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18 Italy

Lisa Curran

From: Set-Off Law and Practice: An International Handbook (3rd Edition)

Edited By: William Johnston, Thomas Werlen, Frederick Link

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 07 June 2023

Banks and cross-border issues — Monetary obligations — Contractual set-off — Judicial set-off

(p. 271) 18  Italy

A.  Introduction

18.01  Italian law recognizes set-off as one of the means by which an obligation can be extinguished in a manner alternative to performance. The Civil Code (C.C.) provides for three types of set-off: set-off by operation of law, by intervention of the judge, or by the will of the parties. The difference between these three types of set-off corresponds roughly to the common law distinction between legal, judicial, and contractual set-off respectively. In addition, the Civil Code also provides for particular rights of combination with regard to amounts credited and debited to current accounts, as well as specific rights of set-off with regard to balances of a plurality of accounts or other relationships between a bank and its customer.

18.02  From an economic perspective, set-off works in a manner which is similar in many respects to a security interest and this is particularly so in an insolvency situation where the debtor is no longer in a position to pay its debts in full. Recognition of this function of set-off is expressed directly in the preamble to the EU Insolvency Regulation,1 which states in Recital 70 that(p. 272)

If a set-off of claims is not permitted under the law of the State of the opening of proceedings, a creditor should nevertheless be entitled to the set-off if it is possible under the law applicable to the claim of the insolvent debtor. In this way, set-off would acquire a kind of guarantee function based on legal provisions on which the creditor concerned can rely at the time when the claim arises.

18.03  Notwithstanding the similarity in function between rights of set-off and rights of security, it is important to keep in mind that, at least for Italian law purposes, set-off is not treated as a security interest. This has various implications, including non-application of the perfection formalities and clawback rules prescribed for security interests. It also means that a creditor possessing a right of set-off, as opposed to a perfected security interest, is at risk from interveners such as creditors obtaining a right of security or attachment over the claim owed to the debtor.

18.04  For the purposes of this chapter, a distinction is made between set-off and netting, in particular close-out netting which is typically used for financial contracts outstanding at the time when one of the parties thereto is admitted to insolvency proceedings. Although there are many similarities between the two, conceptually, netting involves the ability to cancel a number of outstanding contractual positions prior to determining the quantum of a single claim (as opposed to two or more reciprocal claims) owed between the parties. By contrast, set-off is generally applied only to monetary claims and recognizes both obligations to pay between the parties, simply allowing that the obligations can be satisfied or partially satisfied by deducting from the amount owed to each party the amount owed to the other. An analysis of the Italian law treatment of close-out netting for outstanding financial transactions is beyond the scope of this chapter.

B.  Set-off between Solvent Parties

1.  Legal set-off

18.05  In order for legal set-off to be available under Italian law, the two debts must be for a sum of money or a quantity of fungible things of the same kind, and which are equally liquidated and collectable (Article 1243 C.C., first paragraph). The set-off results from the mere fact that the two claims exist at the same time between the same two parties.

(p. 273) 18.06  Set-off by the intervention of a judge may occur when the judge creates the conditions for the set-off to become operative, for example by determining the amount of a credit which is not yet liquid.

2.  Contractual set-off

18.07  Contractual set-off may occur either when the parties agree to remove an obstacle to its effectiveness (eg maturity), or when the parties establish an agreement which regulates the conditions for future set-off (Article 1252 C.C.). More particularly, Article 1252 C.C. provides that set-off may occur by agreement of the parties even in respect of claims which are not fungible, liquid or collectable, and that the parties can establish in advance the conditions for such set-off. Another advantage of contractual over legal set-off lies in the fact that Italian law generally requires a party wishing to avail itself of legal set-off to provide specific notice to that effect each time the proper conditions and prerequisites exist. By contrast, in order for contractual set-off to be available, there need simply be a specific written agreement providing for such right and no further notice of the exercise of the set-off is necessary.

18.08  Mutuality is recognized as a necessary precondition for all types of set-off, including contractual set-off, meaning the debts and credits to be set off must be between the same two legal entities. However, it is also possible to create mutuality through the use of guarantees and/or joint and several liability provisions, making forms of triangular set-off possible, although a threshold issue arises under Italian corporate law, generally with respect to the granting of third-party guarantees, and relates to the question of corporate benefit. For instance, in a cash-pooling scenario, through the granting of personal guarantees and/or acceptance of joint and several liability provisions, a participating affiliate in a creditor position vis-à-vis the bank offering the service agrees to accept a lower rate of interest than the market rate which would otherwise be due to it on its deposits as a result of a notional set-off of its positive account balances with any negative balances of other participating affiliates. Absence of appropriate corporate benefit for a transaction can give rise to issues of ultra vires, voidability, and/or director’s liability. It is worth noting that, while Italian law generally considers the corporate interest in a broad sense and including the interest of the corporate group, if it were the case that a participating affiliate was in a more or less constant net creditor position vis-à-vis the bank, it is to be expected that the issue of corporate benefit may be subject to closer scrutiny from an Italian law perspective.

18.09  A separate question under Italian law is whether, in circumstances where a set-off is validly exercised pursuant to a contractual agreement prior to the onset of insolvency, the subsequent admission to insolvency proceedings could result in an unwinding of the set-off as a voidable preference. This is the subject of discussion under the heading ‘Set-off and voidable preferences’ below.

(p. 274) C.  Set-off against Insolvent Parties

1.  Set-off under the Italian Bankruptcy Law

18.10  Once an Italian company becomes insolvent, the Italian courts will assume jurisdiction over the relevant insolvency proceedings, according to the provisions of the Italian Bankruptcy Law.2 The provisions of the Bankruptcy Law will prevail over the agreement of the parties from the date of the declaration of admission to insolvency proceedings. Where the provisions of an agreement are substantially different or inconsistent with local bankruptcy laws, there will be good public policy reasons why an Italian court should seek to set aside the provisions of the agreement. The court will apply Italian bankruptcy laws from the date of the declaration of admission to proceedings.

18.11  The Bankruptcy Law is not completely hostile to set-off and in fact creates a special right of legal set-off which is available to creditors of the insolvent even in the absence of a contractual provision. Article 56 of the Bankruptcy Law states that creditors have the right to set off their debts owed to the bankrupt against their claims against it, even if the latter are not yet matured at the time of the declaration of insolvency. However, the second paragraph of Article 56 states that such right of set-off does not apply if the creditors acquired their claims against the bankrupt by any inter vivos transaction either after the declaration of the admission to insolvency proceedings or within one year preceding such date. This limitation embodies an ‘anti-build-up rule’ and derives from a suspicion that a creditor may acquire a credit towards the bankrupt in order to avoid payment of its own debt. Any set-off exercised following the admission to bankruptcy proceedings must comply with Article 56 in order to be allowed, regardless of the terms of any contractual agreement.

18.12  The reference in Article 56 to inter vivos transactions limits application of the anti-build-up rule exclusively to situations where a claim is actually acquired by a creditor, as opposed to a situation where a claim is originated between the creditor and the insolvent, or where the creditor incurs a debt toward the insolvent, within the one-year period. However, the incurring of debts toward the insolvent may, depending on the circumstances, be subject to revocation, as further described under the heading ‘Set-off and voidable preferences’ below.

18.13  In the case of certain insolvency proceedings, the rule embodied by Article 56 of the Bankruptcy Law does not apply and creditors may in some circumstances be stayed from exercising rights of set-off. In particular, this may occur in the context of certain reorganization, as opposed to liquidation, (p. 275) proceedings. For instance, in the case of an Italian debtor which is a financial institution, a stay of rights of set-off may occur in the somewhat unlikely event that the Bank of Italy orders a suspension of payments in the context of administration proceedings. This is because there is Italian legal theory, but not case law, holding that a suspension of ‘payments’ affects the ability to consider amounts then owed by the debtor as liquid and collectable, such that forms of set-off (including both legal and contractual set-off) could not be invoked in order to extinguish debts of the insolvent party until such time as the suspension is removed.

There are, however, limits to the application of Italian insolvency laws in relation to set-off, based on the provisions of the EU legislation, as described in the discussion under point D.2 below.

18.14  On the occasion of implementation in Italy of Directive EU/59/2014 establishing a framework for recovery and resolution of credit institutions and investment firms (the BRRD), Italy introduced certain amendments to the provisions of the Banking Law in order to provide for a direct limitation to the exercise of rights of set-off in the context of insolvency proceedings for financial institutions by amending the provisions of Article 56 of the Italian Bankruptcy Law. As a result, in the case of liquidation proceedings for Italian financial institutions, the right of set-off permitted by Article 56 is available only where the set-off has actually been claimed by one of the parties prior to the commencement of the proceedings, unless the right to set-off is based on a financial collateral arrangement or agreement for set-off or netting. This provision is in contrast to the consolidated jurisprudence of the Supreme Court which recognizes that, for the purposes of recognizing enforceability in insolvency, it is only necessary that the claim asserted by the creditor have its origin in a relationship which pre-dates the admission to proceedings and not that set-off be claimed prior to such time. The new rule was prompted by a desire to accommodate the requirement of the Financial Stability Board—as put forward in its final Principles and Term Sheet on Total Loss-Absorbing Capacity (TLAC) dated 9 November 2015 and applicable to Global Systemically Important Institutions (G-SIBs)—that any debt purporting to satisfy the new TLAC requirements must not be subject to contractual or legal set-off. The FSB requirement in this regard is understandable since the loss-absorbing capability of bonds or other instruments issued by a bank or investment firm could be severely impaired if creditors can use these to off-set amounts which they owe to the bank (eg loans).

18.15  The place of domicile of a party claiming set-off against an Italian entity does not have an impact on the enforceability of the set-off, as discussed in this chapter. As noted in the discussion above, Article 6 of the Insolvency Regulation subjects the question of enforceability of the set-off to the law applicable to the insolvent debtor’s claim.

(p. 276) 2.  Set-off and voidable preferences

18.16  Outside the context of insolvency proceedings, creditors of a debtor may apply to set aside any disposal of assets by the debtor in favour of a third party pursuant to Article 2901 of the Italian Civil Code. This right exists provided that:

  1. (i)  the transaction causes prejudice to the other creditors;3

  2. (ii)  the debtor was aware of such prejudice; and

  3. (iii)  the third party was also aware of the prejudice caused to the other creditors.

18.17  Any such action must be initiated within five years of the date of the relevant transaction. If the action is a success, the transaction will be declared void and, therefore, each party must return the assets received under that transaction. The ‘awareness of prejudice’ is interpreted looking at the debtor’s financial position at the time the relevant ‘act’ was done, ie at the time the provision for contractual set-off was entered into. The debtor’s future financial position is not relevant unless the petitioning creditor can show that there was a specific intention on the part of the debtor to preordain prejudice to future creditors, and that the third party was aware of such intention.

18.18  Once insolvency proceedings are commenced, an insolvency official may, in addition to pursuing any action previously commenced by creditors under Article 2901 C.C., bring actions for avoidance pursuant to Article 67 of the Bankruptcy Law. Article 67 entitles an insolvency official to set aside certain transactions entered into by the insolvent debtor, provided the transactions occurred during a preference period preceding the declaration of bankruptcy (the ‘Suspect Period’). The purpose of this rule is to safeguard the equal treatment of creditors (par condicio creditorum) and to avoid transactions that may diminish the debtor’s assets. Depending on the circumstances, the Suspect Period may be of one year or six months.

18.19  Pursuant to Article 67 of the Bankruptcy Law, the following transactions are subject to a Suspect Period of six months:

  1. (i)  the creation of security with respect to debts which, as of the date of creation of the security, have already matured;

  2. (ii)  payments of liquid and collectable debts;

  3. (iii)  transactions for valuable consideration; and

  4. (iv)  the creation of security for debts incurred contemporaneously.

18.20  The following transactions are subject to a Suspect Period of one year:

  1. (v)  economic transactions in which the obligations performed or assumed by the bankrupt party exceed by more than one-quarter the consideration received or promised in return;

  2. (p. 277) (vi)  transactions extinguishing, by any abnormal means of payment, debts which have matured; and

  3. (vii)  the creation of security for pre-existing but unmatured debts.

18.21  Certain exemptions from these avoidance rules have been introduced to Article 67 as a result of the Bankruptcy Law Reform, but are not relevant to the subject matter of this chapter.

18.22  In the case of any transaction (whether subject to a six-month Suspect Period or to a one-year Suspect Period, as described above), the debtor’s counterparty can oppose the setting aside, by giving evidence that he was not aware that the debtor was insolvent at the relevant time. In the case of transactions subject to a six-month preference period (except for case sub (i)), the burden of proof is on the relevant insolvency official to prove that the counterparty was aware that the debtor was insolvent at the time of entering into the transaction.

18.23  There is a significant volume of case law in Italy concerning the elements which may lead to a conclusion that a party was aware of the state of insolvency of another party; however, there is no precise general principle according to which one may establish whether a given circumstance may be considered to point to an effective knowledge of a state of insolvency. Recent case law has established that knowledge of a state of insolvency must be effective and not just potential, but in any case may be proved indirectly including by presumption based on a reasonable standard of diligence (see Court of Cassation n 28445, of 28 November 2008).

18.24  The indicators used to prove the knowledge of a state of insolvency must be serious, precise, and consistent, such as the following: (a) the existence of numerous and significant execution and attachment proceedings (while there is no specific register for these proceedings, it is possible to obtain information through the local tribunal); (b) frequent and alarming press reports concerning the serious financial condition of the debtor; (c) a default, even if partial, in the performance of obligations vis-à-vis the debtor’s counterparty; and (d) the existence of a number of unpaid cheques or bills of exchange (for which there is a register which may be consulted). The case law tends to apply more rigorous standards with regard to the awareness of banks or financial operators of a state of insolvency, it being assumed that parties of these types have at their disposal more efficient means than those available to ordinary commercial enterprises in order to become familiar with the financial state of their counterparties (see Court of Cassation no 17955, of 1 July 2008).

18.25  Article 56 of the Bankruptcy Law has been held to provide for a particular form of legal set-off which is not subject to avoidance.

18.26  On the contrary, where set-off is exercised on the basis of a contractual provision prior to actual admission to insolvency proceedings, it is possible that a challenge (p. 278) could be made on the basis of the fact that Article 67 of the Bankruptcy Law provides for revocation of:

  1. (i)  the payment of debts through any ‘abnormal means’, which is subject to the one-year Suspect Period, and

  2. (ii)  any payment by the debtor (ie even if made through a ‘normal’ means), which is subject to the six-month Suspect Period.

18.27  While contractual set-off has been considered an ‘abnormal means of payment’ in abstract, the risk of revocation under (i) above is limited as long as one can show that the relevant contractual provision is typical or customary in the relevant market, which should normally be the case in respect of financial transactions. This is because the case law has held that the ‘normalcy’ of a given means of payment must be evaluated on a concrete basis in respect of the applicable commercial practice, such that, if the means in question represents an established business practice in respect of the type of transaction in question, it cannot be considered an ‘abnormal means of payment’.4 There is also case law of the Supreme Court which states that the reason for allowing a means of payment which, although ‘abnormal’ in abstract, is usual in commercial practice is that in this case there is no presumption that the means in question was used because of a suspicion as to the solvency of the one of the parties, but we do not believe that this necessarily prejudices an arrangement entered into for practical as well as credit risk reduction purposes.

18.28  With respect to (ii) above, there would not be a risk of clawback as long as the contract for set-off itself was executed within the six-month period preceding the date of the insolvency, with the liquidator required to prove that the solvent party was aware of the insolvency at the time the agreement was entered into rather than at the time the set-off actually occurred. Italian courts distinguish between the agreement to set off and its effect in extinguishing reciprocal claims, recognizing that only the former embodies an ‘act by the debtor’, which is a necessary precondition for challenge of a transaction as a preference.5

18.29  Where either the Insolvency Regulation or the Winding-up Directive applies,6 a further defence to an insolvency clawback action is available, since both allow the creditor a defence to any challenge of an ‘act’ as a voidable preference where it can be proved that the ‘act’ is subject to the law of another Member State and that law does not allow any means of challenge in the relevant case. It is worth (p. 279) noting that the defence against avoidance of set-off is therefore limited to cases where the contract providing the set-off is governed by the laws—in particular the insolvency laws7—of an EU Member State.

D.  Cross-border Issues

1.  Cross-border set-off between solvent parties

18.30  The Rome I Regulation8 applies in Italy to all contracts concluded after 17 December 2009 in circumstances where a conflict-of-laws point is raised before the courts of a Member State in a cross-border context (ie parties established in different States, contractual obligations to be met in a different country, etc). The Rome I Regulation is of universal application, meaning that it will apply even when the contracting parties elect application of the law of a non-Member State (eg New York law).

18.31  According to Article 3 of the Rome I Regulation, the choice of law may be express or result clearly from the contractual provisions or the circumstances of the relevant case. However, where all other elements pertaining to the situation relate to a State other than that whose laws have been chosen to govern the agreement, such choice shall not prejudice the application of imperative rules (whether domestic or based on EU law).

18.32  The Rome I Regulation, unlike its predecessor the Rome Convention, introduces specific provisions concerning the law applicable to set-off.

18.33  Article 1716 of the Rome I Regulation provides that ‘where the right to set-off is not agreed by the parties, set-off shall be governed by the law applicable to the claim against which the right to set-off is asserted’. In other words, it will be the law applicable to the claim of the defendant to an action brought before the courts of a Member State which determines the enforceability of the set-off claimed by the plaintiff in a situation where there is no contractual agreement for set-off.

(p. 280) 18.34  In a situation where there is a contractual agreement for set-off, the applicable law will be that resulting from application of Articles 3 and 4 of the Rome I Regulation.

18.35  Article 3 concerns a situation where the contract provides for an express choice of governing law, in which case such law will be recognized and applied by the relevant Member State.

18.36  Article 4 would apply where there is a contractual provision for set-off, but the contract in question does not provide for an express choice of law, in which case there is a mandatory direction for the applicable governing law in relation to certain types of agreement (sale of goods; provision of services; rights in rem over immovable, tenancy, franchise, distribution, multilateral systems). If none or more than one of these rules applies, then the contract is considered to be governed by the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence.9 However, Article 4 provides that, where it is clear from all the circumstances of the case that the contract is manifestly more closely connected with a country other than that indicated based on the preceding rules, or where the law applicable cannot be determined based on these rules, the law of the State with the closest connection shall apply. According to Recital 20 to the Rome I Regulation, in assessing the criteria of ‘close connection’, account should be taken, inter alia, of whether the contract in question has a very close relationship with another contract or contracts.

18.37  There have not been any Italian court decisions to date concerning the application of the Rome I Regulation to questions of enforceability of rights of set-off.

2.  Cross-border set-off against insolvent parties

18.38  The Insolvency Regulation affects proceedings relating to non-financial institutions and is of direct application in Italy. The Insolvency Regulation must be interpreted purposively and in conformity with European Union law. Nevertheless, its interpretation in the facts of any particular case is up to the courts of the Member State in which insolvency proceedings (whether ‘main’ or ‘secondary’) have been opened in respect of which a right of set-off is claimed.

18.39  The starting position under the Insolvency Regulation is that the insolvency laws of the Member State in which insolvency proceedings are commenced will determine the rules regarding the conditions under which set-offs may be invoked (Article 7(2)(d)). However, as an exception to this general rule, Article 9 of the (p. 281) Insolvency Regulation provides that ‘the opening of insolvency proceedings shall not affect the right of creditors to demand the set-off of their claims against the claims of the debtor, where such a set-off is permitted by the law applicable to the insolvent debtor’s claim’. The ‘law applicable to the insolvent debtor’s claim’ would be the law governing the liability owing by the solvent person to the insolvent person.

18.40  There has been some debate within the EU as to whether the ‘law applicable to the insolvent debtor’s claim’ need necessarily be the law of another EU Member State. However, since the Italian legislation implementing the Winding-up Directive contains no express or implied limitation in this respect, consensus appears to have been reached by Italian practitioners to the effect that no such restriction applies in relation to the governing law of the insolvent debtor’s claim.

18.41  Whenever the Insolvency Regulation applies to insolvency proceedings taking place in Italy, the one-year anti-build-up rule set forth in Article 56 of the Bankruptcy Law, as well as the various rules which could impose a stay on set-off in the context of reorganization proceedings, will no longer apply if the law applicable to the insolvent debtor’s claim is not Italian law. On the contrary, any restrictions on the creditor’s right of set-off will apply only based upon reference to the laws—including likely the insolvency laws—of the jurisdiction governing the insolvent debtor’s claim.

18.42  Notwithstanding the potential application of the Insolvency Regulation, it is worth noting that mutuality will continue to remain a necessary precondition for the exercise of rights of set-off in the context of Italian insolvency proceedings. This is because the permissive rule in relation to set-off applies only to ‘creditors’, and, moreover, only to ‘creditors’ of the insolvent debtor. There is no indication in the Insolvency Regulation to the effect that whether or not one is a ‘creditor’ of the insolvent should be determined with reference to any law other than the law of the relevant proceedings. This means that any attempt to expand rights of set-off to operate between affiliates of the creditor and/or the insolvent debtor or third parties will fail in the Italian proceedings, even if this were allowed under the law applicable to the insolvent debtor’s claim.

18.43  The discussion set forth above in connection with the impact of Article 9 of the Insolvency Regulation would apply equally in the event of insolvency proceedings affecting Italian banks in light of virtually identical provisions which have been set forth in the Credit Institutions Winding-up Directive as implemented by Italian law.10

(p. 282) 18.44  Notwithstanding the beneficial regime accorded to recognition of rights of set-off, it is important to note that Article 9 of the Insolvency Regulation clarifies that avoidance actions for set-off may still be permitted under the lex fori of the insolvency proceedings, although this will be subject to the safe harbour from ‘clawback’ permitted by Article 16 of the Insolvency Regulation.

18.45  As noted in the discussion under (18.31) above, Article 16 of the Insolvency Regulation allows a creditor a defence to any challenge of an ‘act’ as a voidable preference where it can be proven that the act in question is subject to the law of another Member State and that law does not allow any means of challenge in the relevant case. Various pronouncements by the Italian lower courts in relation to Article 13 of the Old Insolvency Regulation (the text of which is virtually identical to Article 16 of the Insolvency Regulation) have provided fairly positive context to the impact of the provision in the context of Italian insolvency proceedings.11


1  Regulation (EU) No 2015/848 of 20 May 2015, which repealed the Old Insolvency Regulation (Council Regulation (EC) No 1346/00 of 29 May 2000). Please note that, pursuant to art 84 of the Insolvency Regulation, although the Old Insolvency Regulation has been repealed, it shall continue to apply to insolvency proceedings which fall within its scope and which have been opened before 26 June 2017. In any case, the present analysis is true for the provisions both of the Insolvency Regulation and of the Old Insolvency Regulation.

2  Royal Decree no 267 of 16 March 1942, as amended from time to time.

3  It is not necessary to prove that there was an intention to prejudice specific claims owed to other creditors, or to show that there was knowledge of a state of insolvency, but merely to show that there was a knowledge that the transaction would cause prejudice generally to other creditors.

4  Court of Appeal of Milan, 25 October 1985 and 30 April 1984.

5  See Court of Cassation, no 5612 of September 1986, which stated that the effect of the agreement in extinguishing reciprocal debts cannot be considered an act which is distinct from the agreement itself, nor can such set-off be autonomously revoked since it is a consequence which follows automatically from the agreement.

6  Directive 2001/24/EC, as implemented via amendment to Legislative Decree no 385 of 1 September 1993.

7  As with art 9, it has been questioned whether, for the purposes of art 16, the court where proceedings have been opened should take into consideration challenges available under the general law or the insolvency laws of the jurisdiction whose laws apply to the ‘act’. However, the fact that art 16 makes reference to ‘any means of challenging’ appears to indicate that the court should consider challenges under the general or insolvency law, even if no insolvency proceedings have been opened in the relevant Member State. This is, in fact, the approach likely to be taken by the Italian courts.

8  Regulation (EC) n 593/2008 of the European Parliament and the Council of 17 June 2008 on the law applicable to contractual obligations (hereafter the Rome I Regulation). We note for completeness that the Rome 1 Regulation has effectively replaced the Rome Convention of 19 June 1980 on the law applicable to contractual obligations, save in respect of matters involving Denmark and another Member State.

9  In the case of financial agreements, particularly those providing for reciprocal performance (ie derivatives, stock loans, repos), it would be difficult to determine a place of characteristic performance. Fortunately, contractual provisions for set-off with specific choice-of-law provisions are the norm in these markets.

10  In respect of Italian banks, see art 95ter(2)(a) of Legislative Decree no 385 of 1 September 1993, as amended, implementing art 23 of the Winding-up Directive. In respect of Italian insurers, we note that art 22 of Directive 2001/17/EC provides for the same beneficial regime in relation to set-off, but has been poorly implemented in Italian law by referring solely to situations where the relevant insolvency proceedings are governed by the laws of a Member State other than Italy (see Article of Legislative Decree no 209 of 7 September 2005, implementing art 22 of Directive 201/17/EC).

11  Article 95ter of Legislative Decree no 385 of 1 September 1993, as amended, provides for an identical defence in the case of Italian banks, in implementation of Article 30 of the Winding-up Directive.