Belgium: Brussels Court Of Appeal Holds FIFA And UEFA Arbitration Clauses To Be Inapplicable

Last Updated: 7 November 2018
Article by Quentin Declève

Most Read Contributor in Belgium, October 2018

In a case involving FIFA (the International Football Association) and UEFA (the European Football Association), the Brussels Court of Appeal (the "Court of Appeal"), handed down an important judgment on 28 August 2018 in which it refused to refer a dispute to arbitration despite the existence of arbitration clauses providing for the jurisdiction of the Court of Arbitration for Sport (the "CAS").

The case at hand (still pending on the merits), concerned a dispute between, on one hand, Belgian football club Seraing ("RFC Seraing") and the investment fund Doyen Sports Investment Limited ("Doyen Sports"), and, on the other hand, FIFA, UEFA and the Belgian football association. RFC Seraing and Doyen Sports contested the validity of sanctions imposed on them by the football associations for violations of FIFA and UEFA rules prohibiting Third-Party Ownership ("TPO") (a practice whereby a physical or legal person, that is usually not a football club, but rather an investment fund or an agent, invests in the economic rights of a professional football player).

RFC Seraing and Doyen Sports had brought their action before a Belgian court arguing that the arbitration clauses contained in the FIFA/UEFA statutes (and which, in principle, compelled them to refer their dispute against FIFA and UEFA to arbitration) did not comply with the requirement, under Belgian law, that such clauses must relate to a "defined legal relationship" and should delimit the scope of the potential dispute arising between the parties (Articles 1681 and 1682, Belgian Code on Civil Procedure). More specifically, RFC Seraing and Doyen Sports contended that – despite the existence, in RFS Seraing's bylaws, of a clause explicitly showing RFC Seraing's commitment to following FIFA and UEFA's statutes – the arbitration clauses at stake were of a general nature and did not relate to "a defined legal relationship" as they merely referred to any kind of dispute, irrespective of its object.

FIFA and UEFA, on the other hand, argued that the arbitration clauses at stake were sufficiently specific since: (i) they only applied to cases arising out of the activities and corporate purpose of FIFA/UEFA; and (ii) they only applied to sports litigation (since the bylaws of the CAS limit the jurisdiction of the latter to sports-related disputes).

The Court of Appeal rejected all of FIFA and UEFA's arguments and refused to refer the case to arbitration.

First, the Court of Appeal recalled that the requirement, under Belgian law, according to which an arbitration clause must refer to a "defined legal relationship" is based on: (i) the right of access to justice; (ii) the parties' agreement (which makes sure that parties are not compelled to arbitrate disputes that they never intended to refer to arbitration); and (iii) the need to avoid a situation whereby a party with strong bargaining power imposes its will on the weaker party.

Second, the Court of Appeal found that the fact that the arbitration clauses at issue only concerned matters falling under the activities and corporate purpose of FIFA/UEFA did not define the legal relationship in a sufficient manner.

Third, the fact that the bylaws of the CAS provide that the CAS only had jurisdiction in sports-related disputes was not relevant since the CAS can always amend its own bylaws in the future.

Finally, based on the finding that the arbitration clauses contained in the FIFA/UEFA statutes were inapplicable and that FIFA and UEFA are both domiciled in Switzerland, the Court of Appeal applied Article 6.1 of the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the "Lugano Convention") which aims to extend the EU Brussels I Regulation's regime on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters within the EU to Iceland, Norway and Switzerland.

Article 6.1 of the Lugano Convention provides that, in cases involving multiple defendants, all defendants can be sued in the State where any one of them is domiciled, provided that the claims against them are so closely connected that it is expedient to hear them together to avoid irreconcilable judgments.

The Court of Appeal applied that provision to the case at hand and found that: (i) the Belgian football association was domiciled in Belgium; (ii) RFC Seraing was also domiciled in Belgium; (iii) the Belgian football association was the football governing body in Belgium and a member of FIFA; and (iv) FIFA and the Belgian football association share regulatory and disciplinary powers. In the light of all those elements, the Court of Appeal found that there was a sufficient degree of connection between the claims, which justified the jurisdiction of the Belgian courts to hear the case.

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.

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