Representation before courts in Romania in disputes between associates or in disputes with contractual partners

Within a company, interactions between associates, administrators, and contractual partners are inevitable. In the business environment, disputes can arise both internally within the company and externally in business relationships, and resolving them amicably is not always possible. In such cases, resolving disputes through the court becomes a necessity, and the team of Romanian lawyers at Blaj Law provides comprehensive legal support for managing corporate and commercial conflicts, protecting clients’ interests.

An effective alternative to court litigation is direct negotiation between the involved parties. Through mediation of conflicts between associates or contractual partners, the Blaj Law team can facilitate an agreement that avoids high costs and lengthy legal proceedings. Through negotiation, we can achieve contract restructuring, establish new collaboration terms, or even amicably resolve conflicts regarding company management.

However, if irreconcilable disagreements arise between associates, the Companies Law in Romania (Law No. 31/1990) provides several legal mechanisms that can resolve conflicts between corporate bodies, such as associate withdrawal, associate exclusion, and, ultimately, company dissolution.

The first of these solutions, associate withdrawal, is the most desirable option, representing a form of amicable conflict resolution where one party concedes and decides to withdraw from the company under the terms set in the articles of association or with the agreement of the other associates. Obviously, associate withdrawal does not necessarily stem from a conflict; it can also be based on various objective or subjective reasons. However, in case of a dispute, withdrawal can serve as a middle ground where the withdrawing associate receives financial rights equivalent to their held shares, while the company continues to operate as agreed by the remaining associates.

In the absence of provisions in the articles of association or when unanimous agreement is not reached, an associate may withdraw based on legitimate reasons through a court ruling, which is subject to appeal.

Clearly, in case of a conflict between associates, the withdrawal of one of them is not very common in practice. Therefore, when disagreements among associates lead to one or some of them harming corporate interests, judicial exclusion of the at-fault associate may be pursued. More specifically, exclusion applies to:

• An associate with unlimited liability who unlawfully interferes in management;
• An associate who, without the written consent of the other associates, uses the company’s capital, assets, or credit for personal benefit or for the benefit of another person;
• An associate with unlimited liability who engages in other competing companies or businesses with the same scope of activity, or conducts similar trade operations on their own or on behalf of others, without the consent of the other associates;
• An associate-administrator who commits fraud against the company or misuses the company’s assets or signature for personal or third-party benefit.

An associate may also be excluded if they fail to contribute their committed share, are declared bankrupt, or become legally incapacitated.

In Romania, he exclusion of an associate can be requested in court by any associate or by the company itself. This measure is enforced through a final court ruling, which simultaneously determines the new ownership structure of the remaining associates.

Blaj Law assists both associates or companies seeking to exclude an associate and those who are defendants in an exclusion lawsuit. Our team provides a tailored approach to each case, analyzing the most suitable defense strategies, regardless of the client’s position in the dispute.

When exclusion is not an option and conflicts between associates become irreconcilable, severely affecting the company’s operations, dissolution may be the only viable option. Although often avoided, in the absence of consensus or an amicable resolution, dissolution becomes inevitable. In this case, the company is dissolved by a court ruling according to Article 227, paragraph (1), letter e):
“The company shall be dissolved by court order, at the request of any associate, for legitimate reasons, such as serious disagreements between associates that hinder the company’s operation.”

The law firm in Romania, Blaj Law, provides comprehensive legal assistance in managing the dissolution process, from strategic consulting and drafting necessary documents to legal representation in court, ensuring that your financial rights as an associate are correctly valued.

In addition to internal disputes among associates, companies often face external conflicts, such as breach of contract by business partners, failure to meet financial obligations, or unfair competition. Issues with contractual partners can severely impact a company’s operations, causing financial and operational blockages that may jeopardize business continuity.

Failure to fulfill contractual obligations can lead to delays in product or service delivery, damaging business relationships and the company’s reputation. Additionally, disputes over payment deadlines or contract clause interpretation can cause liquidity issues, difficulties in executing other contracts, and even the inability to maintain commitments to customers.

When amicable resolution of disputes with contractual partners is not feasible, the Blaj Law team supports clients in resolving commercial disputes by providing legal representation in court.