The sports industry continues to grow, and with it the significance of internationally recognized arbitral bodies increases.
THE sports industry is about more than just games and entertainment organizations. Rather, it is an industry formed by interwoven relationships between many different parties including athletes, sports bodies, sports clubs, federations, and the like. The sports industry has grown over the years, and today’s global sports industry is expected to increase to 100 billion USD within the next few years.
Since its establishment, the Court of Arbitration for Sport (“CAS”) in Switzerland has been shaping the borders of international sports dispute resolution. The number of disputes brought before the CAS proves that it is the leading player in international sports arbitration. Moreover, it is an incontrovertible fact that recognition of the CAS by the statutes of major sports institutions has a considerable impact on the CAS’s fame in international sports arbitration.
This article aims to present the main features of the CAS arbitral institution.
Organizational Structure of the CAS
Two legal entities have been established for sports-related disputes: (i) the International Council of Arbitration for Sports (“ICAS”) and (ii) the CAS. The ICAS is mainly responsible for management and administration of the CAS, which in turn offers the CAS independence to provide services as a dispute resolution body.
The CAS is responsible for resolving disputes under two divisions: (i) the Ordinary Arbitration Division (“Ordinary Division”), which functions as a court of first instance, and (ii) the Appeals Arbitration Division (“Appellate Division”), which resolves the decisions of federations, associations, or sport related bodies on appeal. In addition to the Ordinary and Appeals Divisions, the CAS hears urgent cases that arise during the Olympic Games through special ad hoc divisions under an expedited procedure. The authority known as the Court Office is responsible for assigning cases to the relevant divisions according to the nature of the dispute when parties bring an action before the CAS.
Types of Disputes
The Code of Sports-related Arbitration (“CAS Code”) stipulates that the CAS has jurisdiction to rule on disputes connected with sports. Therefore, any disputes directly or indirectly linked to sports may be submitted to the CAS as long as there is a valid arbitration agreement between the parties. In this regard, any individual or legal entity with the capacity and power to agree on arbitration such as a sports club, players, a sports association and/or a federation, or a manufacturer of sports goods may bring a case before the CAS regarding sports-related disputes. In practice, the CAS hears two types of disputes: (i) disputes of a commercial nature and (ii) disputes in relation to decisions made by sports organizations.
Commercial disputes arise in relation to the execution of contracts, such as those regarding sponsorship, television rights for sport events, media licenses, player transfers and employment, and agency relationships of a commercial nature between players, coaches, agents, and clubs. Disputes arising from civil liability issues also fall under this category such as accidents suffered by athletes during sports competitions.
The Ordinary Division handles commercial disputes in accordance with ordinary arbitration procedure rules stipulated under the CAS Code. The applicable law for the disputes is Swiss law unless the parties agree on another governing law for their disputes.
Surprisingly, despite market volume, CAS does not usually hear commercial disputes.
Disputes in relation to decisions made by sports organizations
The second group of disputes mainly consists of cases rendered by a sports organization concerning matters such as doping, violence on the field of play, abuse of a referee, racism, and ethical disputes. The sports authorities generally deal with these kinds of disciplinary cases which can subsequently become the subject of an appeal before the CAS as a court of last instance. However, it should be noted that parties may only apply for appeal with the CAS when the statutes and regulations of sports bodies or a specific agreement stipulates the jurisdiction of the CAS and when the appellant has exhausted all internal remedies.
These disputes are referred to the Appellate Division and are resolved under the arbitration appeals rules of the CAS. The applicable regulations of the sports body concerned in the appeal shall apply to the dispute. However, if the regulations of the sports body are silent or insufficient, then the panel will apply the law of the country where the sports body is domiciled.
The Fédération Internationale de Football Association (“FIFA”) submitted to the jurisdiction of the CAS in its statutes. Accordingly, there have been many disputes referred to the CAS concerning the interpretation and application of football player transfer rules as well as compensation for the education and training costs of young players. Without a doubt this recognition from FIFA dramatically increased the workload and fame of the CAS.
CAS Procedures: Ordinary Arbitration and Appeal Procedures
Ordinary Arbitration Procedure
The CAS arbitration procedures are similar to standard institutional arbitration procedures. Therefore, practitioners of international arbitration will not have any difficulties when they appear before the CAS.
The arbitral process begins when a party submits a written application to the CAS. This written “Request for Arbitration” must contain a brief statement of facts and legal background, a precise prayer for relief, proof of the arbitration agreement, a preference on the number of arbitrators, and arbitrator names.
The arbitration then proceeds with an exchange of written submissions. The parties must file all evidence together with their submissions. After the exchange, the parties may only submit additional evidence if there is a mutual agreement between parties or with the arbitration panel’s permission under exceptional circumstances.
If a claimant fails to submit a statement in due time, the request for arbitration would be deemed withdrawn. On the contrary, if a respondent fails to submit a response or counter claim, the arbitral panel may proceed and render an award. If any of the parties or their witnesses are summoned and fail to be present at the hearing, the arbitral panel may nevertheless proceed with the hearing and issue an award.
Parties and witnesses present their respective arguments and statements in pleading sessions. Hearings are not mandatory and arbitration panels may find written submissions sufficient enough to make a decision. However, if a hearing is conducted, it is done so on camera unless the parties agree otherwise.
Finally, awards rendered by the CAS where it acts as a panel of first instance are subject to appeal before the CAS Appellate Division.
The appeals procedure is governed by both the General Provisions and the Special Provisions Applicable to the Appeals Arbitration Proceedings of the CAS Code. The proceedings are similar to the procedures set out in the Ordinary Arbitration Procedure.
An appeal commences when an appellant files a “Statement of Appeal” to the CAS, which must contain: A copy of the decision subjected to appeal, a request for relief, the name of an arbitrator chosen from the CAS arbitrators list or a request from the appellant for the appointment of a sole arbitrator, an application for a stay of execution of the decision subjected to appeal if any, and a copy of the statute provisions, regulations, or the specific agreement at issue.
The appellant will deliver its detailed arguments under a “Statement of Appeal” in due time. The CAS will then invite the respondent to present its response and defenses. Failing to submit written statements has the same result as explained in the Ordinary Arbitration Proceedings. Following the exchange of written statements, the parties are not allowed to present exhibits and evidence except by mutual agreement of the parties or with the arbitral panel’s permission under exceptional circumstances.
The appeal panel has the full power to conduct a de novo review on the facts of the dispute and the law. Accordingly, it may issue a new award which may replace the challenged decision or annul the decision and refer the case back to the previous instance panel.
Setting Aside of CAS Awards
The seat of arbitration is located in Lausanne, Switzerland. Therefore, setting aside proceedings against the CAS arbitral awards may only be filed before the Swiss Supreme Court under the principle of lex loci arbitri and must be done within 30 days of the parties’ notification of the decision.
Pursuant to the Swiss Private International Law, CAS awards are final upon communication to the parties and can only be challenged before the Swiss Supreme Court if (i) the arbitral panel was not properly constituted, (ii) the arbitral panel erroneously accepted or declined jurisdiction, (iii) the arbitral panel ruled on different claims from the ones submitted by the parties or failed to decide on one or more of the claims submitted, (iv) essential procedural rights were breached, or (v) the award was contrary to public policy.
The parties may only appeal to the Swiss Supreme Court for the purpose of annulling the CAS awards. Therefore, the Swiss Court can only uphold or revoke the decision fully or partially. If the Swiss Court revokes the decision, then it will return the case to the CAS for further review.
Enforcement of CAS Awards
Arbitral awards have the same enforceability as national court judgements, and they are final and binding upon the parties unless the parties appeal or have the award set aside.
Under Turkish law, two main pieces of legislation apply to the recognition and enforcement of foreign arbitral awards: (i) the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and (ii) the International Private Procedure Law (“IPPL”).
Pursuant to Article 90 of the Turkish Constitution “the international treaties duly put into effect (ratified by the Grand National Assembly) shall enjoy all the legal effect of internal statutory law.” In this respect, provisions of the NY Convention will have the same force as other Turkish statutory provisions and be regarded as part of the domestic legal system.
Enforcement of a CAS awards given by the Ordinary Arbitral Division
According to the IPPL, Turkish courts may dismiss enforcement requests on the following grounds: (i) an arbitration agreement is not executed or arbitration clause does not exist in the main agreement, (ii) the arbitral award is contrary to public morality or public order, (iii) it is not possible to settle the dispute subject to the arbitral award by way of arbitration under Turkish law, (iv) one of the parties has not been duly represented before the arbitrators and has not expressly accepted the acts concluded thereafter, (v) the party against whom the enforcement of the arbitral award is requested has not been duly notified of the appointment of arbitrators or has been deprived of his/her right to make a claim and defense, (vi) the arbitration agreement or clause is invalid pursuant to the governing law designated by the parties, or in the absence thereof, pursuant to the law of the place where the arbitral award is rendered, (vii) the appointment of the arbitrators or the procedure applied by the arbitrators violates the agreement of the parties, or in the absence thereof, the law of the state where the arbitral award is rendered, (viii) the arbitral award has been rendered on an issue that is not included in the arbitration agreement or arbitration clause or exceeds the limits of the agreement or the clause (only the exceeding part), or (ix) the arbitral award is not final, enforceable, or binding under the governing law or the governing procedure or the law of the state where it was rendered or it is annulled by the competent authority in the place where the award is rendered.
As long as a CAS award is not dismissible for any of the foregoing reasons, the Ordinary Arbitral Division decision may be enforced by the Turkish courts.
Enforcement of a CAS awards given by the Appellate Division
Considering the very nature of awards given by the Appellate Division, enforcement would only be needed if a sports federation or club will not perform according to an award. If an award is not fulfilled, then the parties receiving that arbitral award may file a case with the courts. However, enforcement might not be an option due to Turkey’s two reservations in the New York Convention pertaining to “reciprocity” and what qualifies as “commercial”. Accordingly, only foreign arbitral awards rendered in other contracting states will be recognized and enforced under the NY Convention, and the dispute must be of commercial nature under Turkish law. Therefore, unlike commercial disputes which are resolved before the Ordinary Arbitration Division of the CAS, failure to comply with an Appellate Division decision is not commercial in nature and will not be enforced in Turkey. However, failing to comply with CAS awards by sports organizations is not a common practice in the sports world since sports organizations may be exposed to loss of status and reputation.
Examples in Turkish Sports Arbitration
In parallel with the popularity of sports in Turkey, Turkish cases occupy a significant number among all cases held in the CAS. In the past few years, three high-profile CAS cases have struck the Turkish sports world, two involving two of Istanbul’s most famous football clubs and the other involving a Turkish Olympic athlete.
In 2011, bribery allegations were a hot topic of debate in the sports community regarding Turkish Super League club Fenerbahçe FC. These allegations among other things prevented Fenerbahçe FC from being allowed to participate in the Union of European Football Associations (“UEFA”) Champions League. Subsequent to some internal jurisdictional and institutional procedures, Fenerbahçe FC appealed to the CAS regarding a decision of the UEFA Appellate Body excluding Fenerbahçe FC from participating in the next two UEFA club competitions for which they would otherwise qualify. Since the dispute was of a disciplinary nature, the CAS applied its appellate procedure and used the Appellate Division to resolve the case. Following the examination of the evidence, the CAS ruled to dismiss Fenerbahçe FC’s request for appeal. Since an arbitral award from the CAS is final and binding, Fenerbahçe utilized their only means to reverse the decision and appealed to the Swiss Courts to set aside the award. However, the Swiss Court dismissed Fenerbahçe FC’s annulment request on October 16, 2014.
In the first quarter of 2016, Galatasaray FC was excluded from participating in the 2016/2017 and 2017/2018 seasons of UEFA club competition due to a lack of compliance with an agreement between the club and the financial body of the UEFA. This agreement was signed following an investigation that concluded Galatasaray FC had breached the UEFA Club Licensing and Financial Fair-play Regulations. Galatasaray FC then unsuccessfully challenged the legality of the regulations in question before the UEFA Club Financial Control Body Adjudication Chamber and ultimately appealed the UEFA decision to the CAS on March 11, 2016.  Three and half months later, the CAS rendered its award and dismissed the appeal request on the grounds that UEFA’s decision was appropriate since Galatasaray FC had in fact breached the regulations.
Another recent case involved Turkish athlete Sibel Özkan Konak, who appealed to the CAS regarding a decision of the International Olympic Committee that disqualified her results at the Beijing Olympics due to her use of a prohibited substance. As with the Fenerbahçe FC and Galatasaray FC cases, the athlete had exhausted all internal methods of appeal and resorted to the CAS for appeal since the case was of a disciplinary nature. However, as seen in the other two cases, the CAS dismissed her request on November 21, 2016.
It seems more and more cases, especially those involving sports clubs, are being resolved through CAS arbitration corresponding to a rise in public trust regarding the independence and impartiality of CAS arbitration.
A Growing Need for Specialized Practitioners
CAS arbitration has proven to be a successful way of dispute resolution, and as a result, it has gained fame and confidence in the sports world. Furthermore, the experience and expertise of arbitrators contribute to the CAS’s success. This success has inevitably led to a rapid increase in the number of cases in recent years, including Turkish cases such as Fenerbahçe Spor Klubü v. UEFA and Sibel Özkan Konak v. International Olympic Committee. In parallel with the growth in popularity of the CAS Arbitration, the need for specialized practitioners in the sports arbitration practice is also growing. Given the unique nature of the CAS, applicants should seek out specialized arbitration practitioners for guidance during the entire process.