In this entry of bratschi's blog series on sports arbitration, Marco summarizes and briefly comments on the decisions of the Swiss Federal Court (SFC) in sports arbitration published in August and September 2023. All of the decisions relate to awards of the Court of Arbitration for Sport (CAS):
Decision 4A_176/2023 of 24 July 2023 – filing of statement of appeal with the CAS beyond the 21-day time limit, good faith, Article 75 CC and substantive public policy
Facts: Due to accidents on the stands during a qualifying game, the FIFA Disciplinary Committee sanctioned a national football association (Applicant) with a fine of CHF 200,000 and the obligation to play two home matches in the qualifying matches for the FIFA World Cup without spectators. The FIFA Appeal Committee confirmed the decision on 11 November 2021. On 16 December 2021 at 20:40, the FIFA Appeal Committee sent the motivated decision my e-mail to the parties. On 4 January 2022, the Applicant sent a letter dated 3 January 2022 to the CAS, in which it expressed its «intent to lodge an appeal» and, on 7 January 2022, it filed its statement of appeal according to Article R47 of the Code of sports-related Arbitration (CAS Code). The CAS declared the appeal inadmissible because filed too late. The CAS considered that the FIFA Appeal Committee’s decision had been validly notified on 16 December 2021, that the Applicant’s declaration of intent to file an appeal could not be considered a statement of appeal proper and that the statement of appeal of 7 January 2021 had thus not been filed with the 21-day time limit of Article 57(1) of the FIFA Statutes (May 2021 edition). The Applicant filed a set-aside application alleging that the CAS’s award violated its right to be heard (Article 190(2)(d) of the Private International Law Act - PILA) in that the CAS purportedly disregarded important passages of a FIFA’s circular regarding FIFA’s Legal Portal that, according to the Applicant, supported its position. As a second ground for annulment, the Applicant pleaded that the CAS award was contrary to substantive public policy (Article 190(2)(e) PILA) because (i) the Applicant could not foresee in good faith that the CAS would not consider – purportedly against the FIFA’ Disciplinary Code – the 21-day dealine to be suspended during Christmas/New Year and (ii) also because the 21-day time limit purportedly unduly deviates from Article 75 CC, which is a mandatory provision of Swiss law providing for a 30-day time limit to challenge the decisions of an association. The SFC dismissed the set-aside application.
Decision: First, regarding the plea of violation of the rights to be heard (Article 190(2)(d) PILA), the SFC swiftly dismissed this argument as it considered that the CAS panel in fact did considered the arguments pertaining to FIFA’s circular but dismissed them. The Applicant’s arguments amounted to an appellatory criticism to the CAS award which, according to established case law of the SFC, is inadmissible. Second, concerning the alleged contrariety with public policy (Article 190(2)(e) PILA), the SFC recalled from the outset that substantive public policy does not encompass the interpretation of provisions of the statutes of a private association by an arbitral tribunal. It then ruled that the Applicant’s arguments were in fact appellatory in nature and that, in any event, the Applicant overlooked the fact that incorrect or even arbitrary application of procedural rules of a private entity is not in itself sufficient to constitute a breach of substantive public policy. As regards the alleged incompatibility of the 21-day time limit to challenge a FIFA’s decision with the mandatory 30-day time limit in Article 75 CC, the SFC considered that the latter, even if mandatory under Swiss law, does not form part of substantive public policy. Further, the non-application of Article 75 CC does not constitute a breach substantive public policy as under Swiss law the incorrect or non-application of mandatory law is not covered by public policy of Article 190(2)(e) PILA.
Commentary: This decision shows that even if sports arbitration is generally speaking more flexible than court litigation (and even of commercial or investment arbitration), parties and lawyers must be mindful of the procedural requirements at CAS. Even if in practice a statement of appeal remains a relatively succinct document, it must meet the minimal requirements provided for in Article R48 of the CAS Code, which a simple letter communicating the «intent to appeal» does not.
Decision 180/2023 of 24 July 2023 – impossibility to request before the SFC the annulment of FIFA’s decisions, substantive public policy
Facts: A dispute arose between a Swiss football club and a Spanish football coach (Applicant) regarding the termination of an employment agreement. The Applicant filed a claim with FIFA. The football club objected lack of jurisdiction, contending that the Applicant was not a «coach» within the meaning of the FIFA Regulation on the Status and Transfer of Players (RSTP). The Single Judge of the FIFA Players’ Status Chamber (FIFAPSC) asserted jurisdiction and ordered the football club to pay the Applicant around CHF 700,000.00 for outstanding salary and damages. The football club appealed to the CAS, alleging the non-arbitrability of a purely employment dispute under Swiss law and that FIFA PSC had therefore no jurisdiction. The CAS partially upheld the appeal and reduced the compensation to be paid to the Applicant. The football club filed a set-aside application with the SFC requesting the annulment of the CAS award and of the FIFA PSC’s decision for lack of jurisdiction (Article 190(2)(b) PILA). The Applicant also pleaded contrariety to public policy (Article 190(2)(e) PILA) and violation of the right to be heard (Article 190(2)(d) PILA). The SFC dismissed the application.
Decision: At the outset, the SFC ruled that, to the extent that the Applicant requested that the CAS award and the FIFA PSC’s decision – which is not an award under Swiss law – should be annulled, its prayers for relief were inadmissible. The SFC then recalled, that the SFC bases its decision on the facts established by the arbitral tribunal. «In casu», this included the CAS’s finding that the Applicant was domiciled outside Switzerland when the arbitration agreement was entered into, leading to the application of the provisions of Swiss arbitration law applicable to international and not domestic arbitration (Article 176(1) PILA), the application of which had not been excluded by the parties (Article 176(2) PILA). Regarding the purported lack of jurisdiction, the SFC first recalled that it freely reviews jurisdictional challenges according to Article 190(2)(b) PILA from a legal perspective, but that it can only reviews the factual findings of the challenged award insofar as the annulment grounds listed in Article 190(2) PILA are raised against those factual findings or, exceptionally, when new evidence is taken into account. The SFC in the end confirmed that employment disputes are perfectly arbitrable in international arbitration under Swiss law (Article 177 PILA). Further, the SFC explained that it is not possible to raise a jurisdictional objection as per Article 190(2)(b) PILA against an internal body of FIFA and that the Applicant failed to prove the alleged contrariety of the challenged CAS award with public policy (Article 190(2)(e) PILA), its arguments being in fact appellatory. Lastly, the SFC found the Applicant’s argument that the CAS award had breached its right to be heard (Article 190(2)(d) PILA) to be unfounded.
Commentary: This decision, in addition to confirming that employment disputes are perfectly arbitrable under Swiss law in international arbitration (which is undisputed under Swiss law), represents a good reminder that adjudicative procedures before FIFA prior to the CAS arbitration do not qualify as arbitration. Decisions of FIFA’s bodies are not awards under Swiss law and the SFC cannot annul them. Parties and lawyers must therefore carefully formulate the prayers for relief in a set-aside application before the SFC. And sports law practitioners must be mindful of the correct terminology when referring to procedures before FIFA’s internal bodies.