In international construction projects, the Employer (and certainly the Contractor) may suffer the consequences of a wrong selection of the Subcontractor and this may have an impact on the timing for completion or on the quality of works executed.
Giuseppe Broccoli
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Subcontractor selection in Construction Projects and the FIDIC Books
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International Construction
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How to obtain an interim measure in Italian arbitration proceedings
Article 818 of the Italian Civil Procedural Code provides that the arbitral tribunal cannot grant “[…] seizure orders and any other precautionary measures […]”. This provision still comes from the old dis-favor of the Italian legislator for the arbitration compared with the State Court proceedings and accordingly the party will have recourse to Courts for any requests of interim measures during the arbitration proceedings.
The matter is highly debated in Italy for several reasons.
In general terms there are precautionary measures which may affect third parties and that therefore could be of prejudice for the third party who is not a party in the arbitration. There are however also precautionary measures which are directed only to one of the parties of the arbitration and there would be no reason to prohibit the granting of precautionary measures against them.
An additional distinction has then to be made in respect of precautionary measures which requires for their own nature an enforcement or in any event a judicial modification of the status quo.
The arbitrators can be considered as entitled to grant all the precautionary measures addressed to one of the parties who can be voluntarily complied with or those measures which do not imply in themselves any judicial modification of the status quo. The failure to comply voluntarily with measures adopted by the arbitrators can be certainly sanctioned with monetary fines. Such an approach is exactly the one adopted for instance by Italian National and International Chamber of Arbitration of Milan Rules and Italian Arbitration Association (AIA) Rules.
The fact that the arbitrators do not have enforcement powers would certainly jeopardise (some) precautionary measures eventually granted by the arbitrators. It must be however considered that the parties voluntarily decided to refer their future disputes to arbitration and in principle there should be no reason to fear that the parties would not voluntarily comply with interim measures ordered by the arbitrators.
It is widely accepted in Italy that the arbitrators should have been expressly granted the power to issue interim measures as it happens in many jurisdictions and as it is well provided in the UNCITRAL Model Law. Certainly the provision (contained in the Model Law) of security in case of interim measures would have limited the possible negative impact of the granting of such measures and, at least, the Italian Civil Procedural Code could have provided for a second level control to be carried out by the State Courts, maybe similar to the provisions contained in the Model Law.
* This article published by BDA Studio Legale is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The matter is highly debated in Italy for several reasons.
In general terms there are precautionary measures which may affect third parties and that therefore could be of prejudice for the third party who is not a party in the arbitration. There are however also precautionary measures which are directed only to one of the parties of the arbitration and there would be no reason to prohibit the granting of precautionary measures against them.
An additional distinction has then to be made in respect of precautionary measures which requires for their own nature an enforcement or in any event a judicial modification of the status quo.
The arbitrators can be considered as entitled to grant all the precautionary measures addressed to one of the parties who can be voluntarily complied with or those measures which do not imply in themselves any judicial modification of the status quo. The failure to comply voluntarily with measures adopted by the arbitrators can be certainly sanctioned with monetary fines. Such an approach is exactly the one adopted for instance by Italian National and International Chamber of Arbitration of Milan Rules and Italian Arbitration Association (AIA) Rules.
The fact that the arbitrators do not have enforcement powers would certainly jeopardise (some) precautionary measures eventually granted by the arbitrators. It must be however considered that the parties voluntarily decided to refer their future disputes to arbitration and in principle there should be no reason to fear that the parties would not voluntarily comply with interim measures ordered by the arbitrators.
It is widely accepted in Italy that the arbitrators should have been expressly granted the power to issue interim measures as it happens in many jurisdictions and as it is well provided in the UNCITRAL Model Law. Certainly the provision (contained in the Model Law) of security in case of interim measures would have limited the possible negative impact of the granting of such measures and, at least, the Italian Civil Procedural Code could have provided for a second level control to be carried out by the State Courts, maybe similar to the provisions contained in the Model Law.
* This article published by BDA Studio Legale is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Topics:
International Construction
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How a Letter of Patronage Works Under Italian Law
A letter of patronage can be considered either as a mere declaration of courtesy to looking at them, on the one hand, as binding guarantees ("fidejussione") or, on the other hand, as an undertaking to fulfil the obligations of a third party.
Topics:
International Commerce
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New 2014 LCIA (London Court of International Arbitration) Rules
When drafting a contract, one of the most neglected clauses is the one which governs the dispute resolution especially if it refers the dispute to arbitration. When a dispute arises, many parties are not satisfied by the specific clause inserted in their contract.
Topics:
International Arbitration
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