A recent Supreme Court of Cassation decision addressed the invalidity of arbitration clauses that do not agree with Decree-Law 5/2003, which concerns judicial procedures for corporate matters. The court found that in arbitration proceedings concerning disputes between business partners, the clause referring to the appointment of arbitrators assigned to the parties will be void even if stipulated before Decree-Law 5/2003 came into force.
The United Sections of the Supreme Court of Cassation recently addressed a case concerning a cooperative that had been sued before an arbitral tribunal by three partners who alleged that their exclusion, which the company had approved, had been illegitimate. The court found that the 30-day forfeiture term to appeal a decision excluding a partner of a cooperative, as provided for by the Civil Code, is applicable even in the presence of an arbitration clause in the cooperative's articles of association.
A recent Supreme Court of Cassation decision examined the long-standing question of how to interpret Article 827(3) of the Code of Civil Procedure, which provides that an arbitral award which partially decides the merit of the dispute is immediately appealable, whereas the award which decides some of the questions raised, without resolving the arbitral proceeding, is appealable only together with the final decision.
The Supreme Court of Cassation recently considered the nullification of an arbitral decision based on a violation of the rules regarding the merit of the dispute, as set out in Article 829(3) of the Civil Procedure Code as modified by Decree-Law 40/2006. According to the previous version of Article 829(2) of the Civil Procedure Code, unless the parties expressly agreed otherwise, an arbitration award could be appealed for a violation of mandatory laws; however, the revised text overturns this clause.
The Supreme Court of Cassation recently ruled on a dispute between two companies which had accepted two separate arbitration clauses. The court decided that the existence of two arbitration clauses governing the same relationship is a question of merit, rather than jurisdiction, which excludes the possibility that the court examining the procedural facts can also decide who is in charge of the dispute.
The most recent Italian case law has upheld the European Court of Justice's interpretation of EU Regulation 261/2004 in Wallentin-Hermann and Van der Lans by qualifying a hidden manufacturing defect as an 'extraordinary circumstance' under the meaning of Article 5(3) of the regulation and rejecting passenger claims for compensation under Article 7 of the regulation.
In a recent decree the Ministry for the Economic Development started the extraordinary administration procedure for Alitalia pursuant to Law 39/2004 and appointed commissioners to lead the company throughout the procedure. The main purpose of the extraordinary administration is to implement a recovery plan meant to preserve employment levels through the financial restructuring of the company, the sale of the business as a whole or the sale of the business, assets and contracts part by part.
The Competition Authority has often fined airlines for imposing limits on round-trip tickets which force passengers to take flights in the order listed on the original ticket (ie, the so-called 'no-show rule'). The Council of State recently found this rule to be lawful. However, to protect consumer rights, the rule must strike a balance between the commercial needs of airlines and consumer rights. This decision confirms the increased focus on consumer rights without neglecting the commercial needs of airlines.
Italian courts are facing an increase in judicial claims by debt collection companies for denied boarding and the cancellation and delay of flights pursuant to EU Regulation 261/2004. The claims are based on the assignment of passenger rights to compensation under the regulation. The increase in judicial claims has led to jurisdictional and legal entitlement issues which have been resolved by different Italian court approaches.
The Italian Civil Aviation Authority (ENAC) recently issued a circular regarding non-scheduled air transport services operated outside the European Union to and from Italian airports. ENAC's rules apply to EU carriers and extra-community carriers on the condition that their states of origin grant equal treatment to EU carriers and are in line with the Italian Navigation Code.
The Italian courts, as well as scholars and legal practitioners, have debated the concept of supervening usury for many years. Until recently, it was unclear whether interest stipulated below the usury threshold at the time of contract, but exceeding such threshold at the time of payment, was usurious. The Supreme Court finally addressed this issue in a recent decision, which ruled out supervening usury entirely.
The High Court recently held that in the event of a merger, the new entity resulting from the merger is liable for the offences committed by the entities that participated in the merger. In the case at hand, a company was responsible for corrupting members of a foreign government to obtain the right to extract oil. The company was acquired by another firm after the crime had been committed, but before the start of the investigation.
The notional interest deduction (NID) regime has been in effect since the 2011 fiscal year. Under this regime, Italian resident companies and permanent establishments of non-resident companies may deduct notional interest from their corporate income taxable base. The NID is calculated according to the equity increase (ie, new equity rate) from the end of the 2010 fiscal year, multiplied by a rate determined annually.
Articles 1(145) and (146) of Law 208/2015 provide that the parent company of a multinational group resident in Italy must file a country-by-country report with the tax authorities within the specified time limit. The secondary legislation enacted by the Ministry of Finance's February 2017 decree-law provides further details on country-by-country reporting requirements and application rules, considering Organisation for Economic Cooperation and Development recommendations and EU Directive 2016/881/EU.
The Budget Law 2017 has introduced an innovative tax regime based on a substitute flat tax reserved for new eligible individuals who transfer their tax residency to Italy. The new tax regime is based on the non-domiciled resident approach already adopted in the United Kingdom and other EU countries and aims to attract high-net-worth individuals and their relatives to Italy and increase foreign investment.
The Tax Authority recently issued Circular Letter 35/E, which clarifies Italy's controlled foreign companies (CFC) regime in light of recent changes under Budget Laws 190/2014 and 208/2015 and Decree-Law 147/2015. The black-list criteria provided for CFC purposes have been significantly revised and, if a CFC is deemed to exist, material clarifications have been provided with regard to the taxation of dividends paid which are – in principle – fully taxable in the hands of the Italian receiving company.
The Tax Authority recently issued a circular that provides general guidelines regarding leveraged buy-out transactions and similar acquisition structures, with particular reference to investments made by private equity funds. The guidelines cover interest expenses, fees charged by private equity firms, withholding tax on interest, shareholder loans and exit disposals.