The ECHR ruling of May 20, 2021 in the case "Beg S.p.a. v. Italy" (application No. 5312/11).
In 2011, the applicant company was assisted in the preparation of the application. Subsequently, the application was communicated to Italy.
In the case, an application was successfully considered about the lack of impartiality on the part of a judge, a high-ranking official and an adviser to the main (parent) organization for the opposing company that opposed the applicant company in the relevant civil process. The case involved a violation of the requirements of paragraph 1 of article 6 of the Convention.
CIRCUMSTANCES OF THE CASE
Referring to paragraph 1 of article 6 of the Convention, the applicant company appealed against the alleged partiality of one of the judges, N.I., from the Arbitration Chamber of the Rome Chamber of Commerce (ACR), which issued a decision on the award of compensation in the context of voluntary arbitration proceedings between the applicant company and another Italian company - Enelpower S.p.a. In particular, The applicant company claimed that N.I. was insufficiently impartial due to his professional ties with Enelpower's main (parent) company, Enel.
Regarding compliance with subparagraph "a" of paragraph 3 of article 35 of the Convention (jurisdiction ratione personae). The Italian courts analyzed the issue of the validity of the arbitration compensation, recognizing it as predictable, and also considered and rejected both the applicant company's petition for the recusal of the judge and the petition for the annulment of the judgment. In accordance with Italian law, the courts had the right to make such a decision, despite the agreement reached by the parties to waive legal remedies. Consequently, the European Court had jurisdiction ratione personae over the alleged acts or omissions of the Roman Chamber of Commerce, confirmed by the Italian courts.
Regarding compliance with paragraph 1 of article 6 of the Convention. The European Court first considered the issue of refusal of remedies raised in the case. The European Court found that the applicant company could not be considered to have unconditionally waived either the guarantees of the impartiality of the judge established by the rules of the Rome Chamber of Commerce, or the expectation that the Italian courts would ensure that the awarded compensation complies with the norms of the Italian Code of Civil Procedure, including the requirements concerning the impartiality of judges. In formulating its conclusion, the European Court took into account the following factors:
- the applicant company freely and voluntarily agreed to the trial before the appointment of Judge N.I.;
- The rules of the Rome Chamber of Commerce obliged judges to report any contacts with the parties or their lawyers that could affect the independence and impartiality of judges, as well as any direct or indirect personal or financial interest in the subject of the dispute. However, the judges were not required by law to report the absence of these connections and/or interest. Three of the judges directly pointed out the absence of such reasons, while N.I. simply accepted the appointment to the post of judge in the case. In the absence of any obvious negative disclosure of information, it could legitimately be assumed that these connections and/or interests did not exist. The fact that the applicant company did not appeal against the absence of the aforementioned disclosure of information did not prove the company's refusal of its right to have its case examined by an independent and impartial court;
- there was no evidence that the applicant company knew about the professional activities of N.I. As soon as it became aware of the professional ties between N.I. and one of the parties to the case, it notified the Rome Chamber of Commerce and other arbitrators of its intention to file a motion to dismiss the judge, immediately filed such a motion with the Rome Tribunal and later appealed the validity of the awarded compensation. Although the motion to dismiss the judge was rejected as filed in violation of the deadline, the complaint about the invalidity of compensation due to the lack of impartiality of N.I. was recognized as filed in accordance with the established procedure in the framework of the arbitration process and was rejected after consideration on the merits. In this regard, the present case is radically different from the Decision of the European Court in the case "Suovaniemi and Others v. Finland" (See: The decision of the European Court in the case "Suovaniemi and Others v. Finland" (Suovaniemi and Others v. Finland) of February 23, 1999, complaint No. 31737/96.).
Consequently, the arbitration process had to provide the guarantees provided for in paragraph 1 of article 6 of the Convention.
As for the substance of the applicant company's complaint, the relationship between the two companies was important, not their public or private nature. The European Court focused on assessing the objective aspect of impartiality, since no evidence was presented that would suggest the existence of any personal bias or prejudice on the part of N.I. The European Court ruled that the impartiality of N.I. could have been (or at least seemed to be) called into question and that the applicant company's concerns in this regard could be considered justified and objectively justified. The following arguments were essential for making such a decision.
Firstly, the role of N.I. as Vice-Chairman and member of the Board of Directors of Enel during the period when negotiations were held between the applicant company and Enel. Without making assumptions as to whether N.I. really knew about these negotiations, and also taking into account the importance of the relevant business project and the economic interests involved, N.I.'s leadership role in the company Enel, which held the first negotiations and concluded a preliminary agreement, and the subsidiary, which later became the opponent of the applicant company in the arbitration process, considered from the position of an outside observer, could naturally raise doubts about the impartiality of N.I.
Secondly, the role of N.I. as Enel's lawyer in a parallel civil process, at least part of which intersected with the arbitration proceedings under consideration. During the period related to the circumstances of the case, Enelpower was fully controlled by Enel and was its internal division.
In conclusion, the European Court also noted a subsequent change in Italian law, according to which the fact that the judge regularly advised the party in the arbitration process or, inter alia, the company controlling this party, became the basis for the disqualification of the judge. This provided clearer and, if appropriate, broader guarantees of protection against bias in the arbitration process, that is, if the case had been considered by the Italian authorities after the aforementioned reform, the outcome of the review could have been different.
Taking into account the above, the European Court found a violation of paragraph 1 of Article 6 of the Convention.
The case involved a violation of the requirements of paragraph 1 of article 6 of the Convention (adopted unanimously).
In the application of article 41 of the Convention. The European Court awarded the applicant company 15,000 euros in compensation for non-pecuniary damage, the claim for compensation for material damage was rejected.