The main dispute resolution approaches used in Romania in order to solve commercial disputes are:
- Court litigation
Is the most recognized and used method nowadays. It regards a claimant that presents a claim to the court against a defendant leading to a start of legal proceedings.
The decision taken by the court panel is then subject to a first appeal and, in very specific situations, to a second appeal before a higher court. Court litigation concludes with a final binding decision of the panel. This panel consists of one or more judges, depending, inter alia, on the matter, the phase of the trial or the court.
It is important to bear in mind the fact that parties have, nevertheless, the liberty to reach a settlement agreement during the trial, of which the court will take notice.
In Romanian law system, we can find elements of both adversarial and inquisitorial systems. However, the predominant system is the inquisitorial one due to the fact that:
- The judge plays an active role on resolving disputes as he has the competence to assess and administer evidence, playing an active role in finding the truth, subject to the principle that he can only rule within the limits of the claim;
- The parties benefit from the principle of equality of arms;
- Case law is not a source of law.
Here, the judge plays an active role and is under the obligation to encourage the parties to reach an agreement when it deems possible. Hence, the judge can summon the parties to a session where they will be presented with the advantages of mediation. It is important to bear in mind the fact that once the parties are summoned to such a session, they are under the obligation to participate. However, they have the liberty to choose whether to initiate meditation proceedings or to choose other dispute resolution method.
So what does a mediation entail?
It consists of one or more confidential sessions entailed in the presence of a mediator, considered to be a neutral third party. The role of the mediator is to assist the parties in reaching a consensus without imposing a solution based on their judgment.
In order to have the possibility to refer the dispute to an arbitral panel, the parties must have first agreed on this method either by concluding a separate written agreement in this regard or to include an arbitral clause in their contract.
The parties can, through an arbitral clause or an arbitral agreement, determine all the aspects of the arbitral proceedings such as:
- Applicable rules of procedure;
- Applicable court;
- Subject to limits;
- Agreement to settle the dispute in equity.
An arbitral award is considered final and binding. Therefore, it can only be challenged through an action for annulment on expressly provided and very limited grounds. With respect to the enforcement of the arbitral award, it is suffice to say that a domestic arbitral award can be enforced in the same manner as a state court decision.
This alternative dispute resolution method has many advantages such as:
- Celerity of the proceedings, an aspect rather important in Romanian legislation as court proceedings entail some difficulties in this aspect;
- Confidentiality, as opposed to the general rule in court litigation stipulating that the public shall have access to the trial proceedings;
- Procedural flexibility;
- Arbitrator’s experience of business law.
This method is becoming increasingly popular in sectors such as construction, public-private arrangements, corporate joint-venture agreements, transport, information technology and finance and banking.
Furthermore, cross-border commercial disputes are generally submitted before tribunals composed of experienced international arbitrators.
Junior Lawyer Daniela Manolea