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 Pechstein ruling of the Oberlandesgericht München - Time for a new reform of CAS?

Editor's note (13 July 2015): We (Ben Van Rompuy and I) have just published on SSRN an article on the Pechstein ruling of the OLG. It is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2621983. Feel free to download it and to share any feedback with us!


On 15 January 2015, the earth must have been shaking under the offices of the Court of Arbitration for Sport (CAS) in Lausanne when the Oberlandesgericht München announced its decision in the Pechstein case. If not entirely unpredictable, the decision went very far (further than the first instance) in eroding the legal foundations on which sports arbitration rests. It is improbable (though not impossible) that the highest German civil court, the Bundesgerichtshof (BGH), which will most likely be called to pronounce itself in the matter, will entirely dismiss the reasoning of the Oberlandesgericht. This blogpost is a first examination of the legal arguments used (Disclaimer: it is based only on the official press release, the full text of the ruling will be published in the coming months).

 

The Pechstein Saga

Few are able to remember the start of Claudia Pechstein’s legal crusade through all available jurisdictions in the northern hemisphere[1]. Thus, a concise summary of the previous episodes is in order. Claudia Pechstein is a German Speed-Skater, multiple Olympic Gold Medallist and World Champion. In 2009, she was one of the first athletes caught for doping on the basis of the blood profiling system introduced by the International Skating Union (ISU)[2]. Henceforth, the ISU banned her from all competitions for two years. This triggered a long and embroiled legal saga. She appealed the ban in front of the Court of Arbitration for Sport (CAS), based on an arbitration agreement included in her license with the national and international federations. The CAS dismissed (CAS 2009/A/1912 & 1913 and CAS OG 10/04) her claims and confirmed the two-year ban. Subsequently, she contested (twice!) the award in front of the Swiss Federal Tribunal (Case 4A_612/2009, 10 February 2010 and Case 4A_144/2010, 28 September 2010), but was both times unsuccessful. Her case is also pending before the European Court of Human Rights. Meanwhile, she started an action for damages (around € 4 Million) in front of the local Court of Munich (Landesgericht München). This Court released its judgment on 26 February 2014, despite recognizing the invalidity of the arbitration clause, it considered that the award’s res judicata effect was to be recognized because Pechstein did not contest the competence of CAS when she appealed the ISU’s decision to it. Pechstein decided to appeal the judgment to the Oberlandesgericht München, which in its decision from 15 January 2015 embraced her claims.

 

The Decision of the Oberlandesgericht München

The overall position of the Oberlandesgericht concerning the CAS award is straightforward. The court considers the arbitration clause between the ISU and Claudia Pechstein as contrary to German (and maybe European) antitrust law, which is part of German public policy, and, therefore, refuses on the basis of Article V (2) (b) New York Convention of 1958 to recognize the validity in Germany of the CAS awards rendered in the Pechstein case. But, why is it so?

First of all, the judges point out a typical (but often overlooked) fact about International Sports Governing bodies: they are monopolists. In other words, they control the market(s) for international sports competitions and nowadays (at least in speed-skating) no professional athlete can afford, if he is to live from his sport, to miss those competitions. Yet, German antitrust law bans an undertaking placed in a dominant position from imposing contractual conditions that differ from what they would be in a normal competitive environment. Hence, the Court held that the ISU was unlawfully imposing onto Claudia Pechstein the signing of a CAS arbitration clause. But, is a forced arbitration clause per se constitutive of an antitrust violation? The Court is subtler. In fact, it acknowledges that an arbitration clause imposed by a Sports Governing Body does not constitute per se an antitrust violation. To the contrary, the Court clearly states that there are good reasons (for example the uniform application of anti-doping regulations) to subject the resolution of sporting disputes between athletes and Sports Governing Bodies to a unique world court for sport. What is the problem then?  

In the eyes of the German court, the problem lies with CAS and its institutional set-up. First of all, the Sports Governing Bodies (International federations, NOCs and IOC) have a decisive influence on who is potentially called to be an arbitrator in CAS arbitration. Here, without clearly alluding to it in the press release, the Court has the closed list of CAS arbitrators in mind. In short, only a predefined number of people can act as arbitrators before CAS. Those arbitrators are appointed on the CAS list by ICAS, the CAS code in force at the time of the case foresaw that 3/5 of the arbitrators were appointed upon proposals made by the Sports Governing Bodies[3]. This has changed. As from the 1 January 2014 the ICAS is free to appoint whomever it deems appropriate on the list[4]. Nevertheless, the Court finds that, at least for the time Pechstein was facing the CAS, the Sports Governing Bodies were in a structurally favourable position regarding the composition of the arbitral panel. In practice, athletes were forced to ratify this disequilibrium due to the monopoly of Sports Governing Bodies on the access to international sporting competitions.

Furthermore, the German judges consider that this imbalance plagues also the nomination process of a president of an arbitral panel. Indeed, under article R54 of the CAS Code, the president of the CAS Appeals Arbitration Division is responsible to nominate the presidents of the panels[5]. However, the president of the CAS appeals division is himself nominated by the ICAS[6], which consists mainly of representatives of the Sports governing bodies[7], and is often a personality close to them[8]. Currently, the ICAS has 20 members, of which 14 have (or had) direct ties with Sports Governing bodies and none is connected to the existing athlete’s unions. This institutional bias entrenches the structural imbalance in favour of the Sports Governing Bodies already identified by the Court apropos the closed list of arbitrators. Thus, the independence of the panel cannot be guaranteed and the fairness of the arbitral process safeguarded. Therefore, in light of the monopolistic position of the ISU and the lack of independence of CAS panels, the imposition of an arbitration clause depriving the athlete of her constitutional right to a judge constitutes a breach of German antitrust law.

Consequently, and contrary to the first instance Landesgericht[9], the Oberlandesgericht refuses to recognize, on the basis of Article 5 par. 2  b) of the 1958 New York Convention, the validity of the CAS awards invoked by ISU to oppose the damage claims raised by Pechstein. The Court leaves open the question of the damage claims, the partial ruling on the jurisdiction being susceptible to an appeal to the highest German civil Court, the BGH.

 

Towards a Gundel 2.0 for CAS: Reform or die!

The Pechstein Saga is not finished yet; an appeal to the BGH by ISU is to be expected. However, one should not underestimate the symbolic value of the Oberlandesgericht’s ruling and the threat it constitutes to the work of CAS. Indeed, if the ruling were to be confirmed by the BGH it would basically imply that CAS awards are unenforceable in German courts and that athletes may therefore (successfully or not) claim damages against the Sports Governing Bodies imposing sanctions on the basis of these awards. From the press release it remains unclear whether the decision is based solely on German antitrust law or also on EU antitrust law. Nonetheless, this decision might also be constructed as an abuse of a dominant position in the sense of article 102 TFEU and could gain validity in the EU as a whole. This would be a dramatic setback for sports arbitration, nothing short than the death of CAS.

But, it need not come to such extremity. As recognized by the Oberlandesgericht, the CAS fulfils an important function in the sporting world. It is a necessary institution to provide a level legal playing field when issues of doping or transfers are leading to acrimonious transnational disputes. Additionally, it also has advantages for the athletes, as it is usually perceived as cheaper and faster than state justice[10]. All of this is duly acknowledged in the decision. In short, what the German Court is asking for is an institutional reform of CAS. This restructuring would entail a fundamental reshuffling of the internal functioning of the CAS. Indeed, the German judges have identified the two main weak points of CAS, the forced arbitration coupled with its lack of independence[11]. The forced arbitration can be accepted if, and only if, the structural independence of CAS from the Sports Governing Bodies is warranted[12]. The challenge to CAS can be formulated as follows: cut the ties that bind you to the Sports Governing Bodies or we will not accept the validity of the arbitration clause underpinning your competence.

In fact, the CAS was at a fairly similar (less dramatic) crossroad after the Gundel case of the Swiss Federal Tribunal in 1993[13]. In the Gundel case, the SFT recognized the independence of CAS but also clearly indicated that it would not do so if the IOC were a party to a dispute in front of CAS. This led to what is known as the Paris agreement, an in depth structural reform of CAS[14]. Mainly, the ICAS was created to separate the management of CAS from the IOC. The SFT expressed its satisfaction with the reforms in its famous Lazutina case and blessed the CAS with the full recognition of its independence[15]. This, however, did not mean that the recognition of the independence of CAS was legally a given beyond Switzerland. To the contrary, it was (and is) still hotly debated in the literature[16]. Now, the German court basically says the Paris agreement is not enough, we need a new one, ensuring that athletes (and other stakeholders like clubs or supporters) get a true say in the ICAS. It is time for the CAS’s institutional structure to better reflect the diversity of actors affected by its decisions. If not, CAS awards will not be recognized in Germany and, by extension, the entire territory of the EU, thus leading the sports justice into a profound crisis.

 



[1] All the relevant legal documents are available on her website at http://www.claudia-pechstein.de/gerichtsunterlagen.php

[2] On the dispute see D. McArdle, ‘Longitudinal Profiling, Sports Arbitration and The Woman Who Had Nothing to Lose. Some Thoughts on Pechstein v International Skating Union”, available at https://dspace.stir.ac.uk/bitstream/1893/3356/1/Pechstein%20final.pdf

[3] Article S14 CAS Code, edition 2004

[4] The new article S14 CAS Code reads as follows:

« In establishing the list of CAS arbitrators, ICAS shall call upon personalities with appropriate legal training, recognized competence with regard to sports law and/or international arbitration, a good knowledge of sport in general and a good command of at least one CAS working language, whose names and qualifications are brought to the attention of ICAS, including by the IOC, the IFs and the NOCs. ICAS may identify the arbitrators with a specific expertise to deal with certain types of disputes. »

[5] Article R54 CAS Code 2004 (and 2014) reads as follows: “If three arbitrators are to be appointed, the President of the Division shall appoint the President of the Panel upon appointment of the arbitrator by the Respondent and after having consulted the arbitrators.”

[6] Article S6 par.2 CAS Code 2004 (and 2014)

[7] Article S4 CAS Code 2014 foresees that:
« ICAS is composed of twenty members, experienced jurists appointed in the following manner :

1.     four members are appointed by the International Federations (IFs), viz. three by the Association of Summer Olympic IFs (ASOIF) and one by the Association of the Winter Olympic IFs (AIOWF), chosen from within or outside their membership;

2.     four members are appointed by the Association of the National Olympic Committees (ANOC), chosen from within or outside its membership;

3.     four members are appointed by the International Olympic Committee (IOC), chosen from within or outside its membership;

4.     four members are appointed by the twelve members of ICAS listed above, after appropriate consultation with a view to safeguarding the interests of the athletes;

5.     four members are appointed by the sixteen members of ICAS listed above, chosen from among personalities independent of the bodies designating the other members of the ICAS. »

[8] The current president, Corinne Schmidhauser, is a member of the Legal Committee of the Fédération Internationale de Ski (International Ski Federation). It is surely telling that Thomas Bach, the current IOC president, was her predecessor at that post.

[9] The first instance Court (Landesgericht München) considered that due to Pechstein’s appeal and lack of contestation of the CAS’s competence, the award had gained res judicata effect. See paragraphs  IV.2) of the judgment.

[10] A point made by D. Yi, ‘Turning medals into metal:  Evaluating the Court of Arbitration for Sport as an International tribunal’, available at http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1024&context=student_papers

[11] Antonio Rigozzi has highlighted these weaknesses in his Phd thesis, see A. Rigozzi L’arbitrage international en matière de sport, Bruylant, 2005, pp.273-349 and 421-426. See also, M. Maisonneuve, L’arbitrage des litiges sportifs, L.G.D.J, 2011, pp. 141-221 and pp. 267-313.

[12] In principle the Swiss Federal Tribunal has a similar view outlined in the Cañas case (4P.172/2006), but it considers that the CAS already offers « sufficient guarantees of independence and impartiality » (par. 4.3.2.3.). Thus, its assessment of the CAS’s independence is diametrically opposed to the one conducted by the Oberlandesgericht.

[13] Decision 4P.217/1992 of 15 March 1993 (Gundel v FEI), ATF 119 II 271, translated in CAS Digest I,.p. 545

[14] For an introduction on the Paris agreement see, http://www.tas-cas.org/en/general-information/history-of-the-cas.html#c74

[15] Decision 4P.267–270/2002 du 27 mai 2003, Lazutina c. CIO, ATF 129 III 445, Bull. ASA 2003, p. 601

[16] For a recent contribution to this debate see A. Vaitiekunas, The Court of Arbitration for Sport : Law-making and the question of independence, Stämpfli Publishers, 2014 

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Asser International Sports Law Blog | The EU State aid and sport saga: The Real Madrid Decision (part 2)

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 EU State aid and sport saga: The Real Madrid Decision (part 2)

This is the second and final part of the ‘Real Madrid Saga’. Where the first part outlined the background of the case and the role played by the Spanish national courts, the second part focuses on the EU Commission’s recovery decision of 4 July 2016 and dissects the arguments advanced by the Commission to reach it. As will be shown, the most important question the Commission had to answer was whether the settlement agreement of 29 July 2011 between the Council of Madrid and Real Madrid constituted a selective economic advantage for Real Madrid in the sense of Article 107(1) TFEU.[1] Before delving into that analysis, the blog will commence with the other pending question, namely whether the Commission also scrutinized the legality of the operation Bernabeú-Opañel under EU State aid law. By way of reminder, this operation consisted of Real Madrid receiving from the municipality the land adjacent to the Bernabéu stadium, while transferring in return €6.6 million, as well as plots of land in other areas of the city. 


The Commission’s ‘pragmatic’ solution regarding the Operation Bernabéu-Opañel

As was explained in part 1 of this blog, during the formal investigation period (i.e. from 18 December 2013 until 4 July 2016), the operation Bernabéu-Opañel (referred to by the Commission as the ‘2011 urban development agreement’) was firstly suspended by the Madrid High Court (31 July 2014) and later completely annulled (2 February 2015) by that same Court. It is worth reiterating that the Court believed there to be a sufficient link between the 2011 settlement agreement and the operation Bernabéu-Opañel in order to examine the agreements together.[2]

The Commission, however, was actually surprisingly brief on this matter. As can be read from paragraphs 79 and 80 from the decision, “(a)s a result of (the judgment of 2 February 2015), the 2011 urban development agreement has been cancelled between the parties. Consequently, that agreement will no longer be implemented so that the Commission assessment of the 2011 urban development agreement has become without object. The present Decision therefore only examines the 2011 settlement agreement under State aid rules”.[3]

From an EU State aid law perspective, declaring the operation Bernabéu-Opañel “without object” makes sense. With the agreement annulled, there has been no transfer of resources from the State to Real Madrid of any sorts, nor could Real Madrid have obtained an economic advantage from an annulled agreement. Therefore, removing all the problematic aspects of the agreement from a State aid perspective. Yet, it does remain slightly ironic that that the ‘standstill obligation’ was applied to an agreement that was later on never analysed by the Commission. True, the subsequent annulment (based solely on Spanish administrative law) made Commission scrutiny redundant, but one does wonder what the Commission would have decided had the Madrid Court not annulled the operation. 


The 2011 settlement agreement under Article 107(1) TFEU

By way of reminder, in the opening decision, the Commission primarily doubted whether:

1) It was impossible for the Council of Madrid to transfer the Las Tablas property to Real Madrid;

2) This legal impossibility automatically led to an obligation for the Council of Madrid to compensate Real Madrid;

3) A market value of the Las Tablas plot of land has been sought;

4) And whether the value of the properties which were transferred to Real Madrid by the 2011 settlement agreement were market conform.[4]

In reaction to the opening decision Spain argued that transferring the plot in Las Tablas was illegal based on the local urban law 9/2001 of 2001, this interpretation was later confirmed by the Spanish High Court in 2004. Yet, this was already the case in 1998 when the Madrid Council agreed to transfer the land to Real Madrid.[5] Given that Real Madrid had legitimate expectations that it was the owner of the land, it has suffered damages as a consequence of the transfer’s invalidity. As a consequence, Real Madrid needed to be compensated by an amount equal to the market value of Las Tablas in 2011, namely €22.693.054,44. Since this sum was calculated on the basis of an objective model set by the Ministry of Economy and Industry[6], Spain considered that it matched the market value and could not constitute State aid.

The economic advantage criterion according to the market economy operator principle

The Commission’s State aid assessment essentially revolved around the question whether the 2011 settlement agreement between the Council of Madrid and Real Madrid resulted in an economic advantage to the benefit of Real Madrid.[7] As is standard Commission practice[8], “to determine whether a particular transaction carried out by a public authority has been carried out in line with normal market conditions, it is necessary to compare the behaviour of that public authority with that of a similarly situated hypothetical “market economic operator” operating under normal market conditions. If the “market economy operator” would have entered into that transaction under similar terms, then the presence of an advantage may be excluded as regards that transaction”.[9] Referring to EU case law[10], the Commission argued that a prudent market operator would carry out his own ex ante assessment on the basis of sound economic and legal evaluations, when entering such transactions. Public authorities cannot claim that evaluations made after the transaction, based on a retrospective finding that it was actually economically rational, like the Madrid Council did in this case, is the course of action that a prudent market operator would take under similar circumstances.[11]

In continuation, the Commission indicated the two criteria it used in order to determine whether the amount of compensation offered to Real Madrid was in line market conditions:

1) The probability that the Madrid Council would be held liable for its inability to perform its contractual obligations;

2) And the maximum extent of its financial exposure resulting from finding such a liability.[12]

Though these criteria are clearly cumulative, it should be noted that the Commission did not support the criteria with a reference to case law, its own decisional practice or documents of (soft) law. Be that as it may, based primarily on these criteria the Commission concluded that a market economy operator in a similar situation to the Madrid Council would not have entered into the 2011 settlement agreement.

As regards the first criteria, the Commission argued that the Madrid Council should have sought legal advice so as to establish the likelihood that it was indeed liable for not performing its contractual obligations. Without legal advice, the Commission found it hard to believe that a prudent market operator would have assumed full legal liability, especially considering “the legal uncertainties surrounding the potential impossibility to perform (the land transaction), the legal consequences of that potential impossibility, and the Madrid Council’s ability to remedy that legal impossibility through other means”.[13] The Commission seems definitely correct in questioning the chain of events that eventually led to the compensation of more than €20 million. Even though, as Spain now claims[14], it was already legally impossible to transfer the land in 1998, why did the Madrid Council sign this agreement in the first place? After the introduction of local urban law 9/2001, shouldn’t the parties have been aware of the legal impossibility at that moment, or in any case after the 2004 judgment of the Madrid High Court? Consequently, why did the Council wait until 2011 before compensating Real Madrid? In paragraphs 103 and 104, the Commission also drew an interesting comparison with the operation Bernabéu-Opañel. Although this latter operation was declared void by a Spanish Court for not being in line with the general interest, it simultaneously shows that reclassifying a terrain from public to private (sport) use is not entirely legally impossible. In other words, by analogy, the plot in Las Tablas could have been reclassified for private use (provided the reclassification served the general interest) and be legally transferred to Real Madrid.

With regard to the second criteria, i.e. the maximum extent of the Madrid Council’s financial exposure resulting from finding such a liability, the Commission firstly argued that the different valuations of 1998 and 2011 of the land in Las Tablas were based on the mistaken assumption that this land could have been transferred in 2011, which, in hindsight appeared to be legally impossible. “Assuming the Madrid Council could not be held liable for that legal impossibility, for which it never solicited legal advice, it is at least arguable that the market value of the plot in its relationship with Real Madrid would be zero, since the land in question cannot be transferred”.[15] On the other hand, and assuming the Madrid Council is liable and Real Madrid had a right to a compensation, this amount should have been way less than €22 million as a Commission-assigned study concluded. Taking into account the Commission’s consideration that the correct parameter for the valuation of the concerned plot is the long-term exploitation of the land for sport use, the study arrived at a valuation in 2011 of €4.275 million.[16]

For all the above reasons, the Commission established that the Madrid Council had not acted as a prudent market operator. It had not sought legal advice before entering the 2011 settlement agreement, and the subsequent compensation granted to Real Madrid too high. In conclusion, by means of the 2011 settlement agreement, a selective economic advantage was granted to Real Madrid and the State aid criteria of Article 107(1) TFEU were fulfilled. As a result, the amount of aid that Spain was required to recover from the football club amounted to €18.418.054,44 (€22.693.054,44 - €4.275.000) plus interests.[17]


The aftermath

On 2 September 2016, the municipality of Madrid officially ordered Real Madrid to repay €20.3 million, an obligation complied with by the club in early November. Nonetheless, the Real Madrid ‘saga’ has not come to an end. In fact, now that Real Madrid’s appeal is registered by the CJEU, it has become clear that it could take several more years until the case is finally closed. The pending questions are; what are the grounds of Real Madrid’s appeal and could the appeal be successful?

As a preliminary remark, neither Spain nor Real Madrid have claimed that the 2011 settlement agreement falls, or could fall, under one of the exceptions of Article 107(3) TFEU. In principle, this does not prevent Real Madrid from advancing a compatibility plea in front of the General Court, even though it did not raise the argument during the formal investigation.[18] Nonetheless, given the Commission’s wide discretion in applying the exceptions of Article 107(3)[19], the review of the legality of its decision is restricted to determining whether the Commission committed a manifest error in its assessment of the facts or misused its powers.[20] Moreover, as the Commission indicates in paragraph 135 of the decision, the aid granted to Real Madrid is considered as operating aid.[21] In other words, the aid releases an undertaking from costs which it would normally have to bear in its day to day activities.[22] Both the Commission and the CJEU have been very reluctant in permitting operating aid since it rarely facilitates the development of certain economic activities without adversely affecting trading conditions.[23]

In a press-release following the Commission’s announcement of its recovery decision, Real Madrid inter alia argued that the valuation method used in the 2011 settlement agreement is the “only objective method, as it is based in the cadastral value, legally obliging for all Spanish City Councils, and therefore is applied in all transaction between City Councils and third parties whether they are public or private”.[24] The Commission’s final decision takes note of the criticism expressed by Real Madrid regarding the Commission-assigned valuation study, especially concerning the (in its eyes erroneous) valuation method used for the study.[25] Though the Commission rebutted Real Madrid’s criticism[26], it will be up to the General Court of the EU (and potentially later the Court of Justice) to decide whether the Madrid Council used the correct valuation method when determining the 2011 value of las Tablas. This will not be completely new territory for the General Court, given the rich jurisprudence available on valuation methods.[27] As regards the standard of review applied by the General Court, Conor Quigley argues that “where the Commission is found by the Court to have committed a sufficient error of assessment, the decision will be annulled”.[28] It is settled EU case law, that the valuation method must be based on the available objective, verifiable and reliable data, which should be sufficiently detailed and should reflect the economic situation at the time at which the transaction was decided, taking into account the level of risk and future expectations.[29] The General Court remains, however, entitled to fully review and assess the valuation methods presented by the Commission and the interested parties.[30]

The Real Madrid case is too complex and intertwined to draw definitive conclusions on the possible outcome of the appeal. Nonetheless, the thorough State aid assessment conducted by the Commission in its decision should not be underestimated. This will be a tough “legal match” on an entirely new turf for Real Madrid.



[1] By way of reminder, Article 107(1) TFEU reads: “Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market”.

[2] See Oskar van Maren, “The EU State aid and sport saga: The Real Madrid Decision (part 1)”, Asser International Sports Law Blog, 15 November 2016.

[3] Commission decision SA.33753 of 4 July 2016 on the State aid implemented by Spain for Real Madrid CF, paras. 79 and 80.

[4] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, paras. 41-43.

[5] Interestingly enough, Spain’s comments contradict Real Madrid’s comments, according to which, as can be read in paragraph 46 of the decision, Spanish law did allow Las Tablas to be reclassified for private use in 1998 and beyond until a specific law that prohibits that was introduced in 2001.

[6] Commission decision SA.33753 of 4 July 2016 on the State aid implemented by Spain for Real Madrid CF, paras. 29-36.

[7] Since it was clear State resources were transferred, that the measure was selective and that it at least had the potential of affecting intra-Union trade, the other criteria of Article 107(1) TFEU were only briefly discussed.

[8] See also e.g. Commission decision SA.41613 of 4 July 2016, on the measure implemented by the Netherlands with regard to the professional football club PSV in Eindhoven.

[9] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 88.

[10] Case C-124/10 P Commission v. EDF ECLI:EU:C:2012:318, paras. 84, 85 and 105.

[11] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 89.

[12] Ibid, para. 92.

[13] Ibid, para. 94.

[14] Ibid, para. 29.

[15] Ibid, para. 108.

[16] Ibid, paras. 111-112.

[17] Ibid, paras. 139-142.

[18] See for example T-110/97 Kneissl Dachstein v Commission ECLI:EU:T:1999:244, para. 102.

[19]Case T-304/08 Smurfit Kappa Group v Commission ECLI:EU:T:2012:351, para. 90.

[20] Conor Quigley, “European State Aid Law and Policy”, Hart Publishing, 3rd edition (2015), pages 738-739. See also for example T-20/03 Kahla/Thüringen Porzellan v Commission, ECLI:EU:T:2008:395, para. 115.

[21] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 135.

[22] See for example Case C-172/03 Heiser ECLI:EU:C:2005:130, para. 55.

[23] Quigley, page 276.

[24] Real Madrid further found it surprising that the Commission used a valuation made by an architect’s office in Barcelona to dictate their decision. Though many will find this comment by Real Madrid rather amusing, it once again shows that the rivalry between the two clubs (and cities) far exceeds the performances on a football field.

[25] Commission decision SA.33753 of 18 December 2013, State aid– Spain Real Madrid CF, para. 89.

[26] Ibid, paras. 119-128.

[27] See for example T-366/00 Scott v Commission ECLI:EU:T:2007:99; and C-239/09 Seydaland Vereinigte Agrarbetriebe ECLI:EU:C:2010:778.

[28] Quigley, page 737. Based on the case law of the Court, it is not entirely clear whether a “sufficient error of assessment” by the Commission is enough for the Court to annul the decision.

[29] T-366/00 Scott v Commission ECLI:EU:T:2007:99, para. 158. See also Commission Notice C 262/1 of 19 July 2016 on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union, para. 101.

[30] Case T-274/01 Valmont v Commission ECLI:EU:T:2004:266.

Comments (1) -

  • Florentino Perez

    2/11/2017 9:19:30 AM | Reply

    According to the ecological movement (EeA), the advantage for Real in the transfer of the plots in the Opanel district in exchange for the super prime area in front of the Bernabeu Stadium was approx. €60 million which is not unreasonable considering the actual market prices in both areas. That was the lion's share of the aid. Add this to the three years of delay in the stadium redevelopment (no IPIC naming rights at €20-25 million a year and no increase in the match day revenue) and you will see the that the Saga has been ruinous for Real that has been overtaken in the meantime by United and Barca in the revenue league.

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