THE AUTHORS<\/strong>: National courts play a fundamental role in giving effect to arbitral awards by providing the legal framework necessary for the recognition and enforcement of foreign decisions. \u00a0However, nothing occurs in a vacuum: geopolitical developments can significantly impact recognition and enforcement proceedings before national courts. \u00a0This article examines the practical steps taken by Italian courts in supporting arbitral decisions, the impact of the Cartabia Reform (Legislative Decree No. 149\/2022<\/a>), and the challenges posed by geopolitical events to recognition and enforcement proceedings in Italy.<\/p>\n\n\n\n Under Article III of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards<\/a> (\u201cNew York Convention<\/strong>\u201d) \u2013 to which Italy is a signatory \u2013 national legislations shall not impose substantially more onerous conditions or higher fees for recognition and enforcement of foreign awards than those required for domestic awards. \u00a0Prior to the Cartabia Reform, the immediate enforceability of Italian courts\u2019 decisions regarding the recognition of foreign awards was ambiguous, potentially creating additional requirements compared to those provided for domestic awards. \u00a0Accordingly, Article 829 of the Italian Code of Civil Procedure<\/a> (\u201cICCP<\/strong>\u201d) was reformed to crystalize the immediate enforceability of the Decree issued by Italian courts granting recognition and enforcement to foreign arbitral awards (i.e.<\/em>, exequatur<\/em>). This amendment, among others, brought Italy closer to a more uniform application of the provisions of the New York Convention. It is in this context that parties must become aware of the required practical steps to efficiently and effectively obtain recognition and enforcement of arbitral awards in Italy<\/a>.<\/p>\n\n\n\n Articles 839\u2013840 ICCP, and the New York Convention, establish the necessary requirements to seek recognition and enforcement of foreign awards in Italy. In practice, recognition and enforcement proceedings can be summarized as follows:<\/p>\n\n\n\n The intersection of arbitration and geopolitics presents a host of legal and political complexities, as economic sanctions have become an increasingly common tool in international politics, particularly in the context of trade wars and geopolitical tensions. These economic sanctions have had a tangible impact on the recognition and enforcement of foreign arbitral awards. While the New York Convention provides for a clear and predictable system whereby arbitral awards issued in one country can be recognized and enforced in other countries, domestic enforcement mechanisms are increasingly challenged by the geopolitical landscape as economic sanctions come into play.<\/p>\n\n\n\n Pursuant to Article V of the New York Convention, recognition and enforcement of arbitral awards may be refused if, inter alia<\/em>, the subject matter of the dispute is not arbitrable or if enforcement would be contrary to the public policy of the country where enforcement is sought. Although there is consensus that the New York Convention has construed the public policy exception narrowly, it is arguable whether courts may refuse enforcement under the public policy exception<\/a> if the arbitral tribunal failed to consider overriding mandatory provisions of law, including economic sanctions, of the enforcing State. Notably, national courts have taken different approaches when reviewing arbitral awards involving sanctioned parties. Courts tend to give effect only to sanctions reflecting international consensus (e.g<\/em>., those imposed by the United Nations or the European Union) and often disregard unilateral sanctions, such as those imposed by the United States\u2014except in U.S. courts, where such measures are fully enforceable.<\/p>\n\n\n\n In particular, in 2020, the Paris Court of Appeal (\u201cCourt<\/strong>\u201d) in annulment proceedings brought by TMC FR S.A. (\u201cTMC<\/strong>\u201d) to the TMC FR S.A. v. Natural Gas Storage Company<\/em><\/a> (\u201cNGSC<\/strong>\u201d) award issued in favour of NGSC, explicitly differentiated between internationally and unilaterally imposed sanctions. In its decision (Paris Court of Appeal, 19\/07261, 3 June 2020<\/em><\/a>), the Court stated that \u201cinternational sanctions resulting from the United Nations Security Council resolutions, insofar as they imposed on the Member States and therefore on France, may be assimilated to foreign mandatory laws and\/or really international mandatory law<\/em>\u201d.\u00a0 The Court further concluded that sanctions taken by the European Union through Council Regulations, which are directly transposed in the French national legal order, \u201cmay be assimilate to French mandatory laws, <\/em>[and] they must also be integrated in the French concept of international public policy<\/em> [\u2026] which the French legal order cannot disregard<\/em>.\u201d With respect to U.S. sanctions, by contrast, the Court noted that \u201cunilateral sanctions taken by the American authorities against Iran cannot be considered as the expression of an international consensus<\/em>,\u201d since a foreign mandatory law may fall under French international public policy \u201conly<\/em> insofar as it carries the values and principles that cannot be disregarded by this international public policy even in an international context<\/em>.\u201d Accordingly, the Court rejected TMC\u2019s challenge to annul the arbitral award. \u00a0<\/p>\n\n\n\n Italian courts have historically interpreted public policy exceptions narrowly, taking a pro-enforcement stance. Nevertheless, when enforcement involves parties or assets subject to the United Nations or European Union sanctions, courts must take into consideration overriding public international law and EU regulations, which are directly enforceable in Italy as an EU Member State. Accordingly, Italian courts may refuse to recognize and enforce an arbitral award if they conclude that enforcing such an award could constitute a violation of Italy\u2019s public policy, which includes international and EU sanctions, even if the arbitral process otherwise complies with the requirements of the New York Convention. However, Italian courts have consistently affirmed that a violation of public policy should be assessed based on the concrete consequences of enforcing the arbitral award. In particular, a violation of public policy must be found within the decisum<\/em> of the arbitral tribunal, and although the court is permitted to examine the content of an award, such examination cannot give rise to a review of the grounds or merits of the underlying dispute.<\/p>\n\n\n\n The recognition and enforcement of foreign arbitral awards in Italy is firmly rooted in a legal framework shaped by the New York Convention, and the Cartabia Reform has significantly enhanced the efficiency of the recognition and enforcement proceedings in Italy. Nonetheless, bringing arbitral awards to life in the enforcing state remains a complex, multi-step process that demands procedural precision and strategic foresight\u2014especially when provisional measures or enforcement against third-party debtors are involved. Furthermore, layers of complexity are introduced to the enforcement process by the growing influence of geopolitical factors, particularly international sanctions. While Italian courts continue to adopt a pro-enforcement stance, they are also obligated to uphold public order, requiring a careful balancing exercise: protecting the integrity of arbitration while ensuring that enforcement does not contravene overriding mandatory norms.<\/p>\n\n\n\n As international arbitration continues to intersect with geopolitics, the adaptability and legal clarity of national judicial systems in relation to recognition and enforcement proceedings will become increasingly pivotal in safeguarding the effectiveness and legitimacy of international arbitration.<\/p>\n\n\n\n ABOUT THE AUTHORS<\/strong><\/p>\n\n\n\n Letizia Ceccarelli<\/strong><\/a> is an Italian-qualified Senior Associate in the International Dispute Resolution Practice at Squire Patton Boggs<\/strong><\/a> based in Milan and Geneva offices. She has experience in investor-state arbitrations under the ICSID<\/a>, LCIA<\/a>, and UNCITRAL<\/a> Rules. She has also acted for private companies in international commercial arbitral proceedings conducted under the rules of the LCIA and the Milan Chamber of Arbitration<\/a> (CAM Milan). Her cases have involved a wide range of sectors, including oil and gas, mining, construction and infrastructure, aerospace, and telecommunications. Letizia has also assisted both Italian and international companies in commercial litigations before the Italian courts, with a particular focus on contract and bankruptcy disputes.<\/p>\n\n\n\n Hoda Ghassabian<\/strong><\/a> is a Trainee Lawyer in the International Dispute Resolution Practice Group at Squire Patton Boggs<\/strong><\/a> based in Milan, Italy. She is regularly involved in commercial and investor-state arbitrations, with experience with arbitrations conducted under the ICSID<\/a>, LCIA<\/a>, UNCITRAL<\/a>, and ICC<\/a> rules. Hoda\u2019s practice focuses on disputes related to international investment and commercial arbitration, particularly in the oil and gas, energy, natural resources, and telecommunications sectors. She also has experience in public international law, including matters related to climate change and its impacts on human rights before the International Court of Justice and the Inter-American Court of Human Rights.<\/p>\n\n\n\n *The views and opinions expressed by authors are theirs and do not necessarily reflect those of their organizations, employers, or Daily Jus, Jus Mundi, or Jus Connect.<\/em><\/em><\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" Italian courts, strengthened by the Cartabia Reform, streamline recognition and enforcement of arbitral awards while balancing sanctions and public 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Letizia Ceccarelli<\/strong><\/a>, Senior Associate at Squire Patton Boggs<\/strong><\/a>
Hoda Ghassabian<\/strong><\/a>, <\/strong>Trainee Lawyer at Squire Patton Boggs<\/strong><\/a><\/p>\n\n\n\n
\n\n\n\nIntroduction<\/strong><\/h2>\n\n\n\n
The New Italian Arbitration Era following the Cartabia Reform<\/strong><\/h2>\n\n\n\n
Practical Steps to Recognize and Enforce Foreign Arbitral Awards in Italy<\/strong><\/h2>\n\n\n\n
\n
When Arbitration Meets Geopolitics: Sanctions and Enforcement Issues<\/strong><\/h2>\n\n\n\n
Conclusion<\/strong><\/h2>\n\n\n\n
\n\n\n\n
\n\n\n\n