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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Joinder and arbitration

In certain cases, Italian law requires the joinder of certain parties to the proceedings. For instance, as a general rule, the action aimed at setting aside a contract requires the joinder of all parties thereof.

The topic of such compulsory joinder in arbitration proceedings is partly governed by statutory law (Articles 816-quater and 816-quinquies of the Italian Code of Civil Procedure); nonetheless, its implementation gives rise to several turmoils (as it was noted by a learned author).

What happens if the party whose joinder is required by law is not joined to the proceedings?  A possible answer to that question is provided by the Court of Appeal of Campobasso, in its recent ruling (No. 367 of November 7, 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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Objection to State Court’s jurisdiction

A contract contains an arbitration clause whereby the parties’ disputes are referred to arbitration. Notwithstanding the said clause, a party sues the other party in State Court.  The respondent objects to the Court’s jurisdiction, on the basis of the arbitration clause, but the Court issues a wrong decision, rejects the objection and upholds its jurisdiction.  In such a case, what is the appellate Court that the respondent should seize to have the first decision overturned?

Two recent decisions, issued a day apart by two different Courts of Appeal (decision of the Court of Appeal of Catanzaro No. 1782 of 19 September 2019, Italian text available here; and decision of the Court of Appeal of Potenza No. 636 of 20 September 2019, Italian text available here), offer two different answers to the above question: the Court of Appeal of Catanzaro holds that the appeal has to be submitted to the Court of Appeal, while the Court of Appeal of Potenza states that it has to be filed with the Italian Supreme Court. Both decisions are correct because they concern two different kinds of arbitration proceedings.

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Assignment of credit and arbitration clause

The Italian Supreme Court has recently upheld its doctrine on the circulation of the arbitration clause in case of credit assignment (Italian Supreme Court, First Civil Chamber, decision No. 16127 of 14 June 2019, Italian text available here).

I have already examined this topic (in this post); nonetheless, in the light of its relevance, I believe that it is worth re-examining it.

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New arbitration rules of Milan Chamber of Arbitration

The Milan Chamber of Arbitration published its new arbitration rules.  These new rules apply to arbitration proceedings commenced after 1st March 2019 unless the parties have agreed, under Article 832 of the Italian code of civil procedure, that the arbitration proceedings shall be subject to the arbitration rules in force at the time of the stipulation of the arbitration clause (however, in this case, the Arbitration Chamber may refuse to manage the proceedings).

The new rules are available here.

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Setting aside of arbitral awards

A recent decision delivered by the Court of Appeal of Brescia (decision no. 71 of 19 January 2017, Italian text available here) lets us briefly examine Italian rules on setting aside of arbitral awards and, in particular, the grounds for setting aside under Article 829 of Italian Code of Civil Procedure.

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Setting aside of a partial award

If the Arbitral Tribunal issued a partial award on jurisdiction, should the parties immediately request its setting aside or may they await the issuance of the final award? A recent decision of the Italian Supreme Court sitting en banc (decision no. 23463 of 18 November 2016, Italian text available here) maintains that the request for setting aside of such a partial award shall be filed together with the request for setting aside of the final award.

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Arbitration and tort claims

Italian Arbitration Law, as amended in 2006, expressly provides for the parties to enter into an arbitration clause concerning their possible tort disputes.  Indeed, Article 808(b) of Italian Code of Civil Procedure, as enacted by 2006 reform, sets forth that "The parties may establish, in a specific agreement, that future disputes relating to one or more specific non-contractual relations be decided by arbitrators (…)."

There are only a few reported cases concerning Article 808(b) of Italian Code of Civil Procedure, and therefore it appears that that tool is rarely used.  Nonetheless, it could be very helpful: for instance, in the case of related actions, it could prevent the doctrine of "parallel paths" from applying.

A recent decision of the Italian Supreme Court (Supreme Court, VI Civil Chamber, decision no. 20673 of 13 October 2016, Italian text available here) deals with that matter. As far as I know, it is the first decision issued by the Italian Supreme Court concerning the construction of Article 808(b) of Italian Code of Civil Procedure.

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