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

Blog Symposium: Why FIFA's TPO ban is justified. By Prof. Dr. Christian Duve

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective. 

Editor’s note: Finally, the last blog of our TPO ban Symposium has arrived! Due to unforeseen circumstances, FIFA had to reconsider presenting its own views on the matter. However, FIFA advised us to contact Prof. Dr. Christian Duve to author the eagerly awaited blog on their behalf. Prof. Dr. Christian Duve is a lawyer and partner with Freshfields Bruckhaus Deringer LLP and an honorary professor at the University of Heidelberg. He has been a CAS arbitrator until 2014. Thus, as planned, we will conclude this symposium with a post defending the compatibility of the TPO ban with EU law. Many thanks to Prof. Dr. Duve for having accepted this last-minute challenge!


This blog article outlines FIFA’s reasons to introduce Art. 18ter FIFA Regulations on the Status and Transfer of Players (RSTP) which bans third-party ownership of players’ economic rights (TPO). In recent years, TPO was perceived as a threat to the integrity of football competitions within the international football community[i] and has become an area of concern for FIFA. Nevertheless Art. 18ter RSTP has been heavily criticized mainly by the proponents of TPO and a complaint has been filed with the European Commission by the Spanish and the Portuguese Leagues for an alleged violation of EU competition law. In the following it will be shown that such criticism does not sufficiently take into consideration the specific characteristics of the practice of TPO as well as football in general. It explains the rationale behind Art. 18ter RSTP which

-      fosters the integrity of competition which is a priority topic for FIFA,

-      promotes the independence of clubs by preventing third parties’ influence in sporting decisions,

-      leads to stable squads,

-      provides an opportunity for investors to invest in the clubs rather than in single players,

-      leads to financially healthier clubs.

Hence, with the introduction of Art. 18ter RSTP, FIFA pursues legitimate aims which justify the ban of the TPO practice.


1.              FIFA’s Way to Art. 18ter RSTP

TPO covers various situations in which a third party invests in the economic rights of a player in order to receive a compensation with regard to a future transfer. Whilst it is widely used in South America and in Southern Europe as an alternative funding possibility, especially to finance investments in sporting talent,[ii] TPO is explicitly prohibited in England, France and Colombia.[iii] The English ban on TPO was introduced in 2008 after the commotion caused by the Tévez case in 2006 where the contract between Tévez and West Ham United contained a provision giving a third party owner the right to decide on the transfer and the transfer fee of the player without any right to veto by the club.

FIFA has introduced a new rule Art. 18bis RSTP which prohibits clubs to enter into contracts that are liable to jeopardise the club’s independence, its policies or the performance of its teams and freedom of decision-making in employment and transfer-related matters and came into force on 1 January 2008.[iv] However, after having mandated two studies providing data and information on TPO in several countries in 2013 and 2014, it was felt that Art. 18bis RSTP was not sufficient and did not address this subject in an appropriate manner. Therefore FIFA decided to introduce a new Art. 18ter RSTP as from 1 May 2015.

The main provision of Art. 18ter RSTP reads:

1.      No club or player shall enter into an agreement with a third party whereby a third party is being entitled to participate, either in full or in part, in compensation payable in relation to the future transfer of a player from one club to another, or is being assigned any rights in relation to a future transfer or transfer compensation. […]

It has been criticized that Art. 18ter RSTP prevents and restricts competition in the market for capital investment in football in a way that is not proportionate for attaining its legitimate objective and that Art. 18ter RSTP is therefore incompatible with EU Competition law. However, such criticism does not sufficiently take into consideration the specific characteristics of football as will be shown in this blog.


2.              The Rationale of Art. 18ter RSTP

First and foremost, Art. 18ter RSTP protects the integrity of the game itself by allowing for the necessary freedom in the contractual relationship between a club and a player, to determine whether and when the player is fielded as well as to decide independently and for sporting reasons only whether and when they are transferred.

Second, with regard to financial aspects of the clubs, critics undervalue that Art. 18ter RSTP is limited to a prohibition of an investment in a club’s players and does not in any way limit an investment in the clubs themselves leading to financially healthier clubs.

2.1           Art. 18ter RSTP Fosters the Integrity of Football

Art. 18ter RSTP pursues several legitimate aims, inter alia, the integrity of competition (2.1.1.), the independence of clubs (2.1.2.) and the stability of squads (2.1.3.).

2.1.1      Integrity of Competition

The protection of the integrity of the game is not only one of FIFA’s main objectives according to Art. 2 e) of the FIFA Statutes, it was also recognized by the European Commission as a legitimate aim justifying limitations on competition.

With regard to the UEFA rule on the “Integrity of the UEFA Club competitions: Independence of clubs” establishing a ban on the ownership of several clubs participating in the same competition by the same person or company, the European Commission held that the ban was in any case a necessary rule to ensure its legitimate aim of protecting the integrity of sporting competitions by “protecting the uncertainty of the results and giving the public the right perception as to the integrity of the […] competitions with a view to ensure their proper functioning“.[v] Previously, a Court of Arbitration for Sport (CAS) decision has also confirmed the validity of this limitation and found that “when commonly controlled clubs participate in the same competition, the «public’s perception will be that there is a conflict of interest potentially affecting the authenticity of results»” and that “that ownership of multiple clubs competing in the same competition represents a justified concern for a sports regulator and organizer”.[vi]

The danger of such conflicts of interests is, however, not limited to club owners, it extends to investors, agents and coaches. Similar to the situations in which a third party has interests in several clubs participating in the same competition, conflicts of interests can also arise in cases where third parties own shares in economic rights of several players of different teams which are competing against each other.[vii] Especially if a player in which a third party has an economic interest competes against a club that is owned by the same investor, there is a significant potential for such conflicts. Even within the same team, the risk of having the same owner of a number of players presents a competitive integrity risk.[viii]

In any case and irrespective of an actual conflict, a conflict may at least be perceived by the public in connection with TPO. Such perception leads to a loss of confidence in the integrity of the competition and damages the image of the sport. In the light of the increasing threat of match manipulation, the involvement of third-party owners creates a danger to the reputation of the competition that could weaken the football world. The integrity of the game is therefore only guaranteed if players and clubs are not influenced by third parties owning the players’ economic rights with the aim to maximize their investment.[ix]

2.1.2      Independence of Clubs

To ensure the independence of its Members’ affiliated clubs is one of FIFA’s objectives pursuant to Art. 18 para. 2 of the FIFA Statutes. The second TPO study found that “the spread of TPO in the majority of the cases may be closely related to a partial takeover of the clubs’ control by actors seeking primarily short-term profit and speculating on the purchase and sale of economic rights, regardless of sporting concerns”[x]. TPO potentially has an impact on player selection on the field of play and creates complications for transfer negotiations as the clubs’ sporting interests (e.g. of holding a player despite a lucrative offer or of letting a player go without being offered a lucrative transfer fee) may conflict with investors seeking a profitable return on their investment.

Even though interests may coincide if the investor speculates for a rise in the player’s market value (e.g. Santos FC refusing Chelsea FC’s offer for Neymar), one prominent example of conflicting interests is the Tévez case in which West Ham United was deprived of any rights with regard to a future transfer of the player. More recently, contract renewal negotiations with Zambrano, a key player of Eintracht Frankfurt, are jeopardized by a third party whose entitlement to future transfer compensation for Zambrano is to be bought by Eintracht.[xi] 

Overall, the more clubs are depending on TPO financing, the more negotiating power third party investors have. The second TPO study mentions the purchase of economic rights at preferential prices, pre-emptive rights on new players or even greater influence on transfer policy.[xii] Moreover, with players’ economic rights in the hands of various investors the fragmentation of interests within a club increases. The independence of clubs can only be guaranteed by preventing a partial takeover of the clubs’ control by third parties especially with regard to transfers.

2.1.3      Stability of Squads

The aforementioned clash of interests between investors speculating on the purchase and sale of players’ economic rights and clubs reoccurs when it comes to the frequency of transfers. Whereas an investor makes money out of transfers, a club may be more interested in building a stable team and team cohesion for sporting reasons. The Demographic Study of CIES in 2014 found that “in general, the number of transfers carried out by teams during the current season is at an all-time high” and stated that “the increasing speculation surrounding players’ transfers is also visible through the progressive drop in the number of club-trained players, which has attained its lowest level since 2009”.[xiii] Pursuant to the same study, players recruited from January 2013 onwards represented 41.3% of squads on average (10.2 signings per club). At the same time, the best performing clubs generally have the most stable squads. For instance, FC Barcelona has the most stable squad among European top division teams. Its Players have been for 5.5 years in the first team squad on average pursuant to the Demographic Study of CIES in 2014.[xiv]

Leagues and club representatives stressed in the Second TPO study that the increasing gaps between clubs in terms of stability contribute to the general decline in the competitive balance both at national and international level.[xv] FIFA’s overall objective to promote football, laid down in Art. 2 a) of the FIFA Statutes, is endangered by such contractual instability caused by TPO.

2.2           Art. 18ter RSTP Provides an Incentive for Investment in Clubs

Football clubs play the central role with regard to the aforementioned legitimate aims. In order to achieve those objectives, appropriate financing mechanisms are fundamental for football clubs. It is undisputed that clubs need external sources. A solution that takes sufficiently into account the role of the clubs and their needs can only be to finance clubs directly. By prohibiting the TPO of single players’ economic rights, Art. 18ter RSTP creates an incentive for investors to invest in the clubs themselves.

Admittedly, some football clubs have been affected by financial difficulties and thus do not seem to be attractive for investors at first sight. In this context, however, it must be taken into account that clubs that seek regular access to talent by means of TPO are becoming even more and more dependent on the regular injection of funds from external investors which may lead to a “vicious circle of debt and dependence”.[xvi] With a club selling its players’ economic rights to third parties, the value of the respective club’s assets decreases. As a result, it is even harder to find potential investors interested in financing the club.[xvii] Therefore TPO cannot be a sustainable financing option. Improving the overall financial health of club football is a major concern for football associations. Therefore the UEFA Financial Fair Play Regulations (FFP) were established to prevent professional football clubs from excessive spending. Although the regulations only contain disclosure requirements with regard to TPO, they were released in view of a TPO ban.[xviii]

Overall, critics therefore have to take into account that Art. 18ter RSTP prohibits only one single form of investment whilst it promotes at the same time investment in the clubs specifically tailored to the overarching aim of fostering the integrity of the game.


3.              Conclusion

Art. 18bis RSTP has already targeted the aforementioned legitimate aims. However, this provision may be easily circumvented by inserting a clause into the TPO agreement stating that it does not permit any exercise of influence by the third party within the club’s employment and transfer-related matters, policies or performance of its team. In practice, the engaged third parties will interfere with a club’s sporting decisions in many cases despite such a contractual clause. Interviewees in the second TPO study reported that in practical terms, many third­party investors do influence the transfer of players.[xix] Therefore, there is a consensus among football stakeholders that TPO should be restricted. The legitimate aims underlying Art. 18ter RSTP can be achieved most effectively by a total ban of the TPO practice. Whereas critics point to the lack of financing options caused by the prohibition of TPO, this blog has argued that in the specific context of football competitions the integrity of the game benefits from direct investments in the clubs.


[i] Cp. FIFA Circular no. 1420 of 12 May 2014.

[ii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 3.

[iii] Moreover, Poland has a rule which is interpreted by its football association as prohibiting third parties to hold a player’s economic rights with an exception for former clubs, cp. TPO study I, p. 3, 17 et. seq.

[iv] Art. 18bis RSTP, as introduced in 2008, reads:

1.   No club shall enter into a contract which enables any other party to that contract or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.

2.   The FIFA Disciplinary Committee may impose disciplinary measures on clubs that do not observe the obligations set out in this article.

[v] European Commission, Rejection Decision of 25 June 2002, Case COMP/37 806: ENIC/ UEFA, para. 47.

[vi] Arbitration CAS 98/200 AEK Athens and SK Slavia Prague / Union of European Football

Associations (UEFA), award of 20 August 1999, para. 48 (available at http://jurisprudence.tas-cas.org/sites/CaseLaw/Shared%20Documents/200.pdf).

[vii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p.  9, 81.

[viii] Cp. Third-party ownership of players’ economic rights, Part I., Centre international d’étude du sport, p. 33.

[ix] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 81 et. seq.

[x] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 8.

[xi] Available at: http://www.fr-online.de/eintracht-frankfurt/carlos-zambrano-eintracht-frankfurt-zambrano-deal-gefaehrdet,1473446,29843342.html.

[xii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

[xiii] Available at http://www.football-observatory.com/demographic-study-2014-now.

[xiv] Available at http://www.football-observatory.com/demographic-study-2014-now.

[xv] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 78.

[xvi] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 9.

[xvii] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

[xviii] Available at http://www.uefa.com/community/news/newsid=2064391.html.

[xix] Third-party ownership of players’ economic rights, Part II., Centre de droit et d’économie du sport et Centre international d’étude du sport, June 2014, p. 88.

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Asser International Sports Law Blog | Not comfortably satisfied? The upcoming Court of Arbitration for Sport case of the thirty-four current and former players of the Essendon football club. By James Kitching

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

Not comfortably satisfied? The upcoming Court of Arbitration for Sport case of the thirty-four current and former players of the Essendon football club. By James Kitching

Editor's note: James Kitching is Legal Counsel and Secretary to the AFC judicial bodies at the Asian Football Confederation. James is an Australian and Italian citizen and one of the few Australians working in international sports law. He is admitted as barrister and solicitor in the Supreme Court of South Australia. James graduated from the International Master in the Management, Law, and Humanities of Sport offered by the Centre International d'Etude du Sport in July 2012.


Introduction

On 12 May 2015, the Court of Arbitration for Sport (CAS) announced that the World Anti-Doping Agency (WADA) had filed an appeal against the decision issued by the Australian Football League (AFL) Anti-Doping Tribunal (AADT) that thirty-four current and former players of Essendon Football Club (Essendon) had not committed any anti-doping rule violation (ADRV) identified within the AFL Anti-Doping Code (AADC). The players had each been charged with using Thymosin-Beta 4 (TB4) during the 2012 AFL season.

On 1 June 2015, WADA announced that it had filed an appeal against the decision by the AADT to clear Mr. Stephen Dank (Dank), a sports scientist employed at Essendon during the relevant period, of twenty-one charges of violating the AADC. Dank was, however, found guilty of ten charges and banned for life.

This blog will solely discuss the likelihood of the first AADT decision (the Decision) being overturned by the CAS. It will briefly summarise the facts, discuss the applicable rules and decision of the AADT, review similar cases involving ‘non-analytical positive’ ADRVs relating to the use of a prohibited substance or a prohibited method, and examine whether the Code of Sports-related Arbitration (CAS Code) is able to assist WADA in its appeal.

This blog will not examine the soap opera that was the two years leading-up to the Decision. Readers seeking a comprehensive factual background should view the excellent up-to-date timeline published by the Australian Broadcasting Corporation. 


Factual Background

“Blackest day in Australian sport”

The Decision ultimately derived from what one media commentator dubbed the “blackest day in Australian sport” .

On 7 February 2013, the chief executives of the five biggest Australian sports appeared beside the Federal Sports Minister, Federal Justice Minister, and CEOs of the Australian Sports Anti-Doping Agency (ASADA), and Australian Crime Commission (ACC) at a press conference which detailed the findings of a twelve month inquiry into Australian professional sport. The resulting report, “Organised Crime and Drugs in Sport”, set out that the ACC had identified or suspected widespread use of peptides and hormones in Australian professional sport.

Two days prior, Essendon had requested that ASADA and the AFL investigate whether prohibited substances had been administered to its players during the 2012 season.

AFL disciplinary action

On 2 August 2013, the AFL received an interim report from ASADA and eleven days later charged Essendon and four officers with engaging “in conduct unbecoming or likely to prejudice the interests or reputation of the Australian Football League or to bring the game of football into disrepute”. Essendon and three of the officials were ultimately sanctioned.

The grounds for the charges make for sobering reading. The highlights appear below (emphasis added):

51. With the assistance of Shane Charter (Charter), a convicted drug dealer, Dank ordered various peptides, or the raw materials for such peptides. The compounding of these substances was undertaken by Nima Alavi (Alavi) at the Como Compounding Pharmacy (Como). At least some of these substances were intended by Dank for administration to players at the Club and were in fact administered to players at the Club.

67. On 8 February 2012, at a meeting of players of the Club, Dank introduced four substances that were purportedly approved for use in accordance with the Protocol…

68. Following that meeting, 38 players at the Club signed “Patient Information/Informed Consent” forms in relation to these four substances…

69. If the dosages the subject of the “Patient Information/Informed Consent” forms were administered, the playing group would receive in the order of:

(a) more than 1,500 injections of AOD-9064 and Thymosin; and

(b) more than 16,500 doses of Colostrum; and

(c) more than 8,000 doses of Tribulus.

124. During the relevant period, the Club caused the following substances to be administered to players at the Club:

(a) Actovegin;

(b) unspecified amino acids

(c) unspecified multi-vitamins;

(d) AOD-9604 creams;

(e) AOD-9604 injections;

(f) Cerebrolysin;

(g) Colostrum;

 (h) REDACTED;

(i) Lactaway;

(j) Lube-all-plus;

(k) Melatonin;

(l) Melanotan II;

(m) TA-65;

(n) Thymosin Beta 4;

(o) Traumeel; and

(p) Tribulus.

125. The use of these substances by the players was not approved by the Club’s medical staff, with the exception of AOD-9604, which was the subject of some sort of informal approval by Reid in February 2012.

126. In many instances the use of these substances failed to have proper regard to player health and safety.

127. Proper records were not maintained by the Club as to precisely which players received which of the substances referred to in paragraph 124 above, in which quantities and when, during the relevant period.


AFL Anti-Doping Tribunal

Applicable Rules

On 14 November 2014, the AFL issued identical infraction notices to the 34 players alleging use of the prohibited substance TB4 during the 2012 season in violation of Article 11.2 of the AADC. The players were provisionally suspended on the same day. The infraction notices were issued after the players were placed on the ADRV Register of Findings on 12 November 2014 by an independent Anti-Doping Rule Violation Panel pursuant to the National Anti-Doping Scheme prescribed in the Australian Sports Anti-Doping Authority Act 2006.

As the alleged misconduct occurred during the 2012 AFL season, the applicable version of the AADC was the 2010 edition. This version was effectively a mirror of the WADA Code 2009.

As such, the standards applied universally by sports disciplinary and anti-doping panels applied. Accordingly, AFL and/or ASADA bore the burden of proving each ADRV to the comfortable satisfaction of the AADT, bearing in mind the seriousness of each allegation made. Such standard of proof was greater than a mere balance of probability, but less than beyond a reasonable doubt.[1] The AFL and/or ASADA were able to establish the allegations by “any reliable means”.[2]

Decision

The hearing was conducted on various dates between December 2014 and February 2015. The Decision was announced on 31 March 2015. However, its written reasons have never been made public. As such, determining the evidence that was available has been gleaned from numerous media reports (including this comprehensive piece by Gerard Whateley), public announcements, and leaked documents. The author has also had the benefit of discussing the matter with a number of parties close to the proceedings.

It was agreed by the parties that the case against each player had two limbs:

(i)           during the 2012 AFL season, the player used (through injections) TB4; and

(ii)          TB4 was a prohibited substance on the relevant WADA Prohibited List.

As a threshold issue, the AADT was comfortably satisfied that TB4 was a prohibited substance within the category of substances set out in s2 of the 2012 WADA Prohibited List:

any pharmacological substance which is not addressed by any of the subsequent sections of the list and with no current approval by any governmental regulatory health authority for human therapeutic use”.

Thus, the case turned on the ability of ASADA to discharge its burden of proof relating to the first limb. This limb was broken down into three elements, agreed by the parties, which formed the basis of the ASADA case:

(a)          TB4 was procured from sources in China;

(b)          TB4 was obtained by Alavi, compounded and provided to Dank in his   capacity as Sports Scientist at Essendon; and

(c)           Dank administered TB4 to each player.

This was essentially the same conduct, described above, for which Essendon and its four officials were sanctioned.

Charter, Alavi and Dank all refused to appear at the hearing, and ASADA failed in a last-ditch application to the Victorian Supreme Court to compel Charter and Alavi to appear pursuant to the Commercial Arbitration Act 2011.[3] As such, ASADA’s case was wholly circumstantial, and relied, in a large part, on testimony and documents provided to it by Charter and Alavi during its investigation, and statements made by Dank in the media.

The AADT thus had an unenviable task in determining the probative value of the evidence provided by key witnesses without having the benefit of observing them under examination and cross-examination. As such, the AADT held (emphasis added):

“Having considered all the evidence relating to the credibility and reliability of Mr Alavi, Mr Charter and Mr Dank … the Tribunal finds that the credibility of each of these principal participants is at a low ebb and each man in acting as he did in his own way and for his own motive saw a golden opportunity to “feather his own nest.” Their lack of credibility is reflected when their reliability is called into question and the Tribunal is satisfied that on a number of important issues their evidence on those issues was not only unreliable but also … dishonest.

In the absence of reliable direct evidence to establish that the players had used TB4, the decision of the AADT ultimately turned on these adverse credibility findings.

In relation to the first element, ASADA led (predominantly) documentary evidence to demonstrate that two shipments of substances (in December 2011 and February 2012) were procured from China, both of which included TB4, and were provided to Alavi. A substance in the second shipment was tested in May 2012 at a laboratory connected to the University of Melbourne, and the results proved the substance was TB4. As such, the substance that was purported to be TB4 in both shipments, as a result of the test results, was TB4.

After a thorough examination of the evidence and arguments of the players, and in particular, the fact that the majority of evidence had been obtained from dishonest witnesses, the AADT held that the first shipment had occurred, but that the second shipment had not. However, the AADT still considered the veracity of the test results, and whether they gave rise to the position that TB4 was procured in the first shipment. Faced with contrasting expert reports, which gave margin for error in the test results, the AADT ultimately held that “it is possible it was [TB4], but the Tribunal is not comfortably satisfied that it was”.

In relation to the second element, the AADT was not comfortably satisfied that TB4 was compounded or provided to Dank. As a result of its findings relating to the first and second elements, the AADT did not “consider it necessary to consider the third element…as it is dependent upon the first and second elements…being established and neither has been established to the comfortable satisfaction of the Tribunal”.

Accordingly, the AADT was not comfortably satisfied that the first limb required to prove the ADRV was made out, and exonerated each player of their charge.


Non-analytical positive “use”

The Decision is a classic non-analytical positive “use” case.[4] In this class of cases, as no adverse analytical finding is recorded, the relevant anti-doping organisation must rely on a combination of direct and/or circumstantial evidence in order to discharge its burden of proving use of a prohibited substance or method.

Comfortable Satisfaction

Prior to the implementation of the WADA Code, sports arbitration panels embryonically decided to apply a ‘comfortable satisfaction’ standard of proof; less than the criminal standard of proof beyond a reasonable doubt but more than the ordinary civil standard of proof on the balance of probabilities.[5]

This standard was preferred due to sports disciplinary cases not being criminal in nature, but rather, a private law of association type.[6] This principle has been consistently upheld and was espoused as such by the Swiss Federal Tribunal: “the duty of proof and assessment of evidence [are] problems which cannot be regulated, in private law cases, on the basis of concepts specific to criminal law”.[7]

However, precisely where this standard falls between the criminal and civil standards is unclear.[8] That anti-doping cases are presented in a quasi-criminal manner suggests they should be closer to the latter, but the private nature of sports disciplinary cases suggests that the lesser standard is more appropriate.

This distinction is significantly important to WADA overturning the Decision. In its press release after receiving the Statement of Appeal, the CAS recorded that “WADA requests that the CAS issue a new decision based on an appropriate burden of proof and evidentiary standards”. As such, it is clear that WADA considers that the standard of proof applied by the AADT was too high when considering the evidence.

However, an analysis of a number of prior decisions suggests that the standard of proof in this class of cases has always been close to the criminal standard. The jurisprudence suggests that Panels rely solely on direct and incontrovertible testimonial, documentary, and scientific evidence to sanction individuals for “use” violations.


pre WADA Code cases

In French[9], it was alleged that French used prohibited substances after the discovery of a bucket of used syringes, needles containing traces of a prohibited substance, and a supplement whose label stated that it contained a prohibited substance, inside his room at his athlete residence. The CAS, however, was not comfortably satisfied as there was “no direct evidence that Mr. French had used the material in the sense that no-one saw him use it and he has consistently denied use”.[10] Furthermore, that the label stated the name of the prohibited substance was not sufficient to prove that the supplement actually contained the prohibited substance.[11]

In A., B., C., D., E. v IOC[12], five simultaneously-decided cases, the CAS held that admissions of undertaking or performing blood transfusions, coupled with the discovery of instruments and chemicals necessary for blood-doping in their residence during the 2002 Winter Olympics, was sufficient evidence to sanction four individuals for using a prohibited method. In the absence of direct evidence against Mr. E, the only of the five whom argued that “he had nothing to do with the paraphernalia found in the chalet and that he did not perform any type of autologous or other blood manipulation while he was at the 2002 Winter Games[13], the Panel issued a warning only.[14]

In Collins[15], a case deriving from the BALCO scandal, the United States Anti-Doping Agency (USADA) relied on a cache of emails where Collins admitted to using prohibited substances (both EPO and the hybrid testosterone “cream” developed by BALCO)[16], as well as test results of independent blood and urine tests arranged by BALCO.[17] Following expert testimony, the Panel found beyond a reasonable doubt (as was required by the relevant IAAF Rules) that her blood samples demonstrated EPO use in 2002 and 2003[18] and that her urine samples demonstrated “a pattern of testosterone and epitestosterone levels that can only be explained by the illegal use of BALCO’s cream”.[19]


post WADA Code cases

In Gaines[20] and Montgomery[21], two further BALCO cases heard simultaneously, following argument on the appropriate standard, the Panels stated: (emphasis added)

From this perspective, and in view of the nature and gravity of the allegations at issue in these proceedings, there is no practical distinction between the standards of proof advocated by USADA and the Respondents. It makes little, if indeed any, difference whether a “beyond reasonable doubt” or “comfortable satisfaction” standard is applied to determine the claims against the Respondents. This will become all the more manifest in due course, when the Panel renders its awards on the merits of the USADA’s claims. Either way, USADA bears the burden of proving, by strong evidence commensurate with the serious claims it makes, that the Respondents committed the doping offences in question”.[22]

Similar to Collins, the USADA relied on a multitude of testimonial, documentary and scientific evidence to allege use of a prohibited substance. However, the Panel ultimately decided that admissions about their use of the infamous “Cream” developed by BALCO to their ex-teammate Kelli White, was “sufficient in and out of itself[23] to comfortably satisfy themselves of the athletes’ guilt.

In Hamilton[24], the Panel cited the discussion of the appropriate standard referred to in Gaines and Montgomery but did not explicitly apply it.[25] After upholding the reliability and validity of the homologous transfusion test of Hamilton’s blood samples, the Panel relied upon these test results to be comfortably satisfied that Hamilton had used a prohibited method.[26] A similar approach was undertaken by the Panel in Pechstein[27] to find that %retics peaks in her blood sample of February 2009 were abnormal and that accordingly she had used a prohibited method.

In the Cyprus case[28], WADA and FIFA appealed a decision of the Cyprus Football Association (CFA). Prior to a number of league matches, a club coach administered two pills (which he had independently sourced) to the starting line-up, claiming them to be caffeine pills and/or vitamins.[29] Two players subsequently recorded an adverse analytical finding for a prohibited substance, while five others who did not test positive admitted to investigators that they had also used the pills. Only the two players and the coach were sanctioned by the CFA. WADA alleged that the CFA had erroneously failed to sanction the five players. The Panel was not comfortably satisfied of this conclusion:

199. The Panel notes, in fact, that there is no evidence that the actual pills individually used by each of the Other Players contained a prohibited substance. Indeed some players took the pills, were subsequently tested and there was no adverse analytical finding.

200. No clear cut evidence was brought to show that…the pills administered…were “plain steroids” and not “caffeine pills” contaminated by steroids”.[30]

The most famous case in this class, albeit never reviewed by an arbitration panel, was Armstrong.[31] The USADA relied on witness testimony which provided direct evidence of Armstrong using prohibited substances or prohibited methods during the 1999, 2000, 2002, 2003, 2004, and 2005 Tour de France races. The USADA also utilised financial records linking Armstrong to the disgraced sports doctor, Dr. Michele Ferrari, as well as undertaking retesting of old samples which purportedly demonstrated EPO use at the 1999 Tour de France, and provided a “compelling argument consistent with blood doping” at the 2010 Tour de France.


Conclusions

Two overriding conclusions can be drawn.

The first is that there is no definitive answer to the question of what evidence shall be presented to prove a non-positive analytical “use” case.[32] As stated by the Panels in Gaines and Montgomery:

[d]oping offences can be proved by a variety of means; and this is nowhere more true than in “non-analytical positive” cases such as the present”.[33]

The second is that the standard of proof is significantly closer to the criminal than the civil standard. Indeed, in Gaines and Montgomery, the Panels could draw no distinction between beyond a reasonable doubt and comfortable satisfaction, taking into account the allegations raised and the sanctions requested. This elevated standard becomes clear in those matters which relied solely upon circumstantial as opposed to direct evidence.

In French and the Cyprus case, the Panels held that admissions could be relied upon only where there was unambiguous evidence that the substance used either was or contained a prohibited substance. Thus, a label on supplement packaging which lists a prohibited substance as an ingredient, or the ingestion of a pill taken from the same batch as one ingested by a teammate who subsequently tests positive, are not enough on their own to comfortably satisfy a Panel that a used substance was a prohibited substance.

Effectively, the cases require the party bearing the evidentiary burden to prove that the used substance or method was without doubt the substance or method alleged; in other words, the highest possible standard of ‘comfortable satisfaction’. Even in Pechstein, where the Panel emphatically rejected the Appellant’s request to apply a higher than normal standard of proof and stated that it would apply the “normal comfortable satisfaction standard”,[34] the Panel still blurred the lines between the two after systematically reviewing and rejecting each of the Appellant’s argument, leaving little doubt in its own mind that the use of a prohibited method was the only possible reason for the blood abnormalities.

To meet this standard, the cases articulate that only direct evidence should be adduced. This includes: admitting to using a proven prohibited substance or prohibited method; scientific evidence of which no credible explanation other than the use of a prohibited substance or prohibited method is possible; scientific evidence which demonstrates that a substance used is a prohibited substance; witness observations of use; and witness testimony of direct admissions.

One further conclusion can be drawn: WADA, on the basis of its current evidence, is unlikely to overturn the Decision. The inherited ASADA case was wholly circumstantial. It did not contain direct, incontrovertible evidence from any of the classes seen in the previous cases. Its key witnesses chose not to testify, nor could they be compelled under Australian law, and nor is it likely that they can be compelled under Swiss law to attend at the CAS.[35] As such, WADA’s prospects of success hinge upon its ability to adduce new and direct evidence of the use of TB4 by the players. 


Will R57.3 of the CAS Code prevent WADA from adducing new and direct evidence?

R57 of the CAS Code provides that a Panel in the appeal arbitration division has “full power to review the facts and the law”. Appeals are heard de novo and any procedural fairness issues deriving from the first-instance are thus automatically cured. This interpretation has been upheld in numerous Awards and the Swiss Federal Tribunal.[36]

R57.3 of the CAS Code, introduced in 2013, provides one limitation: “[t]he Panel has the discretion to exclude evidence presented by the parties if it was available to them or could reasonably have been discovered by them before the challenged decision was rendered”. This is consistent with Swiss procedural law in that a document can only be adduced, at an appellate hearing, if it did not exist at the time of the first instance hearing or hearings or was not in the possession of the appellant at the time.[37]

According to Rigozzi et al, in appeals against decisions rendered by sports-governing bodies, the scope of R57.3 should extend only to those cases “where the adducing of pre-existing evidence amounts to abusive or otherwise unacceptable procedural conduct by a party”.[38]

Mavromatis characterises de novo review as “not only desirable, but also necessary for a number of reasons, to the extent that the previous instance is not an independent arbitral tribunal but the internal body of a sports federation”.[39] As such, R57.3 should be interpreted “as not to circumvent the core principle of the Panel’s full power of review[40].

In two recent Awards, the Panels held that this discretion should be exercised with caution, in situations where a party may have engaged in abusive procedural behaviour or in any other circumstances where the Panel might, in its discretion, consider it either unfair or inappropriate to admit new evidence.[41]

In SC FC Sportul Studentesc SA[42], the Sole Arbitrator excluded the principal evidence supporting the appeal as he was not provided any satisfactory explanation why it could not be submitted or adduced during the two sports-governing body proceedings.[43]

Hence, it is only in rare cases that the CAS limits its power of full review. Thus, as long as new evidence adduced by WADA is neither abusive nor can be construed as unacceptable procedural conduct, it is highly unlikely to be excluded. Levy has suggested that such exclusions may give rise to an appeal to the Swiss Federal Tribunal due to the denial of the right to be heard.[44] In any event, WADA was not a party at first instance, so it remains questionable whether R57.3 may even be utilised by the players. 


Conclusion

The biggest soap opera in the history of Australian sport will come to a conclusion some time prior to the 2016 AFL season. At the time of publishing, the CAS has recently announced the hearing timeline.

Media reports have recently suggested that WADA ordered retesting of samples obtained from the players in 2011-2012, resulting in two samples demonstrating abnormally high levels of TB4. As set out above, the previous cases suggest that only this type of direct evidence will be able to convince a Panel to the requisite standard. The challenge for WADA, given the length of the ASADA investigation, is to find it.

An independent report commissioned by Essendon published in May 2013, graphically described its supplements programme as “a pharmacologically experimental environment never adequately controlled or challenged or documented within the Club in the period under review”. It is not disputed that the players must ultimately take full responsibility for each substance that presents in their body.

However, at the same time, the gross inadequacies in the governance at Essendon during the period – failures in documentation and record keeping, lack of (proper) informed consent for the players, uncertainty in the supplements administrated, and the creation of an unsafe work environment, among others – for which the club was already heavily sanctioned and which gave rise to the investigation in the first place, ironically appears to be the main obstacle preventing WADA from discharging its burden of proof.



[1] AFL Anti-Doping Code (2010 Edition), Article 15.1.

[2] AFL Anti-Doping Code (2010 Edition), Article 15.1.

[3] ASADA v 34 Players and One Support Person [2014] VSC 635. 

[4] See e.g. Richard H McLaren, An Overview of Non-Analytical Positive & Circumstantial Evidence Cases in Sports, 16 Marq. Sports L. Rev. 193 (2006).

[5] See e.g. N., J., Y., W. v Federation Internationale de Natation CAS 98/208.

[6] Ibid.

[7] SFT, 5P83/1999, para. 3.d.

[8] Michael Straubel, Enhancing the Performance of the Doping Court: How the Court of Arbitration for Sport Can Do Its Job Better, 36 Loy. U. Chi. L. J. 1203 (2005), at 1270.

[9] Mark French vs Australian Sports Commission and Cycling Australia, CAS 2004/A/651.

[10] French at 58.

[11] French at 51.

[12] A., B., C., D. & E. v International Olympic Committee, CAS 2002/A/389, 390, 391, 392, 393.

[13] A., B., C., D. & E. v IOC at 53.

[14] A., B., C., D. & E. v IOC at 53.

[15] United States Anti-Doping Agency vs Michelle Collins, AAA No. 30 190 00658 04.

[16] Collins at 1.3, 4.1, 4.2, 4.3, 4.4.

[17] Collins at 1.3, 4.11 – 4.24.

[18] Collins at 4.16.

[19] Collins at 4.17.

[20] United States Anti-Doping Agency vs Chryste Gaines, CAS 2004/O/649.

[21] United States Anti-Doping Agency vs Tim Montgomery, CAS 2004/O/645

[22] Gaines at 36, Montgomery at 36.

[23] Gaines at 52, Montgomery at 50.

[24]Tyler Hamilton vs United States Anti-Doping Agency and Union Cycliste International, CAS 2005/A/884.

[25] Hamilton at 47.

[26] Hamilton at 91.

[27] Claudia Pechstein vs International Skating Union, CAS 2009/A/1912.

[28] World Anti-Doping Agency and Federazione International de Football Association v Cyprus Football Association, Carlos Marques, Leonel Medeiros, Edward Eranosian, Angelos Efthymiou, Yiannis Sfakianakis, Dmytro Mykhailenko, Samir Bengeloun, Bernardo Vasconcelos, CAS 2009/A/1817.

[29] WADA & FIFA v CFA et al at 14.

[30] WADA & FIFA v CFA et al at 198-200.

[31] United States Anti-Doping Agency vs Lance Armstrong, Reasoned decision of the USADA on disqualification and eligibility (10 October 2012).

[32] McLaren at 212.

[33] Gaines at 45, Montgomery at 45.

[34] Pechstein at 123-126.

[35] See this piece for an excellent analysis of the operation of the powers of compulsion within the Swiss Public International Law Act vis-à-vis Australian law: < http://sociallitigator.com/2015/05/25/essendon-supplements-saga-is-it-up-up-and-away-to-switzerland/>.

[36] see FC Sion v Federation Internationale de Football Association & Al-Ahly Sporting Club, CAS 2009/A/1880; E v Federation Internationale de Football Association, CAS 2009/A/1881; Eintracht Braunschweig GmbH & Co. KG a. A. v. Olympiakos FC CAS 2012/A/2836; SFT 4A_386/2010

[37] Article 317 of the Swiss Civil Procedure Code.

[38] Antonio Rigozzi /Erika Hassler / Brianna Quin, The 2011, 2012 and 2013 revisions to the Code of Sports-related Arbitration, in: Jusletter 3 juin 2013, at 14.

[39] Despina Mavromatis, The Panel’s Right to Exclude Evidence Based on Article R57 Para. 3 CAS Code: a Limit to CAS’ Full Power of Review, in CAS Bulletin 1/2014, at 56.

[40] Mavromatis at 56.

[41] See Zamalek Sporting Club vs Accra Hearts of Oak Sporting Club, CAS 2014/A/3518; MFK Dubnica v FC Parma, CAS 2014/A/3486.

[42] SC FC Sportul Studentesc SA v Romanian Football Federation & several players, CAS 2013/A/3286-3294.

[43] SC FC Sportul Studentesc SA at 66-70.

[44] Roy Levy, The new CAS rules – what you need to know, at < http://www.lawinsport.com/blog/roy-levy/item/the-new-cas-rules-what-you-need-to-know>.

Comments (1) -

  • sam ciccarello

    9/16/2015 3:46:05 AM |

    Very well written and presented.

    Consider your conclusion to be rational and compelling.

    Look forward to your follow up blog when the Decision is made public.

Comments are closed