Thought Articles

Reproduced with permission from Law Business Research Ltd. This article was first published in The Dispute Resolution Review. Fourth Edition (published in April 2012 – editor Richard Clark). The legal highlight of the year is the entry into force, on 1 October, of the New Civil Code, an ample and systemic overhaul of all aspects of substantive civil law. Although a new Civil Procedure Code is yet to come into force, the enactment of the New Civil Code has already impacted Romanian dispute resolution procedures on a number of counts. Firstly, the New Civil Code has introduced rules that allow for new types of claims to be filed with Romanian courts. The new Civil Code regulates for the first time certain institutions (such as trusts and time-share ownerships, or the parties’ permission to set prescription terms for their obligations within certain limits), removes previous interdictions (for instance, it permits the sale with repurchase option) or changes the effects of certain legal actions (such as recognising land book registration as a constitutive rather than a publicity effect). All these novelties and modifications create new legal grounds for claims in court, and will increase the number, variety and complexity of cases. Secondly, by repealing a long-standing distinction between civil and commercial matters, a pinnacle of the former legislation, the New Civil Code called forth several changes in court jurisdiction. While previously jurisdiction over a certain civil or commercial claim was allocated to either the district court or the tribunal by reference to the value of the claim, two different thresholds being set respectively for civil commercial claims, now the distinction between commercial and civil matters has been removed. A single 500,000 lei threshold has been set for all civil cases; all claims under this value fall in the jurisdiction of district courts, while all claims over this value are to be settled by tribunals. In addition, in terms of territorial jurisdiction, courts may no longer retain jurisdiction by reference to the place where a commercial debt was created or where payment was to be performed. A third consequence of the amendment is that the new Civil Code has fundamentally altered the structure of Romanian courts by eliminating a prior separation into commercial and civil divisions within the civil jurisdiction; rather, specialised panels within the unified divisions will rule upon various categories of civil cases.

Reproduced with permission from GamblingCompliance Ltd. This article is also available on www.gamblingcompliance.com The Romanian government recently passed Government Decision No. 823/2011 which amends and supplements the functioning of Government Emergency Ordinance No. 77/2009 on the organisation of gambling activities - the primary piece of legislation for the sector. This new enactment had a particular focus on the online gambling market and has introduced, for the first time, conditions for the licensing of online gambling operators and for the organisation of online gambling activities.

In line with the massive development of the worldwide real estate industry, which reached its peak in 2008, the Romanian real estate market witnessed a period of significant change and achievement. The residential, office and retail sectors have rapidly developed and in less than a decade Romania’s real estate environment has substantially changed. At that time Romania became a very dynamic and attractive market for real estate investors, and foreign investments in this sector continued to grow, especially after it was announced that the country would join the EU in January 2007. The standard income tax rate of 16%, which was introduced in 2005, proved to be another valuable incentive worldwide for foreign investments, and a boost for real estate. Nevertheless, the worldwide financial crisis of the last few years has inevitably impacted on Romania’s development and left a mark on the main economic drivers, such as the real estate market.The new restrictive financing conditions, both at the level of real estate developers and end consumers, have limited investors’ ability to complete ongoing projects for developing new ones, as well as reducing the end consumers’ appetite to buy, especially in the residential sector. As a consequence, we have witnessed a significant shrinkage of investments in general, and for those in real estate in particular. However, since late 2009, the country’s economic cycle has stabilised and at present it seems to be slowly but constantly showing signs of future ascent.

Reproduced with permission from Law Business Research Ltd. This article was first published in The Corporate Governance Review, (published in June 2011 – editor Willem J L Calkoen). The Companies Law No. 31/1990, republished in 2004 and further amended and completed (‘the Companies Law’) and the Capital Market Law No. 297/2004, as further amended and completed (‘the Capital Market Law’) represent the primary sources of law relating to the corporate governance of listed companies in Romania. In addition, as an independent agency the securities regulator, National Securities Commission (‘CNVM’), may issue legally binding regulations. The Bucharest Stock Exchange (‘BSE’), historically Romania’s most important regulated market, has adopted the Corporate Governance Code, which sets forth the principles and recommendations for the corporate governance of companies listed on the BSE. The Code is inspired by the OECD Principles of Corporate Governance. The Code may be voluntarily adopted by the companies listed on the BSE. According to BSE Corporate Governance Code, however, the shares of a listed company may be maintained on the market’s Tier I subject to the issuer’s statement that it has observed at least 14 of the 19 principles of the Code in the last calendar year. Also, the shares of a listed company may be promoted from the market’s Tier II to Tier I subject to a similar statement (i.e., among other requirements). Currently, there are 25 listed companies whose shares are ranked in Tier I out of the 75 domestic companies listed on the BSE.

Reproduced with permission from Law Business Research. This article was first published in The Restructuring Review, (published in May 2011 – editor Richard Clark). Disputes in Romania are settled in court in the vast majority of cases, under procedures regulated mainly by the Civil Procedure Code (‘the CPC’). The CPC has been recently amended by Law No. 202/2010 (the ‘Little Reform Law’), a law expressly designed to introduce elements of procedural celerity in advance to the new Civil Procedure Code, which will replace the CPC entirely on 15 July 2011. The commentary infra takes into consideration the procedures as currently in force. A brief outline of the main amendments to be brought by new Civil Procedure Code will be included in the last section. In advance to the 2011 entry into force of its new Civil Procedure Code, Romania undertook a partial reform of the CPC via the Little Reform Law, which adopts a set of amendments aimed at accommodating heavy ECHR critiques regarding the duration of trials and the enforceability of judgments. As expressly stated in its Statement of Reasons, the law is designed to limit the ways in which trial timeframes are most commonly extended in current practice, by putting forward a series of measures prescribed by the new Civil Procedure Code: (1) the possibility of superior courts to approve a restart of proceedings has been limited; (2) intervals between hearings have been shortened, with courts having the option to hear a given case on successive days; and (3) the law approves service of documents by fax, e-mail and telephone to increase the celerity of proceedings.

Reproduced with permission from The Journal of World Energy Law & Business. The article first appeared in April 2011, with contributions from Sean Rush, Partner, Memery Crystal LLP, London; Cornel Popa, Partner, Țuca Zbârcea & Asociații; Andreea Lisievici, Senior Associate, Țuca Zbârcea & Asociații. Romania is an attractive destination for oil and gas production. The country has a long history of oil development and is in an excellent location in terms of access to infrastructure and markets. We briefly outline below the legal regime governing petroleum exploitation in Romania. Modern petroleum exploitation in Romania began in 1857 when the first commercial well was drilled. In that year, Romania also became the first country officially registered in international statistics as having oil production of 250 tonnes. Oil production in Romania grew rapidly and by 1900 Romania was the third largest oil producer in the world with an annual production of 1.9 million barrels. It also became the first country in the world to export gasoline.