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Essendon supplements saga: Is it up, up and away to Switzerland?

Map Photography: Lausanne City on a Road Map

Now there’s a lot more things to football


That really meets the eye


There are days when you could give it up


There are days when you could fly
 – Mike Brady, Up There Cazaly

Despite the endless jokes lawyers endure, almost all discharge their duties to the client diligently. Sometimes though, this ethical duty hurts a little more than at other times. In this context, spare a thought for the lawyers likely to oppose on their clients’ behalf the World Anti-Doping Agency’s reported preference for Switzerland to be the location for its appeal to the Court of Arbitration for Sport in the Essendon supplements saga.

That’s right. If WADA’s preference is successfully opposed, there will be no international plane flight, no decision about the appropriateness of Business Class versus Premium Economy, and no side trip for a few days once hearings are concluded.

For those in the invidious position of sitting on the other side of the WADA fence, it would be a good idea not to look at the photo below of the Château de Béthusy in Lausanne, Switzerland where CAS resides.

Please also ignore the photos from Ferrari Architects, the design team which successfully overcame the challenge of renovating the Chateau “to meet the client’s needs whilst respecting the historical construction of the building”. In particular, avert your eyes from photo number three of what is, on any view, a stunning hearing room on level one of the Chateau with an outlook over the balcony to gardens yonder.

The historic nature of the building causes words like ‘yonder’ to come naturally to the author’s mind.

For those interested in a virtual tour of Lausanne because, say, their application to oppose venue might win so they will not make it there unless under their own steam, here are a few fun facts:

  • Lausanne is a city in the French-speaking part of Switzerland, situated on the shores of Lake Geneva.
  • It is located in a popular wine-growing region.
  • The city has a population of about 140,000, over 40% of which are foreign nationals.
  • Lausanne is a focus of international sport, hosting not just CAS, but also the International Olympic Committee (which has recognized the city as the “Olympic Capital” since 1994), the International Hockey Federation and some 55 international sport associations.
  • The Tour de Romandie, part of the UCI World Tour, runs in this region in Switzerland, traditionally starting with an individual time trial prologue in Geneva and ending with another individual time trial in the hilly terrains of Lausanne which goes downhill to Lake Geneva, concluding uphill in the stadium again (winners of the tour are not surprisingly excellent at time trials).

For opponents of the Lausanne venue for this appeal, console yourselves with the fact that you can drink wine anywhere; cycling in Lausanne is probably just as good as Beach Road, St Kilda; Switzerland is not known for its coffee; and the re-valuation of the Swiss Franc means you would probably have to pay an arm and a leg for it anyway.

As we examine some of the applicable laws likely relevant to WADA’s appeal, please bear in mind that this analysis is general in nature and not made having regard to the parties’ filed documents or submissions.

Why might WADA want the appeal heard in Switzerland?

Here are a few possible reasons for WADA to want its appeal heard in Lausanne:

  1. The seat of CAS and of each Arbitration Panel is Lausanne, Switzerland: refer Rule 28 CAS Procedural Rules (CAS Rules).
  2. The circumstances do not warrant that the hearing be held elsewhere, having regard to the likely international composition of the panel and at least some of the advocates, as well as the fact that Lausanne is the ‘natural home’ of CAS.
  3. This case has led to some partisan reactions within Australia, and so a neutral location for the hearing makes sense.
  4. There may be laws more favourable to the compulsion of witnesses in Switzerland.

The President of the Panel will make the call about location if the 34 Essendon players oppose WADA’s position and want the hearing held in Australia: see Rule 28.

Let us test whether Possible Reason No.4 has legs. There has been significant media commentary about this issue, which is why a deeper dive to test some of the principles might be worthwhile.

Before doing so, it is important to ask: Why do we care whether or not a witness is called to give evidence?

Most often it is important to have a witness testify out of fairness to the other side. For example, the witness might have prepared a document or statement or have something to say about it. It is important the witness attend the hearing for cross-examination, to give the other side a chance to test the truthfulness or accuracy of what has been said or done.

If the witness refuses to appear, that person can often be compelled to attend a hearing for oral examination via a subpoena issued by a court. That said, the ability to compel people to turn up to a hearing is not as straightforward for arbitrations or tribunal hearings than for court hearings.

If a subpoena is not issued or permitted, parties have options about what to do next. For instance, the party trying to prove a fact can either withdraw the evidence or alternatively ask the court or tribunal to rely on it (accepting that the evidence may have less weight if a person is not prepared to turn up to confirm it). Either party may also ask the court or tribunal to draw inferences (one way or the other) about the evidence due to the witness’s failure to attend.

In other words, it is not ‘the end’ if a witness does not turn up, but it is preferable to have all relevant evidence, including witnesses, available to help the trier of fact come to the right decision.

What does the “seat” of the arbitration mean?

The “seat” of the arbitration has special meaning in arbitration law. Let us have a look at some of the language so we can impress our friends at dinner parties.

The procedural law of the arbitration is called lex arbitri, sometimes also called ‘curial law’. Procedural law governs the arbitration proceedings, namely the conduct of the arbitration and the supervisory power of the court.

Procedural law matters here because it is under this ‘heading’ that we consider things like the compulsion of witnesses to attend a hearing.

Procedural law is different from the substantive or proper law (the applicable law on the merits). The law applicable to the merits for a CAS appeal will be the AFL Ant-Doping Code and, subsidiarily, “the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law the Panel deems appropriate”: see Rule 58 CAS Rules. Given Australian Rules Football is not an international sport, one expects the merits of the case will, to the extent relevant, be governed by Australian law.

The lex arbitri (procedural law) is mostly the law of the place or seat of the arbitral tribunal. Think of it this way: Procedural law is essentially the Law of the Seat.

In the case of WADA’s appeal to CAS in the Essendon saga, this means the Law of the Seat is Swiss law.

Consider this: Because the seat of all CAS appeals remains Lausanne, Switzerland irrespective of where the hearing is held, the Law of the Seat will be Swiss law even if hearings are held in Australia.

However, that is not the end of the story. This is because there is another concept relevant to procedure called the Law of the Hearings.

Cross-border international arbitrations are common nowadays, where parties might reside in one or more countries and the arbitration is held in yet another country. That is why all of this terminology has emerged.

The Law of the Hearings is what the term suggests. This is the law of the place where the arbitral proceedings are held.

How might the relationship work between the Law of the Seat and the Law of the Hearings in a case involving the compulsion of third party witnesses? What if these laws are incompatible?

The position is by no means clear, which means conflicts of laws experts might rub their hands with glee at a scenario involving a CAS hearing in Australia otherwise subject to Swiss procedural law.

That is, by ensuring the Law of the Seat is alway Switzerland, CAS might be perceived to be seeking to make itself immune from interference by domestic courts. However, Australian courts are highly unlikely to want to give up their sovereignty to a foreign jurisdiction, without thoroughly testing whether the relevant principles are compatible with our own laws.

The conundrum

Imagine a case where a CAS appeal is held in Switzerland. Here, the Law of the Seat and the Law of the Hearings would be one and the same. There would be no conflict of laws on procedural questions. Swiss law would be “all systems go!” So far, so good.

However, the third party witnesses from whom evidence is sought might live in another country, say, Australia.

Therefore, even if Swiss law could compel those witnesses to appear at the hearings, you still have to get them from A. to B. How would you go about that?

You could ask the third party witness to appear by video link. However, that would mean getting the witnesses to turn up to a conference room in, say, Melbourne CBD, so that their image and voice can be transmitted to a hearing room designed by Ferrari Architects in Lausanne, Switzerland. Swiss people, however good their chocolate and fondue, and whatever the decision of a Swiss Court, do not have jurisdiction to force someone to go from their home in Melbourne’s suburbs to that conference room in Melbourne’s CBD without Australian help.

It follows that even if an order were made in a Swiss Court compelling a witness to attend the CAS appeal, a process would then likely be required involving an Australian Court to require the third party witness to make the train / tram / car trip to that conference room in Melbourne’s CBD.

Here is another option. With the ruling of a Swiss Court in hand, one could look to the extradition treaty between Australia and Switzerland (in force since the early 1990s) to seek that those reluctant witnesses board a flight from Australia so that they can arrive at Château de Béthusy at 9.30 am on an appointed day.

However, the last time I looked, however seriously we take our sport, the failure to turn up to a sporting tribunal appeal is not an offence punishable by imprisonment or other deprivation of liberty for a maximum period of at least one year (the minimum requirement under the Treaty).

In short, on a ‘first principle’ basis, it appears plain that a Lausanne, Switzerland hearing does not mean it would be smooth sailing in assuring witness attendance.

Third party witnesses are a special category

Fundamentally, arbitrations are different from courts. In arbitrations, the parties are there because they have agreed to be there, pursuant to contract (such as the AFL Anti-Doping Code). It is a consensual process.

Therefore, whilst witnesses give evidence in international arbitrations as they do in litigation, an arbitrator can only make orders concerning the parties that have agreed to be there.

Normally, it is the responsibility of the party calling a witness to ensure that the witness turns up. If the witness refuses to attend, a court may be asked to help out.

People who are not parties to the arbitration, but who may have something helpful to say at a hearing, are called “third parties”. They have not agreed to be subject to or involved in the process. Their interests might be different from the parties to the arbitration. Therefore, it is likely a court or Appeal Panel would engage in a careful balancing exercise of these competing interests before considering whether to force a third party witness to give oral evidence.

A closer look at the Law of the Seat

The Swiss legal system is not like the Australian legal system. Australia’s current legal system has colonial roots from the United Kingdom. The ‘adversarial’ system, to be frank, is not necessarily dedicated to an inquiry into the truth. It is far more focused on the presentation of competing arguments and the declaration of a winner.

Switzerland’s system is ‘inquisitorial’, a concept sourced from its continental heritage of Roman law. Judges take a much more active role in the fact finding exercise to try to ascertain the likely truth of what happened.

Therefore, it is important not to make assumptions about what we expect might happen under Swiss law based on our own experience in Australia.

Research for this post has not found an answer to the propensity or otherwise of a Swiss court to force reluctant witnesses to give evidence in an arbitration. It does appear plain though, that far-reaching pre-trial discovery or extensive document production is not the norm under Swiss law.

What we do know is that the applicable Swiss law is Chapter 12 of the Swiss International Private Law Act of 18 December 1987 (PILA).

For a terrific general article explaining how PILA works in the context of CAS, see “The CAS – An arbitral institution with its seat in Switzerland” by Meinrad Vetter.

The PILA will apply to the WADA appeal before CAS because at least one of the parties at the time of the arbitration agreement was concluded was neither domiciled nor habitually resident in Switzerland: Article 176(1).

The PILA is pretty short. Chapter 12 is based on the concept that private autonomy plays an important role. This gives the parties to an arbitration plenty of scope to conclude their own rules.

That might be all well and good, but the CAS procedural rules say very little about how parties should gather evidence. They assume everyone is a voluntary participant.

The PILA provides only very limited guidance about what happens if a party does not consent to appear. Article 184(2) simply says:

If the assistance of state judiciary authorities is necessary for the taking of evidence, the arbitral tribunal or a party with the consent of the arbitral tribunal may request the assistance of the state judge at the seat of the arbitral tribunal; the judge shall apply his own law.”

The only process this suggests is that:

  • WADA or the 34 Essendon players would need to apply to the Appeal Panel for permission to go to Court for help compelling third party witnesses to testify at the hearing.
  • The Appeal Panel would decide one way or the other.
  • If ‘Yes’, the application would likely be made to a Swiss court (see “state judge at the seat of the arbitral tribunal”).
  • The Swiss court could either make the order or not for the person to attend (we don’t know on what basis);
  • If the order were to be made, a party would then have to work out how to enforce it given that the witness is likely located in Australia.

Here are some options about how to go about trying to enforce in Australia a court order made in Switzerland for a third party witness to attend WADA’s appeal to CAS, either by video link or in person:

In other words, it looks like there is a problem in the ‘back end’ of the process, in trying to get an Australian to give evidence at a foreign CAS hearing.

Does the International Arbitation Act apply?

In a previous post, the Supreme Court of Victoria’s decision not to grant subpoenas compelling witnesses to testify at the AFL Tribunal hearing in this matter was discussed in the context of the pending CAS appeal.

For completion, and with a hat tip to Deeds of Counsel, it is important to note the possible applicability of the International Arbitration Act 1974 (Cth.) (IAA).

Section 16 of the IAA provides that the UNCITRAL Model Law on International Commercial Arbitration (Model Law) has the force of law in Australia. UNICTRAL is the United Nations Commission on International Trade Law.

Note, however, the presence of the word “Commercial” again, and the findings of Justice Croft in the Supreme Court case to the effect that a disciplinary hearing before the AFL Tribunal did not have that essential commercial character.

Legal enthusiasts will be aware that Justice Croft’s decision has less persuasive force as precedent in the Federal Court of Australia.

Article 1(3) Model Law provides that “Commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.

Notably, this definition does not seem to encompass disputes of an employment or disciplinary character.

Please feel free to Comment on this post if there is Federal Court authority in support of the concept that employment or disciplinary disputes have been found to have a “commercial” character under the IAA.

The reason why it is important to understand this is because it appears that the IAA will otherwise apply to WADA’s appeal to CAS (because the seat of the arbitration is outside Australia).

If the IAA does apply, Article 27 of the Model Law provides that:

The arbitral tribunal or a party with the approval of the arbitral tribunal may request from a competent court of this State assistance in taking evidence.”

Whilst this would enable a “request” to be made, it is by no means certain this would lead to a court order.  The Australian court would then likely engage in the balancing exercise discussed above of third party witness interests versus the interests in having that person attend the arbitration.

Conclusion

It is a tangled web of procedural rules indeed. Therefore, if you have made it to the end of this post and you think you have a clear view of what might happen next, all one can say is: “Bravo!”.

So too, if you happen to say to yourself, ‘I never thought when news of the Essendon Supplements Saga broke that I would be contemplating in 2015 the applicability of Swiss law to the matters at hand’, you are certainly not alone.

5 Responses to “Essendon supplements saga: Is it up, up and away to Switzerland?”

  1. Don Williams

    Natalie: thank you for another terrific article.

    It would be fascinating to know what legal advice the AFL received before it signed over the ultimate decision making power in its Anti Doping Code to the CAS…or did they overlook this?

    Don Williams

    Reply
  2. Linda

    thanks Natalie, an interesting read. I’m pretty sure that when the EFC 34 were giving their evidence, apparently impressing the ASADA investigators with their candour and honesty, they didn’t think that they’d be at the centre of this discussion on cross-border arbitration rules and conflicts of law three years down the track either!

    That this is where the matter now lies, as a result of WADA’s decision to appeal the AFL Tribunal’s decision, mostly clearly illustrates the irony of this enquiry. No longer a search for truth, if it ever was, but a fight-to-the-death contest between vested interests (AFL, ASADA, WADA, even the federal govt by some accounts) in which the playing group – the alleged drug-dopers – have emerged as the only party whose conduct and behaviour throughout the entire saga has been exemplary. Ironic indeed.

    As you say, “arbitrations are different from courts. In arbitrations, the parties are there because they have agreed to be there, pursuant to contract (such as the AFL Anti-Doping Code). It is a consensual process.”

    The “consent” of the EFC 34 in this case is light years away from the usual contractual agreement to resolve disputes by arbitration.

    My (extremely limited) experience of arbitration agreements in mid-1990’s Hong Kong is that, in a commercial context, these are fiercely negotiated contractual provisions – purely because arbitration is often a first (expensive) step in dispute resolution and then the parties find themselves in court anyway. The parties need to decide whether it’s going to be money well spent – whether it’s going to be an effective dispute resolution mechanism.

    Prior to Handover, there was a lot of uncertainty about the rule of law and, specifically, enforceability of contracts in post-handover HK. For this reason, there was a lot of business taking place there prior to 1 July 1997 and arbitration clauses were a common way of satisfying a nervous foreign company that the agreement was enforceable. Then businesses started to realise that agreeing to arbitrate the dispute in NY or Paris (the first rule of arbitration is that it must take place in a desirable location!) was not necessarily money well spent unless the dispute was over an agreed threshold amount/material issue. Depending on the deal, the parties sometimes decided against arbitration, that the uncertainty of the post-1997 rule of law was a business risk worth taking.

    It is a stretch to equate this considered commercial contractual consent to arbitration with the consent of the EFC 34 where consent was given by 18 year old footballers signing their EFC/AFL contracts.

    Reply

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