Background

Concept of sovereign immunity

What is the general approach to the concept of sovereign immunity in your state?

The Italian approach to sovereign immunity is focused on the restrictive immunity theory. Indeed, according to recent case law (eg, the Italian Court of Cassation, 8 March 2019, No. 6884), the principle that one sovereign power cannot exercise jurisdiction over another, which is the basis of state immunity, only applies to acts of sovereignty or authority provided by a state and does not apply to acts of commerce or administration performed by a state.

The immunity for acts of sovereignty or authority applies to states or foreign entities acting as subjects of international law or as an organ of a foreign state (eg, public entities, including embassies) (the Italian Court of Cassation, 6 June 2017, No. 13980).

According to case law (the Italian Court of Cassation, 26 November 2018, No. 30527), the principle of immunity applies also in the case of disputes having patrimonial nature where the state or the foreign entity acts as a sovereign entity.

Legal basis

What is the legal basis for the doctrine of sovereign immunity in your state?

Italy does not have a specific law on sovereign immunity. The topic is instead governed by article 10 of the Italian Constitution, according to which the Italian legal system must conform to international principles, including customary international principles.

The principle of restricted state immunity has its roots in customary international law, and this was reiterated in 2012 by the International Court of Justice in the judgment ‘Jurisdictional immunities of the State’ (Germany v Italy); the European Court of Human Rights, which stated that ‘state immunity from jurisdiction is governed by customary international law, the codification of which is enshrined in the United Nations Convention on Jurisdictional Immunities of States and their Property of 2 December 2004’ (Sabeh El Leil v France, 2011); and by the Italian Court of Cassation in several decisions. Thus, according to article 10 of the Italian Constitution, the restricted immunity customary principles apply in Italy.

Multilateral treaties

Is your state a party to any multilateral treaties on sovereign immunity? Has the state made any reservations or declarations regarding the treaties?

While Italy did not sign the 1972 European Convention on State Immunity, it is one of the signatories of the 2004 United Nations Convention on Jurisdictional Immunities of States and Their Property (the 2004 Convention), not yet entered into force. Indeed, Italy ratified the Convention through the Law No. 5/2013, by which the President authorised the execution of the 2004 Convention.

In addition to this, the above-mentioned law is accompanied by a declaration by which it is ruled that the 2004 Convention does not apply to the activities of armed forces and their personnel, either carried out during an armed conflict as defined by international humanitarian law or undertaken in the exercise of their official duties. Similarly, the 2004 Convention does not apply where there are special immunity regimes, including those concerning the status of armed forces and associated personnel (ie, related to specific public officials of a state, such as the President).

Jurisdictional immunity

Domestic law

Describe domestic law governing the scope of jurisdictional immunity.

Because Italy does not have a domestic law concerning state immunity, any aspect of the topic is regulated by international law, particularly by the customary international principles, as codified by the 2004 Convention. In other words, even though the 2004 Convention has not yet come into force, its principles are regularly applied by the Italian courts, as per the aforementioned decision of the European Court of Human Rights stating that restricted state immunity is ‘governed by customary international law’ (see question 2).

According to these customary international principles, Italian courts do not have jurisdiction over acts of sovereignty or authority (ie, acts performing a public function or acts of auto-organisation of a state); or acts performed by a foreign state or a foreign entity acting as part of the foreign state, or as a subject of international law. On the contrary, a state or its organs and instrumentalities could be subject to Italian law if they engage in business transactions.

State waiver of immunity or consent

How can the state, or its various organs and instrumentalities, waive immunity or consent to the exercise of jurisdiction?

Customary international law, as codified by the 2004 Convention, provides that a state is entitled to be subject to the jurisdiction of a court only in cases of express consent arising from an international agreement, a written agreement, a declaration before the court or a written communication in a specific proceeding.

Moreover, a state can implicitly waive its immunity by bringing the proceeding, intervening in the proceeding or taking any other step relating to the merits of a pending proceeding. Last, a state waives its immunity when it brings any counterclaim arising out of the same legal relationship or facts as the principal claim in any type of proceeding in which the state itself is a party or intervener.

In which types of transactions or proceedings do states not enjoy immunity from suit (even without the state’s consent or waiver)? How does the law of your country assess whether a transaction falls into one of these categories?

Pursuant to Italian case law, a state does not enjoy immunity in connection with private and commercial activities and, therefore, for commercial transactions. To determine whether an act falls outside of the scope of state immunity, courts will assess whether the relevant act is performed by the foreign entity as a private entity (eg, economic activities related to an agreement). In other words, the immunity does not apply to activities that are, even indirectly, out of the scope or functions of a state and its public authority (including those activities merely ancillary to the performance of public functions by a state).

In a recent case, related to the sale and purchase of military helicopters, the Italian Court of Cassation stated that, even if the purchase of military equipment has a nexus with the primary scope of a state, such sale cannot be out of the jurisdiction of Italian courts given that it was based on private law and entered into with a private company operating on the market (Italian Court of Cassation, 24 November 2015, No. 23893).

Most of the decisions on the matter available on public databases are issued in connection with labour law disputes. In this regard, the Italian Court of Cassation repeatedly stated that the immunity is not recognised when the employment relationship under discussion before a court is not related to, or does not have any impact on, the sovereign powers of the foreign state in terms of organisation of public offices and services (the Italian Court of Cassation, 8 March 2019, No. 6884).

If one of the exceptions to sovereign immunity set out above applies, is there any related principle that could prevent a court having jurisdiction over the state?

Under Italian case law, the act of a state doctrine and the principle of non-justiciability are not recognised. Both theories are not based on international law or customary international law and, therefore, are not directly applicable under Italian courts.

Under Italian law, once a court decides that an act performed by a foreign state is not included among those connected with the authority of a state, it has jurisdiction on the same. In this regard, Italian courts do not investigate a foreign act if it represents the sovereign power of a foreign state.

Proceedings against a state enterprise

To what extent do proceedings against a state enterprise or similar entity affect the immunity enjoyed by the state? Is there precedent for piercing the corporate veil to subject the state itself to those proceedings?

Sovereign immunity is not jeopardised by proceedings against a state enterprise and no decisions by Italian courts can be recorded in connection with the piercing of the corporate veil. Case law distinguishes between activities performed as public functions and activities performed by an entity as a private entity. Each case considers a foreign state, or an organ or public entity of the foreign state; there are no decisions that deal with the matter at hand with respect to private companies acting privately, even if they are owned by a state (on the assumption that private companies cannot perform public functions). The Italian Court of Cassation has stated (Decision No. 6603, 1 April 2015) that the Italian judge has jurisdiction over a claim filed by an Italian company against a state company owned by Brazil, and where Brazil was summoned as guarantor according to the Brazilian Constitution. In this case, the Court of Cassation has rejected the principle of state immunity since the constitutional guarantee cannot be deemed as a iure imperii act.

Standing

What is the nexus the plaintiff needs to have standing to bring a claim against a state?

To bring a claim against a state acting as a private entity, a plaintiff must provide evidences of the nexus in the following terms: in the case of a breach of an agreement, a plaintiff must demonstrate the nexus between the alleged breach and the damages suffered; and in the case of tort liability, a plaintiff has to provide evidences of the nexus between the illicit conduct and the damages suffered.

Moreover, in the case of a state, a plaintiff has to demonstrate that the act performed by a natural person was not performed on behalf of the state (ie, by that natural person acting as a private citizen).

Nexus of forum court

What is the nexus the forum court requires to exercise jurisdiction over a state if the property or conduct that forms the subject of the claim is outside the forum state’s territory?

Under certain conditions, Italian courts’ jurisdiction covers conducts performed abroad. In the case of extra-EU conducts, the Italian jurisdiction is governed by Law No. 218/1995. According to this law, Italian courts have jurisdiction in several cases, including:

  • when the defendant is domiciled or resident in Italy, or has a representative in Italy who is entitled to appear in court;
  • according to sections 2, 3 and 4 of Title II of the Brussels Convention 1968, as amended (eg, when there are more defendants involved in the case, and one of them is based in Italy); and
  • when parties agreed to apply the Italian jurisdiction (Italian jurisdiction does not include rights in rem related to properties situated outside Italy).

In the case of conducts performed in the EU, the Regulation (EU) No. 1215/2012 applies. Under this regulation, Italian courts have jurisdiction in several cases, including when a person is domiciled in Italy and when the damages arose in Italy. Even under the Regulation (EU) No. 1215/2012, Italian jurisdiction does not include rights in rem related to properties situated out of Italy.

Interim or injunctive relief

When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what interim or injunctive relief is available?

Interim and injunctive relief are not available under an arbitral tribunal governed by Italian law. Before an ordinary court, a party is entitled to ask for an injunction order (in the case of a payment of receivables); or, where there is likelihood of success on the merit of the case and a danger in the delay (ie, there is the risk that the counterparty dissolves its assets during the ordinary proceedings), a party is entitled to ask for a seizure of the counterparty’s assets. These same conditions apply to asking for a precautionary measure (eg, if a party wants to avoid further damages related to the behaviour of a counterparty and asks the court to forbid the other party’s conduct).

Final relief

When a state is subject to proceedings before a court or arbitral tribunal in your jurisdiction, what type of final relief is available?

As with any private entity subject to the jurisdiction of Italian courts, a state could be sentenced to compensation for material and personal damages, as well as subject to an order of specific performance.

Service of process

Identify the court or other entity that must be served with process before any proceeding against a state may be issued.

Pursuant to the 1965 Convention on the service abroad of judicial and extrajudicial documents in civil or commercial matters, signed by Italy, each contracting state shall designate a central authority, in compliance with its own laws, which will undertake to receive requests for service coming from other contracting states.

Further, Italy applies Regulation (EU) No. 1393/2007 concerning the service in EU member states of judicial and extrajudicial documents in civil or commercial matters. Similarly, Italy shall designate public officials, authorities or other persons competent for the receipt of judicial or extrajudicial documents from another member state.

How is process served on a state?

Following the application of the 1965 Convention, the authority designed by each state that is part of the 1965 Convention serves the document or arranges to have it served by an appropriate agency to the head of state or competent minister. In the case of application of Regulation (EU) No. 1393/2007, the head of state or competent minister are notified by the receiving agencies.

In exceptional circumstances, each member state is free to use consular or diplomatic channels to forward judicial documents for the purpose of the service or to the agencies of another member state that are competent for transmitting the document.

Judgment in absence of state participation

Under what conditions will a judgment be made against a state that does not participate in proceedings?

As with any private person, once a state has been properly served, it is free to decide whether to participate in a pending proceeding. If it does not appear, the court declares it at the first hearing. At the end of the proceeding, the decision issued by default affects the state. Decisions issued by default must be nevertheless be served to the counterparty (ie, the state).

Enforcement immunity

Domestic law

Describe domestic law governing the scope of enforcement immunity.

Pursuant to international customary law, a state’s asset related to public services cannot be subjected to any enforcement proceedings; however, a state’s asset related to private functions can be subject to enforcement proceedings.

Application of civil procedure codes

When enforcing against a state, would debt collection statutes and the enforcement sections of civil procedure codes or similar codes also apply?

Enforcement proceedings before Italian courts are governed by Italian law, including those against a state. Therefore, a foreign state acting as a private entity in the Italian territory is subject to enforcement proceedings according to the rules provided for under the Italian Code of Civil Procedure. This code provides that, to recover its receivables, a creditor is entitled to attach movable and immovable properties of the debtor. Moreover, the creditor is entitled to attach the amount due to its debtor by a third party. The latter applies to the attachment of bank accounts.

Consent for further enforcement proceedings

Does a prior submission to the jurisdiction of a court or tribunal constitute consent for any further enforcement proceedings against the property of the state?

No, it does not. The waiver shall always be explicit.

The waiver to immunity from jurisdiction does not imply immunity from enforcement, which shall also always be explicit.

Property or assets subject to enforcement or execution

Describe the property or assets that would typically be subject to enforcement or execution.

The assets that would typically be subject to enforcement are immovable or movable property or credits, and have to be used for private functions or related to private activities.

Assets covered by enforcement immunity

Describe the assets that would normally be covered by enforcement immunity and give examples of any restrictive or broader interpretations adopted by the courts.

Immunity from enforcement proceedings can be applied to assets related to public services, such as military assets, goods intended for diplomatic functions and accounts held by an embassy for public functions. In the past, case law gave a restrictive interpretation of immunity stating that it only applies when it is demonstrated that the asset is related to or connected with a public function.

Explain whether the property or bank accounts of a central bank or other monetary authority would be covered by enforcement immunity even when such property is in use or is intended for use for commercial purposes.

Under Italian case law, courts focus on the purpose of the transaction performed to recognise the immunity of a foreign authority. If a property is used for commercial purposes, it shall be subject to Italian jurisdiction.

Test for enforcement

Explain whether domestic jurisprudence has developed any further test that must be satisfied before enforcement against a state is permitted.

There is no jurisprudence developing a further test to assess whether the enforcement against a state is permitted.

Service of arbitration award or judgment

How is a state served with process or otherwise notified before an arbitration award or judgment against it (or its organs and instrumentalities) may be enforced?

The service of an award or a decision follows the rules of the Italian Code of Civil Procedure or the applicable conventions or regulations (see questions 13 and 14).

History of enforcement proceedings

Is there a history of enforcement proceedings against states in your jurisdiction? What part of these proceedings is based on arbitral awards?

There is no history of enforcement proceedings against a state in Italy (public databases available show fewer than 50 cases). Arbitral awards are not public, and an estimate is not possible.

Public databases

Are there any public databases through which assets held by states may be identified?

Yes, there are. Any person is entitled to access the register of the Chamber of Commerce and obtain a balance sheet of a company, including those owned by a state. A balance sheet may show, among others, properties owned by the company or its bank accounts. Moreover, a person is entitled to request access to the register where immovable assets are registered and to the register where registered movable assets (eg, cars, ships, helicopters) are listed. Finally, a person can be authorised by a court to access the fiscal data of a counter­party, including data related to a bank account.

Court competency

Would a court in your state be competent to assist with or otherwise intervene to help identify assets held by states in the territory?

An Italian court is not entitled to assist in the identification of a debtor’s assets. However, the Italian Code of Civil Procedure provides that the public official in charge of the enforcement is entitled to search a debtor’s assets to attach them. Moreover, a debtor shall declare to the public official in charge of the enforcement where the assets available for the attachment are located.

Immunity of international organisations

Specific provisions

Does the state’s law make specific provision for immunity of international organisations?

Under Italian law, there are not specific provisions governing the immunity of international organisations. Case law stated that international organisations are covered by immunity when the immunity is provided by Italian law or the international convention that established the international organisations.

Domestic legal personality

Does the state consider international organisations headquartered or operating in its territory as enjoying domestic legal personality and could such organisations be subjected to proceedings before a court or arbitral tribunal?

International organisations headquartered or operating in Italy that do not have an international legal personality and are not covered by immunity are subject to proceedings before a court or an arbitral tribunal.

Enforcement immunity

Would international organisations in the state enjoy enforcement immunity? Are there any cases where debtors sought to enforce against a state by attaching or executing assets held by international organisations?

The assets held by international organisations are subject to enforcement. There is no case law available in connection with enforcement against international organisations.

Updates & Trends

Recent developments

Are there any other current developments or emerging trends that should be noted?

Key developments of the past year30 Are there any emerging trends or hot topics in your jurisdiction?

In recent years, Italian courts have been involved in a controversial matter of international law concerning the compatibility between the sovereign immunity of a state and the protection of human rights.

The case related to the damage suffered by an Italian citizen who was arrested and deported to Germany in 1944. In 2004, the Joint Chambers of the Italian Court of Cassation decided that the German state had to be held liable for the damage suffered by the Italian citizen as a result of the conduct of the German military forces on the Italian territory during the Second World War, which constituted a violation of international law.

Germany invoked state immunity, but the Court of Cassation confirmed the Italian jurisdiction over claims for compensation against the German state. The decision was based on the fact that state immunity shall not be recognised for acts that qualify as international crimes, even if adopted in carrying out the state’s sovereignty. According to the Italian decision, these crimes violated superior rules that prevail over international customary law.

As a result of this decision, Germany brought the dispute before the International Court of Justice. On 3 February 2012, the Hague stated that Italy was required to decline its jurisdiction in relation to the acts of a foreign state (Germany) that constituted war crimes and crimes against humanity, impairing inviolable human rights. According to the Hague, the immunity would have been considered a preliminary matter and, therefore, its examination would have excluded any decision on the merits of the case.

On 22 October 2014, the Italian Constitutional Court was involved in the same case to assess whether certain dispositions of Italian law were compliant with the Italian Constitution and, in particular, whether the International Court’s decisions were immediately applicable in Italy. The Italian Constitutional Court denied that customary international law concerning state immunity applies to war crimes and crimes against humanity.

According to the Italian Constitutional Court, even if state immunity is recognised by customary international law, as confirmed by the International Court of Justice in the 3 February 2012 decision, the applicability of the immunity to cases involving violations of human rights is against the Italian legal system and, therefore, cannot be automatically recognised under the Italian legal framework. Thus, the court confirmed the jurisdiction of Italian courts over claims related to damages suffered for acts performed by a foreign state, even if they are acts of sovereignty, when they are against the fundamental values of a human being.

Following the decision of the Italian Constitutional Court, the Italian Court of Cassation, with its Decision No. 15812 issued on 29 July 2016, confirmed the principle. Further, in its Decision No. 21946, issued on 28 October 2015, the Court stated that, in accordance with the principles affirmed by the Italian Constitutional Court, the applicability in Italy of the state immunity customary international law cannot be recognised in claims relating to damages deriving from war crimes and against human beings, even when they are performed by a sovereign state.

This decision clarified that state immunity is not a right, but it is a prerogative of a state, and cannot be recognised when crimes against international rules are committed. Italian courts, therefore, laid the groundwork for a restriction of state immunity to protect human rights.

Therefore, the courts of first instance (recently, the Court of First Instance of Sulmona, Order 2 November 2017) apply this restrictive interpretative trend to the principle of sovereign immunity with regard to gross violations of human rights.