Appeal claiming violation of public policy rejected - late submission of a brief to the Federal Tribunal (remittal to a foreign post office)
The case Federaciòn Española de Bolos ("FEB") v. Fédération Internationale des Quilleurs ("FIQ") and Federaciò Catalana de Bitllesi BowlingFederaciò Catalana de Bitllesi Bowling ("FCBB") involved an application made by FCBB to be admitted as a member of FIQ, whilst the FEB, as the Spanish Federation, was already a member of FIQ.
The Spanish Federation did not take part in the August 30, 2007 meeting of the FIQ and the invitation sent to the members did not mention the names of various applicants (besides FCBB, there were four national federations). All applicants were accepted unanimously.
On September 18, 2007, FEB asked the Presidium of FIQ to find that the decision of the General Meeting accepting FCBB as a full member was null. However, the Presidium of FIQ denied jurisdiction to annul a decision of the General Meeting, whilst pointing out that the FIQ would submit to the jurisdiction of the Court of Arbitration for Sport ("CAS").
An appeal was accordingly made to the CAS and a panel of three arbitrators (François CARRARD, Massimo COCCIA and Bernard HANOTIAU as chairman) issued an award on April 23rd, 2008, rejecting the FIQ appeal.
The Federal Tribunal was seized of the matter and it rejected the appeal.
The Opinion is not of exceptional interest, but the following is worth pointing out:
(i) As will be clear from Section 2 of the opinion, a party submitting an answer to the Federal Tribunal must do so timely. This means that before the deadline, the brief must be filed with a Swiss post office or with a consular or diplomatic representation of Switzerland. Submitting the brief to a foreign post office, albeit with a copy faxed to the Federal Tribunal, will not meet the Swiss legal requirements.
(ii) Other than this procedural question of limited interest, Section 4 of the opinion repeats the view the Federal Tribunal consistently adopted with regard to public policy. The distinction between procedural and material public policy is recalled and the Federal Tribunal reached the conclusion that the Appellant had not been able to show why the arguments brought forward against the admission of FCBB – some of which appear to have been quite serious – would also embody a violation of public policy.
The FEB decision shows once again that the Federal Tribunal is very reluctant to alleviate the requirements of procedural rules in an international context and that it will not help litigants formulate their case. It is submitted that such an approach is fully justified as doing otherwise would simply put litigators in purely “Swiss” matters at a disadvantage.
Decision of October 7, 2008
First Civil Law Court
Federal Judge CORBOZ, Presiding,
Federal Judge KLETT (Mrs),
Federal Judge KOLLY,
Clerk of the Court: CARRUZZO.
Represented by Mr Philipp DICKENMANN and Mrs Aline WEY
Represented by Mr Jean-Louis DUPONT,
Represented by Mr J.________, S.________ and T.________2
A.a X.________ is a National Sport Federation with its seat at A.________. It is a member of Y.________ as a Federation of Tenpin Bowling. Y.________ is an International Sport Federation founded in 1952. It has as its purpose, among others, to encourage the development of bowling at the world level and to support the national organisations encouraging the practice of ninepin and tenpin bowling in their respective territories and in the world. It is domiciled in B.________ (United States of America).
Z.________ is a Regional Sport Federation, having as its purpose, among others, the promotion and the practice of sport activities connected to bowling and to its different disciplines, namely ninepin and tenpin bowling. It has its seat at C.________.
A.b In November 2006, Y.________ invited its members to a biennial Congress, scheduled to take place on August 30, 2007 in D.________ (Mexico). The Agenda of the biennial Congress, set by a provision in its Statutes, provides, among other items, for the admission and eviction of members. The invitation to such a Congress never contains the list of potential members seeking to be admitted to the Federation. X.________ was duly advised of the date and time of the biennial Congress.
On August 15, 2007 Z.________ sent to the Secretary General of Y.________ a written request to be admitted as a member of that Federation. The Presidium, the managing body of Y.________, held a session at D.________ on August 28, 2007. It unanimously decided to recommend to the Congress to admit Z.________ as a member of Y.________ and admitted it as a provisional member.
The candidacy of Z.________ was submitted to the Congress of Y.________ of August 30, 2007 with the candidacies of four national federations. It was unanimously admitted. X.________ did not participate in the meeting and it was not represented.
A.c On September 18, 2007 X.________ seized the Presidium of a request purporting to obtain a finding that the decision of the Congress admitting Z.________ as a member of Y.________ was void.
In a decision of November 18, 2007 notified to the interested party on the same day, the Presidium held that it had no power to annul a decision taken by the Congress. It stated that it would submit to the jurisdiction of the Court of Arbitration for Sport (CAS) should its decision be appealed.
On November 28 and December 18, 2007, X.________ filed a statement of appeal and a brief with the CAS. It submitted that the decision by the Congress should be void because it was in violation of both the Statutes of Y.________ and its national legislation.
In its answer of January 16, 2008, Y.________ submitted that the appeal be rejected. Z.________, called into the proceedings by Y.________, did the same in a submission of February 11, 2008. The CAS, composed of three arbitrators, heard the parties at a hearing held on March 5, 2008 in Lausanne. At the end of that hearing, the parties expressly recognised that their right to be heard had been granted and that they were satisfied of the way in which they had been treated during the arbitral proceedings.
In an award of April 23, 2008, the CAS rejected the appeal. To do so, it firstly ruled out the application of the law of the country of X.________ to the dispute, be it as mandatory law or as law necessarily applicable3. Then, examining the Statutes of Y.________, it concluded that the veto right they give to a member with a view to making it possible to oppose an exemption from the principle according to which only one organisation for each state is admitted to Y.________, may be set aside once and for all by a decision of the Congress, taken by a majority of three-quarters of the votes and admitting a new member, whoever he may be. However, in this case, the candidacy of Z.________ had been unanimously admitted. Thus, a possible opposition by X.________ would have been of no avail under such conditions. Be this as it may, X.________ had not validly made such an opposition, since it had chosen not to participate to the Congress of August 30, 2007 or to be represented there. The CAS further stated why, in its view, Y.________ had complied with the letter and the spirit of the Statutes in the process leading to Z.________ being admitted as a member. It emphasised in that context that the members of Y.________ which do not belong to the Presidium are never advised of the requests for admission before the Congress and that the item on the Statutory Agenda in this respect is never supplemented by the sending of a list of potential members making such requests.
On May 23, 2008 X.________ filed a Civil Law Appeal with the Federal Tribunal. It submits that the award under appeal should be annulled.
Y.________ did not submit an answer within the time limit it had been given for that purpose and it did not act on the invitation made to elect a domicile for notification purposes in Switzerland. As to Z.________ it filed its answer on the last day of the time limit in a post office of C.________ and faxed a copy of that answer to the Federal Tribunal on the same day, whilst electing a domicile in Switzerland for notification purposes.
The CAS submitted its file and did not submit an answer.
The award under appeal is in French. The Appellant used German in its brief. According to Art. 54 (1) LTF4 and to the practice of the Federal Tribunal in this respect, the decision will be issued in French.
In a decision of the presiding judge of June 18, 2008, Z.________ was given a time limit expiring on August 19, 2008 to file its answer to the appeal. Acting pursuant to that decision, Z.________ sent its written answer to the Federal Tribunal, dated August 18, 2008, in a registered letter given on the 19th of the same month to a post office of C.________. The document was received at the Zurich International Post Centre on August 21, 2008. The Respondent also sent a copy of its answer by fax to the Federal Tribunal on August 19, 2008. Pursuant to Art. 48 (1) LTF, the briefs must be handed over on the last day of the time limit, whether to the Federal Tribunal or, to its attention, to the Swiss Post Office or to a Swiss Diplomatic or Consular representation. Except that of Liechtenstein, foreign post offices are not assimilated to a Swiss post office. Handing a brief over to such an office is therefore not tantamount to giving it to a Swiss post office (ATF 125 V 65 at 1 p. 67). In order to comply with the time limit in such a case, the letter containing the brief must arrive at the office of the Clerk of the Federal Tribunal at the latest on the last day of the time limit or it must be received by the Swiss Post Office before the time limit expires (Kathrin AMSTUTZ/Peter ARNOLD, Commentaire bâlois, Bundesgerichtsgesetz, n. 10 ad Art. 48; Yves DONZALLAS, Commentaire de la loi sur le Tribunal federal, n. 1238). Moreover, filing a brief by telefax does not make it possible to comply with the time limit (ATF 121 II 252 at 4; AMSTUTZ/ARNOLD, op. cit., n. 6 ad Art. 48; DONZALLAS, op. cit., n. 1253).
In view of these rules, the filing of the answer of Z.________ appears late. The brief may therefore not be taken into account by this Court. Indeed, the Swiss Post Office obtained possession of the letter two days after the time limit to answer had expired. As to the sending of the brief by telecopy on the last day of the time limit, it did not comply with the time limit.
3.1 In the field of international arbitration, a Civil law appeal is available against the decisions of arbitral tribunals at the conditions set forth at Art. 190 to 192 PILA5 (Art. 77 (1) LTF).
3.2 The seat of the CAS is in Lausanne. At least one of the Parties (in this case the three of them) did not have its domicile in Switzerland at the decisive time. The provisions of chapter 12 PILA are accordingly applicable (Art. 176 (1) PILA).
3.3 The Appellant is directly affected by the final award under appeal, since the award forces it to suffer a Regional Federation of the country in which it has its seat as a full member of the International Federation of the sport involved. Thus, it has a personal, present and legally protected interest to ensure that the award was not issued in violation of the guarantees arising from Art. 190 (2) PILA, which gives it standing to appeal (Art. 76 (1) LTF).
Filed within 30 days from the notification of the award under appeal (Art. 100 (1) LTF), the appeal, which fulfils the formal requirements at Art. 42 (1) LTF, is to be allowed.
There is no need to review the disputed issue as to whether or not a Civil law appeal is subject to a minimal amount in dispute being involved when its object is an international arbitral award. Should this be the case, such a requirement could not go beyond that which is applicable to the Civil law appeal directed against a decision made by a cantonal authority of last instance. Yet, according to case law, a dispute as to membership of an association, as the one at hand, is not a financial matter within the meaning of Art. 74 LTF and is accordingly not subject to the requirement of a minimal amount in dispute (Decision 5A_260/2007 of August 7, 2007, at 1 and cases quoted, in particular ATF 108 II 15 at 1a).
3.4 The appeal may be made only on one of the grounds limitatively set forth at Art. 190 (2) PILA (ATF 128 III 50 at 1a p. 53; 127 III 279 at 1a p. 282; 119 II 380 at 3c p. 383). The Federal Tribunal reviews only the grievances that have been put forward and reasoned by the Appellant (Art. 77 (3) LTF). He must accordingly state the grievances in conformity with the strict requirements arising from case law under Art. 90 (1) (b) (oj6) (see ATF 128 III 50 at 1c), which remain in force under the aegis of the new federal law of procedure.
In a single grievance, the Appellant argues that the award under appeal violates public policy within the meaning of Art. 190 (2) (e) PILA.
4.1 An award is inconsistent with public policy if it disregards the essential and broadly recognized values which, according to the opinion prevailing in Switzerland, should constitute the basis of any legal order (ATF 132 III 389 at 2.2.3). Material public policy must be distinguished from procedural public policy.
Procedural public policy guarantees to the parties the right to an independent judgment of the submissions and the facts submitted to the arbitral tribunal in a manner consistent with applicable procedural law; procedural public policy is violated when some fundamental and generally recognized principles were violated, leading to unbearable contradiction with the sentiment of justice, so that the decision appears inconsistent with the values recognized in a state ruled by law.
An award is contrary to material public policy when it violates some fundamental principles of material law to such an extent that it is no longer reconcilable with the legal order and the determining system of values. Amongst such principles are in particular contractual trust, abiding by the rules of good faith, the prohibition of the abuse of rights, the prohibition of discriminatory or confiscatory measures and the protection of incapable persons.
4.2 In this case, the Appellant totally disregards such principles, as under the disguise of an alleged violation of public policy, it merely seeks to obtain a review of the application of material law, which is not admissible (ATF 116 II 373 at 7b). Indeed, what it denounces, through arguments of a pure apellate nature and by unduly touching up the facts incidentally, is the way in which Y.________ organised the Congress during which Z.________ was admitted as a member of the International Federation, as well as the validity of the decision taken on that item in that occasion. From the arguments put forward in the legal section of the apellate brief, it appears indeed that the Appellant denies that the Congress would have been called in conformity with the Statutes of Y.________ and in compliance with its right to be heard and that it also takes issue with the interpretation by the CAS of the statutory veto right as well as another provision of the Statutes, from which the arbitrators derived the existence of an alternate way of becoming affiliated to Y.________.
One does not see how to connect such arguments to the notion of public policy germane to international arbitration. Like the process of interpretation of a contract and the consequences logically derived therefrom in law, the interpretation of the statutory provisions of a private law organisation by an arbitral tribunal is excluded from the framework of public policy and could not be reviewed by the Federal Tribunal in an appeal based on Art. 190 (2) (e) PILA. Neither does it appear that the simple fact to tolerate the coexistence of a regional federation and a national federation within an international federation violates some fundamental principles to the extent that it would no longer be reconcilable with the legal order and the determining system of values. Under such conditions, this appeal may only be rejected, assuming that the matter is capable of appeal at all.
The Appellant, which loses, will pay the judicial costs (Art. 66 (1) LTF). However, it will not have to compensate the Respondents since one of them (Y.________) did not file an answer and the other (X.________) did so outside the time limit.
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 5’000.- shall be borne by the Appellant.
3. This judgment shall be notified to the representatives of the Parties and to the Court of Arbitration for Sport.
Lausanne, October 7, 2008
In the name of the First Civil Law Division of the Swiss Federal Tribunal
The presiding Judge: The Clerk:
- 1. Translator’s note: Quote as X.________, v. Y.________, Z.________, J.________, S.________ and T.________, 4A_258/2008. The original of the decision is in French. The text is available on the website of the Federal Tribunal www.bger.ch.
- 2. Translator’s note: The Federal Tribunal took the unusual step of blanking out the name of counsel.
- 3. Translator’s note: The expression used in French is loi de police ou d’application immédiate. The translation into English seeks to reflect the French meaning. See KAUFMANN-KOHLER, STUCKI, International Arbitration in Switzerland: A handbook for Practitioners, p. 127-128.
- 4. Translator’s note: LTF is the French abbreviation for the Federal Statute of June 17, 2005 organising the Federal Tribunal, RS 173.110.
- 5. 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.
- 6. Translator’s note: OJ is the French abbreviation for the previous Statute organising Federal Courts.