Case study : The Court of Arbitration for Sport (CAS)
The Court of Arbitration for Sport (CAS) is an independent institution whose main purpose is to hear legal disputes related to sport. It hears mostly commercial and disciplinary disputes, and it tries to resolve them through arbitration or mediation (CAS 2017a; James 2013:52). In the case of arbitration, it will pronounce a binding, enforceable decision (similar to what an ordinary court would do) after a hearing takes place (CAS 2017a). In the case of mediation, it will try to negotiate a non-binding agreement acceptable to both parties (CAS 2017a; James 2013: 62). However, the jurisdiction of CAS is limited insofar as the rules or statutes of an International Sports Federation (ISF) or of a National Governing Body (NGB) must allow the parties to submit applications before it (CAS 2017a; James 2013:52). Otherwise, if this condition is not met, both parties must agree in writing to have recourse to CAS in a one-off basis (CAS 2017a).
In this report, a recent issue involving Malaga Club de Fútbol (CF), a Spanish football club playing in the Spanish First Division, and UEFA (Union of European Football Associations), the governing body of European football, will be examined. The reasons for CAS to intervene, the arguments of both parties and the reasoning behind the CAS final award will be considered. Additionally, the problems arising from the current international legal framework will be analysed.
Explaining the case
In June 2012, Malaga CF had overdue payables towards other football clubs and towards the Spanish tax authorities amounting to 9,420,000 euros (CAS 2013/A/3067 Málaga CF SAD v. Union des Associations Européennes de Football:2). This financial state of affairs was in breach of the Financial Fair Play Regulations (CL&FFPR) set by UEFA, the governing body of European football. Indeed, articles 65 and 66 of these regulations state that licensees cannot have overdue payables towards other football clubs or towards employees, social and tax authorities as of 30 June of the year in which UEFA competitions commence (UEFA 2012a: 39-40). Therefore, the Adjudicatory Chamber of the UEFA Club Financial Control Body fined Malaga CF and excluded the club from UEFA club competitions for the following four seasons (CAS 2013: 5).
In January 2013, Malaga appealed this decision before CAS. The Court of Arbitration for Sport had jurisdiction to intervene in this case as the parties submitted to the competence of the court. More specifically, the UEFA statutes express that “any decision taken by a UEFA organ may be disputed exclusively before the CAS in its capacity as an appeals arbitration body, to the exclusion of any ordinary court or any other court of arbitration” (UEFA 2012b Article 62 par. 1: 26). It follows that, as Malaga CF registered in UEFA competitions, the club agreed to submit to UEFA statutes and therefore to CAS. It is also worth noting that, in doing so, Malaga CF is foregoing from the jurisdiction of Spanish courts and Spanish laws, which is instrumental in the decision taken by CAS.
In this case, two sources of law collide: Spanish national law and the rules set by UEFA. The problem resides in the fact that Malaga CF is under both set of rules because it is under UEFA statutes as it registered in UEFA competitions and under Spanish law as it is based in Spain. This situation makes it difficult to decide which law should prevail, which is why the CAS is called upon.
Indeed, Malaga CF argued that it had no overdue payables because the debts UEFA is referring to should be considered as deferred. The club argues that Spanish law must be taken into consideration when assessing whether there exists any debt and whether the debts to the tax authorities should be considered as overdue or not. More specifically, the club asserts that under Spanish law no written agreement is deemed necessary to extend the deadline of payment (CAS 2013:8). Conversely, UEFA argues that UEFA statutes, rules and regulations are applicable and that the Financial Fair Play Rules explicitly require an agreement in writing for the deferral to be granted (CAS 2013:11). Spanish law is therefore irrelevant in the eyes of UEFA.
The CAS follows UEFA reasoning, asserting that there is “no scope for the application of Spanish law” because the UEFA statutes do not refer to it and because there is already a comprehensive definition of overdue payables in the CL&FFPR (CAS 2013:15). Nonetheless, to make matters even more complex, the CAS does admit that both set of rules are applicable; yet they are applicable to different questions. According to the Court, the Spanish law is applicable to the question of whether there exists any debt to the national tax authorities and the UEFA rules are applicable to the question of whether the debt must be considered as overdue or not. The fact that both sources of law are applicable to such an interconnected aspect such as the debt and the due date of it seems intricate; yet the CAS does not seem to share this opinion (CAS 2013:1).
The case illustrates a persisting problem in sports regulation: the possible conflict between national law and the rules of a private governing body such as the UEFA. According to Mark James, two sports law sources can be identified: on one hand, the rules created by national governing bodies and sporting federations, and what is generally known as lex sportiva, which is the jurisprudence and norms created by CAS; on the other hand, the national, European and international laws. The main distinction between the two is that one set of rules is generally entered because of a contractual agreement between a sports federation and a club or an athlete and the other is imposed by a state or a group of states such as the European Union (James 2013:5).
In the case of Malaga v UEFA, the governing body is effectively making the latter set of rules irrelevant; yet it makes an interesting point of why it should be so. According to UEFA, rules such as the Financial Fair Play Regulations should be applicable to every club participating in UEFA competitions regardless of the country in which they are situated, irrespective of the national law under which they are. In doing so, UEFA aspires to create a “level-playing field” (CAS 2013:10). This point is at the heart of sport: the very essence of it is that different participants engage in the activity as equals. One participant, and in this case one football club should not take advantage of the particularities of its national laws or of the support of the State. It could thus be interpreted that the conflict created between different sources of law and the complexities of this situation are the price to pay for a fairer sport where every participant is equal regardless of the country it is based in.
The tension between the two sources of law is frequently grounded on a desire of NGBs and ISFs to self-regulate on one hand and a desire of athletes and clubs to be judged based on principles found in national, EU and international laws (Irving 2017). The points made by UEFA certainly imply this intention of self-regulation. This has been increasingly the aim of private governing bodies that do not want national or international laws to interfere in sports related issues; but in the case of football this intention has already been explicitly declared decades ago. Indeed, in 1998, Keith Cooper, FIFA’s director of communications at the time stated that “Football has always been remarkably successful at looking after its own affairs. It is difficult to understand why regulatory authorities feel they now have to become involved”. He also casts doubt on the ability of EU rules to serve the best interests of sport (Financial Times 1998 cited in Weatherill 2007:156).
Other cases exemplify this clash between the sources of law as well. The most notable one was Union Royale Belge des Sociétés de Football Association ASBL v Jean-Marc Bosman  when the European Court of Justice outlawed the restrictions on mobility of football players imposed by UEFA as they were breaching the freedom of movement rules set by the Treaty on the Functioning of the European Union (Szymanski 2015: 40 ; Caiger, Gardiner 2000:110; James 2013:267-268). Other cases include Sagen v VANOC , where a conflict arose between an IOC (International Olympic Committee) decision and Canadian law. The decision not to include women’s ski jumping was discriminatory under Canadian law. Despite this, it was judged that it was not of the jurisdiction of the Canadian courts but rather of the IOC. According to Anderson, this case underlined more general problems in the existing legal framework such as the diminishing role of national laws when it comes to regulating international sport and the dominance of private regulatory institutions over decisions concerning sports disputes. This raises issues not only with civil national laws but also with vital principles of equality and respect of the human rights (Anderson 2013:354).
The CAS’s position to deal with the current legal issues has been thrown into question. A lack of transparency and independence is often argued. The Court currently publishes a list of arbitrators but does not reveal when they were appointed and more importantly by which organisation the arbitrator was suggested (CAS 2017b). It does not publish all its decisions, as an ordinary court would do. Even the German regional courts questioned its authority, refusing to enforce a CAS award because it violated international public policy (Duval and Rigozzi 2015: 335). In the case Claudia Pechstein v/ International Skating Union (ISU), the german court found that the way CAS appointed members was biased towards sports governing bodies (Gauthier 2016: 60) and that it abused of its dominant position (Duval and Rigozzi 2015: 335).
Conclusions and recommendations
The existing legal framework seems to be problematic. Sports bodies prefer to run their own affairs, but it is obvious that they cannot do so in opposition to the existing national and international laws. The myriad of sources of law ranging from national civil laws, European laws, international laws, laws of governing bodies and federations and the lex sportiva creates a conflict that needs to be addressed (Caiger and Gardiner 2000:5). The case analysed in this report (CAS 2013) was just one case in a litany of them illustrating the current problems; other cases could be examined to further advance the research.
An improved cooperation between the different actors involved is recommended. It is advised that the CAS, the European Union, ISFs and NGBs work on a mutual platform to be able to make interests converge. It is suggested to the CAS and UEFA to be more flexible when it comes to judging decisions made by sports clubs that have to deal with several systems of law and do not necessarily have the financial means or skilled workforce to do so. A greater transparency and independence at the CAS is also recommended, through publication of comprehensive information about arbitrators and ideally avoiding recruiting arbitrators from governing bodies or federations, preventing potential conflicts of interest. In the case of Financial Fair Play, it is advised to UEFA to be more flexible with club’s debts, as the current stringent stance deters investment and indirectly the overall quality of football.
List of references:
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Weatherill, S. (2007) European Sports Law Collected Papers .The Hague: T.M.C. Asser Press