The Italian-Turkish BIT

Bilateral investment treaties (BIT) are international agreements providing the terms, conditions and protections for private investment by individuals and entities of a contracting State (the home State) in the other Contracting State (the host State).

The proliferation of BITs at the turn of the 20th century has transformed the international investment environment, as they represent a crucial element of globalization.

As far as it is known, approximately 3,000 BITs were signed, and more than 2,000 are in force.

Italy is a party to 102 BITs (and 77 treaties with investment provisions, including the EU treaties).  Turkiye is a party to 132 BITs (and 22 treaties with investment provisions).

On 22 March 1995, Italy and Turkiye signed their BIT, which entered into force on 2 March 2004.  Its English text is available here.

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A Case Study on the Enforcement of Foreign Arbitral Awards in Turkey: Document production v. Confidentiality

Turkey has taken significant steps in becoming an arbitration-friendly jurisdiction over the past decade. Nevertheless, we observe that the foreign arbitral award enforcement proceedings in Turkey are being subject to a more detailed review than other arbitration-friendly jurisdictions on a comparative basis.

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Parallel paths

As far as the relationship between arbitration and Court proceedings is concerned, Italian law applies the s.c. parallel paths doctrine. This doctrine is laid down by Article 819-ter of the Italian Code of Civil Procedure, whereby “the jurisdiction of arbitrators is not excluded by the fact that the same case is pending before the State Courts, nor by the fact that a related case is pending before the State Courts”.

This principle applies in several cases, some of which relate to corporate matters. For this reason, a recent decision of the Court of Milan is of particular interest (Court of first instance of Milan, 12 July 2022, No. 6095, Italian text available here), as the judge failed to apply the said principle.

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Court’s costs and fees

The Court of Appeal of Milan and the Court of first instance of Milan recently issued two decisions on the issue of Court’s and attorney’s fees in case an objection to the Court’s jurisdiction is granted, as the parties entered into an arbitration agreement.

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Arbitration and payment order

A recent decision issued by the Court of first instance of Vicenza (Court of first instance of Vicenza, decision No. 1102 of 27 June 2022, Italian text available here) is of great interest for the unprecedented conclusion reached by the Court.

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Default arbitration proceedings

Default arbitration proceedings, or – with a more accurate wording – arbitration proceedings in which a situation occurs corresponding to the situation giving rise to default proceedings in State Courts, is a topic of relevant practical interest.

Italian scholars dealt with that topic, developing three theses.  The first thesis holds that the above situation may occur in arbitration proceedings.  The second thesis, on the contrary, is that this situation cannot occur.  The third thesis, which is the more persuasive, is that it is necessary to identify the law rules concerning default proceedings before State Courts, which are compatible with arbitration proceedings.

On the other hand, Italian case law tends to repeat the doctrine that default proceedings rules do not apply in arbitration proceedings.

In this framework, two recent decisions, both issued in proceedings for the setting aside of Italian domestic awards, are fascinating, as the awards were issued in ‘default’ arbitration proceedings.

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Parallel proceedings

A recent decision issued by the Court of Appeal of Milan (No. 1946 of 23 June 2021, Italian text available here) deals with a topic of great interest and practical relevance. This topic concerns the relationship between arbitration proceedings and parallel proceedings in a Court of law (which in that particular case were criminal proceedings).

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Mind the steps! Multi-tiered arbitration clauses

A multi-tiered arbitration resolution clause is, in its simplest form, the methodology agreed by the parties that has “multi-tiers” before resorting to the final dispute resolution method.

In practice, we see these multi-tiers before finally resorting to arbitration as initially resorting to various ADR methods, such as negotiation, mediation or expert determination. In this case, the parties should undertake certain steps prior to commencing arbitration in an attempt to amicably settle a dispute before resorting to arbitration.

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Arbitration award and “long” term to commence setting aside proceedings

A recent decision rendered by Italian Supreme Court sitting en banc (decision No. 8776 of 30 March 2021, Italian text available here) has clarified – based on hermeneutical criteria, systematic reasons, and constitutional provisions – when the term for commencing setting aside proceedings under Article 828, para. 2, of Italian Code of Civil Procedure starts to run.

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Multiparty arbitration

Both from a historical point of view and in a number of its actual implementations, arbitration is a bilateral dispute resolution mechanism: in other words, it concerns disputes between two parties, a claimant and a respondent.

It is not by chance that, taking account of the above binary structure, the default rule on the appointment of the arbitral tribunal, contained in Article 810 of Italian Code of Civil Procedure provides that each party appoints an arbitrator and that the chair is jointly appointed by the party-appointed arbitrators.

However, disputes submitted to arbitration (in particular, to international arbitration) might have a more complex structure, either because there are more than two parties to the relevant relationship, or because after the execution of the arbitration agreement the parties increase in number: for instance, in case of succession or inheritance when two or more successors or heirs succeed a single party.

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