Corporate Disputes in Romania

Corporate disputes in Romania are governed primarily by Law No. 31/1990 on Companies (Legea societăților comerciale) and the Civil Procedure Code (Codul de procedură civilă), which together create a structured but demanding litigation environment. Shareholders, directors and creditors operating through Romanian entities face specific procedural requirements, strict standing rules and courts with specialised commercial divisions. Understanding this framework before a dispute escalates is not optional - it is the difference between preserving value and losing it entirely.

Romania's accession to the European Union introduced additional layers of regulation, including cross-border enforcement mechanisms and alignment with EU corporate governance standards. Yet the domestic court system retains its own procedural logic, and international clients frequently underestimate the gap between EU-level principles and their practical application in Bucharest or Cluj-Napoca tribunals. This article maps the legal tools available, the procedural sequence, the realistic costs and the strategic choices that determine outcomes in Romanian corporate disputes.

Readers will find a structured analysis of: the legal context for shareholder and director disputes; the main litigation and arbitration tools; minority shareholder protections; fiduciary duty claims; and the practical economics of each route.

Romania operates a civil law system with French and Italian influences, codified primarily in the Civil Code (Codul civil, Law No. 287/2009) and the Companies Law. The Companies Law remains the central instrument for corporate disputes, setting out the rights and obligations of shareholders, directors and supervisory board members across all major entity types: the societate cu răspundere limitată (SRL, equivalent to a private limited company) and the societate pe acțiuni (SA, equivalent to a joint-stock company).

The Civil Procedure Code, as amended by Law No. 134/2010, governs procedural mechanics: filing, service, interim measures and enforcement. For corporate matters, jurisdiction lies with the Tribunals (Tribunale), which are first-instance courts of general commercial competence. Appeals go to the Courts of Appeal (Curți de Apel), and final legal review lies with the High Court of Cassation and Justice (Înalta Curte de Casație și Justiție - ICCJ).

A critical structural point: Romanian courts do not have a separate commercial court system in the common law sense. Instead, specialised sections within Tribunals handle commercial and corporate matters. The Bucharest Tribunal handles the highest volume of corporate disputes and has developed a relatively consistent body of practice, though procedural delays remain a practical reality.

The Companies Law distinguishes sharply between SRL and SA structures in terms of shareholder rights. An SA shareholder holding at least 5% of share capital may request a general meeting under Article 119 of the Companies Law. An SRL associate holding at least 25% may do the same under Article 195. These thresholds matter enormously when structuring a dispute strategy, because the ability to convene a meeting is often the first lever available to a dissatisfied investor.

Romanian company law also recognises the concept of abuse of majority (abuzul de majoritate) and abuse of minority (abuzul de minoritate), both of which can be invoked before courts. Abuse of majority occurs when controlling shareholders use their voting power to harm the company or minority shareholders for personal gain. Abuse of minority occurs when a minority blocks legitimate corporate decisions without justifiable cause. Both doctrines derive from the general principle of good faith (buna-credință) embedded in Article 1170 of the Civil Code.

When a shareholder dispute in Romania reaches the point where informal resolution has failed, the parties face a structured set of escalation options. Each has different cost profiles, timelines and strategic implications.

General meeting challenges are the most common first step. Under Article 132 of the Companies Law, any shareholder may challenge a general meeting resolution before the competent Tribunal within 15 days of publication in the Official Gazette (Monitorul Oficial) or, for shareholders who were present, within 15 days of the meeting. This deadline is strict and non-extendable. Missing it forfeits the right to challenge that resolution entirely - a common and costly mistake made by international clients who assume Romanian courts will apply equitable discretion similar to common law jurisdictions.

The grounds for challenge include: violation of mandatory legal provisions, violation of the articles of association, and abuse of majority. Courts assess procedural and substantive compliance. A successful challenge results in annulment of the resolution, which has erga omnes effect - it binds all shareholders, not just the claimant.

Director liability claims represent the second major tool. Under Article 155 of the Companies Law, directors owe a duty of loyalty and a duty of care to the company. These are fiduciary duties in substance, though Romanian law does not use that exact terminology. The company may bring a claim against a director by shareholder resolution. If the company fails to act, individual shareholders holding at least 5% of share capital in an SA (or any associate in an SRL) may bring a derivative action (acțiunea socială oblică) on behalf of the company under Article 155¹ of the Companies Law.

Derivative actions are procedurally demanding. The claimant must demonstrate that the company has failed to act despite a formal request, and must provide security for costs in some circumstances. Courts have shown increasing willingness to examine director conduct in detail, particularly in cases involving related-party transactions and asset stripping.

Exclusion of a shareholder is a remedy unique to SRLs under Article 222 of the Companies Law. A court may order the exclusion of an associate who: seriously breaches their obligations; uses company assets for personal purposes; commits fraud against the company; or is declared incompetent. This is a drastic remedy and courts apply it restrictively, but it is a genuine option in deadlocked partnerships where one party is actively damaging the business.

To receive a checklist of shareholder dispute procedures in Romania, send a request to info@vlolawfirm.com.

Minority shareholder protection in Romania has strengthened significantly since EU accession, though enforcement remains uneven in practice. The Companies Law and the Capital Market Law (Law No. 297/2004, now partially superseded by Law No. 24/2017 on issuers of financial instruments) provide a layered set of rights.

For SA shareholders, the key minority protections include:

• The right to request a special audit under Article 136 of the Companies Law, available to shareholders holding at least 10% of share capital.
• The right to request convening of a general meeting under Article 119, available to shareholders holding at least 5%.
• The right to challenge resolutions under Article 132, available to any shareholder regardless of stake size.
• The right to information: shareholders may inspect company documents and accounts, and the company must provide copies within a reasonable period.

For SRL associates, the threshold for meeting convocation is higher (25% under Article 195), but the right to challenge resolutions and the right to information apply equally. In practice, SRL disputes are more common because the SRL is the dominant vehicle for small and medium enterprises in Romania, and many are structured without adequate shareholder agreements.

A non-obvious risk for minority investors in Romanian SRLs is the absence of statutory pre-emption rights in the default articles of association. Unless the articles expressly provide for pre-emption, a majority associate may transfer shares to a third party without offering them to the minority first. This is a structural gap that many international investors discover only after a dilutive transaction has already occurred.

The squeeze-out mechanism for listed SA companies is regulated under Law No. 24/2017 and the Financial Supervisory Authority (Autoritatea de Supraveghere Financiară - ASF) rules. A shareholder holding 95% or more of share capital may compulsorily acquire the remaining shares at a fair price determined by an independent expert. Minority shareholders in listed companies may also exercise sell-out rights in the same circumstances. For unlisted companies, no statutory squeeze-out exists, and exit rights must be negotiated contractually or pursued through dissolution proceedings.

Valuation disputes are a recurring feature of Romanian minority shareholder litigation. When a minority seeks to exit or claims damages, the valuation of their stake becomes contested. Romanian courts typically appoint a judicial expert (expert judiciar) to determine fair value. The expert's report carries significant weight, but it is not binding - parties may challenge it through counter-expertise. The process adds three to six months to proceedings and increases costs materially.

A common mistake made by international clients is to assume that the valuation methodology used in their home jurisdiction (discounted cash flow, comparable transactions) will be applied automatically by Romanian experts. In practice, Romanian judicial experts often apply asset-based methods that undervalue going-concern businesses. Engaging a financial expert early to frame the valuation narrative is a strategic necessity, not a luxury.

The fiduciary duty framework in Romania is less developed doctrinally than in common law systems, but it is substantively present. Directors of Romanian companies owe duties that courts have consistently characterised as including loyalty, care and non-competition obligations, derived from Articles 72, 144 and 155 of the Companies Law.

The duty of loyalty prohibits directors from using company information or opportunities for personal gain. Article 144¹ of the Companies Law requires directors to disclose conflicts of interest to the board and to abstain from voting on affected decisions. Failure to disclose is both a civil wrong and, in serious cases, a criminal offence under the Criminal Code (Codul penal).

The duty of care requires directors to act with the diligence of a prudent businessperson. Romanian courts apply a standard closer to the civil law bonus pater familias (good family man) than the business judgment rule familiar to common law practitioners. This means courts are more willing to second-guess business decisions than their US or UK counterparts, particularly where the decision resulted in loss and the director cannot demonstrate a documented decision-making process.

Non-competition obligations under Article 153²³ of the Companies Law prohibit SA directors from engaging in competing activities without shareholder approval. For SRL managers (administratori), similar restrictions apply under Article 197. Breach gives rise to damages claims and, in some cases, the right to treat competing transactions as made on behalf of the company.

Director liability claims in Romania follow a specific procedural path. The claim must first be authorised by a general meeting resolution under Article 155 of the Companies Law. If the majority blocks the resolution - which is common when the director is also a majority shareholder - minority shareholders holding 5% or more may bring the derivative action directly. Courts have confirmed that the derivative action is available even where the company's articles of association are silent on the point.

Practical scenario one: A foreign investor holds 30% of an SA. The majority director enters into a related-party contract at above-market rates, causing the company to overpay by a material amount. The investor requests a general meeting to authorise a liability claim. The majority votes against. The investor files a derivative action before the Bucharest Tribunal. The court appoints a judicial expert to quantify the overpayment. The process takes 18 to 24 months at first instance.

Practical scenario two: Two equal partners in an SRL reach a deadlock on strategic direction. One partner begins diverting clients to a competing entity they control. The other partner files for exclusion under Article 222 of the Companies Law, simultaneously seeking an interim injunction to prevent further diversion. The court grants a provisional measure within two to four weeks. The exclusion claim proceeds over 12 to 18 months.

Practical scenario three: A minority associate in an SRL discovers that the majority has amended the articles of association at a general meeting to which the minority was not properly notified. The minority challenges the resolution under Article 132 within the 15-day window. The court annuls the resolution. The majority must reconvene the meeting with proper notice.

To receive a checklist of director liability claim procedures in Romania, send a request to info@vlolawfirm.com.

Romanian corporate disputes may be resolved through arbitration where the parties have agreed to an arbitration clause in the articles of association or in a separate shareholders' agreement. The legal basis is the Civil Procedure Code, Book IV (Articles 541-621), which governs institutional and ad hoc arbitration.

The primary institutional arbitration body 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 - CCIR Arbitration Court). International parties also frequently choose ICC, VIAC or LCIA arbitration with a seat in Bucharest or abroad, particularly where one party is a foreign entity.

Arbitrability of corporate disputes is a nuanced issue in Romania. Disputes between shareholders inter se, and disputes between shareholders and the company arising from the shareholders' agreement, are generally arbitrable. However, challenges to general meeting resolutions under Article 132 of the Companies Law are considered matters of public order by most Romanian courts and are therefore not arbitrable - they must be brought before the competent Tribunal. This distinction is frequently overlooked when drafting dispute resolution clauses, leading to situations where an arbitration clause is invoked but the court declines jurisdiction, or vice versa.

Arbitration proceedings before the CCIR typically conclude within 12 to 18 months for straightforward disputes. Complex multi-party disputes may take longer. Costs include registration fees, arbitrator fees and legal representation, and typically start from the low thousands of euros for smaller disputes, rising significantly for high-value claims. The advantage over court litigation is procedural flexibility and, in theory, greater confidentiality.

Mediation is available under Law No. 192/2006 on mediation and the organisation of the mediator profession. Courts are required to inform parties of the possibility of mediation at the first hearing. In practice, mediation is underused in Romanian corporate disputes, partly because of cultural resistance and partly because parties often need a court-ordered interim measure before they are willing to negotiate. However, for disputes where the parties have an ongoing commercial relationship they wish to preserve, mediation can resolve matters in weeks rather than years.

Many underappreciate the role of the shareholders' agreement (acord de acționari or pact de acționari) in shaping dispute resolution outcomes. A well-drafted agreement can specify: the arbitration forum; the governing law for contractual claims; tag-along and drag-along rights; deadlock resolution mechanisms; and valuation methodologies for exit. Without such an agreement, parties are left with the default statutory framework, which is designed for the average case and rarely fits the specific economics of a joint venture or private equity structure.

A non-obvious risk is that Romanian courts have occasionally treated shareholders' agreement provisions as unenforceable where they conflict with mandatory provisions of the Companies Law. For example, provisions that purport to restrict a shareholder's right to challenge resolutions, or that impose supermajority requirements inconsistent with the statutory framework, may be set aside. International investors should have Romanian counsel review the enforceability of key provisions before signing.

Interim measures (măsuri provizorii) are a critical tool in Romanian corporate litigation, particularly where there is a risk of asset dissipation, share transfer or continued breach of duty pending the outcome of proceedings.

The Civil Procedure Code provides two main interim mechanisms. The first is the ordonanță președințială (presidential order), a fast-track procedure under Article 997 of the Civil Procedure Code that allows a court to grant urgent relief without prejudging the merits. Applications are heard within days, sometimes within 24 to 48 hours in urgent cases. The measure is temporary and must be followed by substantive proceedings. The second is the sechestru asigurător (precautionary attachment), which freezes assets pending judgment under Articles 952-970 of the Civil Procedure Code. This requires the claimant to demonstrate a credible claim and the risk of insolvency or asset dissipation.

In corporate disputes, interim measures are most commonly sought to: prevent the transfer of shares pending a challenge; freeze company bank accounts where fraud is suspected; prevent the execution of a contested resolution; or preserve evidence. Courts in Romania have become more willing to grant such measures in recent years, particularly where the claimant can demonstrate urgency and a prima facie case.

The risk of inaction is concrete: if a share transfer completes before an interim measure is obtained, reversing it requires a separate annulment action that may take two to three years. The window for effective interim relief is often measured in days, not weeks.

Enforcement of judgments within Romania follows the standard civil enforcement procedure under the Civil Procedure Code, with enforcement handled by bailiffs (executori judecătorești). For cross-border enforcement within the EU, Regulation (EU) No. 1215/2012 (Brussels I Recast) applies, allowing Romanian judgments to be enforced in other EU member states without a separate exequatur procedure. For enforcement against non-EU assets, bilateral treaties or the New York Convention (for arbitral awards) govern.

A common mistake is to obtain a favorable judgment but fail to enforce it promptly. Romanian enforcement proceedings can be slow if the debtor is uncooperative, and assets may be transferred or encumbered in the interim. Instructing an enforcement specialist alongside litigation counsel from the outset is advisable in high-value disputes.

The cost economics of Romanian corporate litigation deserve explicit attention. Court fees (taxe de timbru) for corporate disputes are calculated as a percentage of the value in dispute, subject to caps and floors set by Government Emergency Ordinance No. 80/2013. For non-pecuniary claims (such as resolution challenges), fees are fixed at lower levels. Legal representation fees vary widely: for straightforward disputes, fees start from the low thousands of euros; for complex multi-party litigation before the Bucharest Tribunal or ICCJ, fees can reach the mid to high tens of thousands of euros. Judicial expert fees add further cost. Parties should budget for a total cost of proceedings - including all fees and expert costs - that may represent a meaningful percentage of the amount in dispute for smaller claims, making early settlement analysis essential.

What is the most significant practical risk for a foreign minority shareholder in a Romanian company?

The most significant risk is the combination of a short challenge deadline and the absence of default pre-emption rights in many SRL articles of association. A minority shareholder who misses the 15-day window to challenge a general meeting resolution loses that right permanently. Simultaneously, if the articles do not provide for pre-emption, the majority can transfer shares to a hostile third party without offering them to the minority first. These two vulnerabilities together can leave a minority investor locked in with an unwanted partner or locked out of a challenge entirely. The solution is proactive: review the articles of association before investing, negotiate a shareholders' agreement with express protections, and monitor general meeting notices carefully.

How long does a corporate dispute typically take in Romania, and what does it cost?

A first-instance judgment from a Romanian Tribunal in a corporate dispute typically takes 18 to 30 months from filing, depending on complexity, the volume of evidence and the court's caseload. Appeals to the Court of Appeal add a further 12 to 18 months. Proceedings before the ICCJ on points of law add another 12 months or more. Total elapsed time from filing to final judgment can therefore reach four to five years in contested cases. Costs at first instance, including legal fees and judicial expert fees, typically start from the low tens of thousands of euros for straightforward disputes and rise substantially for complex multi-party cases. Arbitration before the CCIR is generally faster - 12 to 18 months - but not necessarily cheaper once arbitrator fees are included.

When should a party choose arbitration over court litigation for a Romanian corporate dispute?

Arbitration is preferable when: the dispute arises from a shareholders' agreement rather than from the Companies Law; confidentiality is commercially important; the parties want procedural flexibility and the ability to appoint specialist arbitrators; and the dispute has an international dimension where enforcement in multiple jurisdictions is anticipated. Court litigation is preferable - and in some cases mandatory - when the dispute involves a challenge to a general meeting resolution, a request for exclusion of a shareholder, or any matter classified as non-arbitrable under Romanian law. A mixed dispute, involving both contractual and statutory claims, may require parallel proceedings, which increases cost and complexity. Structuring the dispute resolution clause correctly at the outset avoids this problem.

Corporate disputes in Romania demand a precise understanding of the Companies Law, the Civil Procedure Code and the procedural culture of Romanian courts. The tools available - resolution challenges, derivative actions, exclusion claims, interim measures and arbitration - are substantive and effective when used correctly. The risks of delay, missed deadlines and procedural missteps are equally real. For international investors, the gap between EU-level corporate governance principles and their domestic Romanian application is the central challenge to navigate.

To receive a checklist of key steps for managing a corporate dispute in Romania, send a request to info@vlolawfirm.com.

Our law firm VLO Law Firm has experience supporting clients in Romania on corporate dispute matters. We can assist with shareholder dispute strategy, director liability claims, minority shareholder protection, interim measures and arbitration proceedings. To receive a consultation, contact: info@vlolawfirm.com.