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).
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.
Two virtually simultaneous decisions, issued by two different lower Courts, reached opposite conclusions (Court of Catania, decision No. 1020 of 13 March 2020, Italian text available here; and Court of Milan, decision No. 2091 of 11 March 2020, Italian text available here). The legal grounds of both these decisions are indicated under Article 118, para. 1, of the Implementing Provisions of Italian Code of Civil Procedure. In other words, they merely refer to judicial precedents.
Mountains of papers have been written, countless rhetorical statements and a handful of enlightening and careful considerations were spent to describe 2020 and how tragic and particular that year was.
I don’t intend to add my voice to that chorus. However, I would like to focus on two aspects, which in my opinion deserve the attention of the readers of this law journal.
Italian law provisions on corporate arbitration (enacted by legislative decree no. 5 of 17 January 2003) entails a number of interpretative issues, possibly the reason for the limited recourse to arbitration in corporate matters.
Separability presumption is universally applied, as the relevant doctrine spread all over the world during the first half of XX century.
In the words of Italian lawmakers, “The validity of the arbitration clause must be evaluated independently of the underlying contract” (Article 808, para. 2, of the Italian Code of Civil Procedure).
In order to access the Recovery Fund, EU member States are required to draft a “National Recovery and Resilience Plan”, consistent with the specific recommendations the Europen Commission addressed them.
In that perspective, Italian government recently made available a preliminary document, headed “Guidelines for the definition of the national recovery and resilience plan” (Italian text available here). A short, forty-page document, with two pages only on Italian judicial system.
In fact, the said guidelines contain vague indications with respect to Italian judicial system and Italian justice: they only claim a number of nebulous, undefined proposed goals (shortening the duration of Court proceedings; reforming codes of civil, criminal and tax proceedings; planning interventions on the Italian judiciary organisation). Nothing else.
Following the publication of these guidelines, Unione Nazionale delle Camere Civili, that is to say, the association representing Italian civil lawyers, published its proposal for an extraordinary plan for civil justice (Italian text available here). It took an admirable initiative, as it triggers (or it could be able to trigger) a broad debate on possible specific, practical measures.
An Arbitral Tribunal seated in Padua recently dealt with some issues concerning its jurisdiction. The award was delivered on 21 January 2020 and its Italian text is available here.
The dispute heard by the Tribunal referred to an alleged relationship between a bank and a limited company evidenced by a framework agreement and an interest rate swap contract.
The claimant’s case was that the said contractual documents were never signed by its legal representative and that the signature on them was forged. As a consequence, the claimant requested the respondent to return the amounts the latter received under the terms of the said contracts.
An interesting point is that the claimant commenced the arbitration proceedings provided for by the arbitration clause contained in the contracts that, in its own case, it never entered into.
Another interesting point is that, on the basis of the opinion of a Tribunal-appointed expert, the claimant’s signature on the contracts actually proved to be forged. The respondent did not raise any objection after the filing of the expert opinion. Nonetheless, when the Tribunal requested the parties to express their views on the matter, the respondent objected to the Tribunal’s jurisdiction, lacking an enforceable (and even existing) arbitration clause.
International corporate arbitration under Italian law is a very interesting topic that nonetheless is virtually neglected by Italian scholars. Besides, to date there are no reported decisions.
First of all, a clarification of terminology is due: in this context, ‘international corporate arbitration’ means an abroad seated arbitration concerning a dispute falling within the scope of Article 34 of Italian Legislative Decree No. 5 of 17 January 2003, n. 5, which sets forth particular rules concerning arbitration in corporate matters.
In practice, possible cases of international commercial arbitration are not uncommon. For instance, an Italian incorporated company could represent the investment vehicle of a foreign entity. And that foreign entity could wish that corporate disputes (against an Italian co-investor, or the company’s directors) are referred to an abroad seated arbitration.
A few scholars addressed the relevant issue, which is also addressed by a recent decision issued by the Court of Appeal of Genoa (decision No. 649 of 9 July 2020, Italian text available here).