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

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...

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...


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

International and European Sports Law – Monthly Report – November and December 2019- 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

WADA Conference and the Adoption of 2021 WADA Code Amid Calls for Reform

On November 5-7, WADA held its Fifth World Conference on Doping in Sport where it faced a busy schedule, including the adoption of the revised 2021 World Anti-Doping Code and the election of a new WADA President and Vice-President by the Foundation Board. Concerning the latter, Witold Bańka, Poland’s Minister of Sport and Tourism, was elected as WADA President and Yang Yang, a former Chinese speed skater, elected as Vice-President, replacing Sir Craig Reedie and Linda Helleland respectively.  As Helleland leaves her position, she has expressed some strong views on the state of sport governance, particularly that ‘there is an absence of good governance, openness and independence in the highest levels of international sports’. Helleland was not the only one to recently voice governance concerns, as Rob Koehler, Director General of Global Athlete, also called for a ‘wholesale structural change at WADA’, which includes giving ‘independent’ athletes a vote in WADA’s Foundation Board, ensuring a greater ‘separation of powers’ and ensuring greater protection of athletes’ rights.

In the midst of the calls for reform, the amended 2021 WADA Code and the amended International Standards were also adopted after a two year, three stage code review process. Furthermore, a major milestone in athletes’ rights was achieved with the adoption of the Athletes’ Anti-Doping Rights Acts (separate from the WADA Code), which enumerates certain basic rights to help ‘ensure that Athlete rights within anti-doping are clearly set out, accessible, and universally applicable’. On the other hand, the Act ‘is not a legal document’, which clearly circumscribes some of the potential effects the Act may have. Nonetheless, athlete representative groups have ‘cautiously welcomed’ some of the changes brought by the 2021 WADA Code, such as the ‘modified sanctions for substances of abuse violations’.

Sung Yang’s Historical Public Hearing at the CAS

After much anticipation, the second public hearing in CAS history occurred on November 15 in Montreux, Switzerland in the Sun Yang case (details of this case were discussed in August and September’s monthly report), which was livestreamed and can be seen in its totality in four different parts (Part 1, Part 2, Part 3, Part 4). This was an extremely unique opportunity, which hopefully will become a more common occurrence, to see just how CAS hearings are conducted and perhaps get a taste of some of the logistical issues that can emerge during live oral hearings. One of these problems, accurate translations, rapidly became apparent as soon as Sun Yang sat in the witness chair to give his opening statements. The translators in the box seemed to struggle to provide an intelligible English interpretation of Sun Yang and other witnesses’ statements, while Sun Yang also seemingly had trouble understanding the translated questions being posed to him. The situation degenerated to such an extent that ultimately one of WADA’s officials was called to replace the translators. However, the translation drama did not end there, since during Sun Yang’s closing statements an almost seemingly random person from the public appeared next to Sun Yang who claimed to have been requested from Sun Yang’s team to ‘facilitate’ the translation. Franco Frattini, president of the panel, questioned the identity of the ‘facilitator’ and explained that one could not just simply appear before the court without notice. Interestingly, Sun Yang’s legal team also rapidly intervened claiming that it had not been made of aware of the inclusion of the supporting translator, further complicating the matter. In the end, Sun Yang concluded his statements with the translation from the WADA official.

While it was Sun Yang’s legal team that had provided the original translators in the box, it still raises the question as to how translation at CAS could be improved to ensure a certain standard of translators. After all, quality translation is critical to the parties’ right to be heard under Article 6 (e) ECHR. Regardless, in the end, neither parties made an objection that their right to be heard was violated.

Russian Doping Saga Continues: WADA Compliance Review Committee Recommends Strong Sanctions

As was already discussed in August and September’s monthly report, WADA uncovered numerous inconsistencies concerning data taken from the Moscow Laboratory. After further investigation, WADA’s Compliance Review Committee has recommended that the Russian Anti-Doping Agency (RUSADA) be found non-compliant with the WADA Code. Accompanying the recommendation, the Compliance Review Committee also suggested several sanctions, which include prohibiting Russian athletes from participating in major events like the Olympic Games and ‘any World Championships organized or sanctioned by any Signatory’ for the next four years unless they may ‘dmonstrate that they are not implicated in any way by the non-compliance’. It would also see an embargo on events hosted in Russia during the same period. However, these sanctions did not go far enough for some, like Travis Tygart, chief executive of USADA, who wishes to prevent a repeat of Rio 2016 and PyeongChang 2018 ‘in which a secretly-managed process permitting Russians to compete – did not work’. On the other hand, the IOC has advocated for a softer, individual based approach that pursues ‘the rules of natural justice and respect human rights’. In the midst of these developments, the Athletics Integrity Unit also decided to charge several members of the Russian Athletics Federation (RusAF), including its President Dmitry Shlyakhtin, after a 15 month investigation for ‘tampering and complicity’ concerning a Russian athlete’s whereabouts violations.

Following many calls for strong consequences, the WADA Executive Committee met on December 9th and adopted the recommendations of the Compliance Review Committee. Athlete representatives have expressed their disappointment with the sanctions, calling the decision ‘spineless’ since it did not pursue a complete ban on Russian participation at events such as Euro 2020 and the 2020 Olympics. At this point, RUSADA has sent notice to WADA that it will be disputing the decision of WADA’s Executive Committee’s decision at the CAS.More...


Balancing Athletes’ Interests and The Olympic Partner Programme: the Bundeskartellamt’s Rule 40 Decision - 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

The International Olympic Committee (IOC), after many years of ineffective pushback (see here, here and here) over bye law 3 of rule 40[1] of the Olympic Charter (OC), which restricts the ability of athletes and their entourage to advertise themselves during the ‘blackout’ period’[2] (also known as the ‘frozen period’) of the Olympic Games, may have been gifted a silver bullet to address a major criticism of its rules. This (potentially) magic formula was handed down in a relatively recent decision of the Bundeskartellamt, the German competition law authority, which elucidated how restrictions to athletes’ advertisements during the frozen period may be scrutinized under EU competition law. The following blog begins by explaining the historical and economic context of rule 40 followed by the facts that led to the decision of the Bundeskartellamt. With this background, the decision of the Bundeskartellamt is analyzed to show to what extent it may serve as a model for EU competition law authorities. More...

Is UCI the new ISU? Analysing Velon’s Competition Law Complaint to the European Commission - 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

The UCI may soon have to navigate treacherous legal waters after being the subject of two competition law based complaints (see here and here) to the European Commission in less than a month over rule changes and decisions made over the past year. One of these complaints stems from Velon, a private limited company owned by 11 out of the 18 World Tour Teams,[1] and the other comes from the Lega del Ciclismo Professionistico, an entity based in Italy representing an amalgamation of stakeholders in Italian professional cycling. While each of the complaints differ on the actual substance, the essence is the same: both are challenging the way the UCI exercises its regulatory power over cycling because of a growing sense that the UCI is impeding the development of cycling as a sport. Albeit in different ways: Velon sees the UCI infringing on its ability to introduce new race structures and technologies; the Lega del Ciclismo Professionistico believes the UCI is cutting opportunities for semi-professional cycling teams, the middle ground between the World Tour Teams and the amateur teams.

While some of the details remain vague, this blog will aim to unpack part of the claims made by Velon in light of previous case law from both the European Commission and the Court of Justice of the European Union (CJEU) to give a preliminary overview of the main legal issues at stake and some of the potential outcomes of the complaint. First, it will be crucial to understand just who/what Velon is before analyzing the substance of Velon’s complaint. More...

International and European Sports Law – Monthly Report – October 2019 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

International Sports Law Journal (ISLJ) Conference 2019

The T.M.C. Asser Institute and the Asser International Sports Law Centre held the third International Sports Law Journal (ISLJ) Conference on October 24-25. The Conference created a forum for academics and practitioners to discuss, debate and share knowledge on the latest developments of sports law. It featured six uniquely themed panels, which included topics such as ‘Transfer systems in international sports’ and ‘Revisiting the (in)dependence and transparency of the CAS’ to ‘The future of sports: sports law of the future’. The ISLJ Conference was also honored to have two exceptional keynote speakers: Moya Dodd and Ulrich Haas. To kick off the conference, Moya Dodd shared her experiences from an athlete’s perspective in the various boardrooms of FIFA. The second day was then launched by Ulrich Haas, who gave an incredibly thorough and insightful lecture on the importance, function and legal basis of association tribunals in international sport. For a detailed overview of this year’s ISLJ Conference, click here for the official conference report.

The Asser International Sports Law Centre was delighted to have been able to host another great edition of the ISLJ Conference and is thankful to all the participants and speakers who made this edition such a success.

Moving towards greater transparency: Launch of FIFA’s Legal Portal

On October 31, FIFA announced that it was introducing a new legal portal on its website that will give greater access to numerous documents that previously were kept private. FIFA explains that this is in order to help increase its transparency, which was one of the key ‘Guiding Principles’ highlighted in FIFA 2.0: The Vision for the Future released in 2016. This development comes as many sport governing bodies face increasing criticism for the opacity of its judicial bodies’ decisions, which can have tremendous economic and societal impacts. The newly available documents will include: ‘decisions rendered on the merits by the FIFA Disciplinary Committee and the FIFA Appeal Committee (notified as of 1 January 2019); decisions rendered on the merits by the FIFA Ethics Committee (notified since 1 January 2019); decisions rendered on the merits by the FIFA Players’ Status Committee and the FIFA Dispute Resolution Chamber; non-confidential CAS awards in proceedings to which FIFA is a party (notified since 1 January 2019); list of CAS arbitrators proposed by FIFA for appointment by ICAS, and the number of times they have been nominated in CAS proceedings’. The list of decisions from all the aforementioned bodies are updated every four months, according to their respective webpages. However, time will ultimately tell how consistently decisions are published. Nevertheless, this move is a major milestone in FIFA’s journey towards increasing its transparency.

Hong Kong Protests, Human Rights and (e)Sports Law: The Blizzard and NBA controversies

Both Blizzard, a major video game developer, and the NBA received a flurry of criticism for their responses to persons expressing support for the Hong Kong protests over the past month. On October 8, Blizzard sanctioned Blitzchung, a professional Hearthstone player who expressed support of the Hong Kong protest during a post-match interview, by eliminating the prize money he had won and suspending him for one year from any Hearthstone tournament. Additionally, Blizzard will cease to work with the casters who conducted the interview. With mounting disapproval over the sanctions,  J. Allen Brack, the president of Blizzard, restored the prize money and reduced the period of ineligibility to 6 months.

The NBA controversy started when Daryl Morey, the general manager of the Houston Rockets, tweeted his support for the protests in Hong Kong. The tweet garnered much attention, especially in China where it received a lot of backlash, including an announcement from CCTV, the official state broadcaster in China, that it was suspending all broadcasts of the NBA preseason games. In attempts to appease its Chinese audience, which is a highly profitable market for the NBA, Morey deleted the tweet and posted an apology, and the NBA responded by saying that the initial tweet was ‘regrettable’. Many scolded these actions and accused the NBA of censorship to which the NBA Commissioner, Adam Silver, responded that the NBA remains committed to freedom of expression.

Both cases highlighted how (e)sport organizations may be faced with competing interests to either guarantee greater protection of human rights or to pursue interests that perhaps have certain financial motivations. More...


ISLJ International Sports Law Conference 2019 - Conference Report - By Thomas Terraz

On October 24th and 25th 2019, the T.M.C. Asser Institute and the International Sports Law Centre hosted the International Sports Law Journal (ISLJ) Conference for a third year in a row, bringing together a group of academics and practitioners from around the world. This year’s conference celebrated the 20th year of the International Sports Law Journal, which was originally started by Robert Siekmann. Over the past 20 years, the ISLJ has aimed to be a truly international journal that addresses global topics in sports law while keeping the highest academic standards.

With this background, the conference facilitated discussions and exchanges over six differently themed panels on international sports law’s most pertinent issues and gave participants wide opportunities to engage with one another. Additionally, this year’s edition also had the great honor of hosting two distinguished keynote speakers, Moya Dodd and Ulrich Haas, who were able to share their wealth of experience and knowledge with the conference participants.

The following report aims to give an overview of the ISLJ Conference 2019 to extract and underline the fundamental ideas raised by the different speakers.More...

International and European Sports Law – Monthly Report – August and September 2019 - By Thomas Terraz

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

Another Russian Doping Crisis? Inconsistencies Uncovered in the Data from the Moscow Lab

Storm clouds are brewing once more in the Russian Doping Saga, after several inconsistencies were uncovered by WADA from data retrieved from the Moscow Laboratory. More specifically, a certain number of positive tests had been removed from the data WADA retrieved from the Moscow Laboratory compared to the one received from the original whistleblower. WADA launched a formal compliance procedure on 23 September, giving three weeks for Russian authorities to respond and provide their explanations. WADA’s Compliance Review Committee is set to meet on 23 October in order to determine whether to recommend declaring Russia non-compliant.

Russian authorities are not the only ones now facing questions in light of these new revelations. Criticism of WADA’s decision to declare Russia compliant back in September 2018 have been reignited by stakeholders. That original decision had been vehemently criticized (see also Edwin Moses’ response), particularly by athlete representative groups.

The fallout of these data discrepancies may be far reaching if Russian authorities are unable to provide a satisfying response. There are already whispers of another impending Olympic Games ban and the possibility of a ban extending to other sports signed to the WADA Code. In the meantime, the IAAF has already confirmed that the Russian Athletes would compete as ‘authorised neutral athletes’ at the World Athletics Championship in Doha, Qatar.

Legal Challenges Ahead to Changes to the FIFA Football Transfer Market

FIFA is set to make amendments to its player transfer market that take aim at setting new boundaries for football agents. These changes will prohibit individuals from representing both the buying and selling club in the same transaction and set new limits on agent commissions (3 percent for the buying club and player representative and 10 percent for the selling team). FIFA is already in the process of creating a central clearinghouse through which all transfer payments would have to pass through, including agent commissions. FIFA will be making a final decision on these proposed changes at the FIFA Council meeting on 24 October.

If these proposed changes are confirmed, they will almost certainly be challenged in court. The British trade organization representing football agents, Association of Football Agents, has already begun its preparations for a costly legal battle by sending a plea to its members for donations. It claims that it had not been properly consulted by FIFA before this decision had been made. On the other hand, FIFA claims that ‘there has been a consultation process with a representative group of agents’ and that FIFA kept ‘an open dialogue with agents’. Regardless, if these proposed changes go through, FIFA will be on course to a looming legal showdown.

CAS Public Hearing in the Sun Yang Case: One Step Forward for Transparency?

On 20 August, 2019, the Court of Arbitration for Sport (CAS) announced that the hearing in the appeal procedure of the Sun Yang case will be held publicly. It will be only the second time in its history that a public hearing has been held (the last one being in 1999, Michelle Smith De Bruin v. FINA). WADA has appealed the original decision of the FINA Doping Panel which had cleared Sun Yang from an alleged anti-doping rule violation. The decision to make the hearing public was at the request of both parties. The hearing is set to take place November 15th and is likely to be an important milestone in improving the CAS’ transparency.

Sun Yang, who has already served a doping ban for a previous violation in 2014, has also been at the center of another controversy, where Mack Horton, an Australian swimmer, refused to shake hands and stand on the podium with Sun Yang at the world championships in Gwangju. More...

Caster Semenya’s Legal Battle Against Gender Stereotypes: On Nature, Law and Identity - By Sofia Balzaretti (University of Fribourg)

Editor's note: Sofia Balzaretti is a Graduate research assistant and a PhD candidate at the University of Fribourg (Switzerland) where she is writing a thesis on the Protection against Gender Stereotypes in International Law. In addition to research in human rights and feminist legal theory, she has also carried out some research in legal philosophy and on the relationship between gender and the law.

 

The International Association of Athletics Federations (IAAF), the monitoring body of track and field athletics, regularly submitted South African middle distance runner and Olympic gold medalist Mokgadi Caster Semenya to sex verification tests when it began questioning her sexual characteristics and speculating whether her body belonged on the Disorder of Sex Development (DSD) spectrum. DSD Syndrome is often defined as an “intersex condition” which affects the clear development of either/or genitalia, gonads and chromosomes into one distinctive sex or another. The spectrum of the intersex condition is particularly wide, and the disorder can sometimes be minimal - some cases of female infertility can actually be explained by an intersex condition.

The IAAF deemed the controversial sex verification tests necessary on the grounds that it was required to prove Semenya did not have a “medical condition” which could give her an “unfair advantage”. It was eventually found that, because of an intersex trait, Semenya did have abnormally high levels of testosterone for a woman, which, in the IAAF’s opinion, justified a need for regulatory hormonal adjustments in order for her to keep competing in the women’s category. The IAAF also funded research to determine how ‘hyperandrogenism’ affects athletic performance. In 2018, it issued Eligibility Regulations on Female Classification (“Athlete with Differences of Sexual Development”) for events from 400m to the mile, including 400m, hurdles races, 800m and 1’500m. The IAAF rules indicated that in case of an existing high level of testosterone, suppression or regulation by chemotherapy, hormonal castration, and/or iatrogenic irradiation was mandatory in order to take part in these events.

Semenya and her lawyers challenged the IAAF Regulations in front of the CAS, who, in a very controversial decision, deemed the Regulations a necessary, reasonable and proportionate mean “of achieving the aim of what is described as the integrity of female athletics and for the upholding of the ‘protected class’ of female athletes in certain events” (§626). More...

Asser International Sports Law Blog | The Diarra Ruling of the Tribunal of Charleroi: The New Pechstein, Bosman or Mutu?

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 Diarra Ruling of the Tribunal of Charleroi: The New Pechstein, Bosman or Mutu?

Yesterday the sports law world was buzzing due to the Diarra decision of the Tribunal de Commerce du Hainaut (the Tribunal) based in Charleroi, Belgium. Newspapers were lining up (here, here and here) to spread the carefully crafted announcement of the new triumph of Jean-Louis Dupont over his favourite nemesis: the transfer system. Furthermore, I was lucky enough to receive on this same night a copy of the French text of the judgment. My first reaction while reading quickly through the ruling, was ‘OMG he did it again’! “He” meaning Belgian lawyer Jean-Louis Dupont, who after a string of defeats in his long shot challenge against FIFA’s TPO ban or UEFA’s FFP (see here and here), had [at least I believed after rushing carelessly through the judgment] manufactured a new “it”: a Bosman. Yet, after carefully re-reading the judgment, it became quickly clear to me that this was rather a new Mutu (in the sense of the latest CAS award in the ‘Mutu saga’, which I have extensively analysed on this blog and in a recent commentary for the new Yearbook of International Sports Arbitration) coupled with some reflections reminding a bit (but not really as will be explicated below) the Pechstein case.

In this blog, I will retrace briefly the story behind the case and then analyse the decision of the Belgium court. In doing so, I will focus on its reasoning regarding its jurisdiction and the compatibility of article 17(2) RSTP with EU law.

 

I.              The facts of the case

On 20 August 2013, the French footballer Lassana Diarra and the Russian top-tier club FC Lokomotiv Moscow (Lokomotiv) agreed on a four-year contract (Contract). Article 8 (3) of the Contract provided that in case Lokomotiv terminates the Contract for disciplinary reasons, Mr. Diarra would be liable for compensation amounting to EUR 20,000,000 (Compensation).  One year later, on 22 August 2014, Lokomotiv terminated the Contract due to Diarra's recurring failures to perform his obligations arising thereof. Lokomotiv relied on Article 8 (3) of the Contract and claimed the Compensation.

Less than a month later, Lokomotiv lodged a request for compensation with the FIFA Dispute Resolution Chamber (DRC) against Diarra. Diarra subsequently filed his counterclaim in which he asked for the payment of bonuses and wage arrears as well as the compensation amounting to the remuneration which would still have to be paid between August 2014 and 30 June 2017, the term provided for in the Contract. On 10 April 2015, the DRC rendered its decision ruling that Lokomotiv’s decision to terminate the Contract was justified (DRC Decision). Regarding the compensation due by Diarra, the DRC noted that Article 8 (3) of the Contract provided for the Compensation (amounting to EUR 20,000,000) claimed from Diarra. On the other hand, in case a compensation was due by Lokomotiv, Article 8 (5) of the Contract set a limit to three months of Diarra’s salary (approximately EUR 1,500,000). Taking into account the discrepancy, the DRC noted that the respective rights of the parties were completely disproportionate and the Contract should be disregarded. The DRC nevertheless decided that the consequences of the Contract's termination had to be assessed in light of Article 17 (1) of the FIFA Regulation for the Status and Transfer of Players (RSTP). In line with the said provision, the DRC decided that Diarra had to pay Lokomotiv the amount of EUR 10,500,000 for having repeatedly breached the Contract. Although this issue was not directly related to the case, the DRC pointed out that, following the termination of the Contract, Diarra did not immediately manage to find a new club so that Article 17 (2) RSTP (making a professional player and his new club jointly and severally liable for a compensation owed to a previous club) was in principle not applicable to the case. Furthermore, the DRC ruled that, having regard to the date of the Contract's termination and the time elapsed between that date and the issuance of the DRC Decision, Article 17 (2) would not apply in case Diarra finds a new club in the future.

Yet, during the period between 22 August 2014 and 10 April 2015, Diarra had attracted attention from several European clubs (e.g. Inter Milan, West Ham United, Celtic Glasgow and Sporting Charleroi). Negotiations, however, did not succeed for the reason that those clubs were afraid of being held jointly liable for a compensation which could have been potentially awarded by the DRC. On 19 February 2015, the Belgian football club Sporting Charleroi (Charleroi) offered Diarra a 15-month contract concerning the period between 30 March 2015 and 30 June 2016. This offer was, however, subject to the following conditions:

  1. Diarra is registered and qualified as a member of Charleroi by 30 March 2015 at the latest; and
  2. The governing bodies, Belgian Football Association (URBSFA) and FIFA, expressly confirm that Charleroi is not required to pay the compensation for which Diarra could be held liable at the end of the proceedings before the DRC.

On this second condition, Diarra and Charleroi demanded confirmation from FIFA and the URBSFA. Both governing bodies refused to adopt a concrete position with respect to the application of Article 17 (2) RSTP to the case at hand. On 27 March 2015, in light of the abovementioned replies obtained from FIFA and URBSFA, Diarra referred the case to the President of the Commercial Court of Brussels asking to order FIFA and URBSFA:

  1. To register and qualify him as a professional football player of Charleroi, thereby allowing him to play for the rest of the 2014/2015 season;
  2.  Not to apply Article 17 (2) and (4) RSTP to Charleroi.

No order had been delivered before the DRC Decision was issued. Furthermore, the DRC Decision confirmed that Article 17 (2) RSTP was not applicable to any new club which would hire Diarra in future. As a result, Diarra decided to withdraw his action from the Commercial Court of Brussels. However, he was not able to play as a professional player for Charleroi until the end of the 2014/2015 season. In July 2015, Diarra entered into a contract with the French top-tier club Olympique Marseille. This contract is still in force. 

Diarra also appealed against the DRC Decision before the CAS in Lausanne. On 27 May 2016, the CAS rendered its award by which it confirmed the DRC Decision. In the end, Diarra filed a lawsuit with the the Tribunal de Commerce du Hainaut. Diarra sued both FIFA and URBSFA for damages caused by not being able to exercise the status of a professional football player during the entire 2014/2015 season. Finally, on 19 January 2017, the Hainaut Commercial Tribunal – Charleroi division rendered the judgment analysed in this blog.            

 

II.            The decision of the Tribunal of Charleroi

A.    Does the Tribunal of Charleroi have jurisdiction?

FIFA (and the Belgium federation) argued that the Tribunal lacked jurisdiction for two (main) reasons: Diarra was bound by a CAS arbitration clause and the Belgium court is incompetent based on the Lugano Convention. Let’s turn to the Tribunal’s rebuttal of both objections.

1.     The inexistence of a CAS arbitration clause

FIFA argued that M. Diarra was bound, through his registration as a professional football player with the French Football Federation, by the CAS arbitration clause included in the Statutes of FIFA.[1] In particular it refers to Article 68 of the FIFA Statutes

The Tribunal finds that this provision poses difficult problems of interpretation. Especially, Article 68(3) FIFA Statutes does not stipulate that the prohibition to have recourse to ordinary courts entails necessarily an arbitration clause in favorem of the CAS. Instead, the Tribunal finds this lack of clarity in the wording of the provision to play in favour of the player. Thus, it concludes that the FIFA Statutes do not create an obligation for the player to turn to the CAS to solve this dispute.

The judges add that even if one considers the FIFA Statutes to be sufficiently clear and precise, the parties must have concluded an arbitral convention in the sense of Article 1680 of the Code Judiciaire Belge (Belgian Judicial Code). In this regard, FIFA needs to demonstrate through documentary evidence (not necessarily signed by the parties) the existence of an agreement fulfilling the law’s requirements of clarity and precision.[2] Yet, in the present case, FIFA was unable to show that it had any contractual links with Diarra. Hence, the judges concluded that there were no elements demonstrating that Diarra would have consented expressly or implicitly to arbitrate at the CAS disputes stemming from its relation with FIFA. Additionally, the Tribunal refers in footnote 7 to the evident contradiction between FIFA’s claim and the agreement signed with the European Commission to put an end in 2001 to the Commission’s investigation into the FIFA RSTP. Indeed, this agreement clearly stipulates that “arbitration is voluntary and does not prevent recourse to national courts”.[3] Finally, the Tribunal insists that any general prohibition (as the one included in FIFA’s statutes) to have recourse to national courts would be contrary to Ordre Public and, therefore, must be disregarded by the Tribunal.

Is it a new Pechstein? Hardly. FIFA is not relying on a specific arbitration clause included in its Statutes, nor does it refer to any arbitration clause included in the Statutes of the French Football Federation. In the Pechstein case (on ‘Pechstein’ see our blogs here and here), Claudia Pechstein was forced (as a condition of entry to the competitions of the ISU) to sign an arbitration agreement in favour of the CAS. In the Diarra case, the player never signed anything and the Tribunal just highlighted that the vague language included in the FIFA Statutes cannot be constructed as a sufficient legal basis for a general arbitration agreement binding all football players (and clubs) for all disputes involving FIFA or national federations around the globe.

2.     The competence of the Tribunal of Charleroi on the basis of the Lugano Convention

The second objection raised by FIFA and the URBSFA regarding the competence of the Tribunal is related to the Lugano Convention. In principle, as pointed out by the respondents, Article 2.1. Lugano Convention foresees that one should be sued in the courts of her domicile. Any derogation to this general rule is, in their view, limited to exceptional circumstances in which there is a particularly close linked between the dispute and the jurisdiction other than the one of the domicile of the respondent.

Yet, the Tribunal refers to Article 5.3. Lugano Convention, which stipulates that “in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur”. It held that this special competence is grounded on the existence of closed connecting factors between the dispute and the place where the damage occurred. The judges refer to the Mines de potasse and Shevill jurisprudence of the Court of Justice of the EU to conclude that the notion of harmful event covers both the place where the damage materialized and the place where the event occurred. In the present case, it entails that Diarra is not forced to lodge a complaint in Switzerland, where FIFA adopted the controversial regulation. Instead, he could also submit a complaint at the place where the damage was felt. More precisely in Belgium (and more specifically Charleroi) due to the missed opportunity to be employed by Sporting Charleroi.

This is (with other cases we have chronicled on this blog, see here and here) a good reminder that FIFA’s regulations, as long as they have damaging effects outside of Switzerland, are easily subjected to challenges in the EU Member States. In particular due to a potential incompatibility with EU free movement and competition law.

B.    The compatibility of article 17(2) FIFA RSTP with EU law?

The core of the substantial evaluation of the case plays out mainly around the question of the compatibility of article 17(2) FIFA RSTP with EU law. Unfortunately for the European Sports Law geek, but reasonably in the context of the factual construction of the case, the Tribunal did not pick on the request of Diarra’s lawyer to send a preliminary reference to the CJEU regarding the compatibility of article 17(1) FIFA RSTP with EU free movement law. [4]

Instead, the Tribunal focused on the interpretation (at least until April 2015) by FIFA (and the URBSFA) of article 17(2) FIFA RSTP. Indeed, it refers to the legislative history of the FIFA RSTP and in particular the EU Commission-FIFA agreement to strongly affirm that “there is no doubt that the European Commission would have never given its green light to such a system, which boils down in fine to preventing a worker dismissed by his employer – even if it is due to his behaviour - to find a new job”.[5] To further support this argumentation it refers directly to the CAS award rendered in the latest episode of the ‘Mutu saga’. In that case, the CAS clearly affirmed that the interpretation provided by the FIFA DRC, insofar as it extends the applicability of article 17(2) FIFA RSTP to players dismissed by their clubs on the basis of their behaviour, is contrary to EU law and the Bosman jurisprudence. Thus, the Tribunal concludes that the application of article 17(2) FIFA RSTP supported by the defendants in the present case was contrary to the freedom of movement of workers. Henceforth, the faulty behaviour of FIFA was established.

Interestingly, and this is the more original aspect of the decision, the Tribunal found that the URBSFA should also be deemed at fault for having implemented the rule on FIFA’s behalf. The national federation cannot hide behind its duty to implement FIFA regulations, especially because since 21 January 2015 (meaning before it opposed the move to Sporting Charleroi) it should have been aware of the decision of the CAS (here the Tribunal is a bit unfair with the URBSFA because the full text of the award was not published until March 2015, and until then it was impossible for the URBSFA to clearly assess the CAS’ reasoning). Moreover, the Tribunal rejects the objection raised by the URBSFA that the Russian federation would not have issued an International Transfer Certificate. Instead, the judges held that “when the contract is terminated by the club, the player must have the possibility to sign a new contract with a new employer, without restrictions to his free movement”. The Tribunal added [and this is the key part that had me believe in a new Bosman for a minute ;)]

“Allowing, like the RSTP seems to do, a federation or association to which the former club belongs […] not to deliver an ITC if there is a contractual disputes between the former club and a player that has been dismissed (and who has not taken the initiative of breaching his contract) and who has concluded (or wishes to conclude) a new contract in another country, is equivalent to requiring the new club to pay to the former club the compensation requested from the player, which is akin to imposing to the new club to pay a transfer fee to the former club to recruit a player who in fact is out of contract. This is exactly the practice deemed contrary to EU law in the Bosman case.”[6]

The scope of this paragraph could have been way broader if the Tribunal had not included the “who has been dismissed” part. Indeed, it seems to exclude situations where the player decides to leave his club and, thus, preserves the possibility to hold the new club accountable for compensation due by the player to his former club for having terminated his contract.


Conclusion: Interpreting the FIFA RSTP with a lot of help from EU law

This case matters, not so much for Diarra, who has secured a meagre EUR 60 001 in damages (and not the EUR 6 million announced everywhere) plus a bit more if his lawyers manage to demonstrate a substantial loss of opportunity from not having played with Sporting Charleroi (which, with all due respect, should prove rather difficult), not so much for its substantial solution because the CAS had come to a similar conclusion in its Mutu award from 2015, not so much either for its arbitration dimension as the Tribunal’s considerations regarding the absence of an arbitral agreement are not really surprising (or new for that matter). No, its importance lies in the reaffirmation of the need to read the RSTP in the light of EU law and to interpret it with the jurisprudence of the CJEU in mind and the agreement with the EU Commission on the table. This decision is laying further ground for broader challenges to the RSTP on the basis of EU law. For example, I do not see where one can find in the EU Commission-FIFA agreement the endorsement of a joint liability of the new club and a player for damages incurred by the latter when terminating his contract with his former club. Thus, the entire article 17(2) FIFA RSTP is build on shaky legal grounds, and if one pursues the logic of the Tribunal until the end there is no reason why it should not be deemed contrary to the EU free movement rights of players.


[1] Jugement du Tribunal de Commerce du Hainaut, division Charleroi, A/16/00141, 19 January 2017, at paras 19-21.

[2] Ibid, at para.21.

[3] Ibid.

[4] Ibid, at para. 27.

[5] Ibid, at para. 28.

[6] Ibid.

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