MOTTO: No judge writes on a wholly clean slate.
Corruption offenses have always been controversial and have made headlines in the press. This is not only a national issue; it has been estimated that EUR 120 billion per year, or 1% of EU GDP, is lost to corruption.
The New Romanian Criminal Code (“RCC”) in force since February 1, 2014, regulates a particular type of bribery: that “perpetrated by members of arbitral tribunals or in connection thereto” (Article 293 RCC).
Bribery thus becomes a tailor-made offense, mainly due to the legal status of the offender(s) – i.e., the person(s) conducting arbitral proceedings.
Regulating this new offense was a legal must, especially since Romania had ratified the Additional Protocol to the Criminal Law Convention on Corruption as early as 2004. However, practical controversies related to this new criminal provision appeared immediately.
In-Between Public and Private
Perhaps the most important question raised by criminal law practice has been whether arbitrators could be considered “public officials” or an assimilated category. This is a significant issue, since corruption offenses typically require that the criminal act be committed either by a public official or by a person whose status is assimilated by law to that of a public official (so-called “private officials”).
Thus, the almost Shakespearian dilemma is: are arbitrators public or private officials?
Since bribery acts committed by arbitrators are regulated by a separate criminal provision, distinct from typical offenses, one could argue that arbitrators are not public officials.
So can arbitrators be considered “private officials”? In short, they cannot. A “private official” must be a person who performs a duty in the service of an individual or legal entity. Arbitrators, however, are not in the service of the parties nor are they the employees of a legal entity.
On the other hand, as stated by the Romanian High Court of Justice (in its Decision no. 224 of June 18, 2015), arbitrators exert responsibilities set by law, similar to the prerogatives of the judiciary, which by definition could comfortably include them in the RCC definition of a public official.
This approach, however, has downsides; for example, it voids article 293 RCC of legal effect. In addition, it leaves one essential question unanswered: Why did the lawmaker feel the need to define a special, tailor-made offense for bribery cases involving arbitrators?
The matter remains, unfortunately, unsettled.
This omission will have to be dealt with as soon as possible, because criminal law, above all, should be clear and predictable.
A Notorious Case
On June 18, 2015, the Romanian High Court of Justice convicted the former president of the Romanian Chamber of Commerce and Industry (RCCI) and former arbitrator at the International Commercial Arbitration Court in Bucharest (ICAC), to five years of imprisonment for trading in influence.
A whistleblower reported to authorities that the RCCI president had asked him for EUR 1 million in order to influence the arbitrators within the ICAC (one of whom was his daughter), to obtain a favorable award in a pending arbitration. The RCCI president was then caught while receiving EUR 200,000 from an intermediary of the whistleblower.
Cases involving the former RCCI president are numerous, and some are still pending. A new case will be heard by the Bucharest Court of Appeal on September 8, 2017. Meanwhile, the High Court’s June 18, 2015 decision (though persuasive) is not binding on other Romanian courts.
It will certainly prove interesting to follow these cases as courts may – even by mere obiter dicta – provide further guidance into how practitioners should read the law, with due consideration of the new offense provided by Article 293 of the RCC.
The introduction of a special criminal offense addressing arbitrators is certainly a step forward.
Nevertheless, an express regulation of bribery offenses perpetrated by arbitrators casts a shadow over the applicability of other offenses. After all, if arbitrators are public officials, why then provide specific regulation for their situation? If they are not, why limit applicability to bribery only?
The above questions will certainly allow practitioners’ ink to continue to flow further unless and until the legal texts are clarified by the lawmaker, who should perhaps be reminded that “not only must Justice be done; it must also be seen to be done” (Lord Chief Justice Hewart, in R. vs. Sussex Justices, Ex parte McCarthy, 1924) – and that starts with the lawmaking process itself.
By Silvia Opris, Partner, and Magdalena Roibu, Senior Attorney-at-Law, Schoenherr Bucharest
This Article was originally published in Issue 4.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.