ITALY Law and Practice Contributed by: Maria Chiara Malaguti, Filippo Rossi and Roberto Longhi, PedersoliGattai
7. Other Procedural and Evidentiary Issues 7.1 Notice of Dispute and Consultation Period The Model BIT (Article 27) establishes that any dispute must, as far as possible, be settled amicably through direct consultation, negotiation and mediation. It then fixes rules for negotiations: a written request for nego- tiations must include the legal and factual basis for the request, including any disputed measures, the provi- sions of the relevant investment treaty which were vio- lated in the opinion of the investor, and the investor’s proposals for a possible settlement of the dispute. If a dispute cannot be settled within six months from the date of a written application for settlement, the investor may commence arbitration. This provision is common to Italian BITs generally and to other invest- ment agreements. This is also included in the ECT (Article 26). In all cases against Italy, such request for an amicable solution was submitted thus but never produced a positive result. Owing to the confidentiality of such phases, it is not known whether any dispute was settled amicably at any point in the past. 7.2 Confidentiality and Transparency As stated in 1.2 Arbitration Conventions , Italy has signed the Mauritius Convention on transparency in investment arbitration. Although it has not yet ratified the Convention, it tends to implement its principles in its arbitral procedures. In light of the different confi- dentiality requirements of both parties, confidentiality has been favoured in most of the procedures open against it – typically owing to matters of confidentiality linked to the public interest at stake, though in many instances the claimant also has an interest in confi- dentiality (particularly if it is a listed company). Nonetheless, greater openness to the principles of transparency has been imposed with the new ICSID Rules, adopted in 2022. In fact, today – in compari- son to the past – the parties can consent to ICSID’s publication of the award or the final decision in a post-award remedy proceeding, as well as consent to publication with or without redaction of the relevant document. However, if neither party objects to the publication of the document within 60 days after its issuance, consent to publication is deemed to have
6.2 Third-Party Funding Case Law In some of the previously mentioned cases against Italy, the claimant was financed through TPF. Unlike the rules currently in force, ICSID did not previously require disclosure of the existence of a TPF, so the information was not always transparent in the initial disputes. In some cases, Italy requested security for costs to protect itself from the risk that the TPF would not meet the claimant’s obligations, with mixed results. 6.3 Disclosure and Security for Costs Just as ICSID has introduced the obligation to disclose the existence of a TPF relationship and the option for the parties to extend the disclosure to additional ele- ments (for example, making known the terms of the signed agreement), the CAM also has a rule that regu- lates the TPF: the party that is funded by a third party in relation to the proceedings and its outcome must disclose the existence of the funding and the iden- tity of the funder. Such declaration must be repeated along the proceedings, where supervening facts so require or upon request by the arbitral tribunal or the CAM Secretariat. Moreover, the Model BIT also contains a clause on TPF, including its definition and requiring disclosure of more information than found in arbitral regulations: • TPF is any funding provided by a natural or legal person who is not a disputing party but who enters into an agreement with a disputing party in order to finance part or all of the cost of the proceed- ings in return for a remuneration dependent on the outcome of the dispute or in the form of a donation or grant; • a disputing party benefiting from TPF must notify to the other disputing party, and to the arbitration tribunal hearing the claim, the name and address of the third-party funder and of its beneficial owner; and • such notification must be made at the time of submission of a claim, or, if the funding agreement is concluded or the donation or grant is made after the submission of a claim, without delay as soon as the funding agreement is concluded or the donation or grant is made.
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