Two professional boxers made an unsuccessful application for the British Boxing Board of Control (the “Board”) to be removed as the arbitrator of their respective disputes with their managers on the grounds that there were justifiable doubts about the Board’s impartiality.
(See (1) Paul Smith (2) Jamie McDonnell v (1) British Boxing Board of Control Ltd (2) Frank Warren (3) Dennis Hobson (2015) QBD (Liverpool) 13/04/2015).
The application made pursuant to section 24, Arbitration Act 1996 (the “Act”) was refused by Bird J (sitting in Liverpool QBD) on the following grounds:
- The boxer/manager agreement required all disputes to be referred to the Board (and then the Stewards of Appeal).
- The parties had “agreed a complete mechanism for the efficient and sensible resolution of disputes that may arise between them.”
- To allow the boxers’ application would be contrary to the General Principles in section 1 of the Act and would “completely free the [boxers] from the arbitral framework they signed up to”.
- The Board had “specialist knowledge” and was “well placed to understand the practical and commercial workings of the [boxer/manager] relationship.”
- The dispute resolution procedure had to be looked at as a whole. The impartiality of the appeal body, known as the “Stewards of Appeal”, was not challenged.
- There were no justifiable doubts about the Board’s impartiality and, as such, the objective test of “substantial injustice” was not met.
- In any event, section 73 of the Act meant the application must fail because the boxers’ solicitors had “fully engaged” with the arbitral process.
The case is an example of professional athletes attempting to identify a more favourable means of resolving disputes with their managers than the arbitral process typically mandated by sporting contracts and designed to keep sporting disputes within the sport itself. It serves as an example of the robust stance that the courts will adopt in being unwilling to remove disputes from the jurisdiction of the relevant sport’s governing body.
Other key points to note include:
- Challenging Jurisdiction
The case is a useful reminder that the ability to challenge the jurisdiction or conduct of an arbitral panel will be lost if a party engages or continues to engage in the arbitral process. If a sportsman intends to challenge jurisdiction this must be the first point challenged and resolved before any other steps are taken (section 73 of the Arbitration Act 1996 (the “Act”)).
- Benefits of Arbitration in Sport
The benefits of privacy, cost efficiency, reasonable expediency and specialist knowledge in contrast with the court process are (on the whole) to be found in the arbitral processes adopted by many governing bodies. The same benefits are true in other industry specific arbitral processes. Many of these benefits were noted by the judge in this case.
- Composition of Sports Arbitral Tribunals
The case raises interesting questions about the suitability, appropriateness and potential bias of sports arbitral panels. Governing bodies are at the same time the legislator responsible for drafting the rules of the sport and the body that determines the composition of the quasi-judiciary responsible for interpreting, enforcing and disciplining breaches of those same rules. In the Pechstein case, the plaintiff successfully challenged the jurisdiction of the Court of Arbitration for Sport (“CAS”) in the German Courts on the basis of the institutionalised nature of the closed list of approved CAS arbitrators and the appointment of those arbitrators. The sport sector and, in particular, those sports with rules that permit an appeal to CAS, await the decision of the appeal from the Oberlandgericht to the Bundesgerichtshof.
- Agreement to Arbitrate as Precondition of Participation in Sport
The majority (if not all) sports governing bodies make it a condition of participation that disputes between members and the governing body be referred to an arbitral tribunal as opposed to the courts. As in this case, the agreement to arbitrate may be in a fixed form. This does not allow members to negotiate the scope of the agreement to arbitrate. The concept of an “agreement to arbitrate” is somewhat false if the agreement to arbitrate is in a prescribed form and is a precondition of participation. This point received particular attention in the decisions of both the First Instance and Higher Regional Court in the Pechstein case.
- Key Point for Sports Governing Bodies
The mechanics for constituting arbitral panels differs from sport to sport. Pending the Pechstein appeal, the learning point for governing bodies appears to be that transparency in the appointment of the list of approved arbitrators is the safest way to avoid a challenge. Alternatively, sports governing bodies can now use the services of an independent body to appoint independent sports specialist arbitrators (such as Sport Resolutions UK).