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The Buzz in Romania: Interview with Sebastian Gutiu of Schoenherr

The Buzz in Romania: Interview with Sebastian Gutiu of Schoenherr

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“Over the past few months we have witnessed a serious decline in the number of arbitration cases in Romania,” reports Sebastian Gutiu, Managing Partner at Schoenherr Bucharest, who adds that the recent introduction of local arbitration rules and other legislative changes may help reverse the trend.

“We have several arbitration institutions in Romania.” Gutiu explains. “We have the traditional one attached to the Romanian Chamber of Commerce, the German one attached to AHK Romania, and then there is the younger BIAC, Bucharest International Arbitration Court, which operates under the umbrella of the American Chamber of Commerce.” He notes that of course investors have access to foreign arbitration bodies as well.

Gutiu attributes the recent decline in arbitrations to two factors. “First, it has to do with arbitration clauses, and second, with parties' appetite to arbitrate,” he explains. “Two or three years ago some changes were made to public contracts - an important source of arbitration - and they started to include fewer and fewer arbitration clauses. They simply switched from arbitration to litigation, and we see the effect today." That change is apparently not irreversible, however. “The government has now enacted legislation saying that certain public contracts are again going to include these arbitration clauses, so I think that the number of cases will go up again,” Gutiu says. “It’s just a matter of time.”

He notes that he expects to see more investment arbitrations against Romania, specifically concerning renewable energy, caused by the State's cutting back of what used to be one of the most generous support schemes for this sector in Europe.

When asked how this will affect the market, Gutiu said that he expects to see more lawyers starting to specialize in this field. “Currently there are very few law firms directly focusing only on arbitration law, if any,” he says. “At most, in many of the offices arbitration is part of dispute resolution, and cases are led by litigators. It’s likely that lawyers will start to focus a bit more on arbitration in particular.” 

The start of the new parliamentary session is bringing changes in other areas of the Romanian market as well. “Recent changes to the Insolvency Law will probably bring a lot of work for lawyers,” Gutiu says. "It remains to be seen to what extent the new insolvency legislation will actually support insolvency procedures, given the apparently preferential role given to budgetary creditors. It might impact debtors' chances as well as other creditors' rights." Besides this, he adds, he and his colleagues are also seeing a lot of movement in various regulatory bodies, and they “are waiting to see if the data protection authority will become as active as other authorities have been over the past few years, such as tax, competition or consumer protection.”

Otherwise, he says, “for the moment the market is booming when it comes to work volume for lawyers. We see a good number of M&A transactions, so generally the trend is positive, but in some sectors we still see some post-crisis effects, with insolvencies continuing to pop up.”

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