ENFORCING COURT OF ARBITRATION FOR SPORT (CAS) ARBITRAL AWARDS
From time to time, it may become necessary to legally enforce CAS Arbitral Awards, once final and binding, where a party concerned fails to comply with those Awards, especially ones involving the payment of substantial sums of money, by way of compensation or fines.
Fortunately, there is a comparatively simple and quick way of doing so, under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention). CAS Arbitral Awards qualify as Foreign Arbitral Awards, that is, Arbitral Awards made in another Member State, for the purposes of the Convention.
172 countries, of whom 169 are members of the United Nations, have signed the New York Convention, which came into force in 1959.
Without the New York Convention, to enforce CAS Arbitral Awards, it would be necessary to follow an ‘exequatur’ procedure, which is a cumbersome process to obtain the legal recognition of CAS Arbitral Awards in the foreign country in which the Awards are to be enforced, before following the enforcement procedures as laid down in the rules of civil procedure of those countries. These procedures take time and cost money in terms of the court costs and professional legal fees that are payable.
Basically, under the provisions of Article IV of the New York Convention, the party seeking enforcement of the CAS Arbitral Award must provide the foreign Court with a copy of the Award and a copy of the Arbitration Agreement pursuant to which it was made.
The party against whom enforcement is sought can oppose enforcement on the limited grounds set out in Article V(1), which include violation of due process under Article V(1)(b).
The foreign Court also has an inherent jurisdiction to refuse enforcement of the Arbitral Award on the grounds of public policy. A difficult term to define. In fact, an English Judge in the early part of the 19th Century likened public policy to “a very unruly horse, and when once you get astride it you never know where it will carry you.” Furthermore, what may be considered as being against public policy is of greater scope in domestic law than in international law, where it is more limited.
For example, it has been held by the US Court of Appeals for the Second Circuit in the case of Parsons & Whittmore Overseas Co. v Societe Generale d L’Industrie du Papier (RAKTA) 508 F.2d 969 (1974), that Arbitral Awards should only be refused enforcement in those cases in which the public policy claimed “would violate the forum State’s most basic notions of morality and justice.” In other words, the refusal of enforcement of Arbitral Awards, for public policy reasons, should be interpreted very narrowly for the purposes of the Convention.
The party seeking enforcement of a CAS Arbitral Award can be a natural person, or a private or public legal entity, such as a Sports Governing Body.
We advise and represent clients on the recognition and enforcement of CAS Arbitral Awards and further information may be obtained by emailing Dr Lucien Valloni at ‘valloni@valloni.ch’ or Noemi Delli Colli at ‘dellicolli@valloni.ch’.