The applicable law is contained in the New Civil Romanian Code, EC Regulation 593/2008 (Rome I) and the Romanian Ministry of Justice guide lines regarding the applicable law to contracts that contain an extraterritorial element.
In accordance with article 2640 of the New Romanian Civil Code the law applicable to contracts that contain extraterritorial elements has to be determined in accordance with current European Union law. As a consequence, the applicable law in Romania that will regulate such contractual relations are the Regulations in EC Regulation 593/2008.
The Regulation came into force in 2008 and contained transitional provisions and became fully applicable throughout the EU with effect from 2009. The regulation is applicable to all member states of the EU except Denmark who was able to negotiate certain exemptions. The effect of this is that since 2009, Rome I has been applicable to contracts in Romania. The changes brought about by article 2640 are now that the EU Regulation will be applied to contracts with an extraterritorial element.
The Regulation will apply to all contractual obligations both in civil and commercial matters in the event of there being a conflict of laws. The Regulation does not apply to revenue, customs or administrative matters, or to evidence and procedure which will still continue to be dealt with under local law.
As in all EU regulations there are exceptions and the Regulation does not apply to obligations regarding a Romanian natural person’s status or legal capacity, family relationships, Romanian matrimonial property, negotiable instruments such as bills of exchange, cheques and promissory notes, Romanian arbitration and choice of court, the law of companies and other corporate or unincorporated bodies, guarantees. Further any action or agreement that occur before a contract is concluded, are excluded as are insurance contracts other than life insurances.
The documents which we refer to above all recognize the importance of the harmonization the rules relating to conflict-of-law in the implementation of the mutual recognition principle for decisions in civil and commercial matters. Romanian lawyers and international firms in Romania need to be aware of these provisions and as I have commented previously certain judges in the Romanian courts are unaware or unwilling to apply these rules. This does create work for Romanian lawyers, but as time progresses the risk of the incorrect application of EU Community law will diminish.