Asser International Sports Law Blog

Editor's note: This blog is part of a special blog series on the Russian doping scandal at the CAS. Last year I analysed the numerous decisions rendered by the CAS ad hoc Division in Rio and earlier this year I reviewed the CAS award in the IAAF case.

Unlike the International Association of Athletics Federations (IAAF), the International Paralympic Committee (IPC) was very much unaffected by the Russian doping scandal until the publication of the first McLaren report in July 2016. The report highlighted that Russia’s doping scheme was way more comprehensive than what was previously thought. It extended beyond athletics to other disciplines, including Paralympic sports. Furthermore, unlike the International Olympic Committee (IOC) the IPC had a bit more time to deal with the matter, as the Rio Paralympic Games were due to start “only” in September.

After the release of the McLaren Report, the IPC president Sir Philip Craven was “truly shocked, appalled and deeply saddened at the extent of the state sponsored doping programme implemented in Russia”. He immediately announced the IPC’s intention to review the report’s findings and to act strongly upon them. Shortly thereafter, on 22 July, the IPC decided to open suspension proceedings against the National Paralympic Committee of Russia (NPC Russia) in light of its apparent inability to fulfil its IPC membership responsibilities and obligations. In particular, due to “the prevailing doping culture endemic within Russian sport, at the very highest levels, NPC Russia appears unable or unwilling to ensure compliance with and the enforcement of the IPC’s Anti-Doping Code within its own national jurisdiction”. A few weeks later, on 7 August, the IPC Governing Board decided to suspend the Russian Paralympic Committee with immediate effect “due to its inability to fulfil its IPC membership responsibilities and obligations, in particular its obligation to comply with the IPC Anti-Doping Code and the World Anti-Doping Code (to which it is also a signatory)”. Indeed, these “obligations are a fundamental constitutional requirement for all National Paralympic Committees (NPCs), and are vital to the IPC’s ability to ensure fair competition and to provide a level playing field for all Para athletes around the world”. Consequently, the Russian Paralympic Committee lost all rights and privileges of IPC membership. Specifically, it was not entitled to enter athletes in competitions sanctioned by the IPC, and/or to participate in IPC activities. Thus, “the Russian Paralympic Committee will not be able to enter its athletes in the Rio 2016 Paralympic Games”.

This was an obvious blow to Russia’s Paralympic team and, as was to be expected, the RPC decided to challenge the decisions. Thanks to an agreement with the IPC, the case moved directly to the Court of Arbitration for Sport (CAS), which decided in favour of the IPC on 23 August. Nonetheless, the legal battle did not end there as Russian athletes continued the fight in the German courts. In this blog I will first review the CAS award and then discuss the follow-on disputes in German courts.

I. The IPC’s triumph before the CAS

At play in front of CAS was the use of clauses 9.2.2 and 9.3 of the IPC Constitution to suspend the RPC for failing to fulfil its obligations as a member. Indeed, the member’s obligation provided in clause 2 of the IPC constitution, includes the obligation “to comply with the World Anti-Doping Code”[1] and to “contribute to the creation of a drug-free sport environment for all Paralympic athletes in conjunction with the World Anti-Doping Agency (WADA)”[2]. The RPC challenged the claim that it had failed to comply with these obligations. Furthermore, it considered that in any event the sanction applied was disproportionate.

A. Did the RPC fail to comply with its membership obligations?

The RPC contested in full the factual findings of the McLaren Report. Yet, the Panel held that the RPC failed to provide the necessary evidence to rebut McLaren’s factual claims. In particular, the RPC “decided not to cross-examine him although given the opportunity to do so”[3] and “did not call any athlete named by Professor McLaren as having been subject to the system he described”[4]. In other words, “Mc Laren’s evidence stands uncontradicted”[5]. However, in light of the lack of precise information, the Panel refused to conclude, like the IPC requested, that “the RPC and its Board Members were involved in, or complicit in, or knew of the existence of State sponsored doping of athletes and the methodologies as set out in the IP Report”.[6]

Nonetheless, the arbitrators also found that it is “undisputed that the RPC accepted the obligations imposed on it as a member of the IPC”, and amongst those obligations there is “the specific obligation under Article 20.1 of the WADA Code to adopt and implement anti-doping policies and rules for the Paralympic Games which conform with the WADA Code”.[7] Moreover, “the obligation vigorously to pursue all potential anti-doping rule violations within its jurisdiction and to investigate cases of doping (Article 20.4.10), are not passive”.[8] Thus, at a national level “the RPC is the responsible entity having the obligation to the IPC as well as to the IPCs’ members to ensure that no violations of the anti-doping system occur within Russia”.[9] Yet, the mere “existence of the system as described in the IP Report and in the McLaren affidavit means that the RPC breached its obligations and conditions of membership of the IPC”.[10]

Those are extremely important considerations to support the effectiveness of the world anti-doping system. In practice, the CAS is closing the door on national federations hiding behind the failure of other anti-doping bodies to deny their responsibility. If decided inversely, this would have led to a situation of organized irresponsibility, in which the bucket is simply passed over to a public institution (in Russia’s case RUSADA) that cannot be sanctioned under current anti-doping rules. Indeed, WADA declare RUSADA non compliant, but RUSADA is not a member of sporting associations, it does not enter athletes in international sporting competitions, thus SGBs would be hard pressed to find a way to impose any deterrent sanctions against it. If noncompliance is to be met with adequate sanctions, SGBs, which are tasked to supervise specific sports at national level, must bear the indirect responsibility for the systemic failure of the anti-doping system operating in their home country.

B. Is the sanction imposed by the IPC proportionate?

As the Panel recognized from the outlet: “the more difficult question for consideration is whether the decision to suspend the RPC without reservation, or alleviation of the consequences to Russian Paralympic athletes, was proportionate”.[11] The RPC submited “that the IPC could have adopted a “softer measure” that still permitted clean Russian athletes to compete in the Paralympic Games in Rio”.[12] Furthermore, it argued, “that a blanket prohibition is not justified, as it has not been established that all para-athletes nominated by the RPC have ever been implicated in doping”.[13]

1. Whose right are disproportionately affected?

The Panel considered first that as para-athletes are not parties to this appeal, “[q]uestions of athletes’ rights that may not derive from the RPC, but of which they themselves are the original holder, such as rights of natural justice, or personality rights, or the right to have the same opportunities to compete as those afforded to Russian Olympic athletes by the IOC in its decision of 24 July 2016 regarding the Olympic Games Rio 2016, are not for this Panel to consider”.[14] Instead, the “matter for review by this Panel is thus not the legitimacy of a “collective sanction” of athletes, but whether or not the IPC was entitled to suspend one of its (direct) members”.[15] Furthermore, “the collective member cannot hide behind those individuals that it represents” .[16]

Here the Panel adopts a relatively formalistic reasoning by denying the RPC the competence to invoke the potential rights of its athletes. This might contradict the idea that athletes bear a responsibility for the noncompliance of their national federation with the rules of an international federation as put forward by the Panel in the IAAF case. The RPC does, at least partly, represent the athletes, and there is a good case that can be made for it to be allowed to raise the potential infringements of the personality rights of its members in this procedure. It does not mean that the rights of the athletes were disproportionately affected, only that they should have been considered and not brushed aside as the Panel did in the present instance.

2. The (extraordinary) nature of the RPC’s regulatory failure

Unfortunately, the award’s analytical structure can lead to some confusion when dealing with the proportionality analysis of the IPC’s decision. There are two (implicit) steps that are key in the decision. First, an analysis of the depth (and consequences) of the RPC’s regulatory failure, and second an analysis of the proportionality of the sanction responding to this failure. The former will be dealt with in this section.

The Panel points out that the IPC “was faced with probative evidence of widespread systemic doping under the RPCs “watch””.[17] Moreover, as argued by the IPC, the RPC’s failure to act is even more acute in light of the IPC’s dependence on national members to implement its policies at national level. Thus, in particular, “the IPC relies on the RPC to ensure compliance in Russia with its zero tolerance anti-doping policy”.[18] More generally, “this federal system with complementary international and national obligations is the core back-bone of the fight against doping”.[19] In this context, the fact that the RPC claims that “it did not know what was happening and that it had no control over those involved in the system described by Professor McLaren does not relieve the RPC of its obligations but makes matters worse” [20]. Though it is unclear from the formulation used in this section of the award, the outcome of the case points undoubtedly to the fact that the Panel endorses the IPC’s understanding of the scope of responsibility of the RPC. Furthermore, the arbitrators insist that the “damage caused by the systemic, non-compliance is substantial” [21]. Finally, it finds again that the RPC “had a non-delegable responsibility with respect to implementing an anti-doping policy in conformity with the WADA Code in Russia”.[22] Thus, the RPC could not simply “delegate the consequences [of this responsibility] where other bodies within Russia acting as its agent implement a systemic system of doping and cover-up”.[23]

In this section of the award, the Panel recognizes, rightly in my view, that the effectiveness of the transnational regulation of international sports relies on the compliance of national federations and this is even more so in the case of the anti-doping fight.

3. The proportionality of the sanction

The key question in the proportionality analysis was whether the sanction inflicted upon the RPC was adequate and necessary to attain its aim. The reasoning of the Panel is piecemeal and spread around a number of paragraphs of the award, which are regrettably not well connected together.

The first question is whether the IPC was pursuing a legitimate objective when imposing that sanction on the RPC. On the IPC’s own account, the sanction was considered “the only way to ensure that the system, and systematised doping, in Russia no longer continued”.[24] It adds “that it was a legitimate aim to send a message that made clear the lack of tolerance on the part of the IPC to such systemic failure in a country”.[25] The Panel recognizes that the “concern that clean athletes, inside and outside of Russia, have confidence in the ability to compete on a level playing field, and the integrity and credibility of the sporting contest, represent powerful countervailing factors to the collateral or reflexive effect on Russian athletes as a result of the suspension”[26], and constitutes “an overriding public interest that the IPC was entitled to take into account in coming to the Decision”.[27]

The second question linked to the proportionality of the sanction relates to its necessity. Was there a less restrictive alternative sanction available to attain the aim pursued? The IPC argued that the suspension of the RPC’s membership was necessary for three reasons:

“to provoke behavioural change (for the future) within the sphere of responsibility of the RPC”
“the suspension took into account that the failures in the past had resulted in a distorted playing field on an international level, because the IPC anti-doping policy was not being adequately enacted and enforced vis-à-vis para-athletes affiliated to RPC”
“a strong message had to be issued to restore public confidence, since the Paralympic movement depends – much more than other sports – on the identification with moral values”[28]

The Panel held that the suspension was “a powerful message to restore public confidence”. It insisted also that there “was no submission to the Panel of an alternative measure that would, comparably and effectively, restore a level playing field for the present and the immediate future, affect future behavioral change and restore public trust”.[29]

Finally, the Panel concluded that “in light of the extent of the application of the system described by Professor McLaren and his findings of the system that prevailed in Russia, made beyond reasonable doubt, the Decision to suspend the national federation was not disproportionate”.[30] Moreover, it insisted that the consequences for the athletes were following logically from the suspension of the RPC and therefore proportionate, as it had decided in the IAAF case. The Panel also brushed aside the RPC’s attempt to portray the IPC’s decision as contrary to the IOC Decision dated 24 July 2016. On the one side, it found the IOC Decision to be irrelevant for the IPC and, on the other, it considered the IPC’s suspension to be in any event compatible with the IOC Decision.

II. The Russian appeals in the German courts

The RPC’s appeal to the Swiss Federal Tribunal failed on 30 August because it could not demonstrate its ability to fulfil its obligations with regard to the anti-doping rules of the IPC and WADA, not unlike the one of the Russian athletes and RusAF in the IAAF case,. Nor could RusAF demonstrate that its interests would override those of IPC to fight effectively against doping and protect the integrity of sport.

Yet, interestingly, new challenges against the RPC’s suspension were quickly lodged in German courts. Indeed, as the IPC is seated in Bonn, a number of Russian athletes tried to obtain provisory judgments from the Landgericht (LG) Bonn to participate in the Rio Paralympics. These cases were appealed to the Oberlandesgericht (OLG) Düsseldorf, and even ended up in front of Germany’s constitutional court, the Bundesverfassungsgericht (BVerfG). It would have been ironical if the German courts had quashed the decision of the IPC, bearing in mind that it is the German public broadcaster (ARD) which brought the Russian doping scheme to the fore in the first place.

A. The decisions of the LG Bonn

On 5 and 6 September the LG (first instance tribunal) Bonn rendered two judgments (available here and here) on the matter. Both rejected the claims of the Russian athletes.

The first judgment found that the athletes could not rely on any contractual claims, as no contract existed between them and the IPC. This is due to the fact that the RPC is supposed to nominate them to participate in the Paralympic Games, for the court there is no contract between the IPC and the athletes.[31] Even where the IPC foresees in its rules that it can directly nominate athletes to participate in the Paralympic Games, one cannot derive that it has a contractual duty to select the claimants. Instead, it enjoys certain discretion in doing so. However, the LG recognized that the Russian athletes’ interests are affected by the IPC’s Decision of 7 August 2016, but it also acknowledged that the IPC justified its decision by the existence of a state-run doping scheme in Russia.[32] Thus, the final decision to enter or not athletes in the Paralympic Games of Rio should be left to the IPC. The fact that the IOC applied a different regime to the Russian athletes willing to participate in the Rio Games is deemed not binding upon the IPC, as it is a separate legal entity.

The second judgment, rendered the day after, follows a very similar line of reasoning. The LG added a pointed rebuttal of the claim that the Russian athletes were discriminated against. It insisted that the other countries are not suspected of running state doping schemes.[33] The court recognized that athletes cannot easily change their nationality, but it insisted that the Olympic Games are more than any other sporting competition characterized by the fact that athletes participating are not primarily representing themselves but their home country.[34] In this context, athletes must accept to face restrictions for which they might not be personally responsible.[35] Furthermore, the ineligibility of the Russian athletes was not deemed a disproportionate restriction on the freedom to work or on the fundamental personality rights of the claimants. The LG considered that authorizing specific athletes to compete under a neutral flag would not have been a milder solution to fight against doping, as the Russian public would still have identified them as Russian.[36] Instead, as members of the RPC, the claimants must accept such a restriction to their individual rights.

The LG Bonn strongly supported the decision adopted by the IPC. The court has, as the CAS did, declined to consider the suspension of the RPC, and the ensuing ineligibility of Russian athletes for the Rio Paralympic Games, as discriminatory or disproportionate.

B. The Appeal to the Oberlandesgericht Düsseldorf

The appeal decision of the OLG Düsseldorf is probably the most interesting of the German decisions analysed here. In the first part of its judgment, the OLG criticized harshly the Russian athletes for failing to request earlier a provisory order from the German courts. Indeed, at the time of the decision, 13 September 2016, the Paralympic Games were almost one week underway (7 September). Consequently, many (if not all) of the appellants would be unable to compete at the Games anyway, even if the court were to grant the requested order.

Yet, the core of the OLG’s ruling, and its most important contribution to the world anti-doping system, is its assessment of the balance of interests between the Russian athletes and the IPC. In a nutshell, the OLG found that the IPC’s interest in declaring the Russian athletes ineligible prevails because there is a legitimate suspicion that those athletes have been involved in doping in the previous years.[37] To come to this conclusion, the court conducted a fairly comprehensive assessment of the opposing interests. On the one side, the Russian athletes have an interest in participating in the Paralympic Games to secure economic revenues deriving primarily from sponsoring. On the other side, stands the IPC’s “fundamental interest in the organization of a fair sporting competition excluding athletes who have used doping or against which there is a strong suspicion of doping”.[38] In this case, the OLG held that the interest of the IPC for “clean” Paralympic Games prevails and justifies the rejection of the complaint.[39] For the Düsseldorf court, the personal guilt of the athletes is irrelevant, as the fact that they had the possibility to exercise their sport with the support of doping without risking to be discovered justifies in itself a general suspicion of doping against all Russian athletes.[40] Thus, the IPC can, for the preservation of the fairness of its competitions, declare them ineligible for the Paraympic Games. Only the athletes for whom it can be confidently demonstrated that they have not doped can be exempted from this exclusion.

Hence, the OLG considered that the factual constellation of the case justifies that each and every Russian Paralympian can be legitimately suspected of having been involved in doping over the recent years. Furthermore, Paralympic athletes were, as corroborated by the McLaren Report and his affidavit, also a target of the Russian doping system.[41] This suspicion cannot be rebutted by the oath taken by 68 (out of 84) of the appellants that they have not tested positive for doping in the last two years. Indeed, it cannot be demonstrated that the athletes have been subjected to non-manipulated doping tests.[42] In the end, the OLG fully endorsed the IPC’s decision to prioritize its objective of providing “clean Games” to the detriment of the interests of Russian Paralympians in participating.

C. Final Stop at the Bundesverfassungsgericht

The next, and final stop, for the claimants was the BVerfG in Karlsruhe. The court, which rendered its ruling on 15 September, was faced with the demands of Russian athletes for a provisory order allowing them to participate (at least) to the closing ceremony of the Paralympic Games due to take place on 18 September.

The court’s balancing exercise between the interests of the IPC and those of the Russian athletes is favourable to the former. Thus, the BVerfG found that if it would grant the provisory order and later reject a related constitutional complaint, this would have irreparable consequences for the pending Paralympic competitions and closing ceremony and would send a (negative) signal to sport in general.[43] Even if, to their credit, the individual athletes are not directly involved in the state-run doping scheme unearthed by the McLaren Report, the Court believed that the decision of the IPC and the CAS to declare the whole Russian team ineligible must be respected. The entering of athletes through the national courts would intrude substantially on the autonomy of the IPC and of the CAS[44] and the deterring signal send by the RPC’s exclusion, which aims at scaring off national federations from supporting or tolerating systematic doping schemes, would be substantially weakened.[45]

Furthermore, if instead the provisory order is rejected and the Russian athletes prevail in a later constitutional complaint, the interests of the athletes to participate in the closing ceremony is still of significantly less weight than the IPC’s interest to ensure that the use of doping in sport is fought against effectively.[46] In particular, one cannot ignore that, besides one of the appellants, all the others will in any event not be able to participate to competitions which have already taken place.[47] Even for the only athlete potentially able to participate there are legitimate doubts regarding her material ability to compete in the Rio Paralympic Games. Therefore, the BVerfG rejected the appellants’ plea and definitely put an end to their hope in participating to the Rio Paralympic Games.

Conclusion

At the time of writing, the RPC is still suspended by the IPC and the second McLaren Report has corroborated with more evidence the extensive nature of the Russian doping scheme. The IPC has developed, in collaboration with WADA, a set of tough reinstatement criteria to be met by the RPC in order to be reinstated. The compliance of the RPC with the criteria will be monitored by a special taskforce. Thus, the IPC demonstrated its willingness to tackle head-on the Russian doping scheme. In doing so, it followed a radically different approach than the IOC and declared all Russian Paralympians to be ineligible.

The CAS and the German courts later fully endorsed this approach. In fact, it seems that the national courts were even going beyond the findings of the CAS by emphasizing that there was a legitimate presumption from the side of IPC that all the Russian Paralympic athletes were doped. The CAS and the German courts also insisted that a balancing exercised between the interests of the athletes to participate in the Paralympic Games and the interests of the IPC to defend clean and doping free competitions, would be decided to the benefit of the latter. Even so athletes might not be directly responsible for the state-run doping scheme, they share the responsibility (as in the IAAF case) for the governance failures of their sports governing bodies. In the eyes of the German courts, this responsibility is reinforced by the fact that they are representing their country at the Paralympic Games.

In the end, the CAS (and the German courts) had to choose between:

Burdening athletes for the systematic failure of the Russian sports governing bodies to comply with their anti-doping commitments and risk to sanction innocent athletes;
or let the athletes compete and risk to jeopardize the already weak effectiveness of the world anti-doping system.

In general, this is the big fork-in-the-road question raised by the Russian scandal. On the one side, we can double down on anti-doping, beef up compliance mechanisms, and endure collateral damages: some innocent athletes. Or, on the other side, we acknowledge the total failure of the world anti-doping system as it is and de facto (or de jure) condone the use of doping in international sporting competitions. The CAS and the German courts clearly decided to follow the regulatory route, but this is only the beginning of a very long anti-doping journey.

[1] Clause 2.1.1.

[2] Clause 2.27.

[3] CAS 2016/A/4745, Russian Paralympic Committee v. International Paralympic Committee, award of 23 August 2016, para.43.

[4] Para.44.

[5] Para.43.

[6] Para. 54 and 55.

[7] Para. 56.

[8] Para. 59.

[9] Para. 60.

[10] Ibid.

[11] Para. 73

[12] Para. 76.

[13] Ibid.

[14] Para.79.

[15] Ibid.

[16] Ibid.

[17] Para. 81.

[18] para. 82.

[19] Ibid.

[20] Ibid.

[21] Para. 86.

[22] Para. 86.

[23] Para. 86.

[24] Para.83.

[25] Para.84.

[26] Para.84.

[27] Para.84.

[28] Para. 88.

[29] Para.89.

[30] Para. 91.

[31] „Anders als die Antragsteller meinen, kommt allein durch die Ausrichtung der Paralympics zwischen den Parteien kein Vertragsverhältnis oder vertragliches Vorverhältnis i.S.v. § 311 Abs. 2 BGB zustande. Da die Nominierung zur Teilnahme an den Paralympics im Regelfall durch das S und nicht durch den Antragsgegner erfolgt, ist nicht ersichtlich, dass die Parteien potentielle Vertragspartner wären.“ Landgericht Bonn, 20 O 323/16, at II.

[32] „Das Gericht verkennt nicht, dass die russischen Para-Athleten durch die Entscheidung des Antragsgegners vom 07.08.2016 nachhaltig in ihren sportlichen und auch wirtschaftlichen Interessen betroffen werden. Jedoch hat der Antragsgegner seine Entscheidung nachvollziehbar mit dem Vorwurf des organisierten Staatsdopings in Russland begründet. Insoweit muss es dem Antragsgegner selbst überlassen bleiben, von seinem Recht zur Zulassung einzelner Athleten Gebrauch zu machen oder aber nicht.“ Ibid.

[33] „Soweit die Antragsteller auf eine Ungleichbehandlung im Vergleich zu den Para-Athleten aus anderen Ländern abstellen, ist dem entgegenzuhalten, dass diese anderen Länder nicht dem Verdacht des organisierten Staatsdopings unterliegen.“ Landgericht Bonn, 20 O 325/16, at II.

[34] „Zwar haben die Antragsteller keine Möglichkeit, ihr Land oder ihren Verband zu wechseln. Jedoch werden die Olympischen Spiele sowie die Paralympics weit mehr als Weltmeisterschaften oder andere sportliche Wettkämpfe dadurch gekennzeichnet, dass die Athleten an ihnen nicht nur auf eigene Rechnung, sondern vor allem für ihr Land teilnehmen.“ Ibid.

[35] „Der Charakter und die Besonderheit der Spiele können so auch dazu führen, dass der einzelne Athlet von ihm selbst nicht verschuldete Einschränkungen hinnehmen muss. Insoweit ist auch kein Verstoß gegen das Diskriminierungsverbot der §§ 19, 20 und 33 GWB zu erkennen.“ Ibid.

[36] „Die Zulassung einzelner Sportler bei Beibehaltung der Suspendierung des S wäre – als die Antragsteller meinen – nicht als milderes Mittel gleichermaßen geeignet zum Kampf gegen das Doping. Zwar liefen die russischen Para-Athleten dann nicht mit ihrer Landesfahne auf und träten dabei nicht offiziell für ihr Land auf. Sie würden aber dennoch von den Zuschauern mit ihrem Land identifiziert.“ Ibid.

[37] „Die Abwägung der widerstreitenden Interessen führt zu dem Ergebnis, dass der Antragsgegner den Antragstellern eine Teilnahme an den Paralympischen Spielen 2016 in Rio de Janeiro verwehren darf, weil der begründete Verdacht gerechtfertigt ist, dass diese Sportler in den vergangenen Jahren Doping betrieben haben.“ Oberlandesgericht Düsseldorf, VI-W (Kart) 13/16, at B.2.a.

[38] „Auf der Seite des Antragsgegners, der die Paralympischen Spiele 2016 veranstaltet, steht demgegenüber das fundamentale Interesse, einen fairen und sportlichen Wettkampf zu gewährleisten und alle diejenigen Sportler von den Spielen fernzuhalten, die entweder des Dopings überführt sind oder gegen die der hinreichend begründete Verdacht des Dopings besteht.“ Ibid., at B.2.a.bb.(2).

[39] „Im Streitfall führt das überragende Interesse des Antragsgegners an „sauberen“ Paralympischen Spielen zu dem Ergebnis, dass die streitbefangenen Zulassungsbegehren abzulehnen waren.“ Ibid., at B.2.a.bb.(3).

[40] „Diese ein Doping begünstigenden Rahmenbedingungen rechtfertigen gegen alle Athleten, die unter dem System trainiert haben, einen Dopingverdacht.“ Ibid.

[41] Ibid., at B.2.a.bb.(3) (3.1)..

[42] Ibid., at B.2.a.bb.(3) (3.3)..

[43] „Würde die beantragte einstweilige Anordnung ergehen, die noch zu erhebende Verfassungsbeschwerde aber später erfolglos bleiben, hätte dies erhebliche Auswirkungen für die noch ausstehenden Wettkämpfe und die Durchführung der Abschlussfeier der Paralympischen Spiele am 18. September 2016 in Rio de Janeiro und eine Signalwirkung nicht nur für paralympischen Sport, sondern für den Sport insgesamt.“BVerfG, Beschluss der 2. Kammer des Ersten Senats vom 15. September 2016, 1 BvQ 38/16, at II.3.a).

[44] „Eine Zulassung einzelner Athletinnen und Athleten durch die staatlichen Gerichte griffe erheblich in die Verbandsautonomie des IPC und der internationalen Sportgerichtsbarkeit ein.“ Ibid.

[45] „Die mit dem Ausschluss des RPC von den Paralympischen Spielen beabsichtigte Signalwirkung, die insbesondere nationale Sportverbände von der Duldung, Unterstützung oder Organisation systematischen Dopings abschrecken soll, würde erheblich beeinträchtigt.“ Ibid.

[46] „Zwar erscheint das Interesse der Antragstellerinnen und des Antragstellers auch dann durchaus gewichtig, wenn ihnen nur die Teilnahme an der Abschlusszeremonie am 18. September 2016 möglich sein sollte. Im Vergleich zu dem Interesse des IPC, den Einsatz von Dopingmitteln im Sport nachhaltig und effektiv zu bekämpfen, hat dies jedoch deutlich weniger Gewicht.“ Ibid., at II.3.b).

[47] „Zudem kann nicht unberücksichtigt bleiben, dass - abgesehen allenfalls von der Antragstellerin zu 5) - die übrigen Antragstellerinnen und der Antragsteller wegen des inzwischen weitgehend durchgeführten Gesamtprogramms der aktuellen Paralympischen Spiele nicht mehr an den sportlichen Wettkämpfen teilnehmen können und ihnen damit insoweit nur noch ein bloßer Zuschauerstatus zukommen könnte, den sie auch ohne Erlass der einstweiligen Anordnung wahrnehmen können.“ Ibid.

On 21 January 2015, the Court of arbitration for sport (CAS) rendered its award in the latest avatar of the Mutu case, aka THE sports law case that keeps on giving (this decision might still be appealed to the Swiss Federal tribunal and a complaint by Mutu is still pending in front of the European Court of Human Right). The decision was finally published on the CAS website on Tuesday. Basically, the core question focuses on the interpretation of Article 14. 3 of the FIFA Regulations on the Status and Transfer of Players in its 2001 version. More precisely, whether, in case of a dismissal of a player (Mutu) due to a breach of the contract without just cause by the player, the new club (Juventus and/or Livorno) bears the duty to pay the compensation due by the player to his former club (Chelsea). Despite winning maybe the most high profile case in the history of the CAS, Chelsea has been desperately hunting for its money since the rendering of the award (as far as the US), but it is a daunting task. Thus, the English football club had the idea to turn against Mutu’s first employers after his dismissal in 2005, Juventus and Livorno, with success in front of the FIFA Dispute Resolution Chamber (DRC), but as we will see the CAS decided otherwise[1].

I. Facts and Procedure of the Mutu Case

The Mutu saga is probably one of the most well known sagas in the sports law world (with the unavoidable Bosman case and the up and coming Pechstein one). It cumulates the glamour drama of a star’s downfall due to a positive cocaine test and many important legal developments.

The saga started in July 2004 with a private drug test conducted by Chelsea on Mutu that turned out to be positive to cocaine. The club issued a fine and a warning. But, in October 2004, Mutu was again tested positive to cocaine, this time by the English FA. Upon this finding, and Mutu’s admission of having ingested cocaine, Chelsea decided to terminate his contract on 28 October 2004. On 29 January 2005 the player was registered at Livorno, before being transferred two days later to Juventus. Juventus had reached its quota of non-EU players it could recruit from outside Italy and used this strategy to circumvent the Italian rules applicable at that time.

Meanwhile, Mutu had challenged in front of the FA’s Appeals Committee (FAPLAC) the decision of Chelsea to terminate his employment contract. In April 2005, the FAPLAC decided that Mutu had committed a breach of his employment contract without just cause. Mutu appealed this decision to the CAS without success (CAS 2005/A/876). In May 2006, Chelsea launched a complaint before the DRC to obtain compensation against the player on the basis of the contractual breach without just cause. The DRC in its decision from 26 October 2006 (available here) held that it could not pronounce itself on the matter and that Chelsea had to turn to FAPLAC. Chelsea appealed the decision to the CAS, which enjoined the DRC to decide on the matter (CAS 2006/A/1192). Consequently, the DRC decided on 7 May 2008 to award €17, 173 990 in damages to Chelsea. Unsurprisingly, Mutu decided to appeal the decision to the CAS, he was especially contesting the amount of compensation awarded, which on 31 July 2009 endorsed the decision of the DRC (CAS 2008/A/1644). It even held that the damage claims of Chelsea were higher, but decided it could not go ultra petita and award a higher sum to the club. Mutu, which had unsuccessfully challenged the independence and impartiality of one of the arbitrators due to his previous participation in the first Mutu case (CAS 2005/A/876), went on to contest the validity of the award in front of the Swiss Federal Tribunal (SFT) mainly on this basis. In its decision (4A_458/2009), the SFT rejected Mutu’s claims regarding the lack of independence of the arbitrator, a decision that has attracted widespread criticisms in the literature.[2] Moreover, it also held that the amount of compensation awarded was not a restriction to free movement in the sense of the Bosman ruling and could not amount to an infringement of Mutu’s personality rights. Thereafter, Mutu decided to continue his fight in yet another forum: the European Court of Human Rights (40575/10).

Chelsea had the final award giving it the right to damages, but still needed to get hold on the money. To do so, it even asked (and obtained) for the recognition and the enforcement of the award in the US (see here), where Mutu was expected to have some property. Nevertheless, Mutu went on to play for smaller and smaller teams, thus earning less and less, and Chelsea’s hope of getting paid in full faded away. However, on 15 July 2010, five years after Mutu’s move to Italy’s Serie A in the first place, Chelsea decided to submit a petition to the FIFA DRC against Juventus and Livorno, asking the DRC to find them jointly liable for the awarded compensation. The claim was based on Article 14.3. of the RSTP 2001, stating that: "If a player is registered for a new club and has not paid a sum of compensation within the one month time limit referred to above, the new club shall be deemed jointly responsible for payment of the amount of compensation." The DRC, in an unpublished decision dated 25 April 2013 (see here and here), followed the interpretation of Article 14.3. RSTP suggested by Chelsea and found that “under the clear wording of Article 14.3, the Player's New Club was automatically jointly responsible for the payment of the Awarded Compensation due by the Player, should the latter fail to fulfil his obligations within a month of notification of the relevant decision”.[3] This provision would make “no distinction between the termination of the contract by a player without just cause and the termination of a contract by a club with just cause”.[4] It also held that "the registrations of the player with both [Appellants] were so closely connected that, given the exceptional circumstances of this specific matter, both Juventus and Livorno should be considered the player's new club in the sense of art. 14 of the Application Regulations”.[5]

Both Juventus and Livorno decided to appeal this decision to the CAS, which in its award decided to reject the DRC’s reasoning.

II. The Meaning of Article 14.3 FIFA RSTP

The whole case focuses on the interpretation of the wording of Article 14.3 of the RSTP 2001. Does it mean that every club, whatever the circumstances, must pay compensation when it hires a player that bears the responsibility of the breach of his contract? Or, does it restrict this duty to the cases where the breach can be reasonably imputed to the will of the player to leave his former club?

A. Contractual or statutory interpretation?

In order to determine the interpretative tools to be used to identify the meaning of article 14.3 RSTP, the Panel must first clarify the nature of Article 14.3 under Swiss law.[6] Basically, is the provision of a contractual or quasi-statutory nature? The Panel “does not consider that there is a contractual relationship between the Appellants and Chelsea”.[7] Indeed, “[i]f there is no contractual relationship between an indirect member (i.e. any of the Parties) and a sport federation (i.e. FIFA), the conclusion should be the same as regards the relationship between two indirect members of the same federation”.[8] Furthermore, the “[a]cceptance of general rules (such as FIFA Regulations) does not necessarily entail subjection to specific obligations when their scope must be determinable on the basis of minimum criteria”.[9] Thus, the question raised implies only the interpretation of the bylaw of a Swiss legal entity, FIFA.

The Panel highlights four methods of interpretation under Swiss law:

- the literal interpretation ("interprétation littérale");

- the systematic interpretation ("interprétation systématique");

- the principle of purposive interpretation ("interprétation téléologique");

- the principle of so-called "compliant interpretation" ("interprétation conforme").[10]

The “starting point” [11] is always the wording of the text. The Swiss Federal Tribunal recognizes that “[t]here is no reason to depart from the plain text, unless there are objective reasons to think that it does not reflect the core meaning of the provision under review”.[12] Moreover, when asked to interpret a law, the SFT “adopts a pragmatic approach and follows a plurality of methods, without assigning any priority to the various means of interpretation”.[13] However, the question is whether those interpretative methods should also apply to the (private) bylaws of a private association. The Panel notes that “[a]s regards the statutes of larger entities, it may be more appropriate to have recourse to the method of interpretation applicable to the law, whereas in the presence of smaller enterprises, the statutes may more legitimately be interpreted by reference to good faith”.[14] It finds that “FIFA's regulations have effects which are felt worldwide, and should therefore be subject to the more objective interpretation principles” applicable to Swiss laws.[15]

In short, the Panel is of the opinion that FIFA regulations, bylaws of an association under Swiss law, are to be interpreted analogously to national laws.

B. EU law as THE decisive contextual element to interpret the RSTP

The Panel first tries to interpret Article 14.3 on the basis of its wording. However, it is of the opinion that the wording is ambiguous and therefore “it is necessary to look beyond the wording of this provision”[16] and adopts what it calls a “contextual approach”.

In short, “the context surrounding the implementation of the RSTP 2001 is of crucial importance in interpreting Article 14.3”.[17] In the view of the Panel (and the appellants), this context is constituted by the application of EU law to sport and especially the Bosman case of the Court of Justice of the EU. Indeed, it is “[a]s part of the reform of the FIFA and UEFA rules following the Bosman decision, [that] FIFA adopted the RSTP 2001”.[18] Thus, the requirements set by the CJEU’s jurisprudence in sports matters are decisive to define the reach of the provisions included in the RSTP. Moreover, the rejection decision of the Commission regarding the complaint submitted against FIFA’s transfer regulations is also important.[19] Specifically, the Panel deduces from the Commission’s decision that it recognizes the need to sanction unilateral termination of contracts.[20]

In the present case, it is precisely the “contractual stability [that] is at the centre of the debate”.[21] In a nutshell, does the paramount objective of contractual stability justify that Juventus and Livorno be considered jointly liable for the breach of contract of Mutu leading to the termination by Chelsea of his contract?

In this regard, Chelsea considers that Article 14.3 “is designed to protect contractual stability by means of a deterrent, namely by ensuring that the parties who benefit from the player's breach – the player himself and his New Club – are not allowed to enjoy that benefit without paying compensation to the player's former club”.[22] While, Juventus and Livorno consider that “Article 14.3 – and FIFA regulations in general – are not meant to protect a club's bad investment”.[23] Which one of this two interpretations is EU law supporting? That is the question.

For the Panel “the Player was the author of his misfortune, but the Club was not required to terminate his employment if they still valued his services and preferred to hold him to his contract”. Indeed, “[t]he Club was entitled, not obliged, to dismiss him” and it “makes all the difference in terms of assessing the position of his subsequent employer(s) under the FIFA regulations, read in light of their object and purpose”.[24] As “Chelsea put an end to the Player's Employment Contract, no issue of contract stability, whose purpose was to safeguard the functioning and regularity of sporting competition, was at stake”.[25] Thus, “it strains logic for the club now to contend that the Appellants somehow enriched themselves by acquiring an asset (the player) which it chose to discard”.[26] Moreover, “the Panel finds it hard to understand how, in the name of contract stability, Chelsea's claim of € 17,173,990 against the Player is to be borne jointly and severally by the New Club, which has never expressed a specific agreement in this regard, had nothing to do with the Player's contractual breach, and was not even called to participate in the proceedings, which established the Awarded Compensation”.[27] Additionally, it seems “incongruous for Chelsea to try to seek an advantage from the fact that the New Club benefits from the Player’s services, whereas Chelsea was no longer interested in his service”.[28] Hence, “Chelsea's conduct appears to have had no other purpose than to increase its chances for greater financial compensation” and the Panel “does not see the connection between the damage being claimed and the interest of protecting legitimate contractual expectations”.[29] In other words, the interpretation of Article 14.3 RSTP supported by Chelsea does not fit the fundamental objective of this provision, as highlighted by its legislative context (mainly the Lethonen case of the CJEU and the Commission’s rejection decision in the competition law complaint against the FIFA transfer system) and cannot be followed.

Interestingly, the Panel also recognized that “[t]here must be a balance between the players’ fundamental right to free movement and the principle of stability of contracts, as supported by the legitimate objective of safeguarding the integrity of the sport and the stability of championships”.[30] In the present case, “[i]f the New Club had to pay compensation even if it is established that it bears no responsibility whatsoever in the breach of the Employment Contract, the player would be hindered from finding a new employer”.[31] Indeed, “it is not difficult to perceive that no New Club would be prepared to pay a multi-million compensation (or transfer fee), in particular for a player who was fired for gross misconduct, was banned for several months, and suffered drug problems”.[32] In short, “Chelsea's interpretation of Article 14.3 would bring the matter back into pre-Bosman times, when transfer fees obstructed the players' freedom of movement”.[33] This is unacceptable for the Panel. Had Chelsea’s interpretation been tolerated “the balance sought by the 2001 RSTP between the players' rights and an efficient transfer system, which responds to the specific needs of football and preserves the regularity and proper functioning of sporting competition would be upset”.[34] Consequently, this interpretation is deemed “incompatible with the fundamental principle of freedom to exercise a professional activity and is disproportionate to the protection of the old club's legitimate interests”.[35] Thus, the Panel concludes “that Article 14.3 does not apply in cases where it was the employer's decision to dismiss with immediate effect a player who, in turn, had no intention to leave the club in order to sign with another club and where the New Club has not committed any fault and/or was not involved in the termination of the employment relationship between the old club and the Player”.[36]

Conclusion

This award is of great interest, not so much for its solution - it is difficult to understand how the FIFA DRC could construct Article 14.3 RSTP as imposing a joint liability on Juventus and Livorno - as for the method used to reach it. The CAS had already in the past based its interpretation of the RSTP on its legislative history and especially on it being the result of a negotiation with the EU Commission in the aftermath of the Bosman ruling.[37] It is the first time, however, that it does so in such length and depth. This contextual reading of Article 14.3 tipped decisively the balance in favor of the appellants. Furthermore, it is a timely reminder for other CAS Panels that FIFA’s RSTP must be interpreted in conformity with EU law and especially the case law of the CJEU on the free movement of workers. If not, CAS awards will face problems at the enforcement stage, as highlighted by the recent SV Wilhelmshaven ruling of the OLG Bremen (see our comment here on the EU law dimension)[38]. This implies that the restrictions it imposes on the free movement of players must be justified by a legitimate objective recognized by the CJEU and be proportionate to attain this objective. In the present case, the interpretation of 14.3 promoted by the DRC runs counter to this requirement as it is not truly aimed at an acceptable legitimate objective and certainly not a proportionate mean to attain contractual stability. Nonetheless, this reasoning could also put into question previous interpretations of the FIFA RSTP. This is especially true for the case-law on the implementation of Article 17 RSTP. The Panel, conscious of the potential implication of the analysis used, is adamant that this case-law is compatible with an EU law conform interpretation. Yet, EU law scholars strongly oppose this view and it can be reasonably argued that the way damages are calculated in case of a breach of a contract under Article 17 is not compatible with the letter and spirit of EU law as applied to the transfer system in Bosman and after[39].

This case will set a resounding precedent for future CAS awards. Lawyers dealing with disputes involving the FIFA RSTP in front of the FIFA DRC and the CAS should take note of this development and introduce wider references to EU law in their briefs.

[1] For this article I have much profited from the outstanding research assistance of Thalia Diathesopoulou.

[2]G. Von Segesser, ‘Equality of Information and Impartiality of Arbitrators’, in P. Wautelet, T. Kruger, G. Coppens (eds), The Practice of Arbitration: Essays in Honour of Hans van Houtte

Hart, 2012, pp.45-51 and L. Beffa, ‘Challenge of International Arbitration Awards in Switzerland for Lack of Independence and/or Impartiality of an Arbitrator – Is it Time to Change the Approach?’ (2011) ASA Bulletin 598 et seq.

[3] CAS 2013/A/3365 & 3366, para 39.

[4] Ibid.

[5] Ibid

[6]Ibid, para. 121-136

[7] Ibid, para. 131

[8] Ibid, para. 131

[9] Ibid, para. 131

[10] Ibid, para.137

[11] Ibid, para.138

[12] Ibid, para.139

[13]Ibid, para.139

[14]Ibid, para.139

[15]Ibid, para.140

[16]Ibid, para.148

[17]Ibid, para.149

[18]Ibid, para.151

[19]Ibid, para.156

[20]Ibid, para.157

[21]Ibid, para.158

[22]Ibid, para.159

[23]Ibid, para.160

[24]Ibid, para. 161

[25]Ibid, para. 163

[26]Ibid, para. 163

[27]Ibid, para. 165

[28]Ibid, para. 166

[29]Ibid, para. 168

[30]Ibid, para. 169

[31]Ibid, para. 172

[32] Ibid

[33] Ibid, para.174

[34]Ibid, para.174

[35]Ibid, para.174

[36]Ibid, para.177

[37] ‘It must be remembered that the FIFA Regulations have been issued to regulate the legal and economic aspects of the transfer of players in accordance with the principle of free movement of workers as established by the EC treaty and substantiated by the European Court of Justice in its ruling of 15 December 1995 (case C-415/93), thereby taking the specific needs of professional football into account. In this context, any provisions in the FIFA regulations affecting the player’s freedom of movement should be interpreted narrowly.’ CAS 2004/A/691 FC Barcelona SAD v. Manchester United FC, para. 38; ‘However, the principle behind Art. 5 para. 5 of the Application Regulations is clear: the free movement of workers within the EU/EEA must not be restricted by the imposition of a requirement for the payment of sums by way of compensation for training and education in respect of a player to whom the training club does not offer a contract. In such a case, the failure to offer a contract is an important factor in the assessment of compensation. The compensation payable should not be of such an amount as would impede the player’s ability to move to a new club.’ CAS 2006/A/1125 Hertha BSC Berlin v. Stade Lavallois Mayenne FC, award of 1 December 2006, para. 25; ‘Finally, because of the potentially high amounts of compensation involved, giving clubs a regulatory right to the market value of players and allowing lost profits to be claimed in such manner would in effect bring the system partially back to the pre-Bosman days when players’ freedom of movement was unduly hindered by transfer fees and their careers and well-being could be seriously affected by them becoming pawns in the hands of their clubs and a vector through which clubs could reap considerable benefits without sharing the profit or taking corresponding risks. In view of the text and the history of article 17 par. 1 of the FIFA Status Regulations, allowing any form of compensation that could have such an effect would clearly be anachronistic and legally unsound.’ CAS 2007/A/1298 Wigan Athletic FC v/ Heart of Midlothian & CAS 2007/A/1299 Heart of Midlothian v/ Webster & Wigan Athletic FC & CAS 2007/A/1300 Webster v/ Heart of Midlothian, para. 81.

[38] A. Duval, ‘The Court of Arbitration for Sport and EU law: Chronicle of an Encounter’, Maastricht Journal of European and Comparative Law, forthcoming.

[39] See, R. Parrish, ‘Article 17 of the FIFA Regulations on the Status and Transfer of Players: Compatibility with EU Law ‘Maastricht Journal of European and Comparative Law, forthcoming. See also, Pearson, G. (2015), Sporting Justifications under EU Free Movement and Competition Law: The Case of the Football ‘Transfer System’. European Law Journal, 21: 220–238.

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