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Press releases and law firm thought leadership

This page is dedicated to keeping readers informed of the latest news and thought leadership articles from law firms across the globe.

If your firm wishes to publish press releases or articles, please contact Shehab Khurshid on +44 (0) 207 396 5689 or shehab.khurshid@legalease.co.uk

 

Disputes Resolution Newsletter

April 2006. Press Releases by Voicu & Filipescu SCA (view listing).

ARBITRATION

Notion of arbitration

Arbitration is seen as a conventionally originating private justice, in view of the fact that the parties may authorize, within the limits allowed by law, one or several private persons, called arbitrators to settle, in certain circumstances, a legal dispute between the parties, thus avoiding to submit said dispute to courts of competent jurisdiction.

Arbitration involves two components: a contractual one and a jurisdictional one. The contractual nature derives from the fact that the foundation of arbitration lies in the will of the parties. The parties, choosing to settle their dispute by arbitration, appoint the arbitrators and, to a broad extent, the power thereof, the procedural rules to be observed and the manner of substantiating the decision reached by the arbitrators. Since the purpose and the result of this agreement between the parties is the settlement of a virtual or current dispute upon an award likely to have the same effects as a decision that could have been passed by a court of justice, arbitration has a jurisdictional nature as well.

Internal arbitration and international arbitration

Arbitration is considered internal when its purpose is the settlement of disputes related to commercial relationships born and existing only in Romania, and being exclusively subject to the Romanian law.

Arbitration acquires international character where the dispute is connected to several countries legal systems, when it arises from an agreement or from other commercial relationships of international commerce interest.

Consequently, the determinant factor for the parties in addressing one or another arbitration institution is the nature of the dispute; the international nature of the arbitration institution shall not be transferred to the dispute between the parties.

A. Internal Arbitration

Forms of an arbitration agreement

There are two forms of determining the arbitration : by inserting a compromissory clause in the main contract, and by executing a compromissum, which is an independent agreement.

Compromissory clause is one of the clauses of the contract concluded by the parties, by which they agree that, in the event of a dispute arising from that contract, they shall settle it by means of private justice: an arbitral tribunal. Legal exigencies with regard to the compromissory clause impose written agreement thereupon, either by express stipulation in the main contract, or by means of another document such as an accepted invoice or correspondence, yet in any case the agreement between the parties must be clear and certain. Also, a compromissory clause shall mention the name of the arbitrators or the way of appointing them; this shall be the minimal and prior condition of constituting the arbitral tribunal. A compromissory clause is relatively autonomous towards the contract containing it, in the sense that if it is affected by a nullity cause, the latter shall not necessarily entail the nullity of the contract containing said clause, but if a defect of consent affects the contract in its integrity, the compromissory clause shall be affected as well.

By compromissum the parties agree that a dispute arisen between them should be settled by means of arbitration, mentioning at the same time the object of the dispute and the names of the arbitrators or the way of appointing them. A compromissum is a contract, hence it has to meet al the validity conditions of such legal act.

The momentous criterion of distinction between a compromissory clause and a compromissum is, therefore, the dispute itself: a compromissum is about an already arisen and existing dispute, whereas a compromissory clause provides for a future or even possible dispute.

Non-arbitrable disputes

Disputes related to individuals civil status, criminal disputes, disputes whose object is administrative-conventional liability, disputes related to fiscal matters, disputes whose object is legal reorganization and bankruptcy procedure, disputes related to land matters, and disputes related to privatization may not make the object of arbitral agreements. Also, disputes whose object is non patrimonial intellectual property rights, disputes related to competition law (except for the disputes related to unfair competition, which are arbitrable), as well as disputes related to companies, respectively to the goodwill or the nullity of trading companies, may not be subject to arbitral jurisdiction.

One has to allow for the fact that legal entities governed by public law may not be, in principle, parties to an internal arbitral judgment. The only way such legal entity may resort to arbitration is an express provision of a law, which would entitle it to take this step with regard to the private management of the assets it owns.

Effects of an arbitral agreement

The execution of the arbitral agreement excludes, for the dispute to which it refers, the competence of courts of justice. Nevertheless, the court shall withhold the trial for settling in one of the following cases: if the defendant formulated its defense without any reserve based on the arbitral agreement; if the arbitral agreement is void or inapplicable; if the arbitral tribunal may not be set up for reasons clearly imputable to the defendant in arbitration. In all other cases the court referred to for settling the dispute, upon either party?s request, shall declare itself incompetent if it learns that there exists an arbitral agreement.

Effects of an arbitral award and its annulment

An arbitral award is particularly a jurisdictional act, which has, according to law, the effects of a final court decision. Hence, the award is obligatory, and it shall be willingly executed by the losing party; it is also a writ of execution by being vested with an executory clause, and shall be enforced exactly like a court decision.

There is only one way to cancel an arbitral award, by action for annulment, which may be initiated only in certain circumstances, expressly and restrictively set forth by law. A category of reasons invoked in the request for the annulment of an arbitral award arises from the breach of the arbitral convention, in different respects: the dispute was not subject to arbitration; the arbitral tribunal solved the dispute without a prior arbitral convention existing or under a void or ineffective arbitral convention; the arbitral tribunal was not set up according to the arbitral convention; the arbitral award was pronounced after the end of the maximum term of five (5) months since the setting up date of the arbitral tribunal, where the parties had not agreed otherwise. The other category arises from the breach of certain basic principles, which are valid in any civil trail: the party requesting the annulment of the arbitral award was not present from the session debating the case, and the summoning procedure was not performed in compliance with legal provisions; the arbitral tribunal decided on other matters than requested, or it did not decide on the requested matter, or its decision covered a larger area than requested (it seems that in practice this is the most frequent reason for the annulment of arbitral awards); the arbitral award does not show the grounds and the ruling, it does not mention the date and the venue of the award, it is not signed by the arbitrators; the ruling of the arbitral award sets out inapplicable orders; the arbitral award is in breach of public order, goods mores or imperative legal provisions.

The action for annulment may be initiated within one month after the pronouncement of the arbitral award. The court with competence to judge the action for annulment is the court immediately superior to the one that could have judged the dispute on the merits, in the jurisdiction where the arbitration took place, had not been for the arbitral convention. The decision on the action for annulment may be appealed by the party concerned.

Institutional arbitration and ad-hoc arbitration

Settling disputes by arbitration may be performed by an institutionalized tribunal or by an ad-hoc (occasional) tribunal.

Institutional arbitration is performed by permanent arbitration institutions, acting by the chambers of commerce or large corporative or professional associations, as specialized institutions, while ad-hoc arbitration operates only for the purpose of settling a specific dispute.

In case of institutional arbitration, the parties enter into an agreement with the arbitration institution, which can be deemed an agreement for organizing or managing the arbitration (fundamentally a service supply agreement), wherefrom arise to-do obligations for the institution: the institution shall set up the arbitral tribunal (appointment of the arbitrators ? without prejudice to the will of the parties, which shall choose, from the persons listed by the arbitral institution, the eligible people for setting up the arbitral tribunal, replacement of the arbitrators, settlement of the request for the recuse of the arbitrators, etc.) and shall keep the arbitration file, sometimes it shall set the procedure to be followed ? an ordinary or an emergency procedure, it shall ensure that its own arbitration regulations are observed, and shall guarantee to the parties an equitable trial.

The International Commercial Arbitration Court of the Chamber of Commerce and Industry of Romania functions as a permanent non-governmental body, without legal personality, being independent in exercising its jurisdictional powers. The Court and county Chambers of Commerce and industry may, upon request, organize an ad-hoc arbitration only if there is a written arbitral agreement between the parties. If the arbitral agreement makes no reference as to the Chamber?s organizing the arbitration, this one may organize it upon the parties? joint request or of one of them, upon the other party?s agreement.

The Arbitral Chamber of the Bucharest Stock Exchange and the Arbitral Chamber of RASDAQ are permanent arbitral institutions, without legal personality, independent, organized with a view to organize and settle the disputes arising from stock exchange operations. Beside institutionalized arbitration, the Chambers also organize ad-hoc arbitration, being involved in both cases upon the arbitral agreement executed by the parties or upon parties? joint request or of one of them, followed by the written consent of the other party.

The National Health Insurance House together with the Romanian Medical College and the Romanian Nursing Order organizes the Central Arbitration Commission, which settles the disputes between the medical services suppliers and the health insurance houses.

Also, the Arbitration Court of UCECOM was set up as a permanent arbitration organization, without legal personality, authorized to settle the disputes between the craftsmen? cooperative organizations, and between these ones and their cooperative members.

The National Council of the National Union of Practitioners in Reorganization and Judicial Liquidation is in charge, inter alia, with the intervention for reconciling and arbitrating professional disputes between the members of the Union. It would result that this one organizes and performs the arbitration.

B. International Arbitration

Advantages and disadvantages of international arbitration

One might generally say that arbitration offers a closer judgment to the requirements and the spirit of international business relationships based on the following considerations: arbitral tribunals are less influenced by judicial precedents, they may contain arbitrators of foreign citizenship (the parties are entitled to agree that the sole arbitrator or the superarbitrator should be a citizen of a third-party country); the parties may appoint, in the arbitral tribunal, experts in certain technical industries, and then only the superarbitrator will be a legal expert; high qualification of the arbitrators in the international economic relationships matters will lead to a proper application of the international commercial practice adapted to legal relationships with extraneous elements; the parties may resort to procedural rules corresponding to the knowledge and the expectations of each of them, but, if they address a permanent arbitration institution, they shall accept that the arbitration will be carried out in accordance with the regulation of that specific institution; in the event that the parties did not choose the governing law of the merits of the dispute, the arbitrators shall apply the law they consider appropriate in that case; the parties may choose, upon mutual agreement, an arbitral body, or may determine an arbitration venue that, by its geographical location, lies at a reasonable distance for each of them; forced execution of the arbitral awards is easier acquired than the enforcement of judgments, due to the bilateral and multilateral conventions between countries.

Among the shortcomings of the international arbitration one can list: the risk of sharpening the differences between the arbitrators as regards juridical and ethical concepts they understand to refer to; the limits of the confidentiality provided by arbitration ? the rules of procedure of arbitration institutions prescribe, in principle, that the obligation of keeping confidentiality is incumbent upon Arbitration Courts and the persons with administrative charges; where the disputes concern more than two parties, difficulties may appear with regard to the acceptance by all the business partners of a mutipartite arbitration, as to the appointment of the arbitrators and the determination of the applicable rules of procedure.

Arbitral Tribunal

Taking into account that international arbitration is organized subject to the regulations of various multilateral international conventions on arbitration, concretely determined by the parties by arbitral convention, the rules regarding the setting up of the arbitral tribunal vary from one case to another. Yet, this does not rule out the consideration of the provisions included in the internal sources of law.

As regards the citizenship of the arbitrators, there is no limitation in principle. Nevertheless, the parties may decide by the arbitration agreement that the appointment of the arbitrators should be done in compliance with certain limits determined in accordance with the criterion of citizenship. For instance, it may be agreed that the sole arbitrator or the superarbitrator will not belong to any of the countries whose citizens are the business partners, or where the headquarters thereof is located in.

In principle, each party appoints one arbitrator. Still, where there are several plaintiffs or several defendats, the parties with common interests shall appoint only one arbitrator.

In general, disputes may be settled by one, two, or more arbitrators. If the arbitral tribunal consists of three arbitrators, the superarbitrator may be appointed by the parties, by the other arbitrators or by the arbitration institution. The arbitral tribunal may also be composed of two arbitrators, a superarbitrator being appointed only in the event that these two arbitrators do not agree on the settlement of the case. In such case, the superarbitrator shall be appointed by the parties or by the two arbitrators. Should the parties agree to have their disputes settled by an arbitrator, this one may swiftly settle the dispute, and the costs of the arbitration will be lower.

If the arbitral tribunal was not set up in accordance with the arbitral agreement, it is possible that the arbitral award be annulled; in such case, the recognition and the enforcement of the award shall be denied. For these reasons, the annulment of the arbitral award in the country of one of the contacting parties shall be the ground for the denial of recognition or enforcement of the judgment in the country of the other contracting party.

Recognition and enforcement in Romania of foreign arbitral awards

Romanian law establishes the criterion of the arbitration venue as main criterion based on which is determined the national or foreign character of the arbitral award. Yet, even an arbitral award passed in Romania may be qualified as a foreign award if it involves preponderant extraneous elements.

In the view of recognizing and enforcing foreign arbitral awards, the court invested with the authority to settle the petition shall have to check if the following conditions are complied with: the arbitral award is final; the arbitral tribunal that pronounced the award had, according to the law in the country it was pronounced, the competence to judge the dispute; there is reciprocity, even if only de facto, that is in practice, with regard to the effects of foreign decisions between Romania and the country in which the court pronounced its decision; the decision does not break Romanian private international law public order; the trial has not been settled between the same parties upon a decision, even not final, of Romanian courts, or is not pending in said courts at the moment of its submission to the foreign court; the decision is enforceable according to the law of the court that pronounced it; the right to claim forced execution has not been prescribed yet under the Romanian law.

ARBITRATION CASE LAW

Competent court in case a compromissory clause has been entered into

Decision no. 475 of 9 February 2004 of the High Court of Cassation and Justice ? Commercial Section

The High Court of Cassation and Justice decided that the insurer?s action to retrieve the damages paid to the beneficiary of the insurance, based on an insurance agreement containing a compromissory clause, was lawfully submitted to the Court of International Arbitration of the Chamber of Commerce and Industry of Romania. The assertion that the common law court is the competent court in this case, since the action is in regress, lacks grounds as the insurer?s action is founded on the insurance convention, and the defendant is liable for creating the insured risk.

Copromissory clause included in an accessory agreement

Decision no. 278 of 27 January 2004 of the High Court of Cassation and Justice ? Commercial Section

The High Court of Cassation and Justice decided that assuming the obligations arising from a custody agreement accessory to a sale and purchase agreement containing a compromissory clause are not fulfilled, the dispute is subject to arbitration, justified by the fact that, though executed separately, both agreements had the same purpose, namely the sale of the relevant goods.

Action for annulment of an arbitral award

Decision no. 493 of 10 February 2004 of the High Court of Cassation and Justice ?Commercial Section

As the arbitral award communicated to the parties is as effective as a final court decision, the only grounds that may lead to its annulment are the ones expressly and restrictively provided for by law for the action for annulment. Competence to judge the action for annulment has the court in the jurisdiction where the arbitration took place, immediately superior to the court that could have had the competence to judge the dispute on the merits, had not been for the arbitral convention. Taking into account the legal provisions establishing distinct rules for judging the action for annulment, the High Court of Cassation and Justice held that such action is similar to a real appeal, exercised under the conditions specifically regulated by the Civil Procedure Code.

Decision no. 156 of 20 January 2004 of the High Court of Cassation and Justice ?Commercial Section

Since the arbitral tribunal is not a court of law for the purpose of the provisions of the Civil Procedure Code, the High Court of Cassation and Justice held that one cannot substantially allege that the action for annulment is submitted to the arbitral tribunal on the grounds that the action was deemed an appeal. Such action shall be directly referred to the court located in the circumscription of the arbitral tribunal, immediately superior to the one that could have had competence to judge the case on the merits, had not been for the arbitral convention.

VOICU & FILIPESCU - NEWS

? Voicu & Filipescu advised Sensiblu SRL, the largest Romanian chain of pharmacies, in the process of acquiring the chain of pharmacies composed of 33 pharmacies held by the GlaxoSmithKlein group in Romania.

? Voicu & Filipescu advised, as Romanian legal counsel, Rabobank in granting a credit facility to Rynart Tranport BV, in all the matters related to the loan of up to EUR 60 million secured by assets and shares of the Romanian entity held by Rynart.

? Voicu & Filipescu advised, as Romanian legal counsel, Deutsche Forfait s.r.o. and Deutsche Forfait AG in granting a credit facility to Metrorex, in all the matters related to the loan of up to EUR 45 million and in other issues related to the refinancing of municipal loans.

? Voicu & Filipescu advised in the year 2005 private acquisition transactions exceeding US $ 1 billion of the total of US $ 3.4 billion recorded on a national level.

? In the last six years, Voicu & Filipescu advised 4 of the 10 most important acquisition transactions from Romania.

? Voicu & Filipescu have the pleasure of announcing the ellection of two new partners of the Firm, Mrs. Marta Popa and Mr. Daniel Costea.

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mr. Cristian Gavrila as Senior Associate and Head of Litigation & Arbitration Department. He successfully finalized 14 arbitration cases related to post-privatization, competition, construction, corporate and bankruptcy in accordance with ICC, UNCITRAL, Vienna and CAB?s Rules exceeding the amount at stake of US$ 200 mil

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mrs. Diana Condurache, as a member of the Litigation & Arbitration Department.

Read more…

Real estate Newsletter

April 2006. Press Releases by Voicu & Filipescu SCA (view listing).

I. THE LEGAL REGIME OF PROPERTIES IN THE LIGHT OF THE REVISION OF THE CONSTITUTION AND THE SUBSEQUENTLY ADOPTED REGULATIONS

General background

The property right is of a fundamental nature in any democratic society, and it is for the State to ensure its preservation, therefore its fundamental features must be regulated by the Constitution (as also resolved upon by the Constitutional Court of Romania by Decision no. 4/1992 ). The general regime of property in Romania was perfected concurrently with the revision of the Constitution adopted in 1991.

Guaranteeing private property

The Constitution of 1991, prior to being revised, did not expressly provide that private property is secured; the constituent legislator made no distinction between the forms of property, namely between private and public property, with respect to this matter. Thus, the Constitution generically provided that ?The right of ownership, as well as the claims over the state, are secured? , or that ?Private property is equally protected by the law, irrespective of the owner? or that ?The State protects the property? .

After the revision, new provisions were added to the Constitution, and some of the initial provisions were restated, which resulted in an exhaustive and clearer regulation of the private property right.

Thus, it is expressly stipulated that ?Private property is equally secured and protected by the law, regardless of the owner? . By means of the express reference to the securing of private property, one unequivocally established the State?s obligation to create the legal background necessary in view of complying with, and exercising, the ownership right; the contents and the extent of the right of ownership are, however, set out under the law, so that securing under the Constitution does not transform the right of ownership into an unlimited right.

Limitations of the right of ownership

The fact that this right may only be limited under law represents, in itself, a guarantee of the right of ownership. The limits that may be imposed under the law must not prejudice the substance of the right, namely they must not destroy such right, and they must comply with the principle of proportionality , and the restrictive laws must be of an organic nature (the last aspect is also made clear by the constitutional provision according to which ?Private property is inviolable under organic law? ). The private property right represents one of the fundamental rights provided for under the Constitution, and its legal regime cannot be affected by regulations contained by emergency ordinances .

The most severe limitations that may be imposed upon the right of ownership are those referring to the forced assignments of this right. In the light of the new Constitution, forced assignments may only be carried out through expropriation for causes of public utility, set out under the law, with just and prior compensation or through seizure, in accordance with the law, of the goods intended, used or resulting from, infringements or offences .

Nationalization, as a method of attainment of the right of ownership, as well as ?any other measures of forced transfer of goods into the public ownership?, on the basis of discriminatory criteria, are prohibited by the new Constitution . This measure has been widely used in the past, when many private properties were nationalized by the Romanian State and transferred into the public property on the basis of the nationalization acts.

The public property right

According to the new constitutional provisions, ?Public property is secured and protected under the law and it belongs to the State or the administrative ? territorial units? . As far as the object of the public property is concerned, a series of specifications are in place:

? The goods that represent the exclusive object of public property are listed under art. 136 paragraph 3; other goods may also be added to the above, under organic law;

? An exclusive object of public property is represented by the ?underground resources presenting a public interest?, and not by the ?underground resources of any nature?, as initially stipulated;

? ?Only waters with a power potential that can be capitalized upon, presenting a national interest? may represent an exclusive object of public property, but ?the waters with a power potential that may be capitalized upon and the waters that may be used for the public interest? cannot;

? The goods that represent the exclusive object of public property no longer include thoroughfare;

? In conclusion, the object of private property may include any underground resources which do not present a public interest; waters with a power potential that may be capitalized upon, presenting a local interest; waters that do not have such a potential; thoroughfare, unless organic law provides otherwise.

A new method for the exercise of the public property right is also established, namely the granting of the goods forming the object of this property for the use, free of charge, of the public utility institutions, in addition to the already existing methods: granting to public corporations or public institutions for management purposes, concession and leasing.

Attainment of the right of ownership over lands by foreign and stateless citizens

In the conditions and under the terms of the former wording of the Constitution, it was prohibited for the foreign and stateless citizens to acquire an ownership right over lands located in Romania. This prohibition is reinstated under the special law which regulates the judicial movement of lands and refers to the attainment of the right of ownership over any lands (located either inside or outside the built-up area and irrespective of the category of use thereof).

The foreign and the stateless citizens have a duty regarding the incapacity to acquire a right of ownership over lands under judicial deeds concluded between living persons or for reasons of death, legal inheritance, usucaption or accession.

The status of the lands that represent a part of successions to which foreign or stateless citizens are entitled gave raise to a series of contradictory opinions in practice, as follows: according to one opinion, it was considered that in the successional cases in which the only heir is a foreign or a stateless citizen, one shall acknowledge successional vacancy with respect to the lands; according to another opinion, it was considered that stateless and foreign citizens are entitled to the value equivalent of the lands the ownership of which they cannot obtain by way of inheritance.

The prohibition regarding the stateless or foreign citizens? attainment of a right of ownership over lands has been lifted along with the amendment of the Constitution, as the new regulation focused on the cases and the conditions in which said citizens may attain such a right: ?Foreign and stateless citizens may acquire a right of private ownership over lands solely in the conditions resulting pursuant to Romania?s accession to the European Union and other treaties to which Romania is a party, on a mutual basis, in the conditions provided for under organic law, as well as by means of a legal inheritance? .

The provision according to which foreign and stateless citizens may acquire an ownership right over lands by way of legal inheritance is to be applied immediately. After Romania?s accession to the European Union, foreign and stateless citizens may acquire the right of ownership over lands, in the conditions provided for under organic law. In this respect, one adopted the Law regarding the attainment of the private ownership right over lands by foreign and stateless citizens, as well as by foreign legal entities (?Law 312/2005?), law which shall come into force on the date of Romania?s accession to the European Union .

The contents of Law 312/2005 contemplate several hypotheses, which are set forth below:

1. The attainment of the right of ownership over lands by the citizens of the states that are members of the European Union and the legal entities having the nationality of said states, as well as by the stateless citizens domiciled in a member state or in Romania

? The citizen of a member state, the stateless person having his/her domicile in a member state or in Romania, the legal entity established in accordance with the legislation of a member state, may acquire a right of ownership over lands in the same conditions as those provided for under the law for Romanian citizens/legal entities;

? The citizen of a member state, non-resident in Romania, the stateless person, non-resident in Romania, having his/her domicile in a member state, the non-resident legal entity, established in accordance with the legislation of a member state, may acquire a right of ownership over lands for secondary residences (secondary headquarters, respectively) upon the expiry of 5 years following the date of Romania?s accession to the European Union;

? The citizen of a member state, the stateless person having his/her domicile in a member state or in Romania, the legal entity, established in accordance with the legislation of a member state, may acquire a right of ownership over agricultural lands, forests and forest lands upon the expiry of 7 years following the date of Romania?s accession to the European Union. However, said provisions do not apply to the farmers who carry out independent activities (i.e. any individual who carries out an agricultural or forest-related activity, in view of obtaining vegetal or animal agricultural products, as well as storing activities, activities of processing of the products obtained from their own activity, or who carry out an activity in view of obtaining wooden or non-wooden products of the forest resources) and who are either (i) citizens of the member states or stateless persons having their domicile in a member state, who set up their residence in Romania, or (ii) stateless persons having their domicile in Romania. Said persons shall acquire the right of ownership over the agricultural lands, forests and forest lands in the conditions applicable to Romanian citizens, as of the date of Romania?s accession to the European Union.

2. Attainment of the right of ownership over lands by foreign citizens, stateless persons and legal entities belonging to the third party states / states that are not members of the European Union

? The foreign citizen, the stateless person and the legal entity belonging to the third party states may acquire a right of ownership over lands, in the conditions regulated under international treaties, on a mutual basis, but not in conditions more favorable than those applicable to the citizen of a member state and to the legal entity established in accordance with the legislation of a member state.

II. THEORETICAL AND PRACTICAL ISSUES REGARDING THE LANDS LOCATED ON THE TERRITORY INSIDE THE BUILT-UP AREA ON WHICH BUILDINGS MAY BE ERECTED

Rule ? The constructions are erected on the territory inside the built-up area of the localities

According to the regulations set forth in Law no. 18/1991 regarding the land resources, as amended and republished (hereinafter called ?Law 18/1991?), ?The placement of the new constructions of any type shall be made inside the built-up area of the localities? . The concept of ?territory inside the built-up area? is defined by Law 18/1991 as being ?the one existing as of January 1, 1990, recorded in the real estate register? and which may be ?modified only in accordance with the law? . Therefore, on the lands located inside the built-up area one may erect constructions of any type, after obtaining the construction authorization and in compliance with the regulations regarding the legal regime of constructions.

The lands located inside the built-up area of the localities, on which constructions may be built, may have any category of use (i.e. arable, vineyards, meadows, pastures, grass lands, yards, constructions or other lands). Even if the lands located inside the built-up area of the locality do not have the construction category of use, this does not imply that no constructions can be erected on such lands, as Law 18/1991 makes no distinction with respect to the placement of the new constructions depending upon the category of use of the land.

Exception ? The building of constructions outside the built-up area. The procedure of including the lands located outside the built-up area of the localities inside the built up area of the same

However, the placement of constructions of any type on the lands located outside the built-up area is prohibited .

The lands located outside the built-up area may, however, be included inside the built-up area of the localities, upon the proposal of the local councils, by means of a Government resolution, with the endorsement of the Ministry of Agriculture, Forests and Rural development (the detailed procedure of including the lands located outside the built-up area inside the built-up area is provided for under Law 18/1991). To this effect, one must also take into consideration the provisions of the Law regarding the authorization regarding the execution of construction works, as amended and republished (?Law 50/1991?): ?The lands intended for construction purposes shall be withdrawn from the agricultural circuit, either temporarily or permanently, according to the law? .

The placement of constructions of any type, on the lands subsequently included inside the built-up area, by means of the General Town-Planning Layout ? ?G.T.P.L.? ? may only be executed after the withdrawal of such lands from the agricultural circuit by their owners, upon the payment of a fee. Such fee is calculated by percentage, and it varies between 100 ? 400%, depending upon the class of the agricultural land, for the agricultural lands, and between 300 ? 600%, depending upon the quality class, for the forest lands.

Criteria for the calculation of the fee for the withdrawal from the agricultural circuit:

? The percentage fee shall apply on the value of the land, provided as the price/consideration by the parties to the assignment contract;

? In the event that the land was not subject to a sale-purchase operation and it is owned by the investor or it originates in a concession, donation etc., the percentage fee shall be calculated on the value of circulation of the land located in the respective area;

? For the agricultural lands located outside the built-up area, which are permanently or temporarily withdrawn from the agricultural circuit, the assessors certified by the Ministry of Agriculture, Forests and Rural Development shall obligatorily conduct an assessment. The temporary withdrawal shall last for a maximum period of 2 years. Should it be found that the values resulting from applying the fees according to the first two criteria are lower than the assessment conducted according to the third criterion, one shall use, for the calculation of the percentage fee, the value set out by the assessors certified by the Ministry of Agriculture, Forests and Rural Development.

Therefore, the placement of the constructions of any type may be performed inside the built-up area of the localities, as the latter was established as of January 1, 1990, without any obligation to pay such percentage fee for the withdrawal of the land from the agricultural circuit, and in the case of the lands subsequently included inside the built-up area, pursuant to the extension of the territory located inside the built-up area by way of the G.T.P.L., the building of constructions of any type may solely be performed after the withdrawal from the agricultural circuit, by means of the payment of the aforementioned percentage fee to the State.

In the practice of the administrative bodies, the provisions of Law 50/1991 resulted in misconstructions and abusive implementations the origin of which was the consideration that the lands located inside the built-up area of the localities, existing as of January 1, 1990, set out under the G.T.P.L., also needed to be withdrawn from the agricultural circuit, if they have a category of use other than that of constructions and if their owners intend to erect constructions of any type on such lands .

III. LEGISLATIVE RETROSPECTIVE

Law no. 312/November 10, 2005 (published in the O.G. no. 1008/November 14, 2005) regarding the attainment of the private ownership right over lands by foreign and stateless citizens, as well as by foreign legal entities.

Romanian Government Resolution no. 1481/November 24, 2005 (published in the O.G. no. 1092/December 5, 2005) regarding the establishment of S.C. ?Fondul Proprietatea? ? S.A. In accordance with title VII of Law no. 247/2005 regarding reform in the property and justice field, as well as several adjacent measures, as subsequently amended (?Property Law?), the collective placement body S.C. ?Fondul Proprietatea? ? S.A. was established in the form of a closed investment company. Until the designation of a management company, Fondul Proprietatea shall be managed by the Ministry of Public Finances. The main object of activity of the Fund consists in the management and administration of the portfolio in view of the granting of the compensation related to the real estate properties that cannot be returned in kind, by means of the transfer, free of charge, of the shares from the property of the state into the property of the persons entitled. Fondul Proprietatea shall initially have the Romanian State as its sole shareholder, which shall transfer the shares to the holders of the compensation title or to the subsequent acquirers thereof, as the case may be. Therefore, subsequently, individuals who are holders of compensation titles issued by the Central Committee for the Establishment of Compensation shall become shareholders of the Fund, according to the Property Law. The trading of the Fund?s shares shall be performed on regulated markets.

Law no. 358/December 6, 2005 (published in the O.G. 1106/December 7, 2005) for the amendment of annex no. 1 to the Law on land resources no. 18/1991. New values are set out for the percentage fee owed for the definitive withdrawal of the lands located outside the built-up area from the agricultural circuit, which varies between 100 and 400% (they previously varied between 200 and 400%).

Emergency Ordinance no. 209/December 22, 2005 (published in the O.G. no. 1194/December 30, 2005) for the amendment and supplementing of certain normative acts in the property field. This normative act was adopted for the purpose of facilitating the procedure of control carried out by the National Authority for the Return of Properties in the territory, its objectives being vesting property in the rightful owners and the fulfillment of the obligations incumbent upon the Romanian State under the assumed international undertakings. The following normative acts pertaining to the property field are amended and supplemented: Law 10/2001 regarding the legal regime of real estate abusively taken over during March 6, 1945 ? December 22, 1989; the Property Law; Government emergency Ordinance 94/2000 regarding the retrocession of real estate properties that belonged to religious cults in Romania; Law 18/1991. In the light of the new provisions of Law 18/1991, the deeds that represented the basis for the establishment or the reestablishment of the right of ownership represent ?information of a public interest and are open to the free access of citizens?.

VOICU & FILIPESCU - NEWS

? Voicu & Filipescu advised Sensiblu SRL, the largest Romanian chain of pharmacies, in the process of acquiring the chain of pharmacies composed of 33 pharmacies held by the GlaxoSmithKlein group in Romania.

? Voicu & Filipescu advised, as Romanian legal counsel, Rabobank in granting a credit facility to Rynart Tranport BV, in all the matters related to the loan of up to EUR 60 million secured by assets and shares of the Romanian entity held by Rynart.

? Voicu & Filipescu advised, as Romanian legal counsel, Deutsche Forfait s.r.o. and Deutsche Forfait AG in granting a credit facility to Metrorex, in all the matters related to the loan of up to EUR 45 million and in other issues related to the refinancing of municipal loans.

? Voicu & Filipescu advised in the year 2005 private acquisition transactions exceeding US $ 1 billion of the total of US $ 3.4 billion recorded on a national level.

? In the last six years, Voicu & Filipescu advised 4 of the 10 most important acquisition transactions from Romania.

? Voicu & Filipescu have the pleasure of announcing the ellection of two new partners of the Firm, Mrs. Marta Popa and Mr. Daniel Costea.

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mr. Cristian Gavrila as Senior Associate and Head of Litigation & Arbitration Department. He successfully finalized 14 arbitration cases related to post-privatization, competition, construction, corporate and bankruptcy in accordance with ICC, UNCITRAL, Vienna and CAB?s Rules exceeding the amount at stake of US$ 200 mil

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mrs. Diana Condurache, as a member of the Litigation & Arbitration Department.

Read more…

Competition Newsletter

April 2006. Press Releases by Voicu & Filipescu SCA (view listing).

HORIZONTAL COOPERATION AGREEMENTS

1. Definition, general background

Horizontal cooperation agreements are regulated by art. 5, paragraph 1 of Competition Law no. 21/1996, as republished (hereinafter called ?Competition Law?) and represent joint agreements or practices between two or more undertakings that operate at the same market level. Said agreements or practices have as an object or may have as an effect the restriction, prevention or misrepresentation of competition, and are prohibited, as they are rightfully invalid.

Horizontal agreements may involve both real competitive undertakings (which act on the same relevant market or which, in the absence of the agreement, have the capacity to rapidly modify their production in order to enter the relevant market without significant additional costs or risks), as well as potential competitive undertakings (which, in the absence of the agreement, could make additional investments in order to enter the relevant market).

The horizontal cooperation agreements which, by virtue of their object, intend to restrict competition by means of fixing prices, limiting production or dividing markets or clients, are prohibited, and the provisions of art. 5 paragraph 1 of the Competition Law shall apply from the beginning.

In the event that the object of such agreements is not a restriction of competition, it is necessary to analyze the effects of the agreement. This analysis is performed in accordance with the nature of the agreement, the combined market power of the parties involved and the market structure.

The agreements falling under art. 5 paragraph 1 of the Competition Law may be exempted if the requirements set forth under art. 5 paragraph 2 of the Competition Law are met, as follows:

 The economic benefits of the agreement contribute to the improvement of production or the distribution of the products or the promotion of the technical or economic progress; the Competition Council does not take into consideration cost reductions as a result of a reduction of production, division of the market or the mere exercise of power on the market.

 The existence of benefits for consumers; competition-related pressures shall generally ensure the transfer of the cost reductions to the consumers by means of the reduction of prices or the stimulation of undertakings to bring new products on the market, as fast as possible.

 The indispensable nature of the restriction of competition for the achievement of the competition?s benefits; the indispensable nature depends upon the market conditions and the duration of the agreement.

 The maintenance of competition; if an undertaking holds a position that is or may become dominant as a consequence of the horizontal agreement, the respective agreement may cause anti-competition effects and may not, in principle, be exempted from the enforcement of art. 5 paragraph 1 of the Competition Law.

Consequently, the finality of the horizontal cooperation is the cooperation between competitive undertakings and it covers fields such as: research-development, production, acquisitions or marketing.

The identification of the type of cooperation agreement is performed by means of the analysis of two factors: the starting point of the cooperation and the degree of integration of the various functions that are combined.

As far as horizontal cooperation agreements are concerned, the benefit of exemption provided for under art. 5 paragraph 2 of the Competition Law was determined by means of two regulations of the Competition Council for the following categories of agreements: research-development agreements (The regulation regarding the exemption of research-development agreements from the prohibition provided for under art. 5 paragraph 1 of the Competition Law no. 21/1996, as subsequently amended and supplemented ? hereinafter called the ?Regulation on research-development agreements?) and specialization agreements (The regulation regarding the exemption of specialization agreements from the prohibition provided for under art. 5 paragraph 1 of the Competition Law no. 21/1996- hereinafter called the ?Regulation on specialization agreements?).

Cooperation agreements that do not fall under art. 5 paragraph 1 of the Competition Law are those that imply:

 cooperation between non-competitive parties;

 cooperation between competitive undertakings that are unable to independently achieve the project or the activity to which the cooperation refers;

 cooperation with respect to an activity that does not influence the relevant parameters of competition.

2. Research-development agreements

According to the provisions of the Regulation on research-development agreements, research-development agreements are such agreements that are concluded by and between two or more undertakings, which refer to the conditions in which such undertakings pursue:

 the joint research and development of the products or procedures and the joint exploitation of the results of such research and development;

 the joint exploitation of the results of the research and development of the products or the procedures jointly achieved under a previous agreement between the same parties;

 the joint exploitation of the results of the research and development of the products or the procedures without the joint exploitation of the results.

According to the provisions of the Regulation on research-development agreements, the prohibition provided for under art. 5 paragraph 1 of the Competition Law shall not apply to the aforementioned research-development agreements, which are exempted.

For a research-development agreement to be exempted the following are required:

 all parties to the agreement must have access to the results of the joint research-development activity, for the purpose of the subsequent researches and exploitations;

 each party must be free to independently exploit the results of the joint activity and the already existing know-how;

 joint exploitation must refer to the results protected by intellectual property rights or to those that represent know-how;

 the involved undertakings must honor all parties? delivery orders;

 if the involved undertakings are not competitors, the exemption shall apply for the duration of the research-development; if the results are jointly exploited, the exemption shall apply for the period of 7 years following the time when the contractual products are brought on the market;

 if the involved undertakings are competitors, the exemption shall apply for the aforementioned period only if, at the time when the agreement is concluded, the parties? cumulated market share does not exceed 25% of the relevant market of the products that may be improved or replaced with the contractual products.

The research-development agreements that meet the aforementioned exemption requirements are considered legal, without the obligation to notify the Competition Council or to obtain a decision from the same. The undertakings that invoke the benefit of exemption per categories must produce evidence of meeting the requirements and criteria set forth in the aforementioned Regulation.

3. Production agreements (including specialization agreements)

There are 3 categories of agreements regarding production:

 agreements regarding joint production, whereby the parties agree to jointly manufacture certain products;

 unilateral or mutual specialization agreements, whereby the parties agree, either unilaterally or mutually, to suspend the manufacturing of a product that they would buy from somewhere else;

 sub-contracting agreements whereby one party entrusts the other party with the manufacturing of a certain product.

3.1. Agreements regarding production

Firstly, agreements regarding production, whereby one sets the parties? sale prices, limits production or divides the markets or the clients, fall under art. 5 paragraph 1 of the Competition Law, with the following exceptions:

 when the parties agree upon the volume of production representing the object of the agreement regarding production;

 when a joint production company which also carries out the distribution of its products sets the products? sale price.

Secondly, joint production agreements are exempted from the implementing of art. 5 paragraph 1 of the Competition Law provided that on the relevant market the market share resulting from combining the market shares of the parties involved does not exceed 20%. In the event that such threshold is exceeded, one must assess the effects of the agreement with respect to market production, the degree of concentration of the market and the market shares, as essential elements.

Problems regarding competition may especially occur when the parties are suppliers and cooperate on the relevant market (the market directly affected by the cooperation) and/or on the resident markets (located upstream, downstream or in the neighborhood of the same, at the same level).

3.2. Specialization agreements

According to the provisions of the Regulation on specialization agreements, specialization agreements are the agreements concluded by and between two or more undertakings, which stipulate the conditions in which such undertakings become specialized in the manufacturing of products. The following types of specialization agreements exist:

 unilateral specialization agreements, whereby one of the parties accepts to cease or to refrain from manufacturing certain products and undertakes to purchase such products from undertaking, which in its turn undertakes to manufacture and supply such products;

 mutual specialization agreements, whereby two or more parties undertake, on a mutual basis, to cease or to refrain from manufacturing certain products, which are not the same, and to purchase such products from other parties that undertake to supply such products.

Specialization agreements also include the aforementioned joint production agreements.

According to the provisions of the Regulation on specialization agreements, the prohibition provided for under art. 5 paragraph 1 of the Competition Law does not apply to the aforementioned specialization agreements, nor does it apply to the following:

 purchase agreements whereby the parties accept an obligation of exclusive purchase and/or delivery in the context of an unilateral or mutual specialization agreement or of a joint production agreement;

 marketing agreements whereby the parties do not independently sell the products representing the object of a specialization agreement, but they jointly perform distribution or agree to appoint a third party distributor, in conditions of exclusivity or non-exclusivity, in the context of a joint production agreement, provided that the third party is not a competitor.

This exemption shall apply provided that the parties to the agreement do not hold a cumulated market share of over 20% on the relevant market.

Specialization agreements that meet the aforementioned exemption requirements are considered legal, without the obligation to notify the Competition Council or to obtain a decision from the same. The undertakings that invoke the benefit of exemption per categories must produce evidence of meeting the requirements and criteria set forth in the Regulation on specialization agreements.

3.3. Sub-contracting agreements

Sub-contracting agreements are such agreement whereby an undertaking orders to one of its competitors a basic component or another input for the completion of its final product.

4. Purchase agreements

Purchase agreements imply the joint purchase of the products, achieved by a jointly controlled undertaking or by a company in which several firms hold a small number of shares. Generally, such agreements are concluded between Small and Medium Enterprises in view of the achievement of volumes and discounts similar to large competitors.

Joint acquisitions may affect two markets: the market to which the cooperation directly refers and the sale markets (downstream) on which the parties act as sellers.

Purchase agreements are prohibited under art. 5 paragraph 1 of the Competition Law solely provided that their object does not really refer to the joint acquisition, but represents an instrument for the creation of a disguised coalition.

A joint market share under 15% on the relevant market indicates a small market power, but does not exclude an analysis of the case from the point of view of the exemption requirements provided for under art. 5 paragraph 2 of the Competition Law, and a joint market share of over 15% implies the analysis of the positive effects that must prevail over the negative effects.

Joint acquisitions may entail economic benefits, such as scale savings at orders and transportation, savings registered in costs, from which the consumers benefit.

5. Marketing agreements

Marketing agreements target the cooperation between competitors in the field of sale, distribution or promotion of their products. If the competitors agree to mutually distribute their products, the agreements may either have as an object or as an effect the division of the markets among the parties, or result in illegal secret conventions.

Marketing agreements, as defined above, may fall under art. 5 paragraph 1 of the Competition Law, provided that they contain vertical limitations (the limitation of passive sales, the maintenance of resale prices etc.).

According to art. 8 paragraph 2 of the Competition Law, the agreements that imply the setting of prices and tariffs, the assignment of markets and the faking of tenders always fall under art. 5 paragraph 1 of the Competition Law, irrespective of the parties? market power. In the event that the marketing agreements do not refer to such aspects, one shall analyze the parties? joint market power in accordance with the 15% threshold held on the relevant market. Nevertheless, exceeding the 15% threshold does not automatically indicate negative effects on the market, but it implies a more thorough analysis of the agreement?s impact upon the market.

6. Standardization agreements

Agreements regarding standards imply the definition of the technical and qualitative requirements with which the current or the future products, the procedures or the production methods must comply. Such agreements may have different forms and may cover various aspects, as follows:

 adoption of the standards by means of a national agreement by the European or national acknowledged standardization bodies, consortiums and forums;

 agreements between unique undertakings;

 standardization of the various classes or dimensions of a certain product;

 the technical specifications on the markets where compatibility and interoperability with other products or systems is of the essence.

The involved relevant markets may pertain to several categories:

 the market of the products to which the standards refer;

 the market of the services for setting out the standards;

 the market for testing and certification.

The assessment of each standardization agreement must target the nature of the standard and the likely effect upon the targeted markets, as well as the scope of the possible limitations that exceed the primary target of standardization.

The effectiveness of such agreements is proportional to the industry segment involved in setting out and/or applying the standard and is not necessarily influenced by the market share held by the parties.

Standards must not limit innovation, they must be technologically impartial and the participation in setting out the standard should be open to all competitors on the affected markets.

7. Environment agreements

By means of the environment agreements the parties undertake to decrease pollution (as defined in the environment legislation) or to achieve environment-related targets (decreasing a polluting agent or a certain type of waste etc.).

The involved relevant markets are those to which the agreement refers, with the following specific aspects:

 if the polluting agent is not a product, the relevant market comprises the market of the product into which the polluting agent is included;

 the collection/recycling agreements involve the markets on which the parties act as manufacturers or producers and the market of collection services.

Environment agreements that do not impose an individual obligation upon the parties, or whereby the parties generally undertake to contribute in the achievement of the environment target at the level of a sector, do not fall under the restriction scope of art. 5 paragraph 1 of the Competition Law.

Environment agreements fall under art. 5 paragraph 1 of the Competition Law when the real target of the cooperation does not refer to an environment-related issue, but it represents an instrument for the creation of a disguised coalition, intended for the setting of prices, a limitation of production or a division of markets.

Agreements that may gradually eliminate or may significantly affect a high percentage of the parties? sales with respect to their products or their production procedures shall fall under art. 5 paragraph 1 of the Competition Law if the parties hold a significant percentage of the market.

LEGISLATIVE RETROSPECTIVE

(OCTOBER-DECEMBER 2005)

? Order no. 1870/2005 of the Ministry of Public Finances for the approval of the Instructions for implementing the provisions of art. 194 ?Provisions regarding the recovery of illegal or prohibited state aid? of Government Ordinance no. 92/2003 regarding the fiscal procedure Code, as republished, with its subsequent amendments and additions. The Instructions regulate the legal background that must be complied with by the decisions of the Competition Council, as well as the decisions of the providers of state aids, whereby the recovery of an illegal or prohibited state aid is stipulated. Therefore, said decisions represent writs of execution and are subject to the provisions of art. 137 paragraphs (7)-(9) of the Fiscal Procedure Code.

The Competition Council or the providers of state aids shall send to the Ministry of Public Finances original copies of the decisions issued to this effect, accompanied by a proof of their communication to the beneficiaries of the state aid, and the ministry shall distribute the same to the department having duties in the state aid field.

? Order no. 326/2005 of the Competition Council regarding the amendment of the maximum value provided for under art. 8 paragraph (1) of Competition Law no. 21/1996, as republished. According to article 8 paragraph (1) of Competition Law no. 21/1996, as republished, the undertakings or the undertaking groups for which the turnover for the financial year prior to the display of manners of conduct that are likely to be deemed anti-competitive practices, does not exceed the maximum limit set out by the Competition Council on an annual basis, shall not be subject to the provisions of art. 5 of the aforementioned law, regarding the prohibition of such manners of conduct.

The present Order modifies the maximum value in relation to the turnover, as provided for under art. 8 paragraph (1) of Competition Law no. 21/1996, as republished, from RON 3 million (ROL 30 billion ROL) to RON 4 million (ROL 40 billion).

VOICU & FILIPESCU - NEWS

? Voicu & Filipescu advised Sensiblu SRL, the largest Romanian chain of pharmacies, in the process of acquiring the chain of pharmacies composed of 33 pharmacies held by the GlaxoSmithKlein group in Romania.

? Voicu & Filipescu advised, as Romanian legal counsel, Rabobank in granting a credit facility to Rynart Tranport BV, in all the matters related to the loan of up to EUR 60 million secured by assets and shares of the Romanian entity held by Rynart.

? Voicu & Filipescu advised, as Romanian legal counsel, Deutsche Forfait s.r.o. and Deutsche Forfait AG in granting a credit facility to Metrorex, in all the matters related to the loan of up to EUR 45 million and in other issues related to the refinancing of municipal loans.

? Voicu & Filipescu advised in the year 2005 private acquisition transactions exceeding US $ 1 billion of the total of US $ 3.4 billion recorded on a national level.

? In the last six years, Voicu & Filipescu advised 4 of the 10 most important acquisition transactions from Romania.

? Voicu & Filipescu have the pleasure of announcing the ellection of two new partners of the Firm, Mrs. Marta Popa and Daniel Costea.

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mr. Cristian Gavrila as Senior Associate and Head of Litigation & Arbitration Department. He successfully finalized 14 arbitration cases related to post-privatization, competition, construction, corporate and bankruptcy in accordance with ICC, UNCITRAL, Vienna and CAB?s Rules exceeding the amount at stake of US$ 200 mil

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mrs. Diana Condurache, as a member of the Litigation & Arbitration Department.

Read more…

Intellectual Property Rights Newsletter

April 2006. Press Releases by Voicu & Filipescu SCA (view listing).

HOW TO PROTECT YOUR BRAND

I. Introduction

In a competitive economy, it is impossible for a commercial enterprise to succeed in the absence of a strong ?image?, by means of which customers may identify the products or services that are provided to them by that company.

For this reason companies make significant investments, namely the so-called activity of ?branding?, which is performed through publicity or other actions for the promotion of the products and services.

Through ?branding?, companies attempt to imprint a feeling of trust in the quality of their products and services in the consumers? minds, which feeling would make the consumer acquire such products or services whenever he/she needs them. Practically speaking, this helps create in the consumer?s mind a connection between the company?s ?image? and the product or service marketed by the same.

The binder of this connection is the brand, namely a sign that is likely to be graphically represented, such as, for example: words, names of persons, designs, letters, figures, figurative elements, three-dimensional shapes (the shape of the product or the product?s packaging), color combinations, which shall allow the consumer to identify in the store the products marketed by the company the ?image? of which he/she is familiar with.

If the sign that is used by a company as a brand in unprotected, the competitors of the respective company shall try to take advantage of the investment that such company made with respect to its ?image?, either by copying the brand, or by using a sign that is similar thereto. Thus the advantage conferred by a well developed ?image? shall disappear, as the benefits created by such ?image? shall also extend to the products or services marketed by other competitor companies, which can afford to decrease the price provided that such price does not include publicity expenses as well.

The brand may be protected by means of its registration with the State Office for Inventions and Trademarks, in compliance with the procedure regulated by Law no. 84/1998 regarding trademarks and indications of origin (hereinafter referred to as the ?Trademark Law?).

Undoubtedly, the registration of the brand shall not determine all merchandisers not to attempt to take advantage of the investments intended for promoting the brand, as it is very lucrative to turn the expenses that one should have incurred for promoting one?s own ?image? into profit.

In order to eliminate such illicit activities, the Trademark Law provides the trademark holder with the following legal actions:

(i) the claim based on trademark infringement (hereinafter referred to as the ?Claim for counterfeit?, regulated by Article 35 of the Trademark Law;

(ii) the claim based on unfair competition (hereinafter referred to as the ?Claim for unfair competition?), regulated by Article 86 of the Trademark Law and by Article 5 paragraph 1 letter a of Law no. 11/1991 regarding the prevention of unfair competition (hereinafter referred to as the ?Unfair Competition Law?)

(iii) criminal claims against the persons who are found guilty of infringing the trademark, according to Articles 83 and 86 of the Trademark Law.

We shall further detail only the Claim for counterfeit and the Claim for unfair competition, as they are the methods most frequently used for eliminating the infringement of the holders? rights over a trademark. This is explained by the fact that most times trademarks are not copied, in which case the intention of fraud is evident, but they are imitated, in which case the penal action cannot result in a conviction, as it is very difficult to prove the fact that the person who breached the rights conferred by the trademark intended to do so.

II. THE CLAIM FOR COUNTERFEIT

According to Article 35 of the Trademark Law, the trademark holder may request the competent courts of law to prohibit the third parties from using during their commercial activity:

(a) a sign that is identical to the trademark for products or services that are identical to those for which the trademark was registered;

(b) a sign that, given its identity with or similarity to the trademark, or given the identity or the similarity of the products or services to which the sign applies with the products or services for which the trademark was registered, would cause in the public?s perception a risk of confusion, including the risk of an association of the trademark with the sign;

(c) a sign that is identical with, or similar to the trademark for products or for services that are different than those for which the trademark was registered, when the latter has a renown in Romania and provided that, by using the sign without grounded reasons, one may take advantage of the distinctive nature or the renown of the trademark or the use of the sign would cause prejudice to the trademark?s holder.

In most cases, merchandisers who wish to take advantage of the image of their competitors (i) use for identical products or services a sign that is similar to the trademarks held by the same or (ii) use a sign that is identical to the trademark, but for products or services that are similar to, or different from, those for which the trademark is used.

In this manner, such merchandisers create confusion in the consumers? minds , who, instead of purchasing the products or the services marketed under the respective brand, purchase the competitors? products or services owing to the low price and to the perception that they either originate with the trademark holder or are manufactured or performed with the approval thereof.

The effectiveness of such practices and, implicitly, the very significant prejudices that they cause to the targeted trademark holders, is due to the following:

(i) human memory, which is not perfect and does not remember in detail the trademarks? image;

(ii) the difficulty of proving that the persons who carry out such practices intend to breach the rights conferred by trademark, which is why a penal conviction is very difficult to obtain;

(iii) the quantum of the prejudices suffered by the trademark holder is difficult to prove.

What may the trademark holder demand by way of the Claim for counterfeit?

The trademark holder, who is prejudiced by the use of a sign that is similar to his/her trademark, may demand the court of law to prohibit the following activities:

(i) the affixing of the sign on products or on packages;

(ii) the marketing of the products or the performance of the services under said sign;

(iii) the import or the export of the products under said sign;

(iv) the use of the sign on documents or for publicity reasons.

In practice, the courts of law, upon the plaintiff?s demand, also force the defendant to withdraw the merchandise marketed under the respective sign from the market.

The trademark holder may also demand compensation for the material and for the image-related prejudice suffered as a result of the trademark infringement.

Procedure

The Claim for counterfeit falls under the jurisdiction of the county tribunal situated in the county where the defendant?s headquarters are located.

In practice, the legal nature of the Claim for counterfeit is controversial. Therefore some courts of law consider that this claim is of a commercial nature, others consider that it is of a civil nature. Lately it has become manifest that an increasing number of courts of law qualify the legal actions for the counterfeit of a trademark as being of a civil nature, as a result of the establishment of the Civil and Intellectual Property Section within the High Court of Cassation and Justice. Consequently, the legal action for counterfeit shall not be judged according to the procedural rules applicable to commercial litigation, which would have also imposed the judgment thereof with urgency.

The resolution passed by the county tribunal may be opposed by an appeal before the Regional Court of Appeals, and by a second appeal before the High Court of Cassation and Justice. The resolution of the county tribunal is not of an executory nature and, as a consequence, the defendant may only be prevented from marketing the infringing products only on the basis of the resolution of the Regional Court of Appeals.

For said reason, the trademark holder shall obtain an executory resolution on the basis of which the defendant may be forced to cease marketing the counterfeit products or services within approximately one year and a half.

This context adds increased significance to the provisions of Articles 87 and 88 of the Trademark Law, which allow the trademark holder to demand the county tribunal, by way of an interim injunction, to prohibit the use of the sign that breaches the trademark and to force the defendant to withdraw the products displaying such sign from the market, until the settlement of the Claim for counterfeit.

This demand is judged with urgency and priority, and the resolution passed by the county tribunal is enforceable and may solely be opposed by a second-degree appeal before the Regional Court of Appeals. By using this special procedure, the trademark?s holder may prevent the marketing of the counterfeit products long before an executory resolution is passed in the Claim for counterfeit.

II. CLAIM FOR UNFAIR COMPETITION

According to Article 86 of the Trademark Law and Article 5 paragraph 1 letter a of the Unfair Competition Law, the breaching of the rights conferred by the trademark represents an act of unfair competition, which is incriminated as a crime.

Therefore, the Claim for unfair competition, grounded upon the trademark infringement, shall be promoted in the same three circumstances as the Claim for counterfeit and, as a consequence, it is used in practice as a claim connected to this legal action.

Even though at first the Claim for unfair competition is only an annex of the Claim for counterfeit, the former may prove extremely important in certain cases where the right over the trademark is infringed, but the Trademark Law cannot be applied.

Thus, certain merchandisers use packages similar to those used for the products marketed under a trademark, but which display their own verbal trademark. Such merchandisers take advantage of the fact that, many times, companies only register a name as trademark, as in this way the trademark is protected regardless of the packaging on which it is displayed.

This practice does not take into consideration the fact that the packaging of a product may have, in certain circumstances, greater significance than the trademark itself. Therefore, as a rule, the ordinary consumer identifies on the shelf the product that he/she wants to purchase on the basis of the design of the packaging and not on the basis of the trademark name that is written on the same. The explanation lies in the fact that it is too much of an effort for the consumer to read the names of all products that are displayed on the shelf in order to find the product they want. Moreover, if the consumer were to do so, then the time necessary for making the actual purchases would be very long.

Consequently, similarly to the counterfeit case, in the consumers? minds there may be a confusion with respect to the products? origin, caused by the identity or the similarities between the packages. Nevertheless, the Claim for counterfeit is not available to the trademark?s holder, as the same neglected to protect the design of the package.

The only legal remedy available to the trademark?s holder is filing Claim for unfair competition, on the grounds of Article 5 paragraph 1 letter a of the Unfair Competition Law, according to which ?a) the use [?] of a packaging that is likely to cause confusion with the packages legitimately used by another merchandiser represent a crime [?] ?.

What may the trademark holder demand by way of the Claim for unfair competition?

(i) In the first hypothesis, in which the Claim for unfair competition is adjoined to the Claim for counterfeit, the trademark?s holder may also demand, in addition to the claims set forth under the previous point, that the defendant be forced to publish the resolution under which he/she is convicted, in the media. Therefore, the trademark?s holder obtains an useful remedy for the moral prejudice caused by the trademark infringement.

(ii) In the second hypothesis, when the Claim for unfair competition is filed independently, the trademark?s holder may demand the court (i) to prohibit the defendant from using the respective packaging in his/her/its commercial activity; (ii) to force the defendant to withdraw from the commercial circuit the products which were so packaged and (ii) to publish the court?s resolution in the media.

Procedure

Similarly to the Claim for counterfeit, the Claim for unfair competition falls under the jurisdiction of the county tribunal situated in the county where the defendant?s headquarters are located. Moreover, the plaintiff may file this claim also with the county tribunal in the territorial jurisdiction of which the infringing goods were sold. It is important to specify that this action is of a commercial nature and therefore shall be judged with urgency.

The resolution passed by the county tribunal in the legal action for unfair competition may be opposed by an appeal before the Regional Court of Appeals, and by a second appeal before the High Court of Cassation and Justice.

However, in this case the county tribunal?s judgment is enforceable. Nevertheless, in case of urgency an interim injunction may be filed in accordance with the provisions ofArticle 9 of the Unfair Competition Law, whereby the use of a similar package is prohibited until the settlement of the Claim for unfair competition.

LEGISLATIVE RETROSPECTIVE FOR YEAR 2005

During January 1, 2005 ? January 1, 2006 the following normative acts that govern the intellectual property field were adopted:

(i) Official Gazette no. 843/September 19, 2005 ? Government Emergency Ordinance 123 for the amendment and supplementing of Law no. 8/1996 regarding copyright and neighboring rights.

The Ordinance amends and supplements Law 8/1996, inter alia, with respect to the following (i) public communication of creations, (ii) reproduction for personal use, (iii) radio-broadcasting, (iv) equitable remuneration for public lending, (v) the rights of the sound recording producers, (vi) the rights of the audio-visual recording producers, (vii) the rights of the radio broadcasting and television bodies, (viii) public communication by satellite, (ix) cable re-broadcasting, (x) sui-generis rights of database manufacturers, (xi) administration and protection of copyright and connected rights.

(ii) Official Gazette no. 643/July 20, 2005 ? Government Emergency Ordinance 100/2005 regarding the securing of the compliance with the industrial property right, approved by Law 280/2005 (Official Gazette no. 897/October 7, 2005)

The Ordinance regulates the procedures and the measures by which one may obtain the repair of the damages caused to the holders of industrial property rights. This normative act contains general regulations that do not eliminate the incidence of the special civil or penal law norms contained in other normative acts.

The holders of industrial property rights and any person authorized to use the industrial property rights may demand in court that the provisions of this normative act be applied. Upon the plaintiff?s request, the court may order, with respect to the merchandise that prejudices the industrial property rights and with respect to the materials and the instruments that served to the creation or manufacturing of the respective merchandise, the following measures: withdrawal from the commercial circuits? networks, definitive withdrawal from the commercial circuits or destruction.

(iii) Official Gazette no. 1094/December 5, 2005 ? Law 337 for the amendment and the supplementing of Law 16/1995 regarding the protection of topographies of integrated circuits.

According to the adopted amendments, Law no. 16/1995 shall be called the ?Law regarding the protection of topographies of semi-conductor products?.

The right to the protection of a semi-conductor?s topography belongs, apart from its creator or the successor of the creator?s rights, to the persons who proceed to a first world commercial exploitation of a topography, which exploitation is carried out on the territory of Romania or of the European Union, as well as to the persons who obtained an exclusive authorization to commercially exploit such topography on the territory of Romania or in the European Union.

The aforementioned persons enjoy an exclusive exploitation right that arises on the date of establishment of the regulatory deposit or on the date when the topography was subject to a commercial exploitation for the first time, anywhere in the world, provided that such date is prior to the date of establishment of the regulatory deposit. This right is acknowledged for a period of 10 years.

(iv) Official Gazette no. 1093/December 5, 2005 ? Law 344 regarding certain measures for securing the compliance with the intellectual property rights during the customs clearing operations.

The provisions of the law apply to the merchandise that is likely to prejudice an intellectual property right, which: (i) enter on or exit from the Romanian territory, including into/out of free areas or free wharves; (ii) are declared to the customs authority for placement under a definitive or suspensive customs regime or for export purposes; (iii) are placed under a suspensive customs regime; (iv) are under customs surveillance, in any other circumstances; (v) were not declared at the entry into or the exit from the country and are discovered by the customs authority during legal customs controls; (vi) have entered into the private property of the state by means of seizure or abandonment with the customs authority.

The holder of the breached intellectual property right may demand the intervention of the customs authorities by means of a written request. The request for intervention must be accompanied by a statement of the right?s holder, that the same undertakes responsibility towards all persons involved, in the event that the court should determine that the merchandise does not prejudice an intellectual property right. The request shall also be accompanied by the proof of holding the intellectual property right.

This law was intended to amend and supplement the previous norms that regulated the intervention of the customs bodies for the purpose of protecting the intellectual property rights acknowledged under Romanian law, contained in Law no. 202/2000.

(v) Official Gazette no. 0006/January 4, 2006 ? Law 381 for the amendment and supplementing of Government Ordinance 41/1998 regarding fees in the field of industrial property protection and the regime regarding the use thereof.

The Law, by through its method of regulation of the exemptions and reductions from the payment of fees in the industrial property field, resulted in an increase of the scope thereof. By means of the amendments operated on the quantum of the fees, one pursued an updating of the ROL value thereof and the correlation of the value of the fees in EURO with the current exchange rate of this currency in Romania.

One of the main differences from the previous legislation is the fact that one eliminated the possibility that the fees in the industrial property field may be paid in USD, as the same may only be paid in RON or in EURO, in the case of individuals who are not Romanian citizens or the legal entities the principal office of which is not located in Romania.

VOICU & FILIPESCU - NEWS

? Voicu & Filipescu advised Sensiblu SRL, the largest Romanian chain of pharmacies, in the process of acquiring the chain of pharmacies composed of 33 pharmacies held by the GlaxoSmithKlein group in Romania.

? Voicu & Filipescu advised, as Romanian legal counsel, Rabobank in granting a credit facility to Rynart Tranport BV, in all the matters related to the loan of up to EUR 60 million secured by assets and shares of the Romanian entity held by Rynart.

? Voicu & Filipescu advised, as Romanian legal counsel, Deutsche Forfait s.r.o. and Deutsche Forfait AG in granting a credit facility to Metrorex, in all the matters related to the loan of up to EUR 45 million and in other issues related to the refinancing of municipal loans.

? Voicu & Filipescu advised in the year 2005 private acquisition transactions exceeding US $ 1 billion of the total of US $ 3.4 billion recorded on a national level.

? In the last six years, Voicu & Filipescu advised 4 of the 10 most important acquisition transactions from Romania.

? Voicu & Filipescu have the pleasure of announcing the ellection of two new partners of the Firm, Mrs. Marta Popa and Mr. Daniel Costea.

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mr. Cristian Gavrila as Senior Associate and Head of Litigation & Arbitration Department. He successfully finalized 14 arbitration cases related to post-privatization, competition, construction, corporate and bankruptcy in accordance with ICC, UNCITRAL, Vienna and CAB?s Rules exceeding the amount at stake of US$ 200 mil

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mrs. Diana Condurache, as a member of the Litigation & Arbitration Department.

Read more…

Corporate Newsletter

March 2006. Press Releases by Voicu & Filipescu SCA (view listing).

I. NEGOTIABLE INSTRUMENTS ? THE BILL OF EXCHANGE, THE PROMISSORY NOTE AND THE CHEQUE. NOTION, REGULATION, PRACTICAL USE

The bill of exchange, the promissory note and the cheque represent instruments that offer their legitimate holders the right to cash a certain amount of money, and they are considered, according to Romanian law, to be negotiable instruments. The bill of exchange and the promissory note also represent credit instruments, due to the debtor?s possibility to benefit from credit up to the due date. As far as the cheque is concerned, considering the very short presentation terms and to the impossibility to stipulate interest or payment conditions, this solely represents a payment instrument.

A. THE BILL OF EXCHANGE

Regulation

The bill of exchange is regulated by the provisions of Law no. 58/1934, regarding the bill of exchange and the promissory note (as amended by Government Ordinance no. 11/1993, approved and amended by Law no. 83/1994), provisions that are detailed by regulations of the National Bank of Romania.

What is a bill of exchange? In what circumstances does one issue a bill of exchange?

The bill of exchange is a negotiable credit instrument, a document by means of which a person (the issuer or the drawer), instructs another person (the drawee), to pay on the due date a cash amount to a third person (the beneficiary), or at the order of the latter.

Unlike the case of the cheque, where the payment shall be always made by a bank, in case of the bill of exchange the payment may be made by any person who has a debt towards the issuer of the bill of exchange.

In most cases the bill of exchange is issued when a person must recover a debt from a debtor while, at the same time, in its turn has to pay a debt to a third person. In order to avoid a double payment, the issuer of the bill of exchange shall order its own debtor to pay the amount to the person to whom the issuer owes a debt.

Nevertheless, the bill of exchange may be issued even if there is no debt of the issuer towards another person, as the issuer may mention itself as the beneficiary of the bill of exchange.

What is the use of the bill of exchange?

The bill of exchange ?credit instrument

The main role of the bill of exchange, namely that of a credit instrument, consists in stipulating a payment term, namely a period within which the debtor, while not being forced to pay the amount, benefits from credit. Similarly to the loan agreements, the bill of exchange may also specify an interest that is to accrue up to the date when the payment is made, which interest shall be to the benefit of either the initial beneficiary or a person to whom such right is conveyed.

Moreover, the beneficiary is not obliged to wait for the due date, as the same has the possibility to procure the cash amount by selling the bill of exchange to a specialized bank (in which case the seller of the bill of exchange shall not also benefit from the value of the interest).

What are the requirements regarding the form of the bill of exchange?

In principle, the bill of exchange is a credit instrument concluded in the form of a deed under private signature (authentication is not mandatory).

In order to be valid, the bill of exchange must contain certain mandatory entries, set forth in Law no. 58/1934: (i) the mention ?bill of exchange?, set forth in the very wording of the instrument, (ii) the unconditional order to pay a definite amount, (iii) the name of the drawee, (iv) the due date (the payment term), (v) the place where the payment must be made, (vi) the name of the beneficiary, (vii) the date and the place of the issuance, (viii) the issuer?s signature. Apart from said mandatory elements, the bill of exchange may also contain certain facultative elements (interest, domiciliation, various notes etc.). The bill of exchange may be drawn at sight, on term, within a certain term following the date of issuance or on a set date.

Acceptance and refusal of the bill of exchange

The payment order given by the issuer does not automatically entail the obligation of the debtor (drawee) to make the payment. Only by accepting the bill of exchange (acceptance that is written and signed on the bill of exchange) the drawee becomes obligated to pay the amount. In the event that the drawee refuses to accept the bill of exchange, the statement of refusal must be acknowledged, in compliance with the terms set forth the acceptance, by means of a document drafted by the bailiff, called non-acceptance protest. In such case the beneficiary may recover the amount from the issuer of the bill of exchange or from other persons who guaranteed the payment of the bill of exchange.

How can a bill of exchange be conveyed?

The specific method of conveyance of the bill of exchange to third parties is the endorsement, which consists in a statement written and signed by the endorser on the bill of exchange, resulting in the fact that the endorsee takes over all rights recorded in the bill of exchange. Furthermore, in the event that the drawee does not accept the bill of exchange, the person who conveyed the bill of exchange shall be obligated to personally pay the cash amount specified in the instrument. According to the general rules, the claim right incorporated in the bill of exchange may also be conveyed under the claim assignment.

Can the payment of a bill of exchange be guaranteed?

The securing of the cashing of a bill of exchange may be increased by the procedure of guaranty, by which a person (guarantor), guarantees the obligation assumed by one of the bill creditors. The guarantee is performed through a mention written on the bill of exchange and signed by the guarantor.

What are the remedies in the case of a failure to pay the bill of exchange?

In the event that the bill of exchange is not accepted or paid, the beneficiary of the bill of exchange may choose between filing for legal actions and bill enforcement.

The simplest method to revaluate the bill of exchange in the event of a failure/refusal to pay is the enforcement, as the bill of exchange represents a writ of execution (it must only be vested with an executory clause), therefore the legal action is not necessary.

B. THE PROMISSORY NOTE

The promissory note is a credit instrument similar to the bill of exchange, regulated by the same normative act, and it represents a document by means of which a person (the issuer or the underwriter) undertakes to pay a certain cash amount at the due date to another person (the beneficiary) or upon the order of the same. Unlike the bill of exchange, this credit instrument solely involves two persons: the issuer and the beneficiary.

Similarly to the bill of exchange, the promissory note is a deed under private signature, but the use of standard forms is also permitted, provided that the signature is handwritten. In principle, the promissory note contains the same elements as the bill of exchange, the difference being that the payment order addressed to another person within the bill of exchange is replaced by a payment promise assumed by the very issuer of the promissory note.

Most rules regarding the bill of exchange also apply to the promissory note, which, in the event of non-payment, also represents a writ of execution, therefore legal actions can be avoided in view of revaluating such promissory note.

C. THE CHEQUE

Regulation

The initial regulation of the cheque, law no. 59/1934 (the ?Cheque Law?) has been amended by Ordinance no. 11 /1993 and by the law for the approval of such Ordinance, namely Law no. 83/1994, the provisions of said normative acts being detailed by means of regulations of the National Bank of Romania.

What is a cheque?

The cheque represents a payment instrument by means of which a person (the drawer), orders a bank (the drawee) in which it holds available funds, to pay a cash amount to another person (the beneficiary) when the instrument is submitted.

Unlike the bill of exchange, the person obligated to release the cash amount specified in the cheque may only be a bank. From a practical point of view, the bank shall release to the client or to the ?drawer? blank forms (checkbooks), by means of which the latter may dispose of the available funds placed in the account opened with the respective bank.

What are the cheque?s validity requirements?

From a formal point of view, the cheque Law sets out a series of entries that any cheque must contain: (1) the cheque denomination, set forth in the very wording of the title, (2) the unconditional order placed with the bank, regarding the payment of a certain cash amount, (3) the name of the bank to which the order to make the payment is addressed, (4) an indication of the exact address where the cheque is to be presented for cashing purposes, (5) the date and the place of issuance, (6) the signature of the drawer, autographic and handwritten (the banks shall accept for payment only cheques in which the name of the drawer is written clearly).

The legal sanction in the case of the absence of the aforementioned entries, as well as in the case of the improper mention of the same, consists in the invalidity of the cheque, with the following exceptions: (i) in the event of the failure to specify the place of the payment (of the submission), this shall be considered to be the place where the bank mentioned in the cheque has its head office; (ii) in the event of the failure to indicate the place of issuance, the cheque shall be deemed issued in the place set forth next to the drawer?s name (if such entry exists).

Optional entries

Apart from the mandatory entries provided for under the law, the cheque may also include references regarding the beneficiary, such as:

- the name of the beneficiary, with or without a ?not upon order? clause. In such case the cheque may only be cashed by the nominated person;

- the name of the beneficiary, with a ?upon order? clause. In such case the cheque may be conveyed (granted) to third parties in special circumstances set out under the Cheque Law;

- in the event that the beneficiary?s name is not indicated (with or without the ?bearer? entry), the cheque shall be considered a ?bearer? cheque, resulting in the fact that the cheque may be conveyed to, and cashed by, any legitimate holder.

As the cheque represents a fast payment instrument, payable at sight, no interest and no circumstances that condition the payment may be stipulated.

The existence of available funds ? an essential requirement for the issuance and cashing of the cheque

The cheque must solely be issued provided that the drawer?s available funds may cover the entire amount specified in the contents of said cheque. To this effect, the issuance of a cheque by the drawer, in awareness of the fact that there is no sufficient coverage for its revaluation, the withdrawal of the funds from the account (in full or in part) after the issuance of the cheque, the prohibition imposed upon the bank, to pay the amount set forth in the cheque, all of the above resulting in the beneficiary?s inability to fully cash the cheque, represent variants of the fraud infringement, provided for under art. 215 paragraph 4 of the Penal Code.

How may one convey the cheque?

Similarly to the cases of the bill of exchange and the promissory note, the endorsement represents the specific method for the conveyance of the cheque. The person to whom the cheque was conveyed (endorsee), may further convey the cheque to other persons. By means of the endorsement, the beneficiary of the cheque may use the same for the purpose of making a payment himself/herself, thus waiving the cashing of the cheque.

The claim assignment also applies to the cheque, where the cheque bears the ?not upon order? entry, but may not be conveyed by means of an endorsement (but only by means of a claim assignment).

The endorser shall be held responsible towards the endorsee and the subsequent holders of the cheque in the event of the drawee?s failure to pay the cheque.

How can one diminish the risks of the impossibility to cash a cheque?

The guaranteed cheque

One of the methods of alleviating the risk of the incapacity to capitalize on the cheque by submitting it to the bank is represented by the guaranty procedure, namely the guarantee, by a third party, of the cashing of the amount by the beneficiary.

Similarly to the endorsement, the guaranty is performed by means of recording an appropriate entry on the cheque, bearing the signature of the guarantor. In the event that the cheque cannot be cashed from the bank, the guarantor shall be forced to pay the amount (which amount it may subsequently recover from the person for whom the same guaranteed).

Certified cheque

The safest guarantee of the cheque?s cashing is represented by the certification of the same by the issuer?s bank. By means of such certification, the bank guarantees the fact that at the respective time the amount set forth in the cheque is available in the account. Consequently, the respective amount can no longer be drawn by the issuer and it cannot be used by the bank for other purposes either, the cashing of the cheque thus being guaranteed by the bank.

Cashing of the cheque. Terms of submission and recourse.

The cheque may be cashed on the term specified in its contents in view of the submission. In the event that the submission of the cheque should exceed such date by 8 days (if the same is payable in the very locality where it was issued), 15 days (if the same is payable in a locality other than that where it was issued), or, respectively, 30 days (if it is issued in a foreign European country and payable in Romania), and 70 days (if it is issued in a foreign non-European country and payable in Romania), the beneficiary shall lose the possibility to obtain compensation (in the case of the non-existence of available funds) from the endorsers or from the guarantors.

The right to obtain compensation from the drawer, the endorsers and the guarantors shall be barred within 6 months following the expiry of the submission term.

The enforcement of the cheque in the case of a lack of available funds

The cheque represents a writ of execution, which confers the right to directly demand enforcement, without the need for a prior legal action against the drawer, the endorsers or the guarantors, as the case may be, provided that the aforementioned prescription terms are complied with.

D. CENTRAL STATION FOR PAYMENT-RELATED INCIDENTS

In view of preventing the issuance/the use of credit and payment instruments in bad faith, the Central Station for Payment-Related Incidents (CIP) was established within the National Bank of Romania.

CIP collects the information regarding major payment incidents, such as: payment instruments drawn in the absence of account coverage, cheques issued without the authorization of the bank, cheques issued with a false date or which fail to specify a mandatory entry, circular or traveler?s ?bearer? cheques, cheques issued by a drawer with respect to whom/which there exists a banking prohibition, bills of exchange discounted in the absence of the assigned claim at the time of its assignment.

What is the practical interest of the CIP?

The practical interest of the CIP consists in any person?s possibility to review this database, through a bank, thus being able to determine whether any payment-related incidents were registered in the name of a potential business partner.

LEGISLATIVE RETROSPECTIVE

1. Government Emergency Ordinance no. 151/November 10, 2005 regarding Romania?s accession to the Convention regarding the simplification of the formalities in commodity trading activities, adopted in Interlaken on May 20, 1987.

2. Law no. 333/November 15, 2005 regarding the ratification of the Convention between Romania and the Austrian Republic, for the avoidance of double taxation and prevention of tax evasion with respect to income and capital taxes, and of the annex-protocol, signed in Bucharest on March 30, 2005.

3. Order of the minister of public finances no. 1752/November 17, 2005 for the approval of the accounting regulations complying with the European directives . The regulations approved by said order refer to Directive IV of the European Economic Communities and the accounting Regulations complying with Directive VII of the European Economic Communities. Said regulations provide for the scope, format and contents of the annual financial statements, the accounting principles and the assessment rules, as well as the rules regarding the drafting, approval, auditing and publication of the annual financial statements.

4. Order no. 70/November 22, 2005 of the National Securities? Commission for the approval of Regulation no. 15/2005 regarding financial investment services.

5. Government Emergency Ordinance no. 165/November 24, 2005 for the amendment of Government Ordinance no. 92/2003 regarding the fiscal procedure Code . The amendments refer to the underwriting measures and the liquidation of fiscal claims by means of enforcement.

6. Law no. 357/December 6, 2005 regarding commodity exchanges . Said law set out the method of establishment, organization and operation of commodity exchanges.

7. Order no. 1870 of December 6, 2005 of the Ministry of Public Finances for the approval of the Instructions for the implementing of the provisions of art. 1942 ?Provisions regarding the recovery of illegal or prohibited state aid? of Government Ordinance no. 92/2003 regarding the fiscal procedure Code, as republished, with its subsequent amendments and additions . Said Instructions refer to the elements that must be included in the enacting terms of the Competition Council?s Decisions regarding the recovery of illegal or prohibited state aid.

8. Law 371/December 13, 2005 for the approval of the Government emergency Ordinance no. 65/2005 regarding the amendment and supplementing of Law no. 53/2003 ? The labor Code .

9. Law no. 403/December 27, 2005 for the amendment and supplementing of Law no. 130/1999 regarding certain measures for the protection of employees . Said law amended the obligations of the employer, initially provided for under Law no. 130/1999, as well as the sanctions provided for by the same.

10. Government Resolution no. 1834/December 22, 2005 for the amendment and supplementing of the methodological Norms for the implementing of Government emergency Ordinance no. 88/1997 regarding the privatization of companies, as subsequently amended, and of Law no. 137/2002 regarding certain measures for the acceleration of privatization, approved by Government Resolution no. 577/2002 . The amendment refers to the situations where there exists an obligation of the involved public institution to decide upon the drafting of an assessment report in view of determining the offer price.

11. Order 902/December 20, 2005 of the Ministry of labor, social solidarity and the family and of the President of the National Statistics? Institute with respect to the Supplementing of the Romanian job Classification.

12. Law no. 4/January 5, 2006 for the amendment of the name and the classification of the commodities in the Romanian import customs Tariff, and of the customs duties related thereto .

VOICU & FILIPESCU - NEWS

? Voicu & Filipescu advised Sensiblu SRL, the largest Romanian chain of pharmacies, in the process of acquiring the chain of pharmacies composed of 33 pharmacies held by the GlaxoSmithKlein group in Romania.

? Voicu & Filipescu advised, as Romanian legal counsel, Rabobank in granting a credit facility to Rynart Tranport BV, in all the matters related to the loan of up to EUR 60 million secured by assets and shares of the Romanian entity held by Rynart.

? Voicu & Filipescu advised, as Romanian legal counsel, Deutsche Forfait s.r.o. and Deutsche Forfait AG in granting a credit facility to Metrorex, in all the matters related to the loan of up to EUR 45 million and in other issues related to the refinancing of municipal loans.

? Voicu & Filipescu advised in the year 2005 private acquisition transactions exceeding US $ 1 billion of the total of US $ 3.4 billion recorded on a national level.

? In the last six years, Voicu & Filipescu advised 4 of the 10 most important acquisition transactions from Romania.

? Voicu & Filipescu have the pleasure of announcing the ellection of two new partners of the Firm, Mrs. Marta Popa and Mr. Daniel Costea.

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mr. Cristian Gavrila as Senior Associate and Head of Litigation & Arbitration Department. He successfully finalized 14 arbitration cases related to post-privatization, competition, construction, corporate and bankruptcy in accordance with ICC, UNCITRAL, Vienna and CAB?s Rules exceeding the amount at stake of US$ 200 mil

? Voicu & Filipescu have the pleasure of announcing the beginning of the professional relationship with with Mrs. Diana Condurache, as a member of the Litigation & Arbitration Department.

Read more…

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