In a recent international arbitration, the lawyers of Oglinda&Partners successfully represented their client achieving the admission of the request for arbitration against a company in top 5 world’s tobacco producers. The arbitral tribunal ordered the tobacco producer to pay delay penalties of 3.5 million lei.

Also, the team of Mr. Eugen Sarbu (Partner) and Mrs. Ana-Maria Damian (Senior Associate) persuaded the tribunal to dismiss  Respondent’s defence on reduction of the penalty clause, showing that Romanian contractual law provides limited situations  for the reduction of a penalty clause, which applies only by exception, under clear conditions which were not fulfilled in this case.

Following the reasoning proposed by Oglinda&Partners, the arbitral tribunal ruled that a higher penalty clause is justified taking into account the characteristics of the market on which the two contractual partners operate, especially the fact that the performance of the contract requires the contractor to pay large amounts in short periods of time. This justifies the high penalty agreed by the parties in order to ensure the contractor’s cash flow.

The arbitral tribunal also rejected the Respondent’s view that the penalty was manifestly excessive in relation to the damage that could be foreseen by the parties at the conclusion of the contract. The tribunal decided the parties had predictability over the accepted contractual terms because they usually act as contractors on this market and during negotiations of the contract both parties had counsels specialised on legal, fiscal and economic aspects.

This is another success that proves the experience and thorough legal training of Oglinda&Partners lawyers, qualities that made Oglinda&Partners a traditional leading law firm in international arbitration in Romania. Its lawyers specialized in Romanian arbitration coordinated the first emergency arbitrator procedure in Romania and in the last 20 years they were involved as lawyers or arbitrators in more than 300 arbitration cases in front of Romanian and foreign arbitral institutions like the ICC, VIAC, LCIA, SCC, SHAC or Eastern Europe Courts of Arbitration, covering a wide range of sectors and industries.