Italian corporate law establishes the liability of members of the board of directors of joint stock companies depending on whether they are chief executive officers or executive directors or independent and non-executive directors. Recent Supreme Court of Cassation and Milan Court of Appeal decisions focused on the liability of non-executive directors by affirming that they must be proactive and fulfil their duty to be as informed as possible to ensure a suitable standard of corporate governance.
The so-called 'Growth Decree' includes a rule which allows an Italian patent application to be filed based on an international patent application filed under the Patent Cooperation Treaty. The adoption of this provision offers companies a cheaper alternative where the potential exploitation of an invention does not justify the investment required to obtain a European patent. The provision responds to a pressing practical need and is a welcome change.
The Supreme Court recently ruled on the scope of reinstatement protection in the event of dismissal for cause provided by Article 3 of the Jobs Act. Despite the rule providing for reinstatement to be linked to the non-existence of disputed material facts, the court considered that reinstatement should occur not only when the material facts of a case did not take place, but also when they are insignificant from a disciplinary perspective.
The Civil Code sets out specific rules which apply in the event that a chief executive officer (CEO) or director has extra-company interests. In the event that such a conflict of interests affects the position of a managing director, they cannot vote in the relevant board of director's resolution on the subject of the conflict. A recent Supreme Court of Cassation Decision has emphasised the duties of transparency and fairness to which company directors and CEOs in Italy must adhere.
The recently passed Growth Decree has introduced a number of tax provisions which apply to various sectors. In particular, the decree-law has extended the super depreciation regime to investments in new tangible assets in certain circumstances, introduced a corporate income tax reduction on reinvested earnings and restored tax incentives for business combinations, allowing companies involved in mergers, demergers or business combinations to get a free tax step-up in the book value of relevant assets up to €5 million.
The Administrative Supreme Court recently ruled on the operation of night-time flights for civil purposes over Italian national territory, issuing a milestone decision that put an end to a 20-year regulatory dispute. The decision means that Italian airports now have parity with those located in other EU member states and has removed the negative effect that the ban had had on competition.
The Tribunal of Milan recently published a judgment analysing a common occurrence in shipping matters where a contract of charter is not incorporated into an agreement duly executed by both parties, but is instead contained in a recap fixture exchanged via email. The decision is noteworthy as it reaches conclusions (significantly different from prevailing Italian case law) which deserve to be carefully considered when concluding charter parties.
The use of corporate renewable power purchase agreements (PPAs) looks set to increase in Italy. Corporate PPAs are contracts between buyers and power producers to purchase electricity at a pre-agreed price for a pre-agreed period. As the market for the development of subsidy-free renewable energy projects grows, corporate PPAs are expected to become a common part of the energy and sustainability strategies of Italian corporates.
Decree-Law 34 of 30 April 2019 introduced important amendments to the Italian securitisation framework. Securitisation special purpose vehicles can now play a more active role in the context of non-performing or unlikely-to-pay exposures. Further, a new breed of securitisation has been introduced, where the issuer's obligations are backed by real estate properties (or registered moveable assets) and related cash flows, as opposed to a portfolio of monetary claims.
The government recently approved a legislative decree on clinical trials that introduces changes to several provisions of the existing national regulation on clinical trials. At present, clinical data obtained in Italy from non-profit clinical trials cannot be used for commercial purposes. Moreover, pharmaceutical companies funding non-profit research cannot claim ownership of data and results obtained from such research, irrespective of any agreement with the non-profit entity. This may now change.
The Supreme Court of Cassation recently examined the admissibility of a put option clause in a shareholders' agreement of a joint stock company by which one shareholder was committed to indemnify the other shareholders from any losses arising from payments to the company for stock capital contributions or other payments having a similar effect. The court's decision confirms that Italian company law admits shareholder agreement clauses in line with the international principles of lex mercatoria.
The government recently adopted provisions to coordinate national legislation with the EU Unitary Patent Regulation and the Unified Patent Court (UPC) Agreement. Italy has chosen a proactive approach to the UPC system, aligning its national law with the system's substantive rules in all respects.
The Supreme Court recently decided a labour litigation case filed by an Italian employee of the British Council. The court affirmed the principle that the exoneration from Italian jurisdiction of foreign states and entities that, in a broad sense, hold the status of bodies of a foreign state meets a double limit in the field of labour relations for disputes concerning employment relationships unrelated to the institutional functions and the organisation of the entity and when a claim with exclusively patrimonial content is raised.
The government recently extended the duration of the guarantee on the securitisation of non-performing loans, subject to European Commission clearance. The extension represents a welcome measure to strengthen the stability of the Italian banking system and support, without interruption, the process of reducing the stock of non-performing loans and developing a secondary market for them.
The Lazio Regional Administrative Court recently ordered a number of ministries, including the Ministry of Health, to launch an information campaign to advise the public about the potential risks arising from the misuse of mobile and cordless phones. The decision received considerable media coverage and will most likely renew the debate about electromagnetic pollution and mobile phones.
The Supreme Court of Cassation recently addressed a supply contract between two parties that contained a ritual arbitration clause. Pursuant to the clause, an arbitration proceeding had been commenced, which had resulted in the defendant being ordered to pay damages. The defendant had subsequently appealed the arbitral decision for alleged violation of the procedural rules, despite the fact that appeals for the violation of substantive rules are precluded by legislation and case law.
The government recently issued Decree-Law 22/2019, which is aimed at ensuring the security, financial stability and integrity of financial markets in the event of a so-called 'hard Brexit'. Under the decree-law, UK banks that carry out activities subject to mutual recognition on the United Kingdom's withdrawal date can continue carrying out their activities in Italy by serving notice to the Bank of Italy. Further, Italian branches of UK banks may continue to carry out their activities by serving notice to the Bank of Italy.
A client company recently sued a leading Italian bank, arguing that the interest rate swap contracts concluded between the parties should be declared null and void because, among other things, no master agreement had been executed and the contracts had allegedly been concluded in violation of the bank's general duties of correctness and delay. However, the bank rejected the claims based on the preliminary argument that the limitation period for taking action had already elapsed.
The Regional Administrative Court of Sardinia recently annulled the regional authority's decision to revoke authorisation for the construction and operation of a photovoltaic (PV) plant on the rooftops of agricultural greenhouses following its alleged loss of status as an agricultural company. The decision confirms that the lack of qualification as a professional agricultural entrepreneur should not jeopardise the right to operate PV plants and receive incentive tariffs on the production of renewable energy.
The Italian Medicines Agency recently opened a public consultation on national templates for medicinal products and medical devices to be used in clinical trials carried out in Italy. The public consultation will hopefully help to clarify whether such templates should be considered mandatory and to what extent they may be replaced by sponsors' templates or be subject to negotiation and amendments.