Romania has achieved a significant victory at the International Centre for Settlement of Investment Disputes (ICSID) in Washington regarding the Bucharest-based Casa Radio project.
The arbitral tribunal dismissed the claims made by investor Plaza Centers N.V., protecting the state budget from a potential payment exceeding €300 million.
The dispute concerned the Dâmbovița Center project, where the investor sought damages of more than €300 million or, alternatively, over €200 million, plus interest and legal fees. The tribunal’s majority decision rejected the company's claims on jurisdictional grounds, citing the investor's conduct and specific historical agreements mentioned in the firm's public reports between 2016 and 2020.
Alexandru Nazare, Minister of Finance, said: “An important correction of past errors that puts the interests of the state and citizens first. Romania risked losing hundreds of millions of euros due to an old contractual arrangement, and through our defence, we managed to avoid this loss”.
The Casa Radio project, intended for the development of a large-scale mixed-use complex covering tens of thousands of sqm, remains a sensitive point on the investment agenda. Currently, the same investor is involved in another case at the London Court of International Arbitration, where the Romanian state is seeking to recover damages amounting to hundreds of millions of euros.
Plaza Centers N.V. stated in a press release: “The tribunal dismissed the company's claims on jurisdictional grounds. The decision was based on findings regarding the company's conduct and certain historical agreements. The company is analysing the ruling, including the reasoning and implications of the tribunal's findings, evaluating its position and considering all available options and next steps”.
The court ruled that each party must bear its own arbitration costs, thereby removing the financial burden of legal expenses for the Romanian state.
