“Go forward, but be careful”: Italy and the provisional measures issued by the referees


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Pedro, adelante, con juicio“: this Spanish exhortation comes from a famous Italian novel,”I Promessi Sposi»By Alessandro Manzoni. The Spanish governor of Milan gave these ambiguous instructions to his coachman Pedro, who steered the car in the midst of a crowd of rioters: “forward, but beware“. It has become proverbial to describe a difficult balance between action and caution. As such, it captures recent developments in Italian arbitration law fairly well.

On November 25, 2021, the Italian Parliament approved a bill delegating the government to reform the Italian civil procedure code (the “Law of delegation“), including the chapter on arbitration. Within one year, in accordance with the guidelines set out in the bill, the Government will implement the reform through the promulgation of a decree-law. the delegation is already announcing important changes for Italian arbitration law. This article presents some of the main changes to be introduced (which will then be presented in more detail by a follow-up article), before focusing on provisional measures .

A glimpse of the upcoming reform

The reform aims to increase the guarantees of impartiality and independence of arbitrators by (i) reintroducing, among the grounds for challenging an arbitrator, the notion of “serious grounds for expediency“That before 2006 was applicable as a result of the general reference to the discipline of court judges; and (ii) extend the arbitrator’s disclosure obligation, by introducing a written statement disclosing all the circumstances relevant to impartiality and independence. On this last point, the law gives general application to something already common in arbitral proceedings sitting in Italy, also taking into account the express requirements found in several sets of rules (e.g. Rule 11 of the ICC Rules; Article 20 of the Arbitration Rules of the Milan Chamber of Commerce).

The reform will also explicitly provide that: (i) judicial decisions recognizing foreign awards are immediately enforceable; and (ii) the parties are free to choose the law applicable to the merits. Here the reform expressly clarifies what is already widely taken for granted in practice.

The reform will also reduce, from one year to six months, the time limit for filing an annulment appeal when the award has not been notified to the opponent: a reasonable compromise between the different interests at stake.

The traditional prohibition of interim measures pronounced by arbitrators

From the perspective of international arbitration, the main change concerns the provisional measures pronounced by arbitral tribunals. Currently, arbitral tribunals sitting in Italy do not have the power to grant interim measures. Below Article 818 of the Italian Code of Civil Procedurearbitrators cannot grant seizures or other protective measures, unless otherwise provided by law“. There is only one significant exception based on a lex specialis, applicable when the dispute is based on arbitration clauses included in the articles of association of the companies. In this particular case, when the validity of a shareholders’ resolution is contested, the arbitral tribunal may temporarily suspend the resolution.

In the international landscape, the Italian ban is particular. Over the past decades, most jurisdictions have granted arbitral tribunals significant powers in issuing interim measures: we see this not only in common law jurisdictions such as England, Singapore Where Hong Kong, but also in civil law jurisdictions. For example, arbitral tribunals can order interim measures in France (Article 1468 of the French Code of Civil Procedure), Switzerland (Article 183 of the Federal Law on Private International Law) and Germany (Article 1041 of the German Code of Civil Procedure).

The Italian approach, still echoing a long-standing mistrust of arbitration, may discourage the choice of Italy as the seat of arbitration. Understandably, the issue has been the subject of much debate within the arbitration community, with most voices calling for reconsideration.

Arbitrators empowered to issue interim measures (with certain requirements)

At first glance, the reform goes in the auspicious direction. In accordance with Article 1, paragraph 15 of the law on delegation, the reform of the Italian Code of Civil Procedure will grant arbitrators “the power to take provisional measures in the event of the express will of the parties, manifested in the arbitration agreement or in a subsequent written act, unless otherwise provided by law“.

By implementing this guideline, the reform will finally overcome the general ban on Article 818 of the Italian Code of Civil Procedure. The power of arbitrators to pronounce interim measures will no longer be a very limited exception. However, this power will not be as broad as some might hope: the delegation law sets specific requirements for the granting of interim measures.

First of all, it will be limited to “ritual arbiter“. We will not discuss here the particular differentiation between”ritual arbiter“(Leading to an enforceable sentence) and”irritant”(When the award only has contractual effects) in Italian law. In practice, in the context of international arbitration, when the parties choose arbitration as an alternative to judicial process, the choice is invariably for “ritual arbiter“.

More importantly, the power to issue interim measures will require “express will of the parties“. Such an adhesion mechanism is unusual: in many jurisdictions, the power of arbitrators to pronounce interim measures is of general application (for example in France, see Article 1468 of the French Code of Civil Procedure) or, at most, it can be “chose to withdraw”If the parties agree (for example in Switzerland, see Article 183 of the Federal Law on Private International Law). An opt-in system is not ideal because it only works properly when the parties think about this issue when negotiating the arbitration clause: arguably, this does not happen often. Conversely, it is unlikely that the parties will agree on this point after the dispute has arisen.

In addition, the revised regime requires that the will of the parties be “express”, which may turn out to be a high threshold, especially if express is interpreted as explicit. Before delving into the interpretive tips, we must wait and see how the revision of the Italian Civil Procedure Code will implement this requirement.

As Carlevaris noted 1), a major question revolves around institutional arbitration: can it be argued that the parties, simply by choosing arbitration rules which provide for provisional measures issued by arbitrators, have shown an “express will” on this specific question?

While the revised provisions simply reiterate the notion of “express the will”Without further clarification, it is easy to predict many real-life situations in which there will be reasonable support for opposing interpretations. Such interpretive dilemmas (fascinating as they may be for lawyers) do not bode well for the overall efficiency and attractiveness of the system. Therefore, we should hope that the implementation will clarify what is termed “express will of the parties», And possibly address the issue of institutional arbitration.

The dilemma between exclusive power and competitive power

Another relevant issue with regard to interim measures concerns the coordination between state courts and arbitral tribunals. The delegation law provides that state courts will only have the power to pronounce provisional measures when the request has been made before the appointment has been accepted by the arbitrators. This means that arbitral tribunals will benefit from a wide sphere of exclusivity to issue provisional measures. This is a bold step forward, especially given the blanket ban under the current regime.

However, exclusivity is not necessarily the best solution. In many jurisdictions, parties are allowed to choose freely between courts and arbitrators, even after the tribunal has been established, for all or at least some categories of interim relief (see, for example, Article 1033 of the German Code of Civil Procedure, expressly providing that state courts retain concurrent power to pronounce interim measures). In addition, the guidelines provide that it will be possible to appeal interim measures in state courts, but such appeal will be limited to the grounds of an invalid arbitration agreement and breach of public order.

Logically, the state courts will retain a decisive role in the execution of the provisional measures pronounced by the arbitral tribunals. On this specific point, the law on delegation is much more vague, only providing for the legislative decree issued by the government “”will discipline the modalities of execution of the interim measure still under the control of the court judge“.

An important step forward, but …

Overall, the Italian turnaround on provisional measures is a long-awaited step forward. However, for the reasons discussed above, one can expect criticism of the opt-in mechanism based on the consent of the parties and, possibly, the exclusive power of arbitral tribunals once they are constituted.

In addition, although the reform has yet to be implemented by revising the Italian Civil Procedure Code, in some key areas the guidelines set by the law on delegation are quite detailed, and therefore the government will not have much of latitude. For example, the requirement of “express will of the partiesIs quite specific and we cannot do without it. However, as we have seen, we can hope for further clarification, especially to address the issue of institutional arbitrage and other potential dilemmas of interpretation.

In conclusion, the opening quote “forward, but bewareIs a fair take-away from this reform. By allowing arbitral tribunals to grant interim relief, Italy will truly “cheeky“, arguably even too far in granting them sufficient exclusive power. However, the requirement of”express will of the parties“Betrays a residual suspicion: here we see the”pay attention“Given the objective of making Italy an attractive forum for arbitration proceedings, excessive caution could turn a good reform into a missed opportunity.

This article first appeared on the Kluwer Arbitration Blog here. Written by Pietro meineri of the Homburger company

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