The EU General Court’s Ruling On Exclusive Arbitration Agreements In The ISU Case

On 16 December, the EU General Court rendered its long-awaited decision (the ISU Judgment)[1] in the action brought by the International Skating Union (ISU) against the Decision of the European Commission of 7 December 2017 (the Commission Decision).[2]

The Commission Decision ruled that the ISU’s “Eligibility Rules” infringed upon EU competition rules (Article 101 TFEU), to the extent that their goal was to prevent professional speed skaters from taking part in international events organized by third parties. In turn, such third parties were deprived of the athletes’ participation necessary to organize those competitions.[3] The ISU Eligibility Rules also included arbitration rules that provided for the exclusive jurisdiction of the Court of Arbitration for Sport (CAS) as the appeal body for internal disciplinary decisions.  The arbitration rules were found by the Commission to “reinforce” such infringements through the hurdles imposed on athletes in obtaining effective judicial protection against potentially anti-competitive ineligibility decisions of the ISU. The EU Commission subsequently ordered the ISU to put an end to the infringement through the amendment of its Eligibility Rules, which included the arbitration rules (subject to a periodic penalty payment).

The ISU appealed the Commission Decision to the EU General Court.  While generally upholding the Commission Decision, the General Court annulled the part relating to the ISU arbitration rules in favor of the CAS. The decisions of the General Court are not final but subject to appeal to the Court of Justice of the European Union (Court of Justice).

This article does not discuss the part of the ISU Judgment that held that the ISU Eligibility Rules are incompatible with EU competition rules, which will be addressed in a separate article.  Instead, it focuses solely on examining the decision as it relates to the ISU’s arbitration rules, examining:

• Background – the Eligibility Rules and the Icederby skating event
• The EU Commission Decision
• The EU General Court’s Judgement
• Considerations For Sports Governing Bodies

More generally, the ISU Judgment shows an increasing tendency of the EU adjudication instances to determine the compatibility of the rules of Sports Governing Bodies (SGBs) with EU competition rules by scrutinizing their regulatory drafting and, subsequently, their overall governance structure.[4]