Italian Supreme Court decision n. 23463 of 11/08/2016 resolves conflict of interpretation on the act

With Judgement No. 23463 of November 8th 2016, the United Civil Sections of the Supreme Court intervene to clarify, once for all, an evident conflict of interpretation that had arisen in case law, regarding the immediate actionable nature of the arbitration award deciding solely on the existence of a valid arbitration clause supporting the arbitration competence, i.e. only on a preliminary issue.

The matter comes down to the interpretation of the third paragraph of Art. 827, Code of Civil Procedure, which states that "the award partially deciding the merits of the case can be immediately actioned, but the ruling that addresses some of the issues, without defining the arbitral award, may be challenged only together with the final award".

In concrete terms, the contrast can be seen under a double perspective, not only for the existence of two different orientations in the jurisprudence, but also of two different issues studied by the judges of the Supreme Court.

First, they are called to question about the possibility to immediately challenge the award, even if it only decided only on a preliminary ruling (see the judgments Cass. Civ., Sec. I, April 6th 2012, n. 5634 and Cass. civ., Sec. I, February 17th, 2014, n. 3678), or in cases where it decides on the merits only one question (Cass. civ., sect. I, 26 March 2012, n. 4790 and Cass. civ., Sec. II, 24 July 2014, n. 16963); secondly, the Court's attention shall move to the validity of the arbitration agreement, which sets the grounds for decisional power of the arbitrators: in fact, it must be decided whether this must be deemed a substantial matter (Cass. Civ. sect. I, April 10, 2014, n. 8457), although "only indirectly incident on the good of life claimed by the question" (Cass. civ., sect. I, February 17, 2014, n. 3678), or ritual (Cass . civ., Sec. A., 25 October 2013, n. 24153).

As for this second aspect, the judges observed that the issue has already been addressed, and that the Court fully recognizes, for a long time now, the plea of compromise as a ritual matter, given the nature and function of ritual arbitration to replace ordinary jurisdiction.

As for the distinction between the award which, in part deciding the merits of the dispute, is immediately actionable, and the award resolving some of the issues without defining the arbitration proceedings, thus not immediately actionable, it is explained how such distinction, in part overlapping the existing distinction between final and non-final judgment pursuant to art. 279 Code of Civil Procedure, has now a defined regulatory criteria laid down in Articles 360 paragraph 3 and 361 paragraph 1, of the Civil Procedure Code (as amended by Legislative Decree no. 2 February 2006, n. 40), which recognize the immediate actionability before the Supreme Court only of sentences of general condemnation under art. 278 Code of Civil Procedure, and of judgments that decide one or some of the questions without defining the entire judgment.

As already highlighted by the United Sections in their judgment of 22 December 2015, n. 25774, the aforementioned 2006 reform follows in the wake of the rules already introduced about the arbitration award by Law no. 25 of 1994; therefore, pursuant to the third paragraph of Art. 827, with the expression "award which partially decides the merits of the dispute" refers only to judgements of general condemnation under art. 278 Code of Civil Procedure and those deciding one or some of the questions without defining the entire judgment.

According to this, the interpretation issue before the Court is resolved claiming that the arbitration award that partially decides the merits of the case, immediately challenged under the third paragraph of Art. 827 c.p.c, is both the judgement of general condemnation under art. 278 c.p.c, and that deciding one or a few questions or proposals without defining the entire judgment, not being however immediately actionable the decisions on preliminary issues or questions.