The Belgian Court of Cassation asks whether national law can limit the review of sports arbitration awards
Royal Football Club Seraing (a Belgian football club) entered into agreements with Doyen Sports (a Maltese company) that included the transfer of the economic rights of certain players. FIFA’s Disciplinary Committee found this was a breach of a FIFA prohibition on third-party ownership of players' economic rights and, as a result, imposed a fine and a ban on registering new players.
The appeal of Seraing was dismissed by the FIFA Appeal Committee and by CAS, which largely upheld the sanctions imposed. Seraing then sought to annul the CAS award before the Swiss Federal Tribunal, but that application was also dismissed. In parallel, Doyen Sports and Seraing turned to the Belgian courts to challenge the validity of FIFA's rules under EU law. They argued that the prohibition on third party ownership infringed EU principles, such as free movement and competition law.
The Brussels Court of Appeals held that, under Belgian law, arbitral awards have res judicata effect from the date they are issued, subject to annulment by the competent court. As a result, the CAS award was final and binding from the moment the Swiss Federal Tribunal dismissed Seraing’s application for annulment. Moreover, as foreign judgments are automatically recognized in Belgium without the need for prior proceedings, the judgment of the Swiss Federal Tribunal also prevented Seraing from challenging the validity of the award before the Belgian courts.
Finally, Seraing brought this debate before the Belgian Court of Cassation, which referred two questions to the Court of Justice of the European Union (CJEU) for preliminary ruling. The main question was whether the principle of effective judicial protection under EU law precludes a national law from granting an arbitral award the force of res judicata, where the review of conformity with EU law has been carried out by a court of a third country.
The AG finds that EU Member State courts must review conformity of sports arbitration awards with EU laws
The AG noted that Member States are under an obligation to ensure that subjects of EU law (such as Belgian football clubs) can enjoy their fundamental rights. This means that a Member State court must protect EU-based rights that were allegedly violated by FIFA’s rules and validated by CAS.
The principle of effective judicial protection requires that EU subjects have access to an independent court or tribunal that can review the compatibility of FIFA's rules against all rules of EU law (not only those of public policy), even when a CAS award has already confirmed the validity of these rules.
As a result, the AG took the view that any national law that limits the review of an arbitral award by granting it the force of res iudicata when only a third country court has ruled on a request to annul it, is precluded by the principle of effective judicial protection.
The AG distinguishes sports arbitration from commercial and investment arbitration
The AG recognised that it is not the first time that the CJEU has been asked to decide on the relationship between arbitration and EU law and the extent to which arbitral awards can be reviewed by Member State courts. However, the AG’s view was that the approach to judicial review of sports arbitration awards should be different to the approach taken in commercial arbitration.
According to the AG, there are two main reasons for distinguishing sports and commercial arbitration:
- First, commercial arbitration is of a voluntary nature, where parties freely accept an arbitration clause and exclude the involvement of ordinary courts. Therefore, review may be limited to public policy issues in subsequent exequatur proceedings by ordinary courts. However, players and clubs that follow the FIFA rules have not chosen the jurisdiction of CAS. Such sports arbitration has a mandatory nature, justifying a broader access to courts and scope of review.
- Second, FIFA arbitration has a self-enforcing nature. Unlike in commercial arbitration, parties do not have to turn to ordinary courts to enforce an award, where conformity with EU law (or at least of public policy rules of EU law) can be reviewed. Instead, FIFA can enforce an award on its own, e.g. by refusing the registration of players.
The AG concluded that rules developed for commercial arbitration (e.g. Nordsee and Ecoswiss) are not fitting for arbitration by CAS. To ensure that these rules are preserved for commercial arbitration, a separate approach needs to be taken in sports arbitration. If this distinction is maintained, it would follow that commercial arbitration will not be next in line for more expansive judicial oversight. On the other hand, it might be noted that the AG’s opinion, if adopted by the CJEU, would represent a further advance of the CJEU’s jurisdiction into the realm of arbitration, and one might wonder whether it will be the last such advance.
Finally, the AG also stated that, in her view, the Achmea case law does not add any value to this debate, other than in repeating the importance of the effective judicial protection and uniformity of EU law. Unlike in Achmea, the principle of mutual trust between Member States is not at issue here. Moreover, the principled compliance of FIFA’s arbitral system with EU law is not put into question and the statutes of FIFA differ from international agreements with Member States exercising their public powers.
The AG’s opinion is not binding on the CJEU. It remains to be seen, therefore, whether the CJEU will take the view that the AG was correct in concluding that EU Member State courts should be able to (fully) review the conformity of sports arbitration awards with EU law.
Royal Football Club Searaing v FIFA
