The Italian Court of Cassation has rejected, on February 2019, in Conserve Italia v. Sirec Engineering1 an application by a party to be authorised to amend its appeal, as a consequence of Court of Cassation and Court Constitutional rulings that a new statutory provision, to which it had complied with, which expressly prevented raising a ground for appeal, was construed as allowing it.
In November 2008, the Italian Company Conserve Italia, challenged an award made by an Arbitral Tribunal to the Court of Appeal, Bologna Division, on procedural grounds.
As a consequence of the above Court rulings, the appellant - realizing that it was entitled to benefit of an overruling by the Supreme Court on that issue – applied on 4 February 2014 to be allowed to amend its appeal, by adding to it the ground of breach by the arbitrators of substantive law, a ground which was available before the new legislation (Executive Order no. 40 of 2006) had excluded it (unless expressly provided for by the parties or by a statutory provision).
The application has been rejected by the Court of Appeal on the ground that there had not been the alleged overruling.
The appellant has challenged the appellate judgment to the Supreme Court on the ground that it had wrongly applied the overruling principle and alternatively that it had not recognized that the appellant had not challenged the award also on the ground of an error as to substantive law, just because it had merely applied such statutory provision.
The Supreme Court’s ruling
The Supreme Court has first rightly found that the principle of “prospective overruling” (which allows for neutralizing the applicability of a procedural provision when the Supreme Court construes that provision in a way which be different from its previous construction of it, on which the party had based its defence).
Secondly the Court has held that, even if the statutory provision in issue had provided that such new restrictive legislation applied to arbitral proceedings instituted after its enactment, nevertheless it had to be construed as excluding from its application arbitration agreements entered into before it.
The Court concluded that the lack of timely appeal on such ground was due to a wrong decision by that party, what could not allow it to amend its appeal.
An unacceptable decision
It is submitted with respect that if the new legislation had intended not to extend its ambit to arbitration agreements entered into before its enactment, Parliament could and should have stated it.
In its silence, this provision was extremely clear and the appellant has behaved in compliance with it.
This view is fortified by the application made by the Court of Appeal, Milan Division, in other appellate proceedings to the Constitutional Court to decide whether the statutory provision in issue was in breach of the right of a party to defend itself, and consequently in breach of the Constitution, what would be the case as to parties which, at the time they entered into the arbitration agreement, were statutorily entitled to challenge an award for error on substantive law and are deprived of that right by such subsequent new legislation.
Even assuming then that the provision had not been crystal clear, at least the Court of Appeal’s application to the Constitutional Court showed that it was at least ambiguous.
In both cases, the appellant has not incurred into an error, for which it should be blamed. It is submitted with respect that it should have been entitled to amend its appeal.