Arbitration and non-contractual claims

In the previous post, I examined a decision, regarding arbitration and contractual restitutions, that in my opinion is not correct. On the basis of theoretical principles and in accordance with the case-law of the Supreme Court, this decision is in contrast with the favor arbitrati of Italian law.

I have therefore researched Italian State Courts decision on a very narrow (but interesting) issue: that concerning arbitration of claims under Article 1669 of the Italian Civil Code; that is to say, non-contractual claims connected to a contractual relationship. At the end of my research, I found that some State Courts maintain that Arbitral tribunals have jurisdiction over these claims (Court of Appeal of Catania, decision No. 820 of 10 April 2019, Italian text available here; and Court of Appeal of Bologna, decision No. 2453 of 5 October 2018, Italian text available here). And they do so even though the Italian Supreme Court laid down principles leading to the opposite conclusion (Italian Supreme Court, II Civil Chamber, decision No. 1674 of 3 February 2012, Italian text available here; and Italian Supreme Court, II Civil Chamber, decision No. 4035 of 15 February 2017, Italian text available here) .

Article 1669 of the Italian Civil Code provides for a particular claim that can be raised against a contractor that has built a building, in the ten years from the construction, to claim its liability, in case of ruin of the building or serious defects thereof. This claim can be raised by the employer and its assignees, and the majority case-law maintains that this claim is a non-contractual one even when raised by the employer.

Also with reference to claims under Article 1669 of the Italian Civil Code, the Italian Supreme Court applies the principles it laid down with respect to the relationship between arbitration and non-contractual claims: in a nutshell, if the arbitration clause contained in the contract does not expressly mention the possible non-contractual claims connected with the contractual ones, the Arbitral tribunal only has jurisdiction over the contractual claims.

A number of lower Courts apply the principles laid down by the Supreme Court (in this respect, see a recent article: Di Girolamo, La potestas iudicandi degli arbitri in materia non contrattuale (anche, ma non solo, con riferimento all’azione del compratore ex art. 1669 c.c.), on Riv. Arb., 2019, p. 31 ff., available on academia.edu).

However, a handful of lower Courts maintain that (amicus Plato, sed magis amica veritas) Arbitral tribunals may have jurisdiction over claims under Article 1669 of the Italian Civil Code even though the relevant arbitration clause does not expressly mention non-contractual claims.  The most recent decisions on this point are those issued by the Court of Appeal of Catania in April 2019 and the Court of Appeal of Bologna in October 2018.

The Court of Appeal of Bologna was seised in proceedings for the setting aside of an award. Among the grounds of appeal, the appellant claimed that the Arbitral tribunal did not have jurisdiction over a claim under Article 1669 of the Italian Civil Code, it being a non-contractual claim. The Court of Appeal rejected the claim, noting that the issues that are material under Article 1669 of the Italian Civil Code are included amongst the contractual issues.  As a consequence, there was no reason to exclude the Arbitral tribunal jurisdiction over the claim under Article 1669 of the Italian Civil Code.  The reasoning of the Court seems correct, although laconic, as laconic that I wonder whether the topic was properly examined.

More extensive reasoning is contained in the decision of the Court of Appeal of Catania.  That case also concerned proceedings for the setting aside of an arbitration award: the claimant, amongst other things, claimed that the Arbitral tribunal did not have jurisdiction over a claim under Article 1669 of the Italian Civil Code.

The arbitration clause was very concise. It only provided that: “in the event of a dispute, it shall be submitted by the parties to the non-appealable decision of an Arbitral tribunal“.

On the basis of this clause, which did not refer to contractual nor to non-contractual claims, the Court of Appeal of Catania considered that the Arbitral tribunal had jurisdiction over all the disputes having the contract and its stipulation as their logic and chronologic premise. On the basis of this reasoning, the Court of Catania knowingly disregarded the principles laid down by the Italian Supreme Court in its said decision No. 4035 of 2017.

I hope that these decisions, issued by the Courts of Appeal of Bologna and Catania, would be the first indication of a new line of cases in Italian case law.

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