A Commercial Dispute in Italy for an Israeli Company: Courts, Mandatory Mediation, Payment Orders, Arbitration and Enforcement of Judgments

An Israeli company that sells to Italy, buys from it or works with an Italian partner will at some point encounter an unpaid invoice, defective goods or a breach of a distribution agreement. This guide explains how the Italian court system for commercial disputes is structured, which preliminary procedures are mandatory, how a debt is collected, when arbitration is preferable and how a judgment is enforced between Israel and Italy. It does not replace a review of the specific case.

1Which court hears a commercial dispute in Italy?

Most commercial claims are heard at first instance by the district court (Tribunale). Small claims are heard by the justice of the peace (Giudice di pace), according to amount and type as set by law. An appeal is filed with the Court of Appeal (Corte d'appello), and an appeal on points of law with the Supreme Court (Corte di cassazione).

Alongside these there are specialised company sections (sezioni specializzate in materia di impresa), sometimes called the “companies court”. Under Article 3 of Legislative Decree 168/2003, they hear, among other things, intellectual and industrial property, disputes within capital companies and between shareholders, share transfers, shareholders' agreements and public contracts of such companies. The jurisdiction also expressly covers permanent establishments in Italy of foreign companies.

2How long do commercial proceedings in Italy take?

Civil proceedings in Italy are known to be long relative to the European average, and a case that goes to appeal may last several years. The actual length depends on the court, its workload, the complexity of the evidence and whether the other party contests every stage. So for a clear debt it is worth considering faster tools such as a payment order, and in new contracts it is worth considering arbitration.

3Must mediation be attempted before suing in Italy?

In some areas, yes. Under Article 5 of Legislative Decree 28/2010, as amended by the Cartabia reform, anyone wishing to sue in certain areas must first attempt mediation, and this is a condition for the claim to proceed (condizione di procedibilità). The list includes, among others:

• Condominium, rights in real property, partition and inheritance.
• Leases, loans for use and business leases (affitto di aziende).
• Insurance, banking and financial contracts.
• Participation agreements (associazione in partecipazione), consortium, franchising, works contracts (opera), business networks (rete), continuous supply (somministrazione), partnerships (società di persone) and subcontracting (subfornitura).
• Medical liability and defamation in the media.

Under Article 6 of the same decree, mediation lasts up to six months from the filing of the application, and it can be extended by the parties' written agreement for periods of up to three months each time. Even in areas not on the list, the judge may refer the parties to mediation. Payment order proceedings are exempt from mediation until the court decides on applications for provisional enforcement, and the opposition to the order is subject to special rules.

4What is assisted negotiation between lawyers (negoziazione assistita)?

It is a mandatory attempt at negotiation assisted by lawyers before suing: as of November 2026, under Article 3 of Decree-Law 132/2014, a claim for payment of amounts of up to 50,000 euros, on any ground, usually requires such an attempt before filing. The obligation does not apply in areas where mediation is mandatory, in contracts between a business and a consumer, in payment order proceedings and in other proceedings excluded by law. In practice, the creditor's lawyer sends the debtor an invitation to negotiate, and only if it is rejected or not answered does the matter proceed to court.

5How is a debt collected from an Italian customer through a payment order?

A documented debt is collected mainly through a payment order (decreto ingiuntivo): the court orders the debtor to pay on the basis of written evidence, such as invoices, a signed order or an acknowledgement of debt, without a prior hearing, and under Article 641 of the Code of Civil Procedure the debtor usually has 40 days to oppose (as of November 2026). The creditor files an application, the judge issues the order, and the order is served on the debtor.

Under Article 641 of the Code of Civil Procedure, the debtor may file an objection within 40 days, and the court may shorten the period to 10 days or extend it to 60 days where there are grounds. For a debtor living in another EU member state the period is 50 days, and for a debtor living outside the EU 60 days, and not less than 30 or more than 120. If no objection is filed, the order becomes final and enforceable. If one is filed, the proceedings become an ordinary action, and the court can decide on provisional enforcement.

1. Gather the documents: a contract or order, invoices, delivery confirmations and correspondence in which the debtor acknowledges the debt.
2. Send a formal letter of demand, preferably by registered mail or by PEC if the debtor has such an address.
3. Check with an Italian lawyer whether the debt is suitable for a payment order, and which court to file with.
4. Translate into Italian material documents written in another language.
5. Once the order becomes final, check the debtor's assets before starting enforcement.

The European collection tools, such as the European Payment Order and the European Small Claims Procedure, are intended for cross-border disputes between EU member states. An Israeli creditor with no seat in the EU will usually use the ordinary Italian tools. A European subsidiary of an Israeli group may benefit from the European tools, on their conditions.

6What is the limitation period for a contractual claim in Italy?

As of November 2026, the general limitation period is 10 years, under Article 2946 of the Italian Civil Code, unless the law provides for a different period. There are quite a few shorter periods, some of which are critical in trade:

• Defects in goods sold: under Article 1495, the buyer loses his right if he did not notify the seller of a hidden defect within 8 days of discovering it, unless otherwise agreed or provided, and the claim is time-barred one year from delivery.
• Periodic payments and certain claims: the law sets periods of five years and less for certain types of claims.
• A right established by a final judgment: is time-barred after ten years, even if the original right was subject to a shorter period.

In every case, check the specific period and the possibility of interrupting it, for example by a formal letter of demand, before it expires.

7Arbitration or court in a dispute with an Italian party?

It depends on the contract and on where the assets are, but the main advantage of arbitration between Israel and Italy is enforcement under the New York Convention, to which both countries are party. Arbitration allows the arbitrators, language and seat to be chosen, and it is usually confidential. The big advantage in the Israeli-Italian context is enforcement: according to the UNCITRAL database, Italy acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards on 31 January 1969 (in force from 1 May 1969), and Israel ratified it on 5 January 1959, and no reservations were recorded for either. An arbitral award made in Israel is enforceable in Italy under the Convention, and vice versa.

Commercial arbitration institutions operate in Italy, the best known being the Milan Chamber of Arbitration (Camera Arbitrale di Milano). An international institution can also be chosen. In the guide to choosing between arbitration and court we set out the considerations and the grounds for refusing enforcement under the New York Convention.

8How is an Israeli judgment enforced in Italy?

An Israeli judgment is recognised and enforced in Italy under general Italian law, Law 218/1995 on private international law, if it meets the conditions of Article 64 of that law. The EU regulations on the recognition of judgments do not apply to an Israeli judgment, and we did not find a bilateral treaty between Israel and Italy on this matter.

Under Article 64 of the Law, a foreign judgment is recognised in Italy without a special procedure when all the conditions are met: the foreign court had jurisdiction under Italian jurisdictional principles, the statement of claim was duly served on the defendant and his fundamental rights of defence were not violated, the parties appeared or their default was duly declared, the judgment is final in the country where it was given, it does not conflict with a final Italian judgment and there are no prior Italian proceedings between the same parties on the same matter, and it is not contrary to public policy.

When the debtor does not comply, when recognition is disputed or when compulsory enforcement is needed, an application is made to the court under Article 67 of the Law. Under Article 30 of Legislative Decree 150/2011, jurisdiction lies with the Court of Appeal of the place where the judgment will be enforced, and the proceedings follow a simplified procedure. The foreign judgment, together with the decision confirming it, serves as the basis for enforcement. It is filed as a certified copy, with an apostille and an Italian translation.

9And how is an Italian judgment enforced in Israel?

An Italian judgment is enforced in Israel under Israel's Foreign Judgments Enforcement Law, 1958. Among the conditions: the judgment was given by a competent court, is no longer subject to appeal, is enforceable in the country where it was given and does not conflict with public policy. The law also requires reciprocity, meaning that the foreign country enforces Israeli judgments. The application is usually filed within five years of the judgment. More detail is in our guide on enforcing foreign judgments.

10Which law applies and where is the dispute heard, under the contract clauses?

Mainly according to what the parties agreed in the contract, subject to the EU regulations and Italian law. An Italian court decides the law governing a commercial contract under the EU Rome I Regulation, which applies even when the chosen law is that of a non-EU country, such as Israel. The parties may choose the law, and when they have not, the Regulation sets default rules, for example according to the habitual residence of the seller or the service provider.

As to jurisdiction, the Brussels I recast Regulation respects a jurisdiction clause choosing a court of an EU member state, regardless of where the parties are domiciled. A clause choosing an Israeli court is examined under Italian law. Before choosing an Israeli court, it is worth asking where the Italian party's assets are, because an Israeli judgment will need to be recognised in Italy.

• Governing law: Israeli law can be chosen, but if enforcement will be in Italy, it is sometimes simpler to choose Italian law or the Vienna Convention on Contracts for the International Sale of Goods, if it applies.
• Jurisdiction: a specific Italian court, an Israeli court, or arbitration. The decision depends on the location of the assets and the costs.
• Language: proceedings in an Italian court are conducted in Italian, and documents in another language are translated. In arbitration English can be agreed.
• Early mediation: the contract can provide for an agreed mediation stage before any proceedings.

11What should you do when a dispute with an Italian party begins?

First secure the evidence and the deadlines, and only then choose the procedure. The recommended order:

1. Keep all documents and correspondence, and build a timeline of events.
2. Check the contract's governing-law, jurisdiction, arbitration and notice clauses, and the deadlines for notifying defects.
3. Check the limitation period and the notice deadlines, particularly in claims for defective goods.
4. Send a formal letter of demand, by registered mail or by PEC, which in many cases also interrupts limitation.
5. Check whether the area requires mediation or assisted negotiation between lawyers before a claim.
6. For a documented debt, consider a payment order. In a complex dispute, consider mediation, arbitration or an ordinary claim.
7. Check the other party's assets and financial position before investing in proceedings. The guide on what to do when something goes wrong has a general checklist.

This guide is general information correct as of November 2026 and is not legal advice. Every dispute requires a review of the contract, the documents and the applicable deadlines.

More on doing business in Italy: Setting up a company in Italy · Corporate tax and transferring profits to Israel from Italy · An Israeli company operating in Italy · Comparison of 8 countries · All guides for companies and businesses

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