In a landmark decision issued on 22 September 2021 and published on 5 October 2021 (case A v Union Cycliste Internationale, 4A 166/2021), the Swiss Federal Tribunal (i.e. Swiss Supreme Court) rejected an application requesting the setting aside of a Court of Arbitration for Sport (CAS) award. The decision dealt with the crucial issue of legal aid in international arbitration proceedings. In its analysis, the Court examined whether the legal aid system offered by the CAS was sufficient to preserve the applicant's fundamental procedural rights. Based on this analysis, the Court rejected the applicant's arguments and found that the applicant could not rescind the arbitration agreement.
On 30 May 2017, a competitor identified here as "A" underwent an out-of-competition doping control ordered by the Union Cycliste Internationale (UCI). Following the opening of a disciplinary procedure, the single judge of the UCI Anti-Doping Tribunal found that A had breached UCI Anti-Doping Rules and imposed a four-year ban and a fine of EUR 56,000 on the individual.
On 14 December 2018, A filed an appeal with the CAS, along with a legal aid application that was mostly rejected. Although A was awarded the sum of CHF1,500 for his travel and accommodation costs and those of his counsel, the International Council of Arbitration for Sport (ICAS) rejected his request to be assisted by a pro bono counsel on the grounds that he was already represented by counsel who was not on the CAS list of pro bono counsels. The ICAS also rejected A's request to cover the costs of the same number of experts as UCI. After A indicated that he had rescinded the arbitration agreement, the ICAS reconsidered its decision by granting the assistance of a pro bono counsel. The procedure continued after A informed the CAS that he had appointed a pro bono counsel. On 10 February 2021, the CAS partially upheld the appeal by reducing the fine to EUR 26,000. The four-year ban, however, was confirmed.
Within the 30-day time limit set by Swiss law, A filed an application to set aside the CAS award with the Swiss Supreme Court arguing inter alia that the CAS had no jurisdiction because he had rescinded the arbitration agreement. In this respect, A claimed to have been misled about the scope of legal aid offered by the CAS. He also invoked various violations of his due process rights.
The Swiss Supreme Court swiftly dismissed A's argument concerning the CAS's alleged lack of jurisdiction. The Court considered the legal aid available to the applicant for CAS arbitration and the fairness and effectiveness of the CAS legal aid system. Having reviewed the provisions of the Guidelines on Legal Aid issued by the ICAS, the Court found that applications to the CAS were in principle open to even indigent persons. In this context, the Court noted that it is wrong to conclude that access to justice is only possible with the assistance of a paid counsel. In conclusion, the Court held that there was no reason to uphold A's argument that he had validly rescinded the arbitration agreement.
The Court went on to examine whether A's due process rights had been breached. The federal judges observed that the applicant was not able to demonstrate how those rights were linked to the right to freely appoint a paid counsel (i.e. as opposed to a pro bono counsel). In any event, A's criticisms of the CAS pro bono counsel list were dismissed.
Furthermore, the Court held that the preservation of the right to equal treatment under Swiss law does not require that the opposing parties have equal resources for the conduct of the procedure. Rather, what is required is that each party be given the same opportunity to present his or her point of view in the arbitration.
This ruling clarifies that the possibility for an indigent party to rescind an arbitration agreement depends on the availability of legal aid. Whereas the state (at least in Switzerland) does not grant legal aid for international arbitral proceedings, arbitral institutions may provide other solutions for enabling access to arbitration despite the lack of financial means. Depending on the fairness and effectiveness of the legal aid system put in place, an indigent party may be prevented from rescinding an arbitration agreement. In regard to CAS proceedings, the Swiss Supreme Court considered that the legal aid system put in place by the CAS institution allows indigent persons access to it. Furthermore, the limitation of choice of counsel to a pre-established pro bono counsel list does not constitute an infringement of the right to access justice or the right to equal treatment. The decision of the Swiss Supreme Court reinforces the binding nature of arbitration agreements contained in sports regulations.
For more information on this ruling and international arbitration in Switzerland, contact your CMS partner or local CMS expert.