Sports Arbitration Handy Guide - 7 Cases on Challenges to Jurisdiction

In this article, Alejandro Coghill and Matt Phillip, look back at seven cases that challenged jurisdiction in sports arbitration and identify nine key takeaways.

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23 August 2023

For many years, the Court of Arbitration for Sport (“CAS”) has been recognised as the preeminent forum for the resolution of sports disputes. However, the recent decision in the European Court of Human Rights (ECtHR) in Semenya v Switzerland, is the latest example of athletes seeking to challenge that status. Semenya was successful before the ECtHR, but Switzerland may still appeal the decision. This article highlights some key cases that challenged jurisdiction in sports arbitration and identify nine key takeaways.

1. Mutu and Pechstein v Switzerland

This case concerned Romanian football player Adrian Mutu and German speed skater Claudia Pechstein. Mutu’s contract was terminated due to the player’s cocaine use while Pechstein’s use of reticulocyte resulted in a two-year suspension.

Mutu’s dispute

Mutu’s dispute was referred to the Football Association Premier League Appeals Committee (“FAPLAC”), which determined that Mutu’s cocaine abuse constituted a breach of his contract with Chelsea FC. FAPLAC’s decision was upheld by the CAS. The CAS sits in Lausanne, Switzerland and the process for challenging or enforcing CAS awards is governed by Swiss law, which is why Switzerland plays such an important role in CAS disputes. Chelsea then sued Mutu for damages and FIFA’s Disputes Division ordered Mutu to pay Chelsea €17m.

Mutu unsuccessfully appealed FIFA’s decision to the CAS and subsequently sought the Swiss Supreme Court (“SSC”) to set aside the CAS decision. Mutu contended that the CAS panel that determined his case was not independent and impartial because:

(i)     the President of the CAS panel that determined the case, had allegedly represented Chelsea’s then owner                  Roman Abramovich; and

(ii)     one arbitrator had heard both of Mutu’s disputes.

Mutu alleged that the impartiality of the CAS violated his Article 6(1) rights under The European Convention of Human Rights (“ECHR”). The SCC rejected Mutu’s application, finding that the CAS panel was independent and impartial and that Mutu’s Article 6(1) rights had not been violated.

Mutu then applied to the ECtHR, where his case was joined with Pechstein’s, arguing that the CAS panel was not independent and impartial. Like the SSC, the ECtHR held that the CAS panel was independent and impartial and that Mutu’s rights under the Convention had not been violated. The ECtHR dismissed Mutu’s case as he had not substantiated his claim that a member of the CAS Panel had represented Roman Abramovich. The ECtHR highlighted that the fact that the same arbitrator had heard both of Mutu’s disputes did not render the arbitrator impartial as the disputes related to separate legal issues, namely breach of contract and damages.

Pechstein’s dispute

Pechstein’s two-year suspension was imposed by the International Skating Union (“ISU”). Pechstein appealed this decision to the CAS who upheld the suspension. The CAS hearings were heard in private, despite Pechstein’s request for a public hearing. Pechstein then applied to the SCC, asking for the CAS decision to be set aside. Pechstein argued that the lack of a public hearing made the CAS proceedings partial and violated her Article 6(1) rights.

The SCC rejected Pechstein’s application. Pechstein then applied to the Higher Regional Court of Munich, which determined that the CAS decision was inapplicable in Germany because the arbitration agreement contained in her athlete agreement was invalid. Pechstein had to sign the arbitration agreement in order to compete in her sport. This decision was overturned by the German Supreme Court, which held that Pechstein voluntarily signed the arbitration agreement.

Pechstein then applied to the ECtHR where her case was joined with Mutu’s. Pechstein argued that her Article 6(1) right to a fair trial had been violated in Switzerland because she was denied a public hearing. The ECtHR held that while the CAS panel was independent and impartial, the CAS’s private hearings were a violation of Pechstein’s Article 6(1) right to a fair trial.

For a party to voluntarily submit their dispute to the jurisdiction of an arbitral tribunal the party has to waive their Article 6(1) right to a fair trial (i) freely (ii) lawfully and (iii) unequivocally. The ECtHR found that Pechstein had not freely waivered her right to a fair trial.

Consequently, Pechstein had not freely submitted her dispute to the jurisdiction of the CAS. This was because if Pechstein did not sign the arbitration agreement, she would have been prohibited from participating in speed skating, making her unable to earn her living. Pechstein only signed the agreement because she had no other choice. This differentiates Pechstein’s case from Mutu’s. Mutu had a choice to submit his dispute to the jurisdiction of state courts, he did not have to submit his dispute to the CAS but he chose to do so.

2. Algerian Football Dispute

In this case, a dispute arose between an Algerian football player and his club over unpaid wages. The Algerian Tribunal for Sports Disputes (“ATS”) determined the dispute in favour of the club. The player then brought the dispute before the CAS. The player directed his challenge against both the Algerian Football Federation (“AFF”) and his club. The player contended that he could raise the dispute before the CAS because AFF and FIFA statutes provided that ATS decisions could be challenged at the CAS.

However, the CAS held that it did not have subject matter jurisdiction over the dispute. The CAS clarified that the AFF statutes only allowed parties to appeal ATS decisions for disputes to which the AFF was a party. The dispute in question revolved around a contract between the player and the club and did not involve the AFF. The player then appealed to the SCC, seeking the court to set the CAS decision aside. The SSC upheld the CAS’s reasoning, confirming that the AFF statutes only allowed decisions involving the AFF to be appealed before the CAS.

3. Edward Eranosian v APOP Kinyras Peyeia, FIFA and the Cyprus Football Association

Edward Eranosian was the manager of APOP Kinyras Peyeia (“APOP”), a Cypriot football club affiliated to the Cyprus Football Association (“CFA”), a member of FIFA. Two APOP players tested positive for the banned substance oxymesterone. A CFA inquiry found that Eranosian offered the players the pills and proceedings were subsequently started before the CFA. The CFA imposed a two-year coaching ban on Eranosian and a one-year ban for the players. Eranosian’s cooperation resulted in a shorter ban than was prescribed by FIFA’s Disciplinary Code and the World Anti-Doping Code.

The World Anti-Doping Agency (“WADA”) and FIFA appealed to the CAS, challenging the CFA’s decision and seeking to increase the duration of the suspensions. Eranosian then filed his answers to WADA and FIFA’s appeals, contending that the CAS lacked jurisdiction over the dispute. Eranosian argued that there was “no express reference to the adoption of the jurisdiction of the CAS”, as required by Rule 47 of the CAS Code and that the general reference to the FIFA statutes in the CFA rules was not enough to establish the CAS’s jurisdiction. The CAS found in favour of WADA and FIFA and imposed a four-year coaching ban on Eranosian. Eranosian appealed to the SCC and sought for the CAS’s decision to be set aside for lack of jurisdiction.

The SSC dismissed Eranosian’s appeal, clarifying that jurisdiction can be established by a reference to an arbitration clause contained in the statutes of a national association. The SCC previously established that football players who are members of a national association are bound by the arbitration clause contained in the FIFA statutes. This is because national association statutes contain a provision which binds its members to comply with FIFA rules. By agreeing to become APOP’s manager, Eranosian agreed to subject himself to the statutes of the CFA and, by extension, of FIFA.

Interestingly, the SSC also dismissed the appeal on the basis that the CAS plays an important role in the fight against doping, and striking down its decisions with regard to doping would be undesirable. In this case, the SCC found that there is a growing international trend towards making the CAS the forum for doping disputes.

4. Colombian Football Dispute

In this case, the transfer of a player caused a dispute between two Colombian football clubs. The dispute was referred to the Commission on the Status of the Player of the Major Division of Colombian Football (“CSJ DIMAYOR”), which issued an award in favour of the applicant.

The respondent unsuccessfully appealed the decision to the Colombian Football Federation’s Player Status Committee. The respondent then appealed to the CAS panel, requesting interim measures. The applicant contested the involvement of the CAS, arguing that it lacked jurisdiction. The CAS dismissed the applicant’s argument and raised an award against the applicant. The applicant then filed a motion for the SSC to set the CAS’s award aside as it lacked jurisdiction.

The SSC found in favour of the applicant and rejected the respondent’s argument that the CAS’s interpretation of the rules was binding on it. The SSC found that where one of the parties alleges that there is a lack of jurisdiction, the court is entitled to freely examine issues of law, such as whether or not the arbitral tribunal had jurisdiction. The SSC further provided that an arbitral tribunal must itself determine whether it has jurisdiction. The court also clarified that, in accordance with Article 186(2) of the Swiss Private International Law Act, the fact that the CAS answered a request for interim measures did not constitute the parties’ acceptance of the CAS’s jurisdiction.

5. Partial annulment of award for lack of jurisdiction

In this case, football club (A) was involved in a dispute with another football club (B) and a football player (C). A claimed £1.6m from B and C before FIFA’s Dispute Resolution Council (“DRC”). A argued that C breached their employment contract by signing for B.

The DRC ordered B to pay A £400,000, with C being jointly liable for the damages. B and C appealed the decision from the DRC at the CAS. The CAS issued a termination order regarding the appeal filed by C as the player had failed to pay the advance on costs in time.

Relying on the termination order, A disputed the CAS’s jurisdiction with regard to B’s appeal. A also argued that even if the CAS had jurisdiction, the CAS would only have jurisdiction if the appeal was limited to the amount of damages jointly due by B and C.

The CAS annulled the DRC’s decision and ordered the DRC to make a new decision. A then appealed to the SSC, asking the court to annul the CAS decision because it lacked jurisdiction to annul the DRC decision between A and C. A alleged that the CAS had ruled beyond the claims submitted to it.

The SSC partially annulled the award. The SSC held that B and C, being jointly liable to pay the damages, formed a “consorité materielle simple passive”. This meant that the position of one party, such as a withdrawal or failure to appear, had no impact on the legal position of the other. C’s withdrawal from the appeal proceedings had no impact on the proceedings between A and B. The SSC could not annul the DRC’s decision with regard to C.

6. Heart of Midlothian FC and Partick Thistle FC v The Scottish Professional Football League (“SPFL”)

This case concerned the SPFL’s decision to pass a Written Resolution which allowed the SPFL to alter its rules to relegate Hearts and Partick Thistle and promote Dundee United, Raith Rovers and Cove Rangers.

This took place at the end of the 2020 football season during the first COVID-19 lockdown. Hearts and Partick Thistle argued that the SPFL’s articles of association did not refer the matter to arbitration. A similar argument was made by the clubs in relation to the SPFL’s rules. However, the Court of Session found in favour of the SPFL, determining that both Hearts and Partick Thistle were contractually bound to comply with the SPFL’s rules and, therefore, bound to submit their dispute to arbitration.

Hearts and Partick Thistle then contended that their case, which revolved around the unfair prejudice regarding the SPFL’s decision, could not be suitably determined by arbitration. It was also argued that the dispute did not qualify as a “Football Dispute”. However, the Court of Session found that unfair prejudice is a matter which can be determined by arbitration.

Moreover, the Court of Session also found that the dispute regarding the SPFL decision related to relegation and promotion and had no doubt that the dispute was a “Football Dispute”. The Court of Session also clarified that Scots law recognises that legal persons, such as the parties to this dispute, are able to agree for their disputes to be agreed by arbitration. In general, courts are unlikely to interfere with the resolution of disputes between parties that had agreed to settle their disputes by arbitration. The Court of Session ultimately determined that the dispute was to be settled by arbitration.

7. Stretford v The FA

In this case, the FA initiated disciplinary proceedings against Wayne Rooney’s agent, Paul Stretford. In response, Mr Stretford raised proceedings against the FA, arguing that the disciplinary proceedings, which would be determined by arbitration, violated his Article 6(1) rights. Mr Stretford was unsuccessful and raised proceedings with the Court of Appeal. The Court of Appeal determined that Mr Stretford was bound by the FA rules which had been incorporated into his contract. The Court of Appeal found that Rule K of the FA rules did not conflict with Article 6(1) of the ECtHR and that the dispute could be referred to arbitration. Much like the SSC in the case of Mutu and Pechstein, the Civil Court of Appeal held that Article 6(1) rights could be waived if the party had entered into an arbitration agreement (i) freely, (ii) without duress, undue influence or mistake and (iii) if the terms of the arbitration agreement were not exceedingly onerous or unusual.

The court also outlined that arbitration clauses have become standard and the setting aside of such clauses would have an “undesirable effect on the use of arbitration in the context of sport generally”. This reflects the reasoning of the SSC in the Eranosian case, as the SCC also considered that it would be detrimental for CAS decisions to be set aside (although the SCC was referring to CAS decisions in a doping context.

Take Home Points

  • Arbitration agreements will not violate Article 6(1) of the ECHR if they are entered into (i) freely (ii) lawfully and (iii) unequivocally.
  • If an athlete can only compete in their sport by signing an agreement which contains an arbitration agreement, that athlete will not have waived their Article 6(1) rights and will not have submitted the jurisdiction of their dispute to an arbitral tribunal. Such arbitration agreements are compulsory and violate Article 6(1) of the ECHR.
  • Athletes have a right to request a public hearing in disciplinary cases heard by the CAS.
  • References to an arbitration clause contained in the statutes of a national association are sufficient to establish the jurisdiction of the CAS.
  • It is difficult to argue that the CAS does not have jurisdiction in cases concerning doping as the CAS is becoming the pre-eminent forum for doping disputes.
  • Unless contractually provided, the CAS is unlikely to have jurisdiction over a dispute that is solely between a player and a club.
  • Arbitral tribunals must themselves determine whether they have jurisdiction over a dispute.
  • An arbitral tribunal answering requests for interim measures does not constitute an acceptance of jurisdiction.
  • Generally, courts recognise that parties can agree to settle their disputes through arbitration. Courts will be reluctant to interfere in such disputes.

If you have any questions on the above or would like to find out more about our Sports Law expertise, please get in touch with a member of the team.

This article was co-authored by, Alejandro Coghill, Trainee, Property and Infrastructure Disputes.