On 4 June 2014, the Court of International Commercial Arbitration (CICA) attached to the Chamber of Commerce and Industry of Romania (Bucharest Court of International Commercial Arbitration) introduced a new set of arbitration rules, the Court of International Commercial Arbitration Rules (CICA Rules). The CICA Rules represent a positive and anticipated step forward, particularly since the previous Rules which applied between February 2012 and June 2014 were controversial and had been heavily criticised.
Perhaps the most eagerly awaited change introduced by the CICA Rules is the rule concerning party-appointed arbitrators, a rule which is widely accepted in international arbitrations and which had strangely been abandoned by the Bucharest Court of International Commercial Arbitration under the previous Rules. There are a number of other positive changes that, overall, lay down a less formal and more efficient procedure, allowing the Bucharest Court of International Commercial Arbitration to provide both an attractive alternative to dispute resolution through the courts and a competitive dispute resolution option to other arbitral institutions.
Applying other procedural rules than the CICA Rules
Under the CICA Rules regarding international arbitration proceedings, the parties can refer the dispute to a CICA tribunal opting for other procedural rules than those of the Bucharest Court of International Commercial Arbitration. Parties can even agree on a full package of procedural rules of arbitration different from those applicable under the CICA Rules. This means that the Bucharest Court of International Commercial Arbitration can hear arbitration proceedings based on any arbitration rules the parties have opted to apply (provided, of course, that such rules do not expressly forbid their own application in these circumstances).
Although the Bucharest Court of International Commercial Arbitration maintains an overall discretion to refuse arbitration proceedings under other rules than the CICA Rules (taking into account the nature of the dispute at hand and the contents of the rules proposed by the parties), the general approach can be viewed as a very flexible one.
Approach on the validity of arbitration agreements
The issue of determining the validity of the arbitration agreement is a central one for any body of rules regulating arbitration and the CICA Rules score an extra point for flexibility in this regard. In general, the CICA Rules take the usual approach and provide that a valid arbitration agreement must be in written form (either a clause incorporated into the main contract, or a stand-alone agreement to arbitrate concluded after a dispute has escalated - a compromise agreement).
However, the CICA Rules go a step further in this regard. Under the CICA Rules, the agreement to arbitrate can also be reached after filing the request for arbitration, by one party simply accepting the other party's request to settle the dispute by means of arbitration. Under the previous Rules, somewhat unhelpfully, there was a requirement that such acceptance be express and in writing, a requirement which has now been excluded under the CICA Rules. As a result, the CICA Rules give the parties a considerably broader scope to agree to arbitration proceedings simply by exchanging procedural documents, reviving the concept of the tacit arbitration agreement which had previously been applied by the Bucharest Court of International Commercial Arbitration before the introduction of the February 2012 to June 2014 Rules.
Notably, this reconsidered approach is a positive response to the provisions of Article 548 of the New Romanian Code of Civil Procedure. Article 548 contains what should be a broadly construed "written form" requirement for arbitration agreements, but this requirement has been strictly applied in the light of the requirement for express written acceptance of the agreement to arbitrate contained under the previous Rules. The CICA Rules, which exclude that requirement, are therefore more in line with the sentiment of the New Romanian Code of Civil Procedure.
Return to party-appointed arbitrators
The CICA Rules provide a welcome return for the Bucharest Court of International Commercial Arbitration to the position where the parties can appoint the arbitrators, already a commonly accepted practice in international arbitrations in other jurisdictions. Under the previous Rules, the procedure for appointing arbitrators had the undesirable effect of entirely excluding the parties from the process, a characteristic that has been heavily criticised. Specifically, under the previous Rules, the entire procedure of appointing arbitrators was reserved to the Bucharest Court of International Commercial Arbitration through its Appointing Authority, with the parties unable to either nominate arbitrators or, in the case of a sole arbitrator, agree upon that arbitrator. This approach was in serious conflict with the general spirit of arbitration, and prevented the parties from enforcing in full their arbitration agreement. After a short transitional period, starting May 2014, when the newly appointed Court College suspended the application of these controversial provisions, at the beginning of June 2014 the new version of the CICA Rules restored that spirit, reconnecting the parties to the arbitration process by allowing them to appoint the arbitrators.
Thus, under the CICA Rules, the parties to an arbitration agreement are free to agree on the number of arbitrators, the nominees to be appointed as arbitrators and/or the procedure for appointing arbitrators. The arbitrators can be nominated in an arbitration clause in the main contract, or subsequently by means of a separate arbitration agreement (whether that is concluded before or after the dispute has escalated).
Under the CICA Rules, where the parties cannot agree on the number of arbitrators, three will be appointed. In this instance, the parties will appoint one arbitrator each, and the two nominated arbitrators appoint the third arbitrator, who also acts as president of the arbitral tribunal. The Court will only intervene and appoint the third arbitrator where either party makes a request for it to do so, or where there is disagreement on the arbitrator's appointment.
Express provisions addressing the joinder of additional parties
A new feature introduced under the CICA Rules is the express provision regarding the possibility of joining third parties to the proceedings. The Rules explicitly state that joinder is allowed under the same conditions set out in Articles 61 to 77 of the New Romanian Code of Civil Procedure (that is, under the same conditions applicable for joining third parties in legal proceedings before the Romanian courts).
In addition, the CICA Rules set out that third parties can be joined to the arbitration proceedings provided that:
- The joinder of third parties is possible under the arbitration agreement.
- The effects of the arbitration agreement concluded between the parties in dispute could be extended to additional parties.
Under the CICA Rules, the arbitration proceedings begin with the preliminary stage of receipt of written communications. This procedural stage, although provided for in the old Rules, has been slightly rearranged and better reflects the approach of the New Romanian Code of Civil Procedure.
The request for arbitration and, subsequently, the statement of defence are subject to the verification procedure by the Secretariat of the Court to ensure that they comply with the requirements set out in the CICA Rules and are then served to the parties (after any flaws or gaps are remedied).
The statement of defence must be filed within 20 days of the date that the respondent receives the request for arbitration (in international arbitration cases, this time limit is doubled to 40 days). This is an earlier time limit than that which was set under the previous Rules, which allowed the respondent to file the statement of defence just five days before the date of the first hearing. This change was intended to allow each of the parties the opportunity to review the other party's case and prepare their position in a timely manner before the date of the first hearing, consequently accelerating the proceedings by preventing the need to postpone the first hearing at the claimant's request each time the statement of defence had not been received by the claimant in due time.
However, we would argue that the provision does not go far enough to achieve this aim. The CICA Rules allow the respondent to raise any objections and to submit the evidence it intends to rely on at the first hearing. As a result, the failure to submit a statement of defence within the strict time limit at this preliminary stage of the proceedings may have no negative consequences whatsoever on the respondent's case, provided that the statement of defence is submitted before the date of the first hearing (where it is not submitted, the respondent will be deemed to have waived their right to object, and will consequently be estopped from doing so, save for public policy objections). In this case, the respondent may be ordered to pay the costs caused by any delay.
It should be noted at this point that great significance is given to the date of the first hearing under the CICA Rules. It is an important milestone of the proceedings, since many of the time limits and duties imposed on the parties specifically revolve around this date.
Conceptually, under the CICA Rules the date set by the arbitral tribunal is considered to be the date of the first hearing, provided that the parties have been duly summoned and are able to submit pleas on that date. This date acts as a cut-off point, by which time the parties must raise objections on the jurisdiction and constitution of the arbitral tribunal. Any objections with respect to the validity or existence of the arbitration agreement, as well as any other objections, must be filed at the latest by the date of the first hearing. The parties must also inform the arbitral tribunal by the date of the first hearing:
- Whether the arbitral tribunal is requested to act as amiable compositeur.
- Whether they wish to settle the dispute by agreement.
- Whether there are any further requests, submissions or evidence to be filed by the parties.
By the date of the first hearing the parties are expected to submit all the documents they intend to rely on and to indicate the evidence they intend to produce. Any evidence that has not been presented by the date of the first hearing can only be allowed by the arbitral tribunal if either:
- The need to produce the evidence only arises during the course of the debate conducted during the first hearing, and the party introducing the evidence could not have anticipated the need for that evidence.
- The production of the evidence does not cause any delay to the proceedings.
Specifically with reference to international arbitrations, the CICA Rules now include an express reference to the possibility of applying the International Bar Association Rules on the Taking of Evidence in International Arbitration, which is a positive step forward for both the arbitrators and the parties to agree on the applicability of this set of widely accepted guidelines within the arbitral proceedings.
The CICA Rules have introduced (and for certain measures, reintroduced) a number of particularly practical provisions aimed at providing for more flexibility in arbitral proceedings. The return to the previously applicable rule that the parties appoint the arbitrators, together with other positive changes made by the CICA Rules, are to be welcomed as a positive, qualitative leap forward for the Bucharest Court of International Commercial Arbitration. The CICA Rules are firmly positioned as a modern and arbitration-friendly framework, and will re-position the Bucharest Court of International Commercial Arbitration where it belongs, among the traditional arbitral institutions which represent a viable alternative to legal proceedings in cases of dispute resolution.
The changes made by the CICA Rules, which introduce the forward-looking features of the rules of procedure used in other arbitral institutions, can only be of great benefit to a developing arbitration practice such as the one in Romania. We will continue to see the effects of these positive changes, as the radical change in perception and the rapid manner in which these changes have occurred continue to send an important message to the business environment, increasing business confidence in the Bucharest Court of International Commercial Arbitration.