In a German language decision, dated 29 January 2018, the Swiss Supreme Court dismissed a challenge to an award, rejecting arguments of ultra petita (beyond the matters submitted to the tribunal) and violation of public policy.
In a dispute between a football club and its former coach, the latter requested salary compensation for the full contract term and a contractual penalty due to a breach of contract. The Court of Arbitration for Sport (CAS) found in favor of the coach, additionally ordering the club to cover all fees, taxes and contributions in relation to the awarded amounts.
The Swiss Supreme Court found that the CAS award was not ultra petita because the coach claimed "net" amounts, which, by implicit reference to the underlying contract (evident from the reasoning in the claimant's submissions) and its definition of "net", included a claim for the imposition on the club of all fees, taxes and contributions. Further, the court held that the CAS tribunal's ruling on the order of partial payments was not ultra petita, as the amount of interest awarded did not go beyond the 5% claimed and the total awarded amount was, in any event, lower than the claimed amount.
An interesting aspect is whether public policy sets a limit on the amount of a penalty. While the possibility of reducing penalties is a mandatory part of Swiss domestic law, the Supreme Court confirmed its case law that it is not part of international public policy and thus, it did not review the amount of the penalty granted. Therefore, the CAS tribunal did not violate public policy when awarding a contractual penalty 18 times higher than the coach's average monthly salary. The court also held, however, that such penalty could violate public policy if it were to result in excessive restrictions on the debtor's economic freedom.
Case: Decision 4A_508/2017