Swiss Federal Supreme Court dismisses an appeal to set aside a CAS award | Practical Law

Swiss Federal Supreme Court dismisses an appeal to set aside a CAS award | Practical Law

PD Dr. Nathalie Voser (Partner) and Dr. Petra Rihar (Associate), Schellenberg Wittmer (Zurich)

Swiss Federal Supreme Court dismisses an appeal to set aside a CAS award

Practical Law Legal Update 8-503-2049 (Approx. 3 pages)

Swiss Federal Supreme Court dismisses an appeal to set aside a CAS award

Published on 31 Aug 2010International, Switzerland
PD Dr. Nathalie Voser (Partner) and Dr. Petra Rihar (Associate), Schellenberg Wittmer (Zurich)
In a German-language decision dated 2 June 2010, published on 23 August 2010, the Swiss Federal Supreme Court dismissed an appeal to set aside an award by the Court of Arbitration for Sport (CAS).
In case 4A_320/2009, a detailed and rather standard decision, the Federal Supreme Court dismissed an appeal to set aside a CAS award. The background of the appeal was a dispute between a professional soccer player (X) and his former employer (soccer club B) over X's untimely termination of the employment contract with B which took place neither for "just cause" nor for "sporting just cause" and was thus – indisputably – unlawful. B initiated proceedings against X and X's new employer (soccer club A) at the FIFA's Dispute Resolution Chamber (Chamber). The Chamber ordered X and A to pay B EUR 6.8 million. X, A and B appealed against the Chamber's decision to the CAS. The CAS overruled the Chamber's decision in part and ordered X and A to pay B EUR 11,858,934. X and A appealed against the CAS award to the Federal Supreme Court, arguing several reasons for setting aside.
Some of the Federal Supreme Court's statements are worth mentioning:
  • Under Article 105(1) of the Federal Supreme Court Act (FSCA), the Supreme Court bases its reasoning on the facts as they were found by the arbitral tribunal in the preceding arbitration now subject to the appeal. The Supreme Court can neither correct nor complement the tribunal's substantive findings, even where they are incomplete, manifestly incorrect or are due to a violation of law (within the meaning of Article 95 FSCA). An exception to this rule exists and the Supreme Court can review the findings of fact made by an arbitral tribunal in an arbitral award, where a complainant raises complaints against these findings of fact within the meaning of Article 190(2) of the Swiss Private International Law Act (PILA). However, in order to be able to file complaints under Article 190(2) PILA against a tribunal's findings of fact and have the Supreme Court correct or complement the tribunal's findings, the complainant must prove by way of documentary evidence that the same factual allegations have already been brought before the court of lower instance, but have wrongly remained unconsidered. Accordingly, the complainant is precluded from bringing forward any new allegations before the Supreme Court even if they are intended to support a violation of Article 190(2) PILA (see on this topic case 4A_69/2009 in Legal update, Swiss Federal Supreme Court is bound by factual findings of lower courts).
  • Article 6 of the European Convention on Human Rights (ECHR) (stating that "[i]n the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing") does not apply to the arbitration proceedings. Consequently, the parties to an arbitration have no right to request that an arbitration hearing be held in public (however, in the case 4A_612/2009, the Swiss Federal Supreme Court stated that it would be "desirable" if the CAS allowed public hearings if requested by the athlete concerned – see Legal update, Swiss Federal Tribunal's reasoning in the "Pechstein" case confirms its strict approach to petitions to set aside arbitral awards).
  • The Supreme Court confirmed that an award suffering from an irresolvable inner contradiction does not violate the Swiss public policy and cannot be appealed against under Article 190(2)(e) (which provides that an award can be appealed against if it "is incompatible with Swiss public policy"). By doing so, the Supreme Court confirmed the clarifications made in its previous decisions of 2010 (see, in particular, case 4A_464/2009, where the Supreme Court clarified that when defining the notion of public policy, jurisprudence had prematurely converted the objective of attaining a minimum quality of arbitral awards into a principle constituting the foundation of every legal system according to the conceptions prevalent in Switzerland – see Legal update, Federal Tribunal confirms that contradictions in an award do not violate public policy).