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A legit supreme court of world sports? The CAS(e) for reform

The nature of institutionalized arbitration in transnational orders

In creating the Court of Arbitration for Sport (CAS), the International Olympic Committee (IOC) tapped into a long, global tradition of resolving disputes through private systems of adjudication. For centuries, individuals chose to resolve disputes in a relatively simple and informal way by having them be decided by other individuals they trusted rather than by courts of law. Over time, such informal forms of private adjudication became increasingly regulated by and integrated with national and international law.Footnote 1 When the CAS was created in 1983, an extensive national and international legal framework interacting with private arbitration was firmly in place, offering distinct benefits. This legal framework included, inter alia, the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) that ensures near-global recognition and enforcement of CAS awards.Footnote 2

The phenomenon of arbitration did not cease to develop in the 1980s, however. On the contrary, the evolution of the practice and nature of arbitration has only accelerated since, and in part because of, the creation of the CAS. The CAS and other international arbitration institutions, such as the International Court of Arbitration of the International Chamber of Commerce (ICC) and the International Centre for Settlement of Investment Disputes (ICSID), are a driving force behind what have been described as “the most remarkable stories of institution building at the global level over the past century.”Footnote 3

Arbitration traditionally rested on party consent; the theory is that parties consent to surrender their access to state-based courts primarily because they want their disputes resolved in a neutral forum where neither party has a home-court advantage. The chosen alternative forum should owe its loyalty exclusively or at least primarily to the interests of the parties rather than the system and enjoy considerable discretion in reaching a resolution to the dispute that is appropriate for the parties.Footnote 4 If one focuses on these aspects and expected advantages of arbitration, it is natural to frame arbitration in contractual terms: arbitration bases its jurisdiction and legitimacy on party autonomy and the parties’ voluntary agreement to arbitrate.Footnote 5 Under what can thus be referred to as the contractual model of arbitration, arbitrators act as agents for the parties who are their principals.Footnote 6

While attractive in its simplicity, the contractual model—at least in its simplest form—fails to account for the fact that arbitrators have additional, potentially conflicting duties. Alternative, more complex models of the nature of arbitration have been presented to account for these.Footnote 7 More recently, the establishment of arbitration institutions and their contributions to the development of transnational legal orders constitute particularly powerful challenges to the contractual model. Institutionalization has greatly contributed to arbitration being able to transform from the form described by the contractual model to serving as the beating heart at the center of transnational legal orders,Footnote 8 with authority over its own institutional and normative development.

A key component of this process, which Stone Sweet and Grisel refer to as judicialization, is a shift from arbitration “merely” resolving the individual dispute to also engaging in precedent setting; this is both indicative of and imperative for the development of transnational legal orders.Footnote 9 As transnational orders develop, arbitrators must balance their duties to the parties with a forward-looking eye to the precedent that they might be setting and the interests of the concerned community on the legal question concerned. They must also consider what systemic values of foreseeability, consistency, and coherency demand with regard to adhering to precedents set by arbitrators in deciding previous cases. Acknowledgment of these pressures forms the basis for an alternative model of arbitration, the judicial model, under which the arbitrator performs a similar function as a national judge.Footnote 10 If a transnational order centered around arbitration continues to develop and achieves sufficient autonomy and coherence, arbitrators can engage with other legal orders and take on the constitutional function of enforcing higher-law norms within the transnational order. If arbitrators take on this role, arbitration takes on yet another dimension. To encompass this changed nature of arbitration, Stone Sweet and Grisel propose the pluralist-constitutional model.Footnote 11

Judicialization and the CAS

The concept of judicialization and the related models of arbitration can help us understand the Court of Arbitration for Sport and its role in the development of a transnational legal order in sports. This is not accidental. It was obvious from the very start that its founders’ ambitions for the CAS as an institution went beyond the nature of arbitration on which the contractual model is based as Juan Antonio Samaranch’s original vision for the CAS was famously one of a “Supreme Court for World Sports”.Footnote 12

The Court has embraced the role envisioned by Samaranch. The CAS displays clear signs of judicialization, and the judicial model of arbitration is a good fit. In particular, the CAS engages extensively in de facto precedent setting and precedent following. In its decisions, the CAS establishes rules and principles governing sports. These are normative contributions that sport stakeholders for good reasons expect that the CAS will adhere to when deciding future cases, that parties plead in their submissions in subsequent cases, and that the CAS, as well as other sports dispute-resolution institutions, actually relies upon in deciding subsequent cases.Footnote 13 The case law of the CAS shows that its arbitrators are at least sometimes aware that they are engaging in precedent setting and take into account the consequences that the precedents that they are setting may have on a systemic level.Footnote 14 Finally, the Court of Arbitration for Sport has established the normative conclusion that the CAS ought to follow its own precedents based on the systemic interests of foreseeability, consistency, and coherency identified by the judicial model.Footnote 15 Indeed, one of the CAS’s main functions and a source of its legitimacy is the need for normative uniformity.Footnote 16 In both setting and following precedent, CAS arbitrators must balance their duties to the parties with regard to the individual dispute and to the transnational order that it is helping to create.

Moreover, in many disputes the CAS serves the same function as an apex administrative or constitutional court by checking how the institutions that possess regulatory and executive powers within sports—so-called sports governing bodies (SGBs)—exercise those powers, particularly in relation to subjects at the bottom of the sports pyramid, for example, individual athletes and clubs. Such activities include inter alia controlling that SGBs act within their competences and follow proper procedure;Footnote 17 that they respect the principle of legality,Footnote 18 fundamental rights,Footnote 19 and the principle of proportionality;Footnote 20 and that they interpret and apply applicable rules in a correct and consistent manner.Footnote 21 This can be characterized as a vertical, constitutional-like form of review. The CAS also engages in horizontal review by settling disputes where SGBs disagree on the division of powers between them.Footnote 22 In fulfilling this function, CAS arbitration takes on a nature that the pluralist-constitutional model helps capture.

These comparisons of the Court of Arbitration for Sport and state-based courts are fortified by the finding of the European Court of Human Rights (ECtHR) in Mutu & Pechstein that the CAS is, at least in many cases, subject to the requirements under Article 6 of the European Convention of Human Rights in the same way as state-based courts.Footnote 23

Judicialization and legitimacy

That one can observe a process of judicialization with regard to the CAS is hardly surprising considering both its intended purpose and that the institutional conditions for such development are arguably particularly conducive in the sports sector.Footnote 24 Nor is the development necessary blameworthy, even if it indisputably complicates matters. It does, however, warrant taking seriously the CAS’s role as a supreme court for sports, the importance that the CAS has in sports, and the significant power that it exercises, and therefore also taking seriously questions of the legitimacy of the institution and the power that it wields.

To use the contractual model to explain the nature of arbitration when it comes to the CAS has been insufficient since its earliest days, as has legitimizing its activities based on the parties’ free consent. SGBs have de facto power to force actors on the lower levels of the sporting pyramid to submit to dispute resolution through the CAS. Whatever room previously existed for disagreement on how the SGBs exercise their power and over the voluntary nature of CAS arbitration has diminished significantly following the holding in Mutu & Pechstein that submission to the CAS’s jurisdiction is for many athletes not free and unequivocal but a compulsory condition for their professional activities.Footnote 25

It is obviously important that the panel resolving a specific dispute is legitimate in the eyes of the individually concerned litigants. However, arguably even more important is the legitimacy of the institution as such and its activities in the eyes of all sport stakeholders, all the way down to individual amateur athletes. When we consider the vast impact that the CAS has beyond the individual parties through its jurisprudence and the role of the CAS in the formation of a transnational legal order for sports, it becomes increasingly difficult to use the contractual model to explain or legitimize the CAS. In exercising its supreme-court-like powers, the CAS makes rulings, the effects of which are not limited to the individual litigants but felt throughout the sporting world. The CAS’s rulings impact—sometimes extensively—actors who have no connection to or influence over the case. Thus, the CAS’s legitimacy—in this broad sense—has become increasingly important along with the expansion of its supreme-court-like function, as has the question of from where the institution derives its legitimacy.

In 2010, Jan Paulsson asked “how do we enhance and protect the legitimacy of decent [arbitration] institutions?”Footnote 26 Not only does the question remains largely unanswered, as a result of judicialization it has become increasingly important that we answer it. For the same reason, it is also increasingly difficult to base institutional legitimacy on the contractual model of arbitration. There is no quick fix; legitimacy is best enhanced through a combination of measures. For example, greater transparency in terms of public access to CAS awards would enhance both the quality and legitimacy of the lex sportiva as well as the CAS.Footnote 27

ICS as a model for reform?

One obvious possible point of improvement is how arbitrators are selected. Under the contractual model of arbitration, the parties appointing the arbitrators arguably provide some legitimacy. However, it is also problematic because arbitrators as agents must balance the interests of their principals and their duty to provide a neutral forum,Footnote 28 which is the number one perceived advantage of arbitration.Footnote 29 The system for arbitrator selection used in the CAS has some particularly problematic aspects in this regard due to the outsized influence of the SGBs in the selection process, a link that a minority of the ECtHR characterized as “worrying” in Mutu & Pechstein.Footnote 30 The CAS was significantly reformed in 1994 in response to the criticism raised in Gundel.Footnote 31 The decision in Mutu & Pechstein poses a comparable impetus for meaningful CAS reform.Footnote 32

Although the need for reform is and has for some time been obvious, there are few clear examples of alternative selection procedures on which to model such reform. One interesting exception is, however, the novel Investment Court System (ICS) introduced by the European Union (EU) as a new form for investor-state dispute settlement (ISDS). The Investment Court System was developed as a response to a legitimacy crisis facing arbitration-based ISDS.Footnote 33 It was introduced by the EU in several of its bilateral investment agreements;Footnote 34 the EU is also proposing it as a model for reformed ISDS in multilateral investment agreements. While retaining some of the main advantage of arbitration, such as recognition and enforcement on the basis of the New York Convention,Footnote 35 ICS deviates in multiple regards from the currently dominant forms of ISDS. ICS is centered around a permanent two-tiered institution that imports into arbitration features of traditional state-based courts. A feature of particular relevance in this context is that ICS does away with direct party involvement in the formation of arbitration panels. Instead, ICS employs standing arbitrator–judges who are appointed to serve with the institution itself for fixed periods of time. These individuals are assigned to serve on panels to resolve individual disputes in a rotating and unpredictable manner, much like in state-based courts.

What would it mean if the CAS was to adopt a system for panel formation similar to that of ICS? The ICS model for selecting and organizing arbitrator–judges offers some distinct advantages. First, it could help reduce real or perceived problems with neutrality and impartiality, mainly by doing away with direct party involvement in panel formation. Assigned arbitrator–judges to individual cases using a random or otherwise unpredictable procedure would also enhance panel neutrality. The CAS was a forerunner in 2009 when it banned so-called double hatting,Footnote 36 i.e. where arbitrators also work as counsel, a practice that causes major harm to the legitimacy of arbitration.Footnote 37 It is particularly important to keep roles separate in a highly specialized field such as sports law that relies on a relatively small number of experts and an ICS-like system could help in this regard. Finally, as the organization would be similar to that of state-based courts, the substantive and procedural conditions for appointment, reappointment, and removal could be modeled based on established and well-studied international best practice at such courts.

Second, by decreasing the number of individuals involved in decision making, an ICS-like system could increase the quality of the arbitrators and, thereby, of the functioning of the CAS. A controversial aspect of how the CAS is currently organized is that parties must select arbitrators from a list drawn up by the ICAS.Footnote 38 This limits party autonomy, and the influence of SGBs on ICAS is problematic. The main justification for this system is to ensure that arbitrators have good knowledge of sports and sports law.Footnote 39 An ICS-like system would drastically reduce the number of individuals involved and thereby make it easier to identify the most qualified arbitrators. Along similar lines, it would also make it easier to select for high standards of ethics, independence, and professionalism.

Third, restricting the number of arbitrators that decide cases in the CAS and allowing these individuals the opportunity to do so regularly or even exclusively foster greater jurisprudential consistency, both because the arbitrator–judges would become increasingly familiar with existing jurisprudence and because it is easier to maintain a consistent body of case law within a smaller group of arbitrators. The value of this is obvious since, as discussed above, one of the CAS’s main functions is to provide a consistent body of case law.

Fourth, one challenge to the legitimacy of international adjudication is lack of diversity and representativeness among the decision makers,Footnote 40 and the CAS is no exception in this regard.Footnote 41 An ICS-like system would provide an opportunity for enhanced legitimacy, as arbitrator–judges could be selected to ensure greater diversity with regard to, for example, gender, age, and geographical origin of the arbitrators. This could help enhance the CAS’s legitimacy in the eyes of those who may now feel that their experiences and views are under-represented among CAS arbitrators.

Fifth, a CAS remodeled in this way could provide swifter adjudication. One of the main reasons behind the establishment of the CAS was the particularly great need in sports for expediency in resolving disputes and the hope that the CAS would be able to provide such swift relief.Footnote 42 Today, much time in the CAS is spent on the formation of panels, including both identifying interested arbitrators and for them finding sufficient time to devote to the case. Under an ICS-like system, it would be possible to form panels and schedule times for hearings, deliberations, etc., in advance, and this should reasonably allow for a significant reduction of the time between referral and award compared to the current system.

Such a radical reform would obviously require careful consideration. It would place significant power over the rules and principles governing sports and sport stakeholders into relatively few hands. This does not necessarily mean a drastic change compared to the current situation. The vast majority of all appointments to CAS panels are given to a relatively small number of arbitrators.Footnote 43 Nevertheless, very important for both the quality of the CAS’s activities and its institutional legitimacy would be who are the standing arbitrator–judges, how these individuals are selected, and who is involved in selecting them. The selection process would need to include real and meaningful involvement by all sport stakeholders, not only SGBs.Footnote 44

One should also not underestimate the difficulties involved in introducing new forms of dispute resolution. After all, its time-tested nature and strong roots are prominent explanations why arbitration plays such an important role in transnational legal orders. However, to make much needed adjustments should be significantly easier if one follows in the rather deep footsteps of the European Union.

Notes

  1. Blackaby et al. (2015), sec. 1.04–1.17.

  2. Cf. Bühring-Uhle (2005), p. 35.

  3. Stone Sweet and Grisel (2017), p. 1.

  4. Blackaby et al. (2015), pp. 28–31; Moses (2008), pp. 1–4. See also Park (2011), p. 31 (“Few would argue with the proposition that ‘the task of an arbitrator is to interpret and enforce a contract, not to make public policy’”).

  5. Yu (2008), pp. 265–267.

  6. Ibid., pp. 268–278; Stone Sweet and Grisel (2017), pp. 26–28.

  7. Even before institutionalization and transnationalism became factors, commentators struggled to reconcile the contractual model with the fact that state-based law and courts undeniably play a role in arbitration. See, e.g., Park (2011); Yu (2008).

  8. Cf. Jan Paulsson, quoted in Blackaby et al. (2015), sec. 1.133, fn. 138. (“[I]n the transnational environment, international arbitration is the only game. It is a de facto monopoly.”).

  9. Stone Sweet and Grisel (2017), pp. 11–20.

  10. Ibid., pp. 28–30.

  11. Ibid., pp. 30–32.

  12. Swiss Bundesgericht, BGE 129 III 445 (Lazutina), at p. 462.

  13. Lindholm (2019), pp. 85–114.

  14. Ibid.

  15. Ibid. See, e.g., CAS 96/149, Cullwick, para. 22; CAS 97/176, Jogert, para. 40; CAS 2004/A/628, Young, para. 19; CAS 2008/A/1545, Anderson, para 55; CAS 2008/A/1574, D’Arcy, para 33.

  16. See, e.g., CAS 2006/A/1119, UCI v. L. & RFEC, para. 30; German Bundesgerichtshof’s decision 7 June 2016, KZR 6/15 (Pechstein v. ISU), paras. 59, 62.

  17. See, e.g., CAS 98/185, RSC Anderlecht v. UEFA, para. 5; OG 98/002, Rebagliati, para. 26; OG 04/009, Kaklamanakis, para. 24.

  18. See, e.g., CAS 94/129, Quigley, para. 34; CAS 2001/A/330, Reinhold, para. 17; CAS 2000/A/274, Susin, para. 72; CAS 96/157, FIN v. FINA, para. 22.

  19. See, e.g., CAS 91/53, G. v. FEI, para. 11; CAS 2001/A/317, Aanes, para. 6; CAS 2004/A/777, ARcycling AG v. UCI, para. 20; CAS 2010/A/2275, CGF v. EGA, para. 29.

  20. See, e.g., CAS 96/157, FIN v. FINA, para. 22; CAS 99/A/246, Ward, para. 31; CAS 2004/A/690, Hipperdinger, para. 55.

  21. See, e.g., CAS 94/128, UCI v. CONI, paras. 19–20; OG 02/001, Prusis, paras. 10–15; CAS 2005/A/983 & 984, Suarez, para. 58.

  22. See, e.g., CAS 93/109, FFTri & ITU; CAS 2011/O/2422, USOC v. IOC; CAS 2011/A/2658, BOA v. WADA.

  23. European Court of Human Rights, Mutu & Pechstein v. Switzerland, appl. nr. 40575/10 & 67474/10, para. 115.

  24. Cf. Lindholm (2019), p. 113–114.

  25. European Court of Human Rights, Mutu & Pechstein v. Switzerland, appl. nr. 40575/10 & 67474/10, paras 92–115.

  26. Paulsson (2010), p. 355.

  27. Duval (2019), pp. 18–22; Lindholm (2019), pp. 108–113.

  28. Stone Sweet and Grisel (2017), pp. 26–28.

  29. Bühring-Uhle (2005), p. 35. Paulsson (2010) characterized unilateral arbitrator appointments as “a moral hazard” and argued for its abolishment.

  30. European Court of Human Rights, Mutu & Pechstein v. Switzerland, appl. nr. 40575/10 & 67474/10, joint partly dissenting, partly concurring opinion of Judges Keller and Serghides, para 11.

  31. Swiss Bundesgericht’s decision 15 March 1993 in case 4P.217/1992, ATF 119 II 271 (Gundel v. FEI).

  32. Cf. Duval (2019), pp. 23–26.

  33. See, e.g., Joint Interpretative Instrument on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States OJ L 11, 14.1.2017, p. 3–8, sec. 6(f) (“CETA moves decisively away from the traditional approach of investment dispute resolution and establishes independent, impartial and permanent investment Tribunals, inspired by the principles of public judicial systems”); Sardinha (2017), p. 628; Diependaele (2019), p. 42.

  34. E.g. the EU-Vietnam Free Trade Agreement; the Comprehensive Economic and Trade Agreement (CETA); EU-Singapore Free Trade Agreement.

  35. Jansen Calamita (2017).

  36. CAS Code, Article S18.

  37. See, e.g., Langford et al. (2017); Sands (2015). Tayar (2018—2019).

  38. CAS Rules, Article R33.

  39. See ICAS Statutes, Article S14; German Bundesgerichtshof’s decision 7 June 2016, KZR 6/15 (Pechstein v. ISU), paras. 59.

  40. Baetens, 2020, pp. 6–8.

  41. See Lindholm (2019), pp. 261–275.

  42. Ibid., pp. 66–71.

  43. Ibid., pp. 222–228.

  44. Cf. Universal Declaration of Player Rights, Article 16.

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Lindholm, J. A legit supreme court of world sports? The CAS(e) for reform. Int Sports Law J 21, 1–5 (2021). https://doi.org/10.1007/s40318-021-00184-0

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