72
Legal Focus
OCTOBER 2013
Arbitration –
Continuing with our focus on the issues surrounding arbitration and their advantages and disadvantages, we speak to Giorgio Sacerdoti, Of Counsel with Eversheds Bianchini in Milan.
Please introduce yourself, your role and your firm.
I have been Of Counsel with the firm since 2001 focusing on international contracts, litigation and especially arbitration within the Eversheds arbitration group. I am also a professor of International Law at Bocconi University in Milan, specializing in the same fields. I act independently as an international commercial and investment arbitrator, having chaired several ICSID arbitral tribunals and being regularly appointed by parties as an arbitrator in commercial disputes .
What are the common causes of disputes between businesses in your country, and across borders?
Italy is a rather litigious country, resorting to litigation is extensive notwithstanding that courts are jammed and resolution of disputes is lengthy. Uncertainty of the law, badly drafted contracts, lack of precision and proper legal assistance in making business deals are the most frequent reasons. Additionally, due to the current crisis, financial difficulties prompt often debtors to delay payments thus requiring legal action from creditors to recover their dues. These reasons are applicable also to cross-borders disputes.
Is there a typical method of dealing with dispute resolution for all businesses or do you have to employ a specific tactic for foreign companies compared to local companies?
I do not see differences that depend on whether the client is a foreign, rather than a domestic, business. In both cases trying to negotiate with the support of legal advisors in order to settle favorably a dispute is recommendable as a first step, although there are many companies, especially small ones and individual businessmen who prefer to be sued if they have financial problems in respecting their obligations so to delay payment. Also to be taken into account is the difficulty of recovering claims from small companies due to the inefficiency of enforcement action in Italy when the debtor has no valuable assets easy to be found and liquidated.
What, in your opinion, are the advantages of arbitration as a dispute resolution method as opposed to court action?
Arbitration is advisable when large companies, complex contracts, specialized subject-matters (such
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as finance, IP, construction) are at issue, especially in the interest of non- Italian parties. Arbitration clauses can be negotiated and “tailored-made”. In view of the inefficiency of courts proceedings arbitration is speedier and preferable. Arbitration can rely on arbitral chambers and rules, such as the Milan Arbitral Chamber or ICC, that simplify and give additional predictability to the process, should arbitral proceedings become necessary, including cost efficiency.
On the other hand medium-size and small businesses in Italy are rather unfamiliar with arbitration, especially internationally. We have often to advise such companies
that find themselves in arbitral
proceedings without realizing the implications, the need to respect strict time limits, select competent arbitrators, etc.
Finally, if disputes are of a relatively small value opting out from arbitration for instance, agreeing to mediation, is advisable for reasons of costs and efficiency.
do laws and regulations differ for domestic companies as opposed to foreign companies?
Arbitration law and practice are basically the same for Italian and foreign companies. Both can avail themselves of the wide freedom granted by domestic and international arbitration regulation applicable in Italy to draft flexibly arbitration clauses and proceedings (such as seat, language, choice of arbitrator(s), procedure). Assisting foreign clients is more challenging if they are not familiar with the Italian environment and this is of course our typical field as experienced international lawyers who are part of an extensive network such as Eversheds.
How do you assist clients involved in arbitration? Is there any general advice you could offer clients to prevent the situation from escalating?
We try to assist clients both in drafting appropriate dispute settlement clauses and in advising and supporting them when a dispute arises and in proceedings. As specialists in arbitration we are often approached by outside counsels of companies who ask our assistance for their clients in respect of specific arbitral disputes since they have not the necessary knowledge. We then work together with them at all levels, including settlement initiatives that often
do you foresee the need for legislative change and if so why?
Legislative changes concerning arbitration are not on the agenda in Italy nor do we believe that they are required since Italian arbitration law was modernized fairly recently in 2006 and conforms to international standards. The most relevant legislative change has been in 2013 the introduction of compulsory mediation as a preliminary requirement before going to court in most commercial matter in order to reduce the case backlog. Arbitration remains, however, the preferred avenue for resolving international disputes. The promotion of mediation is likely in any case to increase the awareness in Italian companies of all dimensions of the arbitral option and Eversheds Bianchini is engaged in this direction. LM
contact:
Prof. Giorgio Sacerdoti of counsel Eversheds Bianchini via privata Maria teresa 4 20123 Milan
t +39 02 89287.710 F +39 02 58303818
giorgiosacerdoti@eversheds.it
develop in the context of arbitration. We recommend all our clients to consider any possibility of settlement since a satisfactory result for the client is the objective that should be pursued by whatever means, keeping in mind also the reduction of costs.
We also advise non-Italian companies who have to initiate or are involved in arbitration against Italian companies, also providing assistance to their counsel in charge. We have often also assisted non-Italian companies both in recognition and enforcement of international arbitral awards against Italian companies and in challenging before Italian courts unfavorable awards rendered in Italy against them.
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