Swiss Federal Supreme Court: FIFA Dispute Resolution Is Not Genuine Arbitration
The Swiss Federal Supreme Court (the “Federal Court”) has previously drawn attention on many occasions with its decisions on jurisdictional disputes. Although there are many earlier decisions concerning the jurisdiction of the Court of Arbitration for Sport (“CAS”), this time the Federal Court addressed a new question: what does it mean when the parties have agreed in their contract directly on CAS as the arbitral forum? Do FIFA’s dispute resolution bodies, which act before CAS, have jurisdiction, and how should these bodies be characterised?
The underlying dispute before the Federal Court essentially concerned several employment contracts and their termination by the players on the grounds of unpaid salaries; however, a number of questions regarding jurisdiction to hear the dispute were raised first.
In the dispute in question, the FIFA Dispute Resolution Chamber (“DRC”) upheld the players’ claims. The club appealed the DRC decision to CAS, requesting that the decision be annulled on the grounds that the DRC lacked jurisdiction, or that the case be referred back to FIFA for a new decision.
As always, before examining the merits, the CAS Panel assessed whether CAS and the FIFA body that rendered the decision under appeal (the DRC) had jurisdiction. By an interim award, the CAS Panel partially upheld the club’s appeal, held that the FIFA DRC had jurisdiction, and set aside the FIFA decision, referring the matter back to FIFA for reconsideration. The club then applied to the Swiss courts to have the CAS award set aside, seeking a finding that the DRC lacked jurisdiction or a referral of the case back to CAS for a new decision. The basis of the club’s claim before the Swiss courts was that CAS was not an appellate body for DRC decisions but the arbitral tribunal with primary jurisdiction over the dispute.
Since the player had been employed by the club as a professional footballer and claimed unpaid salaries and compensation arising from the employment contract, the Federal Court upheld the CAS Panel’s award under Article 22(b) of the FIFA Regulations on the Status and Transfer of Players (“RSTP”). It also noted that, under Article 24(3) RSTP, decisions of the FIFA DRC may be appealed to CAS. In short, the Federal Court rejected the argument that the contract concluded between the parties excluded the jurisdiction of the DRC and designated CAS as the first-instance dispute resolution body.
More importantly, however, the Federal Court reiterated its position that FIFA’s dispute resolution bodies are not “arbitral tribunals” with genuine judicial powers, but merely internal decision-making bodies whose decisions are expressions of the will of the federations concerned.
In light of the above, it follows that an arbitration agreement (or arbitration clause) between the parties should be interpreted as excluding the jurisdiction of arbitral institutions other than CAS, not possible internal procedures such as those before the FIFA DRC.
Our Comments
When preparing contracts between clubs and athletes, and in resolving any disputes arising from them, it should be borne in mind that a clause conferring jurisdiction directly on CAS does not exclude the jurisdiction of the FIFA DRC. Considering also that the Agents Chamber, envisaged by FIFA as the dispute resolution body for disputes involving agents, is expected to be established in the coming period, we see that it will no longer be possible to resolve disputes arising from sports contracts in a single stage. Although we regard the two-stage process as a positive development in terms of legal certainty and reviewability, the lengthening of proceedings and the increased difficulty of achieving the expected outcome raise certain concerns from the perspective of fair trial and effective justice.
For the full decision: https://www.swissarbitrationdecisions.com/atf-4a-492-2016