Sport arbitration

Introduction

The sports industry under different estimations covers between 3 and 5 % of the total trade in the world, being a substantial sphere for resolving legal disputes. For the international arbitration community sports sector can be of a particular interest, given that the Court of Arbitration for Sport (CAS) in Lausanne is now receiving new cases almost every working day.

Although sports arbitration has many similarities with commercial or investment arbitration, and many sports arbitrators also act as arbitrations in ordinary commercial and investment cases, it has a considerable amount of interesting particularities that distinguish it from commercial arbitration. For example, some of the sports arbitral awards were issued within expedited arbitral proceedings during 24 hours. Another particularity of sports arbitration is publicity: arbitrators should be prepared to have their awards being analysed in detail by the world’s media or scholars with favour or criticism, given that many of CAS awards are publicly available.

Advantages and unique aspects of sports arbitration

Time-efficiency

The most obvious and probably important particularly of sports arbitration is its time-efficiency. The particular necessity in the sporting disputes being resolved fast derives from the fact that the sports industry is connected to various sporting events and competitions. For example, it will make no sense to have a decision that a particular athlete may participate at the Olympic Games if such decision is rendered after the Games have already been completed.

The most outstanding example of the fast arbitration in sports is the Ad Hoc Division of CAS. This is an arbitral body that is active only for the duration of specific sports competition (Olympic Summer and Winter Games, FIFA World Cup, etc.). For each of these events, CAS appoints a number of arbitrators, who come in the host city of the event and have to be available at all times (day and night) is any legal dispute will arise during the event. At the CAS Ad Hoc Division there is normally a 24 hours term during which the parties should make written and oral statements and the tribunal render an award.

It is also frequent that sports arbitration is conducted within the expedited proceedings taking place under the standard arbitration rules. For these arbitrations to be completed successfully in a very short period of time the cooperation of all parties is required.

Provisional measures

Provisional measures in sports arbitration are more effective remedy than in other types of arbitration due to the fact that sports governing bodies almost voluntarily comply with any orders issued, and the system of enforcement of arbitral awards in sporting disputes is very effective. Similar to the practice generally followed in international commercial arbitration, when considering an application for provisional measures, sports arbitration tribunals generally consider:

  • whether the relief is necessary to protect the applicant from irreparable harm;
  • the likelihood of success on the merits of the claim; and
  • whether the interests of the applicant outweigh those of the other parties.

Particular expertise

The CAS policy of keeping a closed list of arbitrators effectively limits the autonomy of the parties to appoint their own arbitrator. Nevertheless, it ensures that the arbitrators are specialists in the area of sports and will be able to issue fast and consistent decisions.

Consistency of awards

Idea of having the consistent legal precedents in sports matters which may be relied upon by the bodies and individuals from the sporting world is fruitful. The appearance of the CAS as an “international supreme court” for sports disputes leaded to the greater consistency between legal decisions in the sports world and has created a body of case law (lex sportiva). The creation of a consistent body of case law has been made possible given that in all CAS appeals cases the awards shall be made public by the CAS, unless both parties agree that it shall remain confidential. As a result, the CAS publishes a large amount of its awards from which all main legal issues can be understood.

Costs

There is very often a difference between the parties in sports arbitration: for instance, large sporting bodes and one much smaller individual (a club or an athlete). At least 3 features of CAS arbitration should provide facility in the issues of costs for small parties in arbitration:

  • considerably small registration fee of CHF 1’000;
  • fair system of contribution of the legal costs; and
  • special regime for arbitration costs in international disciplinary cases.

The positive financial aspect for athletes implies that once they become involved in international disciplinary cases – no arbitration costs shall be paid by the parties.

Simplicity of enforcement

Another important advantage of sports arbitration is the simplicity of enforcement of sports arbitration awards. Although the parties may also use the New York Convention for such purposes, sports governing bodies must comply with CAS arbitral awards and they have enough internal authority and enforcement mechanisms to make sure the awards against their members are complied with. The Swiss Federal Tribunal calls this as a “private enforcement system”.

Court of Arbitration for Sport

Besides the variety of kinds of international sports, the dominant position of sports arbitration is taken by one institution – the Court of Arbitration for Sport, located in Lausanne, Switzerland. Since its establishment in 1984 it has registered approximately 4’200 separate arbitration proceedings.

Organisation of CAS

The CAS performs its functions through the intermediary of arbitrators, of whom there are at least 300. One of the major new features is existence of two divisions: an Ordinary Arbitration Division, for sole-instance disputes submitted to the CAS, and an Appeals Arbitration Division, for disputes resulting from final-instance decisions taken by sports organisations. Each division is headed by a president.

In addition to the CAS headquarters in Lausanne, the CAS also has two ‘decentralised offices’ in Sydney and New York. The CAS provides four separate and distinct dispute resolution services: Ordinary Arbitration, Appeals Arbitration, Ad Hoc expedited Arbitration at major sporting events and Mediation.

The role of the division presidents is to take charge of the first arbitration operations once the procedure is under way and before the panels of arbitrators are appointed. The presidents are often called upon to issue orders on requests for interim relief or for suspensive effect, and intervene in the framework of constituting the panels of arbitrators. Once nominated, the arbitrators subsequently take charge of the procedure.

The CAS arbitrators are appointed by the ICAS for a renewable term of four years. The Code stipulates that the ICAS must call upon “personalities with a legal training and who possess recognised competence with regard to sport”.

The arbitrators are not attached to a particular CAS division, and can sit on panels called upon to rule under the ordinary procedure as well as those ruling under the appeals procedure. CAS panels are composed either of a single arbitrator or of three. All arbitrators are bound by the duty of confidentiality and may not reveal any information connected with the parties, the dispute or the proceedings themselves.

The CAS Ordinary Division is a classic arbitration service, resolving mainly commercial disputes, and its general structure and workings will be familiar to any practitioners with experience of the ICC, AAA, LCIA, SCC or other commercial arbitration institutions.

Appeals arbitration is usually somewhat of a novelty for other arbitration practitioners. Appeals arbitration consists of appeals filed against decisions issued by other arbitral or disciplinary tribunals, typically either national sports arbitration bodies or the internal disciplinary or judicial bodies of international sports federations.

Legal framework of CAS

The seat of the CAS and of each Arbitration Panel is in Lausanne, Switzerland. This is non-discussible and non-negotiable feature of the sports arbitration.

The same provision applies to the arbitral tribunals of the CAS Ad Hoc Divisions. The location of the hearing has no consequence on the legal seat of the arbitration, which remains in Lausanne.

Given that each CAS panel constitutes an international arbitral tribunal seated in Switzerland, all CAS proceedings are subject to the provisions of Swiss Private International Law Act (PILA), which ensures that there is procedural consistency between all CAS cases. PILA is generally regarded as being “arbitration-friendly”. CAS awards are final and can only be challenged on very limited grounds before the Swiss Federal Tribunal.

Types of disputes submitted to the CAS

Generally speaking, a dispute may be submitted to the Court of Arbitration for Sport only if there is an arbitration agreement between the parties which specifies recourse to the CAS. Article R27 of the Code stipulates that the CAS has jurisdiction solely to rule on disputes connected with sport. Since its creation, the CAS has never declared itself to lack jurisdiction on the grounds of a dispute’s not being related to sport.

In principle, two types of dispute may be submitted to the CAS: those of a commercial nature, and those of a disciplinary nature.

The first category essentially involves disputes relating to the execution of contracts, such as those relating to sponsorship, the sale of television rights, the staging of sports events, player transfers and relations between players or coaches and clubs and/or agents (employment contracts and agency contracts). Disputes relating to civil liability issues also come under this category (e.g. an accident to an athlete during a sports competition). These so-called commercial disputes are handled by the CAS acting as a court of sole instance.

Disciplinary cases represent the second group of disputes submitted to the CAS, of which a large number are doping-related. In addition to doping cases, the CAS is called upon to rule on various disciplinary cases (violence on the field of play, abuse of a referee).

Such disciplinary cases are generally dealt with in the first instance by the competent sports authorities, and subsequently become the subject of an appeal to the CAS, which then acts as a court of last instance.

Football employment disputes

The type of disputes that most commonly arise before the CAS are appeals from decisions of FIFA, the world governing body for football, which has its own internal judicial system. This type of dispute typically arises from the termination of the employment contracts of players or coaches, or the movement of players between clubs. As a consequence of such movement, remuneration is generally payable to the player’s previous clubs, either pursuant to contractual agreements between the parties or according to the complex series of regulations that apply to football transfers, both in a national and international context.

Other international sports arbitration bodies

Many international sports federations have their own dispute resolution systems. However, in the majority of instances, these systems could not accurately be described as independent arbitration, due to the tribunals not being sufficiently independent from the sports organisation responsible for their constitution. One example of a ‘true’ arbitration system is the Basketball Arbitral Tribunal (BAT), which was set up by the world governing body for basketball (FIBA) for the resolution of disputes between players, agents and clubs. BAT arbitration, seated in Geneva, involves a simple, English language procedure with a sole arbitrator, who is appointed by the BAT president. Provisional and conservatory measures are available to the parties and the final award is issued by the arbitrator within six weeks of the end of proceedings. Some notable features of BAT arbitration are that hearings are held only upon application, and the arbitrators decide the cases ex aequo et bono.

Although the majority of international federations allow for an appeal of their own decisions to the CAS, some sports such as rugby and Formula One do not provide for such an appeal, except where mandated by the WADA Anti-Doping Code.

Sports arbitration in Ukraine

So far no specialised sports arbitration tribunal is created in Ukraine aimed on resolving any or certain sports-related disputes. Although idea of its creation is constantly discussed among the lawyers, at least the relevant legislation shall be amended to enable its effective functioning. Foremost, it is important to understand what disputes may be resolved by such tribunal and in what type of sports. The majority of the disputes concern employment-related disputes and disciplinary matters, while the most frequent “clients” of such tribunal could be football, basketball and other athletes on doping-related matters. Football and basketball in Ukraine has their own effective internal system of resolving all types of disputes with established jurisprudence and independent appeal procedure. Furthermore, arbitrability of employment-related disputes is excluded by Ukrainian law. Consequently, creation of a separate sports arbitration tribunal in Ukraine requires amendments to many acts and may not find support of major sports organisations. In any event, some of them have created own quasi-arbitration venues to resolve all types of disputes.

In general, Ukraine is considered arbitration-friendly country and awards rendered by CAS or BAT are subject to recognition and enforcement in Ukraine. Requirements to the arbitration agreement, contained in the law on “International Commercial Arbitration”, are similar to the UNCITRAL Model Law and New York Convention.

So far any jurisprudence regarding the enforcement of the arbitral awards rendered by CAS or BAT is absent.

One of the examples of effective quasi-arbitration tribunal in Ukraine is the Dispute Resolution Chamber of the Football Federation of Ukraine (“DRC”). It may not be considered as pure arbitration venue as it is aimed on resolving disputes only in football and on the basis of the statutes and regulations of the FFU, rather than arbitration agreement. Moreover, arbitrators are not chosen by the parties but appointed by the Chamber. It functions by analogy with the Dispute Resolution Chamber of FIFA. Since its creation in September 2012 the DRC has resolved over 200 disputes between football clubs, players and coaches. Most of the cases concerns employment-related disputes, while 20% refers to the disputes on training compensation and transfer disputes between football clubs. “Procedural law” of the DRC is its internal rules, while the “substantive law” is composed primarily from the contract in dispute, internal football regulations and subsidiarily – Ukrainian law. Any DRC decision is subject to direct appeal to CAS, providing with an effective and independent control. DRC was initially created by the recommended model of FIFA and is composed of equal number of representatives from the clubs/leagues and players.

Such quasi-arbitration body is an excellent example how sports organisations may resolve internal disputes at national level excluding the involvement of national courts, but simultaneously securing the principles of the right to be heard, fair proceedings and effective control through appeal.

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