According to Article 186(2) of the Swiss Private International Law Act (PILA), a plea of lack of jurisdiction must be raised prior to any defence on the merits.

Article 190(2) PILA permits a final award to be set aside on appeal for a limited number of reasons.

The dispute arose when a football club (A) was banned by the Football Federation (X) from taking part in the play-offs for the 2012 Champions League. A appealed against the ban to the Court of Arbitration for Sport (CAS) and made a request for interim measures allowing it to take part in the play-offs. The request was granted by the CAS in February 2012.

In March 2012, having lost one of the matches and therefore having been disqualified from the tournament, A withdrew its appeal, subject to a decision on the costs of the arbitral proceedings. The CAS rendered an award on costs in April 2012, ordering X to bear 40% of the costs and to pay legal fees to A. X petitioned the Swiss Supreme Court to have the award set aside, claiming (among others things) that the tribunal had wrongly accepted jurisdiction.

The Supreme Court rejected X's petition.

The court confirmed its case law, according to which an award on costs constitutes a "final award", capable of being set aside on the grounds listed in Article 190(2) PILA. However, X's petition was insufficiently substantiated. In particular, X alleged that the CAS was wrong to rule that it had jurisdiction over the dispute. Both the CAS and the Supreme Court pointed out that, according to Article 186(2) PILA and the corresponding case law, a party that fails to raise a plea of lack of jurisdiction before entering a defence on the merits is considered to have waived the right to challenge jurisdiction at a later stage. X did not challenge the jurisdiction of the CAS in a timely manner in the course of the arbitral proceedings and was, therefore, barred from requesting that the award on costs be set aside on that basis.

The decision serves as a reminder to counsel, in particular foreign counsel, that the Swiss lex arbitri is strict when it comes to the timing of a jurisdictional challenge. Irrespective of the applicable institutional rules, such a challenge must be brought at the latest at the same time as any defence on the merits. Otherwise, the respondent will risk being precluded from challenging the award on that basis.