Application to set aside rejected by the Federal Tribunal. A party considering that its right to be heard has been breached must protest immediately
Except for the fact that some of you might be interested to learn that the game of chess is actually a “sport” for arbitration purposes, the opinion is of limited interest.
The matter involved the selection of the National Federation of the European Chess Union that would host the 2013 tournaments organized by the ECU.
One of them was awarded to the Montenegro Chess Federation and the other choice was referred to the General Assembly of the ECU, pursuant to a decision taken by the ECU Board in September 2011.
A Federation whose application had been rejected appealed to the CAS and a three members Panel ( James Robert Reid, chairman with Pantelis Dedes and Hans Nater as arbitrators) rejected the appeal on March 22nd, 2012.
The award was appealed to the Federal Tribunal and the following are of some interest in the opinion:
- The Appellant argued that the right to be heard – Swiss parlance for due process – had been violated because the Panel authorized the parties to appear with their own party appointed expert – if they wanted – but did not order a forensic expertise by an expert appointed by the Arbitral tribunal. While correcting the language contained in the award as to the alleged “discretionary” nature of such an appointment, the Federal Tribunal pointed out that the Appellant was fully aware that no independent expert would be appointed and raised no objection during the proceedings, thus forfeiting its right to argue a violation of due process in a subsequent appeal (see section 3.2.2 of the opinion in this respect).
- As the decision by which the Panel advised the parties that there would be no independent expert appointed allegedly emanated – according to the Appellant at least - from the Court Office of the CAS and not from the Panel itself, the Appellant argued an allegedly irregular composition of the Arbitral Tribunal but the argument was hopeless (see section 4 of the opinion in this respect).
Judgment of September 19, 2012
First Civil Law Court
Federal Judge Klett (Mrs), Presiding
Federal Judge Corboz,
Federal Judge Kolly,
Clerk of the Court: Carruzzo
Represented by Mr. Gilles Robert-Nicoud,
European Chess Union (ECU),
Represented by Mr. Marco Del Fabro,
A.a The European Chess Union (hereafter: ECU) is an association under Swiss law based in Hünenberg in the canton of Zug. It purports in particular to manage the various chess tournaments organized in Europe and it has adopted for this purpose a set of rules entitled European Chess Union Tournaments Rules 2010 (hereafter: the Rules).
With one exception the ECU competitions take place once a year. The organization of each tournament is awarded to a national European Federation by the ECU on the basis of a tender and according to the procedures set in the Rules. In brief, upon receiving the applications, the ECU Board appoints an inspector (or two inspectors if there are more than three candidates) who must be an experienced organizer or an arbiter. The inspector visits the cities applying to organize the chess tournaments. He assesses each application pursuant to various criteria divided in seven criteria at Annex 1 of the Rules (tournament hall, hotel infrastructure, air connections, etc.). Then, during a meeting of the ECU Board, the inspector submits his report, including the grades given to each applicant for the seven categories, except two that are reserved to the Board. The organization of the tournament is then awarded to the applicant obtaining the highest grade. However, if the difference between the two or three applications with the highest grades is below a certain percentage, it behooves the General Assembly to choose one of these applications.
A.b On April 30, 2011 the ECU put out a tender with a view to organizing the 2013 tournaments.
Within the prescribed time limit Federation X.________ announced in particular the applications of A.________ for the European Youth Championship (hereafter: EYC) and that of B.________ for the European Senior Team Championship (hereafter: ESTC). Four other National Federations submitted applications for the EYC and three for the ESTC. In particular, Montenegro proposed to organize the EYC in Budva.
The ECU appointed its Tournament Director, C.________, as sole inspector. Indeed there were only three cities that still needed to be visited after the Federations of the other cities applying, including Federation X.________, renounced an inspection against the award of the highest grade to their respective applicants for the tournament hall and the catering. The inspector visited Budva in particular. He was met at the airport by D.________, Executive Director of the ECU, who led him to the sites.
On the basis of the report by inspector C.________ the ECU Board, sitting on September 13 and 14, 2011, awarded the organization of the EYC to the Montenegro Chess Federation (city of Budva). It decided to defer the choice of the city organizing the ESTC to the General Assembly as the difference between the grades obtained by three of the four candidates was not sufficient.
On October 10, 2011 Federation X.________ appealed the decision of the ECU Board to the Court of Arbitration for Sport (CAS).
In substance it submitted that the decision should be annulled and that the organization of the EYC and of the ESTC should be awarded to Federation X.________. Alternatively the Appellant asked the CAS to invite the ECU to initiate a new tender procedure for these two tournaments and subsequently to appoint the two Federations retained as organizers. In its appeal brief, Federation X.________ sought the appointment of an independent expert entrusted with assessing the applications submitted for the EYC and the ESTC according to the criteria in the Rules, with a view to determining if the assessment made by inspector C.________ was sustainable. For this purpose it submitted to the CAS the names of three professional organizers of chess tournaments who could carry out this task.
A three members Panel was constituted and the Parties were duly informed on November 14, 2011.
In a fax of December 6, 2011 a CAS Counsel communicated the following information to the Parties: “The parties are advised that having considered the Appellant's request for the appointment of an expert report and evaluation by an independent organiser, the Panel determines that no grounds have been put forward or established which justify the appointment of such an expert by the Panel. However, the parties are reminded that they are free to nominate such experts and witness they deem necessary, pursuant to the provisions of Articles R44.2, R51 and R55 of the CAS Code.”2
On December 22nd, 2011 the CAS summoned the Parties to a hearing on February 13th, 2012 and reminded them that they had to bring with them any witnesses or possible experts mentioned in their briefs.
Responding to this letter, Federation X.________ indicated the names and addresses of the four witnesses that it requested to be heard.
On January 27, 2012 the CAS issued a Procedural Order confirming at paragraph 9 the terms of its letter of December 22nd, 2011. The Parties countersigned the Procedural Order.
At the hearing on February 3rd, 2012, Federation X.________ appeared with its four witnesses but no expert. At the end of the hearing the Parties expressed their satisfaction as to the handling of the proceedings and made no remark or objection concerning the proceedings.
In an award of March 22nd, 2012 the Panel rejected the appeal to the extent that the matter was capable of appeal.
On May 14, 2012 Federation X.________ filed a Civil law appeal to the Federal Tribunal with a view to obtaining the annulment of the aforesaid award.
In its answer of June 28, 2012 the Respondent submitted that the appeal should be rejected. The CAS made the same submission in its answer of June 29, 2012.
The Parties confirmed their submissions in a second exchange of briefs.
According to Art. 54 (1) LTF3 the Federal Tribunal issues its decision in an official language4, as a rule in the language of the decision under appeal. When the decision is in another language (here English), the Federal Tribunal resorts to the official language chosen by the parties. In front of the CAS they used English. In the briefs submitted to the Federal Tribunal, they used French (the Appellant) or German (the Respondent). According to its practice the Federal Tribunal will adopt the language of the appeal and consequently issue its decision in French.
In the field of international arbitration, a Civil law appeal is available against the decisions of arbitral tribunals pursuant to the requirements of Art. 190 to 192 PILA5 (Art. 77 (1) LTF). As to the object of the appeal, the standing to appeal, the time limit to do so, the submissions made by the Appellant or the grounds of appeal invoked in the appeal brief, none of these admissibility requirements raises any problem in this case. There is accordingly no reason not to address the merits of the appeal.
In a first argument, the Appellant claims that the CAS violated its right to be heard within the meaning of Art. 190 (2) (d) PILA by refusing to implement the expert examination it had requested.
The right to be heard, as guaranteed by Art. 182 (3) and 190 (2) (d) PILA is not different in principle from that which is available in constitutional law (ATF 127 III 576 at 2c; 119 II 386 at 1b; 117 II 346 at 1a p. 347). Thus it was held in the field of arbitration that each party had the right to express its views on the facts essential for the decision, to present its legal arguments, to propose evidence on pertinent facts and to participate in the hearings of the arbitral tribunal (ATF 127 III 576 at 2c; 116 II 639 at 4c p. 643).
As to the right to adduce evidence, it must have been exercised timely and according to the applicable procedural rules (ATF 119 II 386 at 1b p. 389). The arbitral tribunal may refuse to adduce evidence without breaching the right to be heard if the evidence is unfit to base a decision on, if the fact to be proved is already established, if it is without pertinence or if the tribunal, by assessing the evidence in advance, reaches the conclusion that it is already convinced and that the evidence proposed would not change its conviction (judgment 4A_440/20106 of January 7, 2011 at 4.1).. The Federal Tribunal may not review an advanced assessment of the evidence, except from the very narrow point of view of public policy. The right to be heard does not create an entitlement to adducing evidence unfit to prove the alleged fact (judgment 4A_600/20107 of March 17, 2011 at 4.1).
The party claiming that its right to be heard was violated or raising another procedural error must invoke it immediately in the arbitral proceedings under penalty of forfeiture. Indeed it is contrary to good faith to invoke a procedural error only in the framework of an appeal against the arbitral tribunal when the error could have been signaled during the proceedings (judgment 4A_150/20128 of July 12, 2012 at 4.1).
In the light of these principles of case law and on the basis of the arguments submitted by the Respondent and by the CAS the Appellant’s argument can only be rejected.
3.2.1 The Appellant is doubtlessly right in criticizing two arguments advanced by the CAS in its answer to the appeal.
The first concerns the allegedly “discretionary” power that the Panel would have pursuant to Art. R43.3 of the Sport Arbitration Code (hereafter: the Code) to decide to appoint an expert, as opposed to the obligation it would have to appoint an expert each time a party asked it to do so (answer nr 11). It goes without saying that if the CAS could whimsically reject a request submitted timely in the proper format for the adducement of evidence and fit to prove a pertinent fact in dispute, the applicant’s right to be heard, as guaranteed by Art. 182 (3) and 190 (2) (d) PILA, would thereby be violated, even if such power were to result from the correct interpretation of the aforesaid procedural rule.
The second argument is the assimilation that the CAS appears to wish to make between a forensic expertise ordered by the CAS on the basis of Art. R44.3 of the Code – which is applicable to appeal proceedings pursuant to the reference at Art. R57 of the Code – and a party appointed expert report as provided at Art. R44.2 of the Code, applicable by way of the same reference, which gives a party the right to bring its expert(s) to the hearing (answer nr 10). Against such assimilations, the Appellant rightly points out that the rules governing the two types of expert reports are very different and moreover that the evidentiary weight of a private expert report cannot be compared with that of a forensic examination.
3.2.2 Notwithstanding the foregoing, the argument under review cannot be admitted. Indeed, if it considered that its right to be heard had been breached, the Appellant should have so stated to the Panel pendente lite9 and in particular when the Panel advised it on December 6, 2011 that it saw no reason to justify the appointment of an expert. It should have opposed the closing of the arbitral proceedings and drawn the attention of the Arbitrators on the fact that they had not ordered the forensic examination requested and that such an examination could not be substituted with the appearance of a party appointed expert at the coming hearing. Instead of that, the Appellant raised no objection and formulated no remarks whatsoever in this respect between the aforesaid dates and that of the aforesaid hearing (February 3rd, 2012). It even countersigned the January 27, 2012 Procedural Order which was silent as to the forensic investigation requested. Finally it did not formulate any reservation in this respect during the hearing of February 3rd, 2012. It is immaterial in this respect that there is no immediate appeal against an interlocutory decision by which the CAS refuses to appoint an expert, as the Appellant points out. The aforesaid case law still requires under penalty of forfeiture that the party concerned should draw the Panel’s attention to what it considers a procedural error, thus clearly showing its opposition to the step taken, in the hope that its intervention may perhaps lead the arbitrators to change their opinion and to reconsider the contested decision they previously took. The Appellant chose to wait for the outcome of the dispute to raise the grievance, claiming an alleged violation of the right to be heard only after finding out that the outcome was not in its favor, which is not admissible.
Secondly, the Appellant argues that the Arbitral tribunal was irregularly composed (Art. 190 (2) (a) PILA) and in the alternative that the award is inconsistent with procedural public policy (Art. 190 (2) (e) PILA) because the refusal to implement the forensic investigation it requested was notified by the aforesaid telecopy of December 6, 2011, which would doubtlessly emanate not from the Panel, according to the Appellant, but in all likelihood from the Court Office of the CAS.
The Appellant’s argument is merely a set of assumptions as to the author of the procedural order of December 6, 2011 and such assumption could not prevail over the text of the order which mentions “the Panel determines…”10. Moreover, assuming the Appellant tells the truth, this would not change the fact that when advised of the refusal to order the forensic investigation in dispute, no matter by whom, it did not take the necessary steps to seek a different decision from the Panel, an initiative that it should have been even more inclined to take that according to the Appellant, such a refusal could have been notified unbeknownst to the Arbitrators (see above at 3.2.2). Upholding the second argument would therefore not help the Appellant at all.
The appeal must therefore be rejected. The Appellant shall pay the judicial costs (Art. 66 (1) LTF) and compensate its opponent for the federal proceedings (Art. 68 (1) and (2) LTF).
Therefore the Federal Tribunal pronounces:
1. The appeal is rejected.
2. The judicial costs, set at CHF 5’000, shall be borne by the Appellant.
3. The Appellant shall pay to the Respondent an amount of CHF 6’000 for the federal judicial proceedings.
4. This judgment shall be notified to the Representatives of the Parties and to the Court of Arbitration for Sport (CAS).
Lausanne September 19, 2012.
In the name of the First Civil law Court of the Swiss Federal Tribunal.
The Presiding Judge: The Clerk:
Klett (Mrs.) Carruzzo
- 1. Translator’s note: Quote as Federation X._____ v. European Chess Union, 4A_274/2012. 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: In English in the original text.
- 3. Translator’s note: LTF is the French abbreviation for the Federal Statute of June 17, 2005 organizing the Federal Tribunal, RS 173.110.
- 4. Translator’s note: The official languages of Switzerland are German, French and Italian.
- 5. 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.
- 6. Translator’s note: Full English translation at http://www.praetor.ch/arbitrage/claim-of-award-ultra-petita-rejected-claim-of-violation-of-publi/
- 7. Translator’s note: Full English translation at http://www.praetor.ch/arbitrage/cas-award-allocating-fees-and-costs-in-violation-of-the-right-to/
- 8. Translator’s note: Full English translation at http://www.praetor.ch/arbitrage/federal-tribunal-reiterates-that-the-principle-of-pacta-sunt-ser/
- 9. Translator’s note: During the proceedings.
- 10. Translator’s note: In English in the original text.