Asser International Sports Law Blog

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

The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 2 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.


1. EU law and the CAS case-law

Bearing in mind these questions, it is possible to affirm that under EU law, the specificity of sport

i) refers to the inherent characteristics of sport that set it apart from other economic and social activities and which have to be taken into account in assessing the compatibility of sporting rules with EU law; and

ii) under EU law these inherent characteristics of sport must be  considered on a case by case  basis, per the Wouters test as developed by the ECJ in the Meca Medina ruling.

Both aspects can be found in the CAS case-law too, although the CAS case-law shows some remarkable differences and peculiarities. From a general point of view, the application of the principle of specificity of sport in the CAS case-law represents an aspect of the more general issue related to the application of EU law by the CAS. However, the purpose of this paper is not to fully examine if and to what extent the CAS arbitrators apply EU law rules on free movement and competition; rather, the aim is to analyse the way the CAS deals with the concept of the specificity of sport, highlighting similarities and differences compared to the ECJ.

Taking for granted that ‘a CAS panel is not only allowed, but also obliged to deal with the issues involving the application of [EU] law’,[1] as far as the compatibility of sporting rules with EU law is concerned the CAS case-law shows different degrees of engagement. For instance, in the ENIC award concerning the so-called UEFA integrity rule, the CAS panel went through a complete competition-law analysis in perfect harmony with the Wouters et al. ruling by the ECJ.[2] On the contrary, in the above-quoted Mutu case, the issue of compatibility of the FIFA’s transfer regulations with EU competition law was analysed in a rather simple way, merely stating that the FIFA rules at stake were not anti-competitive under EU competition law without giving any reason to support this conclusion. More recently, in the Galatasaray and Milan A.C. awards, concerning the UEFA’s financial fair-play regulations, the CAS  applied a detailed analysis of EU competition law. However, in both cases, according to the CAS the proportionate character of sanctions listed in the UEFA’s financial fair-play regulations cannot affect the evaluation of the legitimacy of these regulations under Art. 101 TFEU. This conclusion represents a clear breaking point with respect to the ECJ case-law, according to which the evaluation of the restrictive effects of a rule necessarily presupposes the analysis of the proportionate character of the sanction imposed in the event of a violation of that rule as well.[3]   In regard to EU free movement, the CAS case-law tends to be less analytical in terms of the principle of proportionality. For instance, in the RFC Seraing award  which concerned both EU free movement and competition law, the CAS panel mainly focused on the legitimate objectives of the contested rule (FIFA’s ban on Third-Party Ownership – TPO), merely affirming that the restrictive measures under EU free movement were justified and inherent in the pursuit of those objectives.More...



The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 1 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.*

 

1. Introduction.

The so-called specificity of sport represents one of the most debated, if not the most debated, but still undefined issue under European Union (EU) law. A noteworthy peculiarity is that the specificity of sport is frequently mentioned in several legislative and political documents issued by EU institutions, however it is not expressly referred to in any judgment by the European Court of Justice (ECJ).Conversely, the Court of Arbitration for Sport (CAS) case-law on Art. 17 of FIFA Regulations on status and transfer of players (RSTP) has repeatedly and expressly referred to the specificity of sport.[1] Apparently, the concept of specificity of sport has different meanings and purposes in the ECJ and CAS jurisprudence. In this blog (divided in two parts), I will try to analyse those two different meanings and to what extent the CAS case-law is consistent with the concept of specificity of sport as elaborated under EU law. More...

SFT rejects Semenya appeal: nothing changes - By Andy Brown

Editor's note: Andy Brown is a freelance journalist who has been writing about the governance of sport for over 15 years. He is the editor of The Sports Integrity Initiative where this blog appeared first.


For the last three days, I have been struggling with what to write regarding the Swiss Federal Tribunal’s (SFT) Decision to dismiss a challenge from Caster Semenya and Athletics South Africa (ASA) against the Court of Arbitration for Sport’s (CAS) Decision to dismiss a challenge to the Eligibility Regulations for the Female Classification (Athletes with Differences of Sex Development), otherwise known as the DSD Regulations. From reading World Athletics’ statement welcoming the ruling, one could be forgiven for thinking that it had won a major trial. Sports journalists, accustomed to covering events now curtailed by Covid-19, focus on the fact that Semenya has ‘lost’ her case against the DSD Regulations. Neither assertion is strictly accurate.

The SFT’s powers to review the CAS’s ruling are severely limited. It can only consider whether the CAS Decision violates ‘widely recognised principles of public order’ on Swiss public policy grounds. The SFT has only reversed a decision based on a a violation of Swiss public policy once in 30 years.

The SFT didn’t reconsider the evidence put forward to the CAS. ‘For there to be incompatibility with public policy, it is not enough that the evidence has been poorly assessed, that a finding of fact is manifestly false or that a rule of law has been clearly violated’, its Decision reads. ‘The only question to be resolved is in fact whether or not the verdict of the CAS renders the referred award incompatible with substantive public policy’. 

There were questions about whether the appeal from Semenya and ASA qualified to be reviewed by the SFT in the first place. World Athletics is a private organisation headquartered in Monaco, and the SFT was troubled as to whether such a complaint brought by a South African athlete against an overseas private organisation is capable of violating Swiss public policy.

‘It is doubtful whether the prohibition of discriminatory measures falls within the scope of the restrictive concept of public order when the discrimination is committed by a private person and occurs in relations between individuals’, the Decision quotes from its pervious 29 July 2019 Decision, which refused the ASA’s request to provisionally suspend the application of the DSD Regulations. ‘In any event, there is no need to examine this question further here since […] the award under appeal does not in any way establish discrimination which would be contrary to public order’

The SFT ruled that the CAS was correct to uphold conditions of participation for 46 XY DSD athletes in order to guarantee fair competition for certain disciplines in female athletics. In doing so, the SFT was ruling on whether the decision taken by the CAS violates public policy, based only on the complaints brought forward by Semenya and ASA. 

Semenya and the ASA had challenged the CAS Decision based around the idea that the DSD Regulations are discriminatory. The CAS held that they are discriminatory, but agreed with the IAAF (as World Athletics was then named) that such discrimination was necessary to protect its female category. The SFT ruled that even if the discriminatory rules of a private organisation such as the IAAF were considered able to pose a threat to public order, Semenya and the ASA had failed to demonstrate that the CAS Decision was so egregious that it posed such a threat.

‘Caster Semenya essentially alleges a violation of the prohibition of discrimination’, reads the Swiss Federal Supreme Court statement. ‘The CAS has issued a binding decision based on the unanimous opinion of the experts who were consulted that testosterone is the main factor for the different performance levels of the sexes in athletics; according to the CAS, women with the “46 XY DSD” gene variant have a testosterone level comparable to men, which gives them an insurmountable competitive advantage and enables them to beat female athletes without the “46 XY DSD” variant. Based on these findings, the CAS decision cannot be challenged. Fairness in sport is a legitimate concern and forms a central principle of sporting competition. It is one of the pillars on which competition is based. The European Court of Human Rights also attaches particular importance to the aspect of fair competition. In addition to this significant public interest, the CAS rightly considered the other relevant interests, namely the private interests of the female athletes running in the “women” category.’

Such strong support for the principle behind its DSD Regulations was rightly welcomed by World Athletics. Its statement asserted that the SFT ‘acknowledged that innate characteristics can distort the fairness of competitions’. I would argue that the SFT ruling didn’t do this, but rather found that a CAS Decision asserting this didn’t violate Swiss public policy. Semantics, perhaps.

Likewise, when World Athletics quotes the SFT Decision as confirming that ‘It is above all up to the sports federations to determine to what extent a particular physical advantage is likely to distort competition and, if necessary, to introduce legally admissible eligibility rules to remedy this state of affairs’, it is paraphrasing two texts quoted in the SFT Decision. The first is ‘La qualification juridique des rules autonomes des organizations sportive’ by Jérôme Jaquier, 2004. ‘Inborn characteristics specific to athletes in a particular group can also distort the fairness of competition’, the SFT Decision quotes from Jaquier. ‘When they enact regulations, the objective of sports federations is to ensure fair and equitable competition’.

The context of the second quote, from ‘Sportrecht – Berücksichtigung der Interessen des Sports in der Rechtsordnung’ by Martin Kaiser, 2011, is even more interesting. It is preceded with a statement from the Swiss Federal Supreme Court, which reads: ‘It is not for the Federal Court to make, abstractly, comparisons between the disciplines to assess whether a particular athlete has an advantage that makes sporting competition meaningless’

‘It is above all for the sporting federations to determine to what extent a particular physical advantage is liable to distort competition’, the SFT Decision quotes from Kaiser. ‘And, if so, to establish legally admissible eligibility rules to remedy this state of affairs’. 

Again, such details might be considered as semantics. But – I would argue – important semantics. Reading the media maelstrom that has resulted from the SFT Decision, one could be forgiven for assuming that Semenya has lost her case, and has no chance of ever defending her 800m title. However, a statement issued by her lawyers reveals that she intends to challenge the ruling in European and domestic courts.

“I am very disappointed by this ruling, but refuse to let World Athletics drug me or stop me from being who I am”, the statement continues. “Excluding female athletes or endangering our health solely because of our natural abilities puts World Athletics on the wrong side of history. I will continue to fight for the human rights of female athletes, both on the track and off the track, until we can all run free the way we were born. I know what is right and will do all I can to protect basic human rights, for young girls everywhere.” More...



The Semenya Decision of the Swiss Federal Tribunal: Human Rights on the Bench - By Faraz Shahlaei

Editor's note: Faraz Shahlaei is a JSD Candidate at Loyola Law School, Los Angeles. His research and teaching interests are public international law, international sports law, international human rights and dispute resolution.

 

The issue of international human rights was a central contention in Caster Semenya case ever since the start of her legal battle against the regulations of the IAAF. However, the human rights arguments were poorly considered in the two proceedings related to this case. To put it in perspective, it is like having a key player nailed to the bench throughout the whole game; no coach ever tried to give it a chance while it had the potential to be the game changer for all parties.

In 2019, the Human Rights Council, the inter-governmental human rights body of the UN, expressed concern over issues of discrimination in sports in particular regarding IAAF female classification regulations. In June 2020, the United Nations High Commissioner for Human Rights submitted a report to the United Nations Human Rights Council on the “Intersection of Race and Gender Discrimination in Sport”. The report draws a detailed picture of how human rights in the Semenya case have been violated and also elaborates on the inherent problem of addressing human rights issues in alternative dispute resolution mechanisms favored by the sport governing bodies. However, despite an in-depth discussion of Caster Semenya’s case at both the CAS and then the SFT, the question of human rights, a key concern and a fundamental pillar of the case, hasn’t been adequately answered yet! More...


The SFT’s Semenya Decision under European human rights standards: Conflicting considerations and why a recourse could be successful at Strasbourg - By Kevin Gerenni

Editor's note: Kevin Gerenni is Assistant Professor in Public International Law (Facultad de Derecho de la Universidad de Buenos Aires) and LLM Candidate 2021 in Public International Law at the London School of Economics.


Even though the decision rendered by the SFT in the Semenya Case was foreseeable, the Tribunal did put forward some concerning reasoning in terms of public policy (“ordre public”) and human rights. In case Semenya decides to challenge the Swiss state before the ECtHR, one can expect the case to shake some grounds at the ECtHR, which would be faced with the question of the application to sport not of fair trial guarantees (as in Mutu & Pechstein) but of substantial human rights provisions such as the prohibition of discrimination on the basis of sex (Article 14 ECHR) and the right to private life (Article 8 ECHR).

Under Swiss law, the reasons that may lead to the annulment of an arbitral award are enumerated in art. 190 of the Swiss Private International Law Act (PILA). Semenya’s strongest case relied on art. 190(2)(e): the award’s incompatibility with public policy. Naturally, this point concentrated most of the SFT’s attention. In order to analyze the compatibility of the CAS award with Swiss public policy, the SFT focused on three main potential breaches of human rights: prohibition of discrimination, personality rights, and human dignity. In doing so, it put forward certain observations that differ with European human rights standards and the ECtHR’s jurisprudence. The purpose of this short article is to analyze those discrepancies and, consequently, Semenya’s prospects of success before the Strasbourg Tribunal.More...


Selected procedural issues –and questions– arising out the Caster Semenya Judgment of the Swiss Federal Tribunal - By Despina Mavromati

Editor's note: Dr Despina Mavromati is an attorney specializing in international sports law and arbitration (Sportlegis Lausanne) and a UEFA Appeals Body Member. She teaches sports arbitration and sports contracts at the University of Lausanne, Switzerland

 

As the title indicates, this short note only deals with selected procedural issues and questions arising out of the very lengthy Semenya Judgment. In a nutshell, the SFT dismissed Semenya’s appeal to set aside the CAS Award, which had denied the request of Caster Semenya (Semenya, the Athlete) to declare unlawful the Differences of Sex Development (DSD) Regulations of World Athletics (formerly IAAF).[1]

At the outset, it has to be reminded that the CAS Award dealt with the merits of the Semenya case in a final and binding way by rendering an arbitral award according to Article R59 of the CAS Code (and Article 190 of the Swiss Private International Law Act – PILA). Therefore, the SFT did not act as an appellate court but rather as a cassatory court, entitled to review only whether the exhaustively enumerated grounds for annulment set out in Article 190 (2) PILA were met (and provided that they were properly invoked and substantiated in the motion to set aside said award).More...

Caster Semenya Case Exposes Design Flaws in International Sports Governance - By Roger Pielke Jr.

Editor's note: Roger Pielke Jr. is a professor at the University of Colorado Boulder

 

The decision this week by the Swiss Federal Tribunal not to revisit the arbitral decision of the Court of Arbitration for Sport (CAS) in the case of Caster Semenya was not unexpected, but it does help to expose a major design flaw in international sports governance. Specifically, the institutions that collectively comprise, create and enforce “sports law” appear incapable of addressing flawed science and violations of basic principles of medical ethics.

While different people will have different, and legitimate, views on how male-female competition classifications might be regulated, the issues highlighted involving science and ethics are not subjective, and are empirically undeniable. In normal systems of jurisprudence, procedures are in place to right such wrongs, but in sports governance processes in place prevent such course corrections. And that is a problem.

The empirical flaws in the science underpinning the IAAF (now World Athletics) Semenya regulations are by now well understood, and have been accepted by WA in print and before CAS (I was an expert witness for Semenya, and was present when IAAF accepted responsibility for the flawed research). You can read all the details here and in the CAS Semenya decision. I won’t rehash the flawed science here, but the errors are fatal to the research and obvious to see.

One key part of the comprehensive institutional failures here is that the journal which originally published the flawed IAAF research (the British Journal of Sports Medicine, BJSM) has, inexplicably, acted to protect that work from scrutiny, correction and retraction. Normally in the scientific community, when errors of this magnitude are found, the research is retracted. In this case, the BJSM refused to retract the paper, to require its authors to share their data or to publish a critique of the IAAF analysis. Instead, upon learning of the major errors, the BJSM published a rushed, non-peer reviewed letter by IAAF seeking to cover-up the errors. All of this is non-standard, and a scandal in its own right.

The violation of basic principles of medical ethics required by the implementation of the WA Semenya regulations is also not contested. Both WA and the IOC have claimed to uphold the World Medical Association’s Helsinki Declaration on medical and research ethics. Yet, the WMA has openly criticized the WA regulations as unethical and asked doctors not to implement them. In response, WA has stated that it will help athletes who wish to follow the regulations to identify doctors willing to ignore medical ethics guidelines.

Flawed science and ethical violations are obviously issues that go far beyond the case of Caster Semenya, and far beyond sport. In any normal system of jurisprudence such issues would prove readily fatal to regulatory action, either in the first instance of proposed implementation or via review and reconsideration.

Sport governance lacks such processes. At CAS, the panel claimed that matters of scientific integrity and medical ethics were outside their remit. The SFT is allowed to reconsider a CAS decision only on narrow procedural grounds, and thus also cannot consider matters of scientific integrity or medical ethics. So far then, the flaws in the WA regulations – sitting in plain sight and obvious to anyone who looks, have not been correctable.

This leaves the world of sport governance in a compromised position. Some may look past the scientific and ethical issues here, perhaps judging that barring Semenya from sport is far more important that correcting such wrongs. 

Regardless of one’s views on sex and gender classification in sport, the WA regulations and the processes that produced and have challenged them reveal that sports governance has not yet entered the 21st century. Science and ethics matter, and they should matter in sport jurisprudence as well.  It is time to correct this basic design flaw in international sport governance.

Caster Semenya at the SFT – in 10 points - By Jack Anderson

Editor's note: Jack Anderson is Professor and Director of Sports Law Studies at the University of Melbourne

 

1.     Caster Semenya appealed to the Swiss Federal Court (SFT) arguing that World Athletics’ regulations violated human rights principles relating to gender discrimination and human dignity. The Swiss Federal Tribunal (as at CAS) held that World Athletics’ regulations may prima facie breach such human rights principles but were “necessary, reasonable and proportionate” to maintain fairness in women's athletics;


2.     Although in part addressed at the SFT, expect further legal argument on this in the domestic courts of South Africa or at the ECtHR, and in the following ways:

  • Necessity - is the athletic advantage that Caster Semenya has of such a scientifically-measurable extent that it is necessary for World Athletics to intervene in such an invasive manner? In a broader ethical sense, is the incidence of what the World Athletics’ regulations call “difference of sex development” of such prevalence in the general population, and specifically in middle-distance athletics, that, by way of the principle of “sporting beneficence”, intervention is justified. Or, in contrast, is the incidence of DSD not at a level which justifies a departure from the ethical principle of primum non nocere – first, do no harm?
  • Reasonableness - if World Athletics’ regulations are necessary, is the manner of implementation reasonable and in line with the principle of human and bodily integrity? In answering such a question, the focus must be on the fact that in order to continue to compete in her favourite events (such as the 800 metres) Caster Semenya will have to lower her testosterone level through medication;
  • Proportionate - if World Athletics’ regulations are necessary and reasonable is the manner of implementation proportionate? In answering such a question, the focus must be on whether the regulations disproportionately discriminate against a certain, limited group of athletes in a certain, limited number of events and in a certain, limited manner.More...


Chronicle of a Defeat Foretold: Dissecting the Swiss Federal Tribunal’s Semenya Decision - By Marjolaine Viret

Editor's note: Marjolaine is a researcher and attorney admitted to the Geneva bar (Switzerland) who specialises in sports and life sciences.

 

On 25 August 2020, the Swiss Supreme Court (Swiss Federal Tribunal, SFT) rendered one of its most eagerly awaited decisions of 2020, in the matter of Caster Semenya versus World Athletics (formerly and as referenced in the decision: IAAF) following an award of the Court of Arbitration for Sport (CAS). In short, the issue at stake before the CAS was the validity of the World Athletics eligibility rules for Athletes with Differences of Sex Development (DSD Regulation). After the CAS upheld their validity in an award of 30 April 2019, Caster Semenya and the South African Athletics Federation (jointly: the appellants) filed an application to set aside the award before the Swiss Supreme Court.[1] The SFT decision, which rejects the application, was made public along with a press release on 8 September 2020.

There is no doubt that we can expect contrasted reactions to the decision. Whatever one’s opinion, however, the official press release in English does not do justice to the 28-page long decision in French and the judges’ reasoning. The goal of this short article is therefore primarily to highlight some key extracts of the SFT decision and some features of the case that will be relevant in its further assessment by scholars and the media.[2]

It is apparent from the decision that the SFT was very aware that its decision was going to be scrutinised by an international audience, part of whom may not be familiar with the mechanics of the legal regime applicable to setting aside an international arbitration award in Switzerland.

Thus, the decision includes long introductory statements regarding the status of the Court of Arbitration for Sport, and the role of the Swiss Federal Tribunal in reviewing award issued by panels in international arbitration proceedings. The SFT also referred extensively throughout its decision to jurisprudence of the European Court of Human Rights (ECtHR), rendered in cases related to international sport and the CAS. More...

New Transnational Sports Law Articles Released on SSRN - Antoine Duval

I have just released on SSRN four of my most recent articles on Lex Sportiva/Transnational Sports Law. The articles are available open access in their final draft forms, the final published version might differ slightly depending on the feedback of the editors. If you wish to cite those articles I (obviously) recommend using the published version.

I hope they will trigger your attention and I look forward to any feedback you may have!

Antoine


Abstract: This chapter focuses on the emergence of a transnational sports law, also known as lex sportiva, ruling international sports. In the transnational law literature, the lex sportiva is often referred to as a key example or case study, but rarely studied in practice. Yet, it constitutes an important playground for transnational legal research and practice, and this chapter aims to show why. The focus of the chapter will first be on the rules of the lex sportiva. Law, even in its transnational form, is still very much connected to written rules against which a specific behaviour or action is measured as legal or illegal. As will be shown, this is also true of the lex sportiva, which is structured around an ensemble of rules produced through a variety of law-making procedures located within different institutions. The second section of this chapter will aim to look beyond the lex sportiva in books to narrate the lex sportiva in action. It asks, what are the institutional mechanisms used to concretize the lex sportiva in a particular context? The aim will be to go beyond the rules in order to identify the processes and institutions making the lex sportiva in its daily practice. Finally, the enmeshment of the lex sportiva with state-based laws and institutions is highlighted. While the lex sportiva is often presented as an autonomous transnational legal construct detached from territorialized legal and political contexts, it is shown that in practice it operates in intimate connection with them. Hence, its transnational operation is much less characterized by full autonomy than assemblage.


Abstract: This chapter aims to show that the work of the Court of Arbitration for Sport (‘CAS’), which is often identified as the institutional centre of the lex sportiva, can be understood as that of a seamstress weaving a plurality of legal inputs into authoritative awards. In other words, the CAS panels are assembling legal material to produce (almost) final decisions that, alongside the administrative practices of sports governing bodies (‘SGBs’), govern international sports. It is argued that, instead of purity and autonomy, the CAS’ judicial practice is best characterised by assemblage and hybridity. This argument will be supported by an empirical study of the use of different legal materials, in particular pertaining to Swiss law, EU law and the European Convention on Human Rights (‘ECHR’), within the case law of the CAS. The chapter is a first attempt at looking at the hermeneutic practice of the CAS from the perspective of a transnational legal pluralism that goes beyond the identification of a plurality of autonomous orders to turn its sights towards the enmeshment and entanglement characterising contemporary legal practice.


Abstract: Has the time come for the Court of Arbitration for Sport to go public? This article argues that after the Pechstein decision of the European Court of Human Rights, CAS appeal arbitration must be understood as forced arbitration and therefore must fully comply with the due process guarantees enshrined in Article 6(1) ECHR. In particular, this entails a strong duty of transparency with regard to the hearings at the CAS and the publication of its awards. This duty is of particular importance since the rationale for supporting the validity of CAS arbitration, if not grounded in the consent of the parties, must be traced back to the public interest in providing for the equality before the (sports) law of international athletes. Thus, the legitimacy and existence of the CAS is linked to its public function, which ought to be matched with the procedural strings usually attached to judicial institutions. In short, if it is to avoid lengthy and costly challenges to its awards, going public is an urgent necessity for the CAS.


Abstract: In 1998 the FIFA welcomed the Palestinian Football Association as part of its members - allegedly, as an attempt by then FIFA President, the Brazilian João Havelange, to showcase football as an instrument of peace between Israeli and Palestinians. Ironically, almost 20 years after Palestine’s anointment into the FIFA family, instead of peace it is the conflict between Israeli and Palestinians that moved to FIFA. In recent years the Palestinian Football Association (PFA) and the Israeli Football Association (IFA) have been at loggerheads inside FIFA over the fate - I will refer to it as the transnational legality – of five (and then six) football clubs affiliated to the IFA which are physically located in the Israeli settlements in the Occupied Palestinian Territories (OPT). This chapter chronicles the legal intricacies of this conflict, which will serve as a backdrop to discuss arguments raised regarding the legality of business activities of corporations connected to the Israeli settlements. Indeed, as will be shown in the first part of this chapter, the discussion on the legality of economic activities in the OPT has recently taken a business and human rights turn involving systematic targeting of corporations by activists. Interestingly, we will see that this business and human rights turn also played a role in the conflict between the IFA and the PFA. This case study is therefore an opportunity to examine how the strategy of naming and shaming private corporations, and in our case not-for-profit associations, for their direct or indirect business involvement in the settlements has fared. It is also an occasion to critically assess the strength of the human rights ‘punch’ added to the lex sportiva, by the UNGPs.

Asser International Sports Law Blog | Blog Symposium: Why FIFA's TPO ban is justified. By Prof. Dr. Christian Duve

Asser International Sports Law Blog

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

Blog Symposium: Why FIFA's TPO ban is justified. By Prof. Dr. Christian Duve

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective. 

Editor’s note: Finally, the last blog of our TPO ban Symposium has arrived! Due to unforeseen circumstances, FIFA had to reconsider presenting its own views on the matter. However, FIFA advised us to contact Prof. Dr. Christian Duve to author the eagerly awaited blog on their behalf. Prof. Dr. Christian Duve is a lawyer and partner with Freshfields Bruckhaus Deringer LLP and an honorary professor at the University of Heidelberg. He has been a CAS arbitrator until 2014. Thus, as planned, we will conclude this symposium with a post defending the compatibility of the TPO ban with EU law. Many thanks to Prof. Dr. Duve for having accepted this last-minute challenge!


This blog article outlines FIFA’s reasons to introduce Art. 18ter FIFA Regulations on the Status and Transfer of Players (RSTP) which bans third-party ownership of players’ economic rights (TPO). In recent years, TPO was perceived as a threat to the integrity of football competitions within the international football community[i] and has become an area of concern for FIFA. Nevertheless Art. 18ter RSTP has been heavily criticized mainly by the proponents of TPO and a complaint has been filed with the European Commission by the Spanish and the Portuguese Leagues for an alleged violation of EU competition law. In the following it will be shown that such criticism does not sufficiently take into consideration the specific characteristics of the practice of TPO as well as football in general. It explains the rationale behind Art. 18ter RSTP which

-      fosters the integrity of competition which is a priority topic for FIFA,

-      promotes the independence of clubs by preventing third parties’ influence in sporting decisions,

-      leads to stable squads,

-      provides an opportunity for investors to invest in the clubs rather than in single players,

-      leads to financially healthier clubs.

Hence, with the introduction of Art. 18ter RSTP, FIFA pursues legitimate aims which justify the ban of the TPO practice.


1.              FIFA’s Way to Art. 18ter RSTP

TPO covers various situations in which a third party invests in the economic rights of a player in order to receive a compensation with regard to a future transfer. Whilst it is widely used in South America and in Southern Europe as an alternative funding possibility, especially to finance investments in sporting talent,[ii] TPO is explicitly prohibited in England, France and Colombia.[iii] The English ban on TPO was introduced in 2008 after the commotion caused by the Tévez case in 2006 where the contract between Tévez and West Ham United contained a provision giving a third party owner the right to decide on the transfer and the transfer fee of the player without any right to veto by the club.

FIFA has introduced a new rule Art. 18bis RSTP which prohibits clubs to enter into contracts that are liable to jeopardise the club’s independence, its policies or the performance of its teams and freedom of decision-making in employment and transfer-related matters and came into force on 1 January 2008.[iv] However, after having mandated two studies providing data and information on TPO in several countries in 2013 and 2014, it was felt that Art. 18bis RSTP was not sufficient and did not address this subject in an appropriate manner. Therefore FIFA decided to introduce a new Art. 18ter RSTP as from 1 May 2015.

The main provision of Art. 18ter RSTP reads:

1.      No club or player shall enter into an agreement with a third party whereby a third party is being entitled to participate, either in full or in part, in compensation payable in relation to the future transfer of a player from one club to another, or is being assigned any rights in relation to a future transfer or transfer compensation. […]

It has been criticized that Art. 18ter RSTP prevents and restricts competition in the market for capital investment in football in a way that is not proportionate for attaining its legitimate objective and that Art. 18ter RSTP is therefore incompatible with EU Competition law. However, such criticism does not sufficiently take into consideration the specific characteristics of football as will be shown in this blog.


2.              The Rationale of Art. 18ter RSTP

First and foremost, Art. 18ter RSTP protects the integrity of the game itself by allowing for the necessary freedom in the contractual relationship between a club and a player, to determine whether and when the player is fielded as well as to decide independently and for sporting reasons only whether and when they are transferred.

Second, with regard to financial aspects of the clubs, critics undervalue that Art. 18ter RSTP is limited to a prohibition of an investment in a club’s players and does not in any way limit an investment in the clubs themselves leading to financially healthier clubs.

2.1           Art. 18ter RSTP Fosters the Integrity of Football

Art. 18ter RSTP pursues several legitimate aims, inter alia, the integrity of competition (2.1.1.), the independence of clubs (2.1.2.) and the stability of squads (2.1.3.).

2.1.1      Integrity of Competition

The protection of the integrity of the game is not only one of FIFA’s main objectives according to Art. 2 e) of the FIFA Statutes, it was also recognized by the European Commission as a legitimate aim justifying limitations on competition.

With regard to the UEFA rule on the “Integrity of the UEFA Club competitions: Independence of clubs” establishing a ban on the ownership of several clubs participating in the same competition by the same person or company, the European Commission held that the ban was in any case a necessary rule to ensure its legitimate aim of protecting the integrity of sporting competitions by “protecting the uncertainty of the results and giving the public the right perception as to the integrity of the […] competitions with a view to ensure their proper functioning“.[v] Previously, a Court of Arbitration for Sport (CAS) decision has also confirmed the validity of this limitation and found that “when commonly controlled clubs participate in the same competition, the «public’s perception will be that there is a conflict of interest potentially affecting the authenticity of results»” and that “that ownership of multiple clubs competing in the same competition represents a justified concern for a sports regulator and organizer”.[vi]

The danger of such conflicts of interests is, however, not limited to club owners, it extends to investors, agents and coaches. Similar to the situations in which a third party has interests in several clubs participating in the same competition, conflicts of interests can also arise in cases where third parties own shares in economic rights of several players of different teams which are competing against each other.[vii] Especially if a player in which a third party has an economic interest competes against a club that is owned by the same investor, there is a significant potential for such conflicts. Even within the same team, the risk of having the same owner of a number of players presents a competitive integrity risk.[viii]

In any case and irrespective of an actual conflict, a conflict may at least be perceived by the public in connection with TPO. Such perception leads to a loss of confidence in the integrity of the competition and damages the image of the sport. In the light of the increasing threat of match manipulation, the involvement of third-party owners creates a danger to the reputation of the competition that could weaken the football world. The integrity of the game is therefore only guaranteed if players and clubs are not influenced by third parties owning the players’ economic rights with the aim to maximize their investment.[ix]

2.1.2      Independence of Clubs

To ensure the independence of its Members’ affiliated clubs is one of FIFA’s objectives pursuant to Art. 18 para. 2 of the FIFA Statutes. The second TPO study found that “the spread of TPO in the majority of the cases may be closely related to a partial takeover of the clubs’ control by actors seeking primarily short-term profit and speculating on the purchase and sale of economic rights, regardless of sporting concerns”[x]. TPO potentially has an impact on player selection on the field of play and creates complications for transfer negotiations as the clubs’ sporting interests (e.g. of holding a player despite a lucrative offer or of letting a player go without being offered a lucrative transfer fee) may conflict with investors seeking a profitable return on their investment.

Even though interests may coincide if the investor speculates for a rise in the player’s market value (e.g. Santos FC refusing Chelsea FC’s offer for Neymar), one prominent example of conflicting interests is the Tévez case in which West Ham United was deprived of any rights with regard to a future transfer of the player. More recently, contract renewal negotiations with Zambrano, a key player of Eintracht Frankfurt, are jeopardized by a third party whose entitlement to future transfer compensation for Zambrano is to be bought by Eintracht.[xi] 

Overall, the more clubs are depending on TPO financing, the more negotiating power third party investors have. The second TPO study mentions the purchase of economic rights at preferential prices, pre-emptive rights on new players or even greater influence on transfer policy.[xii] Moreover, with players’ economic rights in the hands of various investors the fragmentation of interests within a club increases. The independence of clubs can only be guaranteed by preventing a partial takeover of the clubs’ control by third parties especially with regard to transfers.

2.1.3      Stability of Squads

The aforementioned clash of interests between investors speculating on the purchase and sale of players’ economic rights and clubs reoccurs when it comes to the frequency of transfers. Whereas an investor makes money out of transfers, a club may be more interested in building a stable team and team cohesion for sporting reasons. The Demographic Study of CIES in 2014 found that “in general, the number of transfers carried out by teams during the current season is at an all-time high” and stated that “the increasing speculation surrounding players’ transfers is also visible through the progressive drop in the number of club-trained players, which has attained its lowest level since 2009”.[xiii] Pursuant to the same study, players recruited from January 2013 onwards represented 41.3% of squads on average (10.2 signings per club). At the same time, the best performing clubs generally have the most stable squads. For instance, FC Barcelona has the most stable squad among European top division teams. Its Players have been for 5.5 years in the first team squad on average pursuant to the Demographic Study of CIES in 2014.[xiv]

Leagues and club representatives stressed in the Second TPO study that the increasing gaps between clubs in terms of stability contribute to the general decline in the competitive balance both at national and international level.[xv] FIFA’s overall objective to promote football, laid down in Art. 2 a) of the FIFA Statutes, is endangered by such contractual instability caused by TPO.

2.2           Art. 18ter RSTP Provides an Incentive for Investment in Clubs

Football clubs play the central role with regard to the aforementioned legitimate aims. In order to achieve those objectives, appropriate financing mechanisms are fundamental for football clubs. It is undisputed that clubs need external sources. A solution that takes sufficiently into account the role of the clubs and their needs can only be to finance clubs directly. By prohibiting the TPO of single players’ economic rights, Art. 18ter RSTP creates an incentive for investors to invest in the clubs themselves.

Admittedly, some football clubs have been affected by financial difficulties and thus do not seem to be attractive for investors at first sight. In this context, however, it must be taken into account that clubs that seek regular access to talent by means of TPO are becoming even more and more dependent on the regular injection of funds from external investors which may lead to a “vicious circle of debt and dependence”.[xvi] With a club selling its players’ economic rights to third parties, the value of the respective club’s assets decreases. As a result, it is even harder to find potential investors interested in financing the club.[xvii] Therefore TPO cannot be a sustainable financing option. Improving the overall financial health of club football is a major concern for football associations. Therefore the UEFA Financial Fair Play Regulations (FFP) were established to prevent professional football clubs from excessive spending. Although the regulations only contain disclosure requirements with regard to TPO, they were released in view of a TPO ban.[xviii]

Overall, critics therefore have to take into account that Art. 18ter RSTP prohibits only one single form of investment whilst it promotes at the same time investment in the clubs specifically tailored to the overarching aim of fostering the integrity of the game.


3.              Conclusion

Art. 18bis RSTP has already targeted the aforementioned legitimate aims. However, this provision may be easily circumvented by inserting a clause into the TPO agreement stating that it does not permit any exercise of influence by the third party within the club’s employment and transfer-related matters, policies or performance of its team. In practice, the engaged third parties will interfere with a club’s sporting decisions in many cases despite such a contractual clause. Interviewees in the second TPO study reported that in practical terms, many third­party investors do influence the transfer of players.[xix] Therefore, there is a consensus among football stakeholders that TPO should be restricted. The legitimate aims underlying Art. 18ter RSTP can be achieved most effectively by a total ban of the TPO practice. Whereas critics point to the lack of financing options caused by the prohibition of TPO, this blog has argued that in the specific context of football competitions the integrity of the game benefits from direct investments in the clubs.


[i] Cp. FIFA Circular no. 1420 of 12 May 2014.

[ii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 3.

[iii] Moreover, Poland has a rule which is interpreted by its football association as prohibiting third parties to hold a player’s economic rights with an exception for former clubs, cp. TPO study I, p. 3, 17 et. seq.

[iv] Art. 18bis RSTP, as introduced in 2008, reads:

1.   No club shall enter into a contract which enables any other party to that contract or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.

2.   The FIFA Disciplinary Committee may impose disciplinary measures on clubs that do not observe the obligations set out in this article.

[v] European Commission, Rejection Decision of 25 June 2002, Case COMP/37 806: ENIC/ UEFA, para. 47.

[vi] Arbitration CAS 98/200 AEK Athens and SK Slavia Prague / Union of European Football

Associations (UEFA), award of 20 August 1999, para. 48 (available at http://jurisprudence.tas-cas.org/sites/CaseLaw/Shared%20Documents/200.pdf).

[vii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p.  9, 81.

[viii] Cp. Third-party ownership of players’ economic rights, Part I., Centre international d’étude du sport, p. 33.

[ix] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 81 et. seq.

[x] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 8.

[xi] Available at: http://www.fr-online.de/eintracht-frankfurt/carlos-zambrano-eintracht-frankfurt-zambrano-deal-gefaehrdet,1473446,29843342.html.

[xii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

[xiii] Available at http://www.football-observatory.com/demographic-study-2014-now.

[xiv] Available at http://www.football-observatory.com/demographic-study-2014-now.

[xv] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 78.

[xvi] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 9.

[xvii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

[xviii] Available at http://www.uefa.com/community/news/newsid=2064391.html.

[xix] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

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