Milan Court of Appeals, 8th February 2013 (A.G. Alvalle S.A. v. Eichweber R. and Eichweber G.)

Under Art. 14 IPILA, which enshrines the iura novit curia (i.e. “the judge knows the law”) principle, the judge must ascertain the contents of the foreign law in order to assess whether or not the requirement of reciprocity is met, under Art. 16 Preliminary Provisions.

The contract for the purchase of an immovable situated in Italy by a Swiss company is null under Art. 16 Preliminary Provisions, since, in similar circumstances, an Italian company may not buy an immovable situated in Switzerland.

Facts

In 1999, a Swiss company entered into a contract for the purchase of an immovable situated in Italy. Among other provisions, the contract read: “the buyer, a Swiss company […], states that the purchased immovable will be used as the company’s seat. This statement is also made to meet the requirement of reciprocity between Italy and Switzerland, in compliance with Art. 16 of the [Preliminary Provisions to the Law: hereafter, “Preliminary Provisions”]”.

The Swiss company later brought a claim under the contract to the Como District Court.

In 2006, the seized court, of its own motion, ascertained that the requirement of reciprocity provided for in Art. 16 Preliminary Provisions had not been met and thus dismissed the claim.

In 2013, the losing party challenged the decision before the Milan Court of Appeals, which eventually quashed the appeal on the following grounds.

Decision

Before the  Italian Private International Law Act (hereafter “IPILA”) was passed, Italian domestic conflict of laws provisions were found in the Preliminary Provisions. Once the IPILA entered into force, these earlier provisions were amended, a part from Art. 16 Preliminary Provisions.

Art. 16 Preliminary Provisions provides for the requirement of reciprocity, whereby the national of a foreign State may enforce civil rights in front of Italian courts, as far as Italian nationals are allowed to enforce similar rights in front of the courts of that foreign State. The provision, which is headed “Treatment of the foreigner”, stipulates: “[1] The alien is entitled to the civil rights attributed to citizens on a condition of reciprocity and save for the provisions contained in special laws. [2] This provision also applies to foreign legal persons” (AN: translation provider by the Italiano Ministry of Foreign Affairs on its website, see link below)

As underlined by the appelate court – by quoting a judgment rendered by the Full Court of the Court of Cassation (No. 07/24814) – reciprocity does not affect jurisdiction, but rather the right whose enforcement is sought by the foreign national.

If the requirement is not met, in cases where a foreign national seeks to enforce a contractual right, the related contract will be declared null and his claim will be thus dismissed.

When disputes arise as to whether or not there is reciprocity, the national of the foreign State must prove that the right he seeks to enforce may be enforced by an Italian national in the courts of that foreign State.

He may prove this by any means, for instance, by submitting official documents (i.e. an affidavidit) by a public authority of the foreign State.

It is here that the role of the judge comes into play: Art. 14 IPILA allows him to – or better, requires him to – assess whether or not the requirement of reciprocity is met, by collecting, of its own motion, information as to the foreign law concerned.

Actually, Art. 14 IPILA reads: “[1] The judge ascertains of its own motion the foreign law. To such aim he may avail himself, a part from the instruments provided for in international conventions, of information provided by the Ministry of Justice; he may as well consult experts and specialized institutions. [2] Where the judge is unable to ascertain the foreign law, not even by the assistance given by the parties, he applies the law which is applicable by reason of other connecting factors existing in the same legal case. In the absence of that, Italian law applies”.

In the present case, the court noticed that, when the contract was made, under Swiss law, a foreign national could buy an immovable situated in Switzerland, to be used as a private dwelling, only if authorized by the competent Swiss canton. On the opposite, Swiss law allowed the purchase of immovables situated in Switzerland, regardless of any authorizations, where the foreign national purported to use such immovable for business purposes.

In other words, an Italian national could not buy a home in Switzerland, unless authorized by the local Swiss authority.

Actually, during the taking of evidence, the court ascertained that, in spite of the statement made in the contract, the Swiss company had not used the immovable situated in Italy as its legal seat and thus for business purposes.

Conclusion

Therefore, the court maintained that the requirement of reciprocity had not been met: Art. 16 Preliminary Provisions prevented the court from upholding a contractual claim made by a Swiss national under a contract that an Italian national, in similar circumstances, could have not enforced before a Swiss court. As a consequence, the sale contract whose enforcement was sought, was declared null and thus the appeal was quashed.

By the way, no relevance was given to the claim the Swiss company made that Swiss law was about to be amended, so as to allow foreign nationals to buy immovables situated in Switzerland regardless of any authorization.

Short comment

Surprisingly or not, Art. 16 Preliminary Provisions pursues a praiseworthy purpose: it is intended to protect Italian immigrants. In fact, the rule was introduced in the Italian law system in 1942 (Royal Decree of the 16th of March 1942, No. 262), soon after mass migration of the Italian people to the United States. By this codified form of retaliation, the Italian legislator pursued to encourage foreign States to recognize Italian immigrants same civil rights as those enjoyed by natives of the host State.

In domestic private international law rules of other European States, where considered, reciprocity comes into play when recognizing and enforcing judgments rendered by courts of Third States, but rather not when it comes to assessing whether or not a foreigner may enforce civil rights. Art. 16 Preliminary Provisions is thus an original model, one which has not been copied by any known legal system. Nonetheless, this instrument should be reconsidered and could inspire uniform private international law. For instance, under Art. 33 Regulation (EU) No. 1215/2012, in cases of parallel proceedings, the courts of a Member State may oust jurisdiction in favour of those of a Third State, when proceedings before the latter grant a “blurry” standard of trial fairness. This said, another possible solution – inspired by Art. 16 Preliminary Provisions – could be the one of allowing the courts of Member States to oust jurisdiction in favour of Third States only where proceedings comply with the standards of the former courts. This, by the way, could encourage Third States to adopt higher standards of trial fairness.

Futhermore, Art. 16 Preliminary Provisions does not apply when special law so provides. In particular, the main exceptions are provided for in Legislative Decree of the 25th of July 1998, No. 286, where, among the rest, it is provided that European Union nationals enjoy civil rights regardless of whether the requirement of reciprocity is met. In general terms, where nationals from Third States are involved, the assessment is made unless an international covenant exempts from doing so.

In conclusion, a last remark is that, though Art. 16 Preliminary Provisions has a limited scope of application, it could soon restore its former glory with Brexit…

See also

English notes on the requirement of reciprocity by the Italian Ministry of Foreign Affairs:

http://www.esteri.it/mae/en/ministero/servizi/stranieri/condizreciprocita/

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Court of Cassation, Full Court, 19th September 2017, No. 21622 (Sociomantic Labs GmbH v. 6sicuro S.p.a)

Forum election clauses in general terms and conditions published on a websites are valid and enfroceable under Article 23 Regulation (EC) No. 44/2001.

Facts:

6sicuro S.p.a. (hereafter, “6sicuro”), a company having its leagl seat in Italy, entered into a contract with Sociomantic Labs GmbH (hereafter, “Sociomantic Labs”), a German company, whereby the latter undertook to provide the former advertising services on the web.

The contract was made through the exchange of emails and the client signed the related confirmation order, where the link to the general terms and conditions published on the service provider’s website was mentioned.

On February 2016, 6sicuro sued Sociomantic Labs before the Milan Distric Court, claiming it had suffered damages from the alleged breach of contract by the service provider.

The defendant did not appear before the sezied court, but rather submitted a pleading to the Court of Cassation (a sc. ricorso per regolamento preventivo di giurisdizione), seeking for a declaration of lack of jurisdiction of Italian courts, on the grounds of the choice of Berlin courts made in the general terms and conditions that the claimant in main proceedings had agreed upon.

6sicuro challenged the plea by stating that the general terms and conditions where contrary to Directive 2000/31/EC, that the forum selection clause had to be considered as “non existent”, since it was nowhere to be found in the general terms and conditions that had actually been agreed upon when the contract was entered into, and that, in any case, the clause lacked of the formal requirements provided for in Art. 23 Regulation (EC) No. 44/2001 (as replaced by Art. 25 Regulation (EU) No. 1215/2012).

Decision:

The Court of Cassation held, in the first place, that the forum selection clause had to be construed as being exclusive for the purposes of Art. 23 Regulation (EC) No. 44/2001, which indeed applied in the present case since – according to the court – Regulation (EU) No. 1215/2012 applies only to contracts made after the 10th of January 2015, pursuant to Art. 81 thereof.

Secondly, by quoting the European Court of Justice (ECJ, judgment of the 21th of May 2015, C-322/13, Cars on the Web), the court held that the forum selection clause complied with the formal requirements mentioned in Art. 23(1) Regulation (EC) No. 44/2001. In particular, the jurisdiction agreement was entered into by an electronic means which provided a durable record of the same, considering that the general terms and conditions could have been printed and saved before entering the contract.

Nonetheless, 6sicuro averred that its counterparty had not provided sufficient evidence as to the fact that the general terms and conditions could have been printed and saved, nor that the latter were made available on the website when the contract was made, and neither that their text was actually the same as the one submitted in court.

These statements were deemed ungrounded, given that, on the one hand, when signing the confirmation order, 6sicuro stated it had read the general terms and conditions published in Sociomantic Labs’s webiste, and, on the other hand, the Italian company had sent a complaint letter where the same general terms and conditions were mentioned.

Furthermore, 6sicuro’s claims were not upheld by the court since the company had not maintained that the forum selection clause had been changed over time, but rather that the whole general terms and conditions had.

Thirdly, the court dismissed 6sicuro’s argument that the forum selection clause had to be specifically agreed upon, that Directive EC/2000/31 should have applied in the present case, that the clause had been poorly drafted and thus was misleading. As to the latter argument, in fact, 6sicuro underlined that the clause, which read “This contract is governed by German law. EU commerce law is excluded. Place of jurisdiction is Berlin”, had been poorly translated from German into English.

Conclusions:

In the light of all the above, the court concluded by stating: “Therefore, in the presence of a valid forum selection clause, having an exclusive nature, in favour of the judicial authority of a foreign country, the lack of jurisdiction of the Italian judge must be declared”.

Short comment:

This is the first time the Court of Cassation has considered the issue of forum selection clauses in general terms and conditions published on a website. Actually, a lower court, the Turin District Court had already faced the issue.

This said, the court applied Art. 23 Regulation (EC) No. 44/2001, when it should have applied  Art. 25 Regulation (EU) No. 1215/2012 instead, under Article 66(1) thereof. In fact, unlike Regulation (EC) No. 593/2008 (replacing the 1980 Rome Convention), to determine its scope ratione temporis, Regulation (EU) No. 1215/2012 does not take into account the date when the disputed contract was made, but rather the time when proceedings are commenced. In the present case, proceedings were commenced on the 18th of March 2016 and, according to the mentioned provision, Regulation (EU) No. 1215/2012 applies to claims filed from the 10th of January 2015 onward.

The court also confirmed that forum selection clauses need not to be specifically agreed upon (under Article 1341 Italian Civil Code).

Finally, though irrelevant for the purposes of the decision, indeed had the disputed forum (and law) selection clause been poorly translated. In fact, the German general terms and conditions of Sociomantic Labs (see https://www.sociomantic.com/tos/de/) provide for the exclusion of the CISG (“Es gilt das Recht der Bundesrepublik Deutschland unter Ausschluss des UN Kaufrechts”), that in the English version of the same general terms and conditions has been translated into the exclusion of a non existent “EU commerce law”.

See also:

Turin District Court, Company’s Division, court order of the 13th of May 2013, published in Rivista di diritto internazionale privato e processuale, No. 5/2015, pp. 567 and ff.