by ACI Partners

Publications12 June 20150 comments

Arbitration in Moldova: per aspera ad astra

On 26 May 2015 the National Institute of Justice hosted a seminar “Practices and skills for making arbitration decisions”. The seminar was organized by the Chamber of Commerce and Industry of the Republic of Moldova (CCI) in cooperation with the Centre for Effective Dispute Resolution (CEDR), financially supported by the European Bank for Reconstruction and Development. The purpose of the seminar was to provide training to arbitrators of the International Commercial Arbitration Court of CCI on practices and competences for making arbitration decisions.

Currently there are 29 qualified and experienced local and 30 reputable international arbitrators on the list of the International Commercial Arbitration Court. Two partners of ACI Partners, Igor Odobescu and Cristina Martin are included in the list, approved by the Decision of the Council of the Chamber of Commerce and Industry of Republic of Moldova on November 25th, 2011. The entire list may be accessed following the link: http://arbitraj.chamber.md/index.php?id=124

The seminar was conducted by Jeffrey Benz, experienced counsel, arbitrator and mediator in disputes and transactions, which focused on key issues from international perspective. Apparently this was the time when a foreign arbitrator was sharing knowledge with local specialist in such a format. It was a great opportunity for ACI Partners arbitrators, along with several other local arbitrators to address a number of questions to the expert which were discussed internally. His comments were rather useful and will surely help to add quality and quantity changes to the Moldovan arbitration practice.

The seminar has raised a big question: what does local business know about arbitration institution in Moldova? This question is even more “painful” in the context of all projects promoting alternative methods of dispute resolution, financed by international organisations and institutions, and in the context of achieving justice sector reform strategy in Moldova.

So where do we stand and what are the challenges as far as arbitration court in Moldova is concerned?

What is the legal framework governing arbitration?

There are two main laws governing arbitration in Moldova:

Law on arbitration (2008) ‐ applicable to arbitration where the arbitration forum is in Moldova and the dispute is not subject to the Law on international commercial arbitration.

Law on international commercial arbitration (2008) -­‐ applicable when the arbitration forum is in Moldova; parties have their residence in different states; the place of arbitration is designated by the parties; most of envisaged assets or company’s focus of main interests are in another state; or parties decided to link the subject of the arbitration clause with at least two states.

The two arbitration laws contain most of the provisions relevant for the resolution of disputes. Republic of Moldova is among the countries, which transposed the UNCITRAL Model law in its legislation. Although Moldova has chosen the path of adopting two arbitration laws international and domestic arbitration procedures are not much different.

How many arbitration courts do we have?

Based on a list published by the Supreme Court of Justice of Moldova, there is a rather extensive number of arbitration courts in Moldova organized within various NGOs and associations, being 26 arbitration courts in total. The following could be noted inter alia:

There is also a number of arbitration courts listed as organized within various agricultural associations in different regions of Moldova.

What is the statistics of arbitration?

There is no official statistic data available with regard to arbitration cases. We have been able to obtain such data based on internal records from the Arbitration Court within Chamber of Commerce and Industry of Moldova, which is the most active arbitration court in Moldova. You can look through the data below and note the increasing interest in arbitration in the last few years. Based on my personal experience as arbitrator (more than 30 arbitrated cases), I have noted that those companies which once have tried arbitration, will definitely include an arbitration clause in all their contracts with consumers.

What are the costs of arbitration?

Arbitration fees depend on whether the dispute is international or local. Fees are stipulated in the court rules. The fees of the Arbitration Court within Chamber of Commerce and Industry of Moldova are as follows:

International arbitration:

Registration Fee – USD 200

Arbitration Fee – as per the table below

Domestic arbitration:

Registration Fee – MDL 1000

Arbitration Fee – in accordance with the table below

What are the advantages of arbitration?

• Court and arbitrators – chosen by parties
• Procedure – faster (up to 6 months), flexible and less formal
• The decision is final and binding and it cannot be appealed based on the material law reasons
• The process and any related information is confidential
• Reduced costs – arbitration fees are expressed as a percentage, regressive, in tranches, depending on the value of the action
• International recognition – Republic of Moldova, along with over 100 countries, has ratified United Nations Convention on the recognition and execution of the foreign arbitral awards, concluded in New York, in 1958

How can we get to the arbitration?

It is essential that the parties agree to settle the dispute (including potential) by the arbitration. Agreement by which the parties agree to submit the dispute to arbitration is called arbitration agreement, which must have written form, under penalty of nullity.

The arbitration agreement can be expressed as the arbitration clause inserted in the agreement or in the form of a separate agreement. The arbitration agreement can be entered to during or after the dispute arose.

What is the standard clause recommended by the Chamber of Commerce and Industry of the Republic of Moldova to be included in domestic commercial contracts?

“All disputes arising out of or in connection with this Contract, or regarding its conclusion, execution or termination, shall be settled by the Court of International Commercial Arbitration attached to the Chamber of Commerce and Industry of the Republic of Moldova, in accordance with the Rules of Arbitration of this Court. The arbitral award shall be final and binding.”

The parties may also add, at their option, the following:

1. “The arbitral tribunal shall be composed of a sole arbitrator, appointed upon joint agreement of the parties or by the Chairman of the International Commercial Arbitration Court attached to the Chamber of Commerce and Industry of the Republic of Moldova.” OR “The arbitral tribunal shall be composed of three arbitrators, one arbitrator appointed by each party and a presiding arbitrator designated by those two arbitrators.”
2. “The arbitral tribunal shall settle the dispute in law, and the Moldovan law shall be applicable.”
3. “The working language of the arbitral procedure shall be the state language of the Republic of Moldova.”
4. “The place of arbitration is Chisinau municipality, Republic of Moldova.”

What are the best practices in arbitration?

Promoting of arbitration: the best messengers of arbitration are lawyers or attorneys. Whether the client will address the dispute to state court or arbitration tribunal largely depends on lawyers.

The competence: it is recommended to follow international practice, according to which the court declines jurisdiction in any case when the contract contains the slightest allusion to the arbitration court.

Disclosure of information: considering that impartiality and independence of the arbitrator are essential to arbitration as such and violation of these principles may serve as a ground for annulment of arbitration decision, both the arbitrators and parties must take into account the information disclosure rules. These rules are especially important for a country so small as Moldova.

Preliminary hearings: it is recommended to include in local arbitration practice international experience on preliminary hearings, in order to fulfill all preconditions for initiating of the arbitration procedure, regardless of the complexity of the case.

Continuity of to arbitration: it is recommended to continue arbitration of the case, when it is found that the same dispute is being on trial in state court or on the list of another arbitration court.

Using modern information technologies: it is recommended to use telephone conferences or videoconferencing for taking depositions of witnesses or live depositions. The hearing must be recorded by audio or shorthand.

What are the conclusions?

It is up to the companies to decide how they will solve the dispute: whether they go to the court or arbitration. However, the advantages of arbitration in our view are rather obvious.

Should you be interested that your case is resolved by arbitration or require qualified advice on arbitration rules in Moldova, please contact ACI Partners, Cristina Martin, PhD, attorney-at-law, arbitrator.