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A never signed arbitration clause

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.

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International corporate arbitration

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).

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CAM simplified arbitration

The Arbitration Rules of Milan Arbitration Chamber, which came into force a year ago (as discussed here), has recently been integrated.  The new provisions, applying from 1st July 2020, establish a simplified arbitration procedure. 

The said new provisions are contained in Annex D to the arbitration rules, available here (for the time being, only in Italian) 

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Arbitration and tort claims

A recent decision issued by the Court of Milan (No. 1684 of 24 February 2020, Italian text available here) concerns a very interesting topic, that of Arbitral Tribunals jurisdiction over non-contractual claims related to a contract.

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Liquidated damages, termination and arbitration

Arbitrability of disputes arising out of the termination of a contract: in my opinion, this is a very interesting topic, both for its theoretical and practical consequences.  In fact, I have already addressed this topic, a few months ago (in this post), in relation to contractual restitutions, commenting a decision by the Court of Milan that in my view misapplied the principles governing the matter.

A recent decision issued by the Court of first instance of Rome (No. 1695 of 27 January 2020, Italian text available here) gives me the chance to examine again the topic, from a partially different point of view.

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Pre-contractual liability and arbitration

Pre-contractual liability, under Italian law, is a form of tort liability.  In a nutshell (and with some degree of approximation), it concerns cases similar to those provided for by English Misrepresentation Act 1967, as well as other cases falling outside the scope of the said Act involving a breach of the duty to act in good faith during the negotiations aimed at entering into a contract.

In this respect, a topic of great interest is that of the enforceability of the arbitration agreement possibly contained in the contract in case of pre-contractual claims (or tort claims related to the negotiation, the execution and the fulfilment of the contract).

I have already written some posts concerning that topic (available, for example, here and here) and an article of mine will be published soon in the Italian law review Danno e ResponsabilitĂ .

A recent decision issued by the Court of first instance of Milan (No. 58 of 8 January 2020, Italian text available here) addressed the same topic.  In my opinion, such decision is really impressive, both for its detailed and thorough grounds and for the conclusions it reached.

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Counterclaims and objection to Court’s jurisdiction

The Court of first instance of Milan issued an interesting decision addressing the relationship between counterclaims and objection to the Court’s jurisdiction raised by the counter-claimant (decision No. 10728 of 21 November 2019, Italian text available here).

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“Irrituale” arbitration in corporate matters

The Court of first instance of Salerno recently heard a complex corporate case and its decision (No. 3296 of 21 October 2019, Italian text available here), together with the decision issued by the Court of Appeal of Salerno with reference to the same dispute (No. 1311 of 14 September 2018, Italian text available here), provides the perfect opportunity to carry out a brief analysis of the issues concerning “irrituale” arbitration in corporate matters, that is to say the relationship between the “irrituale” arbitration as governed by Italian Code of Civil Procedure and arbitration in corporate matters under Italian Legislative Decree No. 5 of 17 January 2003 .

As a matter of fact, Italian law provides for two different kinds of arbitration proceedings: on the one hand, “regular” (“rituale”) arbitration, resulting in an enforceable award; on the other hand, “irrituale” arbitration, whose award has the effect of a binding contract.

In addition, “irrituale” arbitration has certain other peculiarities: concerning, for instance, the recourse for its setting aside.

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Separability of the arbitration clause

The arbitration clause, in Italian jurisdiction as well as in a number of other jurisdictions, does not constitute an ancillary clause of the underlying contract. On the contrary, it constitutes a separate contract with procedural effects. This principle is usually referred to as separability doctrine.

Under Italian law, this doctrine, based on Article 808 of the Italian Code of Civil Procedure (whereby “The validity of the arbitration clause must be evaluated independently of the underlying contract“), is only derogated in bankruptcy matters (under Article 83-bis of Italian bankruptcy law: I have examined the issue in this post).

This doctrine must also be taken into account if an agreement to agree (which is valid and enforceable under Italian law, and it is quite common in construction and conveyancing) is entered into, containing an arbitration clause, and the subsequent agreement does not contain the arbitration clause. I have already examined this topic a few years ago (in this post). Nonetheless, in the light of its relevance, also from a practical point of view, I consider that it is appropriate to examine it again. The opportunity to do so is offered by a recent decision issued by the Court of Appeal of Brescia (decision No. 1474 of 10 October 2019, Italian text available here).

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Bankruptcy receiver’s claims

A recent decision issued by the Italian Supreme Court (Italian Supreme Court, I Civil Chamber, decision No. 24444 of 30 September 2019, Italian text available here) concerns the Arbitral Tribunals’ jurisdiction over claims raised by the bankruptcy receiver.

I consider this topic of great interest: I already examined it in the past (for example in this post) and in a few days it will be discussed during a debate organised by Milan Arbitration Chamber.

The said decision is also interesting because it summarised the general principles of the matter and applied them to a very peculiar case that had not been heard in previous reported judgments.  This peculiar case is the claim that the bankruptcy receiver may raise under Article 150 of Italian bankruptcy law currently in force: the receiver is entitled to request the Court to issue an order for payment (under Italian law, an ex parte order) towards the shareholders of the bankrupt company with respect to the overdue capital contribution.

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