The guarantors of business transactions are usually exposed to forced acceptance of all standard clauses of guarantee agreements, submitted for their acceptance by Italian banks and based on the model guarantee agreement drafted by ABI (the Italian Association of Banks) since 2003. Such standard clauses cannot be negotiated, i.e., “take it or leave it”.
Such approach by the banks has been held to be contrary to competition rules, being considered as a global agreement reached by all members of a business group (the association of banks) with the aim at imposing one-sided provisions upon third parties which need to deal with such banks.
The Joint Sections of the Italian Supreme Court have therefore thoroughly examined the issue and finally published its judgment no. 41994 of 30 December 2021, pursuant to which, such clauses - which have been taken from the model guarantee unilaterally prepared by ABI – have been held to be null and void, but without affecting the overall validity of the entire guarantee agreement.
The clauses so hit are those which infringe mandatory provisions of Italian and/or European Antitrust laws, that is, only those one-sided clauses which can cause a significant prejudice to the guarantors, to the sole benefit of banks, result to be null and void, but the guarantee agreements continue to be valid and in force as it relates to all other clauses.
The foregoing, obviously, only provided that – without the clauses which so infringe mandatory antitrust rules – the remaining valid clauses of the guarantee agreements are still able to serve their purpose, i.e., to protect the interest of the bank as creditor of the obligated debtor.
As it relates to the finding of the infringement of mandatory antitrust rules, this was already pointed out since 2005 by the Bank of Italy, which, acting as supervisor as well as competition authority (later on, such role has been taken over by the Italian Competition Authority) of Italian banks, found that clauses no. 2, 6 and 8 of the ABI model guarantee agreement were all contrary to competition rules, and more in particular since those clauses respectively provided that: (a) the guarantee should continue to be in force in favor of the bank also after the extinguishment of the main obligations of the debtor; (b) the guarantor should continue to be liable after the expiry of the main obligations of the debtor, even if the bank did not pursue any credit collection action against such debtor within the deadlines provided for to such aim pursuant to article 1957 of the Italian Civil Code; (c) the guarantee should also cover, in favor of the bank, some further obligations other than the obligations directly assumed by the debtor.
The Italian Supreme Court’s Judgment no. 41994/2021 has finally clarified some issues arisen during the last few years, in connection with some conflicting decisions taken by Italian lower Courts on the merits or the case.
According to the Supreme Court, in fact, even if those mentioned clauses are null and void, the remaining part of the guarantee agreement shall survive and continue to be valid and binding upon the parties.
This way, the guarantor – who is usually quite interested to the survival and continuation in force of the loan granted to the debtor – can get rid of those clauses which are wholly one-side and only to the benefit of the bank, while the remaining part of the guarantee agreement continues to be in force (save for such clauses), thus avoiding the collapse of the overall financing structure and the revocation by the bank of the loan initially granted to the debtor.
In turn, the bank continues to be ensured and provided adequate protection as a creditor because most of the guarantee agreement is still in force, even though some clauses have been held to be null and void.
Pursuant to the application of article 1419 of the Italian Civil Code, in fact, the partial invalidity of the above-mentioned clauses does not cause per se the invalidity of the whole guarantee agreement, provided however that the initial mutual interest of the parties to such guarantee protection and commitments continues to exist and be in force even without those clauses which have been eventually held to be null and void.
Prof. Avv. Salvatore Vitale
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