Source: https://www.lawinsport.com/topics/articles/item/the-legality-of-the-arbitration-agreements-in-favour-of-cas-pechstein-part-1
Timestamp: 2019-04-20 09:01:22+00:00

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The German Federal Tribunal (Bundesgerichtshof, BGH) issued its decision in the long-awaited Pechstein case on June 7, 2016 (“BGH Ruling”).2 The core issue at stake before the BGH was the validity of the arbitration agreement between Ms. Claudia Pechstein (the Athlete), a speed skater and five-time Olympic gold medallist, and the International Skating Union (ISU).
The Pechstein saga started in 2009, when the ISU Disciplinary Commission (ISU DC) rendered a decision on July 1, 2009 suspending the Athlete for two years for blood doping. Based on the arbitration agreement that the Athlete had signed in order to participate in the ISU competitions, the Athlete appealed against the ISU decision before the CAS. The latter issued an order on procedure (OP) on September 29, 2009, confirming inter alia its jurisdiction to decide on the issue. The OP was signed by both parties. The CAS rejected the athlete’s appeal on November 25, 2009.
The BGH issued a press release with the operative part of its decision, overturning the OLG München and upholding the arbitration clause between the Athlete and ISU. This article offers an account of the jurisdictional issues raised in the BGH Ruling under German law and discusses the legal dimensions and the repercussions of the decision for sports arbitration in Germany and at the international level.
b) An international sports association like the ISU has a dominant position to the extent that it has a monopoly organizing and allowing athletes’ participation in its sports competitions.
c) However, when a sports federation renders the participation in its competitions conditional on the signing of an arbitration agreement in favour of CAS in accordance with the World Anti-Doping Code (WADC), it does not abuse its dominant position.
d) There are sufficient guarantees in the CAS rules to protect the rights of athletes, notwithstanding the closed list of arbitrators or the fact that the arbitrators are appointed by the international Council of Arbitration for Sport (ICAS). ICAS is the supervising body of CAS and consists predominantly of International Olympic Committee (IOC) and International Sports Federations (IF) representatives. This is because athletes and Sports Federations have a shared interest in the fight against doping.
e) The arbitration agreement is valid, also when assessed against the right of access to justice laid down in Article 2 of the German Constitution (Grundgesetz, GG); the constitutional right of professional exercise (Article 12 par. 1 GG); and the right to a fair trial under Article 6 par. 1 of the European Convention of Human Rights (ECHR).
In the Pechstein case, the Athlete seized – and exhausted – all available instances before the CAS and, subsequently before the SFT. The CAS award had become final and binding. However, the Athlete successively seized the German Courts, yet this time in Germany (her native country), in her National Federation’s offices in Munich, suing also the ISU as co-defendant according to Art. 6 par. 1 of the Lugano Convention for damages.16 The claim was formally different (claim for damages) yet the underlying principles (invalidity of the sanction) touched upon the merits of the case that was brought before – and decided by – the CAS.
The BGH went on to examine the neutrality and independence of CAS from the viewpoint of the CAS rules. According to the Court, the CAS rules provide for sufficient neutrality and independence of the arbitrators: they sign the declaration of independence at the outset of their appointment, and they cannot form part of the ICAS. CAS Arbitrators should disclose any circumstances which may affect their independence with respect to any of the parties (Article R33 of the CAS Code) and they can be challenged by the parties if there are circumstances that give rise to legitimate doubts over their independence or impartiality (under Article R34 of the CAS Code).
The BGH rejected all arguments raised and supported in the OLG München decision about the non-disclosure of recurrent appointments by arbitrators or the scrutinizing of the CAS awards by the CAS Secretary General under Article R59: according to the BGH, these issues cannot alter the character of the CAS as a “genuine court of arbitration”.27 In this respect, the BGH drew an analogy to other major institutional arbitral tribunals that foresee similar practices, like the International Chamber of Commerce (ICC).28 By the same token, the BGH stressed the broad definition of “a genuine court of arbitration” under German law (Art. 1025 ff. ZPO), which essentially leaves outside its scope only tribunals that are not statutorily organized as independent tribunals or act merely as the tribunal of an association.
Overall, the BGH stressed the broad scope of Article 1025 ff. ZPO regarding the definition of a “genuine court of arbitration” and confirmed the compatibility of the CAS rules with the requirements of German law pertaining to the neutrality and independence of the CAS arbitrators. It also highlighted the marginal review typically undertaken by German Courts when it comes to examining possible violations of the principle of impartiality of an arbitral tribunal under the New York Convention. The Court further ruled out a predominant influence of the sports federations on the CAS proceedings based on the common interests of both athletes and sports federations in their shared fight against doping. By doing so, it explicitly differentiated between sports-related disputes and labour law disputes (where employers and employees have opposing interests). This means that, in the BGH’s view, the limitations applying to employment (or consumer) arbitration do not apply to sports arbitration in doping-related disputes. It is however questionable whether this specific argument of shared interests could also be applied to other types of disputes, such as football contractual disputes.
In part two, Despina goes on to review the BHG Ruling's in regards to the compatibility of the arbitration agreement with German anti-trust laws by examining in particular the athlete’s right to a fair trial; the constitutional rights of the athlete and the federation; the status of the Swiss Federal Tribunal and the issue of human rights in sports arbitration; the compatibility of sports arbitration clauses with European competition law; and finally the conformity of CAS sports arbitration clauses with Swiss Law.
From a huge selection of papers and newspaper articles dealing with the Pechstein case, see, generally, https://www.lexology.com/library/detail.aspx?g=0583d0a8-d87b-488e-9f9f-d4d5769714fb, German landmark decision on sports arbitration before CAS, Dr. Benjamin Lissner, June 9 2016; https://iuscomparatum.info/germany-bgh-renders-pechstein-judgment-on-cas/, 17 June 2016; https://www.faz.net/aktuell/politik/inland/bgh-urteil-gegen-claudia-pechstein-staerkt-schiedsgerichte-14274166.html BGH-Urteil zu Pechstein, Fremdbestimmt, aber nicht unwirksam, 7 June 2016, Reinhard Müller. See also Nathalie Voser, The most recent decision in the Pechstein Saga: red flag for sports arbitration? https://kluwerarbitrationblog.com/2015/01/22/the-most-recent-decision-in-the-pechstein-saga-red-flag-for-sports-arbitration/, Kluwer Arbitration Blog, January 22, 2015.
Again, see the analysis of the SFT judgment in Xavier Favre-Bulle: Pechstein v. Court of Arbitration for Sport (fn.5), p. 319.
This is possible according to Art. 123 of the Federal Tribunal Act (Loi sur le Tribunal fédéral, LFT).
See BGH Ruling, at 1-5.
Landesgericht (LG) München I, SchiedsVZ 2014, p. 100.
The Athlete was therefore prevented from invoking the invalidity of the arbitration agreement based on the res judicata effect of the CAS award. See also https://iuscomparatum.info/germany-bgh-renders-pechstein-judgment-on-cas/ (17 June 2016).
Munich Court of Appeals (OLG München Ruling), WuW / E DE – R 4543), judgment of 15 January 2015 (U 1110/14 Kart).
Fundamental provisions of competition law fall within the scope of German public policy, see OLG München at 73 ff.
See more in the blog www.disputeresolutiongermany.com.
See inter alia Christian Duve / Karl Oemer Rösch, Ist das deutsche Kartellrecht mehr wert als alle Olympiasiege?, SchiedsVZ 2015, pp. 69-77. See also Nathalie Voser, Kluwer Arbitration Blog 2015, (fn. 3). See, in particular, see Xavier Favre-Bulle: Pechstein v. Court of Arbitration for Sport (fn. 5), p. 328.
Even if the core issue discussed in the BGH Ruling is the validity of the CAS arbitration agreement, it bears mention that the CAS itself was not a party to the proceedings.
See also below, fn. 62.
See Xavier Favre-Bulle, 50 Years of the New York Convention on Enforcement of Awards: Conventional Wisdom and Recent Developments, in: Müller/Rigozzi (eds.), New Developments in International Commercial Arbitration 2008, Zurich/Basel/Geneva 2008, pp. 61-79. See also Xavier Favre-Bulle, Pechstein v. Court of Arbitration for Sport (fn. 5), p. 326 & 328.
Convention of Lugano on jurisdiction and recognition of judgments in civil and commercial matters of 2007 (“Lugano Convention”).
I.e. Article 1025 ff. of the German Law on Civil Procedure (ZPO); see BGH Ruling, at 23.
See BGH Ruling, at 23.
ATF 4P.267/2002, judgment of 27 May 2003, SchiedsVZ 2004, p. 208 f. See the BGH Ruling at 25. For more details see also Xavier Favre-Bulle, Pechstein v. Court of Arbitration for Sport (fn. 5), p. 335.
The CAS Statutes were amended in 2012 and the quota requirements were abolished.
See Antonio Rigozzi / Erika Hasler / Brianna Quinn, The 2011, 2012 and 2013 revisions to the Code of Sports-related Arbitration, Jusletter, 3 June 2015.
BGH Ruling, at 31. The list of CAS arbitrators currently includes approx. 350 arbitrators. It must be noted that, here again, the BGH referred to the Swiss FT judgment in Danilova/ Lazutina (see above).
See BGH Ruling, at 32.
See, in this respect, Despina Mavromati / Matthieu Reeb, The Code of the Court of Arbitration for Sport, Commentary, Cases and Materials, Alphen aan den Rijn 2015, p. 366.
See BGH Ruling at 34. The BGH referred principally to the analogous provision to Art. R33 of the CAS Code in ICC Arbitration (Art. 27 ICC Rules) and cited Andreas Reiner / Werner Jahnel in Rolf A. Schütze, Institutionnelle Schiedsgerichtsbarkeit, 2nd ed., 2011, ad Art. 27 ICC, at 8 ff.
The New York Arbitration Convention on the recognition and enforcement of foreign arbitral awards of 10 June 1958.
See BGH Ruling of 15 May 1986 - III ZR 192/84, BGHZ 98, 70, 74 f. See BGH Ruling at 36.
Also, by requiring the establishment of bias based on the concrete circumstances (and not mere allegations of bias), the BGH (see BGH Ruling, at 36: “konkret ausgewirkt haben muss”) aligned its reasoning with the approach of the SFT and the authors who had criticized the OLG München Ruling: Nathalie Voser, Kluwer Arbitration Blog 2015, (fn. 3). Contra, see Antoine Duval / Ben Van Rompuy, (fn. 4), p. 17.

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 Art. 27