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

International and European Sports Law – Monthly Report – June - August 2020 by Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

 

The Headlines

CAS Decision on Manchester City FC Case

After the UEFA’s Adjudicatory Chamber of the Club Financial Control’s (CFCB) decision earlier this year to ban Manchester City FC for two seasons, observers waited impatiently to see the outcome of this high profile dispute. The CFCB’s decision had found that Manchester City FC overstated sponsorship revenues and in its break-even information given to UEFA. While some feared this showdown could lead to the demise of UEFA’s Financial Fair Play (FFP) regulations, the now publicized CAS panel’s decision is more nuanced. The panel’s decision turned on (see analysis here and here) (a) whether the ‘Leaked Emails’ were authentic and could be admissible evidence, (b) whether the ‘CFCB breached its obligations of due process’, (c) whether the conclusions of the 2014 Settlement Agreement prevents the CFCB from charging Manchester City FC, (d) whether the charges are time-barred, (e) the applicable standard of proof, (f) whether Manchester City FC masked equity funding as sponsorship contributions, and (g) whether Manchester City FC failed to cooperate with CFCB. In the end, among other findings, the Panel held that some of the alleged breaches were time-barred but maintained that Manchester City FC had failed to cooperate with CFCB’s investigation. In light of this, the Panel significantly reduced the sanction placed on Manchester City FC by removing the two-season suspension and reducing the sanction from 30 million euros to 10 million euros.

 

Qatar Labour Law Reforms Effectively Abolishes the Kafala System

Just a few days after Human Rights Watch released a lengthy report on abusive practices suffered by migrant workers in Qatar, Qatar adopted a series of laws that effectively gets rid of the Kafala system by no longer requiring migrant workers to obtain a ‘No Objection Certificate’ from their employer in order to start another job. The International Labour Organization declared that this development along with the elimination of the ‘exit permit requirements’ from earlier this year means that the kafala system has been effectively abolished. In addition to these changes, Qatar has also adopted a minimum wage that covers all workers and requires that employers who do not provide food or housing at least give a minimum allowance for both of these living costs. Lastly, the new laws better define the procedure for the termination of employment contracts.

In reaction to these changes, Amnesty International welcomed the reforms and called for them to be ‘swiftly and properly implemented’. Indeed, while these amendments to Qatar’s labour laws are a step in the right direction, Amnesty International also cautions that the minimum wage may still be too low, and in order to be effective, these new laws will have to be followed with ‘strong inspection and complaint mechanisms’.

 

CAS Decision Concerning Keramuddin Karim Abuse Case

In June of last year, Keramuddin Karim, former president of Afghanistan’s soccer federation, was banned by FIFA for life (see the decision of the adjudicatory Chamber of the FIFA Ethics Committee) after reports of sexual and physical abuse that emerged in late 2018. Following a lengthy and tumultuous investigation in Afghanistan, Afghan officials came forward with an arrest warrant for Mr. Karim. Nevertheless, despite attempts to apprehend Mr. Karim, Mr. Karim has still avoided arrest over a year later. Most recently in August, Afghan Special Operation officers attempted to apprehend him but he was not at the residence when they arrived.

Meanwhile, Mr. Karim had appealed FIFA’s lifetime ban to the CAS and the CAS Panel’s decision has recently been released. In its decision, the Panel upheld both the lifetime ban and the 1,000,000 CHF fine, finding that due to the particular egregious nature of Karim’s acts, ‘they warrant the most severe sanction possible available under the FCE’. Since both Karim and his witnesses were unable to be heard, the case raises questions connected to the respect of fundamental procedural rights at the CAS.  More...

International and European Sports Law – Monthly Report – March-May 2020 by Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

The Headlines

Coronavirus Pandemic Takes Over Sports

Since the last monthly report, the coronavirus pandemic has completely taken over the headlines and has had enormous impacts on the sports field. The most significant of these impacts so far was the rather slow (see here and here) decision by the IOC to move the Tokyo 2020 Olympic Games to 2021 after a widespread push among athlete stakeholders to do so. Concerns were raised that besides the wellbeing of the participants, athletes under lockdowns would not have the access to the training facilities, meaning preparations for the Games would suffer. The IOC has already started its new planning for Tokyo 2021 and sees this new opportunity to be ‘an Olympic flame’ at the end of a ‘dark tunnel’ for the entire world.

Besides the Olympics, football has also experienced colossal effects as this crisis landed right as leagues were approaching the end of their season. In this context, FIFA has released specific guidelines on player contracts and transfer windows, which has included extending player contracts to the new postponed end of season dates. It has also organized a working group on COVID-19, which has already made recommendations to postpone all men and women’s international matches that were to be played during the June 2020 window. Earlier in March, UEFA had already announced that the EURO 2020 was also postponed by 12 months and has also recently approved guidelines on domestic competitions. These guidelines place emphasis on ‘sporting merit’ and urge ‘National Associations and Leagues to explore all possible options to play all top domestic competitions giving access to UEFA club competitions to their natural conclusion’. Nevertheless, UEFA also emphasizes that the health of all stakeholders must remain the top priority.

In the end, numerous sport federations have also had to amend their calendars due to the pandemic (see UCI and FIBA) and a variety of sport stakeholders have been confronted with immense financial strain (e.g. football, tennis and cycling). For example, UEFA has acted preemptively in releasing club benefit payments to try to alleviate the economic pressure faced by clubs. There have also been efforts to support athletes directly (e.g. FIG and ITF). All in all, the social and economic impacts of the coronavirus pandemic on sport have been unprecedented and will require creative solutions while continuing to place public health as the top priority.

Platini’s ECtHR Appeal Falls Flat

There have also been a few other stories that have (understandably) been overshadowed by the pandemic. One of these include Michel Platini’s unsuccessful appeal to the ECtHR challenging his 2015 football ban. The ECtHR’s decision concerned the admissibility of his appeal and in the end found it to be ‘manifestly ill-founded’. This is because he failed to raise his procedural rights concerns under Article 6 (1) ECHR in his proceedings at the Swiss Federal Tribunal. Besides rejecting his other claims based on Article 7 and 8 ECHR, the ECtHR decision also touched upon the issue of CAS’ procedural and institutional independence. In doing so, it referred to its Pechstein decision and once more affirmed that the CAS is sufficiently independent and impartial (see para 65), further giving credence to this notion from its case law. However, there are still concerns on this matter as was highlighted in the Pechstein dissent. Overall, the decision indicates that the ECtHR is willing to give the CAS the benefit of the doubt so long as it sufficiently takes into account the ECHR in its awards.

Mark Dry – UKAD Dispute

In February, Mark Dry was suspended by UKAD after a decision of the National Anti-Doping Panel (NADP) Appeal Tribunal  for four years after having given a ‘false account’ in order to ‘subvert the Doping Control process’. Specifically, Dry had told anti-doping authorities that he had been out fishing after he had missed a test at his residence. After further investigation, Dry admitted that he had forgotten to update his whereabouts while he was actually visiting his parents in Scotland and in panic, had told anti-doping authorities that he had been out fishing. Following the decision of the NADP Appeal Tribunal, athlete stakeholders have argued the four-year ban was disproportionate in this case. In particular, Global Athlete contended that Whereabouts Anti-Doping Rule Violations only occur in cases where an athlete misses three tests or filing failures within a year. Furthermore, even if Dry had ‘tampered or attempted to tamper’, a four-year sanction is too harsh. Subsequently, UKAD responded with a statement, arguing that ‘deliberately providing false information’ is ‘a serious breach of the rules’ and that the UKAD NADP Appeal Tribunal ‘operates independently’. In light of the mounting pressure, Witold Bańka, WADA President, also responded on Twitter that he is ‘committed to ensuring that athletes’ rights are upheld under the World Anti-Doping Code’. More...

Anti-Doping in Times of COVID-19: A Difficult Balancing Exercise for WADA - By Marjolaine Viret

Editor's note: Marjolaine is a researcher and attorney admitted to the Geneva bar (Switzerland) who specialises in sports and life sciences.


I.               Introduction

The COVID-19 pandemic has shaken the manner in which we approach human interactions that suppose close and prolonged physical contact. Across the world, authorities are having to design ways to resume essential activities without jeopardising participants’ health, all the while guaranteeing that other fundamental rights are paid due respect. The fight against doping is no exception. Anti-doping organizations – whether public or private – have to be held to the same standards, including respect for physical integrity and privacy, and considerate application of the cornerstone principle of proportionality.

Throughout this global crisis, the World Anti-Doping Agency (‘WADA’) has carefully monitored the situation, providing anti-doping organizations and athletes with updates and advice. On 6 May 2020, WADA issued the document called ‘ADO Guidance for Resuming Testing’ (‘COVID Guidance’). A COVID-19 ‘Q&A’ for athletes (‘Athlete Q&A’) is also available on WADA’s website, and has been last updated on 25 May 2020. This article focuses on these two latest documents, and analyses the solutions proposed therein, and their impact on athletes.

Like many public or private recommendations issued for other societal activities, the WADA COVID Guidance is primarily aimed at conducting doping control while limiting the risk of transmission of the virus and ensuing harm to individuals. More specifically, one can identify two situations of interest for athletes that are notified for testing:

  1. The athlete has or suspects that they may have been infected with COVID-19, or has come in close contact with someone having COVID-19;
  2. The athlete fears to be in touch with doping control personnel that may be infected with COVID-19.

Quite obviously, either situation has the potential to create significant challenges when it comes to balancing the interests of anti-doping, with individual rights and data protection concerns. This article summarises how the latest WADA COVID Guidance and Athlete Q&A address both situations. It explores how the solutions suggested fit in with the WADA regulatory framework and how these might be assessed from a legal perspective.

The focus will be on the hypothesis in which international sports federations – i.e. private entities usually organised as associations or similar structures – are asked to implement the COVID Guidance within their sport. National anti-doping organizations are strongly embedded in their national legal system and their status and obligations as public or semi-public organisations are likely to be much more dependent on the legislative landscape put in place to deal with the COVID-19 pandemic in each country. Nevertheless, the general principles described in this article would apply to all anti-doping organizations alike, whether at international or national level. More...



(A)Political Games: A Critical History of Rule 50 of the Olympic Charter - By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

Since its inception, the Olympic Movement, and in particular the IOC, has tirelessly endeavored to create a clean bubble around sport events, protecting its hallowed grounds from any perceived impurities. Some of these perceived ‘contaminants’ have eventually been accepted as a necessary part of sport over time (e.g. professionalism in sport),[1] while others are still strictly shunned (e.g. political protest and manifestations) and new ones have gained importance over the years (e.g. protection of intellectual property rights). The IOC has adopted a variety of legal mechanisms and measures to defend this sanitized space.  For instance, the IOC has led massive efforts to protect its and its partners’ intellectual property rights through campaigns against ambush marketing (e.g. ‘clean venues’ and minimizing the athletes’ ability to represent their personal sponsors[2]). Nowadays, the idea of the clean bubble is further reinforced through the colossal security operations created to protect the Olympic sites.

Nevertheless, politics, and in particular political protest, has long been regarded as one of the greatest threats to this sanitized space. More recently, politics has resurfaced in the context of the IOC Athletes’ Commission Rule 50 Guidelines. Although Rule 50 is nothing new, the Guidelines stirred considerable criticism, to which Richard Pound personally responded, arguing that Rule 50 is a rule encouraging ‘mutual respect’ through ‘restraint’ with the aim of using sport ‘to bring people together’.[3] In this regard, the Olympic Charter aims to avoid ‘vengeance, especially misguided vengeance’. These statements seem to endorse a view that one’s expression of their political beliefs at the Games is something that will inherently divide people and damage ‘mutual respect’. Thus, the question naturally arises: can the world only get along if ‘politics, religion, race and sexual orientation are set aside’?[4] Should one’s politics, personal belief and identity be considered so unholy that they must be left at the doorstep of the Games in the name of depoliticization and of the protection of the Games’ sanitized bubble? Moreover, is it even possible to separate politics and sport?  

Even Richard Pound would likely agree that politics and sport are at least to a certain degree bound to be intermingled.[5] However, numerous commentators have gone further and expressed their skepticism to the view that athletes should be limited in their freedom of expression during the Games (see here, here and here). Overall, the arguments made by these commentators have pointed out the hypocrisy that while the Games are bathed in politics, athletes – though without their labor there would be no Games – are severely restrained in expressing their own political beliefs. Additionally, they often bring attention to how some of the most iconic moments in the Games history are those where athletes took a stand on a political issue, often stirring significant controversy at the time. Nevertheless, what has not been fully explored is the relationship between the Olympic Games and politics in terms of the divide between the ideals of international unity enshrined in the Olympic Charter and on the other hand the de facto embrace of country versus country competition in the Olympic Games. While the Olympic Charter frames the Games as ‘competitions between athletes in individual or team events and not between countries’, the reality is far from this ideal.[6] Sport nationalism in this context can be considered as a form of politics because a country’s opportunity to host and perform well at the Games is frequently used to validate its global prowess and stature.

To explore this issue, this first blog will first take a historical approach by investigating the origins of political neutrality in sport followed by an examination of the clash between the ideal of political neutrality and the reality that politics permeate many facets of the Olympic Games. It will be argued that overall there has been a failure to separate politics and the Games but that this failure was inevitable and should not be automatically viewed negatively. The second blog will then dive into the Olympic Charter’s legal mechanisms that attempt to enforce political neutrality and minimize sport nationalism, which also is a form of politics. It will attempt to compare and contrast the IOC’s approach to political expression when exercised by the athletes with its treatment of widespread sport nationalism.More...

International and European Sports Law – Monthly Report – February 2020 - By Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

The Headlines

Manchester City sanctioned by UEFA’s Financial Fair Play

Manchester City has been sanctioned under UEFA’s Financial Fair Play (FFP) regulations for two seasons for ‘overstating its sponsorship revenue in its accounts and in the break-even information’ it had provided UEFA. The February 14 decision of the Adjudicatory Chamber of the Club Financial Control Body (CFCB) likely heralds the start of a long and bitter legal war between Manchester City and UEFA, which may end up settling many of the questions surrounding the legality of FFP rules. Since its introduction in 2010, the compatibility of FFP with EU law, especially in terms of free movement and competition law, has been a continued point of contention amongst the parties concerned and commentators (see discussion here, here and here). It was only a matter of time that a case would arise to test this issue and the present circumstances seem to indicate that this may go all the way.                                 

Regardless, the ban will not be enforced this season and in light of the appeal process, it is hard to predict when the CFCB’s decision will have any effect. Indeed, Manchester City has shown an incredible willingness to fighting this out in the courts and shows no signs of backing down. The next stop will be the CAS and perhaps followed by the Swiss Federal Tribunal. It should also be recalled that the CAS has already examined FFP in its Galatasaray award, where it found FFP compatible with EU law (see commentary here). There is even a decent chance that this emerging saga may end up in front of the European Commission and eventually the Court of Justice of the European Union.

Sun Yang CAS award published

After a much-anticipated public hearing, the Panel’s award in the Sun Yang case has finally been published, sanctioning Sun Yang with an eight-year period of ineligibility (see here for a detailed commentary). The decision does not reveal anything groundbreaking in terms of its legal reasoning and in many ways the case will most likely be remembered for its historical significance: the case that jumpstarted a new era of increased public hearings at the CAS.

Perhaps of some interest is the extent to which the panel took into account Sun Yang’s behavior during the proceedings in order to support its assessment of the case. For example, the panel describes how Sun Yang had ignored the procedural rules of the hearing by inviting ‘an unknown and unannounced person from the public gallery to join him at his table and act as an impromptu interpreter’. The Panel interpreted this as Sun Yang attempting ‘to take matters into his own hands’ which it found resembled the athlete’s behavior in the case (see para 358). The Panel also found it ‘striking’ that Sun Yang did not express any remorse concerning his actions during the proceedings. Since the proceedings were held publicly and have been recorded, it is possible to verify the Panel’s assessment in this regard.

In the end, it is possible that Sun Yang may seek to reduce the period of ineligibility once the 2021 WADA Code comes into force (see para 368). For now, Sung Yang may also try to appeal the award to the Swiss Federal Tribunal on procedural grounds, and has already indicated his wish to do so. More...

Mega-sporting events and human rights: What role can EU sports diplomacy play? - Conference Report – By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

 On March 05, the T.M.C. Asser Institute hosted ‘Mega-sporting events and human rights: What role can EU sports diplomacy play?’ a Multiplier Sporting Event organized in the framework of a European research project on ‘Promoting a Strategic Approach to EU Sports Diplomacy’. This project funded by the European Commission through its Erasmus+ program aims to help the EU adopt a strategic approach to sports diplomacy and to provide evidence of instances where sport can help amplify EU diplomatic messages and forge better relations with third countries. In particular, Antoine Duval from the Asser Institute is focusing on the role of EU sports diplomacy to strengthen human rights in the context of mega sporting events (MSE) both in Europe and abroad. To this end, he organized the two panels of the day focusing, on the one hand, on the ability of sport governing bodies (SGB) to leverage their diplomatic power to promote human rights, particularly in the context of MSEs and, on the other, on the EU’s role and capacity to strengthened human rights around MSEs. The following report summarizes the main points raised during the discussions. More...

Special Issue Call for Papers: Legal Aspects of Fantasy Sports - International Sports Law Journal

The International Sports Law Journal (ISLJ) invites submissions to a special issue focusing on legal aspects of fantasy sports. For some time, fantasy sports has been a major phenomena in North America and this has been reflected in the sports law literature. Fantasy sports have more recently grown in popularity in the rest of world, raising a number of novel legal questions. The ISLJ wants to support fruitful global discussions about these questions through a special issue. We welcome contributions from different jurisdictions analyzing fantasy sports from the perspective of various areas of law including, but not limited to, intellectual property law, gambling law, and competition law.

Please submit proposed papers through the ISLJ submission system (http://islj.edmgr.com/) no later than November 15, 2020. Submissions should have a reccomended length of 8,000–12,000 words and be prepared in accordance with the ISLJ's house style guidelines (https://www.springer.com/journal/40318/submission-guidelines). All submissions will be subject to double-blind peer review.

Question about the special issue can be directed to the Editor–in-Chief, Johan Lindholm (johan.lindholm@umu.se).

International and European Sports Law – Monthly Report – January 2020 - By Thomas Terraz

Editor's note: This report compiles the most relevant legal news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. 

 

The Headlines

IOC Athlete Commission releases its Rule 50 Guidelines for Tokyo 2020

The IOC Athlete Commission presented its Rule 50 Guidelines for Tokyo 2020 at its annual joint meeting with the IOC Executive Board. It comes as Thomas Bach had recently underlined the importance of political neutrality for the IOC and the Olympic Games in his New Year’s message. Generally, rule 50 of the Olympic Charter prohibits any political and religious expression by athletes and their team during the Games, subject to certain exceptions. The Guidelines clarify that this includes the ‘field of play’, anywhere inside the Olympic Village, ‘during Olympic medal ceremonies’ and ‘during the Opening, Closing and other official ceremonies’. On the other hand, athletes may express their views ‘during press conferences and interview’, ‘at team meetings’ and ‘on digital or traditional media, or on other platforms. While rule 50 is nothing new, the Guidelines have reignited a debate on whether it could be considered as a justified restriction on one’s freedom of expression.

 

The IOC has made the case that it is defending the neutrality of sport and that the Olympics is an international forum that should help bring people together instead of focusing on divisions. Specifically, Richard Pound has recently made the argument that the Guidelines have been formulated by the athletes themselves and are a justified restriction on free expression with its basis in ‘mutual respect’. However, many commentators have expressed their skepticism to this view (see here, here and here) citing that politics and the Olympics are inherently mixed, that the IOC is heavily involved in politics, and that the Olympics has often served as the grounds for some of history’s most iconic political protests. All in all, the Guidelines have certainly been a catalyst for a discussion on the extent to which the Olympics can be considered neutral. It also further highlights a divide between athlete committees from within the Olympic Movement structures and other independent athlete representation groups (see Global Athlete and FIFPro’s statements on rule 50).

 

Doping and Corruption Allegations in Weightlifting 

The International Weightlifting Federation (IWF) has found itself embroiled in a doping and corruption scandal after an ARD documentary was aired early in January which raised a wide array of allegations, including against the President of the IWF, Tamás Aján. The documentary also included hidden camera interviews from a Thai Olympic medalist who admits having taken anabolic steroids before having won a bronze medal at the 2012 London Olympic Games and from a team doctor from the Moldovan national team who describes paying for clean doping tests. The IWF’s initial reaction to the documentary was hostile, describing the allegations as ‘insinuations, unfounded accusations and distorted information’ and ‘categorically denies the unsubstantiated’ accusations. It further claims that it has ‘immediately acted’ concerning the situation with the Thai athletes, and WADA has stated that it will follow up with the concerned actors. However, as the matter gained further attention in the main stream media and faced increasing criticism, the IWF moved to try to ‘restore’ its reputation. In practice, this means that Tamás Aján has ‘delegated a range of operation responsibilities’ to Ursual Papandrea, IWF Vice President, while ‘independent experts’ will conduct a review of the allegations made in the ARD documentary. Richard McLaren has been announced to lead the investigation and ‘is empowered to take whatever measures he sees fit to ensure each and every allegation is fully investigated and reported’. The IWF has also stated that it will open a whistleblower line to help aid the investigation.More...


How 2019 Will Shape the International Sports Law of the 2020s - By Thomas Terraz

Editor’s note: Thomas Terraz is a fourth year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.

 

1.     Introduction

As we begin plunging into a new decade, it can be helpful to look back and reflect on some of the most influential developments and trends from 2019 that may continue to shape international sports law in 2020 and beyond. Hence, this piece will not attempt to recount every single sports law news item but rather identify a few key sports law stories of 2019 that may have a continued impact in the 2020s. The following sections are not in a particular order.More...

Free Event! Mega-sporting events and human rights: What role can EU sports diplomacy play? - 5 March at the Asser Institute in The Hague

The upcoming 2022 FIFA World Cup in Qatar and its links to human rights violations has been the subject of many debates in the media and beyond. In particular, the respect of migrant workers’ labour rights was at the forefront of much public criticisms directed against FIFA. Similarly, past Olympics in Rio, Sochi or Beijing have also been in the limelight for various human rights issues, such as the lack of freedom of the press, systematic discrimination on the basis of sexual orientation or forced evictions. These controversies have led sports governing bodies (SGBs) to slowly embrace human rights as an integral part of their core values and policies. Leading to an increased expectation for SGBs to put their (private) diplomatic capital at the service of human rights by using their leverage vis-à-vis host countries of their mega-sporting events (MSEs). In turn, this also raises the question of the need for the EU to accompany this change by putting human rights at the heart of its own sports diplomacy.


Research collective 
This Multiplier Sporting Event, organised in the framework of the transnational project on ‘Promoting a Strategic Approach to EU Sports Diplomacy’ funded by the Erasmus + Programme, aims to trigger discussions on the role of an EU sports diplomacy in strengthening respect for human rights in the context of MSEs both at home and abroad. It will feature two roundtables focused on the one hand on the diplomatic power and capacity of SGBs to fend for human rights during MSEs and on the other on the EU’s integration of human rights considerations linked to MSEs in its own sports diplomacy.


Programme

13:20 – 14:00 – Welcome and opening speech –Antoine Duval (Asser Institute)
14:00 - 15:30 - Panel 1: Leveraging the Diplomatic Power of the Sports Governing Bodies for Human Rights

  • Lucy Amis (Unicef UK/Institute for Human Rights and Business)
  • Guido Battaglia (Centre for Sport and Human Rights)
  • Florian Kirschner (World Players Association/UNI Global Union)
  • Claire Jenkin (University of Hertfordshire)

15:30 – 16:00 - Coffee Break

16:00 - 17:30 - Panel 2: A Human Rights Dimension for the EU’s Sports Diplomacy?

  • Arnout Geeraert (Utrecht University)
  • Agata Dziarnowska (European Commission)
  • Alexandre Mestre (Sport and Citizenship)
  • Ministry of Health, Welfare and Sport (TBC)

17:30 - Reception

Asser International Sports Law Blog | SV Wilhelmshaven: a Rebel with a cause! Challenging the compatibility of FIFA’s training compensation system with EU law

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

SV Wilhelmshaven: a Rebel with a cause! Challenging the compatibility of FIFA’s training compensation system with EU law

Due to the legitimate excitement over the recent Pechstein ruling, many have overlooked a previous German decision rendered in the Wilhelmshaven SV case (the German press did report on the decision here and here). The few academic commentaries (see here and here) focused on the fact that the German Court had not recognized the res judicata effect of a CAS award. Thus, it placed Germany at the spearhead of a mounting rebellion against the legitimacy of the CAS and the validity of its awards. None of the commentators weighed in on the substance of the decision, however. Contrary to the Court in Pechstein, the judges decided to evaluate the compatibility of the FIFA rules on training compensations with the EU free movement rights. To properly report on the decision and assess the threat it may constitute for the FIFA training compensation system, we will first summarize the facts of the case (I), briefly explicate the mode of functioning of the FIFA training compensation system (II), and finally reconstruct the reasoning of the Court on the compatibility of the FIFA rules with EU law (III).

I.               The complex facts of the case 

In a nutshell, the case concerns the move of an Argentinean player, with an Italian passport (as probably two-third of Argentina), to SV Wilhelmshaven and the training compensation due to its former youth clubs back in Argentina. The player, born in 1987, was an amateur player with an Argentinean club called Excursionistas from 20 March 1998 to 7 March 2005 and with River Plate from 8 March 2005 until 7 February 2007. From 8 February 2007 to 30 June 2007 he signed a fixed-term professional contract with SV Wilhelmshaven, which was later extended for one more season. 

In 2007 SV Wilhelmshaven was playing in the Regional League Nord (fourth tier of German football) and was therefore considered as a club of category 3 for the purpose of the FIFA Regulations for the Status and Transfer of Players (RSTP). In June 2007, Excursionistas and River Plate initiated proceedings with the FIFA Dispute Resolution Chamber (hereafter DRC) claiming €100,000 and €60,000 respectively in training compensation. These demands were partially granted  by the DRC (River Plate obtained “only” €57,500) in two concomitant decisions (available here and here) on 5 December 2008. 

SV Wilhelmshaven decided to appeal the DRC’s decisions to the Court of Arbitration for Sport (CAS). A hearing in front of a sole arbitrator was held on 26 August 2009 and the award rendered on 5 October 2009. The arbitrator confirmed the decision of the DRC awarding the claimed compensations to both Argentinean clubs and rejected all the objections raised by SV Wilhelsmshaven.

The club, however, continued stubbornly to refuse to pay the training compensations. On 13 September 2011, FIFA’s disciplinary Committee sanctioned SV Wilhelmshaven with additional fines and imposed a payment deadline of 30 days. If the club would not respect the deadline, its first team would face a six-point penalty. In light of non-compliance with this decision, FIFA called on the DFB (German FA) to enforce the sanction and secure the payment of the fines. The DFB dutifully implemented the order: six points were deducted and the club’s financial account with the DFB was debited from the requested €21,150. However, SV Wilhelmshaven is a tough nut to crack. Despite the confirmation of the sanctions by the DFB’s internal tribunal it kept on refusing to pay the training compensations awarded by the DRC and CAS. On 15 August 2012, the FIFA asked the DFB to deduct six more points. Given that, in the meantime, the club had been relegated to a lower league, the Norddeutscher Fussball Verband was competent to implement the latest sanction instead of the DFB. It did so on 23 August 2012 and the internal tribunal of the association later confirmed the validity of this decision. In May 2013, the club decided to challenge the point deduction in front of the German courts. Meanwhile, on 5 October 2012, a new decision of FIFA’s Disciplinary Committee imposed the relegation of the club. The SV Wilhelmshaven appealed the decision to the CAS, which confirmed FIFA’s disciplinary decision on 24 October 2013 (unfortunately the relevant CAS award has not been published). Hence, FIFA asked the DFB to implement this decision. The forced relegation was definitely ratified by the board of the Norddeutscher Fussball Verband on 7 December 2013 and validated by the internal tribunal on 20 February 2014. 

The club was challenging both the six-point deduction and the forced relegation in front of the regional Court of Bremen. In first instance, the tribunal simply rejected the claims of the club and considered that the CAS award, not challenged by the club in front of the Swiss Federal tribunal, was a valid legal basis for the sanctions. The club appealed the decision to the Highest Regional Court, which in its ruling of 30 December 2014 overruled the first instance Court. Indeed, it held that the CAS award was contrary to EU law and, therefore, could not be relied upon by the Norddeutscher Fussball Verband to sanction the club (more on this arbitration dimension of the case here and here). Combined with the Pechstein ruling, this case constitutes a powerful challenge to the CAS, but it is also a challenge to FIFA’s training compensation mechanisms. It is on this latter aspect that we will focus in this blog.

II.             The FIFA RSTP’s Training Compensation System 

Let us first take a close look at FIFA’s training compensation regime enshrined in Article 20 of the latest FIFA Regulations on the Status and Transfer of Players (RSTP). It must be highlighted that the FIFA Regulations were adopted after nearly two years of negotiations between the European Commission, UEFA, FIFA and FIFPro.[1] The negotiations ended with the adoption of a set of principles as a basis for the new FIFA transfer regulation. Concerning the training compensations, the principles stipulated that “in the case of players aged under 23, a system of training compensation should be in place to encourage and reward the training effort of clubs, in particular small clubs”. 

Article 20 of the FIFA RSTP transposing this principle reads as follows:

“Training compensation shall be paid to a player’s training club(s): (1) when a player signs his first contract as a professional, and (2) each time a professional is transferred until the end of the season of his 23rd birthday. The obligation to pay training compensation arises whether the transfer takes place during or at the end of the player’s contract. The provisions concerning training compensation are set out in Annexe 4 of these regulations.”

Hence, Article 20 establishes two situations giving rise to a right to obtain a training compensation: the signing of a first professional contract and each transfer until the end of the season of the player’s 23rd birthday. The key to understanding how this duty to pay a training compensation operates in practice can only be found in the Annex 4 of the RSTP. Article 1 paragraph 1 of Annex 4 qualifies the scope of the obligation to pay a training compensation. It states that: 

“A player’s training and education takes place between the ages of 12 and 23. Training compensation shall be payable, as a general rule, up to the age of 23 for training incurred up to the age of 21, unless it is evident that a player has already terminated his training period before the age of 21. In the latter case, training compensation shall be payable until the end of the season in which the player reaches the age of 23, but the calculation of the amount payable shall be based on the years between the age of 12 and the age when it is established that the player actually completed his training.”

Pursuant to article 2 paragraph 2 of Annex 4, a training compensation is not due when “the former club terminates the player’s contract without just cause (without prejudice to the rights of the previous clubs) “, or “the player is transferred to a category 4 club”, or “a professional reacquires amateur status on being transferred”. 

To calculate the amount of training compensation due, every association member of FIFA is “to divide their clubs into a maximum of four categories in accordance with the clubs’ financial investment in training players”.[2] For each category the training costs are equivalent “to the amount needed to train one player for one year multiplied by an average “player factor”, which is the ratio of players who need to be trained to produce one professional player”.[3] The current training costs as defined by each football association for 2014 are available here. The training compensation is meant to cover “the costs that would have been incurred by the new club if it had trained the player itself”.[4] Thus it is calculated “by taking the training costs of the new club multiplied by the number of years of training, in principle from the season of the player’s 12th birthday to the season of his 21st birthday”.[5] The training costs for players for the seasons between their 12th and 15th birthdays, however, are always based “on the training and education costs of category 4 clubs”.[6]

Following the negotiations with the European Commission, FIFA carved out a specific provision for players moving from one association to another inside the territory of the EU (including also the EEA). This provision stipulates that “[i]f the player moves from a lower to a higher category club, the calculation shall be based on the average training costs of the two clubs”.[7] If the player moves from a higher to a lower category, “the calculation shall be based on the training costs of the lower category club”.[8] Moreover, “the final season of training [in the sense of article 1 paragraph 1 Annex 4] may occur before the season of the player’s 21st birthday if it is established that the player completed his training before that time” .[9] Finally, and maybe most importantly, “[i]f the former club does not offer the player a contract, no training compensation is payable unless the former club can justify that it is entitled
to such compensation”.[10] 

The FIFA framework applicable to training compensations is not easy to navigate and many of its provisions have been refined by the jurisprudence of the CAS and the DRC (see this blog for a synthetic assessment).[11] The compatibility of this complex regulatory construction with EU law has never been tested in front of courts (be it national or European). This makes this lawsuit so decisive. 

III.           The SV Wilhelmshaven case and the compatibility of FIFA’s training compensation system with EU law

In its Bosman ruling, the Court of Justice (hereafter CJ) held that the aim of “encouraging the recruitment and training of young players must be accepted as legitimate”.[12] It added “that the prospect of receiving transfer, development or training fees is indeed likely to encourage football clubs to seek new talent and train young players” .[13] Nevertheless, it concluded that “because it is impossible to predict the sporting future of young players with any certainty and because only a limited number of such players go on to play professionally, those fees are by nature contingent and uncertain and are in any event unrelated to the actual cost borne by clubs of training both future professional players and those who will never play professionally”.[14] Hence, receiving such fees could not be “a decisive factor in encouraging recruitment and training of young players or an adequate means of financing such activities, particularly in the case of smaller clubs”.[15] As a final nail into the coffin of training compensations, at least it was thought at that time, the Court followed its Advocate General in holding that “the same aims can be achieved at least as efficiently by other means which do not impede freedom of movement for workers”.[16] 

The FIFA training compensation system as it stands nowadays is a rebuttal to the Bosman ruling. Indeed, it pretends to do the impossible in the eyes of the Court: calculating realistically the costs of training a player in a specific club in order to offer an objective benchmark for the training compensations. Moreover, FIFA simply disregarded the proposals made by Advocate General Lenz, who suggested potential alternative financing mechanisms to support the training of players.[17] FIFA’s rules, endorsed by the EU Commission, have never been tested in front of the CJ, though it came close to it in the relatively recent Olympique Lyonnais case. Here, the Court reaffirmed that “the objective of encouraging the recruitment and training of young players must be accepted as legitimate”.[18] It also recognized that “the clubs which provided the training could be discouraged from investing in the training of young players if they could not obtain reimbursement of the amounts spent for that purpose where, at the end of his training, a player enters into a professional contract with another club”.[19] Thus, it held “that a scheme providing for the payment of compensation for training where a young player, at the end of his training, signs a professional contract with a club other than the one which trained him can, in principle, be justified by the objective of encouraging the recruitment and training of young players”.[20] However, to be proportionate, the scheme must be “taking due account of the costs borne by the clubs in training both future professional players and those who will never play professionally” .[21] In the Olympique Lyonnais case, the French system in place at the time of the dispute, and since then replaced, was deemed incompatible with EU law as the amount of the compensation was not directly correlated with the costs of training the player. Nonetheless, UEFA and FIFA were prompt to see in this judgment a “significant step forward” [22] for the compatibility of the FIFA system with EU law. The present SV Wilhelmshaven case is a good opportunity to test this assumption.

SV Wilhelmshaven had argued in front of the CAS that the FIFA RSTP was contrary to the right to free movement of workers under EU law. However, the single arbitrator rejected the applicability of EU law. Instead, relying on previous CAS awards, it held that “such argument would have been available to the individual Player, not to the Appellant”.[23] This interpretation contradicts the well-established case law of the CJ[24], as noted by the Bremen Court.[25] Moreover, the CAS also declined to recognize the applicability to the case at hand of Article 6 of the Annex 4 to the FIFA RSTP. It considered that “[t]he title of this provision clearly suggests that its scope is narrowly circumscribed within a limited geographic area, i.e. the EU/EEA territory”.[26] Furthermore, “it appears that article 6 of Annex 4 to the FIFA Regulations is nothing more than the codification of the system agreed upon by the European authorities and put into place to govern the transfer of a player moving from one association to another inside the territory of the EU/EEA”.[27] Thus, the panel sees “no reason to depart from the unambiguous wording of article 6 of Annex 4 to the FIFA Regulations, which is obviously not applicable in the case of a player moving from a country outside the EU/EEA to a country within the EU/EEA”.[28] On this exact point, the Bremen Court begged to differ. 

The Bremen Court was not convinced by the distinction between intra-EU and extra-EU transfers made in article 6 Annex 4. The right to free movement of workers extends also to EU citizens moving from a non-EU country to an EU Member state. Therefore, not only could the club legitimately invoke the right to free movement of its player, but it was also right to consider that article 6 annex 4 should have been applicable to an EU citizen moving from Argentina to Germany. Consequently, the German judges considered that the non-application of article 6 and the imposition of the calculation method foreseen in article 4 and 5 of the Annex 4 were contrary to the player’s free movement rights under EU law.[29] Nonetheless, it also acknowledged that the FIFA training compensation rules were supporting “the objective of encouraging the recruitment and training of young players”.[30] Furthermore, Article 6 of the Annex 4 is deemed suitable to attain this objective and compatible with EU law.[31] The key point being for training compensations to cover only the real costs endured to train the player[32], this is what the CAS and the DRC have failed to take in account in the SV Wilhelmshaven case.[33]

Conclusion 

The SV Wilhelmshaven case has potentially damaging consequences for the Court of Arbitration for sport. It intrudes into the system of private enforcement of the CAS awards by forcing the sporting association to consider whether the awards are compatible with German public policy, and especially with EU law before enforcing disciplinary measures based on them. We have deliberately ignored this aspect of the case, as it will be the object of a future blog post. Instead, we decided to focus on FIFA’s training compensation system and its compatibility with EU law.

The Bremen Court’s ruling highlighted the substantial shortcomings of the CAS in dealing with EU law. A long-standing CAS jurisprudence was shown fundamentally flawed and overtly contradictory to the CJ’s interpretation of EU law. Moreover, the FIFA training compensation system as it stands was considered incompatible with EU law in the context of a transfer of an EU citizen from Argentina to an EU Member state. This is not a remote scenario especially when South-American players are involved. However, there is also some good news for FIFA, as the Court found that the FIFA intra-EU training compensation rule is in line with EU law. The case is now at the Bundesgerichtshof (BGH), the highest German civil Court. With this case and the Pechstein case on its plate, the BGH will fundamentally shape the future of sport’s private dispute resolution mechanisms and governance structure. If it is asked to do so or ex officio if it feels the need, the BGH could refer a preliminary question to Luxembourg on the compatibility of the FIFA training compensation system with EU free movement rights. This would be the best way to finally settle a question which has been left wide open since the Bosman ruling, now 20 years ago.



[1] See B. Garcia, ‘The 2001 informal agreement on the international transfer system’, European Sports Law and Policy Bulletin, I-2011, pp.17-29.

[2] Article 4 paragraph 1 of Annex 4.

[3] Article 4 paragraph 1 of Annex 4

[4] Article 5 paragraph 1 of Annex 4

[5] Article 5 paragraph 2 of Annex 4

[6] Article 5 paragraph 3 of Annex 4

[7] Article 6 paragraph 1 a) of Annex 4

[8] Article 6 paragraph 1 b) of Annex 4

[9] Article 6 paragraph 2 of Annex 4

[10] Article 6 paragraph 3 of Annex 4

[11] See F. de Weger, The jurisprudence of the FIFA Dispute Resolution Chamber, ASSER press, 2008, pp. 117-133.

[12]Case C-415/93 Union Royale Belge des Sociétés de Football Association and Others v Bosman and Others [1995] ECR I-4921, paragraph 106.

[13] Ibid, paragraph 108.

[14] Ibid, paragraph 109.

[15] Ibid.

[16] Ibid, paragraph 110.

[17] AG Lenz in Case C-415/93 Union Royale Belge des Sociétés de Football Association and Others v Bosman and Others, [1995] ECR I-4921, paragraph 239

[18] C-325/08 Olympique Lyonnais SASP v Olivier Bernard [2010], paragraph 39.

[19] Ibid, paragraph 44.

[20] Ibid, paragraph 45.

[21] Ibid.

[22] J. Zylberstein, ‘The Olivier Bernard Judgment : A Significant step forward for the training of players’, in M. Colucci, European Sports Law and Policy Bulletin 1/2010

[23] CAS 2009/A/1810 & 1811 SV Wilhelmshaven v. Club Atlético Excursionistas & Club Atlético River Plate, award of 5 October 2009, paragraph.42. Referring to CAS 2004/A/794 and CAS 2006/A/1027.

[24] « Whilst the rights deriving from Article 48 of the Treaty are undoubtedly enjoyed by those directly referred to - namely, workers - there is nothing in the wording of that article to indicate that they may not be relied upon by others, in particular employers. » C-350/96 Clean Car Autoservice Gmbh v Landeshauptmann von Wien [1998] ECR I-2521, paragraph 19.

[25] OLG Bremen, 30.12.2014, 2 U 67/14

[26] CAS 2009/A/1810 & 1811 SV Wilhelmshaven v. Club Atlético Excursionistas & Club Atlético River Plate, award of 5 October 2009, paragraph 46.

[27] Ibid, paragraph 49

[28] Ibid.

[29] OLG Bremen, 30.12.2014, 2 U 67/14, p.22-25.

[30] „Daraus folgt, dass eine Regelung wie im vorliegenden Fall, die eine Ausbildungsentschädigung für den Fall vorsieht, dass ein Nachwuchsspieler nach Abschluss seiner Ausbildung einen Vertrag als Berufsspieler mit einem anderen Verein als dem abschließt, der ihn ausgebildet hat, grundsätzlich durch den Zweck gerechtfertigt werden kann, die Anwerbung und Ausbildung von Nachwuchsspielern zu fördern“. Ibid, p.22.

[31] „Soweit in Art.6 Ziff. 1.b) bei einem Wechsel des Spielers von einem Verein der höheren in eine niedrigere Kategorie die Entschädigung gemäss den Trainingskosten des Vereins der tieferen Kategorie bemessen wird, handelt es sich um eine Regelung, die zu einer Erleichterung des Vereinswechsels führt, also gegenüber der an sich erforderlichen Orientierung an den Kosten des ausbildenden Vereins im Hinblick auf Art.45 AEUV eine Besserstellung des Spielers enthält und daher insoweit unbedenklich ist.“ Ibid, p.25.

[32] « Transferentschädigungen erfüllen mithin die Funktion des Ersatzes von Ausbildungskosten nur dann, wenn sie sich an den tatsächlichen angefallenen Ausbildungskosten orientieren und nicht am Marktwert des fertigen Spielers ». Ibid, p.23.

[33] « Die hier vorgenommene Entschädigung orientiert sich somit nicht an den für die Ausbildung bei den argentinischen Vereinen angefallenen Kosten, sondern nimmt einen Ausgleich in Höhe des pauschal eingeschätzten Aufwands vor, der dem übernehmenden Verein im Hinblick auf diesen Spieler erspart worden ist. » Ibid, p.24.

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