Club X. v. Y. [The Terminated Football Player] No. 4A_260/2009 - Swiss International Arbitration Law Reports (SIALR) - 2010 Vol. 4 Nos. 1 & 2

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Originally from:

Swiss International Arbitration Law Reports 2010 Vol. 4 Nos. 1 and 2

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No. 2

Club X. v. Y.

[The Terminated Football Player]

No. 4A_260/2009

Headnote

■ The principle of sanctity of contracts is part of public policy.

However, an award cannot be challenged on the basis that an

arbitrator failed properly to interpret and construe a term of the

contract in dispute. Similarly, an award cannot be challenged on the

basis that the arbitrator erred in granting a certain relief.

Summary of the Decision

Club X. stopped paying wages to football player Y. and gave him a

notice of the termination of his employment contract. Y. then brought an

action before a national sports-related adjudicatory body seeking

monetary relief from Club X. That body found for Y. in part. Both Y.

and Club X. appealed against this decision. By an award dated 24

April 2009 a CAS panel allowed Y.’s appeal in part and dismissed Club

X.’s claims entirely. The CAS panel inter alia ordered Club X. to pay Y.

the sum representing the wages owed to Y., any wages which Y. would

have been paid if the contract had been performed until its end, as well as

an indemnity for Y.’s housing costs.

Club X. filed an application to have the award set aside by the Federal

Supreme Court, complaining that the CAS panel failed to take the

applicable law and the FIFA Regulations into consideration when it

determined the amount of the indemnity in spite of its finding that such

system of law and such Regulations applied. Therefore, the CAS panel’s

award breached the principle pacta sunt servanda and the rules of good

faith.

The application was denied.

The Court held that the principle pacta sunt servanda and the rules of

good faith, in the narrow definition given by the decisions made under

article 190(2)(e) FPILA, did not apply to decisions made by arbitrators

on issues of contract interpretation and construction; the same was true

of arbitral decisions made on the remedies for breach of contract. It was

not for the Court to determine whether the CAS panel properly

determined the rules of law which were applicable in order to calculate

the indemnity to be awarded to the respondent. Nor was it for the Court