Enforcement and Seizure Proceedings in Romania
The Romanian courts do not necessarily operate with the speed and efficiency that may be found in Western Europe or the USA but this should not prevent a practitioner considering the following steps against a Romanian debtor. Consider here both the enforcement of a decision issued by a competent court as well as a seizure order against a debtor’s assets.
The provisions of art 1103 – 1110 of the Romanian Civil Procedure Code regulate the enforcement of a decision issued by a foreign court. In order to enforce in Romania a decision issued by a foreign Court, the following conditions must be fulfilled:
i) the foreign decision must be definitive;
ii) the Court which issued the decision must be entitled to issue the decision;
iii) that there is an agreement between Romania and the country of the court where the decision is issued with regard to the enforcement of court decisions;
iv) the party against whom the decision was issued has been lawfully served and informed about the case against him/her, and that party was granted the possibility to defend and appeal the decision; and
v) the foreign decision is enforceable according to the laws of the country where it was issued.
The foreign court decision is analysed by the court in Romania of the place of the debtor’s domicile. The proceedings have to be served personally upon the debtor according to the provisions of the Romanian Civil Procedural Code (art. 153-173). Service is by special appointed agents of the Court. If the debtor refuses to accept service or to sign for the receipt of the document the agent will make a note and the service procedure will be considered as completed.
If service cannot be carried out personally, the Court may resort to the following possibilities to serve the documents. Via mail with a confirmation receipt, through a bailiff only if one of the parties makes a special request for it and also pays the bailiff’s fees, via fax or email, or other means of electronic communication if they can be assured of confirmation receipt, if such communication information has been provided by the parties, by publishing details of the papers in a major newspaper, and through the court of the country where the party who cannot be served resides.
If all the provisions are fulfilled, the Romanian court will issue its own decision that is the enforcement decision. The enforcement procedure will be carried out by a bailiff.
A seizure orders of the assets of a foreign creditor in Romania are regulated by the provisions of art 952-959 of the Romanian Civil Procedural Code. If a foreign creditor has an enforcement order or a claim (such as a constructive trust) against a debtor assets in Romania, it can submit a request to the Romanian courts for a seizure order against such assets.
The purpose of the seizure order is to freeze the assets that are in the possession of the debtor or of a third party until the creditor has obtained an enforcement decision in Romania, such , as a recognition of a foreign judgement.
The request for issuing a seizure order is conditional on a court action in Romania against the debtor, which will lead to the issuing of the enforcement decision. This action can be the recognition of a foreign judgement and the payment of a guarantee set out by the Court. The amount of the guarantee is in the discretion of the court and is intended to be of a sufficient amount to indemnify the debtor if the action is fails.
The application for a seizure order in made to a judge in chambers without the presence of either party. The decision is seen as an emergency procedure. Neither party has to be served with the proceedings for the application.
If the Court will accept the request for issuing the seizure order and issue a decision this will be sent to the debtor through a bailiff. The debtor then has only five days to submit an appeal against the seizure order.
During the appeal procedure the debtor can move the property the subject of the seizure order. In practise if for example an order is sought against a bank account the bank may very well refuse to deal with the asset until the question of the appeal has been heard.
It will be seen from the above that procedures do exist and are continuing to evolve to allow the enforcement of foreign court decisions and therefore the recovery of sums from a debtor resident in Romania. the speed may not be the same as in other jurisdictions but it is increasing.
ABOUT THE AUTHOR: Nicholas Hammond and Alina Minciu
The writers are the founding partners of Hammond, Minciu and Associates a commercial law firm based in Romania.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.