Posted Thursday 20th July 2023
When, after having sought all possible remedies and settlement proposals (which is always our first piece of advice) a company comes to the conclusion that litigation must be brought against an international (former) partner in a commercial agreement, the first goal is to secure a convenient jurisdiction (arbitration or judges) where “fighting” may be cheaper and more efficient, i.e. an arbitration venue or a Court “next door”.
As all other legal systems, Italian law has its own peculiarities which may apply also to international contractors and that a layman would not hesitate to name “traps”. Here is one.
Clauses of an agreement (i) printed on a standard form ready to be used for all perspective clients and (ii) relating to arbitration or to the choice of a particular Court must be approved specifically by the other party with a second, dedicated signature.
A company may therefore have been successful in imposing to its contractual partner the mandatory recourse to arbitration or to a convenient Court, by making reference to the application of its general terms of agreement; even more: the contractual partner may also have signed such general terms (including the clause on arbitration and jurisdiction), but if a second signature, specific to arbitration and jurisdiction, was not affixed the clause does not apply if Italian law governs the agreement.
In a recent case a Czech company was challenged on this matter in front of the Italian Supreme Court by its Italian partner who claimed that the second specific signature on the choice of arbitration in Prague was missing. The Court determined that the agreement was governed by Czech law and the requirement of the second signature did not apply. The Italian party had already brought several lawsuits before Italian Courts in order to pre-empt and block arbitration, but all such lawsuits were dismissed for lack of jurisdiction of the Italian Judges in favour of the arbitration in the Czech Republic.
This article was written by Fabio Weilbacher, Quorum.
This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.
