Giustizia Popolare (Italian Edition)

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ITALIAN PROTEST SONGS: CANTI POPOLARI, CANZONI DI DENUNCIA & MUSICA IMPEGNATA – Montréal Serai

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The areas dealt with below concern five aspects of special relevance to international arbitration practitioners dealing with cases with an Italian connection:. Notably, in Decision No. The effect of this decision is that, should a party commence an arbitration and it is subsequently found that there is no valid arbitration clause, the proceedings can be continued before the courts, thereby preserving the substantive and procedural effects of the original reference to arbitration.

In certain cases, this may be vital to the exercise of the rights in dispute where the relevant action is subject to a strict limitation period. Thus, the Court has held that proceedings may now 'migrate' from a court to an institutional arbitration, and vice versa. The judgment of the Constitutional Court represents an important step forward in the sense that there is a unique procedural relationship between arbitration and court proceedings that narrows the distance between court, public justice and arbitration, or private justice.

Only a few months after the decision of the Constitutional Court, in a landmark judgment, 17 a plenary session of the Supreme Court of Cassation went to some length to affirm the principle of the 'jurisdictional nature of arbitration', which it said derives directly from the Constitution. In particular, the Supreme Court clarified that institutional arbitration has a jurisdictional function and is an alternative means of dispute resolution to the ordinary courts.

In the Court's view, it followed that the question of whether a dispute should be decided through arbitration or through the court was an issue of the 'competence' of the court or tribunal and was not a question of 'jurisdiction' as would be the case in a dispute over the jurisdiction of the ordinary courts in relation to a foreign court. Similarly, in an important recent judgment, the Supreme Court, in plenary session, 18 held that an issue relating to the existence or validity of an arbitration clause is to be considered as a preliminary procedural question and does not go to the merits of the case.

Accordingly, the Court considered the decision issued by the Arbitral Tribunal on the arbitration clause as a non-definitive award; as such, it could not be immediately set aside for nullity but only together with the final award. The Supreme Court of Cassation, again in plenary session, 19 subsequently reaffirmed and further clarified the above principle. In particular, it held that the jurisdictional nature of institutional arbitration also applies with respect to international arbitration.

According to the Court, basing its interpretation on Articles 4 and 11 of Law No. Therefore, the lack of jurisdiction of the ordinary courts can be declared in any stage and at any level of the proceedings, provided that the defendant did not expressly or tacitly accept the Italian jurisdiction. In other words, it was only necessary for the defendant, in its statement of defence, to raise the relevant objection of the lack of jurisdiction of the Italian courts.

In another recent decision of the Supreme Court of Cassation of , the closeness of the arbitrators' role to the jurisdictional or court's role was again implicitly confirmed. In this decision, the Court clearly recognised the power of the arbitral tribunal to issue mandatory procedural time limits that the parties are required to comply with the mandatory nature of the time limit, however, must be express in order to comply with the principle of due process. The principle contained in this judgment is of particular interest and of an innovative nature in Italy, as the possibility for an arbitral tribunal to introduce mandatory time limits and consequent preclusions has been traditionally considered extraneous to arbitration, which the legislator has always considered should be 'fluid' and 'elastic'.

The formal requirement that an agreement to arbitrate must be in writing can also be satisfied by an exchange of letters or other written communication Article CCP , and also by the production of copies of documents that have not been disowned or challenged by the other party.

The Italian Court of Cassation 21 has consistently held, in compliance with the New York Convention, that the requirement is satisfied when the writing shows a clear intention to refer any dispute to arbitration, even when such writing makes reference to a separate contract or document, as long as it identifies the ambit and scope of the possible disputes to be referred to arbitration. Soc Iberprotein, 22 reversed the Court's previous insistence that arbitration clauses contained in a different agreement from the one that is the subject of a dispute need to be specifically approved by the parties.

In previous editions of this publication, we reported on Louis Dreyfus Commodities Italia v. Cereal Mangimi, 23 in which the principle agreement between the parties did not contain any choice of forum or arbitration clause, but simply made general reference to another agreement between the same parties that did contain an arbitration clause. The former agreement, however, did not make any express and specific reference to the arbitration clause in the second agreement, but only made general reference to the application of the agreement as a whole. The Court held that, if an arbitration clause is found in a document referred to in an agreement but not contained in a clause of the agreement , the referral must be specific so as to show that the parties have fully understood and agreed that any dispute between them will be referred to arbitration.

Evidence of the clear intention of the parties is required. In Del Medico, the arbitration clause was contained in a GAFTA-prescribed form that was referred to in the separate agreement signed by the parties but that did not make express reference to the arbitration clause. The Court held that the agreement to arbitrate complied with the requirements of the New York Convention, which were directly applicable in Italy and which must also be interpreted in light of the less formal practice of international commerce and the preference for the arbitration of international disputes.

The wording of Article 2 of the New York Convention was considered broad enough to cover the present facts in which there was only a general reference to the standard conditions and no specific reference to the arbitration clause in the agreement signed by the parties. This decision was a significant step, departing from a previous tendency of the courts to take a formal approach to the signing of the arbitration clause by the parties.

It is also relevant here that the arbitration reform introduced a provision aimed at assisting the courts in their interpretation of arbitration clauses in such disputes, which may also extend to the tortious liability of parties to a contract.

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In particular, Article quater provides that: 'In the event of doubt, the arbitration agreement shall be interpreted in the sense that the power of the arbitral tribunal shall extend to all of the disputes that arise from the contract or from the relationship to which the contract refers. Northwave, 26 the Supreme Court openly recognised that the reform not only led to the complete substantial equipollence of arbitration and ordinary court justice as a means of dispute resolution — both having a jurisdictional nature — but also confirmed the principle of favor arbitrati. In the specific case, the parties had included in the same contract both an arbitration clause and the choice of a specific state court to have jurisdiction over any disputes that could not be decided through arbitration.


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The Supreme Court, in its reasoning, clarified that the coexistence of the two clauses did not give rise to any ambiguity or conflict. On the contrary, it was compatible with the clear will of the parties to refer to arbitration any disputes arising in the future between them. The Supreme Court applied in its decision the traditional criteria for the interpretation of contracts and confirmed the trend of both jurisprudence and legal commentators, following the reform, to give prevalence to the arbitration agreement and, as a consequence, a restrictive interpretation of the clause choosing the jurisdiction of a State Court, based on the principle contained in the cited Article quater CCP: in dubio, pro arbitrato.

A similar approach favouring arbitration has been taken by the Italian courts in proceedings commenced through the summary monetary claims procedure. In this type of proceeding, an injunctive decree ordering payment is issued ex parte on the basis of, inter alia , a sworn declaration made before a notary that the claimants' accounts show the commercial debt outstanding. In the event that the other party files an opposition contesting the claim and fails to raise a defect of jurisdiction based on a valid arbitration clause, the opposing party is considered to have accepted the jurisdiction of the courts only with respect to the claim and not with respect to other claims that may arise under the same arbitration clause, which remains valid and binding on the parties for such other claims.

With regard to the validity and effectiveness of an arbitration clause, the decision of the Supreme Court of Cassation in Merit Sa v. Label Company Srl shows the more favourable approach adopted by the courts to arbitration. The award had been issued by a tribunal in new arbitration proceedings, notwithstanding that a first award of non liquet of the same dispute had been issued by a different arbitral tribunal owing to the expiration of the term for the issue of the award, under Article of the CCP.

The approach of the Italian courts in respecting and enforcing arbitration clauses, where legally possible, has recently been confirmed in a number of decisions of the Supreme Court of Cassation.

It is worth mentioning, first, Judgment No. As a consequence, the waiver even implicit by a party of the right to enforce an arbitration clause in a dispute does not entail of itself a definitive waiver to the arbitration clause with respect to any other dispute between the same parties provided that the new dispute does not involve the same petitum and causa petendi unless the parties by agreement have expressly and validly renounced or terminated such clause in its entirety. The facts of the case were that the claim for payment of services supplied by the company before having been declared bankrupt had to be decided within arbitration proceedings, and with the exclusion of the bankruptcy courts.

The Court reasoned that the respecting of the arbitration clause corresponds to the need that disputes arising out of a contract even if expired must be resolved in accordance with the procedure agreed upon by the parties in said contract. Finally, the Supreme Court again in plenary session, 31 giving a wide interpretation to the law that expressly repealed the prohibition on the arbitrability of residential lease disputes, found that the repealing law applied to all leases, on the basis that the law could be interpreted either restrictively or extensively and that the extensive interpretation was the preferred one in view of constitutional principles.

On that basis, in deciding the case, the Court declared that the arbitration clause contained in a lease of a major holiday resort, was valid also in connection with the determination of the rent and its indexation. This judgment is a landmark decision in the area that will have repercussions on all commercial leases. Obviously, the will of the parties encounters certain limits. For example, as to the term for the issuing of an arbitration award, it is worth mentioning a recent judgment of the Supreme Court of Cassation in Coop Edilizia Srl v.

M, dated 19 January Therefore, the Court considered that, although the parties have the possibility to establish a different term even one longer than that term fixed by Article CCP , they cannot validly renounce in a generic way a term by simply agreeing that there is no time limit sine die for the duration of the arbitration. In particular, the parties may give the arbitrators the power to extend the arbitration for a longer period than the term limit established by the law, provided that a final term is nonetheless indicated.

Otherwise, the delegation of ad libitum to the arbitrators is to be considered null and void, and will be replaced by the legal provisions of the CCP. The approach of the Court appears to balance the interests of a time limit to the arbitration proceedings with the contractual freedom of the parties to agree a different time limit for the issue of the award. Notwithstanding the above general trend in favour of arbitration, we still feel obliged to add a word of caution. In a recent judgment, it was held that an arbitration clause contained in a contract does not automatically apply to other contracts, although these may be linked in some way to the main contract in the specific case, the court held that an arbitration clause contained in a lease agreement that had not been expressly recalled in a sub-lease did not apply to the sub-lease.

In the specific case, the Court held that the arbitration clause contained in a works and services contract did not apply to the case in dispute, having as its object a tort claim brought by the plaintiffs in connection with an alleged serious defect of the goods purchased by them. In connection with the latter case, it should be noted that Article quarter of the Civil Code provides 'In case of doubt, an arbitration clause should be interpreted in the sense that it extends to all disputes arising out of the contract or the relationship to which the clause refers'.

Finally, within the ambit of this more restrictive approach, it is also worth mentioning a decision of Section VI of the Supreme Court in which the Court held that only judicial courts and not arbitrators have jurisdiction to decide a dispute where a defendant denies ever having signed a contract containing an arbitration clause , and disowns his or her signature therein, based on the legal principle that referral to arbitration is possible only when the conclusion of the contract and the exact identification of the parties are not disputed. Italy has a specific law to facilitate the arbitration of both domestic and international corporate disputes.

This law simplifies and facilitates the arbitration of such disputes, which may often involve parties who have not signed or expressly accepted an arbitration clause or agreement. Article 34 of Legislative Decree No. Article 34 requires that, to be valid, the arbitration clause must provide for the appointment of a sole arbitrator or members of the arbitral tribunal through an appointing authority that is external to the company to overcome the question of which party or parties to a multiparty arbitration have the right to appoint their own arbitrator. The clause is binding on the company and on its members, including those shareholders and members who did not sign the corporate constitutional documents containing the arbitration clause and those whose status of shareholder is the subject of dispute.

It also may be binding on the company directors and statutory auditors upon their acceptance of their appointment. By Judgment No. Free arbitration in Italy is arbitration that does not follow the procedural rules laid down by the CCP, and that does not give rise to a final award but only to contractual obligations.

The Court held that the requirement of Article 34 that arbitrators appointed to decide a dispute must be external to the company also applies to 'free' arbitration. Thus, a clause contained in a company's by-laws is invalid if it provides for the appointment of arbitrators who are not external to the company. Thus, in this case, the dispute must be referred to the ordinary courts.

For corporate arbitration provisions to apply, the dispute must involve rights concerning internal corporate relationships, such as disputes regarding the running of a company, the approval of its financial statements, and the appointment of persons to its boards and committees. However, an important limitation on the arbitrability of corporate disputes under this law is that the dispute may only concern disposable rights and not those rights that an individual party is not free to give up rules for the protection of collective company rights or of categories of persons.

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Non-disposable rights include, for example, rules regarding the preparation of financial year-end balance sheets that also protect company creditors, and the requirement that corporate objects comprise only legally permitted activities. Recently, a dispute involving the remuneration of the directors and auditors of a company was also considered to be excluded from the ambit of the application of Article The case concerned an arbitration commenced by Z against company X for the recognition of Z's right to remuneration as a director and managing director of the company.

However, the sole arbitrator denied his competence to determine the matter in favour of the ordinary courts. The arbitrability of such disputes is to be excluded in light of the express provision of Article , Paragraph 2 CCP see footnote 9 , as they involve a non-disposable right. Another frequently recurring question considered by the courts concerns the arbitrability of disputes involving the approval by a shareholders' meeting of corporate annual financial statements, as these must be prepared in compliance with mandatory rules aimed at protecting all shareholders and corporate creditors.

Is the right of a shareholder to cast a vote approving or rejecting draft financial statements proposed by the board a disposable right? A recent case before the Court of First Instance of Milan 37 considered the jurisdiction of the court to decide such a dispute in the face of an arbitration clause contained in a company's articles of association. The defendant to the proceedings invoked the arbitration clause, which the applicant submitted was inapplicable because the issues in dispute involved non-disposable rights.

The Milan Court refused its own jurisdiction, deciding in favour of the arbitrability of the dispute. In particular, the Court reasoned that the right of a shareholder to inspect the balance sheet before a shareholders' meeting need not be exercised; in fact, the right to bring proceedings for a breach of obligations of a complete, fair and truthful reporting in financial statements becomes statute-barred after three years; furthermore, the evolving arbitration legislation tends to recognise arbitration as an alternative to court proceedings for the protection of a party's rights and not as 'merely' a private means of dispute resolution with respect to the traditional public court system.

This judgment has a strong pro-arbitration flavour, and the principle contained in it has recently been confirmed by the Constitutional Court in the judgment described in Section II. The judgment of the Court of First Instance of Milan in particular appears to support the arbitrability of any corporate dispute that involves the protection of a party's rights, even when connected with the subject matter, such as a company's balance sheets, which were previously considered non-disposable and, as such, not arbitrable.

The Court has held that the correct approach is to consider the rights for which protection is sought, and not consider arbitrability only on the basis of an abstract characterisation of the subject matter involved.

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MG, 39 which confirmed the principle that non-disposable rights are limited to those protected by mandatory law and that are made for the protection of the shareholders of a company as a category, or its creditors or other third parties. However, while the courts on the merits generally, first and second instance courts have consistently shown a tendency to widen the scope of the arbitrability of corporate disputes, the Supreme Court of Cassation has been more restrictive and has remained of the view that certain categories of company dispute are not arbitrable, such as those involving a challenge for nullity and therefore for alleged breach of mandatory law of the resolutions of shareholders' meetings because of the mandatory nature of the rights involved.

Nevertheless, small openings towards a narrower interpretation of what are non-disposable rights, in the sense that not all mandatory law is necessarily non-disposable, may be found in the most recent decisions of the Supreme Court.


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  • For instance, in Energo Srl v. UBI Leasing Spa, the Court expressly qualified as 'disposable' the right actioned in a claim for the restitution of sums paid under an allegedly usurious interest rate notwithstanding the mandatory nature of Italian law on usury. In particular, the study sees the arbitration of corporate disputes as an important tool to create a legal system that is favourable to companies and also competitive in attracting foreign investment. The purpose of the study was to highlight the potential of arbitration and, on the other hand, the problems posed by the present legislation with a view to identifying possible solutions in the prospective of a further law reform.

    The following were identified in the study as central topics for the enhancement of corporate arbitration: 1 a clearer definition of the area of arbitrability of company disputes, in particular, with respect to those disputes having as their object a challenge to shareholders' resolutions; 2 the elimination of the prohibition of the arbitration of disputes involving companies that raise risk capital on the capital market.

    In this respect, the draft law reform of the Civil Procedure Code A. Furthermore, the draft law reform also intervenes on two other aspects: on the one hand, the extension of the efficacy of the arbitration agreement to the members of the supervisory board and the management board; on the other hand, the attribution of the power to appoint the arbitrators — failing the appointment by the authority designated by the parties — to the President of the Specialized Sections on corporate disputes of the Tribunal where the company has its registered office.

    A distinctive feature of arbitration in Italy is that the legislator has decided not to follow the UNCITRAL Model Law 44 regime, which gives arbitral tribunals the right to hear and determine applications for interim measures of protection. On the contrary, Italian law gives exclusive power to the courts to hear applications for urgent interim relief independently of whether the dispute is the subject of a domestic or international arbitration clause.

    Consequently, a comprehensive system of procedures for interim measures is found in the CCP, in the section entitled 'Provisional measures'. The approach reflects the reticence in Italy to give the power to arbitrators in domestic arbitrations to hear such applications, and the same approach has prevailed with respect to international arbitration.

    The acceptance of jurisdiction by an Italian court with respect to interim measures of protection is not considered to be a breach of Article 2 of the New York Convention, as confirmed by the Model Law Article 17J and also by Article An advantage of the Italian approach is that applications for interim measures are heard swiftly by the courts and also ex parte where sufficient urgency has been shown , and that orders are quickly and directly enforceable in Italy.

    An unresolved issue may arise, however, in the face of a valid arbitration clause for an arbitration with its seat outside of Italy that expressly includes the exclusive power of the arbitral tribunal to entertain applications for interim measures. Such clause would exclude the Italian courts from hearing the application.

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