Three decisions of the Swiss Federal Tribunal on sports arbitration matters | Practical Law

Three decisions of the Swiss Federal Tribunal on sports arbitration matters | Practical Law

PD Dr. Nathalie Voser (Partner) and Philipp Meier (Associate), Schellenberg Wittmer (Zurich)

Three decisions of the Swiss Federal Tribunal on sports arbitration matters

Practical Law Legal Update 6-502-4347 (Approx. 4 pages)

Three decisions of the Swiss Federal Tribunal on sports arbitration matters

Published on 02 Jun 2010Switzerland
PD Dr. Nathalie Voser (Partner) and Philipp Meier (Associate), Schellenberg Wittmer (Zurich)
Three recent decisions of the Swiss Federal Tribunal on matters related to sports arbitration were published in May 2010. In a decision dated 22 March 2010, the Federal Tribunal rejected a petition to set aside an interim award by the Court of Arbitration for Sport (CAS) as the petitioner had failed to show a sufficient "legally protected interest". In a decision dated 12 April 2010, the Federal Tribunal dealt with the legal principles of interdiction of "reformatio in peius", non-retroactivity and "lex mitior" in the context of public policy challenges. Finally, in a decision dated 13 April 2010, the Federal Tribunal held that decisions by the International Council of Arbitration for Sport (ICAS) concerning challenges to arbitrators cannot be brought as such before the Federal Tribunal.
In the German language decision X v A and Y, 4A_566/2009 (22 March 2010), the Federal Tribunal ruled on a petition to set aside an interim award by the CAS. The background of the petition was a dispute between a professional football player (A) and his former employer, football club Y, over A's contract termination and his monetary claims against Y. In accordance with the arbitration clause in A's employment contract, the dispute was referred to the board of directors of X (the national football federation), and later appealed against before X's arbitration board. The award rendered by X's arbitration board was then appealed by A before the CAS. X objected to the CAS' jurisdiction over the matter. The CAS rendered an interim award, formally admitting X as a party to the proceedings and at the same time rejecting X's objection as to jurisdiction.
In its petition to set aside brought before the Federal Tribunal, X requested that the CAS be ordered to deny its jurisdiction. X argued that the two arbitration bodies for deciding disputes between players and clubs (namely its board of directors and its arbitration board) were sufficient. If such disputes could be continued before the CAS, further delays would result, negatively impacting football as a whole and undermining X's authority. As to its entitlement to bring such petition before the Federal Tribunal, X argued that it had been admitted as a party in the CAS proceedings and that it was of vital interest for X, being the national football federation, that disputes were speedily and finally resolved at a national level.
The Federal Tribunal refused to enter into the merits of the petition. Referring to Article 76(1)(b) of the Swiss Federal Tribunal Act, which requires petitioners to have a "legally protected interest" in the setting aside, the Federal Tribunal held that it is for the petitioner to demonstrate such interest. The Federal Tribunal considered that X was not involved in the underlying dispute between A and Y and held that it could not see how the CAS award could affect X's legal position, and that in any event X had failed to demonstrate a "legally protected interest" in the setting aside.
The "legally protected interest" required for bringing a petition to set aside before the Federal Tribunal is only rarely a real issue. This decision highlights that in the few situations in which there may be an issue as to whether a petitioner has a "legally protected interest", it is up to the petitioner to demonstrate that it has such interest.
In the French-language decision X v Y and Z, 4A_624/2009 (12 April 2010), the Federal Tribunal ruled on a petition to set aside a CAS award imposing a lifelong ban on a medium-distance runner based on anti-doping regulations. The petition had been brought by X, the athlete concerned, and was based on Article 190(2)(e) of the Swiss Private International Law Act (PILA), which permits an award to be set aside if it is incompatible with public policy. X argued that the CAS had violated the legal principle which prohibits the worsening of a sentence on appeal (reformatio in peius) and that this legal principle was part of public policy. X also argued that the CAS had also violated the legal principles of non-retroactivity and of lex mitior (according to which the law most favourable to a perpetrator applies in cases where the legal situation has changed between the time the crime is committed and the punishment of the perpetrator).
The Federal Tribunal rejected X's petition. It dismissed X's allegation that the principle forbidding a reformatio in peius had been violated and expressly left open the question whether this principle is actually part of public policy in the sense of Article 190(2)(e) PILA.
The Federal Tribunal also dismissed the athlete's allegation that the CAS had violated the principles of non-retroactivity and of lex mitior. Unlike in the case of the reformatio in peius claim, the Federal Tribunal here directly entered into the merits of the claims.
This decision is noteworthy for the fact that the Federal Tribunal dealt with the merits of the public policy challenge based on non-retroactivity and lex mitior without questioning whether these principles are actually part of the public policy in the sense of Article 190(2)(e) PILA and can thus validly be invoked for a valid public policy challenge. It appears that the Federal Tribunal implicitly presumed that this was the case. This would be remarkable, as neither of these two principles (that may be relevant in situations where sanctions are imposed) is normally mentioned as one of the very few fundamental principles falling within the notion of public policy in the sense of Article 190(2)(e) PILA.
By contrast, whether the principle forbidding a reformatio in peius is part of public policy in the sense of Article 190(2)(e) PILA was (as already mentioned) once again explicitly left open by the Federal Tribunal.
In French-language decision A v X, Y and Z, 4A_644/2009 (13 April 2010), the Federal Tribunal ruled on a petition to set aside a decision by the board of the International Council of Arbitration for Sport (ICAS). The background of the ICAS decision was an appeal brought by the professional racing cyclist A before the CAS against a verdict of the national anti-doping agency of X. The CAS panel constituted for the case included a lawyer, D, who had been nominated as arbitrator by X. Cyclist A raised a challenge against D as arbitrator before the ICAS board which was rejected. A brought a petition before the Federal Tribunal to set aside the ICAS board's decision.
The Federal Tribunal refused to enter into the merits of the petition, referring to precedents according to which a private body's decision over a challenge to an arbitrator cannot (of itself) be subject to a petition to set aside before the Federal Tribunal. In accordance with this case law, the Federal Tribunal held that this also applied to such decisions by the ICAS (or its board), being incorporated as a foundation under Swiss private law and thus being a private body.
This decision confirms the Federal Tribunal's established jurisprudence not to enter into the merits of petitions to set aside private body's decisions over challenges to arbitrators applies to decisions by the ICAS (as has previously been held in respect of such decisions by the ICC Court of Arbitration). Such decisions can only be indirectly brought to the Federal Tribunal's judicial review, namely in the context of a petition to set aside the final award and on the ground of improper constitution of the arbitral tribunal, as provided for in Article 190(2)(a) PILA.