EU and competition

Applicable legal framework

Under Romanian law, foreign judgments are jurisdictional acts, whether contentious or not, issued by courts, notaries or any other competent authority from a non-EU state. Similarly, foreign arbitral awards are international or national arbitral awards rendered in a foreign state and which are not considered national judgments in Romania.

In principle, the Romanian law requires foreign judgments and awards to undergo a recognition and enforcement judicial process in order to produce effects on the Romanian territory. This procedure is commonly known as the exequatur. There are, however, some notable exceptions, such as the court judgments falling under Regulation (EU) no. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the “Regulation no. 1215/2012”) or the foreign arbitral awards issued based on international conventions (e.g. ICSID Awards).

Romanian courts, in general, have a very pro-recognition and enforcement approach. As long as there are no valid grounds for a refusal, the recognition and enforcement of a judgment/award on the Romanian territory may be obtained relatively swiftly.

The recognition and enforcement of foreign judgment and awards is regulated in Romania under the Civil Procedure Code (the “CPC”). Nevertheless, Romania is a member of the European Union and has ratified several international legal instruments relevant for the recognition and enforcement of such judgments and awards (for example, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 – the “New York Convention”).

Depending on the type of foreign judgment or award, there may be four applicable main regulations when seeking its recognition and enforcement in Romania:

Foreign court judgements

• For court judgments rendered in a non-EU state: arts. 1094-1110 CPC are applicable (exequatur procedure), unless other international instruments which Romania has ratified are applicable (for example The Hague Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-Operation in Respect of Parental Responsibility and Measures for the Protection of Children, dated 19 October 1996);
• For court judgments (civil/commercial) rendered in an EU Member State: the Regulation no. 1215/2012 is applicable (simplified procedure); for court judgements in matters not covered by Regulation no. 1215/2012, the relevant EU Regulation is applicable (e.g., the Regulation no. 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility), or the general provisions of the CPC (where no regulation is applicable);
• For court judgments rendered by a court selected through a choice of court agreement: the Hague Convention on Choice of Court Agreements dated 30 June 2005 is applicable.

Following the UK’s withdrawal from the European Union, the recognition and enforcement of court judgments (civil/commercial) issued in the UK is done by applying:

• the Regulation no. 1215/2012 for the procedures initiated in the UK before 31 December 2020;
• the provisions regulating the exequatur under the CPC (unless other international instruments which Romania has ratified are applicable), for procedures initiated in the UK after 31 December 2020.

Foreign arbitral awards

• either the New York Convention or arts. 1124-1133 CPC is applicable (exequatur procedure), depending on the regime more favourable for recognition and enforcement.

2) The exequatur procedure before Romanian courts

The exequatur procedure starts with the filing of a request for the recognition and enforcement of a foreign judgment/award with the competent national court. The court may only examine the decision from the perspective of the fulfilment of the formal conditions and as to whether any grounds for the refusal of the recognition and enforcement may be at play. The court may not evaluate the decision on its merits, nor can it amend it in any way.

After the exequatur is granted, the judgment/award benefits from the res judicata effect on the Romanian territory, and its forced execution may begin in Romania.

What must the request contain?

The request must clearly state whether the applicant seeks only the recognition of the decision, only its enforcement (in case of a previously recognised decision), or both the recognition and enforcement.

The applicant must also show that the conditions on the merits for obtaining the exequatur are fulfilled:

• that the decision is final and/or enforceable, as the case may be, at the state of origin

We note that, according to the CPC, arbitral awards only need to be binding, not necessarily final. Therefore, certain arbitral awards which may be subject to an appeal on the merits (e.g. under the GAFTA Arbitration Rules Rules) could be subject to the exequatur procedure before the conclusion of the appeal proceedings.

• that the issuing body had jurisdiction

The Romanian court verifies whether the court judgment was rendered by the competent court in the state of origin or, as the case may be, by the court chosen according to the provisions of the Hague Convention of 30 June 2005. In case of arbitral awards, the court verifies whether the dispute could be settled by arbitration in Romania.

• that there is reciprocity between Romania and the state of origin (in case of court judgments rendered by a non-EU state or arbitral awards issued in a state which has not ratified the New York Convention 1958)

In theory, the reciprocity is presumed according to art. 2561 of the Romanian Civil Code. However, in practice, Romanian courts sometimes request for the reciprocity to be proved. To this end, the Ministry of Justice is requested to verify whether there is reciprocity between Romania and the state of origin.

Moreover, the request must be accompanied by:

• the copy of the foreign judgment or award;
• the documents which prove the fulfilment of the conditions on the merits, as the case may be;
• the choice of court agreement (in case of an application under the Hague Convention of 30 June 2005;
• the arbitration agreement in original or copy (in case of an application for the recognition and enforcement of an arbitral award).

Furthermore, certain formal conditions must be observed:

• documents which are not in the Romanian language must be accompanied by a certified translation into Romanian;
• documents issued by foreign bodies shall be legalised in the state of origin and by the Romanian diplomatic mission or consular office, unless (i) they were issued in states which are members of the Hague Convention 1961, in which case the documents must bear the apostille, or (ii) in case of a bilateral convention abolishing the requirement of an apostille, in which case the documents issued in the other state do not require neither legalisation, nor the apostille.

Where does the request need to be filed?

The request for the recognition and enforcement of any judgment or award must be filed with a certain district court. The specific district court will vary, depending on the subject matter of the request:

• in case of foreign court judgments, the competent district court is located (i) at the place where the person refusing the recognition is domiciled (for the recognition request), or (ii) at the place where the enforcement is going to be done (for the enforcement request);
• in case of foreign arbitral awards, the competent district court is located at the place where the person against whom the award was made has its domicile or headquarters.

If the aforementioned places cannot be determined, the Bucharest District Court shall have jurisdiction.

What are the applicable time limits?

In Romania, the right to obtain the forced execution is subject to a statute of limitations period of 3 years (or of 10 years, in case of decisions pertaining to rights in rem), unless the law provides otherwise. In case of court judgments and arbitral awards, the limitation period starts from the date when they became final (art. 706 CPC).

The application for the recognition of a foreign court judgment or foreign arbitral award interrupts the limitation period for obtaining the forced execution.

What rules are applicable to the court proceedings?

The rules for ordinary court proceedings regulated by the CPC are applicable also for exequatur proceedings.

As a rule, the exequatur proceedings are conducted inter partes. By way of exception, they may also be concluded without the parties being summoned, if the respondent agreed with the exequatur being granted.

Does the challenge to the foreign judgment/award suspend the exequatur proceedings?

The challenge to the decision which is subject to the exequatur (such as the action to set aside the arbitral award at the seat of arbitration) does not automatically suspend the exequatur proceedings pending before the Romanian courts.

However, a party may request the Romanian court to suspend the exequatur proceedings until the resolution of the challenge to the decision subject to the exequatur. The general grounds for suspending the civil trial provided by the CPC are also applicable in the exequatur proceedings:

• when the resolution of the dispute depends, in whole or in part, by the existence or non-existence of a right which forms the basis for another trial;
• when, in a similar case, a preliminary ruling request has been submitted with the Court of Justice of the EU;
• when criminal investigations have been commenced for an offence which could have a decisive negative effect over the decision which would be rendered in the proceedings.

Moreover, art. 1130 CPC provides a particular case of suspension of the exequatur of foreign arbitral awards. The exequatur court may suspend the proceedings if the annulment or the suspension of the arbitral award had been requested to the competent authority in the state where the award was rendered or in the state according to the law of which the award was rendered. The suspension is not mandatory, but is left to the discretion of the court, which may consider the following criteria in its assessment of the request:

• the merits of the request for the annulment or suspension of the arbitral award;
• the time left until the resolution of the request;
• the damage which may be suffered by the creditor and debtor.

In this latter case, the court may order the requesting party to give security, in the amount of up to 20% of the value of the request (or a maximum of 10,000 RON, approximately 2,000 EUR) according to art. 1057 CPC.

How long until a final decision is rendered?

The proceedings in the first instance usually take between 3-6 months until they are concluded and a court decision is rendered. If there are grounds for multiple postponements due to procedural issues, it may take even longer. In all cases, the decision of the court of first instance is subject to an appeal, which must be filed within 30 days from the communication of the decision (it may take between 1-3 months for the decision to be drafted and communicated). Therefore, if the respondent does not appeal the decision whereby the recognition and enforcement of a judgment/award was granted, the exequatur decision could become final in 6-9 months from the filing of the application.

If the first instance decision is appealed, the appeal proceedings would add a further approximately 3-6 months to the duration of the procedure. In case of requests for the recognition and enforcement of arbitral awards, the decision of the court of appeal is final. However, in case of requests for the recognition and enforcement of court decisions, the decision of the court of appeal may be further challenged by way of a final appeal, which also takes around 3-6 months to be concluded.

All in all, one may expect to obtain exequatur of a foreign arbitral award in up to 15 months, and the exequatur of a foreign court decision in up to 2 years, from the date of filing the application.

How much does it cost?

The stamp duty for filing an exequatur application is a fixed amount of 20 RON (approximately 4 EUR). The party filing an appeal against the decision of the court of the first instance must also pay a stamp duty of 20 RON. In order to file a final appeal against the decision of the court of appeal (in case of requests for the recognition and enforcement of foreign court decisions), the stamp duty is of 100 RON (approximately 20 EUR).

In addition to the stamp duty, the applicant may incur additional costs for the translation of documents into Romanian, for the legalisation/apostille formalities, as well as legal assistance and representation fees.

In principle, these trial costs are recoverable by the claimant from the losing party, in case the exequatur is granted and the court awards the trial costs further to the claimant’s request. However, the court may reduce the awarded legal assistance and representation fees if it finds them to be disproportionate by reference to the complexity of the case or to the activities performed by the counsel.

3) The simplified procedure under the Regulation no. 1215/2012

As opposed to foreign court decisions issued in a non-EU state, the recognition and enforcement of court decisions issued in a EU Member State does not require undergoing an exequatur procedure, but a simplified procedure, as regulated under Regulation no. 1215/2012.

According thereto, a certificate is issued by the court which rendered the decision in question, which contains information such as (i) a description of the decision, (ii) the mention that the decision is enforceable, and (iii) relevant information regarding the calculation of interest.

In view of enforcing the decision in Romania, no application to the Romanian courts needs to be made. The certificate is submitted with the competent bailiff together with a copy of the decision and the translations into Romanian, as the case may be. The bailiff may then proceed with the forced execution of the decision.

In turn, the person against whom the decision was rendered may request the competent district court to refuse the recognition and enforcement of the decision on the Romanian territory.

4) Grounds for the refusal of the recognition and enforcement

The recognition and enforcement of a foreign judgment or award may be refused only based on limited grounds that are expressly provided in the applicable legal framework.

The grounds for refusal mainly concern (i) the breach of the public order, (ii) the breach of the right to a defence, (iii) problems regarding the jurisdiction or the constitution of the court or arbitral tribunal which rendered the decision, or (iv) the lack of the final or binding nature of the decision. These overarching grounds are common among the regimes regulated by the CPC, the Regulation no. 1215/2012 and the New York Convention. Nonetheless, there are certain additional grounds for refusal which pertain to only one or two of the regimes. For example:

• When the CPC is applicable, the recognition and enforcement is refused (i) if the foreign court judgment was obtained exclusively in order to elude the applicable law according to the Romanian private international law, or (ii) if the dispute was settled between the same parties through a decision (even non-binding) of the Romanian courts, or it is pending before the Romanian courts at the date of the initial request to the foreign court;
• When the CPC or the Regulation no. 1215/2012 is applicable, the recognition and enforcement is also refused if the judgment is irreconcilable with a judgment previously rendered beforehand between the same parties;
• In case of foreign arbitral awards, the recognition and enforcement may be refused on the grounds of irregularities pertaining to the arbitration agreement (for example, if the parties did not have the legal capacity to enter into such agreement, or if the arbitration agreement is invalid according to the rules applicable to it).

We note that even the common grounds for refusal may be different depending on the type of decision subject to recognition and enforcement. For example, in what concerns the ground for refusal for breach of the public order, there are certain nuances in the legal provisions which suggest different conditions for the refusal of the recognition and enforcement of foreign court judgments than those for the refusal of the exequatur of foreign arbitral awards or those for the refusal of the recognition and enforcement of EU court judgments:

• 1097 (1) a) CPC provides that the recognition and enforcement of a foreign court judgment (outside of the EU) may be refused if it is “manifestly contrary to the public order of Romanian international private law”;
• 45 (1) (a) of the Regulation no. 1215/2012 provides that the recognition and enforcement (of a court judgment issued by an EU Member State) shall be refused “if such recognition is manifestly contrary to public policy (ordre public) in the Member State addressed”;
• 1125 CPC provides that foreign arbitral awards may be recognised and enforced in Romania if the award “does not contain provisions contrary to the public order of Romanian international private law”.

5) The recognition and enforcement of decisions ordering interim measures

The Romanian law has different approaches when it comes to the recognition and enforcement of decisions ordering interim measures, depending on the type of decision:

• The CPC does not allow the enforcement on the Romanian territory of foreign court judgments (outside of the EU) ordering interim measures and those which may be enforced only provisionally;
• The enforcement of provisional and protective measures contained in a court judgment issued in a EU Member State is allowed in Romania by virtue of art. 35 of the Regulation no. 1215/2012, unless the judgment containing the measure was not served on the defendant prior to enforcement;
• Interim measures ordered by the arbitral tribunal through an “award” (as opposed to an order) could (in theory) be enforced in Romania following an exequatur procedure, only if the court interprets the decision so as to fall under the meaning of “arbitral award” for the purposes of art. 1124 CPC “any internal or international arbitral award rendered in a foreign state and which is not considered a national decision in Romania”;

Conversely, interim measures contained in a procedural order issued by the arbitral tribunal or those ordered by the emergency arbitrator before the constitution of the arbitral tribunal may only be enforced voluntarily in Romania, and are not subject to forced execution.

6) Enforcing the judgment or award after its recognition and enforcement was granted

If the judgment or award is not complied with voluntarily even after its recognition and enforcement on the Romanian territory was granted, the creditor may commence forced execution proceedings of the debtor’s assets, in accordance to the provisions regulated by the CPC.

The creditor must submit a request for the forced execution with the competent bailiff, together with the judgment/award (accompanied by the relevant translation and legalisation, as the case may be) and the final decision in the exequatur (as the case may be).

Shortly after registering the request, the bailiff shall request the competent court to grant the forced execution of the judgment/award. The procedure is different from the exequatur (which needs to be completed before the commencement of the forced execution), and the court may only reject the request for forced execution for limited grounds expressly provided by the CPC.

The forced execution may be done through any of the means provided by the law until the fulfilment of the right granted through the judgment/award, such as the:

• seizure of movable assets – whereby the debtor’s movable assets in the possession of the debtor itself or of third parties may be executed;
• seizure of immovable assets – whereby the debtor’s immovable assets may be executed in order to satisfy the creditor’s rights;
• garnishment – for the execution of amounts of money, securities or other intangible seizable assets owed to the debtor or held on its behalf by a third party or which the third party will owe to the debtor in the future based on existing agreements.

In turn, the debtor may file a challenge against any act or deed in the forced execution proceedings, at the competent enforcement court.

In case the foreign judgment or award which formed the basis of the forced execution proceedings is annulled, the forced execution proceedings come to an end, and, in case the enforcement was concluded, the debtor shall have the right to the reversal of the forced execution, so as the initial situation is reestablished.

7) Brief remarks on the recognition and enforcement of other types of enforcement deeds

Certain enforcement deeds are recognised and enforced in Romania without the need for a declaration of enforceability and without any possibility of opposing its recognition. It is the case of the enforcement deeds originating in an EU Member State, and which may be qualified as an European Enforcement Order within the meaning of the Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims (“Regulation no. 805/2004”). Art. 636 CPC expressly exempts European Enforcement Orders from any formalities for the purposes of their enforcement on the Romanian territory.

Such enforcement deeds are (i) court judgments, (ii) court settlements and (iii) authentic instruments, provided that the claims are uncontested. Within the meaning of the Regulation no. 805/2004, a claim is regarded as uncontested if:

• the debtor has expressly agreed to it by admission or by means of a settlement which has been approved by a court or concluded before a court in the course of proceedings; or
• the debtor has never objected to it, in compliance with the relevant procedural requirements under the law of the Member State of origin, in the course of the court proceedings; or
• the debtor has not appeared or been represented at a court hearing regarding that claim after having initially objected to the claim in the course of the court proceedings, provided that such conduct amounts to a tacit admission of the claim or of the facts alleged by the creditor under the law of the Member State of origin; or
• the debtor has expressly agreed to it in an authentic instrument.

The Regulation no. 1215/2012 also provides that authentic instruments and court settlements which are enforceable in the Member State of origin may also be enforced in the other Member States without the need for a declaration of enforceability. In Romania, the recognition and enforcement may only be refused on grounds of the document being manifestly contrary to the Romanian public policy.

The enforcement is done based on a certificate issued by the competent court or authority in the Member State of origin, which shall contain a summary of the enforceable obligation or of the parties’ agreement contained in the court settlement. In Romania, the court of first instance at the place where the act was issued is the authority empowered to issue such certificates, in order for the deeds to be enforced in another Member State.