Article 829, paragraph 3, of the Code of Civil Procedure, as reformulated by Article 24 of Legislative Decree No. 40/2006, applies to all arbitration proceedings commenced after the entry into force of the reform; however, in order to determine the admissibility of a challenge based on violation of the rules of law on the merits of the dispute, the applicable law must be identified as that in force at the time of the conclusion of the arbitration agreement. Consequently, where a corporate arbitration clause inserted in the articles of association after the 2006 reform contains no express provision for challenge on grounds of errors in iudicando, a challenge to the award for violation of the rules of law concerning the merits of the dispute is not admissible.
The proceedings for challenging an arbitration award do not constitute an ordinary appeal, but are structured in two phases: a rescinding phase, limited to verifying the grounds of nullity exhaustively provided for by Article 829 of the Code of Civil Procedure, and a deciding phase, which is contingent and subsequent to annulment, in which the ordinary court proceeds to reconstruct the facts; in the rescinding phase, the court hearing the challenge is precluded from re-examining the questions of merit submitted to the arbitrators and from re-evaluating the facts and evidence acquired in the arbitration proceedings.
Internal inconsistency in the reasoning of the award may be relevant as a ground of nullity only in the event of absolute impossibility of reconstructing the logical-legal reasoning underlying the decision, due to the total absence of any form of reasoning referable to the functional model; mere erroneousness or disagreement with the reasons set out by the arbitrators does not constitute the defect referred to in Article 829, paragraph 1, No. 5, of the Code of Civil Procedure, where those reasons nonetheless enable the reasoning process of the decision to be understood.
There is no violation of the principle of adversarial proceedings, pursuant to Article 829, paragraph 1, No. 9, of the Code of Civil Procedure, where the party has had the opportunity to present the grounds underlying its submissions and these have been examined and decided by the arbitrators, albeit with an unfavourable outcome; a complaint which, under the apparent allegation of a procedural defect, in reality seeks reconsideration on the merits of the arbitration award is inadmissible.