Whom to sue before the Court of Arbitration for Sport (CAS)?
Two scenarios are particularly interesting:
Appeals against decisions, e.g. by the UEFA Appeals Body, which lead to an exclusion of a club from a competition (Scenario 1). If the club is suing before CAS to be reinstated into the competition, does it suffice to direct the appeal against UEFA? Or does the appellant also have to sue the (replacement) club which benefitted from the decision of UEFA? What are the legal implications of refraining to name one of the above respondents?
Appeals against decisions in so-called "inter-member disputes", e.g. contractual disputes between in-direct members of FIFA (clubs and players), in which FIFA's dispute resolution bodies act as a first decision making instance (Scenario 2). Before CAS, does the appellant also have to name FIFA as a respondent, i.e. the organization whose dispute resolution body took the allegedly wrong decision?
There are different reasons why the question of whom to sue in sports disputes is more difficult to deal with than in commercial proceedings. For one, you are dealing with a multi-tier dispute resolution system which includes internal dispute resolution bodies of associations (e.g. the FIFA DRC or the UEFA Appeals Body), which do not qualify as arbitral tribunals, and are thus open to challenge before state courts or true courts of arbitration.
Furthermore, because football is organized in national and international competitions, a decision taken in a football case often affects several third parties, not just the directly involved parties of a dispute.
Further, neither the regulations of FIFA and UEFA nor the CAS Code contain any specific rules, e.g. concerning the issue of standing to be sued and/or mandatory litis consortium. As a result, CAS Panels regularly turn to Swiss Law to answer the question of whom to sue before CAS.2
Under Swiss law, a party has standing to be sued, for instance, if it is personally concerned with (“obliged by”) the disputed right which is at stake. In other words, a party has standing to be sued and a claim may be brought against it “only if it has some stake in the dispute because something is sought against it.”3
However, in appeal proceedings against decisions taken by FIFA and UEFA bodies, the general definition of standing to be sued also has to be construed in the context of mandatory Swiss association law, namely Article 75 of the Swiss Civil Code (SCC), which reads:
“Any member who has not consented to a resolution which infringes the law or the articles of association is entitled by law to challenge such resolution in court within one month from the day on which he became cognizant of such resolution."
The purpose of Article 75 SCC is to protect a member of an association from unlawful infringements by the association. The provision is interpreted in a broad sense and encompasses any decision of the association, irrespective of its nature, be it e.g. disciplinary or administrative. Most importantly, the party having standing to be sued in matters covered by Article 75 SCC is in general only the association which issued the appealed decision.4
Appeals with a potential influence on rights of third partiesIn the third qualifying round of the 2014/15 UEFA Champions League, Legia Warsaw beat Celtic Glasgow 6-1 on aggregate. However, on 8 August 2014 Celtic Glasgow were reinstated into the competition after the UEFA Control and Disciplinary Body (UEFA CDB) declared the second leg between the two teams forfeit (3-0) in favour of Celtic, because Legia had fielded an ineligible player. In awarding the second leg to Celtic, the UEFA CDB levelled the aggregate score at 4-4, resulting in Celtic progressing on away goals.
Legia challenged the decision before the UEFA Appeals Body and ultimately before CAS, directing its appeal against UEFA and Celtic.
It is obvious that the appeal must be directed against UEFA as respondent because UEFA sanctioned Legia on the basis of its own disciplinary regulations, affecting Legia in its membership rights. Not as obvious is the role of Celtic in the dispute. At first sight, Legia does not have a legal claim against Celtic, so why should Legia direct its appeal also against the club which (indirectly) benefitted from UEFA's decision?
In a similar scenario, Fenerbahce Istanbul was recently excluded by UEFA from the UEFA Champions League and replaced by Trabzonspor. Fenerbahce directed its request for provisional measures before the CAS only against UEFA as respondent, which led the CAS to conclude the following:
“Since the Panel on the basis of the code has no possibilities to make Trabzonspor a party to these proceedings ex officio, it has determined that it is precluded from taking a decision which would directly affect the situation of a third party in such a way without that party being able to present its position. In conclusion and in these circumstances the Panel is not satisfied that it could entertain Fenerbahce’s request for preliminary measures and the request is rejected.”5
The Panel found that it had to reject Fenerbahce’s request, because lifting UEFA’s decision would have had a direct impact on Trabzonspor which was not a party to the proceedings. The Panel found that entertaining the request of Fenerbahce would violate Trabzonspor’s right to be heard. However, the CAS Panel did not clarify how exactly Trabzonspor would have had to be included in the proceedings.
Including Trabzonspor as a respondent would have raised the question whether it had standing to be sued considering that the request for provisional measures was directed exclusively against the UEFA decision. On the other hand, the club which benefitted from the appealed decision had a clear interest in the outcome of the proceedings.
The best possible way to integrate a third party such as Trabzonspor or Celtic into the proceedings seems to be as an intervening party in order to give it the chance to defend its own interests. However, the CAS Code currently provides only for a right of a respondent to cause a third party to participate in the proceedings (Article 41.2 CAS Code) and a right for an interested party itself to apply for an intervention (Article 41.3 CAS Code). No such right is provided for the appellant. A possible solution could be that the appellant informs the possibly affected club about the appeal in order to give it the chance to file a request for participation. In case the affected club refrains from doing so, it could be argued that it waived its right “to present its position” in the proceedings.
CAS jurisprudence does not (yet) confirm this approach, although there is currently a pending proceeding before CAS in which the above question will have to be decided. For the time being, the diligent counsel will have to name third parties whose rights could possibly be affected in an appeal against a UEFA decision as respondents before CAS.
Typical cases in this category are transfer disputes on the basis of Article 17 of the FIFA Regulations on the Status and Transfer of Players (FIFA RSTP). A club sues before the FIFA DRC against a former player and his new club for a compensational payment because the player had terminated his employment contract without just cause. In case the FIFA DRC awards a compensational payment to the old club and the player's new club wants to appeal the DRC decision before CAS, whom does it have to sue?
Undoubtedly, the appeal has to be directed against the player's previous club. The old club was the claimant in the proceedings before the FIFA DRC and obtained a judgment against the player and the new club. In the appeal proceedings initiated by the new club, the old club takes the position of respondent whose right to a compensational payment pursuant to Article 17 FIFA RSTP is challenged by the new club. To say it in the words of CAS: The old club has a stake in the dispute because something is sought against it, i.e. the annulment of the FIFA DRC decision which awarded to the old club a compensational payment against the player and the new club.
In general, the Player does not have to be named as a co-respondent, although it has something at stake in the dispute. Because the player and the new club are joint debtors pursuant to Article 17 (2) FIFA Transfer Regulations, and the obligation of the new club to pay compensation follows automatically from the player's obligation to pay compensation, the legal relationship between the player and the new club in principal calls for one single decision with effect for both of them. CAS jurisprudence suggests, however, that the player and the new club may benefit from an annulment of a FIFA DRC decision independently from each other and irrespective of their participation in the appeal proceedings.6
CAS jurisprudence remains yet indifferent as to whether FIFA also has to be named as a respondent. For some time, scholars and CAS Panels have adopted a narrower interpretation of Article 75 SCC, holding that it shall apply foremost in membership related disputes as opposed to inter-member disputes.7 In their view, the provision would
"not apply indiscriminately to every decision made by an association […]. If, for example, there is a dispute between two association members (e.g. regarding the payment for the transfer of a football player) and the association decides that a club (member) has to pay the other a certain sum, this is not a decision which can be subject to an appeal within the meaning of Art. 75 Swiss Civil Code. […] The sports association taking a decision is not doing so in a matter of its own, i.e. in a matter which concerns its relationship to one of its members, rather it is acting as a kind of first decision making instance, as desired and accepted by the parties. […]"8.
The Panel in CAS 2008/A/1639 to a certain extent challenged the above view, explaining "that an association which settles disputes between its members in application of its own rules and regulations is of course (also) pursuing goals of its own and, hence, is also acting in a matter of its own." However, the question if and to what extent the narrow interpretation of Article 75 SCC would apply was ultimately left unanswered.
In a pending CAS proceeding the question has arisen once again and it will be interesting to see how CAS decides this time. For the time being, however, FIFA should be named as respondent in the statement of appeal in similar cases.
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Christian Keidel is a salary partner at Martens Lawyers in Munich, Germany. He joined Martens Lawyers as part of the initial spin-off team from Beiten Burkhardt, an international commercial law practice. Christian holds a legal degree from the University of Munich and has also studied at the University of Seville.
Alexander Engelhard is a lawyer at ARNECKE SIBETH DABELSTEIN, a German full service law firm with a team of dedicated, highly specialized lawyers who provide comprehensive legal advice to the sports, media and entertainment industry. Alexander focuses on dispute resolution, especially in sports-related cases. He also advises clients on the drafting of rules and contracts.