Protecting Autonomy and Integration, but at What Cost? – Cambridge International Law Journal

Introduction

On 16 January 2025, AG Ćapeta delivered the Opinion in Seraing v. FIFA et al., holding that EU lawprecludes “the appliance of […] the precept of res judicata, to an arbitral award the conformity of which with EU regulation has been reviewed by a courtroom of a State that’s not a Member State of the European Union, which isn’t permitted to refer a query to the Court docket of Justice for a preliminary ruling” (para. 136.1). This Opinion has been construed both as a deliberate assault on arbitration or real willingness to enhance the transparency of the Court docket of Arbitration for Sport (“CAS”). After summarizing the Opinion (II), this put up means that the AG’s method can alternatively be considered as an “overreactive” try by the CJEU ecosystem to guard the autonomy of EU regulation and protect EU integration (III). This try, nonetheless, entails systemic dangers for sports activities arbitration, which is probably not price taking, contemplating the provision of public coverage as a safeguard for elementary EU regulation ideas and aims (IV).

A “Purple Card” to the CAS/ISF Arbitration System: the AG’s Issues about “Obligatory” Arbitration and “Self-Adequate” Enforcement

Seraing involved a preliminary reference by the Belgian Court docket of Cassation, inquiring the CJEU whether or not “an arbitral award the conformity of which with EU regulation has been reviewed by a courtroom of a State that’s not a Member State of the European Union, which isn’t permitted to refer a query to the Court docket of Justice of the European Union for a preliminary ruling”, can have res judicata results. The underlying dispute pertained to a CAS award involving FIFA.

The Opinion begins with the precept of efficient judicial safety which, for the AG, requires States to “be sure that a person who claims that his or her EU-based proper is infringed has entry to an unbiased courtroom beforehand established by regulation, and with the ability to make a reference to the Court docket beneath Article 267 TFEU”; the CAS, naturally, has no such energy (paras. 42-44).

The AG then states that, whereas the CJEU’s Eco Swiss judgment mentioned the evaluation of “common” arbitral awards by nationwide courts on EU public coverage grounds, Seraing was totally different: it concerned “necessary” arbitration guidelines and a system of “self-sufficiency” as regards enforcement, specifically, FIFA’s inner execution system for CAS awards, which entails sport sanctions for non-compliance (paras. 68-76).

Particularly, citing the ECtHR’s Mutu and Pechstein ruling, the AG causes that CAS arbitration involving worldwide sports activities federations (“CAS/ISF arbitration”) doesn’t replicate a celebration’s true option to exclude entry to an EU courtroom and preclude the appliance of EU guidelines (para. 75). In contrast, “it might be thought-about [in commercial arbitration] that the events voluntarily excluded the appliance of some guidelines of a authorized system” (para. 111). CAS/ISF arbitration is self-executing due to its inner system of sport sanctions, leaving little room for scrutiny by EU courts (paras. 76-78).

The AG, lastly, questions the applicability of the New York Conference (“NYC”) to CAS/ISF arbitration, given the absence of real consent. The AG additionally means that, even when the NYC applies, its provisions mustn’t preclude nationwide courts from reviewing CAS awards for compliance with EU regulation, because the precept of efficient judicial safety constitutes public coverage throughout the sense of Article V(2)(b) (paras. 120-122). The AG concludes that EU nationwide courts should have the ability to evaluation CAS awards for compliance with any EU rule, not simply public coverage (para. 114). Importantly, whereas it has been prompt that this conclusion refers to “vertical” CAS/ISF disputes, the AG broadly references “CAS arbitration beneath the FIFA Statutes” in numerous elements of the Opinion, thereby focusing on each vertical and horizontal CAS/ISF disputes.

The “Recreation” of the CJEU ecosystem: may Disintegration, by means of Decreased Autonomy, be the True Adversary?

The above-presented evaluation largely depends on the ECtHR’s judgment in Mutu and Pechstein and the CJEU’s judgment in ISU. However as famous right here, in Mutu and Pechstein, the ECtHR merely highlighted the significance of public hearings and the ideas of independence and impartiality in CAS arbitration. Furthermore, in ISU, the CJEU required that entry to EU courts stay obtainable for violations of EU competitors regulation, not all of EU regulation.

Additional, there is no such thing as a constant doctrine supporting the notion that “necessary” arbitration (whether or not in sports activities statutes, GTCs or in any other case) is just not “arbitration” beneath the NYC. In flip, the discovering that each one of EU regulation, beneath the guise of efficient judicial safety, constitutes public coverage, leaves minimal scope for world automated enforcement.

Lastly, whereas CAS/ISF awards will, normally, not require the help of the NYC for the needs of enforcement, in some circumstances, corresponding to these involving defunct golf equipment, sport sanctions won’t suffice. “Self-sufficiency”, subsequently, doesn’t totally assist the excellence drawn by the AG between CAS/ISF and business arbitration.

If the AG’s method in Seraing seems unusually daring, it’s prone to be motivated by profound considerations concerning the CAS/ISF arbitration system. Though underdiscussed, one in every of these considerations appears to carry vital explanatory energy not solely about Seraing, however extra usually concerning the course CJEU case regulation has taken vis-à-vis sports activities regulation lately: the threatened autonomy of the EU authorized order.

Particularly, it’s properly established that the CJEU has a mandate to protect the autonomy of the EU authorized order (as affirmed in Achmea). In keeping with the CJEU’s President, Koen Lenaerts, autonomy is in flip “a sword that contributes to defining what European integration is all about”. However EU integration and EU regulation autonomy have confronted vital challenges up to now decade.

Indicatively, in the course of the EU sovereign debt disaster, the CJEU was requested to validate EU macroeconomic measures (see right here and right here) in opposition to scepticism in “frugal” States. Subsequent, there was Brexit, adopted by the 2015-2016 migration disaster. Quickly thereafter, considerations have been raised concerning the EU’s perceived incapability to implement the rule of regulation in opposition to particular person States, CETA was restricted to the standing of provisional utility, and TTIP negotiations failed.

Extra just lately, in the course of the COVID pandemic, doubts surrounded the EU’s procurement framework and using authorized gymnastics to subject frequent EU debt. The EU’s reluctance to formalize a standard defence coverage was questioned, the New Migration Pact was criticized, freedom of motion got here beneath stress, and enlargement into the Western Balkans stalled.

With the ideas of autonomy and integration beneath pressure as a consequence of geopolitical dynamics, arbitration may seem more and more problematic from the attitude of the EU judicial system: arbitral tribunals are delocalized and thus not anticipated to prioritize EU regulation autonomy and integration; but nonetheless, they interpret EU regulation exterior the CJEU’s management, thereby not directly affecting these ideas.

The CJEU had to date related this perceived lack of management over the EU authorized order primarily with investor-state arbitration. However “quasi-regulatory” sports activities our bodies, corresponding to FIFA and UEFA, have been extremely lively in figuring out monetary, competitors, and labour-related issues within the EU market. Their measures have an effect on the behaviour of EU shoppers and companies, work together with EU legal guidelines and even affect regulatory developments in EU States. Judicial management over such measures nonetheless formally falls exterior the CJEU ecosystem, resting with CAS panels and the Swiss Federal Tribunal (“SFT”). The above-discussed considerations can assist clarify daring judgments corresponding to Diarra, ESL, ISU, and Antwerp, the place the CJEU seems more and more sceptical of transnational “quasi-regulation” by sports activities our bodies within the EU market; crucially, they’ll additionally clarify the AG’s Opinion in Seraing, which opens with the specific assertion: “[a]t stake on this case is the query of management” (para. 2). The AG couldn’t have been clearer.

The “VAR”: may the CJEU Disallow the Opinion’s Personal Aim, but nonetheless Protect Autonomy and Integration?

The CJEU is anticipated to render its judgment quickly. Statistically talking, it’s prone to affirm the AG’s (in any other case non-binding) Opinion. This could require federations to foresee of their statutes entry to EU courts or EU-seated tribunals (corresponding to an “Irish CAS”), or treatment the “necessary” nature of the present system by introducing instantly negotiated arbitration agreements.

The primary state of affairs may reinforce claims of Eurocentrism, and progressively de-harmonize sports activities regulation by means of the appliance of differing procedural guidelines to EU and non-EU arbitrations. This state of affairs additionally dangers a misalignment between substantive and procedural regulation: to recall, Swiss regulation, within the system’s present construction, will usually govern each process and deserves in a typical federation-related dispute. A shift towards non-Swiss procedural regulation may additionally restrict the relevance of current CAS jurisprudence on numerous elementary procedural issues, impacting predictability.

The second state of affairs can create transactional uncertainties: because the “necessary” nature of CAS/ISF arbitration is just not outlined within the Opinion (though the CJEU will doubtless elucidate this level), it’s unclear how federations ought to formulate their arbitration affords to athletes and golf equipment, and the way a lot negotiating freedom they need to afford in every case, in order that arbitration is just not deemed “necessary”. Equally, it’s unclear how giant sports activities occasions can virtually accommodate particular person negotiations of arbitration clauses.

After all, federations can merely neglect the judgment, persevering with to rely solely on conventional, Swiss-seated CAS/ISF arbitration. Underneath this state of affairs, events on the shedding finish of CAS/ISF arbitrations may seize EU courts, claiming that the dispute concerned EU regulation questions with no res judicata results. Respondents may also search “anti-CAS” injunctions from EU courts. Violations of the NYC and the ECHR, elevated nationwide courtroom caseloads, harm to the EU’s status as an arbitration-friendly jurisdiction, inconsistent selections, and excessive authorized prices related to multi-forum litigation may ensue.

As an alternative choice, the CJEU may body the difficulty as one in every of arbitrability, permitting CAS tribunals to refer EU regulation inquiries to EU courts, whereas deciding different facets of a given case. Nevertheless, the SFT may vacate such awards, contemplating the truth that it just lately prompt that it’s not sure by overseas non-arbitrability determinations.

A 3rd possibility prompt in scholarship is a Solange-style judgment, whereby the CJEU may state that CAS awards lack res judicata results “so long as” the “CAS fails to make sure that worldwide [sports federations] respect European public coverage”. But if public coverage encompasses efficient judicial safety, which is allegedly undermined each time EU regulation points come up in “necessary” CAS arbitration, the Solange-style method would lose its sensible significance.

The above-discussed dangers may, in fact, be overstated. Federations may, in the long run, seamlessly incorporate EU seats into their arbitration agreements or discover different methods of providing discussion board flexibility. Attorneys may train restraint in EU law-based challenges, and tribunals may deal with Swiss case regulation as a part of lex sportiva. Sports activities regulation, general, may require minor changes and endure however a quick interval of uncertainty after Seraing.

Nevertheless, even a quick interval of adjustment or uncertainty ought to ideally be averted. To higher serve the ideas of autonomy and integration, the CJEU may as a substitute make clear that (i) res judicata doesn’t apply to awards that violate EU public coverage, and (ii) efficient judicial safety doesn’t require the provision of EU courts for issues past the scope of EU public coverage. This clarification would suffice, as the primary threats to those ideas largely coincide with areas already addressed by EU public coverage, corresponding to competitors, labour, anti-corruption, well being, and non-discrimination. As demonstrated in ESL, Diarra, and Antwerp, the CJEU stays totally able to reviewing such points; it needn’t danger shedding the “championship” to win a “match”.

Panagiotis A. Kyriakou is an unbiased authorized scholar and affiliate at Archipel, with a PhD in worldwide regulation from the Geneva Graduate Institute.