Introduction

Romania has a history of arbitration that dates back to early 19th Century, of French and Swiss inspiration. Arbitration resisted the 20th century conflicts and communist regime and recovered in the early 1990’s with legislation inspired by the UNCITRAL Model Law on International Commercial Arbitration (‘UNCITRAL Model Law’). It is also an early signatory to the New York Convention (1961), the Geneva Convention (1963), and the ICSID Convention (1975). In 2010, Romania undertook an overhaul reform of its Civil Code and Civil Procedure Code.

The reform of arbitration was inspired by the French, Italian and German Codes of Civil Procedure as well as the Code of Civil Procedure of Quebec, 1 and currently regulates domestic and international arbitration separately and also includes a distinct section on institutional arbitration. Law 134/2010 on the New Civil Procedure Code (‘NCPC’) entered into force on 15 January 2013 and was since then amended six times. 2 The latest amendment, Law no. 17/2017 (‘2017 Amendment’) impacted provisions regarding the setting aside procedure of arbitral awards rendered in Romania. 3

Historical background and reasons for reform

The regime for setting aside of arbitral awards under the NCPC is in line with the UNCITRAL Model Law. Specifically, Article 613 NCPC establishes that the competent court, i.e. the Court of Appeal with jurisdiction at the seat of arbitration, acting as first instance court, can vacate an arbitral award for grounds similar to those included in Article 34 of the UNCITRAL Model Law. 4 The NCPC recognizes discretion to the Court of Appeal in determining whether to grant or deny the motion for setting aside of the arbitral award.

Prior to the 2017 Amendment, there was certain ambiguity in relation to Article 613(4) NCPC on the scope of the Court of Appeal decisions subject to review. The Article originally read as follows:

The Court of Appeal’s judgments rendered under paragraph (3) [i.e. granting the annulment request] are subject to review in final appeal. 5

Article 613(4) NCPC seemed, then, to cover only a review by the High Court of Cassation and Justice (‘High Court’) of the decisions of the Court of Appeal (first instance) vacating, totally or partially, an arbitral award, whilst denying such review for Court of Appeal decisions dismissing the setting aside request. It also impacted those Romanian Courts of Appeal decisions dismissing motions for setting aside on procedural grounds, such as belated applications, inadmissibility, lack of legal standing, prior settlement or waiver of claim, 6 that were apparently left without possible recourses.

Following the NCPC’s enactment in 2010, renowned members of the NCPC drafting committee cautioned that a black-letter interpretation of Article 613(4) NCPC which would result in denying the right to review for a significant part of Courts of Appeal judgments would be ‘simplistic’ since a recourse against decisions dismissing the setting aside claim was not expressly excluded and was, in any case, allowed by general procedural law. A more carefully drafted text would have, however, been welcomed. 7 Active judges also considered that a party whose setting aside action was denied by the Court of Appeal should have the right to a review in final appeal. 8

Inconsistent Court decisions and pleas for unconstitutionality prior to the 2017 Amendment

The interpretation uncertainty was emphasised by High Court’s inconsistent case law on the matter. One example is a High Court decision rendered in 2015, which received strong criticism from the President of the NCPC drafting committee. 9 He argued that the High Court interpreted the law against legislative intent and that Court of Appeal decisions denying annulment of arbitral awards are not excluded per se from the NCPC general provisions allowing a right to final appeal. He added that any such derogation must be expressly provided for in the procedural law and cannot be dictated by a judge. This school of thought, reluctant to such drafting and to such limitation in scope of decisions subject to final appeal, argued that such interpretation may lead to questions of constitutionality by denying access to justice, to the right to a fair trial and to equal treatment. Indeed, the right to a final appeal would in fact hinge on the judgement of the specific Court of Appeal sole judge, who would ultimately have the power to determine whether or not his/her judgment becomes subject to review.

The High Court rendered several similar decisions, leading to no less than ten pleas for the unconstitutionality of Article 613(4) NCPC within 2015 and 2016, initiated by both parties-in-interest and the High Court sua sponte. All such pleas were referred to Romania’s Constitutional Court, which joined all pleas and ruled on the constitutionality issue in 2017. 10 Plaintiffs had essentially argued that the legal provision breached principles such as equality before the law, access to justice, right to a fair trial, and procedural fairness.

Regrettably, the Constitutional Court remained unconvinced of the impact of such NCPC provision on constitutional rights by reasoning that Article 613(4) was in line with the Romanian Constitution, since parties to an arbitration agreed to arbitration as a private dispute resolution mechanism, and that setting aside decisions – with the consequence of having to try the case de novo before a national court – deserve a right to a final appeal in the court system, as opposed to judgments denying annulment of arbitral award where such arbitral award would stand as a final resolution of dispute by alternative means of resolution.

Clarification brought by Law no. 17/2017

Soon after this Constitutional Court decision, whilst the bill that led to the 2017 Amendment was debated in the Chamber of Deputies (and had passed the Senate), Article 613(4) NCPC was revised, undoubtedly extending the right to final appeal against all Court of Appeal decisions on setting aside, regardless of the ruling. The text now reads:

The Court of Appeal judgment that rules in setting aside claims is subject to review in final appeal.

The current language of Article 613(4) NCPC should avoid any further inconsistencies in High Court rulings regarding the review of setting aside decisions and allow an increased predictability for parties in domestic and international arbitration proceedings seated in Romania.



1
For the history of arbitration and its regulation in Romania, see F.A. Baias, Chapter 1 §1.02, ‘The Evolution of the Romanian Legislation on Arbitration’ in C. Leaua, F. A. Baias (eds.), Arbitration in Romania: A Practitioner's Guide, Kluwer Law International, 2016, pp. 10-28.


2
According to Law no. 76/2012 for the implementation of Law no. 134/2010 on the Civil Procedure Code.


3
Law 17/2017 approving Government Emergency Ordinance no. 1/2016 (4 February 2016, amending Law no. 134/2010 on the NCPC and other legislative acts, Official Gazette no. 196, 21 March 2017.


4
The one significant difference between the two consists of the fact that, as opposed to Article 34(2)(b) of the UNCITRAL Model Law, Romanian NCPC does not grant courts the power to look into issues of arbitrability and public policy on its own motion and potentially vacate an award on such grounds; rather it can only do so once it is vested with a motion from the parties, Ș. Dudas, Chapter 4 §4.02 ‘Setting Aside of Arbitral Awards’ in C. Leaua, ibid. p.215. For details on NCPC provisions for setting aside arbitral awards, ibid. pp. 212-236.


5
Free translation from the original text in Romanian: ‘Art. 613 (4) Hotărârile curții de apel, pronunțate potrivit alin. (3), sunt supuse recursului.’


6
See other possible solutions in V. M. Ciobanu, ‘Unele aspecte privind executarea și desființarea hotărârii arbitrale’ [Certain aspects regarding enforcement and annulment of the arbitral award], Revista Română de Executare Silită [Romanian Review on Enforcement] no. 1/2015, p. 9.


7
V. M. Ciobanu, ibid. p. 10 and V.M. Ciobanu, M. Nicolae (eds.), Noul Cod de procedură civilă comentat și adnotat [New Civil Procedure Code commented and referenced], vol. II, Ed. Universul Juridic, Bucureşti, 2016, p. 274.


8
E. Oprina, V. Bozeșan, Analiza ultimelor modificări aduse în materia procedurii civile și executării silite, în special prin Legea nr. 17/2017 [Analysis of latest amendment brought to civil procedure and enforcement, particularly by Law no. 17/2017], https://www.juridice.ro, pp. 6-7.


9
High Court of Cassation and Justice, II Civil Chamber, decision no. 1780 of 25 June 2015, available at www.scj.ro, by which the High Court denied as inadmissible a final appeal (‘recurs’) against Oradea Court of Appeal decision no. 2/C/2014- P.I. of 19.11.2014 for reason that the decision is one denying to vacate the arbitral award, and does not fall under the hypothesis regulated by Article 613 para.(3) and (4) NCPC. See V.M. Ciobanu and C. Vasile, ‘Admisibilitatea recursului împotriva hotărârilor de respingere a acţiunii în anularea hotărârii arbitrale’ [Admissibility of final appeal against decisions denying annulment of arbitral awards], 22 January 2016, https://www.juridice.ro.


10
Constitutional Court Decision no. 100 of 7 March 2017, Official Gazette no. 532 of 7 July 2017.