X. v. Y. Association [The Broadcasting Rights for World Cup Friendly Matches] - Swiss International Arbitration Law Reports (SIALR) - 2008 Volume 2 No. 1

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32 pages

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April, 2008

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Headnote

Where a party fails to challenge the impartiality and

independence of an arbitrator at the time when the ground for such

a challenge is known, or could have been known, such party is

estopped from seeking to have the arbitrator’s award set aside

relying on a lack of independence.

Summary of the Decision

X. and Y. Association concluded a contract entrusting X. with the

organisation of five friendly matches between national football teams in

the days leading up to the 2006 World Cup in Germany. In return, Y.

Association granted X. the exclusive rights to have the matches broadcast

worldwide. After the games were played, X. complained that Y. had

breached the contract by allowing another company to broadcast the

matches live. X. brought arbitration proceedings before a CAS panel and

nominated R. as its arbitrator. The Y. Association nominated S. as its

arbitrator and retained C. as its counsel. The two party-nominated

arbitrators then appointed T. as president of the CAS panel. The CAS

panel made a decision dismissing X.’s request and granting the

counterclaim brought by Y.

X. then brought setting aside proceedings based on the improper

constitution of the CAS panel, essentially arguing that S., C. and T. all

belonged to the same professional association — a fact which they all

failed to disclose — and their independence and impartiality were

thereby compromised.

The Federal Supreme Court held first that X. was estopped from

challenging the award based on the arbitrators’ lack of impartiality and

independence. A party has a duty to challenge an arbitrator as soon as it

is aware of the ground for challenge, that means to say as soon as it has

knowledge of circumstances giving rise to justifiable doubts as to the

arbitrator’s independence. The parties to an arbitration are expected to

exercise a reasonable degree of care and diligence in enquiring into the

arbitrators’ relationship to either party; a failure to exercise such care and

diligence is no excuse for the belated awareness of facts possibly

warranting a challenge.