Recurring appointments of an arbitrator by FIFA and specificities of CAS arbitration
4A_520/2021, judgment of March 4, 2022 A v. FIFA, motion to set aside the CAS Award of 31 August 2021 (CAS 2019/A/6344).
This important judgment of the Swiss Federal Supreme Court (Swiss Federal Tribunal, SFT) deals with the thorny issue of independence and impartiality of CAS arbitrators, examining the so-called “duty of curiosity” of a party’s counsel regarding the appointment of an arbitrator by the other party or by the CAS, the strict admissibility requirements for filing a request for challenge, and the issue of repeated appointments in CAS proceedings where FIFA is a party (see also the recent Newsletter of Hansjörg Stutzer of 20 April 2022).
The case related to the widely known “FIFA-Gate” which revealed, following an investigation by the U.S. authorities, that several individuals were involved in a bribery scheme related to the sale of rights to several football competitions, and charged them with various offences. The Appellant, a former President of the Brazilian Football Confederation Marco Polo Del Nero (also a former member of various FIFA and CONMEBOL committees), was one of the individuals and was also banned for life by the FIFA Ethics Committee and the FIFA Appeals Committee and given a fine of CHF 1,000,000. Ruling in appeal, the CAS reduced his sanction to twenty years and confirmed the fine.
The Appellant filed a motion to set aside the CAS Award for violation of his right to be heard (which was swiftly dismissed by the SFT and will not be further examined below) and for lack of independence and impartiality of the chairman of the panel, who was appointed by the CAS and is a very experienced CAS arbitrator (the Arbitrator). While the latter initially merely disclosed that “FIFA are a party in another case I have on – CAS 2019/A/6229. I am President of that Panel”, following the hearing (which took place almost one year after the panel’s appointment) and at the Appellant’s request for updated declarations related to appointments involving FIFA, the Arbitrator provided the parties with a quite extensive list of ongoing matters involving himself and FIFA. Furthermore, the Arbitrator disclosed that a colleague at his law firm had “(…) recently advised FIFA on an entirely unrelated matter involving GDPR / data protection. For the avoidance of any doubt I was not involved in that matter in any way”. The Arbitrator confirmed his independence and the fact that he provided this disclosure in the interest of “complete transparency”. After an additional request for information of both the Arbitrator and the clerk (who happened to be a lawyer working at the same law firm as the Arbitrator), the Appellant filed a request for challenge before the ICAS Challenge Commission, which was rejected and led, after the final CAS award, to the SFT proceedings examined here.
In its judgment, the SFT first held that the IBA Guidelines on Conflicts of Interest in International Arbitration (“IBA Guidelines”) are a useful tool towards the harmonization of the standards in international arbitration. The pertinent provision in this case was Art. 3.1.3 of the IBA Guidelines, which provides that an arbitrator appointed twice or more by the same party during the last three years falls within the waivable “Orange list”. The SFT also reiterated that, apart from the general declarations of the arbitrators, each party must pursue its own research in order to ascertain the independence and impartiality of the arbitrators (the so-called “duty of curiosity”).
The starting point for the analysis was whether the Appellant’s claim was admissible, to the extent that the parties must raise any such claim as soon as the pertinent fact becomes known, and within the specific time limit of seven days enshrined in Art. R34 (1) of the CAS Code. The SFT considered as decisive the fact that the appellant’s counsel knew of other appointments of the Arbitrator as well as of the FIFA mandate of the Arbitrator’s colleague – through other cases in which it acted before the CAS (at 5.3.1) and failed to raise any objections on time. Referring to previous case law (4A_110/2012 of October 9, 2012 at 2.2.2) the SFT confirmed that the knowledge of the counsel is attributable to his client directly and rejected the appellant’s claim as inadmissible for failing to file the request for challenge on time. Therefore, the SFT concluded that the Appellant was foreclosed from raising the issue of lack of independence and impartiality of the Arbitrator at this late stage.
Even though it held that the claim was inadmissible, the SFT still examined the arguments raised by the Appellant and concluded that the claim would have, in any event, been unfounded: while the Appellant largely based his claim on the failure of the Arbitrator to comply with his duty of disclosure, the SFT reiterated that such duty relates principally to elements which may give rise to legitimate doubts as to the arbitrator’s impartiality and would be insufficient, per se, to justify the challenge of an arbitrator.
The SFT also agreed with the ICAS Challenge Commission, which criticized the Arbitrator’s practice to only disclose pending cases and not to regularly update his declaration of independence but found no evidence of deliberate concealment likely to lead to the recusal of the Arbitrator. On the contrary, the fact that the Arbitrator had already disclosed other appointments in the context of another procedure (in which the Appellant’s counsel was involved) was the decisive element to disprove any intentional concealment. At this point it must be noted that, as per the latest amendment of the LDIP, Art. 179 (5) explicitly provides that the obligation of disclosure “shall persist for the duration of the proceedings”, confirming thus an ongoing duty of disclosure.
Under the strict admissibility requirements of the request for challenge, the arbitrator’s disclosure, even in another case involving the party’s counsel, triggers the time limit of seven days for a potential request for challenge under Art. R34 CAS Code.
With regard to the issue of the repeated appointments of the Arbitrator, the SFT specified the cases prone to play a role in the determination of the arbitrator’s independence: accordingly, only the cases in which the arbitrator was directly appointed by FIFA can count as multiple appointments that could raise doubts as to his impartiality in this case (in the present case the Arbitrator, acting as the Chairman of the Panel, was appointed by the CAS). It also implicitly accepted that consolidated procedures count as one appointment, acknowledging that the three times where the Arbitrator was appointed directly by FIFA in the previous three years may seem problematic at first, under Art. 3.1.3 of the IBA Guidelines. Importantly, however, the SFT referred to the specificities of CAS proceedings and the closed list of the CAS arbitrators in order to justify this number, noting that the arbitrator appointed by the appellant himself was also appointed by FIFA six times in the course of the previous three years!
Apart from the general distinction between commercial and sports arbitration in terms of multiple appointments, the SFT therefore distinguished between an arbitrator appointed by FIFA itself and an arbitrator appointed by the CAS (when acting as a chairman). In any event, the SFT did not specifically address the argument raised by the CAS related to the specific status of FIFA in most CAS proceedings, in which FIFA acts as the body that issued the decision appealed against and does not actively appoint the arbitrator but rather allows the principal respondent to do so. According to the CAS, in these cases FIFA acts as a “passive co-respondent” to the appeal and these cases should not be counted as separate cases under Art. 3.1.3 of the IBA Guidelines (at 5.2.1).
Another aspect not usually discussed in the context of challenge proceedings and Art. 190 (2) (a) LDIP relates to the subsequent disclosure of the Arbitrator and the clerk, relating to a FIFA mandate by the Arbitrator’s law firm colleague: the SFT examined the specific circumstances of the case and concluded that this was an isolated instance, with no connection to the case or the specific arbitrator that brought an insignificant amount to the firm’s turnover. In any event, this fact was also disclosed and made known to the Appellant’s counsel in other proceedings as seen above.
Overall, this case is important for a variety of reasons. On the one hand, it reiterated the high burden of the “duty of curiosity” of the parties’ counsel (which was somewhat narrowed down in the Sun Yang judgment, 4A_318/2020 of December 22, 2020) and the strict admissibility requirements in order to request the challenge of an arbitrator as soon as the ground for challenge becomes known: As such, the arbitrator’s disclosure, even in another case involving the party’s counsel, triggers the time limit for a potential request for challenge. On the other hand, it confirmed that multiple appointments are common in CAS arbitration in view of the closed list of arbitrators and particularly for FIFA which is called to appoint numerous arbitrators every year. In this context, the arbitrator’s failure to duly disclose any appointments with the initial declaration of independence or to regularly update such declaration during the proceedings is not as such sufficient to challenge such arbitrator unless more incriminating elements are present (which, as seen above, were clearly not present in this case). It seems that the burden shifts to the party’s counsel to prove a “deliberate concealment”, which can be extremely difficult at times.
Nonetheless, and as noted by both the ICAS Challenge Commission’s decision and the SFT (at 5.5), it becomes evident that arbitrators must always act in a diligent manner, and not only submit a full declaration (of both past and ongoing cases and appointments by the parties) but also regularly and spontaneously update their declarations during the proceedings.
The full Judgment is available in French at the website of the Swiss Federal Tribunal www.bger.ch. The English translations of important 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. All notes of Dr Despina Mavromati are also systematically published in her LawInSport blog.