In 2009 the German speed skater Claudia Pechstein intended to participate in the World Speed Skating Championships organized by ISU (International Skating Union). A condition of entry was that all participating athletes were obliged to sign an arbitration agreement providing for arbitration before the Court of Arbitration for Sport (CAS). This agreement was in line with the regulations of the ISU which contain – as do most of the regulations of the Olympic International Federations including FIFA – an arbitration clause that acknowledges CAS as the competent court.
In July 2009, shortly before the ISU Championships started, Pechstein was tested positive for drugs and later banned by the ISU for two years because of an anti-doping violation under article 2.2. of the ISU Anti-Doping Rules. Pechstein appealed the decision before CAS. With its decision of 15th November 2009, file number CAS 2009/A/1912 and 1913, CAS upheld the decision of the ISU. Pechstein appealed the CAS decision two more times in the Swiss Federal Tribunal, which is the competent court to appeal against decisions of CAS. Eventually, she appealed against the CAS decision before the German Civil Court. She is seeking a ruling that she was not involved in doping and that the irregularity in her blood samples are linked to an inherited disease. She is claiming compensation for her damages of approx. €3.6 million.
While the German Regional Court in the first instance said it is not competent to review the decision of CAS and dismissed the appeal, the Higher Regional Court in the second instance in Germany ruled on 15 January 2015 in an interlocutory judgment that it is competent to review that case. It is the first time that a German civil court has allowed a case to be heard after CAS has made a final decision.
The Higher Regional Court in Germany concluded that the arbitration agreement signed between the Athlete Pechstein and the ISU shortly before the Championships in 2009 is void. With signing such agreement, the athlete agrees involuntary to the rules and regulations of the sports body. Such declarations are common also in other sports, such as in Football, where similar agreements are signed and comparable clauses are included in the player’s contracts. This arbitration agreement with the ISU included the provision that the Athlete agrees to binding arbitration of CAS as the exclusive jurisdiction and exclusive method of resolution of all claims or disputes, including damage and money claims as well as other claims, which could otherwise be the subject of a lawsuit in a civil court. According to the regulations of the ISU, the CAS is acknowledged as the competent court to make the final and binding decisions as well. The Higher Regional Court conceded that the claims of Pechstein could normally only be heard by CAS because of this arbitration agreement but as this agreement is void in its opinion, the German Court has, exceptionally, the competence to decide this case by itself.
Aside from that, the Higher Regional Court admitted that there is a reason for the international sports organizations to request the athletes to sign an arbitration agreement in order to establish uniform regulations and equal opportunities for all athletes participating in the events. Requiring arbitration agreements that provide the option to appeal only to one specific sports court doesn’t cause per se an abuse of the dominant position of the organizer of international sporting events. In particular, it states that the obligation to sign the arbitration agreement doesn’t constitute an infringement against article 6 par. 1 of the European Convention on Human Rights (ECHR) which creates the right that everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal.
However, the court stated that it doesn’t recognise the CAS as an independent sports court because of the CAS regulations, namely the ‘Statutes of the Bodies Working for the Settlement of Sports-related Disputes’ (Statutes; version of 2004) which infringe the German antitrust law. Under these provisions, the parties were only able to choose an arbitrator out of a list by the International Council of Arbitration for Sport (ICAS) which is a body of the CAS that facilitate the settlement of sports-related disputes through arbitration. According to S6 Nr. 3 of the Statutes, this body “appoints the personalities who are to constitute the list of arbitrators and the list of CAS mediators and can remove them from those lists”. ICAS consist of twenty members of which four members are appointed by the International Sports Federations, four members are appointed by the Association of the National Olympic Committees, four members are appointed by the International Olympic Committee, four members are appointed by the first twelve members of the ICAS after appropriate consultation with a view to safeguarding the interests of the athletes and the last four members are appointed individuals who are independent from those bodies.
The German Court states that through these regulations, the sports organisations have a decisive influence on the composition of the arbitrators which call into question the neutrality of the CAS. Forcing the athletes to sign such arbitration agreement would infringe the mandatory German antitrust law as the international sports organisations abuse their dominant position in the market. If athletes had a choice they wouldn’t sign such an agreement because it is in favor of the sports federations. Therefore, between the sports organisation and the athlete a “structural imbalance” would exist. Acknowledging the CAS decision would infringe the public order. As a result, the decision of the CAS doesn’t need to be recognized by the national courts. In order to prove if Pechstein is entitled to claim the damages of approximately €3.6 million, the national courts are not bound by the findings of the CAS, according to the German court. As the validity of the claims made by Pechstein depend on the question of whether the two year doping ban was justified, the German court will be able to make its own decision on that question as well.
The decision of the German High Regional Court is an interlocutory judgment. The parties have the possibility to appeal against it to the German Federal Supreme Court (Bundesgerichtshof). The decision was widely reported in the media and it seemed to have called into question the entire system of the CAS and its jurisdiction as the German court makes a very serious accusation by saying that the CAS is not acknowledged as an independent, neutral court.
On closer analysis, this opinion is questionable. Every party appoints its own arbitrator for the proceeding. The two arbitrators appointed shall select the President of the Panel by mutual agreement. Only if they are not able to reach an agreement, the President of the Division shall appoint the President of the Panel in lieu of the two arbitrators (Statutes, R40.2). The list of arbitration contains 150 people. It is difficult to believe that all of them are “too close to the sports organisations”. Furthermore, the German court overlooks that the sense of appointing the arbitrator is not to choose one that follows the same interests, here the interests of the Athlete, but to appoint an arbitrator who is competent and experienced and will make his decision only based on facts and on what he considers to be fair in the individual case. Furthermore, the parties have agreed to the competence of the CAS also during the proceedings before CAS by accepting the ‘Order of Procedure’ and no party has contested the competence of the CAS at that time. Therefore, even if the court evaluates the arbitration agreement as void, it should have considered that the parties have agreed to the process before CAS through acknowledging it before CAS and on this reason the behavior is contradictory.
The German Court states that there is a “structural imbalance” between the athlete and the sports federation but in fact, in the proceeding before CAS the German Skating Union (DESG) – which is a national sports federation and where Pechstein fought the decision of the ISU before CAS – shows that in this case assuming an imbalance is not convincing. Further, the Court had no indication to assume that the athletes are disadvantaged in any way before CAS. It just speaks about a potential danger which is from its perspective sufficient for it not to be bounded by the CAS.
Apart from all the legal arguments, the decision is pointing the wrong way for the practice: Most international sports organisation refer to the CAS as appeal body. FIFA, its Confederations and its 209 members acknowledge CAS as the competent court. If the decision is upheld in the German Federal Supreme Court, will every international sports federation then be afraid to sanction athletes under their jurisdiction because of doping violations or match‑fixing? Because if they do, and even if the CAS confirms their decision, the player could still appeal to the national court of his home country and this national court could revise the decision of CAS.
It is not convincing that the national court that reviews the CAS decision would be more neutral than the CAS itself as the national court might have the (unconscious) intention to safeguard its own athlete, the athlete that represents their nation to the world. This would hardly enable constant and uniform case law on an international level.
The decision of the German court sounds like a carte blanche for athletes – even if they get involved in doping or match‑fixing, they could appeal before CAS and if the decision is not in their favor, they could just appeal before the national court of their home country that can easily reverse the decision – and even claim damages. If that scenario became practice, this would discourage sports organisations to make strong and clear decisions by sanctioning violations such as doping and match-fixing with zero tolerance.
This would not be the right signal in the fight against corruption in sports, this would be a black day for integrity.
Dr. Laila Mintas is Director of Sports Integrity at CONCACAF. A lawyer, she was formerly Head of Legal and International Development for FIFA’s Early Warning System (EWS) in Zurich. She previously practised law at international law firm White & Case LLP, headquarters in New York, and has lectured law at the Humboldt University of Berlin. She is a professor for Sports Law at St. Johns University/ISDE in New York.
The views expressed in this column are those of the author and do not necessarily reflect those of CONCACAF.