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12 November 2020
In a recently published decision, the Supreme Court dismissed a challenge against an arbitral award issued by the Court of Arbitration for Sport (CAS) on preliminary objections. The Supreme Court held, among other things, that Article 6(1) of the European Convention on Human Rights (ECHR) is not a separate ground to challenge arbitral awards rendered in Switzerland, and that a violation of such article does not necessarily amount to a violation of procedural public policy.(1)
The dispute arose out of a broad match-fixing scheme of the 2010 to 2011 Turkish Süper Lig games involving Club W. Other entities involved in the dispute were Club V, the Turkish Football Federation (TFF) and FIFA.
Between 2012 and 2017 Club V filed several applications before different bodies arguing, among other things, that it should be awarded the 2010 to 2011 championship instead of Club W. Club V's applications were unsuccessful (as were its subsequent appeals). Among other things, in July 2017 Club V filed a complaint against the TFF and Club W with the FIFA Ethics Committee and the FIFA Disciplinary Committee, which refused to intervene and did not issue any formal decisions. In April 2018 Club V filed an appeal for denial of justice before the FIFA Appeal Committee. The committee dismissed Club V's appeal for lack of standing to sue as it had not taken part in the first-instance proceedings.
In May 2018 Club V appealed the FIFA Appeal Committee's decision before the CAS, requesting that it order the TFF to impose sanctions on Club W and award the 2010 to 2011 championship to Club V. The CAS bifurcated the proceedings and set a hearing to discuss the TFF's and Club W's preliminary objections on admissibility, jurisdiction and standing to sue. Club V requested that the hearing be held in public, as the matters to be dealt with involved complex legal questions. In the absence of an agreement from the other parties, and considering that the hearing would deal only with purely legal and highly technical issues, the CAS rejected Club V's request. Thus, the hearing was held in the absence of the public and without retransmission.
The CAS eventually dismissed Club V's appeal, holding that Club V lacked standing to appeal. Club V (together with two other entities) challenged this award before the Supreme Court.
The applicants first invoked a violation of the principle of public hearings as provided for by Article 6(1) of the ECHR, which, in their submission, formed part of procedural public policy within the meaning of Article 190(2)(e) of the Private International Law Act (PILA).
In this respect, the Supreme Court recalled that the grounds to challenge an award are listed exclusively in Article 190(2) of the PILA.(2) Therefore, although it may be referred to in support of the guarantees invoked under that provision, Article 6(1) of the ECHR is not a separate ground for challenge. The violation of the ECHR does not necessarily correspond to an incompatibility with public policy and the applicants had not established why the alleged violation of Article 6(1) of the ECHR would give rise to a violation of procedural public policy.(3)
The Supreme Court then held that the dispute fell outside the scope ratione materiae of Article 6(1) of the ECHR because the applicants were not affected in their "civil rights and obligations". They could not be assimilated to athletes against whom a disciplinary proceeding was started; they were mere whistleblowers, whose rights were not directly affected, as a club has no right to initiate disciplinary proceedings against another club. The applicants were not even third parties directly affected by a possible disqualification of their competitor, as they would not automatically benefit from Club W's disqualification.(4)
Even assuming that Article 6(1) of the ECHR were applicable and that a public hearing should, in principle, have been ordered, the Supreme Court found that the CAS had sufficiently explained in the award why an exception to this principle was justified in the case at hand – namely, because the hearing was of a preliminary nature and pertained to purely legal and highly technical issues. Thus, the CAS had not violated Article 6(1) of the ECHR.(5)
The applicants also invoked other grounds for challenge, which the Supreme Court rejected for the following reasons, among others.
Violation of principle of good faith (Article 2 of Civil Code), as part of substantive public policy (Article 190(2)(e) of PILA)
The applicants argued that the TFF and FIFA had failed to act in accordance with the rules that they had enacted by, respectively, failing to impose sanctions on Club W and to verify whether the TFF had taken appropriate action, thereby betraying Club V's legitimate expectations. In this respect, the CAS found that Club V would not necessarily have benefited from sanctions being imposed on Club W and that while FIFA has a right to intervene with national federations, it does not have an obligation to do so. Further, the notion of substantive public policy does not encompass the process of interpretation of a sports federation's statutory provisions and the Supreme Court does not review whether an arbitral tribunal has correctly applied the law. Therefore, the applicants' expectation that FIFA would necessarily intervene with the TFF was not protected under Article 2 of the Civil Code. Further, a violation of this provision does not render the award per se incompatible with substantive public policy, and the applicants had not established such an incompatibility.(6)
Endorsement of acts of corruption, as part of substantive public policy (Article 190(2)(e) of PILA)
The dispute did not include the issues of whether corruption was involved and which penalties would have been appropriate. The applicants were not entitled to take legal action relying on the general interest to fight corruption instead of their own interest. Further, once the CAS had established Club V's lack of standing to sue, it was logical and correct not to enter into the merits of the applicants' various pleas.(7)
Violation of right to be heard in relation to CAS's alleged failure to examine arguments on merits (Article 190(2)(d) of PILA)
The CAS thoroughly analysed the question of Club V's standing to sue prior to denying it. The bifurcation of the proceedings for reasons of procedural economy did not violate the applicants' right to be heard. Even without bifurcation, the CAS could have denied V's standing to sue without examining the merits of the case, as it was not required to deal with all of the arguments submitted by the parties. The right to be heard does not confer a right to obtain an obiter dictum.(8)
Violation of right to be heard in relation to applicants' alleged entitlement to have independent judicial body review legal and statutory conformity of FIFA's decision (Article 190(2)(d) of PILA)
The applicants referred to Article 75 of the Civil Code, arguing that the CAS's decision prevented them from obtaining such a review. However, the applicants were indirectly seeking to obtain a review on the merits of the award, which is inadmissible in challenge proceedings.(9)
Incompatibility with procedural public policy (Article 190(2)(e) of PILA)
The applicants argued that, further to the CAS's allegedly too restrictive interpretation of their standing to sue, FIFA's decision was not subject to any review, which violated their rights to an effective remedy and to a fair trial. However, the applicants were in fact seeking to obtain indirectly a reassessment of their standing to sue by the Supreme Court, which is inadmissible in challenge proceedings.(10)
It is not entirely clear how this decision should be viewed against the Mutu v Switzerland judgment issued by the European Court of Human Rights in 2018.(11) In that decision, the European court found that Article 6(1) of the ECHR was directly applicable in 'forced' arbitrations (ie, arbitrations to which a party cannot give its free, licit and unequivocal consent, such as those based on an arbitration clause contained in the statutes of an international sports federation). Consequently, according to the European court, a right to a public hearing under Article 6(1) of the ECHR existed in those forced arbitrations. In the challenge proceedings before this case was referred to the European court, the Supreme Court had also expressed the view that it would be desirable to hold a public hearing at the athlete's request.(12)
It may be relevant that in the case referred to the European court, the applicant was an athlete who had sanctions imposed on them for anti-doping violations. The European court noted that "the facts were disputed and the sanction imposed on the applicant carried a degree of stigma and was likely to adversely affect her professional honour and reputation".(13) Therefore, the Supreme Court's decision in the case at hand may have been different if the disputed hearing had not involved merely legal and technical issues relating to preliminary objections and a club whose rights were not directly affected, but rather an athlete sanctioned for anti-doping violations.
Given its few decisions on the topic of good faith, the Supreme Court's decision is also interesting as it found that the violation of Article 2 of the Civil Code does not render an award per se incompatible with substantive public policy.
For further information on this topic please contact Frank Spoorenberg or Daniela Franchini at Tavernier Tschanz by telephone (+41 22 704 3700) or email (email@example.com or firstname.lastname@example.org). The Tavernier Tschanz website can be accessed at www.taverniertschanz.com.
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