An arbitration clause in a company’s articles of association allows disputes between shareholders and companies to be referred to arbitration. However, the law places precise limits on this option, one of which is that disputes must not concern non-disposable rights.

Concerning a particular type of dispute, namely disputes concerning the challenge of resolutions approving the annual financial statements, case law has long adopted a two-pronged approach: formal disputes (such as those concerning the irregular convening of the shareholders’ meeting or incorrect minutes) are considered arbitrable. In contrast, substantive disputes (i.e. those concerning the alleged falsity of accounting data or the violation of the principles of truthfulness and correctness) are considered to relate to non-disposable rights and are therefore not arbitrable.

This distinction, although clear in theory, has proved problematic in practice.

What happens, for example, when the same appeal contains both challenge types?

An initial ruling by the Court of Milan, dating back a few years, resolved the issue in a restrictive manner. Faced with a mixed appeal – containing both formal and substantive challenges – the Court held that the entire dispute fell within its jurisdiction.

This journal publishes (here) the Court of Milan’s ruling with a critical commentary.

The Court of Milan made an important reversal in its ruling of 18 February 2025 (Italian text available here).

The Court first reiterated the distinction between the two types of defects: complaints relating to the formalities of the approval of the financial statements (convocation, minutes, voting procedures) fall within the jurisdiction of the arbitrator, while disputes relating to the substantive content of the financial statements (truthfulness, reliability, correctness) remain the exclusive jurisdiction of the state court.

Consistent with this distinction, the Court allowed the petitum to be broken down, distinguishing and separating the claims and referring them to the competent courts according to their nature.

This is a more mature view, which recognises the complexity of corporate disputes and the need for a flexible approach that respects contractual freedom (and, therefore, arbitration) and the protection of non-disposable rights.