Asser International Sports Law Blog

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

Luxembourg calls…is the answer from Nyon the way forward? Assessing UEFA’s response to the ECJ’s ISU judgment - By Saverio Spera

 

Editor's note: Saverio P. Spera is an Italian qualified attorney-at-law. He has practiced civil and employment law in Italy and briefly worked at the Asser International Sports Law Centre before joining FIFA in 2017. Until May 2024, he has worked within the FIFA legal division - Litigation Department, and lectured in several FIFA sports law programmes. In the spring of 2024 he has co-founded SP.IN Law, a Zurich based international sports law firm.

 

 

On 21 December 2023 a judicial hat-trick stormed the scene of EU sports law. That day, the European Court of Justice (the “ECJ”) issued three decisions: (i) European Superleague Company, SL v FIFA and UEFA (Case C-333/21); (ii) UL and SA Royal Antwerp Football Club v Union royale belge des sociétés de football association ASBL (Case C-680/21)and (iii) International Skating Union (ISU) v. European Commission – Case C-124/21.

These judgments were much scrutinised (see herehere and here) in the past 6 months. For the reader’s relief, this paper will not venture into adding another opinion on whether this was a fatal blow to the foundation of EU sports law or if, after all, the substantive change is minimal (as persuasively argued here). It will analyse, instead, UEFA’s recent amendments of its Statutes and Authorisation Rules governing International Club Competitions (the “Authorisation Rules”) and whether these amendments, clearly responding to the concerns raised in the ISU judgment with respect to the sports arbitration system,[1] might pave the way for other Sports Governing Bodies (SGBs) to follow suit and what the implications for CAS arbitration might be. More...

New Event! Diversity at the Court of Arbitration for Sport: Time for a Changing of the Guard? - Zoom In Webinar - 14 October - 4pm

On Thursday 14 October 2021 from 16.00-17.30 CET, the Asser International Sports Law Centre, in collaboration with Dr Marjolaine Viret (University of Lausanne), will be launching the second season of the Zoom-In webinar series, with a first episode on Diversity at the Court of Arbitration for Sport: Time for a Changing of the Guard?

The Court of Arbitration for Sport (CAS) is a well-known mainstay of global sport. It has the exclusive competence over challenges against decisions taken by most international sports governing bodies and its jurisprudence covers a wide range of issues (doping, corruption, match-fixing, financial fair play, transfer or selection disputes) including disciplinary sanctions and governance disputes. In recent years, the CAS has rendered numerous awards which triggered world-wide public interest, such as in the Semenya v World Athletics case or the case between WADA and RUSADA resulting from the Russian doping scandal (we discussed both cases in previous Zoom-In discussion available here and here). In short, the CAS has tremendous influence on the shape of global sport and its governance.

However, as we will discuss during this webinar, recent work has shown that the arbitrators active at the CAS are hardly reflective of the diversity of people its decisions ultimately affect. This in our view warrants raising the question of the (urgent) need to change the (arbitral) guard at the CAS. To address these issues with us, we have invited two speakers who have played an instrumental role in putting numbers on impressions widely shared by those in contact with the CAS: Prof. Johan Lindholm (Umea University) and attorney-at-law Lisa Lazarus (Morgan Sports Law). Johan recently published a ground-breaking monograph on The Court of Arbitration for Sport and Its Jurisprudence in which he applies empirical and quantitative methods to analyse the work of the CAS. This included studying the sociological characteristics of CAS arbitrators. Lisa and her colleagues at Morgan Sports Law very recently released a blog post on Arbitrator Diversity at the Court of Arbitration for Sport, which reveals a stunning lack of diversity (based on their calculations, 4,5% of appointed CAS arbitrators are female and 0,2% are black) at the institution ruling over global sport.


Guest speakers:


Moderators:


Register for free HERE.


Zoom In webinar series

In December 2020, The Asser International Sports Law Centre in collaboration with Dr Marjolaine Viret launched a new series of zoom webinars on transnational sports law: Zoom In. You can watch the video recordings of our past Zoom In webinars on the Asser Institute’s Youtube Channel.

Last call to register to the 2021 edition of the Sports Law Arbitration Moot - Deadline 1 December

Dear all,

Our Slovenian friends (and former colleague) Tine Misic and Blaž Bolcar are organising the second edition of the Sports Law Arbitration Moot (SLAM).

The best four teams of the SLAM competition will compete in the finals, which will be held in Ljubljana, Slovenia, on 30th and 31st March, 2021.

This is a great opportunity for students to familiarise themselves with the world of sports arbitration, to meet top lawyers and arbitrators in the field, and to visit beautiful Ljubljana.

Go for it!

You'll find more information and can register at https://sportlex.si/slam/en

Invalidity of forced arbitration clauses in organised sport…Germany strikes back! - By Björn Hessert

Editor's note: Björn Hessert is a research assistant at the University of Zurich and a lawyer admitted to the German bar.

 

The discussion revolving around the invalidity of arbitration clauses in organised sport in favour of national and international sports arbitral tribunals has been at the centre of the discussion in German courtrooms.[1] After the decisions of the German Federal Tribunal[2] (“BGH”) and the European Court of Human Rights[3] (“ECtHR”) in the infamous Pechstein case, this discussion seemed to have finally come to an end. Well…not according to the District Court (LG) of Frankfurt.[4] On 7 October 2020, the District Court rendered a press release in which the court confirmed its jurisdiction due to the invalidity of the arbitration clause contained in the contracts between two beach volleyball players and the German Volleyball Federation[5] (“DVV”) – but one step at a time. More...

The “Victory” of the Court of Arbitration for Sport at the European Court of Human Rights: The End of the Beginning for the CAS

My favourite speed skater (Full disclosure: I have a thing for speed skaters bothering the ISU), Claudia Pechstein, is back in the news! And not from the place I expected. While all my attention was absorbed by the Bundesverfassungsgericht in Karlsruhe (BVerfG or German Constitutional Court), I should have looked to the European Court of Human Rights in Strasbourg (ECtHR). The Pechstein and Mutu joint cases were pending for a long time (since 2010) and I did not anticipate that the ECtHR would render its decision before the BVerfG. The decision released last week (only available in French at this stage) looked at first like a renewed vindication of the CAS (similar to the Bundesgerichtshof (BGH) ruling in the Pechstein case), and is being presented like that by the CAS, but after careful reading of the judgment I believe this is rather a pyrrhic victory for the status quo at the CAS. As I will show, this ruling puts to rest an important debate surrounding CAS arbitration since 20 years: CAS arbitration is (at least in its much-used appeal format in disciplinary cases) forced arbitration. Furthermore, stemming from this important acknowledgment is the recognition that CAS proceedings must comply with Article 6 § 1 of the European Convention of Human Rights (ECHR), in particular hearings must in principle be held in public and decisions freely available to all. Finally, I will criticise the Court’s finding that CAS complies with the requirements of independence and impartiality imposed by Article 6 § 1 ECHR. I will not rehash the  well-known facts of both cases, in order to focus on the core findings of the decision. More...

Seraing vs. FIFA: Why the rumours of CAS’s death have been greatly exaggerated

Rumours are swirling around the decision (available in French here) of the Court of Appeal of Brussels in the case opposing RFC Seraing United to FIFA (as well as UEFA and the Belgian Football Federation, URSBFA) over the latter’s ban on third-party ownership. The headlines in various media are quite dramatic (see here and here), references are made to a new Bosman, or to a shaken sport’s legal system. Yet, after swiftly reading the decision for the first time on 29th August, I did not have, unlike with the Pechstein ruling of the Oberlandesgericht München, the immediate impression that this would be a major game-changer for the Court of Arbitration for Sport (CAS) and the role of arbitration in sports in general. After careful re-reading, I understand how certain parts of the ruling can be misunderstood or over-interpreted. I believe that much of the press coverage failed to accurately reflect the reasoning of the court and to capture the real impact of the decision. In order to explain why, I decided to write a short Q&A (including the (not water-proof) English translations of some of the key paragraphs of the decision).

 More...

Call for papers: Annual International Sports Law Conference of the International Sports Law Journal - 25 & 26 October - Asser Institute, The Hague

 Call for papers: Annual International Sports Law Conference of the International Sports Law Journal

Asser Institute, The Hague

25 and 26 October 2018

The editorial board of the International Sports Law Journal (ISLJ) is inviting you to submit abstracts for its second ISLJ Annual Conference on International Sports Law, which will take place on 25 and 26 October at the Asser Institute in The Hague. The ISLJ published by Springer in collaboration with Asser Press is the leading academic publication in the field of international sports law. Its readership includes academics and many practitioners active in the field. This call is open to researchers as well as practitioners. 

We are also delighted to announce that Prof. Franck Latty (Université Paris Nanterre), Prof. Margareta Baddeley (Université de Genève), and Silvia Schenk (member of FIFA’s Human Rights Advisory Board) have confirmed their participation as keynote speakers.

Abstracts could, for example, tackle questions linked to the following international sports law subjects:

  • The interaction between EU law and sport
  • Antitrust and sports regulation
  • International sports arbitration (CAS, BAT, etc.)
  • The functioning of the world anti-doping system (WADA, WADC, etc.)
  • The global governance of sports
  • The regulation of mega sporting events (Olympics, FIFA World Cup, etc.)
  • The transnational regulation of football (e.g. the operation of the FIFA Regulations on the Status and Transfer of Players or the UEFA Financial Fair Play Regulations)
  • The global fight against corruption in sport  
  • Comparative sports law
  • Human rights in sport 

Please send your abstract (no more than 300 words) and CV no later than 30 April 2018 to a.duval@asser.nl. Selected speakers will be informed by 15 May.

The selected participants will be expected to submit a draft paper by 1 September 2018. All papers presented at the conference are eligible for publication in a special edition of the ISLJ.  To be considered for inclusion in the conference edition of the journal, the final draft must be submitted for review by 15 December 2018.  Submissions after this date will be considered for publication in later editions of the Journal.

The Asser Institute will cover one night accommodation for the speakers and will provide a limited amount of travel grants (max. 300€). If you wish to be considered for a grant please justify your request in your submission. 

Stepping Outside the New York Convention - Practical Lessons on the Indirect Enforcement of CAS-Awards in Football Matters - By Etienne Gard

Editor’s Note: Etienne Gard graduated from the University of Zurich and from King's College London. He currently manages a project in the field of digitalization with Bratschi Ltd., a major Swiss law firm where he did his traineeship with a focus in international commercial arbitration.

1. Prelude

On the 10th of June, 1958, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, widely known as the “New York Convention”, was signed in New York by 10 countries.[1] This rather shy figure progressively grew over the decades to now reach 157 signatory countries, turning the New York Convention into the global recognition and enforcement instrument it is today. As V.V. Veeder’s puts it, “One English law lord is said to have said, extra judicially, that the New York Convention is both the Best Thing since sliced bread and also whatever was the Best Thing before sliced bread replaced it as the Best Thing.”[2]

However, among the overall appraisal regarding the New York Convention, some criticisms have been expressed. For instance, some states use their public policy rather as a pretext not to enforce an award than an actual ground for refusal.[3]  A further issue is the recurring bias in favor of local companies.[4] Additionally, recognition and enforcement procedures in application of the New York Convention take place in front of State authorities, for the most part in front of courts of law, according to national proceeding rules. This usually leads to the retaining of a local law firm, the translation of several documents, written submissions and one, if not several hearings. Hence, the efficiency of the New York Convention as a recognition and enforcement mechanism comes to the expense of both money and time of both parties of the arbitral procedure.

In contrast with the field of commercial arbitration, where the New York Convention is often considered the only viable option in order to enforce an award, international football organizations, together with the Court of Arbitration for Sport (“CAS”), offer an effective enforcement alternative. This article aims at outlining the main features of the indirect enforcement of CAS awards in football matters in light of a recent case. More...



Illegally obtained evidence in match-fixing cases: The Turkish perspective - By Oytun Azkanar

Editor’s Note: Oytun Azkanar holds an LLB degree from Anadolu University in Turkey and an LLM degree from the University of Melbourne. He is currently studying Sports Management at the Anadolu University.

 

Introduction

On 19 October 2017, the Turkish Professional Football Disciplinary Committee (Disciplinary Committee) rendered an extraordinary decision regarding the fixing of the game between Manisaspor and Şanlıurfaspor played on 14 May 2017. The case concerned an alleged match-fixing agreement between Elyasa Süme (former Gaziantepspor player), İsmail Haktan Odabaşı and Gökhan Sazdağı (Manisaspor players). The Disciplinary Committee acknowledged that the evidence relevant for proving the match-fixing allegations was obtained illegally and therefore inadmissible, and the remaining evidence was not sufficient to establish that the game was fixed. Before discussing the allegations, it is important to note that the decision is not only significant for Turkish football but is also crucial to the distinction between disciplinary and criminal proceedings in sports. More...

Report from the first ISLJ Annual International Sports Law Conference - 26-27 October at the T.M.C. Asser Instituut

Close to 100 participants from 37 different countries attended the first ISLJ Annual International Sports Law Conference that took place on 26-27 October 2017 in The Hague. The two-day programme featured panels on the FIFA transfer system, the labour rights and relations in sport, the protection of human rights in sport, EU law and sport, the Court of Arbitration for Sport, and the world anti-doping system. On top of that, a number of keynote speakers presented their views on contemporary topics and challenges in international sports law. This report provides a brief summary of the conference for both those who could not come and those who participated and would like to relive their time spent at the T.M.C. Asser Institute.More...

Asser International Sports Law Blog | The CAS and Mutu - Episode 4 - Interpreting the FIFA Transfer Regulations with a little help from EU Law

Asser International Sports Law Blog

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

The CAS and Mutu - Episode 4 - Interpreting the FIFA Transfer Regulations with a little help from EU Law

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.

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