Commercial Arbitration

Last verified on Thursday 20th May 2021

Commercial Arbitration: Italy

Roberto Leccese, Luigi Cascone and Flavio Rodi

Ughi e Nunziante

Infrastructure

1. Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?

Italy

Yes, Italy ratified the New York Convention on 19 January 1968 with Law No. 62 of 19 January 1968, without any reservations. 

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

2. Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?

Italy

Yes, Italy also ratified:

  • the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards;
  • the 1961 European Convention on International Commercial Arbitration; and
  • the 1965 Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States. 

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

3. Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?

Italy

The main rules that govern arbitration proceedings are provided by articles 806–840 of the Italian Civil Procedure Code (ItCPC).

These rules apply to arbitration proceedings that have their seat in Italy, without prejudice to international conventions in force and insofar as the parties have not adopted specific rules, including by reference to institutional arbitration rules.

Italian rules are not based on the UNCITRAL Model Law, although they do not substantially differ from it. Notably, after a reform enacted in 2006, there is no longer a substantial distinction between domestic and international arbitration.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

4. What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?

Italy

The most important Italian arbitration body with international relevance are the Milan Chamber of Arbitration, related to the Milan Chamber of Commerce (CAM) and the arbitration body of the Associazione Italiana per l’Arbitrato (AIA).

CAM adopted the currently in force Arbitration Rules in 2019 (these rules entered into force on 1 July 2020 and include the new Simplified Arbitration Procedure). Such rules are suitable both for domestic and international proceedings, including proceeding having their seat abroad.

This institution may act as an appointing authority, including for ad hoc arbitral proceedings under the UNCITRAL Arbitration Rules.

The other arbitration body with international relevance, the AIA, on 14 September 2020 resolved that it will no longer administer arbitration proceedings.

AIA adopted its new Arbitration Rules, which clarify that the arbitration proceedings already pending on 21 October 2020 will be governed by AIA Arbitration Rules in force when the arbitration proceedings were initiated, unless the parties decide otherwise, while the arbitration proceedings initiated after 21 October 2020 will be administered by CAM and will be governed by CAM Arbitration Rules.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

5. Can foreign arbitral providers operate in your jurisdiction?

Italy

Yes; many Arbitration Proceedings are administered in Italy by foreign arbitration institutions such as the ICC International Court of Arbitration, LCIA or under the Swiss Rules.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

6. Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with, and supportive of, the law and practice of international arbitration?

Italy

There is no specialist arbitration court in Italy. However, national courts may provide assistance to the parties and to arbitral tribunals with regard to the appointment of arbitrators, the grant of interim measures, the collection of evidence and enforcement of domestic awards.

Courts of Appeal have jurisdiction for the challenge of domestic arbitral awards and for the recognition and enforcement of foreign awards.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Agreement to arbitrate

7. What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?

Italy

Pursuant to articles 807 and 808 of the ItCPC, both arbitration agreements and arbitration clauses must be made in writing. Agreements exchanged by fax, telegraph, telex or telematic message (including emails) are expressly deemed as being in written form for this purpose.

In addition to being in written form, in the case of an arbitration agreement, the parties must also specify the subject matter of the dispute. As far as arbitration clauses are concerned, particular attention should be paid to clauses included in contract forms. In such cases, the arbitration clause is not enforceable if it has not been specifically and expressly approved by the parties. This means in practice that the contract must contain a separate space for signature making express reference to the arbitration clause or reproducing it.

Arbitration clauses contained in a company’s by-laws or deeds of incorporation are valid only if the appointment of all the arbitrators is deferred to an impartial body.

Future disputes, including non-contractual disputes, can be covered by arbitration agreements.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

8. Are any types of dispute non-arbitrable? If so, which?

Italy

As a general principle, only disputes which concern non-disposable rights are non-arbitrable.

For instance, disputes on certain family law matters (divorces, child custody etc) and, of course, criminal liability matters, are non-arbitrable.

In certain ambits, recourse to arbitration is admitted with certain limits. 

With regard to labour matters, arbitration is normally allowed only if provided for by collective employment agreements and, with limited exceptions, the award will only have contractual effects between the parties (arbitrato irrituale; see question 14).

In the ambit of company law, intra-corporate disputes of non-listed companies may be submitted to arbitration with the exception of certain matters, such as the validity of financial statements. In such a case, the arbitration clause must be included in their deed of incorporation or by-laws.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

9. Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?

Italy

The general rule under Italian law is that a third party is not bound by an arbitration agreement since a strict interpretation of the moral personality applies. Thus, extensions or arbitration clauses to group members are normally excluded unless such entities have accepted it in writing, also by reference, to be bound by such clauses. For assignment of a credit arising from a contract containing an arbitration clause, the assignee cannot prevail itself of the clause while the assigned debtor can force the creditor to arbitrate the dispute.    

The joinder of a third party in the arbitration proceeding is generally admitted only with the agreement between the third party and the parties of the proceedings and the consent of the arbitral tribunal. However, the intervention of a third party is always admitted if such intervention is limited to support the case of one of the existing parties (provided that the third party has an actual interest in the outcome of proceedings) or if the decision cannot be legally adopted without the presence of such party.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

10. Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?

Italy

Italian law does not provide any specific rule with regard to the consolidation of separate arbitral proceedings. However, consolidation is quite common in practice, normally with the consent of the parties. In the case of arbitration proceedings administered by arbitration bodies, consolidation may be ordered by the latter, at certain conditions (eg, article 25 of the CAM Rules). In such a case, since the parties have accepted the institutional rules, consolidation cannot be refused. 

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

11. Is the "group of companies doctrine" recognised in your jurisdiction?

Italy

As already mentioned under question 9, the general rule is that arbitration agreements are binding only on the signatories and group of companies doctrine, alter ego, and similar doctrines are not currently applied in Italy

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

12. Are arbitration clauses considered separable from the main contract?

Italy

Yes; article 808 paragraph 2 of the ItCPC expressly states that arbitration clauses shall be considered separable from the main contract. Therefore, if the contract is invalid, such invalidity does not automatically affect the validity of the arbitration clause contained therein.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

13. Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunals jurisdiction and competence?

Italy

Article 817 of the ItCPC provides that arbitral tribunals shall rule on their jurisdiction and decide on the validity, content and scope of the arbitration clause.

Moreover, pursuant to article 819-ter of the ItCPC, as long as an arbitration proceeding is pending, national courts may not decide whether an arbitration agreement is invalid. On the other hand, the competence of the arbitration tribunal is not excluded, and the arbitration proceeding can be pursued if a case identical or related is already pending before national courts. This asymmetric relationship between arbitration and courts has been adopted to favour arbitration and prevent “torpedo” claims before national courts.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

14. Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?

Italy

Even though defective clauses may still be enforceable due to supplementary provisions of the law, it is always important to include in the arbitration clause at least (i) the number of arbitrators and the procedure for their appointment  (ii) the ambit of the arbitration clause  and (iii) the place of arbitration. Since Italian law also foresees a particular kind of arbitration having only contractual effects (arbitrato irrituale, article 808-ter ItCPC), it also worth clarifying that the parties are opting for a “ritual” arbitration (arbitrato rituale), because only the latter kind results in an award having the same force and effects of a court judgment.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

15. Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?

Italy

As far as international arbitration is concerned, institutional arbitration is more common than ad hoc international arbitration. The situation is different with respect to domestic arbitration, in which case ad hoc arbitration is perhaps a little bit more common than institutional arbitration. In ad hoc international proceedings, UNCITRAL Rules are frequently used.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

16. What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.

Italy

In the case of multi-party arbitration agreement, the law provides for several supplementary rules that help an arbitration be viable in almost all cases. However, it is highly advisable to clarify in the arbitration agreement if the parties involved can be regrouped for the purpose of appointing arbitrators – for instance, because they have the same substantial interests or are part of the same company group – or, if that is not possible, to clarify that the arbitrators shall all be appointed by a third party (eg, an arbitral insitution) if consent cannot be reached among all parties. It is also advisable to clarify whether cross-claims are governed by the same arbitration clause or allowed in the ambit of the same arbitration proceeding.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Commencing the arbitration

17. How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?

Italy

Unless otherwise provided for by the arbitration agreement or the arbitration rules of a specific institution, an arbitral proceeding is commenced by a written notice sent by the claimant to the respondent, containing at least (i) a declaration of its intention to press for arbitration (ii) the essential facts and cause of action supporting the request (with sufficient detail to identify the dispute), (iii) the appointment of its arbitrator if that is possible under the applicable clause. The respondent normally has 20 days from receiving the claimant’s written notice to appoint an arbitrator. If the respondent fails to designate an arbitrator, the claimant is entitled to request the appointment of such arbitrator to the President of the Court of First Instance at the seat of arbitration.

It is worth noting that a request for arbitration lacking the above elements, though it may still be cured, does not produce certain important legal effects such as avoiding the lapse of limitation periods. Furthermore, requests for arbitration concerning disputes of transfer of real estate properties should also be registered with the relevant land registry to be opposable to third parties.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Choice of law

18. How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?

Italy

The substantive law of the dispute is normally determined based on the parties’ express choice. If the substantive law is unclear, the arbitral tribunal enjoys a broad discretion in determining which law is the most appropriate since it is not bound, as national courts would be, by specific conflict of laws rules. However, the arbitrators should take into account the fact that the breach of Italian public order may be a ground for challenge of an award rendered in Italy. 

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Appointing the tribunal

19. Does the law of your jurisdiction place any limitations in respect of a partys choice of arbitrator?

Italy

Parties are entitled to appoint as arbitrator an individual of their choice, but the appointed arbitrator must have the general legal capacity to act (article 812 ItCPC). This, of course, excludes from the range of possible arbitrators only a limited number of subjects, such as minors.  

Members of the judiciary power, public officials and state attorneys cannot in principle accept appointment as arbitrators, with very limited exceptions.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

20. Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?

Italy

Non-nationals are allowed to act as arbitrators in arbitrations with seat in Italy. There is no preclusion to the appointment of foreign or stateless individuals as arbitrators. The rules for entering Italian Republic territory and obtaining a visa are, of course, applicable and may vary depending on the country of residence or nationality of the arbitrator although, in general, the duty to participate as an appointed arbitrator should be considered as a justified reason for the obtention of a temporary visa. No limitation should apply within the European Union since EU-resident arbitrators enjoy full freedom to provide services in any other country of the EU.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

21. How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?

Italy

Several default and supplementary rules may cure defective arbitration clauses or lack of activity from the parties.

If the parties did not agree on the number of arbitrators to be appointed, the arbitral tribunal shall be composed of three arbitrators and, if they fail to appoint the arbitrators or do not agree on the applicable method, they will all be appointed by the President of the Court of First Instance at the seat of the arbitration.

If one party fails to appoint its arbitrator, the other party may request the President of the Court of First Instance at the seat of the arbitration to do it. Similarly, if the parties fail to appoint any of the arbitrators, the appointment may be requested to the court.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

22. Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?

Italy

Arbitrators do not enjoy a particular immunity but their responsibility is still subject to certain limits if compared to other professionals.

In particular, arbitrators are liable for breach of their duties:

  • If the arbitrator fraudulently or due to gross negligence did not carry out or delayed any mandatory acts of the proceeding or resigned from his or her office as an arbitrator without a proper reason;
  • If the arbitrator fraudulently or due to gross negligence did not issue the award within the mandatory term.

Each arbitrator shall be liable only for his or her own actions or omissions.

Apart from the cases outlined above, arbitrators may be liable only for fraud or gross negligence within the same grounds and limits of national judges’ (which is rather limited).

In any event, the arbitrator’s liability for the content of its award may be invoked only if and to the extent the award has been challenged and annulled by a decision having res judicata effects and for the same reasons for which the challenge of the award was upheld. If the arbitrator’s liability is not due to fraud, the compensation for damages shall not exceed three times the arbitrators’ fees.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

23. Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?

Italy

The general rule (article 816-septies ItCPC) is that arbitrators are only allowed to refuse to pursue their work if the parties do not pay an advance for foreseeable expenses to be incurred in the conduct of the proceedings but they cannot do the same for the payment of their own fees, unless such possibility has been provided for by the arbitration clause. Despite this, it is common practice for arbitral tribunals to request an advance on payments of their fees at different stages of the proceeding.

Arbitration institutions, such as CAM, may – and normally do – provide fundholding services and the relevant rules allow the arbitrators not to continue their work if parties fail to pay their advances for both fees and expenses.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Challenges to arbitrators

24. On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?

Italy

Pursuant to article 815 of the ItCPC, an arbitrator may be challenged if:

  • the arbitrator does not have the qualifications the parties have expressly agreed upon;
  • the arbitrator, or an entity, an association or a company where he or she is director, has an interest in the dispute;
  • the arbitrator or his or her spouse is a relative of one of the parties, of the parties’ legal representatives or of the parties’ legal counsel;
  • the arbitrator is linked to one of the parties, or to a company controlled by the parties, etc; or
  • the arbitrator provided legal assistance or defence to one of the parties in a previous phase of the dispute or acted as a witness.

The above grounds for challenge of arbitrators are normally interpreted in a very narrow fashion and international standards are normally not taken into consideration by courts deciding on disqualification requests.

A different approach is adopted by arbitration institutions. The grounds for challenging an arbitrator are normally broader under institutional rules. The CAM Rules allow a party to challenge an arbitrator if there are circumstances giving rise to justifiable doubts as to his or her impartiality. In such cases, CAM bodies often take guidance from the IBA Guidelines on Conflicts of Interest in International Arbitration.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Interim relief

25. What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

Italy

With the notable exception of the power to suspend the effectiveness of corporate resolutions, arbitrators sitting in Italy cannot issue interim measures. However, the parties enjoy full access to state courts – both before and during the arbitration proceedings – to obtain any kind of interim measure allowed by the law such as asset freezing orders, injunctive reliefs, evidence acquisition measures, etc. Although the kind of remedies that can be obtained from a state court is quite flexible and can be adapted to specific circumstances (such as the order to perform a certain activity or declaratory reliefs), anti-suit injunctions are not allowed by Italian procedural law. It is also worth noting that the Court of Justice of the European Union has consistently rejected the acknowledgment and circulation of such measures within the territory of the Union even if allowed by the law of one member state.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

26. Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?

Italy

Neither arbitrators nor National Courts have the power to order the parties the payment of a deposit relating to an arbitration proceeding for the fees and expenses of the other party. A rule with this respect was actually part of the ItCPC (article 98) but this provision was declared invalid because conflicting with the constitutional right to have access to justice.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Procedure

27. Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

Italy

While the law provides certain default rules on how to conduct an arbitration proceeding, the parties and the arbitrators enjoy wide discretion and the only limit is represented by the respect of the due process principle and the right to be heard.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

28. What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?

Italy

If a respondent fails to participate in an arbitration, the arbitration proceeding will not be discontinued but the arbitral tribunal has to verify whether the respondent was duly served by the inviting party.

As noted above, lacking the appointment of an arbitrator by the respondent, the appointment can be made by the competent court.   

For Italian scholars, a party bound to an arbitration agreement is not considered as technically absent (contumace) from the proceedings.

For this reason, the arbitrators must always ensure that all their rulings, orders and party submissions are duly communicated or made available to the non-participating respondent to the extent it is necessary for respect of due process.  

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

29. What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Arbitration generally be taken into account?

Italy

In international arbitration proceeding sitting in Italy, consistently with international standards, the most commonly admitted evidence are submission of documents, also through requests of document production, witnesses, expert witnesses and guidance is, as of today, normally taken from the IBA Rules on the Taking of Evidence rather than the Prague Rules. Arbitrators are also allowed to ask Public Administration to provide written information on deeds and documents of its competence.

In purely domestic arbitration proceedings, witness evidence is normally allowed on very strict grounds and the witnesses are usually examined by the arbitrators only (as a court judge would do), limiting the examination on the confirmation on questions suggested by the party submitting the witness. Preliminary discussions on the subject of their testimony between counsels and witnesses are normally considered inappropriate in domestic arbitrations. Instead of expert witnesses, normally arbitrators prefer to rely on tribunal-appointed experts and the party-appointed experts are not required to provide any statement of independence. A certain contamination of domestic and international approaches may occur with respect to the taking of evidence, depending also on the background of the arbitrators.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

30. Will the courts in your jurisdiction play any role in the obtaining of evidence?

Italy

Yes; the arbitral tribunal, if deemed appropriate, may request the competent court to order a witness who refuses to appear before the arbitral tribunal to give testimony.

However, arbitral tribunals and parties are normally quite reluctant to invoke judiciary support during the procedure unless the evidence at stake is strictly necessary.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

31. What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?

Italy

According to the domestic procedural rule, which is also generally applied in domestic arbitrations, upon a party’s request, the judge may order the other party or a third party to disclose and produce a document that is relevant for the proceedings, specifically identified and could not be otherwise obtained by the requesting party.

However, in international arbitration the production of documents will be normally addressed pursuant to international standards such as the IBA Rules on the Taking of Evidence, through the use of Redfern schedules, though an approach narrowing such requests might be expected from panels formed mainly by Italian arbitrators.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

32. Is it mandatory to have a final hearing on the merits?

Italy

No, it is not mandatory, though it is common practice to have a final hearing on the merits also to prevent any objection as to the respect of the due process rule.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

33. If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?

Italy

Yes; unless otherwise agreed by the parties in the arbitration agreement or clause, article 816 of the ItCPC expressly authorises the arbitral tribunal to conduct hearings, perform any other relevant activity or sign the award in a place that differs from the seat of the arbitration and even abroad.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Award

34. Can the tribunal decide by majority?

Italy

Pursuant to article 823 of the ItCPC, the arbitral tribunal decides by majority. It is worth noting that, if any of the arbitrators so requests, deliberations should be held in personal presence of the arbitrators.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

35. Are there any particular types of remedies or relief that an arbitral tribunal may not grant?

Italy

Pursuant to article 824-bis, the award shall have the same effects of a decision issued by national courts, and thus can in principle grant the same reliefs of a civil court's decision. However, as mentioned above, arbitrators are not allowed to grant interim reliefs and it is still debated whether arbitrators can impose penalties (astreintes) as ancillary relief in case of breach of certain orders as these would be a power typically reserved to the “imperium” and thus of state courts. With this respect, the prevailing trend of case law is to extend  such power to arbitrators, provided that such relief has been expressly and timely requested by the parties.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

36. Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?

Italy

Italian law does not provide any specific rule with regard to dissenting opinions. Article 823 ItCPC provides that an award signed only by the majority of the arbitrators shall be valid provided that it mentions that it was deliberated with the participation of all the arbitrators and that it expressly states that the other arbitrators were either unwilling or unable to sign. Since the responsibility of the arbitrators is individual, an arbitrator has the right to express his dissenting opinion and he or she is entitled to attach its dissenting opinion to the award or to have it incorporated in the text of the award. In practice, it is quite infrequent for arbitrator to express dissenting opinions and the majority of awards are unanimous.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

37. What, if any, are the legal and formal requirements for a valid and enforceable award?

Italy

According to article 823 of the ItCPC, an award must indicate:

  1. the name of the arbitrators;
  2. the seat of the arbitration;
  3. the parties;
  4. the arbitration agreement and the parties’ requests for relief;
  5. a summary of the reasoning;
  6. the operative part;
  7. the signature of the arbitrators, with the indication, in case of a majority vote, that the award was deliberated with the participation of all the arbitrators and that the other arbitrators were either unwilling or unable to sign; and
  8. the date of the signatures.

However, the award is null and void only if any of requirements No. 5, 6 or 7 listed above are missing.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

38. What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?

Italy

Pursuant to article 820 of the ItCPC, unless otherwise agreed by the parties in the arbitration agreement or clause, the arbitral tribunal shall render the award within 240 days from the acceptance of its appointment.

Such term may be postponed if:

  • all the parties send a written statement to the arbitrators;
  • by the President of the Court of First Instance at the seat of arbitration upon request of one party or of the arbitral tribunal.

Such term, unless otherwise agreed by the parties, shall be extended by 180 days if:

  • evidence needs to be gathered;
  • an expert witness is appointed by the arbitral tribunal;
  • a partial or interim award is rendered;
  • one of the members of the arbitral tribunal is replaced. 

With regard to the challenging of the award, pursuant to Italian Law, the award may be challenged within 90 days from its service to the party. The award can no longer be challenged after one year from the date of the last signature by the arbitrators, as recently clarified by the Civil Joint Sections of the Supreme Court (Cass. civ., S.U., 30 March 2021, No. 8776).

With regard to the correction, pursuant to article 826 of the ItCPC, each party may request the arbitral tribunal to correct material or calculation errors, or to supplement the award with the requirements set out in article 823, Nos. 1-4, of the ItCPC within one year from the communication of the award.

After the above term, or if the award has been challenged, the Court of Appeal before which the award is challenged may correct or supplement the award (article 826, paragraph 4).

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Costs and interest

39. Are parties able to recover fees paid and costs incurred? Does the "loser pays" rule generally apply in your jurisdiction?

Italy

While the "costs follow the even rule" is expressly provided for national court proceedings, Italian law does not provide specific rules on the recovery of fees and costs incurred in an arbitration proceeding.

However, arbitral tribunals usually decide that the losing party shall bear the costs of the arbitration (arbitrators’ fees, counsel’s fees), but the arbitral tribunals are free to allocate the costs differently, in any way they deem appropriate, provided that they reason their choice.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

40. Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?

Italy

Arbitral tribunals may award interest, if so requested by the parties, and according to applicable contractual provisions or to the substantial law applicable to the merits. If Italian law is applicable to the merits, lacking any contractual provision with this respect, then the legal interest rate provided under article 1284 of the Italian Civil Code would apply. It is worth noting that the rate which is accrued on capital before the commencement the arbitration  is currently only 0.05 per cent per annum (but it is determined every year), can substantially increase after the commencement of the arbitration since, from that moment, it is calculated on the basis of interest for payment of commercial debts of special laws, which is now of 8 per cent. Furthermore, compound interests can be calculated on interests already accrued before commencement of the proceedings. It is also customary to request, and to grant, on top of interests, an amount for the re-evaluation of money which is calculated on indexes provided periodically by the Italian Institute of Statistics (ISTAT).

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Challenging awards

41. Are there any grounds on which an award may be appealed before the courts of your jurisdiction?

Italy

An arbitral award rendered in Italy is final and not subject to a full appeal but it may be challenged on limited grounds for nullity. In particular, if the arbitration agreement has been stipulated on or after 1 March 2006, an award cannot be annulled for breach of law unless the parties have expressly agreed to the contrary; the appeal for breach of the ordre public is always admitted.

The challenge of the award for reasons concerning the merits of the dispute is always admitted in labour disputes and when the award is rendered on preliminary issues that were not arbitrable (article 829, paragraph 3 ItCPC), for public contracts arbitrations, and in certain cases of breach of corporate law.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

42. Are there any other bases on which an award may be challenged, and if so what?

Italy

In addition the grounds for challenge indicated under question 41, pursuant to article 829 of the ItCPC, an award may be set aside if:

  • the arbitration agreement was invalid;
  • the arbitrators were not correctly appointed or the were not legally capable to be appointed;
  • the award exceeded the scope of the arbitration agreement;
  • the award lacks a summary reasoning, the operative part or the arbitrators’ signature (see question 37);
  • the award was rendered after the term provided that the parties had declared that the tribunal should refrain from issuing the award (see question 38);
  • the formalities required by the parties under express sanction of nullity were not duly complied with and the consequent nullity has not been cured;
  • the award is contrary to a previous award which may not be challenged or to a court’s decision with res judicata effects between the parties provided that the previous award or decision was filed in the arbitration proceeding;
  • the due process principle was breached during the arbitration proceeding;
  • the award did not decide on the merits of the dispute and the arbitral tribunal had to render an award on the merits;
  • the award contains contradictory decisions; and
  • the award did not decide on some claims or objections put forward by the parties according to the arbitration agreement.

Furthermore, an award may be subject to revocation if:

  • the award is the result of fraud by one of the parties;
  • the award was rendered on the basis of false evidence;
  • discovery of decisive documents which the party was not able to file in the proceeding due to conduct of the opposite party or due to force majeure; and
  • the award is the result of fraud by an arbitrator.

Third parties that suffer an adverse consequence of an award, can have recourse to courts to protect their rights.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

43. Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?

Italy

After the reform of arbitration law enacted in 2006, the general principle is that grounds for challenge are limited but the parties can, if they so wish, extend certain of them. Therefore, unless the arbitration agreement has been stipulated before 1 March 2006, any express waiver of grounds for challenge or similar expression cannot have the effect of further reducing the grounds for challenge (while this effect still can be inferred for older arbitration clauses). In principle, however, after the award has been rendered, the parties may waive their right to file a claim for setting aside the award.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Enforcement in your jurisdiction

44. Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?

Italy

Pursuant to article 840, paragraph 2, no. 5, of the ItCPC, the recognition and enforcement of a foreign award are denied when it has not become binding upon the parties or it has been annulled or suspended by a court of the place where the award was rendered. Therefore, while the New York Convention would leave room for each state to grant a certain discretion, Italian law compels the courts, in such cases, to reject recognition.

However, if the recognition proceeding in Italy is suspended until the decision is rendered by the foreign competent court, Italian courts of appeal may force the opposing party to provide a payment guarantee. 

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

45. What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?

Italy

Most decisions issued by Italian national courts have shown over the past years a more favourable environment with regard to the enforcement of foreign awards.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

46. To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?

Italy

A state or a state entity is entitled to raise a defence of state or sovereign immunity at the enforcement stage. Italian courts usually distinguish between sovereign and non-sovereign assets. An award is likely enforced only against non-sovereign assets (iure privatorum), that is to say, assets that do not fulfil a sovereign function (iure imperii).  

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Further considerations

47. To what extent are arbitral proceedings in your jurisdiction confidential?

Italy

Italian law does not provide any particular rule on confidentiality in arbitration proceedings. In any event, arbitrators who are bound by a duty of confidentiality due to their professional role, for instance, lawyers, have to respect such duty also for the service rendered in arbitration proceedings. On the other hand, parties are bound to confidentiality only to the extent they have undertaken such duty in the agreement or, for afterwards, any such duty can be inferred from the circumstances and the general duty of bona fide.

As far as institutional arbitration is concerned, express confidentiality obligations are normally imposed on parties, counsel and arbitrators (see, eg, article 8 CAM Rules).

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

48. What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?

Italy

There is no general confidentiality requirement under Italian law. Therefore, unless the parties have agreed otherwise, a party may use evidence legally obtained in other proceedings. However, it is not uncommon that arbitral tribunals may subject the taking of certain evidence to confidentiality undertaking or may allow redaction of documents to preserve sensitive information.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

49. What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?

Italy

Counsel and arbitrators admitted to the Italian Bar are bound by the rules set forth by the Code of Ethics of the Italian Bar Association, No. 241 of 16 October 2014, which contain also specific rules for the attorneys acting as arbitrators and mediators. These rules also apply to foreign counsel with regard to the activities carried out in Italy. Furthermore, in addition to international guidelines and standards, certain arbitration institutions such as CAM, require that arbitrators sitting under their rules abide by their specific code of conduct.  

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

50. Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?

Italy

Arbitrators sitting in Italy should pay particular attention to applicable deadlines for the issuance of the award and to schedule personal meetings when resolution of the awards is concerned if at least one of them so requires, since both these issues may affect the validity of the award.

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

51. Is third-party funding permitted in your jurisdiction? If so, are there any rules governing its use?

Italy

Italian law does not provide specific rules on third-party funding and, provided that relevant banking and financial regulation are complied with, such contracts do not appear to be forbidden or restricted under Italian law. However, since the interest in third-party funding has gained importance over the past few years, we cannot exclude that new regulation will be enacted with this respect to avoid abuse.

The Milan Chamber of Arbitration recently amended its Arbitration Rules to compel parties to disclose the existence of any third-party funder (article 43 CAM Rules).

Answer contributed by Roberto Leccese, Luigi Cascone and Flavio Rodi

Get unlimited access to all Global Arbitration Review content