Arbitration agreement
Arbitrability
Are there any types of disputes that are not arbitrable?
Regarding international arbitration, the Civil Procedure Code (CPC) states that any dispute of an economic nature can be submitted to arbitration if it concerns rights in relation to which the parties can freely dispose and provided that the law of the state where the arbitral tribunal has its seat does not reserve exclusive jurisdiction for the national courts. In principle, only monetary claims can be referred to either domestic or international arbitration. However, there are some monetary claims that are excluded from arbitration. For instance:
- intellectual property disputes concerning the annulment of a trademark, a patent or industrial design, or those related to the author of a creation subject to copyright, where such disputes are given in the exclusive competence of the courts of law;
- regarding antitrust and competition laws matters, the disputes on the lawfulness of the Competition Council’s decisions are reserved to the court of law. However, the parties may refer to an arbitration dispute with claims on damages arising from a breach of competition law, or, in the case of a contractual dispute, one party may raise competition issues in connection with the validity of some clauses, and the arbitral tribunal will retain jurisdiction to assess such matter;
- intra-company (corporate law) disputes are reserved to the courts of law under the provisions of Law No. 31/1990; and
- family matters, inheritance disputes and any matters related to the civil status are also given to the jurisdiction of courts of law.
Requirements
What formal and other requirements exist for an arbitration agreement?
As a rule, the arbitration agreement must be concluded in writing. The criteria for determining whether the arbitration agreement was executed in writing are very generous, being considered to be fulfilled if the parties agreed to arbitration by means of an exchange of correspondence, irrespective of its form, or by an exchange of procedural acts, as well as if the defendant expressly accepts the jurisdiction of the arbitral tribunal, either by written statement or by express statement recorded by the arbitral tribunal. As an exception, article 548(2) of the CPC compels the parties to conclude the arbitration agreement in an authentic form, under the sanction of absolute nullity, if it refers to disputes related to the transfer of an ownership right or to the creation of another property right over an immovable property.
Under article 550(1) of the CPC, the arbitration agreement must include a reference regarding the procedure to appoint the arbitrators, under the express sanction of nullity as to ad hoc arbitrations. In the case of institutional arbitration, such references are not mandatory, considering that the law allows a reference to the procedural norms of the institution that administers the arbitration. Arbitration agreements must be concluded with the observance of the conditions provided for the validity of agreements in general, namely the existence of the capacity of the parties to conclude the agreement, the parties’ consent and a valid object and a valid cause of the main contract. Local or state entities can conclude an arbitration agreement to the extent that a special provision, either domestic or international, allows them to do so.
The Court of International Commercial Arbitration (the Court of Arbitration) recommended a model clause for the arbitration agreement to be used by any concerned parties. This model clause only refers to disputes that arise from the agreement containing an arbitration clause or by a separate agreement (in the form of a compromise). The Rules of the Court of Arbitration provide for the principle of separability of an arbitration agreement from the main contract and its full effects regarding the competence given to the arbitral tribunal to arbitrate (except the cases when the matter in dispute is not arbitrable).
Enforceability
In what circumstances is an arbitration agreement no longer enforceable?
According to article 554 of the CPC and article 6 of the European Convention on Human Rights, an arbitration agreement is no longer enforceable if:
- the institution organising the arbitration fails to comply with the minimum requirements of article 6 of the European Convention on Human Rights;
- the arbitral tribunal cannot be constituted because of the defendant’s obvious default; or
- the proceedings before courts of law were initiated and the defendant raised no objection on jurisdiction.
Separability
Are there any provisions on the separability of arbitration agreements from the main agreement?
Provisions on the separability of arbitration agreements from the main agreement are found in article 550(2) of the CPC in the case of domestic arbitration (‘the validity of the arbitration clause is independent of the validity of the contract that was entered’) and article 1113(3) of the CPC in the case of international arbitration (‘the validity of the arbitration agreement cannot be challenged on the grounds of the invalidity of the main contract or because it would concern a dispute that does not yet exist’).
Third parties – bound by arbitration agreement
In which instances can third parties or non-signatories be bound by an arbitration agreement?
A third party can be bound by an arbitration agreement only to the extent that it becomes a party to that arbitration agreement. In several exceptional cases, non-signatories may be bound by an arbitration agreement if:
- the underlying contract was assigned to a third party under the CPC;
- the assignee of a claim is bound by the arbitration agreement under the accessorium sequitur principale rule; or
- in the case of inheritance, the heirs and legatees of a party contracting to an arbitration agreement are bound by such a clause.
Third parties – participation
Does your domestic arbitration law make any provisions with respect to third-party participation in arbitration, such as joinder or third-party notice?
According to the CPC, if third parties are to participate in arbitration, this must be based both on the consent of the third parties and of all the parties to arbitration, with the observance of the general rules governing third-party participation in disputes. Under those general rules, any person who has a substantive interest can intervene in a dispute pending between other parties. Intervention by a third party who intends to do so for the benefit of one of the original parties is allowed without the need for the consent of the original parties.
The Rules of the Court of Arbitration have a different perspective on third-party participation in arbitration, which is regulated in article 16:
- first, if the third party intends to intervene solely for the benefit of one of the original parties, it must prove the existence of an arbitration agreement with all the original parties or obtain their consent; and
- second, where a third party that may have the same claims as the original claimant intends to intervene in an ongoing proceeding or one of the original parties’ requests for the joinder of the third party, this implies the authorisation of the arbitral tribunal or, where such tribunal is yet to be appointed, of the board of the Court of Arbitration.
When deciding on whether to authorise such intervention, the arbitral tribunal or the Court of Arbitration board shall also consider, among other things, the fulfilment of the following conditions:
- all parties, including the intervenor, agree, even before the arbitral tribunal, that the disputes between them are subject to arbitration conducted under the Rules of the Court of Arbitration and also on the method of choosing the arbitral tribunal;
- the intervention from the third party or the request for joinder have been filed in a timely fashion, at the latest at the first hearing date; and
- the intervening third party or the request for joinder party pays the arbitration fee in the amount established by the Schedules of Arbitral Fees and Expenses in the Rules of the Court of Arbitration, as well as any additional arbitration costs.
Groups of companies
Do courts and arbitral tribunals in your jurisdiction extend an arbitration agreement to non-signatory parent or subsidiary companies of a signatory company, provided that the non-signatory was somehow involved in the conclusion, performance or termination of the contract in dispute, under the ‘group of companies’ doctrine?
Arbitral tribunals are not often confronted with the group of companies doctrine in view of extending an arbitration agreement to non-signatory companies; therefore, to the best of our knowledge, the group of companies doctrine is not recognised in the Romanian jurisdiction with respect to arbitration.
Article 5(35) of Law No. 85/2014 regarding insolvency proceedings refers to the group of companies involving two or more companies interconnected by control or holding of qualified participations, and article 5(37) refers to the ‘parent company’ (ie, the company that exercises control or dominant influence over the other companies in the group). At the same time, articles 183 et seq of Law No. 85/2014 govern the special provisions on insolvency proceedings of a group of companies.
Article 43(1) of Law No. 31/1990 stipulates that the branches do not enjoy legal personality as a company. No particular provision contained in the CPC refers to groups of companies, but this does not mean that no interpretations can be made under the existing provisions, which support the concept of economic and legal reality at the conclusion of contracts.
Multiparty arbitration agreements
What are the requirements for a valid multiparty arbitration agreement?
Romanian arbitration law is silent as far as this specific matter is concerned. Some scholars are of the opinion that the requirements for executing an arbitration agreement remain applicable for such cases as well.
The Rules of the Court of Arbitration have provisions on this matter in connection with the nomination of arbitrators: if there are more claimants or defendants, parties with mutual interests will designate one arbitrator. If the parties fail to agree on this appointment, the arbitrator will be designated by the president of the Court of Arbitration.
Consolidation
Can an arbitral tribunal in your jurisdiction consolidate separate arbitral proceedings? In which circumstances?
The CPC is silent in connection with the consolidation of separate arbitral proceedings. The Rules of the Court of Arbitration attached to the Chamber of Commerce and Industry of Romania deal with this matter under article 17, which provides for three circumstances in which the arbitral tribunal may decide to consolidate separate arbitral proceedings:
- all the parties agree to consolidation;
- all the claims are made under the same arbitration agreement; or
- where the claims are made under more than one arbitration agreement, the relief sought arises from the same transaction or series of transactions and the arbitral tribunal considers the arbitration agreement to be compatible.
In deciding on consolidation, the arbitral tribunal shall consult with the parties and may consider among other things, the stage of the pending arbitration, whether the arbitrations raise common legal or factual issues, and the efficiency and expeditiousness of the proceedings.