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When a foreign buyer stalls on price, your put option may not save you — what UK solicitors must build into every Italian shareholders' agreement before the deal closes
Your founders kept a 30 per cent stake. You gave them a put option in the patto parasociale, the Italian shareholders' agreement. Two years later they exercise it. You — or your industrial partner controlling the majority — dispute the EBITDA multiple. The formula is genuinely ambiguous. Can the minority seller get a court to compel you to buy at their number?
The answer, after a 2025 Court of Milan ruling on exactly this scenario, is: not quickly. Possibly not for two years or more.
That answer reshapes every retained-equity deal where a foreign industrial buyer holds the Italian target and the Italian founder or management team keeps a minority with an agreed exit right. UK solicitors need to know what the Milan ruling actually said, how it fits with the Italian Court of Cassation's existing case law, and — most importantly — what one drafting clause removes the problem entirely.
Yes, in principle. A put option in a patto parasociale — the shareholders' agreement sitting alongside the company's articles — is enforceable under the Italian Civil Code. Article 1331 of the Italian Civil Code (codice civile) regulates the option agreement: the grantor is irrevocably bound for the agreed period, and the holder's notice of exercise brings the contract into existence. The Italian Court of Cassation, United Sections (Corte di Cassazione, Sezioni Unite, judgment no. 4628 of 17 February 2021, Cass. civ., SS.UU., sent. 17 febbraio 2021 n. 4628) confirmed that obligations arising from a patto parasociale are enforceable as contract obligations between the parties, not merely as internal corporate governance arrangements.
So the put option is valid. The put option binds the buyer. Exercise by notice creates a contract of sale. The difficulty arises at the next step: enforcing that contract when the price is not a fixed number but a formula — and the parties read the formula differently.
When the buyer refuses to honour the exercised put, the seller faces a choice between two procedural paths, and neither is fast.
The first is ordinary merits litigation before the Sezione Specializzata in materia di impresa, the specialist commercial court division in Milan, Rome or other major Italian cities. First-instance proceedings typically take 18 to 36 months. The court will construe the price formula, appoint an expert if needed, and give judgment for performance at the determined price, with any damages for late completion. During that period, the minority seller holds an illiquid stake in a company controlled by the person they are trying to exit.
The second path — and the one the 2025 Milan ruling sharply limits — is emergency interim relief under Article 700 of the Italian Code of Civil Procedure (codice di procedura civile, Art. 700 CPC), which allows an urgent injunction where the petitioner demonstrates both fumus boni iuris (an arguable right) and periculum in mora (a risk of irreparable harm from delay). The Court of Milan ruled in 2025 that where the put option price is the subject of a genuine interpretative dispute, the fumus element is not established with sufficient certainty to justify an interim order ordering performance at the price contended for by the petitioner. The court cannot, at an interim stage, effectively pre-determine the price formula dispute on the merits. Relief was refused.
This creates the enforcement gap. The put-holder has a valid right in principle, no interim remedy in practice, and a minimum 18-month wait for a merits decision. During that wait, the buyer retains full control of the business.
The answer depends entirely on whether the price is determined or determinable without contest at the moment of exercise.
Italian Court of Cassation authority — in particular the Italian Court of Cassation, First Civil Division, judgment no. 15202 of 12 June 2018 (Cass. civ., Sez. I, sent. 12 giugno 2018 n. 15202) — holds that a put option is enforceable once exercised and that the buyer's refusal to perform can in principle support an application for urgent relief where the obligation is clear and the harm is immediate and incapable of remedy in damages. The key phrase is "where the obligation is clear."
The 2025 Milan ruling draws the line precisely at clarity of price. Where the formula produces a single undisputed number — say, three times audited EBITDA for the last completed financial year, with no room for disagreement on which year or which EBITDA figure — Art. 700 relief remains arguable. Where the formula is contested — which multiple, which adjustments, whose accounts, which valuation date — the obligation is not sufficiently "clear" to support interim compulsion. The court will not resolve a substantive valuation dispute under the procedural umbrella of emergency relief.
This is not a theoretical risk. In cross-border deals, EBITDA adjustments for management charges, intercompany fees, exceptional items and currency translation are regularly contested. A price formula that looks precise at signing can produce numbers 20 to 40 per cent apart at the moment of exercise.
Italian law offers a structural remedy — but only if the parties draft it in at the outset.
Articles 1349 and 1473 of the Italian Civil Code permit the parties to delegate price determination to a third-party expert (the arbitratore), whose decision is binding on both sides unless made in manifest bad faith or with manifest error. This is expert determination, not arbitration: the expert does not conduct adversarial proceedings; they apply the agreed formula and produce a number. Their determination is final. If a party refuses to comply with a binding expert determination, enforcement is straightforward — the obligation is clear, the price is fixed, and Art. 700 relief or a fast-track claim for specific performance becomes considerably more realistic.
The practical solution is a clause requiring that upon exercise of the put, the parties have 15 days to agree the price. If they do not agree, a named institution — typically the Milan Chamber of Arbitration (Camera Arbitrale di Milano) or a partner at a named audit firm — is appointed within 5 days and delivers a binding determination within 30 to 60 days. The expert's fee (typically EUR 10,000 to EUR 30,000 for a mid-market SRL transaction, depending on complexity) is split equally or charged to the challenging party. Once the determination is issued, the buyer has a fixed deadline — commonly 10 to 20 business days — to complete the purchase. After that deadline, interest accrues and the seller may seek specific performance before the commercial court.
Unlike in England and Wales, where a put option dispute would typically proceed to Commercial Court or arbitration with well-developed interim injunction practice under the American Cyanamid balance-of-convenience test, Italian interim relief under Art. 700 CPC requires a higher threshold of certainty on the merits before any compulsive order is granted. An English court can grant an interim injunction to preserve the status quo while the merits proceed, even where the underlying right is disputed, provided the claimant gives a cross-undertaking in damages. An Italian court granting Art. 700 relief against a put-option buyer would effectively pre-determine the price — a merits question — and Italian courts resist doing so at the interim stage.
Further, Italy has no equivalent of a Tomlin Order or a summary judgment mechanism under CPR Part 24 that would allow a fast determination of a point of contract interpretation before full trial. The Sezione Specializzata does streamline commercial disputes compared with ordinary Italian civil courts, but "streamlined" in Italian commercial litigation still means 18 months or more at first instance before a judgment compelling transfer at the determined price.
The consequence is direct. An English solicitor drafting a put option in an Italian shareholders' agreement by analogy with English shareholders' agreements — relying on the option's formal validity and assuming the courts will enforce it promptly — will find the mechanics fail exactly when the Italian founder most needs them: at the moment the buyer becomes difficult.
Iudex non calculat — the judge does not do the arithmetic. This Roman maxim, still cited by Italian proceduralists, captures exactly why courts resist resolving valuation disputes at the interim stage. Do not ask the court to calculate. Build the calculation mechanism into the agreement.
The clause structure that protects the put-holder has four elements. First, a self-executing trigger: exercise of the put by written notice (certified email, or PEC, is the correct form in Italy) constitutes irrevocable acceptance by the grantor of the obligation to purchase, at a price to be determined under the mechanism. Second, a tight negotiation window: 15 days from exercise for the parties to agree. If no agreement, the mechanism activates automatically — no further notice required. Third, a named or readily identifiable expert and a fixed timetable, typically 30 to 60 days. The expert's mandate should specify that they apply the agreed formula, that they may request documents from both parties (with a 5-day production deadline), and that their determination is final and binding under Art. 1349 c.c. absent manifest error. Fourth, a completion deadline: the buyer must complete the share transfer within 10 business days of the expert determination becoming final, failing which specific performance is immediately available before the Sezione Specializzata and daily penalty interest applies.
In our files, the most common error is a formula clause drafted in English law style that is grammatically clear but leaves the choice of accounting standard, the treatment of earn-out adjustments, and the valuation date all open to competing reasonable interpretation. The clause reads well at signing. It produces a range of EUR 2 million to EUR 6 million at exercise. That range is not a formula: it is a litigation budget for the buyer.
As Benjamin Graham observed in a different context, the risk is not in the instrument itself but in the assumptions built into the price. A put option is only as reliable as the price-determination mechanism behind it. Draft the mechanism, not just the right.
To give decision-makers a realistic picture: without an expert-determination clause, if the buyer contests the price and the put-holder pursues ordinary merits proceedings before the Milan Sezione Specializzata in Materia di Impresa, the realistic timeline is as follows. Filing and serving the claim takes approximately 3 to 4 months. A court-appointed expert's report, if ordered, adds 6 to 9 months. First-instance judgment arrives roughly 18 to 36 months from filing. An appeal before the Milan Court of Appeal adds a further 12 to 24 months. Total exposure: 3 to 5 years from the moment the buyer first refuses.
Legal costs for first-instance proceedings on a mid-market dispute (EUR 1 million to EUR 10 million put price) typically range from EUR 60,000 to EUR 150,000 at each side. Court fees for a claim of EUR 5 million are approximately EUR 7,000 under the Italian contribution (contributo unificato) scale. Neither figure includes management time, the illiquidity premium, or the distraction cost to the minority shareholder of being locked in for years with an adversarial majority.
The expert-determination route costs EUR 10,000 to EUR 30,000 in expert fees and, if properly drafted, resolves the price in 30 to 60 days. The mathematics of drafting this clause correctly are not subtle.
Does Italian law recognise put options in private company shareholders' agreements?
Yes. A put option in a patto parasociale is a valid contractual right under Articles 1331 and 1987 of the Italian Civil Code and is enforceable between the parties. The Italian Court of Cassation confirmed this in its United Sections judgment no. 4628 of 17 February 2021. The option does not require notarial form for an SRL unless the articles specifically require it, but exercise triggers a share transfer obligation that must eventually be documented in a notarial deed of sale (rogito).
Can a minority shareholder in Italy get an urgent court order to force a buyout?
Only in limited circumstances. Emergency interim relief under Art. 700 of the Italian Code of Civil Procedure requires an arguable right that is sufficiently certain at the interim stage. Where the put option price is contested and the formula is genuinely ambiguous, a 2025 Court of Milan ruling held that the required certainty is absent: the court cannot determine the price at an interim hearing, so the relief is refused. The seller must pursue ordinary merits proceedings, which typically take 18 to 36 months at the specialist commercial court.
What is the safest way to structure a put option in an Italian shareholders' agreement for a cross-border deal?
Include a binding expert-determination clause under Articles 1349 or 1473 of the Italian Civil Code, specifying a named appointing institution, a 30 to 60 day timetable, and an express provision that the expert's determination is final absent manifest error. Pair it with a completion deadline of 10 to 20 business days after the determination, with specific performance and daily interest as the remedy for non-compliance. This removes price uncertainty as a defence to enforcement and significantly strengthens the put-holder's position before the Italian commercial courts.
HREFLANG BLOCK:
Editorial Team — Panato Law Firm Staff
