Under the Romanian Civil Code, the statute of limitations is defined as the sanction which consists in the extinction of the material right of action that was not exercised within its term by a certain creditor in relation to the debtor’s incumbent obligation.
The general rule under Romanian law is that the statute of limitations is 3 years (Art.2517 of the Civil Code), starting at the moment when the plaintiff has known or should have known, depending on the circumstances, the accruing of his cause of action.
In such respect, the statute of limitations starts to run when the interested person must act in order to secure its rights against the respective debtor. We note that, in practice, the courts/arbitral tribunals ultimately assess and therefore rule upon the moment when the statute of limitations has started to run against the interested person, by taking into consideration the agreement of the parties as well as the general applicable legal provisions.
When it comes to the provisions of the FIDIC contract (forms approved in 1999) concluded in the public sector, the Employer and the Contractor may raise against each other claims derived from performance of FIDIC contract. Usually, as a matter of practice pertaining to public contracts, the majority of the claims are raised by the Contractor against the Employer.
Thus, due to the general definition contemplating the statute of limitations under Romanian law, Employers usually attempt to speculate the starting point of the statute of limitations and, therefore, in several cases, the Employers have embraced the theory that the statute of limitations for the Contractor’s claims starts to run from the moment when the Contractor sends its notice of claim to the Employer under the FIDIC contract mechanism of claims.
Far from being close to the truth, such theory does not have solid fundaments in the relevant Romanian legal provisions and pursuant to relevant jurisprudence. First and foremost, FIDIC contracts establish clear, mandatory, conventional procedural rules with respect to notification and resolution of the dispute regarding contractual claims, as follows:
– initially, the Contractor must submit the Notice of Claim under Clause 20.1 when deciding to unfold a potential dispute;
– next, the Contractor must consolidate its Notice of Claim and submit it to the Engineer, so the latter can issue a determination based on Sub-Clause 3.5; and
– the parties are required to reach a prerequisite milestone before moving towards arbitration procedure/common court, namely the DAB procedure.
Second, when assessing the moment when the statute of limitations starts to run, arbitral tribunals/common courts should take into consideration the timing required by the determination of the Engineer, by the DAB procedure, as well as the fact that, in practice, certain claims have continuous effects, which may last for more than 3 years.
A more accurate interpretation concerning the triggers of the statute of limitations running term (for both Employer and Contractor) would be the one that depends on the mechanism imposed by the FIDIC Contract at hand with respect to the dispute resolution clauses. It should be noted that in Romania it is quite customary that the public authorities amend the general conditions by particular conditions and consequently, the standard claims procedure and instances under FIDIC contracts may vary from one case to another.
Thus, one should distinguish between the following possible cases:
– Arbitration clause and existence of DAB procedure – the fair interpretation would be that the statute of limitations starts to run from the moment the DAB Decisionis issued. In case the contracts provide for a 56-day term for amicable settlement by the parties after the DAB procedure, the statute of limitation starts to run after such period has elapsed;
– Arbitration clause and lack of DAB procedure – the fair interpretation would be that the statute of limitations starts to run from the moment the Engineer’s Determination is issued (the first moment when a third party issues a decision in respect to the claims of the parties against each other);
– Common courts’ jurisdiction and existence of DAB procedure – the fair interpretation would be that the statute of limitations starts to run from the moment the DAB decision is issued. In case the contracts provide for a 56-day term for amicable settlement by the parties after the DAB procedure, the statute of limitations starts to run after this period has elapsed (in such case, the existing DAB procedure may be deemed as covering the preliminary complaint procedure, as per Law 554/2004);
– Common courts’ jurisdiction and lack of DAB procedure – the fair interpretation would be that the general 3 year statute of limitations should apply pursuant to Art. 53 para. (8) of Law 101/2016, which should start to run from the issuance of the Engineer’s Determination (if a preliminary complaint will be needed from the moment when the answer is provided by the public authority or from the expiry of the term when such answers should have been provided by the latter).
In terms of relevant jurisprudence on this matter, we note that the High Court of Cassation and Justice rendered two reference decisions finding that: (i) the statute of limitations does not start to run until the parties have exhausted all contractual procedures (in this particular case, the DAB procedure) and (ii) the statute of limitations period starts to actually run against the Contractor for the latter’s claim raised against the Employer from the moment the entire works were commissioned by the Contractor to the Employer.
Considering the above possible scenarios, as well as the scarce jurisprudence on this subject, a practical recommendation for the Contractors would be to undergo DAB immediately after the issuance of Engineer’s determination in order to avoid a possible interpretation of the courts that the DAB procedure has solely suspended the running term of the statute of limitations for just 3 (three) months, as per Art. 2532 para. (7) of the Civil Code.