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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