In this new entry of Bratschi's blog series on sports arbitration, Marco and Mariana summarize and briefly comment on the decisions of the Swiss Federal Court (SFC) in sports arbitration published in July 2023. Five decisions relate to awards of the Court of Arbitration for Sport (CAS) (including one decision that annulled a CAS award) and one to an award of the Basketball Arbitral Tribunal (BAT):
Decision 4A_184/2023 dated 5 June 2023 - right to be heard; discrimination; human dignity; public policy
A dispute arose between a French semi-professional cyclist (Cyclist) and the International Cycling Union (UCI) regarding allegations of sexual harassment within the Cyclist’s team (Team). Upon the Cyclist’s complaint against the Team, the UCI’s Ethics Committee opened investigations. According to the applicable rules, the Cyclist was not party to the proceedings and the UCI’s Ethics Committee dismissed her requests to be granted access to the file. The UCI’s Disciplinary Committee eventually found the Team’s manager guilty of sexual harassment but refused to give the Cyclist a copy of the decision for the same reason. The Cyclist filed an appeal against the UCI’s Disciplinary Committee with the CAS. During the CAS procedure, the UCI modified its regulations, and in line with the new regulations communicated the Cyclist a three-page summary of the decision. The CAS sole arbitrator dismissed the appeal in which the athlete requested full access to the file. The Cyclist filed a set-aside application with the SFC alleging (i) the violation of her right to be heard (Article 190(2)(d) of the Swiss Act on Private International Law - PILA) and (ii) contrariety with public policy (Article 190(2)(e) PILA). The SFC dismissed the application.
First, regarding the violation of her right to be heard, the Cyclist claimed that the CAS sole arbitrator infringed the safeguards provided for under Swiss law to the victims of sexual harassment. The SFC dismissed this argument not only because the sole arbitrator had taken into considerations the arguments of the Cyclist in the arbitration, but had also implicitly dismissed them.
Second, the Cyclist claimed that the award had violated its procedural public policy rights because as a victim of sexual harassment she should have been afforded the right to participate in the disciplinary proceedings. The Cyclist further argued that the UCI Disciplinary Committee’s refusal to give her a full copy of its decision infringed her personality rights, the prohibition of discrimination and her human dignity. After recalling that the European Convention on Human Rights (ECHR) and the Swiss Constitution are not among the grounds exhaustively listed in Article 190(2) PILA and cannot, therefore, be invoked as such to annul an international award, the SFC dismissed the argument in its entirety. The SFC considered that the alleged violation of the personality rights was no serious enough to be considered contrary to public policy. The SFC further hold that the rules of the UCI were not discriminatory and that, in any event, an athlete could not necessarily rely on the prohibition of discrimination in a private law relationship with an international sports federation. Finally, the SFC ruled that it was not for it to decide whether the procedural rules adopted by the UCI were suitable to meet the legitimate need for recognition of victims of sexual violence. The SFC only had to decide whether the CAS award was contrary to public policy, which according to the SFC was not the case.
This decision confirms standing case law. In particular regarding the claim of violation of the athlete’s human rights, the SFC’s (non-)analysis is in line with its previous case law (see, e.g., regarding the prohibition of discrimination the decision of the SFC 4A_248/2019 and 4A_398/2019 of 25 August 2020, reason 9.4). Interestingly enough, this decision was published on 10 July 2023, just one day before the European Court of Human Rights (ECtHR) issued its decision in the case of «Caster Semenya» (Semenya v. Switzerland, request 10934/21, decision of 11 July 2023), in which the ECtHR condemned Switzerland ruling that the SFC breached its obligation to examine the compatibility of a CAS award with the ECHR. The ECtHR’s decision in «Semenya v. Switzerland» is not definitive yet and its practical consequences remain to be seen, in particular regarding the SFC’s strict approach not to examine the violation of human rights under Article 190(2) PILA.
Decision 4A_152/2023 dated 5 June 2023 – validity of BAT arbitration clause
A dispute arose between an American-Nigerian basketball player (Player), her agency (Agency) and her Romanian basketball agent (Agent) on one side, and a Turkish basketball club (Club) on the other side, regarding the transfer of the Player.
During the negations, the Club and the Agent agreed on the following arbitration clause:
«V.1. The parties agreed that all the legal issues within involving OR regarding this contract concluded will be tried to be solved extra judicially by their representatives.
V.2 If the non-judicial approach has not solved the legal issues, the parties can address themselves to the Turkish National Courts.
V.3. without harming the provisions of Art. V.2., the Parties have the option to Submit dispute Arising from or related to the present contract to the basketball Arbitrage Tribunal (BAT) in Geneva, Switzerland and shall be resolved in accordance with the BAT Arbitration Rules by a Single Arbitrator Appointed by the BAT President. The seat of the Arbitration shall BE Geneva, Switzerland. The Arbitration shall be governed by Chapter 12 of the Swiss Act on Private International Law, irresp. of the Parties' domicile. The language of the Arbitration shall be English. The Arbitrator shall decide the dispute ex aequo et bono. The Parties waive the right to challenge such Arbitral Award to the Swiss Supreme Court.»
In the end, the contract was not signed for lack of sufficient funds of the Club, following which the Player, the Agency and the Agent initiated arbitration proceedings against the Club before the BAT and claimed compensation for damages. The BAT upheld the Club’s objection to jurisdiction. The Player, the Agency and the Agent (Applicants) filed a set-aside application with the SFC arguing that the BAT’s sole arbitrator had incorrectly rejected jurisdiction (Article 190(2)(b) PILA). The SFC dismissed the application.
After recalling the requirements of Article 178 PILA for an arbitration agreement to be valid and how a pathological arbitration agreement must be interpreted under Swiss law, the SFC explained that the question to be solved at hand was the very existence of an arbitration agreement, i.e. whether the parties have mutually expressed their willingness to resort to arbitration in order to settle any disputes which might arise between them. In this respect, the SFC found that the BAT arbitration agreement was not pathological, but rather inexistent. The SFC recalled that the BAT sole arbitrator had concluded that the parties had lacked any intention to resort to arbitration, which is an assessment of a fact that binds the SFC. Since the Applicants had failed to raise any of the (very limited) grounds listed in Article 190(2) PILA against the BAT’s assessment of the facts, the SFC could not review them and thus upheld the award.
This decision is a good reminder of the difference between the existence and the validity of an arbitration clause. Interpretative tools and the principle of effet utile of the arbitration clause apply to pathological arbitration clauses, but cannot not be used to create an otherwise inexistent arbitration clause (see in this sense decision of the SFC 4A_564/2020 of 7 June 2021).
Decision 4A_254/2023 dated 12 June 2023 – statement of appeal to the CAS filed by e-mail out of time; excessive formalism and good faith; public policy
An US athlete (Athlete) appealed before the CAS the decision of the Disciplinary Tribunal of the International Fencing Federation (IFF) sanctioning her for anti-doping rules violations. According to the applicable rules, the deadline to file the appeal was 21 February 2023. On 20 February 2023, the Athlete’s counsel first filed the statement of appeal by e-mail. According to the Athlete’s counsel, on 22 February 2023, i.e. on the first business day following the deadline, he logged himself into the CAS’s e-filing platform – which was apparently particularly slow – to upload the statement of appeal. On 1 March 2023, the CAS communicated that the statement of appeal had been apparently filed out of time and on 2 march 2023 requested the Athlete’s counsel to bring evidence that the statement of appeal had been filed within the deadline, pointing out that the deadline to file to appeal brief was not suspended. On 3 March 2023, the Athlete filed her appeal brief. In the end, because the Athlete’s counsel was unable to show any message of the CAS’s e-filing platform indicating an informatic problem, the President of the Appeals Arbitration Division declared the statement of appeal inadmissible because it had been filed late. The Athlete filed a set-aside application before the SFC, arguing violation to public policy (Article 190(2)(e) PILA) in that the CAS had allegedly breached (i) the prohibition of excessive formalism and (ii) the principle of good faith because the CAS had allegedly given the Athlete the wrong impression that it would move forward with the arbitration by communicating that the deadline to file the appeal brief was not suspended. The SFC dismissed the application.
First, the SFC recalled that according to its long-standing case law, a violation of the prohibition of excessive formalism may be contrary to public policy only in serious cases. The SFC found that this was not the case here, pointing out that according to Article R31 of the Code of Sports-related Arbitration (CAS Code), the admissibility of a statement of appeal depends on it being successfully uploaded to the CAS’ e-filing platform. Since the counsel had failed to prove any IT problem, the CAS had not infringed the prohibition of excessive formalism.
Second, the SFC ruled that the CAS’ not suspending the deadline to file the appeal brief, could not been seen as a statement of the CAS that it intended to pursue the arbitration.
This decision confirms that using the CAS’s e-filing platform is not a simple formality, but rather a mandatory condition of admissibility of the statement of appeal. The same holds true for other formalities, such as the filing the statement of appeal by courier when not using the e-filing platform (see recent decision of the SFC 4A_580/2022 of 26 April 2023). The SFC’s decision thus confirmed previous case law, such as SFC 4A_54/2019 of 11 April 2019 and 4A_238/2018 of 12 September 2018.
Decision 4A_258/2023 dated 19 June 2023 – lack of interest to file a set-aside application before the SFC
This decision relates to a dispute between an Ecuadorian Player (Player) and the Peruvian, Chilean and Ecuadorian Football Associations. The background is the qualification phase in South America for the 2022 FIFA World Cup, during which the Ecuadorian Football National Team qualified for the final phase, to the exclusion of the Peruvian, Chilean and Colombian national teams. The Chilean Football Federation (CFF) requested the FIFA to open disciplinary proceedings against the Ecuadorian Football Federation (EFF) and the Player, alleging that the latter was in fact a Colombian citizen and therefore not eligible to play for the EFC. The Peruvian Football Federation (PFF) was invited to explain its position. In the end, the FIFA Disciplinary Committee dismissed the accusations against the EFF. The FIFA Appeal Committee confirmed this decision, whereupon the CFF and the PFF filed an appeal before the CAS. The CAS panel partially upheld the appeal, considering that the Player had no standing to be sued, ruling that the EFF had breached the FIFA Disciplinary Code by using a document displaying incorrect information on the Player and sanctioning the EFF. The Player filed a set-aside application before the SFC, alleging in essence that the CAS panel had no jurisdiction in relation to him as he was not bound by any arbitration clause. In his view, the uncertainties about the authenticity of his passport and his true nationality would de facto deprive him of the possibility to practice his profession. For these reasons, he was entitled to appeal against the contested decision. The SFC declared the application inadmissible.
The SFC recalled that based on Article 76(1) of the Federal Act on the Swiss Federal Court (FCA), which applies to the set-aside application before the SFC, a person must have an «actual and legally protected interest» in challenging an award. The interest must be «actual (or current)» and the party must have a personal interest in challenging the decision. A person has such an interest if it (i) had participated in the proceedings before the lower court or was incorrectly not given the opportunity to participate; and (ii) is particularly affected by the contested decision and has an actual interest worthy of protection in its annulment or amendment. The SFC then pointed out that an «interest worthy of protection» within the meaning of Article 76(1) SFA is given when upholding the challenge would prevent the party from suffering an economic, immaterial, material or other disadvantage as a result of the contested decision. If the interest is not obvious, the burden to prove it lies with the party who challenges the decision. The SFC then referred to para. 4 of the operative part of the award and noted that the Player was not party to the procedure before the CAS. In the cited paragraph, the CAS had hold:
«For the sake of completeness, the Panel wishes to remark that the present decision does not produce res judicata effects towards the Player as he has been excluded from this arbitration on account of his lack of standing to be sued, due to the fact that no disciplinary proceedings have ever been started by FIFA against him... Therefore, provided that the statute of limitations and all other procedural requirements are satisfied, FIFA might determine ex officio to open a disciplinary case against the Player where he would then have the right to defend himself, bring any evidence and convince the competent disciplinary bodies that the information on his Ecuadorian passport is accurate. The findings related to the Player's identity in this arbitration are incidenter tantum and do not affect the rights of the Player in a possible subsequent disciplinary proceeding before FIFA and in a possible appeal to the CAS».
In addition, because the CAS panel had found that the Player could validly play for the Ecuadorian National Team during the qualification phase, the SFC concluded that the Player had no interest in challenging the award.
Decision 4A_100/2023 dated 22 June 2023 – FIFA’s standing before the SFC; independence and impartiality of the arbitrator; duty of curiosity
An Austrian assistant coach (Coach) filed a claim with the FIFA Players’ Status Chamber (FIFA PSC) against a professional football club (Club) belonging to the Croatian Football Federation (CFF), claiming damages for unjust termination of his individual employment contract. The Club challenged the FIFA PSC’s jurisdiction, alleging that the employment contract included an arbitration clause in favour of the CFF Arbitral Tribunal. On jurisdiction, the FIFA PSC considered that it had jurisdiction to hear the matter based on Article 22(c) of the FIFA’s Regulations on Status and Transfer of Players (RSTP), as the employment contract did not provide for the exclusive jurisdiction of the CFF Arbitral Tribunal. On the merits, the FIFA PSC ordered the Club to pay the Coach around EUR 200,000 for unjust termination. The Club appealed this decision before the CAS. It appointed a Croatian lawyer as arbitrator (Arbitrator), who signed a statement of acceptance and independence, in which he disclosed no circumstances which could compromise his independence. In their answers to the appeal, the Coach and FIFA submitted that the arbitral tribunal of the FCF could not be held to be an independent and impartial tribunal and that the appeal should therefore be dismissed. Later on, the parties signed and returned the procedural order. A hearing then took place, at the outset of which the parties confirmed that they had no objection as to the composition of the CAS panel. During the hearing, however, they discussed at length the issue of the independence of the CFF Arbitral Tribunal. During a deliberation session of the CAS panel, the Arbitrator stated for the first time in the proceedings that he was also acting as arbitrator of the CFF Arbitral Tribunal. The Head of Arbitration at the CAS suggested that the arbitrator should withdraw as arbitrator from the case or at least immediately disclose this information to the parties. The Arbitrator then updated his statement of acceptance and independence by disclosing his connection to the CFF Arbitration Tribunal. The following day, the FIFA challenged the appointment of the arbitrator and requested his removal. The Arbitrator answered that his independence and impartiality were not affected by his membership to the CFF Arbitral Tribunal. In particularly, he pointed out that this information was publicly available on the CAS’s webpage and other open social platforms. He also underlined that the Coach’s counsel – who is also a member of the CFF Arbitral Tribunal – was perfectly aware of this fact and had never objected to his appointment. The ICAS in the end upheld the challenge and removed the Arbitrator. Later on, a new CAS panel with a new arbitrator issued the award on the merits, confirming the FIFA PSC’s decision considering, in particular, that the CFF Arbitral Tribunal did not offer sufficient guarantees to be considered a genuinely independent and impartial tribunal. The Club filed a set-aside application before the SFC alleging the incorrect composition of the CAS panel (Article 190(2)(a) PILA), arguing in particular that the challenge against the arbitrator had been filed late. The SFC upheld the application and set the CAS award aside.
The SFC explained that even though the FIFA, as a co-defendant, formally took part in the CAS proceedings, the FIFA played the same role – mutatis mutandis – as a court of first instance, whose decisions can be appealed before the competent court of appeal. Therefore, the FIFA, like any state court of first instance, could not be a party or a participant in the proceedings before the SFC, which is why the SFC did not ask the FIFA to file an answer to the set-aside application. The SFC then went on by recalling that pursuant to the new Article 179(6) PILA, in force since 1 January 2021, any person appointed as an arbitrator must immediately disclose the existence of facts that may raise legitimate doubts as to his or her independence or impartiality. The duty to disclose continues until the end of the arbitration proceedings, as provided e.g. in Article R33 of the CAS Code. However, the duty to disclose only exists with regard to facts for which the arbitrator has reasons to believe that they are unknown to the party who could rely on them. In this regard, case law of the SSC imposes upon the parties a duty of curiosity: a party must carry out reasonable investigations to ensure that the arbitrator is independent and impartial. Based on the principle of good faith, the party intending to challenge an arbitrator must raise any grounds for challenge as soon as it becomes aware of them. This rule applies both to the grounds for challenge which the party concerned effectively knew and to those which it could have reasonably known by applying appropriate attention. A party failing to immediately challenge the appointment forfeits the right to do so at a later stage. According to Article R34(1) of the CAS Code, the challenge must be filed within seven days after knowledge of the grounds for challenge. The SFC in the end considered that the Arbitrator had not infringed his duty of disclosure, as his connections with the CFF Arbitral Tribunal were publicly available and known to the Club’s counsel. The Arbitrator was therefore entitled to believe that a disclosure in this respect was not necessary. Furthermore, the SFC hold that FIFA had breached its duty of curiosity. Like in previous case law (see, e.g., the decisions of the SSC 4A_234/2008 of 14 August 2008 and 4A_506/2007 of 20 March 2008), the SFC held that ignoring data that are at any time accessible on the CAS webpage is inexcusable. Obviously, the FIFA had not consulted the Arbitrator's CV published on the CAS website and thus forfeited its right to challenge the Arbitrator’s appointment during the arbitration.
This decision raises two important issues.
First, it deals with the particular situation of «horizontal disputes», i.e. situations where the FIFA acts as adjudicating body in a dispute, but is not party to the dispute: its involvement is limited to ruling – through its adjudicative bodies - on a dispute involving third parties, such as for instance a football club and a player. In those situations, even though the FIFA may be a party to the appeal procedure before the CAS, this does not mean that it must (or can) necessarily be a party before the SFC. It is only the second time (see decision of the SFC 4A_560/2018 of 16 November 2018) that the SFC ruled on this issue, which is very much specific to but not entirely settled in sports arbitration.
Second, the decision is a good reminder for arbitration practitioners of the importance of the duty of curiosity under Swiss law. It is important to recall, however, that such a duty is not without limitations. In the landmark decision regarding the Sun Yang case (decision of the SSC 4A_318/2020 of 22 December 2020, later published as DSC 147 III 65), the SFC ruled that the parties cannot be expected to carry out a systematic analysis of all sources relating to a given arbitrator. Depending on the circumstances, a party may need clues alerting on the existence of a possible conflict of interest or bias before proceeding with an in-depth search. In this respect, the circumstances of the specific case will always be decisive.
Decision 4A 170/2023 dated 28 June 2023 – disciplinary proceedings for alleged sexual abuses; right to be heard; procedural and substantive public policy
Following a document on YouTube and articles on a British newspaper alleging sexual abuses on female football players by the president of a national football federation (Respondent), on 11 May 2002, the Investigatory Chamber of the FIFA Ethics Committee opened disciplinary proceedings against him regarding potential breaches of FIFA’s Code of Ethics (COE). On 25 May 2020, following the publication of an independent report issued by the National Human Rights Network (RNDDH) and public recommendations issued by Human Rights Watch (HRW) regarding alleged sexual abuses within the Respondent’s national federation, the Investigatory Chamber of FIFA provisionally suspended the Respondent from any football-related activity for a duration of 180 days and then issued its final report, contending that several allegations of sexual abuse had been made through social media well before April 2020. On 13 August 2020, the International Federation of Professional Football associations (FIFPRO) transmitted a document to the Investigatory Chamber in which it stated that it had obtained the names of 34 alleged victims of sexual abuse committed among others by the Respondent. On 14 October 2020, the FIFA Ethics Committee published its final report, concluding that the Respondent violated the COE. Some weeks later, in November 2020, a state court of the country where the athletes used to train terminated the criminal proceedings initiated against the Respondent for lack of evidence. After the investigation was closed, the Adjudicatory Chamber of the FIFA Ethics Committee found that the Respondent breached the COE, banning him for life from any football-related activity and sanctioning him with a fine of CHF 1,000,000. The Respondent filed an appeal with the CAS, which upheld the appeal and annulled the FIFA’s decision. The CAS panel considered that FIFA failed to demonstrate the existence of breaches to the COE, because the information in the documents drawn up by FIFPRO and HRW did not constitute sufficient evidence, and because the witness statements provided by FIFA during the procedure came from indirect and implausible sources. The CAS panel also pointed out to the fact that criminal proceedings against the Respondent had been abandoned. FIFA filed a set-aside application with the SFC, pleading the violation of its right to be heard (Article 190(2)(d) PILA) and of public policy (Article 190(2)(e) PILA). The SFC dismissed the application.
First, regarding its right to be heard (Article 190(2)(d) PILA), the FIFA alleged that by suggesting to hear a victim in person in Switzerland with security measures in place, instead of by videoconference distorting her voice – a modality that the CAS platform used for hearings by videoconference could not provide – the CAS panel in fact had refused to hear the victim, in that it knew that she was not able to travel to Switzerland. The SFC rejected the argument quite swiftly. It held that by simply alleging that the solution provided by the CAS videoconferencing was “rather unfortunate” («plutôt regrettable» in its French original version) and by confirming, at the end of the proceedings, that its rights to be heard had been respected, the FIFA had not raised a concrete objection, thereby forfeiting its right to do so before the SFC based on Article 182(4) PILA. For the same reason, the SFC dismissed the FIFA’s arguments that by refusing to admit in the procedures unredacted witness statements, the CAS panel purportedly breached the FIFA’s right to be heard. The SFC pointed out that the ground was in any event unfounded.
Second, as regards public policy (Article 190(2)(e) PILA), the SFC ruled that the FIFA had fallen short of proving how failing to hear protected witness by videoconference with a system of distortion of the voice would violate procedural public policy. The FIFA had also failed to prove why the fact that another football official was found guilty of sexual harassment would make the Respondent’s “acquittal” contrary to substantive public policy.
This decision is a warning to CAS practitioners and users. The SFC does not go gentle when called to decide on whether a party had duly raised procedural objections during the CAS proceedings, in compliance with the principles of procedural good faith (Article 182(4) PILA). «A party must state clearly during the arbitration whether it has any procedural objection and cannot wait until the award is rendered.» That said, this must be distinguished from the situation where, in the final award, the CAS panel fails to consider arguments and evidence submitted by a party. This may constitute a violation of the party’s right to be heard, and a panel cannot protect itself by simply including a boilerplate-clause stating that all of the parties’ arguments and evidence were given due consideration (see decision of the SSC 4A_536 of 16 March 2002, reason 4.2).