How to levy money owed to you in Romania?

By: Eli Doron, Adv; Yaron Tikotzky, Adv, (C.P.A); Dr.Slomo Nass, Adv, (C.P.A)

1/6/2012

PROCEDURES OF COMMERCIAL DEBT COLLECTION IN ROMANIA

In terms of commercial debt recovery, the Romanian law stipulates several procedures, depending on the debt instrument that the creditor has.

The creditor who holds an enforceable title, according to the Romanian law (e.g. a court order, including the decisions of the law courts from abroad - after completing the formalities stipulated by law in Romania regarding their recognition, a decision of the Chamber of Commerce and Industry of Romania, a promissory note, a check, an act authenticated by the Notary Public etc..) - may proceed to the enforcement of the debtor. The procedure is a simple one, the creditor has to address to an executor, who will carry out the enforcement on the patrimony of the debtor (bank accounts, assets etc.).

The creditor whose debt which is not established by an enforceable title, has to address the court, in order to obtain a favorable decision, which will be enforceable in the last phase. During the proceedings in front of the court, depending on the proofs he possess to attest his debt, the creditor may use certain emergency procedures and also a common law procedure.

I. The emergency procedures in commercial matters are:
 

1. Payment order procedure, stipulated by the Ordinance of Government no. 5/2001. The conditions of admissibility of the creditor’s claim under this procedure are:
   -the debt has to be certain (its existence is firm), liquid (in a determined amount) and exigible (matured);
   -the debt represents an obligations to pay a certain amount of money;
   -the debt results from a written document, is determined under a statute, regulation or other documents assumned by the parties, subscribed by signature or otherwise permitted by law;
   -the debt attests rights and obligations regarding the execution of work, providing services or other benefits.
   In this procedure, the creditor may ask the court - that the amount representing the debt, plus the amounts representing interests, penalties for delay – to be updated with the inflation rate applicable at the date of payment.
   If creditor’s claim is admitted, the judge shall issue an ordinance that will specify the amount owed by the debtor and the term within the debtor must pay the respective amount. The payment term will be less than 10 days and will not exceed 30 days. The judge may stipulate another term, in case the both parties agree.
   In case the creditor’s claim is rejected, the judge shall issue an ordinance which is irrevocable, but only for this procedure. In this case, and also in the case that the creditor’s claim under this procedure has been admitted in part, the creditor may submit to the court another claim, following the procedure according to the common law.

2.  The emergency procedure stipulated by the Ordinance no. 119/2007 regarding the measures of prevention the late payment resulting from the execution of commercial contracts
   
   This procedure applies to certain, liquid and exigible obligations of payment of certain amounts of money, resulting from commercial contracts.
   
   This procedure does not apply to claims submitted during the insolvency procedure or to the contracts concluded between traders and consumers.
   
   Besides the amount representing the actual debt, the creditor may require interests, according to the law. The creditor may also claim additional damages for all the expenses incurred in order to recover the debt, due to the non-execution of obligations on time by the debtor.

II. The common law procedure. In case that in order to prove his claim, the creditor needs to administrate complex evidence (as specialized expertise, audience of witnesses etc.), he has to follow the ordinary procedure (or common law procedure). Before submitting the claim to the court, the creditor has to fulfil the prior conciliation procedure.
According to Art. 720 index 1 from the Romanian Code of Civil Procedure, the plaintiff in a commercial dispute which is valuable in money, before submitting the claim to the law court, shall attempt amicable settlement of the dispute with the other party. To this respect, he has to convoke the debtor by recommended letter with confirmation receipt or by other means which can ensure the exact transmission of the text and confirmation receipt to the sender, according to the law. In the respective letter, he shall present his pretensions and shall attach the documents on which his pretentions are based, and shall invite the other party to a meeting in a certain location, also specifying the time the meeting will take place. The date established for the meeting cannot be set less less than 15 days after the other party receives the convocation letter. The result of conciliation will be recorded in a conciliation proceedings, and it will be attached to the claim which will be afterwards submitted to the court, together with the notification and confirmation receipt. The creditor shall submit the claim to the court only after passing a period of 30 days from the date the defendant received the convocation to prior conciliation.