Asser International Sports Law Blog

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

[Advanced professional training] Responding to human rights abuse in sport: Safe, effective & appropriate investigation - 5-6 March

Register now for the second edition of our advanced professional training and learn how to respond in a safe, appropriate, and effective way to cases of human rights abuse in sport. 

In recent years, the world of sport has seen a rise in reports of cases of emotional, psychological, physical, and sexual abuse. Sport has often struggled to respond in a safe, effective and appropriate way to these cases.  This has, at best, led to missed opportunities to improve and strengthen prevention mechanisms.  At worst, it has caused retraumatisation and additional harm to those affected. 

This professional training uses real life challenges from past investigations to provide insight into how (not) to respond to reports and allegations of sport-related cases of abuse. It will provide you with tools and knowledge on how to deal with abuse cases while protecting those affected, complying with human rights, and upholding the integrity of sport.

Register HERE

Widespread abuse in sports
The last five years have seen a huge uptick in reports of cases of emotional psychological, physical and sexual abuse in sport. All over the world, across different sports, non-recent and recent cases have come to light: abuse allegations in Dutch gymnastics and US gymnastics, the abuse of female basketball players in Mali, systematic abuse of child athletes in Japan, the abuse of young boys within the English football, or children in other grass-roots sport in Germany, the sexual abuse ofwomen’s football national teams in Afghanistan and Haiti, or the recent sexual assault against a player of the Spanish women’s national football team, to mention but a few.

Ineffective response
Responses from the relevant entities like sport organisations and governments have often fallen short of both the expectations of those impacted, and internationally recognised human rights standards. Some organisations have failed to initiate any investigation whatsoever, while others have commissioned or led inadequate responses. This has resulted in strong  criticism from affected persons, their representatives, and other civil society organisations. However, until now sport has not benefited from  any real  clarity or consistency around good practice on how to respond in a safe, adequate and effective way to allegations of abuse. This course seeks to address that.

Register HERE

Good practice based on research and experience
The Centre for Sport and Human Rights (CSHR) has conducted a study, in conjunction with victims, survivors, and whistleblowers of abuse across continents and sporting disciplines, and based on the learnings developed and published a guidance on how to conduct safe, appropriate and effective investigations into abuse cases in sport.  In this professional training, the Asser Institute partners with CSHR to connect practical research-based guidelines with relevant legal norms and procedures to address human rights abuses in sport. 

What will you learn? 

  •   How (not) to respond to reports and allegations of sport-related cases of abuse 

  •   Knowledge and experience in responding to such cases in a way that protects the affected person from further harm and complies with human rights 

  •    The role that investigations play in access to remedy more broadly 

Download the full programme

Speakers:

  • Kat Craig (CSHR)
  • Dr Daniela Heerdt (Asser Institute)
  • Joanna Maranhão (4x Olympians and Survivor Network Coordinator)
  • Loïc Alves (Senior Legal Counsel at FIFPRO)
  • Peter Nicholson (Head of Investigations and Intelligence Athletics Integrity Unit and Ethics Officer ICC)

Register HERE

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Asser International Sports Law Blog | ‘The reform of football': Yes, but how? By Marco van der Harst

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 reform of football': Yes, but how? By Marco van der Harst

'Can't fight corruption with con tricks
They use the law to commit crime
And I dread, dread to think what the future will bring
When we're living in gangster time'
The Specials - Gangsters


The pressing need for change 

The Parliamentary Assembly (PACE) of the Council of Europe (CoE), which is composed of 318 MPs chosen from the national parliaments of the 47 CoE member states, unanimously adopted a report entitled ‘the reform of football’ on January 27, 2015. A draft resolution on the report will be debated during the PACE April 2015 session and, interestingly, (only?) FIFA’s president Sepp Blatter has been sent an invitation

The PACE report highlights the pressing need of reforming the governance of football by FIFA and UEFA respectively. Accordingly, the report contains some interesting recommendations to improve FIFA’s (e.g., Qatargate[1]) and UEFA’s governance (e.g., gender representation). Unfortunately, it remains unclear how the report’s recommendations will actually be implemented and enforced. 

The report is a welcomed secondary effect of the recent Qatargate directly involving former FIFA officials such as Jack Warner, Chuck Blazer, and Mohamed Bin Hammam[2] and highlighting the dramatic failures of FIFA’s governance in putting its house in order. Thus, it is undeniably time to correct the governance of football by FIFA and its confederate member UEFA – nolens volens. The real question is how to do it.



            Photograph: Fabrice Coffrini/AFP/Getty Images                   Photograph: Octav Ganea/AP


The main recommendations of the report 

In order to successfully investigate and disciplinary sanction violations made by its members, the report calls on FIFA and UEFA to revamp their institutions. Issues like corruption, nepotism, cronyism, conflict of interests can only be solved if:

  • The rules and decisions are clear, transparent and accountable (i.e. sanctioned) at a central level (Congress)
  • The flow of money is clear, transparent and accountable (i.e. sanctioned) at a central level (Congress)

  • Those who are in charge could be held accountable in a judicial or democratic, transparent and clear way before Congress

  • The duration of the terms of office should be limited at all levels (President, Congress, Committees)
  • The rules and decisions made by independent FIFA/UEFA officials should be made ‘for the good of the game’ and not for personal gains

  • Possible conflicts of interests should be prevented

  • Gender equality with regard to democratic representation (Congress, Committees). 


The report’s lack of clarity on the role of Switzerland

In order to implement the report’s recommendations, it is necessary to fully appreciate the essential role Switzerland could play because, inter alia, FIFA and UEFA are both associations under Swiss law. While taking into account the upcoming implementation of Lex FIFA i.e. the criminalisation of corruption in sport in Switzerland, one needs also to analyse the potential role of Swiss private law to ensure a comprehensive implementation of the report’s recommendations on reforming the governance of football by FIFA and UEFA. 


Good governance, corporate governance or association governance?

‘Good governance’ should be distinguished from ‘corporate governance’. The main and essential difference between the two is that the former concerns the protection of the public interest and the latter the protection of the corporation concerned. Accordingly, the set of duties, responsibilities and competences of, e.g., public law authorities are different from those who serve in a commercial enterprise. Considering the public and private law context and the different demands with regard to using the available instruments thereof, it is important to discern the differences between good governance and corporate governance.[3]

According to the European Commission ‘[c]orporate governance defines relationships between a company’s management, its board … and its … stakeholders[4]. It determines the way companies are managed and controlled’[5] by those stakeholders for the former’s and the latter’s interest.

In principle, corporate governance is mainly the (social) responsibility of the respective corporation[6] whereby those stakeholders play a crucial role to ensure that certain standards[7] such as transparency and accountability – with regard to, e.g., FIFA’s and UEFA’s economic and rule-making activities – would be respected in accordance with mandatory rules of national and EU law[8].

All international sports governing bodies located in Switzerland such as FIFA and UEFA have been recognized as private law associations under Article 60 et seq. of the Swiss Civil Code (CC). Since 1981, Switzerland has also recognized the public law status of the International Olympic Committee (IOC).[9]

Under Swiss law, an association could be a profit-organization that may make turnovers or profits comparable to commercial enterprises.[10] Essentially, however, a corporation differs from an association, namely the former has to be financially accountable to its shareholders whereas the latter is required to be democratically and financially accountable to its members.[11] In order to ensure that those members make use of their membership rights, it is fundamental that the decision-making process with regard to anti-corruption compliance structures and democratic structures are strictly adhered in accordance with mandatory rules of law. Accordingly, it may also be a starting point for associations to act in accordance with the principles of ‘association governance’ if they were – indeed – implemented in mandatory law and applied correctly.[12] 


Constraints to association governance

As one of the state parties to the European Convention on Human Rights (ECHR), Switzerland is inter alia bound by Article 11 of the ECHR i.e. the fundamental right to freedom of (assembly and) association, which is subject to restrictions that are in accordance with the law and necessary in a democratic society. Accordingly, those associations have a restricted competence[13] to set the rules, to apply and to enforce them uniformly to their members.[14]

According to Article 23 Federal Constitution (FC), a private law association with a non-economic objective (i.e. political, religious, scientific, cultural, social or non-profit) has the right of freedom of association i.e. the right to establish or dissolve, to voluntarily be (come) a member or to leave and to participate in the association’s activities, which is not subject to state approval or state supervision. [15] As profit associations are only protected by the right of economic freedom pursuant to Article 27 FC, it is of vital importance for non-profit associations not to aim for monetary or financial benefits for its members.[16]

FIFA’s intent to exist as a non-profit organization is apparent from their articles of association.[17] According to Article 2(a) FIFA statutes, its main objective is: ‘[…] to improve the game of football constantly and promote it globally in the light of its unifying, educational, cultural and humanitarian values, particularly through youth and development programmes’. UEFA has a corresponding objective pursuant to Article 2 UEFA statutes. As long as the surplus of revenues will be spent on its non-commercial objectives under those articles of association, the non-profit status of FIFA – and, mutatis mutandis, UEFA – would not be challenged by Switzerland[18]. However, as a legislator, a judicator and as a state party to the CoE, Switzerland should critically assess those associations’ non-profit objectives and the significant surplus from their economic activities plus the distributions thereof in view of the report’s recommendations on financial transparency and accountability in order to respect the – underlying – association governance principles.[19]

FIFA and UEFA[20] are both established and registered[21] as private law associations under Article 60 et seq. CC[22] and, moreover, bound to respect the Swiss mandatory rules of law under Article 63(2) CC. Thus, mandatory rules cannot be disregarded by the articles of association i.e the self-regulatory framework of FIFA and UEFA. If an association’s resolution were to breach mandatory rules, it would be either voidable (i.e. to be challenged within a month of the notification) or null and void (i.e. to be raised at any time) under Article 75 CC.[23]

In case the articles of association do not address a particular issue, the non-mandatory rules of law would apply.[24] In particular, it should be noted that Articles 64-69b CC mostly[25] refer to mandatory procedural rules with regard to the articles of association. For instance, an association is required to have two organs, namely the general meeting of members that has supremacy over all other organs (Article 64(1) CC) and a committee consisting of members – and non-members if not explicitly forbidden by the articles of association[26] – that are elected by the supreme governing body (Article 69 CC). Other organs may be established pursuant to the articles of association.[27]

In other words, it is up to the, e.g., FIFA articles of association to self-regulate the composition, the independence of the Ethics Committee’s members and the transparency of its work. It is therefore not clear how this particular recommendation (please consider p. 8 of the report) can actually be implemented and enforced by the Swiss authorities. A similar assessment could be made, mutatis mutandis, with regard to all the other recommendations of the report.


Civil liability

Apart from the aforesaid memberships’ rights deriving from the decision-making process with regard to anti-corruption compliance structures and democratic structures, associations could also be held liable by their members because a membership is a contractual agreement between two private parties. In other words, the extra-legal part of association governance may be corrected by the rules of civil liability (including tort).

In accordance with Article 1 in conjunction with Article 155(f) of the Private International Law Act (PILA), Articles 52-59 (‘legal entities’) and Articles 60-79 (‘associations’) CC are applicable to all members of both associations.[28] If a private person or legal entity decides to be(come) a member of a private law association, the respective articles of association, regulations or decisions are contractually binding. Apart from membership contracts, there are – of course – other forms of private law’ relationships available whereby one may contractually be bound (in[29])directly to the FIFA or UEFA rules or decisions like, e.g., labour contracts, commercial contracts, player’ licences or host city agreements (e.g., Qatargate).

In this regard, the mandatory rules of civil law include, in particular public policy, bona mores and the protection of personality rights.[30]

Given that the public policy restrictions have already been assessed in an earlier blog post[31], this blog will specifically focus on bona mores and the protection of personality rights. 

As regards to bona mores, the Swiss Federal Supreme Court ruled that in case an article of association contains a third party’s veto right regarding all decisions of the association’s general assembly, it would be null and void for violating bona mores and the right of autonomy of associations.[32]

In reference to the Swiss notion of personality rights (e.g., the right to professional fulfilment through sporting activities, or the right to economic freedom[33])[34], which must be regarded as the equivalent of human rights horizontally applied to private law’ relationships, Article 27 CC stipulates that ‘[n]o person can wholly or partially renounce its capacity to have rights and to effect legal transactions’.[35] Accordingly, if it cannot be established that the law, the athlete’s consent or the existence of an overriding public/private interest may justify an infringement to, e.g., an athlete’s right to economic freedom (i.e. restraint of trade), it must be regarded as null and void under Article 28 CC.[36] Hence, as legislator and as State party to the CoE, Switzerland should have the duty to critically assess whether FIFA or UEFA may infringe their members’ contractual rights as protected by mandatory rules of law, in particular public policy and the protection of personality rights (i.e. contractual freedoms) in the light of the report’s recommendations on financial and on democratic transparency in order to respect the – underlying – association governance principles. 


Criminal liability

As regards the impact of mandatory rules of criminal law on international sports federations based in Switzerland, the first package of Lex FIFA - that will enter into force in the first half of 2015 if uncontested (i.e. a referendum[37]) - defines their respective ‘presidents’ as ‘politically-exposed persons’ (PEPs) i.e. persons with a prominent public function[38]. As PEPs are in a position to potentially commit financial offences (money laundering or corruption), banks are required to closely monitor those accounts (and of their families!) for any suspicious financial transaction. If PEPs and/or their families were to receive cash payments greater than CHF100,000, the respective bank would be obliged to identify them, to keep a record of the transactions and to clarify the background thereof. In case there is any evidence of criminal activities, the bank must report the unusual transactions to the Swiss authorities.[39] However, and surprisingly, the first package of Lex FIFA does not cover UEFA because ‘it is technically a[n] European organisation’ according to the approved legislative proposal[40] and as interpreted by its initiator Roland Büchel MP.

As part of the future second package of Lex FIFA, Switzerland will implement legislation to make corruption in sport a criminal offence. Insofar, private bribery (i.e. passive/active bribery in the private sector) is only regarded as a criminal offence under Article 4a and Article 23 of the Swiss Federal Unfair Competition Law following a complaint.[41] 


Conclusions

The lofty goals of the Council of Europe’s report on reforming football’s governance are laudable in principle, however they lack a clear reflection on the legal means available to attain them. To this end, it is the main point of this blog post’s author to attract the attention of the reader on the particular responsibility of Switzerland in this regard. Due to FIFA and UEFA being legally seated in Switzerland, Swiss law is tasked with the tough mission, in light of recent events, to enforce via private law and criminal law association governance standards on both non-profit organizations. The future implementation of Lex FIFA with regard to the criminalisation of corruption in sport, is a first step in the right direction. What’s rather missing, however, is a private law perspective. A comprehensive implementation of the report’s recommendations can only be achieved if the interpretation of the relevant provisions of the Swiss Code were to be in line with the report’s recommendations. Indeed, as a prominent Council of Europe’ state party, Switzerland should be stricter when assessing the (un)justifiability of a possible infringement by FIFA or UEFA of a member’s rights under the Swiss notion of mandatory rules of law. In this regard, it should also take into consideration the PACE report’s recommendations on reforming the governance of football by FIFA and UEFA.



[1] E.g. Qatargate: la confession accablante, France Football No. 3582, 9 December 2014, p. 19 et seq.

[2] Connarty, The reform of football governance, PACE report, 27 January 2015, p. 17.

[3] Addink, Goed bestuur, Kluwer 2010, p. 6.

[4] ‘See OECD Principles of Corporate Governance, 2004, p. 11, accessible at

http://www.oecd.org/dataoecd/32/18/31557724.pdf. ‘The EU corporate governance framework includes legislation in areas such as corporate governance statements, transparency of listed companies, shareholders’ rights and takeover bids as well as ‘soft law’, namely recommendations on the role and on the remuneration of companies’ directors.’

[5] COM 2012(740) final, Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies, p. 2-3.

[6] E.g., Giesen, Alternatieve regelgeving and privaatrecht, Monografieën Privaatrecht, Kluwer 2007, p. 29.

[7] COM 2012(740) final, Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies, p. 3.

[8] COM 2012(740) final, Action Plan: European company law and corporate governance - a modern legal framework for more engaged shareholders and sustainable companies, p. 3.

[9] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 65.

[10] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 118. Notes ommitted.

[11] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 118. Notes ommitted.

[12] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 119. Notes ommitted.

[13] Please do take into account Weatherill’s statement on conditional autonomy of sports federations under EU law: Weatherill, Is the Pyramid Compatible with EC Law?, ISLJ 2005(3–4), p. 3–7, republished in: Weatherill, European Sports Law Collected Papers Second Edition 2014, available at: http://www.springer.com/law/international/book/978-90-6704-938-2.

[14] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 40-44.

[15] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 3, 5.

[16] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 5.

[17] Pieth, Governing FIFA – concept paper and report, 19 September 2011, p. 12. Tomlinson, FIFA (Fédération Internationale de Football Association) : the men, the myths and the money, 2014, p. 28.

[18] Pieth, Governing FIFA – concept paper and report, 19 September 2011, p. 12.

[19] By the way, the EU-28 member states are obliged to act in accordance with the Court of Justice rulings in, inter alia, Walrave (Case 36-74, ECR 1974 1405), Bosman (Case C-415/93, ECR 1995 I-4921) and Meca Medina (Case C-519/04 P, ECR 2006 I-6991) with regard to the economic and rule-making activities of UEFA and FIFA. For more information please see Weatherill, European Sports Law Collected Papers Second Edition 2014, available at: http://www.springer.com/law/international/book/978-90-6704-938-2.

[20] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 67-69.

[21] Article 1 FIFA statutes; Article 1 UEFA statutes.

[22] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 19, 40.

[23] Handschin, Good governance: lessons for sports organizations?, in: Bernasconi, International sports law and jurisprudence of the CAS, 2014, p. 126-127. Notes ommitted.

[24] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 6.

[25] With the notable exception of Article 75 CC.

[26] BGE 73 II 1.

[27] Jakob, Huber and Rauber, Nonprofit law in Switzerland, The Johns Hopkins comparative nonprofit sector project, Working Paper No. 47, March 2009, p. 6.

[28] Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 19.

[29] E.g., a dynamic reference to accept the jurisdiction of the Court of Arbitration for Sports (CAS).

[30] Morgan, The relevance of Swiss law in doping disputes, in particular from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344-345. Fenners, Der ausschluss der staatlichen gerichtsbarkeit in organisierten sport, Zurich 2006, paras. 111-113. Baddeley, L’Association sportive face au droit – Les limites de son autonomie, Basel 1994, p. 108.

[31] Marco van der Harst, Can (national or EU) public policy stop CAS awards?, 22 July 2014, available at: http://www.asser.nl/SportsLaw/Blog/post/can-national-or-eu-public-policy-stop-cas-awards-by-marco-van-der-harst-ll-m-phd-candidate-and-researcher-at-the-aislc.

[32] BGE 97 II 108 et seq. Valloni & Pachmann, Sports law in Switzerland, Wolters Kluwer 2011, p. 41.

[33] Let’s not forget that there are two sports law cases pending versus Switzerland at the European Court of Human Rights: Adrian Mutu (No. 40575/10) and Claudia Pechstein (No. 67474/10).

[34] Morgan, The relevance of Swiss law in doping disputes, in particualr from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344, note 6: Decision 4A_558/2011 of 27 March 2012; ATF 134 III 193 (Further notes omitted).

[35] E.g., Morgan, The relevance of Swiss law in doping disputes, in particualr from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344-345.

[36] E.g., Morgan, The relevance of Swiss law in doping disputes, in particualr from the perspective of personality rights – a view from abroad, in: Revue de droit suisse, Band 132 (2013) I Heft 3, p. 344-345.

[37] Deadline: April 2, 2015. Source: http://www.admin.ch/opc/de/federal-gazette/2014/9689.pdf.

[38] In order to prevent being blacklisted by the Organisation for Economic Cooperation and Development (OECD), Switzerland had to implement the 2012 Recommendations of the Financial Action Task Force (FATF) with regard to combating money laundering and terrorist financing.

[39] Sources: http://www.sportsintegrityinitiative.com/swiss-law-requires-bank-account-monitoring-sports-federation-heads/ and http://www.rolandbuechel.ch/news_850_lex-fifa-interessiert-auch-die-russen-buechel-auf-den-russischen-sputnik-news.xhtml.

[40] Bundesgesetz zur Umsetzung der 2012 revidierten Empfehlungen der Groupe d’action financière, December 12, 2014, p. 9697-9698. Available at: http://www.admin.ch/opc/de/federal-gazette/2014/9689.pdf.

[41] Cassini, Corporate responsibility and compliance programs in Switzerland, in: Manacorda, Centonze and Forti (eds.), Preventing corporate corruption: the anti-bribery compliance model, Springer 2014, p. 493.


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Asser International Sports Law Blog | Image Rights in Professional Basketball (Part I): The ‘in-n-out rimshot’ of the Basketball Arbitral Tribunal to enforce players’ image rights contracts. By Thalia Diathesopoulou

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

Image Rights in Professional Basketball (Part I): The ‘in-n-out rimshot’ of the Basketball Arbitral Tribunal to enforce players’ image rights contracts. By Thalia Diathesopoulou

A warning addressed to fans of French teams featuring in the recently launched video game NBA 2K15: Hurry up! The last jump ball for Strasbourg and Nanterre in NBA 2K 15 may occur earlier than expected. The French Labour Union of Basketball (Syndicat National du Basket, SNB) is dissatisfied that Euroleague and 2K Games did not ask (nor paid) for its permission before including the two teams of Pro A in the NBA 2K15 edition. What is at issue? French basketball players’ image rights have been transferred to SNB, which intends to start proceedings before the US Courts against 2K Games requesting 120.000 euros for unauthorized use of the players’ image rights. SNB is clear: it is not about the money, but rather to defend the players’ rights.[1] Strasbourg and Nanterre risk to “warm up” the virtual bench if this litigation goes ahead. 

Source: http://forums.nba-live.com/viewtopic.php?f=149&t=88661&start=250 

The clash between SNB and 2K Games, albeit unprecedented at the European level, should not come as a surprise. The commercialization of athletes’ image rights has become a sine qua non component of sports marketing.[2] The transfer of professional players’ image rights to their clubs or third parties is for some of them more lucrative than their salaries. In the framework of international basketball, this has led to the proliferation of image rights contracts, signed by the players in addition to their employment contracts. While the legal nature of image rights and their unauthorized use by third parties has been recently extensively debated- in the wake of US College Athletes image rights cases before US Courts which will be discussed in the second part of this blog series[3]-, image rights contracts and their enforcement by basketball players before the Basketball Arbitral Tribunal (BAT)[4] are still very much uncharted territories.

This blogpost will look at the basketball players’ image rights contracts in a three-pronged approach. First, we will explain how image rights contracts in international basketball serve as tax loopholes by the clubs, which increasingly force players to sign them (I). Thereafter, based on BAT’s case law, we will attempt to build a legal roadmap with regard to the enforcement of image rights contracts by players. In this light, we will examine the relationship between the main contract and the image rights contract as well as the role of the different dispute settlement clauses included in the different contracts when assessing BAT’s jurisdiction (II). Finally, we will analyse the position of the BAT in enforcing image rights contracts and the significant impact of its awards in the basketball world, taking into account the unique features of basketball arbitration (III). 


I. Image rights contracts in international basketball: Cherchez l’argent!

The use of image rights contracts leads to two possible scenarios. In the first one, which is the most common, a player signs an employment contract with a club indicating the player’s remuneration net of all taxes. This initial contract is usually characterized as the “main agreement”[5] or “master agreement”[6]. Thereafter, the club approaches the player with two additional contracts: the league contract which provides for a remarkably lower monthly salary than the main contract; and an image rights contracts, where the player assigns his rights to a third party, an image rights company. The league contract reporting a much lower wage than the wage actually offered to the player is sent to the league and is used for tax purposes. In parallel, the club signs an image rights contract with the image rights company to which the player has previously assigned his intellectual property rights. According to this contract, the company owns the player’s image rights. This means that the player assigns to the club the use of these rights for commercial and promotional purposes. As a result of this assignment, the club undertakes the obligation to pay a specific amount of money per month to the company. Once the club pays the image rights company, the image rights company transfers this amount to the player.

In order to understand this quite complex scheme, let’s use a concrete example. A player signs with the club a main contract indicating a remuneration of EUR 300.000. Thereafter, the player signs the league contract indicating a remuneration of EUR 30.000 by the club, while the club signs a contract with an image rights company and undertakes to pay a total amount of EUR 270.000. Finally, the player receives the amount of EUR 270.000 by the image rights company. Thus, it is clear that a combination of the league and the image rights contracts amounts to sum foreseen in the main contract (30.000+270.000=300.000). While this fictitious transfer of money through a third party does not seem to have a practical effect on the player’s remuneration, the split of the main contract into two separate agreements helps the club to tailor its tax obligations. In fact, the club would in principle have had to pay taxes on the full amount of EUR 300.000. Nonetheless, by breaking up the payment into different amounts, the club pays taxes and social contributions for the individual income of EUR 30.000 only. True, the club is also obliged to pay the taxes due on the EUR 270.000 transferred to the image rights company. However, taking into account that the tax rate over intellectual property rights is typically much lower than that concerning individual income, the club gains significant tax benefits.[7]

In the second potential scenario, in parallel to the main contract, the player signs a side agreement with the club, which explicitly splits the net compensation into an amount derived from the league contract and an amount derived from the image contract. Subsequently the player enters into an exclusive license agreement with an image rights company to which he assigns the use of his image rights receiving as compensation the amount stipulated in the side agreement. At the same time, the club enters into a sublicense agreement with the image rights company in order to use the player’s image rights, by paying the company the same amount of money that the company then pays to the player under the license agreement.

In short, this scheme is a fiction invented by the clubs in order to get significant tax advantages. While this is done pro forma, without any intent of changing the player’s rights and obligations under the main contract[8], this tax evasion scheme can lead to the club evading also its contractual duties when a club fails to pay the player. In this case, with respect to any outstanding remuneration, can the player enforce the image rights contract against the club in BAT proceedings? 


II. How the BAT establishes its jurisdiction on image rights contracts disputes

An overview of the BAT case law shows that players bring a dispute against their club for outstanding payments on the grounds of a broadly drafted arbitration clause in the main contract, which provides for BAT’s jurisdiction over any dispute arising out of, or in connection with the main contract. However, as is already discussed, a player’s remuneration is often based on a matrix of several contracts – the main contract, the league contract, the image rights contract and/or the license agreement-, which may contain a dispute resolution clause of their own that does not refer to the BAT. Therefore, when a dispute for outstanding payments is brought before the BAT, the arbitrator first has to determine whether the claim made by the player falls within the scope of the BAT arbitration clause included in the main contract. Thus, the arbitrator must consequently determine the relation between the main contract and the other contracts, including the image rights contracts.

The difficulty emerges from the fact that the contracts do not define how they should inter-relate. As a result, the BAT has to interpret the contracts and decide whether the subsequent contracts actually supersede the main contract and the applicable BAT arbitration clause or whether they only supplement the main contract. Namely, the clubs, relying on the fact that the image rights contract is signed after the main contract and referring to the legal principle lex posterior derogate legi priori[9], claim that the dispute settlement provision contained in those contracts override the BAT arbitration clause included in the main contract.[10]

In order to decide on its jurisdiction and the underlying relation between the several contracts, the BAT has consistently used a double test based on the common intention of the parties and the wording of the BAT arbitration clause contained in the main contract. At first, the BAT examines whether the main contract includes all the essential elements with regard to the player’s rights remuneration. Then, it elaborates whether these terms reflect the parties’ common intent under the main agreement to guarantee the payment of the full salary to the player, irrespective of any modalities that would be agreed upon in subsequent contracts as to the mode and schedule of payments.[11] If the main contract is seen as containing the common agreement of the parties on the full amount of remuneration, any further agreement referring to the way this payment is organized has only a supplementary function. The second criterion is based on the interpretation of the BAT arbitration clause. The main contract usually contains a broad BAT arbitration provision that covers any dispute arising from the main contract. Once established that the common intent of the parties is to guarantee the salary stipulated in the main contract, the broad terms of the arbitration clause necessarily encompass any dispute relating to the non- payment of any part of the player’s total salary. Once these criteria are fulfilled, the BAT asserts that the outstanding payments deriving from the image rights contracts fall within the scope of the BAT arbitration clause.

Furthermore, in some cases, the BAT has introduced other criteria, such as the necessity to establish a link between the contracts. In the 0115/10 case, the BAT established a close link between the main contract and the image rights contract, in a way that the image rights contract could not exist but for the original contract.[12] Interestingly enough, this rather broad interpretation has been inspired by the liberal case law of the Swiss Federal Tribunal, which requires that the interconnection between different contracts be taken into account when examining the substantive validity of an arbitration agreement.[13]

It is remarkable that until now, when examining the jurisdictional basis, the BAT has consistently adopted a rather liberal approach by piercing the fictitious veil between the club, the player and the third party when using overlapping contractual constructions. However, on the merits, the BAT’s approach is not totally consistent. 


III. Enforcing image rights contracts: the BAT’s enigmatic approach

In a series of awards, the BAT has found the clubs liable for the breach of the image rights contract and the subsequent outstanding payment of the player.

Applying the legal roadmap established above, the BAT has addressed the supplementary role of the subsequent contracts in organizing the payment schedule of the full remuneration of the player provided in the main contract. Indeed, from a contractual point of view, the terms of the main contract are deemed sufficient to entitle the player to claim the entire amount owed to him on the basis of that contract alone.[14] In this sense, the fact that image rights payments have been made via a third party does not free the club from its duty to guarantee the full remuneration of the player.[15] To reinforce this argument, the BAT has even asserted that the only case in which the club would not be found liable for breach of image rights contract would be the case where the image rights contract explicitly provided a waiver of the player’s claims against the club relating to image rights.[16]

However, this - until recently- consistent approach has been overturned in the latest BAT award concerning the enforcement of image rights contracts.[17] In that case, the image contract was signed between a company to which the claimant assigned the rights to his promotion and a company managing the image and endorsement rights of the club. Although having confirmed the supplementary role of the image rights contract with regard to the employment contract at hand, the arbitrator chose to deviate from the entrenched interpretation in BAT jurisprudence of the intent of the parties. Namely, the arbitrator interpreted the parties’ behaviour as intending to discharge the club of its obligation to guarantee the full amount of the player’s salary under the main contract.

While, in this particular case, the company to which the player assigned his image rights could have been found liable for not transferring the missing amounts to the player, the BAT’s approach is questionable in that it undermined the club’s liability under the main contract. At this point, it should be highlighted that BAT decides all cases ex aequo et bono.[18] In this light, it is the opinion of the author of this blogpost that it would be contrary to general considerations of justice and fairness to consider that the club could take advantage of a tax-optimising structure to no longer guarantee principal amounts contractually due to the player. In other words, it would be unfair to consider that the player has implicitly renounced the guarantees offered to him by the club under the main contract. 


Conclusive Remarks

The system of image rights contracts in international basketball is fragile. Based on the lack of legal certainty in BAT jurisprudence, this blogpost has evidenced the risk that clubs use the BAT to escape their obligations deriving from the image rights contracts. Taking into account that BAT awards are directly enforceable under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, subject only to an appeal on the limited grounds provided in Article 190 Swiss Private International Law Act (PILA)[19], a denial of the BAT to enforce image rights contracts against the clubs leaves the players deprived of any real legal avenue to vindicate their rights. In this sense, a consistent approach of the BAT with regard to the intimate relation existing between the image rights contract and the main employment contract would not only be desirable, but would also be in line with the ex aequo et bono principle.


[1] Johan Passave-Ducteil, the president of SNB remarks in l’Equipe:"Ce n’est pas une histoire d’argent, on défend le droit des joueurs"

[2] D-R Martens, ‘An innovative System for Resolving Disputes in Sport (only in Sport?)’ (2011) 1-2 International Sports Law Journal 54, 60.

[3] Edward O’ Bannon et al v National Collegiate Athletics Association, Electronic Arts Inc and Collegiate Licensing Company ( US District Court, 08.08.2014) and NCAA Student-Athlete Name and Likeness Licensing Litigation, 724 F. 3d 1268 (9th Cir. 2013).

[4] The tribunal was established by FIBA in 2006 under the name “FIBA Arbitral Tribunal (FAT)”. In accordance with the 2010 FIBA General Statutes, the tribunal was renamed into “Basketball Arbitral Tribunal (BAT)”.

[5] Vladimir Golubovic v Basketball Club Union Olimpija Ljubljaba, BAT 0174/11, para 6.

[6] Pawel Kikoeski v KK Union Olimpija Ljubljana, BAT 0155/11, para 23.

[7] In the case where the image rights company is seated in a tax haven state, the tax benefits are almost double for the club.

[8] BAT 0155/11(n 6), para 51.  See also, 0174/11(n 5) para 10: “The Club suggested the image contract because it served tax driven purposes only. That was the only purpose for such a contract, and it was irrelevant for the player, because his remuneration were settled in net amount (tax free)”.

[9] i.e a subsequent law imparts the abolition of a previous one

[10] Richard Hendrix v Club Baloncesto Granada, FAT 0115/10, para 36.

[11] FAT 0115/10(n 10), para 44, Dalibor Bagaric v Fortitudo Pallacanestro SrL FAT 0105/10 para 49, Lazaros Papadopoulos v Fortitudo Palacanestro Societa’ Sportica Dilettantistica a R.L. FAT 0071/09 para 61, Darryl Eugene Strawberry and Bill Duffy International Inc v Fortitudo Palacanestro Societa’ Sportica Dilettantistica a R.L. FAT 0067/09, para 66.

[12] FAT 0115/10 (n 10), para 41.

[13] Ibid, para 43 where the arbitrator makes an extensive reference to Swiss Federal Tribunal case law: Decision of the Swiss Federal Tribunal of 16 October 2003, reported in ATF 129 III 727, 735 using the

word “liberal” with reference to ATF 121 III 38, 45 and the decisions 4P.126/2001 of 18 December 2001

reported in ASA Bulletin 2002, p. 482; 4C.40/2003 of 19 May 2003 at 4, reported in ASA Bulletin 2004, p.

344; see also decision 4P.230/2000 of 7 February 2001 reported in ASA Bulletin 2001, p. 523.

[14] FAT 0067/09 (n 11), para 83.

[15] FAT 0071/09 (n 11), para 76.

[16] FAT 0115/10 (n 10), para 64.

[17] Steven Smith v Virtus Palacanestro Bologna S.p.A, BAT 0413/13

[18] BAT Arbitration Rules, Article 15.1: "Unless the parties have agreed otherwise the Arbitrator shall decide the dispute ex aequo et bono, applying general considerations of justice and fairness without reference to any particular national or international law ".

[19] In fact, according to Article 190 (2) PILA, only serious procedural defects or rulings on substance that are contrary to international public policy may constitute grounds to set aside an award. See A Rigozzi, ‘Challenging Awards of the Court of Arbitration for Sport’ (2010)1 Journal of International Dispute Settlement 217, 217-254.

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Asser International Sports Law Blog | Chess and Doping: Two ships passing in the Night? By Salomeja Zaksaite, Postdoctoral researcher at Mykolas Romeris University (Lithuania), and Woman International Chess Master (WIM)

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

Chess and Doping: Two ships passing in the Night? By Salomeja Zaksaite, Postdoctoral researcher at Mykolas Romeris University (Lithuania), and Woman International Chess Master (WIM)

It may come as a surprise to laymen, but chess players are subjected to doping testing. Naturally, then, the questions follow as to why they are tested, and if they are really tested (at least, with a level of scrutiny comparable to that which physically-oriented athletes are regularly subjected).


The answer to the first question is two-fold. There is an “official” answer and a “pragmatic” answer. Regarding the ostensible one, rather typical doping terminology is employed: certain substances might enhance performance in chess, and thus, they are prohibited. A layperson might ask: “what substances are these?” One fair guess could be beta-blockers – those medications which help reduce heart rates in times of anxiety and thus contribute to clearer thinking, and which are prohibited inter alia in shooting. That sounds pretty sensible; however (mainly due of the lack of scientific evidence on the actual performance enhancing), beta-blockers are not prohibited in chess.[1] As far as I know, chess players do not use beta-blockers, and I cannot imagine that they ever actually will use them to enhance their performance. Nor do chess players use anabolics, EPO, growth hormones – or any other of the “classical” doping substances. What might be an issue is caffeine because of its stimulant properties, but it was excluded from the list of prohibited substances in 2004.[2]


So what are the substances chess players do use? The reigning world champion Magnus Carlsen drinks freshly squeezed orange juice and many top players drink either water or coffee, or both… This is “doping” for chess players. The aforementioned champion was tested several times and said that “there is not so much point of drugs testing in chess, I must admit. However, if I must, then I must.”[3] In 2008 Dresden Chess Olympiad, Vassily Ivanchuk refused to participate in a doping control and actually no penalties were applied as the whole chess community defended him. The official FIDE (World Chess Federation) statement was that he “apparently failed to understand the instructions, especially since English is not Mr. Ivanchuk’s first language.”[4] Such a “flexible” formulation employed by FIDE suggests that the anti-doping system hardly has a real deterrent effect on elite chess players.


Returning to the legal discourse, we should pose some fundamental questions originally coming from the jurisprudence of European Court of Human Rights. These questions read as follows: Is the anti-doping system restrictive, and is the restrictiveness proportionate to the aim that is being sought to achieve? The answer to the first question is positive: the doping system is undoubtedly restrictive. Testing might not only be unpleasant, but also, some accidental factors must be taken into account, and additional time is needed to grasp the medical instructions in order not to trigger a positive test because of some inadvertently taken substances. Most people might not know it, but ephedrine and its form pseudoephedrine[5] (used to treat nasal and sinus congestion and available as the well-known medicine Theraflu) are prohibited, as is heptaminol [6] which falls into Ginkorfort and/or other herbal products. These medicines are sold in pharmacy without a prescription. So, all the athletes – including chess players – should avoid such substances in-competition and some period before the competition. For instance, although the swimmer Frédérick Bousquet stated that he bought the incriminated medicine from a pharmacy, he was tested positive for the heptaminol in 2010, and handed a two month doping ban. Last but not least, each doping test costs about $400 USD. Therefore, some proportionality test should also be applied, weighing the costs and benefits of the anti-doping fight. Thus, to my mind the anti-doping system within the context of chess is not proportionate to achieve its aim – which is to create a level playing field and a clean game.


Perhaps, leaving the legal discourse aside is necessary to unveil the real (not postulated) aims lying behind the adoption of an anti-doping policy in chess. Indeed, political considerations overruled the proportionality test, and all the more interesting is that the chess community, in turn, “silently” accepted those pragmatic considerations. Guess what? Chess officials as well as players really want to get into the Olympic Games. In other words, the chess community would love being an Olympic sport, and hence, if we must, we would silently accept those unnecessary tests. To my knowledge, only a few players have ever been caught and punished. For instance, the games of two players were forfeited, since they refused to provide a sample to doping control at the Calvia Olympiad 2004.[7] It is quite a telling indicator of the potential gap between anti-doping rules and the practical implementation of those rules. And it is not because chess players are absolutely clean (who knows – perhaps they use cannabis or cocaine not less frequently than other athletes caught). It is because everyone understands that the system is designed not for chess, and therefore, “sensibly” does not strictly implement it.


Regarding the title of the blog post: chess players hardly could be associated with doping, but they are! Chess and doping could be compared to the two ships in the darkness that are just saying “hello” to each other, but not really communicating. Hence, we carry the little burden of some inconvenience related to doping testing, but the sweetness of such burden (that is the utopian hopes for inclusion in the Olympics, which probably will not come into effect in the upcoming decade or so) somehow compensates for such discomfort.


By Salomeja Zaksaite, Postdoctoral researcher[8] at Mykolas Romeris University (Lithuania), and Woman International Chess Master (WIM)



[1] Beta-blockers are prohibited in Archery (WA) (also prohibited Out-of-Competition), Automobile (FIA), Billiards (all disciplines) (WCBS), Darts (WDF), Golf (IGF), Shooting (ISSF, IPC) (also prohibited Out-of-Competition), Skiing/Snowboarding (FIS) in ski jumping, freestyle aerials/halfpipe and snowboard halfpipe/big air, http://list.wada-ama.org/prohibited-in-particular-sports/prohibited-substances/.      

[2] In 2004, WADA took all caffeine products out of the prohibited list, in spite of the fact that some caffeine products, such as Animine, can induce serious heart problems and even death if taken in high dosages (de Mondenard, 2004). Quoted from: Paoli L., Donati A. (2014), The Sports Doping Market. Understanding Supply and Demand, and the Challenges of Their Control. Springer New York Heidelberg Dordrecht London, pp. 8.

[3] Venkata Krishna “Now, even Chess players subjected to dope testing”, 20 November 2013, http://www.newindianexpress.com/sport/Now-even-Chess-players-subjected-to-dope-testing/2013/11/20/article1899989.ece .

[4]Decision of the FIDE Doping Hearing Panel, Wijk aan Zee (NED), 21 January 2009, http://www.fide.com/component/content/article/1-fide-news/3704-decision-of-the-fide-doping-hearing-panel

[5] Ephedrine is classified as a specified stimulant (S6) and is prohibited in-competition in all sports, http://list.wada-ama.org/prohibited-in-competition/prohibited-substances/.

[6] Heptaminol is classified as a specified stimulant (S6) and is prohibited in-competition in all sports, http://list.wada-ama.org/prohibited-in-competition/prohibited-substances/.

[7] Actually, the events at Calvia Olympiad are the most known to the chess community. One of those players wrote a blog post accusing FIDE of somewhat “highly flawed” disciplinary hearing.  Shaun Press “FIDE gets it right on drug testing”, 29 November 2008, http://chessexpress.blogspot.nl/2008/11/fide-gets-it-right-on-drug-testing.html. Yet, of course, there were more attempts to test and sanction chess players for anti-doping violations. For example, 2013 WADA report indicates that there were 3 adverse analytical findings (AAF) within those tested (80 samples were taken), however, to my knowledge, the outcomes of these AAF are not publicly available. 2013 Anti‐Doping Testing Figures Samples Analyzed and Reported by Accredited Laboratories in ADAMS, http://www.wada-ama.org/Documents/Resources/Testing-Figures/WADA-2013-Anti-Doping-Testing-Figures-SPORT-REPORT.pdf, pp. 6.

[8] Postdoctoral fellowship is being funded by European Union Structural Funds project ”Postdoctoral Fellowship Implementation in Lithuania”, www.postdoc.lt.

Comments (2) -

  • Clifford

    7/24/2015 9:37:43 AM |

    You fail to consider that abiding by the testing regime may actually be damaging for the health of, particularly older, chessplayers.
    Hans Ree reported that one GM retired after health problems made worse by  abiding by the doping code and avoiding the best drugs for the illness.

  • CLEM REYNOLDS

    12/12/2015 10:02:38 AM |

    "certain substances might enhance performance in chess, and thus, they are prohibited"

    This is not really the case. The general WADA list of banned substances is used (though w/o the beta-blocker appendix), independent of whether such substances might actually enhance chess performance. WADA has repeatedly rejected arguments (in all sports) when a competitor tries to plead that a banned substance isn't really performance enhancing. The Anti-Doping Code is specific about this.

    FIDE had two people refuse tests in 2004 largely for political reasons (and a large number of grandmasters not compete in the first place), and the 2008 Ivanchuk incident, with a related refusal case in a national championship. Back then they might have been able to skirt it, but 10 years down the road, WADA will slap them as being non-compliant if they don't follow the protocol.

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