On 16 January 2025, European Court of Justice ("ECJ") Advocate General ("AG") Ćapeta delivered her Opinion in case C-600/23 about whether a Court of Arbitration for Sport ("CAS") award stops a domestic court in the EU from reviewing anew (de novo) whether FIFA's Regulations on the Status and Transfer of Players ("STP Regulations") breach EU law.1
AG Ćapeta expressed the view that a domestic court does not have to give the force of res judicata to CAS awards where a question of EU law arises and suggested that any award resulting from mandatory arbitration such as CAS might fall outside the scope of the New York Convention (“NYC”).
If followed, this approach may have an important effect given that the exclusive jurisdiction of CAS with limited review of its awards by the Swiss Federal Tribunal ("Swiss FT") is incorporated into the legal regimes of all major sporting federations.
Background
Case C-600/23 concerns a dispute between Royal Football Club Seraing in Belgium on the one hand and FIFA, UEFA, and Union Royale Belge des Sociétés de Football Association ASBL ("URBSFA") on the other hand regarding the consistency of FIFA's STP Regulations with EU law.
Since 2015, Articles 18bis and 18ter of the STP Regulations prohibit third-party ownership of players' economic rights and limit third-party influence on clubs and provide for the possibility of FIFA to impose disciplinary measures.
Royal Football Club Seraing had entered into two contracts with Doyen Sports Investment Limited, a company involved in financing football clubs in Europe, providing for the transfer of ownership of the economic rights of certain of the applicant's players.
On 4 September 2015, the FIFA Disciplinary Committee found Royal Football Club Seraing in breach of the STP Regulations for having entered into the two agreements, prohibited it from registering players for four registration periods (two years), and ordered it to pay a fine of CHF 150,000. An appeal brought by the applicant before the FIFA Appeal Committee was dismissed.
The matter was appealed to a CAS Panel, which concluded in an award on 9 March 2017, that the provisions of the STP Regulations were lawful while at the same time reducing the prohibition on registering players to three periods. An annulment action brought by the applicant against the CAS award before the Swiss FT was dismissed in February 2018.
Separately, on 3 April 2015, Doyen Sports brought proceedings against FIFA, UEFA and the URBSFA before the Brussels Commercial Court, which Seraing joined. The Commercial Court was requested to find that the relevant STP Regulations are inconsistent with the free movement of capital, the right to the freedom to provide services, the right to the free movement of workers, and EU competition law. However, the Brussels Commercial Court declined jurisdiction to hear the case.
The applicant subsequently appealed to the Brussels Court of Appeal. By decision of 12 December 2019, the Brussels Court of Appeal dismissed the appeal. The Court of Appeal held that, according to Belgian law, an arbitral award has the force of res judicata from the date on which it is delivered without the need for a prior exequatur procedure. In the view of the Court, the CAS award was final and thus acquired the force of res judicata following the dismissal by the Swiss FT of the annulment action.
The applicant appealed to the Belgian Court of Cassation, which in particular asked the ECJ if the provisions of EU law preclude the application of national law granting res judicata to an arbitral award where the conformity of that award with EU law has been reviewed by a court of a State that is not a Member State of the European Union (i.e., the Swiss FT).
Analysis and proposal submitted by AG Ćapeta
In her Opinion, AG Ćapeta suggests that the principle of effective judicial protection as enshrined in EU law precludes the application of domestic law granting res judicata to arbitral awards if such an award cannot otherwise be subject to judicial review by an EU domestic court and, in extension, the ECJ.
In her Opinion, AG Ćapeta refers to the binding nature of CAS arbitration, which, to her, makes it necessary that these CAS awards be fully reviewed by the competent courts to ensure consistency with EU law. In matters of EU law, these courts are, first, EU domestic courts and the ECJ. As neither CAS nor the Swiss FT qualify as competent to review EU law, it follows for AG Ćapeta "that their assessment of the compatibility of FIFA's rules with EU-based rights does not satisfy the requirement of effective judicial protection in EU law".2 In the present case, AG Ćapeta thus suggests that the principle of effective judicial protection might be breached where the competent courts, i.e., EU domestic courts and the ECJ, are prevented from reviewing the compatibility of FIFA's STP Regulations with EU law due to a rule of domestic law granting CAS awards, when confirmed by the Swiss FT, the force of res judicata.
Moreover, in the view of AG Ćapeta, due to the mandatory nature in which CAS jurisdiction is imposed on athletes and clubs by sporting federations, CAS awards might not fall within the scope of the NYC, suggesting that such awards might not benefit from its provisions with respect to recognition and enforcement.
Mandatory arbitration and self-enforcing nature of FIFA's dispute resolution system
AG Ćapeta advances two distinguishing circumstances, referred to in the specific setting of FIFA's STP Regulations, distinguishing CAS arbitration from commercial arbitration.
First, her Opinion puts significant weight on the difference between arbitration agreements entered into voluntarily by the parties, as is regularly the case in commercial arbitration settings, and what she calls "mandatory" arbitration in which one of the parties has no choice but to accept arbitration as the means of resolving their disputes such as under many sporting federations' (including FIFA) regulations. In her view, the admissibility of limited review of arbitral awards in the context of commercial arbitration is inherently based on the free choice of the parties concerned to exclude the recourse to ordinary courts for all subject matters covered by the arbitration agreement. By contrast, the acceptance of an arbitration clause providing for the exclusive jurisdiction of CAS does not usually stem from the free will of the athlete or club concerned. Rather, the subscription to a sporting federation's statute and regulations, including to an arbitration clause in favour of exclusive CAS jurisdiction, constitutes a mandatory requirement to participate in events organized by that federation and thus a mandatory condition for athletes and clubs to effectively exercise their profession.
In support of her analysis, AG Ćapeta relies on the jurisprudence of the European Court of Human Rights ("ECtHR"), which observed in the case of Mutu and Pechstein v. Switzerland that CAS arbitration constitutes a form of "compulsory" arbitration, which must be distinguished from cases of commercial arbitration.3
The AG concludes that "for players and clubs, CAS's jurisdiction is mandatory and not chosen of their own free will. It therefore does not reflect their own choice to exclude access to a court and to prevent the applicability of certain legal rules to the dispute between them. This, to my mind, has consequences for the scope of judicial review that national courts should be able to perform in relation to EU law".4
Second, AG Ćapeta's Opinion considers relevant the fact that FIFA or other sporting bodies do not need the support of courts to ensure enforcement of CAS awards. Whereas an arbitral award rendered in the course of a commercial arbitration proceeding must obtain an exequatur prior to being enforced, which subjects the award to review by ordinary courts and ultimately the ECJ, this is not the case of arbitral awards rendered by CAS. Rather, sporting and other sanctions provided for in FIFA's Regulations can be imposed directly on the athlete or club concerned following the confirmation of the CAS award by the Swiss FT. They are thus "self-sufficient".
AG Ćapeta concludes that "[i]n such a self-enforcing system, it is unlikely that the question of compatibility of the arbitral award with EU law will reach a 'court or tribunal' in the sense of Article 267 TFEU in enforcement proceedings"5, and therefore requires judicial review by domestic State courts.
EU domestic courts to review FIFA's Statues and Regulations
Based on the mandatory and self-sufficient nature of CAS arbitration, AG Ćapeta suggests that "those differences demand a specific assessment in light of the principle of effective judicial protection, in relation to both the question of access to courts and the scope of judicial review".6
With respect to, first, the possibility of seizing EU domestic courts to review the EU-legality of FIFA's statutory provisions, AG Ćapeta notes:
"The principle of effective judicial protection […] requires a direct judicial path to assess and, if necessary, to prevent the application of FIFA's rules that are contrary to EU law. An arbitral award proclaiming the conformity of FIFA's rules with EU law cannot stand in the way of a national court's power to review such conformity on its own, referring the question of interpretation of EU law to the Court if necessary.
Therefore, attaching the force of res judicata to an arbitral award in relation to its finding that EU law was not infringed is contrary to the principle of effective judicial protection".7
Concerning, second, the scope of review, AG Ćapeta argues in favour of a public policy review, as well as a full re-examination in light of all applicable provisions of EU-law:
"[…] Even if the precise meaning and scope of public policy of the European Union is not clearly settled, it does not seem to relate to all rules of EU law, but only to those rules of higher public importance.
Public policy control therefore does not necessarily concern every rule of EU law that bestows a right on an individual.
That is acceptable in commercial arbitration, as it may be considered that the parties voluntarily excluded the application of some rules of a legal system, but could not exclude those of public policy.
However, in mandatory arbitration, such as the CAS arbitration under the FIFA Statutes, the parties do not freely choose to exclude the application of some EU rules to their situation.
Therefore, the reasons that justify a limited scope of judicial review in commercial arbitration cannot readily be applied to mandatory arbitration.
A national court must, therefore, be able to conduct the review of FIFA rules against any and all rules of EU law, any CAS award notwithstanding".8
Non-application of the New York Convention to CAS awards
AG Ćapeta goes on to question the applicability of the NYC to CAS awards or, more generally, to arbitral awards rendered in the context of "mandatory" arbitration. According to her, it is possible to conclude that mandatory arbitration does not meet the requirement of Article II(1) of the NYC that the parties 'undertake', i.e., freely and consensually agree to submit their dispute to arbitration.9
The broader context: The proposal of AG Ćapeta in light of previous ECJ jurisprudence and case law of the ECtHR
In her Opinion, AG Ćapeta refers to the ECJ's 2023 decision in C 124/21 P, International Skating Union v European Commission ("ISU"),10 and suggests that her approach is in line with that decision, inviting the ECJ to "expand" on the approach adopted therein.
To recall, in ISU, the ECJ was seized, among others, with a cross-appeal regarding the fact that ISU's regulations required arbitration before CAS of any disputes, including disputes raising issues of EU competition law. The ECJ held that the relevant provisions of EU law formed part of the EU's public policy. According to the ECJ, "judicial review must […] be able to cover the question whether those awards comply with the fundamental provisions that are a matter of EU public policy, which include Articles 101 and 102 TFE".11 It determined that "such a requirement is particularly necessary when such an arbitration mechanism must be regarded as being, in practice, imposed by a person governed by private law, such as an international sports association, on another, such as an athlete".12 Ultimately, the ECJ held that the review by CAS awards provided by the Swiss FT does not guarantee respect of EU public policy and that the requirement to resolve disputes through CAS, in the absence of a review before national EU courts of EU competition policy, is thus inconsistent with EU law.
The Opinion presented by AG Ćapeta picks up on these findings and extends them to apply across the entire range of EU law: "Direct access to challenge FIFA's rules, despite a CAS award confirming their validity, should be available to subjects who claim that their rights guaranteed by EU law have been infringed. The scope of review should not be limited to public policy, but should include all relevant EU law provisions. It should be possible to exercise such review in all judicial proceedings, be they initiated as a direct challenge to FIFA's rules, in enforcement proceedings of a CAS arbitral award, or incidentally in a different type of procedure, such as the one initiated by an action for damages".13
This being said, while the AG refers to the decision of the ECtHR in Mutu and Pechstein v. Switzerland, which also highlighted the mandatory nature of CAS arbitration, it is noteworthy that this did not prevent the ECtHR from considering that CAS was sufficiently independent and impartial to be considered as proper arbitration "and that the CAS, when operating as an appellate body external to international federations, is similar to a judicial authority independent of the parties".14
Conclusion
The Opinion of AG Ćapeta is that CAS is a form of mandatory arbitration which is not able to ensure consistency with EU law given that the only limited review of its decision is before the court of a non-EU State, the Swiss FT. Therefore, she is of the view that domestic courts in the EU as well as the ECJ must be able to fully review any claims under EU law (not limited to competition law) related to measures adopted by sports federations such as in FIFA's STP Regulations. Domestic law cannot give such CAS awards the force of res judicata. She even goes so far as to suggest that CAS awards may not merit protection under the NYC or, that in any case, a full judicial review is required as matter of public policy in respect of CAS awards given their mandatory and self-sufficient nature.
It remains to be seen if the ECJ will follow the AG in her assessment, which would arguably result in a far-reaching extension of the competence of EU domestic courts to review CAS awards. If it does follow the AG's Opinion, the regulations and statutes of sporting federations could be subject to review by any EU domestic court, irrespective of any exclusive jurisdiction clauses in favour of CAS arbitration.
1 Opinion of Advocate General Ćapeta delivered on 16 January 2025, Case C‑600/23, Royal Football Club Seraing v Fédération Internationale de Football Association (FIFA), Union Royale Belge des Sociétés de Football Association ASBL (URBSFA), Union européenne des Sociétés de Football Association (UEFA) (“Opinion”), available here.
2 Opinion, para. 44.
3 ECtHR, Mutu and Pechstein v. Switzerland, Judgment of 2 October 2018, available here, paras. 107-115.
4 Opinion, para. 75.
5 Opinion, para. 79.
6 Opinion, para. 95.
7 Opinion, paras. 105-106.
8 Opinion, paras. 109-114.
9 Opinion, para. 118.
10 European Court of Justice, International Skating Union v European Commission, C 124/21 P, Judgment of 21 December 2023 (“ISU”), available here.
11 European Court of Justice, ISU, available here, para. 193.
12 European Court of Justice, ISU, available here, para. 193.
13 Opinion, para. 125.
14 ECtHR, Mutu and Pechstein v. Switzerland, Judgment of 2 October 2018, available here, paras. 157. The ECtHR only found a violation for lack of public hearing as concerned one of the two athletes (Pechstein) appearing as applicants.
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