Romania has won the international arbitration regarding the real estate project „Casa Radio” in Bucharest, avoiding payment of hundreds of millions of euros in damages.
The announcement was made on Tuesday by the Minister of Finance, Alexandru Nazare. The Minister speaks of an important victory for the public budget.
"Romania has won an international arbitration with a stake of over 300 million euros. An important correction of past errors, putting the interests of the state and citizens first," he posted on Facebook.
What the Washington tribunal decided
According to Economedia, the International Centre for Settlement of Investment Disputes (ICSID) rejected the claim for damages filed by the Israeli real estate developer Plaza Centers, amounting to approximately 385 million euros.
The decision was made by a majority and concerns the arbitration initiated in 2022, following the failure of the Casa Radio / Dâmbovița Center project. The tribunal ruled that each party will bear its own arbitration costs.
The company stated that it is "currently analyzing the decision, including the reasoning and implications of the Tribunal's findings, assessing its position and considering all available options and next steps."
Nazare: Romania was at risk of losing hundreds of millions of euros
The Minister of Finance explained the financial stakes of the case and stated that the state avoided a major loss.
"In short, Romania was at risk of losing hundreds of millions of euros due to an old contractual arrangement, and by the way we defended ourselves, we managed to avoid this loss," wrote Alexandru Nazare.
In the event of an unfavorable decision, the Romanian state would have been required to pay damages of up to approximately 385 million euros, to which interest and arbitration costs would have been added.
"It is an important outcome that means, in concrete terms, protecting public funds. The Ministry of Finance played a major role in this process," emphasized the Minister.
The process is not over: a new dispute in London
Although the victory in Washington reduces immediate risks for the budget, the dispute is not definitively closed.
Profit.ro indicates that there is a separate dispute at the International Arbitration Court in London, where the Romanian state is seeking contract termination and damages.
"The same investor, part of the current case, is involved in another international cause currently before the London Court of International Arbitration. In this case, the Romanian state is seeking to recover damages in the order of hundreds of millions of euros," confirmed the Minister of Finance.
The first hearing in this case is scheduled for May 2027.
How did the "Casa Radio" dispute arise
The "Casa Radio" project originated in 2004 when the government at the time launched a public-private partnership for the development of the "Dâmbovița Center" complex.
The structure provided for Plaza Centers to hold 75% of the project, with the remaining shares allocated to the Romanian state and Turkish investors. The building was leased for 49 years.
The plans were ambitious: three high-rise buildings, a mall, a five-star hotel, and other facilities. The project was not completed due to financial difficulties of the developer, and the building remained abandoned.
The company claimed to have invested approximately 85 million euros, but the works were not carried out further.
A project marked by failures and controversies
Over the years, the project was accompanied by unsuccessful attempts to sell and financial problems of the investor. In 2019, Plaza Centers tried to sell its stake to AFI Europe, a transaction that did not materialize.
The company entered insolvency in 2013–2014 and subsequently began liquidating its assets in Romania.
There were also controversies related to the former majority shareholder, Elbit Imaging, who was fined $500,000 by US authorities for alleged violations of anti-corruption laws. In Romania, the criminal investigation opened in this case was later closed.