On 17 July 2024, the Cluj Tribunal upheld the request filed by SCPA CAMPAN & TIMONEA and referred to the Constitutional Court of Romania the plea of unconstitutionality regarding the provisions of Article 42(2) of Emergency Government Ordinance no. 36/2023 on establishing the general framework for the closure of operational programmes financed during the 2014–2020 programming period.


Background of the case

In the present case, our client, the claimant F.C.S.D., accessed European funds under the Human Capital Operational Programme 2014–2020, a financing contract being concluded on 11 October 2022 with the Ministry of Investments and European Projects (Managing Authority) and the Regional Intermediate Body for European Human Capital Programmes – North-West Region.

Subsequently, during the project implementation phase, on 19 September 2023, the Managing Authority issued a Decision terminating the financing contract, informing the claimant of the termination of the above-mentioned contract and of the obligation to reimburse the amount of RON 833,906, representing the value of Prefinancing Request no. 1, paid on 14 November 2022. At the same time as the termination decision, the claimant was also notified of the Note regarding the continuation of the contract termination procedure, the Proposal for termination of the contract, as well as the Invitation to amicable settlement.

The termination decision was based on Article 42(2) of Emergency Government Ordinance no. 36/2023, according to which:

“For projects/operations financed under the Human Capital Operational Programme 2014–2020 for which, by 30 June 2023, reimbursement claims amounting cumulatively to at least 10% of the non-reimbursable eligible value of the financing contract have not been submitted, the managing authority/intermediate body shall proceed with the termination of the financing contract, with full recovery of the amounts paid.”

We note that this emergency ordinance was published in the Official Gazette on 17 May 2023 and entered into force on 22 May 2023, i.e., after the financing contract had already been concluded between the claimant and the authority.

On the same occasion, an Information Letter was also communicated, by which the claimant was informed that the reimbursement and payment claims submitted had been entirely rejected as a result of the issuance of the termination decision. In this respect, it was noted that, by 30 June 2023, only two reimbursement claims had been submitted, amounting to 5.94% of the total non-reimbursable value of the financing contract, namely RON 490,136.35, which, in the defendants’ view, breached the above-mentioned legal provisions.

Against the termination decision and all administrative acts issued by the authority, the claimant filed a prior administrative complaint, followed by an administrative litigation action seeking their annulment.


Referral to the Constitutional Court

During the course of the litigation, we deemed it necessary to refer the Constitutional Court with a plea of unconstitutionality concerning Article 42(2) of EGO no. 36/2023, as this legal provision constituted the basis for issuing the termination decision.

Regarding the constitutional provisions allegedly breached by the regulatory approach of Article 42(2) of EGO no. 36/2023, we invoked Articles 15, 16, 53, and 73 of the Romanian Constitution.


Article 15(2) of the Constitution:

“The law shall apply only for the future, except for the more favorable criminal or administrative offence law.”

Article 42(2) of EGO no. 36/2023 infringes this constitutional provision by its very purpose, namely by its retroactive application, including to legal acts already concluded—specifically, the financing contract concluded on 11 October 2022. As mentioned, EGO no. 36/2023 was published on 17 May 2023 and entered into force on 22 May 2023.

Moreover, the newly imposed condition—submission of reimbursement claims amounting to at least 10% of the non-reimbursable eligible value by 30 June 2023—is abusive and unjustified, given that a period of approximately 40 days from the ordinance’s entry into force is far too short to allow compliance with this newly imposed obligation.

At the time of signing the financing contract, the claimant relied on the contractual provisions in force and structured its financial strategy accordingly. Imposing a significant change in conduct within such a short timeframe is entirely unpredictable and contrary to constitutional guarantees.


Article 16 of the Constitution

Article 16 enshrines equality before the law and public authorities. Given the breach of Article 15, there is implicitly also a breach of Article 16, as the challenged provision results in discriminatory treatment and undermines the principle that no one is above the law.

Furthermore, Article 42(2) of EGO no. 36/2023 constitutes an interference with the freedom of contract, enshrined in Article 1169 of the Civil Code, and with the binding force of contracts, provided by Article 1270 of the Civil Code, according to which:

“(1) A validly concluded contract has the force of law between the contracting parties.
(2) A contract may be amended or terminated only by agreement of the parties or for causes authorized by law.”

The obligation to fully reimburse non-reimbursable funds already used in compliance with the financing contract contradicts both the purpose of the approved project and the principle of proportionality, recognized in both domestic law and European practice.


Article 53 of the Constitution

Article 53 allows the restriction of rights or freedoms only if strictly necessary in a democratic society and proportionate to the situation that justified the restriction.

In this case, the restriction imposed—termination of the financing contract with ex tunc (retroactive) effects and recovery of funds—does not fall within the situations expressly permitted by Article 53 and is clearly disproportionate, unjustified, and unnecessary, amounting to undue legislative interference in a civil contractual relationship.


Article 73 of the Constitution and hierarchy of norms

Article 73 regulates the categories of laws, including organic laws, which govern, inter alia, the general legal regime of property.

According to the hierarchy of legal norms, the Civil Code, adopted as an organic law, has superior legal force to an emergency ordinance. However, Article 42(2) of EGO no. 36/2023 alters the legal regime of contract termination by introducing retroactive effects, contrary to Article 1554(3) of the Civil Code, which provides that termination produces effects only for the future.

The Constitutional Court has consistently held (Decisions no. 53/1994, 88/1998, 442/2015) that provisions of an organic law may be amended only by norms of the same legal force. Consequently, an emergency ordinance cannot validly derogate from or modify the effects of an institution regulated by an organic law.


Current status and conclusion

For all the above reasons, we maintain that Article 42(2) of EGO no. 36/2023 is unconstitutional, as it breaches Articles 15, 16, 53, and 73 of the Romanian Constitution. We therefore await with interest the ruling of the Constitutional Court on this referral.

Following the request submitted before the Cluj Tribunal, the court ordered the suspension of the proceedings pursuant to Article 413(1)(1) of the Civil Procedure Code, until the constitutional plea is resolved. The case was registered with the Constitutional Court on 17 July 2024 and is currently in the reporting phase.

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