Beyond “who’s right?”: how to choose between court, mediation and arbitration when an Italian dispute starts affecting cash flow, contracts or control
Most cross-border disputes don’t arrive on our desks as neatly packaged legal problems. A supplier stops paying. A distributor quietly reinterprets the contract terms it has honoured for years. A business partner takes a position that puts the entire relationship at risk. By the time the file reaches us, the parties have usually spent weeks, and sometimes months, trading defensive emails, allowing the commercial damage to compound while the legal options narrow.
At that stage, the useful question is rarely “who is right under the contract?” It is “what do we do now?” Do you initiate proceedings? Mediate? Arbitrate? Wait and hope the situation resolves itself before the board starts asking difficult questions?
In 2026, that question plays out differently than it did five years ago. Italy’s dispute resolution system has absorbed a sustained reform cycle that changed how quickly cases move through the courts, how judges treat late evidence, and whether mediation functions as a genuine route to resolution or merely as a procedural formality to get through before the real proceedings begin. Companies that understand those changes keep more control over timing, cost and outcome. Companies that rely on old assumptions, particularly the assumption that Italian litigation is simply slow by default, pay more to catch up, often considerably more.
This article, written by our specialist litigation lawyers, sets out what the current landscape means in practice, which route tends to fit which commercial situation, and what to put in place before a disagreement hardens into something far more expensive to unwind.
“In 2023, the average time needed to resolve a first-instance civil and commercial case in Italy was 511 days, compared to an EU average of approximately 200 days.”
Over the past five years Italy has been gradually introducing new laws to change the way in which litigation is handled by Italian courts. Ech reform has been shifting the practical leverage a business has when a dispute touches Italy, and the table below translates those shifts into commercial reality: what happens if you are prepared, and what happens if the opposing party moves faster than you do.
Nov 2021 — Enabling law passed
Created sustained institutional pressure to reduce delay and improve judicial efficiency. That pressure has driven every reform since and signals that Italian courts are now expected to manage cases actively rather than allowing them to drift.
Feb 2023 — Cartabia Reform in force
The most significant procedural change in decades. Parties must now present their full position, supporting documents and witness evidence at the outset of proceedings. You can no longer hold material back and introduce it gradually to gain a tactical advantage. If your opponent is better prepared than you on day one, they will hold that advantage for the rest of the case.
Nov 2024 — Civil Procedure Corrective (Decree 164/2024)
Refined provisions that had caused practical difficulties during the first year of the Cartabia regime. The core direction remained unchanged, but the procedural path became more predictable, which benefits parties who understood the rules from the start.
Jan 2025 — Mediation Corrective
Gave mediation real procedural teeth. Parties who approach mediation strategically can now resolve disputes before they consume serious management time and legal spend. But mediation is no longer a soft option: the structure is tighter, and failing to engage in good faith carries consequences.
Jun 2025 — Supreme Court ruling on pending cases
Confirmed that elements of the reformed rules can apply to cases already in progress. This means the new, faster approach can reach into live litigation and alter the dynamics midstream, potentially disadvantaging parties who built their strategy around the old, slower rhythms.
Apr 2026 — PNRR 2026 Measure converted into law
Maintained sustained pressure on courts to manage backlogs and push cases forward. The system continues to evolve, and the momentum still favours the party that organises its evidence and strategy early.
A UK-based manufacturer supplies industrial components through a long-standing distributor in Milan. The distributor stops paying, raises vague quality complaints, but continues selling the goods to its own customers.
The UK company spends two months trying to resolve the situation commercially. Internal emails accumulate. The critical WhatsApp exchanges with the distributor’s managing director, messages that would later prove decisive, are never extracted or preserved in a form that would be admissible in an Italian court. The contract’s dispute resolution clause sits unopened in a shared drive.
By the time advice is sought, several things have already gone wrong. The evidence gap has widened, because informal communications that might have clarified the parties’ intentions were lost in the ordinary churn of business messaging. The distributor’s position has hardened, partly because the silence from the UK side was interpreted as weakness. The window for seeking urgent protective measures under Article 700 of the Italian Code of Civil Procedure (a powerful tool for freezing assets or securing evidence before proceedings are fully underway) has narrowed considerably. The legal merits of the dispute have not changed. The dispute has simply become more expensive and more constrained.
The cost of the ‘commercial gap’
We have handled enough cross-border contract disputes to recognise this pattern without needing to check our files: the businesses that stay in control are not necessarily the ones with the strongest legal case, but the ones that treat the first sign of trouble as a decision point rather than an irritation to be managed through another round of emails. The gap between the commercial problem arising and the legal options being examined is far costlier than most businesses budget for, partly because Italian procedural law contains numerous deadlines and preclusions that, once passed, cannot be revived.
Litigation is not the automatic answer to every Italian dispute, and we advise against it frequently. But there are situations where it becomes the strongest tool available, and businesses that avoid it out of reflex typically find themselves negotiating from a weaker position than necessary.
Scenario 1: The non-paying distributor who kept selling
A UK company’s long-standing Milan distributor stopped paying, citing force majeure, while continuing to sell the contracted goods and collect revenue from Italian customers. The negotiation phase had exhausted itself; the distributor’s legal representatives were simply running down the clock. Issuing proceedings changed the calculation immediately. The fact that a claim had been filed—public, serious, and carrying procedural deadlines—created the leverage that had been absent during months of correspondence. The case settled on commercial terms before reaching a full hearing, but it would not have settled at all without the pressure that only formal proceedings could generate.
Scenario 2: The manufacturer who refused to release goods
A manufacturer in northern Italy refused to release finished goods, using a payment dispute the buyer considered entirely fabricated as cover for a commercial disagreement that had nothing to do with the contract. Arbitration would have required constituting a tribunal, agreeing terms of reference, and waiting for a procedural timetable to be set, a process measured in months. An urgent application before the Italian courts recovered the goods in days.
Scenario 3: The deadlocked joint venture
A joint venture between a London investor and an Italian partner deadlocked over dividend distributions. The shareholders’ agreement was ambiguous, and the relationship had deteriorated to the point where neither party would speak to the other without counsel present. The arbitration clause in the agreement was so poorly drafted that initiating proceedings would have required months of preliminary argument over the constitution of the tribunal alone. Instead, we identified a specific Italian court mechanism for urgent corporate relief, Article 700 proceedings, which provided a binding interpretation of the ambiguous clause and forced the Italian partner back to the negotiating table within weeks.
None of these disputes required a years-long courtroom battle, and none of them went all the way to final judgment. What they needed was a clear legal route with enforceable force behind it. That remains what Italian litigation provides when voluntary resolution has failed and the commercial stakes justify the structure.
The question is not whether litigation is good or bad in the abstract. It is whether you need a negotiated outcome or a decision that carries legal force. In our experience, the clients who answer that question clearly at the outset spend less on legal fees overall than those who drift between half-hearted negotiation and procedural delay.
Court proceedings are not always the smartest opening move, and in many cross-border disputes the better question is “which route gets us to the best commercial result with the least unnecessary friction?” The answer turns entirely on what you are trying to protect.
If the business relationship still matters, mediation deserves more than a passing glance. A structured negotiation through a capable mediator, now operating within the tighter framework introduced by the 2025 corrective, can produce a commercial solution faster than formal proceedings, with significantly less reputational exposure and without permanently destroying a relationship that may still have value. But there is an important caveat that gets glossed over in many articles on this topic: mediation only works if both sides actually want a commercial outcome. If the counterparty is simply playing for time, or using the mediation process to gauge the strength of your position before withdrawing to litigate, the exercise will waste both time and money. The skill lies in assessing, early and honestly, whether the other party is engaging in good faith or going through the motions.
If confidentiality is a priority, arbitration is often the stronger route. Italian court proceedings are generally public, and while not every commercial dispute attracts media attention, the mere fact of a filed claim can appear in databases, credit reports, and due diligence searches. For sensitive matters involving pricing structures, supply chain terms, or internal governance disputes, the privacy of arbitration carries real commercial value. However, the quality of the process depends heavily on the drafting of the arbitration clause. We have inherited more than one file where a poorly drafted clause that specified an obscure institutional framework, or failed to specify the seat and language of the arbitration, generated as much preliminary argument as the underlying commercial dispute itself.
If you need enforceable decisions across borders, arbitration can provide a more coherent framework than fragmented court actions across multiple jurisdictions, particularly given the relative ease of enforcing arbitral awards under the New York Convention compared to enforcing foreign court judgments. But it is not automatically faster or cheaper than Italian litigation, especially now that Italian courts are under strict EU mandates to clear backlogs and enforce tight case management. The choice between litigation and arbitration requires a case-specific analysis of where the assets are, where the evidence sits, and which forum offers the most practical enforcement route.
If the contract already points to arbitration, that clause may determine your route from the moment the dispute crystallises. The dispute resolution clause is one of the most consequential provisions in any cross-border agreement, and small drafting decisions made during contract negotiations, often by commercial teams without legal input, can significantly expand or narrow a party’s options when a dispute arises. We have reviewed enough Italian commercial contracts to know that a clause specifying “arbitration in Italy” without further detail is not much better than no clause at all; it defers the real negotiation to a moment when the parties are already in conflict and cooperation is scarce.
There is no universal right answer to the litigation-mediation-arbitration question. The strongest approach is choosing the route that serves your commercial objectives, not the one your organisation has always used out of habit.
“Between 2021 and 2024, Italian Courts of Appeal recorded an average 24% reduction in pending civil proceedings.”
Before a dispute becomes a legal process, it is a management issue. The earlier you get organised, the more control you keep over cost, timing and strategic options. In the Italian context, there are some specific dimensions to this that general commercial advice often misses.
1. Read the contract’s dispute clause first.
It may already lock you into court or arbitration and specify which governing law applies. What many businesses overlook is that the clause may also specify a mediation precondition, a tiered escalation process, or a particular institutional framework. Missing those steps can render a subsequent claim inadmissible in an Italian court. Not knowing that early costs procedural leverage later.
2. Preserve informal communications properly.
In Italian commercial disputes, WhatsApp, WeChat and email exchanges outside the formal contract framework are increasingly decisive in establishing what the parties actually intended. But presenting informal communications in an Italian court requires specific evidentiary steps. You cannot simply print out a screenshot and hand it to the judge. The messages must be extracted, preserved, and often certified in a particular form to be admissible. The businesses that do this properly from day one avoid a costly scramble later, and avoid the disastrous situation where the key message exists but cannot be used in evidence.
3. Test jurisdiction before assuming anything.
Whether Italian courts have authority over the dispute, and whether Italy is the right forum strategically, can reshape the entire case strategy. We frequently encounter the assumption that an English governing law clause automatically keeps the dispute out of Italian courts. It does not. If the counterparty is domiciled in Italy, or if the contractual performance took place there, an Italian court may well have jurisdiction to hear the case. Unless the contract contains a properly drafted exclusive jurisdiction clause, the parties could spend significant sums simply arguing over which country the dispute belongs in.
4. Ask whether urgent relief is needed and available.
If assets, payments or confidential information are at immediate risk, Italian procedural law provides several urgent mechanisms. Article 700 proceedings allow for interim measures to preserve the status quo pending full litigation. A decreto ingiuntivo can provide a fast-track route to securing a payment order in undisputed debt claims. But these tools have specific requirements and tight timelines. The moment you think urgent relief might be necessary, the clock is already running.
5. Get Italian counsel involved before positions harden.
Italian civil procedure contains numerous preclusions: deadlines after which certain arguments, evidence, or procedural steps are simply no longer available. Once a procedural window closes, it rarely reopens. Early input from Italian dispute counsel preserves more options than late reaction almost every time.
When a general counsel is briefing the board, a CFO is modelling cost scenarios, and an operations director is managing a supplier relationship all at the same time, English-language advice that genuinely understands Italian procedure removes a layer of friction that compounds as the dispute progresses.
This is not simply a matter of convenience. The businesses that resolve Italian disputes fastest and cheapest are rarely the ones with the simplest legal arguments. They are the ones that reach clear, confident decisions early, because their legal advice translates procedural complexity into commercial options without stripping out the precision that matters when an Italian judge or arbitrator reviews the file. Decisions land faster because the decision-makers understand what they are deciding. Internal alignment tightens because the legal strategy can be explained coherently to colleagues who do not need to understand Italian civil procedure but do need to understand the commercial path forward.
The alternative of relying on legal advice delivered in a language or style that the business cannot readily absorb creates a hidden cost that accumulates over the life of a dispute in the form of delayed decisions, repeated clarifications, and missed procedural windows that passed while the internal approval process ground slowly onward.
We can assess the legal position of your company, identify the route that best supports your commercial objective, and map out what the next steps should look like in practice, allowing you to brief your board or management team within days.
Yes, foreign companies can both bring and defend claims before Italian courts and in arbitrations seated in Italy. The practical question is not whether you can litigate, but whether you should, and that turns on two issues that need to be analysed together: whether Italian courts have jurisdiction over the dispute, and whether any contractual clause points to a different forum. Resolving those questions early, before positions harden and costs accumulate, almost always costs less than litigating them later.
Less than the reputation implies, at least in 2026. The reform cycle that began in 2021 has applied genuine and sustained pressure on case management, and we now see a more structured and predictable early phase in most commercial cases than was typical before 2023. Complex disputes still take time, as is true in any jurisdiction, but the old assumption that an Italian case will simply drift for years without direction is no longer a reliable guide to how the system operates.
It does not, and this is one of the most common traps we see. Many clients assume that writing “This contract is governed by English law” automatically protects them from being sued in Italy. It does not. Governing law determines which substantive rules apply to the contract. Jurisdiction determines which court or tribunal hears the dispute. These are separate questions. If your counterparty is domiciled in Italy, or if the goods were delivered there or the services performed there, an Italian court may still have jurisdiction to hear the case under European or Italian procedural rules. Unless the contract contains a properly drafted exclusive jurisdiction clause pointing to the English courts, you could spend your first significant tranche of legal fees simply fighting over which country the dispute belongs in. Whenever we review a cross-border contract at the drafting stage, we check that it specifies both the governing law and the exclusive forum clearly and consistently.
It has become a genuine option, particularly since the 2025 corrective decree strengthened the framework. We are seeing more disputes where mediation produces a real commercial resolution rather than a failed meeting that simply clears the way for litigation, especially where the parties have an ongoing relationship or a shared interest in avoiding public proceedings. That said, the process is only as good as the good faith of the participants. If the counterparty is using mediation tactically to assess the strength of your case, to run down the clock, or to create a veneer of reasonableness before escalating, the exercise will add cost without adding value. The skill is in assessing early which dynamic is in play.
What does the dispute resolution clause actually change?
It can determine the forum, the governing rules, the enforcement options, and the practical leverage a party holds before a dispute even starts. A clause that specifies “arbitration in Italy” without further detail defers critical decisions about seat, rules, language and institutional framework to a moment when the parties are already in conflict. That almost always benefits the party with deeper pockets and greater tolerance for procedural delay. A well-drafted clause allocates these decisions upfront, when cooperation is still possible. A vague or inconsistent one can close off options at the worst possible moment.
As soon as Italy becomes more than a theoretical concern, which typically means the moment a counterparty in Italy signals a disagreement that could affect payment, performance, or the commercial relationship. Early input preserves more options than late reaction in almost every case. The most avoidable damage we see in our files is not the difficult legal questions but the procedural and evidential steps that were not taken in time, because nobody realised they needed to be taken until it was too late.
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