You have sold goods or provided services to an Italian counterparty that has now defaulted on payment. This situation may arise for a variety of reasons and raises a number of questions, such as:
- Where should I commence proceedings?
- Will a UK judgment be enforceable in Italy?
- Which law is applicable?
- What options are available in Italy, and how long will it take?
As a matter of good practice, the first point of reference is always the agreement. A well-drafted contract often provides many of the answers, though not all.
Let us assume that there is no written agreement, or that it does not include a jurisdiction clause (i.e. a clause specifying which court has authority to hear disputes arising from the agreement).
You may well think that commencing proceedings in Italy would be a hopeless endeavour. After all, Italy has long been known for significant delays in judicial proceedings (the so-called “Italian torpedo”).
I will not attempt to persuade you otherwise; however, the Italian legal system does offer effective remedies that are worth considering.
Provided that the conditions for Italian jurisdiction are met – which is often the case, as Italian private international law provides that Italian courts have jurisdiction where the defendant is domiciled or established in Italy – , you may apply for a payment order (decreto ingiuntivo).
This can be a particularly advantageous tool for debt recovery. In many cases, it allows you either to commence enforcement proceedings swiftly or to prompt voluntary payment by the debtor.
A payment order is issued by the court based exclusively on certain categories of documentary evidence (such as invoices, delivery receipts, or cheques), and without prior notice to, or hearing of, the debtor. The debtor is then granted 40 days to file an opposition and initiate ordinary civil proceedings. Failure to do so will result in the payment order becoming final and no longer subject to appeal.
As regards provisional enforceability, two scenarios may arise.
In the first scenario, the payment order is granted with immediate provisional enforceability where it is supported by specific categories of documents (such as cheques or notarial deeds), where there is a risk of serious prejudice caused by delay, or where the debtor has acknowledged the debt.
During opposition proceedings, however, the debtor may apply to the court to suspend provisional enforceability, provided they can demonstrate prima facie grounds for the opposition, the risk of harm arising from enforcement, or the absence of legal requirements for issuing the payment order or granting its provisional enforceability.
In the second scenario, the court may grant provisional enforceability during the opposition proceedings if the opposition is not supported by written evidence or if it requires extensive factual assessment and the taking of evidence during the proceedings.
As mentioned above, if the debtor files an opposition, ordinary contentious proceedings will be initiated. In that case, you will need to file a defence seeking dismissal of the opposition and confirmation of the payment order. This phase may take several years; however, if the payment order has been declared provisionally enforceable, enforcement may proceed without waiting for the final outcome.
Are you facing such a situation? If so, get in touch with our team for an initial discussion and assessment of your case.
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