Italian court rulings impact ABI bank guarantee schemes

Recent rulings by the Italian Supreme Court (Cassazione) have addressed the validity of certain clauses within the standardized banking guarantee schemes proposed by the Associazione Bancaria Italiana (ABI). Specifically, certain provisions within the ABI model have been declared null and void.

Under Italian law (Art. 1937 c.c.), a guarantee requires an express manifestation of will to be valid. A guarantor typically becomes jointly liable with the principal debtor, meaning they are responsible with all present and future assets. However, parties can agree to a 'benefit of excussion' (Art. 1944 c.c.), which requires the bank to attempt to seize the debtor's assets before pursuing the guarantor.

The legal discussions also highlight the risks of 'omnibus' guarantees, which require a specified maximum amount under Law 154/1992, and the distinction between standard guarantees and autonomous first-demand guarantees.