ITALY Law and Practice Contributed by: Francesco Dialti, Vincenzo Cimmino, Valentina Bombino and Lucrezia Ghezzi, CBA Studio legale e tributario
ian tax authorities and social security administrators, as well as claims for employee wages.
intermediaries subject to supervision and in relation to cash or financial instruments which have a market value. Another very efficient security is the assignment of receivables by way of security, because under such agreement the receivables become the property of the lender as soon as they originate. Practically, the lender “appropriates” the collateral from the outset and is only required to return any excess proceeds from the collection of the assigned receivables. Another simplified enforcement procedure was intro- duced in 2016 for loans granted by banks and other authorised financial intermediaries registered under Article 106 of the Consolidated Banking Law that are secured by transfer of a real estate asset ( patto mar- ciano ). The transfer is then only conditional on: • payment default by the borrower; or • notification of the transfer to: (a) the owner of the real estate asset; and (b) any other creditors with rights over the same real estate asset. 6.2 Foreign Law and Jurisdiction Choice of Law The choice of a foreign law as the governing law of a contract is valid under Italian law, pursuant to Regula- tion (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), which applies to contractual obligations in civil and commercial mat- ters irrespective of whether the law in question is that of a member state. However, the choice will not restrict the application of the “overriding mandatory provisions” (as defined in Rome I). Choice of Jurisdiction An Italian court will generally decline jurisdiction if the parties have agreed to submit to the jurisdiction of a foreign court. Immunity Italian companies are generally not subject to sover- eign immunity.
6. Enforcement 6.1 Enforcement of Collateral by Secured
Lenders Mortgage
To enforce a real estate mortgage, the secured credi- tor must start a judicial procedure aimed at selling the relevant real estate through an auction. If the value of the real estate asset is equal to or lower than the amount of the claim, the creditor may request that the asset be assigned to it. Pledge The enforcement of a pledge does not require a judi- cial procedure. If the debtor does not fulfil its payment obligations within five days of a request by the secured creditor, the creditor can immediately ask the court bailiff to sell the relevant asset through an auction, or without an auction if the asset has a market price. The secured creditor can also ask the judge to assign the relevant asset to it as a fulfilment of the debtor’s obligations. A pledge over bank accounts is enforced through a notification to the depositary bank stating that the pledgor no longer has the right to benefit from the amounts credited on the relevant bank account and a request to retain an amount necessary to fulfil the debtor’s obligations. A pledge over receivables is enforced through a notification to the assigned debtors to pay the due amounts to the secured party. Needless to say, the enforcement of security (pledges or mortgages) forces the lender to notify the debtor of the enforcement, and consequently exposes the lender to potential court challenges by the debtor that could delay the enforcement. Exempt from such prior notice obligation is the enforcement of a financial collateral ( garanzie finan - ziarie ), which is, however, only available to banks and
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