Moldova: International Arbitration Comparative Guide

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1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

International commercial arbitration is governed by the Law of Moldova 24, dated 22 February 2008 (Law 24/2008), while domestic arbitration is regulated by the Law of Moldova 23, dated 22 February 2008 (Law 23/2008). Although both laws are based on the UNCITRAL Model Law on International Commercial Arbitration, Law 23/2008 includes certain local specifics (eg, the requirement to include in the arbitration agreement a mechanism to constitute an ad hoc arbitral tribunal). Certain norms on recognition and enforcement are also included in the Code of Civil Procedure.

Moldova is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958.

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

Yes. Under Law 24/2008, an arbitration is international if, at the time the arbitration agreement is concluded:

  • the parties have their place of business in different states;
  • one of the following places is situated outside the state in which the parties have their place of business:
    • the seat of arbitration, as determined in, or pursuant to, the arbitration agreement; or
    • the place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject matter of the dispute is most closely connected; or
  • the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country.

Domestic arbitration is an alternative dispute resolution mechanism between individuals and/or legal entities either from or residing in Moldova.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

Yes.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

Moldova is a Model Law country and therefore arbitration is based on the principle of party autonomy. The parties may freely agree on various issues, unless the law provides a mandatory rule (eg, the number of arbitrators may be freely chosen, but must be an odd number). As for issues not specifically addressed by the parties, Law 23/2008 and Law 24/2008 contain supplementary provisions.

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

No.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

Yes – Moldova is a signatory to the New York Convention as of 18 September 1998. The following reservations were made by Moldova:

  • "The New York Convention will be applied to the Republic of Moldova only relating those arbitral awards that have been brought after entering into force of the Convention."
  • "The New York Convention will be applied to the Republic of Moldova, on the basis of reciprocity, only relating those awards made in the territory of another Contracting State."

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

Yes, Moldova is also a signatory to the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States and the European Convention on International Commercial Arbitration of 1961.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

Generally, all disputes are arbitrable, unless there are mandatory rules of law providing for the exclusive competence of the Moldovan courts. Such mandatory rules of law are mainly included in the Code of Civil Procedure, land legislation and consumer protection legislation. They apply, for example, to disputes involving:

  • real estate located in Moldova;
  • consumer relations;
  • goods located or insured in Moldova;
  • carriage contracts (if the carrier or loading/unloading points are located in Moldova); and
  • vessels or aircraft injuncted in Moldova.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

No.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

The arbitration agreement must be in writing and be signed by the parties.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

The principle of separability applies to both domestic and international arbitration. Accordingly, the validity of the arbitration agreement is regarded (and is addressed) separately from the validity of the contract in which it is included.

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

The parties are free to agree on the place of arbitration. Failing such agreement, the place of arbitration shall be determined by the arbitral tribunal, having regard to the circumstances of the case, including the convenience of the parties. Notwithstanding this, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate:

  • to consult among its members;
  • to hear witnesses, experts or the parties; or
  • to inspect goods, other property or documents.

The parties are free to agree on the language or languages to be used in the arbitral proceedings. Failing such agreement, the arbitral tribunal shall determine the language or languages to be used in the proceedings.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

A party which knows that any provision of the law from which the parties may derogate or any requirement under the arbitration agreement has not been complied with, and yet which proceeds with the arbitration without objecting to such non-compliance without undue delay or, if a timeframe is provided therefore, within such timeframe, shall be deemed to have waived its right to object.

4.2 Can a tribunal rule on its own jurisdiction?

The principle of competence-competence applies, so the tribunal may solely rule on its own jurisdiction.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

If the tribunal addresses jurisdiction as a preliminary issue, a party may challenge its decision before the regular (state) court within 30 days of receipt of the decision. The tribunal may continue the proceedings and may even issue an award in the meantime.

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

No specific restrictions apply under the arbitration legislation. Only general rules of law apply (eg, full capacity, power to represent and engage).

5.2 Are the parties under any duties in relation to the arbitration?

All obligations for the parties are in line with the UNCITRAL Model Law. Additionally, Law 24/2008 sets out the obligation of each party to indemnify the other for any preliminary measures which prove to be excessive.

5.3 Are there any provisions of law which deal with multi-party disputes?

There are no separate provisions on multi-party disputes.

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

The lex arbitri is the law of the place of arbitration.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties as applicable to the substance of the dispute. Any designation of the law or legal system shall be construed, unless otherwise expressed, as referring directly to the substantive law of that state and not to its conflict of laws rules. Failing any designation by the parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it considers applicable. The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so. In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the practices of the trade applicable to the transaction.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

There are no rules on consolidation. In consequence, in the absence of the parties' consent, the arbitral tribunal cannot consolidate proceedings.

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

There are no rules on joinder. In consequence, in the absence of the parties' consent and the consent of the third party, the arbitral tribunal cannot join additional parties to the proceeding.

7.3 Does an arbitration agreement bind assignees or other third parties?

Yes, if the assignment is properly (legally) implemented. Third parties are bound by the arbitration agreement if they have consented to such.

8 The tribunal

8.1 How is the tribunal appointed?

The parties are free to agree on the procedure to appoint the arbitrator or arbitrators. If, under the procedure agreed by the parties, a party fails to act as required under such procedure, the parties or two arbitrators cannot reach an agreement expected of them under such procedure, or a third party – including an institution – fails to perform any function entrusted to it under such procedure, any party may request the court or other authority specified in Law 24/2008 to take the necessary measure, unless the agreement on the appointment procedure provides for another means of securing the appointment. The court's decision on the appointment is not subject to appeal.

In appointing an arbitrator, the court shall have due regard to any qualifications required of the arbitrator by agreement of the parties and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator. In the case of a sole or third arbitrator, it shall also take into account the advisability of appointing an arbitrator of a different citizenship from the parties.

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

No one is precluded, by reason of citizenship, from acting as an arbitrator, unless otherwise agreed by the parties.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

When a person is approached with a view to appointment as an arbitrator, he or she must disclose any circumstances likely to give rise to justifiable doubts as to his or her impartiality or independence. From the time of appointment and throughout the arbitral proceedings, an arbitrator must disclose without delay any such circumstances to the parties, unless they have already been informed of them. An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence, or if he or she does not possess the qualifications agreed to by the parties. A party may challenge an arbitrator it has appointed or in whose appointment it has participated only for reasons of which it becomes aware after the appointment has been made.

8.4 If a challenge is successful, how is the arbitrator replaced?

The parties are free to agree on a procedure for challenging an arbitrator.

Failing such agreement, a party that intends to challenge an arbitrator must, within 15 days of becoming aware of the constitution of the arbitral tribunal or of any grounds for challenge, send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge. If a challenge under this procedure or any other procedure agreed by the parties is unsuccessful, the challenging party may, within 30 days of receipt of notice of the decision rejecting the challenge, have recourse to the court or the relevant arbitration institute, whose decision is not subject to appeal. The tribunal may continue the proceedings and may even issue an award in the meantime.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

The general duties apply to the arbitrators – that is, the arbitrators should be independent and impartial.

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) Procedure, including evidence?

Generally, the parties may freely agree on the rules of procedure. If no such rules are agreed, the tribunal will determine the rules of procedure at its own discretion. The competence of the tribunal includes determination of the admissibility, relevance and weight of evidence.

(b) Interim relief?

Arbitrators have the power to order interim measures. Such orders/interim awards are not enforceable in court.

(c) Parties which do not comply with its orders?

Generally, the tribunal will continue the procedure and issue its award on the basis of the available documents and evidence (including the parties' behaviour).

(d) Issuing partial final awards?

Partial final awards are not regulated in the law and the concept is unfamiliar in local practice.

(e) The remedies it can grant in a final award?

The law does not limit the types of remedies that a tribunal can grant.

(f) Interest?

Arbitrators have the power to order interest (even compound interest) if the underlying agreement or the applicable substantive law so specifies and the statement of claim so requests.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

If any of the parties fails to appear in the hearing or fails to submit its evidence, the arbitration tribunal may continue the proceedings and may issue its award based on the available evidence.

8.8 Are arbitrators immune from liability?

The legislation is silent on this issue and there is little practice in this field.

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Yes, if the other party duly objects to the competence of the Moldovan court.

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

If there is a valid arbitration agreement between the parties, the regular (state) courts should dismiss any claim that is lodged contrary to the arbitration agreement. However, the regular (state) court can provide assistance in a pending arbitration procedure and can, for example, order preliminary evidence, interim or protective measures or the provision of security in a separate action.

9.3 Can the parties exclude the court's powers by agreement?

No.

10 Costs

10.1 How will the tribunal approach the issue of costs?

Unless otherwise agreed by the parties, the arbitral tribunal must decide in its arbitral award on the allocation of costs in relation to the arbitral proceedings. To this end, the arbitral tribunal will take into account the particularities of the matter, the winning party and similar.

At the request of the respondent, the arbitral tribunal may oblige the claimant to cover the respondent's costs if it declines its competence.

The arbitral tribunal may also order the parties to advance the costs of the proceedings

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

No, there are no restrictions.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

Yes.

12 Award

12.1 What procedural and substantive requirements must be met by an award?

The award must be made in writing and be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated. The award shall state the reasons on which it is based, unless the parties have agreed that no reasons are to be given or the award is an award on agreed terms. The award must further state the date and the place of arbitration, as determined, and will be deemed to have been made at that place. After the award has been made, a copy signed by the arbitrators shall be delivered to each party.

12.2 Must the award be produced within a certain timeframe?

No.

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

Moldova is a signatory to the New York Convention. Concomitantly, the norms on enforcement contained in the New York Convention are duplicated in the Code of Civil Procedure.

Upon a request for enforcement, enforcement will be carried out in accordance with the rules on judicial enforcement. The request for recognition and enforcement must be filed with the competent court (eg, the court of appeal at the place where the respondent resides or has its place of business, in case of a request to recognise and enforce a foreign arbitral award).

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

An arbitral award may be set aside by the competent court only if:

  • the party making the application furnishes proof that:
    • a party to the arbitration agreement was under some incapacity;
    • the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereof, under the law of Moldova;
    • the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was otherwise unable to present its case;
    • the award deals with a dispute not contemplated by or falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration; however, if those decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or
    • the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement conflicts with a provision of the law from which the parties cannot derogate, or, failing such agreement, was not in accordance with the law; or
  • the court finds that:
    • the subject matter of the dispute is not capable of settlement by arbitration under the law of Moldova; or
    • the award conflicts with the public policy of Moldova.

14.2 Are there are any time limits and/or other requirements to bring a challenge?

Yes. The request to set aside must be submitted within three months of receipt of the arbitral award or, in certain cases, within three months of pronouncement of the arbitral award.

14.3 Are parties permitted to exclude any rights of challenge or appeal?

No.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

No; the legislation is silent in this respect. Usually, the rules of the local arbitration institute will provide clear rules on confidentiality.

15.2 Are there any exceptions to confidentiality?

There are no mandatory norms to this end. Any exceptions may be agreed based on the party autonomy principle.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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