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Even though political debates have focused for years on the issue of shortening the duration of trials in court proceedings, statistics indicate that Italy is still one the EU countries with the longest length of trials. For this reason, the use of arbitration seems to be an increasingly preferable option.
1. LEGISLATIVE FRAMEWORK
1.1 Code of Civil Procedure – Book IV, Title VIII, Articles 806–840 (CPC)
1.1.1 Arbitration in Italy is governed by the CPC rules, which are structured as follows.
1.1.2 Articles 806-808 (quinquies) provide general rules on the arbitration agreement (i.e. formal requirements, arbitrability, effects and interpretation of the arbitration agreement) as well on the so called arbitrato irrituale or free arbitration.
1.1.3 Articles 809-815 concern the arbitrators – ie number, appointment, replacement, incapacity, acceptance, forfeiture, liability, rights and challenge of the arbitrators.
1.1.4 Articles 816-819 provide details on arbitration procedure – ie seat of arbitration, procedural rules, evidence and stay of the proceedings.
1.1.5 Articles 820-826 deal with the award – ie timing, content, effects and correction.
1.1.6 Articles 827-831 deal with challenging the award – i.e. grounds for setting aside, appeal, revocation and third-party opposition).
1.1.7 Articles 832 governs international arbitrations pursuant to established arbitral rules – eg Associazione Italiana per l’Arbitrato Regulations, ICC Arbitration Rules, etc.
1.1.8 Articles 839-840 govern the recognition and enforcement of foreign awards and the procedure for resisting such recognition and enforcement.
1.2 Historical background
1.2.1 In order to modernise the procedure and incorporate the terms of several international conventions ratified by Italy, the provisions of the CPC were amended by three important laws.
Law 9th February 1983, No. 28 (1983 Reforms)
1.2.2 The 1983 Reforms represented the first attempt to reduce the rigidity of the CPC by removing the requirement for Italian nationality as a precondition for appointment as an arbitrator in Italy.
Law 5th January 1994, No.25 (1994 Reforms)
1.2.3 The 1994 Reforms introduced new rules regarding international arbitration in compliance with international conventions and, in particular, with the New York Convention.
Legislative Decree 2nd February 2006, No. 40 (2006 Reforms)
1.2.4 The 2006 Reforms were a re-draft of the previous CPC provisions on arbitral proceedings. The aim of the 2006 Reforms was to promote and improve recourse to arbitration as an attractive alternative to litigation.
2. SCOPE OF APPLICATION AND GENERAL PROVISIONS
2.1 Subject matter
2.1.1 The CPC applies to all arbitral proceedings which take place in Italy, unless otherwise agreed by the parties. The CPC also contains provisions regarding the recognition and enforcement of awards rendered by arbitral tribunals seated outside Italy.
2.1.2 The CPC applies different rules depending on the type of arbitration.
2.1.3 The statutory rules governing domestic arbitrations apply when the seat of the arbitration is in Italy and both parties are Italian.
2.1.4 International arbitrations are governed by the provisions of applicable international regulations chosen by the parties, as no specific provision is provided by the CPC. However, when the seat of arbitration is outside Italy, or the award is rendered outside Italy and the recognition and enforcement is required in Italy, certain provisions of the CPC can be invoked. In these cases, the arbitration will be considered international even if one of the parties is Italian or Italian law has been chosen to govern the dispute between the parties.
2.1.5 In addition to the above, the Italian system distinguishes between arbitrato rituale and arbitrato irrituale. The 2006 Reforms expressly introduced the right for the parties to resort to arbitrato irrituale proceedings and established a right for parties to submit non-contractual disputes to arbitration, known as arbitrato extracontrattuale.
Arbitrato rituale or ordinary arbitration
2.1.6 Arbitrato rituale is the ordinary type of arbitral proceedings governed by the CPC rules.
Arbitrato irrituale or free arbitration
2.1.7 Arbitrato irrituale is an alternative arbitral procedure which does not result in an enforceable award. Rather, an arbitrato irrituale award is binding on the parties in the same way as a contract.
2.1.8 The parties must specify in writing if the arbitration is to be an arbitrato irrituale. If the arbitration agreement does not specify the nature of the arbitration (rituale or irrituale) the arbitration will be deemed to be arbitrato rituale.
2.1.9 The arbitration agreement can provide that the arbitral tribunal must make a decision based on either law or ex aequo et bono principles. The parties can decide the procedural rules to be followed by the arbitral tribunal. The procedural rules in arbitrato irrituale are usually simpler than in arbitrato rituale but, due to the adversarial nature of the proceedings, both parties have the right to be heard and to submit documents and claims.
2.1.10 The award issued in an arbitrato irrituale can be challenged only on the following grounds:
the arbitration agreement is void;
the arbitral tribunal exceeded the scope of the arbitration agreement and this issue was raised as an objection during the arbitral proceedings;
the arbitrators were not appointed in accordance with the provisions of the arbitration agreement;
incapacity of the arbitrators;
the arbitrators breached their duties; and
violation of the rule audi alteram partem.
CPC, art 808 ter, para 2.
2.1.11 Arbitrato irrituale awards can be challenged by applying to the competent court of first instance.
2.1.12 If a party does not comply with an arbitrato irrituale award, the other party can commence an action before the competent court of first instance for breach of contract.
Arbitrato extracontrattuale or arbitration on matters not provided for in a contract
2.1.13 The 2006 Reforms of the CPC rules introduced the possibility of referring all future disputes to arbitration which may arise from one or more given relationship not provided for in a contract.
Ibid, art 808 bis.
Indeed, by way of this new rule, a third type of arbitration (other than arbitrato ritual and irrituale) was introduced. The parties are entitled to refer the dispute to arbitrators regardless of whether they are bound to each other by a contract. Such cases could occur, for example, in disputes concerning real rights, such as boundary regulations, neighbourliness or joint ownership.
2.2 General principles
2.2.1 The CPC rules provide certain general principles, which only apply to arbitrato rituale proceedings.
2.2.2 The parties are entitled to equal treatment by the arbitral tribunal and must be given the opportunity to submit their requests and be heard under the same conditions. Infringement of this principle is a ground for annulment of the award
Ibid, art 829.
. Moreover, the arbitral tribunal has a general obligation to be impartial.
Ibid, art 829 and 815.
2.2.3 The parties are free to agree on the subject matter of the dispute they wish to refer to arbitration, as well as on the choice of arbitrator(s), rules of procedure, seat of arbitration, applicable law, etc. The parties’ autonomy is limited by certain mandatory statutory rules and matters on which national courts have exclusive jurisdiction – ie disputes concerning matters which cannot be submitted to arbitration such as personal status, marital status, judicial separation, divorce as well as national insurance contributions (see paragraph 3.3 below).
Non-intervention by the courts
2.2.4 As a general principle, national courts cannot intervene in arbitral proceedings, except as expressly provided for in the CPC.
3. THE ARBITRATION AGREEMENT
3.1.1 An arbitration agreement is an agreement whereby two or more parties agree to submit the resolution of specific disputes to one or more arbitrators and provide for the principal rules that shall govern the arbitral proceedings (eg the type of arbitration, appointment and constitution of the arbitral tribunal and the seat of arbitration).
3.2 Formal requirements
3.2.1 The arbitration agreement can be in the form of a clause within a contract or a stand-alone agreement. In either case, the arbitration agreement should be in writing and should clearly set out the subject matter submitted to arbitration.
Ibid, art 807.
If it is not in writing, the arbitration agreement will be null and void.
Ibid, art 807-808.
3.2.2 In the event that the arbitration clause is embodied in a party’s general terms of business, it must be expressly confirmed in writing by the parties. However, this requirement has been relaxed in international arbitration so that an arbitration clause contained in general conditions of business, or in a standard form, is considered valid even without any express confirmation in writing by the parties.
See generally A Atteritano, “Art. 808 Clausola Compromissoria”, Commentario alle riforme del processo civile di Antonio Briguglio, Bruno Cappoini, Volumi 2-3, 2009, p 512.
3.2.3 In addition, a written agreement which incorporates an arbitration clause in the general conditions of business is considered valid if the parties were aware of the clause or should have reasonably known of its existence.
3.3 Special tests and requirements of the jurisdiction
3.3.1 Disputes concerning non-disposable rights (such as constitutional rights) or other matters (such as issues concerning personal status and marital separation) cannot be submitted to arbitration.
CPC, art 806.
3.3.2 Disputes regarding individual contracts of employment can only be submitted to arbitration if expressly provided for by law (see section 11.3 below).
3.3.3 Any award which is made in respect of a dispute that could not have been submitted to arbitration is subject to annulment.
Ibid, art 806 and 829.
The Italian courts may also refuse to recognise and enforce international awards on matters which are excluded from arbitration under Italian law.
Ibid, art 839, para 4.
3.4.1 The validity of the arbitration clause is amended independently from the contract in which it is included, in accordance with recognised principles of separability. Therefore, the invalidity of the underlying contract does not necessarily render the arbitration clause invalid
Ibid, art 808, para 2.
3.5 Effects of a binding arbitration agreement
3.5.1 An arbitration agreement duly agreed upon by the parties remains binding until the award is rendered.
Ibid, art 808 quinquies.
4. THE ARBITRAL TRIBUNAL
4.1 Constitution of the arbitral tribunal
4.1.1 As a general rule, the parties are free to determine the number of arbitrators and the procedure governing their appointment. The parties may appoint one or more arbitrators, provided that the tribunal consists of an odd number. If the parties fix an even number of arbitrators, an additional arbitrator must be appointed by the president of the Italian court in the district in which the arbitration has its seat, unless otherwise agreed by the parties.
Ibid, art 809, para 3.
4.1.2 If no number has been fixed in the arbitration agreement and the parties have not reached an agreement on this matter, the number of arbitrators shall be three. If the parties are unable to appoint the arbitrators, the president of the Italian court in the district in which the arbitration has its seat shall proceed to make the appointments, unless the parties have provided for an alternative procedure.
4.1.3 If, as is commonly the case, the parties do not deal with the appointment of the arbitrators in the arbitration clause, the party intending to commence arbitral proceedings – after having previously chosen its own arbitrator – shall serve a notice of appointment of its arbitrator on the other party and a request for the addressee to appoint its own arbitrator.
4.1.4 The respondent has 20 days to appoint its arbitrator from receipt of the request to do so. Failing such appointment, the party who has made the request may petition the president of the Italian court in the district in which the arbitration has its seat to appoint an arbitrator. If the seat of the arbitration has not been agreed by the parties, the arbitrator shall be appointed by the president of the Court in the district in which the arbitration clause was executed or, if it is abroad, by the President of the Court of Rome
Ibid, art 810, para 2.
4.1.5 The president of the Italian court in the district in which the arbitration has its seat shall not proceed with the appointment if the arbitration clause is clearly invalid, or if it clearly provides for arbitration in a country other than Italy.
Ibid, art 810, para 3.
The court order by which the president appoints an arbitrator is not open to appeal.
Corte di Cassazione Civile (CASS), Seizione I, 18 May 2007, No 11665.
Acceptance by the arbitrators
4.1.6 The arbitrators’ acceptance of appointment shall be given in writing in one of three ways:
by signing the arbitration agreement;
by inclusion in the minutes of the first arbitral hearing; or
in a separate agreement in writing.
CPC, art 813.
Capacity to actas an arbitrator
4.1.7 A person who lacks legal capacity, completely or partially, cannot be appointed as arbitrator by the parties
Ibid, art 812.
. For example, minors, persons subject to bankruptcy proceedings and those who are disqualified from holding public office cannot be appointed as arbitrators.
4.2 Challenge of arbitrators
4.2.1 Arbitrators may be challenged or replaced only in the circumstances expressly provided for in the CPC.
Ibid, art 811, 812 and 815.
Challenge of thearbitrators
4.2.2 A party may challenge the appointment of the other party’s chosen arbitrator or the chair by applying to the president of the court in the district in which the arbitration has its seat in the following circumstances:
the arbitrator does not meet the requirements expressly agreed upon by the parties;
the arbitrator, or an entity or an association or a company in which the arbitrator is a director, has an interest in the proceedings;
the arbitrator or the arbitrator’s spouse has family ties up to the fourth degree of kinship, is living with or has a close friendship with one of the parties, their legal representatives or one of their lawyers;
the arbitrator or the arbitrator’s spouse is a party to proceedings pending against, or has a serious hostility with, one of the parties, their legal representatives or one of their lawyers;
the arbitrator is connected to one of the parties, to a company controlled by one of the parties, to the subject that controls it or to a company under common control, by an employment relationship or by a permanent consultancy relationship or by a remunerated provision of services as self-employment relationship, or by other economic or associations that may compromise the arbitrator’s independence;
the arbitrator is a legal guardian or custodial of one of the parties; and/or
the arbitrator has previously given advice or assistance to or defended of one of the parties in the same matter or has appeared as a witness
Ibid, art 815, para 1.
4.2.3 The parties may not challenge their own party-appointed arbitrators except on grounds that arise after the appointment of the arbitrator in question
Ibid, art 815, para 2.
. In any case, the time limit for filing an application to challenge the appointment is ten days from the appointment of the arbitrator or from the date of knowledge of the ground for challenge
Ibid, art 815, para 3.
. The decision of the president of the court cannot be challenged by the parties.
4.2.4 The application does not suspend the arbitral proceedings, unless otherwise agreed by the arbitrators. However, if the challenge is successful, the past activity of the challenged arbitrator will be of no effect.
Replacing an arbitrator
4.2.5 An arbitrator may be replaced in case of:
legal incapacity to act (e.g. incapacitated persons, persons declared bankrupt and some public officers);
conflict of interest;
failure to act properly or delaying the procedure (provided there is evidence that the parties have invited the arbitrator to remedy the situation and the arbitrator has not done so);
resignation from office by an arbitrator with good reason; and
4.2.6 When, for the above reasons, one or more appointed arbitrators are no longer in office, replacement arbitrators must be appointed according to the procedure set out in the arbitration agreement or as set out in the CPC. (See section 4.1 above)
4.3 Responsibilities of the arbitrators
4.3.1 The 2006 Reforms provided complete and uniform regulations on the duties and liabilities owed by arbitrators to the parties.
Ibid, art 813 ter.
Duties of the arbitrators
4.3.2 The arbitrators must render their award within the time limit set by the parties or by law. If they fail to do so and the award is declared null and void due to their delay, they will be responsible for any damage suffered by the parties
4.3.3 The arbitrators cannot withdraw from office after having accepted it without good reason. In the absence of good reason, they may be held liable for damages
4.3.4 Unless otherwise agreed, any arbitrator who fails to perform the relevant duties or fails to perform them in a timely manner can be replaced by agreement of the parties or by a third party appointed for this purpose under the terms of the arbitration agreement
Ibid, art 813 bis.
4.3.5 Failing such replacement, within a period of 15 days after notice has been served on the defaulting arbitrator, either party may file an application with the competent court for the arbitrator’s removal
4.3.6 If the president of the court, having heard the parties, finds that the arbitrator did breach his duties, then the president of the court may remove the arbitrator from office. The court’s order cannot be appealed
Liability of the arbitrators
4.3.7 Arbitrators may be held liable for damage suffered by the parties in the event of:
fraudulent or grossly negligent omission or delay in the procedure;
resignation without a proper cause; or
fraudulent or grossly negligent omission or delay in issuing the award
Ibid, art 813 ter.
4.3.8 Each arbitrator is only liable for their own actions
Ibid, art 813 ter, para 7.
. An action for damages can be brought during the arbitral proceedings in the event of either the first or second grounds set out in paragraph 4.3.7 above.
4.3.9 In the absence of fraud, compensation for damages may not exceed three times the arbitrators’ fees
Ibid, art 813 ter, para 5.
. Further, if an appointed arbitrator is held to be liable, the parties do not have to pay that arbitrator’s fees or, in case of partial nullity of the award, the payable fees are be reduced
Ibid, art 813 ter, paras 5–6.
4.3.10 Except in the cases of liability outlined above, arbitrators have the same immunity from liability in tort or gross negligence as judges (ie liability cannot arise from mere interpretation of the relevant arbitration rules or the evaluation of their facts or the evidence)
Ibid, art 813 ter, para 2; Law 13 April 1988, No. 117, art 2, paras 2 and 3.
4.4 Arbitration fees
4.4.1 The CPC expressly recognises that the arbitrators are entitled to fees and to reimbursement of their expenses
CPC, art 814, para 1.
. The schedule of fees is set out in the Ministerial Decree issued by the Italian Ministry of Justice on 10 March 2014, No. 55.
4.4.2 All parties to the arbitration are jointly and severally liable for the fees and expenses of the arbitral proceedings regardless of how the arbitrators apportion costs between them. If one party pays all the fees and expenses due to the arbitrators, that party is entitled to recover the fees and expenses from the other party within any limits set out in the award
Ibid, art 814.
4.4.3 It is accepted that the role of the arbitrators includes determining their own fees in the award and allocating the responsibility for paying those fees between the parties. However, unless the parties approve the arbitrators’ determination of their fees, that determination will not be binding. Failing payment of their fees, the arbitrators may apply to the President of the court in the district in which the arbitration has its seat in order to determine their fees. That court order, although open to challenge by the parties, is immediately enforceable.
Ibid, art 814, paras 2 and 3.
4.4.4 In accordance with current common practice, arbitrators may refuse to take any steps to progress the arbitral process until they have received payment in advance of the estimated arbitration costs
Ibid, art 816 septies.
4.4.5 If the parties refuse to pay the advance on costs within the timeframe stipulated by the arbitrators, the arbitration agreement is no longer binding
5. JURISDICTION OF THE ARBITRAL TRIBUNAL
5.1.1 The arbitral tribunal is competent to rule on the validity of the arbitration agreement, which includes the ability to assess the capacity of the parties, to determine whether or not the formal requirements have been met, determine the arbitrability of the dispute and address any issues relating to the appointment of the arbitrators. A decision rendered by the tribunal on its jurisdiction is, however, subject to judicial control upon request of one of the parties
Ibid, art 817.
5.1.2 If a party has any jurisdictional objections they must be raised in its first submission on the merits of the dispute.
5.1.3 The arbitrators’ jurisdiction is not excluded if the same dispute is pending before a national court, nor if it is connected to another dispute pending before a national court. However, in the court dispute, one of the parties must raise an objection concerning the lack of jurisdiction of that court in its first defence, otherwise the arbitrators will lose jurisdiction over the dispute
Ibid, art 819 ter.
5.1.4 Similarly, a party must raise during the arbitral proceedings any objection that the pleadings of the other party exceed the limits of the arbitration agreement or it will lose the right to file for annulment of the award on this ground
Ibid, art 817.
5.1.5 Actions on the invalidity or ineffectiveness of the arbitration clause cannot be brought before the court while the arbitration is pending
Ibid, art 819 ter.
6. CONDUCT OF ARBITRAL PROCEEDINGS
6.1 Commencement of arbitration
6.1.1 The arbitral proceedings are deemed to have commenced when a party serves a notice of appointment of an arbitrator on the other party along with a request that the other party appoint its arbitrator
Ibid, art 810.
6.2 General procedural principles
6.2.1 The parties are free to determine the procedural rules governing the arbitration. These rules must be determined before the arbitrators accept office. Upon acceptance, the parties may no longer modify the procedure
Ibid, art 816 bis.
. It is commonly accepted that if the parties insist on amending the procedural rules during the course of the arbitration, this will constitute good reason for the arbitrators to withdraw from office.
6.2.2 Where the parties have not agreed on the applicable procedure, the arbitrators shall apply the rules which they deem suitable
Ibid, art 816, para 3.
6.2.3 The only mandatory rule that the arbitrators may not exclude is their obligation to fix the time by which the parties must submit their demands, documents and replies
Ibid, art 816 bis, para 1.
. This is considered to be the strict minimum to guarantee a fair process.
6.2.4 In the event that the arbitrators do not comply with the rules chosen by the parties, the courts may annul the award
Ibid, art 829.
6.3 Seat, place of hearings and language of arbitration
6.3.1 The parties are free to determine the language of the arbitration
Ibid, art 816 bis, para 1.
6.3.2 The parties must also determine the seat of arbitration within Italy. In the absence of any express choice, the seat will be determined by the arbitrators
Ibid, art 816.
. If neither the parties nor the arbitrators determine the seat of arbitration, it shall be the place at which the arbitration agreement was signed or, if it was signed abroad, the seat of arbitration will be Rome.
6.3.3 Unless otherwise agreed in the arbitration agreement, the arbitrators may carry out their functions (eg hold hearings) anywhere, whether at the seat of arbitration or elsewhere, including abroad.
6.4 Multi-party issues
6.4.1 If the arbitration agreement is entered into between more than two parties, any party may commence arbitral proceedings against all or some of the other parties
Ibid, art 816 quater.
6.4.2 In multi-party proceedings, the arbitrators must be appointed in one of the following ways:
by a third party in accordance with the arbitration agreement;
by agreement between all the parties; or
the claimant(s) jointly appoint their own arbitrator(s), the respondents jointly appoint their own arbitrator(s), or all parties jointly request a third party to make an appointment on their behalf
Ibid, art 816 quater.
6.4.3 The intervention and involvement of a third party (ie a person or legal entity who is not party to the arbitration agreement) is only permitted with the consent of the third party, the parties and the arbitrators
Ibid, art 816 quinquies, para 1.
6.4.4 Any third party who has an interest in the dispute has the right to voluntarily intervene in existing proceedings in support of a party’s defence, or to join as a legally necessary co-party, without the consent of either the parties or of the arbitrators
Ibid, art 816 quinquies, para 2.
6.5 Oral hearings and written proceedings
6.5.1 The arbitration agreement or the arbitrators may provide specific time limits within which the parties must file their formal statements and deposit relevant documents. In any case the arbitrators shall give both parties a reasonable opportunity to be heard and to present their case
Ibid, art 816 bis.
6.5.2 The content of the formal statements, as well as the choice of which documents to attach to such statements, is at the discretion of the parties.
6.5.3 The parties are not obliged to disclose relevant facts or documents that are harmful to their case and will usually only submit the facts and documents that they deem useful in order to establish their position.
6.5.4 The parties are free to organise oral hearings or to conduct the proceedings on a documents-only basis. It is common practice to exchange written submissions and then to hold a final oral hearing at which both parties have the opportunity to present their arguments.
6.6 Default by one of the parties
6.6.1 The term “default” is not expressly defined by Italian law. It is, however, customarily read in its ordinary meaning as the inactivity or lack of participation of one party during the arbitral proceedings
See generally L Salvaneschi, “La devoluzione a un terzo della nomina di arbitri”, La nuova disciplina dell’arbitrato a cura di Sergio Menchini (2010), p 241 footnote 13.
6.6.2 The validity of the award or the arbitral proceedings is not affected by the inactivity or non-participation of one of the parties, provided that the other party has duly served the notice of appointment of an arbitrator on the inactive party and requested that the inactive party appoints its arbitrator
M Curti, L’arbitrato le novità della riforma D.lgs. 2 febbraio 2006, n. 40, p 69.
6.7.1 The parties are free to fix the rules specifying the types of evidence that will be admissible during the course of the arbitration. In the absence of any agreement between the parties, the arbitral tribunal will establish the most suitable framework for the production of evidence (often reflecting Italian statutory rules)
CPC, art 816 bis and 816 ter.
6.7.2 Parties and arbitrators may accept the admissibility of certain forms of evidence (e.g. email correspondence) or, alternatively, may limit the admissible evidence (e.g. only permitting written documents).
6.7.3 The arbitral tribunal may delegate the decision as to whether or not certain evidence should be admissible to one of the arbitrators
Ibid, art 816 ter.
6.7.4 The arbitrators may hear witnesses in a place of their choosing (e.g. at the seat of the arbitration or at the witnesses’ homes or offices), or require a written statement of a witness’s testimony
. When a witness refuses to appear, the president of the court where the arbitration has its seat may order them to appear before the arbitrators (see paragraph 8.3.2 below), upon the arbitrators’ request
Ibid, art 816 ter, para 3.
6.7.5 The arbitrators can request information from public bodies which they consider to be useful for the proceedings.
Ibid, art 816 ter, para 6.
6.7.6 The arbitral tribunal may render interlocutory awards regarding all queries which arise during the arbitral proceedings (e.g. evidential issues or witnesses), as long as they fall within the scope of the arbitration agreement, unless the law provides that the decision on said queries may be final and binding (i.e. not merely interlocutory)
Ibid, art 819.
6.8 Appointment of experts
6.8.1 In addition to the powers mentioned above, the arbitral tribunal may also appoint technical experts to help them resolve technical issues. These may be either individuals or companies
Ibid, art 816 ter.
6.8.2 After the arbitral tribunal has appointed a technical expert, the parties have the same rights provided for in the CPC as parties to ordinary proceedings before the courts. All parties are entitled to appoint their own experts who have the right to submit their own reports in response to the results put forward by the expert appointed by the arbitral tribunal
G F Ricci, “La consulenza tecnica”, Arbitrato – commentario diretto da Federico Carpi (2nd Edition, 2008), p 436; S La China, L’arbitrato il sistema e l’esperienza (Milano, 1999), p 139.
6.9.1 Although there are no compulsory provisions on confidentiality in the CPC, arbitral proceedings generally afford parties a high level of confidentiality.
6.9.2 While the decisions of the ordinary courts are generally available to third parties, arbitral awards are not, unless the parties agree otherwise.
7. MAKING OF AWARD AND TERMINATION OF PROCEEDINGS
7.1 Choice of law
7.1.1 The parties are free to choose the governing law of the arbitration
CPC, art 816 bis.
. In the absence of an express choice, the arbitrators shall select the law that they deem to be most appropriate
. Unless the parties authorise them to do so, the arbitrators may not decide the dispute ex aequo et bono (equità) nor in accordance with lex mercatoria
Ibid, art 822.
7.2 Timing, form, content and notification of award
7.2.1 In the absence of any contrary agreement, the arbitrators must render their decision within 240 days from the acceptance of their appointment as arbitrators
Ibid, art 820, para 2.
. This time limit is suspended when a petition for challenge is filed or when it is necessary to replace one or more of the arbitrators. In the latter scenario, the remaining time, if shorter, will be extended to a minimum of 90 days from the date on which the suspension is lifted
Ibid, art 820, para 4.
7.2.2 The CPC provides for a number of circumstances in which this time limit can be extended with the written agreement of both parties, or if so ordered by a national court, as follows
if the tribunal must admit new evidence;
if an interlocutory award has been rendered;
if a report by an expert is requested; or
if the composition of the arbitral tribunal has changed.
7.2.3 It is important to note, however, that an extension can only be granted once and for no longer than 180 days.
Form and content of the award
7.2.4 The award must be rendered by a majority of the arbitrators and with the participation of all of the arbitrators, recorded in writing and must contain the following information:
identity of the arbitrators;
seat of the arbitration;
identity of the parties;
reference to the arbitration agreement and to the matters submitted to arbitration;
a brief statement of the reasons for the decision;
the decision; and
the signatures of the arbitrators and the date of signature
Ibid, art 823, para 2.
7.2.5 The signature of a majority of the arbitrators is sufficient provided that the decision was taken with the participation of all the arbitrators and the award expressly mentions that one or more arbitrators refused or was unable to sign the award.
Effects and notification of the award
7.2.6 The award has the same effect as a judgment as soon as it is signed
Ibid, art 824 bis.
. The arbitrators shall issue the award in as many original copies as there are parties and notify each party by delivering an original copy of the award to each party by hand or by registered post within ten days of the date of the last signature
Ibid, art 824.
7.3.1 If the parties reach a settlement during the proceedings, it is common practice to inform the tribunal and withdraw from the arbitral proceedings. Alternatively, the parties may ask the arbitrators to issue an award which records the terms of the settlement.
7.4 Power to award interest and costs
7.4.1 The arbitrators will take account of costs as well as their own fees in the award. They can also decide whether to award interest if requested to do so by the parties.
7.5 Stay of the proceedings
7.5.1 The arbitrators are required to stay the proceedings in the following circumstances:
death, termination or loss of legal capacity of a party;
if criminal proceedings are pending in relation to the same matter;
if, during the proceedings, an issue arises which cannot be settled by arbitration and which must be resolved by means of a final court judgment; or
if the arbitrators submit an issue to the Italian Constitutional Court
Ibid, art 819 bis, para 1.
7.5.2 If neither party files an express request to lift the stay on proceedings within the time limit imposed by the arbitrators, then the proceedings shall be terminated
Ibid, art 816 sexies and 819 bis.
7.6 Termination of the proceedings
7.6.1 Arbitral proceedings terminate when the arbitrators render and sign their final award.
7.7 Correction and clarification
7.7.1 The parties may require the arbitrators to rectify the award if it contains formal omissions, errors or miscalculations or when substantial formal requirements are missing
Ibid, art 826.
7.7.2 The tribunal must make a decision regarding the requested corrections within a period of 60 days following the request to do so by one or more parties. The tribunal has an obligation to hear the parties within this period. If the arbitrators do not comply with this time limit, the parties can request that the correction is made by the competent national court
7.7.3 If the award has already been filed with the competent national court for the purposes of enforcement or challenge, that court will rule on possible rectification
8. ROLE OF THE COURTS
8.1 Jurisdiction of the courts and stay of court proceedings
8.1.1 As a general rule, if the parties agree to submit their dispute to arbitration, the national courts must decline jurisdiction on the merits if the respondent raises an objection concerning the lack of jurisdiction of the court in its first defence. The court will decide on its jurisdiction in a judgment
Ibid, art 37, 819 ter.
8.1.2 Should the respondent not raise an objection concerning lack of jurisdiction of the court in a timely manner, the arbitral tribunal will no longer have jurisdiction
Ibid, art 819 ter, para 1.
8.1.3 The 2006 Reforms set out the consequences of disputes concerning the validity of the arbitration clause arising, which will depend on whether the dispute materialises before or after the commencement of the arbitration. In the latter scenario (pending arbitral proceedings), no claim concerning the validity of the clause may be raised in court proceedings
Ibid, art 819 ter, para 3.
. However, if the arbitral proceedings have not been commenced, the dispute shall be referred to court on the grounds that – at that stage – it only concerns the validity of an agreement (ie the arbitration clause). Regardless of the decision of the court, the parties cannot enforce the CPC articles to stay or reinstate the proceedings after a decision on the competence has been taken
Ibid, art 819 ter, para 3.
. New proceedings shall be commenced by the parties before the competent authority (either the arbitral tribunal or the ordinary courts)
Ibid, art 819 ter, para 3; B Capponi, “Rapporti tra arbitri e autorità giudiziaria second oil nuovo art. 819 ter c.p.lc.”, Judicium Il processo civile in Italia e in Europa Civil Procedure in Italy and Europe, 2007 [http://judicium.it/news/ins_11_12_07/ capponi%20nuovi%20saggi,%20819.ter.html] (accessed 21 December 2011).
Award rendered before the termination of the court proceedings
8.1.4 Although there are no specific provisions, if the arbitral tribunal renders an award on a preliminary question before the termination of the court proceedings, the court may be asked by the parties to align its judgment with the award
G F Ricci, “Esclusione della sospensione per pregiudizialità ex art. 295 c.p.c.”, Arbitrato – commentario diretto da Federico Carpi (2nd Edition, 2008), p513; Bove, Cecchella, Il nuovo processo civile (Milano, 2006), p 87.
. For example, if the court proceedings concern a payment of money that depends on the validity of an agreement between the parties, if the validity of the agreement was referred to arbitration on the grounds of an arbitration clause and ruled upon by the arbitral tribunal, the court could be asked by the parties to take note of this ruling.
Award rendered after the termination of the court proceedings
8.1.5 An arbitral decision on a preliminary question relating to an arbitration clause has the effect of a final judgment, while a court decision on the same matter has the effect of an interlocutory judgment. Consequently, a party interested in challenging the court’s judgment could start new proceedings on the basis of the award
G F Ricci, “Esclusione della sospensione per pregiudizialità ex art. 295 c.p.c.”, Arbitrato – commentario diretto da Federico Carpi (2nd Edition, 2008), p 513.
. So by reference to the above example, if the courts have ordered payment in favour of one party, assuming – incidenter tantum – that the agreement was valid, but afterwards the validity of the agreement was denied by an arbitral tribunal, the party that had been ordered to pay would be entitled to start new court proceedings in order to recoup the monies already paid.
8.2 Interim protective measures
8.2.1 National courts have exclusive jurisdiction to grant interim protective measures and seizure orders, whereas arbitrators do not
CPC, art 818.
. However, an application to the national court for interim measures does not suspend the arbitral proceedings.
8.3 Obtaining evidence and other court assistance
8.3.1 Although the CPC recognises the autonomy of the arbitral tribunal, in some cases the president of the court of the district where the arbitration has its seat has powers to provide assistance to arbitrators.
Assistance in hearing witnesses
8.3.2 When a witness refuses to appear following a request by arbitrators, the president of the court of the district where the arbitration takes place can oblige them to appear before them
Ibid, art 816 ter.
. If the arbitrators request assistance from the president, the term within which the arbitrators have to render the award is stayed until the date when the arbitrators hear the witness’s testimony
Other powers of the courts
8.3.3 The president of the court has the power to settle conflicts which may arise during the arbitral proceedings, including the resolution of questions concerning the number of arbitrators or the appointment, removal and replacement of arbitrators (see section 4 above)
8.3.4 The arbitrators are also entitled to apply to the president of the court in the district in which the arbitration has its seat in the event that the parties fail to pay their fees in order to ask the president for a fee assessment. The court order, although open to challenge by the parties, is immediately enforceable.
8.3.5 The role of the court is also important whenever a query arises during the arbitral procedure that cannot be settled by arbitration as a matter of Italian law (see section 3.3).
9. CHALLENGING AND APPEALING AN AWARD THROUGH THE COURTS
9.1 Jurisdiction of the courts
9.1.1 The parties have 90 days from being notified of the award to file an appeal with the Court of Appeal where the arbitration has its seat. Should no notification occur, the term to challenge is extended to one year from the last signature on the award
Ibid, art 828.
9.2.1 Challenging of the award cannot be subject to early waiver of the parties. Any waiver will be null and void. Parties are only entitled to waive their right to challenge after the award has been rendered and before the elapse of the term to challenge.
9.2.2 The CPC sets out the following grounds on which arbitral awards governed by Italian law can be challenged and declared null and void by the court:
lack of a valid arbitration agreement;
the arbitrators were not correctly appointed;
the award was rendered by an arbitrator who did not have capacity to act as arbitrator;
the award was beyond the jurisdiction of the arbitral tribunal or the tribunal did not render a decision on one or more issues or the award is contradictory;
non-compliance with formal requirements;
non-compliance with the time limits;
non-compliance with the statutory rules as determined by the parties;
the award conflicts with a precedent final award or judgment between the parties, provided that the arbitrators were informed of the precedent in the course of the arbitral proceedings;
the award breached rules of fair process;
the award was not determined on the merits of the dispute; and
non-compliance with law (unless the arbitrators were authorised by the parties to decide to the dispute ex aequo et bono)
Ibid, art 829.
9.2.3 In addition to the grounds set out above, the parties may agree on other situations in which the award may be challenged.
9.2.4 Challenge of the award for non-compliance with the law is always permitted, even when not provided for by law or agreed as a separate ground by the parties, in the following cases
Ibid, art 829.
non-compliance with Italian public policy;
disputes regarding employment issues; and
disputes on issues which cannot be settled by arbitration (see section 3.3 above).
9.2.5 A petition to set the award aside does not automatically suspend the enforcement of the award. However, upon the request of the parties, the Court of Appeal may suspend the enforceability of the award
Ibid, art 830.
9.3.1 If the award is declared null and void, unless otherwise agreed by the parties, the Court of Appeal is also entitled to decide the dispute on the merits
9.3.2 The above power is granted to the Court of Appeal only if the award was declared null and void on one of the following grounds:
formal requirements (eg reasons for the decision, order, seat or signature) were not respected in the award;
non-compliance with time limits;
non-compliance with the statutory rules as determined by the parties;
the award conflicts with a precedent final award or judgment between the parties;
the award breached fair process rules;
the award does not decide one or more questions raised by the parties; or
9.3.3 If a party has its residence or its registered office abroad, the Court of Appeal can decide the dispute on the merits only if expressly agreed by both parties
Ibid, art 830.
9.3.4 Should the award be declared null and void, but the Court of Appeal is not entitled to rule on the merits on the grounds of the above, the dispute must be re-submitted to arbitration for a ruling on the merits, provided that the invalidity of the arbitration agreement is not the reason for the award being declared void.
9.4.1 The award may be revoked within 30 days of a party becoming aware of one of the following events
Ibid, art 831, paras 1 and 2.
the award is the result of a fraud committed by a party;
the award has been rendered on the basis of false evidence;
subsequently, one or more relevant documents have been discovered, which were not disclosed due to the behaviour of one of the parties or due to force majeure; or
the award is the result of a fraud committed by one of the arbitrators.
9.4.2 The right to submit an application to revoke the award may never be waived by the parties. Any such waiver will be null and void.
9.5 Third party opposition
9.5.1 A third party can challenge the award within 30 days from the date upon which they became aware of the award if
Ibid, art 831, para 3.
it affects that third-party’s rights; or
it is the result of a fraud against that third-party, in order to prevent it from recovering its credit or from claiming for a purchased right.
10. RECOGNITION AND ENFORCEMENT OF AWARDS
10.1 Domestic awards
10.1.1 The enforcement of domestic awards is subject to an application to the competent national court where the arbitration has its seat. Upon assessment of the formal requirements of the award, the court shall issue an execution order (exequatur)
Ibid, art 825.
10.1.2 The parties can file a complaint with the court if it denies enforcement of the domestic award. The court must decide on the merits of the complaint within 30 days from the date of notification of the court’s decision to the parties
. The decision of the court is final and is not open to appeal
10.2 Foreign awards
10.2.1 The 1994 Reforms introduced a recognition and enforcement regime which applies to all foreign awards unless more favourable provisions are available in an international treaty. The relevant Italian provisions on recognition and enforcement of foreign awards comply almost entirely with the provisions of the New York Convention.
10.2.2 In order to enforce a foreign award in Italy, a party must file an application with the President of the Court of Appeal where the other party has its residence, and if the other party is not resident in Italy, with the Court of Appeal of Rome
CPC, art 839, para 1.
10.2.3 The party must provide the President of the Court of Appeal with an original copy of the foreign award and the arbitration agreement, together with a certified Italian translation
Ibid, art 839, paras 2 and 3.
10.2.4 Upon assessment of the above formal requirements, the President of the Court of Appeal must declare the award enforceable in Italy, unless he establishes ex officio that:
the subject-matter of the dispute cannot be settled by arbitration under Italian law; or
the award is contrary to public policy
Ibid, art 839.
10.2.5 Italian courts will apply an international concept of public policy applied under the New York Convention, which is intended as a body of universal principles aimed at the protection of fundamental human rights and is often embodied in international declarations or conventions
See generally P Biavati, “Le condizioni per l’efficacia del lodo straniero”, Arbitrato – commentario diretto da Federico Carpi (2nd Edition, 2008) p 884.
10.2.6 A party may challenge the decision of the Court of Appeal if that party proves that:
one of the parties to the arbitration agreement was under some incapacity, the agreement was not valid under the law chosen by the parties or under the law of the state in which the award was rendered;
the applicant party was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings, or was otherwise unable to present its case;
the award deals with a dispute not provided for or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration
Note that where decisions on matters submitted to arbitration can be separated from those not so submitted, the part of the award containing decisions on matters submitted to arbitration may be enforced.
the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement conflicted with a provision of the law governing the arbitration; or
the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made
CPC, art 840.
11. SPECIAL PROVISIONS AND CONSIDERATIONS
11.1 Corporate arbitration
11.1.1 In 2003 the Italian Government introduced a new procedural law to be applied to company disputes
With the exception of those companies operating in the venture capital market.
, concerning corporate relations, including disputes arising out of or in connection with incorporation, modification, winding-up, liability actions against managing and auditing bodies of all kinds of companies and share transfers.
Legislative Decree 17 January No. 5/2003 on corporate, banking and finance proceedings (Decree).
Decree, art 34, para 2.
The Decree came into force as of 1 January 2004. It contains a number of relevant provisions to arbitration.
11.1.2 The arbitration clause must provide for the number of arbitrators and set out the procedure for their appointment.
11.1.3 The power to appoint all the arbitrators must be conferred on a third party unconnected with the company, otherwise the arbitration clause itself is null and void. If the third party fails to fulfil its duty to appoint the arbitrators, then the president of the Court of the district in which the company has its registered office has the authority to make the appointment and will proceed accordingly
11.1.4 Appointment of arbitrators by third parties is the main difference between these arbitral proceedings and those governed by the provisions of the CPC and is aimed at promoting impartiality and fairness in the choice of arbitrators.
11.1.5 The memorandum of association of a company may include clauses submitting disputes to arbitration which concern disposable rights relating to the by-laws of the company and which may arise:
between shareholders; or
between the company and its shareholders.
11.1.6 The object of the clause may relate to disputes concerning the existence, the qualification or the regulation of the by-laws of the company or rights deriving from them.
11.1.7 The mere inclusion of an arbitration clause in the company’s memorandum renders the clause binding on the company and on all of its shareholders, including those shareholders whose status is the subject matter of the dispute
Decree, art 34, para 3.
11.1.8 Every amendment to the memorandum that introduces or deletes an arbitration clause needs to be approved by shareholders representing at least two thirds of the company’s capital. Those shareholders who do not vote or participate in the decision are entitled to withdraw from the company within 90 days following the decision
Ibid, art 34, para 6.
11.1.9 If specifically provided for in the memorandum, the clause may also deal with those disputes initiated by or against directors, liquidators and auditors. Such a clause will automatically be binding on such persons upon acceptance of their post
Ibid, art 34, para 4.
11.1.10 Disputes requiring the intervention of the Public Prosecutor may not be submitted to arbitration (eg disputes concerning the appointment and the removal of liquidators)
Ibid, art 34, para 5.
11.1.11 Procedural aspects which are not expressly provided for in the Decree are governed by the provisions of the CPC. The provisions of the Decree that differ from ordinary arbitral proceedings are as follows:
the arbitration application must be filed with the company’s registry and be made available to all of the company’s shareholders
Ibid, art 35, para 1.
third parties may intervene in company arbitral proceedings
CPC, art 105.
ex parte intervention (available for the benefit of third parties who are not shareholders)
Ibid, art 106.
and intervention by virtue of court order (available for shareholders)
Ibid, art 107.
are also permitted;
arbitrators may admit new evidence and extend the period within which they are obliged to render their final award; and
when the dispute concerns the validity of shareholder resolutions, the arbitrators may always suspend the effects of those resolutions as a preventive measure
Ibid, art 35, para 5.
11.2.1 The arbitrability of disputes concerning consumer protection claims has always been the subject of debate in Italy.
Before the Consumers’ Code125Legislative Decree 6th September 2005, no. 206 (Consumers’ Code).
11.2.2 Legal commentators and case law were divided into those who excluded the arbitrability of consumers’ claims
See generally G De Nova, Le clausole vessatorie (1996), p 26; R Marengo, “Clausola compromissoria e contratti dei consumatori”, Rivista dell’arbitrato, 2006, p 73; Court of Ancona, 28th April 2003, Foro italiano, 2004, I, c. 307.
and those who conceded the possibility of submitting consumer disputes to arbitrato rituale, deeming that recourse to arbitrato irrituale or free arbitration did not offer enough protection to consumers.
See generally G Gabrielli, “Clausola compromissoria e contratti per adesione” Rivista di diritto civile, 1993, I, p 555; Court of Rome, 8th May 1998, Foro italiano, 1998, I, c. 1989.
After the introduction of the Consumers’ Code
11.2.3 The Consumers’ Code, in relation to the submission of a consumer claim to out-of-court dispute resolution in general – eg arbitration or alternative dispute resolution (ADR) such as mediation – expressly states that consumers should always have the right to submit their claims to the courts, regardless of the results of the out-of-court decision
Consumers’ Code, art 140, para 6.
11.2.4 Although the Consumers’ Code does not expressly rule on the relationship between consumer protection and arbitration, recourse to arbitrato rituale has now generally been admitted by legal commentators, but without prejudice to the right of consumers to submit their claims to the courts, regardless of the decision rendered by the arbitral tribunal
See generally E Zucconi Galli Fonseca, “La convenzione arbitrale e i consumatori”, Arbitrato – commentario diretto da Federico Carpi (2nd Edition, 2008), p 96.
11.2.5 The above interpretation seems to conflict with the principle introduced by the 2006 Reforms, whereby arbitral awards have the same binding effect as court judgments. This conflict has not yet been resolved.
11.2.6 Recently, out-of-court dispute resolution methods have been strengthened with the introduction of ad hoc ADR proceedings in order to settle disputes arising between consumers and professionals.
11.2.7 ADR proceedings have been introduced in articles 141-141 decies of the Consumer Code by means of the Legislative Decree 6 August 2015, No. 130 which implemented EU Directive 2013/11/EU on alternative dispute resolution in relation to consumer disputes. These ADR proceedings have the advantage of offering a quick, simple and out-of-court solution should a dispute arise between consumers and service providers.
11.2.8 ADR entities appointed to administer the proceedings may be either public or private entities established on a permanent basis; they offer the resolution of national or transnational disputes and are included in an ad hoc list maintained by the Ministry of Economic Development.
11.2.9 The contradiction highlighted under paragraph 11.2.5 does not seem to have been resolved. Indeed, Article 141(10) establishes that consumers cannot be deprived of their right to submit claims to the competent courts, regardless of the decision issued by the relevant ADR entity.
11.3 Employment Law
11.3.1 The 2006 Reforms introduced recourse to arbitrato irrituale or free arbitration in relation to employment disputes, which was previously excluded by law and in collective labour contracts.
11.3.2 The situation was reformed in 2010
Law no. 183 4th November 2010, art 31.
through general reform of the Italian employment law system, which aimed to promote recourse to arbitration in order to lessen the burden on the labour courts.
11.3.3 The new regulation expressly introduces the following cases of arbitrato irrituale or free arbitration in relation to labour disputes:
before making an application to the labour court, pending or following a genuine attempt at conciliation as required by law, the parties are entitled to refer the dispute to arbitration by appointing the conciliation panel already involved in the matter as the arbitral tribunal
CPC, art 412.
the arbitration must be conducted in compliance with the rules set forth by the collective labour contracts put forward by the major trade unions;
Ibid, art 412 ter.
without prejudice of the right to recourse to the labour courts or to the conciliation panel, the parties are entitled to refer the dispute to a panel of three arbitrators, the first two appointed by the parties and the third chosen by university professors of law or by lawyers who are qualified to appear before the High Courts
Ibid, art 412 quater.