ITALY Law and Practice Contributed by: Maria Chiara Malaguti, Filippo Rossi and Roberto Longhi, PedersoliGattai
In all cases where contractual obligations exist, the umbrella clause is also invoked. In some instances, applying the umbrella clause in the event of gener- al measures has also been attempted, with varying results. Finally, Article 13 on expropriation is frequently invoked, as is the most constant protection and secu- rity standard. The expropriation standard is usually applied in its definition of indirect expropriation. Based on the available data, and always keeping in mind that each treaty may have different language and therefore a different articulation of the same standard, it can be assumed that Italian claimants against third countries also base their disputes predominantly on these legal bases. The Italian Model BIT mirrors old BITs – after attempt- ing an amicable solution, the parties may resolve a dispute by choosing an arbitration procedure from among the following: • an ad hoc arbitration tribunal, in compliance with the Arbitration Rules of the UN Commission on International Trade Law (UNCITRAL); • an arbitral tribunal that is established pursuant to the Dispute Resolution Rules of the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) or the SCC; or • ICSID. As illustrated, almost all investment arbitrations opened against Italy are subject to ICSID Rules (only two arbitrations have been conducted under the SCC rules). The selection of arbitrators is therefore gov- erned by the ICSID Rules, which grant the parties considerable freedom (Article 37 ICSID Convention). The ICSID Convention acts as a self-contained inter- national regime for the arbitration. Thus, for ICSID arbitrations, the seat of arbitration does not determine the procedural law. Conversely, in non-ICSID arbitra- tions, the seat of arbitration (lex loci arbitri) is cru- 4. The Arbitral Tribunal 4.1 Limits on Selection
cial, as it determines the applicable procedural law to complement the agreement of the parties or the rules of the institution. However, all arbitration regulations included in the Italian Model BIT have procedures for selection of arbitrators (as well as default procedures: see 4.2 Default Procedures ). Furthermore, under arbi- tration rules other than ICSID, in investor–state arbi- tration parties are also not expected to choose the respondent’s country as the seat of arbitration. Italian law should thus not play a role in investment arbitrations having Italy as a respondent; equally, it would be extremely rare for an Italian claimant to be allowed to choose Italy as the seat of the arbitration in investor–state proceedings against a third country. Should this yet be the case, Article 812 of the Italian Code of Civil Procedure (CCP) establishes who can- not be an arbitrator, specifying that anyone who lacks, in whole or in part, legal capacity cannot serve as an arbitrator. This includes, for example: • minors; • persons under interdiction; • persons under incapacity; • those who are bankrupt; and • those disqualified from holding public office. 4.2 Default Procedures Default procedures are usually included in all arbitra- tion regulations referred to in the Model BIT. Should Italian law yet apply in the selection of arbitrators, the default procedure is established by Article 810 CCP (see 4.3 Court Intervention ). Furthermore, Article 816-quater CCP is the default procedure under Ital- ian arbitration law in the case of a plurality of parties. It establishes that, where more than two parties are bound by the same arbitration agreement, each party may include all or some of the others in the same arbitration proceeding if: • the arbitration agreement delegates the appoint- ment of the arbitrators to a third party; • the arbitrators are appointed with the agreement of all the parties; or • the other parties, after the first has appointed the arbitrator or arbitrators, jointly appoint an equal number of arbitrators or entrust their appointment to a third party.
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