National courts - the only ones competent to judge disputes initiated by former managers of state-owned companies

The disputes resulting from the mandate contracts concluded by the Romanian state companies must be resolved in the country, said yesterday, at the end of the government meeting, Alina Gorghiu, the Minister of Justice.

Alina Gorghiu said: "It's hard to understand what some Romanian state companies are doing! They encourage a lack of confidence in their own justice system, in the Romanian national courts. As Minister of Justice, I cannot accept this. The factual situation is as follows: at the level of mandate contracts concluded between Romanian state companies and members of the board of directors/supervisory/directorates, arbitration clauses are introduced according to which any disputes will be settled by international arbitration jurisdictions (Vienna, Paris, London etc). The situation must be resolved. For reasons related to trust in national justice, but also for economic reasons. The costs of settling these disputes abroad are high. We are talking about: arbitration fees, arbitrators' fees, lawyers' fees, travel costs, accommodation, document translations, etc.".

Mrs. Gorghiu's statement takes place in the context where a memorandum initiated by the Ministry of Justice was on the agenda of the government meeting, after several people recently won the lawsuits filed abroad for their change from the position of manager or member of the Board of Directors at the state companies in our country before the deadline set for the completion of the mandate. The document also mentions the disputes lost on the conveyor belt by Transelectrica, at the Arbitration Center in Vienna, with former heads of the company, for which they must also pay the arbitration costs.

Consequently, to avoid such situations in the future, the memorandum analyzed and approved by the Government proposes the following solutions:

- Elaboration of materials that reflect the situation of disputes in relation to the execution of mandate contracts and the content of compromise clauses and its communication to the Agency for Monitoring and Evaluation of the Performance of Public Enterprises (AMEPIP), after the operationalization of this institution;

- The realization by AMEPIP, of a centralized situation, and based on it, the evaluation of the negotiation of compromise clauses, referring to the document that integrates the state's property policy regarding public enterprises (whose reconfiguration is also assumed by PNRR, Reform 9 , Milestone 440), taking into account the efficiency of budget expenditures and the objectives established in the PNRR regarding the governance of public enterprises;

- Completion, at the proposal of AMEPIP and SGG, of the Government Decision no. 639/2023 for the approval of the methodological rules for the application of the emergency Government Ordinance no. 109/2011, in the sense of inserting the objective of streamlining budget expenditures among those pursued in the course of the selection procedure and nomination of the members of the board of directors or, as the case may be, of the supervisory board and the directorate, but also in the negotiation of mandate contracts, respecting the principle of contractual freedom.

Minister Alina Gorghiu stated: "I am convinced that concrete measures will be taken, and things will change for the better. I have faith in the judiciary in Romania, regardless of whether it is the courts or institutionalized arbitration. It is natural and correct that the disputes resulting from the mandate contracts concluded by the state companies in Romania should be settled in the country".

The document approved yesterday aims to change the trend of recent years, which aimed to include in the mandate contracts of company managers/directors some clauses regarding the settlement of possible disputes at international arbitration jurisdictions, Vienna, Paris, London, etc. (compromising clauses), which generates high costs (taxes, arbitration, arbitrators' fees, lawyers' fees, travel costs, accommodation, document translations, etc.), with an impact on the budget of these companies/autonomous governments and, implicitly, on the state budget.