The case involves a dispute between L., an architect, and Y. SA, a company, over an exclusive licensing agreement for the development of sport catamarans. The contract, signed in March 1990, required L. to contribute to the development and promotion of the catamarans, with financial compensation including a guaranteed minimum annual payment and monthly advances. The agreement was indefinite, allowing termination with a 24-month notice. Y. SA fulfilled its obligations for two years but stopped payments in March 1992, claiming L.'s contributions were unclear and the contract was unbalanced. L. viewed this as wrongful termination and sought damages, initially FF 600,000 but later reduced to FF 250,000.
The dispute was submitted to the Court of Arbitration for Sport (CAS) under an arbitration agreement in October 1992, with French law applicable and the arbitrator authorized to decide as an amiable compositeur, meaning based on fairness rather than strict legal rules. The key issue was whether the dispute fell under CAS's jurisdiction, as it involved sport-related activities but the connection was tenuous. The arbitrator noted that CAS's jurisdiction ultimately depends on the parties' agreement to arbitrate, and since neither the CAS Request Panel nor the arbitrator objected, the case proceeded without a definitive ruling on jurisdictional criteria.
The arbitrator emphasized principles like good faith and respect for contractual commitments, considering both parties were experienced and had freely entered the agreement. While Y. SA argued the contract lacked clarity, the arbitrator found it had been honored for two years without issue, and Y. SA had not sought clarification before unilaterally ceasing payments. The exclusivity clause meant L. had to remain available, and Y. SA's infrequent use of L.'s services did not justify non-payment. The arbitrator ruled Y. SA's actions constituted a wrongful breach, awarding L. FF 250,000 in compensation, aligning with the contract's annual indemnity and allowing L. to reorganize. The contract was declared resolved as of March 1992.
The case highlights CAS's flexibility in handling disputes and the importance of party autonomy in arbitration. It also underscores the principle of equity in resolving conflicts, where fairness and contractual commitments take precedence over strict legal formalities. The decision demonstrates how arbitrators, acting as amiable compositeurs, balance parties' interests to achieve a just outcome.