sparkling new_issue bulboaca

5/26/2018 Sparkling New_Issue Bulboaca

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SparklingNew

Bulboaca & Asociatiis online legal and tax magazine Issue no. 6 January / February 20

New rules on Competition Council's dawn raids

Reduction of the support scheme approved by Parliament on Valentines Day

The impact of the New Criminal Code on the Companies Law no. 31/1990

Enforcing first court commercial decisions under the new Civil Procedure Code


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Contents

The materials inclu ded herein are prepared for the general informatio n of our clients and other in terested persons . They are not and shou ld not be regarded as legal advice.

New rules on Competition Council's dawn raids

by Mona Banu Page 9

The impact of the New Criminal Code on the Companies Law no. 31/1990

by Iulia Berea (Stoiano f) Page 3

2

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Reduction of the support scheme approved by Parliament on Valentines Day

by Mihaela Costache and Alexandru AsafteiPage 5

Sparkling New Issue no. 6 January / February 2014

Enforcing first court commercial decisions under the new Civil Procedure Code

by Toma Grosu Page 11


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Iulia Berea (Stoianof)*

Partner

Direct line: (40-21) 408 89 02

E-mail: [email protected]

The impact of the New

Criminal Code on the

Companies Law no. 31/1990

by

Iulia Berea (Stoianof)

insurance related fraud;

public tender related fraud;

taking advantage of a vulnerable person for financial

gain;

purchase of influence;

forgery of official documents; forgery of private documents, etc.

In addition to the above, perjuryhas been repealed from

the list of criminal offences regulated under Article 6 para.(2) of the Companies Law no. 31/1990. Consequently, as

per the legal provisions currently in force, a person

convicted of perjury may become founder or member of

the management or control bodies of a company.

Note is to be made that these legislative changes shall

not affect the persons who, upon the date of 1 February

2014, were holding the positions of company founders,

members of the management of members of the contract

bodies.

New sanctioning regime applicable

to the corporate white collar crimes

The sanctioning regime regulated under the Company

Law no. 31/1990 has been adjusted as to comply with the

less stricter approach adopted by the New Criminal Code.The adjustment mainly refers to (i) the reduction of the

incarceration period, and to (ii)the substitution of several

criminal offences, as further detailed:

A. Reduction of the minimum and maximum limits of

the applicable criminal sanctions

For the great majority of the criminal offences regulatedunder the Company Law no. 31/1990, the limits of the

applicable sanctions were reduced and, in some of the

cases, the criminal fine has been established as analternative punishment to imprisonment.

Without insisting on this aspect, it is worth mentioning that

the justification that lies behind these legislative changes

resides in the need of harmonization of the sanctioning

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One of the most popular and yet controversial topics of

discussion among practitioners in the field of law, media

professionals and individuals has been lately the entry

into force as of 1 February 2014 of the Law no. 286/2009

regarding the criminal code (the New Criminal Code)

and of the Law no. 187/2012 for the implementation of theNew Criminal Code.

Given the variety and significance of the amendments

thus adopted in the field of criminal law, it seems that the

impact of such on the Romanian Companies Law no.

31/1990, as republished and subsequently amended,

(the Companies Law no. 31/1990) has been under-

estimated.

We shall further detail the main changes brought to the

Companies Law no. 31/1990 and the impact that thesechanges will effectively have on the existing businesses.

Extensive restrictions applicable

with respect to the position of company

founder, member of the managementor member of the control bodies

Article 6 para. (2) of the Companies Law no. 31/1990 sets

forth various criminal offences which cause a person not

to have capacity to become company founder, member of

the management or member of the control bodies

(members of the supervisory board, censors or financial

auditors).

The recent amendments brought to the abovementioned

Article 6 para. (2) mainly consist in the completion of the

said list of criminal offences.

Essentially, along the criminal offences provided under

the former version of Article 6 para. (2) of the Companies

Law no. 31/1990, i.e., breach of trust, fraudulent

management, forgery, use of forgery, fraud, taking or

offering bribe, offences provided under Articles 143-145

of the Insolvency Law no. 85/2006, etc.), new types of

crimes are stipulated as well, thus broadening the criminal

offences area:

*Iulia Berea is recommended by clients and referred to as

being pragmatic.

Legal 500edition 2012



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the relevant Trade Registry or left without any assets

as to avoid payment of any pecuniary obligations

imposed on the company after the criminal

prosecution is commenced.

II. Further to the amendments brought by the New

Criminal Code, the following criminal offences were

repealed from the Companies Law no. 31/1990:

(i)carrying out business activities in the name and on

behalf of a foreign company without complying withthe legal provisions of the law for the operation of

those companies in Romania (which was sanctioned

with imprisonment from 1 year to 5 years)

(Article 280 of the Companies Law no. 31/1990)

The repeal of this criminal offence is more than

welcome, as it generated controversies in practice, in

the context where the same deed is sanctioned by

Law no. 12/1990 on illicit activities as an

administrative offence.

(ii) incorporation of a company based on a falseArticles of Association (which was sanctioned with

imprisonment from 2 years to 8 years)

(Article 280 of the Companies Law no. 31/1990)

We assume that the legislators intention was not to

de-criminalize this offence completely, but rather to

avoid unnecessary duplication of legal criminal

provisions that protect the same social values and

thus to ensure a coherent legal framework in criminal

matters.

Basically, the aforementioned offence is covered by

the New Criminal Code, reason why the duplication of

regulation under a special law (such as theCompanies Law no. 31/1990) proved indeed to be

unnecessary.

C. New crimes are enacted, while existing crimes are

repealed

I. The amendments brought to the Companies Law no.

31/1990 regulate two new offenses, as follows:

(a)The financial assistance newly-regulated crime

The director, general manager, manager, member of the

directorate or the supervisory board shall be punished

with imprisonment from 3 months to 2 years of with a finein case he/she grants loans or advances on the shares

of the company, or constitutes guarantees in conditions

other than those provided by the law.

(Article 273 letter c) of the Companies Law no. 31/1990)

The previous wording of the provisions above referred to

granting loans or advances exclusively, without making

references to constituting guarantees. Further to this

amendment, any form of financial assistance

including thus constituting guarantees in conditions other

than those provided by law is deemed a criminal

offence.

(b)The abuse of decis ion powersnewly-regulated

crime

In case criminal prosecution has been commenced, the

director, general manager, member of the directorate or

the supervisory board shall be punished with

imprisonment from 1 month to 1 year or with a fine for

enforcing resolutions of the general meeting of

shareholders regarding change of the legal form of the

company, merger, spin-off, dissolution, reorganisation or

share capital reduction, without informing the competent

judiciary body or by breaching the prohibition imposed by

the latter.

(Article 274 letter c) of the Companies Law no. 31/1990)

The purpose of this newly-regulated crime is to prevent

the situations where the company is de-registered with

treatment applicable to acts and deeds that violate the

same social values.

In addition, the frequency with which these offences

are usually committed has also been taken into

consideration in the context of the modification by the

New Criminal Code of the applicable sanctioning

regime. Specifically, as per the provisions of the New

Criminal Code, a penalty increase must be applied

whenever multiple offences are committed by the

same person.

The same principle shall apply also with respect to the

crimes regulated by the Company Law no. 31/1990.

B. Legislative clarification regarding the persons

who can be the active subject of the criminal

offences regulated by the Company Law no.

31/1990

The current version of the Company Law no. 31/1990

provides that, besides the director, the manager and

the general manager of a company, any member of

the directorate or of the supervisory board (in case ofcompanies organized in a two-tier system) can be the

active subject of the crimes regulated thereunder and

may be sanctioned accordingly if found guilty.

Note is to be made that, prior to the entry into force of

the New Criminal Code, only the persons holding the

positions of director, manager or general manager of a

company could have been held liable for crimes such

as presentation of false information regarding the

company to the public, use of the companysassets to

ones own interest or any other criminal offences

expressly regulated by the Company Law no. 31/1990.

Extensively criticized by legal scholars for the limited

approach regarding the persons leading orrepresenting a company who may be held liable for

such offences, the amendment brought to the

Company Law no. 31/1990 is more rather an expected

modification of the said piece of legislation.

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Mihaela Costache, Senior Associate

Direct line: (40-21) 408 89 16


Reduction of the support

scheme approved

by Parliament

on Valentines Day

by

Mihaela Costache & Alexandru Asaftei

GCs postponement and GCs reduction

will not cumulate

The Approval Law provides that only the producers of

electricity from renewable sources (E-RES) accredited

until 31st of December 2013 will be affected by the

postponement of certain number of GCs.

In practical terms, this means that reduction and

postponement will not affect simultaneously the same

producers (i.e., the new producers will be subject topotential reduction and the existing operating producers

will be affected by postponement). This provision

mitigates to a certain extent the damaging effect of EGO

57/2013 which envisaged the cumulative incidence of

both measures.

In addition, the Approval Law no longer provides that the

recovery mechanism of the GCs will be regulated by

ANRE, moat likely because such regulation was already

issued prior to the Approval Law, in the process of

implementation of the EGO 57/2013 (i.e., ANRE Order

no. 56/2013, which seems not to be affected by theApproval Law).

Restrictions on accreditation lifted

but annual mandatory quota of E-RES

to be set each year by the Government

The Approval Law repeals the provision according to

which ANRE suspends the accreditation of new E-RES

producers (i.e., the right to receive GCs) until they

integrate in the annual limits provided by the National

Renewable Energy Action Plan in terms of newly installed

capacities. Consequently, all new projects shall receivethe number of GCs granted in the normal course of the

support scheme.

There is however a new change which seems to cancel

the positive effect of the former. Thus, the Approval Law

provides that starting with 2014 the annual quota will be

set for each year in advance by Government Decision

issued following an ANRE proposal based on an b

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The support scheme for renewable energy sources basedon tradable green certificates (GCs) combined with

mandatory quotas was implemented in 2005 and

subsequently augmented in 2008 and especially 2010,

whereas it was cut-off in 2013, following enactment of the

Emergency Government Ordinance no. 57/2013 (EGO

57/2013).

The law approving EGO 57/2013 was adopted by the

Parliament at the end of December last year, but was

sent back by the Romanian President to the Parliamentfor re-examination.

On 14thof February 2014, the Romanian Parliament has

adopted once again the law for the approval of EGO

57/2013 without changes (the Approval Law). The

Approval Law was sent to the President fo r promulgation

on 19thof February 2014. The President has filed on 26 th

of February 2014 a complaint with the Constitutional

Court, claiming that the Approval Law is not compliant

with the Romanian Constitution, because it has been

adopted without a prior notification of the European

Commission.

Therefore, the entry into force of the Approval Law

continues to be delayed.

Although the law was approved on Valentines Day, the

message received by the investors does not seem to be a

message of love. However, it is not a message of war

either. The Approval Law seems to cure some of the

damaging provisions of EGO 57/2013, but unfortunately

adds new ones.

What are the changes?

What are the consequences?

Certainly, the entire industry was preparing for the worst

and still hoping for the best as regards the changes that

the Parliament would bring to the EGO 57/2013.

We pinpoint here below the main changes:

5 Sparkling New Issue no. 6 January / February 2014

Alexandru Asaftei, Junior Associate

Direct line: (40-21) 408 89 56



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Quota obligation on an annual basis

The Approval Law provides that suppliers must fulfil

(and report to ANRE on) their obligation to acquire

GCs ANRE on an annual basis.

EGO 57/2013 provided for a quarterly basis GCsacquisition and reporting obligation. This provision

was meant to ensure liquidity on the GCs market

throughout the year whereas in the annual basis

obligation scenario the market was active usually onlyat the end of the reporting period. The return to the

previous annual basis rule seems to cancel this

positive effect.

Invoicing to end costumers of GCs

value

The Approval Law provides that the value of the GCs

shall be invoiced separately to the end customer after

the acquisition by the supplier of the GCs

corresponding to the mandatory acquisition quota.

Such value shall be calculated by multiplying thevalue of the mandatory GCs acquisition quota

estimated by ANRE with the quantity of billed

electricity (MWh) and the price of the GCs acquired by

the respective supplier on the centralised markets

managed by Opcom.

In determining the invoicing value of the GCs, EGO

57/2013 counted the weighted average of the GCs

price on the centralized market during the last 3

completed transaction months instead of the price of

the GCs acquired by the supplier on the centralised

markets, as provided by the Approval Law. Therefore,

it seems the Approval Law has removed the risk thatthe invoicing value of the GCs to the end costumers

be lower than their acquisition value.

Also, the Approving Law confirms the provision of

EGO 57/2013 according to which by 1stof September

of each year, the electricity suppliers shall regularise

the value of GCs for the previous year, pursuant to

the final mandatory quota of acquisition of GCs

assessment on the achievement of the national

renewable target and the impact on the end customer

in the forthcoming year. Currently, the annual

mandatory quota is prescribed by the law for each

year until 2020.

For the current year 2014, ANRE must propose the

applicable quota within 3 days after entry into force of

the Approval Law and the Government must approve it

by 31st of March 2014.

Although the restrictions to accreditation are lifted andall new projects will receive GCs, the value of these

GCs and their liquidity could be materially jeopardized

by a future reduction of mandatory quotas by the

Government as well as by the elimination of the

proposed off-take guarantee fund (see item 12 below).

In other words, the producers may find that their GCsmay not be sellable or may not worth much, if there

will be a significant excess of GCs compared to the

annual quota set by the Government (GCs inflation).

Thus, from the perspective of investors this change

replaces a type of uncertainty (would a new project

receive GCs and when?) with another type of

uncertainty (would the GCs be sellable at a sufficient

return in a market where the mandatory quota is rather

unpredictable?). The project financing is also severally

affected, since without predictable quotas onreasonably long term, the banks cannot assess the

risk of GCs inflation.

Annual overcompensation

assessment

According to the Approval Law, ANRE monitors on a

annual basis (instead of a half year basis as previouslyprovided) the producers benefiting from the support

scheme, drafts and publishes on its webpage themonitoring report within a term of 90 days as of the

end on the monitored period.

Any reduction due to overcompensation approved by

the Government will be effective as from 1stof January

of the following year. b

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established by ANRE, the invoiced electricity and the

weighted average price of GCs used by each

respective supplier for the previous year, but it adds

that such regularisation shall be made in equal

instalments.

Limitation of GCs reduction

and postponement for projects

benefitting from state aid

EGO 57/2013 provides that the projects benefittingfrom investment aid will receive a reduced number of

CGs established by ANRE based on a provided

algorithm with a view to discount the investment aid

received in addition to the support scheme.

According to the Approval Law, such reduction shall

apply only up to the value of the aid granted,

considering, for calculation purposes, the average

value between the cap price and the floor price of the

GCs. This seems to protect the project owners from

an excessive cut-off of the GCs in excess of the actual

investment aid received.

EGO 57/2013 did not regulate any exemption from the

postponement of GCs for such projects. The Approval

Law regulates that the postponement of GCs will be

applicable only if the number of GCs to be receivedbased on the mentioned algorithm is equal or higher

than 1 (one) and, in this case, the affected producers

must not receive less than one (1) GC per MWh

during postponement period.

Period for the applicability

of the support scheme

The Approval Law, has cancelled the provision saying

that the period for the applicability of the support

scheme shall be reduced for the E-RES producersthat have commissioned their power plants between

the entry into force of Law 220/2008 and the 1st of

November 2011.

Currently, the period for the applicability of the support

scheme shall be reduced in case of producers



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hydro power group installed in a pre-existent hydro

power plant or in a hydro-technical structure used

before for energy generation purposes with the

observance of the other conditions provided for by the

law (i.e. the installed power must be at most 10 MW

and the operating period should be of at least 15

years from commissioning).

Until now it was unclear if such new hydro power

group would qualify as new or refurbished hydro

power plants in order to receive GCs.

Elimination of the guarantee fund

provision

The Approval Law has eliminated the guarantee fund

for GCs.

The purpose of such fund confirmed by EGO 57/2013

was to purchase, through the intermediary of

electricity market operator, upon request of the

renewable producers, the GCs offered for sale but not

sold. It is true that the fund was never set up, but it

was regulated and it can be argued it created alegitimate expectation to investors.

Restrictions for the access

to the electricity market?

According to the Approval Law, the Government will

issue a regulation for the access on the electricity

market with the observance of the safety limit of the

National Power System.

The scope of such provision is rather unclear and it

seems to open the door to new restrictions for energytrading.

Exclusion from the support scheme

The Approval Law added that the electricity produced

in power plants located on vehicles does not benefit

from the support scheme.

commissioning power plants before the entry into force

of Law 220/2008 (i.e., 6 th of November 2008), by the

period during which these producers have benefited of

GC. The E-RES producers will receive the number of

GCs for the period provided within the accreditation

decision.

Cancellation of additional GCs

for certain type of biomass

The Approval Law cancels the 1 (one) additional GC

for the electricity produced in power plants using

biomass from forestry wastes that was granted under

EGO 57/2013.

Bilateral contracts for GCs and

electricity by small producers

According to the Approval Law (i) the producers with

installed power of maximum 1 MW and (ii) the

producers in high efficiency cogeneration using

biomass with installed power of maximum 2 MW have

the right to conclude bilateral sale-purchase

agreements for electricity and GCs directly with

suppliers of the end costumers as an exception from

the rule of trading through centralised markets.

Validity period of GCs reduced

The GCs will have a validity period of 12 months

instead of 16 months. Obviously, this may reduce the

chances of trading the GCs over time, but may

eliminate competitionbetween GCs from consecutive

years (from a practical perspective, the GCs with 12

months validity period cannot be used for the followingyear quota obligation).

Extended definition of refurbished

hydro power plants

The Approval Law has extended the definition of the

refurbished hydro power plants by including the new b

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Higher fines

Failure to fulfil the quota triggers the obligation of the

suppliers to pay a penalty value of 110 EUR per each

shortfall GC and failure to so will trigger the obligation

to pay a fine equal to 3 times the value of the penaltyvalue not paid within the deadline determined by

ANRE.

Pursuant to Approval Law, the maximum fine applied

to the suppliers and producers for failure to complywith their obligation to pay the value of the shortfall

GCs was increased from RON 100,000 to RON

10,000,000.

European Commission notification

According to the Approval Law, the changes brought

by EGO 57/2013 further amended and completed by

the Approval Law will be further notified to European

Commission for clearance.

However, the Approval Law will be immediatelyapplicable even before European Commission

clearance, as the law does not provide for any

suspension provision.

Signs of stability or new clouds

on the horizon?

The Approval Law has, for the most part, confirmed

the restrictions introduced by EGO 57/2013 and its

adoption could bring more stability and predictability of

the legal regime (be it unsatisfactory as it remains).

The Approving Law has partially improved EGO

57/2013 as regards investors predictability andreturns by provisions such as: (i) clear separation of

reduction and postponement, (ii) elimination of

accreditation restrictions, (iii) extension of the

overcompensation assessment period from 6 months

to 1 year, (iv) limitation of reduction and postponement

for certain projects benefiting from state aid, (v) direct



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This is the stage where the issue regarding the limits

between the 1865 Civil Procedure Code and the new

Civil Procedure Code should be finally solved.

Solution

As a general rule, when a court renders a decision, it

has to take into consideration all the consequences of

the rendering, ie. effects and limits.

In this case, the court, ruling under the 1865 CivilProcedure Code, will have in mind all the privileges

given by the said Civil Procedure Code, including the

enforceability power of the decision issued by the first

court.

Thus, if the intention of the law applicable when the

claim was brought in front of the court was for the

decision of the first court to be enforceable,

consequence implied by the governing law, than this

should mean that no other court or enforcement

officer can intervene, unless the law specifically

allows it.

As per our case, the first court ruling a commercial

litigation will render a decision enforceable without

any other formalities needed, based on the provisions

of the law governing when the case was deferred to

justice.

As a consequence, the creditor, whos rights are

confirmed by the first court through the commercial

decision, should be entitled to address the

enforcement officer with a request for starting the

enforcement procedure against the debtor.

The enforcement officer will address the competent

court for approval of the enforcement procedure and,according to the arguments above, the court should

render a positive solution.

However, all these theoretical considerations could be

argued against by the courts, especially since,

usually, the enforcement procedure approvals are

contracts for electricity and GCs trading for small

producers; (vi) slightly more favourable rules for

recovery of GCs cost by suppliers; (vii) higher fines for

suppliersfailure to pay the penalty for not meeting the

quota.

Many other amendments aggravate the negativeeffects of EGO 57/2013 such as: (i) first of all, the

annual E-RES quota left for the Government to set

each year, which creates a huge unpredictability and

ruins project financing perspectives; (ii) quotafulfilment obligation on an annual basis reducing the

liquidity of the GCs market during the year; (iii)

cancellation of additional GCs for certain type of

biomass; (iv) reduction of GCs validity period from 16

to 12 months, (v) elimination of the guarantee fund

provision; (vi) possible forthcoming new restrictions to

market access.

But the key aspect is that the entry into force of the

Approval Law is delayed by the anti-constitutionality

complaint of the President and is therefore subject to

the Constitutional Court validation. We note that the

objection made by the President does not refer tointernal non-compliance with the Romanian

Constitution, but to the manner in which the Approval

Law was adopted, i.e., without European Commission

approval. If it will be promulgated in this form beforethe European Commission clearance is issued, the

Approval Law may additionally require new changes to

comply with the European Commission decision and

Romania may be exposed to an infringement

procedure by the European Commission. Therefore

the saga is not over yet.

Last but not least, there are some new proposals of

further cut-off of the support scheme which arethreatening the apparent clarification of the legislation

by the Approval Law: (i) one proposal from the MinistryDelegate of Energy - to regulate an exemption of up to

85% for GCs acquisition obligation to the benefit of the

large customers and (ii) the other from a group of

senators of the leading party - to reduce the cap price

of the GCs to EUR 30.

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analyzed by newly appointed judges which may be

tempted to apply the new provisions on the

enforcement procedure.



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Mona Banu,Associate

Direct line: (40-21) 408 89 68


New rules on Competition

Council's dawn raids

by

Mona Banu

judicial authorization does not suspend the inspectionproceedings. Moreover, it is extremely likely that the dawn

raid will be conducted immediately after (i.e. the same

day or the day after) the judicial authorization is obtained,

therefore when the actual appeal is heard, most likely the

inspection has already been completed.

However, the effect of a successful appeal should be that

any evidence obtained through such dawn raid (i.e.

invalidated by the superior court) cannot be used against

the investigated company. Of course, unless the

Competition Council refrained (of its own will) fromreviewing the documents picked-up during the dawn raid

pending the appeal before the High Court of Cassation

and Justice, one can legitimately question the efficiency

of such appeal (i.e.the authority may well request another

judicial authorization, this time relying on more substantial

indications of the merits of the case).

This modification which set up an ex ante independent

judicial control on the Competition Councilsdecisions to

perform surprise inspections represents a step further to

ensure a more appropriate guarantee on the protection ofparties rights. While dawn raids are one of the most

powerful and effective investigatory tools available to theCompetition Council to gather evidence on suspected

antitrust infringements, it is also true that they are highly

invasive.

For example, the Competition Council has recently

intensified its efforts to uncover secret cartels by using to

a larger scale tools for digital forensic evidence gathering.

Forensic IT tools allowing for making and seizing copy-

images of hard-drives enable the authority to performmore complex searches to the Competition Councils

premises which include restoring of deleted documents,

index, search, sort and extract files. Forensic IT tools go

also beyond the content of the relevant data byuncovering important information contained in metadata

(i.e.author of a file and the date when it was created, last

altered, accessed or deleted, the identity of the sender

and receiver of the digital information, its traceability).

However such coercive measures, especially when

copying entire hard-drives, may severely interfere with the

right to privacy provided for by article 8 of the EuropeanCharter of Human Rights (e.g.Judgment of 3 July 2012 in

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Introduction

The entry into force on 1stFebruary of the new Criminal

Code and of the new Criminal Procedure Code brought

amendments to the Competition Law too, especially on

the legal requirements necessary for carrying out an

unannounced inspection and reshaping the definition and

the sanctioning of the criminal offence for the individuals

participation to an anticompetitive agreement.

The main amendments made to the Competition Lawhighlight the ambition of a more aggressive and efficient

cartel offence enforcement and also a stricter policy in

safeguarding the undertakingsrights by introducing an ex

ante judicial review on the Competition Councils

decisions to launch unannounced inspections.

New procedural requirement for

carrying a dawn raid by the Competition

Council: obtaining a prior judicial

authorization

Through the Law no. 255/2013 for the enforcement of

Law no. 135/2010 concerning the Criminal Procedure

Code and for the amendment and completion of statutes

which comprise criminal procedure provisions the legal

regime of unannounced inspections proceedings suffered

a substantial amendment. Thus, according to the

aforementioned law, the Competition Council shall

proceed to perform unannounced inspections to the

undertakingspremises only with the judicial authorization

of the Bucharest Appeal Courts President or of a

delegated judge and on the basis of an Order of the

Competition CouncilsPresident.

The request for judicial authorization is examined ex

parte, without the partiesnotification of proceedings. The

court order must be reasoned and may be appealed

within a 48 hours time-limit to the High Court of Cassation

and Justice. The time-limit for appealing the judicial

authorization begins to run on the moment of its

notification to the interested party. The challenge of the


Mona Banu has recently joined

our Comp eti t ion team.

Mona was an inspector and case

handler gaining extensive

experience in deal ing w ith the

most important invest iga t ions o n

the Romanian m arket, part icularly

being involved in landmark c ases

on gasol ine distr ibution, mobi le

cal ls termination market, postal

services market and interbank

lending m arket.


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Increased criminal sanctions

for business executives participating

to anticompetitive agreements.

Criminal immunity for whistle-blowers

With the last amendments of the competition law, theRomanian authorities have taken steps to reshape the

conditions of prosecuting cartel offences. Thus,

through the Law no. 187/2012 for the enforcement of

Law no. 286/2009 concerning the Criminal Code, thelegal regime of criminal offence for participating to

anticompetitive agreements was modified. The current

legal framework is now focusing on business

executives that set up or organize with intent the

participation to hard-core anticompetitive agreements.

The law also extends the upper limit of the sanctionthey face, notably imprisonment between 6 month to 5

years or criminal fine. A complementary penalty of

certain rightsinterdiction may be applied as well.

The novelty of the amending norms is the introduction

of an amnesty program for this criminal offence which

indicates the increased public endeavors to render a

more efficient leniency program and after all a more

successful detecting and deterring cartels policy. In

order to improve the attractiveness for potential

whistleblowers to report the involvement in hard-core

agreements, a lenient treatment (similar to theleniency program dedicated to companies) for

business executives is instituted. The receiving of full

or partial immunity to criminal sanctions is set upon

the moment of the application made by the involved

individual (a full immunity will be granted in case of no

preexisting prosecution investigation and after that

only a half-reduction of the criminal sanctions limits

will be awarded).The above amendments are in line with certain

European countries measures to design a moreaggressive cartel criminal legal regime. For instance,

Belgium and Denmark have recently adopted

enhanced penalties for individuals involved in

collusion. The UK also is currently enforcing a more

aggressive approach by prosecuting a participant in

galvanized steel tanks for water storage cartel.

order to prove their claims, the parties arguments

focused on the Commissionspress releases and on

the unfolding of the inspections as to the questioning

by the Commissions representatives of the emplo-

yees from the high voltage underwater cable sector.

After examining the reasons substantiated by theparties, the Court pointed out that there is an

obligation on the European Commission to specify the

subject-matter and purpose of an inspection in its

inspection decision, as already established by the

case-law. Moreover, the Commission has the

obligation to specify the essential characteristics of

the suspected infringement, indicating the market

thought to be affected.

The Commission must identify the sectors covered

by the alleged infringement with which the

investigation is concerned with a degree of precision

sufficient to enable the undertaking in question to limit

its cooperation to its activities in the respect of which

the Commission has reasonable grounds for

suspecting an infringement of the competition rules,

justifying interference in the undertakings sphere ofprivate activity, and to make it possible for the Court

of the European Union to determine, if necessary,

whether or not those grounds are sufficiently

reasonable for those purposes.

After reviewing whether Commission had reasonable

grounds to issue the inspection decisions in question,

the General Court annulled the inspection decisions in

so far as they concerned electric cables other than

high-voltage underwater and underground electric

cables and associated materials.

The reasons for such a decision relied upon the factthat the Commission did not have reasonable grounds

to launch inspections in relation to the broad categoryof products set out in the decisions, given the

evidence of the Commissionsfile.

Case of Robathin v. Austria no. 30457/06). In addition,

making copy-images of digital devices may raise the

issue of collecting an excessive batch of information

which goes beyond the scope and the purpose of the

investigation and therefore it may constitute measures

that are excessive in relation to the suspected

infringement.

Given the above reason, a tighter regime of

performing the unannounced inspections is an

important safeguard for the undertakings rights,

mitigating the risk of fishing expeditions. However, for

this additional safeguard to be efficient it will be very

important that judges adopt a proactive approach in

verifying, at least prima facie, that there are indeed

reasonable grounds for suspecting an infringement

and that a dawn raid is actually necessary (based on

the proportionality criteria) in a given case. If this

verification is not made, then such prior judicial control

will remain a mere formality.

Recent relevant European case-law

developments

The aforementioned amendments come in the middle

of several European disputes raised by inspected

companies on the European Commissions extendedpowers to perform dawn raids. EUs General Court

delivered two important judgments regarding the

extent of the European Commissionspowers to dawn

raid companies for suspected competition law

infringements (Power cables investigation - Case T-

135/09 Nexans v Commission and Case T-140/09

Prysmian v Commission) and annulled the

Commissionsinspection decisions in both cases.

After having been dawn raided, Nexans and Prysmian

claimed the decisions to inspect were imprecise as

regards the product markets and the vague wording

affected their rights of defence. Both companies

emphasized that it was only in the high voltage

underwater cable sector that the Commission had

information enabling it to suspect an infringement. In b

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Toma Grosu,Associate

Direct line: (40-21) 408 89 29


Old vs . New,

Enforcing first court

commercial1decisions

under the new Civil

Procedure Code

by

Toma Grosu

With these documents, the enforcement officer requestedthe permission from the court to start the enforcement

procedure and, after the approval from the court, the

enforcement procedure was started.

This quick enforceability was in fact the very essence

attribute of the commercial litigations and was necessary

in the context of the extensive time needed for obtaining a

final decision, going through all the litigation phases.

New

According to the new Civil Procedure Code, the litigationsare no longer indexed as commercial or civil but only civil.

In this respect, the decisions that were once rendered by

the court as commercial are today civil decisions.

One of the consequences is that there are no longer

special regulations with respect to what used to be once

commercial litigations.

As a consequence, in the new Civil Procedure Code there

is no reference to the possibility of enforcement of the

commercial decisions rendered by the first court.

Situation

At least for a short period of time, it will not be uncommon

for companies to obtain a solution in court and wonder if it

is possible to start the enforcement procedure before the

solution becomes final.

In such case, the following situation can be identified of

having occured:

A commercial litigation is registered and ruled by the 1865

Civil Procedure Code, the first court decision being

rendered after February 15, 2013, the date the new CivilProcedure Code entered into force.

Against this decision, the debtor registered a request for

first appeal without requesting the suspension of the first

decision.

The issue under discussion is whether the creditor

can enforce the decision before the first appeal is

solved. b

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Even though almost one year has passed since the newCivil Procedure Code entered in force there are still

issues regarding the applicability cases under the

paradigm old vs. new.

Despite the fact that the lawmakers tried to accomplish

the transition as smooth as possible, there are a lot of

situations that were not specifically solved by the Law no.

79/2012 for putting in application Law no. 134/2010

regarding the Civil Procedure Code (the new Civil

Procedure Code).

Law no. 79/2012 states, as a general rule, that all the

litigations and enforcement procedures started under the

1865 Civil Procedural Code will be ruled by such code

until completion and all the litigations and enforcement

procedures started after February 15, 2013, will be ruled

by the new Civil Procedure Code.

There are, however, some procedural events and

attributes that are not clearly associated with the litigation

phase or with the enforcement procedure phase and,therefore, there are issues still without a clear solution

from the procedural point of view.

Such is the case of the first court decisions rendered in

commercial litigations under the 1865 Civil Procedure

Code and willing to be enforced after February 15, 2013,

i.e.under the new Civil Procedure Code.

Premise

Old

According to the 1865 Civil Procedure Code, the first

court decisions rendered in commercial litigations wereenforceable, no matter if there was an appeal or second

appeal declared.

In the 1865 Civil Procedure Code, the procedure was

simple, the creditors only obligation being to obtain a

legalized copy of the rendered decision and lodge it with

an enforcement officer along with a written request.


1For the purpose of this article, the lit igations

started between professionals as they were

defined by the 1865 Civil Procedure Code,

will be referred to as commercial litigations.


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This is the stage where the issue regarding the limits

between the 1865 Civil Procedure Code and the new

Civil Procedure Code should be finally solved.

Solution

As a general rule, when a court renders a decision, ithas to take into consideration all the consequences of

the rendering, i.e. effects and limits.

In this case, the court, ruling under the 1865 CivilProcedure Code, will have in mind all the privileges

given by the said Civil Procedure Code, including the

enforceability power of the decision issued by the first

court.

Thus, if the intention of the law applicable when the

claim was brought in front of the court was for the

decision of the first court to be enforceable,

consequence implied by the governing law, than this

should mean that no other court or enforcement

officer can intervene, unless the law specifically

allows it.

As per our case, the first court ruling a commercial

litigation will render a decision enforceable without

any other formalities needed, based on the provisions

of the law governing when the case was deferred tojustice.

As a consequence, the creditor, whos rights are

confirmed by the first court through the commercial

decision, should be entitled to address the

enforcement officer with a request for starting the

enforcement procedure against the debtor.

The enforcement officer will address the competent

court for approval of the enforcement procedure and,

according to the arguments above, the court should

render a positive solution.

However, all these theoretical considerations could be

argued against by the courts, especially since,

usually, the enforcement procedure approvals are

According to the 1865 Civil Procedure Code, the

decision is enforceable, being a commercial litigation.

But, from the enforcement procedure point of view, a

decision challenged by appeal, is not enforceable

under the new Civil Procedure Code.

Therefore we have a decision that is enforceable if we

consider the enforceability a prerogative of the ruling

under the 1865 Civil Procedure Code but not

enforceable if we consider the enforceability a

prerogative of the enforcement procedure under thenew Civil Procedure Code.

First phase

This issue has to be solved first by the creditor before

drafting the request for the enforcement officer.However, the creditor has the intention to cash in the

amounts included in the decision, so there is no

objectivity in this analysis.

Second phase

The second step is for the enforcement officer to

analyze the creditorsrequest according to the powers

given to him by the new Civil Procedure Code.

This second analysis is not very objective either,

because the enforcement officer has an interest in

cashing in the amounts representing enforcement fees

so he will be willing to go forward with the enforcement

procedure and leave the analysis to the courts.

Third phase

The third and most important analysis happens in front

of the court that has to rule on the approval for starting

the enforcement procedure.

The court has the power and obligation to verify if the

document attached to the requests from the creditor

and enforcement officer is an enforcement title

according to the law and if the said title can be

enforced against the debtor mentioned in the requests.

b

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analyzed by newly appointed judges which may be

tempted to apply the new provisions on the

enforcement procedure.



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b

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