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The Court of Arbitration for Sport handles hundreds of cases annually, many of which involve football in various ways. Last week, one of those cases turned into an order from the European Court of Justice to create a window of review on cases from the Court of Arbitration.
The key facts are that the Royal Football Club Seraing – a Belgian club – was prevented from obtained outside investment from a Maltese company in 2015 due to existing rules from the International Federation (FIFA) and the continental confederation (UEFA). The club appealed within FIFA and lost, then appealed to the Court of Arbitration for Sport in 2016, claiming that the FIFA restrictions:
“infringe [European Union] law and, more specifically, the freedom of movement for workers, the freedom to provide services and the free movement of capital.”
The Court of Arbitration for Sport panel upheld much (but not all) of the FIFA judgement. The club appealed to the Swiss Federal Tribunal on ground that Swiss public policy is being infringed, but the appeal was dismissed in 2018.
At the same time, the club and the investor pursued actions in Belgian courts, losing at the Commercial Court and at the Court of Appeals in December 2019. A further appeal was made to the highest Belgian court, the Cour de Cassation, which asked the European Court of Justice for a ruling on whether a Court of Arbitration for Sport ruling in Switzerland – which is NOT a member of the European Union – must be acknowledged as final since European Union law has not been considered.
That’s the issue here, and the key element to remember is that Switzerland is not an EU member and do not apply EU law.
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A hearing on the question referred to the European Court of Justice was held in October 2024, more than nine years after the dispute started!
The opinion of the European Court of Justice referred to the Treaty on European Union (TEU), Treaty on the Functioning of the European Union (TFEU) and Charter of Fundamental Rights of the European Union, and noted the existing Belgian Judicial Code section 1721 on enforcement of an arbitration award, including:
“(1) The court of first instance may refuse to recognise or declare enforceable an arbitral award, irrespective of the country in which it was made, only in the following circumstances: …
“(b) if the court of first instance finds that: …
“(ii) the recognition or enforcement of the arbitral award would be contrary to public policy.”
This is a narrow ground for review, but it is Belgian law. Interestingly, it is eerily similar to the Swiss Private International Law Act, section 190.2, which states that an arbitration decision can only be annulled if one of five conditions are present.
These are improper appointment of the arbitrator(s), jurisdictional questions, if the decision went beyond the issues submitted (or failed to decide the issue submitted) and:
● “d) if the principle of equal treatment of the parties or the right of the parties to be heard was violated;
● “e) if the award is incompatible with public policy.”
But for the European Court of Justice, it is improper to leave a plaintiff from a European Union country unable to have its claim considered on “European public policy” grounds. Not Swiss, but European Union grounds and in a court in a European Union country.
So, the opinion states, as a matter of law:
“The second subparagraph of Article 19(1) TEU, read in conjunction with Article 267 TFEU and Article 47 of the Charter of Fundamental Rights of the European Union, must be interpreted as precluding
“– the authority of res judicata from being conferred within the territory of a Member State on an award made by the Court of Arbitration for Sport (CAS), in the relations between the parties to the dispute in the context of which that award was made, where that dispute is linked to the pursuit of a sport as an economic activity within the territory of the European Union and the consistency of that award with the principles and provisions of EU law which form part of EU public policy has not first been subject to effective review by a court or tribunal of that Member State that is authorised to make a reference to the Court of Justice for a preliminary ruling;
“– probative value from being conferred, as a consequence of that authority of res judicata, on such an award within the territory of that Member State, in the relations between the parties to that dispute and third parties.” (underline added)
Observed (comments by TSX editor Rich Perelman): As written, the European Court of Justice ruling – which does not deal with the case at all, but is a question of the value of Court of Arbitration for Sport decisions on actors in European Union countries – appears to allow national courts to review Court of Arbitration decisions as to adherence to “EU public policy” only. And the national court does not have to accept the Court of Arbitration for Sport decision as true and correct in all aspects.
This is a complex holding which maintains the ability of European Union plaintiffs and defendants to obtain a review of Court of Arbitration for Sport decisions in national courts in European Union countries, but does not touch the requirements for use of the Court of Arbitration between parties as the primary forum for resolution of disputes.
Now, the question is what will the Belgian courts do with this direction from the European Court of Justice? That is still to be seen. And there is no impact on any Court of Arbitration for Sport decisions which do not involve parties which are outside the 27-state European Union.
Nope, it’s still not over. Not even close.
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