The case concerned a proceeding brought in Italy against Iraq by some Italian companies, and concerning the termination of the contract for the sale of helicopters they had concluded with the Iraqi government. The execution of the contract became impossible because of the interruption of commercial relations with Iraq, decided by the UN Security Council and, later, by the EU, in response to its armed attack against Kuwait. For the United Sections of the Court of Cassation, Italian courts had jurisdiction over the case. On one hand, Iraq did not enjoy exemption from Italy’s civil jurisdiction because it had concluded the contract iure privatorum, and not in the exercise of sovereign powers. On the other hand, the decisions of the UN Security Council, which are mandatory upon, and immediately applicable by Italian courts, made that the contract had become ineffective, including the clause providing for settling the disputes between the parties by arbitration. Further, there was no violation of the ‘fair trial’ principle under Article 14 of the Covenant of Civil and Political Rights, or Article 6 of the ECHR, because the fact of making recourse to regular courts instead that arbitration does not constitute a denial of justice.
Decision of the Court of Cassation, I Civil Section, No. 11027 of 22 February 2016