Italy: Arbitration In Italy

Last Updated: 31 May 2019
Article by Arnone & Sicomo
Most Read Contributor in Italy, August 2019

Arbitration in Italy: how to easily resolve legal cases without the court

What is arbitration in Italy and in which cases should it be used?

The arbitration in Italy, governed by the code of civil procedure, is part of the Alternative Dispute Resolution (ADR) procedures and is an alternative method of resolving disputes, of civil and commercial nature, which exempts the parties from applying to the Court.

The arbitration proceeding assigns to the role of the arbitrator, after having examined the dispute, the task to pronounce the so-called arbitration award or to give the most appropriate resolution to the dispute.

The arbitration award produces effect similar to that of the sentence.

The parties can also opt for the arbitration board, rather than referring to a single person the dispute between them. The arbitration board consists of three arbitrators, two of which are chosen by the parties and one by a third party, which in most cases is the President of the Court.

The choice can be made at the time of drafting the contract, by means of a specific arbitration clause, or after the initiation of the dispute, with the signing of the agreement (arbitration agreement).

Not all disputes can be resolved by resorting to arbitration. Those relating to family law and those in which the right asserted is of an unavailable nature are excluded.

The advantages of arbitration, compared to the judicial proceeding, are:

  • speed in the definition of the dispute;
  • fixed and lower costs.

The arbitration award must be pronounced by the arbitrators within the deadline set by the parties. Failing this, it is envisaged that the award must be pronounced within 240 days from the acceptance of the assignment, a term which may be extended when there is a written declaration by the parties that jointly request it from the arbitrators or by the President of the competent Court if asked by a party or the arbitrators.

The suspension of procedural time limits during the working period is not applicable to the deadline for the award pronunciation envisaged by the art. 820 c.p.c..

Ritual arbitration, non-ritual arbitration and the various types of proceedings

The arbitration proceeding is established when the request for arbitration is presented. The latter is equivalent to that proposed in the courts, so much so that:

  • interrupts the prescription;
  • is transcribable, when it concerns the registered movable or immovable assets.

The parties are entitled to propose exceptions relating to the interpretation, validity and effectiveness of the arbitration agreement (by which the parties agree to refer the dispute decision to the arbitrators).

There are different types of arbitration:

  • ritual arbitration,which, in accordance with the will of the parties, leads to the arbitration award, having has the effect of sentence, and by approving it becomes an enforceable title;
  • non-ritual arbitration, when it leads to an informal award, or having a negotiating nature and effectiveness is unsuitable to become an enforceable title but useful for requesting an injunction;
  • legally binding, when the arbitrators to decide must rely on what is dictated by the law on the matter;
  • equity based, when the arbitrators can pass the law by resorting to broader uses and principles of justice;
  • administered, when the parties request the intervention of an entity or an institution responsible for the management and control of each single phase of the procedure;
  • ad hoc, regulated by the parties in the arbitration agreement or in a separate act;
  • documentary, when it is carried out exclusively through the examination of documentary evidence.

Arbitration in Italy: how to appoint the arbitrators and what requirements must they meet?

The act by which the parties make the choice to resort to arbitration is a contract, the so-called arbitration agreement or arbitration convention which may take two forms:

  • the compromise, when it concerns a dispute that has already arisen;
  • the arbitration clause, relating to disputes that may arise in the future from a specific contract.

The arbitrators are appointed by the parties, by means of the aforesaid "arbitration agreement" with which they refer to a single arbitrator or a board of arbitrators for the resolution of the dispute between them.

In order for the arbitration agreement to be valid it must respect the requirements dictated by the Civil Code on the essential elements of the contract.

The number of arbitrators must always be odd and the appointment can take place at the time of the compromise agreement or later, with an act that will then integrate the latter.

In case of disagreement between the parties, the choice of the arbitrators will be deferred to the President of the Court (art. 810 c.p.c.).

In order to be appointed as an arbitrator, full capacity to act is required of him. After the appointment he will then receive the mandate.

Instead, the profiles of responsibility that can be charged on the arbitrator are:

  • Intentional misconduct or gross negligence, in cases of omission or delay in the execution of due actions, for which he has been dismissed or, otherwise, has renounced himself to the assignment without justified reason;
  • Intentional misconduct or gross negligence, in cases of omission or impediment to pronounce the award before the fixed deadline (art. 820 and 826 c.p.c.).

In which cases it is possible to resort to arbitration in Italy?

The disputes that can be settled by the arbitration are as follows:

  • inheritance disputes;
  • corporate disputes;
  • public administration disputes;
  • labor disputes.

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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