Arbitration and shareholders’ loan

If an arbitration clause is stipulated in the company’s Articles of association, disputes between a former shareholder and the company, concerning the repayment of a shareholders’ loan, shall be referred to an Arbitral Tribunal. This is, in a nutshell, the rationale of decision no. 18316 of 17 September 2015 of the Third Civil Chamber of the Court of first instance of Rome (the Italian full text is available here).

A (former) member of a cooperative company, after exercising the right of withdrawal, obtained from the Court of first instance of Rome a payment order against the company, for the repayment of a shareholders’ loan.

The company challenged this payment order pleading, inter alia, the lack of jurisdiction of the Court according to Article 35 of its Articles of association. This provision states that "All disputes arising out of these Articles of association, the rules approved by the members’ meetings and, in any case, the corporate relationship, including those disputes relating to the validity, construction and fulfillment of the Articles of associations and rules, or the resolutions adopted by the Board of Directors concerning the withdrawal or exclusion of members, which may arise between the cooperative company and its members, or between the members themselves, and which refer to negotiable rights, even if the disputes concern the membership as such (subject to Article 10, which concerns the members’ resolution in the event of the Board of Director’s refusal to admit a new member), shall be referred to an Arbitral Tribunal (…).

The Court of first instance Rome found that the loan the former member granted to the cooperative company "was arising out of the relationship that he had with the company and, as a consequence, the grounds of his claim rest on the relationship with the company, even if it ceased.” Therefore, the Court granted the objection raised by the company. The Court also noted that the objection is grounded even taking into account that the claimant ceased to be a member of the cooperative company. The reason is that the arbitration clause stipulated in the Articles of association also refers to an Arbitral Tribunal those disputes "where certainly one of the parties is no longer a member (…) (i.e., those concerning the withdrawal or exclusion of members).

However, the Court did not declare its lack of jurisdiction. Indeed, the Courts declare that the jurisdiction rests with the Arbitral Tribunal if the arbitration clause provides for the so-called "arbitrato rituale" (that is, the regular arbitration procedure which results in an enforceable award).  On the contrary, if the arbitration clause provides for the so-called "arbitrato irrituale" (that is, an alternative arbitration procedure which does not result in an enforceable award), the Courts declare that the claim is inadmissible.  In the case at hand, since the Articles of association provided for an "arbitrato irrituale", the Court of first instance of Rome declared that the claim was inadmissible. 

Although the claimant lost the case, the Court did not award attorneys’  fees, noting that the former member’s claim was not inadmissible at first. However, it became inadmissible after the company raised its objection based on the arbitration clause. This seems to me a very broad construction of Article 92 of the Italian Code of Civil Procedure, pursuant to which the Court does not award attorneys’ fees if there is no winning party or for "other serious and exceptional reasons.

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