THE USE OF ARBITRATION IN SPORTS DISPUTES

ABSTRACT

In today’s world, sports play a huge role in both our day-to-day lives. Right from the ancient days to the present, people have participated in various sports right from Pankration to Soccer. Sports is a great way of entertainment, improves physical and mental health, provides various career options in administration and management, various fan clubs and events, associations, print and digital media employees, coaching, and training. But in all these emerges a dispute which calls for its solution. The scope of the Court of Arbitration for Sports (CAS) in handling sports disputes in all sports and other relevant details will be determined by reading this article.

KEYWORDS

Arbitration, Court of Arbitration for Sports (CAS), International Olympic Committee, Award.

INTRODUCTION

Today, a significant amount of liberty can be seen in sports both domestically and globally. Sport organizations themselves have the authority to make rules and to set up committees to handle rules and disputes pertaining to sports, subject to working within predetermined parameters. Arbitration has become an important tool for resolving disputes in the sports industry, providing a specialized and efficient alternative to traditional court proceedings. Here, the arbitrators are the expertise in the field of law, hence, this ensures that the decision makers have a deep understanding of the industry’s dispute. What makes it suitable for the sports industry is it’s cost effectiveness along with faster proceedings as the nature of sports is time sensitive. Arbitration offers several advantages that make it the preferred method for dispute resolution in this field as the sports related conflicts are unique and complex in nature. This article deals with the arbitration and it’s use in the sports disputes. It also explores the use of arbitration, particularly the role of the Court of Arbitration for Sports (CAS), in handling sports disputes, highlighting its benefits and significance in maintaining fairness and integrity in the sports industry.

ARBITRATION

The founder of the American Arbitration Association Frances Kellor in her book, ‘American Arbitration: Its History, Functions and Achievements’ has stated that “Of all mankind’s adventures in search of peace and justice, arbitration is amongst the earliest. Long before laws were established, or courts were organized, or judges formulated principles of law, men had resorted to arbitration for the resolving of discord, the adjustment of differences, and the settlement of disputes.”[1] “Arbitration is a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.”[2]

The characteristics of arbitration are as follows: –

• Consensual: It means that arbitration can take place only if both parties have agreed to it. The parties while entering into the contract inserts an arbitration clause just in case if there arises a future dispute. Here, a party cannot unilaterally withdraw from arbitration.

• Neutral in Nature: The arbitrator should remain independent and impartial throughout the proceeding. Hence, this ensures the neutrality of the arbitration procedure.

• Flexible in Nature: The arbitration procedures permit the parties to apply to their arbitration as per their wishes.

• Confidential proceedings: The law protects the confidentiality of the arbitration proceedings and the awards are not published. Therefore, the disputes are not disclosed on the public arena and the business relationships remain maintained.

• Enforceable in nature: The parties in arbitration procedure should carry out without any delay the decision of the arbitral tribunal. Under the New York Convention, the international awards are enforced by national courts. The Convention permits them to be set aside only in very limited circumstances. [3]

HISTORY OF ARBITRATION

According to a number of authors and as per the biblical theory, King Solomon is regarded as the first arbitrator. This was after he had settled the issue between two women who were claiming to be the mother of a baby boy. The authors asserted that the procedure used by King Solomon was very similar to that used in arbitrations today. [4]
Philip the Second, father of Alexander the Great, also had used arbitration for the settlement of territorial disputes in Greece as far back as 337 B.C. Around 600 B.C., in a dispute between Athens and Megara, for the possession of island of Salamis, the matter was referred to five Spartan judges who eventually allotted the island to Athens. Hence, International Arbitration can readily be traced back to the ancient world.[5]

In India, the arbitration flourished since the end of 19^th Century. It was when the Indian Arbitration Act, 1899 enacted, that the arbitration was statutorily recognized. However, it was confined only to the three presidency towns of Madras, Bombay and Calcutta. Arbitration was codified in Section 89 and second Schedule of the CPC, 1908, where the provisions got extended to other regions of British India.[6] This was the advent of arbitration in India.

ARBITRATION IN SPORTS

Disputes can arise between anyone. It could even arise between athletes or other parties to the contract in sports. This could be due to a breach of contract or any non-performance of the contract. Now, between the athletes and members of governing bodies disputes could arise out of a non-disclosure agreement, employment agreement, artist promotion, contract for rights, brand deals, personal service agreement, disputes arising out of security, deficiency of services or breach of rules under the governing body by an athlete. Similarly, there could be a possible dispute between third-party/service providers and governing bodies for contractual compliance agreement disputes, contractual maintenance disputes, supply agreement contracts disputes, etc. Disputes can also arise due to various disciplinary and ethical rules and regulations of governing bodies or because of various elections within the governing bodies. To resolve these disputes including those involving eligibility and disciplinary actions, the most prominent forum, the Court of Arbitration for Sports (CAS) was established in the year, 1984.[7]

THE COURT OF ARBITRATION FOR SPORTS

The Court of Arbitration for Sports (French: Tribunal arbitral du sports) was established un 1984 by the International Olympic Committee President Juan Antonio Samaranch. The main aim of the CAS is to settle various sports related disputes through arbitration. The CAS headquarter is located in Lausanne, Switzerland. The courts are located in New York City, Sydney and Lausanne.[8]

The Court of Arbitration (CAS) has its own set of procedural rules.[9]

Ordinary Arbitration Procedure
Appeal Arbitration Procedure.

It is to be noted that the appeal procedure makes up the bulk of CAS’s caseload. The CAS acts as an appeal body. The parties file written submissions and can produce evidence to support the cases. The evidences can be documentary or witness including both facts and experts.[10]

The arbitration usually culminates in an oral hearing; however, it is at the discretion of the tribunal to decide not to hold a hearing if it considers itself well informed. The timetable for arbitration is decided by the tribunal.[11]

CAS has a closed list of arbitrators from which its tribunals are formed and one cannot be selected if their name is not on this list. The main aim behind this list is to ensure that the arbitrators are well qualified and has the requisite expertise to handle sports disputes. However, this closed list also has its own drawback that it limits the choice of the parties with respect to choosing their arbitrators compared to the commercial arbitration. [12]

The CAS agreements are often compulsory, embedded in sports governing rules.

Mutu and Pechstein v Switzerland, (Applications no. 40575/10 and no. 67474/10) ECHR 324 (2018)[13]

Adrian Mutu, a professional footballer, challenged a decision by the Court of Arbitration for Sport (CAS) upholding a FIFA Dispute Resolution Chamber ruling, which ordered him to pay compensation to his former club Chelsea FC for breach of contract. Whereas, Claudia Pechstein, a professional speed skater, contested a CAS decision confirming her two-year ban by the International Skating Union (ISU) for doping violations.

Issue:

Both athletes argued that the CAS arbitration clauses were compulsory, thus infringing on their right to a fair trial under Article 6(1) of the European Convention on Human Rights (ECHR). Pechstein specifically claimed she was forced to accept CAS arbitration to compete in her profession.

Judgment:

European Court of Human Rights (ECHR) acknowledged that the CAS arbitration clause in Pechstein’s case was compulsory, as she had to accept it to compete professionally. However, despite the compulsory nature of CAS arbitration, the ECHR found that the arbitration proceedings needed to provide the safeguards outlined in Article 6(1) of the ECHR, which guarantees the right to a fair trial. The ECHR confirmed that CAS’s procedures regarding the appointment of arbitrators complied with the requirements of the ECHR but did not declare the CAS arbitration agreements unenforceable but emphasized the necessity for these proceedings to meet fair trial standards.

It is to be noted that CJEU judgment (2023) upheld a decision against ISU, impacting CAS agreements on competition law grounds and this trend of raising competition complaints potentially indicates a future in which the enforceability of CAS arbitration agreements is brought under more scrutiny.

INDULGENCE OF ARBITRATION IN SPORTS

Sports disputes often involve highly specialized knowledge about sports rules, regulations, and standards whereas traditional courts may lack the necessary expertise to handle such cases effectively. Arbitration provides a platform where disputes can be resolved by arbitrators who are experts in sports law and familiar with the nuances of the sports industry. The sports industry requires swift resolution of disputes due to the time-sensitive nature of sports events and competitions.[14] Traditional court proceedings can be lengthy and may not provide timely resolutions, which can disrupt athletes’ careers and sporting events. Arbitration offers a faster alternative and ensures that decisions are made promptly, often within a framework that accommodates the sports calendar. Arbitration proceedings are generally private, which helps protect the reputation and privacy of the parties involved. This confidentiality is crucial in the sports world, where public exposure of disputes can harm the careers of athletes and the reputation of sports organizations. With sports being a global phenomenon, arbitration provides a uniform mechanism for resolving disputes that cross international borders. Institutions like CAS are recognized internationally, ensuring that arbitration awards are respected and enforced globally, which is crucial in international sports competitions. There are various case laws that could prove the above-mentioned characteristics. One of the landmark cases is the Manchester City FC v. UEFA.

Manchester City FC v. UEFA, CAS 2019/A/6298[15]

In 2018, various news articles, notably by Der Spiegel, accused Manchester City of financial misconduct based on leaked documents obtained through hacking. The key allegations included that Manchester City had masked direct equity funding as sponsorship deals. UEFA opened an investigation in March 2019 following these reports. In February 2020, UEFA concluded that Manchester City was in breach of its financial rules and imposed a two-season ban from UEFA competitions along with a EUR 30,000,000 fine. Manchester City appealed UEFA’s decision to CAS ten days after the sanctions were announced.
Issue
The Manchester City v UEFA case revolved around allegations that Manchester City breached UEFA’s financial rules by disguising equity funding from its ownership as third-party sponsorship deals. As a result, UEFA imposed a ban on Manchester City from participating in UEFA competitions for two seasons and fined the club EUR 30,000,000. Manchester City appealed this decision to the Court of Arbitration for Sport (CAS).

Judgment
On July 13, 2020, CAS partially upheld Manchester City’s appeal and found that most of the alleged breaches were time-barred and therefore could not be taken into consideration. The ban on Manchester City from UEFA competitions was overturned and the fine was reduced from EUR 30,000,000 to EUR 10,000,000. CAS determined that the majority of the breaches UEFA alleged were beyond the statutory limitation period for such violations and the remaining breaches did not warrant a ban from UEFA competitions, hence the reduction in the fine. Therefore, the outcome of the case was that the Manchester City was allowed to compete in the 2020-21 Champions League.
The case demonstrated CAS’s ability to handle urgent disputes efficiently and provided an example of CAS’s role in ensuring fair arbitration in sports. Therefore, it can be said that the need for arbitration in sports is driven by the requirement for specialized, swift, confidential, and globally enforceable dispute resolution mechanisms. Arbitration helps in maintaining the integrity and smooth functioning of the sports industry by providing a fair and efficient platform for resolving conflicts.

CONCLUSION

This can be concluded that the need for arbitration in sports is driven by its capacity to provide specialized, timely, confidential, and globally enforceable dispute resolution. As the sports industry continues to evolve and grow, the role of arbitration will remain pivotal in ensuring the fair and efficient resolution of conflicts, thereby preserving the integrity and spirit of competition within the ambit of sports. The establishment of the Court of Arbitration for Sport (CAS) has further strengthened the role of arbitration in maintaining the integrity and smooth functioning of sports around the globe. CAS has demonstrated its ability to handle high-stakes disputes efficiently, ensuring fair play and upholding the principles of justice within the sports arena. Therefore, the arbitration plays a significant role in resolving the sports disputes.

REFERENCES

Tariq Khan, Muneeb Rashid Malik, History and development of arbitration law in India, BAR AND BENCH (July 9, 2024, 01:15 PM) https://www.barandbench.com/columns/history-and-development-of-arbitration-law-in-india#:~:text=As%20per%20the%20biblical%20theory,that%20used%20in%20arbitrations%20today.
WIPO, https://www.wipo.int/amc/en/arbitration/what-is-arb.html#:~:text=Arbitration%20is%20a%20procedure%20in,instead%20of%20going%20to%20court. (last visited July 9, 2024)
Arbitration In Sports, WEBNYAY (July 9, 2024) https://www.webnyay.in/blog/38
Chris Murray, Alexander Stewart, Sports Arbitration: An Introduction to the Court of Arbitration for Sport, CLYDE & CO (July 10, 2024, 3:06 PM) https://www.clydeco.com/en/insights/2024/05/sports-arbitration-the-court-of-arbitration-for-sp
Sports Arbitration- CAS, TCAS and everything in between, WATSON FARLEY & WILLIAMS (July 10, 2024, 5:00 PM)https://www.wfw.com/articles/sports-arbitration-cas-tcas-and-everything-in-between/

[1] Tariq Khan, Muneeb Rashid Malik, History and development of arbitration law in India, BAR AND BENCH (July 9, 2024, 01:15 PM) https://www.barandbench.com/columns/history-and-development-of-arbitration-law-in-india#:~:text=As%20per%20the%20biblical%20theory,that%20used%20in%20arbitrations%20today.

[2] WIPO,https://www.wipo.int/amc/en/arbitration/what-is-arb.html#:~:text=Arbitration%20is%20a%20procedure%20in,instead%20of%20going%20to%20court. (last visited July 9, 2024)

[3] Id

[4] Tariq Khan, Muneeb Rashid Malik, History and development of arbitration law in India, BAR AND BENCH (July 9, 2024, 01:15 PM) https://www.barandbench.com/columns/history-and-development-of-arbitration-law-in-india#:~:text=As%20per%20the%20biblical%20theory,that%20used%20in%20arbitrations%20today.

[5] Id

[6] Id

[7] Arbitration In Sports, WEBNYAY (July 9, 2024) https://www.webnyay.in/blog/38

[8] Chris Murray, Alexander Stewart, Sports Arbitration: An Introduction to the Court of Arbitration for Sport, CLYDE & CO (July 10, 2024, 3:06 PM) https://www.clydeco.com/en/insights/2024/05/sports-arbitration-the-court-of-arbitration-for-sp

[9] Id

[10] Id

[11] Id

[12] Id

[13] Id

[14] Sports Arbitration- CAS, TCAS and everything in between, WATSON FARLEY & WILLIAMS (July 10, 2024, 5:00 PM)https://www.wfw.com/articles/sports-arbitration-cas-tcas-and-everything-in-between/

[15] Chris Murray, Alexander Stewart, Sports Arbitration: An Introduction to the Court of Arbitration for Sport, CLYDE & CO (July 10, 2024, 3:06 PM) https://www.clydeco.com/en/insights/2024/05/sports-arbitration-the-court-of-arbitration-for-sp

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