Foreign Arbitration Clauses And Preliminary Rulings On Jurisdiction: A Few Thoughts On Ruling No. 21550 Of 18 September 2017 Issued By The Joint Divisions Of The Italian Supreme Court

The Italian Supreme Court, acting in the Joint Divisions format, has taken the opportunity to confirm the jurisdictional nature of arbitration.1 It did so while adjudicating on an application for a preliminary ruling on jurisdiction. The Joint Divisions recognise the full applicability of the procedure under Article 41 of the Italian Code of Civil Procedure (i.e. the procedure for obtaining a preliminary ruling on jurisdiction) when dealing with a clause providing for a "foreign" arbitration.2

The ruling is a clear confirmation of the more favourable approach being taken in Italy to domestic and international arbitration. Three passages of the Supreme Court decision confirm this.

The Joint Divisions confirm the admissibility of applications under Article 41 of the Italian Code of Civil Procedure even where the contract contains a clause providing for foreign arbitration. Article 41 of the Italian Code of Civil Procedure allows parties to ask the Supreme Court to resolve questions of jurisdiction, for example, resolving whether a case can be heard by an ordinary judge, an administrative or even a foreign judge (Article 37 of the Italian Code of Civil Procedure and Law 218/1995). Consistent with the most recent case law, the Supreme Court applied the principle that a clause requiring foreign arbitration equates to an ouster of jurisdiction of for the domestic courts in favour of a foreign court. The Court reasons that the jurisdictional aspect of arbitration is now an undisputable fact for both courts and academics.3

It has not always been like this. Over the years, courts and academics had developed different views. The new Supreme Court ruling is the result of a relatively recent revirement.4

The change of approach reflects international trends and, most recently, amendments introduced by Legislative Decree No. 40 of 2006, whereby arbitration awards were recognised as having "the effect of a court judgment" (Article 824-bis of the Italian Code of Civil Procedure).

It can be seen that the Supreme Court decision first addresses the admissibility of an application for a preliminary ruling on jurisdiction where the contact contains a clause providing for foreign arbitration. As said, this examination is carried out in the light, first and foremost, of the jurisdictional nature of arbitration as a substitute for domestic courts. As a consequence, while a dispute on whether competence should be attributed to an Italian panel of arbitrators or to...