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Arbitration in Switzerland the Practitioner’S Guide

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Arbitration in Switzerland the Practitioner’S Guide Arbitration in Switzerland The Practitioner’s Guide Dr. Manuel Arroyo, Attorney-at-Law, LL.M. Published by: Kluwer Law International PO Box 316 2400 AH Alphen aan den Rijn The Netherlands Website: www.kluwerlaw.com Sold and distributed in North, Central and South America by: Aspen Publishers, Inc. 7201 McKinney Circle Frederick, MD 21704 United States of America Email: [email protected] Sold and distributed in all other countries by: Turpin Distribution Services Ltd. Stratton Business Park Pegasus Drive Biggleswade Bedfordshire SG18 8TQ United Kingdom Email: [email protected] Printed on acid-free paper. ISBN 978-90-411-3377-9 © 2013 Kluwer Law International BV, The Netherlands All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, photocopying, recording or otherwise, without prior written permission of the publishers. Permission to use this content must be obtained from the copyright owner. Please apply to: Permissions Department, Wolters Kluwer Legal, 76 Ninth Avenue, Seventh Floor, New York, NY 10011-5201, United States of America. E-mail: [email protected]. Printed and bound by CPI Group (UK) Ltd., Croydon, CR0 4YY Chapter 5 Sports Arbitration under the CAS Rules 936 Arbitration in Switzerland – The Practitioner’s Guide Article R37: Provisional and Conservatory Measures I. Purpose of the Provision 1 In sports arbitration, even the most expedited procedures may not always keep pace with the tight sched- ule of competitions, exposing parties to uncertainty in the interim before a final award. Art. R37 enables the CAS to order the provisional measures that may be necessary to temporarily protect the parties’ rights or regulate the situation between them pending the outcome of the proceedings. 2 This provision was amended significantly both in 2010 and 2013, which is in and of itself an indication that its application raises significant issues. Art. R37 principally deals with jurisdictional issues (II.). It is silent with respect to the types of provisional measures the CAS may order (III.) but now specifies the substantive and procedural requirements that must be met for such preliminary relief to be granted (IV. and V.). The other issues that should be addressed briefly in connection with interim relief orders made by the CAS are the handling of the costs related to these orders, whether they are subject to appeal and the modalities of their enforcement (VI.). II. Jurisdiction – Authority to Order Provisional Measures A. The Legal Basis for CAS Jurisdiction 3 Under Swiss law, both Art. 183(1) PILS (applying to international arbitrations) and Art. 374(1) ZPO (applying to domestic arbitrations) recognize arbitral jurisdiction to order provisional measures, unless the parties provide otherwise. Art. R37 confirms thatCAS arbitrators may order provisional and conserva- tory measures. It also provides that such measures can be ordered by the arbitral institution pending the constitution of the panel (B.) and that in some instances the parties are deemed to have waived their right to request such measures from the state courts (C.). B. Provisional Measures Prior to the Constitution of the Panel 4 Article 183(1) PILS provides (as does Art. 374(1) ZPO) that the “arbitral tribunal may […] order provi- sional [or conservatory] measures”, which in turn can be taken to imply that until the moment the arbitral tribunal is constituted, jurisdiction to issue such orders lies exclusively with the state courts.1 For its part, Art. R37 (third paragraph) of the CAS Code provides for “CAS jurisdiction” to order provisional measures even before the constitution of the panel as it grants the authority to order such measures to “the President of the relevant [CAS] Division” until the file is transferred to the panel. While under the previous versions of the Code provisional measures could only be requested from the filing of the Request for arbitration (Art. R38) or the Statement of Appeal (Art. R48), the new wording of Art. R37 (first paragraph) adopted in 2013 allows for the filing of a request for provisional measuresimmediately after the notification of a final decision by a sports federation, even before the filing of a formal appeal with the CAS, the only require- ment being the exhaustion of “all internal legal remedies provided for in the rules of the federation or sports-body concerned”. 5 Although the President of the relevant CAS division is clearly not an “arbitral tribunal” within the mean- ing of Art. 183(1) PILS and Art. 374(1) ZPO, it is generally accepted that the parties are free to confer such power on the arbitral institution. The same principle underlies the adoption of provisions such as Art. 29 (2012) ICC Arbitration Rules, establishing the so-called “Emergency Arbitrator” procedure.2 It is submitted that the President of the relevant CAS Division can be considered sufficiently independent from the parties to order provisional measures. However, should the case involve the IOC or an issue in which 1 See Boog, above commentary on Art. 183 PILS (Chapter 2), paras. 27–28. 2 For a commentary on this provision, cf. Boog, Chapter 4 above, Art. 29 ICC Rules. Article R37 CAS Code – Rigozzi/Hasler 937 the IOC has an interest, the President of the Appeals Division (who currently happens to be an IOC Vice-President) should step down and ask his deputy to decide the case.3 An important question raised by Art. R37 is whether a party can request interim relief from the panel after a 6 request to that effect was dismissed by the Division President. The chance to get a “second bite at the apple” is relevant, especially in sports disputes, since a decision to dismiss a request for provisional measures may in fact result in the disposal of the entire dispute.4 CAS panels have been very reluctant to hear applica- tions that had already been dismissed by the Division President, unless the applicant could show that there had been new developments since the decision of the Division President dismissing the request5 or if important facts which existed at the time of the decision were unknown to the applicant.6 Absent such new circumstances, CAS panels tend to consider that hearing the same application again would effectively turn the panel into an appeal body reviewing the decisions of the Division President. It is submitted that since decisions on provisional measures are mere procedural orders, this approach is too rigid. If, for instance, the application was originally dismissed on the ground that the applicant’s interests were found not to outweigh those of the other parties involved, and the panel were to disagree with such an assessment of the balance of interests, there would be no reason to prevent the panel from ordering the provisional measures sought by the applicant. The panel should in any event remain free to lift any provisional measures ordered by the Division President if it subsequently finds that the relevant prerequisites were not met or are no longer satisfied. After all, the panel will be in a much better position to assess the chances of success of the claim on the merits. More generally, a party could also argue that the reference to the “arbitral tribunal” in Art. 183 PILS and Art. 374 ZPO grants a statutory right to have an application for provisional measures heard by the panel itself. C. Waiver of the Concurrent Jurisdiction of State Courts in Appeals Proceedings It is unanimously accepted that under Art. 183 PILS (and Art. 374 ZPO) arbitral tribunals and state 7 courts have concurrent jurisdiction to grant interim measures. According to Art. R37 (third paragraph), in agreeing to submit to arbitration under the CAS Code the parties expressly waive their rights to request any such measures from state authorities or tribunals. Originally, this waiver was limited to appeals proceedings, but it has now been explicitly extended to ordinary arbitration proceedings as well. The scope of the waiver has also been extended with respect to appeals proceedings themselves, since the CAS now has jurisdiction to hear requests for provisional measures as from the notification of the decision under ap- peal. This change was meant to prevent parties fromcircumventing the waiver by seizing the state courts before the expiry of the time limit for appeal and then relying on the perpetuatio fori principle.7 Is such a waiver of the parties’ right of access to the state courts valid and enforceable? In other words, can a 8 party challenge the jurisdiction of the state courts relying on Art. R37? The short answer to this question is yes, as it is generally accepted that, at least in international arbitration, the parties can validly agree to exclude the jurisdiction of state courts even for provisional measures. Commentators consider that, to be valid, such a waiver must be “explicit and specific”.8 Art. R37 (third paragraph) is clearly both explicit and specific. As far as CAS ordinary proceedings are concerned, the waiver does not appear to be problematic. The issue is morecomplicated with respect to CAS appeals proceedings as the waiver 3 It goes without saying that it would be preferable if the President of the Appeals Division was a person having no particular links with the sports-governing bodies. 4 Rigozzi, Provisional Measures, p. 220. For example, the Italian Cycling Federation dropped arbitration proceedings against the Italian rider Roberto Menegotto after the CASprovisionally lifted his suspension due to manifest proce- dural irregularities (CAS 97/169, Menegotto v. FIC, Order of 15 May 1997, CAS Digest I, p. 539). 5 CAS 2005/A/916, AS Roma v. FIFA, Order of 23 August 2005, p. 3, para. 4. 6 CAS 2005/A/916, AS Roma v.
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