Editor's note: This is a call for papers for a workshop inviting sports lawyers and historians to reflect on how the lex olympica developed within the last 128 years through the prism of challenges and disruptions to the Olympic Games and the sharp and incremental changes they provoked.

Background

The lex olympica are legal rules the International Olympic Committee created to govern the Olympic Movement. Since the revival of the Olympic Games in 1896, the lex olympica, with the Olympic Charter taking its central place, has undergone tremendous changes. It has increased not only in volume but also in complexity and reach.

While some changes were designed to give further detail to the Olympic values, others seem to serve as responses to numerous disruptions and challenges that the Olympic Games experienced on their way. History shows that the Olympic Games faced boycotts, apartheid, armed conflicts, wars, propelled commercialisation, corruption, critique based on human rights and sustainability, pandemics, and many other obstacles.

One can see triggers for changes in specific incidents, broader societal changes, external political interests, long-term internal processes, etc., or further differentiate them according to relevant stakeholders impacting the change, such as IOC, NOCs, IFs, NFs, athletes, commercial partners, television, activist groups, NGOs, governments, host countries, etc. Regardless of their taxonomies, all these challenges met different reactions and affected the Olympic regulation in various ways. The IOC chose to distance the Olympic Games from some challenges and fully embrace others.

Keynote speakers

• Jörg Krieger, Associate Professor, Department of Public Health and Sport Science, Aarhus University; co-leader of the Lillehammer Olympic and Paralympic Studies Center; Associate Professor II Inland Norway University of Applied Sciences.

• Mark James,  Professor of Sports Law and Director of Research in the Manchester Law School at Manchester Metropolitan University, Editor-in-Chief of the International Sports Law Journal.

Deadline for abstract submission: 15 June 2024

Confirmation of participation: 30 June 2024

Publication: Selected contributions will be considered for a special issue at International Sports Law Journal

Contact information

Yuliya Chernykh (Associate Professor)

yuliya.chernykh@inn.no

Organizer

Lillehammer Olympic and Paralympic Studies Center (LOSC), Inland School of Business and Social Sciences and Legal development research group at INN University

“I'm sure that in 1985, plutonium is available in every corner drugstore, but in 1955, it's a little hard to come by.” (Dr. Emmett L. Brown)[1]

Back to the future?

Availing oneself of EU law in the ambit of sports in 1995 must have felt a bit like digging for plutonium, but following the landmark ruling of the European Court of Justice (ECJ) in the Bosman case[2], 20 years later, with all the buzz surrounding several cases where EU law is being used as an efficient ammunition for shelling various sports governing or organising bodies, one may wonder if in 2015 EU law is to be “found in every drug store” and the recent cases (see inter alia Heinz Müller v 1. FSV Mainz 05, Daniel Striani ao v UEFA, Doyen Sports ao v URBSFA, FIFA, UEFA) [3] cannot but invitingly evoke the spirit of 1995.

One of the aforementioned cases that also stands out pertains to the injunction decision[4] issued on 29 April 2015 by the Regional Court (Landesgericht) in Frankfurt am Main (hereinafter: the Court) in the dispute between the intermediary company Firma Rogon Sportmanagement (hereinafter: the claimant) and the German Football Federation (Deutschen Fußball-Bund, DFB), where the claimant challenged the provisions of the newly adopted DFB Regulations on Intermediaries (hereinafter: DFB Regulations)[5] for being incompatible with Articles 101 and 102 TFEU.[6] The Court, by acknowledging the urgency of the matter stemming from the upcoming transfer window and the potential loss of clients, deemed a couple of shells directed at the DFB Regulations to be well-aimed, and granted an injunction due to breach of Article 101 TFEU.

(Un)harnessing the brokerage in football

The recently adopted FIFA Regulations on Working with Intermediaries (hereinafter: FIFA Regulations)[7] arguably represent the biggest turning point in the regulation of player and club representation in the history of professional football.[8] While some will argue that by implementing these Regulations, FIFA has thrown in the towel on regulating the ambit of representation in football altogether, it could be said that by steering away from controlling the access to the activity and switching the onus on regulating it, FIFA has not deregulated the activity, but rather shifted the scope of the regulation itself.[9] It has been anticipated that the implementation process would expose several contentious issues (e.g. recommended commission cap, duty of disclosure, representation of minors, suitability of intermediaries, etc.),[10] and the DFB’s adoption of the new Regulation has been no exception in that regard.[11]

The DFB, pursuant to Article 1(2) of FIFA Regulations,[12] and following a rather lengthy exchange of information with the German Football League (Deutsche Fußballliga GmbH, DFL) and the German Association of Players’ Agents (Deutschen Fußballspieler-Vertmittlervereinigung, DFVV),[13] adopted the new DFB Regulations on 13 March 2015. By availing itself of the discretion embedded in Article 1(3) of FIFA Regulations,[14] the DFB tailor-made its regulations, which entered into force on 1 April 2015, to a certain extent, which shall be elaborated upon further below. 

Since the new DFB Regulations by virtue of paragraphs 2 and 3 of Article 3[15] indirectly bound the intermediary agencies through binding players and clubs when entering employment or transfer contracts,[16] which had not been the case with the pre-existent norms, the claimant first unsuccessfully sought the annulment of the Regulations directly from DFB. Subsequently, the claimant sought relief in the form of a temporary injunction from the Court, based upon the pending imminent danger stemming from the abuse of the DFB’s dominant position. Such behaviour, according to the claimant, limited the free choice of profession. Furthermore, according to the claimant, the obligatory disclosure of the remuneration amounts and the prohibition of representation remuneration when the player concerned is a minor went way beyond the borders of necessity and were thus unjustified.[17] The DFB, on the other hand, by rejecting the existence of a pending danger since the claimant had allegedly known of the FIFA Regulations for almost a year, deemed the claim inadmissible due to wrongful recourse to the urgent procedure (Eilverfahren), and additionally claimed the Articles 101 and 102 TFEU to be inapplicable, since the addressed provisions did not restrict competition, but au contraire prevented its distortion (i.e. by prohibiting the abuse of  the intermediary activity, providing for the independence of clubs and players, and guaranteeing transparency and contractual stability, hence bringing their scope within the borders of proportionality).[18]

Intermediaries v DFB: 1-0

The DFB’s guerrilla tactics of throwing the sink back at the claimant screaming for inadmissibility proved rather futile. The Court deemed the claim to be admissible and also found a large portion of the claimant’s arguments in the form of EU law-shaped shells to be well-founded. Subsequently, it granted an injunction as sought from the claimant. It addressed the issue through the prism of the Article 101 TFEU, and specific steps in the reasoning shall be dealt with separately below.

Admissibility as a non-issue

The DFB argued that such a claim could not be made in the urgent procedure, since the issue would pertain to the main cause. However, the Court pointed out that such a claim would be possible under Article 33 of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB).[19] Refusal of such a claim would deprive the claimant of its rights and legal remedies, particularly in the light of the pending danger of losing potential customers (clubs and players), bound directly by the DFB Regulations.[20] The Court also rejected the claim that the issue pertained to an internal decision-making process of the DFB, and said that the adoption of the Regulations had an externally oriented scope and effect.[21]

DFB Regulations are an inter-state trade restricting decision of an association of undertakings

The DFB asserted that it could not be seen as an association of undertakings in the sense of Article 101(1) TFEU considering that it also includes members with an amateur status. By referring to Piau,[22] the Court removed any ambiguity pertaining to the status of the DFB saying that: “...the mere fact that a sports association or federation unilaterally classifies sportsmen or clubs as 'amateur' does not in itself mean that they do not engage in economic activities within the meaning of Article 2 EC.”[23] Furthermore, strengthening its reasoning by first quoting Frubo,[24] stating that: ”Article 101 TFEU applies to associations in so far as their own activities of those of the undertakings belonging to them are calculated to produce the results to which it refers”,[25] and then BNIC,[26] it seemingly left no doubt as to the passive standing of DFB.

Having established the DFB’s status as per Article 101(1) TFEU, the Court moved to the DFB Regulations, and by drawing from Bosman,[27] Lehtonen,[28] and most importantly Piau,[29] qualified them as a decision of an association of undertakings, since they entail the regulation of the economic activity of intermediaries, whereby it is clear “...that the purpose of the occupation of players' agent, under the very wording of the amended regulations, is 'for a fee, on a regular basis [to introduce] a player to a club with a view to employment or [to introduce] two clubs to one another with a view to concluding a transfer contract'...”,[30] and therefore this economic activity cannot be qualified as one of a purely sporting nature.[31]

Albeit steering clear of an explicit reference to CJEU’s vast jurisprudence, the Court deemed the relevant market to be the one of intermediary services where the clubs and the players represented the customers and the intermediaries the providers,[32] hence following to a large extent the pre-established path in Piau.[33] It also pointed out that pursuant the provisions of Article 101(1) TFEU the core of the restriction of competition lied within an agreement (or a decision) which hampered the independence of economic decision making of the companies involved in a particular activity. The present case would prove as no exception since the intermediaries’ ability to provide services would take toll by the eventual non-submission of the signed declaration when entering an agreement with a player or a club upon whom loomed the eventual DFB sanctions. In other words, refusal to declare, which at the same time brought the intermediaries within the scope of DFB norms, limited the intermediaries’ economic freedom to be engaged by players or clubs.[34]

Moreover, the Court had little doubts about the Regulations affecting the inter-State trade. With Bundesliga alone representing the third largest national club football competition in Europe, the size of the market itself leads to the conclusion that the decision in question could have a negative impact on an actual or potential, direct or indirect inter-State provision of intermediary services, all the more so, since it lead to partitioning of markets on a territorial basis. In fact, by invoking Wouters,[35] the Court stressed that: “...it is sufficient to observe that an agreement, decision or concerted practice extending over the whole of the territory of a Member State has, by its very nature, the effect of reinforcing the partitioning of markets on a national basis, thereby holding up the economic interpretation which the Treaty is designed to bring about...” [36]

Possible justifications

Having brought the Regulations within the scope of Article 101(1) TFEU, the Court promptly looked at the available justifications, either within the ambit of Article 101(1) TFEU pursuant to the relevant ECJ jurisprudence, or as one of the explicit Treaty exceptions embedded within Article 101(3) TFEU. In light of the former provision it is worth pointing out that the notion of inherence to legitimate (sporting) purposes is crucial in this ambit, since certain potentially restrictive behaviours (e.g. adoption of transfer rules), may be, although caught by Articles 101 and 102 TFEU respectively, exempted from their scope due to their necessity in pursuance of such objectives. Such an inherent necessity must, however, be assessed on a case-to-case basis. Following such reasoning, and by referring to the landmark Meca-Medina case,[37] the Court invoked an almost blasphemous notion in the ambit of EU competition law by stating that such assessment of legitimate goals under Article 101(1) TFEU was to be addressed through the “rule of reason” doctrine.[38]

As an alternative route stemming explicitly from the Treaty, by referring back to Piau, the Court identified the provisions of Article 101(3) TFEU, which envisage that the Regulations “might enjoy an exemption on the basis of this provision if it were established that they contribute to promoting economic progress, allow consumers a fair share of the resulting benefit, do not impose restrictions which are not indispensable to the attainment of these objectives, and do not eliminate competition.” [39]

Summing up, the Court rather curiously, and perhaps simplistically, pointed out that the common denominator of both approaches entailed three key components; namely the Regulations would have to pursue a legitimate goal, and they would have to be necessary and proportionate. As one such legitimate goal, the Court recognised the issue of necessity to level the playing field in football competitions through a transfer system and thereof stemming regulation of the activity of intermediaries in order to prevent eventual abuses in the form of coerced transfers, and, even more importantly, to protect the minors involved in the process.[40] Both parties recognised the existence of past abusive practices that needed to be eradicated. Regardless of the legitimacy of the majority of the aims pursued, the Court established that certain provisions lacked the needed necessity and were disproportionate, as shall be addressed below.[41]

Individual (un)successful claims

Firstly, the Court deemed the registration obligation for clubs and players, which would bring the intermediaries within the scope of DFB and FIFA rules, to be disproportionate. While the registration and declaration obligations as such could be justified, the same could not be said for the pertaining subsumption of the intermediary service under the overarching umbrella of the DFB rules. The disproportionate full submission to DFB rules, which would strip the intermediaries of their possibility of recourse to ordinary justice, could be just as effectively replaced by a proper enforcement by the DFB of the registration rules themselves. Moreover, the Court found it unclear why the DFB would not be able to safeguard the goals pursued by the DFB Regulations before ordinary courts. [42]

Unlike the registration obligation, the duty to submit a criminal record along with the duty to pay a registration fee were seen as justified and thus proportionate in the eyes of the Court. Due to a potentially large impact of the intermediary activity on competition stemming from the potential influence on players and clubs, no less restrictive measure other than a registration duty could be put in place in order to safeguard the transparency of the football leagues. Moreover, considering the utmost necessity to protect the minors, the duty to submit a criminal record is clearly justified. Since the intermediaries financially benefit from their activity, the pertaining registration fee could also be deemed as a proportionate measure.[43]

The third addressed measure, i.e. the remuneration disclosure requirement, was also seen as justified by the Court. The legitimate aims set out in the previous paragraph were also to be pursued through the disclosure of agreements entered into and remuneration paid to the intermediaries. Such measures represented suitable means for controlling the intermediaries’ behaviour and were thus necessary and proportionate.[44]

The same can be said of the prohibition of acceptance of intermediary transfer fees for future transfers. In this context, the premature termination of contracts between clubs and players represented a major incentive for the intermediaries and at the same time a major source of revenue for clubs. The possibility of claiming a share of the transfer fees would therefore draw the intermediaries into seeking actively an early contract termination, as the new Regulations’ provisions were aimed at preventing such external influence, they are considered justified and proportionate.[45]

Fifthly, the imposition of flat-rate transfer fees was deemed unjustified by the Court, since it prohibited the agreed fee to be expressed in percentage pertaining to the cumulative transfer sum. This reinforced doubts that had previously been expressed about the proportionality of the parent FIFA Regulations provision, namely Article 7. Contrary to DFB’s arguments that such a scheme only required an a priori determination of the fee, the Court was not of the opinion that such a restrictive interpretation was appropriate, and that it could also lead to interpreting the provision in the way to detach the flat-rate fee entirely from the transfer sum. In other words, clubs would only be allowed to pay a prefixed amount that could not be expressed in percentage of the entire transfer sum. The Court also had doubts as to how such a restriction would serve the previously mentioned purposes.[46]

Last but not least, the Court also found the prohibition of remuneration of intermediaries of minors having the status of licensed players to be unjustified and disproportionate. By refusing the DFB’s argument to draw parallels with legal representation, the Court rather focused on the potential vulnerability of minors and their susceptibility to influence from the intermediaries, making this the crucial argument for (non)justification of the prohibition.[47] Stressing the legitimacy of a special protection of minors, who would due to their age and consequent inexperience rely heavily on the advice of the intermediaries, it also drew the line between the players plying their trade in the first and second league (licensed players) and others who participated in lower leagues. In the latter case a particular attention ought to have been given to minors brought to Germany from abroad.[48] It was only obvious, according to the Court, that minors playing in the lower leagues should benefit from a higher level of protection due to their stronger economic dependency to the intermediaries and hence susceptibility to their instructions. Minor licensed players, however, due to their market position alone warrant no such protection. Moreover, the significant disproportion of the amount of money spent on transfer fees for licensed minors makes such a prohibition in this ambit even more restrictive.[49]

Summed up, the Court deemed three out of six of the claimant’s legal missiles to have hit their target. First, the intermediaries may still be registered with the DFB without subjecting to its authority. Second, the prohibition of flat-rate transfer fees was unjustified, and third, the prohibition of remuneration of intermediaries of licensed minor players also exceeded the borders of necessity.[50] Since an injunction decision required an imminent and pending danger to be substantiated, as anticipated above, the Court circumvented the DFB’s argument that the claimant had almost a year, hence enough time, to get acquainted with the Regulations, by saying that Article 1(2) of the FIFA Regulations merely provided a minimum compulsory basis to be implemented, and that the DFB adopted substantially different Regulations pursuant Article 1(3) of the FIFA Regulations, leaving significantly less time for the claimant to comply.[51] The reference to previous FIFA Regulations met the same end, since the former pertained only to natural and not to legal persons.[52] 

Side-stepping Article 102 TFEU?

While the Court went to significant depths when analysing the case through the prism of Article 101 TFEU, it quite surprisingly almost completely refused to be drawn into the assessment of the matter through Article 102 TFEU, despite admitting, hence quite possibly just elegantly restating Piau,[53] to a possible existence of a collective dominant position by the DFB and its related associations on the market of intermediary service provision.[54] It merely concluded that there was no abuse in the sense of Article 102 TFEU.[55] One may find this curious at the very least, since the Court itself stated that DFB imposed its rules on non-members, intermediaries in this case, through economic pressure stemming from its monopolistic position on the market in question, which could to a certain extent at least be deemed as abusive.[56]

The epilogue or merely the end of Round One?

With the battle dust temporarily subsided, the DFB has seemingly complied with the Court’s injunction decision by issuing a note in which it restated the judgment’s tenor and informed the interested parties (intermediaries) of an ongoing possibility of a non-binding registration with DFB. The truce may only be a temporary one though, since the DFB has through its president already announced to pursue the matter in the main proceedings and a battle won does not necessarily mean that the war has been won.[57] Regardless of the outcome in Germany though, the issue carries a larger relevance. Since some of the DFB Regulations provisions, addressed in the hitherto analyzed injunction decision, resemble to a large extent if not entirely those embedded in the FIFA Regulations (e.g. the suspended Article 7(7) of DFB Regulations and Article 7(8) of FIFA Regulations),[58] one may wonder if, considering the already pending complaint of the of the Association of Football Agents (AFA) to the Commission,[59] legal challenges of the intermediaries regulations in other countries may only be a matter of time. Especially, since apparently these days EU law conveniently happens to be “available in every drug store”.

[1] R. Zemeckis, B. Gale, Back to the Future (Universal Pictures, 1985).

[2] Case C-415/93, Union royale belge des sociétés de football association ASBL v Jean-Marc Bosman ao, [1995] ECR I-04921.

[3] See inter alia Case AZ: 3 Ca 1197/14, Heinz Müller v 1. FSV Mainz 05, Arbeitsgericht Mainz, 19 March 2015 ; Case 2013/11524/A, Daniel Striani ao v UEFA, Tribunal de première instance francophone de Bruxelles, Section Civile, 29 May 2015.

[4] Case Az. 2-06 O 142/15*, Firma Rogon Sportmanagement v Deutschen Fußball-Bund (DFB), Landgericht Frankfurt am Main, 29 April 2015.

[5] DFB-Reglement für Spielvermittlung, adopted on 13 March 2015.

[6] Treaty on the Functioning of the European Union (TFEU), Consolidated Version, O.J. 2012, C326, 26 October 2012 and as amended by the Croatian Accession Treaty, O.J. 2012, L112/1.

[7] FIFA Regulations on Working with Intermediaries, adopted in Zürich on 21 March 2014.

[8] D. Lowen, A guide to the FA’s Regulations on Working with Intermediaries (www.lawinsport.com, 17 February 2015), <http://www.lawinsport.com/articles/item/a-guide-to-the-fa-s-regulations-on-working-with-intermediaries>.

[9] D. Lowen, FIFA’s Regulation on Working with Intermediaries (T.M.C. Asser Instituut – Summer Programme, 30 June 2015), pp. 2.

[10] N. De Marco, The new FA Intermediaries Regulations & disputes likely to arise (www.lawinsport.com, 31 March 2015), <http://www.lawinsport.com/articles/item/the-new-fa-intermediaries-regulations-disputes-likely-to-arise>.

[11] Focus, Streit mit DFB: Gericht gibt Spielervermittler in Teilen Recht (www.focus.de, 30 April 2015), <http://www.focus.de/regional/frankfurt-am-main/fussball-streit-mit-dfb-gericht-gibt-spielervermittler-in-teilen-recht_id_4650008.html>.

[12] Article 1(2) FIFA Regulations, cited supra note 7: ”Associations are required to implement and enforce at least these minimum standards/requirements in accordance with the duties assigned in these regulations, subject to the mandatory laws and any other mandatory national legislative norms applicable to the associations. Associations shall draw up regulations that shall incorporate the principles established in these provisions.”

[13] Rogon v DFB, cited supra note 4, paras. 15-16.

[14] Article 1(3) FIFA Regulations, cited supra note 7: “The right of associations to go beyond these minimum standards/requirements is preserved.”

[15] Arts. 3(2), 3(3) DFB-Reglement für Spielvermittlung, cited supra note 5.

[16] Rogon v DFB, cited supra note 4, paras. 16-17: “Mit dieser Erklärung erkennt der Vermittler das Reglement auch für sich als verbindlich an und unterwirft sich damit der Verbandshoheit des Antragsgegners einschliesslich der Sportgerichtsbarkeit.”

[17] Ibid., para. 19.

[18] Ibid., paras. 32-39.

[19] Gesetz gegen Wettbewerbsbeschränkungen (GWB), (BGBl. I S. 1554), 26.07.2011.

[20] Rogon v DFB, cited supra note 4, paras. 43-45.

[21] Ibid., para. 46.

[22] Case T-193/02, Laurent Piau v Commission, [2005] ECR II-00209, para. 70.

[23] Rogon v DFB, cited supra note 4, para. 50.

[24] Case 71/74, Nederlandse Vereniging voor de fruit- en groentenimporthandel, Nederlandse Bond van grossiers in zuidvruchten en ander geimporteerd fruit "Frubo" v Commission, [1975] ECR 00563, para. 17.

[25] Rogon v DFB, cited supra note 4, para. 51.

[26] Case 123/83, Bureau national interprofessionnel du cognac (BNIC) v Guy Clair, [1985] ECR 00391, para. 17.

[27] Bosman, cited supra note 2, para. 127.

[28] Case C-176/96, Jyri Lehtonen and Castors Canada Dry Namur-Braine ASBL v Fédération royale belge des sociétés de basket-ball ASBL (FRBSB), [2000] ECR I-02681, paras. 53-60.

[29] Piau, cited supra note 22, para. 73: “As regards, second, the concept of a decision by an association of undertakings...This is therefore an economic activity involving the provision of services, which does not fall within the scope of the specific nature of sport, as defined by the case-law.”

[30] Ibid.

[31] Rogon v DFB, cited supra note 4, paras. 52-53.

[32] Ibid., para. 55.

[33] Piau, cited supra note 22, paras. 112-115.

[34] Rogon v DFB, cited supra note 4, paras. 57-58.

[35] Case C-309/99, J.C.J. Wouters ao v Algemene Raad van de Nederlandse Orde van Advocaten, [2002] I-01577, para. 95.

[36] Rogon v DFB, cited supra note 4, paras. 59-61.

[37] Case C-519/04 P, David Meca-Medina and Igor Majcen v Commission, [2006] ECR I-06991.

[38] Rogon v DFB, cited supra note 4, paras. 63-64.

[39] Piau, cited supra note 22, paras. 100-104.

[40] Rogon v DFB, cited supra note 4, paras. 66-68.

[41] Ibid., paras. 69-70.

[42] Ibid., paras. 72-73.

[43] Ibid., paras. 75-78.

[44] Ibid., para. 80.

[45] Ibid., paras. 83-84.

[46] Ibid., paras. 86-87.

[47] Ibid., paras. 89-91.

[48] Ibid., para. 93.

[49] Ibid., para. 94: “Für die Vermittlung von Lizenzspielern ist eine derartige Beschränkung allerdings unverhältnismäÿig. Lizenzspieler der ersten und zweiten Bundesliga sind nicht in dem Masse schutzbedürftig wie Vertragsspieler der unteren Ligen.”

[50] Handelsblatt, Gericht gibt Spielervermittler teils recht (www.handelsblatt.com, 30 April 2015),<http://www.handelsblatt.com/sport/fussball/streit-mit-dfb-gericht-gibt spielervermittler-teils recht/11716170.html>.

[51] Rogon v DFB, cited supra note 4, para. 104.

[52] Ibid., para. 105.

[53] Piau, cited supra note 22, paras. 117-118

[54] Rogon v DFB, cited supra note 4, paras. 98-99.

[55] Rogon v DFB, cited supra note 4, para. 100.

[56] Ibid., para. 96: “Hier geht es jedoch darum, dass die Antragsgegnerin aufgrund ihrer Monopolstellung Dritte faktisch in die Verbandsherrschaft zwingt, indem sie Verbandsangehörige mit Sanktionen bedroht, sollten diese nicht auf die Antragstellerin im Sinne einer Zustimmung zur Vermittlererklärung einwirken. Insofern fehlt es an der freiwilligen Unterwerfung; es handelt sich vielmehr um eine durch wirtschaftlichen Druck erzwungene Unterwerfung eines nicht verbandsangehörigen Dritten.”

[57] Hamburger Abendblatt, Landgericht bestätigt teilweise neue Spielerberater-Regeln (www.abendblatt.de, 30 April 2015), <http://www.abendblatt.de/sport/article205286615/Landgericht-bestaetigt-teilweise-neue-Spielerberater-Regeln.html>.

[58] Article 7(8) FIFA Regulations, cited supra note 7: “Players and/or clubs that engage the services of an intermediary when negotiating an employment contract and/or a transfer agreement are prohibited from making any payments to such intermediary if the player concerned is a minor ...”

[59] D. Lowen, cited supra, note 8.

The European Commission’s competition decisions in the area of sport, which set out broad principles regarding the interface between sports-related activities and EU competition law, are widely publicized. As a result of the decentralization of EU competition law enforcement, however, enforcement activity has largely shifted to the national level. Since 2004, national competition authorities (NCAs) and national courts are empowered to fully apply the EU competition rules on anti-competitive agreements (Article 101 TFEU) and abuse of a dominant position (Article 102 TFEU).

Even though NCAs have addressed a series of interesting competition cases (notably dealing with the regulatory aspects of sport) during the last ten years, the academic literature has largely overlooked these developments. This is unfortunate since all stakeholders (sports organisations, clubs, practitioners, etc.) increasingly need to learn from pressing issues arising in national cases and enforcement decisions. In a series of blog posts we will explore these unknown territories of the application of EU competition law to sport.

We kick-start the series with a recent investigation of the Swedish National Competition Authority (NCA) into a so-called duty of loyalty clause applied by the Swedish Bodybuilding and Fitness Federation (Svenska Kroppskulturförbundet, SKKF).[1]

Source: http://www.scmp.com/photos/recent/all/1046780

The facts

The SKKF is the only national member of the International Bodybuilding Federation (IFBB) and organises various championships in the sport of bodybuilding and fitness in Sweden. It is essential for Swedish clubs, individual athletes, and officials to be a member of the SKKF as this is prerequisite for participation in IFBB international competitions.

The IFBB’s rules and regulations form an integral part of the SKKF’s Statutes. According to the SKKF’s rules, members who compete or otherwise participate in contests that are not approved or authorised by the SKFF or IFBB can be fined or suspended (i.e. the duty of loyalty clause). Athletes who have taken part in an unsanctioned event must also test for doping, at their own expenses, before they are allowed to compete at SKKF or IFBB events again.

In October 2013, BMR Sport Nutrition AB, a manufacturer of nutritional and bodybuilding supplements that also occasionally organises unsanctioned bodybuilding and fitness events in Sweden, filed a complaint before the NCA alleging that this rule violates Article 101 TFEU and Chapter 2, Article 1 of the Swedish Competition Act as it prevents event organisers from effectively competing with the SKKF (i.e. they are deprived from the chance to gather the human resources necessary for a successful event). The complainant submitted evidence that the threat of a fine and/or the withdrawal of their license by the SKKF effectively deterred athletes from participating in non-sanctioned events.

The context

The Swedish bodybuilding case follows a 2011 decision of the NCA, which ordered the Swedish Automobile Sports Federation (Svenska Bilsportförbundet, SBF) to abolish its rules preventing members from participating in motorsport events not authorized by the KKF.[2] On appeal by SBF, the Swedish Market Court upheld the decision in its entirety.[3]

This “precedent” case dealt with two duty of loyalty clauses in the SBF’s Common Rules prohibiting officials and contestants, licensed by the SBF, to officiate or participate in motor sport events other than those organised by the SBF or its member clubs. A violation of these provisions could result in a fine and/or withdrawal of the licence to officiate or compete in SBF events.

The NCA and the Market Court established that the contested rules constituted a decision by an association of undertakings. While the NCA had only applied national competition law, the Market Court, having defined the organisation of motorsport competitions in Sweden as the relevant product market, found that trade between the Member States was affected and therefore also applied Article 101 TFEU. According to the Court, the mere existence of the rules considerably distorted competition because they led to an absolute ban for SBF members to participate in non-sanctioned events. It concluded that, even if the rules would be regarded as serving a legitimate objective, the total ban could not be considered proportional to achieving such an objective. Moreover, the Court concluded that the restriction of competition could not benefit from an exemption under Article 101(3) TFEU or Chapter 2, Article 1 of the Swedish Competition Act.

While the Market Court’s judgment is far from innovative and carefully followed the proportionality test adopted by the Court of Justice in Meca-Medina, the case drew much media attention and raised concerns and criticism from the Swedish sports movement. Having demonstrated the remedial potential of EU competition law to challenge organisational sporting rules, it was only a matter of time before further national enforcement action would result from this case. 

The outcome

In a statement responding to the filing of the complaint by BMR Sport Nutrition AB, the chairman of the SKKF contested the apparent analogy with the SBF (motorsport) case. He essentially put forward three reasons. First, the SKKF is a non-profit organisation that pursues an aim in the general interest (i.e. the promotion of sport) and reinvests all its income, which is insufficient to cover its costs, in its sports activities, e.g. to fund education and training activities, doping tests, and travel expenses of the national team. This precludes the assumption that it pursues an economic activity. It follows that the SKKF cannot be regarded as an undertaking for the purposes of competition law (contrary to commercially successful sports associations). Second, the SKKF does not act independently of the will of its members. Similar to trade unions, member athletes voluntarily submit themselves to the applicable regulations when they join a member club. They can move to change certain rules if they find, in a true democratic spirit, a majority for such change. Alternatively, member athletes can choose to leave their club and join another association. Third, the right of freedom of association excludes the rule-making powers of the SKKF from the ambit of the competition rules.

Nevertheless, following several meetings between the NCA and the SKKF, the latter committed no longer to suspend or fine athletes, coaches, officials or judges that participate in non-sanctioned events.[4] The requirement that they must test for doping, at their own expense, was not abolished. According to the SKFF, this requirement was necessary to comply with the IFBB anti-doping rules, which conform to the provisions of the World Anti-Doping Code.

Given the commitment of the SKKF to no longer apply the duty of loyalty clause, the NCA decided to close the investigation without concluding whether competition law had been infringed.

Commentary

Those familiar with sports-related competition law cases will surely recognize the arguments of the chairman of the SKKF to assert immunity from the application of the competition rules. While they have been tried and tested many times, also before the Union courts, these arguments keep popping up. So let’s take a closer at why they are not accepted.

Regarding the claim that the SKKF is a non-profit organisation that exclusively aims to promote the development of the sport, it must be recalled that – if there still was any doubt - in Meca-Medina the Court of Justice made clear that the qualification of a rule as “purely sporting” was insufficient to remove the body adopting that rule (or the person engaging in the activity covered by it) from the scope of the Treaty. It thus must be examined, irrespective of the nature of the rule, whether the specific requirements of the various provisions of the Treaty are met. For the purpose of the competition rules, the notion of “undertaking” is a core jurisdictional element. According to established case law, this concept covers “any entity engaged in an economic activity regardless of the legal status of the entity or the way in which it is financed”.[5]

In an attempt to escape the bite of the competition rules, various other sports associations have time and again asserted that they cannot be regarded as “undertakings” because their objective is not the pursuit of economic interests. Even when only considering their regulatory functions, this reasoning finds no support in the case law. The Court of Justice has consistently held that the concept of undertaking does not presuppose a profit-making intention. The fact that entities are non-profit making has no effect on their classification as undertakings.[6] Similarly, the fact that entities pursue cultural or social activities does not in itself prevent these activities from being regarded as economic.[7]

In the case at hand, it is clear that in addition to the SKKF, even assuming that it organises bodybuilding and fitness events without seeking to make profit, other entities like BMR Sport Nutrition AB are also engaged in that activity (and do seek to make a profit). The SKKF offers goods or services on a market in competition with others. The success or economic survival of the SKKF ultimately depends on it being able to impose its services to the detriment of those offered by other event organisers. Consequently, the SKKF must be considered as an undertaking engaged in the markets for the organisation and marketing of bodybuilding and fitness events.

Regarding the somewhat chucklesome claim that the SKKF should be qualified as a trade union (or other professional association) that cannot act independently of the will of its members, it is sufficient to stress that Article 101 TFEU also applies to “associations of undertakings”. A federation like the SKKF, the beacon of democracy it may be, is not an association of employees but (also) of member clubs that engage in economic activities. Hence, the result of the delimitation between the federation acting “in its own right” or “merely as an executive organ of an agreement between its members” is irrelevant: Article 101 TFEU still applies to its regulations.

Regarding the claim based on the principle of freedom of association, indeed protected in the Swedish constitution as well as in the EU legal order, it is difficult to see how the duty of loyalty clause could be considered an inevitable result thereof. In any event, the Court of Justice has made clear that this right cannot be so absolute as to afford sports federations’ complete immunity from EU law.[8] In other words, the need to guarantee sports’ right of self-regulation cannot be a blank check to avoid scrutiny of measures that may conceal the pursuit of economic interest. Provided that its rules are proportional to a legitimate objective, SKKF should have nothing to fear from the competition rules.

So contrary to what the chairman of the SKKF contented, the analogy between its rule and the contested rule in the SBF (motorsport) case was accurate. A confrontation with this inconvenient truth was sufficient to convince the SKKF to commit itself to no longer suspend or fine athletes, coaches, officials or judges for participating in non-sanctioned competitions. That the requirement of a doping test (for those having participated in competing events) could remain clearly illustrates that competition law will leave unscratched restrictive sporting rules that are deemed inherent and proportionate to the organisation and proper conduct of sport. It almost makes you wonder what all the fuss is about when competition law confronts the world of sport.

One final note: the contested “SKKF” rule is the national equivalent of the clause contained in the IFBB Constitution (which forms an integral part of the SKKF’s statutes). Article 19.4.7 stipulates that:

“Any athlete or official who participates in a competition or event not approved or sanctioned by the IFBB, may be fined, suspended or expelled. The amount of the fine as well as the suspension period will be decided by the IFBB Disciplinary Commission … Once the suspension has been completed and before participating in an IFBB competition or event, the athlete must be drug tested at his or her own expenses”

Participation in an event or competition includes (but is not limited to!) competing, guest posing, giving a seminar, lecture or similar presentation, judging, officiating, allowing the use of one’s name and/or likeness for promotional purposes, and/or taking part in a non-IFBB sanctioned competition or event in any other way, shape or form.

To the IFBB and all other European member federations, who have to the author’s knowledge not decided to no longer enforce or abolish this rule: beware!

[1] Swedish Competition Authority (Konkurrensverket), 28 May 2014, Bodybuilding and Fitness Competitions, Decision dnr. 590/2013, http://www.kkv.se/upload/Filer/Konkurrens/2014/13-0590.pdf

[2] Swedish Competition Authority (Konkurrensverket) 13 May 2011, Swedish Automobile Sports Federation, Decision dnr. 709/2009, available at http://www.kkv.se/upload/Filer/Konkurrens/2011/Beslut/09-0709.pdf

[3] Swedish Market Court's ruling 2012:16 in Case A 5/11, Svenska Bilsportförbundet v Konkurrensverket (December 20, 2012), http://www.kkv.se/t/NewsArchive.aspx?id=529

[4] The SKKF notified its member athletes and clubs of the changes via its newsletter and website.

[5] Case C-41/90 Höfner and Elser [1991] ECR I-1979, para. 21.

[6] See e.g. Case C-222/04 Ministero dell'Economia e delle Finanze v Cassa di Risparmio di Firenze SpA and others [2006] ECR I-289; Case C-475/99 Firma Ambulanz Glöckner v Landkreis Südwestpfalz [2001] ECR I-8089; Joined Cases 209/78 to 215/78 and 218/78 Van Landewyck v Commission [1980] ECR 3125; C-244/94 Fédération Française des Sociétés d’Assurances and others v Ministère de l'Agriculture [1995] ECR I-4013; Joined Cases C-115/97 to C-117/07 Brentjens’ Handelsonderneming BV v Stichting Bedrijfspensioenfonds voor de Handel in Bouwmaterialen [1999] ECR I-6025.

[7] See e.g. Joined case C-180/98 to C-184/98 Pavel Pavlov and Others v Stichting Pensioenfonds Medische Specialisten [2000] ECR I-6451; Case C‑218/00 Cisal [2002] ECR I‑691.

[8] Case C-415/93 Union Royale Belge des Sociétés de Football Association and others v Bosman and others [1995] ECR I-4921, paras. 79-80

On 21 January 2015, the Court of arbitration for sport (CAS) rendered its award in the latest avatar of the Mutu case, aka THE sports law case that keeps on giving (this decision might still be appealed to the Swiss Federal tribunal and a complaint by Mutu is still pending in front of the European Court of Human Right). The decision was finally published on the CAS website on Tuesday. Basically, the core question focuses on the interpretation of Article 14. 3 of the FIFA Regulations on the Status and Transfer of Players in its 2001 version. More precisely, whether, in case of a dismissal of a player (Mutu) due to a breach of the contract without just cause by the player, the new club (Juventus and/or Livorno) bears the duty to pay the compensation due by the player to his former club (Chelsea). Despite winning maybe the most high profile case in the history of the CAS, Chelsea has been desperately hunting for its money since the rendering of the award (as far as the US), but it is a daunting task. Thus, the English football club had the idea to turn against Mutu’s first employers after his dismissal in 2005, Juventus and Livorno, with success in front of the FIFA Dispute Resolution Chamber (DRC), but as we will see the CAS decided otherwise[1].

      I.         Facts and Procedure of the Mutu Case

The Mutu saga is probably one of the most well known sagas in the sports law world (with the unavoidable Bosman case and the up and coming Pechstein one). It cumulates the glamour drama of a star’s downfall due to a positive cocaine test and many important legal developments.

The saga started in July 2004 with a private drug test conducted by Chelsea on Mutu that turned out to be positive to cocaine. The club issued a fine and a warning. But, in October 2004, Mutu was again tested positive to cocaine, this time by the English FA. Upon this finding, and Mutu’s admission of having ingested cocaine, Chelsea decided to terminate his contract on 28 October 2004. On 29 January 2005 the player was registered at Livorno, before being transferred two days later to Juventus. Juventus had reached its quota of non-EU players it could recruit from outside Italy and used this strategy to circumvent the Italian rules applicable at that time.

Meanwhile, Mutu had challenged in front of the FA’s Appeals Committee (FAPLAC) the decision of Chelsea to terminate his employment contract. In April 2005, the FAPLAC decided that Mutu had committed a breach of his employment contract without just cause. Mutu appealed this decision to the CAS without success (CAS 2005/A/876). In May 2006, Chelsea launched a complaint before the DRC to obtain compensation against the player on the basis of the contractual breach without just cause. The DRC in its decision from 26 October 2006 (available here) held that it could not pronounce itself on the matter and that Chelsea had to turn to FAPLAC. Chelsea appealed the decision to the CAS, which enjoined the DRC to decide on the matter (CAS 2006/A/1192). Consequently, the DRC decided on 7 May 2008 to award €17, 173 990 in damages to Chelsea. Unsurprisingly, Mutu decided to appeal the decision to the CAS, he was especially contesting the amount of compensation awarded, which on 31 July 2009 endorsed the decision of the DRC (CAS 2008/A/1644). It even held that the damage claims of Chelsea were higher, but decided it could not go ultra petita and award a higher sum to the club. Mutu, which had unsuccessfully challenged the independence and impartiality of one of the arbitrators due to his previous participation in the first Mutu case (CAS 2005/A/876), went on to contest the validity of the award in front of the Swiss Federal Tribunal (SFT) mainly on this basis. In its decision (4A_458/2009), the SFT rejected Mutu’s claims regarding the lack of independence of the arbitrator, a decision that has attracted widespread criticisms in the literature.[2] Moreover, it also held that the amount of compensation awarded was not a restriction to free movement in the sense of the Bosman ruling and could not amount to an infringement of Mutu’s personality rights. Thereafter, Mutu decided to continue his fight in yet another forum: the European Court of Human Rights (40575/10).

Chelsea had the final award giving it the right to damages, but still needed to get hold on the money. To do so, it even asked (and obtained) for the recognition and the enforcement of the award in the US (see here), where Mutu was expected to have some property. Nevertheless, Mutu went on to play for smaller and smaller teams, thus earning less and less, and Chelsea’s hope of getting paid in full faded away. However, on 15 July 2010, five years after Mutu’s move to Italy’s Serie A in the first place, Chelsea decided to submit a petition to the FIFA DRC against Juventus and Livorno, asking the DRC to find them jointly liable for the awarded compensation. The claim was based on Article 14.3. of the RSTP 2001, stating that: "If a player is registered for a new club and has not paid a sum of compensation within the one month time limit referred to above, the new club shall be deemed jointly responsible for payment of the amount of compensation." The DRC, in an unpublished decision dated 25 April 2013 (see here and here), followed the interpretation of Article 14.3. RSTP suggested by Chelsea and found that “under the clear wording of Article 14.3, the Player's New Club was automatically jointly responsible for the payment of the Awarded Compensation due by the Player, should the latter fail to fulfil his obligations within a month of notification of the relevant decision”.[3] This provision would make “no distinction between the termination of the contract by a player without just cause and the termination of a contract by a club with just cause”.[4] It also held that "the registrations of the player with both [Appellants] were so closely connected that, given the exceptional circumstances of this specific matter, both Juventus and Livorno should be considered the player's new club in the sense of art. 14 of the Application Regulations”.[5]

Both Juventus and Livorno decided to appeal this decision to the CAS, which in its award decided to reject the DRC’s reasoning.

    II.         The Meaning of Article 14.3 FIFA RSTP

The whole case focuses on the interpretation of the wording of Article 14.3 of the RSTP 2001. Does it mean that every club, whatever the circumstances, must pay compensation when it hires a player that bears the responsibility of the breach of his contract? Or, does it restrict this duty to the cases where the breach can be reasonably imputed to the will of the player to leave his former club?

A. Contractual or statutory interpretation?

In order to determine the interpretative tools to be used to identify the meaning of article 14.3 RSTP, the Panel must first clarify the nature of Article 14.3 under Swiss law.[6] Basically, is the provision of a contractual or quasi-statutory nature? The Panel “does not consider that there is a contractual relationship between the Appellants and Chelsea”.[7] Indeed, “[i]f there is no contractual relationship between an indirect member (i.e. any of the Parties) and a sport federation (i.e. FIFA), the conclusion should be the same as regards the relationship between two indirect members of the same federation”.[8] Furthermore, the “[a]cceptance of general rules (such as FIFA Regulations) does not necessarily entail subjection to specific obligations when their scope must be determinable on the basis of minimum criteria”.[9] Thus, the question raised implies only the interpretation of the bylaw of a Swiss legal entity, FIFA.

The Panel highlights four methods of interpretation under Swiss law:

-  the literal interpretation ("interprétation littérale");

-  the systematic interpretation ("interprétation systématique");

-  the principle of purposive interpretation ("interprétation téléologique");

-  the principle of so-called "compliant interpretation" ("interprétation conforme").[10]

The “starting point” [11] is always the wording of the text. The Swiss Federal Tribunal recognizes that “[t]here is no reason to depart from the plain text, unless there are objective reasons to think that it does not reflect the core meaning of the provision under review”.[12] Moreover, when asked to interpret a law, the SFT “adopts a pragmatic approach and follows a plurality of methods, without assigning any priority to the various means of interpretation”.[13] However, the question is whether those interpretative methods should also apply to the (private) bylaws of a private association. The Panel notes that “[a]s regards the statutes of larger entities, it may be more appropriate to have recourse to the method of interpretation applicable to the law, whereas in the presence of smaller enterprises, the statutes may more legitimately be interpreted by reference to good faith”.[14] It finds that “FIFA's regulations have effects which are felt worldwide, and should therefore be subject to the more objective interpretation principles” applicable to Swiss laws.[15]

In short, the Panel is of the opinion that FIFA regulations, bylaws of an association under Swiss law, are to be interpreted analogously to national laws.

B. EU law as THE decisive contextual element to interpret the RSTP

The Panel first tries to interpret Article 14.3 on the basis of its wording. However, it is of the opinion that the wording is ambiguous and therefore “it is necessary to look beyond the wording of this provision”[16] and adopts what it calls a “contextual approach”.

In short, “the context surrounding the implementation of the RSTP 2001 is of crucial importance in interpreting Article 14.3”.[17] In the view of the Panel (and the appellants), this context is constituted by the application of EU law to sport and especially the Bosman case of the Court of Justice of the EU. Indeed, it is “[a]s part of the reform of the FIFA and UEFA rules following the Bosman decision, [that] FIFA adopted the RSTP 2001”.[18] Thus, the requirements set by the CJEU’s jurisprudence in sports matters are decisive to define the reach of the provisions included in the RSTP. Moreover, the rejection decision of the Commission regarding the complaint submitted against FIFA’s transfer regulations is also important.[19] Specifically, the Panel deduces from the Commission’s decision that it recognizes the need to sanction unilateral termination of contracts.[20]

In the present case, it is precisely the “contractual stability [that] is at the centre of the debate”.[21] In a nutshell, does the paramount objective of contractual stability justify that Juventus and Livorno be considered jointly liable for the breach of contract of Mutu leading to the termination by Chelsea of his contract?

In this regard, Chelsea considers that Article 14.3 “is designed to protect contractual stability by means of a deterrent, namely by ensuring that the parties who benefit from the player's breach – the player himself and his New Club – are not allowed to enjoy that benefit without paying compensation to the player's former club”.[22] While, Juventus and Livorno consider that “Article 14.3 – and FIFA regulations in general – are not meant to protect a club's bad investment”.[23] Which one of this two interpretations is EU law supporting? That is the question.

For the Panel “the Player was the author of his misfortune, but the Club was not required to terminate his employment if they still valued his services and preferred to hold him to his contract”. Indeed, “[t]he Club was entitled, not obliged, to dismiss him” and it “makes all the difference in terms of assessing the position of his subsequent employer(s) under the FIFA regulations, read in light of their object and purpose”.[24] As “Chelsea put an end to the Player's Employment Contract, no issue of contract stability, whose purpose was to safeguard the functioning and regularity of sporting competition, was at stake”.[25] Thus, “it strains logic for the club now to contend that the Appellants somehow enriched themselves by acquiring an asset (the player) which it chose to discard”.[26] Moreover, “the Panel finds it hard to understand how, in the name of contract stability, Chelsea's claim of € 17,173,990 against the Player is to be borne jointly and severally by the New Club, which has never expressed a specific agreement in this regard, had nothing to do with the Player's contractual breach, and was not even called to participate in the proceedings, which established the Awarded Compensation”.[27] Additionally, it seems “incongruous for Chelsea to try to seek an advantage from the fact that the New Club benefits from the Player’s services, whereas Chelsea was no longer interested in his service”.[28] Hence, “Chelsea's conduct appears to have had no other purpose than to increase its chances for greater financial compensation” and the Panel “does not see the connection between the damage being claimed and the interest of protecting legitimate contractual expectations”.[29] In other words, the interpretation of Article 14.3 RSTP supported by Chelsea does not fit the fundamental objective of this provision, as highlighted by its legislative context (mainly the Lethonen case of the CJEU and the Commission’s rejection decision in the competition law complaint against the FIFA transfer system) and cannot be followed.

Interestingly, the Panel also recognized that “[t]here must be a balance between the players’ fundamental right to free movement and the principle of stability of contracts, as supported by the legitimate objective of safeguarding the integrity of the sport and the stability of championships”.[30] In the present case, “[i]f the New Club had to pay compensation even if it is established that it bears no responsibility whatsoever in the breach of the Employment Contract, the player would be hindered from finding a new employer”.[31] Indeed, “it is not difficult to perceive that no New Club would be prepared to pay a multi-million compensation (or transfer fee), in particular for a player who was fired for gross misconduct, was banned for several months, and suffered drug problems”.[32] In short, “Chelsea's interpretation of Article 14.3 would bring the matter back into pre-Bosman times, when transfer fees obstructed the players' freedom of movement”.[33] This is unacceptable for the Panel. Had Chelsea’s interpretation been tolerated “the balance sought by the 2001 RSTP between the players' rights and an efficient transfer system, which responds to the specific needs of football and preserves the regularity and proper functioning of sporting competition would be upset”.[34] Consequently, this interpretation is deemed “incompatible with the fundamental principle of freedom to exercise a professional activity and is disproportionate to the protection of the old club's legitimate interests”.[35] Thus, the Panel concludes “that Article 14.3 does not apply in cases where it was the employer's decision to dismiss with immediate effect a player who, in turn, had no intention to leave the club in order to sign with another club and where the New Club has not committed any fault and/or was not involved in the termination of the employment relationship between the old club and the Player”.[36]

Conclusion

This award is of great interest, not so much for its solution - it is difficult to understand how the FIFA DRC could construct Article 14.3 RSTP as imposing a joint liability on Juventus and Livorno - as for the method used to reach it. The CAS had already in the past based its interpretation of the RSTP on its legislative history and especially on it being the result of a negotiation with the EU Commission in the aftermath of the Bosman ruling.[37] It is the first time, however, that it does so in such length and depth. This contextual reading of Article 14.3 tipped decisively the balance in favor of the appellants. Furthermore, it is a timely reminder for other CAS Panels that FIFA’s RSTP must be interpreted in conformity with EU law and especially the case law of the CJEU on the free movement of workers. If not, CAS awards will face problems at the enforcement stage, as highlighted by the recent SV Wilhelmshaven ruling of the OLG Bremen (see our comment here on the EU law dimension)[38]. This implies that the restrictions it imposes on the free movement of players must be justified by a legitimate objective recognized by the CJEU and be proportionate to attain this objective. In the present case, the interpretation of 14.3 promoted by the DRC runs counter to this requirement as it is not truly aimed at an acceptable legitimate objective and certainly not a proportionate mean to attain contractual stability. Nonetheless, this reasoning could also put into question previous interpretations of the FIFA RSTP. This is especially true for the case-law on the implementation of Article 17 RSTP. The Panel, conscious of the potential implication of the analysis used, is adamant that this case-law is compatible with an EU law conform interpretation. Yet, EU law scholars strongly oppose this view and it can be reasonably argued that the way damages are calculated in case of a breach of a contract under Article 17 is not compatible with the letter and spirit of EU law as applied to the transfer system in Bosman and after[39].

This case will set a resounding precedent for future CAS awards. Lawyers dealing with disputes involving the FIFA RSTP in front of the FIFA DRC and the CAS should take note of this development and introduce wider references to EU law in their briefs.

[1] For this article I have much profited from the outstanding research assistance of Thalia Diathesopoulou.

[2]G. Von Segesser, ‘Equality of Information and Impartiality of Arbitrators’, in P. Wautelet, T. Kruger, G. Coppens (eds), The Practice of Arbitration: Essays in Honour of Hans van Houtte

Hart, 2012, pp.45-51 and L. Beffa, ‘Challenge of International Arbitration Awards in Switzerland for Lack of Independence and/or Impartiality of an Arbitrator – Is it Time to Change the Approach?’ (2011) ASA Bulletin 598 et seq.

[3] CAS 2013/A/3365 & 3366, para 39.

[4] Ibid.

[5] Ibid

[6]Ibid, para. 121-136

[7] Ibid, para. 131

[8] Ibid, para. 131

[9] Ibid, para. 131

[10] Ibid, para.137

[11] Ibid, para.138

[12] Ibid, para.139

[13]Ibid,  para.139

[14]Ibid, para.139

[15]Ibid, para.140

[16]Ibid, para.148

[17]Ibid, para.149

[18]Ibid, para.151

[19]Ibid, para.156

[20]Ibid, para.157

[21]Ibid, para.158

[22]Ibid, para.159

[23]Ibid, para.160

[24]Ibid, para. 161

[25]Ibid, para. 163

[26]Ibid, para. 163

[27]Ibid, para. 165

[28]Ibid, para. 166

[29]Ibid, para. 168

[30]Ibid, para. 169

[31]Ibid, para. 172

[32] Ibid

[33] Ibid, para.174

[34]Ibid, para.174

[35]Ibid, para.174

[36]Ibid,  para.177

[37] ‘It must be remembered that the FIFA Regulations have been issued to regulate the legal and economic aspects of the transfer of players in accordance with the principle of free movement of workers as established by the EC treaty and substantiated by the European Court of Justice in its ruling of 15 December 1995 (case C-415/93), thereby taking the specific needs of professional football into account. In this context, any provisions in the FIFA regulations affecting the player’s freedom of movement should be interpreted narrowly.’ CAS 2004/A/691 FC Barcelona SAD v. Manchester United FC, para. 38; ‘However, the principle behind Art. 5 para. 5 of the Application Regulations is clear: the free movement of workers within the EU/EEA must not be restricted by the imposition of a requirement for the payment of sums by way of compensation for training and education in respect of a player to whom the training club does not offer a contract. In such a case, the failure to offer a contract is an important factor in the assessment of compensation. The compensation payable should not be of such an amount as would impede the player’s ability to move to a new club.’ CAS 2006/A/1125 Hertha BSC Berlin v. Stade Lavallois Mayenne FC, award of 1 December 2006, para. 25; ‘Finally, because of the potentially high amounts of compensation involved, giving clubs a regulatory right to the market value of players and allowing lost profits to be claimed in such manner would in effect bring the system partially back to the pre-Bosman days when players’ freedom of movement was unduly hindered by transfer fees and their careers and well-being could be seriously affected by them becoming pawns in the hands of their clubs and a vector through which clubs could reap considerable benefits without sharing the profit or taking corresponding risks. In view of the text and the history of article 17 par. 1 of the FIFA Status Regulations, allowing any form of compensation that could have such an effect would clearly be anachronistic and legally unsound.’ CAS 2007/A/1298 Wigan Athletic FC v/ Heart of Midlothian & CAS 2007/A/1299 Heart of Midlothian v/ Webster & Wigan Athletic FC & CAS 2007/A/1300 Webster v/ Heart of Midlothian, para. 81.

[38] A. Duval, ‘The Court of Arbitration for Sport  and EU law: Chronicle of an Encounter’, Maastricht Journal of European and Comparative Law, forthcoming.

[39] See, R. Parrish, ‘Article 17 of the FIFA Regulations on the Status and Transfer of Players: Compatibility with EU Law ‘Maastricht Journal of European and Comparative Law, forthcoming. See also, Pearson, G. (2015), Sporting Justifications under EU Free Movement and Competition Law: The Case of the Football ‘Transfer System’. European Law Journal, 21: 220–238.