diff --git a/java/execution/impl/src/com/intellij/execution/JavaTestFrameworkRunnableState.java b/java/execution/impl/src/com/intellij/execution/JavaTestFrameworkRunnableState.java
index d2cb63307cdb..e20fdcd003c2 100644
--- a/java/execution/impl/src/com/intellij/execution/JavaTestFrameworkRunnableState.java
+++ b/java/execution/impl/src/com/intellij/execution/JavaTestFrameworkRunnableState.java
@@ -41,6 +41,7 @@ import com.intellij.execution.util.JavaParametersUtil;
 import com.intellij.openapi.diagnostic.Logger;
 import com.intellij.openapi.extensions.Extensions;
 import com.intellij.openapi.module.Module;
+import com.intellij.openapi.module.ModuleUtilCore;
 import com.intellij.openapi.project.Project;
 import com.intellij.openapi.projectRoots.JavaSdkType;
 import com.intellij.openapi.projectRoots.JdkUtil;
@@ -379,7 +380,11 @@ public abstract class JavaTestFrameworkRunnableState<T extends
             final GlobalSearchScope configurationSearchScope = GlobalSearchScopesCore.projectTestScope(project).intersectWith(
               sourceScope.getGlobalSearchScope());
             final PsiDirectory[] directories = aPackage.getDirectories(configurationSearchScope);
-            return directories.length > 1;
+            return Arrays.stream(directories)
+                     .map(dir -> ModuleUtilCore.findModuleForFile(dir.getVirtualFile(), project))
+                     .filter(Objects::isNull)
+                     .distinct()
+                     .count() > 1;
           }
         }
       }
diff --git a/java/java-runtime/src/com/intellij/rt/execution/testFrameworks/ForkedByModuleSplitter.java b/java/java-runtime/src/com/intellij/rt/execution/testFrameworks/ForkedByModuleSplitter.java
index 366665bb8032..b36eb05fb1c7 100644
--- a/java/java-runtime/src/com/intellij/rt/execution/testFrameworks/ForkedByModuleSplitter.java
+++ b/java/java-runtime/src/com/intellij/rt/execution/testFrameworks/ForkedByModuleSplitter.java
@@ -68,6 +68,13 @@ public abstract class ForkedByModuleSplitter {
     myForkedDebuggerHelper.setupDebugger(vmParameters);
     final ProcessBuilder builder = new ProcessBuilder();
     builder.add(vmParameters);
+
+    //copy encoding from first VM, as encoding is added into command line explicitly and vm options do not contain it
+    String encoding = System.getProperty("file.encoding");
+    if (encoding != null) {
+      builder.add("-Dfile.encoding=" + encoding);
+    }
+
     builder.add("-classpath");
     if (myDynamicClasspath.length() > 0) {
       try {
@@ -103,7 +110,14 @@ public abstract class ForkedByModuleSplitter {
       char[] buf = new char[8192];
 
       public void run() {
-        final InputStreamReader inputReader = new InputStreamReader(inputStream);
+        final InputStreamReader inputReader;
+        try {
+          inputReader = new InputStreamReader(inputStream, "UTF-8");
+        }
+        catch (UnsupportedEncodingException e) {
+          return;
+        }
+
         try {
           while (true) {
             if (stopped[0]) break;