It took only days for the de facto immunity of the Court of
Arbitration for Sport (CAS) awards from State court interference to collapse
like a house of cards on the grounds
of the public policy exception mandated under Article V(2)(b) of the New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards . On 15 January 2015, the
Munich Court of Appeals signalled an unprecedented turn in the
longstanding legal dispute between the German speed skater, Claudia Pechstein,
and the International Skating Union (ISU). It refused to recognise a CAS
arbitral award, confirming the validity of a doping ban, on the grounds that it
violated a core principle of German cartel law which forms part of the German public
policy. A few weeks before, namely on 30 December 2014, the Court of Appeal of Bremen held a CAS award, which ordered the German Club, SV Wilhelmshaven, to
pay ‘training compensation’, unenforceable for non-compliance with mandatory
European Union law and, thereby, for violation of German ordre public. More...
to the legitimate excitement over the recent Pechstein
ruling, many have overlooked a previous German decision
rendered in the Wilhelmshaven SV case
(the German press did report on the decision here
The few academic commentaries (see here
focused on the fact that the German Court had not recognized the res judicata effect of a CAS award.
Thus, it placed Germany at the spearhead of a mounting rebellion against the legitimacy
of the CAS and the validity of its awards. None of the commentators weighed in
on the substance of the decision, however. Contrary to the Court in Pechstein, the judges decided to evaluate
the compatibility of the FIFA rules on training compensations with the EU free
movement rights. To properly report on the decision and assess the threat it
may constitute for the FIFA training compensation system, we will first
summarize the facts of the case (I), briefly explicate the mode of functioning
of the FIFA training compensation system (II), and finally reconstruct the
reasoning of the Court on the compatibility of the FIFA rules with EU law
The Pechstein decision of the
Oberlandesgericht of Munich is “ground-breaking”, “earth-shaking”, “revolutionary”,
name it. It was the outmost duty of a “German-reading” sports lawyer to
translate it as fast as possible in order to make it available for the sports
law community at large (Disclaimer: This is not an official translation and I
am no certified legal translator). Below you will find the rough translation of
the ruling (the full German text is available here), it is omitting solely the parts,
which are of no direct interest to international sports law.
of CAS is in the balance and this ruling should trigger some serious
rethinking of the institutional set-up that underpins it. As you will see, the
ruling is not destructive, the Court is rather favourable to the function of
CAS in the sporting context, but it requires a fundamental institutional
reshuffling. It also offers a fruitful legal strategy to challenge CAS awards
that could be used in front of any national court of the EU as it is based on reasoning
analogically applicable to article 102 TFEU (on abuse of a dominant position),
which is valid across the EU’s territory.
Enjoy the read!
PS: The translation can also be downloaded at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2561297
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).More...