Recognition and execution of foreign decisions in Italy
Studio Legale Avv. Giovanni Catanzaro, Venice
Judgments, arbitration awards, European orders for payment and tax injunctions
Italian international civil law
It should be emphasised that the reform of private international law has also resulted in an extremely innovative solution over that period, that is, the overcoming of that now obsolete rule which obliged foreign judgments to exequatur before being effective within the Italian territory.
The process of recognition of judgments or decisions of other typologies, has been completely ‘overturned’: if before we reasoned according to the principle that ‘no foreign decision is effective if it is not first recognized’, today it is ‘every decision is effective, unless recognition is denied’.
In this way, the total repeal of Articles 796, 797, 798, 799, 800, 801, 802, 803, 804, 805 of the Code of Civil Procedure, in favour of regulations that ‘take away’ from the Italian judge any power to ascertain the subject of the dispute decided by the foreign judge, circumscribed the function of the Italian judge to a limited, formal, potential control over the conditions of automatic exequatur.
However, international conventions and European regulations have greatly influenced national legislation and so the recognition and effectiveness of foreign decisions assume different peculiarities depending on the type of decision and the state of issue.
Foreign judgments issued in states not belonging to the European Union
According to Article 64 of law no 218 of 1995, a foreign judgement is recognised in Italy without any procedure, when:
The judge who pronounced it was aware of the case according to the principles of jurisdiction pertaining to Italian law.
The introductory act was brought to the attention of the defendant in accordance with the provisions of the law of the place where the trial took place and the rights of the defense were not violated.
The parties appeared in court according to the law of the place where the trial took place or abstentia was declared in accordance with that law.
The judgment has become final according to the law of the place where it was pronounced.
The judgment is not contrary to another decision pronounced by an Italian judge that has become final.
A trial is not pending before an Italian judge in relation to the same object and between the same parties, which was started before the foreign trial.
Article 65 of law no 218 of 1995 generally refers to ‘foreign provisions’, in order not to exclude any type of decisions, which, although not defined as ‘judgment’ by the foreign legal system, but which nevertheless produce the same effects. As a consequence of the way in which Article 65 is written, in Italy ‘foreign provisions’ relating to the ability to act, as well as those relating to family relationships or personality rights have legal authority when they have been pronounced by state administrations (and not necessarily courts).
It must be remembered that in Italy a decision which is recognised as ‘effective’ can have numerous economic and social consequences – even different from the ‘writ of execution’ – such as a registration of corporate change in public registers or the ownership of real estate or the application of lis pendens.
Article 67 of law no 218 of 1995 states that only in the event of a dispute over the recognition of the foreign decision, or when it is necessary to proceed with forced execution, may anyone interested apply to the Italian judicial authority to ascertain whether recognition requirements have been met. This also applies with respect to the implementation and forced execution in Italy of public deeds received in a foreign state and bearing ‘writ of execution’ (as written in Article 68 of law no 218 of 1995).
Therefore, in a practical way, the importance of law no 218 of 1995 is that the ‘writ of execution’of foreign decisions is not necessary, but the Italian one is sufficient; that issued by the Italian judge following the verification of the requirements of the exequatur will allow execution to begin.
Judgments by European Union states
Among European states, the first examples of international conventions on the recognition and execution of foreign decisions were the Brussels Convention of 27 September 1968 (concerning jurisdiction and the execution of judgments in civil and commercial matters, ratified by Italian law no 804 of 21 June 1971), and the Convention of Lugano of 16 April 1988 between the Member States of the EEC and the EFTA States (ratified by Italian law no 198 of 10 February 1992), having the same subject matter.
Subsequently, other regulations intervened in the European legal system which made it possible to further facilitate the circulation of judgments among the Member States of the European Union, gradually replacing the previous conventions. The first regulation (CE) issued was n 44/2001 (called ‘Brussels I’).
The Reg. no 44/2001 and the previous Brussels and Lugano conventions were based on the principle according to which a judgment issued in a Member State must be recognised in the other Member States without the need for any special procedure.
In January 2015, Regulation (EC) no 44/2001 was replaced by Regulation (EU) no 1215/2012, to be applied to judgments, processed, or registered public documents and to judicial operations approved or concluded on 10 January 2015 or later.
The EU Regulation 1215/2012 (called ‘Brussels I-bis’) updates Brussels I relating to the jurisdiction, recognition and enforcement of decisions in civil and commercial matters, seeking to circulate decisions in civil and commercial matters within the EU in an even simpler and faster way, in application of the principle of mutual recognition and the guidelines established in the Stockholm program.
The procedure contained in the Brussels I regulation has been abolished, and the new regulation eliminates the need to obtain from the judicial authority of the executing state a prior declaration of enforceability of the foreign decision. On this point, Article 39 of the regulation provides that:
‘A judgment given in a Member State which is enforceable in that Member State shall be enforceable in the other Member States without any declaration of enforceability being required.’ (Article 39);
This executive decision automatically results in authorisation to proceed with the precautionary and executive measures provided for by the law of the requested Member State (Article 40).
Now, a decision made in an EU country will be enforceable in other EU countries without the need for any specific procedure, or declaration in the execution state.
Operationally, in order to immediately start execution in Italy, to make use of the new EU Regulation No 1215 of 2012 the interested party must:
obtain from the judge who issued the decision a certificate containing a summary of the measure of enforcement and other information, for example on interest applicable and the court costs (the certificate is in the form contained in Annex I to the Regulation); and
notify the certificate to the party against whom execution is requested. If necessary – if it has not already been – the decision to be executed (together with the translation in a language understandable to the recipient or in one of the official languages of the executing state) must also be notified. The notification may also concern the acts that start the actual execution, according to the law of the executing state (in Italy, the decision, the certificate, and ‘order to comply’ should be notified simultaneously).
In conclusion, decisions issued in EU states are automatically recognised without the need for an express recognition or declaration of enforceability. There is always the possibility (pursuant to Articles 45 and 46 of the regulation) for a party to seek to challenge, in the competent court of the state of enforcement, whether the conditions for both recognition and enforcement have been satisfied.
European order for payment procedure ex Regulation (EC) No 1896/2006
Regarding European order for payments as described by EC Regulation no 1896/2006, the ‘strength’ of the foreign provision is even greater and the jurisdiction of the Italian judge regarding exequatur of the Italian judge is almost completely nullified.
The European order for payment is the highest form of protection for the rapid and efficient recovery of outstanding debts (over which there is no legal dispute) to simplify and solve the cumbersomeness between the application of the different national laws when compared with the regularity and speed of cross-border trade.
For these reasons, the European payment order procedure expressly provides, at Article 19, for the abolition of the exequatur: ‘A European order for payment which has become enforceable in the home Member State is recognized and executed in the other Member States without requiring a declaration of enforceability and without any possibility of opposing its recognition’, and in paragraph 3 of Article 22, ‘Refusal of enforcement’, it is stipulated that: ‘the European order for payment may in no case be reviewed in substance in the Member State of enforcement’.
Thus, the cases of suspension or of refusal of enforcement are even more limited than other foreign decisions and provide for a specific procedure. The foreign judge asked to enforce the order can decide to suspend or limit the execution only and exclusively if a ‘review in exceptional cases’ pursuant to Article 20 of the EU Regulation 1986/2006 has been presented to the state that has issued the payment order.
International arbitration awards
With regard to international arbitration awards, Italian law, which exactly refers to the 1958 New York Convention, ratified by the Italian Parliament by law no 62 of 19 January 1968 (with effect established from 1 May 1969), provides for a different procedure to that envisaged for foreign judgments.
As already written, a foreign judgment is immediately effective, but a foreign award, instead, requires formal recognition (that provided for by Article 839 of the Civil Procedure Code), in order to produce effects within the Italian territory. It is interesting to note that even in relation to Italian national awards, the Code of Civil Procedure provides that the party who intends to enact the award must ask the state court to ascertain the formal regularity of the award.
In conclusion, foreign arbitration awards are the only foreign decisions that require formal recognition before they can perform their effects within the Italian territory, without prejudice to future and possible control over the assumptions by the Italian judge in Articles 4 and 5 of the 1958 New York Convention.
Recognition and execution of tax and customs acts (the so-called ‘Acta Jure Imperii’)
In order to offer greater completeness to the enforcement picture, it seems appropriate to provide a brief analysis of the Italian and international legislation relating to so-called ‘acta iure imperii’, ie state taxation (tax and customs duties).
Directive 2011/16/EU of 15 February 2011 (relating to administrative cooperation in the tax sector and repealing Directive 77/799/EC), implemented in Italy by Legislative Decree of 04/03/2014 n 29, imposes strong cooperation among EU member states on tax matters.
This cooperation is reflected in the notification and validity of the instrument containing the tax request but does not affect the recognition or execution procedure. In other words, an Italian tax payment order notified abroad according to the Italian procedure is still valid even if it does not comply with the law of the state in which the notification is made.
But it is different if we talk about the recognition or execution of the tax injunction.
The European conventions mentioned previously expressly exclude the application of the principles of EU Regulation 1215/2012 and EC Regulation 1986/2006 to revenue, customs or administrative matters or the liability of the state for acts and omissions in the exercise of state authority:
Article 1 EU Regulation 1215/2012: “This Regulation shall apply in civil and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii)’.Article 2 of EC Regulation 1896/2006: ‘This Regulation shall apply to civil and commercial matters in cross-border cases, whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters or the liability of the State for acts and omissions in the exercise of State authority ('acta iure imperii')”.
Consequently, in the event of a tax debt with an Italian Public Administration, it cannot be enough to activate an enforcement procedure by simply sending an Italian tax notice to a foreign country. In the Italian system, the ‘tax notice’ is the first act of tax execution - like the ‘order to comply’ in civil law – and as such, the jurisdiction over the executive proceeding belongs exclusively to the state in which the enforceable injunction will eventually be activated.
In fact, in the event of a payment order from the Italian authority to be executed in a foreign country, first of all the judgment must be recognised in the requested court and, only then, can execution be carried out, but necessarily according to foreign legislation.
The principle of exequatur has not, therefore, been abolished in relation to enforcement measures resulting from acta iure imperii. Only these measures require express recognition and declaration of enforceability of the state in which they are to be executed.
Summarising all the above:
All foreign judgments are immediately effective within the Italian territory, and judicial assessment of whether the requirements of exequatur have been met occurs only in the event of a limited matters of public order or of conflict with previous proceedings. A writ of execution from the country of origin is not necessary.
European legislation relating to European Orders for Payment pursuant to EU Reg 1896/2006, can be considered the maximum expression of mutual recognition of judicial ‘provisions’; not requiring recognition procedures or declarations of enforceability in the foreign country, and limiting cases of refusal and suspension to a failure to follow certain specific procedures.
International arbitration awards are the only foreign decisions for which an exequatur procedure is envisaged; without prejudice to any future control by the Italian judge of the conditions in Articles 4 and 5 of the 1958 New York Convention.
For acta iure imperii of the Italian State (especially in matters of taxes and customs), the abolition of exequatur is not envisaged and therefore the authority must necessarily obtain express recognition and a declaration of enforceability in the state in which they are to be executed.
‘Judicial nationalism’ is a phrase born in the journalistic field in the murder trial of the English student Meredith Kercher, in which Amanda Knox and Raffaele Sollecito were accused, but ultimately acquitted.
On the recognition of foreign decisions in the system of l. n. 218 of 1995: Consolo, Evoluzioni nel riconoscimento delle sentenze, in Riv. trim. dir. proc. civ., 1997, 575 ss. e spec. 607 ss.; Carlevaris, L’accertamento giudiziale dei requisiti per il riconoscimento delle sentenze straniere, in Riv. dir. internaz. priv. e proc., 2001, 71 ss.; Civinini, Il riconoscimento delle sentenze straniere, Milano, 2001; Carratta, La sentenza civile straniera fra “riconoscimento” ed “estensione dell’efficacia”, in Riv. dir. proc., 2006, 1147 ss.; D’Alessandro, Il riconoscimento delle sentenze straniere, Torino, 2007, 53 ss.; Civinini, Il riconoscimento automatico, in Lupoi-Vullo-Civinini-Pasqualis, Giurisdizione italiana. Efficacia di sentenze e atti stranieri, Napoli, 2007, 445 ss.
The Italian courts have recognised as not contrary to public order, judgments such as: blank promissory note - Cassation, civil section, decision n. 3646 of 2013 - and loans at a rate higher than the limits of Italian banking law - Cassation, civil section, decision n. 17349 of 2002.
In literature: O Feraci, L’ordine pubblico nel diritto dell’Unione europea, Milano, 2012; F. Mosconi, La difesa dell’armonia interna dell’ordinamento del foro tra legge italiana, convenzioni internazionali e regolamenti comunitari, in Riv. Dir. Int. Proc., 2007, 5 s.; P. Lotti, L’ordine pubblico internazionale, Milano, 2005
The only exceptions are made for debt securities. The article 62, paragraph 2, R.D. 14/12/1933, n. 1669 recognizes the promissory note issued abroad the same enforceable attributed to the national title, provided that such an effect is provided for by the place of issue, the same arrangement is planned for the check in Article 55, paragraph 2, R.D. 21/12/1933, n. 1736.
European legislation prevails over Italian national law. Thus established by the Brussels Convention, art. 10-European Union law, paragraph 1 "The Constitution and the law adopted by the institutions of the Union in the exercise of the powers attributed to it have precedence over the law of the Member States".
In the case of Italy, the Constitutional Court intervened, specifying that in the event that there is a conflict between a national law and a provision of the European Convention, the common national judge must proceed to an interpretation of the provision in accordance with the Convention.
As confirmation, see Judgment of the European Court of 9 March 1978, appointed Simmental s.p.a.// Ministero delle Finanze.
Article 38 Reg. EC 44/2001 Enforcement A judgment given in a Member State and enforceable in that State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there.
According, https://ec.europa.eu/anti-trafficking/eu-policy/stockholm-programme-open-and-secure-europe-serving-and-protecting-citizens-0_en. Is “The Stockholm Programme, adopted by the European Council in December 2009, provides a framework for EU action on the issues of citizenship, justice, security, asylum, immigration and visa policy for the period 2010–2014. It calls for a coherent policy response which goes beyond the area of freedom, security and justice. It includes external relations, development cooperation, social affairs and employment, education and health, gender equality and non-discrimination. Section 4.4.2 particularly highlights trafficking in human beings and the necessity to strengthen and enhance the prevention and combating of trafficking in human beings and smuggling of migrants. It also calls for the establishment of an Anti-trafficking Co-ordinator”.
Review in exceptional cases, may concern incorrect notification, pursuant to art. 14 of the Regulation. The City of Gorizia court, with judgment of 23.05.2019 in trial no. 140/19, admitted the regularity of the notification if made pursuant to art. 136 and 139 of the Kodeks Postepowania Cywilnego (KPC, Polish Code of Civil Procedure), in which the debtor is expected to notify the court of the change of registered office.
However, any kind of fictitious notification is notoriously permitted (for example the French system of remise au parquet).