The Special Payment Injuction Procedure

The entry into force of the New Civil Procedure Code („NCPC”) on 15 February 2013 marks the attempt of the Romanian legislator to create the framework for efficiently combatting delays in the execution of payment obligations of amounts resulting from civil agreements.
Although this initiative does not represent a novelty, the new regulations were seen as needed in order to consolidate existing procedures, allowing creditors to efficiently use a new and unique procedure, regardless of their quality, legal regime or the relationship between them and the contractual debtors.

Special Procedure for the Eviction of Residents

The entry into force of the New Code of Civil Procedure on 15 February 2013 allows for an improved and more efficient management of relationships between landlords and their tenants particularly with those tenants in default.

Hardship and costs of funding

The New Civil Code allows, under certain conditions, courts to intervene in contractual relationships, in cases where performance of contractual obligations becomes excessively onerous for one of the parties (Article 1271). Could one apply, in practice, the provisions of Article 1271 in case of increased costs of funding?

'Uncustomary' clauses in loan documentation

The New Civil Code requires that “uncustomary” clauses are expressly accepted in writing in order to be enforceable. Dealing with this concept requires, among others, thorough scrutiny from the perspective of the definition of standard clauses, application to consumers vs. professional parties, dynamics of negotiations and formalism imposed by the Code. We’ve outlined a few items which we thought relevant on the matter and are looking forward to have your view on the practical implementation of Article 1203. Log in to read more and vote in our poll!

Extension of the mortgage over the proceeds of the mortgaged asset: broader rights for secured creditors

One of the areas where the New Civil Code improves the position of the secured creditors is the extension of the mortgage over the proceeds of the asset brought as security. The concept is not new (it was also provided in the former security law), but the New Civil Code broadens its scope by providing new rights for the secured creditors. In order to benefit of such extended rights, there are some new requirements to be complied with and certain formalities to be fulfilled. There are also relevant differences in the regime of the extension of the mortgage over proceeds of immovable vs. movable assets.

Utilization of loan amounts – potential impact of the New Civil Code

The New Civil Code provides for the right of the account holder to freely dispose of the amounts in the current accounts. The provision expressly mentions loans among the operations to which it applies. This may trigger some interpretation risks with potential impact, among others, on the practicalities of disbursing loans. We have looked into these from the perspective of the lender and have some recommendations in this respect.

Additional certainty for lenders: updates on default interest clauses

Up to now, default interest clauses in facility agreements may have been seen as triggering certain interpretation risks and potentially falling under the restrictions on penalty clauses in loan agreements. Now, the legal regime of default interest clauses has been clarified. Law no. 71/2011 expressly repeals the prohibition of liquidated damages clauses in loan agreements. It also introduces the concept of penalty interest which may be charged in case the payment obligation is not performed at the due date.

Facility agreements as regulated by the New Civil Code

Articles 2193-2195 of the New Civil Code regulate, for the first time under Romanian law, the facility agreement. We have looked into the question whether this regulation will be, from now on, of general application for loans granted by authorized entities or whether it rather has a much more limited scope. The answer to this is also relevant in terms of the scope of application of the unilateral termination as provided by Article 2195.

Control over bank accounts – more food for thought

The concept of „control over the bank account” introduced by the New Civil Code may have a significant impact on various banking practices. We have considered below aspects related to syndicated loans, tying, cash routing and general access to information on borrowers’ level of indebtedness.

Fiducia – additional options for lenders in structuring collateral packages

The trust has been regulated in Romania by the New Civil Code through the fiducia agreement. In our view, lenders should consider it when structuring finance transactions since we see certain merits in using it in addition to traditional security interests.


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