Switzerland: Requisite Elements Of Arbitration Agreement Under Swiss Law

Last Updated: 17 February 2012
Article by Frank Spoorenberg and Isabelle Fellrath

Introduction

The Swiss Supreme Court confirmed recently its practice of constructive interpretation of pathological or ambiguous arbitration clauses.1

Facts

A football club (the "Club") and a football agency (the "Agency", together: the "Parties") had entered into an agreement regarding the transfer of a footballer (the "Agreement"). The Parties agreed that the transfer costs would be shared between them. The Agreement contained the following dispute resolution clause: "The competent instance in case of a dispute concerning this Agreement is the FIFA Commission, or the UEFA Commission, which will have to decide the dispute that could arise between the club and the agent." A dispute arose between the Parties in connection with the transfer fee payment, which the Agency deferred to FIFA Players' Status Committee (the "Committee"). On December 10, 2008, the Committee denied its jurisdiction to hear the claim for lack of standing of the Agency. The CAS Appeals Arbitration Division upheld the Committee's jurisdictional decision (CAS Rules in the 2004 version, R-47 et s.) in January 2009. Having tried in vain to bring the case before a judicially appointed sole arbitrator specialist in sport law, who also denied jurisdiction considering that the Parties had meant to refer their disputes relating to the Agreement to an institution specialised in sport law, and not to a sole arbitrator, the Agency filed for arbitration with the Court of Arbitration for Sport (CAS). The CAS, acting this time as the arbitral authority (Ordinary Arbitration Division, CAS Rules in the 2004 version, R-38 et s.), admitted its jurisdiction to hear the case, dismissed the Agency's claims, denied jurisdiction on the Club's counterclaim, and decided on the arbitration costs. The Club challenged the award before the Swiss Supreme Court on the ground of the CAS' lack of jurisdiction. The Club argued in a nutshell that no consent to arbitrate could reasonably be inferred from the clause, and that the dispute resolution clause was by all means invalid because it referred to two institutions which, based on their own internal regulations, had no authority to decide the case (Swiss Code of Obligations (CO) Art. 20(1)).

Supreme Court Decision

The Swiss Supreme Court acknowledged the jurisdiction of the CAS and upheld its award. It pointed out that, whilst the primary written consent to arbitrate (PILA Art. 178(1)) had imperatively to reflect the parties' converging agreement on all key elements (essentialia negotii) of arbitration, it did not necessarily need to include other non essential points. The written consent to arbitrate hence necessarily requires:

  • the parties' unambiguous intent to submit their legal dispute to an arbitral tribunal in lieu of the judicial authorities for a binding determination;
  • the identification or reasonable possibility to identify the dispute to be submitted to arbitration;
  • the identification or reasonable possibility to identify the parties consenting to arbitration.

Conversely, no consent is required on other non-essential elements of arbitration, typically:

  • the type, place and language of arbitration;
  • the number of arbitrator(s);
  • the composition of the arbitral tribunal;
  • the applicable procedural rules.

The lack of parties' agreement on any of these secondary issues would not, in principle, affect the validity of the parties' primary consent to arbitrate (CO Art. 20(1) and Art. 2(1)); rather, in such case the arbitration agreement should be supplemented on the basis of the parties' hypothetical intention (CO Art. 20(2) and Art. 2(2)).

In the case at hand, the Swiss Supreme Court acknowledged the existence of the Parties' converging agreement on all key elements of arbitration. It considered that, although no reference to arbitration was made in the dispute resolution clause, the wording of the clause clearly reflected the Parties' intent to subject their case to an authority specialised in sport disputes other than state courts. The Swiss Supreme Court further considered that the reference to institutions that could not hear the claim, based on their own internal regulations, should not as such affect the validity of the arbitration clause, but should be remedied on the basis of the Parties' hypothetical intention had they been aware of the impossibility of their chosen option. Considering that the clear intention of the Parties was to refer their dispute to an institution specialised in sport, and in particular in football, the Swiss Supreme Court upheld the jurisdiction of the CAS.

Comments

The Court's decision is in line with its general pro-arbitration stance, always subject to clear evidence of the parties' primary consent to arbitrate. The growing number of arbitration rules and institutions makes it even more desirable for the parties to rely on the model arbitration clause proposed by most arbitral institutions or arbitration rules to avoid such situations that could potentially seriously delay the arbitral process, and to leave it to the relevant arbitration rules to fill the gaps.

Footnotes

1. Supreme Court Decision 4A_246/2011 in X v Y Sàrl, of November 7, 2011. The full text of the decision, which will be published in the official reports of the Supreme Court's decisions, is available in German at "www.bger.ch/fr/index/juridiction/jurisdiction-inherit-template/jurisdiction-recht/jurisdiction-recht-urteile2000.htm" . See prior decision in the case 4A_433/2009 of May 26, 2010, ground 2.4, excerpt in ASA Bull. 3/2011, p. 673.

www.taverniertschanz.com

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions