The Swiss Federal Tribunal on the Burden of Proof in the Context of Public Policy, Decision 4A_304/2013 of 3 March 2014

By Marco Vedovatti[1]

The Swiss Federal Tribunal has recalled that Article 8 of the Swiss Civil Code (SCC) (burden of proof) is not covered by the definition of “public policy” of Article 190.2 letter e PILA. As a consequence, the Parties cannot resort to this latter in order to invoke Article 8 SCC when unhappy with the evaluation of evidence carried out by the Panel.

The proceedings opposed a French football club on the one side, to a UAE-Football Club, a professional football player and FIFA on the other, in a case related to an anticipated termination of the contract without just cause pursuant to Articles 14 and 17 RSTP. The Appellant had been jointly and severally condemned by the DRC to pay 4.500.000 Euros in application of Article 17.2 RSTP. In particular, both the DRC and the CAS (CAS/2013/A/3091, CAS/2013/A/3092, and CAS/2013/A/3093), considered that the French Club had failed to rebut the presumption of Article 17.4 RSTP.

The French club had appealed the award by invoking, among others, a violation of public policy arguing that the burden of proof rule set forth under Article 8 SCC had been allegedly misunderstood and incorrectly applied by the Panel.

The SFT recalled that Swiss case law distinguishes between “procedural public policy” and “material public policy”. As to this latter, the definition given by Swiss case law is not an exhaustive one and it would be difficult and even dangerous to list all the fundamental principles which may potentially be covered by Article 191.2 letter e PILA. On the contrary, it is easier to exclude those principles or law concepts which cannot be considered as being part of the “public policy” to which Article 191.2 letter e PILA refers. Among those elements, the interpretation of a contract and its consequences, as well as the interpretation of by-laws are not do not fall under the concept of “public policy”. According to the SFT, Article 8 SCC on the burden of proof does not belong either to the concept of “public policy” pursuant to Swiss case law.

The SFT also pointed out that, in any event, when a judge forms its opinion by evaluating the evidence at hand, the issue of the burden of proof becomes senseless.

The Appeal was therefore dismissed by the SFT.

Comments by the author: this decision is a clear example of how “substantive public policy”, has to be narrowly construed. At the same time, it confirms that under Swiss law an exhaustive definition of “public policy” does not exist: this implies that “public policy” has to be construed in concreto according to Swiss case law. Indeed, it is worth recalling that in order for an international award rendered in Switzerland to be annulled, it is necessary that the result to which the award leads, is contrary the public policy.

Finally, the decision confirms the Swiss case law on evidence, i.e., that the SFT is (in principle) bound by the evaluation of evidence carried out by a Panel.

Parma FC denied UEFA license by FIGC over unpaid tax

By means of a decision passed on 29 May 2014, the Italian High Court of Justice for Sport (Alta Corte di Giustizia del CONI) has rejected the appeal of the Italian club Parma FC ("Parma") against the decision of the FIGC’s Appeals Committee to deny Parma a UEFA license for the season 2014-2015 over missed tax payments.

The factual background of this case is, basically, that Parma did not comply with the provisions set forth in the UEFA Licensing Manual, released by FIGC in compliance with UEFA’s guidelines.

Specifically, Parma did not respect paragraph 14.7-F04 regarding overdue payables towards tax authorities, a mandatory financial criterion, in case of non-fulfilment of which the competent body is not authorized to grant a club the UEFA License.

On 31 March 2014, peremptory deadline according to UEFA rules, Parma had not remitted an amount of EUR 300.000 in taxes in connection with payments made, during the months of October and November 2013, in favour of ten players transferred on loan.

After the dismissal of the first-instance body, Parma, in its defence before the FIGC’s Appeal Committee, alleged that it had paid the contested sums.

Furthermore, the Italian club affirmed that the disputed payment shall not be considered an anticipation of salaries but a mere subsidy to the players on loan. Therefore, the obligation to pay connected taxes arises only at the end of the sport season and not once the disbursement of salary is done.

Pursuant to the UEFA Licensing Manual, the consequence of a similar default is, as an automatic and immediate effect, the denial of the UEFA license, which should not be considered a sanction, but rather as a non-fulfillment of a licensing criterion. Thus, is not for the Court to evaluate the proportionality of the consequences and the range of the noncompliance contained in the UFEA Licensing Manual.

The High Court of Justice for Sport, in the decision published on its website[1], recognizing that the role of FIGC bodies is to assure the application of UEFA rules, stated that it does not have the competence to evaluate the particular circumstances of a specific case, since it strictly has to apply UEFA’s criteria in order to ensure the respect of the same provisions in the whole UEFA area.

Therefore, since the set deadline was "not arbitrary" and since the late payment was "inexcusable”, as a result, based on UEFA's licensing regulations, the High Court of Justice for Sport did not grant Parma the license to compete in the next Europa League.

Parma already appeal against the decision before the Administrative Court of Lazio, which on 27 June 2014, dismissed the claim for lack of jurisdiction.

Parma’s last chance is to appeal the decision of the High Court of Justice for Sport before CAS even if the FIGC statutes do not mention such right to appeal a federal decision.

The present case is similar to the Rayo Vallecano’s one (CAS 2013/A/3199 Rayo Vallecano v. RFEF) in which the Panel declared its incompetence due to the lack of a specific provision in RFEF regulations, but different from the Giannina case. In the latter case, since the Greek Football Federation granted the license to the club after the Adjudicatory Chamber of UEFA decided to refuse the admission of the Appellant to the UEFA 2013/2014 Europa League, the Panel found its jurisdiction in art. 62.1 of UEFA statute, as Giannina’s counterpart was UEFA.

From this case, it becomes clear that in the modern world of football, it can happen that a club, although having secured a place in a UEFA competition on the pitch, loses its right to participate for reasons extraneous to sport but, nowadays, no less important.

Author: Luca Smacchia

FIFA, ANTI-DOPING AND THE WORLD CUP 2014 : Deco v CBF and FIFA

In an interesting and topical development, FIFA, the Brazilian Football Confederation (CBF) and retired international footballer Anderson Luis De Souza (more commonly known as “Deco”) have recently settled – or more specifically dismissed – an alleged doping violation through a CAS Consent Award.[1]

The case is interesting in the following five respects:

x The athlete’s evidentiary requests; x FIFA’s signature of the consent award despite its jurisdictional objections; x The status of the Superior Tribunal de Justiça Desportiva do Futebol (STJD) in Brazil; x The relevant principles under Swiss law that a CAS arbitrator must consider prior to issuing a consent award;

and x The loss of accreditation for the Rio de Janeiro laboratory and the arrangements that have had to be made

for the 2014 World Cup in light of same.

Brief factual background

On 29 April 2013, Deco was informed of an adverse analytical finding (AAF) for the presence of hydrochlorothiazide (HCTZ - a diuretic) and tamoxifen (an estrogen receptor modulator). The sample had been collected by the (former) WADA-accredited laboratory in Rio de Janeiro, Brazil (the LADETEC).

On 26 September 2013 the STJD suspended Deco for a period of one year for the alleged anti-doping rule violation. Following the dismissal of a national-level appeal in Brazil, on 19 November 2013 Deco filed an appeal with the CAS.

Deco’s essential argument was that there were serious doubts concerning the validity and accuracy of his AAF as a result of: (a) WADA’s revocation of LADETEC’s accreditation in August 2013; (b) WADA’s decision to use the Lausanne WADA-accredited laboratory to conduct testing during the 2014 World Cup; and (c) CAS 2012/A/3334 (Carlos Alberto de Jesus v CBF, STJD and FIFA), where FIFA had made a statement that a departure from the International Standards had caused the athlete’s positive finding for the same two substances identified in Deco’s AAF.

Evidentiary requests

In light of these doubts, Deco made two evidentiary requests: (i) the review of the relevant documentation packages by an expert in anti-doping; and (ii) the performance of an additional analysis on his A- and B- Samples.

The CBF agreed to the evidentiary requests and FIFA noted that in light of LADETEC’s suspension it had asked Prof. Martial Saugy of the WADA-accredited laboratory in Lausanne, Switzerland, to review the documentation packages. FIFA noted that it did not fall within FIFA’s scope to request a retesting of the samples.

Following Prof. Saugy’s conclusion that the identification of tamoxifen had not been proven and that FIFA should be “very careful with this adverse analytical finding made by the Rio laboratory”, the samples were ultimately re-tested in the Lausanne laboratory. On 6 March 2014, FIFA confirmed that the Lausanne laboratory had concluded that no prohibited substances had been detected. The laboratory noted that traces of HCTZ had been detected however these were below the limit of detection set out in the International Standards. The laboratory also noted that the sample had arrived in an unusual container and that the chain of custody could not be guaranteed.

In light of these findings, the parties sought to resolve the dispute by conciliation and indicated their intent to sign an agreement which would be incorporated into a CAS consent award.

The parties reached a settlement agreement on 20 March 2014, such agreement confirming that it had not been established that Deco committed an anti-doping rule violation. The agreement was communicated to the STJD, which indicated that it had no objection to the contents of same.

FIFA and the issue of Jurisdiction

From the outset of the proceedings, FIFA notified the CAS that its communications could not be construed as acceptance of jurisdiction or the admissibility of the appeal.

Deco originally invoked jurisdiction on the basis of Articles 67(5) and (6) which provide for FIFA to appeal any internally final and binding doping decision to the CAS. Deco suggested that mutatis mutandis, and in light of the principle of equal treatment, he was the most interested (and harmed) party in the matter and should also have the right to appeal to CAS. Deco apparently referred to CAS jurisprudence on the matter, however no citations are included in the award.

The Sole Arbitrator was ultimately not required to take a position on this submission in light of the fact that all parties (including FIFA) had eventually agreed that CAS had jurisdiction to at least render a consent award.

The requirements of a CAS consent award

Once the possibility of a consent award had been raised, CAS informed the parties that a Panel or sole arbitrator would nevertheless need to be constituted and appointed to the matter. Deco proposed a sole arbitrator and with the agreement of the other parties Mr. Michele Bernasconi was ultimately appointed. In the decision, the Sole Arbitrator devoted a section to the requirements of a consent award under Swiss law, noting that:

“an arbitration tribunal has authority to issue an award embodying the terms of the parties’ settlement, if the contesting parties agree to the termination of their dispute in this manner. The Panel’s ratification of their settlement and its incorporation into a Consent Award serves the purpose of enabling the enforcement of their agreement.

[…] It is the task of the Sole Arbitrator to verify the bona fide nature of the Settlement Agreement, to ensure that the will of the Parties has not been manipulated by them to commit fraud and to confirm that the terms of the Settlement Agreement are not contrary to public policy principles or mandatory rules of the law applicable to the dispute".

The Sole Arbitrator held that there were no grounds to object or to disapprove of the terms of the Settlement Agreement, and was satisfied that it constituted a bona fide settlement of the dispute.

The status of the STJD

The Sole Arbitrator also confirmed that, consistent with CAS jurisprudence:

“it has been recognized that ‘the STJD is a justice body which is an integral part of the organizational structure of the CBF, with no legal personality of its own’ and that ‘(at least) for international purposes the decisions of the SJTD, although independently reached, must be considered to be the decisions of the CBF. In other words, the CBF is to be considered responsible vis-à-vis FIFA (or other international sports bodies) for the decision adopted by the STJD’. As a result, it has been established by CAS jurisprudence that ‘the STJD has no autonomous legal personality and may not be considered as Respondent on its own in a CAS appeal arbitration concerning one of its rulings; consequently, the procedural position of the STJD before the CAS must be encompassed within that of the CBF’".[2]

The Sole Arbitrator held that in light of these findings (and as confirmed by the STJD itself), the STJD’s non-participation as a party in the proceedings did not affect the validity nor the enforceability of the Settlement Agreement and Consent Award.

This discussion by the Sole Arbitrator demonstrates the importance of identifying the correct parties to an anti-doping appeal – which may not always be straightforward. Parties must ensure that the omission (or inclusion) of a party is properly thought out so as to avoid any issues of jurisdiction, admissibility (in the event that an appeal is not timely filed against the proper party/ies) and the validity and enforceability of the ultimate award.

FIFA World Cup 2014 anti-doping samples

The final interesting element to consider is the question of what FIFA will do with the anti-doping samples collected during the 2014 World Cup.

In this respect, WADA announced the revocation of LADETEC’s accreditation on 27 August 2013[3] which was followed by an announcement that the samples collected at the World Cup would be analysed in the Lausanne laboratory.[4]

As a follow up, FIFA has very recently posted an interesting question and answer section with its Chief Medical Officer Jiri Dvorak and the Director of the Lausanne laboratory Prof. Martial Saugy, with topics such as:

After the revocation of the accreditation of the lab in Rio you had to find another lab abroad to conduct the analysis. Why did you choose Lausanne in Switzerland. Weren’t there other options closer to Brazil?

Dvorak: To manage such an amount of samples we had the possibility of doing it in Montreal, Los Angeles, Cologne or Lausanne. We made the choice of Lausanne because of the high quality standards of the lab, its experience in the development of the biological profile and also because the samples from the FIFA Club World Cup 2012 and 2013 and the Confederations Cup 2013 were already stored there. This allows us to easily compare past results with the latest tests in the establishment of the biological profile.

With such a long trip, how will you ensure that the samples are safe?

Dvorak: We are taking all necessary measures to make sure the samples are safe and get to the laboratory as quick as possible. Up to now, from the out-of-competition controls that have been performed with the different teams around the world, 750 blood and urine samples have been delivered to Lausanne. The average time for delivery was 19:50 hours, the shortest in about 4 hours and the longest from several Latin American countries in less than 33 hours. All samples arrived in satisfactory conditions thanks to the use of special automatic cooling boxes that record the temperature during the whole transportation, which allows the lab to monitor the conditions of the samples.

Saugy: All the necessary measures have been taken to preserve the integrity of the samples in order to get the best biological and analytical information from the collected samples.

How will you manage to get the results of the analyses on time?

Dvorak: The lab in Lausanne is prepared to work 24/7 in order to initiate the analysis immediately upon arrival of the samples and with the objective of providing the results before the following games of the respective teams. This was also one of the reasons for our choice of the lab in Lausanne.

Saugy: We will make every effort to provide FIFA with the results prior to the next game. This is part of the contract and this is clearly our goal.

Isn’t it a huge challenge for the lab to handle so many tests in such a short time?

Saugy: It is indeed a big challenge for us, but we are already used to that kind of major event. Our laboratory is part of the CHUV (University Hospital in Lausanne) and is used to emergency services. And of course, the good relationship we have with FIFA helps a lot. Since the accreditation of the laboratory in Rio was revoked, we prepared carefully all the analyses and organisation with Professor Dvorak in order to get the samples in proper condition and to analyse them as soon as they arrive in the lab. This is a challenge, but the laboratory team is proud to be part of the event.[5]

[1] Award available at http://www.tas-cas.org/d2wfiles/document/7523/5048/0/Consent20Award20Final20339520(201420052026).pdf

[2Citations omitted but references were made to CAS 2007/A/1370 & 1376 and CAS 2011/A/2605.

[3] http://playtrue.wada-ama.org/news/wada-revokes-accreditation-of-rio-de-janeiro-laboratory/

[4] http://sports.yahoo.com/news/swiss-lab-handle-drug-tests-205726032--sow.html

[5] http://www.fifa.com/worldcup/news/y=2014/m=6/news=dvorak-saugy-outline-anti-doping-strategies-2354961.html

Swiss Federal Decisions 4A_362/2013 and 4A_448/2013 – Admission by the Arbitral Tribunal of unlawfully obtained evidence did not violate procedural public policy

By Marco Vedovatti[1]

In two recent decisions both dated 27 March 2014, the Swiss Federal Tribunal (hereafter “SFT”) considered that the admission by the Arbitral Tribunal of unlawfully obtained evidence was not contrary to procedural public policy and that a ban from any football-related activity did not violate substantive public policy since justified by the fight against corruption (match-fixing) in sport[2].

Factual background

Both decisions refer to a match-fixing scandal between the Ukrainian football clubs FC Metalist and FC Karpaty and are related to a match played in 2008 during which a player of FC Karpaty scored an own-goal, allegedly based on match-manipulation. After having carried out investigations, on the 9th of August 2010 the Control and Disciplinary Commission of the Ukrainian Football Federation had issued a decision imposing fines on FC Medalist, players and employees of the Club, as well as a life-ban from any football-related activity on the player and on the sports director of FC Metalist.

Subsequently, the CAS had dismissed the appeal filed the player and the sports director against the Commission’s decision, with an award rendered on the 2nd of August 2013. The Arbitral Tribunal had based its decision on a video secretly recorded by the owner of FC Karpaty in which the player had admitted that the team had accepted money by the FC Metalist for losing the match.

The player and the sports directors filed an appeal before the Swiss Federal Tribunal invoking an alleged violation of procedural public policy by CAS (art. 190.2 letter e PILA) for admitting unlawfully obtained evidence and for applying a standard of proof (“to the comfortable satisfaction of the Panel”) which was allegedly contrary to public policy because at odds with Article 6.2 of the EHRC. In addition, according to the appellants, the ban violated their right to personal freedom and was therefore contrary to substantive public policy.

Decision

The SFT first recalled that a decision violates public policy when it is contrary to fundamental and broadly accepted values which, from a Swiss perspective, represent the basis of any legal system. Public policy can be divided into procedural public policy and substantive public policy.

Fall within the substantive public policy contractual fidelity (pacta sunt servanda), the prohibition of abuse of right, good faith, the prohibition of expropriation without compensation, the prohibition of discrimination, the protection of incapables and the prohibition of “excessive commitment” when it represents a manifestly serious violation of personality rights. The SFT pointed out that there is no exhaustive definition of public policy and that offering and accepting bribes can notably fall within the concept of substantive public policy. Nevertheless, for a decision to be annulled, it is necessary that it is contrary to public policy not only in its motivation, but also in its result.

As to procedural public policy, a decision violates public policy when it is contrary to fundamental and general procedural principles in a way that the decision is irreconcilable with values accepted in a State under the rule of law. Procedural public policy is subsidiary to the other grounds listed under Article 190.2 letters a-d PILA.

The inadmissibility of unlawfully obtained evidence is a general principle admitted under Swiss law. Nevertheless, Swiss law recognizes that under some exceptional circumstances the interest of finding out the truth might justify the admission of illegal evidence. In other words, the tribunal is entitled to carry out a balance of the interests at stake in order to determine whether unlawfully obtained evidence should be admitted. The SFT also recalled, that a wrong or even arbitrary application of a procedural provision does not constitutes, by itself, a violation of public policy.

CAS had carried out an analysis of the individual interests at stake and not simply admitted all evidence. In addition, the appellants had been given the opportunity during the arbitral proceeding to contest the authenticity and the admissibility of the video, but waited more than two years to contest its admissibility. In addition, the argument of the player according to which having a “fair football” was only in the interest of the federation and does not represent a public interest was not sufficient to successfully invoke a violation of public policy.

Concerning the standard of proof applied the by panel (“to its comfortable satisfaction”) the SFT recalled that principles of criminal law such as the one of in dubio pro reo do not apply to federative and arbitral proceedings which are private in nature.

Finally, regarding the alleged violation of personality rights, in spite of recognizing that a ban can potentially violate the right to personal freedom, the SFT recalled that only violations which represent an obvious and serious violation of the personality rights might be contrary to public policy. In the case at stake, the sanction imposed on the player and on the sports director was justified by the fight against corruption in sport and was therefore not contrary to substantive public policy.

For all the above mentioned reasons, the SFT dismissed the appeal.

[1]Swiss qualified attorney-at-law, LLM in International Sports Law (2012), PhD candidate (University of Geneva, Switzerland), Associate at the International Arbitration Department and Sports Law Group of Cuatrecasas Gonçalves Pereira (Madrid office).

[2]Both decisions were issued in German.

Indemnity for non Extension of fixed-term Labor Contracts

By Marco Vedovatti[1]

Abstract

In a decision dated 23 March 2014, the Spanish Supreme Court clarified that the indemnity for non extension of a fixed-term labor contract according to the general provisions on labor contracts is also due in the field of professional sport, although not expressly provided so by the special legislation applicable in the field of professional sport.

The dispute was initiated against the Professional Cyclists Association by the Professional Cycling Teams Association, seeking for judicial declaration that in the event of non extension of a fixed-term labor contract of professional cyclists no indemnity is due to the athlete.

It must be clarified that under Spanish law, labor contracts in the field of professional sport are regulated under the RD 1006/1985[2] (hereafter “RD”), which is considered a lex specialis (“relación laboral especial”) to the general provisions set forth by the general legislation on labor contracts (hereafter “ET”[3]). The RD does not foresee any obligation for the employer to pay to a professional athlete an indemnity in the event of non extension of a fixed-term labor contract, contrary to the ET, which imposes the obligation to pay a compensation equivalent to twelve wage days for every worked year[4]. It must also be added, that under the RD only fixed-term contracts are allowed, with the exclusion of permanent employment contracts[5].

In its decision, the Spanish Supreme Court considered that although the RD does not expressly provide for any obligation to pay compensation when a fixed-term contract is not extended at the discretion of the team, an indemnity is due in accordance with the general provisions of the ET.

According to its decision, the main reason for the Spanish Supreme Court seems to be the legal prohibition of permanent contracts in the field of professional sport, which entails that professional athletes are less protected than other categories of workers. In this sense, the obligation to pay a termination or non-extension indemnity represents an incentive for contractual stability in the world of professional sport and is justified by the core constitutional principle of equality.

Comment

The obligation for the employer to pay an indemnity also in the event of non-extension of a fixed-term contract is not an idea which is common to all legal systems. In particular, it represents a concept which is inexistent under Swiss law. In this sense, the choice of law applicable to the contract is of paramount importance in the event of an ordinary procedure in front of the Court of Arbitration for Sport, given that Swiss law shall be applicable in the absence of choice by the parties (R45 of the CAS Code). In other words, the choice of the applicable when signing a labor contract might represent on the one hand an important standard of protection for the athlete and on the other hand a risk of additional costs for the team to care about.

[1] Swiss qualified attorney-at-law, LLM in International Sports Law (2012), PhD candidate (University of Geneva, Switzerland), Associate at the international arbitration department and sports law group of Cuatrecasas Gonçalves Pereira (Madrid office). The present contribution represents the personal opinion of the author and not of Cuatrecasas Gonçalves Pereira.

[2]Real Decreto 1006/1985, de 26 de junio, por el que se regula la relación laboral especial de los deportistas profesionales.

[3] Estatuto de trabajadores.

[4] Art. 49.1 c ET.

[5] Art. 6 RD 1006/1985.

FIFA Disciplinary Committee Decision passed in March 2014

Argentinean and Uruguayan clubs sanctioned by FIFA for bridge transfers

By Luca Smacchia, LL.M., Trainee at Studio Legale Grassani - Urbinati e Associati

In March 2014, the FIFA Disciplinary Committee sanctioned the Uruguayan club Institución Atlética Sud América and four Argentinean clubs, IA Central Córdoba, CA Independiente, Racing Club and CA Rosario Central, for violations of the FIFA Regulations on the Status and Transfer of Players (FIFA RSTP).

In particular, further to investigations carried out via the FIFA Transfer Matching System (TMS) by the TMS Integrity and Compliance department, FIFA imposed sanctions for so-called “bridge-transfers”.

Bridge transfers constitute a practice, by which third clubs are interposed in transfers of a player between two clubs. However, the respective players are never fielded with these third clubs. In other words, the role of the "bridge club" in such a transfer operation is "fictitious".

The clubs involved use such transfers for various economic reasons. In particular, through bridge transfers, clubs may aim to decrease training compensation or solidarity mechanism payments, to elude the new club’s liability in case of breach of contract without just cause (provided by art. 17 FIFA RSTP), and it also represents a way to reduce taxes or avoid the operability of sell-on fees.

Six of the transfers investigated by FIFA were considered in breach of the pertinent regulations. In all the cases, the respective players were transferred for extremely short periods to Institución Atlética Sud América before being transferred onwards to the Argentinean clubs.

FIFA concluded that in said operations, the clubs acted in bad faith and misused TMS for illicit purposes. In particular, the clubs were found to be in breach of art. 3 par. 1, art. 4 par. 2, art. 8.3 par. 3 and art. 9.1 par. 2 of Annexe 3 of the FIFA RSTP.

For this reason, Institución Atlética Sud América, due to its central role as the “bridge club” in these operations, was sanctioned with a transfer ban of two complete transfer period as well as with a fine of CHF 40.000. The Argentinean clubs were sanctioned each with a fine and a warning.

In the past, in cases such as MTK Budapest v. FC Internazionale Milano (CAS 2009/A/1757) and FIFA DRC Chelsea FC v. Livorno & Juventus (CAS 2013/A/3365 & 3366), the international football judicial bodies already faced the “bridge transfers” practice targeted to circumvent FIFA Regulations, but this appears to be the first time in which investigations have lead to disciplinary sanctions.

One can assume that this harsh stance of FIFA towards bridge transfers may deter clubs from being involved in such operations and therefore lead to a stricter adherence to the FIFA RSTP. On the other hand, it remains to be seen whether the recent banning of Third Party Ownership (see, in this respect, the FIFA circular n. 1464 of 22 December 2014) may have the side effect that "third parties", such as agents and companies, which can no longer conclude agreements related to the economic rights in players, may try to continue their business by investing money in "bridge clubs".

Luca Smacchia

Possible Grounds for Appeal against a CAS Award referring a Matter back to FIFA and the Consequences of a Withdrawal of one Party[1]

The Decision 4A_6/2014 of 28 August 2014 of the Swiss Federal Tribunal, published as BGE 140 III 520

By Dr. Jan Kleiner, Attorney-at-Law, Bär & Karrer AG, Zurich, Switzerland

1) Procedural History

By means of a decision of the FIFA Dispute Resolution Chamber (DRC) dated 15 June 2011, a professional football player was sentenced to pay an amount of GBP 400’000.- to his former club (A) for a breach of contract under art. 17 of the FIFA Regulations on the Status and Transfer of Players (FIFA RSTP). The player’s new club (B) was held jointly and severally liable for the payment of such amount. The player lodged an appeal in front of the Court of Arbitration for Sport (CAS) against the DRC decision, with club A as a counterparty. Club B also lodged an appeal against said decision, equally with club A as a counterparty. However, the CAS proceedings related to the appeal of the player were subsequently terminated, since the player failed to pay the advance of costs in due time. Eventually, therefore, only the appeal lodged by the club B, opposing him to club A, was pending in front of CAS.

In the CAS proceedings, club A expressed the view that CAS did not have any jurisdiction at all to render a decision on this appeal, since the appeal of the player had been withdrawn. If at all, CAS would only have jurisdiction to decide about the amount of compensation, but not on the underlying issue of the breach of contract by the player.

However, CAS upheld the appeal, annulled the DRC decision and referred the entire matter back to FIFA. CAS considered that the entire FIFA proceedings were null and void because of a violation of club B’s right to be heard. According to CAS, the importance of such right lead to the nullity of the DRC proceedings for all parties, regardless of whether or not the player has appealed.

Club A appealed against the CAS award in front of the Swiss Federal Tribunal (SFT) and held that CAS did not have jurisdiction to annul the FIFA DRC decision.

2) Considerations of the Swiss Federal Tribunal

1. Legal qualification of the CAS Award under Appeal

As a first step, the SFT had to consider whether the decision of CAS to refer the matter back to FIFA constitutes a “final decision” (“sentence finale”) as per art. 190 para. 2 of the Swiss Private International Law Act (PILA) or a “preliminary decision” (“décision incidente”) pursuant to art. 190 para. 3 PILA. This question substantially influences the possible grounds for appeal[2].

In this respect, the SFT expressed the view that other than in commercial arbitration, where usually two parties are opposed to each other in a “one-instance” contractual dispute, in sports arbitration, CAS acts as a kind of “second instance” for appeals against decisions taken by a sports federation[3].

The SFT drew an analogy between this constellation and a “normal” system of two instances, as existing in Swiss Procedural Law: Under Swiss Procedural Law, a final decision must not only terminate the proceedings in front of the appeal instance, but the proceedings as a whole, i.e. also the ones initiated in front of the first instance[4].

Accordingly, the SFT held that a decision of CAS to refer a matter back to FIFA does not terminate the underlying matter as a whole (i.e. also the proceedings initiated in front of the sports federation), as it would be required for there to be a final decision. Rather, such decision refers the matter back to the previous “instance” for another decision to be taken, against which another appeal at CAS is possible. Therefore, the SFT decided that the CAS award in question was not final, because it did not entirely terminate the respective proceedings, and that it thus constituted a preliminary decision[5].

In consequence, the CAS award could be appealed against only on the grounds that the Arbitral Tribunal was unduly appointed or constituted[6] or that the Arbitral Tribunal erroneously declared itself competent or incompetent[7]. All further grounds for appeal under art. 190 PILA can, in principle, not be invoked[8].

2. Considerations as to the Substance of the Appeal

Club A argued that, when passing its award, CAS exceeded the limits of its jurisdiction. In particular, club A held that although the player was not a party to the appeal proceedings in front of CAS, the latter had annulled also the rulings of the DRC decision which concerned the dispute between club A and the player. Club A was of the view that the withdrawal of the player’s appeal annulled the arbitration clause existing between club A and the player and that CAS would thus no longer have have jurisdiction in this respect.

In consequence, the SFT had to examine the jurisdiction of CAS against the fact that the player’s appeal had been withdrawn and terminated.

In this respect, the SFT considered that the initial claim of club A under art. 17 FIFA RSTP (i) against club B and (ii) against the player were, procedurally, to be regarded as two separate claims filed against two separate Respondents, however, that the two Respondents were linked under a so-called joinder of proceedings (“consorité matérielle simple passive”)[9].

As such, although adjudicated in the same proceedings, these two claims technically remain independent of each other, and they can under Swiss law even be adjudicated differently, also in the framework of sport appeal proceedings[10]. Therefore, the SFT considered that irrespective of the withdrawal of the player’s appeal, the CAS still had jurisdiction to adjudicate in full on the appeal lodged by club B against the DRC decision, including on the question of, e.g., the player’s breach of contract, even if this would be “incompatible” with the decision of the DRC as far as the player, as a party, is concerned[11].

On the other hand, the SFT was of the view that because the player’s appeal was withdrawn, the “first instance decision” of the DRC had, as far as the player is concerned, become “final and binding” and that consequently, CAS did not have jurisdiction to annul this part of the DRC decision[12].

In consequence, the SFT established that CAS had no jurisdiction to annul the decision of the DRC insofar as this decision concerned the dispute opposing club A and the player, and the appeal was thus partially upheld.

3) Conclusions

From the decision of the SFT, the following conclusions can be drawn: A CAS award referring a case back to FIFA is qualified as a preliminary decision, so that the possible grounds for an appeal with the SFT are limited. Furthermore, on the one hand, based on this SFT decision, the parts of a FIFA DRC decision directly affecting one party, which subsequently does not appeal against such decision, become “binding”[13] and can no longer be changed by CAS for this party. On the other hand, the SFT states that CAS can nevertheless take another decision as far as the other parties are concerned, even if such decision would contradict the “binding” parts of the previous FIFA DRC decision.

In practice, this may lead to a rather odd consequence, notably that FIFA might have to enforce both a FIFA DRC decision (that has become “binding” for one party) as well as a possibly contradicting CAS appeals decision in the same matter (rendered upon appeal by the other parties). It remains to be seen how such a riddle would be resolved in practice.

[1] This article reflects the personal views of the author only.

[2] Final decisions can be appealed against based on all the grounds for appeal pursuant to art. 190 para. 2 PILA, i.e. (a) appointment/composition of the Arbitral Tribunal, (b) competence/incompetence of the Arbitral Tribunal, (c) infra petita or ultra petita

ruling, (d) principle of equal treatment or right to be heard and (e) public policy (ordre public). Preliminary decisions can, according to art. 190 para. 3 PILA, only be appealed against for the reasons pursuant to art. 190 para. 2 lit. a and b PILA.

[3] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 2.2.1.

[4] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 2.2.1.

[5] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 2.2.2.

[6] Art. 190 para. 2 lit. a PILA.

[7] Art. 190 para. 2 lit. b PILA.

[8] For the sake of preciseness, it must be note that such grounds can be invoked “within” the grounds under art. 190 para. 2 lit. a / b PILA, i.e. to argue for a lack of competence or for a wrongful appointment/composition of the Tribunal; SFT, decision 4A_6/2014 (BGE 140 III 520), para. 2.2.3.

[9] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 3.2.2.

[10] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 3.2.2.

[11] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 3.2.2.

[12] SFT, decision 4A_6/2014 (BGE 140 III 520), para. 3.2.2.

[13] In this respect, one should add that it certainly appears quite peculiar to declare, as the SFT did, a FIFA DRC decision as “chose jugée”, since this term describes the binding legal force of decisions of State Courts, while it does not apply to decisions of a private association.

Dismissal of a Football Player due to HIV-Infection

Dr. Jan Kleiner, Attorney at Law, Bär & Karrer AG, Zurich, Switzerland; President of the ISDE Sports Law Alumni[1]

This article summarizes a decision of the High Court of the Canton of Zurich, which had been taken on 8 April 2013[2], yet surfaced to public discussion only recently[3].

In its decision, the Court had to examine the legal validity of a unilateral termination of an employment contract by a football club, related to an HIV infection of a professional football player.

The following paragraphs will first give a brief overview on the legal framework of the termination of an employment contract under Swiss law. Subsequently, the factual circumstances of the case will be outlined, before then presenting the merits of the decision of the High Court.

1. Swiss Employment Law

Under Swiss law, in principle, employment contracts that are concluded for an undetermined period can be terminated by either party without the need for any particular reasons[4], provided that the applicable notice periods are complied with[5] (and provided that a termination is not “abusive”[6] and not issued “at an undue time”[7]).

However, as commonly known and as required by applicable sports regulations, the contracts of professional football players are generally concluded as fix-term contracts. Under Swiss law, such contracts can only be prematurely terminated if there is good cause[8]. Good cause exists in any circumstance under which it can no longer be reasonably expected for a party to continue the contractual relationship[9]. Under both the jurisprudence of the Swiss Federal Tribunal as well as in CAS case law, the existence of good cause is admitted only restrictively[10].

If an employer dismisses an employee with immediate effect without good cause, the employment relationship is nevertheless terminated, but the employee is, as a general rule, entitled to damages in the amount he would have earned had the employment relationship ended after the required notice period or on expiry of its agreed duration[11]. In addition, the competent Court may order the employer to pay the employee an additional “penalty” amount, which can be determined at the court's discretion, taking due account of all circumstances. Such a penalty payment can amount to the equivalent of up to six months' salary[12].

2. Factual Circumstances of the Case at Hand

In May 2002, the player and the club concluded a fix-term employment contract with a duration of 3 years. One month later, the player was informed that in the course of the medical examination, an HIV-infection had been discovered. The president and the coach of the club were equally informed about the HIV-infection.

On 5 July 2002, the medical consultant of the player confirmed that from a medical point of view, the player was in excellent shape and perfectly able to play football. However, on 23 July 2002, the club terminated the employment contract with immediate effect for good cause.

Despite initial attempts to amicable resolve this matter, the parties eventually ended up in front of the competent labour Court of Zurich and, subsequently, in front of the High Court of the Canton of Zurich.

3. The Parties’ Submissions

The issue at the centre of this dispute was whether or not the termination without notice of the player’s employment contract was based on good cause.

While the player held that the prerequisites for a unilateral termination without notice were not met, the club mainly argued that due to the particular danger of infection existing in professional football, and due to the fact

that the player refused to declare his HIV infection to his teammates and other players, the club could not take the responsibility of letting the player participate in its trainings and matches. The club also argued that the player should have informed the club in advance about his HIV infection. The club stated that if – such as in professional football – there is a particular risk of infection at the workplace, the employee is obliged to provide such information by himself, and without being specifically asked to do so prior to signing his employment contract. Since no information had been disclosed by the player about his HIV infection, the club considered that it was entitled to unilaterally terminate the employment contract based on good cause and/or based on an error or deceit by the player.

4. The Considerations of the High Court of Zurich

a) As to the Alleged Obligation of the Player to provide Information about his HIV Infection

With regard to the question whether the player should have by himself informed the club about his HIV infection, the Court first recalled two principles of Swiss law. On the one hand, the principle of good faith demands that an employee must inform an employer about any circumstance, which would render the employee incapable of fulfilling his duties under the employment contract. On the other hand, the Court considered that an HIV-infection constituted a personal characteristic/attribute of the employee, about which an employer is in principle not allowed to gather data, i.e. to require information from his employees[13].

However, the Court then referred to legal doctrine, according to which an employer is (exceptionally) entitled to gather information related to the HIV status of an employee if, at the specific workplace, there is an increased risk of infection for third persons. From this, the Court concluded that if the employer is entitled to gather information about an employee’s HIV status, the employee does not have to inform about an HIV-infection by himself. Rather, the employee may leave it to the employer to request an HIV test, in case the employer deems this necessary. As long as there are no visible symptoms, the employee must only inform about his HIV-infection if it is recognizable to him that he is not suited for the respective work due to his infection[14].

As mentioned, at the time the parties concluded the employment contract, the player was physically fit to play football. Therefore, according to the Court, there was no obligation for the player to inform the employer about his HIV-infection (of which, as the player stated, he in any event had no knowledge).

In consequence, the Court considered that the fact that the player did not inform the club about his HIV-infection did not constitute a good cause, which could have by itself justified a termination of the employment contract with immediate effect[15].

b) The Risk of Infection as a Reason for Termination

The club also argued that it had good cause to terminate the employment relationship because it could not be reasonably expected to fulfill the entire contractual relationship, given the constant risk of infection of other players, in particular because the player refused to communicate his HIV infection to his teammates.

In this respect, the first instance had concluded that the club should have, prior to terminating the contract, issued a warning to the player that if he did not communicate his HIV infection to his teammates, the employment contract would be terminated.

The High Court first considered that an HIV infection, by itself, does not make it unacceptable for a club to adhere to an employment relationship. Only if there are no appropriate measures, with which the risk of infection could be reasonably mitigated, a continuation of the employment contract could no longer be expected. However, the club had apparently stated itself that indeed there would have been measures to reduce this risk, so that in principle, it would have been up to the club to take those measures. Such a measure would notably have consisted of informing the teammates of the player about the player’s infection.

In this respect, the club argued that an HIV infection belonged to the so-called “sphere of intimacy” of a person, so that it was exclusively up to the discretion of the player whether or not to communicate his infection to his

teammates. The club held that if it had pressured the player (by issuing a warning) to provide such information, this would have amounted to a possible coercion or blackmail.

The Court considered that indeed, the club would not have been entitled to inform, by itself, the player’s teammates about the player’s infection without the valid consent of the player, and that only if the player had informed his teammates accordingly, the club could have taken the necessary precautions to prevent a possible spread of the infection[16]. However, the Court was of the view that the refusal of the player to disclose his HIV infection, given the fact that this information belongs to the sphere of intimacy of the player, did not constitute a grave violation of the player’s contractual obligations, which would by itself have entitled the club to immediately terminate the employment relationship[17].

Rather, the Court held that the club should have informed the player about the reasons why such a communication is important, as well as about the consequences if such information is not given. Therefore, the Court concluded that a termination of the employment contract would only have been admissible after a prior warning to the player and if, despite such a warning and information, the player would still have prevented the club from taking the necessary precautions (notably by refusing to inform the other members of the team about the HIV infection)[18].

c) Conclusion

The Court concluded that the termination of the employment contract with immediate effect by the club was not based on good cause. The termination was, in accordance with Swiss law, still valid, but the player was in principle entitled to receive the salary he would have earned, had the contract not been prematurely terminated.

In this respect, the Court had to make several (hypothetical) calculations, notably as regards possible future bonus payments, future salary increases of the player, it had to reduce the compensation due based on (possible) income of the player from other sources, and it had to consider the amount of the penalty payment due to the player under Swiss employment law[19].

Overall, the Court awarded the player an amount of approx. CHF 300’000.-

Finally, it should be noted that had the Club submitted a warning to the player and had the player accepted to disclose his HIV infection to his teammates, the club would not have had any good cause to terminate the employment contract prematurely.

[1] The Article reflects the personal views of the author only. This Article will be published in Football Legal #3, available under www.football-legal.com.

[2] High Court of the Canton of Zurich, decision dated 8 April 2013 – LA110040-0/U.

[3] See the excellent presentation of this case by Netzle, Stephan, Fristlose Entlassung eines Fussballspielers wegen HIV-Infektion, in: Zeitschrift für Sport und Recht (SpuRt), 1/2015, at p. 26-29.

[4] Art. 335 para. 1 of the Swiss Code of Obligations („CO“).

[5] See Art. 335a to 335c CO.

[6] See Art. 336 CO.

[7] See Art. 336c OR.

[8] Art. 337 para. 1 CO.

[9] Art. 337 para. 2 CO; cf. also CAS 2008/A/1517, at para 56; CAS 2006/A/1180, at para. 21, 25. On the issue of termination of a professional football player’s employment contract, see also Kleiner, Jan: Der Spielervertrag im Berufsfussball, Zurich 2013, at p. 721 et seqq.

[10] Swiss Federal Tribunal, decision 130 III 213 et seqq., para. 3.1 at p. 220; CAS 2008/A/1517, at para. 56; CAS 2006/A/1100, at para. 11.

[11] Art. 337c para. 1 CO.

[12] Art. 337c para. 3 CO.

[13] Decision LA110040-0/U, at para. 4.2.3.

[14] Decision LA110040-0/U, at para. 4.2.4-4.2.5.

[15] Decision LA110040-0/U, at para. 4.2.6.

[16] Decision LA110040-0/U, at para. 4.4.2.

[17] Decision LA110040-0/U, at para. 4.4.4.

[18] Decision LA110040-0/U, at para. 4.4.5.

[19] Decision LA110040-0/U, at para. 5.

TRANSFERRING A PLAYER FROM A SPANISH CLUB TO A FOREIGN CLUB – LIABILITY TO PAY THE PLAYER 15% OF THE TRANSFER FEE

By Marco Vedovatti[1]

Abstract

In a decision dated January 20, 2015[2], the Spanish Supreme Court had to decide whether a collective agreement of the Spanish football league, obliging the acquiring club to pay the player an indemnity of 15% of the transfer fee, was or not applicable to a foreign club. The decision unifies the previous and contradictory case law on the matter.

FACTS

The facts underpinning the decision are simple:

On August 3, 2009, the player entered into a labor contract with Getafe Football Club, valid until June 13, 2013. On June 14, 2011, Getafe Club de Fútbol transferred the player to the Ukrainian football club Dnipro. The agreed transfer fee amounted to a net sum of €4,875,000. No provision was made under the transfer contract or the labor contract between the player and his former club as to who had to compensate the player under Spanish law, corresponding to 15% of the transfer fee (i.e., €731,250).

Both the first-instance court (Juzgado de lo Social) and the second-instance court (Sala de lo Social del Tribunal de Justicia) dismissed the claim filed by Getafe Club de Fútbol, ordering the latter to pay the player €731,250.

Getafe Club de Fútbol appealed the decision before the Spanish Supreme Court alleging that under clause 17.3 of the Collective Agreement of the Spanish Football League, the acquiring club must pay the 15% indemnity.

The dispute was based on the following applicable legal provisions:

x Article 13 a) of the Royal Decree 1006/1985, regulating the special labor relationship of professional athletes:

“[Termination of the contract] By mutual agreement. In the event that, by mutual agreement, the athlete is definitively transferred to another club or sports entity, the economic contractual conditions agreed upon by the Parties shall be applicable. In the event that there is no agreement, the indemnity for the Player shall not be less than 15% (gross) of the stipulated sum.”

x Clause 17.3 of the Collective Agreement of the Spanish Football League:

“The football player shall be entitled to a minimum of 15% of the transfer fee, which shall in any event be paid by the Club/Sports Company acquiring the rights”.

Since nothing had been agreed by the parties involved, the issue submitted to the Spanish Supreme Court was therefore whether clause 17.3 of the Collective Agreement is applicable to a transfer between Spanish and foreign clubs.

MERITS

The Spanish Supreme Court decided that clause 17.3 of the Collective Agreement is not applicable to an international transfer for the following reasons:

x the Collective Agreement is limited to football players employed by clubs that are registered in the Spanish professional football league;

x the territorial scope of application is limited to Spain; x the transaction underpinning clause 17.3 of the Collective Agreement is a tripartite contract between the

selling club, the acquiring club and the player. Spanish case law expressly states that collective agreements are not applicable outside Spain, since foreign parties cannot participate in the negotiations. Therefore, for the Collective Agreement to be applicable, all the parties to the contract have to fall under the scope of application of the Collective Agreement;

x consequently, the Ukrainian club is not bound by the Collective Agreement and is not obliged to pay 15% of the transfer fees;

x if there is no collective agreement, the club obliged to pay the 15% to the player would be the selling club; the outcome must logically be the same when a collective agreement does exist, but it is not applicable to the acquiring club; and

x Spanish clubs are supposed to know Spanish legislation: if they do not negotiate with the foreign club for it to pay the 15% indemnity, it can be concluded that the indemnity is already included in the net amount of the transfer fee received by the Spanish selling club.

The Spanish Supreme Court therefore dismissed the appealed decision.

[1] Swiss and Spanish qualified attorney-at-law, LLM in International Sports Law (2012), associate of Cuatrecasas, Gonçalves Pereira’s international arbitration department and member of the sports law group (Madrid office). This article represents the author’s personal opinion and not necessarily that of Cuatrecasas, Gonçalves Pereira.

[2] Decision of the Spanish Supreme Court (Tribunal Supremo, Sala de lo Social), January 20, 2015, No. 500/2014.

The Jurisdiction of the FIFA Dispute Resolution Chamber vis-à-vis the Jurisdiction of National Dispute Resolution Bodies

Dr. Jan Kleiner, Attorney-at-Law, Bär & Karrer AG, Zürich

This article will be published in the Book "Direito de Trabalho e Desporto Vol. II", edited by Dr. Leonardo Andreotti

1 Outset and Introduction

As commonly known, FIFA has established an elaborate dispute resolution mechanism to deal with an array of disputes that occur in professional football[1].

FIFA has jurisdiction to hear various kinds of disputes. Among these are disputes between clubs and players in relation to the maintenance of contractual stability[2] in connection with an ITC request[3], employment-related disputes of an international dimension[4], disputes relating to training compensation[5] and the solidarity mechanism[6] between clubs belonging to different associations[7], disputes relating to the solidarity mechanism between clubs belonging to the same association provided that the transfer of a player at the basis of the dispute occurs between clubs belonging to different associations[8] and, finally, disputes between clubs belonging to different associations that do not fall within the aforementioned types of cases[9].

This article shall, on the one hand, give a brief overview on the jurisdiction of the FIFA Players’ Status Committee and of the FIFA Dispute Resolution Chamber. In particular, the article will examine the jurisdiction of the FIFA Dispute Resolution Chamber, notably in cases where a party argues that it is not the FIFA Dispute Resolution Chamber, but a national dispute resolution body that has jurisdiction to hear a case. In this context, the most relevant aspects of CAS case law shall be presented, so as to provide guidelines to assess questions related to the jurisdiction of the FIFA DRC and, respectively, of national dispute resolution bodies.

2 Overview: The Jurisdiction of the FIFA Players’ Status Committee and of the FIFA Dispute Resolution Chamber in general

Between the FIFA Players’ Status Committee and the FIFA Dispute Resolution Chamber, the jurisdiction is separated as follows:

The FIFA Players’ Status Committee (or its Single Judge) has jurisdiction to hear disputes between a club or an association and a coach[10] or transfer disputes between clubs that belong to different associations[11]. The FIFA Players’ Status Committee (FIFA PSC) adjudicates in the presence of at least three members, unless a case is of such a nature that it may be settled by a Single Judge. In cases that are urgent or raise no difficult factual or legal issues, and for decisions on the provisional registration of a player, the Chairman or a person appointed by him (who must be a member of the Players’ Status Committee) may adjudicate as a Single Judge[12]. In practice, the majority of cases are heard by a Single Judge of the FIFA Players’ Status Committee.

The FIFA Dispute Resolution Chamber, on the other hand, is competent to hear employment-related disputes between clubs and players, with the exception of disputes regarding the issuance of an ITC, as well as disputes related to the payment of the Solidarity Contribution and Training Compensation[13]. The DRC consists of equal numbers of club and player representatives[14]. It adjudicates in the presence of at least three members, including the Chairman or the Deputy Chairman, unless the case is of a nature that may be settled by a DRC Single Judge[15]. According to the applicable Regulations, the following cases may be heard by a DRC Single Judge:

x all disputes up to a litigious value of CHF 100,000; x disputes relating to training compensation without complex factual or legal issues, or in which the DRC

already has a clear, established jurisprudence; x disputes relating to solidarity contribution without complex factual or legal issues, or in which the DRC

already has a clear, established jurisprudence.

In this context, one must note that cases concerning fundamental issues (usually defined on a case-by-case basis) must be referred to the DRC in corpore, even if the aforementioned conditions for a submission to the Single Judge would be met.

Finally, if the separation of jurisdiction between the FIFA Player’s Status Committee and the FIFA Dispute Resolution Chamber is uncertain, the Chairman of the FIFA Players’ Status Committee decides which body has jurisdiction[16].

3The Jurisdiction of the FIFA Dispute Resolution Chamber in international employment-related Disputes in particular[17]

3.1 General Remarks

As mentioned, the FIFA DRC, inter alia, has jurisdiction to hear employment-related disputes that have an international dimension. The FIFA DRC examines its jurisdiction ex officio[18].

3.2 Employment-related Nature

The first prerequisite for the FIFA DRC to have jurisdiction under art. 22 lit. a) and b) RSTP is that the dispute to hear is employment-related. This prerequisite is fulfilled whenever the claims lodged by a player against a club, or vice-versa, have their legal basis in an employment contract between the parties[19].

This applies not only to financial disputes, but also, for instance, to disciplinary sanctions imposed on a player for failing to meet his duties under his employment contract[20]. Likewise, it must be noted that even if a specific national law qualifies a contract differently, e.g. as a service contract, such contracts are nevertheless considered as employment contracts in the meaning of art. 13-17 and 22 of the RSTP, which fall under the jurisdiction of the FIFA DRC, provided that they aim at “having a certain player playing for a certain club”[21].

In addition, most employment contracts on a world-wide level, either directly or indirectly, incorporate regulations of a national association as well as the most pertinent FIFA Regulations, such as the RSTP. In case such regulations are incorporated into an employment contract, and claims are then made by one party against the other on the basis of these regulations (as a part of the employment contract), also such claims qualify as “employment-related” in the sense of art. 22 lit. a) and b) RSTP[22]. Likewise, disputes related to the question whether an employment contract has been concluded at all are considered as employment-related by the FIFA DRC[23].

In practice, the most frequent employment-related disputes submitted to FIFA relate to outstanding salary payments and alleged breaches of contract and, related thereto, claims for compensation based on art. 17 RSTP.

On the other hand, as described further above, the FIFA DRC does not have jurisdiction to adjudicate, e.g., on transfer agreements[24]. The FIFA DRC also has no jurisdiction to rule on contractual agreements with third parties, even if such agreements may have an impact on the contractual relationship between a football player and his club[25]. Finally, it can occur in practice that one party claims that a contract submitted as evidence before the FIFA DRC is forged. In this respect, the FIFA DRC regularly emphasises that it has no jurisdiction to rule on any criminal law aspects such an alleged forgery may entail[26]. However, in the course of its appreciation of the evidence submitted, the FIFA DRC de facto of course has to decide whether it considers a document to be genuine or not.

3.3 International Dimension

The FIFA DRC interprets the prerequisite of “internationality” in a broad manner. For an employment-related dispute to be international, it suffices that a player is of a different nationality than the one of the country in which his club is domiciled[27].

Furthermore, it must be noted that pursuant to art. 22 lit. a) RSTP, also a dispute between a player and a club of the same “nationality” can fall under the jurisdiction of the FIFA DRC, provided that the dispute is related to an ITC request and that there has been a claim from an interested party in relation to this ITC request. This provisions

aims at the constellation where a player of the same nationality as his club breaches his contract, in order to make a transfer to another club in a different country. To grant FIFA jurisdiction also in such circumstances makes sure that also the third country club can be involved in the same proceedings in front of the FIFA DRC[28].

3.4 National Dispute Resolution Bodies in particular

According to art. 22 lit. b) RSTP, the FIFA DRC does not have jurisdiction to rule on an international employment-related dispute if “an independent arbitration tribunal guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs has been established at national level within the framework of the association and/or a collective bargaining agreement.”

In practice, if a party wants to avoid having to respond to a claim lodged against it in front of the FIFA DRC, quite often the argument is raised that actually, the FIFA DRC does not have jurisdiction because a national dispute resolution mechanism of the aforementioned kind has been established.

In consequence, in the following considerations, it shall be examined what the prerequisites for such a national dispute resolution body are, so that the conditions pursuant to art. 22 lit. b) RSTP are met and so that, in consequence, a dispute can be submitted to such national body instead of the FIFA DRC.

3.5 The Jurisdiction of National Dispute Resolution Bodies

3.5.1 General Remarks

Soon after FIFA had enacted rules about the jurisdiction of the FIFA DRC and, conversely, about the possibility that also national dispute resolution bodies can have jurisdiction, FIFA was often approached by its Member Associations, asking which criteria have to be fulfilled for an “arbitral tribunal” to be classed as independent and duly constituted under the terms of the RSTP[29].

The FIFA Circular Letter 1010 sets out a minimum procedural standard, which FIFA requires for a national dispute resolution body to fulfil to be recognized as independent and duly constituted. This standard is defined as follows:

x The principle of parity when constituting the arbitration tribunal:

FIFA requests that the parties, i.e. players and clubs, must have equal influence over the appointment of arbitrators. In FIFA’s understanding, this means that every party shall have the right to appoint an arbitrator and the two appointed arbitrators appoint the chairman of the arbitration tribunal. The parties concerned may also agree to appoint jointly one single arbitrator. Where arbitrators are to be selected from a predetermined list, every interest group that is represented (e.g. players’ unions, clubs’ associations) must be able to exercise equal influence over the compilation of the arbitrator list.

x Right to an independent and impartial tribunal:

In FIFA’s understanding, this right is respected if arbitrators (or the arbitral tribunal as such) can be rejected if there is any legitimate doubt about their independence, e.g. by means of a request for recusal. This also requires that the ensuing rejection and replacement procedure must be regulated by agreement, rules of procedure or arbitration or by state rules of procedure.

x Principle of a fair hearing:

During the hearing in front of the national dispute resolution body, each party must be granted the right to speak on all facts essential to the ruling, represent its legal points of view, file relevant motions to take evidence and participate in the proceedings. Every party must have the right to be represented by a lawyer or other expert.

x Right to contentious proceedings:

According to the prerequisites established by FIFA, each party must be entitled to examine and comment on the allegations filed by the other party and attempt to rebut and disprove them with its own allegations and evidence.

x Principle of equal treatment:

According to FIFA, the arbitration tribunal must ensure that the parties are treated equally, which requires that identical issues are always dealt with in the same way vis-à-vis the parties.

From a Swiss law point of view, the above prerequisites appear quite standard for a contradictory procedure between two parties in front of an independent dispute resolution organ. Interestingly, FIFA constantly refers to the national body as an “arbitral tribunal”, whereas this does, in FIFA’s reading, not exclude that such a dispute resolution body could e.g. also be incorporated within the structures of a national federation (provided, of course, that the aforementioned criteria are met).

With the aim to promote jurisdiction at national level and to “modernise social relations within football between clubs and players and between employers and employees, and (…) to shift responsibilities from FIFA to its member associations”, FIFA has enacted Standard Regulations for national dispute resolution bodies along the lines of the aforementioned principles[30].

3.5.2 When does the National Dispute Resolution Body have Jurisdiction? – Case Law of the Court of Arbitration for Sport (CAS)

Until today, there have been several CAS Awards, addressing the question of whether, and under which circumstances, a national dispute resolution has jurisdiction[31].

CAS considers as a general rule that all employment-related disputes between a club and a player that have an international dimension have to be submitted, in principle, to the FIFA DRC[32]. Only if the following conditions are met, a specific employment-related dispute of international dimensions can be settled by an organ or body different than the DRC.

x There is an independent arbitration tribunal established at the national level; x This independent arbitration tribunal guarantees fair proceedings and respects the principle of equal

representation of players and clubs[33].

When a party disputes the jurisdiction of the FIFA DRC, arguing that an independent arbitration tribunal exists at national level, it is constant CAS jurisprudence that this party bears the burden to prove that such a dispute resolution body exists and that it meets the criteria to qualify as “independent”[34]. From a practical perspective, this primarily means that if a party wants to dispute the jurisdiction of FIFA, it must submit a copy of all the applicable national regulations, which define notably (i) the jurisdiction and (ii) the composition of the specific national body. Failing to do so will regularly result in that party having failed to discharge its burden of proof and thus result in the jurisdiction of the FIFA DRC being admitted[35].

When examining the alleged independence of a national dispute resolution body, CAS generally makes reference to the aforementioned FIFA Circular and the prerequisites set out therein[36]. Likewise, when examining the relevant procedural regulations of the national dispute resolution body, or the regulations governing its composition, CAS often compares these regulations to the Standard Regulations enacted by FIFA[37].

One of the most important criteria to qualify as independent is that the national dispute resolution body respects the principle of equal representation of players and clubs[38], in particular that the parties must have, as mentioned, equal influence over the appointment of arbitrators. Accordingly, in a case where the members of the national dispute resolution body were all nominated exclusively by the Executive Committee of the national association, but without, e.g., involvement of a players' union, CAS rejected that such a body qualifies as independent[39].

Likewise, as set out in the aforementioned FIFA Circular, both parties must have the possibility to present their case in front of the relevant national body. Therefore, if a decision passed at national level does not mention that a player was present at a national hearing, or that he could make submissions as to the merits of the specific matter, such proceedings are not considered as fair[40].

In addition, CAS case law requires, beyond the wording of art. 22 lit. b) RSTP, that a clear reference in the employment contract of the player concerned is made to the jurisdiction of the national dispute resolution body[41]. This prerequisite goes back to the FIFA Commentary on the RSTP[42], according to which “the player needs to be aware at the moment of signing the contract that the parties shall be submitting potential disputes related to their employment relationship to this body”[43]. This reference must make clear that potential disputes will not be submitted to FIFA, but exclusively to a specifically designated dispute resolution body existing at national level.

If, for instance, a clause in an employment contracts mentions the jurisdiction of the national bodies and of FIFA[44], or if the contract states that the national bodies or FIFA shall have jurisdiction[45], the jurisdiction of the FIFA DRC is maintained. In addition, in case of ambiguity, CAS applies the in dubio contra stipulatorem principle and admits the existence of a “clear reference” and thus the jurisdiction of a national body only restrictively[46]. Accordingly, in a case where the employment contract of a player was written in a language which the player did not understand, and which furthermore contained an unclear reference not to the specific dispute resolution body, but only to a national law, and where this unclear reference was made to a dispute resolution system which had in the meantime changed, CAS considered that the FIFA DRC, and not the respective national dispute resolution body had jurisdiction to deal with an employment-related dispute between the player and the club in question[47].

Furthermore, it must be noted that if proceedings are first lodged in front of the FIFA DRC, and only subsequently in front of a national dispute resolution body, and if one party than disputes the jurisdiction of the latter in the course of the national proceedings, a national decision which is passed prior to the decision of FIFA is not considered as a res judicata. In such a case, CAS considered that the principle of res judicata aims at avoiding that contradictory decisions are taken. However, the proceedings in front of the FIFA DRC were already pending when one party also lodged proceedings at national level. The national body was made aware of the pending FIFA DRC proceedings by the counterparty, which disputed the jurisdiction of the national body. Under such circumstances, CAS considered that it would have been the duty of the national body to suspend its proceedings until the FIFA DRC had taken its decision and that the FIFA DRC, seized first, had no reason to suspend its proceedings[48].

Likewise, CAS rejected the binding effect of res judicata in the aforementioned case where a disciplinary sanction had been imposed on a player and was subsequently “ratified” by a national body, but the player was never properly summoned to the proceedings at national level. In view of this violation of the player’s right to be heard in the national level, CAS considered that the national decision ratifying the sanction imposed had no res judicata effect binding the FIFA DRC[49].

4 Summary

FIFA has set in place a dispute resolution mechanism to deal with the majority of disputes that can occur among the stakeholders of international football. In particular, the FIFA Dispute Resolution Chamber deals with many employment-related disputes between players and their clubs. However, the FIFA DRC does not have jurisdiction if at national level, a dispute resolution body exists, which is independent and guarantees fair proceedings. However, in order for such a body to have jurisdiction, it is also required that a clear an unambiguous reference is made in a player's employment contract that it shall not be FIFA, but the respective national body that has jurisdiction.

Over the year, the case law of CAS has further defined the various prerequisites, which must be met for such a national dispute resolution body to have jurisdiction. It remains to be seen whether in the future, other aspects of the jurisdiction of the FIFA DRC and, conversely, of national dispute resolution systems, will give rise to further disputes.

[1] See art. 22 et seqq. of the FIFA Regulations on the Status and Transfer of Players (RSTP).

[2] See art. 13-18 RSTP.

[3] Art. 22 lit. a) RSTP.

[4] Art. 22 lit. b) and c) RSTP.

[5] Art. 20 and Annexe 4 RSTP.

[6] Art. 21 and Annexe 5 RSTP.

[7] Art. 22 lit. d) RSTP.

[8] Art. 22 lit. e) RSTP.

[9] Art. 22 lit. f) RSTP.

[10] Art. 23 para. 1 in conjunction with art. 22 lit. c) RSTP.

[11] Art. 23 para. 1 in conjunction with art. 22 lit. f) RSTP.

[12] Art. 23 para. 3 RSTP.

[13] Art. 24 para. 1 RSTP.

[14] Art. 24 para. 2 RSTP.

[15] Art. 24 para. 2 RSTP.

[16] Art. 23 para. 2 RSTP; see also art. 3 para. 1 of the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber (the “Procedural Rules”).

[17] See, on this topic, Jan Kleiner, Der Spielervertrag im Berufsfussball, doctoral thesis, Zurich 2013, at p.372 et seqq. See also the FIFA Commentary on the Regulations on the Status and Transfer of Players (the „FIFA Commentary“), at p. 64 et seqq.

[18] Art. 3 para. 1 of the Procedural Rules. See, for instance, the decision 03151330, rendered on 17 March 2015 by the DRC Single Judge, at paras. 1 and 2: “First of all, the DRC judge analysed whether he was competent to deal with the matter at hand (…).Subsequently, the DRC judge referred to art. 3 par. 2 and par. 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in conjunction with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2015) he is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from country B and an club from country D.”

[19] See Jan Kleiner, Der Spielervertrag im Berufsfussball, doctoral thesis, Zurich 2013, at p. 372.

[20] CAS 2014/A/3483, at para. 55.

[21] CAS 2010/A/2289, at para. 74.

[22] See the FIFA-Commentary to art. 22 RSTP, note 1, footnote 98.

[23] See decision 10895, rendered by the FIFA DRC on 3 October 2008, at consid. 4 et seqq.

[24] See decision 35671 of the FIFA DRC, at p. 3.

[25] See decision 128331, rendered on 5 December 2008 by the FIFA DRC, at para. 5 et seq.

[26] See, for example, decision 19968, rendered by the FIFA DRC on 9 January 2009, at para. 13: “However, and pertaining to the foregoing, the Dispute Resolution Chamber was eager to emphasise that for issues regarding falsified documents, only the relevant penal courts are competent to pass a formal decision.” See also the further references in Jan Kleiner, Der Spielervertrag im Berufsfussball, doctoral thesis, Zurich 2013, at p. 372, footnote 1262.

[27] See decision 861307 of the FIFA DRC, at para. 2 f.; see also CAS 2005/A/909-912, at para. 6.4, and CAS 2014/A/3483, at para. 56, confirming FIFA’s interpretation of the term “international”.

[28] As widely known, in case of a breach of contract by a player, his new club is jointly and severally liable for the payment of compensation to the previous club; see art. 17 para. 2 RSTP.

[29] See FIFA Circular letter 1010 of 20 December 2005, at p. 1.

[30] National Dispute Resolution Chamber (NDRC) Standard Regulations.

[31] CAS 2014/A/3483, at para. 47 et seqq.; CAS 2013/A/3172, at para. 55 et seqq.; CAS 2010/A/2289, at para. 73 et seqq.; CAS 2008/A/1518, at para. 125 et seqq.

[32] CAS 2010/A/2289, at para. 78; CAS 2008/A/1518, at para. 128.

[33] CAS 2008/A/1518, at para. 128.

[34] CAS 2014/A/3483, at para. 53; CAS 2013/A/3172, at para. 56, 58; CAS 2010/A/2289, at para. 85.

[35] Cf. CAS 2014/A/3483, at para. 58 et seqq.

[36] See CAS 2013/A/3172, at para. 57; CAS 2010/A/2289, at para. 81.

[37] CAS 2010/A/2289, at para. 81.

[38] CAS 2010/A/2289, at para. 81.

[39] CAS 2010/A/2289, at para. 84.

[40] See CAS 2014/A/3483, at para. 59 et seqq.

[41] CAS 2010/A/2289, at para. 80; CAS 2008/A/1518, at para. 128.

[42] See CAS 2010/A/2289, at para. 80, where a clear reference is made to the FIFA Commentary.

[43] FIFA Commentary, at p. 66, footnote 101.

[44] CAS 2013/A/3172, at para. 67.

[45] CAS 2014/A/3483, at para. 50 et seq.

[46] CAS 2010/A/2289, at para. 89.

[47] CAS 2008/A/1518, at para. 125 et seqq.

[48] CAS 2010/A/2289, at para. 76.

[49] CAS 2014/A/3483, at para. 64 et seqq.