Preliminary ruling on jurisdiction cannot be raised by a defendant established in Italy

Published 06 April 2017

Decision: Decision No. 2736/2017 by the Joint Sections of the Court of Cassation

Under the Italy law system, the  preliminary ruling on Italy’s jurisdiction is an extraordinary and exceptional institute, and cannot be raised by a defendant having residence or domicile in Italy.

Keywords: #internationalarbitration; #italylaw; #preliminaryruling;

The case.

An American company served an injunctive decree (order to pay) for approx. € 350K to an Italian firm.

The Italian debtor raised an objection, applying for a preliminary decision on Italy’s jurisdiction at the Court of Cassation accordingly to article 41 of Italy civil procedure code.

The Italian defendant argued that the dispute was submitted to arbitration following to a previous frame-agreement, closed by the company who sold the branch of business to the defendant, including the transfer of the contract who led to the dispute.

The Supreme Court declared the appeal inadmissible, because the preliminary ruling on jurisdiction was raised by a company established in Italy.

Main relevant jurisprudence.

Decision no. 24153/2013 – Joint sections of the Court of Cassation

Order no. 13569/2016 – Joint sections of the Court of Cassation

The decision.

The Court of Cassation mentioned a former decision (Order 13569/2016) in which the Joint Sections already stated that the preliminary ruling about jurisdiction is a legal institute of extra-ordinary and exceptional nature, and as such cannot be extended to hypothesis not explicitly mentioned in art. 41 of the civil procedure code.

Therefore, it is not admissible if raised by a defendant who is resident or domiciled in Italy: the preliminary ruling presupposes that the dispute concerns a “foreign party” (art. 37 of civil procedure code).

In the current system of international law under the frame of Law may 31st, 1995 no, 218, there is no room for a petition of preliminary ruling on jurisdiction if raised by a resident defendant, namely having his domicile or residence in Italy.

The Supreme Court declared the appeal as inadmissible.

Comments.

The defendant, if established in Italy, cannot apply for the preliminary ruling on Italy’s jurisdiction about the litigation: the institute (of preliminary ruling on jurisdiction) is not applicable if the defendant is based in Italy, as its goal is to cases where the defendant is neither resident nor domiciled in Italy, so that such a procedural remedy may be used to define international law issues that might rise.

In this case, the general criterion about jurisdiction (jurisdiction of the defendant) is applicable, so that the judge can deal with the exception(s) raised by the parties, including objections about the arbitration clause.

The Court of Cassation stated again that, notwithstanding the abrogation of art. 37 of the civil procedure code, the cross-reference by art. 41 is a renvoi, having the aim of inserting the provisions within the calling article.