International arbitration is an effective means to resolve disputes between two or more parties from different countries without resorting to national courts.
In the context of international arbitration, precautionary measures serve to preserve the rights and interests of the parties involved through the adoption of urgent measures.
In Italy, the possibility for arbitrators to issue provisional measures has for years been a very limited exception, relating only to the so-called corporate procedure.
The reform, which came into force on February 28, 2023 (known as the Cartabia Reform), has finally made it lawful for arbitrators to issue precautionary measures.
The singular and general prohibition, unique in Europe, present in Italian legislation, was one of the most anomalous characteristics of Italian arbitration law.
After the fall of the anachronistic prohibition of granting provisional measures to arbitrators and arbitral tribunals seated in Italy, the country aspires to become a favorable jurisdiction for international commercial arbitrations.
The Importance of Italy for Arbitrations
According to statistics released by the International Chamber of Commerce – ICC, the largest world business organization, Italian parties involved in international arbitration proceedings always represent large numbers.
In 2020, Italy, along with France, was the fourth most represented nationality among the parties in the arbitrations of the ICC International Court of Arbitration, after the United States, Brazil, and Spain.
For such Italian companies, the choice of a foreign seat for the arbitration almost became obligatory, also due to the impossibility of obtaining precautionary measures from the arbitrators.
Precautionary Measures, Only If There is a Will of the Parties
The reform of the Code of Civil Procedure has provided that arbitrators have the power to adopt precautionary measures, but only if the parties express themselves positively in this regard.
"The parties, also by referring to arbitration regulations, can give arbitrators the power to grant precautionary measures with the arbitration agreement or with a written act prior to the establishment of the arbitral proceedings" (Article 818 C.p.c.).
Such will can be therefore manifested in the arbitration agreement (compromise), a written act subsequent to the emergence of the dispute or in the arbitration clause.
Precautionary measures can only be issued if the route of regular arbitration is chosen and therefore if at the end of the arbitration there is an enforceable award (judgment).
The reform excludes from its scope the "Irregular arbitration" (see Regular and Irregular Arbitration: how they work and differences).
Requirements for the Request of Precautionary Measures
The request for precautionary measures in international arbitration must satisfy a series of requirements, including:
- existence of fumus boni iuris, that is the apparent soundness of the claim;
- verification of periculum in mora, that is the risk that, in the absence of precautionary measures, the requesting party suffers irreparable prejudice.
The request for precautionary measures must be submitted to the arbitrator before the appointment of the arbitral tribunal or, if not, within a reasonable time from the appointment.
Who is Responsible for Supervising the Execution of Measures?
In the reform of the Code of Civil Procedure, the execution of precautionary measures issued by arbitrators is carried out under the supervision of the court in whose district the seat of the arbitration is located.
If the arbitration does not have its seat in Italy, the execution will take place under the supervision of the court of the place where the precautionary measure must be executed.
The enforcement procedure will follow the same rules applicable to provisional judicial orders issued by Italian judges.
For provisional judicial measures, the competence of supervision belongs to the same judge who issued the order, while for provisional arbitral measures issued by arbitral tribunals, with their seat in Italy, the enforcement procedures are the prerogative of the court of the seat of the arbitration.
The execution of foreign provisional arbitral measures in Italy will be verified by the judge of the place where the measure must be executed.
Provisional Measures Issued by Foreign Arbitral Tribunals
Concurrently with the revocation of the general prohibition of provisional arbitral measures, a mechanism has also been envisaged to execute in Italy the provisional measures issued by arbitral tribunals with their seat abroad: this is, specifically, Article 818-ter of the Code of Civil Procedure.
Against the precautionary measure, an appeal can then be proposed before the competent Court of Appeal for the reasons referred to in Article 829, 1st paragraph, and contrary to public order, in order to avoid and limit, interference by the judicial body.
Examples of Precautionary Measures in International Arbitration
Precautionary measures in arbitration are temporary decisions made by the arbitral tribunal in order to protect the rights of the parties involved during the proceeding.
Such measures are often necessary to avoid irreparable damage or to ensure the effectiveness of the arbitration itself.
Arbitrators can adopt any type of precautionary measure just like robed judges.
On this point, the legislator has indeed not established limits to their type.
Based on the specific circumstances of the dispute, one can proceed with an injunction, the seizure of assets, an order not to alienate certain assets, the protection of trade secrets...
In the context of precautionary measures, the International Chamber of Commerce – ICC with its specific rules, offers a clear and effective framework to ensure that such measures are timely, fair, and efficient, thus contributing to the overall success of the international arbitration process.
The reform of Italian arbitration seems to finally meet the needs of arbitration users, aligning Italian arbitration law with international standards.
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.
