Opinion ID: 758022
Heading Depth: 2
Heading Rank: 1

Heading: Enforceability of arbitrato irrituale Award

Text: 23 Maiellano contends that awards granted under the Italian rules known as arbitrato irrituale do not give rise to a binding arbitral award of the sort entitled to enforcement under the Convention because arbitrato irrituale is an informal, extralegal process that lacks procedural safeguards. Moreover, confirmation of the award here would give it greater legal status than it would be accorded in Italy because under Italian law such arbitral awards are considered to be contractual agreements that are not automatically enforceable, but rather are subject to de novo review by an Italian court. Therefore, Maiellano contends, it would be inappropriate to confirm such awards through the summary proceeding and deferential enforcement envisioned by the Convention. Maiellano supports these arguments with a decision by Germany's highest court, the Bundergerichtshof, that held that awards rendered under arbitrato irrituale were not enforceable under the Convention, see Compania Italiana di Assicurazioni v. Schwartzmeer und Ostsee Versicherungsaktien-gesellschaft, BGHZ, Oct. 8, 1981 (IIIZR 42/80), reprinted in [1982] CEC (CCH) 516, as well as opinions of academicians, including one of the draftsmen of the Convention, that state that the Convention was not meant to apply to arbitrato irrituale, see, e.g., Decl. of Hans Smit, Nov. 12, 1996, J.A. at 456; Spier, 663 F.Supp. at 874 (quoting declaration of Pieter Sanders, a draftsman of the Convention); Pieter Sanders and Dr. Albert Jan van den Berg, Consolidated Commentary, IV Yearbook Commercial Arbitration 231, 232-33 (1979). 24 Europcar, on the other hand, points to four decisions of the Italian Supreme Court, the Corte de Cassazione, that have expressly held that arbitrato irrituale does fall under the Convention. See Agracommerz A.G. v. Privilegiata Fabbrica Maraschino Excelsior Girolamo Luxardo S.p.A., Cass., 15 Jan. 1992, n. 405; Federal Commerce and Navigation Ltd. v. Rocco Giuseppe e Figli s.n.c., Cass., sez. un., 15 Dec. 1982, n. 6915, Foro. It. 1983, I, 2200; Carey Hirsch Lumber Co. v. Colella Legnami S.p.A., Cass., sez. un., 6 July 1982, n. 4039, Foro It.1983, I, 736-40; Butera v. Pagnan, Cass., sez. un., 18 Sept. 1978, n. 4167. The Corte di Cassazione recognized that such awards would be treated differently under the Convention than under Italian law. Nevertheless, it held that in order to be enforceable under the Convention, awards must only be binding on the parties, not necessarily judicially binding in the originating country, and that although awards under arbitrato irrituale are merely contractual, and therefore are not immediately enforceable in Italy, they are nevertheless binding on the parties. See, e.g., Butera, n. 4167; Colella Legnami S.p.A., n. 4039. See also Giorgio Bernini, Domestic and International Arbitration in Italy after the Legislative Reform, 5 Pace L.Rev. 543, 544 (1985) ([t]he arbitral award stemming from an arbitrato irrituale is binding upon the parties but has no executory force) [Hereinafter Bernini, Italian Arbitration ]; Susan Choi, Note, Judicial Enforcement of Arbitration Awards under the ICSID and New York Conventions, 28 N.Y.U. J. Int'l L. & Pol. 175, 195-96 (Fall 1995--Winter 1996) (discussing arbitrato irrituale and noting that, according to Italian case law and authorities, awards are binding within meaning of Convention) [hereinafter Choi, Judicial Enforcement ]. The Corte di Cassazione concluded that in light of the differences in arbitration among the signatory countries, the Convention should be read broadly to cover both formal and informal arbitration. See, e.g., Collela Legnami, n. 4039; Butera, n. 4167. 25 Whether or not the Convention applies to arbitrato irrituale is, as far as we can tell, a matter of first impression for any United States federal court. Indeed, apart from the above-cited cases in Germany and Italy, the matter apparently has yet to be ruled on by the Permanent Court of International Justice at the Hague or the courts of any other signatory countries. The only other federal court to be presented with the issue declined to resolve the matter and instead adjourned the proceedings to await the outcome of parallel proceedings in Italy. See Spier, 663 F.Supp. at 876. The district court below found the Italian cases persuasive and held that awards under arbitrato irrituale are enforceable under the Convention. 26 As the district court observed in Spier, the issue of whether or not arbitrato irrituale is enforceable under the Convention presents a close question and there are compelling arguments on both sides. Because resolution of this issue is not necessary to the disposition of this case, however, we leave decision on the matter for another day.