CEE is increasingly on the radar for businesses looking for efficient and cost-effective dispute resolution. Tuca Zbarcea & Asociatii Partner Cornel Popa, PRK Partners Associate Partner Michal Sylla, and Avellum Partner Oleksii Maslov discuss which hubs are leading the way, the challenges they face, and the opportunities shaping the region’s arbitration landscape.
Who’s Catching Arbitration Eyes?
For Ukrainian businesses, options are still limited. “From the perspective of Ukrainian businesses/arbitration practitioners, it is hard to single out any CEE jurisdiction, apart from Austria, as an arbitration hub,” Maslov says. “In other words, it would be unusual to see a Ukrainian party choosing any CEE jurisdiction, aside from Ukraine or Vienna, as a place of arbitration/arbitral institution, unless the other party has links to such jurisdiction (e.g., in a contract between a Ukrainian and a Polish company the parties may choose Polish SAKIG or Ukrainian ICAC as an arbitration venue). That’s not to say that CEE jurisdictions lack well-developed arbitral institutions or vibrant arbitration communities (e.g., Poland, Lithuania, Romania, and Ukraine have both).”
Sylla sees the region’s appeal differently: “In the current landscape, Central and Eastern European arbitration hubs are becoming increasingly attractive due to their comparable speed to major international centers and significantly lower procedural costs.” According to him, “the region offers a compelling value proposition for businesses seeking efficient and economically sensible dispute resolution mechanisms.”
Looking at Romania, Popa identifies Bucharest as a city with growing potential. “I believe that Bucharest has the potential to become a more prominent choice in the near future,” Popa notes. “The city offers many of the key advantages that parties typically seek when selecting an arbitration venue, such as a range of suitable locations, experienced law firms and arbitrators, strong English language capabilities, arbitration-friendly courts, and cost-effective venues.”
Established Hubs vs. Emerging Centers
The relationship between long-standing arbitration centers and newer contenders appears largely complementary. “While VIAC leverages its long-standing reputation and hears disputes not necessarily connected to Austria, other CEE institutions usually get chosen in cases that have some connections to their home jurisdiction (party, assets, etc.),” Maslov notes. “Once again, this is not to say that they have less work on their hands. For instance, in 2024 alone, the ICAC resolved 440 disputes (against 298 cases accepted in 2021), a volume that surpasses many established international arbitral institutions.”
“Arbitration practitioners generally value tradition and the reassurance of established precedents,” Popa echoes. “They are inclined to choose solutions that have a proven track record, which means that established hubs like Vienna continue to play a vital role. At the same time, newer venues can offer alternative options and contribute to the overall development of the region’s arbitration landscape.”
The Austrian capital still appears to hold a notable advantage. “Vienna particularly stands out by providing arbitrators with specialized expertise in critical sectors like engineering, transportation, and industrial technologies, while maintaining substantially lower costs compared to traditional venues such as the ICC,” Sylla says. “This unique combination of quality and affordability creates a distinctive competitive advantage for this Austrian arbitration hub.”
Hurdles for the Up-and-Coming Hubs
Despite promising attributes, emerging centers face obstacles. “Some of the obstacles relate to current economic and security challenges from the Russian aggression,” Maslov reports. Still, he says that “Ukraine has well-developed arbitration laws, its courts deliver – quite consistently – positive practice on arbitration-related matters, it has a sophisticated legal market and pool of experienced arbitrators, and a seasoned and active arbitration institution.”
For the Czech Republic, Sylla identifies both legal and institutional hurdles. “Our jurisdiction currently struggles with outdated arbitration legal frameworks that fail to meet international standards,” he notes. “Additionally, there is a diminished trust in general courts responsible for reviewing arbitral awards, particularly in the wake of numerous cancellations in consumer-related cases, which significantly undermines the attractiveness of our arbitration environment.”
Sylla further adds that “while the Czech Republic offers excellent infrastructure and venues for arbitration proceedings, the current political representation lacks enthusiasm for promoting arbitration as an optimal dispute resolution method. Internal disputes between local arbitration centers and a noticeable reluctance to modernize legal frameworks further complicate the jurisdiction’s potential as a prominent arbitration hub.”
Popa notes a perception challenge in Romania as well. “Even though Bucharest possesses many of the attributes necessary to become a reliable arbitration center, it still faces challenges related to lingering perceptions of corruption and concerns about the reliability of local courts,” he says. “Overcoming these perceptions will require the continued growth and strengthening of a vibrant arbitration community, which can help build trust and confidence among international parties.”
At the same time, “a successful arbitration hub depends on long-term commitment and legislative stability,” Popa notes. “Local courts play a crucial role as guardians of legality and public order, but they must also respect the autonomy of arbitral tribunals by refraining from intervening in the factual and legal determinations made by arbitrators. Consistent government support and a stable legislative framework are essential to foster a favorable environment for arbitration.”
Looking Ahead: What Will Drive Growth?
Sylla believes that looking ahead, the economic shifts are key for the development of CEE jurisdictions as arbitration hubs. “We firmly believe that potential transformative developments will be predominantly driven by economic factors, particularly the potential relocation of manufacturing sectors – such as defense and high-tech industries – to the CEE region,” he says. “Economic shifts and regional industrial repositioning are likely to be more influential than other geopolitical or legal considerations in shaping the future of arbitration in CEE.”
“Several factors could shape the future of arbitration in the region,” Popa adds. “Legally, a strong and sustained commitment to supporting arbitration is vital. Economically, the presence of a robust local economy and strong domestic companies can help build trust in the arbitration process within a jurisdiction and encourage companies to accept that their disputes should be solved more effectively in that particular jurisdiction.”
Finally, Maslov points to the post-war reconstruction of Ukraine as a transformative factor. “The end of the war in Ukraine will be the single most transformative event for the region’s dispute resolution landscape,” he notes. “The subsequent reconstruction will be a massive economic driver, requiring an influx of hundreds of billions of dollars in foreign investment for infrastructure, energy, and industrial projects. This unprecedented level of activity will inevitably generate a substantial volume of complex commercial disputes, creating a historic opportunity for CEE jurisdictions that can offer efficient, reliable, and expert dispute resolution.”
This article was originally published in Issue 12.8 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
