Allegedly infra petita award - Violation of public policy and of right to be heard rejected
The case will confirm that the Court of Arbitration for Sports (CAS) is likely to remain a very significant source of Swiss jurisprudence on international arbitration for some time. The CAS is based in Lausanne, as you know, and the number of decisions it issues is important. Some are reported (see their website at www.tas-cas.org), others not , but quite a few seem to find their way to the Swiss Supreme court, including some which should perhaps not have been appealed at all.
The case involved a player participating (or not ) in the football tournament of the Olympic games in Beijing in 2008. On December 16, 2008 the CAS issued an award, essentially holding that a FIFA letter of August 12 refusing to intervene in the dispute was not capable of appeal to the CAS. In its turn the CAS award was appealed to the Federal Tribunal, perhaps imprudently. The Appellant argued (i) that the award had been issued infra petita, because the CAS would have failed to adjudicate the issue it was seized of and (ii) that a violation of due process (”right to be heard”) had taken place.
The Federal Tribunal rejected the appeal in a short and somewhat curt opinion, as you will see. Frankly, this is not a decision worth much of the reader’s time, because the appeal may have been filed with a touch of unwarranted optimism, considering the Swiss Supreme Court’s well known reticence to overturn an award on the merits unless the appellant establishes a very strong case – as opposed to issues of jurisdiction, where the review is more detailed and the Court’s reluctance to interfere less manifest.
Judgement of June 23, 2009
First Civil Law Court
Federal Judge KLETT (Mrs), Presiding,
Federal Judge CORBOZ,
Federal Judge KISS (Mrs),
Clerk of the Court: LEEMANN.
Represented by Prof. Dr. David DÜRR and Mr Daniel ZOLLINGER
Represented by Mr Christian JENNY
A.a X.________ (the Appellant) is a German association based in D.________ which belongs to the German Football Federation. Y.________ (the Respondent) is the National Football Association of F.________2 belonging to the Fédération Internationale de Football Association (FIFA).
A.b On July 7, 2008 the Respondent notified to the German Football Federation that among others, the player “Z.________” (hereafter Z.________), who played with the Appellant at the time and was younger than 23 years of age, had been selected by the national team of F.________ to participate in the Olympic Games in Beijing in August 2008. The Respondent asked the German National Association to instruct the Appellant to make the player available for that occasion. In a letter of July 11, 2008, the Appellant rejected the request and took the view that there was no obligation to free Z.________ according to the applicable FIFA-Regulation. Still on July 11, 2008, the Respondent asked again that the German Football Federation inform the Appellant of its duty to make the player available. The German Football Federation answered on July 17, 2008 and agreed with the Appellant to deny an obligation to make the player available. On the same day, the Respondent communicated the player’s flight schedule to the Appellant with a view to the gathering of the National Team of F.________ for the Olympic Games. When Z.________ did not join the training camp, the Appellant’s counsel pointed out in a letter of July 21, 2008 that this was a violation of the employment contract obligations towards the Association, which would call for damages. On July 22, 2008 Z.________ travelled from Germany to join the F.________ National Team in Beijing. On the same day, counsel for the Appellant demanded that the Respondent issue a written statement according to which the latter would commit, among other things, to refraining from any additional pressure on the player and he announced legal steps should such a statement not be available on July 23, 2008 at the latest. On July 23, 2008 FIFA Circular 1153 was issued, among other things pointing out with regard to players aged less than 23 years that they were to be made available for the Olympic Games 2008 in Beijing. On July 29, 2008 the Emergency Committee of FIFA also took a position in favour of such duty to make players available. On August 6, 2008 the Court of Arbitration for Sport (CAS) issued a decision concerning several proceedings by the Appellant and other Football Associations against FIFA, in which the CAS, among other things, held that the Appellant had no duty to release player Z.________ for the 2008 Olympic Football Tournament in Beijing. The Appellant’s offer of the same day to free the player for the Olympic Games against payment and with a guarantee of some insurance coverage remained unanswered by the Respondent.
A.c On August 11, 2008 the Appellant filed a claim against the Respondent with the FIFA Players’ Status Committee3 and essentially submitted that the Respondent was to be ordered to refrain from retaining player Z.________ for the preparatory training or for the Olympic Football Tournament and that he should be authorised to return immediately to the Appellant. Additionally compensation of EUR 50’000.- should be paid to Foundation G.________ for each day after the decision that player Z.________ would be engaged in the preparatory training or in the Olympic Football Tournament, as well as payment of EUR 26’600.- for each day after July 23, 2008 until the decision was issued. FIFA communicated to the Appellant in a letter of August 12, 2008 signed by the Head of Legal Affairs4 and by the Head of Players’ Status5 that it was not in a position to take action in this matter.
The Appellant challenged the FIFA letter of August 12, 2008 in front of the CAS on the same day and submitted that the decision should be overturned and that the request made to the FIFA should be granted. In an additional Statement of Appeal6 of August 14, 2008 the Appellant adapted its claim for payment among others, whilst principally seeking the annulment of the decision under appeal. In an award of December 16, 2008, the CAS decided that the FIFA letter of August 12, 2008 was not capable of appeal and rejected all other submissions. Referring to R47 of the CAS Sport Arbitration Code and to Art. 63.1 of the FIFA Statutes, the CAS found that an appeal was possible only against a decision. The FIFA letter of August 12, 2008 did not affect the legal position of the parties, was merely for information purposes and did not anticipate on any possible decisions of the competent organs of FIFA in this matter. Thus it was not a decision which could be appealed to the CAS.
In a Civil law appeal the Appellant submits to the Federal Tribunal that the CAS decision of December 16, 2008 should be annulled and the matter sent back to the CAS, alternatively to the FIFA Players’ Status Committee7. The Respondent and the CAS submit that the appeal should be rejected.
The decision under appeal was issued in English. The parties used German in the proceedings in front of the Federal Tribunal. According to Art. 54 BGG8 the decision is to be issued in German as an official language.
In the field of international arbitration, a Civil law appeal is possible under the conditions of Art. 190-192 PILA9 (Art. 77 (1) BGG).
2.1 The seat of the arbitral tribunal was in Lausanne. None of the parties has its seat in Switzerland. The parties did not exclude in writing the provisions of chapter 12 PILA, which are accordingly applicable (Art. 176 (1) and (2)).
2.2 Only those grievances which are limitatively spelled out in Art. 190 (2) PILA are admissible (BGE 134 III 186 E. 5 S. 187; 128 III 50 E. 1a S. 53; 127 III 279 E. 1a S. 282). According to Art. 77 (3) BGG, the Federal Tribunal reviews only the grievances which are brought forward in the appeal and reasoned; this corresponds to the obligation to reason contained at Art. 106 (2) BGG in case of violation of fundamental rights or cantonal and intercantonal law (BGE 134 III 186 E. 5 with references). As to grievances based on Art. 190 (2) (e) PILA, the inconsistency of the decision under appeal with public policy must be demonstrated as to each of them (BGE 117 II 604 E. 3 S. 606). Criticism of an apellate nature is not allowed (BGE 119 II 380 E. 3b S. 382).
2.3 The Federal Tribunal bases its judgment on the facts found by the arbitral tribunal (Art. 105 (1) BGG). It may not rectify or supplement the factual findings of the arbitral tribunal, even when these are obviously inaccurate or result from a violation of the law within the meaning of Art. 95 BGG (see Art. 77 (2) BGG ruling out the application of Art. 105 (2) and of Art. 97 BGG). However, the Federal Tribunal may review the factual findings of the award under appeal when some admissible grievances within the meaning of Art. 190 (2) PILA are brought against such factual findings or it may exceptionally consider some new facts (BGE 133 III 139 E. 5 S. 141; 129 III 727 E. 5.2.2 S. 733; with references). In order to claim an exception from the Federal Tribunal being bound to the factual findings of the lower court and to have the facts corrected or supplemented on that basis, an appellant must show with reference to the documents that the corresponding factual allegations were already made in conformity with the procedural rules in the proceedings in front of the lower court (BGE 115 II 484 E. 2a S. 486; 111 II 471 E. 1c S. 473; with references). The Appellant precedes its legal reasoning with a thorough presentation of facts in which it describes the events and the proceedings from its point of view. It deviates on many points from the factual findings of the lower court or makes them broader, without alleging any substantiated exceptions to the binding character of the factual findings according to Art. 105 (2) and Art. 97 (1) BGG. To that extent, its arguments may not be considered.
According to Art. 190 (2) (c) PILA, an international arbitral award may be appealed because the arbitral tribunal decided some issues which were not in front of it or left some submissions undecided.
3.1 The Appellant relies on the second part of that provision. It claims that if the FIFA letter of August 12, 2008 was a decision - and that was the case contrary to the CAS opinion - then there is an object to appeal and the decision of the CAS represents a violation of the prohibition to leave a submission undecided. The Appellant then explains to what extent its legal position was affected by the letter of August 12, 2008 and for which reason this would have constituted a refusal to entertain the issue. He deducts from that that there is an object to appeal in the decision under appeal because the CAS illicitly left its submission undecided.
3.2 The grievance is unfounded. The CAS interpreted the FIFA letter of August 12, 2008 to reach the conclusion that it had no legal effect but was merely informative in nature. Thus, there was no appealable decision according to R47 of the CAS Sport Arbitration Code10 and to Art. 63.1 of the FIFA Statutes, which made the matter incapable of appeal. Having denied the existence of the conditions for an appeal to the CAS, the CAS logically found that the matter was not capable of appeal and renounced an examination of the Appellant’s other submissions. The Appellant does not question that the denial of the existence of an object to appeal has such consequence; rather, it challenges the legal classification of the August 12, 2008 letter by the CAS. In doing so, it is not the failure to decide some submissions that is argued but the decision of the CAS which is questioned in itself and that is not admissible in the framework of Art. 190 (2) (c) PILA (see BGE 128 III 234 E. 4a S. 242 f.). The Appellant does not claim a violation of the jurisdictional provisions of Art. 190 (2) (b) PILA.
The Appellant further claims a violation of the right to be heard and of the principle of equality of the parties (art. 190 (2) (d) PILA).
4.1 It claims first that the denial by the CAS that there was an object to appeal would not be merely inaccurate, but would contradict “the documental evidence in such an obvious manner as to be almost tantamount to a formal denial of justice”. According to practice, such patterns may fall within the violation of the right to be heard when the tribunal inadvertently makes a finding contrary to the evidentiary documents; this must apply even more when the contradiction with the available documents takes place willingly as would be the case here. The Appellant’s grievance is not sufficiently reasoned (Art. 73 (3) BGG). Irrespective of the fact that it is not clear from its argument which findings of facts of the CAS would be contrary to the documentary evidence, (the Appellant)11 disregards that according to the case law of the Federal Tribunal, a factual finding which is obviously inaccurate or contrary to the documentary evidence is not per se sufficient to annul an international arbitral award. The Appellant should have demonstrated to what extent a judicial inadvertence made it impossible for (the Appellant12) to bring forward and prove its point of view with regard to an issue that was relevant in the case (BGE 133 III 235 E. 5.2; 127 III 576 E. 2b-f). It abstained from doing so and its argument is therefore not to be considered.
4.2 To the extent that the Appellant blames the CAS for a violation of the principle of equality between the Parties, its arguments are not based on the factual findings of the award under appeal which binds the Federal Tribunal (Art. 105 (1) BGG). Thus it cannot be deducted from the decision under appeal that the FIFA approach was “obviously a partisan protection” to the Respondent’s advantage, neither that FIFA would have decided to provide the Respondent with “massive protectory assistance by blocking the Appellant’s legal attempts”. The mere fact that the CAS shared the Respondent’s legal point of view with regard to the possibility to appeal the FIFA letter of August 12, 2008 does not constitute a violation of the principle of equal treatment of the parties (Art. 190 (2) (d) PILA). The grievance is not sufficiently reasoned, to the extent that the matter is capable of appeal in this respect.
4.3 The Appellant sees a violation of the right to be heard because the CAS based its reasons on the FIFA letter of November 4, 2008 among others, which had been given to the CAS without any corresponding invitation. Thus one could not have anticipated that the CAS would “shortly thereafter qualify that letter as a decisive part of the attitude of the lower authority and weight it accordingly”. To the extent that the lower authority would have based its decision on the aforesaid letter, without giving the parties an opportunity to express a view, this would have violated the principle of the right to be heard (Art. 190 (2) (d) PILA). The Appellant does not deny to have been given the FIFA letter of November 4, 2008 by the lower authority for information purposes on November 5, 2008. The decision under appeal was issued on December 16, 2008. The Appellant had accordingly more than a month to express its view on the aforesaid letter. It is unclear to what extent it would not have been possible for the Appellant to take a position with regard to the FIFA letter within that timeframe, in case it would have considered necessary to do so. The grievance of a violation of the right to be heard is not reasoned.
Finally, the Appellant claims a violation of public policy (Art. 190 (2) (e) PILA).
5.1 To the extent that the Appellant brings forward as a reason that the FIFA letter of November 4, 2008 would have proved “in the whole context of events” to be an attempt to “apply inappropriate pressure” on the CAS, the grievance falls into emptiness. FIFA advised the CAS in the aforesaid letter that it renounced participating in the arbitral proceedings as a party and expressed its view as to whether its letter of August 12, 2008 was capable of appeal or not. The Appellant does not sufficiently explain, whether in general or as to the letter of November 4, 2008, how inappropriate pressure would have been brought on the lower authority. A violation of public policy is out of question.
5.2 Finally, the Appellant substantiates its grievance of a violation of public policy by claiming that the CAS would not have applied the law that the parties had chosen on the basis of the FIFA Statutes but the wrong law. Irrespective of the issue as to whether or not applying an inaccurate legal order may constitute a violation of public policy at all, the Appellant’s explanation cannot be adhered to. The Appellant itself recognises that the lower authority came accurately to the conclusion that the FIFA-Regulations and additionally Swiss law were applicable to the dispute. Its grievance that the CAS would have decided whether the FIFA letter of August 12, 2008 was a decision that could be appealed or not in disregard of the applicable law (and)13 only based on its own practice and thus according to “TAS law” leads nowhere. Contrary to the allegations made in the appeal there is no indication that the CAS would have resorted to an inaccurate legal order. The Appellant’s grievance is rather an attempt at mere criticism of the way the CAS applied the law, which is not admissible in an appeal against an arbitral award. There is no indication of a violation of public policy.
The appeal is unreasoned and must be rejected to the extent that the matter is capable of appeal. In view of the outcome of the proceedings, the Appellant has to pay the costs and compensate the other Party (Art. 66 (1) and Art. 68 (2) BGG).
Therefore the Federal Tribunal pronounces:
1. The appeal is rejected to the extent that the matter is capable of appeal.
2. The judicial costs set at CHF 7’000.- shall be borne by the Appellant.
3. The Appellant shall pay to the Respondent an amount of CHF 8’000.- for the federal judicial proceedings.
4. This judgment shall be notified in writing to the Parties and to the Court of Arbitration for Sport (CAS).
Lausanne, June 23, 2009
In the name of the First Civil Law Court of the Swiss Federal Tribunal
The presiding Judge: The Clerk:
KLETT (Mrs) LEEMANN
- 1. Translator’s note: Quote as X.________ v. Y.________, 4A_62/2009. The original of the decision is in German. The text is available on the website of the Federal Tribunal www.bger.ch.
- 2. Translator’s note: Name of a country.
- 3. Translator’s note: In English in the original text.
- 4. Translator’s note: In English in the original text.
- 5. Translator’s note: In English in the original text.
- 6. Translator’s note: In English in the original text.
- 7. Translator’s note: In English in the original text.
- 8. Translator’s note: German abbreviation for the Federal Statute of June 17, 2005 organising the Federal Tribunal RS 173.110.
- 9. Translator’s note: PILA is the most frequently used English abbreviation for the Federal Statute of December 18, 1987 on Private International Law, RS 291.
- 10. Translator’s note: In French in the original text.
- 11. Translator’s note: added for clarity
- 12. Translator’s note: added for clarity
- 13. Translator’s note: added for clarity