English News

new arbitration system will radically overhaul the way the capital markets in Romania are regulated

 

 

The Bucharest Stock Exchange (BSE), the operator of the regulated securities market, has set up the Arbitration Court of the Bucharest Stock Exchange (BSEAC).

It is governed by the 2006 procedure rules, which are approved by the regulatory authority, the National Securities Commission.

 

Competence of the BSEAC

The BSEAC is a permanent arbitration body for the settlement of disputes resulting from operations carried out on the regulated markets and the alternative trading system operated by the BSE.

They arbitrate when such disputes arise between:

• participants of the BSE trading system and issuers of financial instruments admitted to trading on the regulated markets operated by the BSE;
• issuers of financial instruments admitted to trading on the regulated markets operated by BSE;
• intermediaries, their agents, their clients and employers, resulting from BSE market operations or operations on different markets.

The competence of the BSEAC is not exclusive. The Court of International Commercial Arbitration, which is attached to the Court of Commerce and Industry of Romania, is a well-known alternative.

 

Arbitration agreement

The parties to a dispute may submit a claim to the BSEAC for arbitration if there is an arbitration clause agreed under the contract existing between such parties; or the parties agree to arbitrate once the dispute has occurred.

The agreement to arbitrate (either in the form of an arbitration clause or a separate agreement) has to be in writing as a condition of validity.

The validity of the arbitration clause is independent of the validity of the contract in which the arbitration clause is included.

 

Arbitral tribunal

The arbitral tribunal has the authority to rule on its own competence to decide the case.

Should there be no contrary provision in the arbitration clause or in the agreement to arbitrate, it is deemed that the parties will accept the procedure rules applicable to the arbitration by the BSEAC.

Disputes submitted to arbitration by the BSEAC are to be heard and decided by a panel of three arbitrators, or by a sole arbitrator, if the parties so agree.

In the case of a three-member panel, each party shall nominate one member of the panel and one replacement from among the persons recorded on the published list of arbitrators of the BSEAC. The two members nominated by the parties shall nominate the third arbitrator, who will also chair the arbitration panel.

Should one of the parties fail to nominate an arbitrator, or the two arbitrators fail to agree on the person to chair the panel, the claimant may request the chairman of the BSE Arbitral court to proceed with the nomination.

The arbitrator may be recused if their independence or impartiality is called into question.

The party that nominated the respective arbitrator may request their recusal only for causes subsequent to their nomination.

 

Arbitration proceedings

The request for arbitration has to be filed in writing, identifying the parties, indicating the arbitration clause or agreement, the subject matter and claimed value. De facto and de jure grounds for each of the claims must also be submitted, along with documents and evidence in support, and details of the nominated arbitrator.

The respondent has a 30-day term to submit a statement of defence. Any counter-claims may be filed either with the statement of defence or separately, up until the first hearing of the case.

Once the arbitral tribunal is constituted, the file shall be transmitted to the tribunal (or the sole arbitrator).

Any motion regarding the existence or validity of the arbitration agreement, the constitution of the tribunal, the limits of the arbitrators’ competence or the proceedings, may be raised until the first hearing, unless a shorter term has been set by the tribunal. In addition, any written evidence must be submitted by the date of the hearing.

 

Arbitral decision

The arbitral tribunal has to pass its decision within five months of being selected, unless the parties involved have agreed otherwise.

The tribunal’s decision should be based on the main contract, the relevant legal provision, and the prevailing commercial practice. Should the parties expressly agree, the arbitral tribunal may resolve the dispute on the basis of ex aequo et bono — in other words, what is fair and equitable in the case at hand.

The arbitral decision communicated to the parties has the effect of a final court judgment.

The decision may be challenged in court on the basis of several grounds strictly provided by the law. These grounds include scenarios in which the dispute should not have been resolved through arbitration (only private law matters may be submitted to arbitration), and where the arbitral tribunal has decided on the case in the absence of an arbitration clause.

The parties may not waive their right to challenge the arbitral decision until after it has been passed.

Cristina Metea is a partner with Tuca Zbarcea & Asociatii

http://www.legalweek.com/Navigation/32/Articles/1165586/Romania+Stock+standard.html.

Romania president Traian Basescu said on Thursday that the situation of the industry looks less critical than its image would suggest. „As far as I’ve seen, Romanian industry doesn’t look like being in very difficult situation”, said Basescu, adding that the Government should intervene though, in

 

order to help producers find their market. After visiting the train car producing company SC Astra Vagoane Arad, president Basescu said that he met „various employers’ associations”, but that the discussions he had with their officials didn’t help much in constructing a general image of the situation, because „they discuss general matters, such as fiscal conditions”. „I already knew that decreasing the social contribution rate may help a company”, said Basescu.

The head of state used Azomures as example: „There’s no use to decrease the Health contribution 2% for such a company, if no one will order fertilizer in January. The tax level has nothing to do with the workers being sent home, on temporary unemployment”.

http://www.hotnews.ro/stiri-business-5173946-president-basescu-far-ive-seen-romanian-industry-doesnt-look-like-being-very-difficult-situation.htm

Due to a decrease in demand for new apartments, real estate developers are doing their best to get some benefits from their investments by renting the new apartments in residential locations. Several real estate developers across Romania, in Bucharest, Ploiesti, Oradea Constanta or Cluj seek to rent

 

the apartments or houses built in order to return some profits.Real estate companies’ representatives declared that there are four options a client can choose from: thus, he can have a credit without offering any advance payments, a credit with an advance, renting with an option to buy later and simply renting

 

http://english.hotnews.ro/stiri-business-5218346-crisis-solution-real-estate-developers-rent-new-apartments-bucharest-ploiesti-oradea-constanta-and-cluj.htm

 The volume of construction works increased 21.9% during the first ten months of the year, compared to the similar period of 2007. The growth was recorded for all types of constructions, the National Statistics Institute announced on Friday. The volume increased 5% in October, compared to September

 

and 19.1%, compared to October 2007. Compared to the first 10 months in 2007, the growth was 32.8% in non-residential buildings, 28.6% in engineering constructions and 25.4% in residential buildings.

http://english.hotnews.ro/stiri-business-5219822-constructions-sector-grows-29-1-far-2008.htm

Due to the fall of the car market in Romania, Dacia will stop its production starting December 11, 2008 until January 11 2009 in order to reduces its stocks and will also reduce its production rates thereafter. Even though Dacia registered a success in its exports this does not compensate with the

 

general decrease of the car market in Europe, the company informs.Plus, Dacia will revisit its investment budget for 2009 from 250 million euro to 150 million euro. Starting January, Dacia will reduce its production from 1 360 cars to 1085 cars/day. Dacia will also reduce its investment plans for 2009, from 250 million euro to 150 million. Investments targeting the improvement of work conditions and the quality of the products will not be affected. Dacia will also maintain its investments in developing its models.

In Romania, the car market registered a 50% decrease in November 2008 and in the same month, Dacia sold 4698 cars on the internal market, a 52% decrease as compared to the similar month, last year.

http://english.hotnews.ro/stiri-business-5228456-dacia-give-620-its-employees-and-reduces-its-2009-investment-plans-100-million-euro.htm

The American media group Tribune, owning several influent newspapers – such as Los Angeles Times, Chicago Tribune and Baltimore Sun – demanded on Monday protection against bankruptcy, newspapers in the group’s portfolio announced. The reasons are the fast decrease of advertising

 

income and the burdening credits accumulated by the company.
„The move opens the most painful episode yet in a tumultuous period at the company that started when the former owners of the Los Angeles Times, which Tribune Co. acquired in 2000, forced the company to seek a restructuring more than two years ago. That process culminated in Zell taking the company private last December in a debt-laden transaction, which exposed the Chicago Tribune parent, a longtime pillar of the city’s business and civic life, to fierce economic forces it couldn’t weather”, Chicago Tribune explains

http://english.hotnews.ro/stiri-business-5231559-the-tribune-media-group-files-for-bankruptcy-protection.htm

The car pollution tax was tripled on Monday, after the last Governmental ordinance on the issue was published in Monitorul Oficial (The Official Gazette). Starting on Tuesday, all those who need to pay their car tax will do it complying with the new rules.

 

According to the ordinance, cars with engines below 2,000 cubic centimeters registered for the first time in Romania or any other EU states don’t have to pay the tax until December 31, 2009. The car tax does not apply, starting on Tuesday, to hybrid and electrical cars, nor to Euro 5 and Euro 6 standard compliant vehicles

http://english.hotnews.ro/stiri-business-5232314-car-tax-officially-tripled.htm

The number of payments delayed by companies has doubled in November, data gathered by the financial evaluation agency Coface indicate. The trend is considered as a sign of the fact that the financial crisis is deepening in Romania. Most incidents involve companies in the constructions

 

segment, IT and retail distribution. The cash crisis in Romania is confirmed by the increasing number of companies seeing their payment instruments refused by the banks, because of the lack of cash into the accounts, Coface adds. Out of 3,500 companies verified by Coface during the [past two months, 5% were noted as having payment incidents.

Although the situation is of nature to stir concern, Coface adds that a fact even more to worry about is that the list of companies with problems includes names considered as having a good financial situation in 2007.

In October and November, some 2,000 insolvency files were opened

http://english.hotnews.ro/stiri-business-5233206-coface-twice-many-payment-delays-november-crisis-aggravating.htm

The financial crisis will have significant effects for at least two years from now. An increasing number of projects are delayed, the payments between companies are always late, some of the companies would accept to be sold for one Euro, while programmers no longer have the higher stand in

 

negotiations, officials of the National Software and Services Association (ANIS) say. The Romanian IT will lose its 25% growth rate recorded during the past few years. Still, the industry will not fall, but simply reduce its growth pace, ANIS representatives said on Tuesday.

Radu Georgescu, GeCad president and ANIS vice president, believes that all players on the market will be in debt after the following six months. Georgescu was already offered to buy 4-5 companies for one Euro

„Some of the major projects are postponed for better days”, says Georgescu. ANIS officials also fear that the demand decease will lead to lay offs.

http://english.hotnews.ro/stiri-business-5233297-crisis-effects-delayed-projects-lay-offs-cheap-takeovers.htm

Credit Institutions, Romanian legal entities, can be constituted and are able to function only on the basis of an authorization emitted by the Romanian National Bank.
The Romanian National Bank grants the authorization to a credit institution in Romania only if making

 

sure that the respective credit institution is able to insure on-going activity in conditions of safety and respecting the requirements of a prudent and business-healthy administration to insure the protection of the clients and creditors and the well-maintenance of the banking system per the Law’s stipulations.INSURANCE AND INSURANCE BROKERAGE
The Commission of Insurance Supervising is able to grant authorization for the companies activating in the insurance/re-insurance market, in the case of cumulative fulfillment of the following conditions:
a) Procedure to cover all risks in one class of activity and in the situation which the insurance company only wishes to cover certain risks included in the respective class, a feasibility study must be drafted which must contain the following information and documents:

1. The nature of the legal engagements or risks which the insurer wants to cover;
2. The calculations methods used for the establishment of the technical reserves;
3. The principles of the re-insurance program and the lists with the re-insurers per the provisions of the norms emitted for the application of the Law.
4. The components of the Safety Fund, per the legal norms.
5. The financial resources to cover the expenses and resources of the insurer for granting the assistance.
6. The first three financial exercises, the feasibility study which will also contain:
a) The estimation of the expenses afferent to the executive management and to management positions specific to the insurance area;
b) Estimation of bonuses and damages;
c) Budget of income and expenses;
d) Estimation of the financial resources necessary to the constitution of technical reserves and margin of solvency;
7. An information technology system adequate for the optimal insurance activity per the information required at point 1, per the norms regarding the authorization of the insurers, emitted for the application of the Law.
IMPORTANT: For obtaining the authorization to function, as well as at any time during the actual activity, an insurer or a re-insurer must be in working relations with at least one actuary and in the case which the volume of activity requires the employment of 2 or more actuaries.
An insurer cannot be registered in the Romanian Trade Register without the prior permission for the registration from the Insurance Supervision Commission.

COMPANIES WITH ACTIVITIES IN THE ADMINISTRATION OF CNVM
The Law regulates the formations and functioning of the financial instruments market, with the specific institutions and operations as well as the collective placement organisms for the purpose of the mobilization of the financial resources through investment in financial instruments.

IMPORTANT:
The National Commission of Movable Valuables, named C.N.V.M., is the competent authority which applies the provisions of the Law through the prerogatives established in its governing regulations.
 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
and in particular Article 95 thereof,

 

Having regard to the proposal from the Commission, Having regard to the opinion of the European Economic and
Social Committee

Acting in accordance with the procedure laid down in Article 251
of the Treaty (2),
Whereas:

(1) Council Directive 87/102/EEC of 22 December 1986 for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (3) lays down rules at Community level concerning consumer credit agreements.

(2) In 1995, the Commission presented a report on the operation of Directive 87/102/EEC and undertook a broad consultation of the interested parties. In 1997, the Commission presented a summary report of reactions to the 1995 report. A second report was produced in 1996 on the operation of Directive 87/102/EEC.

(3) Those reports and consultations revealed substantial differences between the laws of the various Member States in the field of credit for natural persons in general and consumer credit in particular. An analysis of the national laws transposing Directive 87/102/EEC shows that Member States use a variety of consumer protection mechanisms, in addition to Directive 87/102/EEC, on account of differences in the legal or economic situation at national level.

(4) The de facto and de jure situation resulting from those national differences in some cases leads to distortions of competition among creditors in the Community and creates obstacles to the internal market where Member States have adopted different mandatory provisions more stringent than those provided for in Directive 87/102/EEC. It restricts consumers’ ability to make direct use of the gradually increasing availability of cross-border credit. Those distortions and restrictions may in turn have consequences in terms of the demand for goods and services.

(5) In recent years the types of credit offered to and used by consumers have evolved considerably. New credit instruments have appeared, and their use continues to develop. It is therefore necessary to amend existing provisions and to extend their scope, where appropriate.

(6) In accordance with the Treaty, the internal market comprises an area without internal frontiers in which the free movement of goods and services and freedom of establishment are ensured. The development of a more transparent and efficient credit market within the area without internal frontiers is vital in order to promote the development of cross-border activities.

EUR-LEx

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 61(c) and the second indent of Article 67(5) thereof,

 
Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Economic and Social Committee ,

Acting in accordance with the procedure laid down in Article 251 of the Treaty

 

(1) The Community has set itself the objective of maintaining and developing an area of freedom, security and justice, in which the free movement of persons is ensured. To that end, the Community has to adopt, inter alia, measures in the field of judicial cooperation in civil matters that are necessary for the proper functioning of the internal market.

(2) The principle of access to justice is fundamental and, with a view to facilitating better access to justice, the European Council at its meeting in Tampere on 15 and 16 October 1999 called for alternative, extra-judicial procedures to be created by the Member States.

(3) In May 2000 the Council adopted Conclusions on alternative methods of settling disputes under civil and commercial law, stating that the establishment of basic principles in this area is an essential step towards enabling the appropriate development and operation of extrajudicial procedures for the settlement of disputes in civil and commercial matters so as to simplify and improve access to justice.

(4) In April 2002 the Commission presented a Green Paper on alternative dispute resolution in civil and commercial law, taking stock of the existing situation as concerns alternative dispute resolution methods in the European Union and initiating widespread consultations with Member States and interested parties on possible measures to promote the use of mediation.

(5) The objective of securing better access to justice, as part of the policy of the European Union to establish an area of freedom, security and justice, should encompass access to judicial as well as extrajudicial dispute resolution methods. This Directive should contribute to the proper functioning of the internal market, in particular as concerns the availability of mediation services.

(6) Mediation can provide a cost-effective and quick extrajudicial resolution of disputes in civil and commercial matters through processes tailored to the needs of the parties. Agreements resulting from mediation are more likely to be complied with voluntarily and are more likely to preserve an amicable and sustainable relationship between the parties. These benefits become even more pronounced in situations displaying cross-border elements.

(7) In order to promote further the use of mediation and ensure that parties having recourse to mediation can rely on a predictable legal framework, it is necessary to introduce framework legislation addressing, in particular, key aspects of civil procedure.

(8) The provisions of this Directive should apply only to mediation in cross-border disputes, but nothing should prevent Member States from applying such provisions also to internal mediation processes.

(9) This Directive should not in any way prevent the use of modern communication technologies in the mediation process.

(10) This Directive should apply to processes whereby two or more parties to a cross-border dispute attempt by themselves, on a voluntary basis, to reach an amicable agreement on the settlement of their dispute with the assistance of a mediator. It should apply in civil and commercial matters. However, it should not apply to rights and obligations on which the parties are not free to decide themselves under the relevant applicable law. Such rights and obligations are particularly frequent in family law and employment law.

(11) This Directive should not apply to pre-contractual negotiations or to processes of an adjudicatory nature such as certain judicial conciliation schemes, consumer complaint schemes, arbitration and expert determination or to processes administered by persons or bodies issuing a formal recommendation, whether or not it be legally binding as to the resolution of the dispute.

(12) This Directive should apply to cases where a court refers parties to mediation or in which national law prescribes mediation. Furthermore, in so far as a judge may act as a mediator under national law, this Directive should also apply to mediation conducted by a judge who is not responsible for any judicial proceedings relating to the matter or matters in dispute. This Directive should not, however, extend to attempts made by the court or judge seised to settle a dispute in the context of judicial proceedings concerning the dispute in question or to cases in which the court or judge seised requests assistance or advice from a competent person.

(13) The mediation provided for in this Directive should be a voluntary process in the sense that the parties are themselves in charge of the process and may organise it as they wish and terminate it at any time. However, it should be possible under national law for the courts to set time-limits for a mediation process. Moreover, the courts should be able to draw the parties’ attention to the possibility of mediation whenever this is appropriate.

(14) Nothing in this Directive should prejudice national legislation making the use of mediation compulsory or subject to incentives or sanctions provided that such legislation does not prevent parties from exercising their right of access to the judicial system. Nor should anything in this Directive prejudice existing self-regulating mediation systems in so far as these deal with aspects which are not covered by this Directive.

(15) In order to provide legal certainty, this Directive should indicate which date should be relevant for determining whether or not a dispute which the parties attempt to settle through mediation is a cross-border dispute. In the absence of a written agreement, the parties should be deemed to agree to use mediation at the point in time when they take specific action to start the mediation process.

(16) To ensure the necessary mutual trust with respect to confidentiality, effect on limitation and prescription periods, and recognition and enforcement of agreements resulting from mediation, Member States should encourage, by any means they consider appropriate, the training of mediators and the introduction of effective quality control mechanisms concerning the provision of mediation services.

(17) Member States should define such mechanisms, which may include having recourse to market-based solutions, and should not be required to provide any funding in that respect. The mechanisms should aim at preserving the flexibility of the mediation process and the autonomy of the parties, and at ensuring that mediation is conducted in an effective, impartial and competent way. Mediators should be made aware of the existence of the European Code of Conduct for Mediators which should also be made available to the general public on the Internet.

(18) In the field of consumer protection, the Commission has adopted a Recommendation [3] establishing minimum quality criteria which out-of-court bodies involved in the consensual resolution of consumer disputes should offer to their users. Any mediators or organisations coming within the scope of that Recommendation should be encouraged to respect its principles. In order to facilitate the dissemination of information concerning such bodies, the Commission should set up a database of out-of-court schemes which Member States consider as respecting the principles of that Recommendation.

(19) Mediation should not be regarded as a poorer alternative to judicial proceedings in the sense that compliance with agreements resulting from mediation would depend on the good will of the parties. Member States should therefore ensure that the parties to a written agreement resulting from mediation can have the content of their agreement made enforceable. It should only be possible for a Member State to refuse to make an agreement enforceable if the content is contrary to its law, including its private international law, or if its law does not provide for the enforceability of the content of the specific agreement. This could be the case if the obligation specified in the agreement was by its nature unenforceable.