Tuca Zbarcea & Asociatii law firm wins arbitral dispute worth 5.5 million Euro

An irrevocable ruling handed down by the supreme court in a 5.5 million Euro arbitration ends a nine-year-long dispute whereas Tuca Zbarcea & Asociatii represented a private company.

The dispute arose from a contract concluded in 2007. Under such contract, a private company had undertaken obligations to design, deliver, install and train the beneficiary’s staff in connection with the performance of an electronic archiving system.

Given that its contractual partner (a public authority) refused to pay the second instalment of the agreed price, the company initiated in 2012 an arbitral dispute before the International Commercial Arbitration Court of the Chamber of Commerce and Industry of Romania.

Initially, by an arbitral award handed down in 2015, the arbitral tribunal admitted the claims consisting in the price balance, and it forced the public authority to pay approximately 5.5 million Euro. Next, in 2016, the Bucharest Court of Appeal admitted the action for annulment filed by the public authority and annulled the arbitral award, retaining that the dispute could not be subject to arbitration. Finally, the company lodged a final appeal against such ruling before the High Court of Cassation and Justice and this month, the supreme court handed down its irrevocable ruling whereby it allowed the company’s final appeal and thus it maintained the initial arbitral award.

This closes a real saga arising from this contract. At the end of 2019, the supreme court previously handed down a final ruling in yet another dispute between the same parties, whereas the company had requested the refund of the amount of the letter of bank guarantee abusively enforced by the beneficiary. At that time, the High Court of Cassation and Justice rejected the authority’s final appeal and thus it maintained the arbitral award under which the authority had been obliged to pay an amount of approximately EUR 1.4 million.

In this dispute, the applicant was represented by a legal team coordinated by Cornel Popa and Ioana Gelepu, Partners in the Litigation and Arbitration practice group of Tuca Zbarcea & Asociatii, as well as Cornelia Tabirta, Managing Associate within the same department.