Editor’s note: Professor Mitten is the Director of the National Sports Law Institute and the LL.M. in Sports Law program for foreign lawyers at Marquette University Law School in Milwaukee, Wisconsin. He currently teaches courses in Amateur Sports Law, Professional Sports Law, Sports Sponsorship Legal and Business Issues Workshop, and Torts. Professor Mitten is a member of the Court of Arbitration for Sport (CAS), and has served on the ad hoc Division for the XXI Winter Olympic Games in Sochi, Russia.

This Book Review is published at 26 Marquette Sports Law Review 247 (2015).

This comprehensive treatise of more than 700 pages on the Code of the Court of Arbitration for Sport (CAS) (the Code) is an excellent resource that is useful to a wide audience, including attorneys representing parties before the CAS, CAS arbitrators, and sports law professors and scholars, as well as international arbitration counsel, arbitrators, and scholars.  It also should be of interest to national court judges and their law clerks because it facilitates their understanding of the CAS arbitration process for resolving Olympic and international sports disputes and demonstrates that the Code provides procedural fairness and substantive justice to the parties, thereby justifying judicial recognition and enforcement of its awards.[1]  Because the Code has been in existence for more than twenty years—since November 22, 1994—and has been revised four times, this book provides an important and much needed historical perspective and overview that identifies and explains well-established principles of CAS case law and consistent practices of CAS arbitrators and the CAS Court Office.  Both authors formerly served as Counsel to the CAS and now serve as Head of Research and Mediation at CAS and CAS Secretary General, respectively, giving them the collective expertise and experience that makes them eminently well-qualified to research and write this book.

The extensive commentary and materials in this prodigious work are useful in understanding the history and operation of the CAS, as well as the process by which CAS arbitration resolves disputes and establishes an evolving, rich body of lex sportiva. The book’s many useful features include the following: a thorough and detailed index; a table of acronyms; integrated discussion of the Code’s provisions and their application by CAS panels, their relationship to and consistency with the Swiss Private International Law Act (PILA) requirements along with relevant comparisons to the Swiss Code on Civil Procedure (Swiss CCP), and judicial interpretation through review of CAS awards by the Swiss Federal Tribunal (SFT); thousands of footnotes and citations, reflecting the product of exhaustive research; comparisons to analogous International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA), and United Nations Commission on International Trade Law (UNCITRAL) rules; an extensive bibliography; numerous charts and graphical illustrations; several sample provisions and documents; and comprehensive lists of all referenced CAS awards and SFT cases reviewing CAS awards.

Based on my perspective as a sports law professor and a CAS arbitrator who also arbitrates domestic sports, commercial, and consumer disputes in the United States, I found the authors’ discussion of many of the Code’s provisions to be particularly helpful and/or interesting.

Article R27 provides that the Code’s procedural rules apply when the “parties have agreed to refer a sports-related dispute to CAS.”[2]  A variety of important issues are carefully addressed, including the authority of a CAS panel to determine its jurisdiction (“Kompetenz- Kompetenz”), which also is discussed in connection with Article R39 (in which this authority is explicitly conferred), as well as the form and material conditions Article 178 of the PILA requires for a valid arbitration clause and for CAS jurisdiction to exist.  In addition, there is a thorough discussion of the relationship and differences among CAS jurisdiction, the arbitrability of particular disputes, the legal standing of the parties whose substantive rights are affected under Swiss law, and the relevance of foreign laws in resolving these issues.  Several examples of clauses permitting CAS jurisdiction to resolve sports-related disputes are provided in the accompanying Annexes.

Article R28 provides that the seat of any CAS arbitration is Lausanne, Switzerland, regardless of the geographical location of the arbitration proceeding.  The authors explain the importance and implications of this rule, which effectively provides that Swiss law governs the procedural aspects of all CAS arbitration proceedings throughout the world.  The creation of a uniform procedural regime establishes a stable legal foundation for CAS arbitrations that ensures coherence in determining the law governing the merits of the dispute pursuant to Articles R45 and R58, in the developing body of Olympic and international sports law established by CAS awards (with limited judicial review by the SFT under the PILA), and in equal treatment of the parties. 

Article R33 inter alia requires the independence and impartiality of CAS arbitrators and panels in connection with the cases to which they are appointed. Article R34 establishes the process pursuant to which the International Council of Arbitration for Sport (ICAS) considers and resolves challenges to an arbitrator’s independence or impartiality.  There is an elaborate discussion of this important topic that explains the distinction between “independence” and “impartiality,” provides guidance regarding an arbitrator’s disclosure obligations (with references to the International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration), and gives illustrative examples of circumstances giving rise to objectively justifiable doubts regarding an arbitrator’s independence (and those that do not) from the perspective of the ICAS or the SFT.  The authors’ commentary provides a historical perspective regarding the application and evolution of these Code rules and identifies their underlying roots in Articles 179 and 180 of the PILA.

Article R37 is based on Article 374 of the CCP and enables the appeals or ordinary arbitration president or a CAS panel to grant provisional (i.e., interim) measures to either safeguard a party’s right that is at risk or to exercise its right during the pendency of a CAS arbitration proceeding.  For example, an athlete may request the stay of an appealed decision of a sport body imposing a doping or disciplinary suspension that prevents him from participating in an upcoming athletic event.  The text explains the prerequisites for granting provisional relief, including: exhaustion of potential legal remedies within the sports organization or tribunal rendering the appealed decision, plausible CAS jurisdiction, irreparable harm, reasonable likelihood of success on the merits, and balance of interests.  There is a detailed discussion of the irreparable harm requirement, which provides several illustrative examples.  The authors note that a party’s request for provisional relief constitutes a waiver of any right to request such relief from a court and that a CAS order granting or denying provisional relief cannot be challenged before the SFT because it is not a final CAS award. 

Article R44 governs the CAS ordinary arbitration procedure (e.g., written submissions, hearing, evidentiary proceedings, expedited procedure, and default awards). The authors provide a detailed overview of each of these procedures, while pointing out that all evidence (e.g., exhibits and\ summaries of the testimony of witnesses and experts) must be filed at the same time as written submissions—which are mandatory—and that a hearing is optional.  They note the responsibilities of the CAS panel president in connection with these procedures and offer guidance regarding the steps to be taken to ensure appropriate discharge of the procedures. There is a particularly useful explanation regarding a CAS panel’s discretion in determining the admissibility of evidence, as well as its authority to order the production of evidence (e.g., documents, examination of witnesses) from a party and appointment of independent experts and the procedure for doing so.  The Annexes include a helpful checklist regarding the eight stages of a CAS hearing (i.e., opening of hearing, preliminary remarks by parties, hearing of witnesses, hearing of experts, examination of parties, closing of evidentiary proceedings, closing oral arguments, and the deliberation by the panel) that supplements the discussion in the text. 

Articles R47, R48, R49, R51, R55, and R56 collectively constitute the key Code provisions governing the CAS appeals arbitration procedure for appeals against a final decision of a sports federation or association, the largest group of cases before the CAS.[3]  Similar to their discussion regarding the CAS ordinary arbitration procedure, the authors provide detailed commentary regarding the appeals arbitration procedure, which is more complex and governed by more rules.  Among the important topics covered are the following: prerequisites for CAS jurisdiction, including the need for a final decision by a sports body and exhaustion of its internal legal remedies, along with a valid arbitration agreement; the importance and method of determining applicable deadlines for each stage of the appeals arbitration procedure, as well as the consequences of late submissions; and the required components of an appellant’s statement of appeal and appeal brief as well as a respondent’s answer.  The accompanying Annexes for these rules provide checklists and illustrative charts that significantly facilitate an understanding of the appeals arbitration procedure.

Articles R45 and R58 determine the substantive law applicable to the merits of cases arising under the CAS ordinary and appeals procedures, respectively.  The authors explain that parties’ agreement to submit their dispute to CAS arbitration for resolution, which constitutes their agreement to have the Code and Swiss law provide the applicable procedural rules, does not necessarily mean that Swiss law is the substantive law to be applied regarding the merits of a dispute.  They note that: (1) both Articles permit parties to choose the applicable rules of law, which may be a system of rules other than national law (e.g., the Olympic Charter, International Federation statutes, or the World Anti-doping Code in an appeals arbitration proceeding) if the laws “satisfy the need of rationality, security and foreseeability”[4] and are relevant to the disputed issues; (2) each Article identifies the governing national law in ordinary Swiss law or appeals arbitration (“law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled”[5]) if the parties do not do so; and (3) a CAS panel should apply laws considered to be “mandatory” according to Article 19 of the PILA (e.g., European Communities law).  The authors identify and discuss the narrow limits on parties’ freedom to choose the law to be applied to the merits of their dispute (i.e., the chosen law cannot manifestly violate international or transnational public laws).  They point out the important distinction between the provision of Article R45, which empowers a CAS panel to rule ex aequo et bono (i.e., as a matter of equity rather than according to specific legal rules) if the parties authorize the panel to do so, and the differing provision of Article R58, which authorizes a panel to apply the “rules of law [it] deems appropriate”[6] and to give reasons for its decision, while providing detailed explanations of both provisions and the CAS practices pursuant thereto. They observe that a CAS panel should apply the parties’ validly chosen rules of law to avoid a judicial challenge to a CAS award on the ground it violates the right to be heard, while noting that its mere failure to do so or to apply the wrong law is not a per se violation of a party’s right to be heard.  A CAS award will be vacated by the SFT pursuant to Article 190 paragraph 2(e) of the PILA on the ground that public policy is violated only if application of the chosen or appropriate law would change an award’s outcome. 

Article R57 governs a CAS appeals arbitration procedure hearing. The authors note that,

this provision is the milestone of the CAS appeals procedure, since it not only specifies the scope of the Panel’s review of the case . . . but also provides essential information on the conduct of the hearing and the power of the Panel to proceed with the hearing in case one of the parties is duly summoned but fails to appear.[7] 

Because Article R57 provides a panel with “full power to review the facts and the law”[8] (i.e., de novo review), the scope of CAS arbitral review is broader than the more limited arbitrary or capricious standard of judicial generally exercised by sport governing body decisions in Swiss and other national courts.[9]  The authors point out that this broader scope of review has significant legal consequences:

The Panel is thus not limited in merely reviewing the legality of the decision challenged, but can issue a new decision on the basis of the applicable rules . . . [admit] new prayers for relief and new evidence and [hear] new legal arguments . . . [and correct] procedural flaws, which occurred during the proceedings of the previous instance.”[10] 

Limits on the CAS’s de novo power of review, which preclude the panel from adjudicating issues other than those raised by the parties, changing or rewriting sports federation rules, and reviewing field of play decisions, are also identified and discussed.  They note that a CAS panel should be cautious about exercising its discretion under Article R57 “to exclude evidence presented by the parties if it was available to them or could reasonably have been discovered by them before the challenged decision was rendered”[11] in order “to guarantee the parties’ access to justice and a full review by an independent arbitral tribunal.”[12] The authors also describe the eight main stages of an appeals arbitration hearing (which are the same as those for an ordinary arbitration appeal) in both the text and an accompanying checklist in the Annex, as well as provide an overview of how a hearing generally is conducted and issues that may arise in connection therewith.

Articles R46 and R59 apply to the award in ordinary and appeals arbitrations, respectively.  The authors note that awards in both proceedings are by majority decision; must state brief reasons for each resolved issue and be written, dated, and signed; set forth the basis of CAS jurisdiction; determine which party bears the arbitration costs;[13] are final and binding on the parties with res judicata effect; and are enforceable on the date the parties are notified of the operative part of the award.  The CAS Secretary General reviews all awards for form (e.g., errors in grammar, spelling, or calculation of numbers are corrected) and fundamental issues of principle.  Although CAS arbitration awards do not constitute binding precedent or have a stare decisis effect in subsequent similar cases, CAS panels frequently cite to and rely on prior awards. This effectively “accord[s] to previous CAS awards a substantial precedential value and it is up to the party advocating a jurisprudential change to submit persuasive arguments and evidence to that effect.”[14]  Thus, the CAS Secretary General’s review of an award regarding fundamental issues of principle includes pointing out any departure from well-established CAS jurisprudence without adequate reasons and suggesting revisions in an effort to “ensure that there is no unjustified change in the CAS established case law under the same or similar conditions.”[15] However, the authors note that “the CAS Secretary General may only suggest some changes and cannot impose them to the Panel, which remains solely responsible for the award and is free to accept the suggestions or not.”[16]  They observe that CAS ordinary arbitration awards, which typically resolve commercial disputes between the parties, generally are confidential and not published; whereas CAS appeals arbitration awards, which resolve appeals from final decisions of sports federations, are usually published to facilitate the development of a uniform body of Olympic and international sports law (including interpretation and application of the World Anti-doping Code).  The commentary regarding Article R59 includes a comprehensive discussion of the grounds on which the SFT may vacate a CAS ordinary or appeals arbitration award pursuant to Article 190 paragraph 2 of the PILA: (1) irregular composition of the CAS panel (e.g., lack of independence or impartiality); (2) lack of CAS jurisdiction over the parties or claims; (3) failure to decide a validly raised claim, or deciding a claim or issue not raised by a party; (4) violation of the parties’ right to be heard or equal treatment; and (5) violation of procedural or substantive Swiss and international public policy (i.e., the essential and widely recognized values prevalent in every legal system).  The authors provide a detailed qualitative analysis of each of these defenses, as well as provide aggregate statistics regarding their respective success, and identify the SFT cases in which a particular defense is successful. 

This excellent book is a must-read for attorneys representing parties before the CAS and CAS arbitrators.  It is a valuable resource for sports law professors and scholars, as well as international arbitration counsel, arbitrators, and scholars concerning the CAS arbitration process for resolving Olympic and international sports disputes.  This book is an important addition to my library of sports law materials, which I anticipate consulting and referencing frequently.

[1] See James A. R. Nafziger, International Sports Law, Handbook on Int’l Sports Law 27–28 (James A. R. Nafziger & Stephen F. Ross eds., 2011) (the CAS has established the “gold standard in resolving sports-related disputes” by “ensuring fairness in terms of even-handedness, impartiality, acting in good faith, and coherence.”); Matthew J. Mitten, The Court of Arbitration for Sport’s Jurisprudence: International Legal Pluralism in a World Without Boundaries, 30 Ohio St. J. on Disp. Resol. 1, 42 (2014) (“The CAS arbitration system ‘demonstrates how civil and common law legal systems can function effectively together within an international tribunal to resolve a wide variety of complex, time-sensitive disputes between parties of different nationalities,’ which produces ‘globally respected adjudications” of Olympic and international sports disputes’).

[2] Despina Mavromati & Matthieu Reeb, The Code of the Court of Arbitration for Sport – Commentary, Cases, and Materials 19 (2015).

[3] The authors also provide helpful commentary regarding Articles R50, R53, and R54 that addresses the number, nomination, appointment, and confirmation of arbitrators as well as Article R52, which addresses initiation of the appeals arbitration proceeding by the CAS, as well as expedited and consolidated proceedings.

[4] CAS 2006/A/1123& 1124, Al-Gharafa SC v P. Wanchope Watson & P. Wanchope Watson v. Al-Gharafa SC, award of 18 December 2006, §67.

[5] Mavromati & Reeb, supra note 3, at 535.

[6] Id.

[7] Id. at 505.

[8] Id. at 503.

[9] “The full review by the CAS is the principal reason for excluding a full review by the state courts (i.e., in case of a subsequent appeal against a CAS award to the SFT, the later will not fully review the case but will act as a cassatory court based on the exhaustively enumerated grounds of Article 190 paragraph 2 PILA).”  Id at 520.

[10] Id. at 507–08.

[11] Id. at 519.

[12] Id. at 520.

[13] Article R64 applies to CAS ordinary and appeals arbitration costs, but Article R65 pertains only to CAS appeals arbitration costs in proceedings involving appeals against decisions issued by international federations in disciplinary matters; both of which the authors comprehensively discuss in their commentary and Annexes regarding these rules.  

[14] CAS 2008/A/1545, Anderson et al v IOC, award of 16 July 2010, §116.

[15] Mavromati & Reeb, supra note 5, at 367.

[16] Id. at 366–67.

Editor’s note: Josep F. Vandellos is an international sports lawyer associated to RH&C (Spain). He is also a member of the Editorial Board of the publication Football Legal and a guest lecturer in the ISDE-FC Barcelona Masters’ Degree in Sports Management and Legal Skills.

Article 6 of Annexe IV (Training compensation) of the FIFA-RSTP (Ed. 2016) contains the so-called “Special Provisions for the EU/EEA” applicable to players moving from one association to another inside the territory of the European Union (EU) or the European Economic Area (EEA).
The provisions regarding training compensation result from the understanding reached between FIFA and UEFA with the European Union in March 2001[1], and subsequent modifications introduced in the FIFA-RSTP revised version of 2005 to ensure the compatibility of the transfer system with EU law.[2]
This blog will focus on the exception contained in article 6(3) Annexe IV of the FIFA-RSTP. According to this article, when “the former club” fails to offer a contract to the player, it loses its right to claim training compensation from the players’ new club, unless it can justify that it is entitled to such compensation. Instead, the right of “previous clubs” to training compensation is fully preserved irrespective of their behaviour with the player.[3] From a legal standpoint, such discrimination between the “former club” and the “previous clubs” raises some questions that I will try to address in this paper.
For that purpose, the author will depart from the restrictive interpretation of article 6(3) adopted by the FIFA Dispute Resolution Chamber (DRC) and continue with a substantive assessment of the rule, firstly by looking at its purposive aim and secondly, by evidencing the potential negative impact on players’ mobility and its inherent anticompetitive effects. 

A. Article 6(3) Annexe IV of the FIFA-RSTP (Ed. 2016)

Article 6(3) of the FIFA-RSTP reads as follows: “3. If the former club does not offer the player a contract, no training compensation is payable unless the former club can justify that it is entitled to such compensation. The former club must offer the player a contract in writing via registered post at least 60 days before the expiry of his current contract. Such an offer shall furthermore be at least of an equivalent value to the current contract. This provision is without prejudice to the right to training compensation of the player’s previous club(s).”[4]
In summary, as a general rule, the former club of the player loses its right to claim training compensation if it fails to offer the player a contract in the terms described by the article, or cannot demonstrate a legitimate interest.
So far, the DRC has been consistent in interpreting that the obligation to offer the player a contract lies exclusively with the former club of the player as opposed to the previous clubs. In other words, the previous club is entitled to ask for training compensation when the player signs the first professional contract[5] no matter whether they offered the player a contract or showed bona fide interest in retaining him.
At first glance, this rigid interpretation might appear controversial in light of the more pragmatic approach towards the formal requirements of article 6(3) adopted in the CAS award 2009/A/1757 between MTK Budapest v. FC Internazionale Milano SpA[6]. In this case, in order to conclude that MTK Budapest was still entitled to request training compensation despite not having offered the player a contract in the terms indicated in the regulation, the adjudicating Panel emphasized that “[the] aims of sporting justice shall not be defeated by an overly formalistic interpretation of the FIFA Regulations which would deviate from their original intended purpose”.[7]
The DRC has thus systematically admitted claims of previous clubs against clubs that have registered professional players for the first time (e.g. DRC decision of 17 May 2016[8]) without delving into whether such clubs are indeed entitled to training compensation or not.
In an attempt to defy such dogmatic approach to the issue, I question whether the different references made in Annexe IV of the FIFA RSTP to the “former club”[9] could and should instead be interpreted more extensively, so as to include all former clubs (thus including previous clubs) where a player has been registered. Firstly, by having a look at the systematic context of the rule and its purposive interpretation[10], and secondly, by taking into consideration the potential competitive disadvantages between European clubs resulting from the regulation.
As to the rationale of the rule, the FIFA DRC jurisprudence (vid. e.g. DRC Decision of 27 April 2006 ref. no. 461185[11]) indicates that “the spirit of and purpose of article 6 para 3 of Annexe 4 of the RSTP, 2016 edition, is to penalise clubs which are obviously not interested in the players’ services as a professional, no matter if the club would have to offer the player an employment contract for the first time or a renewal due to the expiry of an already existing contract.”[12]
It appears therefore, contrary to the spirit of the rule that a club that has shown no interest in keeping the player as a professional, a roster or for its academy, can at a later stage request to be rewarded for the training of that player, irrespective of whether it was the former club, strictly speaking, or the former former club, so to speak (i.e. the previous club in the RSTP exact wording).
One could easily argue at this point, and I would subscribe to it, that at very young ages it is either legally prohibited for training clubs to offer a contract, or unreasonable to require clubs to offer contracts to all its players in order to safeguard their potential right to training compensation.  This was highlighted by the CAS Panel in the CAS award 2006/A/1152 ADO Den Haag v. Newcastle United FC[13] which was the appeal against the above cited DRC Decision of 27 April 2006.
However, nothing prevents training clubs to at least show a genuine interest in retaining the player as an amateur by formally offering him to continue training with them or even through a simple positive evaluation of the player. In order to alleviate the unreasonable burden that such obligation would suppose on training clubs, a solution could be to require the genuine interest at least, for players as from the season of their 16^th birthday. This would coincide with the age when in most EU countries players are legally allowed to sign employment contracts, and form a strict sportive perspective, the age from when training compensation is calculated in full according to article 5(3) of Annexe IV.
The final reference in article 6(3) (i.e. “This provision is without prejudice to the right to training compensation of the players’ previous club(s)”) helps to ground this interpretation. It is difficult to justify from a legal standpoint, why previous clubs should be exempted (as they, in fact, are) from observing the same rules and obligations as the former clubs, especially considering the principle of free movement of workers in the EU. The right to claim training compensation is, being redundant, “without prejudice to the right (…) of the players’ previous club(s)”. Previous clubs should therefore, demonstrate as well their entitlement to training compensation by evidencing a genuine interest in the player, such as former clubs do. 
To illustrate the situation, consider the case were an EU football club omits to offer one of its players (e.g. 18 years old) a professional contract in the terms of article 6(3) of Annexe IV, and that player further registers as an amateur with another EU club for one season. That second club also fails to offer the player (now 19 years old) a professional contract. After two seasons as an amateur, the player, finally signs a professional contract with a third EU club at the age of 20 years. The current interpretation of the exception leads to conclude that the first club, which failed to offer the player a professional contract, perhaps because he was simply not sufficiently interesting to retain, would now be reinstated in the right to claim training compensation, while the former club, under identical circumstances and reasons would be deprived from it.
Within those parameters, de lege ferenda the exception of article 6(3) could reasonably be extended to those previous clubs that failed to show the so-called bona fide interest. This way, by failing to show real interest in keeping a player, the previous clubs would be also prevented from asking training compensation upon the first registration of the player as a professional, to the same extend as the former club when it fails to offer the player a contract, in the terms indicated by the exception.
Turning now the attention, to EU law, the conclusions on why article 6(3) Annexe 4 current interpretation seems unfair and should be reformulated, point towards the same direction. 
 

B. Article 6(3) Annexe IV of the FIFA RSTP and EU competition law

The Bosman ruling and its most recent successor, the Bernard ruling, stand out as constant reminders that EU Law applies to the realm of European club football insofar as it constitutes an economic activity in the sense of Article 2 of the Treaty.[14] It is nowadays unarguable that football is a real economic activity and that the regulations adopted by its governing bodies must respect EU Law as long as they apply in the territory of the EU, or in case the player concerned has a European passport and is transferring to an EU Member State. Only rules which are “inherent to sport” such as the rules of the game, and other “practices likely to be exempted” meaning, those activities not necessarily linked to sport but which are worth of protection, could potentially fall outside the remit of EU competition law (the sporting exception) as pointed out by the “Helsinki Report on Sport” in 1999. However, the decision in the Meca-Medina case went even further, overcoming the traditional distinction between rules of purely sporting nature from others, to determine that rules cannot be of purely sporting nature when they have economic repercussions, and consequently, making it possible to explore new legal avenues to test regulations that in principle may seem outside the scope of EU competition law (such as the doping regulations in Meca-Medina).
According to Bosman[15] and Bernard, training compensation is a practice worth of protection, but it is undeniable that its rules have strong economic implications, for they are expressly meant to financially reward[16] football clubs involved in the training and education of players when these move to other clubs. For that reason, they fall under the remit of EU Law.
The legitimate aim of the training compensation system is also embraced by legal scholars. For example, while delving into the aftermath of the Bosman case and the agreement reached between FIFA and the EU Commission in 2001, S. Weatherill remarked that “(…). Sport has special features that deserve respect. In accordance with Bosman, it should be regarded as legally permissible for football to devise an internal taxation system to transfer money into the hands of nursery clubs, as part of a scheme for sustaining a larger number of clubs than would survive in ‘pure’ market conditions and to diminish gaps in economic strength between clubs.”[17]
However, it is my firm belief that Annexe IV of the FIFA RSTP has in many ways gone beyond the indications in Bosman, the Helsinki Report[18] and later in Bernard. In this last case, the Court referred to a system meant to compensate[19] and not reward training; and it is precisely that difference regarding the foundations of the system implemented by FIFA that leads to disproportionate results when the amounts to pay as training compensation are superior to the real costs incurred by the training clubs.[20]
All these issues jeopardize free mobility within the EU[21], for they restrict the chances of clubs to recruit players, and have an impact on the commercial relations between clubs and players in the sense of Article 101. By way of example, a Romanian football club registering a 21-year old player trained in Romania as a professional for the first time, would end up paying the training club a significantly lower amount of training compensation than a Hungarian club of the same category, wishing to sign that same player. The reason for that is that whilst in the first scenario the Romanian club would be subject to the internal training compensation mechanism; in the second scenario, the Hungarian club would be subject to the FIFA regulations that impose higher training compensations.
With these premises in mind, the testing of article 6(3) Annexe IV of the FIFA RSTP under EU competition law seems appropriate, although the application of EU competition law in this type of cases will probably remain an exception.[22]
In short, Article 101 TFEU[23] prohibits agreements, decisions of associations and concerted practices which may affect trade between Member States and have as their object or effect the prevention, restriction or distortion within the internal market.[24] Saskia King, explaining the so-called “objective criterion”[25], has highlighted that “when determining whether an agreement restricts competition under Article 101(1) TFEU, ‘object’ expresses a true alternative to ‘effect’ and as such requires separate consideration”. Therefore, if the object of the agreement is anticompetitive, there is no need to look behind the effects.
A primary aspect of competition law is the identification of the relevant market where a possible anticompetitive practice takes place. In the present context, the relevant market is the transfer market of football players, that is, the market on which the offer and supply of players meets and clubs compete against each other to recruit the best players.[26] Geographically speaking, the market is limited to the territory of the Member States of the EU.
Assuming also, that the FIFA RSTP (ed. 2016) qualifies as a “decision by an association of undertakings”[27] and that the rules of training compensation have an appreciable affect in trade between Member States[28] since any change of clubs for players under the age of 23 requires the payment of a training compensation[29]; the questions left to answer are therefore, whether or not article 6(3) of Annexe IV of the FIFA-RSTP (Ed. 2016), in its current formulation is (1) likely to prevent, restrict or distort competition in the EU transfer market of football players under Article 101(1) TFEU and more importantly, (2) whether the restrictive effects are proportionate and “[reasonably] necessary for the organization and proper conduct of sport?”[30]
As to the first question, it is my view that both the object and the effects produced by, article 6(3) restrict and distort competition between clubs, for they discriminate former clubs vis-à-vis previous clubs with regard to their right to claim training compensation. Additionally, the compensation limits the ability of clubs to take on players acting as free agent.
As to the second question, the Meca-Medina case –though in a different context[31]- offered valuable guidance to test the compatibility of rules of sports associations with EU competition law: “42. Not every agreement between undertakings or every decision of an association of undertakings which restricts the freedom of action of the parties or of one of them necessarily falls within the prohibition laid down in Article 81(1) EC. For the purposes of application of that provision to a particular case, account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives (Wouters and Others, paragraph 97) and are proportionate to them.”
Following the Meca-Medina reasoning, and focusing on the rationale behind article 6(3) Annexe IV, in the CAS award 2006/A/1152 ADO Den Haag v. Newcastle United FC, the CAS Panel corrected the view of the original DRC decision of 27 April 2006. Specifically, it remarked that the aim of the rule is “to ensure that no player, whether amateur or professional, in whom the training club has no interest, is impeded to accept the offer of another club because he carries some sort of ‘compensation price tag”[32] rather than to penalize clubs failing to offer a contract to their amateur players. The unquestionably legitimate goal of “the exception to the exception” - as the Panel calls article 6(3) - is thus to limit the obstacles to the free mobility of players aforementioned.
However, as to “whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives and are proportionate to them” there cannot be a positive answer. To me it is doubtful whether the anticompetitive effects produced by establishing different conditions between former clubs and previous clubs are inherent or a necessary consequence to ensure the objective of rule (i.e. contributing to free mobility). I believe the contrary to be true. (i.e. uently,conditions ctive of the rule, tt of EU Law. by scholars.r compensation. in the application of such principle. nsatI bI be The effects generated by the current interpretation of article 6(3) collide with the aim of the rule (i.e. protecting free mobility), for reinstating previous clubs in their rights to claim training compensation irrespective of their behaviour vis-à-vis the player, compromises free movement within the EU and creates unfair competitive advantages for previous clubs.
In conclusion, my suggestion is to rethink, the current formulation of article 6(3) (if not the entire training compensation system) and correct its detrimental effects by preventing all previous clubs that fail to offer players a professional contract or to show bona fide interest as from the season in which a player turns 16 years old from requesting training compensation. It is certainly not the role of the CAS to do so, but the responsibility of the EU Commission to take an active lead to ensure full compliance of football regulations with EU law. 

[1] See FIFA Executive Committee, “Commentary on the Regulations for the Status and Transfer of Players”, Annex 4 (29 June 2005) at page 124.

[2] European Commission Press Release of 5 March 2001, “Outcome of discussions between the Commission and FIFA/UEFA on FIFA Regulations on international football transfers”.

[3] A bona fide and genuine interest in keeping the player must be demonstrated before the DRC cf. Arbitration CAS award 2009/A/1757 MTK Budapest v. FC Internazionale Milano S.p.A., award of 30 July 2009.

[4] FIFA Regulations on the Status and Transfer of Players, article 6(3) Annexe IV.

[5] In cases of subsequent transfer, the club entitled to claim training compensation will always be the “former club”.

[6]“17. As noted earlier, it is the 2005 Regulations which apply in the present case. At the same time, however, FIFA itself has clarified that the aim of the revisions introduced in 2005 was simply to “facilitate the evidence of a contract offer being made”. In its Decision, the DRC stated that “...when revising the Regulations it was decided to integrate in the 2005 edition of the Regulations some formal preconditions in order to facilitate the evidence that a contract offer was effectively made...This is the actual aim of the relevant formalities”. Consequently, the Panel does not interpret the 2005 revisions to the Regulations as constituting a substantive or material alteration to the 2001 regulatory regime because, as FIFA has said, the changes introduced related only to matters of form, and not of substance.”

[7] See para. 31 of the award. Although, the transfer structure used in this case could qualify as a bridge transfer used for the purpose of circumventing the FIFA regulations on transfer compensation.

[8] Decision of the Single Judge of the Sub-committee of the DRC case Budapest Honved FC (Hungary) v. AFC ASA 2013 Targu Mures (Romania) ref. TMS 243. Unpublished.

[9] See also FIFA RSTP, article 2 para. 2 of Annex IV.

[10] See the CAS award 2007/A/1363 TTF Liebherr Ochsenhausen v/ETTU, award of 5 October 2007 para 12 page 8: “10. By interpreting rules and regulations of associations, the starting point and the predominant element of construction is the wording (literal interpretation). Other elements such as the systematic context, the purpose and the history of the rule may contribute to the correct understanding of the meaning of the rule. This principle is accepted in both civil and common law and it has been constantly applied by CAS panels. It is also embedded in the law of Luxembourg (see, e.g., Art. 1156 of the Code Civil of Luxembourg) and the parties have not argued otherwise.” Emphasis added.

[11] Decision not published.

[12] De Weger, The Jurisprudence of the FIFA Dispute Resolution Chamber, Asser Press, 2^nd Edition, 2016. Page 401.

[13] See para. 22 of the CAS award 2006/A/1152 ADO Den Haag v. Newcastle United FC, award of 7 February 2007.

[14] See also Case 36/74, Walrave and Koch v UCI, ECLI:EU:C:1974:140.

[15] Case C-415/93, Union Royale Belge des Sociétés de Football Association and Others v Bosman and Others, ECLI:EU:C:1995:463, paras. 106-110.

[16] See FIFA Executive Committee, “Commentary on the Regulations for the Status and Transfer of Players”, article 1(2) and Annex 4 para. 1 (Objectives), page 112.

[17] S. Weatherill, European Sports Law Collected Papers, Asser Press, 2^nd Edition (2014), pages 218 and 219.

[18] See Report from the Commission to the European Council of 10 December 1999 with a view to safeguarding current sports structures and maintaining the social function of sport within the Community framework – The Helsinki Report on Sport - para. 4.2.1.3: The Report refers to a system of objectively calculated payments that are related to the costs of training.

[19] Case C-325/08, Olympique Lyonnais SASP v Olivier Bernard and Newcastle UFC, ECLI:EU:C:2010:143, paras. 44 and 45.

[20] As an example of this disproportionality, a simple comparison between the training costs established for Cat. III UEFA clubs (30.000 Euro per) with the training costs established for internal transfers by the Romanian Football Football Federation (5.000 RON per year equivalent to 1.107 Euro).

[21] Training compensation rules were recently tested against EU law, and in particular with regard to the freedom of movement of workers, by TAS-CAS in the Riverola case (CAS award 2014/A/Bologna FC 1909 SpA v. FC Barcelona). The award is not public, but a full comment and legal analysis is published in: Luca Smacchia, “The Riverola case: how the enforcement of FIFA rules may restrict the freedom of movement for workers within the EU”, Football Legal, #5 (June 2016), pages 20-24.

[22] See e.g. Ben Van Rompuy, “Sport and EU Competition Law: New developments and unfinished business”, Asser International Sports Law Blog (22 May 2015).

[23] Article 101 TFEU: “The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which: (…) (d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;”

[24] “The distinction between "restrictions by object" and "restrictions by effect" arises from the fact that certain forms of collusion between undertakings can be regarded, by their very nature, as being injurious to the proper functioning of normal competition.” - Commission Staff Working Document of 25 June 2014, Guidance on restrictions of competition “by object” for the purpose of defining which agreements may benefit from the De Minimis Notice, page 3.

[25] Saskia King, “Agreements that restrict competition by object under Article 101 (1) TFEU: Past, present and future”, PhD Thesis – The London School of Economics and Political Science (2015), Page 28.

[26] “The combined investment of summer and winter transfer windows in the top five European leagues was almost €3.4 billion. That was up by 29 per cent versus last season and again a record high ever.” - Soccerex Transfer Review Winter Edition 2016, Prime Time Sport, page 4.

[27] See, for example, Case T-193/02, Piau v. Commission, ECLI:EU:T:2005:22, para. 69: “As regards, first, the concept of an association of undertakings, and without it being necessary to rule on the admissibility of the arguments put forward by an intervener which go against the claims made by the party in support of which it is intervening, it is common ground that FIFA's members are national associations, which are groupings of football clubs for which the practice of football is an economic activity. These football clubs are therefore undertakings within the meaning of Article 81 EC and the national associations grouping them together are associations of undertakings within the meaning of that provision.”

[28] For an in-depth economic data analysis see, e.g., FIFA T.M.S., Global Transfer Market 2012 Highlights, pages 14 and 15 – Overall Market Activity - and pages 23 and 24 - Player Age.

[29] David Nilsson, “The Revised FIFA Regulations for the Status and Transfers of Players’ Compatibility with EU competition law – the Transfer System revised”. Master Thesis. Faculty of Law - University of Lund, (September 2006).

[30] Supra, 30.

[31] Doping rules under EU competition law.

[32] See para. 20 page 7 of the award: “The Panel does not share the DRC’s view that the purpose of the first sentence of Article 6 para. 3 is to penalise clubs which do not offer professional terms to their amateur players. Rather, in the Panel’s opinion, the purpose of the above provision is to ensure that no player, whether amateur or professional, in whom the training club has no interest is impeded to accept the offer of another club because he carries some sort of “compensation price tag”.