Nigeria: From Bosman To Perchstein – The Finality Of The Arbitral Awards Of The Court Of Arbitration For Sports Examined

Last Updated: 5 December 2017
Article by Steve Austine Nwabueze

In Search of a harmonious Sports Dispute Resolution Platform

____________________________________________________

The issue of the appropriate dispute resolution mechanism to adopt in resolving disputes has bedeviled International Sports for ages. The consensus has always been to ensure a common dispute resolution platform shorn of the characteristic red tapes and delays associated therewith. Even post-judgment, the challenges of enforcement stares the victorious litigant in the face. Little wonder then why international sports bodies like FIFA, IAAF, IOC & FIBA adopted ADR as the known dispute resolution mechanisms between member countries, players and associations. It is cost-effective, fast and is devoid of the rancorous underpinnings that follow litigation upon determination of the rights of the parties.

Without a competent means of internal dispute resolution, more and more cases would have to be referred to the courts and portends a grave danger to the concept of self-regulation that sports governing bodies thrive on1.

The various International Sports Associations have therefore ensured a self-regulated process that ensured that final decisions are left with the Court of Arbitration for
Sports (CAS).  Typically, member associations enact rules guiding dispute resolution generally. It is only where they fail in the first instance that recourse is had to the appellate and supervisory jurisdiction of the CAS. The crux of this article is the "finality" of the decisions of the CAS.

With litigation, litigants face a daunting task enforcing the judgment of the Court. However, as far as enforceability of arbitral awards is concerned, sports arbitration does not face the challenge of enforcement in the manner that commercial arbitration does. This is best illustrated through the example of a Swiss football club, FC Sion which disregarded a CAS ruling which cut off the club's eligibility to sign transfer players. After FC Sion signed the players, the Federation Internationale de Football Association ("FIFA"), the international governing body for football, demanded that the Swiss Football Association ("Swiss FA"), the domestic governing body, punish FC Sion. Because of the relationship between FIFA and Swiss FA, Swiss FA was compelled to comply with FIFA's demands or face severe sanctions, thus creating a system where compliance with arbitral awards is honored. This power though a lack of resistance to arbitral award enforcement is a central aspect of both international and global sports law.

 

The Court of Arbitration for Sports- CAS

___________________________________

The name, "Court of Arbitration for Sports" gives the erroneous impression that it is an International Court of law. The position is however, quite the contrary as it is merely but an arbitral tribunal. The CAS was created in 1983 by the IOC as a court with specialized knowledge in the field of sports. CAS is also known by its French name, Tribunal Arbitral du Sport (TAS). Disputes concerning game rules, disqualifications, and other technical questions are settled by the relevant sport body (IAAF, IOC, national sport organization, for example). Non-technical issues (such as sponsorships, suspension, etc.) are settled by the CAS. Its jurisdiction to determine sporting disputes derives from various sporting rules and regulations. For example, the Olympic Charter and the World Anti-Doping Code confer jurisdiction on the CAS to determine certain disputes.

The CAS was therefore created as a fast and cost-effective forum for resolving international sporting disputes.

Appellate/ Supervisory Jurisdiction of the CAS

__________________________________________

The appellate/supervisory jurisdiction of the CAS is best illustrated through Oscar Pistorius' Olympic eligibility battle with the International Association of Athletics Federation2 ("IAAF"). Oscar Pistorius won gold medals in the 100, 200 and 400-meter class-43 events at the 2006 Athletics World Championships using his prosthetic legs while competing against athletes without disabilities. Pistorius then sought to be considered for selection in South Africa's 2008 Olympic team in the 400-meter and the 4x400meter relay. Shortly after his Athletics World Championships success, however, the IAAF changed its rules on "technical aids" specifically to prohibit the use of devices that use springs, wheels, "or any other element that provides the user with an advantage over another athlete not using such a device." Following the rule change, Pistorius completed several tests for the IAAF to further perform research on his situation. Based on these tests, the IAAF Council ruled that Pistorius was ineligible for Olympic selection because his prosthetic legs permitted him to exert less energy than able bodied athletes and constituted an advantage over them. Thereafter, Pistorius appealed the IAAF decision to the CAS, asking the arbitrators to vacate the IAAF decision and rule that he could participate in IAAF sanctioned events. The CAS declared that Pistorius was eligible to compete in IAAF sanctioned events because he was not in violation of the new IAAF rule relating to technical aids on several grounds. The need for oversight and review of sporting bodies' decisions was further proven as necessary by the IAAF's actions following the CAS ruling. The IAAF remained very hostile toward Pistorius as evidenced by IAAF officials stating that "[they] prefer that (South Africa) do(es)n't select him for reasons of athletes' safety" without advancing any evidence in support of that argument. Without the oversight of the CAS, sporting entities would be left to their own devices, possibly to the detriment of athletes like Pistorius.

Is The CAS Decision Truly Final?

__________________________________________

Questions have therefore been asked regarding the validity, enforceability and indeed, the finality of the International arbitral awards rendered by the CAS as well as the recognition thereof. International arbitral awards by the CAS are typically recognized and enforced by national courts under the New York Convention 1958. This issue was addressed in the recent case of Pechstein v International Skating Union OLG Munchen3 With its "seat" in Switzerland, any proceedings to set aside a CAS award must be brought before the Swiss Federal Tribunal4 .

Notwithstanding this, national courts may (pursuant to S. 8 (7) -(7A) IAA 1974) refuse to enforce CAS awards if to do so would be contrary to "public policy". This is what occurred in Pechstein.

Given the felt-need for self-regulation in football, the general consensus was usually to recognize the decisions of the CAS as final and binding. However, one of the earliest recorded act of petulance and challenge of the CAS was recorded in what is known as the "Bosman ruling".  Marc-Jean Bosman5, a Belgian footballer, played for Belgian First Division team R.F.C. de Liege. Upon the expiration of his contract, his intended move to French club, Dunkerque failed because the French club failed to meet the transfer fee demanded by his Belgian club. With the football rules then allowing clubs to obtain a transfer fee for players despite expired contracts, Bosman approached the court arguing that those rules amounted to restraint of trade and violated the principle of free movement of workers established in the European Union (EU).

After five years and appeals against each ruling, the case reached the European Court of Justice, where the Court agreed with this argument and issued the landmark ruling, the basic significance of which is that EU players may now move to another club without a transfer fee, upon the expiration of their contract. For Bosman, the length of time involved in finally settling the case was injurious to his professional career. Having played in the Belgian First Division prior to the trial, he moved to playing in the French lower leagues during the period of the trial, ending up at Belgian Third Division team C.S. Vise after the trial. For the football governing body, the ruling amounted to an encroachment into its sphere of regulation and resulted in a shake-up of its rules.

The German case of Pechstein v ISU has cast a serious doubt over the validity and enforceability of arbitral awards rendered by the Court of Arbitration for Sport, the arbitral tribunal established to determine international sporting disputes. Pechstein may provide a future avenue for challenging sports arbitral awards globally.

Pechstein V Isu- Background Facts

________________________________

In 2009, Olympic Gold medallist skater Claudia Pechstein tested positive for a banned substance. The International Skating Union ("ISU") banned her from competing for two years.

Pursuant to an arbitration clause in her athlete agreement, appeals against ISU decisions must be brought before the CAS. In two CAS appeals, she was unsuccessful, the CAS upholding her two-year suspension (see CAS 2009/A/1912 & 1913 and CAS OG 10/04).

Pechstein applied for judicial review to the Swiss Federal Tribunal, but those appeals were dismissed (see Case 4A_612/2009 and Case 4A_144/2010).

Subsequently, Pechstein brought a damages proceeding against the ISU in a German civil court – the Landesgericht of Munich. The Landesgericht held that the arbitration clause was invalid, however Pechstein was precluded (res judicata) from challenging the CAS' jurisdiction.

Pechstein appealed to the Oberlandesgericht of Munich. Here, however, the Court allowed the appeal, determining that the CAS awards were invalid on public policy grounds under Article V (2) New York Convention. The Court's reasons were as follows:

The Decision

________________

The Court held that the ISU is a monopolist in the market for organizing speed-skating competitions worldwide, and therefore holds a dominant position in that market. It noted that professional skaters must compete in all ISU-organized competitions to earn a living; By sporting associations offering their services in the sports competition market, this constitutes an undertaking in the provision of goods and services from a dominant position. However, the imposition of a CAS arbitration clause by the ISU is not, per se, an abuse of the ISU's dominant position. To the contrary, there are "sound and weighty" reasons for allowing international disputes between athletes and international sporting federations to be determined by a sporting tribunal rather than national courts. Those reasons include harmonization and uniformity of global sports dispute decision making and procedure.

The CAS was not a, however, "neutral arbitral tribunal", but rather there was a "one-sided designation of the potential arbitrators which favour the sporting associations". It noted that, under the CAS rules, sporting associations had a "decisive influence" over the selection, composition and nomination of CAS arbitrators. Those factors embedded a "structural imbalance" that threatened the CAS' neutrality, which created a risk that such arbitrators "predominantly or even entirely favour" the sporting associations over athletes in determining their disputes.

Therefore, the imposition of a CAS arbitration clause in the circumstances, was an abuse of the ISU's dominant position, violated antitrust law, and therefore was invalid under Article V(2) New York Convention 1958.

Pechstein was decided on a breach of German (and possibly European) competition law regarding abuse of market power. So what relevance does it have for us?

Jurisprudential posers raised by the decision

_________________________________________

In the first place, the element of party autonomy and/ or freedom of contract that ordinarily pervades international commercial arbitration and makes it an attractive dispute resolution option is eroded by the mode of appointment of the arbitrators. The writer notes that the doctrine of freedom of contract or party autonomy is exercisable to the extent of statutory restriction or intervention6. As most of the CAS powers and scope of operation are amply provided under the enabling statute, the only option left to the ordinary Courts would be to strictly construe the statutory provisions strictly against the enacting bodies/associations.

Secondly, the most quintessential element of international arbitration is an impartial, independent and neutral tribunal. Where impartiality and independence of the arbitrators is equated with direct relation to or bias towards one of the parties, neutrality becomes highly doubtful.

Third, as professional athletes are often required to sign mandatory arbitration agreements, to either the CAS or another sporting arbitral tribunal, Pechstein serves as a timely reminder to consider the composition of any such arbitral body to determine whether or not the members hearing the dispute are sufficiently neutral and impartial to provide a fair hearing to the athlete.

From a global sport dispute resolution perspective, this decision potentially undermines the standing of the CAS as the "Supreme Court for World Sport". While the author notes that the rules for nomination and addition to the CAS list of arbitrators have been amended in recent years, this might not be sufficient in itself to prevent a future landmark decision of the regular Courts overturning an international sports arbitral award.

Footnotes

1 Article 68(2) of FIFA Statutes generally prohibits recourse to ordinary courts of law as a means of

resolving football-related disputes, providing as follows: Recourse to ordinary courts of law is prohibited unless specifically provided for in the FIFA. Regulations. Recourse to ordinary courts of law for all types of provisional measures is also Prohibited.

2 See Oscar Pistorius v The IAAF- CAS/2008/A/1480

3 Pechstein v International Skating Union OLG Munchen, U 1110/14 Kart (15 January 2015)

4 See, eg, Raguz v Sullivan [2000] NSWCA 240

5 Union Royale Belge des Sociétés de Football Association ASBL v. Jean-Marc Bosman [1995] ECR I-4921.

6 See the case of M.V. Panormos Bay v. Plam Nig. Plc (2004) 5 NWLR (Part 855) 1 at 14; Tawa Petroleum v. M.V. Sea Winner 3 NSC 25.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions