The decision of the Bundesgerichtshof (BGH), the Highest Civil Court in Germany, in the Pechstein case was eagerly awaited. At the hearing in March, the Court decided it would pronounce itself on 7 June, and so it did. Let’s cut things short: it is a striking victory for the Court of Arbitration for Sport (CAS) and a bitter (provisory?) ending for Claudia Pechstein. The BGH’s press release is abundantly clear that the German judges endorsed the CAS uncritically on the two main legal questions: validity of forced CAS arbitration and the independence of the CAS. The CAS and ISU are surely right to rejoice and celebrate the ruling in their respective press releases that quickly ensued (here and here). At first glance, this ruling will be comforting the CAS’ jurisdiction for years to come. Claudia Pechstein’s dire financial fate - she faces up to 300 000€ in legal fees – will serve as a powerful repellent for any athlete willing to challenge the CAS.

Personally, I have, to put it mildly, mixed feelings regarding this decision. On the one hand, I am relieved that the BGH did not endorse the reasoning used by the Landgericht München in its ruling, challenging the necessity of forced CAS arbitration. But, on the other hand, I am rather disappointed that the BGH failed to endorse the balanced reasoning used by the Oberlandesgericht München in its decision (I translated the relevant parts of the ruling here). I believed this framing of the case would have offered a perfect vantage point to force a democratic reform of the CAS without threatening its existence. For those concerned with a potential flood of appeals, this could easily have been avoided by barring Claudia Pechstein to prevail on the merits of the case (or through preclusion for example). There was room for mild audacity and transnational constitutionalism (as I argued elsewhere), but the BGH opted for conservatism and conformism. I deeply regret it.

Though it is always perilous to comment on a case based only on a preliminary press release, I will offer here some (critical and preliminary) thoughts on the main aspects of the BGH’s legal reasoning.

I.               This is not forced arbitration (or is it?)

Paradoxically (or not), I chose to start with the end of the BGH’s press release discussing the validity of the arbitration agreement. The BGH is also very much drawn to paradoxes in this final paragraph of its press release. In a first sentence it states rather bluntly that Pechstein has freely signed the arbitration agreement in favour of the CAS.[1] Yet, conscious of the absurdity of such a claim (unless one means only that Pechstein was free to decide to become a professional speed-skater), it immediately qualifies its assertion by claiming that in any case the fact that she was forced to sign the agreement does not imply that it is invalid.[2] This is justified on the basis of a balancing exercise (which is not detailed in the press release and will be important to scrutinize in the final judgment) between the athlete’s fundamental right to a judge and her freedom to provide services and the constitutionally protected autonomy of associations (e.g. ISU).[3] This is particularly so, because Claudia Pechstein could appeal a CAS award to the Swiss Federal Tribunal (SFT).[4] Thus, she had access to a national judge and did not necessitate recourse to the German courts.[5]

Hidden in this relatively small paragraph, compared to the overall press release, are many controversial statements and assumptions. First, the claim that Claudia Pechstein (and any other international athlete for that matter) freely submits to CAS arbitration is surreal. So unconvincing, that the BGH itself debunks it in the following phrase. What is it then? Free consent or forced consent? You need to choose! In fact, CAS arbitration is always (in appeal cases) forced arbitration. This should be openly acknowledged by the BGH and the SFT. Instead, they are forced into logical convolutions that can only be perceived, in the SFT’s own words, as “illogical”.[6] Second, the balancing exercise conducted by the BGH should be scrutinized. Unfortunately, there is very little information on this balancing in the press release. Yet, one should not accept a restriction on the freedom of an athlete to provide services and on its fundamental right to access national courts, unless a forced CAS arbitration is shown as absolutely necessary to secure the autonomy of the Sports Governing Bodies (SGBs). Moreover, such a weighty restriction on the fundamental rights of an athlete should imply a strict assessment of the quality of the judicial process at the CAS. In light of the BGH’s assessment of the independence of the CAS (see more on this in part II.), one can doubt that it has taken this balancing exercise seriously. Finally, the claim that access to the SFT could compensate for the loss of Claudia Pechstein’s access to German Courts is ludicrous, or in good German realitätsfremd. Any CAS practitioner knows that the SFT favours (to its credit openly) a “benevolent”[7] approach to the CAS, and that it is extremely reluctant to overturn awards on the basis of procedural or substantial ordre public.[8] Winning an appeal against a CAS award in front of the SFT is a bit like Leicester City winning the Premier League, an oddity.

Based on the BGH’s press release, the ruling seems at best vague and unpersuasive and at worse negligent in its assessment of the factual and legal situation. One can well argue that on balance of interests, forced CAS arbitration might be necessary to preserve the existence of international SGBs and their competitions, but this would imply a way stricter assessment of the institutional independence of the CAS, which is entirely lacking in the press release. 

II.             The (in)dependence of the CAS

The core of the press release concerns the independence of the CAS. The BGH considers that the CAS is a true arbitral tribunal in the sense of German civil procedural law and that it is not structurally imbalanced in favour of the SGBs.[9] Therefore, forcing athletes to arbitrate disputes at the CAS does not constitute an abuse of dominant position. 

I contend that the BGH’s assessment of the independence of the CAS is, based on this press release, imprecise and in some regards even erroneous. It relies on four main arguments:

• SGBs and athletes share the same interest in the fight against doping
• SGBs and athletes share the same interest in having a uniform and swift sporting justice
• The CAS Code allows for sufficient safeguards in case an arbitrator is not sufficient independent/impartial
• The athlete can appeal to the SFT to challenge the lack of independence of an arbitrator

In the following sections of this blog, I will aim at critically unpacking and deconstructing these four arguments one by one.

A.    The shared interest of athletes and SGBs in the fight against doping

In a first paragraph, the BGH sets out to rebut the OLG’s argument that the CAS is structurally imbalanced in favour of the SGBs, i.e. due to the selection process of CAS arbitrators included in the CAS list. In the past, and still nowadays, it is the ICAS, a body constituted of 20 members nominated overwhelmingly by the SGBs, which decides who gets to be on the CAS list. Currently, based on their official CVs available on the CAS’ website, 13 out of 20 ICAS members have direct links with SGBs. Hence, the OLG’s reasonable assumption that the selection process of arbitrators could lead to the perception that the CAS was in a way captured by the SGBs and prone to favour their interests.

The BGH’s trick to rebut this finding of the OLG is to merge the interests of the athletes and of the SGBs into a shared objective of fighting against doping.[10] This is, bluntly speaking, ludicrous. It would be like arguing that the independence of the criminal justice is redundant, because both the State and the accused citizen share an interest in public safety and security. This is legal nonsense and is not up to the standards of the BGH. It is easy to discern that beyond an undoubtedly shared concern for the fight against doping, the athlete and the SGB involved in a particular dispute over a failed anti-doping test have radically opposite interests. Consequently, the independence of the CAS is crucial to ensure that the SGBs do not abuse their legitimate regulatory and executive powers in an anti-doping dispute. 

B.    The shared interest in a uniform and swift sporting justice

The BGH, thereafter, argues that the CAS would be necessary to ensure the uniformity and swiftness of sporting justice and that this would be also in the interest of the athletes.[11] I actually share the view of the BGH on this need for a uniform sporting justice embodied by the CAS. Still, the German judges fail to comprehend that this argument can be used only to justify the post-consensual foundations of the CAS, but is toothless to promote laxer standards of independence for the CAS. The need for uniformity and swiftness might call for a single institution having mandatory jurisdiction, but not for this same institution to be captured by the SGBs or to fail to ensure due process guarantees. Here, ironically, the BGH is laying the ground for a strict review: the recognized necessity of forced arbitration calls for an impeccable CAS on the due process side.

C.    The CAS Code safeguards the independence/impartiality of CAS arbitrators

In the following sections of its reasoning, the BGH argues that any remaining imbalance of the CAS in favour of the SGBs could be remedied via the procedural safety mechanisms included in the CAS code.[12] In the full judgment it probably refers to article S.18 CAS Code providing that arbitrators have to sign “an official declaration undertaking to exercise their functions personally with total objectivity, independence and impartiality, and in conformity with the provisions of this Code” and to article R.33 CAS Code stating that “[e]very arbitrator shall be and remain impartial and independent of the parties and shall immediately disclose any circumstances which may affect her/his independence with respect to any of the parties.” Based on article R.34 CAS Code, any challenge of an arbitrator on the basis of the latter provision must be submitted to the ICAS Board composed of six members, five of which are or have been in the past involved in executive positions in SGBs. In these conditions, it should be obvious that challenging the independence of an arbitrator vis-à-vis the SGBs is extremely unattractive for an athlete, even more so when considering that in case of failure there is a risk of alienating the arbitrator in question. This is why the CAS’s independence issue is systemic and cannot be solved without re-designing the selection process and composition of the ICAS.

Furthermore, the BGH also argues that both parties can chose an arbitrator and that both arbitrators will then designate the President of the panel.[13] This is plainly wrong. In appeal cases, concerning almost all the anti-doping cases and which was the procedure followed in the Pechstein case, it is the President of the appeal division that designates the President of the panel.[14] The president of the division is also the one in charge of ensuring “that the arbitrators comply with the requirements of Article R33”. [15]  This person is directly nominated by ICAS and it suffices to remind that the previous holder of this position was (until 2013) Thomas Bach (now IOC President, then IOC Executive Board member), to demonstrate how doubtful its independence from the SGBs was and still is. It is difficult to understand how such a basic mistake has found its way into a BGH press release. Even the official CAS Code Commentary by the CAS Secretary General openly justifies this exclusive prerogative of the President of the appeal division by stating that she “can better evaluate if it is preferable to appoint an experienced arbitrator in order to act as chairman of the Panel or a less experienced CAS arbitrator, who is not widely known to the parties but who would have the necessary background to rule on a particular case”.[16] The dilettante manner in which the BGH has conducted its assessment of the CAS’ independence contrasts strongly with the OLG’s thorough discussion of the problematic role of the ICAS and of the president of the appeal division.[17]  

D.    The SFT’s control of the independence/impartiality of CAS arbitrators

Finally, and this is a point already touched upon in the first part of this blog, the BGH insists that the losing party has the possibility to appeal to the SFT, which can annul the award.[18] The problem is, again, that the SFT is a mere paper tiger. Yes, it intervened (mildly) in the famous Gundel case in 1993, because back then the IOC was directly and openly controlling the CAS, but since then it has adopted a very narrow interpretation of the scope for challenges of the independence of CAS arbitrators.[19] Generally, the SFT considers the CAS as a necessary evil that should be (very) benevolently checked. This is hardly a credible avenue to ensure that its decisions abide by the democratic standards called for on the basis of its mandatory global jurisdictions.[20]

Conclusion: A missed opportunity

In work of arts, I am, and remain, a fond admirer of Magritte’s surrealist take on life. Yet, I doubt that a Court should engage in a similar exercise when drafting its judgments. Its role is to get its facts right (or close to right) and find the fitting interpretation of the law in a particular context. In the present case, I believe the BGH failed on both fronts. In its press release it misrepresented basic facts (that can be checked in two clicks via google) on the functioning and institutional structure of the CAS, often concerning facts that were already available in the OLG’s judgment. This is extremely worrying for such a reputable Court. Additionally, it failed to properly understand its constitutional role vis-à-vis the CAS and the need to ensure that basic due process rights of athletes are respected at the CAS. This needed not entail the death of the CAS, nor the end of its mandatory jurisdiction, nor even that Pechstein should be allowed to have her liability claim heard (a flood of appeals could have been easily avoided). Instead, a reform of the CAS could have been simply achieved by a subtle Solange formula stating roughly that forced CAS arbitration is fine ‘as long as’ the independence of the CAS is safeguarded and the due process rights of athletes warranted. Hopefully, the case will move to the Bundesverfassungsgericht (and it is still pending before the European Court of Human Rights), which knows a thing or two about Solange formulas…

[1] “Die Klägerin hat die Schiedsvereinbarung freiwillig unterzeichnet.”

[2] “Dass sie dabei fremdbestimmt gehandelt hat, da sie andernfalls nicht hätte antreten können, führt nicht zur Unwirksamkeit der Vereinbarung.”

[3] “Denn auch insoweit ergibt die Abwägung der beiderseitigen Interessen am Maßstab des § 19 GWB eine sachliche Rechtfertigung der Verwendung der Schiedsklausel, die nicht gegen gesetzliche Wertentscheidungen verstößt. Dem Justizgewährungsanspruch der Klägerin sowie ihrem Recht auf freie Berufsausübung steht die Verbandsautonomie der Beklagten gegenüber.”

[4] “Schließlich ist der Klägerin im Anschluss an das Schiedsgerichtsverfahren Zugang zu den nach internationalem Recht zuständigen schweizerischen Gerichten möglich.”

[5] “Ein Anspruch gerade auf Zugang zu den deutschen Gerichten besteht danach nicht.”

[6] “Qu'il y ait un certain illogisme, en théorie, à traiter de manière différente la convention d'arbitrage et la renonciation conventionnelle au recours, sous les rapports de la forme et du consentement, est sans doute vrai.” BGE 133 III 235, at 245.

[7] “Exprimée d'une autre façon, cette logique veut que le maintien d'une possibilité de recours constitue un contrepoids à la "bienveillance" avec laquelle il convient d'examiner le caractère consensuel du recours à l'arbitrage en matière sportive.”

[8] See on this difficulty A. Rigozzi, Challenging Awards of the Court of Arbitration for Sport, J Int. Disp. Settlement (2010) 1 (1): 217-265.

[9] “Der CAS ist ein "echtes" Schiedsgericht im Sinne der §§ 1025 ff. ZPO.”

[10] “Denn die Verbände und die Athleten stehen sich nicht als von grundsätzlich gegensätzlichen Interessen geleitete Lager gegenüber. Vielmehr entspricht die weltweite Bekämpfung des Dopings sowohl den Interessen der Verbände als auch denen der Athleten.”

[11]“Die mit einer einheitlichen internationalen Sportsgerichtsbarkeit verbundenen Vorteile, wie etwa einheitliche Maßstäbe und die Schnelligkeit der Entscheidung, gelten nicht nur für die Verbände, sondern auch für die Sportler.”

[12] “Ein dennoch verbleibendes Übergewicht der Verbände wird ausgeglichen durch die Verfahrensordnung des CAS, die eine hinreichende individuelle Unabhängigkeit und Neutralität der Schiedsrichter gewährleistet.”

[13] “Der konkret an dem Verfahren vor dem CAS beteiligte Sportverband - hier die ISU - und der Athlet müssen je einen Schiedsrichter aus der mehr als 200 Personen umfassenden Liste auswählen. Diese Schiedsrichter bestimmen gemeinsam den Obmann des Schiedsgerichts. Ist ein Schiedsrichter befangen, kann er abgelehnt werden.”

[14] Article R54 CAS Code: “If three arbitrators are to be appointed, the President of the Division shall appoint the President of the Panel following nomination of the arbitrator by the Respondent and after having consulted the arbitrators.”

[15] Article R54 CAS Code.

[16] See footnote 2 in M. Reeb & D. Mavromati, The Code of the Court of Arbitration for Sport. Commentary, cases and materials. Kluwer, 2015, p.479.

[17] See generally A. Duval & B. van Rompuy, The Compatibility of Forced CAS Arbitration with EU Competition Law: Pechstein Reloaded. Available at SSRN: http://ssrn.com/abstract=2621983.

[18] Die unterliegende Partei hat die Möglichkeit, bei dem zuständigen schweizerischen Bundesgericht um staatlichen Rechtsschutz nachzusuchen. Das schweizerische Bundesgericht kann den Schiedsspruch des CAS in bestimmtem Umfang überprüfen und gegebenenfalls aufheben.

[19] See L. Beffa, 'Challenge of international arbitration awards in Switzerland for lack of independence and/or impartiality of an arbitrator – Is it time to change the approach?' (2011) 29 ASA Bulletin, Issue 3, pp. 598–606

[20] Here I implicitly refer to the pathbreaking democratic theory for international courts developped in A. Von Bogdandy & I. Venzke, In Whose Name? A Public Law Theory of International Adjudication, Oxford University Press, 2014.