Romanian High Court Has Issued a Binding Interpretation Decision on Who Can Administer Institutional Arbitration in Romania
Publication: ZRVP
The Romanian High Court’s binding decision of 17 June 2024 clarified that only NGOs explicitly authorized by law can administer institutional arbitration in Romania, addressing conflicting case law and excluding international arbitral institutions and chambers of commerce from its scope.
On 26 August 2024, the Romanian Court of Cassation and Justice (the “High Court”) published its binding decision of 17 June 2024 (see full version of the decision in Romanian here) on the uniform interpretation and application of Art. 616 (1) of the Romanian Code of Civil Procedure (“Romanian CCP”) regarding institutional arbitration. This decision is the most notable development concerning arbitration in Romania in the recent years, limiting the types of entities that can administer arbitration in Romania.
In essence, the High Court has established that non-governmental organisations of public interest (“NGO”s) may administer institutional arbitration in Romania only if authorised by law to do so.
The matter was escalated by Romania’s General Prosecutor, who referred to the High Court the question of whether associations and foundations established in accordance with domestic law can include in their statutes the purpose of organising institutional arbitration. This referral was prompted by conflicting case law in the context of an increasing number of newly established NGOs functioning as arbitral institutions in Romania.
The High Court recalled that, pursuant to Art. 616 (1) of the Romanian CCP, institutional arbitration can be administered either by a governmental domestic or international institution or by an NGO of public interest, “under the conditions of the law”.
As regards NGOs, the High Court held that NGOs whose statutes include the activity of administering institutional arbitration, without being so empowered under the law, operate unlawfully.
The High Court is the supreme judicial authority in Romania and its interpretation in the decision of 17 June 2024, as published on 26 August 2024, is binding.
The decision does not deal with the activity of international or foreign arbitral institutions, and certainly will not apply to established institutions, such as ICC, VIAC, SCC, which are popular choices among Romanian arbitration users. In fact, in the reasoning of the decision, recalling Romania’s long tradition of institutional arbitration, the High Court noted that Romania accepted the jurisdiction of international arbitration courts in commercial matters by ratifying in 1963 the European Convention on International Commercial Arbitration of 21 April 1961.
The decision also does not affect the activity of the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania and that of the local arbitral institutions attached to the county chambers of commerce across Romania. The authority of the national and county chambers of commerce to establish arbitral institutions is provided in Law no. 335/2007 on chambers of commerce in Romania.