Italy / 05 January 2007 / Italy, Corte di Cassazione (Supreme Court) / Heraeus Kulzer GmbH v. Dellatorre Vera SpA / 35
| Country | Italy |
| Court | Italy, Corte di Cassazione (Supreme Court) |
| Date | 05 January 2007 |
| Parties | Heraeus Kulzer GmbH v. Dellatorre Vera SpA |
| Case number | 35 |
| Applicable NYC Provisions | II | II(3) |
| Languages | English |
| Summary | A German company (Heraeus Kulzer) and an Italian company (Dellatorre Vera) entered into a distributorship agreement under which Dellatorre Vera would distribute orthodontic products manufactured by Heraeus Kulzer in Italy. The contract referred to an arbitration agreement contained in a separate document. An individual buyer sued an Italian intermediate seller (Merident), who had acquired Heraeus Kulzer products from Dellatore Vera, before the Tribunale di Napoli (Naples Tribunal of First Instance) on the grounds of liability for hidden defects. Merident joined Dellatorre Vera in these proceedings, which in turn joined Heraeus Kulzer based on the warranty against hidden defects. Heraeus Kulzer raised a jurisdictional objection based on the arbitration clause referred to in the distributorship agreement. In the alternative, it argued that even if the parties’ dispute was not covered by the arbitration agreement, the Italian courts would still lack jurisdiction in favour of German courts by virtue of a jurisdiction clause contained in a document attached to the distribution contract, based on Article 17 of the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (“the Brussels Convention”). The Tribunale di Napoli found that the Italian courts lacked jurisdiction in respect of the dispute between Hereaus Kulzer and Dellatorre Vera over the existence of an arbitration agreement. The Corte di Appello di Napoli (Naples Court of Appeal) reversed the decision and upheld the jurisdiction of the Italian courts. It held that the arbitration clause referred to in the distributorship agreement could neither be extended to the third parties, which had initiated the domestic court dispute (such as Merident), nor be applied to Dellatore Vera’s warranty claim against Heraeus Kulzer. Heraeus Kulzer appealed the decision, arguing that the Italian domestic courts lacked jurisdiction since the warranty claim was based on the distributorship agreement containing the arbitration clause and the broad wording of the arbitration clause covered disputes directly or indirectly arising out of the distributorship agreement. The Corte Suprema di Cassazione (Supreme Court) reversed the decision of the Corte di Appello di Napoli. It noted that the validity of an arbitration clause relates to the merits of the case and does not constitute a jurisdictional issue. It further stated that it is an inherent part of the power of the domestic court to review the validity of the arbitration agreement, on the basis of which it waives its own jurisdiction. The Corte Suprema di Cassazione stated that such a principle is applicable even under Article II(3) NYC, which does not require that a case be referred to arbitration through a declaration for lack of jurisdiction by the domestic courts, but rather leaves it to the legal order of the contracting state to determine the mechanism by which domestic courts divest themselves of a case in favour of arbitration. According to the Corte Suprema di Cassazione, Article II(3) NYC, therefore, allows the Italian legal order to consider the issue of validity and efficacy of the arbitration agreement as an issue of admissibility of the claim rather than as an issue of jurisdiction. It held that while the Italian courts have a duty to review the validity or efficacy of an arbitration clause on a preliminary basis, they may not, however, exercise such review with respect to a foreign court. The Corte di Cassazione held that, in the case at hand, the Corte di Appello di Napoli had erred in maintaining the jurisdiction of the Italian courts after having decided that the dispute did not fall within the scope of the arbitration agreement, because it had ruled, on the wrong premise, that the interpretation of the arbitration agreement raised an issue of jurisdiction. The Corte Suprema di Cassazione further disapproved the lower court’s finding that the arbitration agreement did not apply since the dispute before the Italian court involved parties that had no contractual link with the parties to the arbitration agreement. It noted that Dellatore Vera’s warranty claim against Hereaus Kulzer was based on the distributorship agreement referring to the arbitration agreement, and that an examination of whether Dellatore Vera’s warranty claim fell within the arbitration agreement was a prerequisite to the examination of the warranty claim by the lower court. After noting that it is up to the court deciding on the merits to assess the content of the arbitration agreement, the Corte di Cassazione held that the lower court had failed to examine the text of arbitration clause and, in particular, the reference to disputes directly or indirectly arising out of the distributorship agreement. The Corte Suprema di Cassazione concluded that the lower court had failed to give reasons why such broad wording would not include Dellatore Vera’s warranty claim within the scope of the arbitration agreement. It remanded the case before a different section of the Corte di Appello di Napoli for a reexamination of the scope of the arbitration agreement and refused to examine the alternative motion for lack of jurisdiction based on the jurisdiction clause in favour of the German courts. |
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Attachment (1)
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