Once again, on arbitration and insolvency

by Roberto Olivaart. 806 It. code civ. proc., art. 808 It. code civ. proc., EC Regulation no. 1346/2000, EU Regulation no. 848/2015Posted on No Comments

Two recent rulings of the Italian Supreme Court analysed the relationship between arbitration and insolvency proceedings.

The first ruling (decision no. 13089 of 24 June 2015 of the of the I Civil Chamber of the Supreme Court, Italian text available here) established that “claims against a bankrupt party may not be brought before an Arbitral Tribunal.  Indeed, the jurisdiction of the arbitrators is in any case prevented due to the prevailing jurisdiction of the Insolvency Courts on such claims.” 

The second ruling is more interesting (decision no. 15200 of 21 July 2015 of the Supreme Court sitting en banc, Italian text available here). This judgment focused on the issue of the relationship between arbitration and insolvency when an arbitration procedure is pending abroad and therefore EC Regulation no. 1346 of 29 May 1999 concerning insolvency proceedings applies.

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Arbitration and shareholders’ loan

by Roberto Olivaart. 806 It. code civ. proc., art. 808 It. code civ. proc., art. 808/quater It. code civ. proc.Posted on No Comments

If an arbitration clause is stipulated in the company’s Articles of association, disputes between a former shareholder and the company, concerning the repayment of a shareholders’ loan, shall be referred to an Arbitral Tribunal. This is, in a nutshell, the rationale of decision no. 18316 of 17 September 2015 of the Third Civil Chamber of the Court of first instance of Rome (the Italian full text is available here).

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Construction of arbitration clause

by Roberto Olivaart. 806 It. code civ. proc., art. 808 It. code civ. proc., art. 808/quater It. code civ. proc.Posted on No Comments

The wording of the arbitration clause should be carefully selected, as it constitutes the basis of the jurisdiction of the Arbitral Tribunal.  A possible wrong wording will not always be emended, once the dispute has arisen.

Nevertheless, it is commonplace that due attention is not devoted to this clause, either because it is inserted at the last minute in an agreement (known as the “midnight clause” effect), or because the agreement is reached after long negotiation on its commercial terms, underestimating the risk of a possible dispute.

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