The Milan Chamber of Arbitration (Camera Arbitrale di Milano or the “CAM”) issued revised arbitration rules that entered into force on 1 March 2023 (the “CAM Arbitration Rules“), following the long-awaited reform of Italian arbitration law (see International Arbitration in Italy: 2022 Amendments).
The Milan Chamber of Arbitration, which forms part of the Chamber of Commerce, is the first Italian arbitration centre that has promoted arbitration nationally and internationally and is today the leading arbitral institution in Italy. The CAM primarily administers arbitral proceedings under the CAM Arbitration Rules while also offering an array of other services.[1] At the request of the parties, for instance, the CAM appoints arbitrators and designates neutrals and experts in proceedings in cases where the CAM Arbitration Rules are not applicable. [2] The CAM also appoints arbitrators and offers its services in arbitrations conducted under the Arbitration Rules of the United Nations Commission for International Trade Law.[3]
The most recent 2023 revision of the CAM Arbitration Rules, following two previous revisions in 2019 and 2020, has brought the CAM Arbitration Rules in line with other modern arbitration rules. The Milan Chamber of Arbitration has thereby created a modern and flexible procedural framework for both national and international arbitrations that should be more appealing to foreign investors, especially for arbitrations seated in Italy.
General Features of the CAM Arbitration Rules
One general feature and overreaching principle of the CAM Arbitration Rules is the principle of good faith. Article 9 of the CAM Arbitration Rules expressly provides that the Chamber of Arbitration, the arbitrators, the experts, the parties and their counsel shall act in good faith in any phase of the proceedings. The CAM Arbitration Rules further provide the arbitral tribunal with the power to sanction any breach or any unlawful conduct that is contrary to good faith.[4] The parties also explicitly commit to enforcing any awards, orders or decisions of the arbitrators. The arbitrators further take into account the good faith and conduct of the parties when deciding on the costs of arbitration.[5]
Arbitration proceedings are commenced by the filing of a request for arbitration with the Secretariat. The request for arbitration has to be signed by the party, or counsel with a valid power of attorney, and contain the elements expressly stipulated in Article 10(2) of the CAM Arbitration Rules. The respondent shall then file its reply to the request for arbitration with counterclaims (if any) within 30 days from the receipt of the request by the Secretariat.[6]
The CAM Arbitration Rules, like most modern arbitration rules, provide for the possibility of the consolidation of two or more arbitral proceedings, provided that (1) all parties agree to consolidate and (2) the arbitration agreements are the same or “compatible” as to the way of appointment of the arbitrators and the seat of arbitration.[7]
If a party has any objections to the existence, the validity or the effectiveness of the arbitration agreement or lack of jurisdiction of the arbitral tribunal, such objection shall be raised in the first brief or at the first hearing following the claim to which the objection relates; if not, the right to object shall be deemed to be waived.[8]
Constitution of the Arbitral Tribunal
The CAM Arbitration Rules provide for a standard procedure for the constitution of the arbitral tribunal. In line with the parties’ autonomy, the parties are free to determine the number of arbitrators. If the number is even, the Arbitral Council of the CAM appoints an additional arbitrator unless otherwise agreed by the parties.[9] Where the parties have not agreed upon the number of arbitrators, the Arbitral Council will typically appoint a sole arbitrator unless it finds that three arbitrators are appropriate because of the dispute’s complexity or economic value.[10]
Arbitrators are appointed per the procedures established by the parties in the arbitration agreement (if any) or otherwise in accordance with the CAM Arbitration Rules.[11] Unless otherwise provided in the arbitration agreement, the sole arbitrator shall be appointed by the Arbitral Council. When the parties have different nationalities or registered offices in different countries, the sole arbitrator or the president of the arbitral tribunal shall be a person of a nationality other than those of the parties.[12]
The 2020 Amendments to the CAM Arbitration Rules
2020 brought several notable revisions to the CAM Arbitration Rules (see 2020 CAM Arbitration Rules), aimed at bringing the rules in line with the revised Italian Arbitration law and further in line with international arbitration practice.
Simplified Procedure
The so-called “Simplified Procedure” is an interesting feature of the CAM Arbitration Rules aimed at reducing the time and cost of arbitration as compared to the ordinary procedure. The Simplified Procedure was introduced in July 2020 in the midst of the COVID-19 pandemic to expedite proceedings and reduce the costs of less complex cases.
The rules regarding the Simplified Procedure are provided in Annex D of the CAM Arbitration Rules and apply to arbitrations in which the claims do not exceed EUR 250,000 unless one of the Parties opts out in the request for arbitration or in the reply to the request for arbitration.[13] The Simplified Procedure can also apply to all arbitrations, regardless of the value of the claims, if the parties have agreed to this in the arbitration agreement or until the filing of the reply to the request for arbitration.[14]
The simplified rules allow the parties to obtain an arbitral award within three months from the appointment of the sole arbitrator, thus saving around 30% of costs compared to the ordinary procedure. According to the most recent CAM Annual Report 2023, costs have been reduced by about 30% compared to ordinary arbitration, whereas the duration of arbitration has been cut in half.[15]
The 2023 revision of the CAM Arbitration Rules also introduced changes to the simplified procedure, amending the content requirements concerning requests for arbitration (Article 2 of Annex D). Requests and answers are no longer inadmissible if they do not specifically allege the facts that each exhibit is intended to prove, as was previously the case. The 2023 CAM Arbitration Rules further clarify that if the respondent raises a procedural objection or files a counterclaim, the claimant shall reply to the Secretariat with any statement of defence within 15 days from the receipt of the reply to the request for arbitration.[16]
Transparency and Third-Party Funding
A provision regarding third-party funding was included in the CAM Arbitration Rules already in 2019. The CAM was one of the first institutions to adopt a straightforward approach to the disclosure of third-party funding to avoid any risk of conflicts of interest or any undue influence on the proceedings. Article 43 of the CAM Arbitration Rules introduced in 2019 explicitly provides that “the party that is funded by a third party in relation to the proceedings and its outcome shall disclose the existence of the funding and the identity of the funder.” Similarly, Article 20 of the CAM Arbitration Rules, which relates to the arbitrators’ statement of independence, was also amended to include a specific reference to financial relationships relevant to assessing possible conflicts of interest.
The duty of disclosure introduced by Article 43 aims to ensure that the institution, as well as the parties, their legal representatives and arbitral tribunals, are well aware of all the participants and interests involved in the proceedings. Such a higher standard of transparency was rather innovative in 2019, not only in Italy but also in the international setting. Other major arbitral institutions have only included the disclosure of third-party funding more recently.[17]
The 2023 Revision of the CAM Arbitration Rules
As indicated, the most recent update to the CAM Arbitration Rules entered into force on 1 March 2023, following the significant and long-awaited reform of Italian arbitration law (also known as “Cartabia reform”) (see International Arbitration in Italy: 2022 Amendments). Italian arbitration law now, finally, and in line with general trends in international arbitration, allows arbitral tribunals to issue interim or provisional measures and has further strengthened the guarantees of impartiality and independence of arbitrators. Such changes, inevitably, had a significant impact on the work of the CAM and its Arbitration Rules.
The revised 2023 CAM Arbitration Rules, which apply to arbitration proceedings commenced after 1 March 2023 unless the parties have agreed otherwise, are now fully aligned with Italian law. The key revisions include the power of the arbitral tribunals to issue conservatory and interim measures, rules regarding emergency arbitration and several other minor amendments reflecting general international arbitration practice.
Before the 2022 reform, the 2020 CAM Arbitration Rules already allowed arbitral tribunals to order interim measures. However, this power was subject to significant limitations imposed by Italian law. This provision was, therefore, purely theoretical, at least for arbitrations seated in Italy. Arbitrators may now order interim measures as soon as they are duly constituted, provided that the parties have agreed to this. Such an agreement may be explicit or implicit through a reference to the arbitration rules in the arbitration clause. This is explicitly provided in Article 26 of the CAM Arbitration Rules, which now reads as follows:[18]
ARTICLE 26 – INTERIM OR PROVISIONAL MEASURES
Unless otherwise agreed by the parties, at request of a party, the Arbitral Tribunal has the power to grant all urgent and provisional measures of protection, also of anticipatory nature, that are not barred by mandatory provisions applicable to the proceedings.
Upon the request of the applicant party, the Arbitral Tribunal may grant the order even without notice to the other party, if such notice may seriously harm the applicant’s interests. In this case, with the decision granting the application, the Arbitral Tribunal schedules a hearing within 10 days of the decision in order to discuss the case with the parties and set deadlines for the submission of briefs, if any. At the hearing, or in any case within 5 days of the hearing, the Arbitral Tribunal, having heard the parties, issues an order confirming, modifying or revoking the measure already granted.
The Arbitral Tribunal may order the party requesting an interim measure to provide appropriate security for costs as a condition to issue the measure.
Any request for interim measures made by a party to a judicial authority does not imply any waiver of the effects of the arbitration agreement or of the request for arbitration, if any.
Therefore, following the 2022 reform, any provisional or conservatory measures can be issued by arbitral tribunals, regardless of their nature. Nevertheless, Italian state courts still retain exclusive jurisdiction regarding (1) appeals against interim orders issued by tribunals and (2) the enforcement of interim measures.
Emergency Arbitration
Another modern feature of the CAM Arbitration Rules introduced in 2019 is the rules on emergency arbitrations. Article 44 of the CAM Arbitration Rules provides that prior to the constitution of the arbitral tribunal, any party may file an application for the appointment of a sole emergency arbitrator and request urgent and provisional measures of protection, also of an anticipatory nature, provided that they are not barred by mandatory provisions of the law applicable to the proceedings.[19]
Article 44 has now been slightly revised in the 2023 CAM Arbitration Rules. One major difference is that emergency arbitrations are now available to all parties, not just to arbitrations where the arbitration agreement was concluded after 1 March 2019.
The deadlines provided for by Article 44 of the CAM Arbitration Rules are very short, which is in line with the expeditious nature of such requests. Article 44(2) now explicitly emphasizes that the Chamber of Arbitration appoints the emergency arbitrator as soon as possible and, in any event, within five days of receipt of the file. The emergency arbitrator issues the requested interim, urgent and provisional measures by way of a procedural order, where he/she deems that the application is grounded within 15 days of receiving the file, having heard the parties and having adopted the most appropriate measures.[20] The Emergency Arbitrator will issue the requested provisional measure by way of provisional order if he/she considers the application to be “grounded”. The revised rules, therefore, lowered the threshold from the previous “manifestly grounded” standard,[21] which is also in line with the standard to obtain interim relief before Italian state courts and tribunals.
In the 2023 revision, the CAM also amended Article 8(2) of the CAM Arbitration Rules regarding confidentiality. The provision now allows the CAM to publish redacted copies of arbitral awards for research purposes unless one party objects to publication within 30 days of the filing of the arbitral award. The amended wording of Article 8(2) refers to procedural orders and measures, in addition to arbitral awards, also covering interim and provisional measures, which is also in line with general trends in international arbitration.
Cost of the Proceedings
The cost of CAM arbitration depends upon the value of the dispute. The Secretariat shall determine the value of the dispute based on the request for arbitration and the reply to the request for arbitration, as well as based on any further indications given by the parties and the Arbitral Tribunal. The rules regarding the costs of the proceedings are provided in Articles 39-43 of the CAM Arbitration Rules. The criteria for determining the value of the dispute are set in Annex B to the CAM Arbitration Rules.
Statistics for 2022: The CAM Annual Report 2023
According to the CAM Annual Report: Arbitration published in 2023, 131 new requests for arbitration were filed with the CAM in 2022. In one out of five cases, the parties chose the simplified procedure. The total dispute value was more than EUR 272 million. Compared to 2021, there were 27% more appointments of sole arbitrators. Statistics for 2022 also show that:
- The average duration of proceedings in 2022 was 13 months, which has remained unchanged in comparison to 2021;
- 44% of proceedings were concluded by settlements, and 45.6% of cases by a final award;
- 66% of hearings were conducted online;
- The nationality of the parties remained predominately Italian (92.1%), with merely 5.7% of the parties coming from other EU countries and 2.2% from outside the EU;
- The seat of the proceedings was predominantly Milan, Italy, whereas the language of the proceedings was predominately Italian (89% of the arbitrations were conducted in Italian and 11% in English).[22]
[1] The CAM offers a range of services for non-administered arbitration upon the request of the parties and according to their needs. See Milan Chamber of Commerce, CAM On Demand.
[2] Rules of the Chamber of Arbitration of Milan Arbitration Rules (the “CAM Arbitration Rules”), Preamble.
[3] The CAM Arbitration Rules, Preamble.
[4] The CAM Arbitration Rules, Article 9(3).
[5] The CAM Arbitration Rules, Article 9(4).
[6] The CAM Arbitration Rules, Article 11.
[7] The CAM Arbitration Rules, Article 12.
[8] The CAM Arbitration Rules, Article 13.
[9] The CAM Arbitration Rules, Article 14(1) and 14(3).
[10] The CAM Arbitration Rules, Article 14.
[11] The CAM Arbitration Rules, Article 15.
[12] The CAM Arbitration Rules, Article 15(5). However, under particular circumstances, and provided that none of the parties objects thereto within the time limit set by the Secretariat, the Arbitral Council may appoint a sole arbitrator or a president sharing the nationality of one of the parties.
[13] The CAM Arbitration Rules, Annex D, Article 1(1). See also Milan Chamber of Commerce: Arbitration, Simplified Procedure.
[14] The CAM Arbitration Rules, Annex D, Article 1(2).
[15] The CAM Annual Report: Arbitration 2023, pp. 9-11.
[16] The CAM Arbitration Rules, Annex D, Article 2(3).
[17] See 2021 ICC Arbitration Rules, Article 11(7); 2022 ICSID Arbitration Rules, Rule 14(4); 2022 DIAC Rules, Article 22; 2018 HKIAC Arbitration Rules, Articles 44 and 45(3)(e); 2021 VIAC Arbitration Rules, Article 13(a).
[18] The CAM Arbitration Rules, Article 26 (emphasis added).
[19] The CAM Arbitration Rules, Article 44(1).
[20] The CAM Arbitration Rules, Article 44(3).
[21] See Article 44.3 of the 2019 and 2020 CAM Arbitration Rules.
[22] The CAM Annual Report: Arbitration 2023, p. 18.