The legal system

08.02.2013 ZF English

Broadly, the Romanian legal system stems from the Roman branch of law, but it is also partly influenced by the Anglo-Saxon branch. Romanian legislation has mostly been brought into line with EU law, as part of the EU accession procedure.

The Constitution

The Romanian Constitution took effect in December 1991 and was revised in 2003, in preparation for EU accession. The Constitution provides strong support for the fundamental principles of private property and free market exchange, as well as explicit limitation and control of powers vested in public authorities.

The amendments made in 2003 include the guarantee of private property as well as recognition of the rights of foreign citizens and stateless persons to privately own land in Romania under certain conditions, as well as by way of lawful inheritance.

Citizens' rights and duties set out in the Constitution are generally typical of those applying in democratic countries, such as freedom of speech, freedom of religion and movement as well as protection against arbitrary arrest and imprisonment. The Constitution states that citizens of national minorities with a significant population in local administrative units are entitled, under special circumstances, to use their mother tongue in their relations with local public administration authorities and local public service providers. The constitutionality of parliamentary legislation (i.e. laws, parliamentary regulations and government ordinances) and international treaties and/or agreements is subject to control by the Constitutional Court.

Body of Laws

1. Civil Law

The New Civil Code came into force on 1 October 2011, replacing the former code that was adopted in 1864, based on Napoleon’s Civil Code of 1804. The current Civil Code is based on multiple sources of inspiration from many systems of law, e.g., civil codes of France, Italy, Quebec, Switzerland. The New Civil Code regulates for the first time certain institutions, such as trusts, parties’ permission to set prescription terms for their obligations, etc., and modifies the effects of certain legal actions.

The New Civil Code repeals the distinction between civil and commercial matters, encompassing regulations for legal entities insofar as their establishment and operation are concerned along with other important commercial rules.

Romanian law also closely follows the provisions of the Geneva Convention of 1930 with respect to negotiable instruments such as checks, drafts/bills of exchange and promissory notes. Since 1989, Romania has extensively expanded its body of laws concerning civil and commercial matters to ensure greater flexibility in the country’s private law system and to adapt it to the market economy.

Besides the new Civil Code, a new Civil Procedure Code has been adopted, effective as from 15 February 2013. This new code includes significant amendments to the procedural practices regulated by the former code, aiming to improve efficiency and the speed of legal proceedings. Significant amendments include: (i) Amendments to courts’ jurisdiction (ii) Extension of the second/final appeal terms to 30 days, (iii) Compulsory enforcement cases, with the possibility for various categories of creditors, expressly provided under law, to intervene in the relevant procedure initiated by another creditor (iv) Mandatory attendance by the parties to several types of civil litigation cases at a meeting before an authorized mediator, to be informed about the advantages of settling the dispute by resorting to mediation, etc.

2. Criminal Law

The new Criminal Code (Law 286/2009) creates a more coherent legal framework by avoiding duplication of rules through norms set out under both the current criminal code and the special laws, while transposing the regulations adopted at European Union level into national criminal legislation, thus harmonizing it with the systems existing in other European Union member states. This new Criminal Code is to come into force on 1 February 2014.

The new Criminal Procedural Code, adopted under Law 135/2010 will also come into force on 1 February 2014. Its regulations are intended to reduce the length of trials, simplify criminal judicial procedures, and protect fundamental human rights, observing the principles of fair criminal trial in line with international standards and the requirements of European Court of Human Rights case-law.

Judicial System

According to the Constitution and the Civil Procedure Code, the Romanian judicial system comprises: local courts (judecatorii), tribunals (tribunale), courts of appeal (curti de apel) and the High Court of Cassation and Justice.  Local courts and tribunals act in first instances depending on the type and value of the dispute, while the courts of appeal judge first or final appeals. The High Court of Cassation and Justice is Romania’s supreme court. It deals with second appeals, as well as having a relevant role in interpreting the unitary application of legislation at national level.

The Court of Accounts (Curtea de Conturi) is the supreme financial regulatory institution in the field of public finance. It performs its functions independently, under the supervision of the Romanian Parliament. The main duty of the Court of Accounts is to verify the creation, administration and use of the financial resources of the State and the public sector. Currently, this institution does not have any jurisdictional role.

Commercial Arbitration

Romania is a signatory party to the New York Convention of 1958 on the recognition and enforcement of foreign arbitration awards. The International Commercial Arbitration Court functions in Bucharest and applies rules similar to the Arbitration Rules or rules agreed by the litigating parties. Arbitration in Romania is regulated by the new Civil Procedure Code. The new provisions are better adjusted to the current requirements on arbitration initiation and organization, imposed by European Union legislation.

Recognition and enforcement of foreign courts’ decisions

Since Romania’s accession to the European Union on 1 January 2007, the recognition and enforcement of foreign judgments depends on whether they have been made inside or outside the European Union.

Judgments given in civil and commercial matters in another EU member state are recognized in Romania in accordance with Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters as well as Council Regulation 805/2004 creating a European enforcement order for uncontested claims. A judgment made in an EU Member State, enforceable in that state is also enforceable in Romania, subject to fulfilment of certain specific procedures.

The procedure for recognition and enforcement of judgments made in a non-EU country is set out under the specific provisions on international private law under the new Civil Code and Civil Procedure Code. Under these legal provisions, Romanian courts may not examine a case or amend foreign awards issued by foreign judicial or arbitration courts. A Romanian court may only verify the fulfilment of the conditions for recognition or enforcement of such awards.

 

Source: KPMG - Investment in Romania report (May 2013)