Italy

Unlike specialised commercial courts in some jurisdictions, the Italian system retains generalist tribunals but with specialised divisions for business matters.

In the Italian legal system, the resolution of specialised commercial disputes is the responsibility of the local courts: the Tribunals (Tribunali) for first-instance proceedings (or, for lower-value cases, the Justice of the Peace, Giudice di Pace) and the Courts of Appeal (Corti d’Appello) for appellate proceedings. If the dispute concerns specific commercial matters (such as corporate disputes or issues relating to intellectual property and patents), it falls within the jurisdiction of the Specialised Sections for Business Matters (Sezioni Specializzate in Materia di Impresa) of the competent Tribunal or Court of Appeal.

Specialised Sections for Business Matters were established by Legislative Decree No. 168 of 2003 and had their jurisdiction significantly expanded by Decree-Law No. 1 of 2012. They are located in Tribunals and Courts of Appeal in regional capitals, as well as in additional locations such as in the city of Brescia. Their purpose is to centralise the adjudication of technically complex disputes within a single specialised forum, thereby ensuring more efficient and expert decision making. Judges assigned to these sections are selected from among magistrates with specific expertise in the relevant areas of law within their jurisdiction.

Commercial litigation in Italy is governed by the rules of the Code of Civil Procedure (Codice di Procedura Civile, Royal Decree No. 1443/1940). This piece of law has recently undergone significant reform, particularly through Legislative Decree No. 149 of 2022 (the so-called “Cartabia Reform”), which has reshaped several fundamental aspects of civil procedure and is aimed at shortening the duration of proceedings and ensuring greater efficiency of justice. The reform was aimed at increasing efficiency and ensuring compliance with the targets set by the EU Recovery and Resilience Plan (PNRR).

In addition to the traditional judicial route, the Italian legal system provides for alternative dispute resolution mechanisms (ADR), which are increasingly encouraged in order to reduce the judicial workload and promote a faster and more efficient resolution of disputes.

Before initiating commercial litigation, the party and their legal counsel must carry out a number of strategic assessments and comply with specific procedural obligations. Failure to do so may have an adverse effect on the outcome or even render the claim inadmissible.

These preliminary steps can be divided into two main categories:

• strategic and procedural evaluations; and
• statutory requirements that operate as conditions of admissibility.

The first category involves, for example, determining the court with jurisdiction and competence to hear the dispute, deciding which decision-making procedure is most appropriate — for example, whether to apply the ordinary procedure or the simplified procedure governed by Article 281 decies et seq. of the Italian Code of Civil Procedure, etc.

The second category concerns the use of ADR mechanisms, such as mediation or assisted negotiation, which in certain cases are mandatory prior to bringing the matter before a judicial authority. Failure to comply with these requirements renders the claim inadmissible.

Lastly, although there is no obligation to do so, it is common, before commencing judicial proceedings, to send the counterparty a pre-action letter asserting one’s claim and specifying that, should the counterparty fail to comply with the request, legal action will be initiated against them.

Early engagement in mediation or negotiation is often advisable, as Italian courts tend to look favourably on parties that have attempted settlement before filing suit.

In the Italian legal system, parties involved in high-value commercial disputes can access various ADR mechanisms. These instruments are designed to offer a quicker, more confidential and more specialised way of resolving disputes than ordinary litigation in state courts. The main ADR methods are arbitration, mediation, and assisted negotiation:

• Arbitration. Arbitration is the most structured ADR method and the one most comparable to judicial proceedings. Through a written agreement (the “arbitration clause” or “submission agreement”), the parties agree to submit the resolution of their dispute to one or more private individuals — the arbitrators — whose decision (the award) is binding on the parties. Institutional arbitration, particularly under the Rules of the Milan Chamber of Arbitration, is widely used in complex commercial disputes and ensures high procedural standards.
• Mediation. Mediation, regulated by Legislative Decree No. 28/2010, is a process conducted by an impartial third party (the mediator) who assists two or more parties in reaching an amicable settlement of their dispute. Unlike an arbitrator, the mediator does not make a decision but rather facilitates communication and negotiation to help the parties identify a solution that they can all accept. Mediation may be voluntary, ordered by the judge during pending proceedings, or mandatory before starting judicial proceedings. In certain matters — including, for instance, banking and financial contracts, medical liability, and lease agreements — attempting mediation is a precondition for the admissibility of a judicial claim.
• Assisted negotiation. Assisted negotiation, introduced by Decree-Law No. 132/2014, is an agreement in which the parties undertake to cooperate with their respective lawyers in good faith and fairness, with the assistance of their respective lawyers, to reach an amicable resolution of the dispute. Similarly to mediation, assisted negotiation is a precondition for the admissibility of certain claims, that is, the payment request, on any grounds, of amounts not exceeding EUR 50,000, as well as for disputes concerning compensation for damage arising from the circulation of motor vehicles and watercraft.

In Italy the duration of proceedings depends greatly on the court, the complexity of the case and the conduct of an evidentiary phase (that is to say, for example, a technical expert examination or the hearing of witnesses).

In first instance proceedings before the tribunal, the average time to reach final judgment in 2024 was around one year and four months.

Although proceedings remain comparatively lengthy, recent reforms have reduced average duration significantly compared to previous years, when first-instance proceedings often exceeded two (or even three) years.

In Italy, there are no general disclosure obligations.

Unless the court orders the production of such documents pursuant to Article 210 of the Italian Civil Procedure Code, which is used when a relevant document is in the possession of the opposing party or a third party, the disclosure of documents is left to the discretion of the parties and there are no disclosure obligations to comply with.

The absence of discovery is often perceived as one of the major distinctions between Italian and common law litigation.

In the Italian legal system, witnesses may be required to appear at trial. However, there is no true cross-examination, as is the case in common law systems.

When a witness is admitted by the judge at the request of a party, they are issued with a summons to testify.

If the witness fails to appear without a valid reason, the judge may order the witness to be brought there by force or impose a pecuniary sanction (Article 255 of the Italian Civil Procedure Code).

In Italian civil proceedings, the judge conducts the examination of witnesses directly, asking questions submitted by the parties.

While the parties may propose additional or clarifying questions, they do not conduct the questioning directly as occurs in cross-examination under common law procedure.

In the Italian civil procedural system, the general rule on costs is the principle of defeat (principio di soccombenza), as set out in Article 91 of the Italian Civil Procedure Code. According to this principle, the losing party must reimburse the opposing party for the legal costs incurred.

However, pursuant to Article 91 of the Italian Civil Procedure Code, the court has a degree of discretion and may wholly or partially offset the costs between the parties when justified reasons exist, such as:

• mutual partial success of the parties;
• the absolute novelty of the legal issue dealt with;
• a change in the case law concerning decisive questions; or
• the existence of other serious and exceptional circumstances, which must be expressly stated in the reasoning.

Furthermore, under Article 96, the court may order a party that has acted or resisted in bad faith or with gross negligence to pay additional damages or equitable indemnity to the other party.

The main types of interim measures available under the Italian legal system are as follows:

• Judicial seizure (sequestro giudiziario, Article 670 of the Italian Civil Procedure Code) is intended to preserve and safeguard property that is the subject of a dispute, preventing its alteration, deterioration or misuse pending a final judgment.
• Conservatory seizure (sequestro conservativo, Article 671 of the Italian Civil Procedure Code) is a measure that enables the creditor to preserve the integrity of the debtor’s assets up to the amount claimed, as these assets constitute the property against which the creditor will enforce its rights.
• Preliminary technical assessment (accertamento tecnico preventivo, Article 696 of the Italian Civil Procedure Code) is a form of pre-trial evidence gathering that allows a technical expert to assess the condition or value of assets or works when there is a risk that such evidence may later become unavailable or difficult to obtain.
• Possessory actions (azioni possessorie, Articles 1168–1170 of the Italian Civil Code and Articles 703–705 of the Italian Civil Procedure Code) are aimed at protecting possession by restoring it when it has been unlawfully taken (azione di reintegrazione) or preventing interference with lawful possession (azione di manutenzione).
• Denunciatory actions (azioni di nunciazione, Articles 1171–1172 of the Italian Civil Code and Article 688 et seq. of the Italian Civil Procedure Code) are designed to avert imminent and serious harm to property or from danger arising from a building or structure.
• Urgent measures (provvedimenti d’urgenza, Article 700 of the Italian Civil Procedure Code) are an atypical and residual form of interim relief, available when no specific measure is provided by law.

All interim remedies require evidence of both fumus boni iuris (a prima facie showing of the right claimed) and periculum in mora (a risk of serious or irreparable harm pending the proceedings).

The Italian legal system and case law demonstrate a modern approach that promotes arbitration, recognising it as an alternative and effective dispute resolution mechanism, essentially equivalent to state jurisdiction.

The Italian arbitration law is not a direct transposition of the UNCITRAL Model Law, but it has been strongly influenced by it, especially with regard to international arbitration.

Italian arbitration law is considered modern and business-friendly, with courts generally supportive of the arbitral process.

Following the recent Cartabia Reform (Legislative Decree No. 149/2022), arbitrators now have the power to grant interim measures. Indeed, Article 818 of the Italian Code of Civil Procedure, in its new wording, provides that: “the parties, including by reference to arbitration rules, may confer upon the arbitrators the power to grant interim measures through the arbitration agreement or by means of a written agreement executed prior to the commencement of the arbitral proceedings”.

This power, which may include both standard and non-standard (atypical) measures, is shared with the state court, which remains competent until the arbitrator accepts its appointment.

Although not being automatic (as it is subject to the will of the parties), this power marks a significant change from previous practice and brings Italian law into line with international standards.

This reform represents a paradigm shift, aligning Italy with leading arbitration jurisdictions.

In the Italian legal system, an appeal against an arbitral award is a remedy that can only be brought on grounds specifically provided by law. The rules and grounds for challenging an award depend on whether the arbitration is ritual or so-called irritual (contractual arbitration).

Ritual arbitration is governed by Articles 827–831 of the Italian Civil Procedure Code. The award may be challenged on the grounds of nullity set out in Article 829, which include procedural defects; a challenge based on violation of rules of law on the merits is admissible only if expressly provided for by the parties or by law.

So-called irritual arbitration (i.e. arbitration of a contractual nature) is regulated by Article 808 ter of the Italian Civil Procedure Code. The award is not considered a judicial decision, but rather a contractual agreement between the parties and it may be challenged, inter alia, for defects of consent or for exceeding the limits of the mandate conferred upon the arbitrators.

With regard to the enforcement of foreign judgments, Italy is subject to:

• Regulation (EU) No. 1215/2012 (Brussels Recast Regulation) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters;
• Lugano Convention dated 30 October 2007 on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters concluded between the European Union and Denmark, Iceland, Norway and Switzerland;
• Hague Choice of Courts Convention concluded on 30 June 2005; and
• Hague Convention concluded on 2 July 2019 on the recognition and enforcement of foreign judgments in civil or commercial matters, ratified on 29 August 2022 by the European Union, which has concluded effect on 1 September 2023.

Finally, in the absence of an applicable convention, Italian Law No. 218/1995 (Italian private international law) applies.

The enforcement of a foreign arbitral award in Italy is governed by a dual-level regulatory system, consisting of international conventional law and the domestic provisions of the Code of Civil Procedure. The main source is the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted in New York on 10 June 1958, and implemented in Italy by Law No. 62/1968.

In Italy, enforcement is permitted only in respect of the enforceable judgments expressly identified as such in Article 474 of the Italian Civil Procedure Code. These include court judgments, judicial orders, and other acts to which the law expressly attributes enforceable effect, such as arbitral awards.

According to the Italian legal system, the enforceability of a court judgment or an arbitral award is subject to their qualification as an enforceable title. Compulsory enforcement may take place only on the basis of an enforceable title that certifies a right that is certain, liquid, and due.

Judgments ordering payment or performance issued by Italian courts constitute the principal enforceable judicial titles. Judgments issued by foreign judicial authorities may be recognised and become enforceable in Italy in accordance with the procedures established by Law No. 218/1995 mentioned above, or under the provisions contained in the conventions on the enforcement of judgments or arbitral awards to which Italy is a party.

In general, judgments that are merely declaratory or constitutive in nature, as well as decisions contrary to public policy, are excluded.

In Italy, foreign judgments are not formally “registered”, but, where necessary, need to be declared enforceable through a specific procedure.

When it comes to the enforceability of an EU Member State judgment, the Brussels I bis Regulation states, as a general rule, that such judgments shall be recognised in the other Member States without any special procedures being required.

Different rules are applied for extra-EU judgments. Based on the specific country involved, the Lugano Convention of 30 October 2007, the Hague Convention of 30 June 2005, the Hague Convention of 2 July 2019 must be looked at to ascertain the specific procedure applicable to the enforcement of foreign judgments.

In the absence of an applicable international convention, Law No. 218/1995 applies. This law does not require any specific procedure for the recognition of a judgment issued by a foreign state, provided that the prerequisites indicated in Article 64 are met.

As to foreign awards, the procedure for obtaining the recognition and enforcement (commonly referred to as exequatur) of an arbitral award issued abroad is primarily governed by the Italian Code of Civil Procedure, specifically Articles 839 and 840. These provisions must be interpreted in accordance with the international conventions ratified by Italy, first and foremost the New York Convention of 10 June 1958. The procedure begins with a petition to the President of the Court of Appeal, who performs a summary review to verify the formal regularity of the award and its compliance with public policy. If the outcome is positive, the President issues a decree declaring the immediate enforceability of the award in Italy. An objection may be filed against the decree, initiating full cognisance proceedings. The grounds on which the Court of Appeal may refuse recognition are exhaustively listed in Article 840 of the Code of Civil Procedure, which mirrors Article V of the New York Convention.

Italian courts apply a pro-enforcement approach consistent with international standards.

Once declared enforceable in Italy, foreign judgments and awards are treated as equivalent to an internal judgment or award for the purposes of taxation and are therefore subject to:

• a tax equal to 1% of the amount assessed when they contain the assessment of rights of a financial nature; or
• a tax equal to 3% of the amount declared due when they contain an order for payment of money (Article 8, Annex A, Tariff, Part I, Presidential Decree No. 642/1972).

In any case, the principle of joint and several liability between the disputing parties for payment of the tax applies.

Once a foreign judgment or arbitral award is declared enforceable, it can be enforced in Italy in the same way as any domestic decision. Enforcement is governed by the Italian Civil Procedure Code.

In particular, the forms of enforcement that may be carried out on the basis of a judgment or an arbitral award declared enforceable are:

• Movable property enforcement at the debtor’s premises, which concerns movable assets located in places belonging to the debtor;
• Real property enforcement, concerning the debtor’s immovable (real estate) assets; and
• Third-party enforcement, concerning the debtor’s claims against third parties (e.g. salary, rental payments, or sums deposited in a bank account) or movable assets belonging to the debtor but held by third parties.

Pending the formal proceedings for recognition provided for by Article 67 of Law No. 218/1995, it is possible to obtain interim relief, provided that the prerequisites requested by Italian laws are met (i.e. periculum in mora and fumus boni iuris).

In general, while enforcement proceedings are still pending, the interested party can start a conservatory seizure (Article 671 of the Italian Civil Procedure Code) or ask for urgent measures (Article 700 of the Italian Civil Procedure Code).

Proceeding on the assumptions outlined in the Model Answer, would a court in this jurisdiction recognise and enforce the arbitral award under the New York Convention?

In particular:

• Does the award fall within the scope of Article V(1) of the Convention, or would any of the grounds in Article V(1) justify refusal on the assumed facts?
• Is the subject matter of the dispute capable of settlement by arbitration under domestic law for the purposes of Article V(2)(a)?
• Would recognition or enforcement of the award be contrary to public policy within the meaning of Article V(2)(b)?

Response

Although the clause’s structure is atypical and could give rise to interpretative challenges, an Italian court would most likely recognise and enforce an arbitral award rendered on its basis.

Italian courts, consistently with their pro-arbitration stance and the restrictive interpretation of the grounds for refusal under the New York Convention of 10 June 1958, would likely acknowledge the effectiveness of the clause as an instrument designed to facilitate the international enforcement of monetary obligations already established by a court judgment. Indeed, the general governing principle is that of favor arbitratis, which leads courts to interpret arbitration agreements in a manner that preserves their validity and effectiveness, subject only to limited exceptions.

In light of the atypical nature of the clause at issue, the enforcement in Italy of the arbitral award resulting therefrom must be carefully assessed with reference to two potential grounds for refusal set out in Article V of the New York Convention and Article 840 of the Italian Code of Civil Procedure.

The first potential ground for refusal could concern the arbitrability of the dispute under Italian law. Indeed, under Italian law, arbitration is permitted only for disputes that do not concern non-disposable rights (Article 806 of the Italian Code of Civil Procedure). However, the Italian Supreme Court has consistently affirmed that arbitrability is the rule, while non-arbitrability is the exception, limited to cases involving non-disposable rights or an express statutory prohibition (Court of Cassation No. 9434/2023). In our view, therefore, a monetary claim — even where established by a final court judgment — remains a disposable right.

The second potential ground for refusal could relate to a violation of public policy. However, a clause that limits the arbitrator’s mandate to verifying the existence of a final judgment and the debtor’s failure to comply with it, without reopening the merits of the dispute, may be regarded as valid, as it does not infringe the principles of res judicata or ne bis in idem. Indeed, this would amount to a claim for mere declaratory relief, which can validly be submitted to arbitration. In fact, the type of relief sought (whether declaratory or condemnatory) does not, in itself, affect the arbitrability of the dispute, which instead depends on the nature of the underlying right.

As regards an order to provide security, when such an order is included in the final award, it is enforceable in the same manner as any other monetary obligation imposed by the award. Similarly, no issues arise as to the recognisability of the award insofar as it orders the payment of interest on unpaid amounts.

If, however, the decision containing the order to provide security qualifies merely as a provisional or interim measure, intended to temporarily regulate the parties’ relationship pending the final decision on the merits, it is by its nature non-binding. Such orders are typically revocable and modifiable by the arbitral tribunal in the course of the proceedings. In this case, the measure would not satisfy the requirement of “binding effect” under Article 840, par. 3, no. 5, of the Italian Code of Civil Procedure. As it does not constitute a final decision on (even part of) the dispute, but rather a temporary procedural instrument, it cannot be subject to recognition and enforcement proceedings applicable to foreign arbitral awards. Its effects are confined to the arbitral proceedings themselves.

The situation is different where the measure at issue, although not resolving the entire dispute, qualifies as a partial award. This would be the case where the decision on the amount ordered as security is not temporary but final and binding with respect to a portion of the claim. Such a partial award is recognisable in Italy pursuant to the principle of separability (or severability) of arbitral decisions, as codified in Article 840, par. 3, no. 3 of the Italian Code of Civil Procedure.

With regard to the validity of the above-mentioned arbitral clause under Italian domestic arbitration law, should the arbitration be seated in Italy, we believe that the clause may, at least in part, give rise to doubts as to its validity.

The finality of a judgment (i.e. its having become res judicata) is a procedural quality that a decision acquires pursuant to specific procedural rules, once it is no longer subject to ordinary means of appeal. This is therefore a purely legal determination, based on mandatory provisions of the Italian Code of Civil Procedure. Such an assessment does not amount to a true “dispute” between the parties concerning a disposable right, but rather to a mere verification of the procedural status of a judicial decision. Entrusting an arbitrator with the power to “ascertain”, with binding effect, whether a judgment has become final appears extraneous to the typical function of arbitration, which is to resolve a dispute by rendering a decision — whether condemnatory or declaratory — on the parties’ substantive rights, but not on the res judicata status of a judicial ruling. Indeed, if a judgment is deemed final under Italian law, but the arbitral award was instead to conclude that the judgment is not final, this could give rise to an irreconcilable conflict between the two decisions.

By contrast, the determination of whether a sum awarded by a judgment has not been paid entails the verification of a factual circumstance, namely, the debtor’s non-performance. On the one hand, a creditor holding a final condemnatory judgment (Italian or recognised in Italy) would not require a further arbitral determination in order to commence enforcement proceedings, as the judgment itself constitutes an enforceable title for purposes of attachment. On the other hand, the assessment of whether the debtor has failed to comply with the obligation imposed by a condemnatory judgment — unlike the determination of the judgment’s finality — cannot be resolved automatically through the mere application of procedural rules, but may give rise to a dispute between the parties and necessarily requires a factual assessment by the arbitrator. For this reason, this part of the clause may be considered legitimate and valid under Italian law.

As for the provision allowing the arbitrator to issue an order requiring the payment of a sum by way of security, this does not appear problematic under Italian law where it takes the form of a final and definitive ruling contained in the award, and — subject to certain conditions — even where it constitutes an interim measure issued during the proceedings. Indeed, following the reform introduced by Legislative Decree No. 149/2022, Article 818 of the Italian Code of Civil Procedure provides that the parties may confer upon arbitrators the power to grant interim measures, either directly or by reference to arbitral rules, through the arbitration agreement or a written agreement entered into prior to the commencement of the arbitral proceedings. In such cases, an application for interim relief may be submitted to the competent state court only before the sole arbitrator has accepted the appointment or the arbitral tribunal has been constituted. Accordingly, where the parties have conferred upon the arbitrators the power to grant interim measures in their arbitration agreement (or in a subsequent written agreement), the arbitrators may issue an order requiring a party to pay a specific amount by way of security. If the party against whom the order is issued fails to comply voluntarily, the beneficiary party must apply to the competent court for its enforcement, in accordance with the rules of the Italian Code of Civil Procedure.