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Blogs - Arbitration Case Digest

Challenge by FIFA against Swiss domestic award not admitted

08.02.2019 – Case Number: 4A_338/2018 (28 November 2018)

In a German-language decision, the Swiss Supreme Court declined to admit a challenge by FIFA against an arbitral award under which FIFA was ordered, among others, to pay damages. The award was a Swiss domestic award since both parties were domiciled in Switzerland at the time of the conclusion of the arbitration agreement. Unlike international awards rendered in Switzerland, domestic awards can be set aside if they are arbitrary.    

In the underlying dispute, a ticket reseller requested damages and delivery of tickets for the World Cup 2018. FIFA and the reseller had restructured their relationship in 2013, replacing an agreement between them with an agency agreement concluded by the reseller with a longstanding FIFA partner. The arbitral tribunal rendered an award in favor of the reseller, finding that FIFA had retrospectively approved relevant assurances/guarantees made on its behalf. FIFA appealed the award, arguing that the decision was arbitrary and violated its right to be heard. Pursuant to FIFA's ex parte application, the court initially granted, but eventually denied, suspensive effect to the challenge.

The Swiss Supreme Court found all of FIFA's setting aside arguments inadmissible. More specifically, all of the arguments asserting that findings of fact were contrary to the record were found to relate exclusively to the tribunal's assessment of evidence, which the Swiss Supreme Court does not review in setting aside proceedings. The court confirmed that an award is generally only arbitrary if it (i) misquotes or omits relevant evidence or (ii) obviously misapplies the law. Additionally, recalling its own "very restrictive" case law, the court found the only sufficiently substantiated alleged violation of the right to be heard inadmissible due to FIFA's failure to specify why the application of a specific legal provision had been unforeseeable.

The decision serves as a reminder of the Swiss Supreme Court's strict case law regarding the grounds for setting aside arbitral awards, in particular the necessity to specify and clearly explain which grounds are invoked and why the standard is met. As illustrated by this case, the Swiss Supreme Court does not hesitate to declare a challenge inadmissible if that is not the case. Even though the decision concerned a domestic arbitral award and the arbitrariness ground is not available against international awards, it is nonetheless relevant to international arbitration, in particular because the same, stringent standard for admissibility applies.