The growth of sports law in the UAE


Published 04 February 2015 By: Nijoe Joseph

UAE Polo

The Middle East, particularly Qatar, Dubai and Abu Dhabi, have over recent years enjoyed growing success in the hosting home-grown and international sporting events,1 perhaps most obviously culminating in FIFA award the State of Qatar the honour of hosting the 2022 Football World Cup.

A recent study by management consultants, PriceWaterCoopers, indicated that the EMEA (Europe, Middle East and Africa) market is currently ranked as the second largest sports market in the world, and is estimated to be worth a staggering $42.8 Billion, which represents nearly a third of the global sports industry market. The very same industry is also expected to see revenue growth continue at 4.6 per cent per annum.2

Among the Gulf Cooperation Council ("GCC")3 nations, the United Arab Emirates ("UAE") has been among the front-runners when it comes to the adoption and promotion of sporting interests in the region. The two cities of Dubai and Abu Dhabi alone play host to some of the sporting world's most prestigious events including the world's richest horse race4, the only sunset Formula One circuit in the world, PGA ranked golf tournaments, ATP tennis tournaments, international marathons and the recent Indian Premier League cricket tournament. The UAE also headquarters of some of world sports' leading regulatory bodies, such as the International Cricket Council. Nowadays, one would find it very difficult to name an international sport that does not have some degree representation, participation or association within the UAE.

This being so, sports law practices are also priming themselves for continuing growth in the UAE. We are seeing UAE based business houses and individuals continue to make significant investments into global sports ventures5 which, given the increasing complexity and sums of money involved, are requiring a greater depth and sophistication of legal involvement to – in particular - help safely transact deals and protect interests. Transactional, regulatory and litigious practices6 are all seeing increasing demand, as advice is sought on sponsorship issues, venue construction matters, regulatory and compliance issues, complaints filing, anti-doping appeals and other sports related litigious matters. We’ll look more specifically at key growth areas below.

 

Sponsorship in the UAE

With an increasing number of national and international sporting events being hosted and promoted in and by the UAE, sponsorship related opportunities and the inevitable challenges related to such endeavours are also on the rise. The perception in the UAE is that by sponsoring the best sportsmen, sporting teams and sporting events, the reputation of the UAE is enhanced on the world stage.

Of course, a potential downside to sponsorship association is that a sponsor’s brand may also be damaged in the event of a scandal (think the Lance Armstrong doping incident7 and Tiger Woods infidelity8 cases). The UAE experienced an unfortunate incident in horse racing when one of the stables in Newmarket owned by the Dubai based racing operation "Godolphin" had to be shut following a restructuring due to a doping scandal.9

Consequently, sponsoring clients are demanding that the utmost care is taken to protect the their brand interests (present and future) against such eventualities. Like in other jurisdictions, this requires the performance of detailed due diligence to ensure that all possible scenarios are examined in detail before any commitment to the sponsored individual or organization is made. Once the decision to go ahead with the sponsorship deal is reached, firms help sponsors by ensuring that adequate provisions are included in the sponsorship contract that will further protect the sponsors' interests, including strict morality clauses,10 perennial representations and warranties, sponsor friendly dispute resolution clauses, reasonable and calculated liquidated damages as well as other remedial clauses.

 

Regulatory issues

There is an increasing awareness within and outside the field of sports that the growth of sporting industries particularly in emerging economies like the UAE, must come hand in hand with the development of transparent and sustainable regulatory structures that adhere to international standards of best practice.

The UAE are live to this, a good example being the constitution of the UAE Football Association (UAE FA).11 The UAE FA was established pursuant to Ministerial Resolution No. 17 of 1972, legislation that is considered to be at the core of regulating the sport of football in the UAE and that is consistent with the international rules and regulations expounded by FIFA and world football leagues.

Motorsports is a thriving sector in the UAE,12 and similarly regulations governing safety, qualifications and the affiliation of the local motorsports bodies with the international motorsports authorities are rigorously adhered to. The Automobile and Touring Club of the UAE (ATCUAE)13 in affiliation with the Fédération Internationale de l'Automobile (FIA),14 regulates, licenses and oversees all legal motorsports activities across the UAE.

The UAE is also currently formulating legislation that governs safety in sporting venues.15 Nevertheless, in the author’s opinion, the presence of regulations alone may not suffice, and more coordination is required between the local legislation and international sporting regulations to ensure appropriate safety levels are met. The processes introducing and implementing sports regulations must be thought out carefully and must be in compliance with established international regulations and processes. This is only possible if the UAE has adequate resources to skilled sports law practitioners and specialists that would help facilitate the growth of robust and enduring regulatory regimes in the UAE.

 

Dispute Resolution

The UAE is seeking to establish itself as a globally respected centre of dispute resolutions in the sports industry. As a result of an agreement between the Abu Dhabi Judicial Department16 and the International Council of Arbitration for Sport (ICAS), a UAE chapter of the Court of Arbitration for Sport (CAS)17 was inaugurated in the Abu Dhabi. With the opening of CAS, the UAE could soon be seeing a large number of high profile global sports dispute cases being solved in the Country.

In addition to CAS, there is also a draft law in the UAE facilitating the establishment of an Emirates Sports Arbitration Centre.18 This would further help accelerate the position of UAE as a jurisdiction with world class facilities and expertise to decide technically challenging disputes that would often arise in the field of sports. However, once again, the presence of such centres underpin the fact that there must necessarily be legal professionals available in the UAE who are skilled in the subjects of sports law, so that the CAS and other forum users can be confident that their matters will be handled professionally in the jurisdiction.

 

The future

The reasons here demonstrate why we can expect sports law and sports law practice to continue to grow and develop in the UAE. Given the pace of the investment, interest and participation of the UAE in the global sporting arena, this author expects there to be an increasing demand for specialised legal resources from relevant individuals, businesses and sporting bodies in the UAE, to help them ensure that sporting transactions are able to cross the finish line smoothly, and that disputes are resolved quickly and efficiently.

 

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About the Author

Nijoe Joseph

Nijoe Joseph

Nijoe is a finance counsel, specialising in transportation finance.

Most of Nijoe's work for clients has focused on the sectors of aviation and ship financings, commercial agencies and franchises, logistics and distribution, banking, construction, infrastructure, urban transportation related transactions.

He advises international and local companies including family businesses on corporate, commercial, trade and transportation (aviation and maritime) laws in the United Arab Emirates, the GCC and India. Nijoe also has extensive experience with finance, corporate, commercial and transportation transaction projects in India.

He has qualified in both India and UAE law.

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