The Basketball Arbitral Tribunal’s policy on publishing written reasons – does it strike the right balance between speed & legal certainty?Wouter Janssens
On March 8, the first ever User Conference of the Basketball Arbitral Tribunal (BAT) was hosted in Munich, Germany. Wouter Janssens, founding partner at international boutique sports law firm CRESTA, participated in a round table discussion to tackle several topics from over a decade of BAT practice.
One of the key subjects discussed was the BAT’s policy on publishing written reasons when issuing awards. It’s an important matter to consider as written reasons can help to explain the Arbitrator’s thinking, allowing legal practitioners to analyse awards, deduce the general legal principles applied by the Arbitrator, and comprehend the decision in the context of underlying jurisprudence. On the other hand, written reasons imply higher arbitration costs (on average € 3,930 - three thousand, nine hundred and thirty Euros - for awards without, versus € 8,963 for awards with written reasons) and an extended duration of the proceedings1.
Underlying principle: awards with written reasons
Subject to Article 16.2, the Arbitrator shall give a written, dated and signed award with reasons. Before signing the award the Arbitrator shall transmit a draft to the BAT President who may make suggestions as to the form of the award and, without affecting the Arbitrator's liberty of decision, may also draw his/her attention to points of substance….
This means decisions contain a full overview of:
the identity of the parties;
the identity of the Arbitrator;
the facts and the procedural background;
the parties’ submissions;
the BAT’s jurisdiction;
the findings on the merits of the case;
the costs; and
the dictum (operative part) of the award.
Alternative: awards without reasons
However, Article 16.2 of the BAT Rules carves out certain circumstances in which awards are rendered without reasons - i.e. merely with the operative part of the award. Specifically, a reasoned award will not be issued for cases up to a certain value unless the following requirements are met:
By agreeing to submit their dispute to arbitration under these Rules, the Parties agree that, where the value of the dispute does not exceed EUR 100,000, the Arbitrator shall issue an award without reasons, provided, however, that the Arbitrator shall deliver reasons if a party
files a request to that effect at any stage from when the Request for Arbitration is filed until no later than ten (10) days after the notification of the award without reasons; and
pays the respective advance on costs as determined and within the time limit set by the BAT Secretariat. (emphasis added)
The determination of the value of the case is straightforward, as nearly all BAT cases are monetary claims. In other cases, the value shall be determined by the President of the BAT (Article 17.1 of the BAT Rules). In any event, for a claim to be brought before the BAT, it must have a pecuniary aspect (i.e. be relating to money – see Article 177(1) of the Swiss Private International Law Act - PILA).
The minimum value of a case required for a written decision has evolved over time. To begin, the "minimum" level did not exist (every award was issued with written reasons). It was introduced in May 2010, when only awards in cases with a value over €30,000 were rendered with written reasons. As of May 2014, the claimants were in addition given the opportunity to request an award be rendered without written reasons in cases with a value over €30,000 and up to €200,000 if the respondents’ share of the advance on arbitration costs remained unpaid. As respondents often default on the payment of their share, claimants usually opted for awards without reasons for reasons of time and cost efficiency. On average, the arbitration costs for awards without reasons are €5,000 lower than for awards with reasonsabove), the minimum level in fact was raised to €200, 000. In January 2017, the BAT adopted an intermediate position by setting the minimum level at €100,000:
Making a Request for Reasons
On receiving an award without reasons, each party has 10 days to file a “Request for Reasons” with the BAT, subject to the payment of an additional advance on arbitration costs, which in the author’s experience consistently amounts to € 5,000.
In practice, however, it rarely if ever happens that a Request for Reasons is filed. Normally, the successful party is not too concerned about the reasons behind a favourable decision. An unsatisfied party, on the other hand, could file an appeal in annulment against the award with the Federal Supreme Court of Switzerland (SFT). Despite the fact that Article 189(2) of the PILA requires that an award must set forth the reasons on which it is based, the SFT has declared an appeal against an award without reasons admissible (SFT 4A_198/2012). The chances of success, however, seem to be limited in default of the written reasons. In any event, the filing of an appeal seems somewhat hypothetical as:
the possibility to file such appeal could be excluded in the underlying arbitration agreement if none of the parties is domiciled in Switzerland (Article 192(1) of the PILA);
the grounds for such appeal are limited (Article 190(2) of the PILA);
the appeal goes with additional costs (Articles 62-68 of the Swiss Law on the Federal Supreme Court);
the effect on the merits of a successful appeal is likely to be limited, as the grounds for appeal, except for public policy, are mainly procedural and the result would merely be the annulment of the award; and
the value of the dispute is (by definition) likely to be limited, meaning the costs of an appeal are likely to be disproportionately high.
Availability of Reasons
Two elements that could jeopardize the availability of awards, and thus also of written reasons, are confidentiality and the publication rate. However, BAT awards in principle are non-confidential, unless ordered otherwise by the Arbitrator or the President per Article 16.4 of the BAT Rules. Besides, the publication rate for non-confidential BAT awards is nearly 100%.
The main issue for the availability of awards with written reasons is the "minimum value" under Article 16.2 of the BAT rules in combination with the decreasing trend in the average value of BAT cases since 20145:
Relevance of Reasons
Since May 2014, nearly all awards with reasons pertain to cases with a value over € 100,000.
The value of the dispute, however, is not always an indication of the jurisprudential importance of a case. For example, cases relating to the recovery of €500,000 in undisputed overdue payables can be relatively straightforward (and probably do not require written reasons). On the other hand, disputes between players and agents or disputes regarding contract termination — which in the author’s experience usually do not reach the current €100,000 threshold (or even the former €30,000 threshold) — can often prove to be more complex and involve important points of law and principle.
In this light, the ratio of awards with relevant written reasons (i.e. contributing important points to the overall body of jurisprudence) is considerably lower than the abovementioned percentages. In the author’s view, this trend needs to be given consideration because limiting the absolute number of awards with written reasons could in turn could jeopardize the predictability of the outcome of BAT disputes (i.e. the certainty and consistency). It is to be noted, however, that the BAT in any event remains the best possible solution for the efficient and effective resolution of disputes in professional basketball, benefiting also from the enforcement via FIBA Secretary General (Article 3-335 of the FIBA Internal Regulations).
The first ssuggestion might seem obvious: to lower the minimum value of a case required for a written decision. Given the following spread of the BAT cases by absolute value since 20177, however, it is clear that a 50% reduction of the current "minimum level" to € 50,000 would result in merely an additional 19% of the awards being rendered with written reasons, while increasing the costs of said awards by about 5% - 10% of the value of the case:
Considering the trade-off between lower costs (which facilities greater access to justice) versus more written reasons (which facilitates greater perceived justice and certainty), the current "minimum level" at €100,000 seems reasonable.
As a sounder solution, the author has suggested that the BAT consider the option that awards that are currently rendered without reasons be joined with limited reasons in the form of a bullet-point overview of the Arbitrator’s relevant legal considerations. Ideally, this could be done in an applied manner for each award. Alternatively, it could be done in an anonymised manner by providing an overview of the general legal considerations deduced from a set of BAT awards, for example each time they are being published. The financing of such limited reasons could be done via cross-subsidization by no longer rendering full reasons for high value cases that are clear on the merits. In case the rendering of limited reasons would be made optional to the parties, the related costs should be minor in order to not constitute a deterrent to file a Request for Limited Reasons. As such, the abovementioned trade-off could be avoided, and legal practitioners would be able to duly advise clients both proactively to adapt their commercial and contractual behaviour and reactively when facing disputes.
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- Tags: Arbitration | Basketball | Basketball Arbitral Tribunal (BAT) | BAT Rules | Dispute Resolution | Federal Supreme Court of Switzerland | Regulation | Swiss Private International Law Act (PILA)
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About the Author
Founding Partner, CRESTA
Wouter is a founding partner at CRESTA, international boutique sports law firm based in Brussels (www.crestafirm.com).
Sports lawyer representing players, agents, clubs, leagues and investors on contractual, contentious (FIFA, FIBA, FIVB, CAS, BCAS) and regulatory matters.
Attorney-at-law at the Brussels Bar and Assistant Professor of Law at the University of Leuven.