In the following paper we present various types of debt recovery methods, according to the Romanian legislation, focusing on the specific features of each method, duration, costs and risks.
When it comes to debts recovery, the Romanian and also the European legislation allow us to decide among several options depending on factors such as the amount of the debt, its due date, the legal relationship of the parties, creditworthiness of the debtor and so on.
Our first advice is to try to solve amicable the dispute, as a negotiated solution keeps a door open for future business relationships with your partners; and if you set-up this solution in a notarized payment agreement (“angajament la plata”) you have a direct enforceable title against the debtor. This means you can directly execute the debtor without going to court.
Furthermore, a court trial can be very costly and is generally a time-consuming process. The average length of a trial in Romania takes about three months for summons for payment procedures (“Ordonanta de plata”, “Cerere cu valoare redusa”, “Somatie europeana de plata”, “Procedura europeană cu privire la cererile cu valoare redusă”) and more than one year for the Common Law Procedure (“Procedura de drept comun”).
Seeking an amicable solution may also be a mandatory preliminary procedure before going to court, as in the case of some summons for payment procedures and a few Common Law Procedures.
Thus, if the debt is not confirmed by an enforceable title which is directly executable, the creditor must obtain a court decision. The creditor, depending on the source of the debt, can choose between the following procedures:
I. Common Law Procedure
This procedure is governed by the Civil Procedural Code. It represents the common law and it is applicable to any dispute for which there is no special procedure foreseen.
The procedure provides a written and an oral stage. The parties can use any kind of proves necessary: documents, witnesses, interrogation, and expertise.
The competent court: The petition shall be submitted with the court that has the competence to judge on the merits of the case in the first instance, which is established according to the general rules of competence.
The material competence belongs to Judecatorie (lowest court in Romania) for claims up to 200.000 RON (app 45.000 EUR). Claims that go beyond this amount will be judged by the Tribunal.
In principle, the territorial competence is where the headquarters of the defendant is situated.
Costs: The claim is subject to a stamp duty regulated by Government Ordinance 80/2013, depending on the value of the claim, as the following:
a) up to the value of 500 RON – 8%, but not less than 20 RON;
b) between 501 RON and 5,000 RON – 40 RON + 7% for exceeding 500 RON;
c) between 5.001 RON and 25,000 RON – 355 RON + 5% exceeding 5.000 RON;
d) between 25.001 RON and 50,000 RON – 1.355 RON + 3% exceeding 25.000 RON;
e) between 50.001 RON and 250,000 RON – 2.105 RON 2% for exceeding 50.000 RON;
f) over 250.000 RON – 6.105 RON + 1% for exceeding 250.000 RON.
Remedies: Against the court decision the parties can file an Appeal at the Tribunal within 30 days after the court Decision was communicated. Against a Decision ruled in the Appeal, the parties can file a second appeal (Recurs) within 30 days after the court Decision was communicated.
Observation: According to Art. 83 from the New Civil Procedural Code, under penalty of nullity, the party who filed a second appeal (Recurs) must be assisted by a lawyer or legal adviser.
II. Summons for payment procedures
- The Payment Ordinance (“Ordonanta de plata”).
This procedure applies only for receivables that are certain, liquid and outstanding and represent payment obligations arising out of civil agreements, including those concluded between a professional and a contracting authority.
Mandatory preliminary procedure: Under the sanction of rejection of the claim as inadmissible, the creditor must give the debtor a written payment notice with 15 days term from receipt.
The competent court: The claim shall be submitted with the court that has the competence to judge on the merits of the case in the first instance, which is established according to the general rules of competence.
The material competence belongs to Judecatorie (lowest Court in Romania) for claims up to 200.000 RON (app 45.000 EUR). Claims beyond this amount will be judged by the Tribunal.
In principle, the territorial competence is where the headquarters of the defendant is situated.
Costs: The claim is subject to a stamp duty of 200 RON (app 50 EUR).
Remedies: Against a Payment Ordinance the parties can file a contestation within 10 days after the court decision was communicated.
Observation: This procedure applies only if the creditor has a certain, liquid and outstanding debt. The procedure is formalistic, the only admissible evidence is the documents. The average length of a trial takes about 3 months.
- Small claims procedure (“Cerere cu valoare redusa”).
This procedure can be applied, alternatively to the Common Law Procedure, when the value of the claim (claims), without taking into account interests, legal fees and other accessories, does not exceed 10.000 RON (app 2.500 EUR) at the time claim is filed. This remedy cannot be used for claims in relation to tax and administration law, labor law or disputes in insolvency lawsuits.
The procedure is similar to the EU Regulation no. 861/2007 establishing a European procedure on small claims. The procedure is formalistic, the plaintiff has to fill in a standard claim form, approved by the Ministry of Justice, giving details of the claim, the sum demanded and the proofs which can be submitted. The form is sent to the debtor who is obliged to give an answer within 30 days.
The claim is judged in the council chamber of the judge without the parties, although the judge can summon the parties to the court if it is considered necessary.
The competent court: The petition must be submitted at the Judecatoria where the headquarters of the defendant is situated.
Costs: The claim is subject to a stamp duty between 50 RON to 200 RON (app 50 EUR).
Remedies: Against the court decision the parties can file an appeal at the Tribunal, within 30 days after the court decision was communicated.
- European small claims procedure (“Procedura europeană cu privire la cererile cu valoare redusă”).
The procedure which is regulated by Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007 establishing a European small claims procedure, applies in cross-border litigation to civil and commercial matters where the claim does not exceed 2,000 euros.
A “cross-border case” is one in which at least one of the parties is domiciled or habitually resident in an EU country other than the country of the court hearing the action. The regulation applies to all EU countries except Denmark. This remedy cannot be used for claims related to tax and administration law, labor law or disputes in insolvency lawsuits, matrimonial property regimes and social security conflicts.
The procedure is formalistic; the plaintiff has to fill in a standard claim form, giving details of the claim, the sum demanded, and proves which can be submitted.
Once the court has received the properly filled in claim form, it prepares a standard answer form. This, together with a copy of the claim is sent to the defendant. The defendant replies within 30 days.
The defendant’s response is forwarded to the claimant. Any counterclaim submitted by the defendant is sent to the plaintiff in the same way. The plaintiff has 30 days to respond. If the sum of the counterclaim is higher than 2.000 euro both claim and counterclaim will be dealt with in accordance with the relevant procedural law applicable in the Member State in which the action is taken (and not in accordance with the European Small Claims Procedure).
The judgment is given in 30 days and it is directly enforceable.
- European order for payment procedure (“Procedura Somatiei de plata europeana”).
The procedure, regulated through Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure, applied in cross-border litigation in cases concerning uncontested pecuniary claims in civil and commercial matters. This claim cannot be used in claims regarding tax and administration law, labor law or insolvency, matrimonial property regimes, social security.
The procedure is formalistic, the plaintiff has to fill in a standard claim form, giving details of the claim, the sum demanded, proves which can be submitted.
Once the court has received the properly filled in claim form, it prepares a standard answer form, this, together with this a copy of the claim is sent to the defendant. The defendant replies within 30 days. The defendant can make an opposition to the order, without having to specify the reasons. In this case, the proceedings continue before the competent courts of the EU country of origin in accordance with the rules of ordinary civil procedure, unless the plaintiff has requested that the proceedings are terminated in that event.
If the defendant does not make an opposition the order for payment becomes directly enforceable, without the need for a declaration of enforceability and without any possibility of opposing its recognition.
The parties can seek to solve their disputes outside the courts, in an alternative private jurisdiction, through arbitration. Arbitration in Romania, can be institutionalized (i.e. The Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of Romania), case where the parties obey the Rules of Arbitration given by the Court and the dispute will be solved according with the law or ex aequo et bono.
Length: The dispute must be solved within 12 months (by international disputes) and within 6 months (by domestic disputes).
Costs: The Court fees are set proportional to the value of the claim, the parties must pay an administrative tax and the arbitrator’s fees.
The decision is binding for the parties and is international widely recognized, as Romania ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards since 1961.
The parties can also refer the dispute to an ad-hoc arbitrator chosen by the parties, case in which the procedural norms (place of the arbitration, language, and general procedural terms) will be set by them.
For further information on this aspect and any other questions please feel free to contact: Mag. Raluca Mihaila L.L.M. firstname.lastname@example.org.