Brussel’s Court of Appeal Challenges CAS Jurisdiction Clause in FIFA Statutes
In recent weeks, the media has reacted rather dramatically to the decision handed down by the Brussel’s Court of Appeal on 28 August 2018, in a case brought by Belgian football club RFC Seraing (Seraing). The precise impact of the decision remains to be seen although it is unlikely that this represents the fall of international sports arbitration as we know it. In fact, the CAS has been here before – in 2016 the German Supreme Court upheld a CAS arbitration agreement in the Pechstein case.
The coverage has centred around the Court’s finding that “enforced arbitration” clauses contained in the FIFA, UEFA and Royal Belgian Football Association (URBSFA) Statutes and Regulations which give jurisdiction to the Court of Arbitration for Sport (CAS), may be challenged. This is on the basis that such clauses may be too general and do not concern a “specific legal relationship”.
In 2015, Belgian football club RFC Seraing and Doyen Sports (Doyen), an investment fund in support of third party ownership, challenged a transfer ban issued by FIFA, which held Seraing to be in breach of the FIFA Third Party Ownership (TPO) rules found is section V of the FIFA Regulations on the Status and Transfer of Players (RSTP). Seraing were consequently banned from registering players in four (4) consecutive registration periods. Seraing appealed the FIFA decision before the CAS, resulting in a decision dated 9 March 2017 (TAS 2016/A/4490). In that decision, the Panel partially modified FIFA’s ruling reducing the ban on registering players to three (3) consecutive registration periods:
“RFC Seraing is prohibited from registering players, both nationally and internationally, during the three (3) complete and consecutive registration periods following notification of this arbitration award.”
Unhappy with the ruling, Seraing and Doyen appealed the decision before the Swiss Federal Tribunal in proceedings marked 4A 260/2017. The judgment dated 20 February 2018 made reference to the Lazuntina and Pechtein cases and inter alia: upheld the independence of the CAS as an arbitral institution, upheld the basis of FIFA’s TPO rules rejecting the argument that it interfered with the economic freedom of clubs and rejected the appellant’s dis-proportionality argument in relation to the penalty on the basis that such a claim was not admissible before the Federal Tribunal.
Seraing and Doyen also brought a challenge to the CAS decision before the Belgian Court in Liege and then subsequently, the Belgian Court of Appeal, which is the focus of the latest media furore.
The Appellants made an application for interim relief to: (i) suspend the CAS decision upholding (in part) FIFA’s sanction; and (ii) ordering URBSFA to allow a variety of players (professional and youth) to be registered with Seraing. These requests for interim relief were denied both in the Liege Court of First Instance and this latest Court of Appeal judgment.
However, as a part of the Belgian club’s challenge, the Brussels Appeal Court had to consider its own jurisdiction in the light of submissions by FIFA, UEFA and URBSFA that a valid jurisdiction clause within the relevant statutes conferred jurisdiction on the CAS and not the Brussel’s Appeal Court.
Under Article 66.1 of the 2015 FIFA Statutes (then in force), “FIFA recognises the independent Court of Arbitration for Sport (CAS) with headquarters in Lausanne (Switzerland) to resolve disputes between FIFA, Members, Confederations, Leagues, Clubs, Players, Officials, intermediaries and licensed match agents.”
The Court found that the aforementioned arbitration provision did not constitute a valid and enforceable arbitration clause as a matter of Belgian law, as it is too vague and consequently does not concern a “specific legal relationship”. At paragraph 15 of the judgment, FIFA is criticised for a submission attempting to imply certainty into Art 66.1 of the FIFA Statutes:
“… according to FIFA, the clause would implicitly apply only to “sports disputes” because the CAS itself could only be seized of such disputes. Such precision does not appear in the arbitration clause itself and the CAS is a free third party to amend its statutes and regulations, regardless of whether the “sporting” nature of the disputes concerned would be sufficient to consider that the clause refers to a definite legal relationship.”
URBSFA made submissions that the arbitration clause was defined in that it was limited to disputes concerning “the statutes, regulations, directives and decisions of URBSFA, FIFA and UEFA.” Further, reference was made to Article 38.2 of Seraing’s statutes which contains an arbitration clause referring disputes to the FIFA arbitration bodies. However, the Court noted that this did not provide for the referral of arbitration to the CAS, which is not a body of FIFA.
Consequently, the Belgian Court of Appeal rejected the submission of FIFA, UEFA and URBSFA that a valid arbitration clause precluded the Court from adjudicating on the issue.
In essence, the Brussels Court of Appeal has not held that there are any inherent issues with the CAS, but rather that the wording of the arbitration clauses in the statutes of FIFA, UEFA, URBFSA and Searing are not adequate. The Court will sit again in October and hear the parties on the broader issues.
This is nothing new for the CAS. In the Pechstein case the arbitration clause in the International Skating Union’s (ISU) statutes was brought into focus with the German athlete claiming that it was not entered into voluntarily by athletes. She also argued that the CAS lacked independence as its panels were invariably constituted by members or ex-members of sporting federations. The latest decision in this case, rendered by the German Supreme Court, upheld the CAS arbitration clause found in the ISU’s statutes and found that the CAS was an independent tribunal.
The practical implications are relatively minor because the fact remains that there is no real alternative to the CAS. The reality is that global sport would suffer immensely if a truly international tribunal did not sit above local courts. It cannot be the case that one set of rules applies in one jurisdiction and not in another. Taken to a logical extreme, you could end up with a scenario whereby athletes can take a certain level of, say, salbutamol in one jurisdiction without sanction, but would be considered to have committed a doping violation in another. Although the CAS is not immune from criticism by any stretch, the media reports, perhaps for want of understanding, seem to think that it would be appropriate to throw the baby out with the bathwater.
We await to see the outcome of the hearing in October, but irrespective of that decision, it is unlikely that there will be any significant movement away from the CAS.
authored this post.