LUXEMBOURG/LAUSANNE: The near-absolute authority of the Court of Arbitration for Sport risks being undermined after the latest intervention by the European Court of Justice.

An ECJ ruling came 10 years after Belgian club RFC Seraing were banned from registering new players and fined 150,000 Swiss francs by world governing body FIFA when they signed agreements with a company that transferred part of the economic rights to players.

FIFA ruled the deal with a Maltese-based company Doyen Sports as a breach because third parties are not allowed to hold economic rights to players, with the sanctions being upheld by CAS and then the Swiss Federal Supreme Court.

Seraing then approached the Belgian courts who referred the issues to the Court of Justice, which has ruled its jurisdiction as contrary to EU law.

The ECJ ruled: “It is essential that recourse to arbitration does not undermine the rights and freedoms that the fundamental rules of EU law guarantee athletes, clubs and, more broadly, any other person practising a professional sport or pursuing an economic activity linked to that sport.

“On those grounds, the court rules that the national courts or tribunals must be empowered to carry out… an in-depth judicial review as to whether arbitral awards made by CAS are consistent with EU public policy.”

The ECJ found that in Seraing’s case, FIFA made the club go to CAS to settle the dispute, rather than letting the club choose how to resolve it – a setup common in resolving sports-related disputes.

It added: “The Court rules that, in order to ensure effective judicial protection for athletes, clubs and other individuals who might be affected as a result of pursuing a sports-related economic activity within the European Union, the awards made by the CAS must be amenable to effective judicial review.”

The court also said that any country’s laws that treat such CAS awards as immune from further scrutiny are incompatible with EU law.

Currently, all CAS awards are subject to review by the Swiss Federal Tribunal, Switzerland’s highest court of law.

Dupont role

Jean-Louis Dupont – the popularly-labelled ‘Bosman lawyer’ – and Martin Hissel, representing the club, welcomed the judgment.

They said: “It is clear that the particularly severe disciplinary sanctions imposed on RFC Seraing by FIFA, and upheld by the CAS, were the result of a procedure that was completely unlawful under EU law.

“The serious damage caused must now be fully compensated… the CJEU has put an end to the procedural deception by which international sports federations attempted to evade the genuine application of EU law by imposing compulsory arbitration outside the EU.”

CAS acknowledged that the Court of Justice’s judgement determined that reviewing of CAS awards should be “limited to EU public policy only”.

It added: “CAS resolves sporting disputes worldwide and already applies EU law when required.

“Whilst the vast majority of cases before CAS concern contractual and disciplinary issues not governed by EU law, matters related to EU competition law can already be challenged before EU state courts following a previous CJEU judgement.”

That judgement relates to when the Court of Justice ruled that the International Skating Union’s arbitration rules may conflict with EU competition law. The decision had challenged the ISU’s athlete ineligibility rules.

In 2015, a German court allowed a lawsuit by five-time Olympic champion Claudia Pechstein seeking damages from the ISU over a doping ban to be heard. A civil court allowed the case to be heard after CAS ruled against it.

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