Editor’s Note: Etienne
Gard graduated from the University of Zurich and from King's College London. He
currently manages a project in the field of digitalization with Bratschi Ltd.,
a major Swiss law firm where he did his traineeship with a focus in
international commercial arbitration.
1. Prelude
On the
10th of June, 1958, the Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, widely known as the “New York
Convention”, was signed in New York by 10 countries.[1] This rather shy figure progressively grew over the decades to now
reach 157 signatory countries, turning the New York Convention into the global
recognition and enforcement instrument it is today. As V.V. Veeder’s puts it, “One English law lord is said to have said, extra judicially, that the
New York Convention is both the Best Thing since sliced bread and also whatever
was the Best Thing before sliced bread replaced it as the Best Thing.”[2]
However,
among the overall appraisal regarding the New York Convention, some criticisms
have been expressed. For instance, some states use their public policy rather
as a pretext not to enforce an award than an actual ground for refusal.[3] A further issue is the
recurring bias in favor of local companies.[4] Additionally, recognition and enforcement procedures in application
of the New York Convention take place in front of State authorities, for the
most part in front of courts of law, according to national proceeding rules.
This usually leads to the retaining of a local law firm, the translation of
several documents, written submissions and one, if not several hearings. Hence,
the efficiency of the New York Convention as a recognition and enforcement
mechanism comes to the expense of both money and time of both parties of the
arbitral procedure.
In
contrast with the field of commercial arbitration, where the New York
Convention is often considered the only viable option in order to enforce an
award, international football organizations, together with the Court of
Arbitration for Sport (“CAS”), offer an effective enforcement alternative. This
article aims at outlining the main features of the indirect enforcement of CAS
awards in football matters in light of a recent case.
2. Facts of the Case
The dispute at hand involved a football
club affiliated with the United Arab Emirates Football Association (“UAEFA”) and
a player’s agent. The club at hand owed a commission to the agent following the
completion of a player’s transfer. The agent ultimately won the case before the
CAS and the latter awarded him monetary compensation against the football club.
Shortly thereafter, means of enforcement
against the club were sought.
It is
widely recognized that the awards rendered by the CAS do qualify as awards
under the New York Convention and may thus be subject to the classic enforcement
provided therein.[5]
Whilst
this is to be welcomed because it offers alternatives to the prevailing party
seeking recognition and enforcement of the arbitral award, the following will
show that another route exists, which may prove just as effective whilst saving
both time and money.
Indeed, though
the United Arab Emirates did ratify the New York Convention, the general critics
mentioned above also applied in the case at hand. This meant that going down
the route of direct enforcement against the UAE-based football club would have
had several drawbacks. First, the translation workload in order to comply with
the local procedural rules was significant. Second, since the recognition
procedure was due to take place in front of national courts, a local law firm
would have had to be retained. Finally, there was no clear timeline as to when
exactly the due compensation would effectively be paid.
3. The Indirect Enforcement
Luckily,
the world of football organizations provides for an alternative path, which
proved to be highly effective at hand. Indeed, as a result of the deep-rooted
integration of CAS and of its decisions in effectively all organizational layers
of national and international football, the New York Convention is not the only
global enforcement mechanism available to a prevailing party in that field.
Although it requires to take steps outside that Convention and, as a result, of
the entire ‘state-supported’ enforcement system, the indirect enforcement
described below nonetheless proves to be a viable alternative for parties
involved in football-related arbitration.
3.1 The
Statutory Basis of Indirect Enforcement
It all
starts with art. 15 para. 1 let. f of the FIFA Statutes which stipulates that
the statutes of the member associations shall ensure that, inter alia, all relevant stakeholders must agree to recognize the
jurisdiction and authority of CAS.[6] Art. 23 para. 1 let. f provides for a similar obligation with
regard to the confederations’ statutes.[7]
Pursuant to art.
61 para. 1 of the Statutes of the Asian Football Confederation (“AFC”), to
which the UAEFA is a member, the AFC recognizes the CAS to resolve disputes
between, inter alia, clubs and
intermediaries.[8] Further, according to art. 62 para. 1 of said Statutes, the member
associations, among which the UAEFA, shall agree to recognize CAS as an
independent judicial authority and to ensure that their members and clubs comply
with the decisions passed by CAS. Any violation of these provisions will
trigger a sanction on the breaching party, according to art. 62 para. 3 of the AFC
Statutes.
Finally, art. 19
para. 4 of the UAEFA Statutes provides that each club, upon application for
affiliation, shall provide a declaration whereas it undertakes to accept and
implement the decisions rendered by the CAS.[9]
In
light of the above, the rules of football organizations put in place a terraced
indirect enforcement mechanism regarding CAS awards, whereas each club undertakes
to comply with such awards vis-à-vis its home association, each such
association being in turn similarly obligated vis-à-vis FIFA and its own
Confederation. The latter finally has the duty to ensure that its affiliated associations
recognize the authority of CAS, thereby closing the loop.
The broad sanction
mechanism at every stage leaves considerable discretionary powers to the
competent bodies in order to appropriately pressure the breaching stakeholder,
on whichever link in the chain the latter may be, into complying with CAS
decisions.
3.2 The Indirect
Enforcement Procedure
The FIFA Statutes
do not provide for any particular body directly tasked with the enforcement of
CAS awards against FIFA’s affiliates and their stakeholders. Nor is there any
particular procedure enshrined in the FIFA Statues as to how the indirect
enforcement of CAS awards shall take place. In particular, art. 64 FIFA
Disciplinary Code only applies to CAS decisions in appeal arbitration
proceedings regarding the decisions of FIFA and not to CAS decisions rendered
in an ordinary arbitration procedure.[10]
However, art. 45
of the FIFA Statutes does provide that the Member Associations Committee shall
deal with relations between FIFA and its member associations as well as the
member associations’ compliance with the FIFA Statutes. The same is true at the
level of the AFC, whereas art. 54 of its Statutes provide that the Associations
Committee shall be responsible for relations between the AFC and its Member
Associations as well as Member Association’s compliance with FIFA and AFC
Statutes and Regulations.
In other words,
both at FIFA and AFC level, a standing committee is responsible for ensuring
that the Members comply with the applicable statutes and thus, inter alia, with awards rendered by CAS.
Based on the
above, we concluded that in order for the competent FIFA and AFC standing committees
to examine the case of a club not complying with a CAS award, they needed to be
first convinced that (i) a final and binding CAS award had been rendered
against a club affiliated with a member association and that (ii) such club
refused to comply with said award. Second, the above-mentioned committees would
need to be shown that the national football association has been notified of
such occurrence and been asked to take appropriate actions against the club
according to its own statutes.
From this point in
time onwards, the FIFA and AFC standing committees will have been notified that
a member’s association has been asked to remedy a matter of non-compliance of
an affiliated club with a CAS award and thus such association is now under a
statutory obligation to ensure compliance from the club, as described above, or
else may itself be found to have breached the FIFA and/or AFC Statutes and
sanctioned accordingly.
4. Epilogue and Conclusion
Shifting
the focus back to the case that prompted the idea of this blog, once the route
leading to indirect enforcement was mapped, we proceeded with gathering the
evidence needed, i.e. that the CAS award was final and binding upon the
football club.
Section
193 of the Swiss Private International Law Act – which applies to international
CAS proceedings – enables the parties to request an enforceability certificate
from the competent state court regarding an award rendered by an international
arbitral tribunal with its seat in Switzerland. This document certifies that
the award in question is final and that no appeal can be filed against it. In
the case of the CAS, the state court competent for the issuance of an
enforceability certificate is the Tribunal
cantonal, in Lausanne.
Once
this certificate was obtained, we filed it together with a copy of the award to
the competent national association, the UAEFA, urging the latter in writing to
request from the club that it complied with the CAS award, or else the club would
be sanctioned. Both the competent standing committees of the FIFA and of the
AFC received a copy of that letter.
From
this moment onwards, the machinery of the indirect enforcement mechanism was
switched on and we knew that leverage existed at every level, up until FIFA, to
ensure that each stakeholder, be it the UAEFA or the AFC, pressures its
affiliated bodies, and, ultimately, the club, into complying with the CAS
award.
In the
case at hand, this method proved to be successful. Indeed, as a result of the aforementioned
steps, the AFC promptly contacted the UAEFA, requesting this matter to be
solved and the football agent received the awarded compensation from the club
within a few weeks after the UAEFA, the AFC and the FIFA were notified as
described above.
This case
shows how operating outside the New York Convention can prove both cost- and
time-effective. When used properly, the indirect sanction mechanism put in
place by football organizations proves to be a proper alternative to classic
enforcement proceedings and shall in any event be considered as a viable option
under similar circumstances.
