Italy: Arrest Of Ships In Italy (Part I)

Power of attorney

The filing of a lawsuit, the presentation of an application as well as any legal activity before major Italian Courts are made by a solicitor by virtue of a power of attorney issued in his/her favor.

Powers of attorney issued outside Italy must be legalized and apostilled pursuant to Hague Convention 5 October 1961 (ratified by Italy by law 20 December 1966 n. 1253), or alternatively legalized by the Italian Embassy or Consulate in the country of issuance.

Italian Courts are quite demanding in assessing the validity of powers of attorney issued abroad, it is therefore important to make sure that all formal requirements are duly met: the validity of powers of attorney has been, for instance, excluded in cases where the Notarization was made at a time and a place different than the ones of signature.1

The apostille is unnecessary, though, for powers of attorney released in countries party to the Brussels Convention 1987 which abolished the need of the apostille for deeds issued inside the EU, which has been ratified to date by Belgium, Denmark, France, Ireland and Italy; the apostille may be furthermore excluded by virtue of bilateral agreements.

Italian solicitors have the authority to legalize powers of attorney issued before them, provided that they have had the opportunity to identify the party signing the deed.2

In arrest or urgent proceedings an option is furthermore provided by article 77 c.p.c. which permits the possibility of an agency appointment, generally made in practice by appointing (by fax or e-mail) as agent for urgent matters (including the one for which the measure is sought) a lawyer who in turns appoints (usually) another lawyer of the firm as attorney in law. A formal duly legalized power of attorney is often disclosed at a later stage in order to prevent exceptions and technicalities.

Procedure

Arrest of ships is available in a wide variety of situations, including claim for damage done by or suffered to a vessel, claims for goods, bunker or materials supplied to a vessel for its operation or maintenance; the actions can be taken by a bank that has terminated the loan facility and wishes to draw on its mortgage, crew members that have outstanding wages, cargo interests and insurers for claims for loss of - or damage to - the goods.

Arrest is admitted regardless of the fact that Italian Courts have jurisdiction for the merits of the case: the Italian Court competent for the arrest is the Court of the port of call, and the application is subject to the condition that the vessel is within Italian territorial waters.3

Italian Courts normally grant the arrest of ships ex parte (provided they are satisfied with the prima facie evidence of the ground of the claim) upon presentation of the application, setting the hearing for the appearance of the parties (normally within a short term).

In non maritime arrest proceedings the judge summarily examines the request and grants the measure if the claim brought is at first glance well grounded ("fumus boni iuris") and the applicant proves that it is exposed to damages beyond repair during the course of the ordinary proceedings ("periculum in mora").

The requirement of the periculum in mora is generally not requested for maritime arrest, though, at least in case the arrest is sought pursuant to Brussels Convention 1952, on the ground that the Convention does not contemplate such a requisite.

The Court may alternatively issue an order preventing the vessel from leaving pursuant to article 646 Navigation Code: the order does not state the quantum for which the arrest is granted and is not, strictly speaking, an arrest, but has in practice the same effects.4

Unlike other legal systems, no security is required as a preliminary condition to seek an arrest of ship. The Judge may order the applicant to tender a countersecurity, although this is rather uncommon at the time of the filing of the application, and a security is normally requested only where the Court considers that the arrest is controversial or the merits of the claim have not been assessed with sufficient depth.

Where the arrest is obtained and confirmed, the applicant is compelled to commence the proceeding for the merits (unless one is already pending) before the Court having jurisdiction within 30 days.

In case the application is rejected it is possible to file an appeal within 15 days. It is disputed whether an appeal can be pursued once the ship has left Italian waters: the possibility to seek an appeal should be unquestionable under Italian law, but a few decisions have held that an appeal cannot be pursued where the ship cannot actually be placed under arrest.5

If the claim is subject to foreign law and jurisdiction (for instance, where the arrest is sought as security for a claim arising from a charter party containing an English law and jurisdiction clause) the applicant is required to provide suitable evidence of the ground of the claim: this could be provided for example by means of affidavits or disclosing foreign authorities and case-law proving the grounds for the claim.

A peculiar position exists for arrests aimed at securing the successful enforcement of arbitration awards or foreign judgments: jurisdiction for the exequatur is in the Court of Appeal, and the position often expressed by Italian Courts6 is that an arrest preceding the exequatur should be sought before the Court having jurisdiction for the recognition of the award or the judgment. This may have (and frequently has in fact) practical pitfalls, since it may turn out quite complex to obtain an order of arrest from the Court of Appeal at the speed normally allowed by Tribunals.

Italian Courts have started in the last few years (and in very few cases) to recognize the possibility of lifting the corporate veil, but this is quite exceptional, and the burden of proof resting on the applicant is severe. Italian law is indeed very strict in the definition of ownership in the context of companies and in applying the principle of autonomy of companies which are distinct and separate entities. As a result Italian Courts are reluctant to pierce the corporate veil, and the applicant intending to do so must be able to prove that the company structure has been actually created or employed with the purpose to frustrate creditors' actions.

Footnotes

1 Cassazione n. 3410/2008 Media Barter c. Cairo Communication; Cassazione n. 13228/2008 Tomoana Pelt Processors Ltd c. Conceria Pellami Gasm.

2 Cassazione n. 5840/2007, Alpina Versicherung A G c. Royal & Sun Alliance.

3 Court of Venice, 25 August 2001, El Sayed Aly Alla c. Sayed Nasr Navigation Lines

4 Court of Venice, 5 June 1998, TMB c. Dal Bon

5 Court of Gorizia, 25 May 2006, Stx Pan Ocean co. ltd. c. Adam Swoboda

6 Court of Gorizia, 2 May 1998, Ministero trasporti ucraino c. Pied Rich BVA. Court of Appeal of Genoa, 12 February 2000, Morsviazputnik Satellite Navigational c. Azov Shipping co.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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