ICSID Allows Arbitration to Proceed
The International Centre for Settlement of Investment Disputes (ICSID), based in Washington, has rejected a request from Romania to halt an arbitration case. The case was initiated by Eurohold Bulgaria and its subsidiary, Euroins Insurance Group (EIG), following the revocation of Euroins Romania's operating license by Romanian authorities. The decision, announced on Monday, October 27, 2025, means the arbitration proceedings will now move forward to their next phase.
Background to the Investment Dispute
Eurohold Bulgaria and EIG filed the arbitration case at ICSID in May 2024, seeking more than 500 million euro (approximately $580.6 million) in damages from Romania. The Bulgarian companies allege that Romania's financial regulator violated the 1994 bilateral investment treaty between Bulgaria and Romania. This treaty is designed to protect investors from unfair or discriminatory treatment. According to Eurohold, the actions taken by Romanian authorities caused significant damage to the insurance group's activities in Romania, ultimately leading to the destruction of Euroins Romania's business.
Euroins Romania's Collapse and Regulatory Scrutiny
The arbitration stems from the decision by Romania's Financial Supervisory Authority (ASF) to revoke Euroins Romania's operating license on March 17, 2023, citing 'clear signs of insolvency'. Subsequently, the Bucharest Tribunal initiated bankruptcy proceedings for the insurer in June 2023. An appeal against the bankruptcy ruling by Euroins Romania was rejected by the Bucharest Court of Appeal in February 2025, confirming the insolvency.
Prior to its collapse, Euroins Romania was a major player in the Romanian insurance market, holding a dominant 27% share of the RCA (compulsory motor insurance) market as of March 2023. The ASF had subjected the company to intense regulatory scrutiny, imposing 26 sanctions and fines exceeding 16 million lei between February 2020 and January 2023. Eurohold has characterized the ASF's actions as an 'unrelenting campaign' against the company, which they claim began after the group declined to acquire another bankrupt Romanian insurance operator. EIG had invested nearly 300 million euro in the Romanian insurance market.
Next Steps and Potential for Further Action
With ICSID's rejection of Romania's request, the arbitration case (ICSID Case No. ARB/24/18) will now proceed. Furthermore, Eurohold and EIG have indicated their intention to file a second arbitration case at ICSID. This new case would address Romania's alleged failure to comply with its obligations under the Romanian Investment Promotion Act (OUG No. 92/1997; Legea No. 241/1998). An earlier request to incorporate these violations into the existing case was not accepted by the tribunal.
5 Comments
Fuerza
It's concerning that a major insurer with a large market share collapsed, indicating either poor management or aggressive regulatory pressure. Both sides have valid points about their responsibilities, and the arbitration will hopefully clarify the sequence of events.
Manolo Noriega
Ensuring a stable financial market is a government's duty, but allegations of an 'unrelenting campaign' against a foreign investor are serious. The ICSID process is necessary to determine if regulatory actions were justified or discriminatory.
Fuerza
The rejection of Romania's bid to halt arbitration emphasizes the binding nature of international investment agreements. Yet, the high number of sanctions against Euroins prior to its collapse suggests there were legitimate regulatory concerns that need to be weighed against claims of unfair treatment.
Ongania
This sends a strong message: regulatory bullying won't be tolerated.
Fuerza
While investor protection treaties are important for attracting foreign capital, national regulators must also have the authority to address clear insolvency. The challenge here is determining if ASF's actions crossed the line from oversight to unfair targeting.