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The International Olympic Committee (IOC), a Legal Entity Having Its Seat in Switzerland, Is the Organiser of the Prime Sporting

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The International Olympic Committee (IOC), a Legal Entity Having Its Seat in Switzerland, Is the Organiser of the Prime Sporting The International Olympic Committee (IOC), a legal entity having its seat in Switzerland, is the organiser of the prime sporting event in the world, ie the Summer Olympic Games that are going to be held in London 2012. At this event 12’000 athletes from around the world are going to participate. In order to be eligible, the athletes must fulfil certain sporting conditions and, in addition, enter into an “event participation contract” (hereinafter referred to as EPC) with the IOC. According thereto all Athletes participating in the Olympic Games must – inter alia – comply with the rules and regulations of the IOC, in particular with the Olympic Charter (hereinafter referred to as the OC). No admittance to the games is granted to athletes who do not sign said contract. The IOC fears that disputes might arise in the context of the Olympic Games and, therefore, contacts its legal advisor to inquire whether an arbitration agreement should be included in the EPC. (i) What would be the benefits and disadvantages of including an arbitration agreement in the present case? The legal advisor of the IOC recommends providing the following clause in the (written) EPC: “The contractual relationship between the Athlete and the IOC is submitted to the rules and regulation of the IOC, in particular the OC”. Further, the OC is amended and the following clause is inserted in the Olympic Charter: “Art. 62 All disputes arising out of or in connection with the application of these rules or the Olympic Games are finally settled by an arbitral tribunal consisting of three arbitrators. The seat of the arbitration is in Lausanne, Switzerland.” (ii) Discuss the validity of the arbitration agreement from a Swiss law perspective. (iii) Under what circumstances/ in what proceedings can an athlete seize an English (state) court in order to have the validity of the arbitration agreement examined? What standards/rules would the court apply? In addition to Art. 62, the OC is further amended by the following clause: “Art. 63 The parties hereby fully waive the action for annulment against any arbitral award issued in accordance with Art. 62.” Athlete X from Germany participates in the Olympic Summer Games. There are rumours that he used prohibited (doping) substances to enhance his performance. As a consequence the IOC strips him of his gold medal. X brings the case before the arbitral tribunal. The IOC requests the arbitral tribunal to hear a witness that – allegedly – saw X taking prohibited substances. In order to protect the personal safety of the witness the IOC requests that the identity of the witness is only disclosed to the Panel and not to X and his counsels. The arbitral tribunal accepts the request. The witness is heard via video conference. The identity is not revealed. In addition, technical protection devices make it impossible to identify the witness. Based on the testimony of the “protected witness” the arbitral tribunal concludes that X had taken prohibited substances and dismisses X’s case. 20 days after receipt of the arbitral award, X files an action for annulment with the Federal Tribunal. (iv) Discuss the admissibility of evidence by a protected witness. What are the prospects of an appeal against the award? Annex (Art. 29 Swiss Federal Constitution and Art. 6 European Convention on Human Rights) Swiss Federal Constitution: Art. 29 General procedural guarantees 1. Everyone has the right to equal and fair treatment in judicial and administrative proceedings and to have their case decided within a reasonable time. 2. Each party to a case has the right to be heard. 3. Anyone who does not have sufficient means has the right to free legal advice and assistance unless their case appears to have no prospect of success. If it is necessary in order to safeguard their rights, they also have the right to free legal representation in court. European Convention on Human Rights Art. 6 1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgement shall be pronounced publicly by the press and public may be excluded from all or part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. 2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. 3. Everyone charged with a criminal offence has the following minimum rights: (a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him; (b) to have adequate time and the facilities for the preparation of his defence; (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require; (d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; (e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court. ad (i) Advantages - since both parties (in most cases) have their place of business/domicile in different countries concluding an arbitration agreement gives them the opportunity to choose a “neutral forum”; - parties may choose arbitrators who have expert knowledge in the respective filed and who are familiar with the particularities of these kind of contracts. This is one of the substantial benefits of arbitration as a means of dispute resolution; - confidentiality is often perceived as one of the major advantages of arbitration. Arbitration is a private process between the parties and, therefore, not public. This might be particularly interesting for disputes arising in connection with sporting events in order to prevent bad publicity that could be detriment to the marketing of the sporting event; - arbitration proceedings are not subject to a rigid set of procedural rules applicable in national court proceedings. By contrast, party autonomy and procedural flexibility are guiding principles of international arbitration. This might be important in the present case, since it might well be that the parties involved have different legal backgrounds. Party autonomy enables them to agree on a hybrid set of procedural rules that harmonize civil law and common law approaches. Furthermore, the parties are free to agree on the language of the proceedings; - in case enforcement should be necessary, it is worth to mention that arbitral awards are – almost globally – enforceable under the New York Convention on Recognition and Enforcement of foreign Arbitral Awards. - arbitral awards are only subject to limited review which is not comparable to an appeal process applicable in state court proceedings. In many cases, therefore, arbitration will provide a faster dispute resolution than state court proceedings. However, this is not necessarily the case and varies from jurisdiction to jurisdiction; - arbitration enables the parties to enforce the principle of uniformity in sport, ie that all athletes are treated along the same material standards and, thus, a level playing field in sport is established. Disadvantages - the IOC should be aware of the risk that the costs of arbitral proceedings may and often are higher than those of state court litigation (depending on the arguments submitted, costs can also be listed under advantages) ; - since the very basis of an arbitral tribunal’s jurisdiction is a private agreement between the parties arbitral tribunals lack coercive power. In particular arbitral tribunals o lack the power to enforce interim measures or the arbitral award itself, o lack the power to require the attendance of witnesses under penalty o lack the power to sequestrate assets to secure the enforcement of the award; - no universal rule on the issue of res iudicata exists; - since the arbitrators are –to a certain extent – party-appointed, there may be issues of independence and impartiality; - the lack of judicial review is – commonly – not perceived as a disadvantage ad (ii) 1. the applicable standard: - Swiss law differentiates between 2 internal sources of law, ie the PILA and the CCP. Scope of application of the PILA is defined in Art. 176. According thereto o the seat of arbitration must be in Switzerland: The seat of the arbitral tribunal can be defined as the “juridical connection which binds the parties to the arbitration and the arbitrators, on the one hand, to a state court forum and a national arbitration law, on the other hand”. Designating the seat of arbitration is primarily a matter for the parties, see Art. 176 III PILA/Art. 355 CCP. o at least one of the parties at the time of the conclusion of the arbitration agreement was neither domiciled nor habitually resident in Switzerland. The problem in the case at hand is, that IOC has its seat in Switzerland. If an athlete that is domiciled in Switzerland “signs” the EPC, the PILA will not apply (but the CCP instead). So only for the great majority of the athletes (but not all of them) the PLA will be the standard against which the validity of the arbitration agreement will be measured. However, the IOC and the athletes residing/domiciled in Switzerland may agree to “opt in” for the PILA (Art. 353 III CCP). 2. substantive validity: - is governed by Art.
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