Breach to the arbitral agreement

Commercial arbitration practitioners sometimes face problems arising from the conduct of a party that, recalcitrant to see the dispute decided by the arbitrators as agreed, engages in conduct with the apparent intent to prevent or hinder and slow down, the arbitral proceedings.

The leading arbitral institutions are also aware of this and have included in their rules the admonition represented by the express provision that the parties must conduct themselves in good faith and fair dealing.

The subject has not, however, found particular attention in Italy.  For this reason, it seems appropriate to address it.

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Some thoughts on the reform of Italian arbitration law

Much has been written, and much will still be written, about the recent reform of Italian arbitration law. The undeniable merit of this reform is that it brings the Italian system closer to that of other jurisdictions sharing the same civilizational perspective. The changes that have (finally) allowed arbitrators to issue interim and precautionary measures, as well as those concerning the disclosure and disqualification of arbitrators, should indeed be interpreted in this sense. Italy is now among the most advanced jurisdictions, with changes that include the choice of applicable law, allowing parties and arbitrators to apply non-state rules such as lex mercatoria.

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Italian arbitration in 2022

2022 has been an exciting year for Italian arbitration practitioners.

First, in 2022 was enacted the reform of Italian arbitration law, which will enter into force on 1 March 2023.  It is the first significant reform since that passed in 2006.  It is worth immediately noting that:

  • Italian arbitration law will impose specific disclosure duties on the appointed arbitrators. The influence of international best practices is evident, and the fulfilment of the said duties will likely avoid the occurrence of events such as those discussed in BEG v. Italy, and
  • Italy finally leaves the restricted club of jurisdictions not allowing arbitrators to issue interim measures.

Second, Italian practitioners had to brush up on seasoned precedents on the arbitrability of disputes involving a party affected by trade sanctions.  Italian Courts dealt with this matter concerning the sanctions against certain Iraqi entities; the same principles will likely apply to the sanctioned Russian entities.

Third and eventually, Italian institutional arbitration is in sharp expansion.  The time is still far when Italian administered arbitrations will outnumber ad hoc proceedings.  Nonetheless, Italian arbitral institutions, particularly the leading institution (Milan Chamber of Arbitration), significantly contributed to shaping the landscape for domestic and international cases.

Sanctions and arbitrability

The sanctions adopted against certain Russian entities and individuals after the invasion of Ukraine by the Russian Federation might raise an issue of arbitrability of disputes between sanctioned entities and third parties.

This is not a new subject for practitioners of international arbitration, as it has been addressed in the past when the international community adopted sanctions, for example, against Iraq or Iran. The current sanctions are somehow different (for example, they are not adopted by the United Nations) and are more similar to those adopted against the same Russian Federation following the annexation of Crimea.

The issue now requires further attention, either because of the scope of the new sanctions or because of the relevance in the international trade of several of the sanctioned entities.

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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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Arbitration in Italy’s 2020

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.

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Arbitration and choice of forum clauses

The Court of first instance of Milan addressed in its decision No. 7692 of 26 November 2020 (Italian text available here) the issue arising out of the coexistence, within the same contract, of an arbitration clause and a choice of forum clause.

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A proposal for Italian arbitration

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.

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Corporate arbitration: the doctrine is (finally) right, its application is wrong

Corporate arbitration is a major topic for Italian arbitration practitioners.  The Italian Supreme Court developed a doctrine and laid down principles not entirely right.  Some lower Courts tried to take a more appropriate approach, but to no avail (I discussed this issue, for instance, in this post).

A recent decision issued by the Court of first instance of Bologna (No. 1378 of 13 June 2019, Italian text availabe here) ostensibly applied the right doctrine (or the doctrine I deem right); nonetheless, it came to the wrong conclusion.

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