by Dr Despina Mavromati

4A_338/2018, Judgment of November 28, 2018, FIFA v. Company A. AG

Appeal against the Award of May 2, 2018 (n° 600461-2016) rendered by the Arbitral Tribunal seated in Zurich

  1. Background Facts

The case involves a dispute between the world governing football body, FIFA, and a Swiss-based ticket-reselling company (Company A) but not CAS arbitral proceedings or a CAS award. The parties entered into a first agreement for the purchase and resale of tickets for various editions of FIFA World Cup in 2010. After discussions regarding the restructuring of the agreement, Company A and its long-term partner (Company B) concluded an “agency agreement”, based on which the latter became the non-exclusive sales agent of Company B for hospitality packages at the 2014 FIFA World Cup. In August 2016, Company A initiated an arbitration at the Swiss Chambers’ Arbitration Institution against FIFA, requesting damages and the delivery of tickets for the World Cup 2018. The Company A’s requests for relief were essentially admitted by the arbitral tribunal and FIFA was ordered, among other things, to pay damages. It held that FIFA had retrospectively approved relevant assurances/guarantees made on its behalf.

  1. The Appeal to the Swiss Federal Tribunal

Swiss Domestic Arbitration and Arbitrariness

In the subsequent appeal to the Swiss Federal Tribunal, FIFA requested the annulment of the award and the issuance of a new award.

This was a Swiss domestic award (since both parties had their seat in Switzerland) subject to the application of the Swiss Code of Civil Procedure, under which it is possible to attack an award for arbitrariness (a ground that is not admissible for international awards under the Swiss Private International Law Act, PILA).

The appeal was subsequently dismissed as inadmissible, with the Federal Tribunal reiterating its own restrictive definition of arbitrariness.

Assessment of the evidence

More specifically, the Federal Tribunal considered that, even within the scope of the arbitrariness plea, a party cannot question the assessment of evidence made by the arbitral tribunal. By the same token, it cannot question the factual findings, to the extent that these are mentioned in the contested award, so far as such party fails to establish that the Arbitral Tribunal has wrongly reproduced the content of these files, oversaw parts of the files, or gave them a meaning other than their real meaning. Since the burden of proof governs the consequences of the lack of evidence, if, as in the present case, a court concludes that a factual statement has been proved or refuted, the allocation of the burden of proof is irrelevant

Violation of Article 8 Swiss Civil Code (allocation of the burden of proof)

The Federal Tribunal also answered to the plea of violation of Art. 8 Swiss Civil Code (related to the burden of proof) in terms of establishing the compensation (at 4.4.2) and dismissed it as inadmissible: if an arbitral tribunal concludes that a factual statement has been proved or refuted, the allocation of the burden of proof is irrelevant (BGE 141 III 241 at 3.2; BGE 138 III 359 at 6.3; BGE 134 III 235 at 4.3.4).

The allocation of legal costs is a procedural, not a substantive issue.

Finally, an interesting point to retain from this judgment relates the principle of allocation of costs: FIFA supported that the allocation of costs by the Arbitral Tribunal was arbitrary within the meaning of Art. 393 lit. e Swiss Code of Civil Procedure (CPC). The Federal Tribunal highlighted the difference between the status prior to the enactment of the CPC and found that the distribution of the legal costs is a procedural question and not one of substantive law, implying that this could (theoretically) fall within the scope of procedural public policy. As such, it fell outside the scope of the arbitrariness plea and was therefore inadmissible.

Note: The full judgment is available in French at the website of the Swiss Federal Tribunal www.bger.ch. The English translations of the international arbitration decisions rendered by the Swiss Federal Tribunal (from French, German and Italian) are available on the website www.swissarbitrationdecisions.com , operated jointly by Dr. Despina Mavromati and Dr. Charles Poncet as a service to the international arbitration community.