International Arbitration 2024 Comparisons

International arbitration is not the prevailing method of dispute resolution in Italy. However, domestic parties increasingly consider deferring their disputes to arbitration as a more rapid and efficient instrument than ordinary court proceedings.

The recent reform of civil proceedings, which will be addressed below, tried to make arbitration a more attractive dispute resolution method and set a more transparent and valuable system.

The narrow limits applying to the recognition and enforcement of arbitral awards are an additional element which makes the Italian system arbitration-friendly.

Italy has a long history of resolving corporate disputes through arbitration. Areas like construction and post-M&A transactions have experienced significant international arbitration activity, too. This is likely due to the involvement of entities from various countries. For the same reason, contracts governed by the CISG often include an arbitration clause.

The Milan Chamber of Arbitration (CAM) is the most used arbitral institution for international arbitration in Italy. The reason is that CAM has the resources and background to handle international arbitration procedures and is aligned with international best practices in administering arbitral proceedings.

Some Italian bar associations have established arbitral institutions that deal mainly with local arbitral procedures.

Also, Italy has a long tradition of ad hoc arbitration, in which parties do not rely on pre-established rules of arbitral institutions. These proceedings are governed by the Italian Code of Civil Procedure (CCP) only.

In Italy, the Courts of Appeal (ie, the courts of second instance) are the courts designated to:

• hear disputes on the appeal of domestic arbitral awards;
• decide on the recognition of foreign awards and on the subsequent challenge.

All judgments of the Courts of Appeal can be further appealed to the Supreme Court (Corte di Cassazione).

Domestic courts of first instance might be involved in arbitral proceedings when provided by the law – eg, for the appointment or challenge of an arbitrator or in case of enforcement of domestic awards.

The CCP is the primary legal framework for arbitration in Italy.

Articles 806 to 832 of the CCP outline the key procedural rules for arbitration proceedings held in Italy, without prejudice to relevant international conventions in force. Articles 839 and 840 of the CCP focus on the recognition and enforcement of foreign arbitral awards in Italy.

Italy’s arbitration law is not based on the UNCITRAL Model Law on international commercial arbitration but shares many core principles.

The recent “Cartabia reform” (see 2.2 Changes to National Law) has filled the biggest gap between Italian legislation and the UNCITRAL Model Law concerning the possibility for arbitrators to grant interim measures.

On 28 February 2023, the so-called “Cartabia reform” for the reform of civil proceedings, introduced by the Italian Legislative Decree No 149 of 2022, entered into force and, among other things, introduced some changes to the national arbitration law.

The main, and most keenly awaited, innovation is the introduction of the arbitrators’ power to grant interim measures. This was a significant factor that differentiated Italy from other major jurisdictions and was thought to be an obstacle to the growth of international arbitration in Italy. It must be added that such power must be conferred on the arbitral tribunal by the parties in writing, in the arbitration clause or by a specific agreement. However, a reference to the rules of an arbitral institution granting this power satisfies the condition.

Other significant innovations are:

• the addition of a new ground for the challenge of arbitrators for “serious reasons of convenience”;
• the obligation upon each arbitrator to declare all circumstances that might compromise their impartiality and independence. Failure to disclose causes the invalidity of the acceptance of their appointment;
• the explicit provision that the decree declaring the effectiveness of a foreign award is immediately enforceable, although the term to submit the appeal to challenge the decree has not yet expired;
• the regulation of the “translatio iudicii” from arbitration proceedings to ordinary proceedings and vice versa and
• the time limit to challenge an arbitration award through annulment proceedings, which has been shortened from one year to six months (however, the 90-day deadline to challenge an award upon service by the other party remains unchanged).

The CCP, in Articles 807 and 808, establishes two ways in which parties can agree to settle disputes through arbitration (both hereinafter referred to as “Arbitration Agreement”):

• the arbitration clause (Clausola Compromissoria), included within an agreement to handle future disputes that may arise from that specific agreement;
• the arbitration agreement (Compromesso), which represents a separate agreement formed after a dispute has arisen, designed to submit that particular dispute to arbitration.

A key difference between the two is that the arbitration agreement must explicitly identify and clarify the specific dispute being submitted to arbitration.

By contrast, both the arbitration clause and the arbitration agreement must be in writing to be valid. In this regard, agreements entered into by telegraph, telex, fax are considered to have been made in writing. So is an agreement entered into by the so-called “certified email” (a particular email system widely used in Italy).

Furthermore, should one party unilaterally insert an arbitration clause into its general terms and conditions (if governed by Italian law), the clause must be specifically accepted in writing by the other party – ie, an acceptance of the overall general terms is not sufficient. Otherwise, according to Article 1341 of the Italian Civil Code, the arbitration clause will be deemed null and void.

Whether a dispute can be settled through arbitration depends on the nature of the rights involved: according to Article 806 of the CCP, disputes concerning “non-disposable” rights (rights that are considered fundamental and essential to a person or society and that cannot be freely given up, transferred or inherited – eg, those commonly found in criminal law, personality rights and family law) are not arbitrable.

In this regard, the nature of a right (ie, if it is or is not disposable) is usually stated by the law itself or clarified by case law.

Disputes concerning individual employment agreements can be settled through arbitration only if provided by law or by the relevant national collective bargaining agreement (contratto collettivo nazionale di lavoro).

In addition, Article 808-bis of the CCP introduced the possibility of referring to arbitral jurisdiction even future disputes concerning one or more relationships, including non-contractual relationships, as long as they are specified and as long as the legal relationships referred to the arbitrators concern disposable rights.

Arbitration agreements are mostly enforced by Italian courts. If a valid arbitration clause exists, both parties are obligated to use arbitration to settle disputes until a final award is issued.

As regards the law governing the Arbitration Agreement, before the Cartabia reform, the most common approach was to apply the conflict of laws rules (ie, Law 218 of 31 May 1995, without prejudice to the application of international conventions). Thus, the law governing the arbitration agreement was, by default, the one chosen by the parties – often the same one applicable to the agreement in which the arbitration clause was included. It should also be noted that, according to conflict of laws rules, agreements can be drafted to have separate legal rules apply to different sections of the same agreement. This means the law governing the arbitration clause might differ from the law that applies to the remainder of the agreement.

Under the revised Article 822 of the CCP, parties to an arbitration agreement have more flexibility in choosing the law that will govern their arbitration. They can now specify this law in two ways: (i) within the arbitration agreement itself, or (ii) through a separate written document entered into before the arbitration proceedings begin.

Article 808 of the CCP separates the validity of the arbitration clause from the validity of the agreement. This means that even if the agreement is found to be invalid, the arbitration clause can still be considered valid and enforceable.

In the arbitration agreement, the parties can decide how the arbitrators will be appointed. The only limitation that exists concerns the number of arbitrators, which can be one or more, but always an odd number to avoid deadlock situations.

In this respect, Article 809 of the CCP provides that if an even number of arbitrators is indicated, an additional arbitrator shall be appointed by the president of the court competent for the arbitral seat.

While there may not be mandatory qualifications for arbitrators, choosing someone with expertise in the specific dispute benefits all parties. For the arbitrators, professional ethics dictate that they should decline the appointment if they lack the skills and knowledge necessary to deliver a fair award.

According to Article 809 of the CCP, if the arbitration agreement does not specify the number of arbitrators and the parties are unable to agree, the arbitrators will then be three and will be appointed by the president of the court of the seat of the arbitration.

The competent court also appoints arbitrators if the appointing authority chosen by the parties to select arbitrators fails to do so.

The same provision also applies in case of multiparty arbitrations.

In addition to what explained in 4.2 Default Procedures, the court can also get involved in choosing arbitrators if one party fails to appoint their own (Article 810 of the CCP). In this case, the party who appointed its party-appointed arbitrator can file a motion to the court president. The president will then make the appointment, as long as the arbitration agreement seems valid and does not clearly provide for foreign arbitration.

Following the recent update of Article 810 of the CCP, the appointing authority shall ensure criteria of transparency, rotation and efficiency in the appointment of the missing arbitrator(s).

There are three main reasons why a party might challenge an arbitrator in a case (Article 815 of the CCP).

• Lack of qualifications – the arbitrator does not have the specific skills or experience that the parties originally agreed upon.
• Conflict of interest – the arbitrator has a financial stake in the outcome of the case, or a personal relationship with one of the parties or their lawyers.
• Lack of impartiality – while not explicitly stated, impartiality is ensured by allowing the parties to challenge the arbitrators for being related to a party or having ongoing legal disputes with them, for having assisted or represented a party in a previous phase of the dispute.

An important update to Article 815 of the CCP introduced by recent civil procedure reform (Cartabia reform) allows parties to challenge arbitrators for “serious reasons of convenience”. This provides more flexibility in situations where an arbitrator might be perceived as biased but would not meet the traditional tests of conflict of interest or lack of qualifications. While the exact definition of “serious reasons of convenience” is not explicitly defined, it will likely be determined on a case-by-case basis. This means courts will consider the specific circumstances to determine if the reasons are significant enough to lead to replacing the arbitrator.

This addition brings the CCP more in line with international arbitration rules, which often have broad clauses for challenging arbitrators due to impartiality concerns.

A party cannot challenge an arbitrator they appointed unless they discover grounds to do so after the time of the appointment. Even then, they only have ten days to file a challenge with the court at the arbitration seat, starting from either the appointment date or when they discover the grounds for challenge.

The party that appointed the removed arbitrator may choose the substitute. If the arbitrator was chosen by an appointing authority, that authority will be responsible for finding a substitute.

Upon acceptance of appointment, arbitrators are required to declare any circumstances that might raise doubts about their neutrality or independence. This declaration is mandatory and failure to do so may result in the removal of the arbitrator. The parties have ten days from the acceptance of the arbitrator or the discovery of the undeclared information to request the arbitrator’s removal.

According to the rules of professional conduct, a lawyer must not assume the function of arbitrator when they have, or have had in the last two years, professional relations with one of the parties. The same applies to partners of the arbitrators and other lawyers who share the same premises as the arbitrators. The lawyer appointed as an arbitrator shall also disclose in writing to the parties any additional circumstance that may affect their independence.

Similar rules are provided in the arbitration rules of the Milan Chamber of arbitration. Indeed, Article 20 provides that the appointed arbitrators shall submit their statement of independence within a predetermined time limit. In the statement, the arbitrator shall disclose, specifying the time and duration:

• any relationship with the parties, their counsel and any other person or entity involved in the arbitration, even on a financial relationship basis, which may affect their impartiality or independence;
• any personal or economic interest, either direct or indirect, in the dispute; and
• any bias or reservation as to the subject matter of the dispute.

The statement shall be repeated in the course of the proceedings, if necessary, in case of supervening circumstances.

Disputes concerning non-disposable rights cannot submitted to arbitration, save as otherwise provided by the law. For example, the right to life, integrity and privacy, or issues concerning personal status are non-disposable rights.

In Italy, the principle of competence-competence applies, meaning arbitral tribunals have the authority to decide on their own jurisdiction.

This is confirmed by Article 817 of the CCP, which grants arbitrators the power to assess both their jurisdiction and the validity, scope, and content of the arbitration agreement.

To this purpose, any challenge to the arbitral tribunal’s own jurisdiction shall be raised no later than the first procedural activity following the arbitrators’ acceptance of their appointment.

Article 819-ter strengthens this principle by stating that the jurisdiction of arbitrators is not excluded by the pendency of the same case before the court, or by the connection between the dispute referred to them and a case pending before the court. Moreover, during arbitration proceedings, national courts cannot determine the validity of the arbitration agreement.

A court can address issues of jurisdiction of an arbitral tribunal only if the arbitration is not pending yet.

Pending arbitration proceedings, the court can address issues of jurisdiction only after the award is pronounced (see 11.1 Grounds for Appeal on grounds for nullity).

Article 828 No 10 of the CCP offers a potential avenue to challenge negative rulings on jurisdiction by arbitral tribunals. This provision allows an appeal of the award if it fails to decide the merits of the dispute, even though the arbitral agreement mandated the arbitrators to do so.

Parties have the right to go to court to challenge the jurisdiction of the arbitral tribunal only after an award has been rendered.

The standard of judicial review for questions of admissibility and jurisdiction is de novo.

When a valid arbitration agreement exists, and the respondent challenges the court’s jurisdiction in their first defence, national courts must decline to hear the case on the merits. If the respondent fails to challenge the court’s jurisdiction in time, the arbitral tribunal will no longer have jurisdiction over the dispute. Moreover, under Article 808 quater of the CCP, in case of doubts, arbitration agreements must be interpreted as to extend to all disputes connected with the agreement or the legal relationship concerned.

It follows that the courts do not allow proceedings in breach of arbitration agreements.

Article 816-quinquies of the CCP regulates how additional parties that are neither parties to an arbitration agreement nor signatories to the contract containing the arbitration agreement can join an ongoing arbitration. The “original” parties involved in the arbitration, the arbitrators and the third party itself must agree for this to happen.

A third party is entitled to join either voluntarily or upon the request of another party. However, any third party with an interest in the outcome of the dispute can join the proceedings to support the position of an existing party; similarly, the original parties can always require the involvement of any necessary co-party in the proceedings.

Concerns have been raised in this regard. Since the third party cannot appoint an arbitrator of its choice, some argue that this might undermine the integrity of the arbitral tribunal. This issue is still unresolved.

The rules of the Milan Chamber of Arbitration delegate any decision on the joining of a third party to the arbitral tribunal, which will consider the position of all parties involved and the specific circumstances of the case to take a decision.

Overcoming the restriction established by the old Article 818 of the CCP, the new Article 818 authorises arbitrators to grant provisional measures. This is an innovation for the Italian legal framework, which had remained “de facto” isolated from other European legal systems that have long recognised such power. This means that the arbitrators will now have the power to issue any sort of interim measure depending on the law applicable to the arbitration proceeding.

The parties can grant the arbitrators such power in two ways: (i) by explicitly stating it in the arbitration agreement or in a subsequent written deed prior to the commencement of the arbitration proceedings, or (ii) by referencing a set of rules that grant arbitrators the power to issue interim measures. Since most major arbitration institutions already have such rules, it is clear that this simplifies the process in most of the arbitration proceedings.

In addition, Article 816-bis(3) of the CCP empowers the arbitrators to issue a preliminary award and a preliminary order on all matters involved in the arbitration proceedings, which can be reviewed and potentially modified by the arbitrators later in the proceedings.

Article 818 of the CCP introduces exclusivity for arbitrators in issuing interim measures. If the parties grant this power to arbitrators, courts can only intervene pre-emptively – meaning before the arbitrator officially accepts the appointment, without such an application being deemed to be a waiver of the arbitration agreement. Once the arbitrator takes on the case, the court’s authority to issue these measures is permanently lost.

Parties may appeal interim measures issued by arbitrators before the court of appeal. However, appeals are limited to the specific grounds stated in Article 829(1) of the CCP or if the measures violate the public order.

While appeals are handled by the court of appeals, the implementation of the interim measures shall, instead, be carried out under the supervision of the ordinary court of first instance. In this respect, new Article 818-ter provides that interim measures granted by arbitrators shall be enforced under the control of the court in whose district the arbitration seat is located. If the seat of arbitration is not in Italy, the competent court will be that of the place where the interim measure must be implemented.

Italian law does not include any specific provisions concerning security for costs.

However, some scholars argue that security for costs may be ordered by arbitral tribunals under the conditions provided by the law applicable to the arbitration proceedings (ie, provided that the parties have expressly granted arbitrators the power to issue interim measures or have referred to an institutional regulation in the Arbitration Agreement that expressly gives the arbitrators such power, including the power to grant security for costs).

The CCP acts as the primary source for both litigation and arbitration procedures. Articles 806 to 832 of the CCP specifically govern arbitral proceedings that have their seats within Italian territory, without prejudice to any relevant international conventions. The “Cartabia reform” moved the regulation of corporate arbitration into new Articles 838-bis to 838-quinquies. Articles 839 and 840 of the CCP address the recognition and enforcement of foreign arbitral awards.

The CCP grants parties flexibility in shaping the arbitration process. They can either:

• establish the rules – this involves explicitly outlining the specific procedures to be followed in the arbitration agreement. Parties can also reference existing national laws or established arbitration rules from institutions; or
• empower the arbitrators – parties can choose to grant the arbitrators the authority to determine the procedural rules. This includes the power to address any unforeseen situations not covered by the existing legal framework.

The Italian legal system recognises a distinction between free arbitration (arbitrato irrituale) and the standard contractual arbitration (arbitrato rituale). In standard arbitration, the resulting award carries the weight of a judgment, with specific grounds for challenge. Arbitrato irrituale, on the other hand, deems the arbitrator’s decision as a binding agreement, subject to different legal considerations.

Special provisions apply to arbitration proceedings involving labour law, and arbitration proceedings involving individuals and/or companies on one hand and public entities on the other.

Article 816-bis of the CCP establishes a key principle for Italian arbitration proceedings. In the absence of a specific agreement between the parties, either outlined in the arbitration agreement or established prior to the commencement of the proceedings, arbitrators hold the authority to determine the appropriate procedures. However, this freedom comes with a crucial safeguard: the “adversarial principle” (principio del contraddittorio). This principle ensures that both parties receive a fair and equal chance to be heard throughout the arbitration proceedings.

Considering the freedom granted by the CCP, arbitrators have wide-ranging powers throughout the arbitration proceedings, including the specific powers explored in this Guide (see, for example, 6.1 Types of Relief and 8.1 Collection and Submission of Evidence).

In 2006, a comprehensive set of rules governing arbitrators’ duties was established. Among others, an arbitrator must:

• uphold independence and impartiality – arbitrators must be and remain free from any influence or bias towards either party throughout the arbitration;
• ensure fairness and good faith – the arbitration process must be conducted in a just and equitable manner, adhering to the principles of good faith;
• maintain confidentiality – all aspects of the arbitration, including information and arguments presented, must be kept confidential by the arbitrators; and
• deliver a reasoned and timely award – the arbitrators are obligated to issue a well-reasoned decision within the designated timeframe.

If an arbitrator fails to comply with the aforementioned duties, they may be held liable for any damages suffered by the parties. The same liability also applies in the event that an arbitrator withdraws from office without reasonable grounds.

Although Italian law does not require legal representation during arbitration, it is strongly recommended. Ideally, the representative chosen should have expertise in both Italian law and international arbitration.

The rules on representative mandate apply to the party-defendant relationship, which can be established either with individuals registered as lawyers or with individuals who have no special professional qualifications. In the event that they are appointed, defence attorneys are now granted extended powers to any procedural action, even without express indication of the parties, including the waiver of claims and the determination or extension of the time limit for the pronouncement of the award (Article 816-bis of the CCP).

By contrast, legal representation by an Italian qualified lawyer becomes mandatory in the event that the dispute moves to the Italian courts, including the appeal of arbitration awards.

According to Article 816-bis of the CCP, the parties may agree on the procedural rules that the arbitrators shall follow in the proceedings. Failing an agreement by the parties, the arbitrators can proceed in the manner that they deem most suitable, provided that the parties’ right to be heard is respected.

Arbitrators generally approach the collection and submission of evidence by replicating the instruments provided by the CCP. Therefore, there is very limited disclosure. Also, expert witnesses are appointed by tribunals and the parties can appoint a party’s witness expert who will discuss the technical issues with the arbitral tribunal’s appointed expert.

Sometimes, however, arbitrators might be more willing to adopt international standards in the collection of evidence, allowing the use of witness statements and cross-examination.

The rules of evidence follow the same principles mentioned in 8.1 Collection and Submission of Evidence.

Arbitrators in Italy lack the power to compel a witness to appear before them. However, they can apply to the court to obtain a compelling order.

If the parties have not set different rules, the arbitrators have the power to order the production of documents by the parties.

Italian arbitration legislation is silent on confidentiality. This means there is no legal requirement for confidentiality by default.

However, strong confidentiality safeguards exist in practice. These come from two key sources:

• arbitral rules – many arbitral institutions, like the Milan Chamber of Arbitration (CAM), have their own rules that often include robust confidentiality provisions. Parties choosing these institutions would be bound by such rules; and
• professional conduct regulations – arbitrators themselves are typically subject to professional codes of conduct that emphasise confidentiality obligations.

As a result, while not mandated by law, confidentiality is generally a hallmark of arbitration proceedings seated in Italy.

Information used in arbitral proceedings cannot be disclosed in subsequent proceedings, unless the parties involved agree.

The award is determined by a majority vote of the arbitrators. It must be a written document including the following information:

• names of the arbitrators;
• seat of the arbitration proceedings;
• details of the parties involved in the dispute;
• reference to the arbitration agreement and the parties’ final claims;
• reasoning behind the decision;
• verdict of the arbitral tribunal; and
• signatures of the arbitrators and award date.

The majority of arbitrators must sign the award, explicitly stating if any other arbitrators were unable or unwilling to do so. The award becomes effective upon the final signature and must be delivered to both parties within ten days.

In the absence of a specific timeframe established by the parties, the arbitrators have 240 days to issue the award, starting from the constitution of the arbitral tribunal. This period may be automatically extended by another 180 days under certain circumstances, including:

• collection of testimony;
• appointment of an expert by the tribunal;
• issuance of a partial or provisional award; and
• replacement of an arbitrator.

The time limit may also be extended by order of the court, at the request of the arbitrator or one or all parties, or by agreement.

If the matter is arbitrable, the arbitrators may grant any remedy provided by law.

Although arbitral tribunals in Italy generally have broad discretion in determining the appropriate remedy under the applicable law, there are some limitations.

In this regard, all awards must conform to Italian public policy. This means that the award cannot contain elements that substantially contradict Italian legal principles. Awards that violate public policy risk being set aside by the competent Court of Appeal.

Punitive damages, for instance, may be considered compatible with Italian public policy on the basis of past rulings of the Italian Supreme Court (Corte di cassazione civile, Sezioni Unite, sentenza 05/07/2017 No 16601).

As long as the matter is arbitrable, arbitrators may award interest in accordance with the applicable law.

The allocation of legal costs, as a procedural matter, is governed by the arbitration agreement. The agreement may refer to specific institutional rules governing the allocation of legal fees and the costs of the arbitration.

If the arbitration agreement is silent on the subject and both parties seek reimbursement of legal fees, it is generally considered that they have implicitly agreed on the allocation of costs. However, if neither party seeks an award for legal fees, the court cannot award them because they have not been requested.

In most cases, arbitral tribunals follow a proportional approach. The allocation of costs reflects the relative success of the parties on the merits of the case. Sometimes other factors, such as the conduct of the parties during the proceedings, may also be taken into account when determining the final allocation of costs.

In Italy, challenging an arbitration award on the merits is uncommon. The parties generally have to opt in to appeal on the merits, but this is rare.

Instead, challenges are mainly limited to the formal grounds specified in Article 829 of the CCP, known as “grounds for nullity”. These grounds include:

• invalid arbitration agreement – the agreement outlining the arbitration process is not legally valid;
• improper appointment of arbitrators – the arbitrators were not appointed according to established procedures;
• lack of capacity of arbitrators – the arbitrators did not have the necessary legal qualifications to hold the position;
• overstepping the scope – the award addressed issues beyond the scope of the originally agreed arbitration;
• lack of components of the award – the award lacks essential elements such as the grounds, rulings, or signatures of the arbitrators;
• violation of timeframe – the award was issued after the deadline had expired;
• procedural violations – failure to comply with mandatory procedural steps outlined in the arbitration agreement, if not remedied;
• conflict with previous rulings – the award contradicts a previous final and binding judicial decision or an arbitration award submitted during the proceedings; and
• unequal opportunity to present the case – one or both parties were denied a fair opportunity to present their arguments.

Although “grounds for nullity” are the main grounds for challenging an award, there are some exceptional circumstances: (i) revocation due to fraud – if a party discovers evidence of fraud committed by the other party or an arbitrator after the award has been issued, revocation may be sought; (ii) revocation due to newly discovered evidence – similarly, if a party discovers crucial documents previously hidden by the actions of the other party, this too may be grounds for revocation; (iii) opposition by third parties – in rare cases, a third party not involved in the arbitration may challenge the award if it significantly impairs its legal rights.

A party seeking to have an award declared null and void must file a summons with the court at the arbitration’s seat within 90 days of receiving the award. If formal service of the award never occurred, the deadline is extended to six months from the date of the last arbitrator’s signature. For challenges based on revocation due to fraud or newly discovered evidence, or third-party opposition, the deadline is stricter. The interested party has 30 days from the date they become aware of the circumstances triggering the challenge to file with the court.

An agreement entered into by the parties for the purpose of excluding/extending rights to appeal will not be valid.

However, the party who caused the ground for nullity, or waived it, or who has not objected in the first subsequent application or request to a violation of a rule governing the conduct of the arbitral proceedings, cannot challenge the award on that ground.

Article 830 of the CCP aims to balance two competing interests. On the one hand, it seeks to uphold the arbitrator’s authority to decide on the substance of the case. On the other hand, it aims to prevent an unreasonable delay in resolving the dispute if the Court of Appeal decides on the merits.

The Article outlines the court’s actions upon upholding an appeal for nullity of the award. If the grounds for nullity fall within a specific category, the Court of Appeal will issue a judgment setting aside the award. However, for a different set of nullity reasons outlined in the same Article, the Court of Appeals will itself decide the merits of the dispute, unless the parties have a prior agreement – either in the original arbitration agreement or a subsequent one – specifying otherwise.

Moreover, if one of the parties, as of the date of signing the arbitration agreement, resides or has its actual place of business abroad, the court of appeal shall decide the dispute on the merits only if the parties have so determined in the arbitration agreement or agree to do so.

Italy signed the New York Convention without reservations.

Articles 839 and 840 of the CCP govern the recognition and enforcement of a foreign award. These Articles replicate the content of Article V of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

In the first phase of the proceedings, the party seeking enforcement of an international award in Italy shall resort to the president of the Court of Appeal where the counterparty resides. If the counterparty resides outside of Italy, the competent Court of Appeal shall be that of Rome. The party seeking enforcement must file the award with the competent court, along with the arbitration agreement. The court will only check if the award meets the formal requirements provided for by law and provides (or denies) the declaration of enforceability by decree.

In the second (potential) phase, one party can challenge the decree.

If the award has not yet become binding or has been set aside or suspended by a competent authority of the state of the seat or of the law under which it has been issued, the Court of Appeal denies its enforcement. If a party requested the annulment or the suspension of the validity of the foreign award to the foreign competent authority of the seat, the Court of Appeal may stay the proceedings for the recognition or enforcement of the award; upon request by the party concerned, it may, in the event of a stay, order that the other party give an appropriate security.

A foreign state can invoke sovereign immunity to object to the enforcement of arbitral awards and shield its property and assets used to perform its sovereign functions. On the other hand, property and assets related to private functions can be subject to enforcement proceedings.

Italian courts tend to recognise and enforce arbitral awards.

Domestic courts refuse to enforce arbitral awards on public policy grounds by referring to international public policy, avoiding the implementation of values incompatible with the Italian legal system’s inspiring principles, as provided by the Constitution and all those laws equated with it.

The CCP does not contain provisions that allow for class-action arbitration or group arbitration.

However, Article 816-quater of the CCP does allow for combining multiple claims into a single arbitration case, provided that (i) the arbitration agreement devolves the appointment of arbitrators to a third party, (ii) the arbitrators are appointed by agreement of all the parties, or (iii) the other parties, after the first party has appointed their arbitrator or arbitrators, appoint by agreement an equal number of arbitrators or entrust a third party with the appointment of arbitrators.

There is no ethical code in Italy specifically intended for counsel and arbitrators conducting proceedings. However, if admitted to practice law in Italy, counsel and arbitrators are subject to the provisions of the code of professional ethics.

Moreover, some arbitral institutions have their own code of ethics for arbitrators (eg, the code of ethics for arbitrators of the Milan Chamber of Arbitration is an annex to the arbitration rules).

There are no rules in Italy applicable to third-party funding and there is no legal obstacle to use it in arbitration. However, it is still uncommon in Italy.

While the CCP does not explicitly address consolidating separate arbitration proceedings, it is generally considered permissible under certain conditions. In particular, all parties involved in the separate proceedings must consent to consolidation and the arbitration agreements, involved parties, and arbitral tribunal for the separate proceedings must be the same.

In practice, many arbitral institutions’ rules provide guidance on consolidation. For instance, the Milan Chamber of Arbitration empowers its arbitrators to decide whether to consolidate multiple proceedings connected to the same dispute.

In Italy, arbitration agreements typically only bind the parties who signed them.

Arbitration agreements can extend to third parties if provided for by law, either expressly or pursuant to interpretation by the courts.

For example, Article 838 bis of the CCP provides that the arbitration clause included in the company’s by-laws is binding for shareholders and corporate bodies. It can be argued that shareholders implicitly accepted the arbitration clause included in the articles of association. However, this argument is weaker for members of the corporate bodies, which simply accept an appointment.