CAS's neutrality questioned (part 1)

The recent ruling by a German court in a case involving speed skater Claudia Pechstein has left a question about the 'neutrality' of the Court of Arbitration for Sport (CAS), the highest court in sports litigation. The legal community  is abuzz, the media has started speculating CAS's future in the present format. A two-part piece here brings details and attempts to explain the issue.

The foundations of the Court of Arbitration for Sport (CAS) have been shaken by the recent judgement of a Munich court in an appeal filed by multiple Olympic medallist Claudia Pechstein.

In what could be of far-reaching consequences in sports arbitration, especially in matters of doping and other disciplinary procedures, the Munich appeal court (Oberlandesgericht München) ruled that there were structural imbalances in the composition of the International Council of Arbitration for Sport (ICAS) and thus in the CAS panels that could be deemed favourable to the sports associations.

The Munich court consequently ordered in its judgement on Jan 15, 2015, that the CAS verdict in relation to a doping appeal by Pechstein could not be acceptable as per German ‘competition law’ and the New York Convention of 1958, thus opening up a fresh avenue for the German skater to claim damages from the International Skating Union (ISU) in a German civil court.

In a nutshell, the Pechstein ruling has questioned the ‘neutrality’ of the ICAS and CAS, leading to a situation where individual athletes, clubs and officials from other countries could approach civil courts in their own countries to resolve doping issues and other disputes from a long-term perspective. At least in theory that could be possible.

It is too early of course to say whether the Munich court ruling is here to stay, so don’t jump to quick conclusions. Legal experts do expect the ISU or any other competent authority to go in appeal to the highest German civil court, the Bundesgerichtshof (BGH), which could be expected to pronounce a final verdict on this drawn-out drama that began unfolding in 2009.

The Pechstein case

What is the Pechstein case?

Background and brief analysis are available at the Asser International Sports Law Centre 

The case, as explained in the above article, relates to a ‘blood passport’ finding of the German speed skater in 2009. She was suspended for two years by the ISU in July, 2009. Pechstein, owner of nine Olympic medals including five goldis the most successful Olympic speed skater, male or female, of all-time. She is also the most successful German Winter Olympian ever.

Pechstein’s was the first case to be determined under the biological passport system introduced by WADA in 2009 in which an athlete’s biological variables over a period of time are monitored rather than the blood tested to find out the doping substance or method.

Pechstein was banned for two years by the ISU, leading to a series of legal battles that eventually culminated, six years later, in the recent judgement by the German court. In between she approached CAS which dismissed her appeal in November 2009. She knocked at the CAS doors again next year, unsuccessfully, as she tried to compete in the team skating events of the Vancouver Olympics with an appeal to the CAS ad hoc division.

Pechstein went to the Swiss Federal Tribunal twice and failed on oth occasions. The Swiss court gave its final ruling on September 28, 2010, rejecting the German’s plea. She returned to competition in February 2011, won a bronze in that year’s World Championships in the 5000m race, and almost took a medal in the Sochi Olympics last year.

By then she had filed a petition before a lower court in Munich seeking damages including for loss of earnings of around four million Euros from the ISU. Despite accepting the invalidity of the arbitration clause that forced her to seek justice at the CAS in an arbitration proceeding with the ISU, the Munich court in its order of Feb 26, 2014 held that the res judicata effect of the CAS verdict was to be recognized since the Olympian did not contest the competence of CAS in her appeal. (res judicata is a term used to indicate that the effect of a first judgement by a competent authority was to be preserved if the subsequent appeal was identical in nature or substantially the same.)

She appealed this Munich court decision to Oberlandesgericht München, an appellate court,  which has now given the path-breaking verdict, not only questioning the neutrality of the ICAS and CAS but also providing the skater with an opportunity to seek damages from the ISU.
The Munich appeals court noted that the arbitration clause signed on the 2 January 2009 by the appellant (Pechstein) and the respondent No. 2 (ISU) did not preclude access to the ordinary courts

 "To this end the question whether the CAS, designated by the arbitration clause, can be considered a real arbitration tribunal, despite the fact the parties have no equal influence on its composition, can stay open. The arbitration clause would also be null in that case.

"The arbitration clause is in the present case inapplicable because it goes against

Anti-trust law," the court stated.

Even as it acknowledged the utility of an independent court or arbitration body to deal with cases related to sports, especially doping, the Munich appeal court went by the argument that the composition of the CAS panel had an imbalance in favour of the sports associations.

Monopolistic

The Munich courts concluded that the ISU (and all such international sports governing bodies) were monopolistic in nature, thus ruling out the possibility of a banned athlete competing in any competition and make a living out of the sport.

A rough translation of the Munich court decision in German, provided by the Asser International Sports Law Centre, states “The provisions regulating the selection of the potential CAS arbitrators favour the sports associations in disputes against athletes, thus embedding a structural imbalance that is threatening the neutrality of CAS.”

Though rules have changed from Jan 2014 as far as eligibility to be named on the CAS list of arbitrators are concerned the court apparently took note of the previous set of rules applicable to the German’s case that did not facilitate selection of arbitrators from an open panel.

Moreover, even now, the sports bodies, including the International Olympic Committee (IOC), the international federations and the Association of National Olympic Committees (ANOC), have a large say in the appointment of the 20 members who constitute the ICAS which in turn approves the CAS panel members.

Is there a bias?

 “This disproportionate influence creates the risk that the persons included on the CAS arbitrators list predominantly or even entirely favour the side of the sporting associations over the athletes. This is also true concerning the arbitrators that are not suggested by the sporting association, but are selected in view to protect the interest of athletes or on the basis of their independence, as they are designated by ICAS members chosen by the sporting associations. A balanced influence of the parties on the composition of the arbitral tribunal that would be needed to safeguard its independence is thus not provided. Such a structural deficiency threatens the neutrality of the arbitral tribunal; this is independent of the fact whether the persons included on the CAS list of arbitrators are in any way linked to the sports associations, as this would actually open the possibility to challenge their nomination. Even when the personal integrity of the persons included on the CAS list is not affected, there is a potential risk that arbitrators share the worldview of the sports associations rather than the one of the athletes,” said the order, as translated by Asser International SportsLaw Centre.
Can this lead to drastic reforms in the ICAS and CAS framework? Is this binding on the ISU and in turn will other international federations be forced to cough up money if damages are claimed in litigations in different countries on the same premise as in the Pechstein case? Even in such instances where a final appeal might have been disposed of by CAS?

Is it the beginning of the end of CAS and world-level sports arbitration as has been made out by some observers?

 (continued)

(updated 24 Feb 2015)