The principle of fairness in the lex sportiva of CAS awards and beyond.

• Author: Nafziger, James A.R.
• Position: ARTICLES

1. Lex Sportiva and the Court of Arbitration for Sport

   The concept of a lex sportiva refers to a limited body of emerging law that is roughly analogous to the lex mercatoria or law merchant in international commercial practice and commercial arbitration. These two bodies of law have numerous similarities, particularly in their origins of general practice and their development by arbitral tribunals. They also have numerous differences, particularly as the lex sportiva has matured. (1)

   Although the scope of the lex sportiva has been variously defined, sometimes expansively to embrace most if not all of international sports law. (2) Ordinarily, however, the term is limited to its original definition as a body of rules and principles derived from awards made by the Court of Arbitration for Sport (CAS), primarily, and other formal pronouncements of general practice.

   CAS, which is headquartered in Lausanne, Switzerland with branches in New York and Sydney, celebrated its twenty-fifth anniversary in 2009, having arbitrated well over 700 cases. Its purpose is to provide a specialized body of experts to decide a broad range of sports-related disputes. By contrast to litigation, the advantages of CAS, like other arbitral tribunals, include confidentiality, expertise, flexibility, and simplicity of procedures, speed, reduced costs, and international effectiveness of an award by CAS. Its arbitral panels, however, do not resolve technical questions involving the rules of the game, scheduling of competition, or dimensions of the playing field, for example. Instead, they generally hear three kinds of disputes that transcend field-of-play and other technical questions: disciplinary measures against athletes, other issues involving the eligibility of athletes, and commercial issues.

   Either individual athletes or sports organizations can bring disputes to CAS for arbitration. In disputes between athletes and their sports organizations, the interests of the athletes receive priority. On the issue of an athlete's strict liability for doping, for example, the interests of the athlete take precedence over those of an IF if questions of fact or legal interpretation arise. More generally, CAS will always have jurisdiction to overrule IF decisions and rules in order to protect the due process of athletes, even if the IF rules declare those rules and decisions under them to be nonappealable. (3)

   CAS has three divisions: ordinary arbitration, involving such issues as media rights and contracts between athletes and their agents or sponsors; appeals arbitration to review decisions by sports bodies, often addressing issues that involve sanctions against athletes and typically based on choice-of-forum clauses mandated by sports bodies between them and athletes; and adhoc arbitration during major sports competition such as the Olympic Games, British Common-wealth Games, and World Cups. Alternatively, the parties may also submit their dispute to mediation organized by CAS or authorize CAS to decide the dispute ex aequo et bono, an approach that would almost inevitably engage considerations of fairness. CAS also issues advisory opinions concerning any sports-related legal questions asked by designated organizations such as the International Olympic Committee and international sports federations.

   According to the CAS Rules of Procedure, the parties to a dispute are generally at liberty to agree on the governing law; in the absence of such choice, Swiss law applies. Switzerland's Federal Act on Private International Law governs CAS arbitrations to the extent that CAS Rules do not otherwise prescribe a particular procedural rule. CAS awards may be appealed to the Swiss Federal Tribunal, but the majority of appeals have failed because of the tribunal's normal deference to CAS. With a few exceptions, awards generally are not appealeable to courts of law. This is so as a matter of Swiss law regardless of the actual location of a CAS hearing and award insofar as the legal seat of CAS proceedings is always deemed to be in Lausanne, Switzerland.

   CAS awards are final and binding on the parties and are enforceable internationally under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards to the extent that it binds a state where enforcement is sought (as it usually does among nearly 150 parties to the agreement). (4) Although the awards do not constitute precedent in the sense of the common law, they provide firm guidance in future cases (5) and are gradually forming the body of law that we call lex sportiva.

   The emerging lex sportiva does not address all issues involving sports-related arbitration, however. Besides issues involving field-of-play decisions, rules of the game, or other technical questions that are not susceptible to formal arbitration under international sports law, such issues as the arbitrability of a dispute, the validity of an arbitration agreement, and judicial relief from arbitral awards do not normally fall within the lex sportiva. Instead, these issues are subject to the applicable rules of a particular arbitral tribunal, such as the lex arbitrii of Swiss law in the instance of CAS. Also, arbitral pronouncements on the civil rights of athletes or on labor, anti-trust (competition), and other regulatory law generally fall outside the scope of the lex sportiva, as do any awards that are deemed to violate mandatory domestic law or public policy (ordre public).

   In the end, the important point is that CAS awards are indeed creating "a unique body of law known as lex sportiva." (6) Although much of the general practice is still lex ferenda - that is, law still in the process of formation and acceptance - lex sportiva rules are evolving steadily, as is the larger process of international sports law itself. (7)

2. The Principle of Fairness

   A core principle, perhaps the core principle, to inform the lex sportiva and the larger body of international sports law is fairness. This commentary considers a broad range of sports-related contexts in which legal issues of fairness arise. The many examples are by no means definitive. They are intended only to stimulate further reflection about the role of fairness in guiding the decisions of CAS and other tribunals and in more broadly addressing fundamental issues of international sports law. Let us begin with two negative examples, that is, examples of dispute resolution that in one case rejected and in the other case ignored the principle of fairness in sports activity.

   2.1. The Mercury Bay Case

   Twenty years ago, the most famous litigation in the history of the sport of sailing was tacking in and out of United States courts. Mercury Bay Boating Club v. San Diego Yacht Club (8) concerned an interpretation of the Deed of Gift that established the America's Cup in 1851. As later amended in 1887, it has served as the foundation for sailing's premier competition, which, in the words of Deed of Gift, is to be a "friendly competition between foreign countries." The winning yacht club becomes the trustee of the Deed and is thereby responsible for planning and conducting the next competition. The New York Yacht Club, having won every competition since the first race in 1851, became a sort of everlasting trustee until 1983, when the Royal Perth Yacht Club of Australia won the Cup. Since then, Australian, New Zealand, American, and Swiss clubs have served as trustees of this strangely established and organized competition. (9) The competition normally takes place only every few years, based on the initiation of a challenge under the Deed of Gift. In the 2010 competition, the Golden Gate Yacht Club of San Francisco won the Cup against a Swiss-based club that had been the trustee. (10) The victorious Golden Gate Yacht Club will therefore stage the next competition.

   As of 1988, the load water-line lengths of the competing boats and other terms of the competition were defined by customary practices and mutual consent provisions. In that year, however, such stability of expectations and cooperation collapsed after the Mercury Bay Boating Club of New Zealand challenged the San Diego Yacht Club, which was then the trustee of the Cup. Mercury Bay announced that it would compete with a boat that was nearly three times as long as the customary length. The New Zealand gambit virtually invited a radical response by the San Diego Yacht Club, which obliged by announcing that it would compete with a multi-hulled catamaran. Mercury Bay then brought a civil action in a New York court against the San Diego Yacht Club, claiming that its selection of a catamaran for the race did not comply with the Deed of Gift. The trial and appellate courts disagreed, ruling that the Deed of Gift did not preclude the San Diego Yacht Club from entering a catamaran and that the club had satisfied its fiduciary responsibilities as trustee. The court rejected the admission of extrinsic evidence, ruling strictly within the four corners of the Deed of Gift.

   It is noteworthy that the courts refused to consider the fairness of the strange race. Instead, the appellate court held that

   [t]he question of whether particular conduct is "sporting" or "fair" in the context of a particular sporting event ... is wholly distinct from the question of whether it is legal. ... Questions of sportsmanship and fairness with respect to sporting contexts depend largely upon the rules of the particular sport and the experience of those knowledgeable in that sport; they are not questions suitable for judicial resolution. (11) A strong dissenting opinion (12) argued, however, that issues of fairness are fundamental to a proper interpretation of the Deed, particularly its requirement of "friendly competition between countries." This view echoed the words of a dissenting opinion in the trial court that "[t]he 1988 America's Cup races were manifestly unfair in every sense. True sportsmanship and the integrity of this great sport...