In the proceedings brought by Angela Miglionico against Sun World International LLC, the Court of Appeal of Milan issued, on 23 January 2026, a partial judgment within the context of the action to set aside arbitral awards, resumed following the decision of the Italian Supreme Court (Corte di Cassazione) No. 9429 of 9 April 2024 (see here).

The dispute arises from an agreement entered into in 2015 for the exploitation of the plant variety Sugranineteen and from subsequent disputes concerning the performance of the contractual relationship, which culminated in arbitration before the Milan Chamber of Arbitration. The arbitral awards issued in 2018 and 2019 were challenged before the Court of Appeal, whose 2022 decision was subsequently partially set aside by the Italian Supreme Court.

Upon review of the judgment of the Court of Appeal No. 2704 of 5 August 2022, which had found the arbitral awards to be free from defects, the Supreme Court set aside that decision and remitted the case for a new appellate review, to be conducted in accordance with the following principle of law:

“In the field of Community plant variety rights, a contractual clause is null and void for being contrary to public policy, due to the infringement of Article 13(2) and (3) of Council Regulation (EC) No. 2100/94, as interpreted by the Court of Justice, where it grants the holder of intellectual property rights over the protected cultivars the power to designate the persons exclusively entitled to distribute the fruits obtained by a producer previously authorized to use the variety constituents of the protected variety from which such fruits are derived, where such fruits are not usable as propagating material.”

In the proceedings resumed upon remittal, the Court of Appeal of Milan, sitting in a different composition, re-examined the dispute in light of that principle. By partial judgment No. 451/2026, the Court set aside the final arbitral award of 7 January 2019 for being contrary to public policy, pursuant to Article 829(3) of the Italian Code of Civil Procedure and, in the rescissory phase, declared null and void Clauses 3.4 and 4.2 of the main agreement (set out in full below), which, on the one hand, reserved ownership of the plants to the variety holder and, on the other hand, required that the fruits be marketed exclusively through a network of authorized distributors.

3.4
The Parties expressly acknowledge and agree as follows:
(a) SUN WORLD is the owner of each individual Leased Plant and/or Sun World Cultivar subject to this Agreement, with the exception of the fruits produced by the Leased Plants which, pursuant to Article 1615 of the Italian Civil Code, belong to the Grower, who may, however, dispose of them within the limits and under the conditions set out in this Agreement;
(b) notwithstanding Article 934 of the Italian Civil Code, none of the provisions of this Agreement shall be construed as transferring any ownership rights in the plants or in the progeny of the Leased Plants and/or Sun World Cultivars, without prejudice to the provisions set out in paragraph (a) above.”

4.2
The Parties agree that the Reserved Ownership Fruit produced from the Leased Plants shall be distributed through an Authorized Distributor, such requirement constituting an essential condition for the effectiveness of this Agreement. Any marketing, distribution, or export of the Reserved Ownership Fruit cultivated by the AUTHORIZED GROWER that is not carried out by an Authorized Distributor shall result in the immediate termination of this Agreement, as well as the withdrawal of any authorization and license granted by SUN WORLD pursuant to Article 1. Annex “C” (as amended from time to time by SUN WORLD) contains a list of Authorized Distributors in Italy.”

The decision falls within the framework established by the Italian Supreme Court, referring to the principle of exhaustion and the distinction between propagating material and harvested product.

It should be noted that the judgment has not yet finally disposed of the proceedings, which will continue in respect of the strictly pecuniary aspects, namely those relating to the consequences (whether financial or otherwise) of the unlawful exercise by Sun World International LLC of the right to immediate termination of the agreement on the basis of the alleged breach of Clauses 3.4 and 4.2 of the Agreement.

The ruling is of international significance.

From a regulatory standpoint, the issue of exhaustion of rights in plant varieties is currently the subject of recent work within UPOV, which has established a dedicated Working Group (whose materials are available here).

From a case law perspective, developments have been recorded in the United Kingdom in Nador Cott Protection SAS v Asda Stores Limited & Anor (Neutral Citation Number [2026] EWHC 553 (Pat)). In its judgment of 12 March 2026, the High Court of England and Wales examined the scope of plant breeders’ rights in relation to the marketing of fruits obtained from a variety considered essentially derived (EDV), addressing the limits of enforcement along the commercial chain (available here).

Roberto Manno, together with Avv. Francesco Saverio Costantino, represented the successful party in the proceedings.

The text of the judgment of the Court of Appeal of Milan is available (in Italian) here.