Requisite Elements Of Arbitration Agreement Under Swiss Law

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...