No violation of the right of the parties to be heard if the arbitral tribunal dismisses a party's untimely request to hear an additional witness

Case information
July 20, 2011
4A_162/2011
Interest to foreign readers: 
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Of some interest
Topics: 
Violation of due process (right to be heard)
Violation of public policy
Equal treatment of the parties
Original language: 
German
Published: 
30 ASA Bull 177 (2012)
Chairman: 

Counsel

Respondent: 
Introductory note: 

The case is not without interest and it involved the technical director and chief coach of the national team of Jamaica, a Mexican citizen of Serbian origin, who had been hired in late 2006, and was terminated in November 2010. The coach filed a claim with the Players’ Status Committee of FIFA and he was awarded USD 1,000,000 for wrongful termination in February 2010. The Jamaican Football Federation appealed that decision to the Court of Arbitration for Sport (CAS). A three-arbitrator Panel was constituted with Romano Subiotto as chairman, and Rui Botica Santos and Fernando Cabrera as arbitrators.

 

On February 2, 2011, the CAS partly granted the appeal of the Jamaican Football Federation and reduced the amount to be paid to the coach. A counterclaim by the coach was also rejected.

 

A civil law appeal was made to the Federal Tribunal and the following are interesting in the opinion:

 

  1. Whilst the right to be heard (Swiss parlance for due process) remains a pillar of Swiss arbitration law, it means that a party is entitled to present its arguments, to introduce witnesses, to participate in hearings, to access the record, etc. but it does not contain a legally protected right to obtain a reasoned decision (see section 2.1.2 of the opinion in this respect).

 

  1. Whilst a party is entitled to present its evidence, this applies only to the extent that submissions were made in a timely manner and made in accordance with applicable rules. There is no right to a “late witness” (see section 2.3.1 and 2.3.2 of the opinion in this respect).

 

 

  1. The principle that the parties should be treated equally does not prevent an arbitral tribunal sitting in Switzerland from refusing to hear an additional witness when the request for the testimony of that witness could and should have been made earlier in the proceedings (see section 2.3.3. of the opinion in this respect).
Translation: 

 

4A_162/20111

 

Judgment of July 20, 2011

 

First Civil Law Court

 

Federal Judge Klett (Mrs), Presiding

Federal Judge Corboz,

Federal Judge Kiss (Mrs),

Clerk of the Court: Leeman.

 

Appellant,

X.________,

Represented by Mr Philipp J. Dickenmann and Mr Reto Hunsperger,

 

v.

 

Respondents,

Jamaican Football Federation, JM-Kingston, Jamaica,

Represented by Abogado Gianpaolo Monteneri

 

Participating in the proceedings,

Fédération Internationale de Football Association (FIFA), FIFA-Strasse 20, 8044 Zurich,

Represented by Mr Christian Jenny,

 

Facts:

 

A.

A.a

X________ (the Appellant) was born in what is today Serbia. He was previously a professional football player and is presently active as football coach. He lives in Mexico City and adopted Mexican citizenship. The Jamaican Football Federation (Respondent) is the national football federation of Jamaica and as such a member of the Fédération Internationale de Football Association (FIFA; participant in the proceedings), a non-profit corporation under Swiss law with its headquarters in Zurich.

 

A.b

On December 1, 2006, the Appellant entered into an employment contract with the Respondent. He undertook there to act as technical director and chief coach of the national team of Jamaica between November 15, 2006, and November 14, 2010. A yearly salary of USD 1,000,000, namely a global amount of USD 4,000,000 for the four years of the contract, was foreseen as compensation.

 

The Appellant’s duties were described as follows at paragraph 5 of the employment contract:

 

5(1): Be responsible for and undertake the preparation, supervision and management of All National Football Teams; the assessment, supervision and upgrading of all national coaches; and such other matters necessary for the smooth and orderly development of the sport of football in Jamaica;

5(2): Devote his full time and best efforts to the performance of the terms of this Agreement. In this regard, the Technical Director & Head Coach of The Senior Team agrees not to engage in the provisions of any other services, or in any business or commercial activity without the prior written approval of the Federation;

5(3): Advance the coaching methods of football teams island-wide in accordance with the National Football Programme approved by the Federation;

5(7): Prepare and outline a plan of action for the comprehensive development of local football including all National Teams and present this to the Board of Directors of the Federation within six (6) months of the signing of this agreement.2

 

According to paragraph 9 (2) the Contract is to be terminated without further ado when “the Technical Director & Head Coach of the Senior Team breaches Clause 5 or 7 hereof or habitually neglects the duties he is required to perform under the term of this Agreement, and the Federation gives thirty (30) days written notice to the Technical Director & Head Coach of the Senior Team of its intention to terminate this Agreement upon the expiry of such notice.”3 Paragraph 9 (4) also provides that the Respondent could terminate the employment contract by giving thirty days’ notice to in the event that the national team should not be qualified for the 2010 World Championship in South Africa.

 

A.c

By letter of November 7, 2010, the Respondent terminated the contract with the Appellant and relied in this respect on paragraph 9 (2), 5 (1), 5 (3) and 5 (7) of the employment contract. It claimed that the Appellant failed to (in summary):

a) To prepare, supervise, and train the national team and other football teams with the required knowledge, care and involvement, which contributed to the poor results and therefore violated paragraph 5 (1) of the employment contract;

b) To develop a program to improve the national coaches, which would be a further violation of paragraph 5 (1);

c) To develop a plan for the improvement of the coaching methods of the football teams of Jamaica in accordance with the national football program, which violated paragraph 5 (3) of the employment Contract;

d) To present a plan of action for the comprehensive development of local football, which violated paragraph 5 (3).

 

The Respondent pointed out in its letter that it would pay the Appellant USD 62,500 as compensation for disregarding the thirty days’ notice requirement contained in the Contract, USD 330,500 for the salary due until November 15, 2007, for the first contractual year and USD 7,553 as reimbursement of expenses, namely USD 400,553 in total.

 

B.

B.a

On February 28, 2008, the Appellant filed a claim with the Players’ Status Committee of FIFA against the Respondent and demanded payment of more than USD 3,000,000 for unjustified termination and USD 1,000,000 as damages to his reputation.

 

On February 10, 2010, the FIFA Players’ Status Committee awarded the Appellant an amount of USD 1,000,000 for unjustified termination. In particular it found that the Respondent had provided no proof of the alleged contractual violations. The Players’ Status Committee furthermore found that the employment contract would have terminated as of November 19, 2008, according to paragraph 9 (4) as it turned out that the Jamaican national team did not qualify for the 2010 World Championship. Accordingly the Appellant was merely entitled to his salary up until that point in time and not until the end of the remaining three contractual years. The Players’ Status Committee rejected the claim for damages to the Appellant’s reputation.

 

B.b

B.b.a

On April 28, 2010, the Respondent appealed the decision of the FIFA Players’ Status Committee of February 10, 2010, to the Court of Arbitration for Sport (CAS). On May 10, 2010, it submitted the reasons in support of its appeal to the CAS. It submitted principally that the decision under appeal should be annulled for lack of jurisdiction of the FIFA Players’ Status Committee. Alternatively, it submitted that the decision under appeal of February 10, 2010, should be annulled, that the Appellant’s claim for damages should be rejected, and that the Appellant should be ordered to pay USD 500,000 with interest at 5%.

 

The Appellant principally submitted that the decision under appeal of the FIFA Players’ Status Committee of February 10, 2010, should be upheld. Alternatively, he submitted a counterclaim that the Respondent should be ordered to pay USD 3,000,000.

 

B.b.b

In a communication of June 30, 2010, the CAS requested the Parties make further submissions as to certain issues in dispute as to jurisdiction, as to the breach of contract and the mitigation of damages. Furthermore, the Parties were to express their views as to whether or not there were any witnesses that should be heard. The submissions were made to the CAS on July 20 and July 21, 2010. The Parties made further submissions on July 28 and 29, 2010.

 

On November 15 and 17, 2010, the Parties signed the Order of Procedure4 issued by the CAS as to the subsequent proceedings. The hearing took place on November 22, 2010, in Lausanne. Two witnesses were heard over the telephone.

 

On November 23, 2010, the CAS requested that the Respondent produce the minutes of the meetings of its Board of Directors between December 2006 and November 2007, and to express its position as to some newspaper articles and media communications.

 

On November 30, 2010, the Respondent submitted to the CAS the minutes of the Board of Directors meeting of June 9, 2007, and September 9, 2007, with an indication that they were the only minutes that it could find for the relevant period. It also stated its position with regard to the newspaper articles and press communications mentioned in the CAS letter and in addition it filed various witness statements.5

 

Pursuant to a request of the CAS, the Appellant expressed its views in a letter of December 14, 2010, as to the Respondent’s submission. He requested in his letter that a new hearing should be held, during which Y________, the Respondent’s president at the time, should be heard as a witness. The CAS rejected the request based on the procedural rules of Article R55 and R56 of the CAS-Code. It pointed out in this respect that the Appellant had neglected to call Y________ as a witness when this would still have been possible procedurally, even though he had been specifically requested by letter of June 30, 2010, to name any additional witnesses for the hearing. Furthermore, according to Article R56, the chairman of the arbitral tribunal could only allow new factual allegations or evidence after the filing of the reasons supporting the appeal or that of the answer to the appeal in exceptional circumstances; yet the Appellant had not claimed any exceptional circumstances to justify his late request for evidence.

 

B.b.c

In an arbitral award of February 2, 2011, the CAS partly granted the Respondent’s appeal against the decision of the Players’ Status Committee of February 10, 2010, (award paragraph 1) and ordered the Respondent to pay damages in the amount of USD 19,691.90 to the Appellant in addition to the amounts (USD 62,500 + USD 330,500 + USD 7,553) contained in the Respondent’s letter of November 7, 2007 (award paragraph 2). Furthermore the CAS rejected the Appellant’s counterclaim for payment of USD 3,000,000 (award paragraph 3). Finally it issued a decision as to costs (award paragraph 4 and 5) and rejected any further submissions (award paragraph 6).

 

C.

In a Civil law appeal the Appellant submits that the Federal Tribunal should annul paragraphs 1-2 and 4-6 of the CAS arbitral award of February 2, 2011, and that the dispute should be sent back to the arbitral tribunal for a new decision.

 

The Respondent and the CAS submit that the appeal should be rejected. FIFA chose not to participate actively in the proceedings.

 

Reasons:

 

1.

In the field of international arbitration a Civil law appeal is allowed under the requirements of Art. 190-192 PILA6 (SR 291) (Art. 77 (1) (a) BGG7).

 

1.1

The seat of the arbitral tribunal is in Lausanne in this case. Neither the Appellant nor the Respondent had their domicile, seat, or habitual residence in Switzerland at the decisive time. As the Parties did not rule out the provisions of chapter 12 PILA in writing, they are applicable (Art. 176 (1) and (2) PILA).

 

 

1.2

Only the grievances limitedly spelled out in Art. 190 (2) PILA are admissible (BGE 134 III 186 at 5 p. 187; 128 III 50 at 1a p. 53; 127 III 279 at 1a p. 282). According to Art. 77 (3) BGG the Federal Tribunal reviews only the grievances which are brought forward and reasoned in the appeal; this corresponds to the duty to reason contained in Art. 106 (2) BGG with regard to the violation of constitutional rights and of cantonal and intercantonal law (BGE 134 III 186 at 5 p. 187 with references). Criticism of an appellate nature is not permitted (BGE 119 II 380 at 3b p. 382).

 

1.3

The Federal Tribunal bases its judgment on the factual findings of the arbitral tribunal (Art. 105 (1) BGG). This Court may not rectify or supplement the factual findings of the arbitral tribunal, even when they are blatantly inaccurate or based on a violation of the law within the meaning of Art. 95 BGG (see Art. 77 (2) BGG, which rules out the application of Art. 97 and Art. 105 (2) BGG). However the Federal Tribunal may review the factual findings of the arbitral award under appeal when some admissible grievances within the meaning of Art. 190 (2) PILA are brought forward against these factual findings or exceptionally when new evidence is taken into consideration (BGE 133 III 139 at 5 p. 141; 129 III 727 at 5.2.2 p. 733; with references). The party that argues for an exception to the rule that the Federal Tribunal is bound by the factual findings of the arbitral tribunal and seeks to rectify or supplement the facts on that basis, that party must show, with reference to the record, that the corresponding factual allegations were already made in conformity with procedural rules in the arbitration proceedings (see BGE 115 II 484 at 2a p. 486; 111 II 471 at 1c p. 473; with references).

 

The Appellant precedes his legal argument with several pages of factual allegations, in which he presents the background of the dispute and of the proceedings from his own point of view. In several respects he departs from the factual findings of the arbitral tribunal or broadens them without claiming any substantiated exceptions from the rule that the factual findings bind this Court. Furthermore he engages in appellate criticism of the award under appeal in many respects, yet without raising any admissible grievances according to Art. 190 (2) PILA. To that extent his arguments shall not be addressed.

 

2.

The Appellant argues a violation of the right to be heard and of the principle of equal treatment of the Parties (Art. 190 (2) (d) PILA).

 

 

 

2.1

2.1.1 The Respondent argues that the right to be heard does not only encompass the duty of the arbitral tribunal to take into account the arguments of the parties and to consider them for its decision but also that they find their way in the reasons of the award and that the considerations by which the arbitral tribunal let itself be led and on which it based its award should be evident from the reasons.

 

With regard to paragraph 5 (7) of the employment contract, the arbitral tribunal reached the conclusion that the contractual provision, properly interpreted, contained an obligation to submit the plan of action to the Board of Directors of the Respondent, which could not have been fulfilled by the facts the Appellant alleged in his briefs, yet without any supporting documents. The Appellant claims that the arbitral tribunal did not take into consideration his argument that the Respondent’s Board of Directors was informed of the plans he had developed.

 

2.1.2 Art. 190 (2) (d) PILA allows an appeal only for a violation of the mandatory procedural rules according to Art. 182 (3) PILA. The arbitral tribunal must guarantee (in particular) the right of the parties to be heard. With the exception of the entitlement to reasons, this corresponds to the constitutionally protected right contained in Art. 29 (2) BV8 (BGE 130 III 35 at 5 p. 37 ff; 128 III 234 at 4b p. 243; 127 III 576 at 2c p. 578 ff). Case law derives from that in particular that the parties have a right to express their views on all facts relevant for the decision, to submit their legal arguments, to prove their factual allegations important for the decision with appropriate means proposed timely and in conformity with formal requirements, to participate in the hearings, and to access the record (BGE 130 III 35 at 5 p. 38; 127 III 576 at 2c p. 578 ff; with references).

Contrary to what the Appellant seems to assume, there is no entitlement to reasons of the award in the principle of the right to be heard within the meaning of Art. 190 (2) (d) PILA (BGE 134 III 186 at 6 p. 187 ff with references). By way of the allegedly insufficient reasons of the award under appeal he submits none of the grievances contained at Art. 190 (2) PILA (see BGE 134 III 186 at 6.1 p. 187; 127 III 576 at 2b p. 577 ff; with references). Contrary to the opinion expressed in the appeal, it is not the case that the CAS would have disregarded the argument of the alleged cognizance of the Board of Directors. On the one hand, it found factually that the Respondent had introduced evidence to the fact that the Board of Directors had been presented no plan of action, whilst the Appellant had produced no evidence to the contrary. On the other hand, it found that it could not be concluded from the Appellant’s allegations(which, incidentally, were left unproven), that he would have complied with his contractual duty to present the plan of action to the Board of Directors.

 

In doing so, the arbitral tribunal satisfied the minimum requirement arising from the principle of the right to be heard (Art. 190 (2) (d) PILA) to review the issues relevant for the decision and to address them (see BGE 133 III 235 at 5.2 p. 248). There can be no claim that judicial oversight would have made it impossible for the Appellant to present his point of view in the arbitration as to an issue relevant for the dispute (see BGE 133 III 235 at 5.2 p. 248; 127 III 576 at 2f p. 580). Rather, his arguments are aimed at criticizing the contents of the award under appeal; yet he rightly does not argue that it would be contrary to public policy (Art. 190 (2) (e) PILA).

 

2.2

2.2.1 The Appellant further argues that the arbitral tribunal disregarded his arguments concerning the real reason for termination by the Respondent, in violation of the right to be heard. This is despite the fact that he pointed out many times in the arbitral proceedings that the termination without notice which took place on November 7, 2007 was only due to the fact that four days previously the then president of the Respondent had been removed and substituted with Z. ________. The reasons relied upon by the Respondent as to the termination of the contract without notice would be mere pretexts.

 

2.2.2 The arbitral tribunal summarized the Appellant’s arguments as to the issue of the proper performance of the contract. In doing so it expressly mentioned that the Appellant claimed that he had fulfilled his contractual obligations and that the Respondent violated the employment contract to the extent that it pretended to terminate it according to paragraph 9. According to the arbitral tribunal the Appellant claimed that he had not been terminated for inadequate performance of his contractual obligations but as a consequence of the change in the presidency of the Respondent which took place on November 3, 2007 as Y________ was substituted by Z________. In view of the reasons contained in the award under appeal there can be no claim that the arbitral tribunal did not take into consideration the Appellant’s argument. The CAS took into consideration in the award the argument that the reasons for termination would have been mere pretexts. To the extent that it found a violation of paragraph 5 (7) of the employment contract by the Appellant and held that the termination was lawful, it correspondingly rejected the argument. There was no need for specific reasons in this respect (see BGE 134 III 186 at 6 p. 187 ff). The argument that the right to be heard was violated (Art. 190 (2) (d) PILA) is therefore unfounded.

 

2.3

2.3.1 The Appellant argues a violation of the principle of equal treatment of the parties and of the right to be heard (Art. 190 (2) (d) PILA) because the arbitral tribunal, according to him, gave the Respondent an opportunity to introduce further evidence as to the issue of the violation of paragraph 5 (7) of the employment Contract, whilst the Appellant would have been denied additional evidence in this respect, namely the interrogation of Y________ as a witness. The arbitral tribunal could not deny to the Respondent (subsequent designation of evidence; subsequent designation of an additional witness), that which it had just granted to the other party in the same situation. The rejection of the request for a second hearing and testimony of Y________ by the CAS would have violated the Appellant’s right to equal treatment and the entitlement to the right to be heard.

 

2.3.2 The argument of a violation of the right to be heard is unfounded. An entitlement to evidence exists only to the extent that the evidential submission took place in a timely manner and in compliance with formal requirements (BGE 119 II 386 at 1b p. 389; see also BGE 134 I 140 at 5.3 p. 148; 127 I 54 at 2b p. 56; 124 I 241 at 2 p. 242; with references). The Appellant’s submission that a new witness should be heard was late, according to the procedural provisions applicable to the arbitration. Therefore the arbitral tribunal did not violate the Appellant’s right to be heard when it relied on Article R55 and R56 of the CAS-Code to reject the request, made only in a letter dated December 14, 2010, that Y________ should be heard as a witness.

 

2.3.3 The principle of equal treatment of the parties demands that the arbitral tribunal should treat the parties equally in all procedural issues (Frank Vischer, in: Zürcher Kommentar, 2 Ed. 2004, nr 25 to Art. 182 PILA, Bernard Dutoit, Commentaire de la loi fédérale du 18 décembre 1987, 4 Ed. 2005, nr 6 to Art. 182 PILA).

 

There is no entitlement of the Appellant to a subsequent second hearing or to a witness hearing of Y________ to be deduced from that principle. Also, the Appellant does not accurately quote the CAS Procedural order of November 23, 2010, when he claims generally that the Respondent was given an opportunity to introduce subsequent evidence as to the issue of the violation of paragraph 5 (7) of the employment contract and to produce additional evidence. The CAS instead required the Respondent in the aforesaid Procedural order to produce some specific documents (namely the minutes of its Board of Directors meetings between December 2006 and November 2007) and to express a view as to certain newspaper articles and media communications. Contrary to what the Appellant seems to assume, no invitation to the Respondent is to be found there to introduce new evidence as to the issue of the violation of paragraph 5 (7) of the employment contract, or to propose new evidence by way of hearings of witnesses. A new hearing of witnesses was neither requested nor ordered. Accordingly the principle of equal treatment of the parties did not require granting the Appellant’s new submissions of evidence, in particular as to the hearing of a new witness, let alone a second hearing. The Appellant rightly does not dispute that he was able to express a view as to the Respondent’s corresponding submission. The reasons in the award under appeal as to the rejection of the request to introduce new evidence, (namely that according to Art. R55 of the CAS-Code witnesses have to be named in the answer to the appeal and that the Appellant had not requested that Y________ be heard as a witness in his answer to the appeal, nor upon the specific request of the arbitral tribunal of June 30, 2010, with regard to the hearing, and that furthermore even in his submission of December 14, 2010, he did not claim any extraordinary circumstances for a subsequent admission of evidence according to Article R56 of the CAS-Code), do not violate the mandatory procedural requirements of Art. 190 (2) (d) PILA. There is no entitlement of the Appellant to a subsequent second hearing or to the interrogation of Y________ as a witness to be deduced from the principle of equal treatment.

 

3.

The appeal proves to be unfounded and is to be rejected to the extent that the matter is capable of appeal. According to this outcome of the proceedings, the Appellant has to pay costs and to compensate the Respondent (Art. 66 (1) and Art. 68 (2) BGG). As the Respondent only requested security for costs in its answer to the appeal, it had already undergone all its costs at the time of the request, which has accordingly become moot (BGE 118 II 87 at 2 p. 88).

 

 

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 15,000 shall be borne by the Appellant.

 

3. The Appellant shall pay to the Respondent CHF 17,000 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, July 20, 2011.

 

 

 

In the name of the First Civil Law Court of the Swiss Federal Tribunal

 

 

The Presiding Judge:                                     The Clerk:

 

 

Klett (Mrs)                                                     Leeman

  • 1. Translator’s note: Quote as X._____ v. Jamaican Football Federation and FIFA, 4A_162/2011. 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: In English in the original text.
  • 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: PILA is the most commonly used English abbreviation for the Federal Statute on International Private Law of December 18, 1987, RS 291.
  • 7. Translator’s note: BGG is the German abbreviation for the Federal Statute of June 17, 2005 organizing the Federal Tribunal, RS 173 110.
  • 8. Translator’s note: BV is the German abbreviation for the Swiss Constitution.