What is Sports Law?
Sports has evolved from a hobby into a huge industry as people today not only embody its ideals but view sports as a thriving business. Like any other industry, rules and regulations are essential. People in the industry need to know and understand what they can or cannot do.
In sports, the need for clear and precise ruling is as pronounced as the need for clear and precise judgment from a court of law. We often read of complaints of unfairness in sports and more often than not, the search for the accurate decision in sports is as important as the sport itself.
Over the last few decades, dispute resolution in sports has developed, evolved and expanded to not only disputes during the game but outside the game as well. Over and above disciplinary board or committee of respective sports associations, many sports disputes spill into the court rooms and is also heard at arbitrations. An independent and new regime of sports law has also evolved at the same time.
Sports Law is largely an amalgamation of inter-related legal disciplines which blends normal rules procedures with sports activity involving areas such as general Contract and Tort Law, Employment Law, Competition (Anti-Trust) Law and so on and so forth. According to James A.R. Nafziger and Stephen F. Ross in their book Handbook on International Sports Law, Sports Law involves multiple regimes of law which is influenced by culture, history and practical. With this unique feature of an area of law, Sports Law has been recognised in public international law. Generally, international Sports Law refers to a process which comprises a more or less distinctive body of rules, principles, and procedures to govern the conduct and consequences of transnational sports activity.
The Court of Arbitration for Sport or commonly known by its acronym “CAS”, is an arbitration body created by the International Olympic Committee (IOC) in 1983. In the early years, questions have been raised with regard to the independence and impartiality of CAS which led to a concern for the parties to the proceedings heard by CAS. This stems from the fact that IOC not only played a major role in the governance of CAS where it financed CAS entirely, it also has a proxy to modify CAS’ statutes and the President of the IOC has the power to appoint the members of CAS. This issue, in fact, was brought to the attention of the Swiss Federal Tribunal in the case of G. v. Fédération Equestre Internationale and Court of Arbitration for Sport (CAS) (1993), Swiss Federal Tribunal 1st Civil Division, 15 March 1993, as an appeal against a decision made by CAS, which ruled in favour of the International Equestrian Federation (FEI) in relation to a horse-doping case.
In that case, the Swiss Federal Tribunal made comments that strong links between CAS and IOC will give rise to the questionable independence of CAS. Eventually, CAS was restructured into the formation of the International Court of Arbitration for Sports (ICAS) through the 1994 Paris Agreement.
Pursuant to the said Paris Agreement, the IOC created the ICAS with the aim to oversee CAS and to separate entirely the IOC from CAS. Nonetheless, the procedural rules for both ICAS and CAS remain the same. The major change in CAS after the creation of ICAS is that it is now separated into two divisions: the Ordinary Appeals Division (OAD) and the Appeals Arbitration Division (AAD). The OAD has the jurisdiction over private disputes arising from the practice and development of sport such as contractual or commercial disputes which span from image rights to appearance fees, whereas AAD only has the power to arbitrate over appeals against decisions made by sporting organisations provided the statutes or regulations of those sporting organisations permit such an appeal. It is a well- known fact that CAS is recognised to be the final court of appeal for sporting disputes and is called the “Supreme Court for Sports”. However, this position has been challenged in recent cases which will be discussed in the later part of this article.
CAS is governed by the Code of Sports-related Arbitration (the Code) which provides for the rules in the organisation and arbitration procedures of CAS. It is also important to note that the Code is divided into two parts: the Statutes of the bodies working for the settlement of sports-related disputes (Articles S1 to S26), and the Procedural Rules (R27 to R69).
As mentioned above, there are two sorts of disputes which may arise between parties. Before we delve into that, it is pertinent to note that disputes can only be heard by CAS if and only if both parties to the dispute agree to do so, as per S12 of the Code. Firstly; for disputes arising from legal relations between parties such as pursuant to a contractual agreement, the contractual clause must provide for an independent arbitration agreement known as an arbitration clause which gives jurisdiction to CAS to hear the matter. Parties are then bound by the said arbitration clause and similarly bound by the arbitral award decided by CAS. Secondly; for disputes relating to decisions made by sport bodies, an arbitration clause may be inserted in its statutes or regulations. For the arbitration clause in this instance to be enforceable, the athlete must show his adherence, in writing, for the dispute to be brought to arbitration.
As the nature of CAS is arbitration, it possesses similar features of an ordinary arbitration in that CAS is not bound by the common law principle of stare decisis (binding legal principle). On another note, CAS also offers non-binding ‘Advisory Opinion’ on potential disputes or on any legal issues with respect to the practice of development of sport or any activity related to sports (R60-62 of the Code). Bodies such as the International Olympic Committee (IOC), the International Federation (IF), the National Olympic Committee (NOC) or any other organisations recognised by IOC which has the intention to request for an Advisory Opinion from CAS may do so simply by an application to CAS. When the application is accepted, the relevant party may put forward their questions to the President of CAS for him to formulate the questions and submit them to a designated Panel of three arbitrators for examination. An advisory opinion is not to be constituted as an arbitral award and is not binding on the parties.
It is established that the seat of arbitration for CAS is in Lausanne (Switzerland). It was submitted by Adam Beach in his article entitled ‘The Court of Arbitration for Sport – a Supreme Court for the Sports World?’, that CAS needs to take a more practical approach by opening or creating more forums for arbitration proceedings besides the one in Sydney, New York and the official seat of Lausanne. He suggested London, Rio de Janeiro and Beijing to be the additional seats. In furtherance to this, the available Guidelines to CAS states that in particular circumstances, the arbitration hearings can be held elsewhere provided both parties agree to do so.
The great news for Malaysia is that pursuant to a Memorandum of Understanding signed between CAS and the Kuala Lumpur Regional Centre for Arbitration (KLRCA) on 8th May 2012, KLRCA is able to serve as the official host of an alternative hearing centre for CAS in Kuala Lumpur, Malaysia.
Generally, the applicable law for the Ordinary Division of CAS is Swiss law due to the fact that its original seat of arbitration is in Switzerland, as per R45 of the Code. However, parties to a dispute may agree on a particular applicable law to govern the proceedings. If it is not specified in the arbitration agreement, the law governing the proceedings depends on the seat of the arbitration of that particular dispute. For example; if a dispute is heard in Sydney, the applicable law ought to be Australian law. Apart from the governing law, parties may also agree that the panel decides ex aequo et bono i.e. considering equitable remedies regardless of the law.
As for the Appeals Division, Art 17 of the CAS Arbitration Rules provides that for the Olympic Games (established under the Ad Hoc Division at the Olympic Games), the governing law, if not provided in the sports agreement i.e a contract between the National Sports Organisation and the athlete, will be the law where the federation, sports body, or association is domiciled, or the law that the CAS panel deems appropriate.
Once CAS has made its decision, the award is final and binding on the parties and it is enforceable internationally through the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This shows that the sports federations are recognising CAS as an arbitral body thereby acknowledging the enforceability of the arbitral award rendered by CAS.
CAS is known to be an independent international body on arbitration for sports. This is because, most of the time, it comprises of non-government agents such as an individual athlete, National Sports Organisations (NSO), and the IFs. It is therefore independent from the national government of the individual athlete of which he or she is a citizen/resident of. This, however, differs with matters related to doping. In doping cases, the matter may still be heard before an arbitrator in CAS but the national rules of that athlete’s country of citizenship/residence may still apply. For example; a Malaysian athlete alleged to be on drugs or sports stimulation drugs may be adjudged not only based on international law but also on the Malaysian law on drugs. Over and above that, the World Anti-Doping Code (WADC) is an applicable rule in such cases.
As mentioned above, CAS is regarded as the “Supreme Court for Sports” where parties to a dispute can apply for the matter to be heard by CAS, whether in Lausanne or any other forums available. We also discussed above that the CAS’ arbitral award is binding on the parties and final. This is illustrated by the case of WADA & Carmona Alvarez CAS 2006/a/1149 which involved a Mexican footballer by the name of Jose Salvador Carmona Alvarez. Carmona had tested positive for a second time for usage of illegal substance of which previously he was suspended for one year. It was submitted that FIFA regulations provide that a player will be banned for a lifetime from sport if he commits a second doping violation. The Mexican Football Association (FMF) however, failed to enforce this ban. The decision was later appealed to an agency governed by the Mexican Ministry of Public Education (CAAD) and the appeal was rejected. FIFA then requested that WADA exercise its rights under Article 13.1.1 of the WADC which allows an appeal for all issues pleaded before the initial decision maker, to appeal to CAS against FMF decision. It was then decided by CAS that Carmona is to be treated as an international athlete thus FIFA regulations are applicable on Carmona. CAS concluded by upholding the lifetime ban imposed against Carmona. This case clearly illustrates the supremacy of CAS.
However, this position has been challenged in recent times. Earlier this year, on 15 January 2015, the Munich Court of Appeals (the highest court in Germany) decided against the CAS arbitral award in a case between a German speed skater, Claudia Pechstein and the International Skating Union (ISU) on the grounds of violation of Germany’s public policy. Ms. Pechstein challenged the partiality and independence of CAS, in particular the composition of its arbitrators, on the basis that sports organisations have influenced the selection and appointment of the arbitrators in CAS. Besides this point, the German Court also refused to recognise the CAS’ arbitral award on grounds that the athletes were forced to sign an arbitration agreement with the ISU, a dominant company and the sole organiser of the speed skating World Championship, which is in favour of a dependent and partial tribunal. It was held that this is a violation of Germany’s anti-trust law.
Similarly, in the case of SV Wilhelmshaven, the Court of Appeal in Bremen, on 30th December 2014, decided that the decision made by CAS which ordered the German Club to pay ‘training compensation’ is in violation of the German ordre policy due to the fact that it was a non-compliance with the mandatory European Union law. The German court further held that sports associations have a duty to review the awards granted by CAS with regards to its compatibility with Germany’s public policy.
What then is the future for CAS? Will CAS still be recognised as the “Supreme Court for Sports” when local courts are starting to overturn the decisions made by it?
In absence of any improvements to CAS, this trend of an appeal to local courts can be damaging to the status of CAS. CAS may soon become irrelevant if this trend continues mainly because athletes will not want to submit their case to CAS and they will lose trust in CAS based on similar grounds, as seen in the above cases.
However, it is important to note that in both cases of Pechstein and SV Wilhelmshaven, the Court did not question the validity or status of CAS but merely overturned CAS’ decision on grounds of policy and natural justice. It is submitted that CAS is very much still, the Supreme Court for sports.
Michael Lenard, in his journal entitled ‘The Future of Sport Dispute Resolution’, suggested a change to the system of CAS and they are; (1) the quality of arbitrators, and (2) access to the lex sportiva – the precedent of CAS.
For his first suggestion, Michael Lenard opined that there is a need for the arbitrators who are appointed to have a full knowledge on sports cases, even though a dispute may not be a doping matter. Michael also proposed that arbitrators undergo a mandatory training which will harness a continuing learning and leadership development. In addition to this, there is a need for the existence and implementation of a standard code of ethics and role for arbitrators.
Adam Beach in his article believed that CAS should establish a permanent court which brings along with it, a permanent set of arbitrators. As we all know, arbitrators can be appointed by the parties in dispute to arbitrate their proceedings. This seems to have contributed to the inconsistencies in the way CAS adjudicates upon matters and the difficulty in identifying a consistent pattern in CAS’ awards. There is also a suggestion to have a ‘permanent sitting International Court of Justice for Sport’ which would mirror the International Court of Justice.
The latter suggestion i.e the introduction of lex sportiva would assist in ensuring consistency and standards in CAS’ decisions. Michael Lenard suggested for a more effective medium to access records of CAS’ decisions, which is now being practiced by CAS through publications of its decisions on the official website.
It is established that in the world of sports, CAS plays an important role in ensuring that dispute resolution in sports are properly ventilated and adjudicated. However, the recent decisions in Court overturning CAS’ awards is a cause for concern though its position as the Paramount Court for all matters in sports is very much still entrenched. Perhaps in time, like any other dispute resolution body, CAS may have to look inwards and review and revolve itself especially in matters related to appointment of arbitrators, application of legal principles and continued trainings for its arbitrators. In the meantime, at Malaysia notwithstanding these purported issues against CAS, the sports and legal fraternity look forward to have CAS’ hearings here in Malaysia.
Published on 06 July 2020