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Blogs - Arbitration Case Digest

Termination of proceedings for failure to pay advance, not excessively formalistic

24.05.2017 – Case Number: 4A_692/2016 (20 April 2017)

In a decision dated 20 April 2017, the Swiss Supreme Court refused to vacate a termination order by the Court of Arbitration for Sport (CAS). It held that the termination of the proceedings under Article R64.2 of the CAS Code, due to the appellant's failure to pay the full advance on costs within the specified deadline, neither violated the appellant's right to be heard nor constituted excessive formalism.

The Swiss Supreme Court held that the termination order did include a final decision on substance and therefore constituted a matter capable of appeal.

The court emphasised that its scope of review did not extend to the question of whether the CAS had properly interpreted Article R64.2 of the CAS Code. Even though this was not required, the termination order had adequately set forth the relevant facts and conclusions on which the CAS had based its decision and therefore did not violate the appellant's right to be heard.

The court further held that the termination order did not contravene Swiss procedural public policy. It pointed out that the wording of Article R64.2 of the CAS Code was clear in that it leads to the CAS terminating the proceedings. The parties had been made aware in advance of the amount to be paid, the payment deadline and the consequences of non-payment. Therefore, the court considered it irrelevant that the appellant only paid the respondents' share of the advance on costs after the deadline, due to an internal clerical error. It cautioned that a more lenient approach would likely result in abuse and render Article R64.2 meaningless.

The notable elements of this decision are the finding that a termination order is capable of appeal and the fact that the termination of proceedings for failure to pay the advance on costs is not per se excessively formalistic. (Decision 4A_692/2016.)

Published in Practical Law Arbitration