Boxing: Swiss Courts to deal with AIBA crisis

By Dr. Thilo Pachmann & Alexander Theiler of Pachmann, Attorneys-at-Law, Zurich, Switzerland

 

The crisis within the AIBA, the International Boxing Association, has reached its temporary peak less than a month before the World Boxing are due to be held in Hamburg, Germany. Members of a so-called interim management committee (IMC) are asking the Swiss courts to remove AIBA’s president, Wu Ching-Kuo, who has been in charge since November 2006 and, in addition, is an influential member of the IOC’s Executive Board.

In the last few weeks, it has been revealed that AIBA faces the risk of bankruptcy as it is hit by demands to pay back immediately loans of $10m and £14.65m, assumingly far more than AIBA has in its accounts.

The IMC, which was set up only last week following a widely-supported motion of no-confidence in Wu at a meeting held in Moscow, Russia, on 24-25 July, believes Wu is responsible and blames him not only for financial mismanagement, but also that he is using AIBA’s funds to pay his personal legal bills. In addition, AIBA has presumably spent excessive amounts for its President’s office in Taiwan and representational fees, including travel, and over one million Swiss Francs for legal services only over the past year.

To restore financial health to AIBA, the IMC now has taken legal action before the Swiss courts against Wu, asking the court to authorise the IMC or a temporary administrator to run AIBA, instead of President Wu, until an extraordinary congress can be held deciding Wu’s fate.

Furthermore, the IMC demands to block Wu’s access to the funds with the assistance of the court in order to have them protected from further abuse. To make matters even worse, AIBA’s offices at the Maison du Sport International in Lausanne were shut down in the wake of the dispute and Swiss police were called to remove staff from their offices, among them at least one IMC member and several AIBA Executive Committee members.

Wu denies any allegations of wrongdoing and financial mismanagement. He describes the action of the IMC as politically-motivated; as “a military coup” against him; and denies the right of the IMC to even exist, stating that it has no legal foundation. In addition, he claims AIBA’s financial means are on a sound basis with more than 10 million US dollars in the bank and no debt.

Disputes in Sports law worldwide are regularly resolved by the Court of Arbitration for Sport (CAS) in Lausanne by applying the CAS procedural code. Things are a bit more complicated when it comes to provisional (or interim) measures, such as those presently requested by the IMC. In these cases, there is at least a concurrent jurisdiction of state courts. As a general rule, an arbitral tribunal cannot order interim measures before it has been constituted and no emergency arbitrator is available. Furthermore, even when ordered by an arbitral tribunal, interim measures must be enforced by state courts, or, at least, with the assistance of state courts in case a party concerned does not comply voluntarily. See further on this subject: ‘CAS Provisional and Conservatory Measures’, Ian Blackshaw and Thilo Pachmann, ‘Yearbook of International Sports Arbitration 2015’, Asser Press, The Hague, The Netherlands, at pp. 93-110.

AIBA itself is greatly reluctant to provide further legal details of this bitter internal fight. However, we are eager to follow up this exploding crisis within AIBA and how long President Wu is able to hold his top position. Recent developments, though, have shown that he is under considerable pressure and may not survive.

Watch this space!

 

Dr Thilo Pachmann and Alexander Theiler may be contacted by e-mail at ‘thilo.pachmann@pachmannlaw.ch’ and ‘alexander.theiler@ pachmannlaw.ch’ respectively.