TTFA v FIFA: What the Court of Appeal found

The decision means that FIFA is now free to reintroduce the normalisation committee (NC) which replaced Wallace and his three vice presidents — Clynt Taylor, Joseph Sam Phillips, and Susan Joseph-Warrick (resigned) on March 17. The The elected executives were contending that the NC installed on March 27 by FIFA “was unwarranted and indefensible” and also “made in bad faith and for an improper and illegal motive”.

DECISION

Chief justice Ivor Archie

1. I have had the benefit of reading the judgment of Bereaux, J.A. in this matter and I agree with his reasoning and conclusions. Accordingly, I too would allow the appeal and set aside the decisions and declarations of the learned judge at first instance. It would also follow that the TTFA must pay FIFA’s costs. However, this court – having rendered its decision – I wish to make some observations about the manner in which this case has been managed.

2. Service of originating documents, unless unequivocally waived, is a pre-requisite to the progression of proceedings. As any experienced practitioner will know, service of originating process is an arcane area of procedural law that is littered with pitfalls. Many a claim has floundered at the first hurdle. This is merely the latest example. Having come to the conclusion that the service was unlawful, quite apart from the other reasons set out in the judgment of my learned brother, we have no choice but to allow this appeal.

3. As Mendonca J.A. opined in Gomes v Nunez, (see para 33), the Civil Procedure Rules are a complete, self-contained scheme for the management of civil litigation. There is no inherent power in the Court to invent a process that is outside the contemplation of the Rules and then to direct a party to employ it. That is a recipe for chaos. Permitting it to stand would only further complicate an already difficult area of the law as there would be no guardrails for the purported exercise of any such discretion.

4. Owing to the particular primary challenge mounted by FIFA, it would have been wiser to let the challenge to service be determined, particularly in the context of a pending appeal. It was neither prudent case management nor an economical deployment of judicial time and resources to attempt to finally determine the substantive issues and to deliver a judgment less than a week before the scheduled hearing of the interlocutory appeal. The foreseeable result is that we must now set aside the declarations granted below.

5. While we are aware that the filing of an appeal against a final decision does not entitle the unsuccessful party to a stay, deeper consideration must be given in circumstances like this where, depending on the outcome of the appeal, the effort expended would have been in vain and the appellate court may be obliged to reverse any decision. Zeal is commendable but it must not obscure the need for caution. I trust that, in future, Courts at first instance will be guided accordingly.

Summary of decision

Nolan P.G Bereaux Justice of Appeal

The appeal is allowed for the reasons given at paragraphs i, iii and iv below:

i. The filing of these proceedings was a breach of Article 67 of TTFA’s Constitution by which the TTFA is bound. Section 67 is unambiguous. Any appeal against a final and binding decision passed by FIFA shall be heard by CAS. The filing of these proceedings was therefore ultra vires Article 67, null, void and of no effect and must be struck out.

ii. There is no evidence that William Wallace was not authorised by the Board to bring this action. That there cannot therefore be established.

iii. The judge was plainly wrong in refusing to stay these proceedings in favour of arbitration before the CAS. The Court of Appeal is entitled to look at the matter afresh. FIFA has met the threshold requirements which trigger the court’s discretion under section 7 of the Arbitration Act Chapter 5:01. I am satisfied that there was no reason why the matter should not have been referred to arbitration and that FIFA was ready, willing and able to conduct the arbitration.

iv. The purported service of proceedings by e-mail was a breach of the laws of Switzerland. Consequently, it was a breach of Part 7.8(2) of the Civil Proceedings Rules 1998 (CPR) which expressly provides that neither Part 7.8 nor any court order authorises any person to do anything in the country in which the court order is to be served, which is in breach of the law of that county. Because service of process by e- mail is illegal in Switzerland, any such service is void and therefore a nullity. It was also a breach of Part 7. 6(2)(b) of the CPR.

Analysis

Nolan P.G Bereaux Justice of Appeal

iv. On a proper review of the evidence, FIFA’s refusal to pay the advance costs of the arbitration did not amount to a lack of readiness or an unwillingness to properly conduct the appeal. As Mr. Palacios explained, it was FIFA’s practice, in conducting its arbitrations, not to pay advance costs because of the large numbers of arbitrations in which it is involved. Other than that, FIFA had proceeded to nominate one of the three arbitrators required for the conduct of the arbitration.

Issue ii – Did the President, William Wallace, have the authority to bring these proceedings?

31. Mr. Hamel-Smith submitted that he did not. He contended that under the TTFA’s Constitution, that authority resided in the board of directors as a whole and there was nothing in the evidence to suggest that such authority had been obtained. Certainly we would expect that any action taken by a corporate person will first have had the sanction of its board of directors. But there is nothing in the evidence to suggest that Mr. Wallace did not have the authority.

Issue iii – Should these proceedings have been stayed in favour of arbitration?

32. Had I come to another conclusion on the vires of the TTFA’s institution of these proceedings the appellant would have been entitled to a stay of these proceedings under section 7 of the Arbitration Act Chapter 5:01 or under the courts inherent jurisdiction. I shall address only the section 7 power in this appeal. Section 7 provides:

“If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in the Court against any other party to the arbitration agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time after appearance and before delivering any pleadings or taking any other steps in the proceedings, apply to the Court to stay the proceedings, and the Court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.”

37. Dr. Crowne submitted that FIFA’s refusal to pay the advance costs of the arbitration rendered the costs of the arbitration prohibitive and the arbitration agreement inoperable. The evidence in this regard showed that by letter dated 30th April, 2020 CAS informed TTFA of FIFA’s policy of not paying advance costs and then called upon the respondent to pay the entire upfront fee. In the context of an already financially straitened organisation, such a request did seem to me to be highly unreasonable. My concern was heightened when I read Article 64(2) of the Statutes of the Bodies Working for the Settlement of Sports Related Disputes (which govern CAS arbitrations it appears) which was used by CAS to justify TTFA paying the entire amount of upfront costs. There was no basis under that provision for calling on the TTFA to pay the entire sum. Dr. Crowne submitted that calling upon the TTFA to pay that exorbitant sum was unconscionable and rendered the agreement unenforceable. He relied on the decision in Uber Technologies Inc v Heller 2020 SCC 16, in which a majority of the Canada Supreme Court held such a clause to be unconscionable and unenforceable in circumstances where the upfront costs to arbitrate a claim against Uber was equal to all or most of the gross annual income of the claimant working full time as an Uber driver. There is no question of unconscionability here. That case is distinguishable. The facts of this case are nowhere as extreme. FIFA in any event recanted its position and was prepared to pay its upfront costs.

Order

Nolan P.G Bereaux Justice of Appeal

50. I would therefore formally order as follows:

(i) The appeal is allowed. The decision of Gobin J dated 13th August, 2020 is set aside.

(ii) The decision of Gobin J dated 13th October, 2020 is set aside. The order granting declarations therein is quashed.

(iii) The costs of this appeal must follow the event. The TTFA therefore shall pay the appellant’s costs of the application in the High Court, certified fit for one senior and one junior attorney-at-law.

(iv) The TTFA shall also pay the appellant’s costs of this appeal which shall be two thirds of the costs assessed in the High Court.

Appearances:

C. Hamel-Smith SC, J. Walker instructed by C. Gopie, Attorneys-at-law, for the Appellant

Dr. E. Crowne, M. Gayle instructed by J. Jones and C. Paul, Attorneys-at-law, for the Respondent

Editor's Note:

The above represents selected portions taken from the 23-page judgment delivered on October 23, 2020 by the Court of Appeal.

SOURCE: T&T Guardian