When in Rome … Guidance from judges applying Italian law

Two recent decisions – both coincidentally dealing with the application of Italian law in the English courts – have given some useful general indicators about how the courts will approach the determination of disputes concerning foreign law.

In River Countess BV & Ors v MSC Cruise Management (UK) Ltd [2021] EWHC 2652 (Admlty), Andrew Baker J considered a claim for damages arising out of the collision of two cruise ships in one of Venice’s major canals.

Meanwhile, in Deutsche Bank AG London v Comune di Busto Arsizio [2021] EWHC 2706 (Comm), Cockerill J dealt with a case concerning the very different situation of swaps entered into by a small Italian local authority with Deutsche Bank.

English lawyers dealing with cases governed by Italian law would be well advised to read the useful summaries of the Italian legal system and Civil Code in these cases.

For the purpose of this blog, I am drawing attention to just two things: (i) the comments about how judges will resolve battles between foreign law experts and (ii) the analysis of whether an English court can depart from decisions of foreign courts – even, in this case, the ultimate appeal court of Italy.

Resolving a battle of the experts

Andrew Baker J made the by now familiar point (see our previous blog here) that when considering the expert foreign law evidence, the court was not interested in a battle of the CVs:

His impeccable credentials qualifying him to give expert evidence of Italian law do not mean that Prof Barcellona’s opinion is necessarily to be preferred where it differs from Prof Lorenzon’s. Even the greatest and most respected of legal minds get things wrong on occasion, or may hold some views as to the content of the law that, if tested, may be found wanting.

Much more important was the question of substance and how the expert came across in cross-examination:

In my judgment that is the position here on the main point of dispute, on which I found Prof Barcellona argumentative, dogmatic and on occasion partisan. In my view he was seeking to defend a somewhat revisionist stance adopted in his academic writing, leading him to present a thesis that did not withstand the scrutiny that came with being challenged. It is a thesis that in my judgment does not fit with the leading decision of the Cassazione on the meaning and effect of the applicable provisions of the Italian Civil Code.

However, despite these strong criticisms of the expert’s evidence, it did not follow that the judge would be compelled to accept the other side’s position in its entirety. The court ultimately has to make up its own mind about the content of the foreign law:

As will be seen below, the result overall is that I do not accept the defendant’s primary position that none of the contentious losses is recoverable in principle as a matter of Italian law; but nor do I accept the claimants’ primary position that all of them are.

Departing from foreign case law

In her case, Cockerill J had to consider the interesting question of whether she could, in deciding the issues before her, diverge from a decision of the ultimate court of appeal in Italy.

In that respect, she bore in mind the the warning of Walker J in an earlier Italian swaps case, Dexia Crediop S.p.A v Comune di Prato [2015] EWHC 1746 (Comm) at [128]:

The task for the Court is to evaluate the expert evidence of Italian law and to predict the likely decision of the highest court in the relevant Italian system of law if this case had been litigated there on each of the points in dispute.

However, this did not mean unquestioningly following Italian decisions on the relevant point. Back in the early 20th century an English court had made this clear:

It seems to me that we must consider whether in our opinion this decision was correct, and must consider it as a question of fact upon the evidence. If this were not so, evidence as to foreign law would be useless wherever there was a decision of any foreign judge on the point, and our Courts could only follow that decision as a binding authority. This is not the position of our Courts in such a matter.

Guaranty Trust Company of New York v Hannay [1918] 2 KB 623, 638-639

In Banco Santander Totta SA v Companhia de Carris de Ferro de Lisboa SA [2016] EWHC 465 (Comm), Cranston J summarised the modern position:

As to the identification of judgments and other authorities, the court “is not bound to apply a foreign decision if it is satisfied … that the decision does not accurately represent the foreign law”.

Cockerill J therefore expressed her own conclusion on this issue as follows:

I conclude that it is open to me to diverge from even the highest authority, particularly in the context of a civilian law system. For example if, on the evidence I can be satisfied that an authority, however eminent, does not represent the law – if for example a foreign court has unwittingly diverged from a long established approach to a particular issue. However I must be astute to give full weight to that judgment before concluding that that is the correct course and that in future an Italian court confronted with this issue would diverge from that high authority.

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