Article 190(2)(d) of the Swiss Federal Statute on Private International Law (PILA) permits an arbitral award to be set aside where "the principle of equal treatment of the parties or the right of the parties to be heard was violated."

Article 123(2) of the Swiss Federal Statute on the Federal Tribunal (FSFT) permits a petition for revision (that is, revocation), when "the applicant has subsequent knowledge of important facts or discovers decisive evidence that it was not able to invoke in the arbitration, excluding facts and evidence that only came into existence after the decision."

On 15 November 2007, company X entered into an employment contract with cycling professional Y. On 23 July 2008, X terminated the contract relying on a medical report indicating that Y had used the drug EPO. On 1 September 2008, Y filed a Request for Arbitration with the Court of Arbitration for Sport (CAS), claiming breach of contract. On 31 May 2009, a new technical directive on EPO (the Directive) adopted by the World Anti-Doping Agency entered into force. Under the Directive, the fact of Y's bone marrow stimulation caused by administering exogenous EPO should have been deemed established. The claimant faxed a copy of the Directive to the CAS on 15 June 2009. Earlier that day, the CAS issued an award (the Award) in Y's favour . The CAS concluded that X had terminated the employment contract based on a mere suspicion and that it had failed to follow the dispute resolution procedure in the contract.

X filed a petition for setting aside under Article 190(2)(d) PILA, arguing that its right to be heard had been violated as the CAS had failed to take into account the Directive. It also filed a petition for revision under Article 123(2) FSFT, on the ground that the Directive constituted a "new fact" within the meaning of that Article.

The Swiss Federal Tribunal rejected both of X's petitions for setting aside and revision.

Order of priority: The Federal Tribunal decided that the petition for setting aside would be considered first.

Waiver of application to set aside: The Federal Tribunal rejected Y's argument that the parties had agreed to waive applications to set aside, finding that the provision in the arbitration clause that the parties would "in good faith and faithfully" submit to the Award did not satisfy the conditions for waiver specified in Article 192(1) PILA or the relevant case law (see also BGE 134 III 260). Having reached that conclusion, the Federal Tribunal did not have to decide whether an effective waiver of an application to set aside would operate as a bar to an application for revision.

Right to be heard: The Federal Tribunal confirmed that the right to be heard contained in Articles 182(3) and 190(2)(d) PILA guarantees each party to an arbitration the right to be heard on the facts essential to the decision, to present its legal arguments, to present evidence and to take part in hearings. The Federal Tribunal also emphasised that the right to be heard is violated if the arbitral tribunal does not take into consideration the parties' arguments and evidence that are important to the decision. The complaining party must establish, first, that the arbitral tribunal failed to examine certain factual, evidentiary, or legal elements, and second, that these elements would have influenced the outcome of the proceedings.

Here, X had sent the Directive to the CAS after it had rendered its Award. As such, the Federal Tribunal found that it could not argue that the CAS had failed to take it into account. Moreover, at the end of the CAS hearing, each party had declared that its right to be heard had been respected and that it had no objection to the manner in which the hearing had occurred.

Revision: Revision under Article 123(2) FSFT was only available where the applicant discovered facts that existed during the arbitration, were unknown to the claimant and were not, and could not with reasonable diligence have been, discovered until after the proceeding. Such facts must be capable of affecting the findings of fact in the underlying award and of leading to a different decision based on the proper legal assessment of those facts.

Here, the conditions for revision were not met. X clearly had knowledge of the Directive (the alleged "new fact") before the Award was made on 15 June 2009. For example, X had mentioned the Directive at the hearing of 29 April 2009 and had indicated that the Directive would enter into force soon. The Federal Tribunal found that X could have introduced the "new fact" during the hearing of 29 April 2009. It would have been prudent for X to ask CAS to take the Directive into account, even if that meant requesting a stay of the proceedings until the Directive entered into force. Further, X could have requested CAS to take into account the new fact under Article 44(3) of the Statutes of the Bodies Working for the Settlement of Sports-related Disputes. Instead, it had waited to find out the outcome of Y's claim.

Even if this ground for revision had been established, the Award would stand, as the Federal Tribunal upheld CAS' finding that X had failed to follow the dispute resolution procedure in the contract.

These two decisions highlight the importance of raising new facts or evidence as early as possible in the arbitral proceedings. Here, X had known about the Directive but had failed to raise it with the CAS in time, defeating both its claim that its right to be heard had been violated and its "newly discovered evidence" claim. Note that the need for prompt action, as the Federal Tribunal suggested, may mean requesting a stay of the proceedings pending the outcome of important factual or legal developments.

It is unclear why X did not send the Directive to the CAS until the evening of 15 June 2009, a few hours after the CAS had rendered its award). On its face, it appears as though by pointing to a subsidiary basis of decision (X's failure to observe the dispute resolution procedure in the contract), the Federal Tribunal sought to lessen the impact of both the failure to transmit the Directive in a timely fashion, as well as X's "lack of diligence" in bringing the Directive to CAS's attention in the proceeding.

4A_352/2009 and 4A_368/2009.