Arbitration clause and payment order

It is quite usual that, when inserting an arbitration clause in an agreement, a party would like to preserve its right to file with the Court a request for a payment order (which is an ex parte order). The purpose would be to attain a temporarily enforceable payment order, since it would be an effective and fast solution to protect its rights.

Nonetheless, the outcomes of such choice could be different from those expected. The VI Civil Chamber of the Supreme Court, in its order no. 21666 of 23 October 2015 (Italian text available here), analysed the possible consequences.

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The case of the additional preposition

A recent judgment of the Supreme Court (decision no. 18707 of 22 September 2015, Italian text available here) dealt with a very peculiar case. A party objected that an arbitration clause was unenforceable, since it included an additional preposition (more precisely the preposition “di”, which in Italian means “of”).

In this case, the Supreme Court, as well as the Court of first instance, avoided a formalistic excess. The Court did not repeat the old case, referred to by Gaius, in which a party lost the case due to a lexical mistake.

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Arbitration and statute of limitations

The First Civil Chamber of the Supreme Court requested the First President of the Court to transfer to the Supreme Court sitting en banc a case concerning the relationship between arbitration and the limitation period provided for by a specific statue of limitations. The dispute concerned Article 2527(3) of the Italian Civil Code, which states that the member excluded from a cooperative company is entitled to challenge the relevant resolution within 30 days of its communication. The current rule in force is Article 2533(3) of the Italian Civil Code, which extended the limitation period to sixty days, the same limitation period provided for by Article 2287(2) of the Italian Civil Code with respect to partnerships. The Italian full text of the order no. 20101 of 7 October 2015 is available here.

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Waiver of the right to arbitrate

The Court of first instance of Rome (decision no. 19215 of 28 September 2015, Italian text available here) ruled in a complex case concerning the relationship between a limited liability company and its former director. First of all, the company sued the former director before the Court, claiming his liability. In a second case (the case of the decision at hand), the former director requested the Court to issue a payment order against the company, in order to obtain the amounts allegedly owed to him. The parties did not take into account the arbitration clause stipulated in Article 26 of the Articles of association. This provision notes that “all controversies arising among the quotaholders or among the quotaholders and the company, the directors, liquidators and statutory auditors shall be settled by a sole arbitrator appointed by the President of the Certified Public Accountants Register of the place where the company has its registered office (….).” In the judicial proceedings commenced by the company, the former director objected that the Court did not have jurisdiction, due to the above mentioned arbitration clause. On its turn, the company raised this objection when challenging the payment order issued in favour of the former director.

Did the parties waive their right to arbitrate, by initiating Court proceedings?

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