Costs in General in CAS Arbitration
The costs in the arbitration before the Court of Arbitration for Sport ("CAS") include mainly the fees of arbitrators and general costs of the proceedings. In order to lodge a claim or an appeal before the CAS, the Claimant/Appellant is required to pay the Court Office fee of 1.000 CHF which is non-refundable1.
Following the formation of the Panel, the CAS Court Office shall decide upon an amount, a method, and time limit for payment of the advance of costs that the Parties are obliged to pay2. In addition, each Party shall bear the costs of its witnesses, experts and interpreters. If the Panel appoints an expert or orders an interpreter, the Panel shall also determine how their costs will be covered3.
At the end of the proceedings, the CAS Court Office determines the exact amount of the arbitration costs. These costs include the CAS Court Office fee, administrative costs, the fee of the arbitrators, and the costs incurred by the arbitrators, the fee of the ad hoc clerk, the contribution towards the expenses of the CAS; the fees of witnesses, interpreters and experts, and the costs so incurred by them. The account for the costs of the arbitration proceeding may be specified in the arbitral award or, separately, sent to the parties.
Advance of Costs and Late Payment
In order to proceed with a case before the CAS, the advance of costs determined by the CAS Court Office upon formation of the Panel must be paid by the Parties. This rule also applies, both to the claims subject to ordinary arbitration procedures, as well as appeals, under the appeal arbitration procedure.4 Together with the amount of the advance of costs, the CAS Court Office also determines the method and the time limit for the payment. The advance of costs is equally paid by the Parties. When a Party fails to pay its share of the advance costs, the other party is expected to pay in its stead. In principle, the proceedings are deemed to be withdrawn and terminated in the event that the party bearing the burden of payment does not pay the advance costs, or does not pay in lieu of the party that has failed to pay its share of the advance costs under Article 64.2 of the Code of Sports-related arbitrations ("CAS Code").
With this regard, late payment of advance costs in CAS proceedings raised specific issues before the Swiss Federal Tribunal ("SFT"), which are as follows: (i) Is the termination order of the CAS Panel an appealable decision before the SFT? (ii) Does the termination of CAS proceedings as a result of delay in the payment of the advance costs in CAS proceedings violate the right of the related party to be heard? (iii) Does the termination of CAS proceedings, as a result of delay in the payment of the advance costs in CAS proceedings constitute excessive formalism? The SFT addressed these issues in 2016, in case numbered 4A_692/2016, and examined the challenges in a decision of the CAS, which had deemed the appeal withdrawn after the appellant failed to pay the advance costs.
Decision of SFT 4A_692/2016
In 2016, the World Anti-Doping Agency ("WADA") appealed an agreement, namely, the "Acceptance of Sanction which was concluded between a US gymnast and the United States Anti-Doping Agency ("USADA"). The Acceptance of Sanction was concluded after the USADA penalized the gymnast in order to prevent any further prosecutions. However, the WADA appealed this Agreement, since it did not concur with it.
In the appeal proceeding, the Parties were informed by the CAS that the advance costs were calculated as 18.000 CHF for each Party. Afterwards, the Respondents (the USADA and the gymnast) did not pay their portion of the advance costs, and the WADA was instructed to pay their shares within a specific period, and were informed that the appeal would be deemed withdrawn, and the proceedings would be terminated, unless payment was made.
Within the deadline prescribed by the CAS, the WADA paid only half of the Respondents' advance of the costs due to an administrative error. After the WADA was informed by the CAS that only partial payment had been made, the WADA immediately paid the remaining outstanding amount of the advance costs; however the deadline for payment had already passed, and USADA and the gymnast requested termination of the proceedings due to the late payment. Even though the WADA informed the CAS that it had always intended to pay the full amount of the advance costs, the one-half payment made, the fact that the second half was paid later and that the late payment had only been rendered due to a clerical mistake, the proceeding was terminated through an order for termination by the CAS Appeals Division President. In response to this Termination Order, the WADA applied to the SFT claiming a violation of its right to be heard and violation of public policy since the termination order constituted excessive formalism5.
Admissibility of an Appeal against Termination Order of CAS
The first question the Court resolved was whether the Termination Order given by the CAS Appeals Division President, which is not an award of the arbitral tribunal, could be challenged before the SFT. Even though the Termination Order is not titled as an "arbitral award," and Article 190 of the Private International Law Act ("PILA") clearly mentions arbitral awards, the SFT held that a request to set aside a termination order given by the CAS may be appealed before the SFT. The main reason for this is that the Termination Order ends the arbitration on procedural grounds, which also constitute a final and substantive decision.
The SFT admitted that a decision of the CAS President, rather than an Arbitral Tribunal/Panel, can be considered to be an arbitral award when it concludes the arbitration. The WADA's appeal was considered admissible by the SFT in this respect6.
Right to be heard
One of the main arguments in the WADA's appeal is the alleged violation of the WADA's right to be heard before the CAS proceedings, since the CAS did not examine an essential argument put forward by the WADA, namely, whether strict application of the relevant provision was justified in light of the circumstances of the case.
In its decision, the SFT clarified that the right to be heard allows the Panel to consider the essential arguments, facts and evidence; however, it does not force the Panel to take into consideration every single claim of the Parties. The SFT also found that the examination of whether the President of the Appeals Division had correctly interpreted Article R64.2 of the CAS Code falls outside of the scope of its review.
The STF further noted that the Termination Order set out the facts upon which the President of the CAS Appeals Division based the termination, particularly the fact that the WADA was unable to rely upon its own error to explain its failure to make the payment necessary within the time limit set by the CAS. With this regard, the SFT found that before the termination order, the WADA was completely informed by the CAS about the results of late payment, and only complained about the strict penalty. Therefore, the SFT concluded that the CAS sufficiently abide by the right to be heard principle and dismissed the claims of the WADA. .and dismissed the claims of the WADA7.
The WADA also argued that the CAS acted in an excessively formal manner by terminating the arbitration proceeding due to late payment, which is tantamount to violating Swiss public policy8.
In this regard, the SFT further examined the question of whether the procedural public policy covers the prohibition of excessive formalism. The SFT left the answer to this question unclear due to absence of any applicable theory in the doctrine. On the other hand, the SFT noted that there was no need to discuss the issue since the CAS demonstrated no excessive formalism towards the WADA.9 The SFT also stated that a judicial body should strictly apply its own rules. It was finally acknowledged that accepting the claim of the WADA would possibly encourage misconduct, and render Article R64.2 of the CAS Code meaningless.
It is clear that the Parties of a dispute handled by the CAS should give the utmost attention to deadlines and the instructions of the Panel and the CAS Court Office. As it is prescribed by the SFT, in the event of a delay in the payment of advance costs, the delayed party will face termination of the proceeding regardless of the reason for the delay. Parties before the CAS are strongly recommended to seek an extension for the time limit in which to pay advance costs. On the other hand, it must be borne in mind that the CAS is not obliged to grant the parties such extension to the time limit for payment of advance costs. As a result, the most reasonable act of the Parties would be to strictly follow the procedural rules and instructions given by the CAS.
 CAS Code Article R64.1.
 CAS Code Article R64.2.
 CAS Code Article R64.3.
 CAS Code Article R64.2.
 Termination of proceedings for failure to pay advance, not excessively formalistic (Swiss Supreme Court) by Prof. Dr. Nathalie Voser (Partner) and Dr. Philip Wimalasena (Associate), https://www.swlegal.ch/media/filer_public/c7/b1/c7b1dff1-1572-42a8-8c37-ae96bf821df4/2017_nathalie_voser__philip_wimalasena_termination_of_proceedings_for_failure_pay_advance_not_excessively_formalisti.pdf (Access date: November 2019).
 Formalism is typically considered excessive when interest worthy of protection does not justify strict application of the rules, and unsustainably complicates the application of substantive law, or restricts access to the courts.
 Please see 4A_600/2008: The SFT similarly concluded in another case of late payment of advance costs, and this procedure was also brought before the CAS.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.