Romania: Romania Wins International Arbitration with Noble Ventures, Inc.

Last Updated: 26 January 2018
Article by Alina Nicolae

The Romanian State scored a major arbitration victory before the International Center for Settlement of Investment Disputes (ICSID) within the World Bank in Washington.

Noble Ventures, Inc. submitted its claim under the bilateral investment treaty between the United States and Romania to arbitration under the ICSID Convention in August 2001. Noble Ventures` claimed as much as USD 353 million in damages from Romania, challenging Romania’s treatment of Noble Ventures and its investment in Combinatul Siderurgic Reşita S.A. (CSR) following the steel company’s privatization.

ICSID award was communicated to both sides on Wednesday, October 12, 2005 in Washington, at 15.00 hours (22.00 hours, Bucharest time) and dismissed Noble Ventures claims for disbursements. The Romanian State shall only bear the expenses with taxes, fees and other court-related costs, according to the order for splitting the arbitration costs.

The team of lawyers that successfully represented the Romanian State before ICSID includes Florentin Ţuca (Managing Partner with Ţuca & Asociaţii), Cornel Popa (Partner with Ţuca & Asociaţii), Cristina Metea (Senior Associate with Ţuca & Asociaţii), Levana Zigmund (Senior Associate with Ţuca & Asociaţii).

The outcome of the arbitration in Washington has brought back the smile and scattered the concerns of the authorities in Bucharest, the success being ensured, to a great extent, by the teams of lawyers, along which legal experts, accounting experts and experts in the steel industry have worked in a file comprising tens of thousands of pages. The case covered very complex international law matters (particularly issues related to expropriation, standard of fair and equitable treatment, investment protection etc.) as well as relevant Romanian law matters (privatization, fiscal law, bankruptcy and insolvency, contract law, companies’ law, employment etc.).

"It is a very important success for the Romanian State. We have been waiting the decision of the arbitration court in Washington with optimism and emotion at the same time. We haven’t lost hope that ICSID decision would be favorable to the Romanian side and, indeed, our efforts, as lawyers defending the Romanian State interests materialized in a huge success. Of course, we can be but happy about this result; however, it is desirable that in the future, the State authorities make higher diligences in order to prevent similar law suits which may result in significant losses", said Florentin Ţuca, the coordinator of the Romanian team of lawyers in Resita file and currently the Managing Partner of Ţuca & Asociaţii.

Resita case reached ICSID in 2001 and the Arbitration panel was formed in 2003, by a German arbitrator, Mr. Karl-Heinz Bockstiegela, chairman, a British arbitrator, Mr. Jeremy Level, and a French arbitrator, Pierre-Marie Dupuy.

First, the Americans required damages worth USD 200 millions. Later, their claims escalated to USD 447 millions and then stopped at to USD 353 millions.

This amount would have represented the aggregated amount of profits which were to be realized within an unspecified period pursuant to the investment made by Noble Ventures, says Cornel Popa, Partner with Ţuca & Asociaţii, who worked in this file.

The defense strategy was unfolded in Washington by a team made of more than 15 Romanian and American lawyers, who used about 30 witnesses from among the Romanian authorities, four Romanian legal experts and one English legal expert, a British company expert in the steel industry and an American company specialized in accounting expertise, says Cornel Popa. "We have been better prepared. The Canadian law firm, a small one, although specialized in this kind of litigations, brought almost all its lawyers to the court but only one has actually took part in the hearings. He was actually outnumbered by our lawyers" adds Popa.

Background information:

Ţuca & Asociaţii is one of the major players that entered the Romanian legal market. The eight partners are among the “veterans” of Romanian legal consultancy, as they have been active on this market since its emergence. Ţuca & Asociaţii team numbers over 40 lawyers and it has a very strong litigation department, specialized in complex litigation and international arbitration files.


Noble Ventures, a company specialized in consulting services in the steel industry, has purchased from the Romanian State, in 2000, an equity of 94.4% of CSR shares, the total value of the transaction, investments included, amounting to USD 85.25 million.

The privatization contract was terminated in December 2002, based on one of its clauses setting forth that the privatization was subject to cancellation in the event of failure by the investor to pay two consecutive installments.

Resita plant was then taken over at the symbolic price of EUR 1, in the beginning of 2004, by the German company Sinara, the distributor of the largest pipes producer of Russia, TMK Group.


The International Center for Settlement of Investment Disputes (ICSID) was created in 1966, as part of the World Bank, with the purpose to encourage foreign investments and to instate a mutual trust environment between States and foreign investors, by providing an international framework for conciliation and arbitration for investment related disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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