Apr 2023

Italy

Law Over Borders Comparative Guide:

Arbitration

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1 . Key considerations in deciding whether to arbitrate in this jurisdiction

Italy is a Model Law-compliant and pro-arbitration jurisdiction. Parties deciding to arbitrate in Italy will benefit from a comprehensive and sophisticated normative framework – recently updated by the reform of civil proceedings enacted through Legislative Decree No. 149/2022 (the 2022 Reform) – supplemented by several Supreme Court judgments and hundreds of scholarly writings.

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1.1. Advantages

The main advantage of Italian arbitration law is that it analytically regulates several issues which tend to pose significant procedural hurdles, such as those relating to multi-party arbitrations (e.g. interventions and joinder, mandatory participation of “necessary” third parties and the constitution of the tribunal) and subject-matter jurisdiction (e.g. the power to hear set-off objections exceeding the scope of the arbitration agreement and to decide – on an incidenter tantum basis (i.e., by means of a decision that cannot become res judicata) – preliminary issues lacking subject-matter arbitrability). 

Moreover, Italian law includes a set of provisions (Arts. 838-bis ff. of the Italian Code of Civil Procedure (CCP)) tailored to the specific requirements of arbitration on corporate-related matters. 

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1.2. Disadvantages and common pitfalls

The main drawbacks of arbitrating in Italy are the duration of ancillary court proceedings, the frequency of legal reforms and the relatively small pool of practitioners versed in international arbitration (compared to other arbitration hubs). 

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1.3. Other distinctive features

Unlike most arbitration laws, Italian arbitration law provides third parties affected by the “reflex effects” of an award with a specific remedy (opposizione di terzo) and confers on the arbitral tribunal the power to refer questions of constitutional legitimacy to the Italian Constitutional Court.

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2 . Principal laws and institutions relating to international arbitration in this jurisdiction

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2.1. Legal framework

Italian arbitration law is mostly made up of instruments of international law and domestic law, with EU law playing also a role. 

The most relevant instruments of international law are the treaties on commercial arbitration to which Italy is a party such as the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention)– ratified by Italy in 1968 – and the European Convention on International Commercial Arbitration of 21 April 1961 (the Geneva Convention). As these treaties have not been reproduced into an instrument of domestic law but have been incorporated through a direct renvoi by means of an implementation order (ordine d’esecuzione), Italian courts must directly apply them in accordance with the relevant rules of international law. 

As to investment arbitration, Italy is a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 18 March 1965 (the ICSID Convention) and more than 80 bilateral investment treaties.

The main domestic source on arbitration is the CCP, specifically Arts. 806–840 thereof, which were recently partially amended by the 2022 Reform. This set of provisions devoted to arbitration is supplemented by certain Articles of the CCP on court proceedings, such as those regulating service of judicial documents, interim relief and, according to certain scholars, the taking of evidence.

A handful of provisions contained in the Italian Civil Code (CC) – chiefly those regarding the evidentiary value of certain documents, witness testimony or statements made by a party – may also be relevant in the context of arbitral proceedings. It should be noted, though, that Art. 816-bis CCP grants wide power to the parties and, after the arbitral tribunal is constituted, to the arbitrators with regard to the regulation of the proceedings. 

Special statutes apply to proceedings in specific sectors such as public procurement arbitration, governed by the Italian Public Procurement Code of 2016.

Lastly, while there is no special court or chamber devoted exclusively to arbitration related matters, challenges of awards are heard by a specific chamber within each Court of Appeal. 

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2.2. What qualifies as international arbitration?

Prior to the reform enacted through Legislative Decree 2 February 2006 No. 40, Italian law identified international arbitrations as those proceedings in which:

  • one of the parties had its residence or effective seat abroad; or 
  • a significant part of the obligations arising from the disputed relationship had to be performed abroad. 

Following the reform, however, Italian arbitration law does not distinguish between purely domestic and Italian-seated “international” arbitrations. Thus, regardless of the existence of any link to other legal systems, Italian-seated arbitrations are now subject to a single set of rules (Arts. 806 to 832 CCP) largely inspired by the more arbitration-friendly rules that previously governed ‘international’ arbitrations seated in Italy.

The sole (minor) exception to the “monistic” regime currently in force is provided by Art. 830(2) CCP according to which, if one of the parties resided abroad when the arbitration agreement was executed, the Court of Appeal, rather than the arbitral tribunal, shall decide on the merits of the dispute following the set aside of the award only on an opt-in basis (that is, if the arbitration agreement provided so or if the parties have made a joint request).

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2.3. Main local international arbitration institutions

The institution with the most established international practice and reputation is the Milan Chamber of Arbitration (CAM) of the Milan Chamber of Commerce. 

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3 . Arbitration agreements

Under Italian law, arbitration agreements may take different forms depending on whether the relevant disputes: 

  • have already arisen (compromesso); 
  • may arise in the future from a given contract (clausola compromissoria); or 
  • may arise in the future from non-contractual relationships (convenzione di arbitrato in materia non contrattuale). 

By a less frequent type of arbitration agreement, however, the parties may opt to settle their disputes through a decision having contractual effects (arbitrato irrituale), rather than an award displaying the same force and effects of a court judgment.

Regardless of the type, arbitration agreements must meet the same requirements as to arbitrability and are subject to the same rules regarding effectiveness and interpretation. 

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3.1. Requirements as to content and form

To be valid and enforceable, arbitration agreements must be in writing and must identify the subject matter of the dispute. The written form requirement is satisfied when the arbitration agreement is:

  • incorporated in a contractual clause; 
  • contained in an agreement ad hoc; or 
  • in correspondence exchanged between the parties (in this case, a specific reference to a clause contained in a separate instrument would suffice too) also by means of electronic devices. 

Arts. 1341(2) and 1342(2) CC set a further formal requirement by providing that arbitration clauses included in standardised terms or predetermined forms drafted by one of the parties are effective – or, according to a different view, valid – only if they have been ‘expressly approved in writing’ by the other party. These provisions should not apply to international arbitration, but this is debated. 

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3.2. Validity of arbitration agreements

By virtue of the principle of severability enshrined in Art. 808(2) CCP, the validity of an arbitration clause is to be assessed autonomously from that of the contract in which it is incorporated. 

As to capacity, Italian law distinguishes between the entitlement to be a party to an arbitration agreement (capacità giuridica) – which is conferred to all individuals and entities – and the capacity to enter into such an agreement (capacità d’agire). With respect to the latter, Art. 808(2) CCP provides that the power to execute a contract includes the power to execute the relevant arbitration clause. In cross-border situations, the law governing this issue will be determined on the basis of the relevant conflict of law rules.

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3.3. Special formalities

Special formalities apply to agreements submitting corporate disputes to arbitration which, pursuant to Art. 838-bis CCP, must be contained in a company’s deed of incorporation or by-laws to be valid. 

There are no special formal requirements applicable to arbitration agreements entered into by States or State entities.

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3.4. Governing law

Under Italian law, the governing law of the arbitration agreement is determined applying the conflict of law rules on contractual relationships, namely Art. 57 of the Italian Private International Law (PIL), which in turn refers to Arts. 3 and 4 of EU Regulation No. 593/2008 (Rome I Regulation).

Short of an express choice (the first criterion under the above provisions), an implicit choice of law may be inferred by either the choice of the seat of the arbitration or the choice of the law applicable to the disputed contract, depending on which is deemed more indicative of the will of the parties. 

Last, if no choice has been made, whether explicit or implied, the arbitration agreement will be deemed to be governed by the law bearing the closest connection.

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4 . Arbitrability

Under Art. 806 CCP, parties may submit to arbitration all disputes other than those: 

  • concerning non-disposable rights (diritti indisponibili); and 
  • those lacking subject-matter arbitrability because of a statutory prohibition. 

In light of how Art. 806 CCP is framed and, more generally, of the favor arbitratus principle which lies at the heart of Italian arbitration law, case law and commentators maintain that the above exceptions to arbitrability should be construed narrowly.

Italian-seated arbitral tribunals may however address any non-arbitrable issue relevant for the adjudication of the dispute on an incidenter tantum basis (that is, through a decision not capable of acquiring res judicata effects), unless the law mandatorily requires said issue (e.g. the status of individuals) to be decided through a res judicata court judgment.

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4.1. Applicable restrictions

As to the first restriction to arbitrability, under Italian law a right is “disposable” when the parties can waive the relevant “right of action” either by settlement or by electing not to bring the relevant claim within the applicable statute of limitations. 

In the context of civil litigation, the disputes concerning non-disposable rights overlap with those mandatorily requiring the participation of a public prosecutor (as is the case with certain matters of insolvency, company law, intellectual property, status and capacity of individuals, personal rights, matrimonial relationships, employment and proceedings for forgery (querela di falso). Given that in proceedings involving the participation of a public prosecutor the court performs an administrative rather than adjudicatory function, this first restriction to arbitrability in practice does not have a significant impact on international arbitration. 

As to the second limitation, the main statutory prohibitions of arbitration are those concerning labour, consumer and insolvency disputes. With the exception of disputes regarding the validity of financial statements, corporate matters are arbitrable provided that the mandatory provisions set out in Arts 838-bis ff. CCP are complied with. 

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5 . Enforcing arbitration agreements

Pursuant to Art. II(3) New York Convention, upon request of a party (or ex officio if any of the situations contemplated by Art. 11 PIL materialises), Italian courts shall refer the parties to arbitration when their dispute falls within the scope of an arbitration agreement, unless this is found to be ‘null and void, inoperative or incapable of being performed’. 

To decide on the referral, Italian courts perform a prima facie review as to the arbitration agreement’s existence, validity and effects on the basis of the allegations and evidence on the record. If the arbitration agreement invoked in judicial proceedings before an Italian court provides for an arbitration seated abroad, pursuant to Art. 41 CCP the parties may request that this jurisdictional exception be submitted directly to the Italian Supreme Court, the apex court of the Italian judiciary, for being finally determined. 

With respect to Italian-seated arbitrations, the allocation of adjudicatory powers between courts and arbitral tribunals is regulated by Arts. 817 and 819-ter CCP which, in accordance with the principle of Kompetenz-Kompetenz, provide that each adjudicatory body is empowered to establish the boundaries of its own jurisdiction. 

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5.1. Stay of proceedings

If the same dispute is submitted to arbitration and court litigation, Italian law provides that the relevant proceedings should run in parallel, the suspension of either of them on the grounds of lis pendens being expressly precluded by Art. 819-ter (2) CCP. 

Thus, should such an overlap occur, any conflict arising therefrom will have to be resolved on a res judicata basis: the decision which becomes final first shall prevail. In principle, this solution favours arbitration which tends to be swifter than proceedings before Italian courts. But in practice this does give rise to the unattractive possibility of parallel proceedings and a race to judgment.

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5.2. Anti-suit injunctions

Italian courts lack the power to issue anti-suit injunctions to restrain proceedings brought abroad in breach of an arbitration agreement. In this respect, it bears also noting that the Court of Justice of the European Union is unwavering in barring the circulation of anti-suit injunctions within EU territory. 

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6 . Arbitral Tribunal

The arbitral tribunal can consist of one or more arbitrators. If the arbitration agreement however provides for an even number of arbitrators, the President of the court (tribunale) having jurisdiction in the area where the seat is placed must appoint an additional arbitrator.

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6.1. Restrictions on the parties’ freedom to choose arbitrators

Parties are free to appoint as arbitrator any individual having the general legal capacity to act (which, as a rule, is acquired at the age of 18). Some categories of public servants, such as members of the judiciary, public officials, professors and state attorneys are however barred from acting as arbitrator by the law or their employment contract. 

Arbitrators may be selected on the basis of certain party-fixed requirements, provided that their impartiality and independence are not affected. Requirements concerning nationality, religion or gender must be reasoned and functional to the decision of the dispute, lest the relevant arbitration agreement may go counter the public policy principle of non-discrimination.

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6.2. Requirement of arbitrator independence and impartiality

All members of the arbitral tribunal must be impartial and independent of the parties. This crucial requirement has been further heightened by the ongoing disclosure obligation introduced by the 2022 Reform (Art. 813 CCP) and the expansion of the grounds for challenging an arbitrator (Art. 815 CCP), described in detail below. 

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6.3. Mandatory rules applicable to the appointment process

The appointment process must mandatorily comply with the principle of equality of arms of the parties, which is satisfied, for example, if each party appoints one arbitrator, the entire tribunal is appointed by agreement of the parties or designated by an impartial and independent third party (e.g. an arbitral institution or a judicial authority). Any imbalance as to the parties’ appointment rights in the arbitration agreement would render it null and void. 

Art. 816-quater CCP ensures that the appointment process in multiparty arbitrations complies with the equality of arms principle by providing that the tribunal shall be mandatorily constituted in accordance with either of the three following mechanisms: 

  • a third party appoints the entire tribunal; 
  • the tribunal is appointed by joint agreement of all parties; 
  • after the claimant(s) has appointed one or more arbitrators, the other parties agree to jointly appoint (or entrust a third party with appointing) an equal number of arbitrators.

If none of these mechanisms is applicable, the arbitration will develop into separate arbitral proceedings against each of the respondents, unless under Italian law the dispute requires the mandatory participation of all parties involved (litisconsorzio necessario), in which case it must be declared inadmissible. 

Lastly, arbitration clauses contained in the by-laws or deed of incorporation of an Italian company must provide for the appointment of the entire tribunal by a third party independent from the company under sanction of nullity. 

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6.4. Appointment mechanism in the absence of party agreement or applicable institutional rules

In the absence of party agreement on the appointment of the arbitrators (or their number), pursuant to Art. 809(3) CCP the arbitral tribunal shall be appointed by the president of the competent court in accordance with the procedure set out below in Section 7.3.

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6.5. Mandatory rules applicable to the replacement process

If one or more arbitrators are missing for whatever reason (other than removal, which follows a discrete procedure), they should be replaced according to the rules provided for their appointment or, in lack thereof (or default by the appointing party), by the president of the competent court pursuant to Art. 810 CCP. 

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6.6. Mandatory disclosure obligations

The 2022 Reform has imposed on the arbitrators an ongoing duty of disclosure throughout the proceedings. 

Art. 813(1) CCP also provides that the written declaration of acceptance by the arbitrators must be accompanied under sanction of nullity by a statement in which the arbitrator discloses any circumstance that may give rise to a challenge under Art. 815 CPC or declares that no such situation exists. Should an arbitrator fail to release such statement or deliver an incomplete and inaccurate one, the parties may seek their removal within 10 days of the discovery of the relevant circumstance. 

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6.7. Grounds for challenge

Pursuant to Art. 815 CCP arbitrators may be recused if they:

  • lack the required qualifications;
  • bear (also through an entity managed by them) an interest in the outcome of the dispute;
  • are related to, or have strong personal links with, a party, its representative or counsel;
  • have (or their spouse has) proceedings pending against, or serious enmity with, a party, its representative or counsel;
  • entertain contractual or other relationships affecting their independence and impartiality with a party, its representative or counsel;
  • have acted as counsel, advisor or witness in a prior phase of the dispute.

The 2022 Reform has introduced an additional sweeping ground (modelled on a similar provision applicable to the recusal of magistrates) allowing the parties to challenge an arbitrator for serious reasons of convenience and opportunity that affect the arbitrator’s independence and impartiality. 

Notably, the parties are free to provide for additional grounds in the arbitration agreement or by referring to institutional rules.

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6.8. Mandatory rules governing the challenge of arbitrators

If the parties have not opted for a different procedure by referring to institutional rules, challenges should be filed by way of an application (ricorso) to the president of the same court competent for the appointment of the arbitrators pursuant to Art. 810 CCP within the mandatory time limit of 10 days of the date on which the party received notice of the arbitrator’s appointment or became aware of the relevant ground for recusal. 

Having heard the parties and the challenged arbitrator (and gathered information, if necessary), the president of the competent court decides on the application through a final order that may be challenged only before the Supreme Court on the grounds of errors in the law. 

The filing of a challenge does not trigger the suspension of the arbitral proceedings nor does the tribunal have the power to order a stay on this ground. 

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6.9. Removal

Art. 813-bis CCP sets out the default procedure for the removal of an arbitrator who has failed to carry out a due act.

The arbitrator may be replaced either by joint agreement of the parties or by the person or body that was entrusted by the parties with the arbitrator’s appointment. If neither of these situations occurs, each party may send a default notice to the failing arbitrator by registered mail requesting that action be taken within 15 days of receipt. If the arbitrator fails to comply with said notice, the party may request that the president of the competent court removes and replaces the arbitrator in accordance with the procedure provided by Art. 810 CCP for judicial appointments. Upon hearing the parties and the arbitrators, the president of the competent court shall remove and replace the arbitrator in default or dismiss the application if the breach is unfounded. 

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6.10. Liability and immunity of arbitrators

For the purposes of shielding arbitrators from undue pressure in the performance of their adjudicatory function, Art. 813-ter CCP grants them a significant degree of immunity. Arbitrators are thus only liable:

  • for an exhaustive list of breaches (failure to perform or delayed performance of a due act which resulted in the arbitrator’s removal from office; resignation without cause; failure to deliberate the award, or its correction, within the applicable deadlines; commission of acts for which a magistrate could be held liable under Italian law);
  • if they have acted with wilful misconduct or gross negligence;
  • for a capped sum (triple the amount of the fees), unless the breach was deliberate.

The above list of breaches does not however preclude the parties from bringing other types of claims, such as those arising from torts committed by the arbitrator(s) (e.g. fraudulent behaviour).

As a further measure of protection, no claims may be filed against the arbitrators: 

  • while the arbitral proceedings are still pending; 
  • if the award has not been set aside by a decision with res judicata effects on the same grounds on which the responsibility of the arbitrator(s) is predicated. 
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7 . Assistance by the State courts

Italian courts perform various ancillary functions with respect to Italian-seated arbitrations, the most important of which are those relating to the arbitral tribunal (appointment, removal, replacement, and recusal of arbitrators), the issuance of interim measures and the gathering of evidence. 

Moreover, Italian courts may have jurisdiction over matters relating to foreign arbitrations such as applications for interim or ancillary measures (the attachment of assets, the collection of evidence, etc.) to be implemented in Italy. 

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7.1. Interim measures

Overview of interim measures

Until the 2022 Reform, arbitrators were barred from issuing interim measures, with the sole exception of orders suspending the effectiveness of corporate resolutions. 

Pursuant to the amended Art. 818 CCP, arbitrators have exclusive jurisdiction to grant interim relief if the parties have accorded such power to them in the arbitration agreement (or in a separate agreement preceding the commencement of the arbitration) or by referring to institutional rules that contemplate arbitral interim relief. This last possibility is particularly significant since most institutional rules (including Art. 26 of the CAM Rules) expressly empower tribunals to issue provisional measures. 

Arbitral decisions on interim measures may be challenged before the Court of Appeal of the district where the seat of the arbitration is located on the same procedural grounds which are available for challenging an award (Art. 829(1) CCP) or on public policy grounds. Interim measures are to be carried out under the supervision of the first instance court (Tribunale) of the seat.

Italian courts retain the exclusive power to issue interim measures before the arbitration as well as during the arbitral proceedings, when the parties have not bestowed the relevant power on the arbitral tribunal.

Relevance of availability of emergency arbitrator mechanism

Emergency arbitrator mechanisms are barred by Art. 818 CCP, as amended by the 2022 Reform, pursuant to which only State courts may issue interim measures prior to the constitution of the arbitral tribunal.

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7.2. Taking of evidence

The tribunal is entitled to request that the competent court subpoena a witness who refuses to appear before the arbitral tribunal to give testimony. The issuance of the court’s subpoena triggers a suspension of the deadline for rendering the award until the date when the testimony is delivered. If the subpoenaed witnesses nonetheless fail to testify without just cause, the judge may fine them and order that they be escorted to the hearing by police officers.

Italian courts are not empowered to act as juge d’appui with respect to the gathering of other forms of evidence (e.g. documents). 

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7.3. Appointment or challenge of arbitrators

Italian courts are empowered to deal with the appointment and challenge of arbitrators (illustrated above in Sections 6.3, 6.4 and 7.3). 

Italian courts may be requested to appoint one or more arbitrators pursuant to Art. 810 CCP if:

  • one of the parties failed to take action;
  • the appointing authority designated by the parties failed to take action;
  • the arbitration agreement directly entrusts the judiciary with the appointment;
  • the parties failed to reach an agreement;
  • the co-arbitrators failed to reach an agreement on whom to appoint as president;
  • the arbitration agreement provides for an even number of arbitrators;
  • the arbitration agreement is silent as to the number of members of the tribunal and/or the procedure for their appointment. 

Additionally, as mentioned above, Italian courts may be seized to replace a missing arbitrator or remove and replace a defaulting arbitrator.

The relevant ex parte application must be filed with the president of either 

  • the court of the seat; or, absent a choice of seat, 
  • the court of the district in which the arbitration agreement was entered into; or if the agreement has been entered into abroad,
  • the Court of Rome. 

Unless the arbitration agreement is manifestly null and void or provides prima facie for a foreign seat, the president of the competent court proceeds with the requested appointment by an order (ordinanza) that may be challenged before the competent Court of Appeal.

Under the 2022 Reform, the appointment process must comply with the principles of transparency and efficiency and should ensure a turnover of the appointees. 

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7.4. Other available assistance

Italian courts may also be seized in connection with the determination of the arbitrators’ fees and expenses as well as for the extension of the deadline for the issuance of the award.

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8 . General procedural (minimum) requirements

Parties and arbitrators enjoy ample discretion in the conduct of arbitral proceedings within the limits of the due process principle and the parties’ right to be heard.

These principles require (at a minimum) that the parties be afforded an opportunity to gather evidence, present written or oral submissions and address any issue raised ex officio by the tribunal. In light of the restraint exercised by Italian courts in this respect, for an award to be set aside the breach of contradictoire must have caused concrete harm to a party’s (or both parties’) right of defence.

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9 . Confidentiality

Italian law does not regulate the confidentiality of arbitral proceedings. However, Italian lawyers – whether counsel or arbitrators – are bound to confidentiality under the bar disciplinary code. It might also be argued that a confidentiality obligation is implicit in the mandate conferred to the arbitrators. 

Parties wishing to keep the proceedings and the award confidential should thus include a provision to that effect in the arbitration clause, enter into a confidentiality agreement or seek an order in this respect from the arbitral tribunal. 

Institutional rules, such as those of the CAM, impose broad confidentiality obligations on the parties, the arbitrators and the experts. 

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10 . Awards

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10.1. Requirements as to content and form

Pursuant to Art. 823 CCP, awards must be in writing and indicate the names of the arbitrators and those of the parties, the seat of the arbitration and quote the arbitration agreement and the parties’ prayers for relief. Moreover, the award must also include (at least) a brief reasoning and the operative part. 

Finally, arbitrators must sign the award. An award may be signed by the majority alone, provided that the award states that all arbitrators have taken part in the deliberations and explains why the third arbitrator has not signed it. 

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10.2. Time limit

If the parties do not fix a time limit, the award must be rendered within 240 days from the acceptance of the arbitrators. Both the default and the party-fixed deadline may be postponed:

  • by agreement of the parties; 
  • by judicial order; or 
  • automatically on the occurrence of the events listed by Art. 820(4) CCP. 
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10.3. Remedies

Following the 2022 Reform, arbitral tribunals may grant the same types of relief as a court (including interim protection). According to most commentators, arbitrators may also issue astreintes as ancillary relief in case of non-compliance with the operative part of the award.

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11 . Post-award proceedings

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11.1. Interpretation and correction of awards

Italian law does not empower the arbitral tribunal to interpret its own award. Such power may nevertheless be bestowed on the arbitrators by the parties, also by reference to institutional rules under Art. 832 CCP. 

Pursuant to Art. 826 CCP, parties may request that the arbitral tribunal correct the award within one year of its notification. This remedy applies exclusively to clerical and computational errors and omissions. The correction request must be addressed to the court of the seat if the arbitrators fail to correct the award, a party has already requested the exequatur of the award or the one-year time limit has elapsed. If, instead, the award has been challenged, the relevant application shall be addressed to the competent court of appeal.

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11.2. Challenge of an award

Pursuant to Arts. 828 and 829 of the CCP, the losing party may challenge the award before the Court of appeals of the seat of the arbitration. The right to request the setting aside cannot be waived ex ante by the parties.

Consistently with most advanced arbitration laws, Italian law provides limited grounds for set aside and, as a rule, awards may not be challenged on the merits.

Art. 829(1) CCP lists 12 procedural violations that warrant the setting aside of an award, namely:

  • invalidities affecting the arbitration agreement;
  • invalidities affecting the appointment of arbitrators;
  • incapacity of the arbitrators;
  • the award decides a dispute which was not contemplated by, or was beyond the limits of, the arbitration agreement (ultra compromissum) or, while falling within the scope of the arbitration agreement, was not the subject matter of a claim filed by the parties (ultra petita partium);
  • failure of the award to fulfil mandatory formal requirements;
  • failure of the arbitral tribunal to decide within the time limit for rendering the award;
  • failure to comply with the procedural formalities set by the parties;
  • conflict with a previous award or a court decision that has become res judicata;
  • failure to comply with the principles of fair trial and due process (contradictoire);
  • failure to decide on the merits when a decision on the merits was due;
  • contradictions affecting the dispositive part of the award; and
  • failure to rule on any of the parties’ claims or objection in conformity with the arbitration agreement.

Awards may be challenged for errors in law only if such ground was ‘expressly’ agreed by the parties or contemplated by the law (as happens for corporate law and labour disputes). Furthermore, pursuant to Art. 829(3) CCP awards may be annulled for breach of Italian public policy.

Annulment applications are subject to two different time limits. If the award has been served  by means of certified mail or a court bailiff by one of the parties on the other, the challenge must be filed within 90 days of the date of service (Art. 828(1)) CCP). If, instead, the award is not served, following the 2022 Reform parties are barred from bringing a challenge after six months from the date of the last arbitrator’s signature of the award (Art. 828(2) of the CCP).

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11.3. Recognition and enforcement proceedings

Art. 824-bis CCP provides that, as of the date of the last signature, a domestic award (being an award issued in an Italian-seated arbitration) has the same effects as a court judgment. Under Art. 825 CCP, the winning party who intends to enforce the award must file a request with the court at the seat of arbitration for granting exequatur. In the context of the exequatur proceedings, the court merely reviews the formal validity of the award.

The enforcement of domestic awards is subject to the 10-year ‘ordinary’ statute of limitations set by Art. 2946 CC.

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11.4. Cost of enforcement

The court fees for the filing of the application for the enforcement of a domestic award or the recognition of a foreign arbitral award are rather limited, in that they consist of a fee of EUR 98.00 (contributo unificato), plus stamp duty amounting to EUR 27.00. 

The recognised award is however subject to a registration tax (at a rate of either 1% or 3% depending on the type of relief awarded).

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11.5. Enforcement of orders of emergency arbitrators

Following the 2022 Reform (which, as mentioned, allows arbitral tribunals to grant interim relief), it is expected that orders of foreign-seated emergency arbitrators may be recognised and enforced in Italy.

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12 . Enforcement of foreign awards

Italy ratified the New York Convention on 19 January 1968 without making any reservations. Since the New York Convention was directly incorporated in the Italian legal system by means of an execution order (ordine esecutivo), it applies directly in lieu of the provisions laid down by Arts. 839 and 840 CCP, which remain applicable only for matters not regulated by the Convention or when providing for a regulation that is ‘more favourable’ to the recognition and enforcement of a foreign award within the meaning of Art. VII of the Convention.

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12.1. Process for enforcing New York Convention awards

The procedure for the recognition and enforcement in Italy of foreign arbitral awards consists of two phases: 

  • an ex parte phase; and 
  • a potential adversarial opposition phase.

In the first phase, the party seeking recognition in Italy of the foreign award applies to the competent Court of Appeal, which examines ex officio the formal regularity of the award and whether any of the grounds preventing recognition under Art. V(2) of the New York Convention exist. Depending on the outcome of the said review, the president of the Court of Appeal issues a decree whereby it either declares the award immediately enforceable or dismisses the application (Art. 839 CCP).

The application must be filed in the form of an application (ricorso) addressed to the President of the Court of Appeal of the district of the domicile, or registered office, of the party against whom the recognition and enforcement is sought. 

In the second phase, any interested party may challenge the decree of the president of the Court of Appeal before the same court acting as a panel, leading to adversarial proceedings assessing, under Art. V(1) and (2) of the New York Convention, the existence of the grounds that justify the refusal of recognition of a foreign award (Art. 840 CCP).

Art. 840(3) CCP provides that the competent court denies recognition and enforcement of the foreign award if the award debtor proves any of the five grounds listed in Art. V(1) New York Convention and restated in Art. 840(3) CCP. In addition, under Art. 840(5) CCP, recognition and enforcement may also be refused ex officio if the court finds that either one of the two grounds for non-recognition set out in Art. V(2) New York Convention apply. 

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12.2. Grounds for resisting enforcement of New York Convention awards

The grounds under which an award may be refused recognition correspond to those set forth by the New York Convention.

Italian courts tend to apply these grounds narrowly to comply with the object and purpose of the New York Convention, which is that of favouring the circulation of arbitral awards. Moreover, public policy is construed as a reference to international (rather than purely domestic) public policy with the consequence that awards will be denied recognition in Italy on these grounds only if they are at odds with the core of fundamental values enshrined in the Italian Constitution.

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12.3. Enforcing Non-Convention awards

The recognition and enforcement in Italy of Non-Convention Awards is governed by Arts. 839 and 840 CCP which, as described above, mirror the grounds contemplated by the New York Convention.

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13 . Professional and ethical rules

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13.1. Applicable to counsel

Italian lawyers acting as counsel must abide by the Code of Deontology of the Italian Bar Association.

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13.2. Applicable to arbitrators

Arbitrators must follow the ethical duties of their professional association, if any. Italian lawyers sitting on an arbitral tribunal may be sanctioned pursuant to Art. 61 of the Code of Deontology of the Italian Bar Association for any breach of their duties of probity, impartiality and confidentiality.

Furthermore, arbitrators may be subject to institutional codes of conduct such as that adopted by CAM. 

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14 . Third-party funding

While Italian law does not contemplate, let alone regulate, forms of litigation funding, it is widely held that such arrangements are permissible under the “freedom of contract” principle enshrined in Art. 1322 CC.

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14.1. Applicable regulatory requirements

Absent a specific regulatory framework, parties drafting a funding agreement should be mindful of the funder’s potential conflicts of interest, the lawyer’s professional rules of ethics and any disclosure obligation under the applicable arbitration rules (such as Art. 43 of the CAM rules).

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14.2. Overview of the third-party funding market in this jurisdiction

Given the paucity of funders active in Italy and the (relatively) high number of disputes submitted to arbitration, Italy is deemed to hold great (untapped) potential for third-party funding. 

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15 . Trends and recent developments

As mentioned throughout this chapter, the 2022 Reform has introduced several innovations (including the removal of the prohibition on arbitral interim relief) which are likely to increase the appeal of Italy as a seat for international arbitrations. It may also be envisaged that, following a trial period, Italian lawmakers may intervene again to fine tune the recently amended provisions. 

For a deeper analysis of all the issues addressed in this Chapter see M.V. Benedettelli, “International Arbitration in Italy”, Kluwer International, 2020.

EXPERT ANALYSIS

Chapters

Australia

Cara North
Eleanor Clifford
Nastasja Suhadolnik
Samuel Kay

Brazil

Anna-Katharina Scheffer da Silveira
Paulo Macedo
Rafael Alves

Colombia

Juan Felipe Merizalde
Juan Pablo Gómez-Moreno

Ecuador

Adriana Rodas
David Toscano
Gabriela Ortega

England and Wales

Gregory Fullelove
Katie Bewlock

France

Carl Szymura
Julie Spinelli

Hong Kong

Kim M. Rooney

India

Sanskriti Sidana
Shaneen Parikh
Tushar Karkaria

Nigeria

Igonikon Adekunle
Konyinsola Osipitan
Sesan Sulaiman

Saudi Arabia

Fahad N. AlArfaj

Singapore

Joel Quek
Koh Swee Yen SC
Wendy Lin

South Africa

Clement Mkiva
Jackie Lafleur
Jonathan Barnes
Tori Herholdt

South Korea

Brandon Bang
Hangil Lee
In Hyuk Hwang
Tony DongWook Kang

Switzerland

Noradèle Radjai

United States

Benjamin Guthrie
Carlos Hafemann
Daniela Páez
Emma McGrath
Lucila Marchini
Louis Thivierge

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