Even though political debates have focused for years on the issue of shortening the duration of trials in court proceedings, statistics indicate that Italy is still one the EU countries with the longest length of trials. For this reason, the use of arbitration seems to be an increasingly preferable option.
1. LEGISLATIVE FRAMEWORK
1.1 Code of Civil Procedure - Book IV, Title VIII, Articles 806-840 (CPC)
1.1.1 Arbitration in Italy is governed by the CPC rules, which are structured as follows.
Chapter I
1.1.2 Articles 806-808 (quinquies) provide general rules on the arbitration agreement (i.e. formal requirements, arbitrability, effects and interpretation of the arbitration agreement) as well on the so called arbitrato irrituale or free arbitration.
Chapter II
1.1.3 Articles 809-815 concern the arbitrators - ie number, appointment, replacement, incapacity, acceptance, forfeiture, liability, rights and challenge of the arbitrators.
Chapter III
1.1.4 Articles 816-819 provide details on arbitration procedure - ie seat of arbitration, procedural rules, evidence and stay of the proceedings.
Chapter IV
1.1.5 Articles 820-826 deal with the award - ie timing, content, effects and correction.
Chapter V
1.1.6 Articles 827-831 deal with challenging the award - i.e. grounds for setting aside, appeal, revocation and third-party opposition).
Chapter VI
1.1.7 Articles 832 governs international arbitrations pursuant to established arbitral rules - eg Associazione Italiana per l'Arbitrato Regulations, ICC Arbitration Rules, etc.
Chapter VII
1.1.8 Articles 839-840 govern the recognition and enforcement of foreign awards and the procedure for resisting such recognition and enforcement.
1.2 Historical background
1.2.1 In order to modernise the procedure and incorporate the terms of several international conventions ratified by Italy, the provisions of the CPC were amended by three important laws.
Law 9th February 1983, No. 28 (1983 Reforms)
1.2.2 The 1983 Reforms represented the first attempt to reduce the rigidity of the CPC by removing the requirement for Italian nationality as a precondition for appointment as an arbitrator in Italy.
Law 5th January 1994, No. 25 (1994 Reforms)
1.2.3 The 1994 Reforms introduced new rules regarding international arbitration in compliance with international conventions and, in particular, with the New York Convention.
Legislative Decree 2nd February 2006, No. 40 (2006 Reforms)
1.2.4 The 2006 Reforms were a re-draft of the previous CPC provisions on arbitral proceedings. The aim of the 2006 Reforms was to promote and improve recourse to arbitration as an attractive alternative to litigation.
2. SCOPE OF APPLICATION AND GENERAL PROVISIONS
2.1 Subject matter
2.1.1 The CPC applies to all arbitral proceedings which take place in Italy, unless otherwise agreed by the parties. The CPC also contains provisions regarding the recognition and enforcement of awards rendered by arbitral tribunals seated outside Italy.
2.1.2 The CPC applies different rules depending on the type of arbitration.
Domestic arbitrations
2.1.3 The statutory rules governing domestic arbitrations apply when the seat of the arbitration is in Italy and both parties are Italian.
International arbitrations
2.1.4 International arbitrations are governed by the provisions of applicable international regulations chosen by the parties, as no specific provision is provided by the CPC. However, when the seat of arbitration is outside Italy, or the award is rendered outside Italy and the recognition and enforcement is required in Italy, certain provisions of the CPC can be invoked. In these cases, the arbitration will be considered international even if one of the parties is Italian or Italian law has been chosen to govern the dispute between the parties.
2.1.5 In addition to the above, the Italian system distinguishes between arbitrato rituale and arbitrato irrituale. The 2006 Reforms expressly introduced the right for the parties to resort to arbitrato irrituale proceedings and established a right for parties to submit non-contractual disputes to arbitration, known as arbitrato extracontrattuale.
Arbitrato rituale or ordinary arbitration
2.1.6 Arbitrato rituale is the ordinary type of arbitral proceedings governed by the CPC rules.
Arbitrato irrituale or free arbitration
2.1.7 Arbitrato irrituale is an alternative arbitral procedure which does not result in an enforceable award. Rather, an arbitrato irrituale award is binding on the parties in the same way as a contract.
2.1.8 The parties must specify in writing if the arbitration is to be an arbitrato irrituale. If the arbitration agreement does not specify the nature of the arbitration (rituale or irrituale) the arbitration will be deemed to be arbitrato rituale.
2.1.9 The arbitration agreement can provide that the arbitral tribunal must make a decision based on either law or ex aequo et bono principles. The parties can decide the procedural rules to be followed by the arbitral tribunal. The procedural rules in arbitrato irrituale are usually simpler than in arbitrato rituale but, due to the adversarial nature of the proceedings, both parties have the right to be heard and to submit documents and claims.
2.1.10 The award issued in an arbitrato irrituale can be challenged only on the following grounds:
- the arbitration agreement is void;
- the arbitral tribunal exceeded the scope of the arbitration agreement and this issue was raised as an objection during the arbitral proceedings;
- the arbitrators were not appointed in accordance with the provisions of the arbitration agreement;
- incapacity of the arbitrators;
- the arbitrators breached their duties; and
- violation of the rule audi alteram partem.1
2.1.11 Arbitrato irrituale awards can be challenged by applying to the competent court of first instance.
2.1.12 If a party does not comply with an arbitrato irrituale award, the other party can commence an action before the competent court of first instance for breach of contract.
Arbitrato extracontrattuale or arbitration on matters not provided for in a contract
2.1.13 The 2006 Reforms of the CPC rules introduced the possibility of referring all future disputes to arbitration which may arise from one or more given relationship not provided for in a contract.2 Indeed, by way of this new rule, a third type of arbitration (other than arbitrato ritual and irrituale) was introduced. The parties are entitled to refer the dispute to arbitrators regardless of whether they are bound to each other by a contract. Such cases could occur, for example, in disputes concerning real rights, such as boundary regulations, neighbourliness or joint ownership.
2.2 General principles
2.2.1 The CPC rules provide certain general principles, which only apply to arbitrato rituale proceedings.
Due process
2.2.2 The parties are entitled to equal treatment by the arbitral tribunal and must be given the opportunity to submit their requests and be heard under the same conditions. Infringement of this principle is a ground for annulment of the award3. Moreover, the arbitral tribunal has a general obligation to be impartial.4
Autonomy
2.2.3 The parties are free to agree on the subject matter of the dispute they wish to refer to arbitration, as well as on the choice of arbitrator(s), rules of procedure, seat of arbitration, applicable law, etc. The parties' autonomy is limited by certain mandatory statutory rules and matters on which national courts have exclusive jurisdiction - ie disputes concerning matters which cannot be submitted to arbitration such as personal status, marital status, judicial separation, divorce as well as national insurance contributions (see paragraph 3.3 below).
Non-intervention by the courts
2.2.4 As a general principle, national courts cannot intervene in arbitral proceedings, except as expressly provided for in the CPC.
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Footnotes
1. CPC, art 808 ter, para 2.
2. Ibid, art 808 bis.
3. Ibid, art 829.
4. Ibid, art 829 and 815.
Originally published 2 June 2020
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.
