The action for setting aside (annulment) represents the only legal remedy available against a Romanian arbitral award. It is partially similar in content and effect to a second (cassation) appeal in judicial proceedings. The legal nature of this remedy stems from the final nature of the arbitral award, which cannot be appealed and is enforceable. However, the action for annulment has its own particularities, determined by its specific legal grounds.

Legal Framework

The procedure of setting aside of arbitral awards is regulated by Art. 608–613 of the Romanian Civil Procedure Code (“CPC”). According to these provisions, the party dissatisfied with a Romanian (domestic) arbitral award may request its annulment before the court of appeal in the jurisdiction where the arbitration took place, generally within one month from the service of the arbitral award.

Grounds for Setting Aside of Arbitral Awards

The grounds for setting aside of arbitral awards are exhaustively listed under Art. 608 CPC:
a) the dispute could not have been resolved through arbitration;
b) the arbitral tribunal ruled on the dispute without a valid arbitration agreement or under a null or ineffective arbitration agreement;
c) the arbitral tribunal was not constituted in accordance with the arbitration agreement;
d) a party was absent at the hearing on the merits, and the service of summons was not lawfully carried out;
e) the award was rendered after the lapse of time of the arbitration term provided by Art. 567 CPC, even though at least one party declared its intention to invoke the lapse of time and the parties did not agree to continue the proceedings pursuant to Art. 568 (1) and (2) CPC;
f) the arbitral tribunal ruled on matters not requested or granted more than was requested;
g) the arbitral award lacks a dispositive section and reasoning, does not indicate the date and place of issuance, or is not signed by the arbitrators;
h) the arbitral award breaches public order, morality, or mandatory legal provisions;
i) after the arbitral award was issued, the Romanian Constitutional Court ruled on a constitutional challenge raised in the case, declaring unconstitutional the law, ordinance, or a provision thereof that was subject to the challenge, or other provisions from the challenged act that are necessarily and evidently inseparable from the cited provisions.

Limitations on the Grounds for Setting Aside

According to Art. 608 (2) CPC, irregularities that were not raised in accordance with Art. 592 (1) and (3) or that may be remedied under Art. 604 CPC may no longer be invoked as grounds for annulment of the arbitral award.

For example, under Art. 592(1) CPC, any objection regarding the existence or validity of the arbitration agreement, the constitution of the arbitral tribunal, the scope of the arbitrators’ mandate, and the conduct of the proceedings must be raised by the first hearing to which the party was legally summoned, otherwise will be implicitly waived and may not be raised at the annulment stage.

Similarly, Art. 592(3) CPC states that any procedural irregularity is deemed waived if not raised at the time it occurred or, if the party was absent then, at the next hearing at which it was present or legally summoned, and in any case before the merits are heard.

Art. 604 (2) CPC provides that if the arbitral tribunal omitted to rule on a head of claim, a party may request the tribunal to supplement the award. Such an omission does not constitute a ground for setting aside the arbitral award.

With regard to the evidence, Art. 608 (3) CPC allows only the production of documentary evidence to prove the grounds for annulment.

Waiver of the Right to bring an Action for Setting Aside

According to Art. 609 CPC, parties cannot waive, via the arbitration agreement, their right to bring an action for annulment of the arbitral award. However, such waiver is possible after the award has been rendered.

Time Limit for Filing an Action for Setting Aside

Under Art. 611(1) CPC, the action for annulment must be filed within one month from the service of the arbitral award. If a request for clarification, correction, or supplementation of the award was filled (under Art. 604 CPC), the time limit runs from the service of the decision resolving that request for clarification, correction, or supplementation of the arbitral award.

Exceptionally, for the reason stated in Art. 608(1) (i) CPC, Art. 611(2) CPC provides a special three-month period starting from the publication of the Constitutional Court’s decision in the Official Gazette of Romania, Part I.

Suspension of Enforcement of the Arbitral Award

According to Art. 612 CPC, the court of appeal may suspend the enforcement of the arbitral award challenged with an action for setting aside. The provisions of Art. 484(2)–(5) and (7) CPC shall apply accordingly.

The request for suspension is subject to a court fee of RON 50, according to Art. 10(1)(b) of Government Emergency Ordinance no. 80/2013. It must also be accompanied by proof of deposit of a bond, calculated according to Art. 719 CPC.

The suspension request is adjudicated in judges’ chambers, with summons of the parties, by the same judge who hears the annulment case on the merits. If the suspension request is filed separately and before the case is assigned to a judge, it is resolved by a randomly assigned judge designated specifically for that request. The single-judge panel, just like for the annulment action, must rule within 48 hours of the hearing by a reasoned, final decision.

Pursuant to Art. 612 CPC and Art. 484 (7) CPC, the court of appeal may revoke the suspension of enforcement for good cause.

Ruling on the Application to Set Aside

Under Art. 613 (1) CPC, the court of appeal rules on the application to set aside in the panel provided by law for first-instance hearings (one judge panel).

According to Art. 613 (2) CPC, a statement of defence is mandatory, and Art. 205–208 CPC (re. general provisions on the statement of defence in civil court cases) apply accordingly.

The court of appeal may either reject the annulment action (i.e. as unfounded etc.) and maintain the arbitral award, or either grant the annulment and set aside the arbitral award. In the latter case, under Art. 613 (2) CPC the court of appeal:

• in the cases set out in Art. 608(1) (a), (b), and (e) CPC, will remit the case to the court competent under the law;

• in the other cases provided under Art. 608(1) CPC, will remit the case for rehearing to the arbitral tribunal if at least one of the parties expressly requests this.

If such a request is not made and the case is ready for judgment, the court of appeal will decide the case on the merits, within the limits of the arbitration agreement. If new evidence is required to resolve the merits, the court will rule after administering it. In such a case, the court will first issue the annulment decision and subsequently the ruling on the merits. If the parties have expressly agreed that the dispute be resolved by the arbitral tribunal ex aequo et bono (in equity), the court of appeal will also rule in equity.

According to Art. 613(4) CPC, the court of appeal’s judgment on the action for annulment is subject to cassation (second appeal).

Conclusion

The regulation of setting aside of arbitral awards in the CPC aims to strike a balance between respecting the final nature of arbitration and ensuring a minimal judicial review over the legality of the procedure and the content of the arbitral award. The grounds for annulment are exhaustively and strictly defined, addressing serious violations of the rules governing arbitral proceedings, public order, morality, or mandatory legal provisions. The procedure is a special one, handled by courts of appeal, under clear rules regarding jurisdiction, admissible evidence, and the consequences of upholding the claim. Thus, the legal framework offers both protection against potential errors made by arbitral tribunals and predictability and stability for arbitration as an efficient alternative to state court jurisdiction.