Real estate developer Plaza Centers rejects ICSID ruling, demands compensation from Romania
Real estate developer Plaza Centers (LON: PLAZ) announced on Monday, May 11, that it had filed a compensation request ranging between EUR 60 million and EUR 420 million against Romania with the Arbitration Court in London. The filing is only the latest development in an ongoing legal battle after the failure of a public-private partnership contract signed in 2006 related to the Casa Radio project in Bucharest.
Specifically, Plaza Centers submitted both a “Statement of Defence,” through which it rejects the accusations made by Romania, and a “Statement of Counterclaim,” through which it requests financial compensation “in connection with the dispute,” estimated between approximately EUR 60 million and EUR 420 million, according to Economedia.
The claim was filed on May 8 before the London Court of International Arbitration (LCIA), after the Ministry of Finance initiated a separate legal action seeking the termination of the public-private partnership signed in 2006 and the return of the project’s assets to state ownership.
In parallel with the new legal counteroffensive, the Israeli company is also facing issues regarding legal representation. Plaza Centers announced that the London-based law firm representing it in both the LCIA arbitration and the ICSID proceedings has terminated its mandate as of May 9, 2026.
The new legal move also comes less than a month after Romania obtained an important victory in the case at the International Centre for Settlement of Investment Disputes tribunal. The court rejected the EUR 385 million compensation claim filed by Plaza Centers against the Romanian state in relation to the same Casa Radio project.
The ICSID tribunal justified its decision through “findings regarding the company’s conduct and certain historical agreements” mentioned in Plaza Centers’ public documents from the 2016–2020 period.
The dispute between the Romanian state and Plaza Centers is based on the failure of the Casa Radio real estate project, launched during the early 2000s as one of the largest public-private partnerships in Romania. The project provided for the transformation of the unfinished Casa Radio building into a large complex with a shopping mall, five-star hotel, office buildings, and residential towers of up to 34 floors. Although the investor claimed to have invested around EUR 85 million in the project, the development was never completed, and the construction site remained abandoned.
In 2022, the Romanian state decided to seek contract termination through international arbitration in London. In parallel, Plaza Centers attempted to sell its stake in the project to AFI Europe, but the transaction has not been completed to date. At the end of 2025, the company announced a new extension of the agreement regarding a possible sale.
The Casa Radio project also generated controversies related to the former majority shareholder of Plaza Centers. Elbit Imaging, which until the end of 2018 was the company’s largest shareholder, received a USD 500,000 fine from the US Securities and Exchange Commission (SEC) in a case involving possible violations of US foreign corruption practices legislation.
According to the allegations made at the time, the company allegedly made unjustified payments of EUR 14 million to consultants in connection with the Casa Radio project. In Romania, prosecutors also launched an investigation, but later closed the case, stating that there was no evidence indicating bribery in connection with the project.
(Photo source: Daniel CaluianDreamstime.com)
