Corporate arbitration: and yet it moves!

A recent decision by the Court of first instance of Florence (decision no. 1129 of 21 March 2016 of III Civil Chamber of the Court of first instance of Florence, Italian text available here) re-opens the debate on the topic of arbitrability of corporate disputes, and it is particularly notable for the clarity of its reasoning.

We previously talked about this topic on several occasions (for instance, on this post, on this one and this one as well).

The case decided by the Court of Florence may be summarised as follows.

A member of a cooperative company of taxi drivers was excluded from the company (firstly¬†by¬†a resolution passed by the company’s General Meeting and thereafter by¬†another resolution passed by the company’s Board of Directors), due to his alleged improper behaviour (hoarding of clients damaging his colleagues).

The taxi driver challenged before the Court both the resolutions above mentioned (the General Meeting resolution and the Board of Directors one).

The cooperative company appeared in¬†Court and objected to its jurisdiction. Indeed, the company’s Articles of association¬†contain an arbitration clause (Articles 44 and 45) whereby¬†any dispute concerning the corporate relations (apart from those for which the law provides for the intervention of the Public Prosecutor) shall be referred to a sole arbitrator.

The Court of Florence checked whether the dispute at hand was capable of arbitration and ruled that it was.

First, Article 2533(3) of the Italian Civil Code (whereby the excluded member of a cooperative company is entitled to challenge the company’s resolution “before the Court“) does not exclude¬†the jurisdiction of the Arbitral tribunal.

In fact – and this is the most interesting point in the ruling of the Court of Florence – “The sole¬†disputes which are not capable of settlement by arbitration are those disputes concerning non-negotiable rights, that is, the disputes concerning an (alleged)¬†incurable¬†nullity.” In other words, “A non-negotiable right (…) is other than a right provided for by a¬†mandatory¬†law rule. Indeed, only a non-negotiable right is enforceable and actually enforced regardless of the conduct of the parties, in order to protect the public interest; moreover, the violation of a non-negotiable right entails¬†an incurable nullity.”¬†

Therefore, the Court of Florence ruled that, if a resolution of the company’s General Meeting is challenged due to an alleged¬†lack of notice, the lack of the minutes and even if its object is not possible or unlawful, the relevant dispute is capable of¬†arbitration. In fact, the invalidity at hand is cured if no challenge¬†is filed within three years (counting from the registration or filing¬†of the resolution with the Companies‚Äô Register or its¬†transcription¬†in the Book of General¬†Meetings, as the case may be:¬†Article 2379(1) and Article 2479.ter(3) of the Italian Civil Code).

On the other hand, a resolution modifying the corporate purpose by providing illegal or impossible activities is null and void and may not be cured (in fact, it may be challenged without time limit).  As a consequence, the disputes concerning that resolution are not capable of settlement by arbitration.

Therefore,¬†the disputes concerning the resolutions passed by the Annual General Meeting, whereby the company’s¬†financial statements are approved, are always capable of arbitration, irrespective of the reasons of their challenge. The Court of Florence did not explicitly make¬†that statement, but it¬†is a clear and obvious consequence of its reasoning. In fact, the invalidity of the above mentioned resolutions is¬†cured if no challenge is filed¬†before the approval of the following financial statements (Article 2434.bis of the Italian Civil Code).

In other words, the Court of first instance of Florence superseded the case law¬†of the Supreme Court, which I have analysed before (for instance, on this post). According to the Supreme Court case law, a dispute concerning¬†resolutions approving financial statements is not capable of arbitration if the claimant claims that the content of the financial statements is inaccurate. ¬†That case law is now reversed by a statement of the same Supreme Court: “The¬†sole¬†disputes which are not¬†capable of settlement by arbitration are those disputes concerning non-negotiable rights, that is, the disputes concerning¬†an (alleged)¬†incurable¬†nullity.” (decision¬†no. 15890 of 20 September 2012 of the VI Civil Chamber of the Supreme Court, Italian text available here).

And yet it moves!

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.

Browsing this website you accept the use of cookies. more info

The following information is provided in accordance with Article 13 of Regulation (EU) 679/2018 ("GDPR"), to users who access the services available at (‚ÄúSite‚ÄĚ). When consulting the Site, information concerning users may be collected that constitutes personal data under the Privacy Code. This information is provided exclusively for the Site and does not affect any other web sites accessible by the user through links provided on the same.
Data Controller (Titolare del trattamento) is Arbitration in Italy Ltd, a company incorporated under English law, registered at No. 12459814, with registered office in 61 Bridge Street, Kington, HR5 3DJ, UK ("Company"). Data Processor (Responsabile del trattamento) is the Company's present legal representative.
The processing of data related to the web services on this Site is carried out at the premises of the Company set out above and is performed by internal personnel duly appointed as Persons in charge of processing (Incaricati del trattamento).
Surfing Data
During the normal operation, the computer systems and software procedures used to operate the Site acquire some personal data whose transmission is implicit in the communication protocols of the Internet. This information is not collected to be associated with identified persons, but by its very nature could, through processing and association with data held by third parties, allow identification of users. This category of data includes IP addresses or domain names of computers used by users who connect to the Site, URI (Uniform Resource Identifier) of requested resources, the time of the request, the method used to submit the request to the server, the size of the file obtained in reply, the numerical code indicating the status of the response from the server (successful, error, etc.) and other parameters regarding the operating system and computer environment. These data are used only to obtain statistical information about the site and its use and to check its correct functioning and are deleted immediately after processing. The data could be used to ascertain responsibility in the event of possible computer crimes committed against the Site: except in this case, the data on web contacts are kept for a maximum period of seven days.
Data provided voluntarily by the user
The sending of optional, explicit and voluntary e-mails to addresses shown on this Site, and the filling in of forms specifically provided involve the subsequent acquisition of the sender’s e-mail address and the additional personal data provided in the electronic communication, together with the sender/user’s data necessary to respond to requests as well as to provide the service. Specific summary information will be provided in relation to specific services.
Cookies are data files which some websites, while visited, can send to the user with the scope of tracing its path inside the site and collect data in anonymous form, in order to enhance the offer and the use of the site. The Company does not use information technology for the direct acquisition of personal data by which the user can be identified. Cookies for the transmission of personal information or systems for the tracing of users are not used. The Company uses so-called technical cookies only with the scope of rendering browsing the Site possible and to make it possible for the user to use its functions. Some technical cookies are necessary in order to optimize the use and have the user accredit itself with the Site, for example in order to enter a restricted area (so-called browser cookie). The browsing cookies are session cookies and are deactivated automatically once the browser is closed. For the installation of these cookies it is not necessary to collect the consent of the user. The Company uses furthermore analytic cookies of thirds parties by which information on the interaction of the visitor with the content of the Site is obtained (most frequently used pages, time of use, etc.) and which thereby provide statistic information which makes it possible to optimize the Site and to enhance its use.
Unless specified for surfing data, the user is free to provide personal information in the application forms or otherwise indicate them in order to request any information packs or other communications. Failure to provide personal information may, however, make it impossible to fulfill the request.
Personal data are processed by automated tools for the time necessary to achieve the purposes for which they were collected. Specific security measures have been taken to prevent loss of data, unlawful or incorrect use and unauthorized access.
The personal information provided by users who request dispatch of information packs or rendering of services is used only to provide the service requested and may be disclosed to Company’s employees and consultants, duly appointed as Persons in charge of processing, as well as third parties that render ancillary or instrumental services to the activity of the Company and which are appointed as Data Controllers. There will not be any other communication of data to third parties, except upon request of public authorities. The data collected will not be disseminated.
Data subjects are entitled, pursuant to Article 12 of the GDPR, to obtain, at any time, confirmation of the existence of the data and to know their origin, verify their accuracy or request their integration, updating or correction. Pursuant to this article data subjects shall have the right to request cancellation, anonymization or blocking of data processed in violation of the law, and in any case, to object on legitimate grounds to their processing. Requests should be sent to the Data Processor, at the above address or by email to