New arbitration rules of Milan Chamber of Arbitration

The Milan Chamber of Arbitration published its new arbitration rules.  These new rules apply to arbitration proceedings commenced after 1st March 2019 unless the parties have agreed, under Article 832 of the Italian code of civil procedure, that the arbitration proceedings shall be subject to the arbitration rules in force at the time of the stipulation of the arbitration clause (however, in this case, the Arbitration Chamber may refuse to manage the proceedings).

The new rules are available here.

The new rules improve and rationalise various provisions of the previous arbitration rules and also contain some new interesting provisions.

First of all, with respect to the interim and provisional measures. The new rules confirm that the arbitral tribunal may issue all urgent and provisional measures of protection, also of anticipatory nature, that are not barred by mandatory provisions applicable to the proceedings (Article 26). The same provision was already contained in 2010 arbitration rules (Article 22; the old rules are available here).  The new element is that the arbitral tribunal has also the power to adopt any determination of provisional nature with binding contractual effect upon the parties. This is a significant innovation and perhaps it would have been appropriate to provide for its application only in arbitration proceedings commenced on the basis of a clause entered into after the entry into force of the new rules, as it is provided for the emergency arbitration.

The other significant innovation concerns emergency arbitration (Article 44).  Emergency arbitration is a procedure for the issuance of urgent and provisional measures pursuant to Article 26 by a specifically appointed emergency arbitrator. The request is submitted to the emergency arbitrator within 5 days and she or he shall issue the relevant decision in the following 20 days after having heard the parties (or in the following 5 days, without notice to the other party, if prior disclosure risks causing serious harm to the applying party). The arbitration proceedings on the merits, if not already commenced, shall be instated within 60 days from the filing of the request, or within the time limit set by the emergency arbitrator. Otherwise, the emergency measure becomes ineffective.

This provision,  as mentioned, only applies in arbitration proceedings pursuant to an arbitration agreement entered into after the entry into force of the new rules. It appears to be the answer to that minority line of cases holding that the stipulation of an arbitration clause prevents the parties from filing with the State Courts an application for urgent and/or provisional measure if the arbitral tribunal is vested with the power to issue provisional measures (I already examined this line of cases in this post). For the time being, it is not possible to predict whether this provision would also induce Italian Courts to overrule the majority line of cases whereby State Courts may issue urgent and/or provisional measures before the constitution of the arbitral tribunal (I examined this line of cases, for instance, in this post and in this post). I do hope that Italian Courts would reaffirm the majority line of case, also in the light of the fact that, in cases of the utmost urgency, State Courts are able to provide the parties with a protection of their rights faster and more effective than the emergency arbitration provided for by the new arbitration rules of Milan Chamber of Arbitration: indeed, State Courts might issue a preliminary measure even the very same day of its request.

The new rules of the Milan Chamber of Arbitration also set forth precise disclosure duties with respect to third-party funding (Article 43).

As far as corporate arbitration is concerned, the new rules set forth that, if the arbitration clause contained in the company’s articles of association does not provide for the appointment of the arbitral tribunal by a third party, the appointment is made by the Arbitral Council (Article 17). This provision clearly aims at avoiding the arbitration clause being deemed as null and void under Article 34.2 of Italian legislative decree no. 5 of 17 January 2003, whereby the corporate arbitration clause that does not provide for the appointment of the arbitral tribunal by a third party, unrelated to the company, is null and void. In the next few years, we will be able to understand if this provision would be able to achieve its purpose, as I hope it would be able to do, and if the case law would hold the arbitration clause enforceable, as supplemented by the arbitration rules.

Other interesting provisions are also those concerning the replacement of the arbitral tribunal (Article 23) and the duty to act in good faith during any phase of the proceedings (Article 9).

At the end of the day, it could be maintained that the new rules take into account the developments in international arbitration and its best practices and contribute to enhancing and promoting Italy as the venue of international arbitration proceedings.

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