The dichotomy and future of sports arbitration - Domestics arbitration
Published 20 July 2016 | Authored by: Nick De Marco QC
This four part series of articles by Nick De Marco1 reflects on the recent Pechstein case, a case that placed the Court of Arbitration for Sport (“the CAS”) and the sports arbitration system under great scrutiny, and consider:
- The issue of consent and compulsion in sports arbitration (Part 1);
- The appointment of arbitrators (Part 2);
- The use and accessibility of legal aid/assistance for players/athletes and the publications of decisions (Part 3); and,
- The structure of domestic sports arbitration, with a focus on The Football Association (Part 4).
Throughout this series of articles the author makes a number of recommendations to change the procedure of both the CAS and domestic sports arbitral bodies in order to promote fairness and impartiality and protect players.
Domestic sports arbitration
These recommended reforms, although discussed in relation to the procedure of the CAS, should equally apply to domestic sports arbitral bodies. The English FA, for example, would greatly benefit from reform to its disciplinary process (which is currently non-arbitral)2 and its arbitral procedure for resolving other disputes. First, the disciplinary procedures should be arbitral in nature. One of the many disadvantages of the current procedure is that members of the first instance and appeal panels are drawn from the same group of persons. So, although different persons will hear a matter at first instance and at appeal, the limited number of persons who sit on these panels makes it inevitable that panel members are frequently reviewing one another’s decisions. The attendant risks of a less scrupulous review are of great concern to players. There should, at the very least, be a separate pool of persons able to sit on both first instance and appeal panels. Further, as a result of these proceedings being non-arbitral, The FA’s arbitral procedure under Rule K can be used to challenge the decisions of appeal boards. This is inefficient, and could be avoided were the disciplinary panels (or at least the disciplinary appeals panels) arbitral proceedings.
Second, although The FA does have a sophisticated arbitral procedure for resolving other disputes (referred to above and set out at Rule K of the Rules of the Association 2015-2016), this too would benefit from reform. Most notably, ss. 44, 45 and 69 of the Arbitration Act 1996 are excluded from the Rule K arbitration procedure3 —accordingly, in a Rule K arbitration parties cannot apply to the court to exercise certain powers in support of arbitral proceedings, cannot apply to the court for a preliminary determination on a point of law, and cannot appeal on a point of law. These exclusions not only impact on the fairness of arbitral proceedings but they also detrimentally effect the efficacy of those proceedings. In Paul Smith & Jamie McDonnell v British Boxing Board of Control Ltd, Frank Warren & Dennis Hobson,4 for example, the boxers sought to challenge an agreement (which contained the arbitration clause) as unenforceable as an unreasonable restraint of trade, they also argued that the BBBC tribunal was biased and should not hear the matter. Because s. 45 of the Arbitration Act 1996 had not been excluded from the arbitration, the BBBC tribunal was able to give the boxers permission to make an application to the Court under s. 45 to have the Court determine whether the contract was enforceable.5 A s. 45 application enabled the arbitral tribunal to continue to hear the matter where they may otherwise have felt unable to (by reason of allegations that they had an interest in the validity of their own rules). By excluding s. 45, The FA makes its tribunals vulnerable to challenges on points of law which they are unable to determine. Further, exclusion of the courts’ supervisory powers under s. 69 leads to concerns about the quality of some Rule K arbitral panel decisions (because they cannot be appealed even if obviously wrong in law). The fairness of a Rule K arbitration would be much improved if these sections were applicable.
Consideration of the particular relationship between Rule K tribunals and the courts leads to a more general point, which is especially pertinent to sports arbitral bodies not governed by the Arbitration Act 1996 and therefore not bound by that Act’s mandatory provisions. It is vital that both the parties and the tribunals of all sports arbitral proceedings should have access to the courts to make applications for orders in support of the arbitration, or to avail themselves of the supervisory jurisdiction of the court. Indeed, without such access the arbitral body may be unable to reach a just result. In England and Wales Cricket Board Limited v Kanerira,6 for example, the Claimant had to apply to the court for a witness summons for its main witness (under s. 43 of the Arbitration Act 1996)—without resort to the court, the tribunal would have been unable to secure the witness’ attendance and would as a result have been unable to fairly resolve the matter.
More generally, the reforms identified above in relation to the CAS are of particular importance in domestic sports arbitrations, in all countries, and for all sports, where there is an even greater risk of pro-regulator bias. In most sports disciplinary proceedings, the governing body (which is the prosecuting body) has a close relationship with those who sit on panels as arbitrators. That proximity has two worrying possible consequences. First, it risks arbitrators giving decisions favourable to the governing body in hope of re-appointment. Second, the mere familiarity between the prosecution and the panel of arbitrators risks an unconscious bias against players, in favour of governing bodies.
Further, domestic arbitral tribunals would benefit from adopting the CAS’ provisions on joinder of parties and interim relief:
- With regard to joinder, the Procedural Rules to the 2016 Code provides that a third party may participate in an arbitration if it is a party to the agreement or if the other parties agree in writing. If there is no such agreement, then the President of the Division or the Panel (if formed) may decide.7 This procedure is welcome and should be adopted by domestic sports arbitral tribunals, many of which currently do not allow for joinder unless both parties agree (which is the presumptive position under the Arbitration Act 1996). Only allowing for joinder when all parties agree risks agreement not being reached for tactical reasons. For example, in 2007 Fulham FC requested that arbitral proceedings they had commenced against The FA Premier League (“FAPL”) be consolidated with arbitral proceedings that Sheffield United FC had commenced against the FAPL where both proceedings were based on similar allegations and sought similar relief. The FAPL refused to agree to full consolidation; although Fulham could make submissions in the proceedings, they could not call witnesses or cross examine.8 Such problems could be easily avoided by the question of joinder being resolved on application to the panel, which would enable a decision on joinder to be made on the basis of whether it is appropriate in the proceedings as a whole (rather than strategically advantageous for one party) with each party able to make submissions to that end. Joinder is to be particularly encouraged in sports arbitration (as opposed to commercial arbitration) for the benefits it has for consistent decision making, as well as being greatly more cost and time effective then the institution of separate proceedings.
- With regard to interim relief, the CAS has a power (as do FA Rule K arbitral tribunals) to order interim measures and interim relief. Where possible, domestic sports arbitral bodies should also enable parties to apply to the panel for interim relief. Where this is not possible (because, for example, the panel does not have the necessary powers to order interim relief) then arbitral bodies should allow parties to apply to the court for orders in support of arbitral proceedings (by s. 44 of the Arbitration Act 1996). The availability of interim relief is important to protect parties’ positions pending resolution of their dispute, and it would be of particular benefit to sports governing bodies who would thereby be able to request provisional suspension, or to prevent dissipation of assets prior to a final decision. Such an amendment, therefore, would be unlikely to be opposed.
“Compelled consent” in international sports arbitration is deeply concerning, especially for the players forced to submit, but it is almost certainly necessary for the effective and consistent resolution of international sports disputes. Sport is not like other private commercial disputes and requires a tailor made arbitral approach that reflects the combined requirements of consistency, equality, transparency, efficiency and fairness. Commerce is not usually about the creation of a level and fair playing field (often the opposite), yet those principles are integral to sport and to the resolution of disputes in sport. The need for a unified system of arbitration in sport requires great care to be taken to ensure the fairness of proceedings, particularly for players who are forced to accept arbitral clauses drafted by the regulators who control entry into the sport and who often form one of the parties to the dispute. Fairness is also essential for the regulators themselves – to guarantee the integrity of their dispute resolution processes, but also their very survival (from legal challenges such as those bravely and importantly brought by Ms Pechstein). The CAS’s invitation for suggested further reform is welcome and reflects the fact that ensuring that players have a fair hearing and an effective remedy is beneficial to the CAS as well as to players themselves. For such reform to be meaningful proposals such as those above ought to be implemented by both domestic sports arbitral processes as well as the CAS.
This four part series is taken from the author's original paper which can be found here.9 For those who wish to read more about the Pechstein case and sports arbitrations the following articles will also be of interest:
- The Legality of the Arbitration Agreements in favour of CAS (Pechstein) Part 1 by Despina Mavromati
- The Legality of the Arbitration Agreements in favour of CAS (Pechstein) Part 2 by Despina Mavromat
- The Pechstein judgment: CAS’s reaction & potential ramifications by Andrew Smith
- A guide to the Higher Regional Court’s decision in the Pechstein case by Christian Keidel
- Another round in favour of sports arbitration: Court confirms boxing disciplinary appeal panel is an Arbitration by Nick De Marco
- 10 key considerations arising from Kaneria by Nick De Marco
- Civil liability for sports injuries and why courts compete with arbitration in Belgium by Sven Demeulemeester and Grégory Ernes
- Interview with Matthieu Reeb, Secretary General of the Court of Arbitration for Sport by Sean Cottrell
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- Barrister at Blackstone Chambers specialising in sports law. Nick is an expert in sports arbitration having acted for sports regulators in the leading recent UK cases on the developing area (such as the ECB in Kaneria and the BBBC in Paul Smith, mentioned below in the article); he regularly appears before a variety of domestic and international sports arbitral panels, including the CAS, representing both sports governing bodies and players; he sits as arbitrator across a number of sports (football, rugby and wrestling); he is currently assisting the football players’ union, the Professional Footballers’ Association, in attempts to reform certain disciplinary/arbitral processes in football.
- See General Provisions Relating to Inquiries, Commissions of Inquiry, Regulatory Commissions of the Association, Other Disciplinary Commissions, Appeal Boards and Safeguarding Review Panel Hearings at [1.1] (p.316 of The FA Handbook 2015-2016).
- s. 4(1) of the Arbitration Act 1996 provides that there are mandatory and non-mandatory provisions of the Act: the mandatory provisions have effect notwithstanding any agreement by the parties to the contrary; the non-mandatory provisions can be excluded or amended by agreement between the parties. The mandatory provisions are listed at Schedule 1 of the Act, which does not include ss. 44, 45, and 69. S. 43 of the Act, however, which allows parties to apply to the court to secure the attendance of witnesses, is listed at schedule 1 and therefore cannot be excluded by parties to an arbitration.
- QB, Liverpool DR, Mercantile Court, 13 April 2015, unreported; and see also discussion at https://sportslawbulletin.org/2015/09/10/another-round-in-favour-of-sports-arbitration-court-confirms-boxing-disciplinary-appeal-panel-is-an-arbitration/
- As it happened in this case, the boxers did not make an application under s. 45 within the time frame allowed by the tribunal. Six months later the boxers then applied to the Court under s. 24 of the Arbitration Act 1996 asking that the arbitrators be removed for reasons of bias. This application failed, partly because the boxers had accepted the jurisdiction of the arbitral tribunal and had failed to make a s.45 application to the Court when they had an opportunity to do so.
-  EWHC 1074 (Comm); see also discussion at: https://sportslawbulletin.org/2013/05/13/cricket-disciplinary-appeal-is-an-arbitration/
- See  ISLR SLR-77 for the Sheffield United decision. For discussion of these cases see https://sportslawbulletin.org/2013/10/10/behind-closed-doors-how-to-avoid-the-problems-of-private-proceedings/
- Nick De Marco, 'Compelled Consent—Pechstein & The Dichotomy And Future Of Sports Arbitration', Blackstone Chambers, 4 July 2016, last accessed 19 July 2016 https://www.blackstonechambers.com/document.rm?id=680
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About the Author
Nick is rated a leading silk in Sports Law and is a member of Blackstone Chambers.
He has advised and acted for a number of sports governing bodies, athletes, most Premier League football clubs and many world-class football players in commercial and regulatory disputes.