Italy / 07 June 1995 / Italy, Corte di Cassazione (Supreme Court) / WTB - Walter Thosti Boswau Bauaktiengesellschaft v. Costruire Coop. srl / 6426
| Country | Italy |
| Court | Italy, Corte di Cassazione (Supreme Court) |
| Date | 07 June 1995 |
| Parties | WTB - Walter Thosti Boswau Bauaktiengesellschaft v. Costruire Coop. srl |
| Case number | 6426 |
| Applicable NYC Provisions | IV | III | V |
| Languages | English |
| Summary | An Italian company, Costruire Coop, subcontracted certain construction works to a German company, Walter Thosti Boswau Bauaktiengesellschaft (“WTB”). The parties’ contract contained an arbitration clause providing for arbitration before the International Chamber of Commerce (ICC). A dispute arose and Costruire Coop sent WTB a notice of termination for the contract based on alleged breaches of the same, and also filed a request for arbitration against WTB. On 27 June 1988, the arbitral tribunal rendered a partial award on liability, holding Costruire Coop liable for wrongful termination of the contract. On 4 August 1989, the arbitral tribunal rendered a final award on damages. WTB sought enforcement of the final award in Italy but the Corte di Appello di Bologna (Bologna Court of Appeal) held that WTB’s petition for enforcement was inadmissible given that (i) WTB should have sought enforcement of the partial award on liability along with the final award on damages, as they constituted a single and indivisible decision, and (ii) it had not met the requirements of Article IV NYC as it had not provided the original or a certified copy of the partial award in addition to the final award. WTB appealed the decision arguing that a failure to request enforcement of the partial award on liability is not a ground for refusing enforcement of the final award on damages. The Corte Suprema di Cassazione (Supreme Court) reversed the decision of the Corte di Appello di Bologna on the ground that the request for enforcement can be limited to the final award and need not extend to the partial award on liability. The Corte di Suprema di Cassazione first observed that the new Articles 839 and 840 of the Italian Code of Civil Procedure (the wordings of which are equivalent to Article IV and V NYC did not apply to the instant case as the enforcement request had been filed prior to the entry into force of the 1994 Italian arbitration law reform. It noted that the provisions of the NYC, which are applicable and have precedence over the provisions of the Code of Civil Procedure, provide for a liberal system of enforcement and recognition of foreign awards. It added that the provisions of the NYC are at a crossroads between the view that an international arbitral award is a decision whose efficacy depends entirely on the will of the parties independent of domestic legal orders, and the more traditional view pursuant to which arbitration is connected to the domestic legal order of a State and the recognition of an award derives from a concession of other states under a condition of reciprocity. The Corte Suprema di Cassazione noted in this respect that although Article III NYC leaves it to domestic legislators to regulate the proceedings for the recognition of foreign awards, it provides that contracting states shall not impose substantially more onerous conditions or higher fees than those imposed on recognition or enforcement of domestic awards. The Court Suprema di Cassazione concluded that the NYC sets forth an autonomous micro-system for both the substantive and procedural requirements of the enforcement of foreign awards. Under such a system, the burden on the party requesting enforcement is limited to the production of certain documents required under Article IV NYC, and there is a presumption of enforceability of the award that may only be reversed by the courts ex officio on one of the two grounds of Article V(2), or by the defendant proving that one of the five exhaustive grounds for refusal of enforcement listed in Article V(1) is met. The Corte Suprema di Cassazione therefore held that in the instant case, the lower court had erred in ruling in terms of admissibility of the request for enforcement, as the only grounds for declaring such a request inadmissible are those set forth in Article IV NYC (i.e., the production of the original or of an authentic copy of the award and of the arbitration agreement) which do not include a ground of indivisibility between partial and final awards. The Corte Suprema di Cassazione held that the lower court should rather have analyzed whether Costruire Coop’s objection that the separate enforcement of the final award, allegedly aimed at avoiding a review of a non-final award that was not enforceable, could constitute a breach of one of the exhaustively listed grounds for refusing enforcement, that either has to be proven by the opposing party under Article V(1) NYC, or may be raised by the court ex officio as per Article V(2) NYC. The Corte Suprema di Cassazione concluded that absent proof by the opposing party or an ex officio finding from the court that the enforcement of only the award on damages, without the award on liability, constituted a violation of public policy or a violation of the other grounds in Article V NYC, the request for enforcement of the final award had to be granted. |
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Attachment (1)
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