Art. 1938 of the Civil Code regulates the omnibus surety bond as a guarantee contract by which the guarantor undertakes to guarantee the performance of all obligations, present and future, which the debtor has assumed or will assume towards the creditor, under the credit opening contract.
The United Sections of the Supreme Court, in ruling No. 41994 of 2021, intervened on the issue of the nullity of omnibus surety bonds drawn up in accordance with the ABI scheme on the grounds that they are contrary to competition law.
The issue arises from a request made by a surety before the Rome Court of Appeals to have the surety declared null and void (even if only partial) for violation of antitrust law. This was in view of the compliance of some contractual clauses – and specifically Articles 2, 6 and 8 of the contract – with the outline drafted by the Italian Banking Association.
In partial adherence to the requests of the “guarantor,” the Court declared the nullity of Articles 2, 6 and 8 of the surety contract, ordering the Bank to pay damages.
Specifically, the contractual clauses referred to are as follows:
Art. 2 Revocation clause “the guarantor is obliged to reimburse the bank for any sums that had been collected by the bank in payment of guaranteed obligations and that should be returned as a result of the cancellation, ineffectiveness or revocation of the payments themselves, or for any other reason”
Art. 6 Exception clause to Art. 1957 of the Civil Code “the rights arising to the bank from the surety shall remain intact until all its claims against the debtor have been fully discharged, without the bank being obliged to enforce the debtor or the guarantor themselves or any other co-obligor or guarantor within the time limits provided, as the case may be, by Art. 1957 of the Civil Code, which shall be deemed to be waived”
Art. 8 Continuation clause of the surety bond, in the event of extinguishing events and nullity of the principal obligation “if the guaranteed obligations are declared invalid, the surety nevertheless guarantees the debtor’s obligation to repay the sums disbursed to the same.”
Against this ruling, the bank appealed to the Supreme Court focusing:
- on the unilateral nature of the guarantee declarations, attributable to the will of the guarantor;
- on the argument that the nullity of the anticompetitive agreement does not extend to individual contracts;
- On the requalification of the autonomous guarantee contract to which Article 1957 Civil Code does not apply;
- On the groundlessness of the claim for damages.
The Supreme Court, deeming the issue to be of particular legal significance, therefore referred the dispute to the United Sections.
It should be pointed out that over the years there have been a series of conflicting pronouncements on the issue of the validity or otherwise of bank guarantees that contained such clauses, resulting in three clearly delineated jurisprudential orientations:
- A first orientation considered such clauses to be valid, granting the guarantor only compensatory protection.
- A second orientation considered such clauses null and void because they conflicted with Article 2 paragraph II (a) of Law No. 287/90.
- Finally, a third orientation (prevailing with respect to the other two), leaned toward a partial nullity of the clauses pursuant to Art. 1419 paragraph I of the Civil Code with the consequent elimination of only the clauses reproducing the competitive agreement.
The question referred to the United Sections, drawing its origin from provision no. 55 of 02.05.2005 with which the Bank of Italy – called to pronounce on the conformity between the scheme prepared by the ABI and the regulations on restrictive competition agreements – saw the confirmation of the thesis according to which the “downstream surety contracts are partially null and void pursuant to art. 2 paragraph 3, Law No. 287/1990 and Article 1419 of the Civil Code in relation only to the clauses that reproduce those of the unilateral scheme constituting the prohibited agreement, unless a different intention of the parties can be inferred from the contract, or is otherwise proven.”
The surety bond contract de quo still remains valid, but is “freed” from the clauses declared null and void by the Bank of Italy.
And what are the consequences of the partial nullity of the surety contract?
- Imprescriptibility of the nullity action.
- Prosecutability of the claim for recovery of undue payment.
- Prosecutability of the action for damages.
But the most important consequence will concern the position of debtor guarantors who are signatories to surety contracts containing the offending clauses No. 2, 6 and 8 since, in the event that they are sued by a credit institution for the payment of sums due, they will be able to assert the partial nullity of the surety and, in particular, of Article 6 containing the exception to Article 1957 of the Civil Code.
