an arbitration
institution.
The Chamber of Commerce and Industry of Romania may offer
assistance in ad hoc arbitration aiming to settle internal and
international disputes, provided that the parties so agreed before or
after the dispute was born.
Institutional Arbitration
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Institutional arbitration is the one organized by an arbitration

institution such as the International Commercial Arbitration Court
attached to the Romanian Chamber of Commerce.
Its main features is that is organized by an arbitration institutions, in
exchange of an administrative tax, usually at its headquarters. The
arbitration institution deal with appointment of the arbitrators in
case the parties fail to do so, establish the fee of the arbitrators,
ensure the logistics and secretarial assistance during the procedure,
etc.
The arbitration clause must be in writing, must contain the name of
the arbitrators or the modality of appointment, and in case of a
compromise, it must mention the subject-matter of the dispute.
Failure to comply with these requirements renders the arbitral clause
void (CCP, Art.343 and 3432).
According to art. 344 of Civil Procedural Code, the parties may
appoint as arbitrator any individual with Romanian citizenship who
has full legal capacity. However if the parties choose the
institutionalized arbitration organized by the Court of International
Commercial Arbitration attached to the Chamber of Commerce and
Industry of Romania (CICA-CCIR), they are restricted to choose the
arbitrator only from the list of the Court of Arbitration.

Mediation
Mediation is a relatively new form of alternative dispute resolution.
Under mediation, parties have the possibility of solving in a short
period of time minor disputes without involving the courts of justice.
The first step of a mediation procedure is the conclusion of a
mediation contract between the parties and the chosen mediator.
The purpose of the mediation is to conclude an agreement where the
parties agree on the terms and conditions of the dispute settlement.
The role of the mediator is to facilitate discussions between the
parties and keep the negotiations on track. The mediator is not
entitled to solve the conflict by deciding the dispute, but can only
advise the parties on the legality of the settlement.
- the judge may propose a mediation meeting
- during such proceedings any kind of limitation term is adjourned for
a maximum of 3 months, beginning from the moment the mediation
is initiated.

-"Avocatul Poporului"- Ombudsman institution was founded in order

to settle in an amiable way the disputes between individuals and the
public administration by mediation or dialogue.
Romanian law provides for mediation or a mandatory conciliation
procedure to be completed before starting a commercial action. This
applies to monetary commercial disputes.
Commercial disputes involving monetary claims can only be brought
before the court after mediation or the mandatory conciliation
procedure. Non-compliance with this requirement may lead to the
dismissal of the claim as inadmissible. If the parties did not attempt
mediation before the initiation of the lawsuit, the court can
recommend parties resort to mediation and can also request the
parties to participate in a meeting where a mediator would inform
the parties of the advantages of mediation.
Under the law governing mediation, documents or admissions made
or produced throughout the mediation process cannot be used in
court, unless the parties expressly agree or if legal provisions
provide otherwise.
The mediation process and its outcome are confidential.
The mediation contract must contain detailed provisions regarding
costs incurred during the mediation.
Mediators have their own offices, similar to lawyers and notaries.

The organization of the courts of law:

The Romanian courts of law are organized on 4 levels:
- Local courts (there are several in each county)
- County courts (Tribunals - one existing for each of the county and
one for Bucharest)
- Courts of Appeal (15 appeal courts in Romania, their jurisdiction
extending over 2 or more counties)
- High Court of Cassation and Justice (located in Bucharest)
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First instance courts (their jurisdiction being separated depending on

value or the nature of the claim):
- local courts
- the tribunals
I) Smaller, less complex claims are judged by the local courts:
- civil claims up to RON 500,000; commercial claims up to RON
100,000; possessory rights claims; partition claims; divorce trials
II) Tribunals have material jurisdiction regarding:
- claims over RON 500,000; commercial claims over RON 100,000;
labour & social security litigations; expropriation lawsuit;
administrative and tax litigations; intellectual property litigations;
enforcement and recognition of foreign law courts' decisions and
other matters provided by the law.