Supreme Court decision

On March 17 2011 the Swiss Supreme Court overturned a Court of Arbitration for Sport (CAS) award of September 27 2010.


National federations A, B, C, D and E, as well as F Inc, a lobbying company, had filed a request for arbitration before the CAS against X, the international federation of which A, B, C, D and E were members. The dispute involved compliance with formal rules relating to the nomination of S (the then president of X) for a new mandate as president. Mr R wanted to be elected as the new president of X, and the national federations and lobbying company supported him rather than S.

In a September 27 2010 decision, the CAS panel dismissed the relief sought by the national federations and declared F Inc's request for arbitration as non-admissible due to lack of jurisdiction. The panel also ruled on the arbitration costs, ordering that they be split between the parties, and that A, B, C, D, E and F Inc pay an indemnity of Sfr35,000 to X as a contribution to its legal costs.

X lodged an appeal with the Supreme Court, alleging a breach of its right to be heard and seeking to have the decision on the legal costs quashed. The panel had invited the parties to file comments on costs, and they in turn had requested the panel to set a specific time limit for this at the end of the hearings. X alleged that the CAS panel had made its award without setting such a time limit and without giving an opportunity to the parties to file their written comments and evidence on costs.

Supreme Court decision

The Supreme Court first stated that the CAS award (in relation to the disputed issue of legal costs) was based on Article R64.5 of the CAS Code (edition in force as of December 31 2009). This provision provides, in particular, that

"as a general rule, the Panel has discretion to grant the prevailing party a contribution towards its legal fees and other expenses incurred in connection with the proceedings and, in particular, the costs of witnesses and interpreters."

Further, the Supreme Court recalled that the scope of the right to be heard pursuant to Articles 182(3) and 190(2) lit d of the Private International Law Act does not differ from the similar right under constitutional law. The right to be heard also includes the right of the parties to produce evidence supporting their allegations. The arbitral tribunal can refuse to take evidence without breaching the right to be heard if:

  • the fact to be proven is already established;
  • the fact to be proven is not relevant; or
  • the panel proceeds with an anticipated assessment of evidence – such anticipated assessment of the evidence offered by the parties can be performed by the arbitral tribunal only to the extent that the result of the taking of the evidence offered has no influence on the outcome of the proceedings.

In the present case, the CAS panel defended its award on legal costs before the Supreme Court on the grounds that:

  • it was not mandatory for the parties to file written comments on costs and, in any event, only a contribution towards such costs had to be paid to the prevailing party pursuant to Article R 64.5 of the CAS Code; and
  • no particular procedure for the assessment of this contribution was foreseen by the CAS Code.

The Supreme Court did not follow these arguments, although they were also supported by the national federations. The Supreme Court noted that the CAS panel had somehow breached the rule of venire contra factum proprium (ie, a party may not contradict its previous statements or actions). This was because the CAS had requested the parties to file written comments on legal costs but failed to set a precise deadline for the parties to file such observations (as requested by them), and then issued its award without giving them the opportunity to be heard in this respect.

The court noted that the CAS panel had most probably no obligation to request the parties to file written observations and evidence related to costs. As a general rule, in order to comply with the right to be heard, it would have been sufficient that the parties had the chance to provide the panel with observations and evidence in this respect during the proceedings. However, the panel had explicitly requested the parties to file written observations on this topic. Thus, to issue the award disregarding this request and without warning the parties amounted to a breach of their right to be heard.

According to the Supreme Court, the fact that the applicable rule of the CAS Code provides only for a contribution to be paid to the prevailing party, and no precise procedure is provided by such set of rules, does not mean that CAS panels should overlook the concrete situation of the parties and the actual costs borne by them in relation to the proceedings when calculating such a contribution. Obiter, the court also suggested that Article R 64.5 be amended in order to provide guidance to CAS panels for the calculation of contributions for legal costs, in order to limit to some extent their discretion in this respect.

Thus, the Supreme Court upheld X's appeal and quashed the CAS award regarding the contribution for legal costs due to a breach of X's right to be heard pursuant to Article 190(2) lit d of the Private International Law Act.

For more information please contact Philipp Fischer, Marjolaine Viret or Rocco Rondi at Lenz & Staehelin by telephone (+41 58 450 7000), fax (+41 58 450 7016) or email ([email protected], [email protected] or [email protected]).