Arbitration and tort claims

Italian Arbitration Law, as amended in 2006, expressly provides for the parties to enter into an arbitration clause concerning their possible tort disputes.  Indeed, Article 808(b) of Italian Code of Civil Procedure, as enacted by 2006 reform, sets forth that “The parties may establish, in a specific agreement, that future disputes relating to one or more specific non-contractual relations be decided by arbitrators (…).“

There are only a few reported cases concerning Article 808(b) of Italian Code of Civil Procedure, and therefore it appears that that tool is rarely used.  Nonetheless, it could be very helpful: for instance, in the case of related actions, it could prevent the doctrine of “parallel paths” from applying.

A recent decision of the Italian Supreme Court (Supreme Court, VI Civil Chamber, decision no. 20673 of 13 October 2016, Italian text available here) deals with that matter. As far as I know, it is the first decision issued by the Italian Supreme Court concerning the construction of Article 808(b) of Italian Code of Civil Procedure.

The case heard by the Italian Supreme Court may be summarised as follows.

Wind Jet and Alitalia entered into a memorandum of understanding and an agreement (in April 2012) concerning the possible purchase by Alitalia of Wind Jet’s going concern.

Wind Jet claims that Alitalia unlawfully refused to enter into the sale and purchase agreement; moreover, it has even used some confidential pieces of information it received during the negotiations so as to gain market shares at the expenses of Wind Jet.  Such behaviour would entail, under Italian law, a liability in tort and therefore Wind Jet sued Alitalia in the Court of first instance of Catania, seeking compensation for the suffered damage. 

Alitalia appeared in Court and objected to its jurisdiction, noting that the agreement entered into by the parties provided for an arbitration clause, further specifying that the Court of first instance of Milan shall be the proper venue for disputes that cannot be brought in arbitration.  As an alternative, the proper venue would be the Court of first instance of Civitavecchia, where Alitalia has its registered office.

The Court of Catania upheld Alitalia’s objection and stated that the jurisdiction lies with the Arbitral Tribunal provided for by the arbitration clause entered into by the parties. Wind Jet appealed that decision to the Italian Supreme Court, claiming that the above mentioned arbitration clause does not refer to non-contractual disputes (such as the one arose between the parties).

Alitalia appeared in Court, pleading that the Court of Catania was right in giving a broad construction of the arbitration clause, as it is expected (and indeed required) to do under Article 808(d) of Italian Code of Civil Procedure.  In any event, Alitalia noted that, should the arbitration clause not apply, the Court of Milan (or of Civitavecchia) would be the proper venue for the dispute.

The Supreme Court ruled that the jurisdiction over the dispute does not rest with an Arbitral Tribunal because the arbitration clause does not refer to non-contractual disputes.  That clause reads as follows: “All the disputes arising out of this Agreement, including those concerning its validity, construction, fulfilment and termination, shall be settled under the national rules of the National and International Arbitration Chamber of Milan (…).”  The Supreme Court ruled that, in order to have a non-contractual dispute settled by arbitration, that dispute has to be mentioned in the arbitration clause and, failing the parties to mention it, the construction rule contained in Article 808(d) of Italian Code of Civil Procedure is to no avail: “under Article 808(b) of Italian Code of Civil Procedure, if the parties wish their non-contractual disputes, stemming from a contractual agreement, settled by arbitration, they have to expressly state their intention.  In other words, in the light of the provision contained in Article 808(b) of Italian Code of Civil Procedure, if the parties did not express their intention to also have their non-contractual disputes settled by arbitration, Article 808(d) of the above mentioned Code is to no avail. Indeed, Article 808(d) of Italian Code of Civil Procedure allows a broad construction of the arbitration clause, provided that the parties have expressly provided for the jurisdiction of an Arbitral Tribunal over their non-contractual disputes.“

In the case at hand, the findings of the Supreme Court are also confirmed in the light of another clause contained in the agreement entered into by the parties, that is the clause whereby “(…) the Court of first instance of Milan shall be the proper venue for any dispute concerning this Agreement that cannot be brought in arbitration.”  Indeed, that clause would be meaningless, if the parties had agreed on an arbitration clause concerning all their possible disputes (regardless of their contractual or non-contractual nature). 

The Supreme Court ruled that the jurisdiction over the case rests with the State Courts and that the proper venue is the Court of first instance of Milan. Meanwhile, it also provided helpful guidance as to the content and the wording of arbitration clauses, in the case the parties wish all their disputes (contractual and non-contractual) be settled by arbitration.