Finally, interim measures in Italian arbitration

One of the major arbitration law novelties included in the to be implemented structural reform of the Italian justice system is, undoubtedly, the power for arbitral tribunals seated in Italy to issue interim measures in support of their proceedings. This long awaited change will put to an end one of the main differences, in the arbitration sphere, between Italy and other European countries.

The new statutory provisions on interim measures granted by arbitral tribunals

The main principles to be implemented by the Italian Government in relation to the new arbitration related rules are set out by Article 1, para. 15, of Law No 206/2021. Letter (c) of this provision stipulates that:

• arbitral tribunals shall be granted powers to issue interim measures, substantially within the same limits applicable to Italian courts, provided the parties have expressly consented thereto;
• Italian courts will have the power to grant provisional relief only prior to the arbitrators’ acceptance of their appointment;
• Italian courts will have jurisdiction on challenges to interim measures granted by arbitrators, which will be allowed only on limited grounds (corresponding to most of the grounds for setting aside awards under Italian law i.e. those under Article 829, para. 1, of the Italian Code of Civil Procedure (“ICCP”) and for conflict with public policy), as well as over the supervision of the enforcement of such measures.

The previous Italian law regime

As expected, this key amendment to the Italian arbitration law has been welcomed with much enthusiasm by Italian scholars and arbitration practitioners, who have, for many years, strongly argued in favour of such a reform.

The current prohibition, in Italian law, on arbitrator granted interim measures (see Article 818 ICCP) has traditionally been justified on the basis that, under Italian law, arbitral tribunals lack any power of coercion (and need the involvement of state courts to enforce their awards).

So, it was argued, a power to grant (immediately enforceable) interim measures would not be consisted with this. Many Italian scholars, however, have put forward very convincing arguments against this posture. Over time, the preservation of the prohibition under Article 818 ICCP has become an anomaly and has begun to carry the appearance of a policy choice by the legislature  reflecting a reluctance to give arbitration full equivalence with court proceedings. In the face of this, Italian scholars and arbitral institutions have attempted to construe this prohibition restrictively, arguing for the arbitrators’ possibility to issue, subject to the parties’ consent, “determination[s] of [a] provisional nature with binding contractual effect upon the parties” (see Article 26 of the Arbitration Rules of the Milan Arbitration Chamber – CAM).

The Italian justice system reform

The forthcoming new legislation is part of a comprehensive structural reform of the Italian judicial system, which represents one of the key measures contemplated by Italy’s Recovery and Resilience Plan, enacted in the context of the recent NextGenerationEU program.

The goal of this reform is primarily to improve efficiency by shortening the duration of civil and criminal proceedings , to be pursued, among others, by recognising in full the jurisdictional nature of arbitration proceedings (including in a potential interim phase), and trying to have more disputes adjudicated through arbitration (thus lessening the pressure on Italy’s busy courts).

In this regard, Law No 206/2021 establishes directives (as the ones provided for under the above-described Article 1, para. 15) to be implemented by the Italian Government through more detailed legislative enactments amending and/or integrating the ICCP. These statutes shall be enacted within one year of the date of entry into force of Law No 206/2021 (i.e. 24 December 2021).

Next steps

It remains to be seen how, and in what form, the new legal principles will, in practice, be implemented by legislation.

For instance, particular areas of interest will include, amongst others:(i) whether relevant provisions in the rules of arbitration institutions will qualify as “express” consent to interim measures;(ii) the exequatur mechanism applicable to interim measures issued by arbitral tribunals;(iii) the relationship (e.g. exclusive or concurrent?) between emergency arbitrators’ powers and  Italian courts’ interim relief jurisdiction prior to the arbitrators’ acceptance;(iv) which courts will have jurisdiction over issues related to the interim measures; and (v) whether interim measures granted by an arbitral tribunal may be binding on persons who are not parties to the arbitration proceedings.

In any case, whatever its precise shape, this  reform will unquestionably bridge a current gap which exists between Italy and other more arbitration-friendly jurisdictions, thereby increasing Italy’s attractiveness as a seat.