In a recent decision, the Supreme Court of Cassation found that:

the decision with which the President of the Tribunal states on the request for recusal of the arbitrator, in addition to being expressly declared as not appealable according to art. 815 c.p.c., moreover is not appealable with the extraordinary appeal before the Court of Cassation in accordance to art. 111 of the Constitution.(1)

Facts

During an arbitration proceeding, a company filed a motion to the tribunal president for:

  • the recusal of an arbitrator appointed by the counterparty; and
  • the appointment of a third arbitrator, which had been disputed by both parties.

The tribunal president rejected the motion as the dispute had already been decided in a previous arbitration award.

The company appealed the decision before the Supreme Court of Cassation, stating that having declared the inadmissibility of the motion to appoint the third arbitrator, the tribunal president's decision had prevented the establishment of the arbitration panel, thus violating the parties' entitlement to obtain protection of their subjective rights.

Decision

The Supreme Court of Cassation found that under Article 815(3) of the Code of Civil Procedure, the decision of an arbitral tribunal president regarding a request for the recusal of an arbitrator cannot be appealed (Decision 9767/2018). Moreover, such a decision cannot be appealed through an extraordinary appeal before the Supreme Court of Cassation in accordance with Article 111 of the Constitution.

The court also found that the motion filed to appoint a third arbitrator was inadmissible, given that it concerned a decision that could not be appealed before the Court of Cassation under Article 111 of the Constitution.

Comment

The Supreme Court of Cassation's decision confirmed its previous decisions and addressed two key problems with regard to arbitration.

Article 815(3) of the Code of Civil Procedure states that a recusal request should be decided "with a not appealable decision" (before the Court of Appeal), thus creating the question of whether such a decision can be the subject of an extraordinary appeal before the Court of Cassation.

Adhering to previous decisions, the court underlined that a tribunal president's decision regarding a request for recusal of an arbitrator cannot be appealed through an extraordinary appeal before the Supreme Court of Cassation, given that it lacks the finality and decision-making requirements.

Requests for recusal decisions do not concern an arbitral panel's constitution and have no effect on the rights of the parties to appoint an arbitrator. Rather, they concern only the appointment in question, which – according to case law – is of an administrative nature.(2)

The Supreme Court also addressed the question of whether a decision concerning Article 810(2) of the Code of Civil Procedure (ie, a tribunal president's appointment of an arbitrator in the absence of an appointment by the parties) could be appealed. The court held that such decisions cannot be appealed as the decision of a tribunal president in this regard is a governing measure that affects only the appointment of a panel member and not the appointment's requirements.

Further, the court pointed out that a decision regarding the appointment of a third arbitrator, on which the parties in this case had not agreed, compensates for an activity that has not been performed by the parties and is a voluntary process. Thus, it cannot be appealed before the Supreme Court of Cassation, as provided for in Article 111 of the Constitution.

Such decisions can be appealed before the Supreme Court of Cassation in accordance with Article 111 of the Constitution only where they are definitive and concern the parties' subjective rights (and not just their procedural rights.(3)

In view of the above, it is not disputed that decisions concerning Article 810(2) of the Code of Civil Procedure cannot be appealed before the Supreme Court of Cassation, as a tribunal president's mandate is not connected to the merits of the dispute, which implies overseeing the parties' attempts to define the dispute in contractual and not judicial terms.

Nonetheless, the parties to a dispute can control the scope of this mandate: if an arbitration panel is established, it will verify the scope and legitimacy of its powers. If an arbitration panel is not established, the parties' prejudice is related to the failure to carry out the procedure to appoint arbitrators and this matter can be resolved by commencing an action before an ordinary judge.

For further information on this topic please contact Costanza Mariconda at Mariconda e Associati Studio Legale by telephone (+39 02 795 212) or email (costanza.mariconda@studiomariconda.com). The Mariconda e Associati Studio Legale website can be accessed at www.studiomariconda.com.

Endnotes

(1) Supreme Court of Cassation, 19 April 2018, 9767.

(2) Supreme Court of Cassation, 10359/2012; 23638/2011.

(3) Supreme Court of Cassation, 3129/2002.

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