ROMANIA: NEW HORIZONS IN COMMERCIAL ARBITRATION

In 2010 a lecture1 in which Professor Jan Paulsson suggested that it would be

useful to forbid or, at least, rigorously police, the practice of unilateral
appointments provoked a large debate among arbitration practitioners. The
main reason for such a proposal was related to Paulssons assessment that
the arbitrators appointed by the parties are far from being neutral and that
the only possibility for ensuring an impartial dispute resolution would be
through the appointment of the arbitral tribunal by a neutral body. That
proposal faced a large criticism2, most of the arbitration practitioners
expressing their view in the sense that the possibility to appoint an arbitrator
constitutes an essential right of the parties that cannot be removed.
A study3 conducted in 2012 by Queen Mary University of London and White &
Case reached the same conclusion as the one expressed in most of the
reactions to Paulssons proposal: 76% of the respondents preferred a
unilateral appointment of the two arbitrators while only 7% expressed their
view in favor of an appointment by an arbitral institution or appointing
authority.
Both reactions to the proposal of Jan Paulsson and the above mentioned study
are sound evidence that the unilateral appointment of the two arbitrators
enjoys a wide popularity among practitioners, being one of the reasons for
which arbitration is chosen.
In general lines, the perspective on this matter is quite similar in Romania,
although there are certain features with a greater significance in the view of a
local practitioner. Thus, the possibility of appointing the two arbitrators is
perceived as a fundamental right, the keystone of international arbitration
and the main reason for choosing arbitration as a method for resolving the
disputes. Considering the tremendous importance of the parties possibility to
unilaterally appoint the arbitrators among local practitioners, it is not
surprising that the changes imposed by the Rules of Arbitration issued by the
Court of International Commercial Arbitration (CICA) attached to the
Chamber of Commerce and Industry of Romania in 2012 were highly
1 Jan Paulsson Moral Hazard in International Dispute Resolution, Inaugural Lecture as Holder
of the Michael R. Klein Distinguished Scholar Chair, University of Miami School of Law, 29
April 2010
2 See in this respect, for example Alexis Moure Are unilateral appointments defensible? On Jan
Paulssons Moral Hazard in International Arbitration, kluwerarbitrationblog.com, October, 2010;
Charles N. Brower and Charles B Rosenberg, The Death of the Two-Headed Nightingale: Why
the Paulssonvan den Berg Presumption that Party-Appointed Arbitrators are Untrustworthy is
Wrongheaded, Arbitration International, Vol. 29 (2013
3 http://www.arbitration.qmul.ac.uk/docs/164483.pdf
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unpopular. In fact, the changes of the Rules of Arbitration in 2012 (the

greatest change being the appointment of the arbitrators by the Appointing
Authority) are seen as one of the main causes that led to a massive decrease
of the number of the arbitrations administered by CICA.
Without the fundamental possibility of appointing an arbitrator and a certain
degree of control on the appointment of the decisive person, namely the
president of the arbitral tribunal, local practitioners have sought alternative
means of solving their disputes, including by resorting to other Courts of
Arbitration (such as ICC Paris), whose rules were unlikely to suffer such
dramatic changes.
The Rules enacted in 2012 had a very short life span, being completely
changed in 2014. That change represented basically a comeback to the
classic formula of appointing arbitrator, the one without which the arbitration
had not been considered an option anymore (there were also other important
changes aimed to increase the confidence in this arbitral institution, but these
changes are not subject of the present article).
Although the 2012 CICA Rules were in force only for a short period, their
enforcement has raised difficult problems such as the one concerning the
contradiction between the real will of the parties and the provisions of the
Rules. As most of the Rules establish, the 2012 CICA Rules provided that by
choosing the arbitration institution the parties shall be deemed to submit to
the Rules in force on the date of commencement of the arbitration. However,
that provision, together with the one regarding the appointment of the
arbitrators by the appointing authority, clashed with the real will of the
parties from the moment when the arbitration clause was signed, according
to which the two arbitrators were to be appointed by the parties.
Considering the local perspective concerning arbitration and the fact that the
appointment of the arbitrator had been considered the most distinctive
feature of the arbitration, nobody even conceived that such a possibility could
be removed from the Arbitration Rules of CICA. Thus, although not expressly
mentioned in the arbitration agreement, the parties have chosen CICA to
administer their litigation in consideration of the future possibility to appoint
the arbitrators. Facing with a change of the rules of the game while the game
was on, the affected parties had a different approach: a part of them decided
to change the arbitration clause, indicating ad-hoc arbitration or another
arbitral institution instead of CICA, another part decided to agree on the rules
in force, while others decided to oppose to the application of such rules that
contradicted their expectation about the method of solving the litigation.
The conflict between the provisions of the Rules of Arbitration and the real
intention of the parties received different solutions from the Courts of Law,
which were requested to set aside the awards rendered by arbitrators
appointed by the Appointing Authority. However, although there were several
decisions in which a rather formal approach was adopted (to upheld the
arbitral awards considering that by choosing the arbitral institution the parties
automatically submitted to the rules of arbitration in force at the date of
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initiation of the arbitration), there were certain decisions 4 in which, following a

thorough analysis of the real intention of the parties and its predominance
over the Rules of Arbitration, the Court decided to set aside the decisions
issued by the arbitrators that were not appointed in accordance with the
parties will.
This approach of the courts directed toward discovering the real intention of
the parties and giving the due importance to such intention is encouraging
and adds certain confidence in terms of correcting any deviation such as the
one occurred in 2012 at the CICA.

4 For example, Decision no. 3808/02.12.2014 issued by the High Court of Cassation and Justice
issued in file no. 1082/2/2014, unpublished
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