The decision 4A_100/2023 invokes the "duty of curiosity"

Case Analysis

- The Swiss Federal Tribunal (SFT), relying on article 190(2)(a) of the Private International Law Act (PILA), annulled an award of the Court of Arbitration for Sport (CAS) for erroneously admitting an application for the challenge of an arbitrator who was out of time. Cavaliero & Associates, under the instruction of Radic & Radic, acted on behalf of the appellant, obtaining the purported annulment of the arbitral award.

- This decision highlights the figure of "duty of curiosity", underlining the need for parties to be proactive in investigating and verifying the independence and impartiality of arbitrators to avoid potential conflicts of interest.

In a significant ruling, the Swiss Federal Tribunal (SFT) reinforced the duty of curiosity as a fundamental point in arbitration concerning the independence and impartiality of arbitrators, as well as preventing potential conflicts of interest. The case stems from a dispute that has been ongoing since 2019 between a Croatian professional football club and an Austrian coach. The coach claimed damages for an alleged wrongful termination of his employment contract.

Despite the contract containing a jurisdiction clause in favor of the Croatian Football Federation’s (HNS) Court of Arbitration, the coach brought the claim before the FIFA Players' Status Chamber (PSC), which declared itself competent. The PSC issued a decision in favor of the coach, leading to the club challenging it before the Court of Arbitration for Sport (CAS). During the CAS proceedings, the club appointed an arbitrator who had initially not disclosed information in his Declaration of Acceptance and Independence. Five months into the proceedings, and after the exchange of written submissions and a hearing had taken place, the arbitrator disclosed that he was also acting as an arbitrator within the HNS Court of Arbitration.

FIFA challenged the arbitrator the day after this disclosure, and the challenge was upheld by the ICAS Challenge Commission. Subsequently, a new CAS Panel decided to dismiss the club's appeal. The set-aside application before the SFT was filed against that award, with the Appellant arguing the incorrect composition of the CAS panel (Article 190(2)(a) PILA), based on the ground that the challenge against the arbitrator had been filed late.

The SFT concluded that the arbitrator's duty of disclosure is "not absolute." It only exists concerning facts for which the arbitrator has reason to believe that they were unknown to the party who could rely on them. Thus, according to the SFT's reasoning, a "duty of curiosity" is imposed on parties, requiring them to actively investigate to ensure the independence and impartiality of appointed arbitrators. The SFT agreed with the Appellant’s arguments, stating that FIFA should have challenged the arbitrator’s appointment immediately after his nomination, as information about his affiliation with the CFF Court of Arbitration was explicitly mentioned in his CV and easily accessible on the CAS website. Therefore, the objection was deemed time-barred.

The SFT's ruling also addresses FIFA’s standing to be sued in "horizontal disputes," specifically in situations where FIFA acts as a decision-making body in a dispute but is not a party to the conflict. In such cases, even though FIFA may be a party to the appeal proceedings before CAS, it does not imply that it should or could also be a party before the SFT. This ruling is one of the few occasions where the SFT has addressed this specific issue, which remains unclear in the world of arbitration.

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