Yearbook of International Sports Arbitration 2016

On 30 January 1987, a panel composed of arbitrators François Carrard, Hans Nater and Jean Gay rendered an award resolving a dispute that had arisen between Hockey Club X. and the Swiss Ice Hockey Federation (LSHG), further to an incident during a match in the Swiss National Championship of 1985. The HC X. c. LSHG award was the very first award rendered by the then fledgling Court of Arbitration for Sport (CAS). History has shown that the establishment of the CAS responded to a real and important need in the international sports community, but this was far from certain at that time. Today, as the designated last-instance adjudicating body in most international sports regulations, and having issued more than 3,000 awards, including in the course of 11 editions of the Olympic Games, the CAS is universally seen as the “supreme court” of world sports. Arbitrators Carrard, Nater and Gay have kindly accepted to share their memories of that first case, their views on the CAS’s development over the 30 years that have elapsed since the issuance of their award, and some ideas for the future of this unique institution.

In late 2016, the BAT issued a new set of arbitration rules, due to come into force on 1 January 2017 (the 2017 BAT Rules). This note discusses the main changes introduced by the 2017 BAT Rules, which concern the provisions governing costs, the content, issuance and notification of the award, and the BAT President’s and Secretariat’s functions. Noteworthy amendments include the introduction of an internal consultation mechanism for arbitrators (subject to the BAT President’s authorisation) and the modifications made to the brackets in the scale of monetary values for disputes, which are relevant, inter alia, to determine the amount of the “non-reimbursable handling fee” to be paid by claimants when filing the request for arbitration and the applicable default rule on whether the award will be issued with or without reasons. Overall, the amendments included in the 2017 Rules may be seen as improvements in the users’ access to BAT justice.

At the end of December 2015, the CAS decided on a very public contractual dispute between Sporting Clube de Portugal Futebol SAD (Sporting) and Doyen Sports Investments Limited (Doyen). The club was claiming that two Economic Rights Participation Agreements (ERPAs) it signed with Doyen were invalid and refused to pay the due share on the transfer of one of its players, Marcos Rojo, to Manchester United. Doyen, instead, was arguing that Sporting breached the ERPAs and was therefore liable to pay compensatory damages. The dispute was much publicized, as it was the first case involving a TPO deal heard by the CAS after FIFA’s ban on Third-Party Ownership (TPO), which entered into full force on 1 May 2015. In fine, the CAS award favoured Doyen and found its ERPAs to be compatible with Swiss law. Yet, I argue that the case does not affect the compatibility of FIFA’s TPO ban with EU law or Swiss law.

Article 64 FDC provides for a specific mechanism for the “self-enforcement” of FIFA decisions and CAS awards rendered in appeal proceedings against the non-complying debtor. However, Article 107(b) FDC provides that the competent FIFA body may close the disciplinary proceedings in case the debtor is declared bankrupt. The question is whether the latter provision also applies in a case when reorganization proceedings are commenced against the debtor (in casu a football club). In the present case, the CAS Panel upheld the FIFA’s decision to close the disciplinary proceedings launched against an insolvent Spanish club for non-payment of a training compensation. In substance, based on a “balance of interests” test (and in line with CAS jurisprudence), the CAS Panel held that the claim concerned had arisen prior to the commencement of the reorganization proceedings and, consequently, there was no reason to treat preferably the creditor claiming for the payment of the training compensation in comparison with the other ordinary creditors of the Spanish club. In our view, the approach taken by the CAS Panel is questionable as Article 64 FDC is not primarily aimed at enforcing monetary claims but rather at providing for associative sanctions against (indirect) members who do not comply with a FIFA decision or a CAS award rendered in appeal proceedings. In other words, the CAS Panel has put too much emphasis on the particularities of Spanish insolvency law when applying the above-mentioned balance of interests test. In our view, it should have rather taken into account the very purpose of Article 64 FDC which, similar to the UEFA Club Licensing and Financial Fair Play Regulations, aims at maintaining a level playing field between football clubs, in particular by sanctioning clubs which fail to comply with their financial obligations. In the present case, the debtor benefited (for a second time) from reorganization proceedings and, as a result, could continue to compete with the player at issue and, eventually, transfer him for a substantial transfer fee without paying the full amount of the training compensation. In our view, the non-compliant club may have been sanctioned in such circumstances notwithstanding the fact that it was subject to reorganization proceedings. A sanction may be imposed provided that it is proportional and does not jeopardize the club’s rescuing (i.e. existence) through reorganization proceedings.

The 2015 WADA Code, with its potential four-year sanctions for a first violation based on whether or not the anti-doping rule violation was intentional, now makes the question of intent an important issue in virtually every anti-doping case. In cases that do not involve “Specified Substances” the athlete carries the burden of proving “no intent” to avoid the application of a four-year default sanction. In these cases, the athlete is required to prove that he or she did not intentionally violate the anti-doping rules. It is therefore important to consider what will happen to the athlete who did not knowingly ingest the prohibited substance, and who, despite investigation, is unable to prove the source of the prohibited substance. In a series of recent CAS cases, the tribunals have begun to analyse this issue, and the level of proof that will be required for an athlete to avoid a finding that he intentionally violated the anti-doping rules, in the absence of proof of the source of the prohibited substance in his specimen. These cases have now clarified that an athlete is not per se required to establish the source of the prohibited substance as a prerequisite of establishing lack of intent to violate the anti-doping rules under Article 10.2.1.1 WADA Code, while at the same time acknowledging the difficulty in meeting this burden of proof without proving the source of the prohibited substance. Future CAS cases will likely provide further guidance on the circumstances under which athletes can and cannot prove that they did not intend to violate the anti-doping rules, where they are unable to prove the source of the prohibited substance in their sample.

This case commentary examines the CAS Award in WADA v. Sundby with particular focus on the CAS Panel’s reasoning with respect to the occurrence of an anti-doping rule violation (“ADRV”). Among interesting points are the CAS Panel’s application of the principle of legal certainty as well as the practical implications of the CAS Panel’s findings with respect to the interpretation of the rule in question––the β2A Provision of the Prohibited List. This commentary also addresses the burden of proof, standards for appreciation of scientific evidence, assessment of fault and determination of sanctions.