Arbitration in Italy is governed by the Italian Code of Civil Procedure (Book IV, Title VIII of the “Codice di Procedura Civile”) (“CPC”).

In order to modernise the procedure and incorporate the terms of several international conventions ratified by Italy, the CPC was amended by three important laws:

• Law No. 28 of 9 February 1983, which was the first attempt to reduce the rigidity of the CPC by excluding Italian nationality as a basic requirement for appointment as an arbitrator;
• Law No. 25 of 5 January 1994, which provided for new rules regarding international arbitration in compliance with international conventions (in particular the New York Convention 1958 concerning the recognition and enforcement of foreign arbitral awards); and
• Legislative Decree No. 40 of 2 February 2006, which constitutes a wholesale redrafting of the previous CPC rules relating to arbitration proceedings.

The CPC applies to all arbitration proceedings taking place in Italy, unless otherwise agreed by the parties. The CPC also contains provisions regarding the recognition and enforcement of arbitral awards rendered by tribunals seated outside Italy.

The CPC provides for different bodies of rules depending on the type of arbitration, namely:

Domestic arbitration:
The statutory rules governing domestic arbitration apply in the event that the seat of the arbitration is in Italy and both parties are Italian.

International arbitration:
International arbitrations are governed by the provisions of applicable international conventions. No specific provision is provided for by the CPC. However, whenever the seat of the arbitration is outside Italy and/or the award is rendered outside Italy and the recognition and enforcement is required in Italy, certain provisions of the CPC can be invoked. In such case, the arbitration shall be considered international even if one of the parties is Italian or Italian law has been chosen to govern the dispute between the parties.

A specific body of rules is provided for annulment and recognition.

Arbitrato irrituale or free arbitration:
A peculiarity of the Italian system is the difference between arbitrato rituale and arbitrato irrituale. The recent reform of the CPC rules concerning arbitration has expressly introduced the possibility for the parties to resort to arbitrato irrituale proceedings.

Arbitrato rituale is the normal type of arbitration proceedings governed by the CPC rules that will be discussed below in more detail.

The so-called arbitrato irrituale is an alternative arbitration procedure which does not lead to an enforceable award. The final decision is, however, binding on the parties in the same way as a contract.

The arbitration agreement can provide that the arbitrator has to decide according to law or according to ex aequo et bono principles.

The parties can decide the procedural rules to be followed by the arbitrator(s): the procedural rules are usually simpler than in ordinary arbitration, but due to the adversarial nature of the proceedings, the right to be heard and to submit documents and claims must be granted in favour of both parties.

The real difference between the two kinds of arbitration concerns the effects of the award: the award issued at the end of an arbitrato irrituale is nonenforceable.

The parties must specify in writing if the arbitration is to be an arbitrato irrituale. If the arbitration agreement does not specify the nature of the arbitration (rituale or irrituale) the arbitration will be considered to be rituale.

The award issued in an arbitrato irrituale can be challenged only on the following grounds:

• the arbitration agreement is void;
• the arbitrators exceeded the scope of the arbitration agreement and such issue was raised as an objection during the arbitral proceedings;
• the arbitrators were not appointed in accordance with the provisions of the arbitration agreement;
• incapacity of the arbitrators;
• the arbitrators breached their duties; or
• violation of the rule audi alteram partem.

The arbitrato irrituale award can be challenged by applying to the competent Court of First Instance.

Finally, if a party does not comply with the arbitrato irrituale award, since it has the value of a contract, the other party can commence an action before the competent Court of First Instance for breach of contract.

Arbitrato extracontrattuale or arbitration on matters not provided for in a contract The recent reform of the CPC rules concerning arbitration has expressly introduced the possibility for the parties to refer to arbitration all future disputes which may arise from one or more given relationships not provided for in a contract (Article 808 bis CPC).

The CPC embodies the following general principles which only refer to arbitrato rituale proceedings:

Due process
Under this principle, the parties to arbitration are entitled to equal treatment by the tribunal and must have the opportunity to submit their requests and to be heard under the same conditions. Infringement of this principle may be a ground for annulling the award (Article 829 CPC). Moreover, the arbitral tribunal has a general obligation to be impartial.

Autonomy
The parties are free to agree on the object of the dispute they wish to refer to arbitration, as well as on the choice of arbitrator(s), rules of procedure, seat of arbitration, applicable law, etc. The parties’ autonomy is limited by mandatory statutory rules and with respect to subject matters on which national courts have exclusive jurisdiction (i.e. disputes concerning matters which cannot be submitted to arbitration).

Non-intervention by the courts
As a general principle, national courts cannot intervene in arbitration proceedings, except as expressly provided in the CPC.

Formal requirements
The arbitration agreement can be in the form of a clause in a larger contract or a stand-alone agreement. In either case, the arbitration agreement should be in writing and should clearly set out the subject matter submitted to arbitration (Article 807 CPC). An arbitration agreement that is not in writing is void. Nonetheless, the CPC does not require that the agreement is embodied in one single document. Hence, the agreement may arise out of an exchange of letters, telegrams, e-mails signed with an electronic signature, a communication by teleprinter or by telefax.

In the event that the arbitration clause is embodied in a party’s general terms of business, this clause has to be explicitly confirmed in writing by the parties.

This requirement has been attenuated with respect to international arbitration. Indeed, in this type of arbitration, the arbitration clause contained in the general conditions of the agreement or in standard forms is considered valid even without any explicit confirmation in writing. In addition, an arbitration clause contained in general conditions incorporated into a written agreement is considered valid if the parties were aware of the clause or should have known of its existence by exercising reasonable diligence.

The validity of the arbitration clause is examined independently of the contract in which it was included. In other words, the invalidity of the underlying contract does not necessarily render the arbitration clause invalid.

Arbitrability
Pursuant to Article 806 of the CPC, disputes concerning inalienable rights cannot be submitted to arbitration. Moreover, disputes regarding individual contracts of employment can be submitted to arbitration only if expressly provided for by law or in collective labour contracts (the arbitration clause in collective or individual labour contracts is null and void if it authorises the arbitrators to decide ex aequo et bono or if it excludes the possibility to challenge the award).

An arbitral award which rules on disputes that could not be submitted to arbitration is subject to annulment. The Italian courts may also refuse the recognition and enforcement of international awards on matters for which arbitrability is excluded under Italian law.

The composition of the arbitral tribunal
As a general rule, the parties determine the number of arbitrators and the procedure governing their appointment. The parties may appoint one or more arbitrators, provided that the tribunal consists of an uneven number of arbitrators. In the event that the parties fix an even number of arbitrators, the additional arbitrator has to be appointed by the President of the Italian Court in the district in which the arbitration has its seat, unless otherwise provided by the parties. If no number has been fixed in the agreement and the parties have not reached an agreement on this matter, the number of arbitrators shall be three. If the parties are unable to appoint the arbitrators, the President of the Italian Court in the district in which the arbitration has its seat shall proceed to make the appointment, unless the parties have provided for an alternative procedure (Article 809 CPC).

If, as is commonly the case, the parties do not appoint the arbitrators in the arbitration clause, the party intending to commence arbitration proceedings shall serve on the other party an appointment act including an invitation for the addressee to appoint his arbitrator, and shall give notice of the appointment to the appointed arbitrator. The other party has 20 days from receipt of such invitation to appoint its arbitrator. Failing such appointment, the party who has made the invitation shall request the President of the Court in the district in which the arbitration has its seat to appoint the arbitrator. The court order by which the President appoints the arbitrator is not open to appeal (Article 810 CPC).

The President of the Italian Court in the district in which the arbitration has its seat shall not proceed with the appointment if the arbitration clause is clearly invalid or if it clearly provides for arbitration seated outside Italy.

Capacity to act as an arbitrator
Under Article 812 CPC, a person who lacks legal capacity, completely or partially, shall not be appointed as an arbitrator by the parties.

Amongst others, minors, persons suffering from legal incapacity, persons subject to bankruptcy proceedings or who are disqualified from holding public office cannot be appointed as arbitrators.

Acceptance by the arbitrators
Acceptance by the arbitrators shall be given in writing, by signing the arbitration agreement or the minutes of the first arbitral hearing, or by a separate act.

Duties of the arbitrators
The arbitrators have to render their award within the time limit set by the parties or by law. If they fail to do so and the award is declared null and void due to their delay, they are responsible for the damage suffered by the parties.

The arbitrators cannot withdraw from their office after having accepted it without good reason. In the absence of a good reason, they may be held liable for damages.

Unless otherwise agreed, any arbitrator who fails to perform his duties or postpones any act connected with his office can be replaced by agreement of the parties or by a third party appointed for this purpose under the terms of the arbitration agreement. Failing such replacement within a period of 15 days after notice has been served on the defaulting arbitrator, each party may file an application to the competent court for his removal. The President of the Court, having heard the parties and found that the arbitrator did breach his duties, declares the arbitrator removed from office and replaces him by an order against which there is no appeal.

Replacing an arbitrator
An arbitrator may be replaced in case of:

• incapacity (e.g. minors, incapacitated persons, bankrupts and some public officers);
• conflict of interest;
• failure to act properly or delay in the procedure, provided there is evidence that the parties have invited the arbitrator to cure his default;
• resignation by an arbitrator from office with good reason; or
• death.

When, for the above reasons, one or more appointed arbitrators are no longer in office, replacement arbitrators have to be appointed according to the procedure set out in the arbitration agreement or as set out above.

Liability of arbitrators
Arbitrators may be held liable for the damage suffered by the parties in the event of:

• their fraudulent or grossly negligent omission or delay in the procedure;
• their resignation without a proper cause; or
• their fraudulent or grossly negligent omission or delay in the issuing of the award.

Each arbitrator is liable only for his own actions.

Liability actions can be brought during the arbitration proceedings only on the first and second grounds described above. If the liable arbitrators did not act fraudulently, compensation for damages cannot exceed three times the arbitrators’ fees. When the appointed arbitrators are held liable, their fees shall not be due.

Rights of arbitrators
Article 814 of the CPC expressly recognises that the arbitrators are entitled to fees and to reimbursement of their expenses. Arbitrators should make reference to the “schedule of fees” as set forth in the Ministerial Decree issued by the Italian Ministry of Justice on 8 April 2004. All parties to the arbitration are jointly and severally liable for the fees and expenses of the arbitration procedure, apart from how the arbitrators apportion costs between them. If one party pays out all the fees and expenses due to the arbitrators, it is nevertheless allowed to recover from the other party the fees and expenses paid to the arbitrators within the limits set forth in the award.

It is commonly accepted that the role of the arbitrators includes determining their own fees in the award and allocating between the parties the responsibility for paying these fees.

Nevertheless, unless the parties approve the arbitrators’ determination of their fees, such determination is not binding on the parties. Failing payment of their fees, the arbitrators apply to the President of the Court in the district in which the arbitration has its seat in order to determine their fees. The court order, although open to challenge by the parties, is immediately enforceable.

Challenge of the arbitrators
A party may challenge the appointment of the arbitrator chosen by the other party and of the chairman of the panel by applying to the President of the Court in the district in which the arbitration has its seat in the following cases:

• the arbitrator does not meet the requirements agreed upon by the parties;
• the arbitrator or the company of which he is director has an interest in the proceedings or in related proceedings;
• the arbitrator or his wife/her husband has family ties up to the fourth degree of kinship, is living together or has a close friendship with one of the parties or with one of the parties’ lawyers;
• the arbitrator or his wife/her husband is party to proceedings pending against or is creditor or debtor of one of the parties or one of their lawyers;
• there is serious hostility between the arbitrator and one of the parties or one of their lawyers;
• the arbitrator is tutor, agent or employer of one of the parties, or is director of an entity having an interest in the proceedings;
• the arbitrator has given advice, has appeared as witness or was involved as judge or arbitrator in the same matter; or
• there are serious reasons of convenience which make it advisable not to act in the proceedings.

The parties cannot challenge their own arbitrator except on grounds arising after the arbitrator’s appointment.

The time limit for filing an application to challenge the appointment is ten days of the appointment of the arbitrator or of the date of knowledge of the grounds for challenge. The decision of the President of the Court cannot be challenged by the parties.

The application does not suspend the arbitral proceedings, unless otherwise agreed by the arbitrators. Nevertheless, if the challenge is successful, the past activity of the challenged arbitrator will have no effect.

Competence to rule on its own jurisdiction
The arbitral tribunal is competent to rule on the validity of the arbitration agreement, which includes an assessment of the capacity of the parties, compliance with formal requirements, the arbitrability of the dispute and the appointment of the arbitrators. The decision rendered by the tribunal on its jurisdiction is subject to judicial control at the request of one of the parties.

A party must raise any jurisdictional objections in his first submission on the merits of the dispute (Article 817 CPC).

The arbitrators’ jurisdiction is not excluded if the same dispute is pending before a national court or if there is a connection with another dispute pending before a national court. However, in the dispute before a national court, the party must raise the objection concerning the lack of jurisdiction of that court in the party’s first defence, otherwise the jurisdiction of the arbitrators is excluded for the dispute pending before the courts (Article 819 ter CPC).

The parties have to raise the objection that the pleadings of the other party exceed the limits of the arbitration agreement during the arbitration proceedings; otherwise they cannot file recourse for annulment of the award on this ground.

If arbitration is pending, actions on the invalidity and/or ineffectiveness of the arbitration clause cannot be brought before the court (Article 819 ter CPC).

Commencement
The arbitral proceedings are deemed to commence when one of the parties serves on the other party a notice of the party’s appointment of an arbitrator and a request that the other party appoint the party’s arbitrator. The parties can be represented by a lawyer.

Seat of arbitration
The parties shall determine the seat of arbitration. In the absence of any express choice, the seat shall be determined by the arbitrators. If neither the parties nor the arbitrators determine the seat of arbitration, it shall be the place at which the arbitration agreement was signed or, if it was signed abroad, the seat will be in Rome.

Unless otherwise agreed in the arbitration agreement, the arbitrators can carry out their functions (e.g. hold hearings) anywhere they please, whether at the seat of the arbitration or elsewhere.

Advance payments
In accordance with current common practice, the arbitrators can refuse to take any steps to advance the arbitration process until they have received payment in advance of the arbitration costs estimated by the arbitrators (Article 816 septies CPC).

If the parties refuse to pay the advance on costs within the timeframe stipulated by the arbitrators, they are no longer bound by the arbitration agreement with respect to the dispute. However, a party can pay in advance the sums due by the other party.

Rules governing the procedure
The parties are free to determine the language of the arbitration and the procedural rules governing the arbitration. These rules have to be determined before the arbitrators accept their office. Upon acceptance, the parties may no longer modify the procedure. It is commonly accepted that the arbitrators have a good reason to withdraw from their office if the parties insist on amending the procedural rules during the course of the arbitration.

Where the parties have not agreed on the applicable procedure, the arbitrators shall apply the rules which they deem most suitable. The only mandatory rule that the arbitrators may not exclude is their obligation to fix the time by which the parties have to submit their demands, documents and replies (Article 816 bis CPC). This provision is considered the strict minimum to guarantee a fair process.

In the event that the arbitrators do not comply with the rules chosen by the parties, the courts may annul the award.

Multi-party proceedings
If the arbitration agreement is concluded between more than two parties, either party can commence arbitral proceedings against all or some or all of the other parties.

In multi-party proceedings, the arbitrators must be appointed in one of the following ways:

• by a third party in accordance with the arbitration agreement;
• by agreement between all of the parties; or
• by the claimant(s) jointly appointing their own arbitrator(s) and the defendants jointly appointing their own arbitrators or jointly requesting a third party to do so.

It should be noted that the voluntary intervention and involvement of a third party (i.e. a person or legal entity who is not party to the arbitration agreement) is only allowed with the consent of the third party, the parties and the arbitrators.

Choice of law governing the arbitration
The parties are free to choose the law governing the arbitration. In the absence of an express choice, the arbitrators shall select the law that they deem to be most appropriate. Unless the parties authorise them to do so, the arbitrators may not decide the dispute ex aequo et bono (“equità”) or in accordance with the lex mercatoria.

Submissions
The arbitration agreement, or if not the arbitrators, may provide for specific time limits within which the parties have to file their formal statements and deposit relevant documents (Article 816 bis CPC).

The content of the formal statements, as well as the choice of which documents to attach to such statements, is at the discretion of the parties.

The parties are not obliged to disclose relevant facts or documents that are harmful to their cases and will usually only submit to the arbitrators the facts and documents that they deem useful in order to establish their rights.

Oral hearings and ‘document only’ arbitrations
The parties are free to organise oral hearings or to conduct the proceedings on a documents only basis. It is common practice to exchange written submissions and then to hold a final oral hearing at which both parties have the opportunity to present their arguments.

Evidence
The parties are free to fix the rules as to what types of evidence can and cannot be submitted during the course of the arbitration. In the absence of any agreement between the parties, the arbitral tribunal will establish the most suitable framework for production of evidence (often reflecting the Italian statutory rules).

Parties and arbitrators may nevertheless ignore the applicable Italian legislation by accepting the admissibility of certain forms of evidence (e.g. e-mail correspondence) or, on the other hand, limiting the admissible evidence to written documents.

In addition, the arbitral tribunal may delegate the decision as to whether or not certain evidence should be submitted to one of the arbitrators.

The arbitrators may hear witnesses in a place of their choice (e.g. at the seat of the arbitration, or at the witnesses’ homes or offices) or require written statements of witnesses’ testimonies. When a witness refuses to appear upon the arbitrators’ request, the President of the Court can oblige him to appear before the arbitrators (Article 816 ter CPC).

Furthermore, the arbitrators can request that public bodies provide them with documents or written information which could be useful as evidence and can appoint technical experts to help them resolve technical issues (Article 816 ter CPC).

Pursuant to Article 819, the arbitral tribunal may render interim awards regarding all queries that arise during the arbitral proceedings (evidential issues, witnesses, etc.) as long as they fall within the scope of the arbitration agreement.

Provisional measures
The arbitrators do not have the power to grant seizure orders or other interim and provisional measures.

Suspension of proceedings
The arbitrators shall suspend the proceedings in the following cases (Article 819 bis CPC):

• death or termination and/or loss of legal capacity of a party (Article 816 sexies CPC);
• criminal proceedings pending on the same matter;
• if during the proceedings an issue arises which cannot be settled by arbitration and which must be resolved by means of a final court judgment; or
• if the arbitrators submit an issue to the Italian Constitutional Court.

The proceedings shall be terminated if no party files an express request to lift the suspension of the proceedings within the time limit imposed by the arbitrators.

Decisionmaking by the tribunal
In addition to the mandatory rules regarding due process, the parties may agree upon specific rules regarding the decisionmaking process in the arbitration agreement. Moreover, under Article 823 of the CPC, the arbitrators must decide by simple majority and with the participation of all the arbitrators.

In the absence of any agreement to the contrary, the arbitrators have to render their decision within 240 days of the acceptance of their appointment as arbitrators (Article 820 CPC). The time limit is suspended when a petition for challenge is filed and when it is necessary to replace one or more of the arbitrators. In the latter scenario, the remaining time will be extended to a minimum of 90 days from the date on which the suspension is lifted.

The CPC nevertheless provides for different cases in which the above period can be extended if both parties agree in writing or if so ordered by a national court (e.g. if the tribunal has to admit new evidence; if an interlocutory award has been rendered; or if the composition of the arbitral tribunal has been changed). It is important to note, however, that an extension can only be granted once and for not more than 180 days.

Form, content and effect of the award
Under Article 823 of the CPC, the award must be rendered by a majority vote of the arbitrators and with the participation of all of the arbitrators, recorded in writing and must contain the following indications:

• identity of the arbitrators;
• seat of the arbitration;
• identity of the parties;
• reference to the arbitration agreement and to the matters submitted to arbitration;
• a brief statement of the reasons for the decision;
• the decision; and
• signatures of all the arbitrators and the date of signature. In this respect, the signature of the majority of the arbitrators is sufficient provided that the decision was taken with the participation of all the arbitrators and that the award mentions explicitly that one or more arbitrators refused, or was unable, to sign the award.

The award has the same effect as a judgment as soon as it is signed.

The arbitrators issue the award in as many original copies as there are parties and notify each party by delivering an original copy or sending it by registered letter within ten days of the date of the last signature.

Settlement
If the parties settle their dispute(s) in the course of the arbitration, it is common practice that they inform the tribunal and withdraw from the procedure. However, the parties can also ask the arbitrators to issue an award which records the terms of the settlement.

Correction and interpretation of the award
Pursuant to Article 826 of the CPC, the parties may require the same arbitrators who decided the case to rectify the award when it includes formal omissions, errors and miscalculations and/or when substantial formal requirements are missing. The tribunal has to take a decision regarding the corrections within a period of 60 days following the request of one or more parties. Within that same period, it has an obligation to hear the parties. If the arbitrators do not comply with such time limit, the parties can require that the same correction be made by the competent national court.

If the award has already been filed with the competent national court for the purposes of enforcement or a challenge, it shall be for that court to rule on possible rectifications.

The CPC sets out the following grounds on which awards governed by Italian law can be challenged:

• lack of a valid arbitration agreement;
• the arbitrators were not correctly appointed;
• the award was rendered by an arbitrator who did not have capacity to act as arbitrator;
• the award was beyond the jurisdiction of the arbitral tribunal, the tribunal did not render a decision on one or more issues, or is contradictory;
• noncompliance with formal requirements;
• noncompliance with the time limits;
• noncompliance with the statutory rules determined by the parties;
• if the award is in conflict with a precedent final award and/or judgment between the parties, provided that the arbitrators were informed of the act in the course of the arbitral proceedings;
• the award breaches fair process rules;
• the award does not decide the merits of the dispute; and
• noncompliance with law (unless the arbitrators were authorised to decide on the dispute ex aequo et bono).

Apart from the above cases, the parties may agree on other situations in which the award can be challenged.

Challenge of the award for noncompliance with the law is always permitted, even when not provided for by the law or by the parties, in the following cases:

• noncompliance with Italian public policy;
• disputes regarding employment issues; and
• disputes regarding issues which cannot be settled by arbitration.

The parties have 90 days from being notified of the award to file a challenge to the award with the Court of Appeal (“Corte di Appello”) where the arbitration has its seat, and not later than one year from the last signature on the award.

Unless otherwise agreed by the parties, the Court of Appeal may also decide the dispute on the merits provided that it declared the award null and void on one of the following grounds:

• formal requirements (reasons for the decision, order, seat, signature) were not respected in the award;
• noncompliance with the time limits;
• noncompliance with the statutory rules determined by the parties;
• if the award is in conflict with a precedent final award and/or judgment between the parties;
• the award breached fair process rules;
• the award does not decide one or more questions raised by the parties; or
• noncompliance with law.

Nevertheless, if a party has its residence or its registered office abroad, the Court of Appeal can decide the dispute on the merits only if expressly agreed by both parties. Whenever the Court of Appeal decides not to rule on the merits, the dispute has to be re-submitted to arbitration for a ruling on the merits.

A petition to set the award aside does not automatically suspend the enforcement of the award. That said, upon the request of the parties, the Court of Appeal may suspend the enforceability of the award.

Domestic awards
Pursuant to Article 825 of the CPC, the enforcement of domestic awards is subject to an application to the competent national court where the arbitration has its seat. Upon assessment of the formal requirements of the award, the court shall issue an execution order (exequatur).

The parties can file a complaint with the same court if the latter denies enforcement of the domestic award. The court has to decide on the complaint within 30 days from the date of notification of the court’s decision to the parties. The decision of the court is final and thus not open to appeal.

Foreign awards
The 1994 reform introduced a recognition and enforcement regime which applies to all foreign awards unless more favourable provisions are available in an international treaty. Nevertheless, the relevant Italian provisions on recognition and enforcement of foreign awards comply almost completely with the provisions of the 1958 New York Convention.

In order to enforce the foreign award in Italy, the party has to file an application with the President of the Court of Appeal where the other party has its residence, and if the other party is not resident in Italy, with the Court of Appeal of Rome.

The party has to provide the President of the Court of Appeal with an original copy of the foreign award and the arbitration agreement, together with a certified Italian translation.

Upon assessment of the above formal requirements, the President of the Court of Appeal has to declare the award enforceable in Italy, unless he establishes ex officio that:

• the subject matter of the dispute cannot be settled by arbitration under Italian Law; or
• the award is contrary to public policy: the Italian courts do not apply the domestic concept of public policy but the international concept of public policy applied under the New York Convention. A Milan Court of Appeal described this concept as “a body of universal principles shared by nations of similar civilisations, aiming at the protection of fundamental human rights, often embodied in international declarations or conventions”;
• a challenge to the Court of Appeal’s decision is admitted upon the request of the party against whom it is invoked if that party proves that:
• one of the parties to the arbitration agreement was under some incapacity, or the agreement was not valid under the law chosen by the parties or, failing any indication thereon, under the law of the State in which the award was rendered;
• the applicant party was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
• the award deals with a dispute not provided for by or falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration. Nevertheless, where decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced;
• the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of the law governing the arbitration; or

the award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

The jurisdiction of the courts
As a general rule, if the parties have agreed to submit their dispute to arbitration, the national courts must decline jurisdiction on the merits if the defendant raises an objection concerning the lack of jurisdiction of the court in his first defence. Even though the CPC recognises the autonomy of the arbitral tribunal, the President of the Court has the power to settle conflicts which may arise during the arbitration proceedings, e.g. settlement of the number of the arbitrators, appointment, removal and replacement of the arbitrators as well as settlement of the fees and the costs of the arbitration.

The role of the court is also important whenever a query arises during the arbitration procedure that cannot be settled by arbitration under Italian law.

Provisional measures
According to Article 818 of the CPC, the national courts have exclusive jurisdiction to grant provisional measures. An application to the national courts for interim measures does not suspend the arbitration proceedings.

Revocation
The award may be revoked within 30 days of a party becoming aware of one of the following events:

• the award is the result of a fraud committed by a party;
• it has been rendered on the basis of false evidence;
• subsequent to the award one or more relevant documents were discovered, which the party could not have discovered earlier due to the other party’s behaviour or force majeure; or
• the award is the result of a fraud committed by one of the arbitrators.

Third-party opposition
A third party can challenge the award within 30 days of the date upon which he became aware of the award if:

• it affects his rights; or
• it is the result of a fraud against him in order to prevent him from recovering his credit or claiming for a purchased right.

On the basis of Bill No. 366 dated 3 October 2001, the Italian Government issued legislative decree No. 5/2003 (hereinafter “the Decree”) in September 2002, introducing a new procedural law to be applied to corporate disputes (with the exception of those companies resorting to the venture capital market) concerning all corporate relations, including disputes arising out of or in connection with incorporation, modification, winding-up, liability actions against managing and auditing bodies of all kinds of companies, and share transfers.

The Decree was approved and came into force as of 1 January 2004.

Arbitration clause (Article 34)
The content of the clause:
According to Article 34, an arbitration clause must provide for the number of arbitrators and set out the procedure for their appointment. The power to appoint all the arbitrators must be conferred on a third party unconnected with the company, otherwise the clause is null and void.

If the third party fails to fulfil its duty to appoint the arbitrators, then the President of the Court of the district in which the company has its registered office is competent to make the appointment (Article 34 Para. 2 CPS) and will proceed accordingly.

Appointment by third parties is the element differentiating these arbitration proceedings from those governed by the provisions of the CPC and aims at promoting impartiality and fairness in the choice of the arbitrators.

Arbitrability:
The memorandum of association of a company may include clauses submitting to arbitration those disputes concerning disposable rights relating to the byelaws of the company and which may arise:

• between shareholders; and/or
• between the company and its shareholders;

The object of the clause may relate to disputes concerning the existence, qualification, or regulation of the byelaws of the company or rights deriving therefrom.

The mere inclusion of an arbitration clause in the company’s memorandum will make such clause binding on the company, and on all of its shareholders, including those who contest their status as such.

Each and every amendment to the memorandum which either introduces or deletes an arbitration clause will need to be approved by shareholders representing at least two-thirds of the company’s capital. Those shareholders who did not vote or participate in the decision are entitled to withdraw from the company within the following 90 days.

If specifically provided for in the memorandum, the clause may also deal with those disputes initiated by or against directors, liquidators and auditors. Such a clause will automatically be binding on such persons upon acceptance of their post.

Disputes necessarily requiring the intervention of the Public Prosecutor may not be submitted to arbitration (disputes concerning the appointment and the removal of liquidators, for example).

Arbitration proceedings
Procedural aspects which are not expressly provided for in the Decree are governed by the provisions of the CPC. The provisions of the Decree that differ from ordinary arbitration proceedings are as follows:

• the arbitration application must be filed with the companies’ registry and be made available to all of the company’s shareholders (Article 35 Para. 1 CPC);
• third parties may intervene in company arbitration proceedings (Article 105 CPC). In addition, ex parte intervention (Article 106 CPC) and intervention by virtue of court order (Article 107 CPC) are allowed. The first kind of intervention is for third parties who are not shareholders; however, they may only intervene before the first hearing. The other two kinds of intervention are only meant for shareholders. Following intervention, arbitrators may admit new evidence and extend the period within which they are obliged to render a final award;
• Article 819 CPC (pursuant to which arbitration proceedings are to be suspended where interlocutory issues which are not subject to the jurisdiction of the arbitrators arise) does not apply to company arbitration, thus facilitating a rapid resolution of the dispute; and
• when the dispute concerns the validity of shareholders’ resolutions, the arbitrators may always suspend the effects of those resolutions as a preventive measure.

CMS Adonnino Ascoli & Cavasola Scamoni
Via Agostino Depretis, 86
00184 Rome, Italy


Paola Ghezzi
T +39 06 47 81 51
F +39 06 48 37 55
E paola.ghezzi@cms-aacs.com


Laura Opilio
T +39 06 47 81 51
F +39 06 48 37 55
E laura.opilio@cms-aacs.com