The effects of corruption on contracts in Italy: the long road towards a legal and fair, competitive market

Italy is one of the most corrupt countries in Europe where corruption in the public sector is reported to be the most widespread notwithstanding recent legal reforms and restless judicial action. Typically, corruption is rife in developing countries that have weak legal systems. Conversely, Italy is one of the most important economies of the Eurozone and its legal system is well structured. Corruption in Italy is mainly domestic. There have been investigations of cases of corruption of foreign public officials abroad by domestic undertakings, but cases of foreign undertakings bribing domestic public officials are not reported. This means that Italian case law on corruption contracts only concerns domestic contracts. This chapter aims to provide an analysis of the specific provisions and the general principles governing the effects of corruption on the contracts concerned. Particular attention is given to the public procurement sector, being the area most vulnerable to corruption. Annulling contracts awarded when corrupt practices have affected the awarding process is complex because the traditional private law principles governing contract validity in general must be integrated, and in some cases derogated from, by a fragmented and incoherent specific body of legislation. Finally, to complete the framework of private remedies for corruption in Italy, we discuss the most famous Italian damages recovery action brought by a victim of corruption, even though it does not relate to the validity of a contract, rather involving a case of judicial corruption.