With Ruling No. 31350/22, filed on 24 October 2022, the First Civil Section of the Court of Cassation returned to rule on the interpretation and scope of arbitration clauses included in contracts.
In the case submitted to the Court's consideration:
– the literal wording of the clause was the following: “Any dispute that may arise with regard to this contract, either with regard to its interpretation, or individual clauses, or with regard to its performance, shall be decided by an arbitration board”;
whereas
– the claim brought before the arbitral tribunal was for compensation for non-contractual damages, albeit related to the performance of the contract in which the arbitration clause was included.
The arbitration award (pronounced in November 2013 and awarding damages) was appealed by the losing company before the Court of Appeal on various grounds, including, primarily, the lack of jurisdiction of the arbitrators (who had ruled outside the limits of the arbitration clause).
The Court of Appeal held, however, that the issues of non-performance, termination and compensation for damages were also within the scope of the arbitration clause and therefore dismissed the appeal.
Almost ten years after the award, the Supreme Court ruled in favor of the plaintiff, excluding the arbitrators' jurisdiction to rule on the claim.
The judges held, in fact, that the arbitration clause that generically refers to disputes arising from the contract must be interpreted, in the absence of an express intention to the contrary, as meaning that only disputes having their ground (“causa petendi”) in the contract itself, shall fall within the jurisdiction of arbitration.
Since the action brought before the arbitral tribunal was an action in tort (and, therefore, referring to the contract only as historical background, but not as its basis), the Court held that the jurisdiction of the arbitrators did not exist.
In support of its ruling, the Court of Cassation then referred to:
– Cass. No. 23088/2007, according to which the clause deferring to arbitrators the disputes concerning the interpretation and performance of the contract is not applicable to the claim for damages. However, when there are several related claims, with only some falling within the jurisdiction of arbitration, the latter is absorbed and excluded by the ordinary jurisdiction;
and
– Court of Cassation No. 3795/2019, according to which, in the absence of an express intention to the contrary, an arbitration clause must be interpreted as attributing to arbitral jurisdiction all disputes that have their ground (“causa petendi”) in the contract in which the clause is inserted.
The wording of the arbitration clause is therefore of decisive importance in determining the jurisdiction of the arbitrators.
This was also recently pointed out by the Section Specialized in Corporate matters of the Court of Milan, which, in its ruling of 8 January 2020, held that a dispute of extra-contractual nature was also within the scope of arbitration by virtue of the wording of the arbitration clause included in the contract (which reads as follows: “any dispute, controversy or disagreement shall be settled by arbitration in Milan in accordance with the rules established by the Chamber of Arbitration of Milan, of which the parties acknowledge that they are aware. The board will be composed of three arbitrators appointed by the Arbitration Chamber.”)
Therefore, “Rem tene, verba sequentur” (i.e. ‘focus on the concept, words will follow', cit. Catone).
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