Italy: The Italian Court Of Cassation Has Ruled Again On The Validity Of An Arbitration Clause Referred To In A Bill Of Lading

The Italian Court of Cassation has decided again on the validity of an arbitration clause referred to in a bill of lading.

In the case brought to the attention of the Supreme Court, the bill of lading contained a general reference to the terms and conditions of the transport contract, which included, among other things, an arbitration clause. The dispute arose from the fact that neither the transport contract nor the bill of lading had been signed by both parties.

Courts have already repeatedly dealt with said issue and this ruling confirms once again their consolidated position.

Italian case law, in assessing the validity of arbitration clauses referred to in bills of lading, considers first of all the legal nature of the latter. A bill of lading, being a credit instrument representing the goods transported, is a unilateral deed, drafted (only) by the carrier, which is normally not signed also by the person interested in the cargo.

Therefore, according to Italian case law, the bill of lading cannot satisfy the requirements of Article II of the New York Convention on the recognition and enforcement of foreign arbitral awards¹, which provides that, in order for an arbitration clause to be valid, the relevant agreement must be signed by both parties to the contract of carriage.

So, when the arbitration clause is inserted directly in the bill of lading, the verification of the existence of the formal requirements established by the New York Convention must be carried out on the title that includes a bilateral agreement and this can only be the underlying transport contract.

In this case, it can be assumed that it is not necessary to verify the consent of the shipper when issuing the bill of lading, since it is sufficient that the arbitration clause included in the bill of lading is accepted by the shipper upon conclusion of the transport contract.

As mentioned, the dispute at issue arose from the fact that the parties had not signed the transport contract containing the arbitration clause. Therefore, the Court of Appeal upheld the theory of the shipper, which maintained the non-existence of a written agreement necessary for the recognition in Italy of the award issued on conclusion of the arbitration carried out on the basis of the arbitration clause. Indeed, the arbitration clause was only referred to in the bill of lading, which was signed only by the master of the vessel and not also by the shipper.

According to the Supreme Court, "the signing of the bill of lading, although implying the recipient's acceptance of the maritime transport contract, cannot be considered, per se, as acceptance of an arbitration clause for foreign arbitration unless express and specific reference is made to said clause, since such an agreement must be stipulated in writing"².

Said approach has been corroborated also by the European Court of Justice³, which decided to exclude that a unilateral deed, such as a bill of lading, may be taken as evidence of waiver of jurisdiction when other circumstances show that the agreement was not expressly accepted by the parties.

The European Court further clarified that the bill of lading would be sufficient evidence of the waiver agreement provided that it is reasonable to believe that a previous written contract to that effect was concluded between the parties, also in consideration of commercial practices relating to a given field. This does not exclude that the actual consent of the parties with respect to the referral to arbitration of any disputes must anyway be sought.

Said approach is also accepted by legal doctrine, according to which evaluations should not be based on formal criteria only. This also with a view to balancing the needs for protection of the user of maritime transport and the simplification of commercial bargaining, where the criterion of reasonableness is often sought.

In light of the above, one can understand the reasoning of the Supreme Court, which in the absence of a contract signed by both parties, has decided to confirm the ruling by the Court of Appeal of Turin as to the lack of the necessary requirements of written form for the purposes of the declaration of enforceability of the aforementioned arbitration award.

This ruling can act as a reminder for all the operators of the sector who wish to refer any disputes to arbitration. It is important to remember to include the arbitration clause in the transport contract and to make sure that the same is signed by both parties. In fact, the mere inclusion of the arbitration clause in the bill of lading is not sufficient since, normally, the latter is not signed by both parties.

Footnotes

1 Cfr. Art. II, par. 1, "1. Each Contracting State shall recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration".

2 Cfr. Court of Cassation, 19.9.2017, No. 21655

3 Cfr. ex multis Court of Justice, 14 December 1976, case 24/1076, Ditta Estasis Salotti c. Ruwa Polstereimaschinen GmbH; Court of Justice, 16 March 1999, case C-159/97, Trasporti Castelletti Spedizioni Internazionali S.p.A. c. Hugo Trumpy.

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