Once again, on arbitration and insolvency

Two recent rulings of the Italian Supreme Court analysed the relationship between arbitration and insolvency proceedings.

The first ruling (decision no. 13089 of 24 June 2015 of the of the I Civil Chamber of the Supreme Court, Italian text available here) established that ‚Äúclaims against a¬†bankrupt party may not¬†be brought before an Arbitral Tribunal. ¬†Indeed, the jurisdiction of the arbitrators¬†is in any case prevented due to the prevailing jurisdiction of the Insolvency Courts on such¬†claims.‚Ä̬†

The second ruling is more interesting (decision no. 15200 of 21 July 2015 of the Supreme Court sitting en banc, Italian text available here). This judgment focused on the issue of the relationship between arbitration and insolvency when an arbitration procedure is pending abroad and therefore EC Regulation no. 1346 of 29 May 1999 concerning insolvency proceedings applies.

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Once again, on arbitration and companies financial statements

The Supreme¬†Court confirmed the non arbitrability of disputes¬†concerning the challenge of company’s resolutions approving the¬†financial statements (order no. 17950 of 10 September 2015 of the VI Civil Chamber of the Supreme¬†Court,¬†Italian full text available here).

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Arbitrators’ fees

In its decision no. 17956 of 11 September 2015, the Supreme Court applied¬†for the first time Article 816/septies of the Italian Code of Civil Procedure concerning the arbitrators’ fees. In this decision, the Court examined the scope and conditions of application of the above mentioned provision. The Italian full text of the¬†decision is available here.

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Challenge of shareholders’ resolutions

Order no. 17283 of 28 August 2015 of the Italian Supreme Court affirmed the jurisdiction of an Arbitral Tribunal on the challenge of certain shareholders’ resolutions, pursuant to the arbitration clause stipulated in the company’s Articles of associations. The clause at hand only referred¬†to the arbitrators ‚Äúall disputes which may arise between the company and any¬†shareholder¬†or among¬†the shareholders (…) concerning the company‚Äôs activities.” The Italian full text of the order is available here.

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Arbitration and companies financial statements

The Court of first instance of Milan went back to analyse the relationship between Courts’¬†jurisdiction and the jurisdiction¬†of Arbitral Tribunals, with respect¬†to the challenge of the resolution approving the company’s financial statements (in this case, a limited liability company whose Articles of association¬†included an arbitration clause). The Italian full text of the decision (decision¬†no. 9115 of 28 July 2015 of the Court of first instance of Milan) is available here.

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Arbitration and insolvency

In insolvency¬†matters, Italian law does not favour arbitration. On the one hand, the vis attractiva concorsus principle pursuant to article 24(1) of the Italian¬†Insolvency¬†Law¬†states that ‚Äúthe Court which opens the insolvency proceedings¬†shall have jurisdiction on¬†all the civil actions¬†resulting from such proceedings.‚ÄĚ On the other hand, Article 83/bis of the Italian Insolvency Law¬†notes that ‚Äúif a contract containing an arbitration clause is terminated in accordance with the provisions of this Section, the pending arbitration proceedings shall not continue.” The interaction between both Articles results in a significant reduction of the scope of the arbitrability of the disputes a party to which is subject to insolvency proceedings. And this reduction also interferes with the principle of¬†separability of the arbitration clause. ¬†Indeed, the explanatory memorandum to the decree introducing the comprehensive reform of the Italian Insolvency Law states that “(…) the already pending arbitration proceedings shall not continue if¬†the contract containing the arbitration clause is terminated¬†pursuant to the provisions of section IV. The purpose¬†is to prevent that the arbitration proceedings survives the agreement, terminated as a consequence of the bankruptcy, which contained the arbitration clause.‚Ä̬†

A recent order of the Supreme Court sitting en banc (order no. 10800 of 26 May 2015, Italian text available here) concerns the relationship between arbitration (in the case at hand, international arbitration) and insolvency proceedings.

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