Asser International Sports Law Blog

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The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

I’m A Loser Baby, So Let’s Kill Transparency – Recent Changes to the Olympic Games Host City Selection Process - By Ryan Gauthier (Thompson Rivers University)

Editor's Note: Ryan Gauthier is Assistant Professor at Thompson Rivers University in Canada. Ryan’s research addresses the governance of sports organisations, with a particular focus on international sports organisations. His PhD research examined the accountability of the International Olympic Committee for human rights violations caused by the organisation of the Olympic Games.


Big June 2019 for Olympic Hosting

On June 24, 2019, the International Olympic Committee (IOC) selected Milano-Cortina to host the 2026 Winter Olympic Games. Milano-Cortina’s victory came despite a declaration that the bid was “dead” just months prior when the Italian government refused to support the bid. Things looked even more dire for the Italians when 2006 Winter Games host Turin balked at a three-city host proposal. But, when the bid was presented to the members of the IOC Session, it was selected over Stockholm-Åre by 47 votes to 34. 

Just two days later, the IOC killed the host selection process as we know it. The IOC did this by amending two sections of the Olympic Charter in two key ways. First, the IOC amended Rule 33.2, eliminating the requirement that the Games be selected by an election seven years prior to the Games. While an election by the IOC Session is still required, the seven-years-out requirement is gone.

Second, the IOC amended Rule 32.2 to allow for a broader scope of hosts to be selected for the Olympic Games. Prior to the amendment, only cities could host the Games, with the odd event being held in another location. Now, while cities are the hosts “in principle”, the IOC had made it so: “where deemed appropriate, the IOC may elect several cities, or other entities, such as regions, states or countries, as host of the Olympic Games.”

The change to rule 33.2 risks undoing the public host selection process. The prior process included bids (generally publicly available), evaluation committee reports, and other mechanisms to make the bidding process transparent. Now, it is entirely possible that the IOC may pre-select a host, and present just that host to the IOC for an up-or-down vote. This vote may be seven years out from the Games, ten years out, or two years out.

 

Why the Changes? 

To hear IOC President Thomas Bach put it, these changes were necessary to prevent “too many losers”. Bach voiced this concern in December 2016, and again in May 2019. The essence of Bach’s concern seems to be that a city will put time and effort into a bid, only for it to not be selected by the IOC.

However, the harm caused by losing a bid is unclear. Is the fear that a losing city’s bid will be a one-and-done affair? To be fair, most are. The cities that bid multiple times before winning, such as PyeongChang (2010, 2014, 2018), and Paris (2012, 2024), are rare. But it is difficult to see how the changes will affect this.

Losing an Olympic bid certainly does not make a city a “loser”. While feelings may be hurt in the short run, cities keep on running. Toronto has lost five bids to host the Olympics, with the most recent loss in 2001 for the 2008 Games. But no one seriously thinks of Toronto as a “loser” city – particularly after the Raptors’ NBA championship victory. Legacies can still be created from losing bids. Developing a bid allows the city to re-imagine itself, and market itself to the world. It might even be in a city’s best interest to bid for the Olympics, but not win, to get the benefits without having to invest the billions of dollars to host the Games.

 

The IOC may be changing the process to eliminate this “winner’s curse”. Currently, bidding cities try to out-promise each other, driving up complexity and costs. Under the new system, the IOC could work more closely with a potential city or region from the outset, organizing and delivering an Olympics that truly fits. The IOC has stated that it would work less like franchisors, and more like partners with future Games hosts, and has formalised this approach in their “New Norm” modifications to Olympic Games delivery.

Finally, the IOC may be hoping that this new approach will encourage cities that might see themselves as “long-shots” to come forward and host the Games. But the last “long-shot” selected as host of the Olympic Games, Rio de Janeiro, was plagued with allegations of corruption, displacement of vulnerable people from the favelas, and poor legacy outcomes.

 

Back to Salt Lake City? 

This new process, with the IOC possibly presenting only one possible city to the IOC Session for an up-and-down vote has the possibility to undermine transparency in the host selection process. If the IOC is unwilling to announce possible candidates until a deal is already done, the promises made by a city or region may not even be known by its own public until the IOC Session votes on it.

Robert Livingstone, who runs the website GamesBids.com, worries that these changes will lead to “a devolution back to the 1980s and 1990s when a translucent bid process eventually led to the Salt Lake City bribery scandal.” I share that same fear. With Salt Lake City looking to host the 2030 Games, history is rhyming a little to closely.

Even if the return to lavish visits, gift-giving, influence-buying, and outright corruption don’t come to pass, this is a reversal of the general direction since the IOC published Agenda 2020 in 2014. Agenda 2020 called for more transparency, such as publishing Host City Contracts. To their credit, the IOC has followed through on many of the Agenda 2020 reforms.

A reduction in transparency will likely lead to less public participation. And that may be the IOC’s goal. The IOC is sensitive to referendums. The general public is more critical of the Games than it was in the past. In recent years, hosting the Games has been subject to more referendums than ever, with almost all of those referendums saying ‘no’ to the Games.

IOC Member Dick Pound stated that he has “no hesitation in allowing a [future host] commission to have discussions that are out of the public eye that perhaps occur with sports authorities or interested groups even before the governments had been engaged in this, and can be done on a very confidential basis.” This type of process, without even government knowledge, effectively undercuts public consultation and participation in any bid process.

This new bid process has not happened, yet. It is possible that IOC’s approach will continue to be ever-more transparent, and to allow for public input into the bid process. Naturally, until the IOC shares more of its thoughts about the process, and until we see a host selection process in action, which may be years away (under the old process, the selection process for the 2030 Games would take place between 2021–2023), any commentary about the process is admittedly speculative.

 

Is the IOC Afraid of Losing?

The IOC is facing a crisis of legitimacy. This crisis is no more apparent than when no city seems to want to host the Olympic Games. Of course, there are many reasons that cities are wary of the Games. High costs, poor legacies, perceptions of corruption, and other problems regularly plague the Games.

The IOC’s Agenda 2020 reforms were positive steps forward in addressing some of these issues. Instead, the IOC has seemingly decided that it would rather take the process out of the public eye under the guide of the cities being afraid of being “losers”. But it seems that the IOC is the one afraid of “losing”. Afraid of hearing that “Nobody Wants to Host the Olympics Anymore”. Afraid of the Games coming out on the losing end of referendums. Afraid of having to choose between a bad and worse option to host the Games. The only loser here might be the Olympic Games.

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Asser International Sports Law Blog | The Reform of FIFA: Plus ça change, moins ça change?

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The Reform of FIFA: Plus ça change, moins ça change?

Since yesterday FIFA is back in turmoil (see here and here) after the FIFA Council decided to dismiss the heads of the investigatory (Cornel Borbély) and adjudicatory (Hans-Joachim Eckert) chambers of the Independent Ethics Committee, as well as the Head (Miguel Maduro) of the Governance and Review Committee. It is a disturbing twist to a long reform process (on the early years see our blogs here and here) that was only starting to produce some tangible results.

This journey to a new FIFA started in 2015 after the events that eventually pushed Sepp Blatter and Michel Platini out, and Gianni Infantino in. As noted by the FIFA Reform Committee in its final report, it became clear FIFA needed to undertake “significant modification to its institutional structure and operational processes […] to prevent corruption, fraud, self-dealing and to make the organisation more transparent and accountable”.[1] The Reform Committee put forward a series of recommendations, which later culminated in a set of reforms approved during the Extraordinary FIFA Congress held in Zurich the 26 February 2016. Greater transparency and accountability were the leading mantras of the reform, which – broadly speaking – hinged on (i) generating a cultural change at FIFA, (ii) fostering greater participation of member associations and stakeholders in FIFA and, most importantly, (iii) reforming the principles of governance at FIFA. The essence of the reform process was about changing the governance structures and ethos at FIFA. This was to be done mainly by:

  • Separating the political and management functions
  • Financial Transparency and Transparency of Compensation
  • Term Limits and Eligibility Checks
  • Promotion of the role of women in football

And, to be fair to FIFA, on paper at least, things changed quite dramatically over last year, here is how.


1.     The new FIFA Council                                                                          

First, the reform changed the political and administrative structure of FIFA. The Executive Committee being replaced by the Council, a new body with a different composition and set of competences. The Council’s larger size is aimed at ensuring broader participation and representativeness. While the Executive Committee comprised 24 members plus the FIFA President, the Council is composed of 36 members plus the FIFA President. The Congress elects the President, whereas the other members of the Council represent the confederations. Each Confederation president is ex officio a vice-president of the Council. UEFA has three vice-presidents at the Council and the other Confederations one each, for a total of eight vice-presidents. The rest of the members are divided as follows: four from CONMEBOL and CONCACAF, six from AFC, UEFA and CAF, and two from OFC. 

One of the main objectives of the governance reform was to reduce the possibility of conflicts of interests. To this end, a firm separation between political decision-making and management was considered crucial. Even though the Council’s role is supposed to be confined within the boundaries of supervising FIFA’s administration and defining strategic directions, it retains strong steering powers through its competence, enshrined in Article 34 FIFA Statutes, to nominate and dismiss the members of FIFA’s Committees as well as FIFA’s Secretary General. Nevertheless, the executive functions are delegated to the Secretary General, who has the duty to carry out the day-to-day business and implement the strategies outlined by the Council. While, the Chief Compliance Officer, oversees this activity and reports to the independent Audit and Compliance Committee.

 

2.     The introduction of eligibility checks

The FIFA reform committee recognized that a trustworthy governance of FIFA requires that the executives be, as much as possible, free of conflicts of interest. Hence, all the members of the Council are now subject to eligibility checks carried out by the Review Committee, a special commission within the newly created Governance Committee, formed by its chairperson, its deputy chairperson and one independent member. The members of the Governance Committee are in turn subject to eligibility checks carried out by the investigative chamber of the Ethics Committee. According to Art. 27(8) FIFA Statutes: “candidates for the positions of chairperson, deputy chairperson and members of each of the Audit and Compliance Committee and the judicial bodies must pass an eligibility check carried out by the Review Committee”.[2] The Secretary General is required to fulfil an eligibility check as well[3] and so do the candidates for standing committees.[4] This new check is the cornerstone of FIFA’s governance reform. In the absence of truly open and fair democratic elections to determine who exercises power inside FIFA, the eligibility checks are a fundamental brake to control the pool of potential executives and ensure a modicum of ethical virtue amongst them.


3.     The strive for financial transparency

The FIFA Reform Committee Report proposed to make public the compensation packages of FIFA’s executives. Thus, the new Art. 51(10) FIFA Statues imposes a duty to disclose the individual compensation of the FIFA President, the members of the Council and the Secretary General. The compensation of the said members and the Compensation Rules are determined by the Compensation Sub-Committee within the Audit and Compliance Committee.[5] Indeed, in its 2016 Governance Report, published in April 2017, FIFA disclosed the compensation packages of its executives. This was a much-needed development in light of the way Blatter, Platini and co were playing with FIFA’s finances, sometimes/often to their own benefits.

                                                      

4.     The limited role of the FIFA President

The reformed Statutes reduced the role and discretionary power of the FIFA President, who is now depositary of a more ambassadorial than executive role. Pursuant to Art. 35 FIFA Statutes, the President has no right to vote at the Congress and has one ordinary vote in the Council. The new provision repealed the possibility for the President to have a casting vote whenever votes are split equally inside the FIFA Council.[6] And yet, due to his capacity to set the agenda of the FIFA Council and to steer the Council’s appraisal of the Secretary General, his influence inside the constitutional structure of FIFA should not be underestimated.

 

5.     The introduction of term limits

The need to answer to transparency and accountability demands also resulted in the provision of term ceilings for the most prominent figures within the Organisation. The President, the members of the Council and the members of the independent committees can serve their office for no more than three terms, whether consecutive or not, of 4 years each.[7]

 

6.     The representation of women

FIFA recognised that “football governance at all levels needs to include more women in order to create a more diverse decision-making environment and culture”.[8] It has aimed to achieve this goal in two ways. First, FIFA adopted gender equality as an explicit statutory objective.[9] Second, and more visibly, each Confederation has to reserve for women at least one seat at the FIFA Council.[10]

 

7.     The reform of the standing committees

In order to improve efficiency the number of standing committees was reduced from 26 to 9. The current standing committees, which “advise and assist the Council in their respective fields of function”[11] are: the Governance Committee, the Finance Committee, the Development Committee, the Organising Committee for FIFA Competitions, the Member Associations Committee, the Player’s Status Committee, the Referees Committee, the Medical Committee and the Football Stakeholder Committee. The latter was freshly created to foster greater engagement with the football stakeholders.

Some specific requirements to be fulfilled by the members of the committees are laid out in Art. 39 FIFA Statutes. Paragraph 3 of that provision states that, while the general rule is that members of the committees can be at the same time members of the Council, the members of the Governance Committee, the independent members of the Finance Committee and the independent members of the Development Committee cannot simultaneously belong to the Council.[12]

Furthermore, at least 50% of the members of the Governance Committee, Development Committee and Finance Committee need to fulfil the independence criteria as defined in the FIFA Regulations.[13] These independence criteria need to be fulfilled also by the chairpersons, deputy chairpersons and members of the FIFA judicial bodies, i.e. the Disciplinary Committee, the Ethics Committee (both its investigatory and the adjudicatory chambers) and the Appeal Committee.[14] Furthermore, the members of the Audit and Compliance Committee must not belong to any other FIFA body.[15] The same applies to all the members of the FIFA judicial bodies.[16]


Conclusion: Plus ça change, moins ça change?

To sum up, on paper FIFA did change. It is undeniably a bit more transparent (but we are still waiting for the publication of the Garcia Report or of the decisions of the Ethics Committee) and its executives are a bit more likely to face independent counter-powers (e.g. Ethics Committee or the Governance Committee). FIFA’s reforms rely on a double strategy:

·       independent ex ante control on who is to exercise power inside the organization and;

·       independent ex post review of how this power is exercised.

And yet, with Blatter becoming a phantom of an almost forgotten past, the urge to reform is quickly receding. In fact, reform at FIFA is a bit like the ebb and flow. Its urgency, rises with the tide of public outrage at corruption scandals, and diminishes with public indifference in the face of a new business as usual.

Yesterday, 9 May 2017, we ebbed anew. It seems that the FIFA Council has decided that the time for reforms has past. New sponsors are lining up for the next world cups, the old guard is gone and the time seems ripe to turn the page. However, the institutional changes introduce over the last year made sense only if they are being monitored by strong independent institutions (the Ethics Committee and the Governance Committee), whose members do not feel that they are at the mercy of the power of the FIFA Council. Their role is to be disagreeable and to act as counter-powers, if they are dismissed at will when they do their job then the whole house of cards of FIFA reforms falls apart and we are back to square one. The dismissal and departure of independent and highly qualified academics like Miguel Maduro (with whom I  had the pleasure to work with at the European University Institute during my PhD) and Joseph Weiler are a sign that the Governance Committee and its capacity to control access to FIFA’s most powerful positions is being curtailed. Maybe it’s due, as some seem to think, to the Committee’s decision to bar access to the FIFA Council to Russia’s infamous former sports minister Mutko. In any event, it’s seems that FIFA’s strong (mostly) men are unimpressed by the benefits of “good governance”.

The tide will certainly turn again. Scandals will arise and force through new changes. Nonetheless, one is left to wonder whether the Swiss State and/or the European Union should not forcefully intervene to impose once and for all certain basic “constitutional” requirements  (e.g. independence, transparency, separation of powers) to a global body that exercises a strange form of public-private authority.


[1] 2016 FIFA Reform Committee Report, 2 December 2015, p. 1.

[2] Art. 27(8) FIFA Statutes.

[3] Art. 37 (3) FIFA Statutes.

[4] Art. 39(5) FIFA Statutes.

[5] Art. 51 FIFA Statutes.

[6] Art. 35 FIFA Statutes.

[7] Art. 33 FIFA Statutes.

[8] 2016 FIFA Reform Committee Report, 2 December 2015, p. 9.

[9] Art. 2 f) FIFA Statutes includes “the full participation of women at all levels of football governance” among the objectives of FIFA. The heading of Art. 4 FIFA Statues was amended to explicitly include ‘gender equality’.

[10] Art. 33(5) FIFA Statutes.

[11] Art. 39(2) FIFA Statutes.

[12] Art. 39(3) FIFA Statutes.

[13] Art. 40(1), Art. 41(2) and Art. 42 (1) FIFA Statutes.

[14] Art. 52(4) FIFA Statutes.

[15] Art. 51(1) FIFA Statutes.

[16] Art. 52(5) FIFA Statutes.

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Asser International Sports Law Blog | Invalidity of forced arbitration clauses in organised sport…Germany strikes back! - By Björn Hessert

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Invalidity of forced arbitration clauses in organised sport…Germany strikes back! - By Björn Hessert

Editor's note: Björn Hessert is a research assistant at the University of Zurich and a lawyer admitted to the German bar.

 

The discussion revolving around the invalidity of arbitration clauses in organised sport in favour of national and international sports arbitral tribunals has been at the centre of the discussion in German courtrooms.[1] After the decisions of the German Federal Tribunal[2] (“BGH”) and the European Court of Human Rights[3] (“ECtHR”) in the infamous Pechstein case, this discussion seemed to have finally come to an end. Well…not according to the District Court (LG) of Frankfurt.[4] On 7 October 2020, the District Court rendered a press release in which the court confirmed its jurisdiction due to the invalidity of the arbitration clause contained in the contracts between two beach volleyball players and the German Volleyball Federation[5] (“DVV”) – but one step at a time.

 

1.     Arbitration clauses in organised sport

Over the past few decades, the Olympic movement has created its own judicial system in its endeavour to create and maintain a uniform judicial level playing field outside national courts. This is important, because athletes participating in international sports competitions need to be subject to the same sanctioning regime in the light of fairness and equality in sport.[6] In this regard, the jurisdiction of national courts threatens the uniform application of rules and regulations of international sports federations insofar as they could apply them differently. This could lead to the unsatisfying result that, for example, an athlete from Germany is punished for an anti-doping rule violation with a 2-year ineligibility sanction while a Swedish athlete is subject to a lifetime ban for the same misconduct.

In order to preserve the uniform application of sporting rules and – ultimately – a legal level playing field, the rules and regulations of the respective sports federation or individual contracts, including employment contracts or athlete agreements and licence agreements (“entry forms”), generally contain arbitration clauses in favour of private sports arbitral tribunals, e.g. the Court of Arbitration for Sport (“CAS”). As a result, the arbitration agreement between the parties to membership contracts or entry forms ousts the jurisdiction of national courts.[7] Due to the fact that athletes are not generally direct members of national and international sports federations, contractual clauses in their employment contracts or entry forms make reference to arbitration clauses set out in the rules and regulations of said sports federations. For example, international football players are generally bound by the regulations of the Fédération Internationale the Football Association (“FIFA”), including its statutes. Article 58(1) of the FIFA Statutes (2020 edition) provides that “[a]ppeals against final decisions passed by FIFA’s legal bodies against decisions passed by confederations, member associations or leagues shall be lodged with CAS […]”. References in individual contracts of sportspersons contained in the rules and regulations of sports federations, so-called “arbitration agreements by reference”, have been considered to be valid. In this respect, the Swiss Federal Tribunal (“SFT”) held that

in sporting matters the Swiss Federal Tribunal examines arbitration agreements between parties with a certain goodwill in order to promote the fast resolution of disputes by specialised courts, which as the CAS, offer comprehensive guarantees of independence and neutrality.[8]

Athletes are generally forced to accept such arbitration agreements in favour of sports arbitral tribunals due to the monopolistic structure in organised sport, meaning that only one national and international sports federation governs each sport on the basis of the pyramidal European Model of Sport (so-called Ein-Platz-Prinzip).[9] In other words, athletes can only choose between accepting such arbitration agreements (by reference) or renouncing their calling as professional athletes.[10] Against this background, it appears to be questionable whether mandatory arbitration agreements in organised sport concluded between monopolistic sports federations and athletes are valid, taking into account that arbitration as a mechanism of alternative dispute resolution generally finds its basis in the free and voluntary will of the parties to the dispute concerned. The validity of mandatory arbitration agreements was at the heart of the Pechstein[11] case and has now been addressed in the recent decision rendered by the District Court of Frankfurt[12].

 

2.     The decisions of the BGH and the ECtHR in the Pechstein case

Claudia Pechstein is a professional speed-skater. Prior to the speed-skating world championships, organised by the International Skating Union (“ISU”), she signed an entry form, including an arbitration agreement in favour of the CAS.[13] During her proceedings before German courts and the ECtHR, Pechstein argued that the arbitration agreement concluded between her and the ISU had not been accepted freely and voluntarily, because otherwise she would not have been eligible to participate in professional speed-skating competitions.

After the Higher Regional Court (OLG) of Munich had decided that the arbitration agreement signed by Ms Pechstein was invalid under German competition law as a result of ISU’s abuse of a dominant position[14], the BGH overruled this decision.[15] In the view of the BGH, the ISU is a monopoly within the meaning of sec. 19(1) of the German Competition Act (“GWB”).[16] However, the BGH took the view that the dominant position of a party to the arbitration agreement does not automatically revoke the voluntary nature of the consent to an arbitration agreement in favour of private sports arbitral tribunals.[17] Instead, the examination of the validity of the arbitration agreement is subject to a balancing process in consideration of the interests of both parties, i.e. sports federations and individual athletes.[18] In consideration of the legal protection of athletes and the specificity of sport, particularly in ensuring fair competitions and uniform case law in organised sport, which “would be seriously jeopardised”[19] by the invalidity of the arbitration agreement, the court came to the conclusion that the interests of the ISU prevail in this regard.[20] The CAS is a genuine arbitration court and guarantees legal protections for athletes equivalent to national courts.[21] Furthermore, the consistent application of the rules and regulations of sports federations by a specialised arbitration institution is not only in the interest of sports federations, but also in the interest of athletes.[22] 

The ECtHR indirectly confirmed the validity of the arbitration agreement concluded between Ms Pechstein and the ISU. However, in determining the free will of athletes when entering into an arbitration agreement with a monopolistic sports federation, the court held that the arbitration clause is generally not based on the free consent of the athlete and thus has a forced nature.[23] In case the athlete is compelled to accept an arbitration agreement, Article 6(1) of the ECHR is applicable to the sports arbitration proceedings in protection of the procedural rights of the athlete.[24]  

However, arbitration agreements in organised sport are not compulsory per se if the applicable sports rules and regulations leave it to the sports federation and the athlete to freely and voluntarily agree on an arbitration agreement. In this case, athletes are not in the same predicament and may therefore choose between different clubs before signing an arbitration agreement.[25]Furthermore, the complaining athlete must provide evidence that “other professional football clubs, which perhaps have more modest financial means, would have refused to hire him on the basis of a contract providing for dispute settlement in ordinary courts.”[26]

According to the BGH, the validity of arbitration agreements in organised sport is subject to a balancing process between the competing interests of the parties to it. However, if an athlete was compelled to accept arbitration clauses of monopolistic sports federations, the ECtHR concluded that Article 6(1) of the ECHR is applicable to the arbitration proceedings concerned. Both courts therefore set the benchmark against which the validity of arbitration agreements and proceedings in organised sport is measured. 

 

3.     Decision of the District Court of Frankfurt (based on the press release)

The decision of the District Court of Frankfurt is insofar remarkable as the court was in the position to consider both the decision of the BGH and the ECtHR in its decision-making process. With regard to the validity of the arbitration agreement concluded between two volleyball players and the DVV, the court stated in its press release of 7 October 2020[27] as follows:

Die Streitigkeit habe nicht vorrangig vor einem Schiedsgericht ausgetragen werden müssen. Zwar enthielten die Verträge der Klägerinnen mit dem Beklagten jeweils eine Schiedsvereinbarung. Dieser sei aber unwirksam, «weil die Klägerin sich ihr nicht freiwillig unterworfen habe», so die Richter. Seit der Entscheidung des Europäischen Gerichtshofs für Menschenrechte (EGMR) im Fall Pechstein sei bei professionellen Leistungssportlern von einer unfreiwilligen Unterwerfung unter einer Schiedsgerichtsbarkeit auszugehen, wenn die Profisportler «vor der Wahl stehen, eine Schiedsklausel anzunehmen, um durch die Ausübung ihres Sports ihren Lebensunterhalt bestreiten zu können, oder sie nicht zu akzeptieren und damit vollständig auf ihren Lebensunterhalt durch Ausübung des Sports zu verzichten.» Es sei nicht belegt, dass die Klägerinnen seinerzeit tatsächlich die Wahl hatten, die Schiedsklauseln abzuschliessen oder nicht. Deswegen sei von einer Unfreiwilligkeit auch dann auszugehen, wenn die Volleyballerinnen die Klauseln kritiklos unterzeichnet hätten.”

[free translation: The dispute did not have to be settled primarily before an arbitration tribunal. It is true that the plaintiffs' contracts with the defendant each contained an arbitration agreement. However, this was invalid ‘because the plaintiff did not voluntarily submit to it’, the judges said. Since the decision of the European Court of Human Rights (ECtHR) in the Pechstein case, professional athletes must be presumed to have involuntarily submitted to arbitration if the professional athletes ‘are faced with the choice of accepting an arbitration clause in order to be able to earn their living by practising their sport or not accepting it and thus refrain completely from earning a living from their sport’. There is no evidence that the plaintiffs at the material time actually had the choice of whether or not to accept the arbitration clauses. Therefore, it can be assumed that the arbitration was involuntary even if the volleyball players had signed the clauses without criticism/objection.]

Based on the wording of the press release – and in absence of the full judgement – it appears that the court sided with the findings of the ECtHR insofar as it qualified the arbitration agreement contained in entry forms of athletes as mandatory in nature.

Furthermore, it can only be speculated why the court stated in its press release that the athletes had not objected to the signing of an arbitration clause. The court may have considered that the volleyball players were in a similar position than Ms Pechstein. This approach would be consequent, because beach volleyball players, like the plaintiffs in the proceedings before the District Court Frankfurt, are generally faced with the same dilemma as Ms Pechstein was. They cannot choose between different national federations for the sport of volleyball. In this case, it is not necessary for the athletes to show that they could not conclude a contract with the DVV without an arbitration agreement in favour of a sports arbitral tribunal.

Be it as it may, it is – with the BGH decision in the Pechstein case in mind – difficult to understand how the District Court of Frankfurt came to the conclusion that the arbitration agreement between the beach volleyball players and the DVV is invalid. It appears that the court deduces this invalidity from the compulsory nature of arbitration clauses in organised sport, as highlighted by the ECtHR. This would contradict the BGH’s view that forced arbitration can be justified in the sporting context and that the validity of particular clause must be determined on the basis of a balancing process.[28] If the District Court of Frankfurt applied such a balancing process between the competing interests of the parties to the dispute, it will be interesting to see why the court arrived at the conclusion that the arbitration agreement is invalid. In light of the above, the specificity of sport, particularly the consistent and uniform application of rules and regulations of sports federations, is a strong argument in favour of forced arbitration. Indeed, the legal level playing field and ultimately the sporting level playing field would be jeopardised if national courts would decide on sporting cases instead of national sports arbitral tribunals, such as the German Court of Arbitration for Sport (“DIS”) or the CAS. The interest of sports federations also prevails in domestic disputes. Otherwise, there is a risk that the national courts will interpret the sporting rules of a particular sports federation inconsistently.

On balance, it will be important to carefully analyse how the Frankfurt court substantiated its departure from the BGH decision in the Pechstein case. In my view, the press release indicates that the court was apparently unable to strike a fair balance between the competing interests involved, bearing in mind the specificities of sport.


[1] See e.g. District Court (LG) Cologne, decision of 13 September 2006, 28 O (Kart) 38/05; District Court (LG) Munich I, decision of 26 February 2014, 37 O 28331/12; Higher Regional Court (OLG) Munich, decision of 15 January 2015 – U 1110/14 Kart.

[2] BGH, decision of 7 June 2016, KZR 6/15; a translation of the decision is published on the CAS website.

[3] Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018.

[4] District Court Frankfurt, 7 October 2020, 2-06 O 457/19 (unpublished); press release available at https://ordentliche-gerichtsbarkeit.hessen.de/sites/ordentliche-gerichtsbarkeit.hessen.de/files/PM%207_10_2020%20Schadensersatz%20f%C3%BCr%20Profi-Volleyballerinnen_0.pdf.

[5] Press Release, District Court Frankfurt, 7 October 2020 available at https://ordentliche-gerichtsbarkeit.hessen.de/sites/ordentliche-gerichtsbarkeit.hessen.de/files/PM%207_10_2020%20Schadensersatz%20f%C3%BCr%20Profi-Volleyballerinnen_0.pdf.

[6] Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018, para. 98.

[7] Daniel Girsberger and Nathalie Voser, International Arbitration (3rd edn, Schulthess Juristische Medien AG, 2016) 4; see also Antoine Duval, ‘Not in my Name! Claudia Pechstein and the Post-Consensual Foundations of the Court of Arbitration for Sport’ Max Planck Institute for Comparative Public Law & International Law (MPIL) Research Paper No 2017-01.

[8] SFT, decision of 7 November 2011, 4A_246/2011, para. 2.2.2; see also SFT, decision of 28 May 2018, 4A_314/2017, para. 2.3.1; SFT, decision of 2 February 2018, 4A_490/2017, para. 3.1.2.

[9] Commission of the European Communities, ‘White Paper on Sport’, COM(2007) 391 final, 13. SFT, decision of 22 March 2007, 4P.172/2006, para. 4.3.2.2.; BGH, decision of 7 June 2016, KZR 6/15; Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018, para. 113.

[10] SFT, decision of 22 March 2007, 4P.172/2006, para. 4.3.2.2.; BGH, decision of 7 June 2016, KZR 6/15; Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018, para. 113.

[11] BGH, decision of 7 June 2016, KZR 6/15; Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018.

[12] District Court Frankfurt, 7 October 2020, 2-06 O 457/19 (unpublished)¸ ); press release available at https://ordentliche-gerichtsbarkeit.hessen.de/sites/ordentliche-gerichtsbarkeit.hessen.de/files/PM%207_10_2020%20Schadensersatz%20f%C3%BCr%20Profi-Volleyballerinnen_0.pdf.

[13] BGH, decision of 7 June 2016, KZR 6/15, para. 2.

[14] Higher Regional Court (OLG) Munich, decision of 15 January 2015 – U 1110/14 Kart.

[15] BGH, decision of 7 June 2016, KZR 6/15.

[16] Ibid, para. 9.

[17] Ibid, para. 54; Ulrich Haas, ‘The German Federal Court on Treacherous Ice- A final point in the Pechstein case’ in Christoph Müller, Sébastian Besson and Antonio Rigozzi (eds), New Development in International Commercial Arbitration 2016 (1st edn, Schulthess Juristische Medien AG, 2016) 219, 256 et seq.

[18] Ibid, para. 55.

[19] Ibid, para. 50.

[20] Ibid, para. 59; Ulrich Haas, ‘The German Federal Court on Treacherous Ice- A final point in the Pechstein case’ in Christoph Müller, Sébastian Besson and Antonio Rigozzi (eds), New Development in International Commercial Arbitration 2016 (1st edn, Schulthess Juristische Medien AG, 2016) 219, 263 et seq.

[21] Ibid, para. 62.

[22] Ibid.

[23] Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018, para. 113.

[24] Mutu and Pechstein v Switzerland, ECtHR, Application no. 40575/10 and no. 67474/10, 2 October 2018, para. 115.

[25] Ibid, para. 120.

[26] Ibid, para. 119.

[27] Press Release, District Court Frankfurt, 7 October 2020, 2.

[28] Ulrich Haas, ‘The German Federal Court on Treacherous Ice- A final point in the Pechstein case’ in Christoph Müller, Sébastian Besson and Antonio Rigozzi (eds), New Development in International Commercial Arbitration 2016 (1st edn, Schulthess Juristische Medien AG, 2016) 219, 250.

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