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Mr Chairman,

So many things have been said about the alleged incorrect behaviour of the Italian authorities that I am forced to give once again a brief outline of the real situation, with the hope that this time I may be understood by all the members of the Council, as well as by the representatives of the Secretariat.

A - FAO's immunity from legal process

The 1982 judgement of the Corte di Cassazione, which has become familiar to all of us, does not deny FAO's immunity from legal process, but only specifies the limits of that immunity. The said judgement is based on concepts which have long existed and have been affirmed by a long series of court judgements, not only in Italy but also in the great majority of countries.

In accordance with such concepts, immunity from legal process of foreign states and other subjects of international law (such as international organizations) is not without boundaries but rather is limited to the acts (so-called acts "jure imperii") through which those entities carry out their institutional purposes, thus presenting themselves as "sovereign" and in no way subject to the local state. On the contrary, when a foreign state or an international organization carries out, within the legal system of the local state, any acts which are typical of private individuals (so-called acts "jure gestionis"), such as entering into a lease contract in accordance with local laws, then immunity from legal process is not recognized.

I wish to stress that the concept to which I have just referred, namely the distinction between acts "jure imperii" and acts "jure gestionis", are not at all something new which emerged from the 1982 judgement of the Corte di Cassazione. Suffice it to say that in a judgement of 25 June 1969 the Pretore of Rome made use of these very concepts in order to declare that FAO (which at the time did not hesitate to appear in Court) did indeed enjoy immunity from legal process in a labour dispute involving the Organization and a staff member

The 1982 judgement of the Corte di Cassazione, therefore, although it has produced so much commotion, has really said nothing new. Is has simply answered a query, made by FAO, on whether Italian courts lacked jurisdiction in the dispute concerning the FAO/INPDAI lease contract, and it has confirmed that a lease contract is a typical act "jure gestionis", for which no foreign state and no international organization could possibly claim immunity from legal process.

In connection with the general question of immunity from legal process, there are two points that I wish to stress with the greatest emphasis, hoping that all members of the Council will pay due attention to them, because they appear to me to have been the source of much confusion.

B - Validity of arbitration clauses

The first point concerns the validity of arbitration clauses (which FAO might include in all the contracts it executes in Italy) aimed at avoiding that any dispute arising from the contract be subjected to the jurisdiction of Italian courts.

This matter was dealt with briefly and incidentally, as an "obiter dictum", in the 1982 judgement of the Corte di Cassazione. The Corte stated that the particular arbitration clause contained in the FAO/INPDAI contract (which clause had not even been invoked by FAO) was not valid under Italian law, and that therefore it could not possibly derogate the jurisdiction of Italian courts.

The matter, however, deserves much more attention. Italy has become a party to the New York Convention of 6 October 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. Not only has the said Convention been approved by the Italian Parliament (thus acquiring the force of law in Italy), but the Corte di Cassazione has maintained in numerous judgements that arbitration clauses providing for foreign arbitral awards in accordance with the New York Convention do have the power to derogate the jurisdiction of Italian courts. In practice, therefore, FAO could very well make use of such clauses in the contracts it executes in Italy, and would thus be no longer subjected to Italian courts in any dispute arising from its contracts. It goes without saying, however, that, if the other contractor attempted to ignore the arbitration clause and initiated legal proceedings against FAO before an Italian court, the Organization would have to appear before the judge in order to demonstrate to him the existence of a valid arbitration clause; otherwise, the proceedings would continue "in absentia" until the issuance of a final judgement. Under the Italian laws of civil procedure, it is not conceivable that anyone else but FAO should appear before the Court to protect its own interests. In particular, the Italian Government could not defend FAO's interests before a court, but could at most put at FAO's disposal, with no charge, the Avvocatura dello Stato, which is a body of lawyers by which the Italian State itself is represented and defended in court disputes.

C - FAO's immunity from measures of execution

The other point which deserves the utmost attention is the clear distinction which exists between, on the one hand, the general concept of immunity from legal process, with which I dealt at the beginning of my speech, and, on the other' hand, the concept of immunity from measures of execution. While the former concept has some limits (i.e., it applies only to acts "jure imperii" as opposed to acts "jure gestionis"), the immunity from measures of execution enjoyed by FAO under the Italian legal system is full and complete. It is true that there has never been any test case to prove that the courts would uphold such immunity, but it is not difficult to understand that the reason why no one has ever tried to attach FAO's property (for instance INPDAI, which already obtained a court judgement condemning FAO to pay) is exactly the legal impossibility to carry out measures of execution against the Organization. In this connection too, however, it is important to realize that, if someone attempted to carry out measures of execution against FAO (by initiating an ad_ hoc proceeding before the competent "judge of the execution" in accordance with the code of civil procedure), the Organization would have to appear before the judge in order to point out the existence of its immunity under Section 17 of the Headquarters Agreement. Such appearance in court could be made through any lawyer, including the Avvocatura dello Stato, which the Italian Government, as I said before, is willing to put at FAO's disposal free of charge. If, on the other hand, FAO refused to appear in Court, the Italian Government could try to help FAO only by calling the attention of the judge of the execution to Section 17 of the Headquarters Agreement. Such course of action, however, would not be the best to follow, since the most reliable way of convincing a judge - in a legal system based on total separation between the Judicial Power and the Executive Power - is to present one's case in court properly through a lawyer.

Finally, I should like to add that, in order to make FAO's immunity from measures of execution even more explicit, and to avoid even the need for FAO to appear in Court and to claim immunity under Section 17 of the Headquarter's Agreement, the Italian Government has taken the initiative to adopt a new legislative provision. The new law, which is presently being formulated, provides that no measures of execution against any international organization can be carried out by any court, unless there is an express authorization by the Ministry of Justice. Only under such a system, which already exists with respect to foreign states, will the Executive Power actually be allowed to block (for reasons of political convenience) the otherwise independent functioning of the Judicial Power.

D - Conclusions

Mr. Chairman,

I have made the best effort I could to try to convey to the Council an honest view of the real situation in which FAO finds itself today with respect to the question of immunity within the Italian legal system. This situation is not dramatic. If things were viewed by all with a spirit of collaboration and mutual understanding, many problems would really appear to be non-existent.

Above all, I do hope to have explained that the decisions taken by the Council and Conference, by which the Director-General was instructed not to participate in legal proceedings before Italian courts under any circumstances, need to be reviewed, because they are not in the interest of the Organization. Their only effect is to keep nerves tense, not to solve any problems. If the Director-General were allowed a certain flexibility to decide whether in some future case it would be opportune or necessary to put in an appearance in court, in order to defend the Organization's immunities before the independent judicial organs of this country, he would simply be following a practice which was followed by FAO in the past, and which is still followed in Italy by all foreign states and international organizations, including NATO. Only a few days ago we have learned that the President of the United States, represented by a high-level officer of the Department of Justice, has lodged a complaint with the Italian Corte di Cassazione, seeking a decision to the effect that a judgement issued by the Catania Tribunal, concerning a labour dispute of the American Military Base at Sigonella, is not enforceable.

If FAO followed this course of action, it might recognize the existence of Italian courts only for the limited purpose of seeing its immunity reaffirmed in the proper forums, thus avoiding that the legal proceedings continue on the merits.

To ignore completely the existence of the courts and of the legal system of the host country is quite an anomalous attitude on the part of FAO. Certainly, when the Organization executes contracts which are governed by the Italian legal system, it does act as a legal person within the said system. On the other hand, Section 14(c) of the Headquarters Agreement expressly states that the Italian Government recognizes the juridical personality of FAO and, in particular, its capacity to institute legal proceedings.

In this connection I believe that it might be useful to examine such matters more in depth, perhaps through a meeting of high-level jurists of both FAO and the Italian Government.

Before I conclude, Mr Chairman, I should like to add a few words about the dramatic presentation, according to which, after the judgement of the Corte di Cassazione, FAO would be exposed to all kinds of risks and would have been made the target of numerous litigations.

I repeat, first of all, that until now no measure of execution has been attempted against FAO. As far as other legal actions are concerned, apart from the INPDAI case (with which I will deal later), only two new cases have arisen, both deriving from the same accident in which two Italian companies working on FAO premises were involved.

With one of these companies FAO has already made a settlement, for which I am grateful to the Organization. Thus there is only one legal action pending, which the second company might not even pursue in view of the settlement already made with the first one.

As far as INPDAI is concerned, my government has complied with the invitation made by the Council and the Conference, and has done everything possible to facilitate a settlement between EAO and INPDAI. Some meetings have already taken place, and I believe that the negotiations have already gone so far that a rapid solution of the dispute appears now quite possible. I do hope that the Organization will not delay much longer the payment of some rent increases which are due since 1974.

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