ROMANIA: An Introduction to Dispute Resolution
Romania continues to be one of the most dynamic dispute-resolution markets, reflected in an increase in energy disputes and an ever-increasing number of construction cases.
In the era of technology, constant change and corresponding adaptation remain key. In Romania, legal practitioners have rapidly adapted to make use of the progress brought by the latest technologies, including AI, by seeking to develop the best tools to enhance efficiency.
With the spillover effects of the unceasing armed conflict affecting Romania’s vicinity and wide-ranging sanctions against Russia raising concerns over Europe’s energy resources and reserves, all exacerbated by the most recent political turmoil stirred up under the MAGA era, all eyes are on Romania. Romania’s energy sector continued to advance significantly over the past year, with OMV Petrom and Romgaz progressing the development of the two offshore gas fields in the Neptun Deep area, a project which will become operational in 2026 and is expected to produce a staggering 100 billion cubic metres of natural gas, making the European Union’s largest gas producer.
Arbitration in Romania
Romania’s arbitral institutions align with international standards, adopting AI and new technologies to improve efficiency. As a result, businesses increasingly prefer arbitration over litigation for its adaptability and speed.
The Court for International Commercial Arbitration (CICA) in Bucharest follows rules aligned with the International Court of Arbitration (ICC), ensuring flexibility and efficiency while avoiding court formalities. Romanian parties are also involved in cases before the ICC, the Vienna International Arbitral Centre (VIAC), the London Court of International Arbitration (LCIA), the SCC Arbitration Institute (SCC), and the German and Italian arbitration institutions, particularly for German and Italian investors.
Romania is a party to 23 ICSID (International Centre for Settlement of Investor Disputes) disputes, with eight cases still pending. The most recent claim, filed in early 2024, stems from Euroins Romania’s bankruptcy under the Bulgaria-Romania Bilateral Investment Treaty. Romania also secured a major victory in 2024 in the Rosia Montana mining dispute, avoiding potential USD6.5 billion in damages.
General Trends in Dispute Resolution
As the economy stabilises, disputes reflect a return to normal business activity. However, the post-pandemic political climate, the Ukraine conflict, and Russia sanctions have driven up energy and contractual disputes, putting pressure on businesses.
Despite this, investments in real estate and infrastructure remain strong. Public procurement disputes continue, prompting legislative changes aimed at streamlining Romania’s tendering system, particularly for EU-funded projects under the National Resilience and Recovery Plan (NRRP). Delays in public procurement litigation have led the government to introduce faster procedures and to reduce formalities to meet funding deadlines.
A key development has been the impact of the EU Foreign Subsidies Regulation (FSR) on major infrastructure tenders in Romania. The FSR requires the disclosure of foreign financial contributions, affecting Turkish and Chinese contractors competing for EU-funded projects.
In the renewable energy sector, Romania has simplified permitting procedures to accelerate renewable electricity capacity expansion and meet 2030 energy targets.
Another major shift is the introduction of representative actions for consumer disputes, transposing EU Directive 2020/1828. This change is expected to make litigation faster and more cost-effective, particularly against large companies, addressing inconsistencies in previous court rulings.
Investments – the Romanian FDI Screening Regime
The end of 2024 saw further clarifications to Romania’s FDI screening framework as authorities continued to fine-tune the legislation introduced in previous years. Following the significant changes implemented in late 2023 to align with the ECN+ Directive (Directive (EU) 2019/1), the Romanian government has maintained its cautious stance in assessing and reviewing investments with local relevance.
The previous wording in the Foreign Direct Investment (FDI) Law dealing with EU investors was fairly ambiguous, and led to many debates and uncertainty in the market. The scope of screening has now been improved, with it being made clear that EU investors (including Romanian investors) fall under the scope of FDI screening. At the same time, and in line with the authorities’ position that screening would not be too much of a burden for investors, the latest FDI amendment hints towards an expedited process for EU investors. In terms of sanctions, the government may decide to cancel an investment made in breach of the FDI legislation and restore the status quo before implementation.
To further refine the screening process, the Romanian legislator clarified key concepts related to "gun-jumping" (ie, implementing a transaction before obtaining the necessary approvals) and harmonised sanctions for non-compliance across both EU and non-EU investors. The law aims to create a level playing field, ensuring that all investors are equally accountable under the FDI framework.
Romania’s National Recovery and Resilience Plan (NRRP)
As of December 2024, Romania’s National Recovery and Resilience Plan (NRRP) continues to advance its comprehensive reform and investment agenda, structured across 17 thematic components. Following the approval of the revised plan in December 2023, which introduced the REPowerEU chapter, Romania has been actively implementing measures to enhance energy independence and efficiency.
In December 2024, the Ministry of European Investments and Projects initiated several calls for proposals under the REPowerEU chapter. These initiatives mainly focus on promoting renewable energy adoption and improving energy efficiency among various beneficiaries.
In financial terms, the NRRP’s total allocation stands at EUR28.5 billion, comprising EUR13.6 billion in grants and EUR14.9 billion in loans. This adjustment reflects a EUR2.1 billion reduction in grants due to Romania’s stronger-than-expected economic growth in 2022.
However, despite the ambitious scope of the NRRP, concerns have been raised regarding the pace of fund absorption and project execution. As of late 2024, only 47% of the available funds have been disbursed, prompting discussions about potential extensions and the need for enhanced coordination to meet the August 2026 completion deadline for all milestones and targets.
The NRRP remains a pivotal instrument for Romania’s economic recovery and resilience, aiming to modernise infrastructure, promote sustainable energy, and strengthen social cohesion. Ongoing efforts are focused on accelerating project implementation to fully capitalise on the opportunities presented by this significant financial package.
Recent Economic Developments
Romania’s economic growth slowed to 2.1% in 2023 due to high inflation and weak external demand, according to The World Bank (April 2024). Growth rebounded in 2024, driven by private consumption and EU-funded investments, with construction as the main driver despite slowing residential activity. Industry contracted for a second year due to high production costs in energy-intensive sectors.
Medium-term growth depends on external shocks, including the Ukraine conflict, fiscal challenges, and the 2024 elections. Efficient EU fund absorption will be key to ensuring a sustainable, green, and inclusive recovery amid high interest rates and uncertainty.
Critical Developments in International Arbitration – Bucharest Arbitration Days 2024
The fifth edition of Bucharest Arbitration Days (BARD) gathered over 200 delegates and 40+ speakers from 12 countries, reinforcing Bucharest’s role as an emerging arbitration hub. The 2024 conference focused on legitimacy concerns in international arbitration.
A major theme was foreign investment disputes, particularly in the context of regulatory shifts driven by clean energy transitions and climate commitments.
Notable speakers included Professor Julian DM Lew KC (Twenty Essex, London), Professor Maria Chiara Malaguti (UNIDROIT President), Julie Bedard (Skadden), Jonathan Wood (CIArb President), and Professor Eduardo Silva Romero (Wordstone Dispute Resolution).
What the Future Holds
The coming year brings both challenges and opportunities as the world adapts to a new reality amid ongoing conflicts. Businesses and their legal advisers must seize opportunities and choose the right dispute resolution mechanisms to navigate this landscape effectively.