After a first attempt made last June by the Government was aborted, from February 22, 2014 new courts, established in a number of main cities, will have jurisdiction over proceedings involving foreign companies in some specific matters, such as intellectual property, unfair competition and corporate law.
Although some of the new provisions may not be very easily applied, the reform seems to represent a good fit for foreign companies, who could be more comfortable litigating before courts in main business centers.
Scope of the new venue rules
One of the main innovations introduced by Law Decree December 23, 2013, no. 150 (converted with modifications by the Law of February 21, 2014, no. 9) concerns the concentration in only 11 main city courts of disputes in which foreign companies are involved and that, in most cases, would otherwise fall within the competence of other (smaller) courts. For this reason the new "Super-courts" are located in cities deemed strategic to a specific geographic area: Bari, Cagliari, Catania, Genoa, Milan, Naples, Rome, Turin, Venice, Trento and Bolzano.
Not all proceedings in which the parties are foreign companies fall under the new provision. Indeed, they must concern disputes relating to:
- intellectual and industrial property law
- unfair competition
- Italian and European antitrust law
- corporate relations
- claims for damages against the members of the managing or statutory auditing boards
- shareholder agreements
- liability claims brought by creditors of subsidiary companies against companies that control them
- relationships relating to subsidiary companies
- public procurement contracts.
According to the new rules, the disputes that fall within their scope shall be decided by fewer courts. This should be an advantage for foreign companies in general, for the following reasons:
- The bigger courts (and the law firms based in the relevant areas) should be more familiar with disputes with international aspects; the expectation is that decisions should therefore be reached more quickly.
- The small number of courts should lead to greater predictability of decisions. Indeed, if there are fewer judges involved in disputes of these kinds, it is more probable that their decisions will be consistent and, therefore, that the outcomes of the disputes may be easier to predict in terms of processing times and/or economic costs.
Some issues raised by new rules
The new set of rules does not cover all cases which may occur in practice, so there will still be problems that need to be solved by judges and lawyers.
For example, it is not specified whether the new rules shall apply not only when the foreign company is plaintiff but also when it is defendant. In this respect, the new rule can reasonably be interpreted as stating that the Super-courts also have jurisdiction in cases where the foreign company is defendant.
Another question arising from the reform concerns whether the new rule also applies to companies incorporated in Italy in the form of a S.r.l. or S.p.A., but that have transferred their registered office to another EU Member State, while retaining the "lex societatis" of the incorporation and/or establishment country (in this case Italy). While we deem it is highly probable that Super-courts shall have jurisdiction also in these cases, on the contrary, we interpret the rule as inapplicable in cases where a party of the dispute is a company incorporated abroad but with its registered office in Italy.
Finally, the first commentators on the rule have deemed that the foreign company may well waive jurisdiction set out according to the new rules and follow the ordinary ones instead. It could therefore sue the defendant before a court corresponding to where the defendant is domiciled, where the contract has been executed, or where the relevant obligations have to be performed, even if such court is not one of the Super-courts established by the new rules. Furthermore, there are reasons to expect that the foreign company could accept a clause in a contract stipulating that the court with jurisdiction over the disputes arising from the same contract will not be a Super-court.
Despite these issues of interpretation, the reform should be welcomed. The challenge is now to enable the judges working within the Super-courts to achieve the goals envisaged by the new rules. In particular, the Super-courts should be organized in such a way that any backlog does not adversely affect the work of the judges. Furthermore, it is fundamental that the same judges be properly identified on the basis of their skills and experience in disputes with international aspects.