Parting with powerful executives: Lessons for sports organisations from the IFAF v Tommy Wiking casePaul Nicholls QC
This article reviews the decision of the Court of Arbitration for Sport (the CAS) in International Federation of American Football (IFAF) and others v Tommy Wiking1.
The case is a salutary lesson in the difficulties that can arise when senior individuals within sporting bodies fall out with the organisation, which then wants to part with that individual. It is also an example of how it may be possible for a sporting organisation to exploit circumstances to achieve its preferred outcome.
The facts and the dispute
The case is factually very complicated, and involved, amongst other things, parallel groups each claiming to represent and act for the IFAF. The key decision for the CAS was to determine who was in charge and so able to act on behalf of the IFAF.
The relevant background, however, was as follows. Tommy Wiking had been elected as President of the IFAF. His appointment was for a series of four-year terms commencing in 2008 and 2012, the last one thus due to end in 2016.
IFAF’s case was that problems had arisen in connection with the 2015 IFAF World Championship, which had been due to take place in Sweden. The organisation of this event had been the responsibility of the Swedish American Football Federation (SAFF), which had arranged for a company called Amfium AB to make the necessary arrangements. Mr. Wiking had been President of SAFF from 2000 to 2014 and was Chairman of Amfium. In the event, no World Championship took place in Sweden. It was instead held in Ohio, USA.
In order to explain why the World Championship did not proceed, IFAF relied on a published article,2 which reported that Mr. Wiking had taken leave of absence due to ill health until January 2015. The article said that it was not clear whether his absence was due to his arrest by authorities in Sweden for embezzlement. The article recorded that hotel bookings had been cancelled and that it was not clear that the main stadium for the World Championship had been booked. A spokesperson for SAFF said that there was insufficient money to organise the event.
We do not know whether Mr. Wiking accepted or disputed what was in the article because, as the CAS noted, he hardly addressed the events surrounding the cancellation of the World Championship in Sweden, saying that they were irrelevant.
It was common ground that Mr. Wiking remained absent due to ill health. The IFAF asked that his leave of absence be extended in order to allow him to provide a description of the actions he had undertaken relating to the World Championships, expressing "deep concerns" relating to their cancellation.
There followed an e-mail from Mr. Wiking which was central to the case. On 3rd February 2015, he wrote:
"I’ve been on a IFAF leave of absence since mid-December for health reasons and now have decided that it is best for me to resign – due to health issues – so IFAF leadership can move forward on the important business ahead … I will as you can see per above resign at April 30th" [Para 150]
He then referred to other organisations with which he had links and said:
"I will explain to these leaders that I will resign on April 30th and [named individuals from IFAF] will be there to see/hear it" [Para 22]
"I have now declared my intentions to you. It shouldn’t be unclear to you what will happen on April 30th. But I would like to be the one who informs the member federations. I don’t want the members to find out via some website or social media. The part that I’m on leave of absence can of course be communicated. But not that I’m resigning April 30th." [Para 22]
The IFAF Executive Board then resolved to accept Mr. Wiking’s resignation effective 30 April 2015.
Mr. Wiking then had second thoughts about resigning and on 30th April 2015 forwarded a statement to say that he would not be resigning but would continue as IFAF President. If that was right, it would mean that he would remain in post until the expiry of his term in 2016. The IFAF acted on the basis that he had resigned with effect from 30th April 2015. Its position was that the leader of the IFAF was from 30th April a senior Vice President, Mr. Kaneuji.
There then followed a series of parallel events hosted by Mr. Kaneuji and Mr. Wiking. The latter was prevented from accessing the podium reserved for the Executive Board at the IFAF Congress in July 2015. In his absence, a meeting was held under Mr. Kaneuji which elected a new President, Mr. Noronen. That meeting was attended by representatives of 19 member countries.
A number of delegates, cross at Mr. Wiking’s exclusion from the podium, attended what was described as a parallel meeting chaired by him at which he was elected as President and Mr. Kaneuji as Vice President. Representatives of 22 countries attended that meeting and voted.
There followed further meetings of the different groups in 2016, including an IFAF Congress in September 2016. Each of these meetings held elections for President of the IFAF. The Congress in September 2016 chose Mr. MacLean. Mr. Wiking was elected at the meeting he chaired.
The Court of Arbitration for Sport decision
The matter then went to the CAS. The main issue for determination was who was the President of the IFAF. That turned on whether Mr. Wiking had resigned. There were also issues as to the validity of decisions taken by the two factions of IFAF member countries, but that largely depended on the question who was the President.
Mr. Wiking also challenged the ability of the IFAF to refer the case to the CAS in the first instance without his approval, but that, too, turned on the central question who was President.
For all the factual complexity connected with the acts of the different groups, in the CAS’s analysis, the case turned on one short point: the construction of the e-mail of 3rd February. Had Mr. Wiking resigned? Since resignation is a unilateral act by the holder of an office, the short question was whether that e-mail had been a legally effective decision to resign or whether, as Mr. Wiking argued, it was
"a mere declaration of his intention to resign on 30 April 2015 and cannot, therefore, be construed as a legally binding declaration of his will to resign"[Para 137]
Moreover, he would add, he changed his mind and did not on the date act as he had indicated he would.
The CAS held that it was necessary not only to look at the words used but also the context in which it was sent to consider how it was understood by the addressees. It was common ground that the context and events surrounding the e-mail were fundamental to its interpretation.
The CAS emphasised several factors. It referred to what it described a "number of difficulties and challenges which … he did not disclose to the IFAF Executive Board". These included that the Executive Board had not been informed of difficulties with the organisation of the World Championship; allegations that funds had disappeared; that Mr. Wiking had not told the IFAF that he had spent some time in police custody; and that he had been involved in agreements or negotiations linked to the interests of SAFF or IFAF.
The CAS recorded that these events led the IFAF to encourage Mr. Wiking to resign in order to preserve his reputation. The 3rd February e-mail was sent against the background of expressions of concern by the IFAF.
Its conclusion was that the e-mail was an effective resignation and so had the consequence that Mr. Wiking was bringing his tenure as President to an end. It conclusion was that he:
"unequivocally declared that he was resigning on 3 February 2015 effective 30 April 2015 so that he could remain on sick leave until then and so that he could announce his resignation himself first. Consequently the content of the e-mail was not a mere “declaration of intent” but an unequivocal declaration of resignation" [Para 153]
The CAS rejected the suggestion that the e-mail had been sent under duress. It was a decision freely and unambiguously taken.
It concluded that Mr. Wiking resigned on 3rd February and that the resignation became effective on 30th April. It followed that after 30th April, Mr. Wiking had no power to act on the IFAF’s behalf.
On that basis, the rest of the case fell into place. Since Mr. Wiking had resigned, Mr. Kaneuji took over. He was therefore able to organise the meeting at which Mr. Noronen was elected as President. Because Mr. Wiking had resigned, the meeting which he held at which he was elected President could not bind the IFAF. The only legitimate meeting was that chaired by Mr. Kaneuji. At that meeting, there was a quorum of countries and a sufficient number voted for Mr. Noronen. It is ironic to note that, had those dissenting countries not elected to leave and attend a meeting which the CAS held had no legal effect, they could have stayed at the only effective meeting and voted against Mr. Noronen. But they did not and so his election stood.
The later meeting of the IFAF in September 2016 which elected Mr. MacLean was effective and he was declared to be the President of the IFAF. The Congress which met in September 2016 to elect Mr. MacLean was the authority of the IFAF.
Analysis of the CAS decision
For all the great factual complexity of this case and the numerous background issues alluded to, the case in truth turned on one very narrow issue: what did the e-mail of 3rd February 2015 mean? Was it a resignation or was it an intimation of Mr. Wiking’s intention which would only become effective if, when 30th April arrived, he resigned? As indicated, the CAS referred to the background material, but in the end that was only the context in which that document had to be construed.
It would have been open to the CAS to come to a different view. It is eminently arguable that Mr. Wiking was doing no more than to indicate what he intended to do in the future; that on 30th April he would resign. It could be said, first, that that was not a resignation on 3rd February. On any view, he remained President on that day. He could also say that he did not by that e-mail give notice. One can well envisage a form of words which says on 3rd February that the author hereby gives notice that his appointment as President will come to an end on 30th April. That would be a resignation, albeit a resignation on notice. But it could be argued that this e-mail did not do that.
There has been a recent English case, in a very different context, where an e-mail similar to Mr. Wiking’s was construed as an indication of an intention to resign and not a resignation.
Jones v Wigan Council,3 in which the author acted, was a case about whether a councillor had resigned so as to create a vacancy which could be filled by an election. He said he had not resigned and that therefore the election should not be held. The councillor had sent an e-mail in terms not wholly dis-similar from Mr. Wiking’s. On 5th January 2018 he said:
"With a lot of thought, I have to inform you that as of the 20th February 2018, I will be resigning from my role as an elected councillor for Wigan Council. I do hope that we can go our separate ways with no hard feelings. Due to personal circumstances, as well as depression, I need to get my life back on track."
The Council treated that e-mail as a resignation and declared a vacancy for the position of councillor. Three days later he changed his mind and said he would not be resigning, but the Council said that that was too late.
The Council therefore said that the election should proceed and Mr. Jones applied for an injunction to restrain it. He succeeded. The Judge concluded that he had not resigned on 5th January, the date of the e-mail, but that instead he was intending to do so in the future. Admittedly, this case required the Court to construe the e-mail in the context of the legislation governing the calling of elections where the question is whether a vacancy had arisen which would enable the returning officer to call an election. The legal context is therefore very different. However, a central issue in the case remained whether the councillor had resigned and that turned on the construction of his e-mail. If this was a resignation on the date of the e-mail, then there was a vacancy and an election could be called. Faced with that question of construction it appears that the Court preferred the view that this was an expression of intention rather than an effective resignation. That question of interpretation was similar to that which had been before the CAS.
Whilst emphasising that Jones was a case under the election legislation and therefore, as indicated, arose against a different legal background, it is also right to add that the governing law in Mr. Wiking’s case was the law of France and it would be that law which would inform questions of interpretation. That having been said, the CAS did not identify or apply any particular provisions of French law in coming to its conclusion.
Conclusions to draw from the Case
What this indicates is the very fine lines on which the decision in IFAF was reached. As is apparent, the CAS was strongly influenced by the context of the decision, perhaps more so than other courts might have been. The point is that this is a case that a different panel might have decided differently. Also, there might be different decisions depending on the law that was applicable to the dispute and the principles of construction to be derived from that law.
No doubt because the IFAF no longer wished to have any relationship with Mr. Wiking it was prepared to run the argument even if it had been of the view that the case was evenly balanced.
As things turned out, the IFAF was advantaged by Mr. Wiking’s e-mail. But what if he had not sent such an e-mail or what if he had sent an e-mail in terms that a court held did indicate only an intention and not a decision to resign? In that event, it would presumably have followed that he could have argued that the congress at which he was elected should prevail and that the purported election of another president was invalid. In this alternative analysis, he might have been able to cement his position. This shows how high were the stakes and how important for sporting bodies disputes with senior individuals can be.
Thus the other lesson to learn from the IFAF case is that sports organisations may need to arm themselves in advance to deal with the situation of disputes with powerful senior people. As I have indicated, but for the fortuity of the e-mail, the IFAF would have been bound to work with Mr. Wiking notwithstanding concerns they had expressed at least until the end of his term. The IFAF was in a position at least that its president was appointed for a fixed term and was nearing its end. But in other cases, senior posts may last for much longer fixed terms or be subject to lengthy notice periods that would be expensive to buy out.
A way in which organisations may seek to protect themselves is by considering the inclusion in the contract of terms which permit the lawful early termination of contracts. This could be because of the conduct of the individual or because of external circumstances. This will, of course, be an issue for negotiation and it may be when one has a much in demand senior figure that those negotiations will be difficult. There is room for the view that the IFAF was fortunate in this case. For the reasons given by reference to Jones a different decision might have been reached. But the only reason that the IFAF found itself having to have these arguments and having to latch on to the 3rd February e-mail was the lack of other contractual means of bringing the relationship with Mr. Wiking to a premature end.
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- Tags: American Football | Court of Arbitration for Sport (CAS) | Dispute Resolution | Employment Law | International Federation of American Football (IFAF)
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About the Author
Paul Nicholls QC is a barrister at Matrix Chambers and specialises in a number of areas including restraint of trade and unlawful competition, employment law, commercial law, procurement law and public law.