By letter of 7 July 2008, the respondent national football association of country F (the respondent), a member of the Fédération Internationale de Football Association (FIFA), informed the German National Football Association that it had selected a player, Z, to participate in the Olympic Games in Peking in August 2008. At that time, Z was engaged by the complainant German football club (the complainant). The respondent asked the German National Football Association to order the complainant to make Z available for this event. By letter of 11 July 2008, the complainant refused that request and stated that, according to the applicable FIFA regulations, it had no duty to make Z available. By letter of 17 July 2008, the German National Football Association confirmed the complainant’s statement.

On 11 August 2008, the complainant filed a claim against the respondent with the FIFA Players' Status Committee. The complainant requested that the respondent be enjoined from engaging Z for the Olympic Games 2008, including the preparation and training for the Games. By letter of 12 August 2008, FIFA informed the complainant that it was not in a position to intervene in this matter. The complainant appealed to CAS against FIFA's letter of 12 August 2008 and requested that FIFA's decision be dismissed and that the complainant's demands submitted to FIFA be granted.

By an arbitral award dated 16 December 2008, CAS decided that, among other things, an appeal against FIFA's letter of 12 August 2008 was inadmissible. Referring to R47 of the CAS Code de l'Arbitrage en Matière de Sport, and to article 63.1 of the FIFA Statutes, CAS held that an appeal is only possible against a decision of a lower instance court. FIFA's letter of 12 August 2008 was only informative in character and did not anticipate possible decisions of the competent institutions of FIFA in this matter. Since FIFA's letter of 12 August 2008 did not affect the legal positions of the parties, it was not a "decision" against which an appeal before CAS was possible. When rendering its award of 16 December 2008, CAS based its considerations, among other things, on an unsolicited letter, submitted to it by FIFA on 4 November 2008.

In its appeal before the Federal Supreme Court, the complainant advanced several arguments to set aside the arbitral award. This legal update focuses on two of the complainant’s arguments.

First, the complainant argued that its right to be heard in an adversarial proceeding had been violated because the CAS based its considerations, inter alia, on FIFA's letter of 4 November 2008. There had been no indication that CAS would rely upon this letter "as a deciding part of the position of the lower instance". According to the complainant, by basing its award on this letter without giving the parties an opportunity to comment, CAS infringed the principle of the right to be heard. It is worth noting that the complainant did not deny the fact that FIFA's letter of 4 November 2008 was delivered to it for its information by CAS on 5 November 2008.

The Federal Supreme Court held that CAS did not violate the complainant's right to be heard in this regard. The appealed decision was issued on 16 December 2008. The complainant, therefore, had more than one month to comment on FIFA's letter of 4 November 2008. Since the complainant did not advance any explanation as to why it had not been able to comment on FIFA's letter during that period of time, its complaint that its right to be heard had been violated was unfounded.

Secondly, the complainant argued before the Federal Supreme Court that CAS' award of 16 December 2008 violated Swiss public policy because CAS' decision was not based on the law chosen by the parties according to FIFA Statutes, but on CAS case law. Hence, according to the complainant, CAS' award was based on the wrong legal system.

The Federal Supreme Court dismissed this complaint also. The complainant had admitted that the CAS, in its award, rightly held that FIFA Statutes, as well as Swiss law, were applicable to the present dispute. The complainant's allegation that the CAS decision was based on CAS case law, and therefore on the wrong legal system, was flawed. The argument focused on the (correct) application of law itself, rather than the identification of the applicable law. Such arguments, however, cannot be brought before the Swiss Supreme Court.

Although rendered in the particular context of sports arbitration, the decision is interesting from a practical point of view since it indicates that under Swiss arbitration law, the arbitral tribunal is free to base its decision on a unsolicited submission - even if it comes from a third entity which is not formally a party to the proceedings - and does not need to specifically invite the parties to comment on it for that purpose. In order for the right to be heard to be respected it is sufficient that the parties had sufficient time to comment on such submission. Thus any party must make sure that its comments on any submission on its own motion if it thinks that the arbitral tribunal could rely on it for the purpose of rendering the award.

Further, the Federal Supreme Court raised, but did not address, the question of whether an arbitral tribunal violates Swiss public policy if it bases its decision on a legal system not chosen by the parties. In its past decisions the Federal Supreme Court held that Swiss public policy is not violated where a tribunal renders an award based on a legal system different from the one chosen by the parties and the award, in result, does not deviate materially from the decision which would have been rendered had the tribunal applied the law chosen by the parties (see, for example, the decision of the Federal Supreme Court of 14 November 1990, published as 116 II 634, on p. 637). This has been supported by Swiss legal authorities.