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National arbitration laws
What legislation applies to arbitration in your jurisdiction?
Arbitration based in Italy, whether domestic or international, is governed by the Code of Civil Procedure. Certain aspects of arbitration are additionally governed by special laws; the most important concern corporate matters, public works contracts, employment issues and administrative disputes.
Arbitration based in a foreign country is governed by the laws of that country. In such cases Italian law governs only recognition and enforcement of the award.
Are there any mandatory laws?
Certain rules of the Code of Civil Procedure are mandatory, while others may be waived by the parties, subject to compliance with certain principles. In general, the rules governing the following issues are mandatory:
- the relationship with the arbitrators;
- the commencement and object of arbitration;
- the form of the arbitration agreement;
- the effectiveness of the award; and
- the independence and impartiality of the arbitrators.
New York Convention
Is your country a signatory to the New York Convention? If so, what is the date of entry into force?
Italy ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards through Law 62/1968. It acceded to the convention on January 31 1969 and the convention entered into force in Italy on May 1 1969.
Are there any reservations to the general obligations of the convention?
Treaties and conventions
What other treaties and conventions in relation to arbitration is your jurisdiction party to?
Italy acceded to the European Convention on International Commercial Arbitration in Geneva on April 21 1961 and the Paris Agreement on Implementation of the Convention on International Commercial Arbitration on December 17 1962.
In addition, numerous bilateral treaties relating to commerce and navigation, legal aid and the recognition and enforcement of judgments in civil and commercial matters contain rules on the recognition of arbitral awards.
Italy has also acceded to the Washington Convention of March 18 1965 on the Settlement of Investment Disputes between States and Nationals of Other States, and has entered into 81 bilateral investment treaties.
Has your jurisdiction adopted the UNCITRAL Model Law?
No. However, the Italian arbitration law contains many principles which are enshrined in the UNCITRAL Model Law.
Are there any impending plans to reform the arbitration laws in your jurisdiction?
The arbitration regime as set out in the Code of Civil Procedure was fully reformed by Legislative Decree 40/2006. At present, there are no plans for further reforms.
What are the validity requirements for an arbitration agreement?
The arbitration agreement must be in writing; otherwise, it will be void.
If an arbitration clause is included in the general conditions of a contract or in pre-printed forms prepared by a party for uniform use in a series of indefinite contractual relationships, it must be specifically approved in writing; otherwise, it will be invalid.
With regard to consumers, an arbitration clause is presumed to be overly burdensome until proven otherwise and as such is void.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
Arbitration agreements both establish the power of the tribunal and revoke the power of the national courts to make a decision. If a claim that is subject to an arbitration agreement is brought before a national court, the court’s jurisdiction must be challenged upon submission of the first brief of defence at the latest; otherwise, the arbitral tribunal will lose its competence over the dispute. If the arbitral tribunal finds that it does not have jurisdiction, the dispute may proceed before the national courts and vice versa.
The national courts are generally pro-arbitration and will give effect to a valid arbitration agreement between the parties. Pursuant to Article 808-quater of the Code of Civil Procedure, in case of doubt the arbitration agreement is interpreted to extend to all disputes arising under the contract or from the relationship implied by the agreement.
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?
This issue is not expressly regulated by law. Two different situations may be distinguished in this regard:
- In the case of arbitration between the same parties based on a single arbitration clause contained in a single contract, it is possible to consolidate different proceedings, provided that the tribunal is comprised of the same members and the parties so agree.
- In the case of arbitration between the same parties based on multiple arbitration clauses arising from different interconnected contracts, in principle, separate proceedings are required for each dispute. However, the Supreme Court of Cassation has found it acceptable to have a single proceeding where:
- the parties expressly agree to this and a single tribunal is appointed; or
- the disputes are related and arise from related contracts containing homologous arbitration clauses, if the parties agree and appoint the same arbitrators for each of the proceedings.
Choice of law
How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
The parties are free to determine the applicable law, subject only to compliance with Italian public policy.
Where the parties have not agreed on the applicable law, the tribunal will decide this based on the conflict of laws rules. In international arbitration, the tribunal has greater autonomy and can apply the regime deemed most appropriate (eg, based on the location of the dispute), or apply the conflict of laws systems for each party to the dispute, the Lex Mercatoria or the principles of UNIDROIT.
Are there any provisions on the separability of arbitration agreements?
The principle of the autonomy of the arbitration agreement is expressly addressed in Italian law. The validity and enforceability of an arbitration agreement should be evaluated independently from the rest of the contract. However, the principle of autonomy carries certain consequences:
- The nullity, invalidity or unenforceability of the contract does not also imply the nullity, invalidity or unenforceability of the arbitration agreement, except where the defect is inherent.
- Termination of the contract does not terminate the effects of the arbitration agreement; thus, it is for the tribunal to rule on subsequent disputes arising after termination of the relationship.
- The tribunal retains the power to decide on its own jurisdiction, even where the existence or validity of the arbitration agreement is challenged.
Are multiparty agreements recognised?
Multiparty arbitration is governed by Article 816-quater of the Code of Civil Procedure, which establishes the following conditions for multiparty arbitration:
- All of the parties must be bound to the same arbitration agreement.
- The tribunal must be nominated as follows:
- All arbitrators must be appointed by a third party;
- The arbitrators must be nominated by agreement of all parties; or
- Once the plaintiff has nominated its arbitrators, the other parties can nominate an arbitrator if all are in agreement; otherwise, they must entrust the nomination to a third party.
If these conditions are not met and a joinder is necessary (ie, if the dispute concerns a multiparty substantive relationship), the arbitration cannot proceed and the dispute will be brought before a national court. If there is a voluntary joinder, the dispute will split into multiple parallel arbitration proceedings.
Where, conversely, more parties regroup into two opposing camps, each of these groups will nominate its arbitrator.
Criteria for arbitrators
Are there any restrictions?
Pursuant to Article 812 of the Code of Civil Procedure, anyone who is wholly or partially devoid of legal capacity to act cannot serve as an arbitrator.
Furthermore, like a national judge, an arbitrator must be independent and impartial, maintain a neutral position between the parties and be indifferent to the outcome of the dispute. If an arbitrator is a lawyer, the principles of impartiality and independence are expressly set out in the Professional Code of Conduct (Article 55), which specifically addresses situations in which a lawyer cannot assume this role (ie, where he has or had a professional relationship with a party or its lawyer). The Professional Code of Conduct thus obliges lawyers appointed as arbitrators to disclose to the parties any circumstances that may affect their independence, in order to obtain consent from the parties to accept the appointment. Generally, the regulations of arbitration institutions also provide for a disclosure obligation and require that the arbitrators sign a declaration of independence.
Other than these principles, the parties are free to determine the qualifications required of the arbitrators. A foreign arbitrator may also be appointed.
What can be stipulated about the tribunal in the agreement?
If the arbitration agreement does not provide for the appointment of the arbitrators, a procedure for their appointment must be established. The parties enjoy considerable freedom in regulating the appointment of the tribunal and identifying the requirements of the arbitrators. The appointment of the tribunal can also be effected through a subsequent agreement. Otherwise, the appointment is effected by the president of the court in the district where the seat of arbitration is located, at the request of the party that has commenced the proceedings.
In the arbitration agreement, the parties may stipulate that each will appoint an arbitrator and the third arbitrator, as president, will be nominated by the other appointed arbitrators, by agreement of the parties or by a third party (eg, the president of the court). The parties can also stipulate that all arbitrators be nominated by a third party or refer to the rules of appointment in the regulations of an arbitration institution.
In certain special types of arbitration, certain procedures for the appointment of the tribunal may be imposed. For example, in corporate arbitration, the arbitrators must be nominated by a third party.
Are there any default legal requirements as to the selection of a tribunal - for example, concerning the number of arbitrators or their characteristics?
There may be one or more arbitrators, as long as this is always an odd number. If the arbitration agreement provides for an even number of arbitrators, it is invalid. Unless the parties have agreed otherwise, a final arbitrator shall be nominated by the president of the court in the district where the seat of arbitration is located. There are no further requirements, other than in relation to number and capacity.
Challenging the appointment of an arbitrator
Can the appointment of an arbitrator be challenged? Can an arbitrator be disqualified? What is the procedure for this?
The appointment of arbitrators in breach of the agreement of the parties or the law must be challenged while the arbitration proceedings before the same arbitral tribunal. If the arbitrators were not appointed as specified, the award is invalid and may be challenged before the competent court of appeals.
An arbitrator may be recused for the following limited grounds:
- He lacks the qualifications expressly required by the parties.
- He has an interest in the proceedings.
- He or his spouse is a relative or a person particularly close to a party or its lawyer.
- He or his spouse has pending litigation or grave enmity towards a party or its lawyer.
- He is tied to a party by an employment, advisory, financial or other relationship that compromises his neutrality, or is a guardian or trustee of a party.
- He has provided advice, assistance or protection to a party at a previous stage of the case or has previously acted as a witness.
A party cannot recuse an arbitrator whom it nominated or helped to appoint.
Recusal is proposed by petition to the president of the competent court within 10 days of the arbitrator’s appointment or the party becoming aware of the reasons for the recusal. This decision cannot be appealed.
The application for recusal does not suspend the arbitration proceedings, unless the arbitrators decide otherwise. If the recusal is granted, all activities carried out by the recused arbitrator will be deemed without effect.
How should an objection to jurisdiction be raised?
The arbitrators’ jurisdiction may be challenged on the grounds of the validity, content or scope of the arbitration agreement or the constitution of the tribunal. If the challenge is not raised upon submission of the first defence after the appointment of the arbitrators at the latest, the right to challenge is lost, unless:
- the dispute is not arbitrable; or
- the arbitration agreement is invalid because it is contained in a contract concluded between a consumer and professional in the absence of individual negotiations (see European Court of Justice, Section I, October 26, 2006, C-168/05).
The tribunal is competent to decide on its own jurisdiction.
The jurisdiction of a national court may also be challenged because the dispute is the subject of an arbitration agreement. In this case the challenge must be brought by no later than submission of the first brief of defence. The decision may be appealed to the Supreme Court of Cassation.
Replacement of an arbitrator
Why and how can an arbitrator be replaced?
An arbitrator may be replaced on the following grounds:
- refusal or renunciation of the appointment;
- revocation by the parties;
- supervening incapacity;
- inability to perform the role;
- acceptance of a request for recusal; or
If the parties have not established a specific framework for replacement, this will be done in accordance with the rules for appointment of the arbitrators. If the parties or a third party designated to appoint does not provide for a replacement, the president of the court of the district where the seat of arbitration is located will do so.
An arbitrator’s appointment may also be invalidated for failure to carry out, or delay in carrying out, an act relating to his functions. In this case, the arbitrator may be replaced.
Powers and obligations
What powers and obligations do arbitrators have?
Arbitrators have a range of powers in relation to the proceedings. If the parties have not included procedural rules in the arbitration agreement (or referred to the rules of an arbitration institution), the arbitrators have the power to regulate the proceedings in the manner they deem most appropriate.
During the evidence phase, the arbitrators have substantially the same powers as a national court in relation to the parties, although they have no powers in relation to third parties. The arbitrators, by express provision of the law, may refer a question of constitutionality to the Constitutional Court.
When an arbitrator accepts the appointment, an arbitration contract comes into existence between the parties and the arbitrator. The arbitrator’s obligations include the following:
- to act in a timely manner with respect to anything relating to his functions; and
- to issue a ruling within the time limit specified by the parties, by the regulations of the relevant arbitration institution or by law.
Liability of arbitrators
Are arbitrators immune from liability?
The arbitrators are subject to liability under Article 813-ter of the Code of Civil Procedure if they:
- resign without good cause;
- delay in performing or fail to perform necessary acts, either intentionally or with gross negligence;
- fail to issue an award within the time limit, either intentionally or with gross negligence; or
- take action that causes damage to one of the parties, either intentionally or with gross negligence.
Within the tribunal, each arbitrator is solely responsible for his own situation.
An arbitrator’s liability is enforceable through an ordinary action of recognition before a national court.
Communicating with the tribunal
How do the parties communicate with the tribunal?
There are no provisions in this regard; it is up to the tribunal to specify this (usually, via email, certified email or courier).
Is unanimous agreement of the tribunal required? If there is disagreement, does the will of the majority suffice? What are the implications of this?
Unanimity is not required. The award and all other decisions are made by majority vote. A dissenting arbitrator may write a dissenting opinion. There are no particular implications where an award is passed by majority instead of unanimously. If the parties have provided for the right to appeal on the grounds of a violation of the applicable rules, a dissenting opinion may assist in the appeal.
Are there any disputes incapable of being referred to arbitration?
Under Article 806 of the Code of Civil Procedure, disputes concerning inalienable rights or other aspects expressly prohibited by legislation or disputes between private parties and the administration acting as an authority (see Supreme Court Judgment 2126, January 31 2014) may not be submitted to arbitration.
Can the arbitrability of a dispute be challenged?
If the arbitration agreement provides for the arbitration of disputes concerning inalienable rights, the relevant clause will be considered null and void. The arbitrability of a dispute may be challenged at any time. An award issued on non-arbitrable matters may be appealed for annulment; such awards will be considered non-existent and without effect.
Jurisdiction and competence-competence
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 tribunal’s jurisdiction and competence?
Italian law recognises the principle of competence-competence (ie, the tribunal is competent to rule on its own jurisdiction). The tribunal’s decision may be appealed to the competent court of appeals; otherwise, this decision becomes final. A party that wishes to challenge the tribunal’s decision must do so by no later than submission of the first defence in the arbitration process; otherwise, the right to challenge is lost.
Conversely, if a claim is submitted before the national courts, jurisdiction can be challenged on the basis of an arbitration agreement. This decision is subject to the typical rules on jurisdiction and may be challenged before the Supreme Court of Cassation.
Italian law also accepts the principle of ‘parallel roads’, under which the tribunal’s jurisdiction is not excluded by concurrent proceedings in relation to the same dispute before a national court; neither prevails over the other. However, once a decision on the merits is reached in either proceedings, there is no further possibility to challenge and the other proceedings will end because the dispute has already been resolved. If the tribunal or the national courts decline jurisdiction through a final and binding decision, this decision must be respected.
Before commencing arbitration, it is possible to ask the national court to assess the validity or effectiveness of the arbitration agreement. Its decision will be binding. Once arbitration has commenced, no questions on this matter can be brought before the national courts.
Starting an arbitration proceeding
What is needed to commence arbitration?
In order to commence arbitration, a request for arbitration should be served on the other parties, setting out the details of the dispute and the appointment of an arbitrator, if required by the arbitration agreement. If the agreement provides for the appointment of a sole arbitrator or arbitrators by a third party, the request for arbitration must include a request to that third party to make such appointment.
The request for arbitration must be signed personally by the party, or solely by its lawyer if the request is accompanied by the appropriate power of attorney.
Notification of this act marks the starting point of the arbitration proceedings and produces the typical substantive effects of a judicial demand.
Are there any limitation periods for the commencement of arbitration?
No. The standard Civil Code time bar provisions (concerning both the right in dispute and its exercise) will apply. The term for exercising a right may also be specified in a contract.
Are there any procedural rules that arbitrators must follow?
According to Article 816-bis of the Code of Civil Procedure, the procedural rules are determined by the parties before the commencement of arbitration, either through the arbitration agreement or in a separate written document. Otherwise, the arbitrators will establish the rules for conducting the proceedings in the manner they deem most appropriate (although they will usually also seek the consent of the parties). The parties or the arbitrators may also apply the rules for judicial proceedings set forth under the Code of Civil Procedure, where appropriate. In any case, the regulatory powers of the parties and the arbitrators are subject to compliance with the adversarial principle, according to which the parties must be afforded reasonable and equal opportunities of defence.
Where the parties have provided for the application of the regulations of an arbitration institution, the rules therein will apply.
Are dissenting opinions permitted under the law of your jurisdiction?
Dissenting opinions are not expressly regulated, but in practice they are permitted.
Can local courts intervene in proceedings?
Since arbitrators cannot order precautionary, provisional or emergency measures (in according to Article 818 of the Code of Civil Procedure), the parties must apply to the national courts to obtain such measures. Under certain circumstances, the national courts may be used to safeguard a party’s right to evidence.
Can the local courts assist in choosing arbitrators?
A national court may intervene in the selection and appointment of the arbitrators where:
- the parties or the law require it to do so;
- the parties did not specify the method of appointing the arbitrators in the arbitration agreement and cannot reach agreement on this (according to Article 810 of the Code of Civil Procedure);
- an arbitrator must be replaced (according to Article 811 of the Code of Civil Procedure); or
- a party responsible for appointing an arbitrator fails to do so.
What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration? Can the courts compel parties to arbitrate? Can they issue subpoenas to third parties?
A respondent’s failure to participate in arbitration is not governed by the Code of Civil Procedure and is uncommon. In principle, this exposes the respondent to liability and the other party may seek termination of the arbitration agreement. Alternatively, the plaintiff may ask that the arbitrator be appointed instead by the president of the national court of the district in which the seat of arbitration is located. In this case, the arbitration will proceed with full effects notwithstanding the absence of the respondent. A party cannot be forced to participate in the proceedings.
The arbitrators cannot issue summons to third parties either to be heard as a witness or to join the proceedings. In the former case, if a witness does not appear, the tribunal may ask the president of the competent national court to order the witness’s appearance. In the latter case, the tribunal may in certain cases encourage the third party to participate in the proceedings. However, if the third party does not show up, there is no other instrument to oblige it to join.
In what instances can third parties be bound by an arbitration agreement or award?
In general, third parties are not bound by arbitration agreements or awards, except in the following circumstances.
The arbitration agreement may extend to third parties as successors in title. This issue is frequently debated, but it is clear that a third party which assumes the substantive legal position of one of the parties (eg, through transfer from a contract or of a company) also assumes the arbitration clause.
Third parties that have not joined the arbitration proceedings are not generally bound by the award. However, like a national court judgment, the award will bind the successors of a party by law, as well as third parties with claims against that party (ie, parties which, during the arbitration proceedings, succeeded to ownership of the entitled rights). Such third parties, including entitled beneficial owners, may also intervene voluntarily in the arbitration proceedings, provided that the original party continues to participate; although with the agreement of the other parties, the original party may be ousted from the proceedings.
Default language and seat
Unless agreed by the parties, what is the default language and location for arbitrations?
Unless the parties have agreed otherwise, the language of arbitration is determined by the arbitrators (according to Article 816-bis of the Code of Civil Procedure), taking into account the facts of the dispute and the need to afford the parties equal rights of defence, given their respective knowledge and that of their counsel. The use of multiple languages is not excluded and may be allowed where appropriate.
The seat of arbitration is very important:
- It is the main criterion for establishing the nationality of the arbitration and the award.
- It determines the competent court to appoint the arbitrators or order the appearance of witnesses, where necessary; and
- It determines the competent court of appeals for both appellate issues and enforceability.
- The seat of arbitration is generally determined by the parties and is binding on the arbitrators; otherwise, the arbitrators will choose a seat which is equidistant from and neutral for the parties. As last resort, Italian law provides that the seat will be the place where the arbitration agreement was signed; if the agreement was signed abroad, the seat will be in Rome (according to Article 816 of the Code of Civil Procedure).
The seat of arbitration will not necessarily be the place where the proceedings are actually conducted.
How is evidence obtained by the tribunal?
There is greater flexibility with regard to the taking of evidence in arbitration proceedings than before the national courts. The following general legal principles cannot be derogated from and must also be observed in the context of arbitration:
- Each party must be afforded a fair opportunity to present its case.
- The arbitrator must be independent and impartial, which also extends to the admission and evaluation of evidence.
- Other principles may be derogated from by the parties. The parties may also grant the arbitrators investigative powers (which are not generally provided by law). Certain rules on the admissibility of evidence may be derogated from – specifically, as regards the types of evidence admissible and limitations with respect to certain types of evidence.
The law (Article 816-ter of the Code of Civil Procedure) expressly provides that where there is more than one arbitrator, the arbitrators may delegate to one arbitrator the necessary powers to carry out some or all of the actions involved in taking evidence.
What kinds of evidence are acceptable?
The following types of evidence are admissible:
- documents, agreements and deeds;
- witness testimony, both oral and through witness statements. While in ordinary proceedings cross-examination is not permitted, in arbitration witnesses can be cross-examined if the parties have agreed to this;
- production orders. The arbitrator may order one of the parties to the proceedings or a third party to produce a document. However, if the person so ordered fails to comply, the arbitrators do not have the ability to impose sanctions;
- requests for information from the public administration relating to specific acts or documents. The arbitrators may request such information either at the request of a party or on their own initiative;
- sworn statements;
- the results of searches which the arbitrators order to the person or property of a party to the proceedings or a third party; and
- expert report. Cross-examination of experts is permitted, but rare.
By agreement of the parties, the International Bar Association Rules on the Taking of Evidence in International Arbitration may be applied, as far as possible.
Atypical forms of evidence which are not expressly regulated by the law are also considered admissible in arbitration proceedings.
Is confidentiality ensured?
There is no specific provision imposing a duty of confidentiality on arbitrators. However, the parties may impose such an obligation. Arbitrators who are lawyers must also comply with a general and specific duty of confidentiality pursuant to the Professional Code of Conduct. The rules of arbitration institutions also expressly impose confidentiality obligations on the institution itself, the arbitrators, the parties and the experts.
Can information in arbitral proceedings be disclosed in subsequent proceedings?
In principle, a party may legitimately use information from arbitration proceedings or an arbitral award in another proceeding in order to safeguard its rights.
What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
Lawyers (as counsel as well as arbitrators) are subject to the Professional Code of Conduct, which includes specific provisions to guarantee independence and impartiality and preserve the trust placed in them by the parties. In addition, arbitration institutions often have specific codes of ethics that apply to arbitrators.
Estimation & allocation
How are the costs of arbitration proceedings estimated and allocated?
The costs of arbitration proceedings vary according to the value of the dispute and the activities carried out in the course of the proceedings. Where the parties have adopted the rules of an arbitration institute, these will usually set specific fees for both the arbitrators and the tribunal. Otherwise, the arbitrators may freely determine their compensation. Where the arbitrators are lawyers, specific rates will apply, although such rates are not binding.
Usually, costs are paid in advance by the parties and borne proportionally. If a party fails to pay its allocation of costs in the course of the arbitration, such costs are requested from the other party. If the other party also does not pay, the parties will no longer be bound by the arbitration agreement and the proceedings are suspended. In any event, failure to pay advance costs constitutes grounds for the arbitrators to withdraw from this role.
The costs of the proceedings including the remuneration of arbitrators and the expert and legal fees of the winning party – are borne by the losing party. However, if the facts so justify, the costs may be allocated differently between the parties, as long as they are paid in full.
Security for costs
Can the national court or tribunal order security for costs under the law in your jurisdiction?
The national courts cannot order the payment of a deposit relating to arbitration proceedings. The tribunal may require an advance of the costs, but cannot order payment of an actual deposit.
What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
As awards issued in Italy have the same status and effect as national court judgments, there is no need for recognition. However, an exequatur is necessary if the party intends to enforce the award (because it contains an order), to record it in a public register or to register a lien.
Foreign awards require prior legal recognition to be enforceable and have legal effect in Italy, in accordance with the New York Convention. Recognition is sought by submitting a request to the president of the court of appeals of the district where the counterparty is resident; if the counterparty is not resident in Italy, the Rome Court of Appeals has jurisdiction. The president of the court of appeals cannot assess the content of the award, but can only confirm its formal compliance. An award cannot be recognised if:
- the dispute is not arbitrable under Italian law; or
- the award contains provisions that are contrary to public policy.
The decision of the president of the court of appeals may be subject to challenge. In the event of a challenge, recognition will be refused if the challenger can prove any of the following:
- A party to the proceedings lacked capacity under the applicable law or the arbitration agreement was invalid.
- The challenger was not informed of the appointment of an arbitrator or of the commencement of proceedings, or had no opportunity to defend itself.
- The dispute did not fall within the scope of the arbitration agreement.
- The composition of the tribunal or the proceedings themselves did not comply with the agreement between the parties or applicable law.
- The award is not yet binding between the parties, or was annulled or suspended by the applicable authority in the state in which it was issued.
Timeframe for delivery
Are there any time limits on delivery of the award?
Awards must be issued within the time limit established by the parties. Otherwise, the arbitrators must issue the award within 240 days of accepting their appointment. This time limit may be extended by written declaration of all parties or by the president of the competent court, at the request of a party or the arbitrators. An extension may be granted only before the time limit has expired.
Unless the parties have provided otherwise, this time limit may be extended by 180 days, which cannot be further extended, if:
- evidence must be admitted;
- an expert is appointed;
- a non-definitive or partial award is issued; or
- the composition of the tribunal is altered or a sole arbitrator is replaced.
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
The arbitrators may generally issue all orders necessary to safeguard the rights of the parties. However, they cannot issue orders that are contrary to public policy or that a national judge would be unable to issue.
Orders relating to payment included in an award can be enforced. Penalties payable for each day of delay in fulfilling such orders are also permitted. However, an order to pay punitive damages cannot be subject to exequatur and enforcement in Italy, as this is considered contrary to public policy (not even a national judge can order punitive damages).
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
Interim measures may take different forms and are instrumental in protecting the rights under adjudication by the arbitrators. Emergency measures may be obtained, such as injunctions, protection orders and seizures.
National courts may grant interim and emergency measures, both before and during the arbitration proceedings. The arbitration agreement may not limit access to interim or emergency measures.
Can interest be awarded?
Liquidated amounts in the award may accrue interest at different rates, depending on the basis of such amounts. If the award orders the recovery of damages, compensatory interest typically accrues from the date of issue of the award, at the statutory rate. In the case of an order to pay a liquid and enforceable cash debt, default interest accrues from the date of default by the debtor.
At what rate?
In commercial transactions, default interest accrues at the statutory rate, which is currently equal to the European Central Bank interest rate plus eight percentage points.
Is the award final and binding?
The award is final and binding between the parties as of the date of the last signature.
What if there are any mistakes?
If the award contains errors, it may be subject to correction. Corrections may be requested for omissions or material or calculation errors.
Corrections must be made by the arbitrators within one year of issue of the award. Subsequently, corrections are made by the court of the district in which the seat of arbitration is located. In the case of an exequatur, the competent court has the authority to make corrections. The award may then be corrected by any judge before which it is brought or challenged. However, the parties must always be heard in the correction procedure.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
The validity of an award may be challenged for select mandatory reasons. Prior to issue of the award, the parties may not exclude challenges to its validity.
The award may be challenged for violation of the law applicable to the merits of the dispute only if the parties have expressly provided for this in the arbitration agreement.
What is the procedure for challenging awards?
Challenges must be submitted within 90 days of service of the award or, if it is not served, within one year of the last signature. The court of appeal of the district in which the seat of the arbitration is located will be competent. The appeal ruling may be challenged before the Supreme Court.
An extraordinary challenge is also possible: an award may be challenged for revocation where it has resulted from the wilful misconduct of a party or an arbitrator or is based on false evidence; or if decisive new evidence comes to light after it has been issued.
Non-participating third parties may challenge the award only where:
- it is incompatible with their rights; or
- they are a necessary joint litigant or party to the arbitration agreement, but were not called to join the proceedings.
The award may also be challenged by third parties and creditors that can demonstrate wilful misconduct or collusion that is detrimental to them.
A non-final award (ie, on preliminary or pre-judicial issues) may be challenged only once it has become final. A partial award (ie, only on certain issues) may be immediately challenged.
The above provisions do not apply to an agreed award (‘lodo irrituale’). This has the effect of an agreement between the parties and may be challenged only on the grounds provided for in general by contract.
On what grounds can parties appeal an award?
The validity of the award may be challenged only on the following mandatory grounds:
- The arbitration agreement is invalid.
- The arbitrators were not appointed as specified.
- The award exceeds the scope of the arbitration agreement or relates to a dispute which was not arbitrable.
- The award was issued after the deadline for its issue.
- The award is contrary to another prior award which is no longer subject to challenge or to a prior judgment which has become final and binding.
- The award was issued by an arbitrator who lacked capacity.
- The award does not meet the minimum formal requirements (ie, summary of the reasons, the decision and signatures of the arbitrators).
- The parties did not have equal opportunity to defend themselves.
- The award has terminated the proceedings without ruling on the merits of the dispute which should have been decided.
- The award contains contradictory provisions.
- The award does not address some of the issues or challenges submitted by the parties.
The award may be challenged for violation of the law applicable to the merits of the dispute only if the parties have expressly provided for this in the arbitration agreement.
It is always possible to challenge an award that is contrary to public policy.
What steps can be taken to enforce the award if there is a failure to comply?
An order contained in an award that is not voluntarily complied with can be compulsorily enforced.
Can awards be enforced in local courts?
Enforcement is subject to the grant of exequatur. Exequatur is granted by the national court of the district in which the seat of the arbitration is located. It is subject merely to confirmation of formal compliance of the award. The decision on exequatur may be challenged before the court of appeals.
How enforceable is the award internationally?
The New York Convention has been ratified by Italy without reservation. Italian awards may thus be enforced in all states that have ratified the convention.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
Except in the case of express waiver, a state and its entities benefit from immunity against enforcement of an arbitral award; further, enforcement cannot be imposed on assets used for sovereign purposes. In identifying such assets, the approach adopted by the Italian courts will favour the state and its entities.
Are there any other bases on which an award may be challenged, and if so, by what?
Pursuant to Article 840 cpc, the party against which the award is invoked can file an opposition within 30 days, if it demonstrates that:
- the parties to the arbitration agreement were under some incapacity under the law applicable to them or the agreement was invalid according to the law to which the parties submitted or, failing any indication, under the law of the country in which the award was made;
- the party against which the award is invoked was not informed of the appointment of the arbitrator or of the arbitration proceedings, or was otherwise unable to make its own defence;
- the award deals with a matter not contemplated by the arbitration agreement or that is beyond its scope, provided that if the decisions on matter submitted to arbitration can be separated from those on matters not submitted, the former may be recognised and declared enforceable;
- the composition of the arbitral tribunal or the arbitration proceeding was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the country in which the arbitration took place; or
- the award has not yet become binding for the parties or has been set aside or suspended by the competent authority of the country in which, or under the law of which, the award was issued.
How enforceable are foreign arbitral awards in your jurisdiction?
A foreign award can be compulsorily enforced. For this purpose, an exequatur must be granted.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
An award that has been declared null by the court of the seat of arbitration cannot be granted exequatur. If exequatur is granted, the party may challenge this decision and enforcement of the award.
Rules and restrictions
Are there rules or restrictions on third-party funders?
Italian law does not regulate third-party funding. There are also grounds to doubt whether legal actions can be financed by third parties which are not entitled to enforce the rights in dispute, with the aim of obtaining a percentage of any eventual award. The relevant contract may be deemed not worthy of protection and null in relation to both its subject matter and its purpose. Such arrangements may also be deemed contrary to the principle of procedural due process, as they could increase the volume of litigation and result in an abuse of the system.
Class-action or group arbitration
Is there a concept in your jurisdiction providing for class-action arbitration or group arbitration? If so, are there any limitations to the arbitrability of such claims or requirements that must be met before such claims may be arbitrated?
The Italian system does not provide for class actions in the context of arbitration. Class actions were only recently introduced before the national courts. Many aspects of the legislation relating to class actions preclude its application to arbitration.
Are there any hot topics or trends emerging in arbitration in your jurisdiction?
As a result of the reforms implemented in recent years, the Italian arbitration regime can now be deemed wholly equivalent to the judicial system and awards have substantially the same effect as court judgments. Additionally, arbitration is often more efficient than court proceedings, in terms of both duration and – especially in technically sophisticated cases – the accuracy of decisions. Arbitration also guarantees greater stability, as challenges to the award are limited to select mandatory grounds. On the flipside, however, arbitrators do not have the coercive powers of the national judge and cannot order emergency and interim measures.