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28 April 2021
newsletter
romania

Romania: International arbitration on the rise: record number of cases in the past year

Leading international arbitral institutions have announced record numbers in terms of the volume of new cases registered in 2020.

Amid restrictions imposed in the context of the Covid-19 pandemic, arbitral institutions have swiftly adapted their rules and guidelines to allow electronic submissions and communication, as well as virtual hearings, thus avoiding costly postponements in ongoing proceedings. The business community quickly understood the advantages of this alternative method of resolving disputes: according to statistics published by the main international arbitral institutions, last year marked a record increase in the number of new arbitration cases.

Last year, 946 new cases were registered at the International Court of Arbitration - ICC, the world's preferred arbitral institution, the largest number of cases registered in a year, from 2016 to date. The London International Court of Arbitration - LCIA also broke its own record in 2020 in terms of the number of cases received, with 444 new cases. The situation is the same in the case of the major arbitral institution in Switzerland, the Swiss Chambers' Arbitration Institution - SCAI, which reported 83 new cases, above the average of cases registered in previous years.

For the Hong Kong International Arbitration Centre - HKIAC, an institution that handled cases with a total of about USD 8.8bln last year, the 318 cases recorded in 2020 accounted for the largest number of new arbitration cases in the last decade.

These record figures have encouraged established arbitral institutions to expand internationally. Thus, with over 1,000 new cases registered in 2020 (the largest volume of cases opened in a year in the history of the centre), the Singapore International Arbitration Centre - SIAC decided to set up an office in New York to meet the needs of 500 parties from the United States.

Investment arbitration also saw an increase last year, with 54 new cases registered by the International Centre for Settlement of Investment Disputes - ICSID. Among them are two cases filed by foreign investors against Romania and registered with ICSID during 2020, both in connection with the Romanian state's changes to the support scheme for renewable energy. The two cases registered last year brought the total number of proceedings initiated over time by investors against Romania at ICSID to 17.

For the Vienna International Arbitral Centre – VIAC, last year was a "regular" year in terms of the number of registered cases. VIAC reported 40 new cases in 2020.

In Romania, based on our information, it seems that the activity of the Court of International Commercial Arbitration of the Chamber of Commerce and Industry of Romania has maintained a level similar to that of previous years, in terms of the number of newly entered cases. However, this could change in the near future. The fact that, last year, companies that had disagreements with their contractual partners had to wait for the end of the state of emergency to file claims with the courts in order to resolve these disputes, could have the effect of increasing interest among companies to include an arbitration clause in their commercial contracts and opt to take existing disputes to arbitration by entering into a submission agreement, in order to ensure their access to more efficient dispute resolution.

Ultimately, the situation generated by the Covid-19 pandemic has generally fueled claims and increased the appetite of the business community to have their disputes resolved in a confrontational way. This has clearly resulted in an increased preference to resort to arbitration as an alternative way of resolving disputes. In addition to the economic context, which proved to be a driver of conflict resolution in 2020, both the flexibility and the digitisation measures taken by arbitral institutions to facilitate remote access have done all the more to make arbitration more attractive for the economic actor. These measures include, for example: the introduction by VIAC of a portal that allows online case management, or the updating by the LCIA of the Arbitration Rules, in order to establish electronic communication as the default method for communication and filing submissions.­

It is expected that such measures will be maintained even after the lifting of all restrictions imposed in the context of the pandemic, all the more so as they are welcome adaptations to digital times and in line with the recent trends adopted by the arbitral institutions in order to enhance efficiency and facilitating access to arbitration, among which is this year's entry into force of the new ICC Arbitration Rules and the announced partnership ICC - Jus Mundi to publish selected ICC arbitral awards.

In this context, it is very likely that last year's trend will continue and that the growing interest of the economic actors in arbitration will be among the long-term effects of the paradigm shifts generated during the pandemic. Such a development would be welcome, given the traditional advantages of arbitration for the parties: flexibility, its consensual nature and neutrality.

authors: Sebastian Gutiu, Adina Rusanescu

Sebastian
Guţiu

Office Managing Partner

romania

co-authors