Introduction

On 13 September 2017, more than 40,000 people witnessed the successful debut of the football club RasenBallsport Leipzig (RB Leipzig) in the UEFA Champions League (UCL) against AS Monaco. In the eyes of many supporters of the German club, the mere fact of being able to participate in the UEFA's flagship club competition was probably more important than the result of the game itself. This is because, on the pitch, RB Leipzig secured their place in the 2017/18 UCL group stage already on 6 May 2017 after an away win against Hertha Berlin. However, it was not until 16 June 2017 that the UEFA Club Financial Control Body (CFCB) officially allowed RB Leipzig to participate in the 2017/18 UCL alongside its sister club, Austrian giants FC Red Bull Salzburg (RB Salzburg).[1] As is well known, both clubs have (had) ownership links to the beverage company Red Bull GmbH (Red Bull), and therefore it came as no surprise that the idea of two commonly owned clubs participating in the same UCL season raised concerns with respect to the competition's integrity.

The phenomenon of multi-club ownership is nothing new in the world of football. As will be seen below, the English company ENIC plc. (ENIC)[2] established itself as a pioneer in this type of business activity, having acquired in the late 1990s, through subsidiaries, controlling interests in several European clubs, including SK Slavia Prague in the Czech Republic (Slavia), AEK Football Club in Greece (AEK) or Vicenza Calcio in Italy (Vicenza). Apart from ENIC and Red Bull, a more recent example of a global corporation investing in multiple football clubs worldwide is the City Football Group owned by Sheikh Mansour bin Zayed Al Nahyan. In August 2017, the City Football Group acquired 44.3% stake in Girona FC, a Spanish club that had just been promoted to La Liga for the first time in their history, thereby adding a sixth club to its portfolio consisting of Manchester City, New York City, Melbourne City, Yokohama Marinos[3] (Japan) and Club Atlético Torque (Uruguay).[4] Private individuals may also become owners of two or more football clubs, the most prominent examples being Giampaolo Pozzo and his son Gino who are in possession of the Italy's second oldest club Udinese Calcio and the English top-flight club Watford FC respectively,[5] or Roland Duchâtelet, a Belgian millionaire whose dubious management of his five clubs, namely Charlton Athletic (England), Carl Zeiss Jena (Germany), AD Alcorcón (Spain), Sint-Truiden (Belgium) and Újpest FC (Hungary), has been met with considerable opposition. Moreover, clubs themselves have acquired stakes in other clubs, including, for instance, Atlético Madrid's investment in RC Lens (France) and Club Atlético de San Luis (Mexico), or AS Monaco's recent takeover of the Belgian second-division club Cercle Brugge.

Leaving commercial and marketing aspects aside, the investment in multiple football clubs is often driven by the vision of recruiting talented players at low cost, preferably in Latin American or African countries, and subsequently facilitating their development in smaller European clubs to prepare them for the level required at the lead club. Hence, should Manchester City discover in Uruguay a 'new Luis Suárez', it will not take much effort (and money) to convince such a player to join the academy of Club Atlético Torque, especially if he is promised further development at language-barrier-free Girona and sees himself wearing the Citizens' sky blue shirt one day. Along these lines, it could well be argued that the phenomenon of multi-club ownership in fact creates a supply chain for talent.

For reasons suggested above, qualification for a UEFA club competition is normally not the primary objective of clubs like Girona, which find themselves somewhere in the middle of this supply chain. This at least partially explains why, to the best of my knowledge, only twice the prospect of two or more commonly owned clubs participating in the same UEFA club competition became so imminent that it required UEFA's direct intervention. The first intervention dates back to May 1998 when the UEFA Executive Committee adopted a landmark rule entitled 'Integrity of the UEFA Club Competitions: Independence of the Clubs' (Original Rule) in response to Slavia and AEK, both under ENIC's control, having qualified for the 1998/99 UEFA Cup. The Red Bull case, for its part, revolved around the interpretation of 'decisive influence in the decision-making of a club', a concept that could not be found in the Original Rule.

Against this background, this two-part blog will focus on the UEFA rule(s) aimed at ensuring the integrity of its club competitions. The first part will take a closer look at how the Court of Arbitration for Sport (CAS) and the European Commission (Commission) dealt with ENIC's complaints alleging that the Original Rule was incompatible, inter alia, with EU competition law. The second part will then examine the relevant rule as it is currently enshrined in Article 5 of the UCL Regulations 2015-18 Cycle, 2017/18 Season (Current Rule) and describe how the CFCB Adjudicatory Chamber interpreted the aforementioned concept of decisive influence[6] in the Red Bull case. Finally, in light of the conclusions reached by the CFCB Adjudicatory Chamber, the second part of this two-part blog will discuss whether any modification of the Current Rule is desirable.

The ENIC saga: How the Original Rule survived EU competition law scrutiny

Background

It has already been noted that the adoption of the Original Rule was prompted, first and foremost, by the fact that ENIC-controlled Slavia and AEK qualified on sporting merit for the 1998/99 UEFA Cup. However, what needs to be added is that the initial impulse came a season before, when Slavia, AEK and Vicenza all reached the quarter-final of the UEFA Cup Winners' Cup. Although UEFA was fortunate that time as the clubs were not drawn to play against each other and only Vicenza advanced to the semi-final, it learnt its lesson and as a result of this situation adopted robust rules aimed at ensuring the integrity of its club competitions.

The Original Rule

The Original Rule made admission to the UEFA club competitions conditional upon fulfilment of three specific criteria. First, a club participating in a UEFA club competition must have refrained from (i) holding or dealing in the securities or shares; (ii) being a member; (iii) being involved in any capacity whatsoever in the management, administration, and/or sporting performance; and (iv) having any power whatsoever in the management, administration and/or sporting performance of any other club participating in the same UEFA club competition. Second, the Original Rule stipulated that no person could be simultaneously involved in any capacity whatsoever in the management, administration and/or sporting performance of more than one club participating in the same UEFA club competition. Third, an individual or legal entity was prohibited from exercising control over more than one club participating in the same UEFA club competition. The Original Rule further clarified that an individual or legal entity was deemed to have control over a club, and thus the third criterion was not satisfied, where he/she/it (i) held a majority of the shareholders' voting rights; (ii) was authorized to appoint or remove a majority of the members of the administrative, management or supervisory body; or (iii) was a shareholder and single-handedly controlled a majority of the shareholders' voting rights. In principle, under this third criterion, it was permissible for an individual or legal entity to hold up to 49% of the shareholders' voting rights in multiple clubs participating in the same UEFA club competition.

Proceedings before the CAS

It was the third criterion that was applicable to ENIC, a company listed on the London Stock Exchange. Given that both Slavia and AEK were owned as to more than 50% by ENIC, the respective criterion was not satisfied. Consequently, the Committee for the UEFA Club Competitions, a body responsible for monitoring fulfilment of the aforementioned criteria, ruled that only Slavia was eligible to take part in the 1998/99 UEFA Cup on account of its higher club coefficient. Not content with this decision, Slavia and AEK filed a request for arbitration with the CAS on 15 June 1998, challenging the validity of the Original Rule, inter alia, under Articles 81 and 82 of the Treaty Establishing the European Community (TEC) (now Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU)). On the same day, the clubs also lodged a request for interim relief which was eventually granted on 16 July 1998.[7] As a result, UEFA was barred from giving effect to the Original Rule for the duration of the arbitration procedure and both Slavia and AEK were given the green light to participate in the 1998/99 UEFA Cup. On 20 August 1999, the CAS rendered its award in which it upheld the validity of the Original Rule and allowed UEFA to apply the rule in question as of the 2000/01 season.

Before embarking on a comprehensive analysis of the compatibility of the Original Rule with EU competition law, the Panel recognized that participation of two or more commonly owned clubs in the same UEFA club competition creates fertile ground for conflicts of interest, and thus ''represents a justified concern for a sports regulator and organizer''.[8] The Panel then confirmed that EU law was applicable to the case before it as the Original Rule could not benefit from any 'sporting exception'.[9] That being clarified, the Panel moved on to examine the relevant market potentially affected by the Original Rule. It defined the relevant product market as the ''market for ownership interests in football clubs capable of taking part in UEFA competitions'' which would include, on the supply side, ''all the owners of European football clubs which can potentially qualify for a UEFA competition'', and, on the demand side, ''any individual or corporation potentially interested in an investment opportunity in a football club which could qualify for a UEFA competition''.[10] The relevant geographic market, for its part, was confined to the territories of national football federations affiliated to UEFA.[11]

Analysis under Article 81 TEC

Article 81 TEC (now Article 101 TFEU) prohibits ''all agreements between undertakings, decisions by associations of undertakings and concerted practices which […] have as their object or effect the prevention, restriction or distortion of competition within the internal market''. While it is evident that UEFA could be classified as an undertaking[12] or an association of undertakings (representing national football federations) within the meaning of Article 81 TEC, it is less clear whether UEFA could also be regarded, through national football federations representing both professional and amateur clubs, as an association of 'club undertakings'. This question is of crucial importance because if UEFA was not to be regarded as an association of 'club undertakings', the Original Rule would not be considered as the product of a horizontal collusion between clubs and, as a result, would fall outside the scope of Article 81 TEC.[13] The role of UEFA in such a case would not go beyond a mere sports regulator.[14] In this context, Advocate General Lenz insisted in the Bosman case that even though national football federations encompass a sheer number of amateur clubs not engaged in economic activities, this does not alter the conclusion that (i) national football federations are to be regarded as associations of undertakings in accordance with Article 81 TEC; and consequently that (ii) UEFA, through these national football federations, is to be regarded as an association of 'club undertakings'.[15] Although not entirely persuaded by the respective argument, the Panel assumed for the purposes of conducting an analysis under Article 81 TEC that the Original Rule represented a decision by an association of 'club undertakings' and, as such, did not fall outside the scope of Article 81 TEC.[16]

The Panel then turned to the question lying at the heart of the dispute, that is, whether the Original Rule had as its object or effect the prevention, restriction or distortion of competition within the internal market. It found that the Original Rule was only designed to ''prevent the conflict of interest inherent in commonly owned clubs taking part in the same competition and to ensure a genuine athletic event with truly uncertain results'', thereby excluding any anti-competitive object of the Original Rule.[17] With respect to the effect of the Original Rule, the Panel asserted that even though the rule in question may have discouraged an owner who had already been in possession of a high-level European club from acquiring controlling interest in another such club, its overall effect was pro-competitive in that it enabled more undertakings to enter the relevant market, and thus stimulated investment in professional football.[18] Moreover, the Panel was concerned that, in the absence of the Original Rule, high-level European clubs would potentially be concentrated in few hands which would, in turn, lead to an increase in prices for ownership interests in those clubs.[19]

Having found that neither the object nor the effect of the Original Rule was anti-competitive, the Panel was further not required to pronounce itself on whether the Original Rule was necessary and proportionate to the legitimate aim pursued. Yet, it held that the Original Rule was ''an essential feature for the organization of a professional football competition and [was] not more extensive than necessary to serve the fundamental goal of preventing conflicts of interest''.[20] In a similar vein, the Panel could not identify any plausible less restrictive alternative to the Original Rule, and therefore it declared that the Original Rule was proportionate to the stated aim of preventing conflicts of interest.[21]

Based on the above considerations, the Panel ultimately concluded that the Original Rule was compatible with Article 81 TEC.       

Analysis under Article 82 TEC 

Article 82 TEC (now Article 102 TFEU) prohibits abusive conduct by companies that have a dominant position on a relevant market. Since UEFA cannot become an owner of a football club, the Panel maintained that it was not present on the relevant market for 'ownership interests in football clubs capable of taking part in UEFA competitions', and for that reason UEFA could not be held to enjoy a dominant position.[22] Accordingly, the Panel concluded that the Original Rule did not violate Article 82 TEC.  

Proceedings before the Commission

In the wake of the CAS award, ENIC's business strategy suffered a blow. However, the English company was not yet ready to give up and lodged a complaint with the Commission on 18 February 2000, again claiming that the Original Rule infringed Articles 81 and 82 TEC.

In its decision, the Commission relied to some extent on the CAS award, adopting the definition of the relevant market or confirming that the Original Rule could not benefit from any 'sporting exception'. As far as the object of the Original Rule was concerned, the Commission articulated that the rule was not intended to distort competition, but rather to ''avoid conflicts of interest that may arise from the fact that more than one club controlled by the same owner […] play in the same competition''.[23] With respect to the Original Rule's effect, the Commission referred to the Wouters case in which the European Court of Justice held that an agreement between undertakings or a decision of an association of undertakings restricting the freedom to act may nevertheless fall outside the scope of Article 81 TEC, provided that its restrictive effects are inherent in the pursuit of a legitimate objective.[24] Applied to the case before it, the Commission ruled that the restrictive effects of the Original Rule were ''inherent in the pursuit of the very existence of credible pan-European football competitions''.[25] Consequently, the Commission found no violation of Article 81 TEC. Turning to Article 82 TEC, the Commission briefly noted that ''if one were to assume that UEFA enjoys a dominant position in whatever market, the fact that UEFA has adopted such a rule does not appear to constitute in itself an abuse of dominant position''.[26]

Conclusion

It is quite intuitive that the aim of preserving the integrity of the UEFA club competitions should outweigh the restriction introduced by the Original Rule which essentially rendered owners of high-level European clubs unable to acquire controlling interests in similar clubs. However, the fact that the Original Rule appeared bullet-proof under EU competition law does not mean that it was entirely without flaws. As will be seen in the second part of this blog, UEFA later decided to make the Original Rule more stringent since it realized that even if an individual or legal entity does not have de jure control over a club, it may still be able to exercise de facto control over such club.

[1]   RB Salzburg were eliminated by HNK Rijeka in the third qualifying round.

[2]   ENIC is currently a majority shareholder of the English top-flight club Tottenham Hotspur.

[3]   Among the clubs listed, Yokohama Marinos is the only club in which the City Football Group holds a minority stake (20%).

[4]   Furthermore, Manchester City have a formal cooperation agreement with Dutch side NAC Breda.

[5]   The Pozzo family also owned Spanish side Granada FC, before selling the club to a Chinese firm in 2016.

[6]   UCL Regulations 2015-18 Cycle, 2017/18 Season, Article 5.01(c)(iv).

[7]   According to the CAS, the fact that UEFA enacted the Original Rule shortly before the start of the 1998/99 season contravened the principles of good faith, procedural fairness and legitimate expectations. See CAS 98/200 AEK Athens and SK Slavia Prague / UEFA, Award of 20 August 1999, p. 5.

[8]   CAS 98/200 AEK Athens and SK Slavia Prague / UEFA, Award of 20 August 1999, para. 48.

[9]   Ibid. para. 83. According to the well-established jurisprudence of the European Court of Justice, ''the practice of sport is subject to [EU] law only in so far as it constitutes an economic activity''. See Case 36/74 Walrave [1974] ECR 1405, Judgment of 12 December 1974, para. 4. See also Case C-415/93 Bosman [1995] ECR I-4921, Judgment of 15 December 1995, para. 73. On the 'sporting exception', see also Richard Parrish and Samuli Miettinen, The Sporting Exception in European Union Law (T.M.C. Asser Press 2008).

[10] AEK Athens and SK Slavia Prague / UEFA (n 8) paras 101-104.

[11] Ibid. para. 108.

[12] According to the European Court of Justice, ''the concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed''. See Case C-41/90 Höfner [1991] ECR I-1979, Judgment of 23 April 1991, para. 21.

[13] AEK Athens and SK Slavia Prague / UEFA (n 8) para. 88.

[14] Ibid.           

[15] Bosman, Opinion of Advocate General Lenz delivered on 20 September 1995, para. 256.

[16] AEK Athens and SK Slavia Prague / UEFA (n 8) para. 94.

[17] Ibid. para. 113.

[18] Ibid. paras 114-119.

[19] Ibid.

[20] Ibid. para. 136.

[21] Ibid.

[22] Ibid. para. 141. It should be noted, however, that this assertion was later challenged, albeit in the context of FIFA, by the Court of First Instance in the Piau case. The Court held in this case that the fact that FIFA is not itself an economic operator on the market for the services provided by players' agents was ''irrelevant as regards the application of Article 82 TEC, since FIFA is the emanation of the national associations and the clubs, the actual buyers of the services of players' agents''. See Case T-193/02 Piau [2005] ECLI:EU:T:2005:22, Judgment of 26 January 2005, para. 116.

[23] Case COMP/37 806: ENIC / UEFA [2002] Commission, para. 28.

[24] Case C-309/99 Wouters [2002] ECR I-1577, Judgment of 19 February 2002, para. 97.

[25] See Commission decision (n 23) para. 32.

[26] Ibid. para. 45.

This post offers a basic literature review on publications on international and European sports law in 2015. It does not have the pretence of being complete (our readers are encouraged to add references and links in the comments under this blog), but aims at covering a relatively vast sample of the 2015 academic publications in the field (we have used the comprehensive catalogue of the Peace Palace Library as a baseline for this compilation). When possible we have added hyperlinks to the source.^[1]

Have a good read.

Books

Stefano Bastianon (ed.), La sentenza Bosman vent'anni dopo. Aspetti giuridico-economici della sentenza che ha cambiato il calcio professionistico europeo (Giappichelli, Torino 2015)

Stefano Bastianon (ed.), L'Europa e lo sport. Profili giuridici, economici e sociali. Atti del 4° Convegno (Bergamo, 26 novembre 2014) (Giappichelli, Torino 2015)

Frédéric Buy & al (ed.), Droit du sport (L.G.D.J, Paris 2015)

Johnny Maeschalk et al., Sportrecht (Die Keure, Brugge, 2015)

Mathieu Maisonneuve (ed.), Droit et olympisme : contribution à l'étude juridique d'un phénomène transnational, (Presses Universitaires d'Aix-Marseille, Aix en Provence 2015)

Despina Mavromati and Matthieu Reeb, The Code of the Court of Arbitration for Sport : commentary, cases and materials (Wolters Kluwer, Alphen aan den Rijn 2015)

David McArdle, Dispute Resolution in Sport: Athletes, Law and Arbitration (Routledge, Taylor & Francis Group, London, New York 2015)

Patrick Meier, Dopingsanktion durch Zahlungsversprechen: das Beispiel der Ehrenerklärungen des Weltradsportverbands UCI (Duncker and Humblot, Berlin 2015)

Mario Merget, Beweisführung im Sportgerichtsverfahren am Beispiel des direkten und indirekten Dopingnachweises (Duncker and Humblot, Berlin 2015)

Katarina Pijetlovic, EU sports law and breakaway leagues in football (Asser Press, The Hague 2015)

Moritz Tauschwitz, Die Dopingverfolgung in Deutschland und Spanien. Eine strafrechtliche und kriminologische Untersuchung (Duncker and Humblot, Berlin 2015)

Klaus Vieweg (ed.), Lex Sportiva (Duncker and Humblot, Berlin 2015)

Klaus Vieweg, Gert-Peter Brüggemann, Franz Steinle (ed.), "Techno-Doping": Leistungssteigerung durch technische Hilfsmittel aus naturwissenschaftlicher und juristischer Perspektive (Boorberg, Stuttgart 2015)

Klaus Vieweg (ed.), Impulse des Sportrechts (Duncker and Humblot, Berlin 2015)

Marjolaine Viret, Evidence in Anti-Doping at the Intersection of Science & Law (T.M.C. Asser Press, 2016)

Markus Zimmermann, Vertragsstabilität im internationalen Fußball : unter besonderer Berücksichtigung der Rechtsprechung der FIFA und des CAS (Richard Boorberg, Stuttgart 2015)

Academic Journals[2]

The International Sports Law Journal

Antonio Rigozzi, Ulrich Haas, Emily Wisnosky, Marjolaine Viret, Breaking down the process for determining a basic sanction under the 2015 World Anti-Doping Code, June 2015, Volume 15, Issue 1, pp 3-48

Elena Atienza-Macias, 2015 WADA code comes into effect: significant changes in the Spanish legal arena, June 2015, Volume 15, Issue 1, pp 49-54

Antoine Duval, Cocaine, doping and the court of arbitration for sport, June 2015, Volume 15, Issue 1, pp 55-63 

Corinna Coors, Are sports image rights assets? A legal, economic and tax perspective, June 2015, Volume 15, Issue 1, pp 64-68

Simon Boyes, Legal protection of athletes’ image rights in the United Kingdom, June 2015, Volume 15, Issue 1, pp 69-82

Tom Serby, The Council of Europe Convention on Manipulation of Sports Competitions: the best bet for the global fight against match-fixing?, June 2015, Volume 15, Issue 1, pp 83-100

Jonathan Liljeblad, Foucault, justice, and athletes with prosthetics: the 2008 CAS Arbitration Report on Oscar Pistorius,  June 2015, Volume 15, Issue 1, pp 101-111

Jacob Kornbeck, Lisbonisation without regulation: engaging with sport policy to maximise its health impact?, June 2015, Volume 15, Issue 1, pp 112-122

Sergey Yurlov, Right to participate in sporting competition: a human right or legal fiction and the Russian legal framework for sport, June 2015, Volume 15, Issue 1, pp 123-127

SpuRt: Zeitschrift für Sport und Recht

Fabian Stancke, ‘Pechstein und der aktuelle Stand des Sportkartel‘ (2015), Volume 22, Issue 2, 46-51

Jan F. Orth, Martin Stopper, ‘Entscheidungsvollzug in der Verbandspyramide und Ausbildungsentschädigung‘ (2015), Volume 22, Issue 2, 51-56

Philipp Wackerbeck, ‘Das Aus der Spielervermittlerlizenz und das "Dritteigentum an Spielerrechten" - eine erste, kritische Bestandsaufnahme‘ (2015), Volume 22, Issue 2, 56-61

Michael Geistlinger, Julia Schaffelhofer, ‘Die Vierjahressperre nach dem WADC 2015 aus dem Blickwinkel der grundrechtlichen Berufsfreiheit‘ (2015), Volume 22, Issue 3, 101-105

Causa Sport: die Sport-Zeitschrift für nationales und internationales Recht sowie für Wirtschaft

Peter W. Heermann, ‘Related Parties gemäss Financial Fair Play: Erste Erfahrungen‘ (2015), Issue 1, 3-9

Markus Zimmermann, ‘Komplexe Konsequenzen bei Vertragsauflösungen im Fussball‘ (2015), Issue 1, 16-22

Patrick Redell, ‘Spielerverträge mit Minderjährigen: droht ein neuer "Bosman" Fall?‘ (2015), Issue 1, 28-36

Anne-Sophie Morand, ‘Verbote religiöser und politischer Symbole im Sport im Lichte des Persönlichkeitsrechts‘ (2015), Issue 1, 72-81

Luca Beffa & Olivier Ducrey, Review of the 2014 Case Law of the Swiss Federal Tribunal concerning Sports Arbitration (2015), Issue 2, 115-123

Marco Del Fabro, Optionen nach dem Verbot von Third Party Ownerships (2015), Issue 3, 219-230

Ralf Eckert  & Clauia Wisser, Die Genehmigungsgebühr des DLV im Lichte des <Pechstein-Urteils> des OLG München (2015), Issue 3, 238-241

Matthias Neumann, Die Lizenzbox : attraktives Steuerungsinstrument für Fußballklubs im Rahmen des Merchandising (2015), Issue 3,  295-303

Dominik Kocholl, Schiedsklauseln im internationalen Sport : gewollt oder nicht? : Anmerkungen zur Entscheidung des Gerichtshofs vom 18. Februar 2015 3 Ob 157/14f (2015), Issue 3,  311-321

Urs Scherrer, FIFA : Reflexionen zu Fakten, zu Spekulationen und zur Zukunft (2015), Issue 3, 322-325

Jonas Leder, Das Bewerbungsverfahren um die Ausrichtung der Olympischen Spiele nach der IOC-Agenda 2020 (2015), Issue 4, 339-343 

Robin van der Hout & Christian Wagner, Neue Möglichkeiten beihilferechtskonformer Finanzierung von Sportinfrastrukturen (2015), Issue 4, 344-352

Paul Lambertz, Problematische Namensveröffentlichungsregelung in Dopingfällen gemäss WADA-Code (2015), Issue 4, 369-373

Peter W. Heermann, Abstellung von Nationalspielern aus kartellrechtlicher Sicht (2015), Issue 4, 384-391

Revista española de derecho deportivo

Diego Medina Morales, ‘Derecho del deporte y normas de juego’ (2015), Volume 35, Issue 1, 11-18

Sandra L. Echeverry Velásquez, ‘Límites en la actividad publicitaria de naturaleza general y especial aplicada al deporte’ (2015), Volume 35, Issue 1, 55-78

Emilio A. García Silvero, ‘La disciplina deportiva en las federaciones deportivas internacionales: algunos aspectos básicos para su adecuada comprensión’(2015) Volume 35, Issue 1, 79-102

Rivista di diritto ed Economia dello sport

Mario Vigna, La Saga Pechstein : Tremano le colonne del tempio tas ? (2015), Issue 1, 13-30

Alessandro Coni, Le Third-Party Ownership, (2015), Issue 1, 31-68

Michele Spadini, La normativa FIFA a tutela dei minori alla luce del « caso Barcellona »
(2015), Issue 2, 17-46

Piero Sandulli, Acquisizione e valutazione della prova nel processo sportivo : Profili problematici ? (2015), Issue 2, 47-58

Luca Smacchia, Il lodo Mutu : Come il diritto europeo limita la specificità dello sport (2015), Issue 2, 75-88

Gerardo Russo, Lo sviluppo tecnico normativo nella lotta al doping e l’impatto sul rilascio delle licenze world tour UCI : Il caso Astana (2015), Issue 2, 89-116

Salvatore Civale, L'Indennità di formazione e il contributo di solidarietà nei trasferimenti internazionali dei calciatori alla luce della circolare FIFA n.1500 (2015), Issue 2, 117-126

Massimiliano Zampi & Giovanna Tassoni, Il doping tra medicina legale e diritto, osservazioni sulla liceità dei prelievi e sulle modlità di accertamento(2015), Issue 2, 135-148

Alessandro Coni, Il caso RFC Sérésien : La prima condanna per violazione del divieto di TPO (2015), Issue 2, 135-148

Sweet & Maxwell's international sports law review

James M. Dorsey, ‘To watch or not to watch? : Middle Eastern Women's Sporting Rights’ (2015) Sweet & Maxwell's international sports law review

Lauri Tarasti, ‘First International Convention against Sport Manipulation’ (2015) Sweet & Maxwell's international sports law review

Kevin Carpenter & Adam Pendlebury, ‘Tweeting the Game into Disrepute : Regulation of Social Media by Governing Bodies : Lessons from English Football’ (2015) Sweet & Maxwell's international sports law review

Ulrich Haas, ‚The Court of Arbitration for Sport in the Case Law of the German Courts’ (2015) Sweet & Maxwell's international sports law review

Others

Toine Spapens and Marjan Olfers, Match-fixing: The Current Discussion in Europe and the Case of The Netherlands (2015) European Journal of Crime Criminal Law and Criminal Justice; vol. 23, Issue. 4, 333-358

Ulrich Haas, Der Court of Arbitration for Sport im Spiegel der deutschen Rechtsprechung (2015) Zeitschrift fur Vergleichende Rechtswissenschaft; vol. 114, issue. 4, 516-544

Andrew Wacke, Spiel und Wette (insbesondere Sportwetten) in der Entwickliung des europäischen Zivilrechts (2015) Zeitschrift für europäisches Privatrecht, Issue 1, 88-104

Valerie Kaplan, UEFA Financial Fair play Regulations and the European Union Antitrust Law Complications (2015) Emory International Law Review, Volume 29, Issue 4, 799-857

Philippe Cavalieros, Janet (Hyun Jeong) Kim, Can the Arbitral Community learn from Sports Arbitration? (2015) Journal of International Arbitration, Volume 32, Issue 2, 237-260 

Ralf Eckert, Maut fürs Laufen : zur Rechtmäßigkeit einer von einem Sportverband erhobenen Abgabe (2015) Wirtschaft und Wettbewerb, Volume 65, Issue 5, 480-489

Evelyne Lagrange, L'État et les puissances privées : digressions sur la compétence plénière de l'État et "l'autonomie du mouvement sportif" in Pierre d'Argent, Béatrice Bonafé et Jean Combacau (eds.) Les limites du droit international : essais en l'honneur de Joe Verhoeven, 183-204, 2015, ISBN 9782802742913

Mark Pieth, Ist der FIFA noch zu helfen? (2015) Zeitschrift fur Schweizerisches Recht, vol. 134, Issue. 1, 135-148

Danielle Wood, Giving Competition a Sporting Chance? : The Role for Antitrust Laws in Promoting Competition from New Sporting Leagues in Australia and the United States (2015) Australian Business Law Review; vol. 43, Issue. 3, 206-227

Oliver Budzinski, Stefan Szymanski, Are restrictions of competition by sports associations horizontal or vertical in nature? (2015) Journal of Competition Law & Economics, Volume 11, Issue 2, 409-429

Phinney Disseldorp, Voetballers niet langer te koop!? : Over een verbod op Third Party Ownership (2015) Tijdschrift voor sport & recht, Issue 1, 1-7

Geoff Pearson, Sporting Justifications under EU Free Movement and Competition Law: The Case of the Football ‘Transfer System’ (2015) European Law Journal, Volume 21, Issue 2, 220–238

Ben Van Rompuy, The Role of EU Competition Law in Tackling Abuse of Regulatory Power by Sports Associations (2015) Maastricht Journal of European and Comparative Law, vol. 22, issue. 2, 179-208

Nicolaides Phedon, A Critical Analysis of the Application of State Aid Rules to Sport (2015) Maastricht Journal of European and Comparative Law, vol. 22, issue. 2, 209-223

Antoine Duval, The Court of Arbitration for Sport and EU Law: Chronicle of an Encounter (2015) Maastricht Journal of European and Comparative Law, vol. 22, issue. 2, 224-255

Richard Parrish, Article 17 of the FIFA Regulations on the Status and Transfer of Players: Compatibility with EU Law, (2015) Maastricht Journal of European and Comparative Law, vol. 22, issue. 2, 256-282

Jacob Kornbeck, The Stamina of the "Bosman" Legacy : The European Union and the Revision of the World Anti-Doping Code (2011-2013) (2015) Maastricht Journal of European and Comparative Law, vol. 22, issue. 2, 283-304

Anna Sabrina Wollman, Olivier Vonk & Gerard-René De Groot, Towards a Sporting nationality? (2015) Maastricht Journal of European and Comparative Law, vol. 22, issue. 2, 305-321

Stefano Bastianon, The Striani Challenge to UEFA Financial Fair-Play. A New Era after Bosman or Just a Washout? (2015) Competition Law Review, Volume 11 Issue 1, 7-39

Beverley Williamson, Premiership Rugby Union: Through the Antitrust Looking Glass (2015) Competition Law Review, Volume 11 Issue 1, 41-60

Oskar van Maren, The Real Madrid case: A State aid case (un)like any other? (2015) Competition Law Review, Volume 11 Issue 1, 83-108

SSRN Articles

Anastasios Kaburakis, Ryan M. Rodenberg, John T. Holden, Inevitable: Sports Gambling, State Regulation, and the Pursuit of Revenue (10 January 2015)

Ben Van Rompuy, The Odds of Match Fixing - Facts & Figures on the Integrity Risk of Certain Sports Bets (22 January 2015)

Craig Dickson, Complex Rules & Inconsistent Interpretation: Duty of Care and Causation in Collision Sports (27 February 2015)

Craig Dickson, Courtsiding' in Sport: Cheating, Sharp Practice or Merely Irritating? (13 March 2015)

Kyle Mulrooney, Katinka Van de Ven, ”Muscle Profiling”: Anti-Doping Policy and Deviant Leisure (23 March 2015) 

Antoine Duval, Ben Van Rompuy, The Compatibility of Forced CAS Arbitration with EU Competition Law: Pechstein Reloaded (23 June 2015)

Michele Giannino, Can Joint Sale Agreements for Exclusive Media Rights to Sport Events Amount to Abusive Conducts? The Simbia/CLT-UFA Case in Luxembourg (10 July 2015)

Dick Pound, Sports Arbitration: How it Works and Why it Works (16 June 2015)

Kathryn Henne, Reforming Global Sport: Hybridity and the Challenges of Pursuing Transparency (20 August 2015).

Kathryn Henne, Defending Doping: Performances and Trials of an Anti-Doping Program (20 August 2015).

Thomas Margoni, The Protection of Sports Events in the European Union: Property, Intellectual Property, Unfair Competition and Special Forms of Protection (August 29, 2015).

Teresa Scassa and Benoit Séguin, Ambush Marketing Legislation to Protect Olympic Sponsors: A Step Too Far in the Name of Brand Protection? (October 7, 2015).

Others:

Bulletin TAS/CAS Bulletin 2015/1

[1] This literature review would not have been possible without the precious support of our former intern Piotr Drabik.

[2] Only the articles deemed relevant from an international sports law perspective are listed here.

It took only days for the de facto immunity of the Court of Arbitration for Sport (CAS) awards from State court interference to collapse like a house of cards on the grounds of the public policy exception mandated under Article V(2)(b) of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards . On 15 January 2015, the Munich Court of Appeals signalled an unprecedented turn in the longstanding legal dispute between the German speed skater, Claudia Pechstein, and the International Skating Union (ISU). It refused to recognise a CAS arbitral award, confirming the validity of a doping ban, on the grounds that it violated a core principle of German cartel law which forms part of the German public policy. A few weeks before, namely on 30 December 2014, the Court of Appeal of Bremen held a CAS award, which ordered the German Club, SV Wilhelmshaven, to pay ‘training compensation’, unenforceable for non-compliance with mandatory European Union law and, thereby, for violation of German ordre public.

Although none of these decisions is yet final, with two red cards in a row, one could presume that the ‘death’ of CAS is closer than ever. Beyond such extreme and rather unconvincing predictions, the two cases set a fundamental precedent: sports arbitration, like all arbitration proceedings, shall abide by minimum standards of institutional impartiality and independence (Pechstein) and apply mandatory EU law (SV Wilhelmshaven).[1] Nevertheless and without prejudice to the need for a potential institutional reform of the CAS (see our analysis here), from a purely international arbitration point of view, the two German courts’ decisions brought into surface the controversial question of the powers of national courts in enforcement proceedings to review CAS arbitral awards with regard to the application of mandatory rules. The Pechstein case illustrates well the potential conflict between two apparently competing policies: the finality of CAS awards and the respect of public policy. In the SV Wilhelmshaven case, the Court went even a step further by implying that sport associations have the ‘duty’ (!) to review a CAS award with regard to its compatibility with German public policy.[2] In view of its uniqueness and complexity, this aspect of the SV Wilhelmshaven case deserves a thorough examination in a future blogpost.

In this blogpost, we will argue that the Pechstein case could be considered as a borderline case with regard to the limits of national courts’ power when scrutinizing CAS awards’ compatibility with domestic public policy. Challenging the validity of CAS awards before national courts, however, is something new under the sun of sports arbitration and could prove fatal for the finality of CAS awards, which is a sine qua non safeguard of procedural equal treatment among athletes[3] and legal coherence in sports law. Should athletes rely on national courts to police the institutional flaws of the CAS? Or is it high time for the Swiss Federal Tribunal (SFT) to abandon the hands-off deferential approach towards CAS arbitration and adopt a broader scope of review in the sporting context?

In this regard, the key claim is the following: national courts’ decisions should not threaten CAS arbitration as long as the Swiss Federal Tribunal review guarantees a minimum quality of CAS arbitrators’ work on the merits.

The Pechstein case: Testing the limits of a national court’s power to review a CAS award

In the latest decision of the Pechstein saga, the Higher Regional Court in Munich found the underlying arbitration agreement between the athlete and ISU in favour of the CAS invalid and that the CAS award issued on the basis of that agreement violated mandatory German cartel law prohibits abusive conduct by companies that have a dominant position on a particular market. The ISU, as sole organizer of speed skating world championship, enjoys a monopolistic position in speed skating and forced the athlete to sign the arbitration agreement at issue. Initially, the Court hold that the arbitration agreement as a prerequisite to the athlete’s participation in competitions does not constitute per se an abuse of a dominant position, since it responds to the specificity of sport and particularly to the need of consistency in sports disputes. However, considering the decisive influence of sports organizations on the selection and appointment of arbitrators under the CAS regulations, the Court concluded that the independence of CAS is questionable. In this light, forcing the athletes to sign an arbitration agreement in favour of a rather dependent and partial tribunal would constitute an abuse of the international sports organizations’ dominant position in the market, thereby infringing the mandatory German antitrust law. More importantly, unlike the First Instance Court, the Higher Regional Court concluded that the res judicata effect of the CAS award does not prevent the athlete from bringing her claim before the Court. Instead, it found  that the recognition of the CAS award would be contrary to Germany’s public policy, since it would perpetuate the abuse of ISU dominant market position.

From a substantive point of view it is evident that the decision primarily concerns the independence of CAS arbitration. However, considering that the Court based its reasoning on the application of German competition law, it could also serve as a model for an abuse of dominant position in the meaning of Article 102 TFEU[4], since the decision provides important insights on the role of a national court in tackling competition law issues at the enforcement stage of an arbitral award. In the Pechstein case, the Court examined the enforcement of a CAS award, which failed to deal with competition law, since the issue was not raised during the arbitral proceedings.[5] Indeed, a competition law issue was never raised before the CAS and neither before the Swiss Federal Tribunal. Interestingly enough, the invalidity of the forced arbitration agreements was raised only in the German courts proceedings.

Given the mandatory nature of competition law, one could argue that if the matter was not raised during the arbitration proceedings by the parties or ex officio by the arbitrators, it could still be considered in enforcement proceedings.[6] However, this approach could hardly be followed in a situation where the applicability of competition law is not prima facie evident and the alleged breach would in no case amount to a hard-core violation of competition law.[7] The answer to this dilemma is to be found in the difficult balance between the public interest in the application and enforcement of competition law on the one hand and the public interest in the finality of CAS arbitral awards on the other. In this light, the following remarks can be made regarding the Pechstein case.

First, it is debatable whether the enforcement of the CAS award results in serious violation of competition law.[8] The Court alleged violation of German cartel law based on the structural imbalance of the CAS and the subsequent challenge of its independence. However, this was rather an examination of the potential effects of the absence of CAS independence which could be hardly interpreted as a hard-core violation of competition law. While the CAS is still “perfectible”[9], the German Court’s decision did not clearly demonstrate to what extent the so-called structural imbalance actually weighted against Pechstein before the CAS. Moreover, one cannot not exclude the possibility that a national court reviewing a CAS awards would be less neutral than the CAS itself as it may have the unconscious intention to safeguard its own athlete.[10] Furthermore, as Nathalia Voser interestigly remarks, the Pechstein ruling failed to provide an assessment of actual excluding and exploitative effects of the forced arbitration clause, in absence of which, it is questionable whether the rules of an arbitral institution could be considered anticompetitive.

Even assuming that the violation of competition law is serious, it is problematic that this issue was raised only in the proceedings before the national courts. The German Court argued that the athlete had no choice but to sign the arbitration agreement and the fact that she never raised a violation of competition law could not justify a perpetuation of the abuse of a dominant position by the ISU.[11] Nevertheless, this argument seems hardly convincing. A refusal of enforcement of an award for failure to apply competition law in the arbitration proceedings, notwithstanding that the party which would have benefited from its application did not raise the issue during the arbitration, could be conceived as an invitation to the parties to behave in bad faith.[12] Had Pechstein won before the CAS, she would not challenge the validity of the arbitration agreement and the Court would not delve into the conformity of the forced arbitration agreement with competition law.

For these reasons, it is the opinion of the author that competition law issues should have been raised in a timely fashion in their proper venue, before the arbitrators. This solution does not entail a danger of systematic violation of competition rules, since the national courts can still protect athletes in case of hard-core violations. On the contrary, treating competition law as a second bite of a cherry for athletes seems to be at odds with the rationale of the public policy exemption and open the road to abusive practices seriously compromising the principle of finality of CAS awards.

The counterbalance? A stricter review of the CAS awards by the Swiss Federal Tribunal (SFT)

In the wake of the Pechstein ruling, it is almost certain that more athletes will resort to national courts to challenge CAS awards aiming to reverse them in their favour and even claim damages against the sports governing bodies imposing sanctions on the basis of these awards. This can lead to a problematic situation as States adopt different standards of protection of fundamental rights of the athletes and arbitration clauses inserted in statutes of international sports federations can potentially conflict with non-Swiss legal systems.[13] Furthermore, it has been demonstrated in this blogpost that a meticulous review of the application of mandatory rules by national courts poses a serious risk for the effectiveness of arbitration without necessarily guaranteeing much better protection of public policy.

In this light, the concentration of jurisdiction at a single forum is an overriding need in order to ensure that the athletes participating in competitions are on equal footing.[14] Nevertheless, this does not come without limits. In view of the ‘forced’ nature of sports arbitration and the specificity of sports disputes, athletes should enjoy further safeguards for their rights. To this end, the Swiss Federal Tribunal (SFT) should play a key role. By adopting a broader and stricter review of the CAS awards, (namely one that would really take into account the forced nature of sports arbitration) the SFT could at the same time safeguard the enforceability of CAS awards and uniform application of sports law at domestic and international level, while guaranteeing athletes’ fundamental rights.

In fact, a CAS award can be challenged before the SFT on the limited grounds provided in Article 190 (2) PILA and particularly: (a) if the sole arbitrator or the arbitral tribunal was not properly appointed or composed; (b) if the arbitral tribunal erroneously held that it had or did not have jurisdiction; (c) if the arbitral tribunal ruled on matters beyond the claims submitted to it or if it failed to rule on one of the claims; (d) if the equality of the parties or their right to be heard in an adversarial proceeding was not respected; or (e) if the award is incompatible with public policy. The current SFT jurisprudence reviewing CAS awards has demonstrated its capacity to protect parties’ procedural rights.[15] Nonetheless, when it comes to the merits of the dispute, the SFT has consistently adopted a hands-off approach by interpreting the concept of incompatibility with public policy under Article 190 (2)(e) very narrowly, covering only those fundamental principles that are widely recognized and should underlie any system of law according to the prevailing conceptions in Switzerland.[16] For example, in practice, this means that the SFT will not consider whether an award is compatible with EU competition law and EU fundamental principles, irrespective of whether such an award could be enforced within the EU, since they are not embedded in Swiss legal tradition.

It was only in 2012 that the SFT for the first time in over twenty years took the bold step to annul a CAS award on the basis of a violation of substantive public policy.[17] In this judgment, the SFT has answered the criticism that its substantive review under Art 190(2) (e) PILA is a dead letter[18] and more importantly it made it clear that the CAS has the primary responsibility of ensuring that its awards are fair on the merits and the SFT’s role is to examine whether the CAS successfully assumed this duty. However, the Matuzalem ruling instead of marking a turning point in the SFT review on the merits, was soon proven to be a rare exception. The repeated ‘excuse’ of the SFT for this pro-CAS arbitration approach has been that Art 190(2) (e) PILA mandates an excessively limited review on the merits. The CAS arbitration being under the sword of Damocles, should this hands-off approach be sustained?

This question has to be answered negatively. In fact, Chapter 12 of the PILA, including Article 190(2), was originally drafted for the purpose of governing international commercial arbitration. Nevertheless, in its almost 20 years of practice, the SFT has acknowledged that sports arbitration should be treated differently than standard commercial arbitration.[19] It could be argued, therefore, that in view of the particularity of sports arbitration, the restrictive reading of substantive public policy under Art 190 (2)(e) could be tolerated in international commercial arbitration, but not for CAS arbitration. It has been suggested, instead, that in view of protecting athletes’ fundamental rights, the SFT should engage in a broader review and take into account the specificity of sports arbitration in defining the scope of its review on the merits of CAS awards.[20] A suggestion has also been made for a redefinition of public policy under which the SFT could freely review whether CAS has complied with the essential rights of athletes.[21] Considering that athletes are forced to accept CAS arbitration, a broader scope of review that would ensure a minimum quality guarantee of the CAS awards on the merits should be offered to athletes. Therefore, a potential institutional reform of the CAS to ensure independence and impartiality coupled with a more stringent review of its awards by the SFT should bring about a more restraint approach of national courts when reviewing CAS awards’ compliance with domestic public policy and ensure the subsequent finality of CAS awards.

[1] B Hess and F Kaps, ‘Claudia Pechstein and SV Wilhelmshaven: Two German Higher Regional Courts Challenge the Court of Arbitration for Sport’ (6 February 2015).

[2] Hanseatisches Oberlandesgericht in Bremen, SV Wilhelmshaven e.V. gegen Norddeutscher Fußball-Verband e.V. (30 Dezember 2014) “i) Der Senat sieht weder sich noch den Beklagten durch die Satzung des Beklagten und die darin in Bezug genommene Satzung des DFB daran gehindert, die Ent-scheidung des Beklagten vom 13.01.2014 unter diesem rechtlichen Aspekt zu prüfen und im Hinblick auf die Unvereinbarkeit der der Vereinsstrafe zugrunde liegenden Festsetzung der Ausbildungsentschädigung mit Art. 45 AEUV die Rechtswidrigkeit des angegriffenen Zwangsabstiegs der ersten Herrenmann-schaft festzustellen. Im Gegenteil war der Beklagte verpflichtet, die „umzuset-zende“ Disziplinarentscheidung und den ihr zugrunde liegenden CAS-Schiedsspruch darauf zu überprüfen, ob diesen nicht zwingendes nationales oder internationales Recht entgegensteht.’’

[3] A Rigozzi, ‘International Sports Arbitration: Why does Swiss Law Matter?’ in Citius, Altius, Fortius-Mélanges en l’ honneur de Denis Oswald (2012), 446.

[4]A Duval, ‘The Pechstein ruling of the Oberlandesgericht München - Time for a new reform of CAS?’ (19 January 2015).

[5] A similar example of this situation is the Eco Swiss v Benetton arbitration, which led to the C-126/97 judgement of the Court of Justice.

[6] L Radicati di Brozolo, ‘Antitrust: a paradigm of the relations between mandatory rules and arbitration-a fresh look at the “second look” ’ (2004) 7 (1) International Arbitration Law Review, 31.

[7] Ibid

[8]  For an interesting analysis on the competition law perspectives of the Pechstein case, see N Voser ‘The Most Recent Decision in the Pechstein Saga: Red Flag for Sports Arbitration?’ (22 January 2015)

[9] Decision 4P.267–270/2002 du 27 mai 2003, Lazutina c. CIO, ATF 129 III 445, Bull. ASA 2003, 465

[10] L Mintas, ‘Dr Laila Mintas: Is this the end of CAS arbitration?’ (3 February 2015)

[11] OLG München · Teil-Urteil vom 15. Januar 2015 · Az. U 1110/14 Kart, paras 135 and 137.

[12] L Radicati di Brozolo (n 5) 32.

[13] J Lukomski, ‘Arbitration clauses in sport governing bodies statutes: consent or constraint? Analysis from the perspective of Article 6(1) of the ECHR’ (2013) 13 The International Sports Law Journal, 69

[14] S Netzle, ‘Jurisdiction of arbitral tribunals in sports matters : arbitration agreements by reference to regulations of sports organisations’ in Arbitration of sports-related disputes (1998,  Basel : Association suisse de l'arbitrage) 47

[15] A Rigozzi, ‘L’importance du droit suisse de l’arbitrage dans la résolution des litiges sportifs internationaux’ (2013) Revue de droit suisse 2013, 320.

[16] Ibid

[17] Swiss Federal Tribunal, Francelino Da Silva Matuzalem v FIFA (27 March 2012) 4A_558/2011

[18] P Landolt, ‘Annulment of Swiss International Arbitration Awards for Incompatibility with Substantive Public Policy: First Annulment in over Twenty Years’ (2012) 27 MEALEY’S International Arbitration Report Issue 4, 22.

[19] Swiss Federal Tribunal, Guillermo Cañas v. ATP Tour (22 March 2007) 4P.172/2006 See also, A Rigozzi (n 13), 321-322.

[20] M Baddeley, ‘La décision Cañas: nouvelles règles du jeu pour l’arbitrage international du sport’ (2007)  CAUSASPORT 2007, 161.

[21] A Rigozzi (n 13), 325.