Italy: The Adjunct Rules Of The Court Of Arbitration For Art: A Closer Look

In a previous article (available here) we already focused on the Court of Arbitration for Art (CAfA), which was presented earlier in June 2018 as the first attempt to solve Art-related disputes with ADR methods other than mediation and negotiation.

Since the CAfA has been introduced as one-of-a-kind ADR institution, our primary thought was aimed at understanding which new and improved tools such entity would introduce into the scenario of the resolution of Art-related disputes. Because, of course, we were expecting that such a focus on Art would be followed by appropriate and tailor-made provisions, adequate to solve the very peculiar disputes of the Art world.

The Rules

The CAfA is the outcome of the cooperation between the Netherlands Arbitration Institute (NAI) and the non-profit association Authentication in Art (AiA). Thus, it does not come as a surprise that the Adjunct Rules of the CAfA consistently rely on the rules applied by the Netherlands Arbitration Institute.

The CAfA, actually, chose to adopt Adjunct Arbitration Rules, i.e. a set of rules, called "Points", which supplement and replace certain provisions of the NAI Rules. The Adjunct Rules can be read here.

However, the amendments and supplements of the NAI Arbitration Rules introduced through the Adjunct Rules seem to hard-hit the needs of the Art-world, while – in some cases – the actual benefit of such modifications is hard to be detected just analyzing the provisions on paper and might be cleared through their future application. 

Some relevant provisions, which are not driven by the fact that CAfA deals with Art, consist in the introduction:

  1. of the criteria for the choice of the substantive law in case the parties have not designated one (Point 13 of the Adjunct Rules suggests as "appropriate" choice of substantive law "the law of the principal location of the seller, if known at the time of the transaction, or, if no sale is involved, of the owner of the object in question at the time of the commencement of the arbitration") and
  2. of a net monetary threshold to set the number of the arbitrators (Point 5 of the Adjunct Rules, according to which "The number of arbitrators shall be three, unless the monetary value of relief sought is less than € 500.000 (five hundred thousand Euros) or the parties have agreed to one arbitrator"). 

The name or identity of the object

The most coherent provision that has been introduced appears to be the possibility for the AiA to publish the awards revealing the "name or the identity of the object in question" (Point 15 of the Adjunct Rules). Although the party may request the information to remain confidential, this provision takes for sure into consideration the need to "spread the news" about the events that involve a piece of art among the relevant people (and markets). This provision deviates from the confidentiality principle which is one of the milestones of arbitration.

The Arbitrators Pool

With reference to the choice of Arbitrators, the Adjunct Rules introduced a crucial provision (namely, Point 4) which states that "Arbitrators shall in principle be chosen from among those persons listed in the Pool". It might seem that such Rule does not amount to a significative amendment, as Article 14 of the NAI Rules already allows the parties to appoint an arbitral tribunal composed by members chosen between the ones short-listed by the NAI administrator among professionals that the NAI itself will deem have the necessary expertise to deal with the matter at issue.

On the contrary, the novelty of the provision consists in the fact that:

  1. the Adjunct Rules' Arbitrators Pool focuses on professionals that have a specific competence exclusively in the Art-field

("private practice lawyers, judges, law professors with at least 5 years of significant experience in at least one relevant field, including (without limitation): (a) authenticity; (b) chain of title of art or cultural property (including heritage/patrimony/restitution); (c) purchase and sale of works of art through private sale and/or auction; (d) copyright in the field of art; (e) insurance of fine art or cultural property; (f) museum exhibition and loan agreements; (g) loan agreements (non-museum); (h) UNESCO; (i) taxation, trusts, estates & succession; (j) import/export regulations; and/or (k) international arbitration");

  1. the Arbitrators Pool is going to be publicly displayed on the NAI's website and therefore freely available for consultation online. The decision to deviate from the traditional confidentiality that most Chambers impose on their list of arbitrators might be interpreted as the intention to grant the maximum transparency and reliability of the institution, of the professionals involved and – therefore – of the decision process that leads to the award.

The Technical Process Advisor

Another interesting "character" introduced by the Adjunct Rules is the "Technical Process Advisor" – hereinafter "TPA" (Points 11 and 12 of the Adjunct Rules titled "Assistance to the Tribunal").

Since the TPA can be chosen from the Expert Pool compiled by the AiA Board, we can infer that such professional shall have technical skills, rather than legal ones. However, as (s)he could be requested "to advise the arbitral tribunal with respect to the pre-hearing evidence gathering and evidence exchange process", it is correct to suppose that such professional might need to have a legal-oriented approach to the task assigned, along with a strong technical expertise on the matter.

Explanatory Note n. 8 of the Adjunct Rules helps to get the difference between the arbitral tribunal appointed "Expert" referred to at Points 10 and 11 of the Adjunct Rules and the TPA: "Such an advisor is intended to assist an arbitral tribunal with respect to the evidentiary matters of a highly complex or technical nature, such as those concerning an evidence of an object's authenticity. The advisor can help facilitate identifying and the gathering of relevant evidence in an efficient and cost-effective manner. The advisor acts under the authority and direction of the arbitral tribunal, but may, if requested, draft proposed procedural orders for adoption by the arbitral tribunal. The precise role in any given case will depend upon the needs and desires of the tribunal and nature of the issues involved.".

The reason for the introduction of this new actor is not clear but, as practitioners, we welcome any means that facilitate the dialogue between arbitrators and other players on highly technical and complex issues.

Expert evidence

Finally, a sore point. Point 10 of the Adjunct Rules states that "On issues of forensic science or the provenance of an object, the only admissible expert evidence shall be from an expert or experts appointed by the arbitral tribunal". Being the subject of the inquiry different, party-appointed experts are more than welcome. The reason for this difference is not easy to grasp. If the concerns regard the impartiality of the decision process according to which the tribunal shall rule, the very same reasoning should apply to the acquisition of all evidentiary meanings that should come from the parties, that might all potentially impact on arbitrators leaning, without giving any relevance to the issue of the case.

Once again, we can conclude only affirming that just time will tell if the choices made by the CAfA will end up being successful.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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