The issue arises from two judgments of the Court of Rome – Specialised Business Division, issued by differently composed panels, No. 14701/2023 and No. 15855/2023 (the parties subsequently reached a settlement in the appeal proceedings). Both were delivered in similar disputes concerning two different contracts for the construction of highly complex plants, between a public company and a major listed multinational. In both cases, each party sought termination of the contract for breach attributable to the other, together with the resulting claims for damages, while the contractor also brought a monetary claim for recognition of the reserves (riserve) it had recorded.
At the end of these complex proceedings, the Court held the contractor liable for serious breach under Article 1453 of the Italian Civil Code in both cases (a successful outcome for the contracting authority, whose defence team included Prof. Antonio Briguglio). It then addressed how the claim for damages should be coordinated with the reserves, reaching markedly different results. In the first case (judgment No. 14701/2023), the Court made clear that the reserves system is unrelated to a claim for termination for breach: since recording reserves concerns claims for additional costs affecting the price of the works, recognition of such claims presupposes a validly performed contract. Recording reserves may admittedly be relevant in assessing any breach by the contracting authority; however, once it has been established that the contractor is responsible for the termination and the contracting authority’s claim for damages has been upheld, the retroactive (ex tunc) termination of the contract and the restitutio in integrum entail the recognition – by equivalent – solely of the contract price offered in the tender and accrued for the works performed.
Conversely, the other judgment (No. 15855/2023), delivered almost at the same time, while declaring the contract terminated for the contractor’s serious breach and awarding damages to the contracting authority, deducted from the amount awarded the (very limited) sum of certain reserves it found to be well-founded: a less rigorous approach in terms of principle, though probably prompted by considerations of substantive fairness.