Italian Courts have no jurisdiction for class actions against defendants not seated in Italy
The Court of Milan has recently stated about the Italian jurisdiction about a class action filed by three Italian retail investors against multiple entities belonging to the Binance Group and some of its executives.
The plaintiffs sought damages for substantial financial losses they allegedly suffered due to repeated system outages (“blackouts”) on the Binance Futures trading platform between February and June 2021.
The Court declared lack of jurisdiction in favor of foreign arbitration, based on the arbitration clauses included in Binance’s Terms of Use.
The Court concluded that:
- The arbitration clause was formally valid, having been accepted via a “point and click” mechanism.
- It was substantively valid under the New York Convention (1958) and respective Swiss and Hong Kong laws, with expert opinions supporting this interpretation.
- The Italian consumer protection laws and Civil Code provisions invoked by plaintiffs do not qualify as mandatory overriding provisions and therefore do not prevail over the international arbitration agreements.
Furthermore, under the Italian class action rules, class actions must be brought before the court where the defendant has its seat. Since none of the Binance entities have a seat or establishment in Italy, the Italian courts lack jurisdiction for this class action.
For all the reasons above, the Court of Milan declared it lacks jurisdiction in favor of foreign arbitration.
