Legal issues of general application

Government permission

What government approvals are required for typical project finance transactions? What fees and other charges apply?

In Italy, for project finance transactions, no specific government approval or taxes, fees or charges are generally applicable, save for licences and permits usually required to commence building activities or services supply. Moreover, in the context of concession-based transactions, before lending entities may implement a step-in right, the public entities may require a preliminary evaluation of the new private entrepreneur in relation to its capability to run the project and with reference to the anti-corruption and anti-bribery requirements.

As in the context of a financing transaction, the project finance documents (both finance and commercial) may need to be registered for tax purposes or to ensure their validity or enforceability.

Italian law is the usual governing law for transaction documents, except for major financing transactions where a cross-border syndication may be required or it is expected. In such latter cases, English law is usually applicable to loan documents.

Registration of financing

Must any of the financing or project documents be registered or filed with any government authority or otherwise comply with legal formalities to be valid or enforceable?

See question 20.

Arbitration awards

How are international arbitration contractual provisions and awards recognised by local courts? Is the jurisdiction a member of the ICSID Convention or other prominent dispute resolution conventions? Are any types of disputes not arbitrable? Are any types of disputes subject to automatic domestic arbitration?

On foreign arbitral award recognition, Italian law allows parties to submit a dispute to arbitration, with the exception of disputes concerning non-disposable rights. Pursuant to article 824-bis of the Italian Code of Civil Procedure (applicable to arbitrations where the place of arbitration is Italy, even if dealing with international disputes), arbitral awards have, as from the date of signature, the same effects as court decisions.

In addition, under either the Brussels Regulation (EU) No. 1215/2012 (in the case of judgments from the courts of other EU member states) and Title II of Law No. 218/1995 (in any other case), the jurisdiction of Italian courts can be derogated by contract in favour of foreign courts or foreign arbitration.

The recognition and the enforceability of foreign arbitral awards is governed by the 1958 New York Convention, ratified by Italy, according to which foreign arbitral awards are recognised and may be enforced in Italy even if the country recognising the decision is not a party to the Convention.

Law governing agreements

Which jurisdiction’s law typically governs project agreements? Which jurisdiction’s law typically governs financing agreements? Which matters are governed by domestic law?

The usual governing law for transaction documents is the Italian law, save for major financing transactions where a cross-border syndication may be required or it is expected. In such latter cases, the financing agreements are usually subject to English law. As for project commercial agreements (such as energy, procurement and construction, and operation and maintenance contracts) usually Italian law is applicable as for Italian-based transactions. However, if the contractor is not an Italian entity (eg, wind turbine suppliers or servicers), the contract can be governed - at first instance - by the legislation of the state of incorporation of the relevant contractor, provided that Italian law is often recalled by way of a specific direct agreement to be executed between the parties (ie, the company and the contractor) and the financing entity involved in the deal.

Submission to foreign jurisdiction

Is a submission to a foreign jurisdiction and a waiver of immunity effective and enforceable?

According to Italian private international law, parties to a contract may freely choose the applicable law to the whole or a part of the contract, and select the court that will have jurisdiction over disputes. It is provided that any such choice does not conflict with any provisions of Italian law of mandatory application, since the principles setting limits on the recognition of foreign laws (such as public policy or mandatory principles of law) do not apply to commercial relationships.

In particular, subject to exceptions, whether the countries involved are EU member states, the Italian courts will apply the Rome I Regulation ((EC) No. 593/2008) on the law applicable to contractual obligations to determine the governing law of a contract made on or after 17 December 2009. As specified, the general rule under Rome I is that the contract is governed by the law chosen by the parties. Exceptions include, in particular, circumstances where the choice of law is fraudulent or the application is manifestly incompatible with the public policy of the forum or in the case of overriding mandatory provisions of the law of the forum. Except for particular cases, an Italian court would also uphold an agreement made in advance to submit non-contractual obligations (eg, a claim in respect of a misrepresentation made in the course of contractual negotiations) to the law of a particular country, in accordance with the terms of the Rome II Regulation ((EC) No. 864/2007).

Enforceability in Italy of final judgments obtained in a foreign court is governed by either the Brussels Regulation ((EC) No. 44/2001) (in the case of judgments from the courts of other EU member states) or Title IV of Law No. 218/1995 if no bilateral treaty applies. A final and conclusive judgment for a definite sum of money entered by a foreign court in any proceeding should be enforced by the Italian courts without re-examination or relitigation of the matters adjudicated upon provided that the requirements under Title IV are complied with.

On waiver of immunity, a party may waive its sovereign immunity. Nonetheless, some matters are unquestionably subject to Italian law and a waiver of certain immunities will not be recognised or allowed by courts.