Mr. A v. XYZ
Italy Arbitral Tribunal
November 2011 (2011)
- Written by Curtis Parvin, JD
Facts
XYZ s.p.a. (XYZ) (defendant) had a two-tiered governance system that featured a board of supervisors and a managing board. Misters A (plaintiff), B, and C were the founding shareholders and the original managing board. In 2006, A, B, C, and other shareholders agreed that XYZ would use its best efforts to have the board of supervisors appoint A, B, and C as the managing board. The group of shareholders also agreed to have XYZ use its best efforts to have A appointed as the managing director for six years, with a liquidated-damages provision should A be removed without cause from the managing director position before the expiration of the agreed term (the collaboration agreement). The board of supervisors removed A as the managing director in 2010, causing A to initiate arbitration against XYZ for breach of the collaboration agreement. In response, the board of supervisors terminated A from his nonexecutive director position for cause. Under Italian law, the managing board members could not be appointed for terms longer than three years, though the managing board members could be reappointed to additional terms. XYZ contended that the collaboration agreement was void as against Italian law.
Rule of Law
Issue
Holding and Reasoning (Per curiam)
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