A recent decision of the Italian Supreme Court1
confirms that judgments awarding punitive damages are
non-enforceable in Italy, because they are contrary to public
The Court of Appeal of Turin had granted the enforcement in
Italy of a judgment of the Supreme Court of Cambridge,
Massachusetts, ordering an Italian company to pay damages up to $8
million in favor of an employee who had suffered serious injuries
following an accident which had taken place inside the
defendant's U.S. subsidiary.
The judgment did not contain a specific reference to punitive
The Court of Appeal of Turin had considered the reasonability
and fairness of the quantum awarded in favor of the plaintiff in
consideration of the seriousness of the injuries suffered by the
employee, with no consideration though of the criteria
traditionally adopted by Italian Courts when assessing and
liquidating compensatory damages, and despite the fact that the US
decision did not contain any indication of the criteria followed
for the quantification.
The Italian defendants have appealed the enforcement order, and
the Supreme Court overturned the ruling, on the grounds that the US
decision awarded punitive damages and the Italian civil liability
system is strictly compensatory, not punitive.
The decision confirms the stance the Italian Court of Cassazione
has adopted for several years.
The leading case is the judgment2 whereby the
Cassazione confirmed the decision of the Venice Court of Appeal,
which had refused to enforce a judgment of the Federal District
Court of Alabama awarding damages in favor of the parents of a
young motorcyclist who had died in an accident due to the alleged
failure of the helmet buckle, which had been manufactured in Italy.
The Venice Court held that the award was punitive in nature, and
was therefore incompatible with domestic public policy.
Here again, the Alabama judgment did not contain an explicit
reference to punitive damages, but the Venice Court identified
several elements which led it to conclude that the decision was in
fact punitive in nature, such as the lack of statement of reasons,
which made it impossible to identify the losses the Court intended
to compensate for and the amount of damages awarded (which were
considerably higher than the sums received by the plaintiff
following settlement agreements with other defendants).
Is it possible to separate the punitive element when
Whilst the position on punitive damages seems now rather
clear-cut, it is worth noting that an approach sometimes adopted by
Italian Courts is to grant enforcement of compensatory damages,
refusing however the enforcement of punitive elements.
An interesting decision in this respect is the judgment of the
Court of Appeal of Trieste3 where the Court was
requested to grant a conservatory arrest aimed at securing the
recovery of a claim awarded by a Turkish judgment.
The Trieste Court ruled that the decision of the Court of
Istanbul was indeed enforceable, save for the part where the
judgment had awarded interests which would have been usurious under
The Court therefore granted the arrest up to the amount
coinciding with the capital sum, on the grounds that the plaintiffs
would subsequently seek the enforcement of the Turkish judgment for
capital alone, leaving aside interest.
The decision confirms an approach the Italian Court of
Cassazione has adopted for several years in regard to enforcement
of foreign judgments awarding punitive damages.
These judgments are generally found non-enforceable, since they
are incompatible with public policy.
However, it is possible (at least in light of a few recent
decisions) to seek the enforcement of a judgment awarding punitive
damages when purely compensatory damages can be separated from the
punitive element, and the enforcement can be therefore sought if
punitive damages are set aside.
The English court has recently clarified the principles of the duty to mitigate loss. The decision in Thai Airways International plc v KI Holdings Co Ltd  EWHC 1250 (Comm) highlights why an innocent party should carefully consider their options when faced with another party's breach of contract.
International Private and Procedure Law No. 5718 ("IPPL") allows parties to a contract bearing a foreign element freely choose the governing law to be applied to disputes arising out of such contract...
Obtaining a favorable foreign judgement or arbitration award is only a half of a battle in any international dispute, as it is more important to have those rulings enforced.
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