A recent decision issued by the Court of first instance of Milan (decision No. 7884 of 22 August 2019, Italian text available here) concerns the relationship between contractual restitutions and arbitration.

In a nutshell, the case heard by the Court of Milan concerned a business lease. The relevant contract contained an arbitration clause. When serious faults emerged, hindering the carrying out of the business, the lessee commenced the arbitration proceedings provided for by the said clause, and the proceedings resulted in the termination of the contract.

In the meantime, the lessor called on a bank guarantee and cashed some promissory notes, which were issued to secure the rent payment.

The lessee, as a consequence, commenced proceedings in State Court, claiming the restitution of the amounts unduly cashed by the lessor.

The lessor objected to the jurisdiction of State Court, on the basis of the said arbitration clause.

This exception was rejected by the Court of Milan, based on the following reasoning.

In the opinion of the Judge, the restitution claim is not based on the contract, but on the termination of the contract. Therefore, considering that the restitution claim is a non-contractual claim and given that, in the arbitration clause, there was no reference to non-contractual claims, the Court of Milan stated that it has jurisdiction over the restitution claim.

In this regard, the Court applied the principles laid down by the Italian Supreme Court with respect to the arbitrability of disputes concerning pre-contractual liability (I examined the topic in this post).  Indeed, the Court considered that a broad interpretation of the arbitration clause, so as to also include in its scope of application restitution claims, is prevented by the fact that the clause does not mention disputes of non-contractual nature.

In my opinion, the conclusion reached by the Court of Milan could be questioned.  Indeed, the arbitration clause expressly referred to arbitration under the rules of Milan Chamber of Arbitration the disputes “concerning (…) the termination of the (…) contract“. I consider that these disputes also include those concerning the restitution due as a consequence of the termination.

However, the decision issued by the Court of Milan confirms that Milan Chamber of Arbitration appropriately modified its model clause, inserting an express reference to non-contractual disputes, on the occasion of the entry into force of its new rules (which I examined in this post).