Romanian Court clarifies who can administer institutional arbitration in Romania

What is the significance of the Court’s decision? 

The decision of Romania's High Court of Cassation and Justice (Court) is the most notable and significant development concerning arbitration in Romania in recent years. In essence, the Court has established that non-governmental organizations of public interest (NGOs) may administer institutional arbitration in Romania only if authorized by law to do so. Since the New Civil Procedure Code (Code) entered into force in 2013 and included a definition of institutional arbitration, the case law on who could administer arbitrations has been inconsistent. These conflicting approaches needed uniformity.

What was the reason for the court’s decision? 

In Romania, chambers of commerce and professional associations have historically conducted arbitration pursuant to specific legislation.

In line with this precedent, the prosecutor general of Romania argued that institutional arbitration requires legislative backing to ensure both impartiality and the preservation of this form of alternative dispute resolution. The crux of the argument was that parties who choose institutional arbitration as a recognized alternative jurisdiction to state courts must have the certainty that fundamental principles of law are respected.

To the Court, this can only be achieved with explicit state authorization. As the Court held, this was in fact the legislator’s intention in including a definition of institutional arbitration. Rather than bring any changes to the arbitration landscape in Romania, the definition in the Code turned the historical pattern of institutional arbitration into the letter of law.

What are the implications of this decision for arbitration in Romania? 

The Court’s decision reinforces the framework for arbitration in Romania, making it clear that institutional arbitration is reserved for bodies legally established with a “public purpose” and “legislative mandate”. It sets a high standard to be met by arbitral institutions, and brings needed clarity to the legal framework in which they operate.

The Court’s approach mirrors global trends where only authorized, independent bodies manage institutional arbitration to prevent conflicts of interest and maintain consistency. It also supports Romania’s standing as a reliable venue for arbitration, committed to maintaining high standards. This should reassure both local and international parties that arbitration here is impartial, regulated, and aligned with global expectations for alternative dispute resolution.

Are Romanian parties still able to agree on the application of the SCC Rules?  

Absolutely, the Court’s decision does not apply to international or foreign arbitral institutions, and certainly shall not apply to established and respected arbitral institutions such as the SCC. As a neutral and impartial organization, the SCC can and does administer cases involving parties from Romania. Indeed, the SCC observes an increasing number of Romanian parties in the previous five years.