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Swiss Federal Tribunal’s Decision On Challenging Appointment Of Arbitrator Highlights Uniqueness Of Sports Arbitration

Thu, 2022-06-23 06:05

4A_520/2021, judgment of March 4, 2022 , A v. FIFA, motion to set aside the CAS Award of 31 August 2021 (CAS 2019/A/6344).

This important judgment of the Swiss Federal Supreme Court (Swiss Federal Tribunal, SFT) deals with the thorny issue of independence and impartiality of CAS arbitrators, examining the strict admissibility requirements for filing a request for challenge and the issue of repeated appointments within the specific context of CAS proceedings where FIFA is a party (see also the recent Newsletter of Hansjörg Stutzer of 20 April 2022). 

The case related to the widely known “FIFA-Gate” which revealed, following an investigation by the U.S. authorities, that several individuals were involved in a bribery scheme related to the sale of rights to several football competitions, and charged them with various offences. The Appellant, a former President of the Brazilian Football Confederation Marco Polo Del Nero (also a former member of various FIFA and CONMEBOL committees), was one of the individuals and was also banned for life by the FIFA Ethics Committee and the FIFA Appeals Committee and given a fine of CHF 1,000,000. Ruling in appeal, the CAS reduced his sanction to twenty years and confirmed the fine.

The Appellant filed a motion to set aside the CAS Award for violation of his right to be heard and for lack of independence and impartiality of the arbitrator appointed by the CAS to act as the chairman of the panel. While the latter initially merely disclosed that "FIFA are a party in another case I have on - CAS 2019/A/6229. I am President of that Panel", following the hearing (which took place almost one year after the panel’s appointment) and at the Appellant’s request for updated declarations related to appointments involving FIFA, the Arbitrator provided the parties with a quite extensive list of ongoing matters involving himself and FIFA. Furthermore, the Arbitrator disclosed that a colleague at his law firm had “(...) recently advised FIFA on an entirely unrelated matter involving GDPR / data protection. For the avoidance of any doubt I was not involved in that matter in any way”. The Appellant’s request for challenge before the ICAS Challenge Commission was rejected and led, after the final CAS award, to the SFT proceedings examined here.

The starting point for the analysis was whether the Appellant’s claim was admissible, to the extent that the parties must raise any such claim as soon as the pertinent fact becomes known, and within the specific time limit of seven days enshrined in Art. R34 (1) of the CAS Code. The SFT considered as decisive the fact that the appellant’s counsel knew of other appointments of the Arbitrator as well as of the FIFA mandate of the Arbitrator’s colleague – through other cases in which it acted before the CAS (at 5.3.1) and failed to raise any objections on time. The SFT confirmed that the knowledge of the counsel is attributable to his client directly and rejected the appellant’s claim as inadmissible for failing to file the request for challenge on time.

Even though it held that the claim was inadmissible, the SFT still examined the arguments raised by the Appellant and concluded that the claim would have, in any event, been unfounded: while the Appellant largely based his claim on the failure of the Arbitrator to comply with his duty of disclosure, the SFT reiterated that such duty relates principally to elements which may give rise to legitimate doubts as to the arbitrator’s impartiality and would be insufficient, per se, to justify the challenge of an arbitrator. As such, the SFT found no evidence of deliberate concealment likely to lead to the recusal of the Arbitrator: the fact that the Arbitrator had already disclosed other appointments in the context of another procedure (in which the Appellant’s counsel was involved) was the decisive element to disprove any intentional concealment.

With regard to the issue of the repeated appointments of the Arbitrator, the SFT specified the cases prone to play a role in the determination of the arbitrator’s independence, holding that only the cases in which the arbitrator was appointed by FIFA can count as “recurring appointments” that could raise doubts as to his impartiality. It also implicitly accepted that consolidated procedures count as one appointment, acknowledging that the three times where the Arbitrator was appointed directly by FIFA in the previous three years may seem problematic under Art. 3.1.3 of the IBA Guidelines. Importantly, however, the SFT referred to the specificities of CAS proceedings and the closed list of the CAS arbitrators in order to justify this number, noting that the arbitrator appointed by the appellant himself was also appointed by FIFA six times in the course of the previous three years!

Another issue discussed in this judgment related to the disclosure of a FIFA mandate by a law firm colleague of the Arbitrator: the SFT examined the specific circumstances of the case and concluded that this was an isolated instance, with no connection to the case or the specific arbitrator that brought an insignificant amount to the firm’s turnover.

Overall, this case is important for a variety of reasons. On the one hand, it reiterated the high burden of the “duty of curiosity” of the parties’ counsel (which was somewhat narrowed down in the Sun Yang judgment, 4A_318/2020 of December 22, 2020) and the strict admissibility requirements in order to request the challenge of an arbitrator as soon as the ground for challenge becomes known: As such, the arbitrator’s disclosure, even in another case involving the party’s counsel, triggers the time limit for a potential request for challenge.  On the other hand, it confirmed that repeated appointments are common in CAS arbitration in view of the closed list of arbitrators and particularly for FIFA which is called to appoint numerous arbitrators every year. In this context, the arbitrator’s failure to duly disclose any appointments with the initial declaration of independence or to regularly update such declaration during the proceedings is not as such sufficient to challenge such arbitrator unless more incriminating elements are present (which, as seen above, were clearly not present in this case). It seems that, here again, the burden shifts to the party’s counsel to prove a “deliberate concealment”, which can be extremely difficult at times. Nonetheless, and as noted by both the ICAS Challenge Commission’s decision and the SFT (at 5.5), it becomes evident that arbitrators must always act in a diligent manner, and not only submit a full declaration (of both past and ongoing cases and appointments by the parties) but also regularly and spontaneously update their declarations during the proceedings.

Note: This was originally published on SportsLegis, a specialised sports law practice run by Dr Despina Mavromati. The original can be found here.

An English translation of the judgment can be viewed below.

AuthorDr Despina Mavromati

Safeguarding Proceedings - How To Balance The Rights Of The Accused With Treatment Of The Abused?

Mon, 2022-06-20 02:28

Safeguarding practice is about protecting and promoting wellbeing. It encompasses a wide variety of actions that are designed both to protect individuals from abuse and maltreatment, and to positively improve individuals’ lives and outcomes. In keeping with that, safeguarding proceedings are not about the punishment of those who perpetrate abuse - that is a function of criminal and disciplinary proceedings. Safeguarding proceedings are instead concerned with the management of risk. However, insofar as proceedings might be necessary to manage the risk an individual might pose to others, safeguarding practice is concerned with ensuring (as far as possible) that such proceedings are not themselves the cause of harm or distress. This is especially so in respect of the giving of evidence by children and adults at risk at hearings.

Fortunately, it is possible for sports regulators to resolve most safeguarding cases without the need for there to be a hearing involving live evidence. Alternative outcomes can readily be legislated for in sports regulators’ safeguarding rules and regulations. In respect of lower level (poor practice) concerns, cases can often appropriately be resolved through measures such as guidance and training. In cases following criminal convictions, the fact of the criminal conviction will usually stand as irrefutable evidence of the facts relating to the conviction - so there is no need to hear factual evidence to establish the same facts. And in cases across the spectrum of severity, sports regulators can reach agreement with individuals who admit poor practice and/or abuse as to the appropriate risk management measures to be applied in their cases.

The most difficult safeguarding proceedings in sport are those that are contested and require a hearing involving oral evidence to determine relevant facts (often involving cases that failed to meet the threshold for criminal prosecution, or that resulted in an acquittal when tried against a higher criminal standard of proof) – such cases are difficult for those who have been abused, for those who stand accused of abuse (and/or of posing a risk of harm to others), for friends and family of those parties, for witnesses, and indeed often for any lawyers and other experts involved in the process.

Achieving a procedure for safeguarding cases that finds the right balance, particularly as between the treatment of victims/survivors/complainants on the one hand, and respondents to safeguarding proceedings on the other, is no easy task. This article examines how that balance may be best achieved, by looking at

AuthorRichard Bush

When is there a right to replay a football match? FIFA, UEFA and The FA laws on fielding an ineligible player

Tue, 2022-06-14 06:13

Consider this scenario: a club fields an ineligible[1] or suspended player in a match.  That club wins the match.  The player’s ineligibility or suspension is then discovered and the offending club is subjected to a form of disciplinary process and is penalised.

The innocent, losing club has no points from a match in which the opposition fielded a player who should not have been on the pitch in the first place.  Should the match be replayed?

This situation plays out virtually every season[2]. Ultimately each case is fact-specific and the answer depends upon the particular competition rules applicable to the match played.

In practice what this means is that, whilst fielding an ineligible or suspended player in one competition may lead to a replay, in others it will not.  This article looks at the approaches taken in FIFA, UEFA and The FA’s competitions, and then sets out general guidance about when, and in what circumstances, a replay probably will and will not be ordered.

AuthorGrahame Anderson

Unilateral extension options in football contracts: Are they valid and enforceable?

Sun, 2022-06-12 23:35

Unilateral extension clauses (UECs) are contractual clauses that give one party to a contract the exclusive right to extend the employment relationship with the other party. Unlike reciprocal clauses - where both parties need to agree to the extension - UECs do not require both parties to consent to activating the clause. In the context of football, we often see UECs in favour of football clubs in employment contracts between players and clubs.

This article examines:

  • where and how UECs are used in football;

  • why they have proved to be controversial; and

  • what jurisprudence at the Court of Arbitration for Sport (CAS) has said about the legality of such clauses.

The article will conclude by briefly contemplating whether, and how, UECs could be regulated going forward.

AuthorTiran Gunawardena

The Lifecycle Of An International Athlete – Dealing With Divorce

Wed, 2022-05-25 00:31

This blog in our series for international athletes explains key points of English law in relation to family issues and divorce.  

Whilst the intricacies of contractual clauses and the tax efficient structuring of assets are undoubtedly at the forefront of many advisers' minds, an athlete’s relationship status should similarly not be overlooked. Sportspeople, and those advising them, must carefully consider the potential financial ramifications of relationships and their breakdowns, particularly given that England is widely regarded as “the divorce capital of the world”.   This blog examines:

  • Key points for professionals who are already married (or in a civil partnership)
    • How is an entitlement to a divorce (and related financial claims) determined in England?
    • How will the English court divide capital assets upon a divorce?
    • How will the English court treat income upon a divorce?
    • Will the circumstances of the relationship breakdown affect the divorce or impact upon the financial division?
  • What steps should be taken if the sportsperson is unmarried?
  • What steps can be taken to minimise the risk of adverse publicity about family issues?
AuthorTammy Knox

Fulham FC v Jones: When Is There Civil Liability For Causing A Serious Injury In Football?

Thu, 2022-05-19 04:31

This article examines the case between Fulham Football Club and Mr Jordan Levi Jones which concerns the circumstances in which the Court will find civil liability for a serious injury sustained in the course of a professional football match. The judgment is of importance for all sports law practitioners, given the anticipated rise in claims brought by injured sports people in respect of alleged career-ending injuries.

The full judgment may be found here.[1] 

AuthorLuka Krsljanin

A Guide For Sports Organisations To Partnering With A Cryptocurrency Provider

Wed, 2022-05-18 01:56

One of the most noticeable trends in the sporting world since the emergence of COVID is the increased prominence of cryptocurrency brands in the world of sports sponsorship. According to Nielsen’s Global Interactive Marketing Report,[1] investment by blockchain and cryptocurrency companies in sports sponsorship is estimated to reach US$5 billion by 2026. In the same report, Nielsen estimate that investment by cryptocurrency and blockchain brands in sport sponsorship will increase by 778% when compared to the levels of investment in 2021; for context, investment in sport sponsorship by automotive brands is projected to rise by 5% from 2021 to 2026.

In February of this year, Manchester United agreed a multi-year deal with Tezos for sponsorship of the training kit of its men’s and women’s teams. Manchester United’s announcement[2] of the deal mentions the introduction of “fans to Web3 technology through the Tezos blockchain” and “several new fan experiences built on the Tezos blockchain”. Only a few weeks later, Manchester City announced[3] that OKX, a global cryptocurrency exchange, is to become the club’s “Official Cryptocurrency Exchange Partner”. It is now being reported that Liverpool are exploring the possibility of a front-of-shirt sponsorship deal[4] with a cryptocurrency exchange from the 2023/24 season onwards.

This trend in sponsorship investment isn’t just restricted to football. As of Christmas Day 2021, Staples Center, the home of the NBA’s Los Angeles Lakers, was renamed the Crypto.com Arena. This adds to Crypto.com’s already impressive suite of sports sponsorships: a multi-year fight apparel deal with the UFC, an agreement to be a “Global Partner” of Formula 1 and the “Official Cryptocurrency Platform Partner” of Paris Saint-Germain.

The sums involved in the majority of these cryptocurrency sponsorships are significant and rightsholders across the sporting world are understandably taking note – however, given the nature of these deals, it is important for both the rightsholder and the sponsor to ensure they are minimising the risks involved from a legal, regulatory and compliance perspective. 

This article examines the steps that sports organisations should take when considering such a partnership, including:

AuthorJoshua Kay

Top 10 Tips For Launching An ‘Independent Review’ In Sport

Mon, 2022-05-16 04:31

When the ever-growing lists of sports organisations being subject ‘Independent Reviews’ following allegations of ethical violations, financial misconduct, discrimination, mental and physical abuse of athletes, John Mehrzad QC, a leading sports lawyer and Head of Sports Group at Littleton Chambers set-out his top ten tips for sports organisation conducting an independent review.

John draws on his extensive experience as member and chairperson of several independent panels that carried out the reviews into sporting governing bodies/ He has also written, lectured and spoken widely about best practice for sporting reviews.

By way of handful of examples only, since 2016 there have been independent sporting reviews British Cycling, the British Equestrian Federation, UK Athletics and the Professional Footballer’s Association and historic sex abuse allegation in football and tennis and gymnastics.

By way of overview, it is worth stressing that an independent review is not an internal investigation.  A review’s purpose is to consider contributions, in oral or paper form, and documents to build a factual picture in order to best inform the review panellists of issues that need be addressed by way of suggested recommendations in a final review report.  A review is, therefore, primarily a forward-looking process.  An internal investigation, on the other hand, is usually an initial step as part of a disciplinary or whistleblowing procedure, which may lead to disciplinary action.

AuthorJohn Mehrzad QC

The Lifecycle Of An International Athlete – Negotiating Sponsorship & Endorsements Deals

Fri, 2022-05-13 04:57

This blog in our series for international athletes explains the key points to consider when entering into sponsorship and endorsement deals or merchandising agreements. 

Most athletes in most sports have relatively few years at the top.  The average playing career of a Premier League footballer is eight years, and it’s a similar story at the highest level of most other professional sports.  For this reason alone, it is important that athletes and their advisers consider how to leverage their elite status and commercialise their name and image rights, through sponsorship and endorsements (and possibly also merchandising).   Not only is it an important revenue stream but it may also enable the athlete to maintain their “brand value” long after their playing career has come to an end.

This blog examines some of the key issues to consider including:

  • What are the different options available to athletes?
  • What are the main things that athletes should be considering?
  • What are the key terms to be considered when negotiating a contract?
    • Exclusivity
    • Marketing rights granted
    • Reputation management
    • Athlete’s liability
    • Control and approvals
  • Overall strategy
AuthorMary-Clare Palmer Edmund Forey

The Independent Mali Basketball Abuse Investigation – Important Lessons For International Sport

Wed, 2022-05-11 05:51

On 10 June 2021, a New York Times reporter sent an email to the International Basketball Federation (FIBA), indicating that the New York Times was in the process of investigating allegations of systemic sexual abuse of female basketball players in Mali. The investigation was based on information received from Human Rights Watch and others, who claimed to have spoken to multiple victims of alleged sexual abuse by certain named Mali Basketball Federation (FMBB) officials.[1]

On the same day, i.e., 10 June 2021, the FIBA Secretary General contacted the FIBA Independent Integrity Officer, Professor Richard H. McLaren, O.C., requesting that he proceed with an investigation into the allegations and provide an independent report to FIBA upon its completion. The report of Professor McLaren and his investigative team was published on 14 September 2021 (FIBA Report), and it contains damning findings against the FMBB and various individuals connected to it.[2]

The content of the FIBA Report highlights both the importance of addressing the risks of abuse in sport, and the significant challenges in doing so effectively - particularly from the viewpoint of an international federation. While there are a great many things that can be taken from the FIBA Report, this article identifies a few specific points that should be of interest to international federations and might be helpful in informing their approach to promoting and embedding safe sport.  Specifically, it looks at:

AuthorRichard Bush

The Lifecycle Of An International Athlete - Dealing With Branding And Image Rights

Fri, 2022-05-06 03:55

This blog in our series for international athletes explains the key legal points on image rights and trade marks to consider when coming to compete in the UK.

For athletes and sports personalities, in their capacity as ‘brand owners’, registering their personal brands is an important investment that generates significant practical, commercial and legal benefits, and enables them to prevent unauthorised usage and take full advantage of any licensing and/or other commercial opportunities.

This blog explores some of the core intellectual property rights that might form part of an athlete’s brand portfolio:

  • How does image right protection in England and Wales compare to other countries?
  • Is there anywhere to register image rights?
  • Are there alternative means of protecting image rights in the UK?
    • "Passing off"
  • Trade mark registration 
AuthorGavin Stenton

The Lifecycle Of An International Athlete - Navigating The UK Property Market

Thu, 2022-05-05 02:43

Wherever you wish to buy or rent a home, signing any contract relating to property is a risky business and the UK is no exception.

In this blog in our series for overseas athletes and their advisers, residential property expert Duncan Taylor outlines the options available when moving to the UK and considers the related pros and cons.

AuthorDuncan Taylor

A new dawn? How India Is Regulating Online Gaming & Fantasy Sports

Wed, 2022-04-13 02:06

According to a report released by KPMG, gamechilling, a trend has seen a significant rise in India with lockdowns and work from home models.[1] The Indian online gaming market saw a drastic increase in the revenue contribution of the gaming industry at rupees 60 billion. This comes at a time when the legality of online gambling and fantasy sports is a contentious issue. With state governments banning online-gambling while courts declaring such laws violate the provisions of the Indian Constitution: the legal landscape of online-gambling remains uncertain. This article attempts to decode, explain and analyse the recent developments on this front.

Specifically, it deals with:

AuthorEashwari Nair

A guide to the legal due diligence process when buying a football club

Tue, 2022-04-05 23:30

At the time of writing the bidding process for Chelsea, following the sanctions imposed on Roman Abramovich, is ongoing. An important element of that process is the due diligence undertaken by the bidders on the target club. 

So what is due diligence?  How long should it take? And how might it impact on a potential sale?  

AuthorRichard Barham

Can sports formats be protected by copyright law?

Fri, 2022-03-18 04:31

On the 19th of January, 2022, the High Court of Delhi provisionally ruled upon a claim of copyright, vis a vis a specific T20 format of cricket. While the case (Samir Kasal v Prashant Mehta & Ors.)[1] is reserved for a completion of pleadings in late April 2022, this provisional order of the Court could prove crucial for future adaptations of T20 cricket in India. 

This article relays the factual background of the case, the arguments of the parties and the Court’s preliminary rulings against protection of sports format through copyright, and examines whether sports formats can be protected through intellectual property.

AuthorWilfred Synrem

Challenging FIFA’s Jurisdiction: Why Appeals To The SFT Must Be On Public Policy Grounds

Fri, 2022-03-11 04:19

In this football-related case, a national football association (the Appellant) terminated its contract with the football coach (the Respondent) of its women’s team prematurely; the Respondent filed a claim before the FIFA Player Status Committee (PSC), which was partially admitted. Importantly, the PSC accepted its jurisdiction (which was objected to by the Appellant) based on Art. 22 (c) (in conjunction with Art. 23) of the FIFA Regulations on the Status and Transfer of Players (RSTP), according to which the FIFA PSC is a competent tribunal for international labor disputes between an association and a coach.

The Appellant launched an unsuccessful appeal before the CAS, also invoking FIFA’s lack of jurisdiction, following which it filed a motion to set aside the CAS award before the Swiss Federal Tribunal (SFT) based on Art. 190 (2) (b) of the Swiss Private International Law Act (LDIP). This ground for annulment of a CAS award relates to the erroneous jurisdiction of the arbitral tribunal. 

This case is interesting because, unlike other SFT challenges, the Association did not challenge the jurisdiction of the CAS directly but rather the jurisdiction of the previous instance, namely the FIFA tribunal, to decide on this matter. The SFT reiterated its view that the FIFA tribunals are not arbitral tribunals, and that their decisions are mere expressions of the will of their association and not judiciary acts. Upon exhaustion of the internal instances, these decisions can either be challenged before state courts under Art. 75 Swiss Civil Code or – if there is a valid arbitration agreement – before an independent arbitral tribunal such as the CAS (see also 4A_612/2020 of June 18.2021 para. 4). In the present case, the CAS relied on Art. 57 ff. of the FIFA Statutes (2019) and Art. R47 CAS Code. 

Interestingly, the SFT held that, to the extent that the Appellant itself appealed the FIFA decision to the CAS and did not attack the aforementioned legal basis, it could no longer challenge the jurisdiction of the CAS itself. The SFT proceeded to a quite restrictive – but logical – view of the jurisdictional ground for annulment of Art. 190 (2) (b) LDIP: so long as the CAS has upheld its jurisdiction in an appeal against a decision rendered by a FIFA tribunal, the jurisdiction of the FIFA tribunal can no longer be challenged before the SFT under Art. 190 (2) (b) LDIP (which only encompasses the jurisdiction of CAS and not the instance prior to that) but only under the limited control of violation of public policy (Art. 190 (2) (e) LDIP).

Takeaway: An erroneous jurisdictional decision by a FIFA tribunal can only be challenged before the Swiss Federal Tribunal as a violation of public policy, not jurisdiction

Note: The case is connected to another one involving the same appellant association against the head coach of the women’s national team (4A_344/2021). Notwithstanding the similarities, the SFT refused to consolidate the two proceedings.  

This note was originally published on SportsLegis, a specialised sports law practice run by Dr Despina Mavromati. The original can be found here.

An English translation of the judgment can be viewed below.

AuthorDr Despina Mavromati Dr. Charles Poncet