Global Vantage – Interim Measures in Italian ArbitrationsJuly 2022
In November 2021 the Italian Parliament approved Law n.206 of 2021 relating to the reform of the Italian Code of Civil Procedure (the ‘Bill’). One of the most significant amendments proposed by the Bill is the power for arbitral tribunals seated in Italy to grant “interim measures” in support of proceedings. This change will more closely align Italian law with the position in many other international jurisdictions, which in turn could help to improve its popularity as an arbitration destination.
In the context of arbitration, “interim measures” generally refer to any measures (usually temporary) which are ordered by the tribunal before the issue of its award. Unsurprisingly, the type of measure that a party seeks will vary depending on the circumstances and any restrictions on the tribunal’s powers that are imposed by the rules of the relevant arbitration institution / domestic legislation. However, they will usually be directed at ensuring that a party (which could be a party to the action or a third party) takes protective / conservatory steps to support the proceedings. For example, a tribunal might order a “freezing injunction” to try to prevent certain assets from being dissipated / hidden by a party, or make an order for “security of costs” where there are concerns that the claimant will be unable to satisfy the defendant’s costs if it is unsuccessful. These measures can help to preserve evidence and reduce the risk of the arbitration process being prejudiced by the actions of a particular party.
Historically, Italian law has not recognised the ability for tribunals to grant interim measures, save for some limited exceptions relating to corporate law (Article 818, Italian Code of Civil Procedure). As a result, any agreement between the parties to confer such powers on the tribunal, or any interim measure(s) purportedly issued by an Italian arbitral tribunal, could not be enforced. Instead, parties have been required to go through the domestic courts system, which could have significant implications for both time and costs.
In contrast, in England and Wales there is no restriction on the ability to agree that a tribunal may grant interim measures and, even in the absence of agreement between the parties, certain powers (e.g. in certain circumstances to order a claimant to provide security for costs) are conferred on the tribunal by default unless otherwise agreed (Section 38, Arbitration Act 1996). Similar provisions are also in force in civil law jurisdictions, such as France (Article 1468, French Code of Civil Procedure) and Germany (Section 1041, German Code of Civil Procedure). As such, the traditional Italian position makes it somewhat of an outlier in the international arbitration sphere, and this may go some way to explaining the relatively modest caseload handled by even its largest arbitral institution. In 2019, the Milan Chamber of Arbitration received only 102 new requests for arbitration, compared to the London Court of International Arbitration (LCIA), which saw 406 cases referred to it in 2019 (of which 346 were arbitrations fully administered by the LCIA pursuant to the LCIA Rules).
The Bill’s proposals are therefore a step-forward and show a genuine shift towards creating a more pro-arbitration environment in Italy. However, there is perhaps still some evidence of a reluctance to give tribunals true autonomy in this area. For example, the Bill suggests that, in order for the power to grant interim measures to be conferred on the tribunal, the ‘express will’ of the parties to this effect must be demonstrated in the arbitration agreement (or a subsequent written document). This ‘opt-in’ requirement means that the parties will need to have specifically considered the issue of interim measures when negotiating their arbitration clause (or try and agree at a later stage, at which point a dispute may have already arisen, making agreement less likely). Therefore, it remains to be seen just how much of an impact the Bill’s reforms – assuming that the Government adopts them in some form – will have on Italy’s attractiveness as an arbitration destination in the coming years.Download PDF