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 2016. By Kester Mekenkamp

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.   


The headlines

What a month June turned out to be. Waking up the morning after the 23rd, the results of the UK referendum on EU membership were final. The words of Mark Twain: “Apparently there is nothing that cannot happen today”, might provide the most apt description of the mood felt at the time.[1] The Leave campaign’s narrow victory has brought along tremendous economic, political and legal uncertainties for both the UK and the (other) Member States. To give but one example, with regard to the implications of Brexit on Europe’s most profiting football league, we recommend an older blog by Daniel Geey and Jonny Madill. More...


The EU State aid and sport saga: The Showdown

It’s been a long wait, but they’re finally here! On Monday, the European Commission released its decisions regarding State aid to seven Spanish professional football clubs (Real Madrid on two occasions) and five Dutch professional football clubs. The decisions mark the end of the formal investigations, which were opened in 2013. The Commission decided as follows: no State aid to PSV Eindhoven (1); compatible aid to the Dutch clubs FC Den Bosch, MVV Maastricht, NEC Nijmegen and Willem II (2); and incompatible aid granted to the Spanish football clubs Real Madrid, FC Barcelona, Valencia CF, Athletic Bilbao, Atlético Osasuna, Elche and Hércules (3). 

The recovery decisions in particular are truly historic. The rules on State aid have existed since the foundation of the European Economic Community in 1958, but it is the very first time that professional football clubs have been ordered to repay aid received from (local) public authorities.[1] In a way, these decisions complete a development set in motion with the Walrave and Koch ruling of 1974, where the CJEU held that professional sporting activity, and therefore also football, is subject to EU law. The landmark Bosman case of 1995 proved to be of great significance as regards free movement of (professional) athletes and the Meca-Medina case of 2006 settled that EU competition rules were equally applicable to the regulatory activity of sport. The fact that the first ever State aid recovery decision concerns major clubs like Real Madrid, FC Barcelona and Valencia, give the decisions extra bite. Therefore, this blog post will focus primarily on the negative/recovery decisions[2], their consequences and the legal remedies available to the parties involved.[3] More...

International and European Sports Law – Monthly Report – May 2016. By Marine Montejo

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.   


The Headlines

Challenged membership put a lot of emphasis on football federations in May. The Court of Arbitration for Sport (“CAS”) has rendered an award, on 27 April 2016, ordering the FIFA Council to submit the application of the Gibraltar Football Association (GFA) for FIFA membership to the FIFA Congress (the body authorised to admit new members to FIFA). The GFA has sought since 1999 to become a member of UEFA and FIFA. In May 2013, it became a member of the UEFA and went on to seek membership of FIFA. More...


Operación Puerto Strikes Back!

Forget the European Championship currently held in France or the upcoming Olympic Games in Rio. Doping scandals are making the headlines more than ever in 2016. From tennis star Sharapova receiving a two-year ban for her use of the controversial ‘meldonium’, to the seemingly never-ending doping scandals in athletics. As if this was not enough, a new chapter was added on 14 June to one of the most infamous and obscure doping sagas in history: the Operación Puerto.

The special criminal appeal chamber,  the Audiencia Provincial, has held that the more than 200 blood bags of professional athletes that have been at the center of the investigations since 2006 can be delivered to the relevant sporting authorities, such as the Spanish Anti-Doping Agency (AEPSAD), WADA, the UCI and the Italian Olympic Committee (CONI). In other words, there is now a good chance that the identities of the involved athletes might eventually be revealed.

Source: http://www.telegraph.co.uk/sport/othersports/cycling/9834122/Operation-Puerto-doctor-Eufemiano-Fuentes-treated-tennis-players-athletes-footballers-and-a-boxer.html

This case note will analyze the court’s ruling and summarize its most important findings. Given the amount of time passed since the scandal first came to light (2004), the blog will commence with a short background summary of the relevant facts. More...

FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München. By Marine Montejo

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre.

On 3 June 2016, the Landgericht München (“Munich Regional Court”) ordered temporary injunctions against the International Basketball Federation (“FIBA”) and FIBA Europe, prohibiting them from sanctioning clubs who want to participate in competitions organized by Euroleague Commercial Assets (“ECA”). The reasoning of the Court is based on breaches of German and EU competition law provisions. FIBA and FIBA Europe are, according to the judge, abusing their dominant position by excluding or threatening to exclude national teams from their international competitions because of the participation of their clubs in the Euroleague. This decision is the first judicial step taken in the ongoing legal battle between FIBA and ECA over the organization of European basketball competitions.

This judgment raises several interesting points with regard to how the national judge deals with the alleged abuse of a dominant position by European and international federations. A few questions arise regarding the competence of the Munich Regional Court that may be interesting to first look at in the wake of an appeal before examining the substance of the case. More...

The Müller case: Revisiting the compatibility of fixed term contracts in football with EU Law. By Kester Mekenkamp

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre.

On 17 February 2016, the Landesarbeitsgericht Rheinland-Pfalz delivered its highly anticipated decision in the appeal proceedings between German goalkeeper Heinz Müller and his former employer, German Bundesliga club Mainz 05.[1] The main legal debate revolved around the question (in general terms) whether the use of a fixed term contract in professional football is compatible with German and EU law. 

In first instance (see our earlier blog posts, here and here), the Arbeitsgericht Mainz had ruled that the ‘objective reasons’ provided in Section 14 (1) of the German Part-time and Fixed-term Employment Act (Gesetz über Teilzeitarbeit und befristete Arbeitsverträge, “TzBfG”), the national law implementing EU Directive 1999/70/EC on fixed-term work, were not applicable to the contract between Müller and Mainz 05 and therefore could not justify the definite nature of that contract.[2] In its assessment the court devoted special attention to the objective reason relating to the nature of the work, declining justifications based thereupon.[3] Tension rose and the verdict was soon labelled to be able to have Bosman-like implications, if held up by higher courts.[4] More...

The BGH’s Pechstein Decision: A Surrealist Ruling



The decision of the Bundesgerichtshof (BGH), the Highest Civil Court in Germany, in the Pechstein case was eagerly awaited. At the hearing in March, the Court decided it would pronounce itself on 7 June, and so it did. Let’s cut things short: it is a striking victory for the Court of Arbitration for Sport (CAS) and a bitter (provisory?) ending for Claudia Pechstein. The BGH’s press release is abundantly clear that the German judges endorsed the CAS uncritically on the two main legal questions: validity of forced CAS arbitration and the independence of the CAS. The CAS and ISU are surely right to rejoice and celebrate the ruling in their respective press releases that quickly ensued (here and here). At first glance, this ruling will be comforting the CAS’ jurisdiction for years to come. Claudia Pechstein’s dire financial fate - she faces up to 300 000€ in legal fees – will serve as a powerful repellent for any athlete willing to challenge the CAS.More...



The EU State aid and Sport Saga: Hungary revisited? (Part 2)

On 18 May 2016, the day the first part of this blog was published, the Commission said in response to the Hungarian MEP Péter Niedermüller’s question, that it had “not specifically monitored the tax relief (…) but would consider doing so. The Commission cannot prejudge the steps that it might take following such monitoring. However, the Commission thanks (Niedermüller) for drawing its attention to the report of Transparency International.”

With the actual implementation in Hungary appearing to deviate from the original objectives and conditions of the aid scheme, as discussed in part 1 of this blog, a possible monitoring exercise by the Commission of the Hungarian tax benefit scheme seems appropriate. The question remains, however, whether the Commission follows up on the intent of monitoring, or whether the intent should be regarded as empty words. This second part of the blog will outline the rules on reviewing and monitoring (existing) aid, both substantively and procedurally. It will determine, inter alia, whether the State aid rules impose an obligation upon the Commission to act and, if so, in what way. More...

The Rise and Fall of FC Twente

Yesterday, 18 May 2016, the licensing committee of the Dutch football federation (KNVB) announced its decision to sanction FC Twente with relegation to the Netherland’s second (and lowest) professional league. The press release also included a link to a document outlining the reasons underlying the decision. For those following the saga surrounding Dutch football club FC Twente, an unconditional sanction by the licensing committee appeared to be only a matter of time. Yet, it is the sanction itself, as well as its reasoning, that will be the primary focus of this short blog.More...

The EU State aid and Sport Saga: Hungary’s tax benefit scheme revisited? (Part 1)

The tax benefit scheme in the Hungarian sport sector decision of 9 November 2011 marked a turning point as regards the Commission’s decisional practice in the field of State aid and sport. Between this date and early 2014, the Commission reached a total of ten decisions on State aid to sport infrastructure and opened four formal investigations into alleged State aid to professional football clubs like Real Madrid and Valencia CF.[1] As a result of the experience gained from the decision making, it was decided to include a Section on State aid to sport infrastructure in the 2014 General Block Exemption Regulation. Moreover, many people, including myself, held that Commission scrutiny in this sector would serve to achieve better accountability and transparency in sport governance.[2]

Yet, a recent report by Transparency International (TI), published in October 2015, raises questions about the efficiency of State aid enforcement in the sport sector. The report analyzes the results and effects of the Hungarian tax benefit scheme and concludes that:

“(T)he sports financing system suffers from transparency issues and corruption risks. (…) The lack of transparency poses a serious risk of collusion between politics and business which leads to opaque lobbying. This might be a reason for the disproportionateness found in the distribution of the subsidies, which is most apparent in the case of (football) and (the football club) Felcsút.”[3]

In other words, according to TI, selective economic advantages from public resources are being granted to professional football clubs, irrespective of the tax benefit scheme greenlighted by the Commission or, in fact, because of the tax benefit scheme. More...

Asser International Sports Law Blog | The CAS Ad Hoc Division in 2014: Business as usual? – Part.1: The Jurisdiction quandary

Asser International Sports Law Blog

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

The CAS Ad Hoc Division in 2014: Business as usual? – Part.1: The Jurisdiction quandary

The year is coming to an end and it has been a relatively busy one for the CAS Ad Hoc divisions. Indeed, the Ad Hoc division was, as usual now since the Olympic Games in Atlanta in 1996[1], settling  “Olympic” disputes during the Winter Olympics in Sochi. However, it was also, and this is a novelty, present at the Asian Games 2014 in Incheon.  Both divisions have had to deal with seven (published) cases in total (four in Sochi and three in Incheon). The early commentaries available on the web (here, here and there), have been relatively unmoved by this year’s case law. Was it then simply ‘business as usual’, or is there more to learn from the 2014 Ad Hoc awards? Two different dimensions of the 2014 decisions by the Ad Hoc Division seem relevant to elaborate on : the jurisdiction quandary (part. 1) and the selection drama (part. 2).


Part. 1: The Jurisdiction quandary: Too early to be judged!


The scope of jurisdiction of the Ad Hoc Division of CAS is provided for in article 1 of the ‘Arbitration Rules for the Olympic Games’ (the same is true for the Asian Games)[2]. However, legal uncertainties over this scope of jurisdiction remain a defining feature. Many earlier disputes in front of the Ad Hoc division have tackled this question, and this has been true again this year.[3]

It is not so much the scope rationae personae that might be problematic, although one case arose at the Asian games in which two former squash players were denied access to the Ad Hoc division on the basis of not being “participating athletes”.[4] Nor is it the rationae materiae that has been a real problem, as claimants tend to submit disputes, which are related to the Games. No, the problem child is usually the jurisdiction rationae temporis. Indeed, article 1 of the rules states that “any disputes covered by Rule 61 of the Olympic Charter, insofar as they arise during the Olympic Games or during a period of ten days preceding the Opening Ceremony of the Olympic Games” can be subjected to the jurisdiction of the Ad Hoc Division. So the key question is: When does a dispute “arise”? 

In the Birkner case[5], the Ad Hoc Division in Sochi had to grapple extensively with the question of when the dispute arose as, during the hearing, the respondent, Comitato Olympico Argentino, “denied the existence of a basis of jurisdiction of the panel”. The case concerned a selection drama for the Sochi Games (see part 2); jurisdiction rationae personae and rationae materiae were unproblematic. The CAS did examine whether the local remedies were exhausted, and considered that “that there were no internal remedies to exhaust”.[6] The only barrier left for jurisdiction to be asserted was the ratione temporis. In short, “did the dispute arise in the required time frame?”[7]

This “vexing issue” [8] was touched upon repeatedly in past Ad Hoc division awards.[9] In the Birkner case, it had to be demonstrated that the dispute arose not earlier than the 28 January 2014, 10 days before the opening ceremony scheduled for the 7 February 2014. The panel first reaffirmed the fact that “the date when the dispute arose cannot, per se, be the date when the Request for Arbitration is filed” .[10]  So, back to the key question, when did the dispute arise?

The award refers extensively to the Schuler case[11]. In its main holding on jurisdiction, the 2006 panel considered that “it would not be possible to say that a dispute had arisen until Ms Schuler had decided to appeal and had filed notice of her appeal”.[12] Nevertheless, the 2014 panel refused to consider the Schuler precedent to be applicable to the Birkner case for two reasons: the factual situation is different and the reasoning used in Schuler is fundamentally flawed.

On the factual side, contrary to the Schuler case, the panel finds that “[i]n the present case […] the explanation was not given on a date inside the required period, as it was either on 20 January 2014, which is the date of the letter of explanation, or on 22 January 2014, which is the date on which the Applicant says that she received that letter”.[13] Both of these dates being well before the 10 days period, the panel is of the opinion that it lacks jurisdiction. On the legal side, the panel is clearly not “convinced by the legal reasoning adopted in the Schuler case” .[14] In fact, it considers that “[s]uch conclusion could extend the jurisdiction of the ad hoc Division outside the precise and limited framework set by the Rules, which this Panel is required to respect and apply” [15]. The panel is of the opinion that “the date when a dispute arises is in general […] the date of the decision with which the Applicant disagrees” .[16] However, “[s]uch a date can arise later […] if […] the decision is not self-explanatory and requires some explanation in order for the parties to know with certainty that they are in disagreement”.[17]

This is a noteworthy consideration, which indicates a substantial reduction of the scope of jurisdiction of the CAS Ad Hoc Division. If the parties do not agree to the jurisdiction of CAS (in practice they often do not contest the jurisdiction[18]) it will render more difficult the referral of a dispute to the Ad Hoc Division. This understanding of the start of a dispute is contradicting the overall aim of the Ad Hoc Division, which is to deal swiftly with all disputes intimately linked to the Games. In this light, a more flexible interpretation of the jurisdiction rationae temporis, as suggested in the Schuler case, is preferable. Athletes are no legal experts; they (and sometimes their lawyers) need time to find their way through the jungle of sporting regulations and dispute resolution mechanisms potentially applicable. The crucial importance of the Olympic Games for an athlete’s career call for an interpretation of the start of the dispute that focuses on the intention to challenge the decision as highlighted in the Schuler award[19]. Moreover, any doubts concerning the starting date of the dispute should play in favour of the athlete, unless the time between the date of notification of the contentious decision and the decision to lodge a complaint in front of CAS is disproportionately (and abusively) long. The attack by the Birkner panel on the reasoning adopted in Schuler is no anodyne move; in the future it may threaten the access to justice of athletes and their ability to obtain a swift and fair decision, in a context where they most urgently need it.

 



[1] On the early days of the CAS Ad Hoc Division at the Olympics, the book by Gabrielle Kaufmann-Kohler is a must read : G. Kaufmann-Kohler, Arbitration at the Olympics, Kluwer Law, 2001.

[2] Article 1 of the Arbitration Rules for the OG stipulates that:

“The purpose of the present Rules is to provide, in the interests of the athletes and of sport, for the resolution by arbitration of any disputes covered by Rule 61 of the Olympic Charter, insofar as they arise during the Olympic Games or during a period of ten days preceding the Opening Ceremony of the Olympic Games.”

“In the case of a request for arbitration against a decision pronounced by the IOC, an NOC, an International Federation or an Organising Committee for the Olympic Games, the claimant must, before filing such request, have exhausted all the internal remedies available to him/her pursuant to the statutes or regulations of the sports body concerned, unless the time needed to exhaust the internal remedies would make the appeal to the CAS Ad Hoc Division ineffective.”

[3] CAS OG 14/03; CAS AG 14/01; CAS AG 14/02.

[4] See CAS AG 14/01, §2.5. See also CAS OG 12/03, §2.3.

[5] CAS OG 14/03

[6] CAS OG 14/03, §5.14

[7] CAS OG 14/03, §5.17-5-30

[8] CAS OG 14/03, §5.20

[9] Most notably in the Schuler case, CAS OG 06/002. For a general commentary see: I.S.LR. 2006 pp.50-51 and A. Rigozzi, ‘The decisions rendered by the CAS Ad Hoc Division at the Turin Winter Olympic Games 2006’, Journal of International Arbitration 23 (5): 453-466, 2006

[10] CAS OG 14/03, §5.21

[11] CAS OG 14/03, §5.24

[12] CAS OG 06/002, §14

[13] CAS OG 14/03, §5.25

[14] CAS OG 14/03, §5.25

[15] CAS OG 14/03, §5.27

[16] CAS OG 14/03, §5.28

[17] CAS OG 14/03, §5.28

[18] See for example CAS OG 14/01 §6.2 and CAS OG 14/02 §6.5

[19] In cases, in which the dispute overtly arose earlier than 10 days before the games such a restrictive interpretation could be tolerated. See for example: CAS OG 12/03, §2.3.23; CAS OG 12/02, §4.10; CAS OG 12/04, §5.2.

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