INTRODUCTION

Almost a year after their announcement, the new FIFA Regulations on working with Intermediaries (“FIFA Regulations”) came into force on 1 April 2015. Their purpose is to create a more simple and transparent system of regulation of football agents. It should be noted, however, that the new FIFA rules enable every national football association to regulate their own system on players’ intermediaries, provided they respect the compulsory minimum requirements adopted. In an industry that is already cutthroat, it thus remains to be seen whether FIFA’s “deregulation” indeed creates transparency, or whether it is a Pandora’s Box to future regulatory confusion.

This blog post will provide an overview of the new FIFA Regulations on working with intermediaries and especially its minimum requirements. Provided that national associations are encouraged to “draw up regulations that shall incorporate the principles established in these provisions”[1], three different national regulations have been taken as case-studies: the English FA Regulations, the Spanish RFEF Regulations and the Brazilian CBF Regulations. After mapping their main points of convergence and principal differences, the issues that could arise from these regulatory differences shall be analyzed.  

FIFA REGULATIONS ON WORKING WITH INTERMEDIARIES

The objective of the new Regulations, as explained in a blog dated from 3 July 2014, is no longer to regulate access to the activity of players’ agents (now ‘intermediaries’), but to provide a framework for a better control of the activity itself by establishing minimum standards and requirements and by installing a transparent registration system.[2]

The most significant change is that FIFA introduced a provision recommending to cap the maximum remuneration an intermediaries should derive from an individual transfer. Article 7(3) holds that the maximum commission payable to an intermediary should be 3% of the player’s basic gross income (regarding an employment contract) or 3% of an eventual transfer fee (transfer agreement). Additionally, FIFA prohibits any payment when the player concerned is a minor. These two restrictions have triggered a complaint of the AFA (UK Association of Football Agents) before the European Commission. Moreover, in Germany, the company Rogon Sport Management challenged the new DFB regulations for intermediaries and won a partial victory in a preliminary ruling of the Regional Court of Frankfurt.[3] They argue that these regulations could lead to an infringement of the competition law. This issue will be developed in a different blog post later this week.

Another minimum requirement set by FIFA is the obligation for all intermediaries to submit an Intermediary Declaration (Annex 1 and 2 FIFA Regulations) to the relevant association. This is due each time an individual or a company wishes to be registered as an intermediary with a national association, and also in order to register a transaction in which he acts on behalf of a player or a club. By signing the Declaration, the intermediary is supposed to be bound to the FIFA Regulations, in addition to the regulations of every confederation and association to which he is contractually related.

Furthermore it is stipulated that legal persons can also be considered ‘intermediaries’ under the new Regulations.[4] However, they do not provide any criteria defining how the national associations are required to register the legal persons acting as intermediaries.

The FIFA Regulations prohibit any payment to the intermediary in connection with a transfer compensation (other than the commission established in the Article 7(3)), training compensation and solidarity contributions. Moreover, in accordance with provision 7(4) of the FIFA Regulations, no compensation can be based on the future transfer value of a player.

Another compulsory prerequisite at stake is that the intermediary ought to be registered with the association where he desires to provide his services prior to initiate any activity (Article 3(1) FIFA Regulations). As will be highlighted below, this provision has important practical consequences. Finally, FIFA no longer claims jurisdiction over disputes that could arise between intermediaries and their clients or other intermediaries. It entrusted the national associations to deal with these kind of disputes. The national associations shall establish proper dispute resolution mechanisms to hear these disputes.   

NATIONAL REGULATIONS ON WORKING WITH INTERMEDIARIES

With the objective of analysing how the different associations have implemented the new intermediaries’ system, three different national regulations will be compared: The FA Regulations on Working with Intermediaries, the RFEF (Spain) Regulations and the CBF (Brazil) Regulations. 

1. The FA (England)

The FA was the first association to publish new provisions regulating intermediaries (”FA Regulations”). It should be pointed out that the new FA Regulations are to a large extent similar to the former FA Agents Regulations. For example, the assignment or subcontracting services or duties, the definition of interest, the dual representation standards and the payment to the intermediary by the club on the player’s behalf as a taxable benefit were already included in the former FA Agents Regulations. 

Nevertheless, it is surprising that the FA Regulations do not require the intermediary to submit an Intermediary Declaration, even though it is a mandatory requirement imposed by the FIFA regulations. As stated above, national associations, such as the FA, are required to implement and enforce these minimum standards/requirements. It is not excluded that FIFA, based on Article 10 FIFA Regulations, will “take appropriate measures if the relevant principles are not complied with”.

The FA prescribes that all intermediaries are to undertake the so-called ‘Test of Good Character and Reputation for Intermediaries’. By undertaking this ‘Test’, the intermediary is asked to demonstrate his impeccable reputation and declares that he has not been convicted for any offence related to his services as an intermediary.

The individual who wishes to register himself as intermediary with the FA will have to pay a registration fee of £500 (around 690 €) for the first registration. However, this fee is waived to those who were already ‘FA Registered Agents’ on 31 March 2015. Instead, in order to remain registered as an intermediary, an annual renewal fee of £250 (around 345 €) will de be due.

Additionally, if the intermediary wishes to act on behalf of minors, he must obtain a specific authorisation from the FA. He will need to provide the FA with the ‘Disclosure and Barring Service check’ (CRB check), which enables in the UK to make better informed recruitment decisions by identifying candidates who may be unsuitable for certain work, especially involving children, or an equivalent for non-English intermediaries. Moreover, regulation B8 FA Regulations prohibits any approach to, or enter into an agreement with, a player before the start of the calendar year in which he turns 16.

Out of the three national associations analysed, the FA is the only association that has provisions regarding the existing representation contracts lodged with the FA before 1 April 2015. These contracts have to be resubmitted to the FA within 10 days of the intermediary registering with the FA.

For the purpose of the representation contracts between a player and an intermediary the maximum length will be two years (regulation B10).

With respect to legal persons, the FA Regulations impose the obligation to register the company/partnership by an individual already registered as an intermediary. Moreover, any individual carrying out intermediary activities on behalf of a legal person must be registered as well.[5]  

Lastly, the FA adopted the same wording as FIFA in relation to the 3% recommendation (C11 FA Regulations). However, the English football association also published a statement (‘Intermediaries Guidance Notes’) indicating that this ‘recommendation’ is non-binding and that clubs and players are free to remunerate intermediaries as they wish. It is clear that this provision could generate doubts regarding the amount of the compensation that the intermediary is entitled to. In fact, the 3% recommendation is significantly lower than the 5-10% commission rates that licensed agents tended to receive[6]. However, with this statement, the FA is not precluding an intermediary and his client to agree on a percentage higher than 3%.

2. RFEF (Spain)

As far as the RFEF (Spanish association) Regulations on working with Intermediaries (“RFEF Regulations”) are concerned, they are the most in line with the FIFA Regulations as compared to the FA and CBF Regulations. The Intermediary Declarations are attached as Annex 1 and 2 at the end of the Regulations.  The registration fee for the first registration as an intermediary in Spain is 861 €. Registration has to be renewed on a yearly basis. However, it is yet unknown what the exact costs will be for renewing the registration. Similar to the FA’s ‘Test of Good Character and Reputation’, the RFEF provides a ‘Code of Ethics’ (Annex 3), which has to be signed by the applicant. Furthermore, the maximum length of a representation contract between a player or a club and an intermediary is two years.[7] Although the maximum length of contracts in England is also two years, it should be kept in mind that the FA Regulations only refer to contracts between intermediaries and players, not between intermediaries and clubs.

The most controversial aspect of the Spanish Regulations is the way that the Registration Procedure (Article 4) is designed. The steps for becoming a RFEF Intermediary are summarized as follows:

1. The potential intermediary has to provide a written request addressed to the RFEF General Secretariat (“Secretaría General”).

2. After the application is declared admissible, the RFEF will grant the individual the status of “Applicant”. Subsequently, the RFEF will convoke the applicant for an interview and decides whether the Applicant is ‘suitable to advice’ clients on the football market.   

3. If the outcome of the interview is positive, the Applicant must provide the following documents: ID, VAT number (for legal persons), two pictures, CV, Intermediary Declaration, the payment of the Registration Fee, return the former agent license (if any) and the Code of Ethics. 

Another interesting point is that the Spanish Regulations do not provide any information on the intermediary’s remuneration. Bearing in mind that FIFA recommends the remuneration to be 3%, it will be interesting to see the consequences of the RFEF’s decision to disregard this recommendation.

This could be understood as an implicit challenge to the ‘3% recommendation’. In practice, this omission has similar consequences than the solution adopted by the English FA. In short, FIFA’s recommendation is treated as a soft advise rather than a binding legal standard.

3. CBF (Brazil)

The CBF (Brazilian association) Regulations on Working with Intermediaries (“CBF Regulations”), were approved on 24 April 2015. In order to be registered as an intermediary, the individual must provide the Intermediary Declaration attached in Annexes 1 and 2 to the Regulations. The registration fee has not been published yet. The applicant should also deliver a declaration stating that he has neither conflicts of interest nor a criminal record. Moreover, the potential CBF intermediary is required to take out a professional liability insurance for the amount of 200,000 ‘reais’ (around 60,000 €). Thus, the CBF, taking advantage of its right to ‘go beyond’ the minimum requirements imposed by FIFA, has introduced a feature of the former Agents Regulations that the new FIFA Regulations had abandoned, i.e. the professional liability insurance.[8]

Following the line of the FA and the RFEF, the Representation Contract shall not last more than “24 months” (Article 11(3)). Given that the Regulations do not state whether it refers to contracts with players or clubs, it can be inferred that all parties are subject to this restriction. On the other hand, the CBF prohibits in article 11(2) to extend the Representation Contract tacitly, a renewal in writing is necessary.

The remuneration of the intermediary is regulated in the same way as in the FIFA Regulations, except for one detail concerning the transfer fee: in Brazil, the remuneration, which should not exceed 3%, amount must be calculated on the basis of the “possible basic gross income for the entire duration of the relevant employment contract” (article 19.III), instead of a share of the transfer fee as envisaged by the FIFA, RFEF or FA Regulations.

Finally, Article 4 expands the scope of application of these regulations to ‘international activities’, specifically “operations regarding the negotiation of an employment contract or players’ transfer which have effect in a different national association”. By means of this Article, an operation which takes place out of the CBF jurisdiction has to be registered by the ‘CBF Intermediary’ with the CBF. As a consequence, the CBF Intermediary must register the operation with two federations: first, the national association where the operation takes place, and second, the CBF, where the only connection is the intermediary. 

Table providing an overview of the main requirements stipulated by the FIFA, FA, RFEF and CBF Regulations

 CONCLUSION

The mandatory registration requirement for intermediaries with the relevant national association, as stipulated by the FIFA Regulations, the FA Regulations, the RFEF regulations and the CBF Regulations, leave room for a wealth of legal uncertainties that will need to be clarified by football’s governing bodies and the various courts (and also the EU Commission) called to pronounce themselves on those regulations.  Specifically, should an intermediary register himself with every single association where he is supposed to act on behalf of his clients? What would happen if on 31 August (summer transfer window deadline) a Spanish club calls him to sign one of his players and he is not registered in Spain as an intermediary?

Furthermore, every association has a registration fee to satisfy prior to the registration of around 500 €. Taking into account the international dimension of football and its transfer market, it could well be necessary for an intermediary to register himself with a dozen of associations simply to carry out his profession effectively. As a result, he would have to spend roughly 6.000 € in registration fees on a yearly basis.  

Subsequently, this could lead to an increase of the number of corporations, which provide intermediary services. Indeed, the recourse to a transnational agency employing a number of intermediaries registered with different national associations would be a very efficient way to tackle this problem. Thus, at medium long-term, at least at the international level, the new system will probably not generate the chaos that some authors are predicting. In fact, rather than opening the market to everyone, these requirements could well be a barrier of entry for many intermediaries and might trigger a consolidation of the market in a smaller number of bigger players. This has bad sides, less competition, and good sides, more sophisticated players more likely to provide quality services and to care about their long-term reputation. In short, we predict that only the main ‘cowboys’ in the ‘wild west’ will be able to play by the new rules of the game for football intermediaries.

[1] Nick de Marco, “The new FA Intermediaries Regulations & disputes likely to arise”, available at lawinsport.com, 31 March 2015.

[2] Daniel Lowen, ‘A Guide To The FA’s Regulations on Working with Intermediaries’ www.lawinsport.com, 17 February 2015.

[3] Handelsblatt, “Gericht gibt Spielervermittler teils recht”, 30 April 2015.

[4] See FIFA Regulations on Working with intermediaries: Definition of an intermediary, page 4

[5] Appendix II FA Regulations

[6] UEFA ‘Club Licensing Benchmarking Report 2012’, page 54. http://www.uefa.org/MultimediaFiles/Download/Tech/uefaorg/General/02/09/18/26/2091826_DOWNLOAD.pdf

[7] Article 8(4) RFEF Regulations

[8] Article 5(e) CBF Regulations

At the end of December 2015, the CAS decided on a very public contractual dispute between Sporting Clube de Portugal Futebol SAD (Sporting) and Doyen Sports Investments Limited (Doyen). The club was claiming that Doyen’s Economic Rights Participation Agreement (ERPA) was invalid and refused to pay Doyen’s due share on the transfer of Marcos Rojo to Manchester United. The dispute made a lot of noise (see the excellent coverage by Tariq Panja from Bloomberg here, here and here) as it was the first TPO case heard by the CAS after FIFA’s ban. Yet, and it has to be clear from the outset, the case does not affect the legality of FIFA’s TPO ban; it concerned only the compatibility of Doyen’s ERPA with Swiss civil law. The hearing took place in June 2015, but the case was put under a new light by the football leaks revelations unveiled at the end of 2015 (see our blog from December 2015). Despite these revelations, the CAS award favoured Doyen, and was luckily for us quickly made available on the old football leaks website. This blog will provide a commentary of the CAS decision. It will be followed in the coming days by a commentary by Shervine Nafissi on the judgment, on appeal, by the Swiss Federal Tribunal.

I. The facts

During the summer of 2012, Sporting Clube de Portugal Futebol SAD (‘Sporting’) signed two professional football players: (i) Zakaria Labyad, a Dutch-Moroccan international from PSV Eindhoven for a transfer fee of €900,000; and (ii) Faustino Marcos Alberto Rojo (Marcos Rojo), an Argentinean international from Spartak Moscow for a transfer fee of €4 million.

Against this background, negotiations took place between Sporting and Doyen Sports Investments Limited (‘Doyen’), a private investment company known for its engagement in the acquisition of professional football players' economic rights. On 23 August 2012, Sporting and Doyen concluded a series of agreements which were aimed at providing a financial aid to Sporting in exchange for the acquisition of a proportionate share of Labyad's and Rojo's economic rights.

According to the Economic Rights Participation Agreement related to Labyad (‘ERPA 1’), Sporting accepted to transfer 35 % of Labyad's economic rights to Doyen against the payment of €1.5 million. The other Economic Rights Participation Agreement related to Rojo (‘ERPA 2’) obliged Sporting to transfer 75 % of Rojo's economic rights to Doyen for the price of €3 million. These agreements also provided Doyen with the unilateral so-called 'Put Option' to sell back to Sporting for a predetermined price its share of the players' economic rights in case Sporting should not have transferred the players on or before 1 July 2015.

On 28 March 2013, Sporting appointed a new Board of Directors. In order to ameliorate the club's financial situation, Sporting subsequently decided to put Rojo on a transfer list. At the same time, Sporting requested Doyen to find a solution for. Rojo. One of the main representatives of Doyen allegedly agreed on the transfer of Rojo to Calcio Catania, a then top-tier Italian club. Nonetheless, shortly thereafter, Sporting indicated that its new-appointed coach had decided to keep Rojo and asked Doyen to revoke the deal.

In the meantime, an agreement was signed between Sporting, the Dutch club SBV Vitesse Arnhem (‘Vitesse’) and Labyad, whereby the latter was loaned to Vitesse from 8 January 2014 until 30 July 2015. The loan was made without compensation. It was agreed that during the loan period that Vitesse would pay for the player's wages and secure the necessary insurance policies. This contract did not contain any purchase option.

Following his unexpectedly great performances in the Argentinean national shirt during the 2014 FIFA World Cup in Brazil, Rojo attracted many prominent clubs in Europe. Initially, Rojo was not willing to leave Sporting, but he switched this position in August 2014.

After a round of unsuccessful negotiations with Southampton F.C., Manchester United F.C. placed its offer for Mr. Rojo's services amounting €20 million. Eventually, on 19 August 2014, Sporting contractually agreed to transfer Mr. Rojo to Manchester for the sum of €20 million net, plus 20% of the capital gain of any future transfer above the amount of €23 million. On the same day, Manchester also accepted to transfer the Portuguese international Nani to Sporting on a temporary loan basis for one year.

By that time, relations between Sporting and Doyen deteriorated, particularly due their opposing views with respect to the applicability of the ERPAs to the case at hand. As a result thereof, Sporting notified Doyen of its intention to terminate both ERPAs. In its response, Doyen objected to the termination of these agreements and attached to its communication an invoice of €15 million to be paid in two instalments. On 28 August 2014, Sporting reimbursed to Doyen the value of its investment made under the ERPAs (i.e. the amount of €4.5 million).

On 16 October 2014, Sporting filed with the CAS a combined request for arbitration and statement of claim against Doyen in accordance with Article R38 et seq. of the Code of Sports-related Arbitration. On 21 October 2014, Doyen filed its request for arbitration against Sporting. Later that month, the parties agreed to consolidation of the both procedures. The hearing before the CAS was held on 16, 17 and 18 June 2015. Finally, on 21 December 2015, the CAS rendered its arbitral award.

II. The reasoning of the CAS

The CAS award is structured around Sporting’s various claims against the validity of the ERPA, as well as its contention of lawfulness of its breach. To do so, the CAS examined closely the compatibility of the ERPA with Swiss Law and EU Law.

1. Is the ERPA legal?

In a preamble, the CAS reminds that the “principle of party autonomy is the backbone of Swiss contract law”.[1] However, “Articles 19 and 20 CO [Swiss Code of obligations], prohibit contracts which are impossible, unlawful, immoral and/or contravene public policy or personality rights.”[2] In particular, the Sporting claimed that the performance of the contract is unlawful and immoral.

• Is the performance of the ERPAs unlawful under Swiss law?

As pointed out by the Panel, under Swiss contract law, an unlawful contract is null and void. According to the Swiss Federal Tribunal, “contract is unlawful when its content violates Swiss law (federal and/or cantonal)”.[3] The question was consequently whether Sporting could demonstrate such a violation. In this regard, the club argued first that the ERPAs contradicted Swiss labour law. The Panel, however, quickly rejected this argument, as the players were not parties to the ERPAs. The second, and more serious, potential violation of Swiss law pointed out by Sporting concerned Article 157 CPS (Swiss Penal Code).[4] The provision condemns profiteering and overlaps with article 21 CO (Swiss Code of Obligations) respective to unfair advantage.[5] Any claim stemming from article 21 CO must be raised within the first year after the conclusion of the contract, thus Sporting was time-barred. Regarding Article 157 CPS, the panel considered it “cannot be deemed violated in this case, since the acts invoked as being criminal by Sporting all fall outside the territorial scope of application of the CPS, bearing in mind that the contracts were signed outside Switzerland by non-Swiss individual/entities without any of the Parties’ acts or their effects occurring in Switzerland”.[6] Such reasoning would basically immunize from nullity any contract signed and enforced exclusively outside of Switzerland, even if found contrary to Swiss criminal law. In any case, the Panel went on to assess substantively whether the ERP violates Article 157 CPS. Following the jurisprudence of the SFT, profiteering is constituted “when business good practice requirements are grossly violated and the limits of what seems normal and usual in light of all the circumstances, are significantly exceeded (ATF 92 IV 132, consid.1)”.[7] Moreover, “the offender must know that the other party is in a weak position and must be aware of the fact that a) there is a disparity between the respective considerations and b) the victim accepts this unbalanced deal because of its weakened state (ATF 130 IV 106 consid.7.2)”.[8] Based on the following elements:

• Sporting was not inexperienced in sharing its players’ economic rights with investment funds.
• Sporting entered into contact with Doyen and asked for its financial assistance.
• Sporting needed Doyen’s support to finance the transfer of two players; one of them (Rojo) was also the “target” of another club, SL Benfica.
• The ERPAs were negotiated for a month, each party being assisted by lawyers and experts.
• The signatories confirmed that they freely chose to sign the ERPAs.
• Sporting’s new management was aware of the scope of the ERPAs but never contested their validity before August 2014.
• There is no evidence that the signature of the ERPAs has deteriorated Sporting’s financial situation.[9]
  

The Panel, hence, found “that at the moment of entering into the ERPAs, Sporting was not in a state of “need, dependence, inexperience, or weakness of mind or character”, which was exploited by Doyen”. [10] Moreover, “Sporting was not forced to sign these players and the acquisition of their services was certainly not a “matter of life and death” for the club”. [11] Henceforth, the CAS arbitrators concluded that “the material conditions for Article 157 CPS to apply are not met”.[12]

The Panel quickly brushed aside the claim that the ERPAs would contradict FIFA regulations as those are not mandatory provisions of Swiss law in the sense of Article 20 CO.

• Is the performance of the ERPAs immoral under Swiss law?

The second strand of arguments of Swiss law raised by Sporting concerns the immorality of Doyen’s ERPAs. As recalled by the CAS, immoral contracts under Swiss law are those that:

• fall under a dominant moral disapproval; or
• contravene the general sense of what is right and what is wrong; or
• go against the ethical principles and values of the legal system as a whole.

Moreover, on immorality, “Swiss case law is very restrictive and is mainly linked to sex-related cases, unfair competition and bribery”.[13] Thus, the fact “that there is a big disparity between the respective considerations is not in itself immoral”, as “the Swiss legal order do not forbid a difference in value between the contractually agreed performance”. [14] Thus, the CAS set out a very challenging legal framework for Sporting to demonstrate the immorality of the ERPAs.

The CAS Panel considered that a “global evaluation of the two ERPAs shows that both the club and Doyen entered into a standard business oriented deal, where the amount of the loan granted was not necessarily in relation with the percentage of the assigned economic rights”.[15] It also held that “[s]uch a profit sharing is quite usual in the football industry, where the transferee clubs often undertake to share a percentage of the future transfer with the player’s former club”. [16] Thus, it “finds that the object of the ERPAs is not legally immoral”.[17]

In the proceedings before the CAS, Sporting had insisted on the huge return on investment earned by Doyen on the Rojo ERPA, to highlight the discrepancy between the two sides of the contract. But the CAS Panel recalled “that the fact that there might be a disparity between the respective considerations is not immoral”.[18] Moreover, it pointed out that “a discrepancy in possible profits (one party making more profit than the other) is quite different from the scenario where only one party stands to gain and the other to lose”. [19] Hence, it concluded “that there was no “economical unbalance” as defined by Swiss law between Doyen and Sporting’s respective considerations”. [20] Furthermore, as Sporting was in financial difficulties at the time of the conclusion of the ERPAs, the CAS Panel “disagrees with Sporting when it claims that Doyen’s investment was risk free”.[21] It did insist that even if the “Put Option” and the “Minimum Interest Fee” were considered immoral, they would not come in play in the present case as they were not triggered.

Finally, the Panel assessed Sporting’s claim that the ERPAs would constitute an excessive restriction of Sporting’s economic freedom under Article 27(2) CC (Swiss Civil Code).[22] The CAS arbitrators refer to the SFT’s view that “a contractual limitation of economic freedom is disproportionate within the meaning of Article 27 para. 2 CC only when the obligee submits to someone else’s arbitrariness, gives up his economic freedom or restricts it in such a way that the foundation of his economic existence is jeopardized”.[23] In this regard the Panel concluded that “among all the creditors of Sporting (representing a consolidated debt of €500 million), Doyen was certainly not in a position to prevent Sporting from continuing its economic and other activities”.[24] Indeed, would Sporting “have failed to meet its commitments, it would not have been subjected for that reason alone to Doyen’s arbitrariness or threatened in its economic freedom in such a serious manner that the foundations of its economic existence would be jeopardized”.[25] Furthermore, responding to Sporting’s claim that its freedom to act was drastically curtailed by the ERPAs, the Panel held that the facts of the case demonstrate “that on important occasions, Sporting was free to act as it wished”.[26] In short, Sporting failed to demonstrate with concrete evidence that Doyen’s ERPAs were used to forced the club to take key economic decisions.

• Are the ERPAs contrary to EU law?

The claims of Sporting against the ERPAs based on EU law or the ECHR failed due to the lack of evidence presented by the club to support them. The incompatibility of an ERPA with EU competition law seems very difficult to demonstrate in the abstract. It is true that UEFA and FIFPro have submitted a joint competition law complaint to the European Commission against TPO contracts. Yet, it remains difficult to envisage the specific competitive restrictions or abuses of dominant position that could be argued against Doyen’s ERPAs. Additionally, regarding the potential infringement of the free movement rights of the player, the Panel rejected Sporting’s right to raise the argument in the name of the players.[27] In any case, this is a tricky argument for a club to make, because if ERPAs have the potential to affect the players’ freedom to work, it is only through the club’s willingness to punish the player for not accepting a transfer requested by a third party.

In conclusion, the CAS deemed Doyen’s ERPAs compatible with Swiss and EU law

2. Has Sporting unlawfully terminated the ERPA?

The next question was whether Sporting terminated the ERPAs with just cause. In this part of the award, the validity of the ERPAs is not anymore at play. Instead, it is the conformity of Doyen’s actions with the contractual duties stemming from the ERPAs which was scrutinized by the Panel. In this regard, the main argument of Sporting was that Doyen has violated the non-interference duties enshrined in Articles 6.2[28] and 14[29] of Rojo’s ERPA. The assessment of this claim is highly dependent on factual elements brought forward by Sporting and Doyen.

With regard to Article 6.2 of the Rojo ERPA, the Panel found “that Sporting has not established in a convincing manner that it expressly and unequivocally asked Doyen to stop looking for transfer offers for Mr Rojo”. [30] In particular, “the fact that the President and Vice-President of the club admitted that they would “keep the door open” to any sufficiently interesting offer”.[31] Additionally, the Panel held “that given the very long period of time during which Sporting expressly requested and/or implicitly accepted that Doyen seek offers on its behalf, it would have taken particularly clear written instruction for the latter to be led to believe in good faith that it must cease all activity”. [32] Hence, “in the absence of a clear revocation, Doyen was entitled to continue looking for better transfer conditions”.[33] The arbitrators concluded that Doyen had not breached Article 6.2 of the ERPA.

As regards Article 14 of the Rojo ERPA, and whether Doyen exercised pressure on Sporting’s transfer-related policy, the Panel’s holdings are less favourable to Doyen, even though Sporting’s claims are rejected in the end. In light of the evidence presented, the arbitrators refused to consider that Sporting had demonstrated that Doyen exercised undue or unusual pressure to impose the transfer of Rojo. They insisted on a number of circumstances that played in favour of Doyen:

• Doyen was only “relying on a contractual right” when drawing attention to the fact that it would claim the €15 million if Sporting refused to transfer Rojo;
• Doyen was willing to consider ways of improving (compared to the ERPA) the benefit Sporting would get from the transfer;
• Sporting never seemed impressed by Doyen’s messages and refused numerous proposals in the past;
• Doyen’s intervention led to a substantial increase of the transfer fee from €12.5 million to €20 million;
• Doyen tried desperately to get a meeting with Sporting’s President;
• Sporting went on to transfer Rojo to Manchester United by itself.[34]
  

In the award, the Panel did acknowledge that Nelio Lucas was “putting some pressure on Sporting but essentially in an attempt to obtain a meeting with Mr Bruno de Carvalho”.[35] Moreover, the Panel also noted “Doyen and Sporting had been in a business relationship on a long-term basis and were used to discussing openly and regularly”. [36] This part of the award illustrates the structural ambiguity and incoherence of the ERPAs. On the one side, as indicated under Article 6.2 and 14 of the ERPA, Doyen commits to not influencing a club’s policies, while, on the other, through Article 9, 10.4 and 15 of the ERPA, it can undoubtedly strongly influence the transfer policies of a club through economic pressure. The Panel decided to resolve this contradiction in favour of Doyen and refused to consider that it had breached its contractual duties enshrined in Article 14. This led the CAS to conclude that “Sporting cannot, in good faith, claim that it had a just cause to unilaterally terminate its contractual relationship with Doyen”.[37] Henceforth, the club was sanctioned to pay to Doyen a considerable sum of money approximating €12 million.

Conclusion: Is FIFA’s TPO ban at risk?

My first concluding point is related to the legality of TPO under Swiss law. I think by now everybody should be aware of the liberalism of Swiss contract law. To be deemed unlawful and/or immoral a contract has to reach a high bar, which, for the CAS at least, Doyen’s ERPAs do not pass. This is great news for Doyen, because if they did all its ERPAs would have been unlawful under Swiss law. Paradoxically, this liberalism is also why FIFA’s TPO ban, a contractual regulation by a Swiss association, is unlikely to be found contrary to Swiss law either. In any event, the CAS rightly points out the general hypocrisy underlying this dispute, TPO contracts are just a spin off of traditional contractual practices in football, and, indeed, clubs, which are speculating on the transfer market constantly (as Sporting was), are extremely badly placed to challenge the morality of TPO.

This leads me to my second point, and, paradoxically again, to a conclusion that I think reinforces the legitimacy of FIFA’s TPO ban. The rejection of Sporting’s claim that Doyen breached the ERPAs provisions highlights the shadowy nature of a transfer market ripe with conflicts of interests. The CAS Panel might very well conclude that Doyen did not force Sporting into transferring Rojo, but based on the facts of the case and what we know since then (on the dirty business tricks of Doyen revealed by the football leaks see here), it is easy to understand how Doyen can be suspected of influencing and controlling the transfer policies of any club with which it had signed an ERPA. The CAS felt that Sporting was playing a similar double game, and this might be true in practice, but the set-up of the contractual situation is such that it necessarily incentivizes speculation and abuses to the detriment of the stability of the clubs’ squads (which, as a reminder, is the main legitimate rationale recognized by the EU Commission to support the legality of the FIFA transfer system as a whole vis-à-vis EU competition law).

Is this award a blow to the legality of FIFA’s TPO ban? Personally, I doubt it (in this regard I differ slightly from Shervine’s conclusion in his case note on the Swiss Federal Tribunal decision to be published on this blog in the coming days). The award recognizes that under Swiss law this type of contractual practices (as many other controversial ones) is legal, but in turn this does not mean that FIFA (or any other State for that matter) is not legitimate in regulating or banning it. Instead, I believe the case highlights very well the many reasons why a TPO ban might be needed. Sporting’s dire financial fate puts a dim light on the incentives of club management to burden their clubs with huge financial risk for short-term sporting benefits. These risks are enhanced by the easy availability of TPO funding and the possibility to speculate on the players’ transfer value. Moreover, clubs tend to be too popular to fail, and investors are very much in a moral hazard position, knowing that municipalities prefer to bail out their local clubs rather than let them fail (see our blog on the rise and fall of FC Twente as a case in point). Finally, TPO enhances the complexity of the (already complex) contractual networks underlying player transfers. The practice makes it way harder (as highlighted by the CAS’s discussion of the steps leading to Rojo’s transfer) to disentangle the various contractual responsibilities, as well as the potential conflicts of interest that might in the end affect the field of play (through indirect financial pressure exercised on players, agents, managers or executives). This opaque complexity is a threat to the integrity of the game and an open door to financial speculation and abuses (as those highlighted by the recent football leaks).

[1] CAS 2014/O/3781 & 3782, Sporting Clube de Portugal Futebol SAD v. Doyen Sports Investment Limited, Award of 21 December 2015, para. 184.

[2] Ibid., para. 190.

[3] Ibid., para. 195.

[4] Article 157 (1) CPS reads as follows: Any person who for his own or another's financial gain or the promise of such gain, exploits the position of need, the dependence, the weakness of mind or character, the inexperience, or the foolishness of another person to obtain a payment or service which is clearly disproportionate to the consideration given in return, any person who acquires a debt originating from an act of profiteering and sells or enforces the same, is liable to a custodial sentence not exceeding five years or to a monetary penalty.

[5] Article 21 CO reads as follows:

1. Where there is a clear discrepancy between performance and consideration under a contract concluded as a result of one party’s exploitation of the other’s straitened circumstances, inexperience or thoughtlessness, the injured party may declare within one year that he will not honour the contract and demand restitution of any performance already made.

2. The one-year period commences on conclusion of the contract.

[6] CAS 2014/O/3781 & 3782, para. 211.

[7] Ibid., para. 212.

[8] Ibid., para. 213.

[9] Ibid., para. 220.

[10] Ibid., para. 221.

[11] Ibid.

[12] Ibid., para. 222.

[13] Ibid., para. 227.

[14] Ibid.

[15] Ibid., para. 231.

[16] Ibid.

[17] Ibid., para. 232.

[18] Ibid., para. 234.

[19] Ibid., para. 236.

[20] Ibid., para. 237.

[21] Ibid., para. 239.

[22] Ibid., paras. 240-249.

[23] Ibid., para. 242.

[24] Ibid., para. 246.

[25] Ibid.

[26] Ibid., para. 248

[27] Ibid., para. 260.

[28] Article 6.2 of the Rojo ERPA states that: “The FUND [Doyen] shall not share the Transfer Information with third parties other than its own advisers while such information remains out of the public domain, and shall be strictly prohibited from contacting or interfering in any way whatsoever, either directly or indirectly, with any of the parties (other than the Club) which is directly or indirectly involved in the negotiations of the potential Transfer, except with the written permission of the Club.”

[29] Article 14 of the Rojo ERPA states that: “The FUND recognizes that the Club is an independent entity in so far as the Club’s employment and transfer-related matters are concerned and the FUND shall not, either through this Agreement or otherwise, seek to exert influence over these matters or the Club’s policies or the performance of its teams.”

[30] CAS 2014/O/3781 & 3782, para. 279

[31] Ibid.

[32] Ibid., para. 280.

[33] Ibid.

[34] Ibid., para. 287.

[35] Ibid., para. 289.

[36] Ibid., para. 290.

[37] Ibid., para. 296

Editor's note: We (Ben Van Rompuy and Antoine Duval) are at the origin of today's decision by the European Commission finding that the International Skating Union's eligibility rules are contrary to EU competition law. In 2014, we were both struck by the news that ISU threatened lifetime ban against speed skaters wishing to participate in the then projected Icederby competitions and convinced that it was running against the most fundamental principles of EU competition law. We got in touch with Mark and Niels and lodged on their behalf a complaint with the European Commission. Three years after we are pleased to see that the European Commission, and Commissioner Vestager in particular, fully embraced our arguments and we believe this decision will shift the tectonic structure of sports governance in favour of athletes for years to come.

Today is a great day for Mark Tuitert and Niels Kerstholt, but more importantly for all European athletes. The European Commission did not only consider the International Skating Union's eligibility rules contrary to European law, it sent out a strong message to all international sports federations that the interests of those who are at the centre of sports, the athletes, should not be disregarded. This case was always about giving those that dedicate their lives to excelling in a sport a chance to compete and to earn a decent living. The majority of athletes are no superstars and struggle to make ends meet and it is for them that this decision can be a game-changer.

However, we want to stress that this case was never about threatening the International Skating Union’s role in regulating its sport. And we very much welcome the exceptional decision taken by the European Commission to refrain from imposing a fine which could have threatened the financial stability of the International Skating Union. The International Skating Union, and other sports federations, are reminded however that they cannot abuse their legitimate regulatory power to protect their economic interests to the detriment of the athletes.

We urge the International Skating Union to enter into negotiations with representatives of the skaters to devise eligibility rules which are respectful of the interests of both the athletes and their sport.

Since the summer of 2014, it has been our honour to stand alongside Mark and Niels in a 'David versus Goliath' like challenge to what we always perceived as an extreme injustice. In this fight, we were also decisively supported by the team of EU Athletes and its Chance to Compete campaign.

Finally, we wish to extend a special thank you to Commissioner Vestager. This case is a small one for the European Commission, but Commissioner Vestager understood from the beginning that small cases do matter to European citizens and that European competition law is there to provide a level playing for all, and we are extremely grateful for her vision.

Dr. Ben Van Rompuy (Leiden University) and Dr. Antoine Duval (T.M.C. Asser Instituut)

The IOC has trumpeted it worldwide as a « historical milestone »: the United Nations has recognised the sacrosanct autonomy of sport. Indeed, the Resolution A/69/L.5 (see the final draft) adopted by the General Assembly on 31 October states that it  “supports the independence and autonomy of sport as well as the mission of the International Olympic Committee in leading the Olympic movement”. This is a logical conclusion to a year that has brought the two organisations closer than ever. In April, UN Secretary General Ban Ki-moon appointed former IOC President, Jacques Rogge, Special Envoy for Youth Refugees and Sport. At this occasion, the current IOC President, Thomas Bach, made an eloquent speech celebrating a “historic step forward to better accomplish our common mission for humanity” and a memorandum understanding was signed between the UN and the IOC. This is all sweet and well, but is there something new under the sun?

A beautiful friendship

As the IOC points out itself, it has always had a friendly institutional relationship with the UN. There is a good deal of solidarity of kin between the two transnational organisations. The UN has been keen on shoring up the Olympic truce. In fact, since 1993, it has adopted no less than 24 resolutions supporting sport (and the Olympic Games) as a means to promote education, health, development and peace. However, this year’s resolution goes beyond the previous resolutions. The text includes the usual references to the use of sport to foster peace and development, but it also celebrates in unequivocal terms the work and the autonomy of the Olympic movement. This is music to the IOC’s ears and resonates with its repeated calls on States to respect the autonomy of the “lex olympica”. The IOC has already stretched the interpretation of the resolution and claims “boycotts are incompatible with this UN request for respect of the values of sport”. Nevertheless, one must keep her feet on legal earth. This resolution by the General Assembly (GA) has no legally binding value on the UN Member States, it is merely encouraging them to act upon it. International legal scholars have endlessly debated the potential legal effects of UN resolutions, and they agree on one thing: Resolutions by the GA are not per se legally binding.[1] To be so, they must be capable of creating obligations on their addressees, or recognized as customary international law, both very unlikely in our case. Thus, this resolution should be interpreted as a declaration of friendship, which could have a practical impact (or not) on the work of national courts, depending on their willingness to acknowledge the UN resolution. In practice, it is just another sign (after the UEFA-EU arrangement) that international organisations tend to side politically (and usually uncritically) with the IOCs of this world.

A liaison dangereuse

Being good friends with the IOC guarantees good shots of the UN Secretary General holding the torch, but it might not be in the best interest of the UN, nor of the world’s citizens. The Olympic Games’ capacity to trigger an Olympic peace of some sort has been largely discredited by the invasion of Crimea and the proxy war fuelled by Russia in Ukraine, just days after the Winter Olympic Games in Sochi came to a close. The Secretary General of the UN himself stated in a recent (20 October 2014) report to the General Assembly that “[s]adly, there is no evidence of any initiative by warring parties either to unilaterally observe the Olympic Truce or to promote its mutual observation”. The Olympic truce myth has been a collective exercise of wishful prophesizing with no self-fulfilling effect in sight.

Furthermore, the UN General Assembly reaffirms “that any form of discrimination is incompatible with belonging to the Olympic movement”, but the latest Games in Sochi have also shown that the IOC is not sanguine, to say the least, in fighting discriminatory laws adopted by Olympic host countries. In fact, exactly on this matter, the IOC has announced already that it does not “have a mandate to impose measures on sovereign States outside its own fields”. This is surprising, as the IOC seems to consider it has a mandate to impose (via the host city contract) a string of measures on sovereign States covering core public policies (tax, infrastructure or intellectual property rights). Why does it not include the fight against all sorts of discrimination in the "fields" it deems its own? The latest draft of the Host city contract for the 2022 Winter Games comprises a reference to the “prohibition of any form of discrimination”, but it is still deprived of real legal teeth.

This relationship between the IOC and the UN is more of a liaisons dangereuse than a “beautiful friendship”. The UN should be weary to associate itself too closely with an institution characterised by a lack of transparency, internal democracy and accountability. Sure, one could hope that this friendship would lead the IOC to reform itself, but its readiness to do so is rather enhanced by public outrage and the threats of legal challenges than warm accolades. There is a regrettable paradox here: While the global citizenry is loudly contesting the IOC and FIFA, it is à la mode for international organisations to align themselves politically with them.

[1] On this question in general, see K. Hailbronner and E. Klein, Commentary of Article 10 of the UN Charter in B. Simma (ed.), The Charter of the United Nations : A Commentary, Oxford University Press, 2002, p.257-275

Introduction: The new WADA Code 2015
Day 1: The impact of the revised World Anti-Doping Code on the work of National Anti-Doping Agencies
Day 3: Proof of intent (or lack thereof) under the 2015 World Anti-Doping Code
Day 4: Ensuring proportionate sanctions under the 2015 World Anti-Doping Code

Editor's Note
Marjolaine Viret: An attorney-at-law at the Geneva bar, specialising in sports and health law. Her doctoral work in anti-doping was awarded a summa cum laude by the University of Fribourg in early 2015. She gained significant experience in sports arbitration as a senior associate in one of Switzerland’s leading law firms, advising clients, including major sports federations, on all aspects of anti-doping. She also holds positions within committees in sports organisations and has been involved in a variety of roles in the implementation of the 2015 WADC. Her book “Evidence in Anti-Doping at the Intersection of Science & Law” is scheduled for publication in 2015.

Emily Wisnosky: An attorney-at-law admitted to the California bar, she currently participates in the WADC 2015 Commentary research project as a doctoral researcher. She also holds an LLM from the University of Geneva in International Dispute Settlement, with a focus on sports arbitration. Before studying law, she worked as a civil engineer.

Introduction

Doping often results from the illegitimate use of a therapeutic product. As a result, many Prohibited Substances and Methods are pharmaceutical innovations that are or have been developed to serve legitimate therapeutic purposes. Much is being done within the anti-doping movement to coordinate efforts with the pharmaceutical industry in order to prevent abuse of drugs that have been discontinued or are still in development phase. Conversely, at the other end of the range, some Athletes may require legitimate medical treatment and wish to receive that treatment without being forced to give up their sports activities.

This post takes a cursory look at how the World Anti-Doping Code (“WADC” or “Code”) tackles these issues and provides a summary of the main changes that affect the modalities for Athletes to receive medical treatment after the 2015 revision. The first part discusses the avenues open to an Athlete to compete while under treatment, namely by applying for a Therapeutic Use Exemption (“TUE”) or, in some cases, navigating the provisions governing conditionally prohibited substances. The second part addresses the consequences in case an Athlete should fail to take the proper avenues. The post closes with observations regarding the current system in light of one of the pillars of the anti-doping movement: the Athlete’s health.

1.     Obtaining Clearance to Compete – Therapeutic Use Exemptions and Conditional Prohibitions

Amendments to Procedural Requirements for Granting a TUE

An Athlete undergoing medical treatment that involves a Prohibited Substance must seek a TUE from the competent Anti-Doping Organisation (“ADO”). The 2015 regime preserves the “national vs international” distinction that existed under the previous rules. The basic principle is that International-Level Athletes request TUEs from their International Federation, while National-Level Athletes request TUEs from their National Anti-Doping Organisation (“NADO”)[1]. During the consultation process leading to the 2015 Code, recommendations were made for an international independent TUE Committee that would grant TUEs in a centralised manner. No such system has been introduced at this point, but the 2015 revision does take steps to ease the procedural burden and enhance clarity for those Athletes whose competition schedule would require multiple TUEs (e.g. those transitioning from national-level competition to international-level competition). In particular the 2015 Code:

§  Provides a streamlined process for Athletes seeking international recognition of a national-level TUE. These Athletes are now relieved from having to go through a whole new application process if they already have the benefit of a TUE granted by their NADO: they can have the TUE “recognised” by the International Federation, which “must” grant such recognition if the TUE is in compliance with the International Standard for Therapeutic Use Exemptions (“ISTUE”).

§  Encourages the automatic recognition of TUEs. ISTUE 7.1 newly encourages International Federations and Major Event Organizers to declare automatic recognition of TUEs, at least in part – e.g. those granted by certain selected other ADOs or for certain Prohibited Substances.

Another key procedural change reflected in the 2015 revision is an increased storage time for application data, in accordance with the extended statute of limitation period for initiating anti-doping proceedings from 8 to 10 years (revised WADC 17). During the TUE process, the application must include the diagnosis as well as evidence supporting such diagnosis[2]. This sensitive medical data is newly stored for 10 years under the revised 2015 regime for the approval form (versus 8 years under the 2009 regime). All other medical information must be kept for eighteen months from the end of the TUE validity[3].

Amendments to Substantive Requirements for Granting a TUE

The requirements to receive a TUE have been slightly adapted in the revised 2015 ISTUE, but not in a manner that would significantly alter the assessment. In short, the TUE Committee must find that the following four criteria are fulfilled:

1. Significant impairment to the Athlete’s health if the substance or method were withheld,
2. Lack of performance enhancement beyond a return to a normal state of health through the use of the substance or method,
3. Absence of any other reasonable therapeutic alternative, and
4. Necessity for use not a consequence of prior use without a valid TUE.

With regards to the manner in which these criteria operate, the 2015 revision:

§  Places the burden of proof on the Athlete. The 2015 ISTUE received an explicit addition that confirms and codifies the interpretation of the CAS panel in the recent ISSF v. WADA award (Article 4.1, in initio): “An Athlete may be granted a TUE if (and only if) he/she can show that each of the following conditions is met” (emphasis added). While a welcome addition for legal predictability, the hurdle for the Athlete to overcome is high and can lead to nearly insurmountable evidentiary situations, such as in ISSF v. WADA regarding beta-blockers in shooting and lack of additional performance-enhancement[4].

§  Remains silent as to the standard of proof. The requisite standard of proof to establish these substantive criteria is still not explicitly stated. Although the issue was left undecided in ISSF v. WADA, the solution most in line with the WADC and general principles of evidence seems the “balance of probability”-standard, as per the general provision for establishing facts related to anti-doping rule violations (WADC 3.1)[5].

§  Newly allows retroactive TUEs for “fairness” reasons. As a rule, TUEs must be obtained prior to using the Prohibited Substance or Method (ISTUE 4.2). Exceptionally, a TUE may be granted with retroactive effect, which mostly concerns lower-level Athletes for whom the applicable anti-doping rules accept such possibility (WADC 4.4.5), or for emergency situations (ISTUE 4.3). The 2015 ISTUE contains a new possibility to grant a retroactive TUE if WADA and the relevant ADO agree that “fairness” so requires. The scope of this new exception remains unclear. A recent award rejected an Athlete’s plea that (s)he did not “timeously” request a TUE based on ignorance of the system[6]. One may wonder whether fairness related reasons could offer a solution for situations of venire contra proprium factum, i.e. when the Athlete received assurance from a competent ADO that the substance or method was not prohibited^[7] and the latter could thus reasonably be considered estopped from pursuing a violation based on a subsequent positive test.

Transparency for Conditionally Prohibited Substances

Only minor changes were made in the 2015 revision in the context of conditionally prohibited substances. Some categories of Prohibited Substances are widely used to treat minor conditions, including in the context of sports medicine. Moreover, their effects on the Athlete may depend on the mode of use. Thus, the Prohibited List prohibits the following substances only conditionally:

§  Beta-2 agonists (class S.3) – e.g. Salbutamol, the active ingredient of “Ventolin” –widespread against asthma in endurance sports. “Limits of use” have been determined that are deemed to reflect an acceptable therapeutic use of the substance^[8].

§  Glucocorticoids (class S.9)^[9], which have been the subject of debates for their use in sports medicine, are prohibited only when administered by certain routes (oral, intravenous, intramuscular or rectal). A contrario all other routes of application are permitted.

These categories require adjustments for establishing an anti-doping rule violation compared to the standard regime, as the finding of a violation calls for information beyond the mere detection of the substance. Unless a distinctive trait for dosage or route of administration can be identified directly during Sample analysis^[10], the information must be gathered during results management and generally supposes explanations from Athletes regarding the causes that led to the findings. In particular, for these types of substances, the 2015 Code:

§  Applies a different burden of proof. Whereas the burden is on the Athlete to show that the criteria for a TUE are realised (see above), or to demonstrate the origins of the analytical findings to obtain a reduced sanction (WADC 10), for S.3 and S.9 substances proving dosage and/or route of administration is part of the requirements for a violation. A specific allocation of the burden to the Athlete is only provided in the Prohibited List for findings of Salbutamol and Formoterol above a certain Threshold. In all other situations, it ought to be sufficient for the Athlete to present credible explanations (e.g. listing the substance on the Doping Control form[11]) that the Prohibited Substance originated from an authorised Use. The burden of proof ought then to be on the ADO to convince the hearing panel to a comfortable satisfaction (WADC 3.1) that a prohibited Use occurred.

§ Prefers short-cut procedures and transparency. The International Standard for Laboratories (“ISL”) introduces the “Presumptive Adverse Analytical Finding” to promote procedural economy by allowing a laboratory to enquire with the Testing Authority whether a TUE exists prior to the confirmation step of the A Sample for a S.3 or S.9 class substance (normally the presence of a TUE is determined after report of the Adverse Analytical Finding, during the initial review by the ADO). The revised 2015 regime maintains this pragmatic solution, but seeks to foster transparency in order to avoid this short cut from being abused by ADOs to stop cases from going forward. The 2015 ISL makes it explicit that any such communication and its outcome must be documented and provided to WADA (ISL 5.2.4.3.1.1)[12].

2.     Sanctions for Legitimate Medical Treatment without a TUE

An Athlete who is undergoing legitimate medical treatment that involves a Prohibited Substance, but does not have a TUE might – if tested – return an Adverse Analytical Finding. As mentioned above, an anti-doping violation cannot be invalidated for reasons of legitimate medical treatment, save in exceptional circumstances where the system allows for a retroactive TUE or for authorized Use of S.3 & S.9 class substances. Thus, Athletes will typically first turn to the options in the sanctioning regime to reduce or eliminate the sanction for Fault-related reasons. The success of this effort varies considerably from case-to-case, with no clear pattern emerging in the CAS jurisprudence.

The 2015 WADC has not improved the clarity of the situation for violations involving legitimate medical treatment, unless contamination is involved. In the 2009 WADC, if Athletes were “fortunate” enough to have inadvertently Used a Specified Substance then the Panel had the flexibility to settle on a sanction ranging from a reprimand and no period of Ineligibility, up to a two-year period of Ineligibility; if the Prohibited Substance was non-Specified, the shortest period of Ineligibility available was one year. This raises questions of fairness, since violations under similar factual circumstances, and with similar levels of fault are punished with very different sanctions.[13] The 2015 WADC remedied this disparate treatment when the violation involves a Contaminated Product.[14] No analogous exception to receive a facilitated reduction in the case of legitimate medical treatment is available, even though similar policy arguments could also be lodged in this context.

Before Athletes can seek to establish a Fault-related reduction, newly under the 2015 WADC they must first avoid a finding that the violation was committed “intentionally”. This prospect poses interpretational issues for medications[15]. According to the definition in WADC 10.2.3, “the term ‘intentional’ is meant to identify those Athletes who cheat.” However, the core of the definition defines “intentional” conduct as encompassing both knowing and reckless behaviour[16]. Since the violations considered in this post involve the knowing administration of a medication, it can be expected that Athletes will rely on the reference to “cheating” to argue that their conduct falls outside of this definition[17]. If they were to succeed with this line of argumentation before hearing panels, then their basic sanction starts at a two-year period of Ineligibility that is subject to further reduction for Fault-related reasons[18]. If they were to fail, they face a strict four-year period of Ineligibility, which would inevitably raise proportionality concerns for this type of violation.

The Fault-related reductions in the 2015 WADC, like those in the 2009 WADC, rest in an interpretive grey area for violations arising from legitimate medical use. A sanction can be reduced for Fault-related reasons if the Athlete can establish a factual scenario that is accepted to reflect No Fault or Negligence, or No Significant Fault or Negligence. On one hand, it is well-established that medications often contain Prohibited Substances, thus panels expect a high-level of diligence from an Athlete to avoid a violation arising from medications. Thus, these types of violations often are committed with a high level of negligence at least bordering on “significant” and at times approaching “reckless”[19]. As to the level of Fault, CAS panels are not consistent. One CAS panel found that a legitimate medical Use of a Prohibited Substance that could have been (and eventually was) excused by a TUE can implicate only a low-level of Fault[20], whereas others have come to the opposite conclusion, holding that the (alleged) “legitimate therapeutic use” of a medication was “irrelevant”, and contributed to the Athlete’s significant level of Fault[21]. In light of these different characterisations, it is difficult to predict how a panel would sanction these violations under the 2015 Code.

Conclusion – Remember Health Considerations behind Anti-Doping

Athletes do not have it easy when it comes to reconciling necessary medical treatment with high-level competition in sport. The conditions for claiming the right to compete despite Use of a Prohibited Substance or Method are stringent, and the procedure at times burdensome. There is no doubt that the system must strictly monitor any possible abuse of medical treatment as a cover up for doping attempts. Nevertheless, this system should not escalate into penalising Athletes who had a legitimate need for treatment and resorted in good faith to such treatment, especially since in many cases the performance-enhancing effects of the Use of a Prohibited Substance or Method are hypothetical at most.

The current system requires considerable Athlete transparency in matters related to their health. The TUE process is not the only context in which Athletes may have to reveal information about medical conditions and/or ongoing treatment for these conditions. Apart from the disclosure of medication and blood transfusion that Athletes are required to make on the Doping Control form, the anti-doping proceedings themselves may bring to light information about medical conditions affecting the Athlete. This may occur either because the Athlete is bound to reveal information to build a defence, or because the detection system itself may uncover collateral data indicating a pathology – known or unknown to the Athlete[22].

In return for these expectations, the anti-doping movement must keep in mind one of its key stated goals – the protection of the Athlete’s health – when regulating matters implicating legitimate medical treatment. This protection must include efforts to avoid the Athlete inadvertently committing an anti-doping rule violation while under therapeutic treatment, which may include more systematic labelling of medication with explicit warnings. The attentiveness to the Athlete’s health, however, could go beyond these efforts and exploit the data collected as part of Doping Control also for the benefit of the Athlete. The current regime already allows for suspected pathologies detected on the occasion of Doping Control to be communicated to the Athlete on certain specific aspects[23]. As Athletes agree to disclose large parts of their privacy for the sake of clean sport, it might be desirable to explore paths through which clean sport might wish to pay these Athletes back by providing them and their physicians with an additional source of data on health matters, an aspect of Athlete’s lives that is always on the brink of being endangered in elite sports.

[1]             Article 4.4.4 further addresses the right for Major Event Organisations to provide specific requirements for their Events ; for more details, see Rigozzi A, Viret M, Wisnosky E, Does the World Anti-Doping Code revision live up to its promises? Jusletter, 11 November 2013, n° 173 et seq.

[2]             See e.g. ISTUE, Annex 2.

[3]             See WADA International Standard for the Protection of Privacy and Personal Information, Annex A.

[4]             See Rigozzi A, Viret M, Wisnosky E, The ISSF v. WADA CAS Award: Another Therapeutic Use Exemption Request for Beta Blockers Shot Down, Anti-Doping Blog, 10 August 2015.

[5]             Ibid.

[6]             CAS 2014/A/3876, Stewart v. FIM, April 27, 2015. See, for a detailed analysis, see our comment on the Stewart CAS Award in Rigozzi A, Viret M, Wisnosky E, Switzerland Anti-Doping Reports, International Sports Law Review (Sweet & Maxwell), Issue 3/15, p.61 et seq, also available online at: wadc-commentary/stewart

[7]             The Prohibited List is an “open list”, which means that simply consulting the list does not always provide a conclusive answer as to whether a particular substance or method is prohibited. Prohibited Methods (“M” classes) need by their very nature to be described in somewhat general scientific terms that always leave a certain room for interpretation (see e.g. CAS 2012/A/2997, NADA v. Y). For substances (“S” classes), the precision of the description of the prohibition under the Prohibited List varies depending on the substance at stake.

[8]             Not to be confused with a Threshold concentration in the Sample. Only Salbutamol and Formoterol currently have a form of Threshold with a Decision Limit (in TD2014DL), beyond which the finding is presumed not to result from a therapeutic use and the Athlete needs to produce an administration study to invalidate the Adverse Analytical Finding.

[9]             New terminology under the 2015 Prohibited List. Up to the 2014 List, “glucocorticosteroid”.

[10]           In particular by finding Metabolites that differ depending on the route of administration. A solution codified e.g. in the revised TD2014MRPL, Table 1, for the glucocorticoid budesonide.

[11]           The standard Doping Control Form and ISTI 7.4.5 (q) invite Athletes to disclose all recent medication, supplements and blood transfusions (for blood sampling). On the legal implications of this disclosure, see Viret M, Evidence in Anti-Doping at the Intersection of Science & Law, p. 573 et seq.

[12]           On the imprecise use of the term TUE, see Viret M, Evidence in Anti-Doping at the Intersection of Science & Law, p. 379 et seq. ADOs would rely in practice on Athlete declarations on the Doping Control Form. The 2015 WADA Results Management Guidelines encourage ADOs to contact the Athlete to enquire about the route of administration if there is no TUE on the record (Section 3.4.2.2).

[13]           See also our comment on the Stewart CAS award in Switzerland Anti-Doping Reports, International Sports Law Review (Sweet & Maxwell), Issue 3/15, p.61 et seq.

[14]           A new provision (WADC 10.5.1.2) allows for these types of violations to be subject to a flexible zero-to-two year period of Ineligibility, regardless of the type of substance involved.

[15]           “Intentional” violations draw a four-year period of Ineligibility, whereas non-“intentional” violations start with a two-year basic sanction. Only non-intentional violations are subject to further reduction for Fault-related reasons. See, more generally, on intentional doping, the contribution by Howard Jacobs in this Blog Symposium.

[16]           Article 10.2.3 ab initio: “As used in Articles 10.2 and 10.3, the term ‘intentional’ is meant to identify those Athletes who cheat. The term, therefore, requires that the Athlete or other Person engaged in conduct which he or she knew constituted an anti-doping rule violation or knew that there was a significant risk that the conduct might constitute or result in an anti-doping rule violation and manifestly disregarded that risk.”

[17]           For a discussion of the expected role of the term “cheat” in establishing that a violation was “intentional”, see Rigozzi A, Haas U, Wisnosky E, Viret M, Breaking Down the Process for Determining a Basic Sanction Under the 2015 World Anti-Doping Code, International Sports Law Journal, June 10, 2015. On a related note, an argument akin to those made in the Oliveira/Foggo line of cases under the 2009 Code could also arise here: If Athletes do not have actual knowledge that their medications contain a Prohibited Substance, would purposefully consuming the product still be considered “intentional”?

[18]           Article 10.2.1 places the burden of proof to establish that the violation was not “intentional” on the Athlete if the violation did not involve a Specified Substance, and on the Anti-Doping Organisation to establish that the violation was “intentional” if the violation did involve a Specified Substance.

[19]           See, e.g. CAS 2014/A/3876, Stewart v. FIM, April 27, 2015, para. 79; See also, CAS 2012/A/2959, WADA v. Nilforushan, April 30, 2013, para. 8.21. In rare cases, Athletes have been able to establish No Fault or Negligence under very specific circumstances. See, e.g. CAS 2005/A/834, Dubin v. IPC, February 8, 2006.

[20]           See, e.g. CAS 2014/A/3876, Stewart v. FIM, April 27, 2015, para. 84 where the CAS panel held that the Athlete’s level of Fault must be considered “light” where he was prescribed the medication by a doctor and later obtained a TUE. See also CAS 2011/A/2645, UCI v. Kolobnev, February 29, 2012, paras. 87-90, which does not specifically address the possibility of obtaining a TUE, but confirmed a first instance decision (after weighing a list of factors) that a Prohibited Substance taken for purposes unrelated to sport performance, and upon medical advice fell at “the very lowest end of the spectrum of fault”.

[21]           See, e.g. the ITF Independent Anti-Doping Tribunal, ITF v. Nielsen, June 5, 2006, that found that it not relevant “whether the player might have been granted a therapeutic use exemption”. See also CAS 2008/A/1488, P. v. ITF, August 22, 2008, para. 19, which found it of “little relevance to the determination of fault that the product was prescribed with ‘professional diligence’ and ‘with a clear therapeutic intention’”. These cases were both referenced in CAS 2012/A/2959, WADA v. Nilforushan, April 30, 2013, para. 8.20.

[22]          See, as a prominent example, the Claudia Pechstein saga with respect to the explanations – doping or rare pathology? - for her abnormal blood values.

[23]           See the Guidelines for Reporting & Management of Human Chorionic Gonadotrophin (hCG) and Luteinizing Hormone (LH) Findings in male athletes, as well as the recommendations for ABP expert review in the Athlete Biological Passport Operating Guidelines.