A significant and extensive reform of the Italian Code of Civil Procedure (ICCP) was recently enacted by the Italian Government. Legislative Decree No. 149/2022 (the Reform), became applicable as of February 28, 2023.
The Reform introduced material changes to the rules governing proceedings before State Courts, with the aim of increasing efficiency and cutting the time required to decide a case. Extremely relevant changes also impacted arbitration, making Italy an even more arbitration-friendly jurisdiction. Below the most significant features.
Reinforced Impartiality and Independence of Arbitrators
With a view to aligning Italian arbitration law with the practice of the main international arbitration institutions, the amendments impose on each arbitrator a duty to disclose, at the time of acceptance of their appointment, the existence or absence of any circumstances that could lead to a challenge pursuant to the relevant Italian law provision (Article 815, para. 1, ICCP).
Without this declaration, the arbitrator’s acceptance will be considered null and void.
Moreover, article 815 of the ICCP provides a list of grounds for challenging an arbitrator. Until now, such grounds were specific and mostly related to the arbitrator’s relationship with the parties. With a view to strengthening the guarantees of impartiality and independence of arbitrators, the reform added a broader ground for the challenge, namely: “serious reasons of convenience.”
New Power to Grant Interim Measures
Under the amended Article 818 of the ICCP, parties can now grant arbitrators the power to issue interim measures. This power requires the parties’ express written consent, to be provided prior to the commencement of the arbitration. Consent may be provided by reference to relevant provisions in the rules of an arbitration institution designated by the parties. State courts will continue to have the power to grant interim measures only until arbitrators accept their appointment.
Interim measures granted by arbitrators can be challenged before the competent Court of Appeal, limited to the same grounds for annulment of arbitral awards, as well as limited to cases where interim measures are contrary to public order.
Interim measures granted by arbitrators shall be enforced under the jurisdiction of the court in whose district the seat of arbitration is located. If the seat of arbitration is not in Italy, the competent court will be that of the place where the interim measure is to be enforced.
Recognition and Enforcement of Foreign Awards
Foreign awards will be immediately enforceable in Italy upon issuance of an ex parte recognition decree by the president of the competent Court of Appeal. As a result, an award-creditor will be entitled to commence enforcement proceedings irrespective of a pending challenge to the award’s recognition. However, if a challenge is lodged, the Court of Appeal may stay enforcement, or suspend the enforceability of the award, in the event of serious concerns.
The time-limit to challenge an award has been shortened from 1 year to 6 months.
Additional New Rules
A request for arbitration will now have the same effect for limitation purposes as the commencement of court litigation proceedings. Previously, no section of the ICCP expressly provided for this, with subsequent uncertainties.
Under the new Section 819 quater of the ICCP the parties may now ‘save and transfer’ the effects of a claim submitted in court or compelled in arbitration when jurisdiction is denied, meaning they can effectively resume the existing proceedings before the alternative competent authority. In summary, the Reform’s goal is to establish a more efficient mechanism for reinstating proceedings in the correct forum, whether they were erroneously initiated before either state courts or arbitral tribunals.
Conclusion
The practical implementation of the Reform is posing some uncertainties and the results in terms of efficiency of Court proceedings will need to be gauged over the next few years. However, changes outlined do still bring the Italian legal framework in line with the most advanced jurisdictions and should contribute not only to improving the efficiency of the civil justice system, but also to increasing Italy’s appeal as an attractive and fast-growing seat in the international arbitration market.
Arcangela Gerbino (Trainee) contributed to this article.
