Judges give Italian history lesson to lawyers in bank dispute ruling

Three London judges have given English lawyers a brief lesson in Italian history in a ruling on a dispute between a bank and a local authority.

The Italian bank, Dexia Crediop, had given advice on debt restructuring and said Comune di Prato, a local authority with responsibility for the municipality of Prato in Tuscany, owed money.

Judges in England analysed the case because international financial deals were involved and agreements made were covered by English law.

Lord Justice Longmore, Lord Justice Floyd and Lord Justice Simon made a number of detailed findings after analysing the latest stage of the litigation at a Court of Appeal hearing in London in May.

But they began their 214-paragraph written ruling in unconventional style - by giving a guide to Prato's history.

"In the Palazzo Comunale in the Tuscan town of Prato, there hangs a magnificent portrait by Alessandro Allori of Francesco Datini, better known to English visitors since the publication of Iris Origo's book as the Merchant of Prato," they wrote.

"He is depicted in an overgarment of scarlet cloth, the commodity for which Prato was well-known (and indeed pre-eminent) in the Middle Ages.

"He was himself an elected Councillor of the Comune and is usually regarded as the founder of the city's prosperity.

"His statue stands outside the Palazzo holding a sheaf of bills of exchange. On the first page of each of his ledgers were the words 'In the name of God and of profit', but he left his fortune to the city rather than the church.

"The Comune di Prato is still in existence as an Italian local authority but one feels that the facts of this appeal would cause the merchant some dismay, because from 1996 onwards its finances had become under considerable pressure."