Arbitration in Romania: Key Aspects

Arbitration in Romania offers businesses a recognised and enforceable alternative to state court litigation for resolving commercial disputes. Romanian arbitration law is grounded in the Civil Procedure Code (Codul de procedură civilă), Books IV and VII, which govern both domestic and international arbitration. For international companies operating in Romania or contracting with Romanian counterparties, understanding the procedural architecture, institutional options, and enforcement mechanics is essential to protecting commercial interests effectively.

This article covers the legal foundations of Romanian arbitration, the distinction between domestic and international proceedings, the main institutional forum, procedural timelines, recognition and enforcement of awards, and the most common strategic mistakes made by foreign clients. Readers will also find practical scenarios illustrating how arbitration plays out across different dispute values and party configurations.

Romanian arbitration law underwent a comprehensive reform with the adoption of the current Civil Procedure Code (Codul de procedură civilă), which entered into force in 2013 and has been amended several times since. Book IV of the Code (Articles 541-621) regulates domestic arbitration, while Book VII (Articles 1111-1133) addresses private international law aspects, including the recognition and enforcement of foreign arbitral awards.

Romania is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Convenția de la New York privind recunoașterea și executarea sentințelor arbitrale străine), which it ratified in 1961. This treaty framework is the primary basis on which Romanian courts recognise awards rendered abroad, and it also governs the enforceability of Romanian awards in other contracting states.

The Romanian arbitration framework draws heavily on the UNCITRAL Model Law on International Commercial Arbitration, though it is not a verbatim adoption. Key principles embedded in the Code include party autonomy, equal treatment of the parties, the separability of the arbitration agreement from the underlying contract, and the competence-competence doctrine (kompetenz-kompetenz), under which the arbitral tribunal has authority to rule on its own jurisdiction before any state court intervenes.

Under Article 542 of the Civil Procedure Code, arbitration is available for any dispute involving rights that the parties may freely dispose of - that is, patrimonial rights not excluded by law. Disputes involving consumer rights, labour law, family status, insolvency proceedings, and certain administrative matters fall outside the scope of arbitrable subject matter. A common mistake made by foreign clients is assuming that any commercial dispute is automatically arbitrable; Romanian law draws a clear line, and drafting an arbitration clause for a non-arbitrable matter renders the clause void.

The arbitration agreement itself - whether a standalone submission agreement (compromis) or an arbitration clause (clauza compromisorie) embedded in a contract - must be in writing. Article 549 of the Civil Procedure Code specifies that the written form requirement is satisfied by any means that records the agreement, including electronic communications. Oral arbitration agreements have no legal effect in Romania.

The primary institutional forum for commercial arbitration in Romania is the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania (Curtea de Arbitraj Comercial Internațional de pe lângă Camera de Comerț și Industrie a României), commonly referred to as the CCIR Court of Arbitration. It administers both domestic and international disputes and operates under its own Rules of Arbitral Procedure, most recently revised to align with contemporary international standards.

The CCIR Court of Arbitration has jurisdiction over disputes where at least one party has its registered seat or habitual residence abroad, or where the parties have expressly agreed to submit their dispute to this institution. For purely domestic disputes between Romanian entities, the same institution may be used, though parties sometimes opt for ad hoc arbitration or regional chambers of commerce.

Parties may also agree to submit disputes to foreign arbitral institutions - such as the ICC International Court of Arbitration (Curtea Internațională de Arbitraj ICC), the Vienna International Arbitral Centre (VIAC), or the Stockholm Chamber of Commerce (SCC) - and Romanian courts will recognise and enforce the resulting awards under the New York Convention framework, provided the procedural requirements are met.

Ad hoc arbitration, conducted without institutional administration, is fully permitted under Romanian law. Parties choosing ad hoc proceedings typically incorporate the UNCITRAL Arbitration Rules by reference. The practical risk of ad hoc arbitration is that, without institutional support, procedural gaps - such as the failure of a party to appoint an arbitrator - must be resolved by the competent Romanian court, which can introduce delays of several months.

The seat of arbitration (sediul arbitrajului) is a critical choice. Under Article 1111 of the Civil Procedure Code, an arbitration is international if it involves a dispute arising from international commercial relations. The seat determines the lex arbitri - the procedural law governing the arbitration - and the court with supervisory jurisdiction. Choosing Romania as the seat subjects the proceedings to Romanian procedural law and grants Romanian courts the power to set aside the award on the grounds listed in Article 608 of the Code.

To receive a checklist on selecting the correct arbitral institution and drafting an enforceable arbitration clause in Romania, send a request to info@vlolawfirm.com.

The procedural lifecycle of a Romanian arbitration follows a structured sequence with defined timelines, though parties retain significant flexibility to modify the default rules by agreement.

Proceedings commence when the claimant files a Request for Arbitration (cererea de arbitrare) with the chosen institution or serves it on the respondent in ad hoc proceedings. Under the CCIR Rules, the request must include a description of the dispute, the relief sought, the value of the claim, and the claimant's nomination of an arbitrator. The respondent typically has 30 days to file an Answer and nominate a co-arbitrator.

The constitution of the tribunal is a pivotal stage. In a three-member panel, each party appoints one arbitrator, and the two party-appointed arbitrators jointly select the presiding arbitrator. If agreement fails, the institution or, in ad hoc proceedings, the competent court makes the appointment. Challenges to arbitrators on grounds of lack of independence or impartiality are governed by Articles 558-561 of the Civil Procedure Code and must be raised promptly - delay in raising a challenge is treated as a waiver.

The evidentiary phase in Romanian arbitration is less formalised than in common law jurisdictions. Documentary evidence predominates. Witness statements, expert reports, and site inspections are all available, but extensive cross-examination is not the default. Parties from common law backgrounds frequently underestimate the importance of submitting comprehensive documentary packages at the outset, rather than relying on oral testimony to fill gaps.

Under Article 567 of the Civil Procedure Code, the arbitral tribunal must render its award within the time limit agreed by the parties or, absent agreement, within the time limit set by the institutional rules. The CCIR Rules set a default timeline of six months from the constitution of the tribunal, extendable by the institution. In practice, straightforward disputes are resolved within eight to twelve months; complex multi-party or high-value disputes may extend to eighteen months or beyond.

The arbitral award (hotărârea arbitrală) must be in writing, signed by all arbitrators, and include the reasoning unless the parties have waived this requirement. Dissenting opinions are permitted. Under Article 603 of the Civil Procedure Code, the award has the same binding force between the parties as a final court judgment (hotărâre judecătorească definitivă) from the moment it is communicated.

Costs in Romanian arbitration consist of the institutional administrative fee, the arbitrators' fees, and the parties' legal costs. Institutional fees at the CCIR are calculated as a percentage of the amount in dispute, on a degressive scale. For mid-range disputes in the low hundreds of thousands of euros, total institutional and arbitrator costs typically fall in the low tens of thousands of euros. Legal representation fees vary considerably; for complex international disputes, counsel fees start from the low tens of thousands of euros per side and can rise significantly. The tribunal has discretion to allocate costs between the parties, and the prevailing party frequently recovers a substantial portion of its legal costs.

The mechanism for challenging an arbitral award rendered in Romania is the action for annulment (acțiunea în anulare), governed by Articles 608-613 of the Civil Procedure Code. This is not an appeal on the merits; Romanian courts do not review the substance of the tribunal's findings of fact or law. The grounds for annulment are exhaustive and procedural in nature.

Article 608 of the Civil Procedure Code lists the following grounds on which an award may be annulled:

• The arbitration agreement is non-existent, void, or unenforceable.
• The tribunal was not constituted in accordance with the arbitration agreement or the law.
• The award was rendered outside the agreed time limit, and the party raised this objection before the award was communicated.
• The tribunal ruled on matters not submitted to arbitration or exceeded its mandate.
• The award does not contain the reasoning, the date, or the place of arbitration, or is not signed by the arbitrators.
• The award violates public order (ordinea publică), good morals (bunele moravuri), or mandatory provisions of Romanian law.
• The party was not properly represented or was unable to present its case due to an irregularity in the proceedings.

The action for annulment must be filed with the competent Court of Appeal (Curtea de Apel) within one month of the date on which the award was communicated to the party. This deadline is strict. Missing it extinguishes the right to challenge the award through this mechanism. The Court of Appeal examines only the listed grounds; it does not rehear the dispute. If annulment is granted, the court may either refer the matter back to the same or a differently constituted tribunal, or, in limited circumstances, resolve the dispute itself.

A non-obvious risk for foreign parties is the public order ground. Romanian courts have, on occasion, applied this ground broadly to protect Romanian parties or to enforce mandatory provisions of Romanian law that the tribunal did not apply. International clients should ensure that the arbitral tribunal is made aware of any mandatory Romanian law provisions that could affect the enforceability of the award, rather than discovering this issue at the annulment stage.

The action for annulment does not automatically suspend enforcement of the award. A separate application for suspension must be filed, and the court has discretion to grant it, typically requiring the applicant to post security. Failing to apply for suspension means the award creditor may proceed to enforcement while the annulment action is pending.

To receive a checklist on defending against or filing an action for annulment of an arbitral award in Romania, send a request to info@vlolawfirm.com.

Foreign arbitral awards are recognised and enforced in Romania primarily under the New York Convention, which Romania applies on a reciprocity basis. The procedure is governed by Articles 1125-1133 of the Civil Procedure Code and the general enforcement provisions of Book V of the Code.

The party seeking recognition and enforcement must file an application (cerere de recunoaștere și executare) with the competent tribunal (tribunal) in the jurisdiction where the debtor has assets or is domiciled. The application must be accompanied by the original or a certified copy of the award and the arbitration agreement, together with certified translations into Romanian where the documents are in a foreign language. The translation requirement is strictly enforced; incomplete or uncertified translations are a frequent procedural stumbling block.

Romanian courts examine recognition applications on the limited grounds set out in Article V of the New York Convention. These mirror the domestic annulment grounds: invalidity of the arbitration agreement, lack of proper notice, excess of jurisdiction, irregular tribunal composition, non-binding or set-aside award, non-arbitrability of the subject matter, and violation of Romanian public order. The burden of proof lies on the party opposing recognition.

In practice, Romanian courts grant recognition of foreign awards in the majority of contested cases, provided the procedural requirements are met. The most common grounds successfully invoked to resist recognition are public order and non-arbitrability. Awards rendered in jurisdictions with which Romania has bilateral treaties on legal assistance may benefit from a simplified recognition procedure under those treaties, which can reduce the procedural burden.

Once recognition is granted, the award is enforced through the standard Romanian enforcement mechanism: the creditor obtains an enforcement order (încuviințarea executării silite) from the court and engages a bailiff (executor judecătoresc) to carry out enforcement against the debtor's assets. Romanian enforcement proceedings can be protracted if the debtor actively contests them or if assets are difficult to locate. Asset tracing before commencing enforcement is a practical step that many creditors overlook, leading to enforcement actions that consume time and costs without recovering the debt.

Three practical scenarios illustrate how these mechanics play out:

• A German manufacturer holds a CCIR award against a Romanian distributor for unpaid invoices totalling approximately EUR 300,000. The distributor has no liquid assets but owns commercial real estate. The creditor engages a bailiff to levy execution against the property. The process from enforcement application to auction takes approximately twelve to eighteen months, depending on the debtor's cooperation and court scheduling.

• A Cypriot holding company obtains an ICC award against a Romanian joint venture partner. The award is rendered in Paris. The Cypriot company files for recognition in Romania. The Romanian party contests recognition on public order grounds, arguing that the tribunal failed to apply mandatory Romanian corporate law provisions. The court examines the argument but ultimately grants recognition, finding no genuine violation of Romanian public order.

• A Romanian company initiates ad hoc arbitration against a Swiss supplier under UNCITRAL Rules, with the seat in Bucharest. The Swiss party fails to appoint an arbitrator. The Romanian party applies to the Bucharest Tribunal to appoint the arbitrator. The court makes the appointment within approximately sixty days. The arbitration proceeds and concludes within fourteen months.

Choosing arbitration over Romanian state court litigation involves a genuine cost-benefit analysis. Romanian state courts have improved in efficiency and quality over the past decade, but proceedings in complex commercial matters at first instance and through the appellate chain can extend to four or five years. Arbitration, even when contested, typically concludes in one to two years, and the award is directly enforceable across New York Convention states without further merits review.

The arbitration agreement is the foundation of the entire strategy. A poorly drafted clause - one that is ambiguous about the institution, the seat, the number of arbitrators, or the governing law - creates jurisdictional disputes that consume time and money before the merits are even reached. A common mistake is copying a standard clause from a template without adapting it to the specific transaction, the parties' locations, and the likely dispute value. For high-value transactions, the clause should specify the institution, a three-member panel, the seat, the language of proceedings, and the governing law of the contract separately from the governing law of the arbitration agreement.

The choice of arbitrators deserves careful attention. Romanian arbitration practice has a relatively small pool of experienced arbitrators. Parties should investigate candidates' availability, language skills, and any prior relationships with the opposing party or its counsel. The CCIR maintains a list of recommended arbitrators, but parties are not obliged to choose from it. For international disputes, appointing an arbitrator with experience in both Romanian law and the relevant industry sector is preferable to appointing a generalist.

Interim measures are available in Romanian arbitration. Under Article 585 of the Civil Procedure Code, the arbitral tribunal may order provisional or conservatory measures. Additionally, under Article 586, a party may apply to the competent state court for interim relief even while arbitration is pending, without this being treated as a waiver of the arbitration agreement. This dual avenue is particularly valuable in cases involving asset dissipation risk, where speed is critical. Failing to apply for interim measures early - within the first weeks of a dispute - is a recurring mistake that allows the opposing party to restructure or transfer assets before enforcement becomes possible.

The risk of inaction is concrete: under Romanian law, the general limitation period for contractual claims is three years from the date on which the creditor knew or should have known of the damage and the identity of the debtor, pursuant to Article 2523 of the Civil Code (Codul civil). Allowing a dispute to drift without commencing arbitration within this window extinguishes the claim entirely. For some categories of claims, shorter limitation periods apply.

The cost of engaging non-specialist counsel in Romanian arbitration is also significant. Procedural errors - such as failing to raise jurisdictional objections at the correct stage, submitting evidence in an inadmissible format, or missing the deadline for the action for annulment - are difficult or impossible to correct after the fact. The additional costs generated by remedying procedural errors, or the loss of the entire claim due to a missed deadline, typically far exceed the cost of engaging experienced arbitration counsel from the outset.

We can help build a strategy for arbitration proceedings in Romania, including drafting arbitration clauses, advising on institutional selection, and managing the full procedural lifecycle. Contact info@vlolawfirm.com to discuss your situation.

What happens if the Romanian counterparty refuses to participate in arbitration after signing an arbitration clause?

A party that has signed a valid arbitration agreement cannot unilaterally opt out of arbitration by refusing to participate. If the respondent fails to appoint an arbitrator or ignores the proceedings, the institution or the competent court makes the appointment on its behalf, and the arbitration proceeds in its absence. The tribunal will render an award based on the evidence and submissions of the participating party. The resulting award is enforceable in Romania and in other New York Convention states in the same way as any other arbitral award. The non-participating party retains the right to challenge the award on procedural grounds, but substantive non-participation is not itself a ground for annulment.

How long does it take and what does it cost to enforce a foreign arbitral award against a Romanian company?

The recognition phase before a Romanian court typically takes between three and eight months for an uncontested application, and up to eighteen months or more if the Romanian party actively contests recognition. Once recognition is granted, enforcement through a bailiff depends on the nature and location of the debtor's assets. Bank account garnishment is the fastest method and can be completed within weeks of the enforcement order. Real estate execution takes considerably longer, often twelve to twenty-four months through to auction. Total legal costs for recognition and enforcement proceedings, including counsel and bailiff fees, generally start from the low thousands of euros for straightforward cases and rise substantially for contested or complex enforcement actions.

When is it better to litigate in Romanian state courts rather than arbitrate?

State court litigation is preferable in several specific situations. Where the dispute involves insolvency proceedings, Romanian courts have exclusive jurisdiction and arbitration is not available. For low-value disputes where the cost of arbitration would be disproportionate to the amount at stake, state courts offer a more economical route. Where urgent interim measures are needed immediately and the arbitral tribunal has not yet been constituted, state courts can act faster. Additionally, where one party lacks an arbitration agreement with the counterparty and cannot obtain one, state court litigation is the only available forum. For high-value, cross-border commercial disputes between sophisticated parties, arbitration generally offers superior enforceability and confidentiality.

Arbitration in Romania provides a mature and enforceable dispute resolution mechanism for commercial parties, anchored in a modern legislative framework and supported by the New York Convention. The key variables - the arbitration agreement, the choice of institution, the seat, and the composition of the tribunal - determine the quality and enforceability of the outcome. Foreign parties who invest in careful upfront structuring and engage experienced counsel consistently achieve better results than those who treat arbitration as a fallback option to be addressed only when a dispute has already escalated.

Our law firm VLO Law Firm has experience supporting clients in Romania on international arbitration and commercial dispute matters. We can assist with drafting and reviewing arbitration clauses, advising on institutional selection, representing clients in CCIR and ad hoc proceedings, and managing recognition and enforcement of foreign awards in Romania. To receive a consultation, contact: info@vlolawfirm.com.

To receive a checklist on the full arbitration process in Romania - from clause drafting through to enforcement - send a request to info@vlolawfirm.com.