August 4 – In a ruling that could upend sports’ legal order, the European Court of Justice (CJEU) said that national courts can conduct full judicial reviews of arbitral awards by the Court of Arbitration for Sport (CAS) to ensure compliance with EU law.
The ruling follows Belgian club RFC Seraing’s dispute with world governing body FIFA over third-party ownership. Zurich ruled that the club’s agreement with Maltese company Doyen Sports was a breach of TPO rules and CAS as well as the Swiss Federal Supreme Court confirmed FIFA’s verdict, which banned Seraing from registering new players.
The CJEU took a different view saying that “it is essential that recourse to arbitration does not undermine the rights and freedoms that the fundamental rules of EU law guarantee athletes, clubs and, more broadly, any other person practising a professional sport or pursuing an economic activity linked to that sport. On those grounds, the Court of Justice rules today that the national courts or tribunals must be empowered to carry out, at the request of individuals or of the court’s or tribunal’s own motion, an in-depth judicial review as to whether arbitral awards made by the Court of Arbitration for Sport (the CAS) are consistent with EU public policy.”
Following Advocate General Ćapeta’s opinion in January, the court has argued in favour of “effective judicial review.” It said that “that review must in any event allow individuals to obtain in-depth judicial review as to whether those awards are consistent with the principles and provisions of EU public policy.”
In her opinion in January, Advocate General Ćapeta wrote that “that judicial remedies that were considered sufficient to guarantee effective judicial protection and uniformity of EU law in the context of commercial arbitration are not sufficient for the system of the self-sufficient mandatory arbitration at issue in the present case.”
The view of the CJEU could shift litigation in sports in the future. Clubs, players and officials are typically subject to CAS decisions, based on arbitration clauses, but such forced arbitration may no longer be tenable, even if the Swiss Federal Tribunal (SFT), Switzerland’s highest court of law, can review CAS rulings.
Public policy in the EU includes competition and free movement rules, allowing for a broad review. At the same time, sports governing bodies will seek to interpret public policy narrowly, excluding “any and all rules of EU law” as Ćapeta had suggested in her opinion. Even so, the ruling may have opened the door to litigators simply bypassing CAS.
The decision renews broader questions over the function and role of CAS and its frequent rulings in favour of its football paymaster FIFA
“CAS resolves sporting disputes worldwide and already applies EU law when required,” said CAS in a statement. “Whilst the vast majority of cases before CAS concern contractual and disciplinary issues not governed by EU law, matters related to EU competition law can already be challenged before EU state courts following a previous CJEU judgement.”
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