ENI Wins Dismissal of a Damage Claim

March 20, 2007

Cleary Gottlieb won dismissal of a damage claim filed against ENI, the largest Italian gas operator, before the Tribunal of Monza on March 20, 2007. The claims were filed by Confartigianato, the national association of small enterprises providing "post-counter services," such as supply and installation of gas devices and heating systems maintenance. Confartigianato alleged that ENI violated Italian energy regulations by franchising networks to provide post-counter services. Confartigianato obtained an interim measure suspending ENI’s advertising of its franchising networks on September 16, 2005 and also sought damages.

Italian energy regulations prohibit companies from operating in a competitive market for post-counter services in areas where they hold concessions to provide local public services or to manage natural gas and electricity networks. This prohibition applies also to the concessionaires’ subsidiaries and affiliates. Cleary Gottlieb successfully argued that the statutory prohibition is not applicable to ENI, as it does not hold these concessions, nor can ENI be deemed affiliated with any companies within the ENI group holding such concessions. The Tribunal of Monza also accepted the argument that, in any event, by acting as franchisor, ENI had not entered the market of post-counter services.

The decision is the first ruling on the merits interpreting the significance of the prohibition and is particularly significant as it automatically sets aside the interim measure previously obtained by Confartigianato. In 2005 and 2006, Cleary Gottlieb won dismissals of six requests for similar interim measures filed against ENI before other Italian courts.