ITALY Law and Practice Contributed by: Maria Chiara Malaguti, Filippo Rossi and Roberto Longhi, PedersoliGattai
1. Overview 1.1 National Position
lic ) and was followed by several similar disputes relat- ed to the same general measures on incentives to renewable energy production under the Energy Char- ter Treaty (ECT). Most recently, more diversified cases have been taken to investment arbitration tribunals. The fact that intra-EU investor–state arbitration is gen- erally considered incompatible with EU law impacts the disputes involving Italy and companies based in other EU member states. These companies might resort to domestic courts as an alternative. One point is of interest: in the aforementioned renew- able energy cases, pioneered by Blusun , many inves - tors, both domestic and foreign, initially appealed to the Italian administrative courts, arguing that the measures were unconstitutional under the Italian Con- stitution. In this context, many also argued that they were incompatible with the European Convention on Human Rights (ECHR) and the ECT. However, while the administrative judges referred the matter to the Italian Constitutional Court (which found the meas- ures legitimate), calling also upon the ECHR rules, the applicability of the ECT provisions was not finalised. 1.4 Key Industries In Italy, companies that resort to international invest- ment arbitration are typically those involved in infra- structure or large projects abroad. Available data shows that large transportation, telecoms and energy companies make the most use of this instrument. In investment arbitration against Italy, most cases involved the energy sector. Together with energy com- panies, several investment funds that had participated in investments started arbitration proceedings. Use of this instrument by small and medium-sized compa- To date, Italy has been involved in 14 arbitration pro- ceedings, some of which have also led to an annul- ment phase (International Centre for Settlement of Investment Disputes – ICSID) or appeal (Stockholm Chamber of Commerce – SCC). 11 of these con- cerned the same general renewable energy measures – namely a remodulation of previously granted incen- tives for photovoltaic energy production – and were based on the ECT. The fair and equitable treatment nies remains much rarer. 1.5 Major Arbitrations
Italy is generally in favour of investor–state arbitration, and to that end inserts clauses in its investment trea- ties on a regular basis. However, as a member state of the European Union (EU), it does not recognise the validity of investment arbitration for intra-EU disputes and has terminated all of its intra-EU bilateral investment treaties (BITs). The European Court of Justice (ECJ) has declared any arbitration clause for intra-EU investment disputes as incompatible with the EU legal order (C-284/16 – Achmea ; C-741/19 – Komstroy ), and member states would violate EU law if they recognised this method of resolution of disputes under such circumstances. 1.2 Arbitration Conventions Italy is party to all major international conventions on arbitration and recognition of arbitral awards, including the Convention on the Settlement of Investment Dis- putes between States and Nationals of Other States 1965 (the “ICSID Convention”) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the “New York Convention”). In May 2015, Italy signed the United Nations Conven- tion on Transparency in Treaty-based Investor-State Arbitration (the “Mauritius Convention”), but has not yet ratified it. Through the Mauritius Convention, states consent to the application of the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration. 1.3 Prevalence of Investor–State Arbitration Traditionally, many disputes that can also be resolved under international investment law were, and still are, resolved before domestic courts (see 2.6 Arbitration Clauses in Investor–State Contracts for investment contracts), though this also applies for measures of a general nature, subject in principle to scrutiny under administrative law. However, more recently, foreign investors have begun to utilise the investment arbitration mechanism. The first case against Italy was taken in 2014 (ICSID ARB/14/3, Blusun SA and Others v the Italian Repub-
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