Rumours are swirling around the decision (available in French here) of the Court of Appeal of Brussels in the case opposing RFC Seraing United to FIFA (as well as UEFA and the Belgian Football Federation, URSBFA) over the latter’s ban on third-party ownership. The headlines in various media are quite dramatic (see here and here), references are made to a new Bosman, or to a shaken sport’s legal system. Yet, after swiftly reading the decision for the first time on 29th August, I did not have, unlike with the Pechstein ruling of the Oberlandesgericht München, the immediate impression that this would be a major game-changer for the Court of Arbitration for Sport (CAS) and the role of arbitration in sports in general. After careful re-reading, I understand how certain parts of the ruling can be misunderstood or over-interpreted. I believe that much of the press coverage failed to accurately reflect the reasoning of the court and to capture the real impact of the decision. In order to explain why, I decided to write a short Q&A (including the (not water-proof) English translations of some of the key paragraphs of the decision).

1.     What is the case about?

RFC Seraing United (hereinafter Seraing) has, since the adoption of FIFA’s ban on third-party ownership, been at the forefront of a legal crusade against the ban (as I have explained on this blog I personally believe the ban is legitimate and compatible with EU law). The club has fought the ban tooth and nail at the CAS (the award is here) and later at the Swiss Federal Tribunal (the translation of the ruling is available here), in both instances unsuccessfully. It is now challenging before the Belgian courts the sanctions that were imposed by FIFA, confirmed by the CAS award, and enforced by the URSBFA. For this protracted and expensive legal campaign, RFC Seraing enjoys the backing of Doyen, the infamous investment firm at the centre of the football leaks scandal. The 29th August decision is the last episode in this saga and the first that has been widely portrayed as a big win for RFC Seraing.

2.     What are the findings of the decision?

So, why is it widely reported as a win for Seraing? This is because the Court of Appeal considered itself competent to hear the case and disregarded the objections (in particular the claim that a valid CAS arbitration clause existed) raised by FIFA, UEFA and the URSBFA regarding its jurisdiction. However, the Court also refused to send a request for a preliminary ruling to the  Court of Justice of the European Union, a long-standing demand of Seraing’s lawyers.

3.     Why did the Belgium court find that the CAS arbitration clause invoked by FIFA & Co is invalid?

The core of the reasoning (found at §13 to §15 of the decision) on the validity of the CAS arbitration clause included in FIFA’s statutes turns on whether it aims at a « defined legal relationship », a prerequisite for the validity of arbitration clauses under Belgium law and the New York Convention. In laymen terms: if the clause is too general and does not provide a clear definition of the scope of disputes it covers, then it is invalid. Unlike reported in many outlets, the focus is not directly on the free consent to CAS arbitration, and the Court of Appeal does not declare the clause contrary to EU law or the ECHR on this basis, but on the vague nature of the CAS arbitration clause enshrined in the FIFA Statutes and its incompatibility with Belgian law.

In the case of Seraing, the clause invoked by FIFA was by reference, meaning that the reference of Seraing’s statutes to its compliance with the statutes of FIFA (at the time of initiating the proceedings the 2015 FIFA Statutes), which include an arbitration clause, was supposed to constitute a valid agreement to arbitrate the present dispute. Yet, as the Court of Appeal points out, the FIFA statutes are rather vague with regard to the nature of the disputes that are to be arbitrated. In fact, article 66.1 FIFA Statutes (2015 edition) provides simply that « FIFA recognises the independent Court of Arbitration for Sport (CAS) with headquarters in Lausanne (Switzerland) to resolve disputes between FIFA, Members, Confederations, Leagues, Clubs, Players, Officials, intermediaries and licensed match agents ». Moreover, the Court of Appeal also refers to article 59.1 and 2 FIFA Statutes (presumably this time 2018 edition) that does not allow recourse to national courts unless provided by FIFA rules. It concludes that based on these provisions, « the submission to arbitration is provided in general for all disputes between certain parties, including FIFA, UEFA, URBSFA and football clubs (including RFC Seraing), but without any precisions or indications with regard to the legal relationship affected ». Hence, « the intention of the drafters of this clause is clearly to capture all types of disputes between the designated parties, turning it into a general clause, which cannot be found applicable as it does not constitute an arbitration clause recognised under Belgian law ».

FIFA submitted that the type of disputes governed by the arbitration clause were necessarily limited to the social objective of FIFA and that the CAS’s competence was limited to « sporting » disputes. But the Court of Appeal countered that the former limit remains too vague to find that the clause targets a « defined legal relationship ». It further deemed that the restriction to « sporting » disputes was not included in the clause and that the CAS could independently decide to amend the scope of the disputes that fall under its competences. It also rejected the view of the URBFSA that the clause was limited to disputes concerning « the statutes, regulations, directives and decisions of the URBFSA, FIFA and UEFA ». And, it refused to consider that the article 38.2. of Seraing’s statutes, providing that « [E]very arbitral dispute with a foreign dimension, susceptible of being subjected to the international bodies of FIFA and concerning the statutes, regulations, directives of FIFA, will be submitted to its internal arbitral bodies », constitutes a valid CAS arbitration clause as it refers to FIFA’s internal arbitral bodies (even though no such arbitral bodies exist in practice).

A flurry of other less convincing arguments raised by the defendants were also dismissed by the Court, which came to the conclusion that the clause invoked did not aim at a defined legal relationship and could therefore not be considered an arbitration clause in the sense of articles 1681 and 1682, §1 of the Judicial Code. There is, however, no indication that the Court of Appeal fundamentally objects to FIFA, UEFA or the URSBFA imposing that certain disputes be dealt with by the CAS. Crucially, the emphasis is on certain: what the Belgian court criticized is the general all-inclusive wording of the current FIFA Statutes.

4.     What are the immediate consequences of this invalidity for FIFA and the CAS?

For Seraing, the consequences are vital, any other finding would have put an abrupt end to its case before the Belgian court. Now, it will have the right to argue its case in front of the Court of Appeal in October, and this is a victory in itself. Yet, beyond Seraing, the systemic effects are in my view far less far-reaching than highlighted in the media. FIFA was never immune from challenges by clubs (and other football stakeholders). It was, for example, repeatedly attacked in front of the European Commission on competition law grounds. Moreover, clubs, such as the SV Wilhelmshaven, were already challenging the implementation of CAS awards confirming FIFA sanctions in national courts. In this regard, there is nothing new under the sun. Finally, the Court of Appeal has not excluded that it would accept a reformulated CAS arbitration clause with a better-defined scope (such as one that would narrow it down only to disputes arising out of the regulations and decisions of FIFA).

In practice, not much should change with the Seraing ruling. FIFA will continue to hand out its decisions sanctioning clubs circumventing its rules. The Swiss courts, which are under the Lugano Convention primarily competent to hear challenges to the decisions of a Swiss association, will continue to enforce the CAS arbitration clauses by reference as they have always done, and clubs will, therefore, continue to have to go through CAS arbitration (or they will have to wait to be sanctioned by their national associations to initiate proceedings in front of national courts). Furthermore, from a strategic point of view, few clubs (unless they are desperate like SV Wilhelmshaven and/or backed by an external funder such as Seraing) will be interested in starting a multi-year litigation odyssey in national courts to challenge FIFA (or any other sports governing body, SGB). The same is true for athletes (let’s remind that Claudia Pechstein is bankrupt and still far from having won her case). Doing otherwise would mean being ostracized from professional football for many years, something very few clubs (and athletes) can afford. Thus, while the Seraing judgment confirms that going to national courts is an option that is available to clubs challenging FIFA, it does not affect the general governance context of global football (and sports in general) that remains extremely unfavorable to litigation in national courts. Challenging FIFA in national courts was never out of question, it was (and remains) just very costly and very unlikely to succeed, and Seraing has changed this state of affairs only at the margin.

5.     Why do I think Pechstein is more important than Seraing?

As pointed out, the Seraing case might encourage a re-writing of FIFA’s statutes and reminded us that CAS arbitration clauses cannot cover any and every dispute that can arise between SGBs and clubs (or athletes), but it stops there and does not challenge the institutional structure of the CAS, nor its centrality in the global governance of sport. The Pechstein ruling of the OLG München was more interesting in this regard, as it was addressing the core institutional problems of the CAS. These are not related to the voluntary nature of CAS arbitration (I personally think there are good reasons to bind athletes and clubs to CAS arbitration even against their will). Instead, the critical focus should be on CAS’s structure as a judicial institution that is not legitimated like any other arbitral tribunal by autonomous free consent, but by public interests (e.g. the neutral governance of global sports, the worldwide fight against doping or the regulation of the transnational labour market in football). Thus, CAS’s function and legitimacy must lie primarily in its role as an independent counter-power to the transnational private authority exercised by SGBs. It is, therefore, crucial that its independence from the SGBs be submitted to more stringent control than it currently is (see our paper with Ben Van Rompuy on this question). The OLG München recognized it in its Pechstein ruling, but the BGH failed to appreciate this profoundly constitutional question and the importance of at the same time saving forced CAS arbitration and challenging the current set-up of the CAS. The Pechstein case is now pending at the German Constitutional Court and should be decided relatively soon (but the German press recently reported that there is still no date for a hearing). The fact that the Constitutional Court has accepted to take the case on its docket is already a sign of its skepticism towards the BGH’s decision. If we want to see a ground-breaking, earth-shattering, revolutionizing new Bosman we better turn our heads towards Karlsruhe, the winds of change in sport justice might come from there...

Nearly twenty years after the European Court of Justice declared in the Bosman case that all professional athletes within the EU were given the right to a free transfer at the end of their contracts, the Spanish Tribunal Supremo[1] provided a judgment on 26 March 2014 that will heighten a new debate on the rights of professional athletes once their contract expires.

This case originates in a dispute between the Spanish Association of Professional Cycling Teams (Asociación de Equipos de Ciclismo Profesional) and the Spanish Association for Professional Cyclists (Asociación de Ciclistas Profesionales). The two parties had concluded a collective agreement for professional cycling in 2010. Even though it is common practice that cyclists would never sign employment contracts for an indefinite period of time, nor would cycling teams compensate their cyclists merely for contract expiration, article 15(2) of the agreement established that, at the end of the contract, the team is obliged to compensate the cyclist with the amount that is due to him based on the employment contract[2].

On 14 May 2012 the Association of Professional Cycling Teams, as applicant, requested from the Spanish Audiencia Nacional to pronounce itself on the correct interpretation of article 15.2 of the collective agreement, taking into account the Real Decreto 1006/1985 on the special employment relationship of professional athletes and article 49.1.c) of the Workers Statute (Disposición Transitoria Decimotercera del Estatuto de los Trabajadores). According to article 49.1.c) of the Workers Statute, after expiration of the contract, a worker shall have the right to receive a compensation of an amount equal to 12 days of salary for every year of service. One of the goals of this article was to promote indefinite contracts.

The applicant argued that, due to the nature of contracts of professional athletes, for which the duration is never indefinite, article 49.1.c) is not applicable to professional athletes. By contrast, article 6 of Real Decreto 1006/1985, which states that the duration of sporting contracts are always fix-term contracts, should be used for the interpretation of the collective agreement between the two cyclist associations.

In its judgment of 16 July 2012, the Social Chamber of la Audiencia Nacional[3] confirmed that professional athletes are not to be treated differently than regular employees, and should therefore be compensated at the end of their contract. However, the Audiencia Nacional recognized the specific nature of the employment contracts of professional athletes, whose employment conditions are specifically regulated in Real Decreto 1006/1985. Hence, it declared article 49.1.c) of the Workers Statute inapplicable to professional athletes.

The decision of the Audiencia Nacional being appealed, the Spanish Supreme Court was in turn confronted with the question whether a professional athlete is entitled to the compensation as stipulated in Article 49.1.c of the Workers Statute after expiration of the employment contract. In other words, are the general labour rules regarding the end of the employment contracts also applicable to professional athletes?

The Court answered this question affirmatively, seeing no reason whatsoever for the Workers Statute, including article 49.1.c) not to be equally applicable to professional athletes. Moreover, by applying the Workers Statute, the compensation will become an instrument for the promotion of contract extensions, thereby improving the employment stability of athletes. Lastly, and referring to point 6 of the preamble of Council Directive 1999/70/EC concerning the framework agreement on fixed-term work, the Court argued that indefinite contracts contribute to the quality of life of the affected workers[4], and is therefore in line with the original goals of article 49.1.c) of Workers Statute.

The consequences of this judgment are simple enough: A professional athlete who had a five year contract with a specific club or team for 100,000 Euros a year will, at the end of his contract, receive a compensation of approximately 16,438.36 Euros (100,000 / 365 x 12 x 5), or 16.4% of his yearly salary.

This ruling is an important step forward on the long and tangled road towards the full recognition of professional athletes as true workers deserving the same rights and duties as their peers.

[1] El Tribunal Supremo is the highest court in Spain for all matters not relating to the Spanish Constitution

[2] Article 15(2) …Al finalizar la relación laboral se liquidará el finiquito que contendrá todos los conceptos económicos que regule la legislación vigente.

[3] The Audiencia Nacional is a special and exceptional high court in Spain

[4] Sentencia del Tribunal Supremo de 26 de Marzo de 2014 (CASACION 61/2013), part 7, §1

On 24 and 25 October, the Asser Institute will host an advanced professional training co-organised by Ben Van Rompuy and Antoine Duval focused on 'EU competition law and transnational sports governance'. The training is building on their experience acting as legal advisors for the complaint submitted to the European Commission (EC) by two Dutch speed-skaters, Mark Tuitert and Niels Kerstholt, against the International Skating Union (ISU), leading to the first negative decision rendered by the EC against an international sports governing body (SGB).  

The training will consist of: 

• An in-depth introduction to the specific application of EU competition law to transnational sports governance

• Specific sessions on the different (national, European and transnational) processes (both judicial and administrative) through which EU competition law claims can be raised against international SGBs

• A concrete case study during which the group will be divided into teams representing different sides of a competition law claim involving an SGB

• A round-table with  leading experts in EU competition law and sports for an interactive discussion on future developments in this area

[More information and registration HERE]

Why this professional training? 

Transnational sports governance is not neutral, its exercise comes with considerable economic effects and consequences, which can be controversial. In recent years we have witnessed an uptick of challenges on the basis of EU competition law against the governance decisions of international SGBs. In 2017, the European Commission for the first time adopted a decision finding a sporting rule (the ISU’s Eligibility Rules prohibiting skaters from participating in third-party events) in violation of EU competition law. Since then, we have seen a string of decisions by national competition authorities and high-profile private actions being launched against, for instance, UEFA and FIFA by the European Super League Company, football club Royal Antwerp F.C. or football agents. In short, EU competition law has become the main legal avenue through which regulations and decisions of international SGBs are being contested– both from outside the Olympic family and within. It is therefore crucial that sports stakeholders become proficient in the language of EU competition law, in understanding the specificities of its application to transnational sports governance, and in grasping the intricacies of the legal processes that can be used to do so. 

Is this training for you? 

This training is primarily aimed at professionals involved in the field of sports governance, such as legal counsels of SGBs, practicing lawyers active in the sports sector, public servants involved in the enforcement of competition law in the sporting context, and representatives of athletes, clubs and other sports stakeholders.  The advanced training will be both interactive, focusing on open exchanges between experts and participants, and participative, with the preparation of a case study in smaller groups.  

[More information and registration HERE]

Speakers include:

• Prof. Stephen Weatherill
• Prof. An Vermeersch
• Mark E. Orth
• Dr. Ben Van Rompuy
• Dr. Antoine Duval

[More information and registration HERE]

Programme

Day 1 - Tuesday, 24 October

12:30 – 13:00 - Registration

13:00 – 13:30 - Welcome and introduction - Antoine Duval & Ben Van Rompuy

13:30 – 15:00 - How EU competition law applies to transnational sports governance: Key doctrines and cases  - Antoine Duval & Ben Van Rompuy

15:00 – 15:30 Coffee Break

15:30 – 16:30 - Bringing a competition law case against SGBs before the European Commission: Lessons from the ISU case  - Ben Van Rompuy & Antoine Duval

16:30 – 17:30 - Bringing a competition law case against SGBs in national courts: The German experience -  Mark E. Orth

17:30 – 18:00 - Bringing a competition law case against SGBs before the CAS: Opportunities and challenges -  Antoine Duval

19:00 - Dinner

Day 2 - Wednesday, 25 October

9:00 – 12:00 - Case study on FIFA’s Football Agent Regulations and EU competition law - Antoine Duval, Ben Van Rompuy, Mark E. Orth

12:00 – 13:00 Lunch

13:00 – 15:00 - Case study on FIFA’s Football Agent Regulations and EU competition law - Antoine Duval, Ben Van Rompuy, Mark E. Orth, An Vermeersch and Stephen Weatherill

15:00 – 15:30 - Coffee Break

15:30 – 17:00 - Closing discussion on the future of EU competition law and transnational sports governance - Antoine Duval, Ben Van Rompuy, Mark E. Orth, An Vermeersch, and Stephen Weatherill  

The European Commission has published the “Study on Sports Organisers’ Rights in the EU”, which was carried out by the ASSER International Sports Law Centre (T.M.C. Asser Institute) and the Institute for Information Law (University of Amsterdam). 

The study critically examines the legal protection of rights to sports events (sports organisers’ rights) and various issues regarding their commercial exploitation in the field of media and sports betting, both from a national and EU law perspective.  

In a number of posts, we will highlight some of the key findings of the study. 

“It was Hyde, after all, and Hyde alone, that was guilty.” 

In recent years, numerous national and European sports organisers have called for the adoption of a specific right to consent to the organisation of bets (“right to consent to bets”), by virtue of which no betting operator could offer bets on a sports event without first entering into a contractual agreement with the organiser. 

A sports organisers’ right to consent to bets was first introduced in Victoria (Australia) in 2007. Yet it was the recognition of a similar right in France that created the true momentum for sports organisers to advocate its adoption at the EU or EU-wide national level. The argument is twofold. First, a right to consent to bets would entitle sports organisers to demand a “fair financial return” for the commercial exploitation of theirs sports events by betting operators. Second, it would establish a statutory obligation for betting operators to work in partnership with sports organisers to preserve the integrity of sports events. According to the contractual provisions agreed upon by the involved parties, mutual obligations (for e.g. fraud detection) and conditions of information exchange can be identified. 

A restriction to the freedom to provide services? 

From an EU internal market law perspective, it is important to note that the conditions implementing a right to consent to bets are capable of constituting a restriction of the free movement of services within the Union (within the meaning of Article 56 TFEU). Indeed, the requirement for betting operators to obtain consent for the organisation of sports bets could impede or render less attractive the free provision of gambling services.[1] 

The Court of Justice (CJ) has consistently held that restrictions on gambling activities are acceptable only if justified by an imperative requirement in the general interest and compliant with the principle of proportionality. The CJ has accepted the prevention of fraud as a legitimate objective justification. The financing of public interest activities through proceeds from gambling services, on the other hand, can only be accepted as a beneficial consequence that is incidental to the restrictive policy adopted.[2]  

It follows that a strict regulatory framework that genuinely reflects a concern to prevent the manipulation of sports events must accompany the introduction of a right to consent to bets. 

The origins of the French betting right 

With the enactment of a new gambling law in 2010, the French legislator, following case law precedent recognizing sports bets as a form of commercial exploitation of sports events, introduced a right to consent to bets in the French Sports Code. 

Interestingly, the concept of the right to consent to bets evolved considerably during the course of the legislative process.  

When the draft law opening up online gambling and betting to competition and regulation was introduced in the French parliament, the rationale of the right to consent to bets was solely expressed in terms of generating a “fair financial return” to sport. Under Chapter IX (“Provisions concerning the exploitation of sports events”) of the original draft law, the following addition to Article L.334-1 of the Sports Code was proposed: 

“The use, for commercial purposes, of any characteristic element of sporting events or competitions, notably names, calendars, data or results, requires the consent of the owners of the exploitation rights under conditions, in particular of a financial nature, defined by contract, subject to the provisions of articles L. 333-6 to L.333-9”.^[3]

On 5 March 2009, the French authorities notified the draft law to the European Commission, in accordance with the provisions of Directive 98/34/EC of 22 June 1988.[4] In its detailed opinion, the Commission stressed that several provisions of the draft law would infringe Article 56 TFEU if they were to be adopted without due consideration of the Commission’s objections. Amongst other things, the Commission rightly observed that the financing of sport through gambling revenues could not justify an obstacle to free movement, in this case the requirement to obtain consent from the sports organiser. The Commission further noted that the characteristic elements that are already in the possession of sports organisers, such as calendars, data or results, could not qualify for sui generis database right protection.  

It was only during the subsequent first reading of the draft law in the French National Assembly that the statutory recognition of the right to consent to bets was presented as a means of preserving sports integrity. On 21 July 2009, the French Minister for the Budget declared: 

“in reality, the interest of this right for sport is not financial but ethical, by requiring commercial agreements between gambling operators and the organisers of sports competitions, this right finally will give professional sport the means to make the operators share their concerns in matters of competition ethics”.^[5]

 Accordingly, the relevant provision was substantially amended to address the concerns about its compliance with the EU internal market rules. First, it no longer mentioned that the consent to the organisation of bets was related to the use of fixtures and schedules. Second, the title of Chapter IX was changed to “Provisions concerning the exploitation of sports events and the fight against fraud and cheating in the context of these events” (emphasis added). Third, multiple paragraphs were added, so as to stipulate that (1) the betting right contracts should impose obligations on betting operators concerning fraud detection and prevention and (2) the financial contribution is intended to compensate for costs incurred by sports organisers for anti-fraud mechanisms.^[6]

The proof of the pudding is in the eating  

On the basis of an in-depth assessment of the exploitation of the French right to consent to bets, the study concludes that the rationale of safeguarding the integrity of sports events did not really override its economic rationale. 

Decree No. 2010-614 requires the betting right marketing contracts to specify information and transparency obligations imposed on operators to detect fraud and prevent the risk of harm to the integrity of sports events.^[7] Contrary to the relatively strong language about the stipulation of “information and transparency obligations” imposed on the operators, Decree No. 2010-614 merely requires the holder of the right to consent to bets to specify in the contracts the measures it “intends” to introduce for preventing the risk for the integrity of the events in question. However, the law does not mandate the effective implementation of these integrity measures. Furthermore, although the compensation paid for the right to organise bets must take account “in particular the costs incurred in detecting and preventing fraud”, there is no guarantee that the income is allocated to fraud prevention and detection. 

If Member States would consider introducing a right to consent to bets, it appears critical from an EU law perspective that it is genuinely designed to protect a non-economic public interest objective in a proportional manner. The Victorian (Australia) regulatory regime is recommended as a best practice model. Here, the financial return is truly a compensation for the integrity assurances given by the sports bodies. Before a sports body is legally entitled to exercise the right to consent to bets, it must first invest time and resources into developing adequate integrity mechanisms. Furthermore, in case the sports body fails to fulfil its contractual obligations, the gambling regulator may revoke its ability to exercise the right to consent to bets. Indeed, the rights and obligations in the betting right agreements must work both ways: sports betting operators are also entitled to expect that the sports organisers truly implement the integrity policies.  

For a detailed exploration of the virtues of a right to consent to bets and the challenges of adopting such a mechanism from a legal, institutional, and practical perspective, check out the full study available at http://ec.europa.eu/sport/news/2014/study-on-sport-organisers-rights_en.htm.

[1] All measures that prohibit, impede or render less attractive the exercise of the fundamental freedoms must be regarded as restrictions, see e.g. C-439/99 Commission v Italy [2002] ECR I-305, para. 22; Case C-205/99 Analir and Others v Administratión General del Estado [2001] ECR I-271, para. 21.

[2] See e.g. Joined Cases C 316/07, C 358/07 to C 360/07, C 409/07 and C 410/07 Markus Stoß and Others v Wetteraukreis and Others [2010] ECR I-8069, para. 104; C-67/98 Questore di Verona v Diego Zenatti [1999] ECR I-7289, para. 36; Judgment of the EFTA Court in Case 3/06 (Ladbrokes) para. 63.

[3] Unofficial translation by the research team (“L’utilisation, à des fins commerciales, de tout élément caractéristique des manifestations ou compétitions sportives, notamment leur dénomination, leur calendrier, leurs données ou leurs résultats, ne peut être effectuée sans le consentement des propriétaires des droits d’exploitation, dans des conditions, notamment financières, définies par contact, sous réserve des dispositions des articles L. 333-6 à L. 333-9”).

[4] Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations (1998) OJ L 204/37. This “Transparency Directive” requires Member States to notify their rules on information society services in draft form, and generally observe a standstill period of at least three months before formal adoption, in order to allow other Member States and the European Commission to raise concern about potential trade barriers within the EU.

[5] Assemblée Nationale, Audition de M. Éric Woerth, ministre du budget, des comptes publics, de la fonction publique et de la réforme de l'État au cours de la réunion du 21 Juillet 2009.

[6] In the context of the second reading of the draft law in the French Senate, the rapporteur of the Finance Committee welcomed this solution to accommodate the European Commission’s concerns regarding Article 52. Sénate, Rapport n° 209 (2009-2010) de M. François Trucy, fait au nom de la commission des finances, déposé le 19 janvier 2010.

[7] Décret no. 2010-614 du 7 Juin 2010 relatif aux conditions de commercialisation de droits portant sur l’organisation de paris en relation avec une manifestation ou compétition sportives, Article 2.

Editor's note: Saverio P. Spera is an Italian qualified attorney-at-law. He has practiced civil and employment law in Italy and briefly worked at the Asser International Sports Law Centre before joining FIFA in 2017. Until May 2024, he has worked within the FIFA legal division - Litigation Department, and lectured in several FIFA sports law programmes. In the spring of 2024 he has co-founded SP.IN Law, a Zurich based international sports law firm.

On 21 December 2023 a judicial hat-trick stormed the scene of EU sports law. That day, the European Court of Justice (the “ECJ”) issued three decisions: (i) European Superleague Company, SL v FIFA and UEFA (Case C-333/21); (ii) UL and SA Royal Antwerp Football Club v Union royale belge des sociétés de football association ASBL (Case C-680/21)and (iii) International Skating Union (ISU) v. European Commission – Case C-124/21.

These judgments were much scrutinised (see here, here and here) in the past 6 months. For the reader’s relief, this paper will not venture into adding another opinion on whether this was a fatal blow to the foundation of EU sports law or if, after all, the substantive change is minimal (as persuasively argued here). It will analyse, instead, UEFA’s recent amendments of its Statutes and Authorisation Rules governing International Club Competitions (the “Authorisation Rules”) and whether these amendments, clearly responding to the concerns raised in the ISU judgment with respect to the sports arbitration system,[1] might pave the way for other Sports Governing Bodies (SGBs) to follow suit and what the implications for CAS arbitration might be.

The ISU judgement in a nutshell

On 23 June 2014, two professional speed skaters belonging to the Royal Netherlands Skating Federation (KNSB), Mr Tuitert and Mr Kerstholt, filed a complaint to the European Commission (the “Commission”) against the ISU (of which, the KNSB is a member) for an alleged violation of Article 101 and 102 TFEU by the ISU Prior Authorisation and Eligibility Rules. Three years later, on 8 December 2017, the Commission issued its decision, considering the compatibility with EU competition law of (i) the ISU Eligibility Rules (i.e., the provisions determining the conditions in which athletes could take part in skating competitions); (ii) the ISU Prior Authorisation Rules (i.e., the provisions setting out the procedure to follow in order to obtain from the ISU the authorisation to organise international skating competitions) and (iii) the ISU Arbitration Rules (i.e., the provisions establishing that, in case of disputes, the relevant ISU decision would have had to be appealed at the CAS).[2] In essence, the Commission found that the Eligibility and Prior Authorisation Rules did not satisfy the conditions required by Article 101(3) TFEU in order to benefit from an exemption and, importantly, that the Arbitration Rules had to be revised because they were reinforcing the restriction of commercial freedom already determined by the substantive rules under scrutiny. 

The ISU appealed the EC’s Decision to the General Court (the “GC”), seeking its annulment. On 16 December 2020, the GC issued its decision (the “Appealed Decision”) rejecting most of the appeal. However, the judges annulled the part of the EC’s Decision dedicated to the ISU Arbitration Rules. In essence, the GC considered that conferring exclusive jurisdiction to the CAS, a specialised arbitral tribunal capable of quickly resolving these disputes, was justified by legitimate interests linked to the specific nature of the sport.[3]

On 26 February 2021, the ISU filed an appeal to the ECJ against the ruling of the GC, while the speed skaters (supported by the Commission) filed a cross-appeal requesting to set aside the Appealed Ruling in so far as it annulled the part of the EC Decision that concerned the Arbitration Rules.  

Regarding these, the ECJ was not convinced by the GC’s conclusion that legitimate interests linked to the specific nature of sport can justify arbitration rules when they confer exclusive jurisdiction to the CAS to review decisions capable of touching upon public policy provisions of the EU (such as matters of EU competition law). Instead, it stressed that the contested Arbitration Rules concerned disputes that could arise in the context of economic activities linked to the organisation and marketing of international speed skating events. Hence, any disputes subjected to these Arbitration Rules come under EU competition law, and the relevant decision must comply with it.[4] The ECJ demanded that the court having jurisdiction to review the award perform an effective judicial review to guarantee that substantive rights – part of EU public policy – are safeguarded.[5] In this context, the ECJ also underlined that it is not sufficient to provide ex postremedies allowing parties to seek damages for violations of competition law condoned through the arbitration process.[6]

A standstill between two systems which inevitably cross paths

According to the ECJ, any provision or decision of an association of undertakings crossing the boundaries of “questions of interest solely to sport […] extraneous to any economic activity”[7] and potentially restrictive of competition must be scrutinised through the lens of EU competition law.

A problem of coexistence between two legal regimes that inevitably interact seems to be evident. On the one hand, the international sports arbitration system, with the CAS as specialised dispute resolution method and the SFT as judicial apex, and on the other EU law and the EU institutions.  

i.               The problem does not lie with the CAS in itself…

Notoriously, CAS panels do apply EU law when required.[8] The legislative basis upon which they do so is Article R58 CAS Code,[9] Article 19 of the Swiss Federal Act on Private International Law (PILA)[10]  and – depending on the circumstances – Article 187(1) PILA.[11] Over the years, CAS panels have regularly assessed the compatibility of regulations of UEFA and FIFA with EU Competition law. 

In CAS 2007/A/1287 Danubio FC v. FIFA & FC Internazionale Milano S.p.A., the panel analysed the compatibility of the FIFA solidarity mechanism with EU competition law. On that occasion, it recognised that “it is not only allowed, but also obliged to deal with the issues involving the application of EC law in the present matter”. The same conclusion was reached by other panels on several occasions over the years (see, inter alia, CAS 2009/A/1788 UMMC Ekaterinburg v. FIBA Europe e. V., In CAS 2012/A/2852 S.C.S Fotbal Club CFR 1907 Cluj S.A. & Manuel Ferreira de Sousa Ricardo & Mario Jorge Quintas Felgueiras v. FRF, CAS 2014/A/3561 & 3614 IAAF & WADA).

A recent CAS award entirely revolved around the compatibility of the newly adopted FIFA Football Agents Regulations (FFAR) with EU law.[12]

The ECJ’s demands for an effective scrutiny through the lens of EU Competition law of certain types of regulations of associations of undertakings is thus met by the arbitral body having (almost invariably) exclusive jurisdiction to review them.

ii.              …but with the court which reviews its awards

However, while a CAS award can be challenged before the Swiss Federal Tribunal (SFT) on the ground of – inter alia – incompatibility with public policy,[13] Swiss public policy and EU public policy (which covers EU competition law[14]) are two very distinct concepts and the SFT (i) only takes the former into account and (ii) certainly does not refer questions to the ECJ for preliminary rulings. 

Hence, the failure to apply (or the wrong application of) EU law does not necessarily result in the setting aside of the relevant CAS award since it does not violate Swiss public policy.[15]

On a few occasions, the SFT has considered whether EU competition law is part and parcel of Swiss public policy.[16] In a judgment of 8 March 2006, the SFT rejected a request to set aside an arbitral award on the basis of a claimed incompatibility with substantive public policy due to an alleged violation of EU (and Italian) competition law. On that occasion, the SFT – once having formulated a definition of Swiss public policy[17] – determined that EU competition law does not meet the test.[18]

Thus, even if EU law is considered to be a mandatory foreign substantive law by the relevant arbitral panel, this does not make it part of the Swiss public order. The SFT seems to be content with the conclusion that the public policy weighing on the Court is different from the one weighing upon the arbitrator.[19]

Ultimately, the problem is not really the CAS per se, but the fact that it is seated in Switzerland.

Is UEFA paving a way forward to diffuse the potential conflict between CAS arbitration and EU competition law?

It is not the first time that the EU judges draw the SGBs’ attention to the fact that their rules and decisions are not adopted in a social and economic vacuum and that their (a priori legitimate) governing authority needs to account for its effects on the EU’s internal market. As illustrated in the ISU case, this extends to dispute resolution processes that are provided for in the SGBs’ rulebooks. 

UEFA has recently attempted to address these concerns by amending its Authorisation Rules and its Statutes. Article 16 of the Authorisation Rules, concerning ‘Dispute resolution’, was amended through the addition of paragraph 3 and 4 reading as follows:

3. CAS shall primarily apply the UEFA Statutes, rules and regulations and subsidiarily Swiss law. The party filing the statement of appeal and/or a request for provisional measures, whichever is filed first with CAS, shall indicate in its first written submission to CAS whether the party accepts Lausanne, Switzerland, as seat of the arbitration or if the seat of the arbitration shall be in Dublin, Ireland, in derogation of Article R28 of the CAS Code. In the latter case, UEFA is bound by the choice of Dublin, Ireland, as seat of the arbitration and UEFA shall confirm its agreement to such seat in its first written reply to CAS. In case no seat is indicated in the first written submission to CAS, Article R28 of the CAS Code shall apply. 

4. The decision of CAS shall be deemed to be made at the seat of the arbitration determined as per paragraph (3) above. The CAS award shall mention the seat of the arbitration. The decision of CAS shall be final and binding to the exclusion of jurisdiction of any ordinary court or any other court of arbitration. This is without prejudice to the right of appeal of any party in accordance with the applicable law of the seat of the arbitration as well as the right to challenge the enforcement or recognition of a CAS award on grounds of public policy (which may include European Union public policy laws) in accordance with any applicable national or European Union procedural laws. 

Article 63 of Statutes, in turn, was modified in its paragraph 2 (now reading “CAS shall primarily apply the UEFA Statutes, rules and regulations and, subsidiarily, Swiss law. In addition, any party before CAS shall be entitled to raise mandatory provisions of foreign law in accordance with Article 19 of the Swiss Private International Law Act, which may include European Union public policy laws”) and an entirely new third paragraph was added to it:

3. CAS awards shall be final and binding to the exclusion of jurisdiction of any ordinary court or any other court of arbitration. This is without prejudice to the right to file an appeal against a CAS award before the Swiss Federal Tribunal in accordance with Swiss law and the right to challenge the enforcement or recognition of a CAS award on grounds of public policy (which may include European Union public policy laws) in accordance with any applicable national or European Union procedural laws or the right to file a case before a competent competition authority.

While laudable, the clarification in the Statutes does not add much to the picture. As seen, CAS panels were already applying foreign mandatory law. The new paragraph 3 does not seem to change the general balance of the UEFA arbitration rules either, since the possibility to challenge the enforcement or recognition of a CAS award existed already.

The changes to the Authorisation Rules are much more significant with regard to the CAS arbitration procedure. They concern disputes related to UEFA’s decisions not to authorise the organisation of International Club Competitions.[20]According to the Authorisation Rules, a potential organiser needs to meet administrative and financial criteria,[21]sporting and technical criteria,[22] ethical criteria,[23] sporting merit criteria,[24] and submit to UEFA a request for authorisation containing all the relevant information and supporting documents concerning the mentioned prerequisites in order to obtain authorisation to organise an International Club Competition.[25] Any dispute related to these rules has to be brought to the CAS. Yet, the appellant can derogate to Article R28 of the CAS Code and choose to have the CAS seated in Dublin rather than in Lausanne and if it does so: (A) UEFA is bound by that choice; (B) the relevant award will be subjected to setting aside proceedings before the Irish High Court (on the limited grounds of Article 34(2) of the Model Law, which include public policy, as explained here).

The amendment is significant. Is it revolutionary? Probably not, but it certainly shows UEFA’s willingness to appease Luxembourg and Brussels’ concerns. The Authorisation Rules are a textbook example of the type of rules whose compatibility with EU competition law might be challenged and for which access to the preliminary reference procedure ought to be available. 

Does the reform address the ECJ’s concerns as expressed in the ISU ruling? In part, undoubtedly. In the future, in cases involving the Authorisation Rules, the appellants will be able to choose to bind UEFA to an arbitral process subjected to the review of the national court of a Member State which can refer to the ECJ a preliminary reference. However, there are many more UEFA rules that can potentially infringe EU competition law which are currently outside of the scope of this new procedure.[26]

Is this a model for other SGBs to follow? Possibly. It preserves the CAS as a specialised international arbitral tribunal sitting in Switzerland (which is dear to many stakeholders for a variety of reasons) yet guaranteeing that – when it comes to some rules typically touching upon issues of EU competition law – potentially affected parties can opt to have an effective EU law review by choosing a seat of the arbitration within the EU, while at the same time being reassured about the enforceability of the award (as Ireland is signatory of the New York Convention).

This compromise appears to offer a feasible and potentially fruitful path to appease the concerns of the ECJ, while preserving the specific relationship between sports governance and the CAS. In the end, the CAS might have to be ‘EUropeanised’, but it seems high time to ensure a greater embeddedness of sports arbitration in the EU legal order in order to protect the lex sportiva from a head-on conflict with EU law and the EU institutions.

[1] As argued by Antoine Duval: “one of the least visible and yet potentially most consequential findings in the trio of decisions”.

[2] In parallel, Article 25 of the ISU Statutes provided for the possibility for athletes who wished to challenge a decision imposing a penalty of ‘loss of eligibility’ or ‘ineligibility’ on them to lodge an appeal against that decision before the CAS.

[3] Appealed Decision, para. 156.

[4] ISU judgment, para. 189.

[5] Ibid, paras. 198 – 199.

[6] Ibid, paras. 200 – 204. 

[7] It is interesting to note that the revival of the concept of ‘purely sporting rule’ by the Court has been authoritatively criticised (see here and here).

[8] For a complete overview of the interaction between EU law and the CAS, see Duval A (2015) The Court of Arbitration for Sport and EU law: chronicle of an encounter. Maastricht Journal of European and Comparative law, 22(2) 224-255.

[9] Article R58 CAS Code (law applicable to the merits): “The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision” (emphasis added)

[10] Article 19 PILA: “1. If interests that are legitimate and clearly preponderant according to the Swiss conception of law so require, a mandatory provision of a law other than the one referred to by this Act may be taken into consideration, provided the situation dealt with has a close connection with that other law. 2. In deciding whether such a provision is to be taken into consideration, consideration shall be given to its purpose and the consequences of its application, in order to reach a decision that is appropriate having regard to the Swiss conception of law”.

[11] Article 187(1) PILA: “The arbitral tribunal shall decide the dispute according to the rules of law chosen by the parties or, in the absence of such a choice, according to the rules of law with which the case has the closest connection”.

[12] The panel indeed assessed whether Article 15(2) FFAR: (i) pursued legitimate objectives recognised by the EU legal order (paras. 283 – 288); (ii) was appropriate to pursue those objectives (paras. 289 - 297) and (iii) was proportionate (paras. 298 – 310) and concluded in the affirmative with respect to each of them.

[13] See Article 190(2) lit. e) PILA.

[14] See, for instance, Case C-126/97 – Eco Swiss China Time Ltd. v Benetton International NV, [1999] ECR I-3055.

[15] See Sandra de Vito Bieri – the application of EU law by arbitral tribunal seated in Switzerland in ASA Bulletin 1/2017 (Volume 35, pages 55 – 66), who points out that the only chance for such an action to be successful would be in the improbable case in which the CAS were to find EU law applicable to the dispute but were to deny jurisdiction to decide on matter of EU law.

[16] ATF 128 III 234, consid. 4c at 242; Judgment 4P.119/1998 of 13 November 1998, consid. 1b/bb, published in ASA Bulletin 1999 at pp 529 et seq.

[17] Judgment of 8 March 2006, 4P.278/2005, consid. 2.2.3: “[…] an award is incompatible with public policy if it disregards essential and widely recognised values which, in accordance with conceptions prevalent in Switzerland, must constitute the foundation of any legal order”.

[18] In essence, the SFT did not consider competition law to be a fundamental principle of law applicable in any legal order given the different extents to which this is accepted in the various legal systems. In particular, with respect to EU competition law, the SFT observed that the values that it protects are confined to the EU because drafted in the attempt to guarantee the functioning of the European internal market, and – as such – they cannot be considered part of a more universal principle that can be shared by all countries, including Switzerland

[19] Ibid, consid. 3.3. See Landolt P. “Judgment of the Swiss Supreme Court of 8 March 2006 – A Commentary”.

[20] See Article 2 of the Rules for more details on their scope of application.

[21] Article 4 of the Rules.

[22] Article 5 of the Rules.

[23] Article 6 of the Rules.

[24] Article 7 of the Rules.

[25] Articles 8 to 12 of the Rules.

[26] There are rules admittedly escaping EU law scrutiny, however – as poignantly argued by Prof. Weatherill here – those entirely extraneous to economic activity are not many and possibly the focus should not be on their purely sporting nature but rather on the effect of their practice.