Recent amendments to the CAS Code (2010-2012) by Dr. Xavier Favre-Bulle

Recent amendments to the CAS Code (2010-2012)

 

by Dr. Xavier Favre-Bulle[1]

 

Introduction

 

The Code of Sports-related Arbitration (the “Code”) governs arbitration proceedings before the Court of Arbitration for Sport (“CAS”). The Code was adopted in 1994, and its first main revision entered into force in 2004. Thereafter it remained unchanged for six years until a major revision which occurred in 2010. Three main concerns seem to have guided the 2010 revision:

 

–    strengthening the credibility and reputation of the CAS as an arbitration institution;

–    improving procedural efficiency; and

–    clarifying and formalising some CAS practices while abandoning others.

 

On 1 July 2011, the Code was again amended in certain respects, the most significant being the Court Office fee which was increased from CHF 500 to 1,000. (The fee, charged for the filing of a request for arbitration/statement of appeal, had remained the same since 1994.)

 

A few months later, on 13 December 2011, new amendments to the Code were announced on the CAS website.[2] They came into force on 1 January 2012.

 

The purpose of this article is to discuss the main amendments made in these three revisions and their underlying reasons, presented by categories:
1    organisational provisions in the Statutes;

2    procedural rules, both for the Ordinary Arbitration Procedure and the Appeal Arbitration Procedure;

3    costs.[3]

 

Minor changes of mere form or relating to the structure of the rules are not addressed.

 

Organisation

 

The Statutes have been amended on some minor points of organisation, mainly relating to the composition and attributes of the relevant bodies contemplated in the rules. The most significant changes are described below.

 

The selection of arbitrators for inclusion in the CAS list established by the ICAS is governed by more flexible rules

 

By way of background, the International Council of Arbitration for Sport (“ICAS”) is composed of 20 members and is the supreme body of the CAS. Its main task is to safeguard the independence of the CAS and the rights of the parties. The ICAS is in charge of the amendments to the Code. It also looks after the administration and financing of the CAS, and appoints the CAS members to be placed on the (closed) list of arbitrators.[4]

 

Under the 2004 edition of the Code, the ICAS in principle had to follow strict allocation requirements when putting together the list of CAS arbitrators. In developing this list, it drew from five categories of arbitrators selected by different sports bodies (category 1: the International Olympic Committee (“IOC”); category 2: the International Federations (“IFs”); category 3: the National Olympic Committees (“NOCs”); category 4: the athletes) or chose from among persons independent of these bodies (one-fifth for each of these five categories).[5]

 

Since 1 January 2012, the ICAS designates arbitrators “whose names and qualifications are brought to the attention of the ICAS, including by the IOC, the IFs and NOCs”[6] (in addition to other credentials required from the arbitrators, which remain the same). This will give more flexibility and discretion in the selection process. The ICAS is no longer bound by the requirement to choose an equal number from the categories of arbitrators proposed by sports bodies as mentioned above.

 

The prohibition of the “double hat” arbitrator and counsel at CAS

 

For some time, a number of CAS arbitrators who practised as attorneys acted as arbitrators in some proceedings and as counsel in others. A first restriction was introduced at the 2000 Sydney Olympic Games: arbitrators were prohibited from appearing as counsel before the ad hoc division.[7] Subsequently, in 2006, the ICAS adopted guidelines recommending that a CAS arbitrator should not act as counsel in a CAS matter while acting as arbitrator in another CAS Panel.

 

As of 1 January 2010, a much more drastic solution has been adopted. A new sentence has been inserted in Article S18 of the CAS Code as follows:

 

“CAS arbitrators and mediators may not act as counsel for a party before the CAS.”

 

According to the CAS press release published at the time, the aim of this rule is to “limit the risk of conflicts of interest and to reduce the number of petitions for challenge during arbitrations”.[8] The new Article S18 may be seen as a preventive and proactive measure to do away once and for all with any criticism relating to a person’s dual position as arbitrator and counsel (in different cases) in CAS matters.

 

In recent years, the Swiss Supreme Court has on several occasions dealt with the question of the extent of admissible contacts between arbitrators and counsel. For instance, the Court refused to accept as a valid ground for challenge the fact that counsel for a party and one of the arbitrators had sat together (in the past[9], or even in parallel[10]) as arbitrators on another Panel. The Court also held that regular contacts within a professional association are not a sufficient ground for challenge.[11] Despite this favourable line of precedents, the ICAS decided to act proactively to avoid situations where an arbitrator acting as counsel in a CAS case might jeopardise the credibility of the Panel or the institution as a whole. The new regime has had practical consequences: some CAS arbitrators, who have a significant practice as counsel, preferred to resign and no longer appear as arbitrators on the CAS list. The slight increase of the CAS arbitrators’ fees (hourly rates) in the Schedule of Arbitration Costs[12] does not appear to have counteracted this moderate exodus in any substantial manner.

 

Further, the new rule in Article S18 is in the organisational chapter of the CAS Code and not in the rules of procedure, and notably not in the section on the grounds for challenge. This raises the question of the sanctions that can be imposed to ensure that the new prohibition is complied with. According to the official Comments on Article S18 posted on the CAS website at the time, a violation of this rule does not prevent the counsel concerned from keeping his position in the proceedings, but “the ICAS will have the power to take particular measures towards him/her with respect of his/her function as arbitrator/mediator”. These measures will be based on the revised Article S19 whereby the ICAS is granted authority to remove, permanently or temporarily, an arbitrator from the list of CAS members in case of a violation of provisions of the Code or actions affecting the reputation of the ICAS/CAS.

 

Exclusion of liability

 

An express provision has been added for the purpose of excluding the liability of CAS arbitrators, CAS mediators, the ICAS and its members, as well as the CAS and its employees “for any fact or omission in connection with any CAS procedure[13]. As for a number of other arbitration institutions, the wide language of such an exclusion raises the question of its admissibility under the applicable law, in particular in case of an intentional act or gross negligence

 

Procedure

 

Issues of jurisdiction

 

Most of the amendments made in 2012 relate to CAS jurisdiction. In essence, the Code now provides for a regime inspired by Article 186 of the Swiss Federal Private International Law Act (1987) in terms of the following[14]:

 

–    the power of the Panel to rule on its own jurisdiction (competence-competence principle);

–    the timing of such a decision (either in a preliminary decision or in an award on the merits) and due process considerations (after the parties have been invited to file written submissions on the CAS jurisdiction when a jurisdictional objection has been raised);

–    lis pendens (the Panel shall rule on its jurisdiction irrespective of any other actions pending between the same parties, unless substantive grounds require a suspension of the proceedings).

 

If the Panel has not yet been constituted, a summary assessment of the CAS jurisdiction may also be made by the Division President in connection with an application for provisional measures, with the possibility of terminating the proceedings if there is manifestly no jurisdiction.[15] These decisions taken by the arbitration institution rather than by the arbitral tribunal should be made with great caution and be left to exceptional circumstances since they cannot be challenged before the Swiss Supreme Court.

 

In appeal proceedings, it is also provided that the CAS may decline to administer the arbitration if the arbitration agreement relied upon “is manifestly not related to the dispute at stake”[16] (in addition to the more standard test, i.e. whether there is manifestly no arbitration agreement referring to the CAS).

 

Procedural efficiency and flexibility

 

Various amendments are aimed to improve procedural efficiency and flexibility. As stated in the information on the CAS website pertaining to the 2012 revision, the procedural rules of the Code have been supplemented on several points “to make the arbitration proceedings quicker and more efficient”[17].

 

A significant feature of the CAS is its composition of two divisions, the Ordinary Arbitration Division and the Appeals Arbitration Division, for the administration of “ordinary” arbitrations under the Ordinary Arbitration Procedure, on the one hand, and “appeal arbitrations” under the Appeal Arbitration Procedure, on the other hand.[18] The 2004 version of the Code provided that “Arbitration proceedings submitted to the CAS are assigned by the Court Office to one of these two Divisions according to their nature”. The decision by the Court Office is not always easy, mainly because the proceedings are at a very early stage when the decision is to be made.

 

Until 2010, the parties were not protected from a wrong assessment and decision of the Court Office, all the more so because Article S20 provides that “[s]uch assignment may not be contested by the parties or raised by them as a cause of irregularity”. The consequences could be significant, as the rules governing the two procedures are different on some points. This is the reason why Article S20 was modified by adding the possibility of reassigning a case from one division to the other, so that the appropriate procedure (ordinary or appeal) can apply. However, Article S20 seems to limit the reassignment “in the event of a change of circumstances during the procedure” and the Panel must be consulted (and the reassignment shall not affect the constitution of the Panel or the validity of the proceedings that have already taken place). By resolving a problem, the Code may have created new ones: since the advance of costs is significantly higher in the ordinary proceedings than in the appeals proceedings, a transfer from the appeal division to the ordinary division could create issues of costs.

 

As regards the evidentiary proceedings, the filing of exhibits by electronic mail is now allowed.[19] The President of the Panel also has the express power to conduct a hearing by video-conference or to hear parties, witnesses and/or experts via tele- or video-conference.[20]

 

More importantly, the list of witnesses in the parties’ submissions must include not only the names of the potential witnesses but also a brief summary of the expected testimonies and, for experts, their area of expertise.[21] This new regime serves to avoid a practice by some parties whereby they reserved their right to call witnesses and experts, without giving the content of the expected testimonies and/or did not provide the names of the witnesses and experts until a late stage. The wording of the rules regarding written witness statements could nevertheless be improved as it suggests that such statements are limited to witnesses proper; expert reports are not expressly mentioned, although parties would be well advised to file such reports if they wish to adduce expert evidence, as opposed to a description of only the “area of expertise” of the expert as now required, which may not be every useful for the Panel.[22]

 

The Panel or, before its constitution, the Division President, is expressly allowed to stay the proceedings for a limited period of time, although the text does not provide any guidance as to the circumstances which might justify such a stay, thereby leaving wide discretion to those who are called upon to decide.[23]

 

ADR techniques are introduced in the appeal procedure: at any time, the Panel may seek to resolve the dispute by conciliation. It is also clarified that the parties who settle their dispute during the proceedings may request that their agreement is incorporated in an award by consent.[24]

 

The practice of appointing an ad hoc clerk to assist the Panel is officially acknowledged.[25] The clerk must be independent from the parties and his/her fees shall be included in the arbitration costs.

 

Confidentiality requirements have been relaxed. Facts or other information relating to the dispute or the proceedings may be disclosed to third parties if the permission of the CAS is obtained. The publication of awards may be agreed by all parties, failing which a decision by the Division President may suffice.[26]

 

Stricter rules as a solution for certain situations

 

Some provisions aim at ensuring that parties do not deal with procedural rules in a frivolous manner or that practical problems are adequately dealt with in the rules.

 

For example, if some requirements for notifications and submissions by the parties (e.g. number of copies) are not complied with, the CAS “will not proceed”.[27] In addition, a request for an extension of time can be granted only if the initial time limit has not yet expired. The Secretary General may now decide on requests for extensions of time where such requests do not exceed a maximum of five days and are made for the first time (and no time extension may be granted for the statement of appeal).[28]

 

In appeal proceedings, the CAS must be informed in writing if the statement of appeal is to be considered as the appeal brief. If the Appellant fails to do so, the appeal shall be deemed withdrawn.[29]

 

The three-month time limit for the communication of the award (at least its operative part) in appeal proceedings shall start from the date of receipt of the file by the arbitrators.[30] Previously, the time limit was four months, but started from the filing of the statement of appeal. The reason for the change lies in the frequent delays occurring between the receipt of the statement of appeal and the moment when the Panel can actually start working on the file (disputes or difficulties regarding preliminary issues such as the constitution of the Panel, the choice of the language or the payment of the advance of costs).

 

Another established practice has been codified: the CAS does not recognise dissenting opinions and does not communicate them to the parties.[31] Therefore, an arbitrator desiring to render a dissenting opinion will have to send it directly to the parties.

 

Counterclaims, consolidation and the role of third parties

 

It is no longer possible to file a counterclaim in appeal proceedings. A decision must be appealed by any concerned party within the same time limit.[32] A party can no longer wait until the other party files an appeal and then at such time raise a complaint against the decision as a respondent to the appeal; instead, that party must start separate appeal proceedings. In case of parallel appeals against the same decision, however, the proceedings will most likely be consolidated.[33]

 

This new regime will oblige parties to review their strategy. For example, when a sports body (federation, the World Anti-Doping Agency (“WADA”), etc.) appeals to seek a greater sanction than the one decided against an athlete, that athlete will not be able to file a counterclaim aimed at having the sanction lowered. The only possibility for the athlete will be to file an appeal as a precautionary measure (at a cost of CHF 1,000 for the Court Office fee) in case the athlete expects the other side to file its own appeal, just so that his right to request a lower sanction is preserved.[34]

 

Consolidation has also been expressly addressed in the ordinary procedure. The President of the Panel or, before his appointment, the Division President, may decide after consultation with the parties to consolidate two proceedings relating to similar arbitration agreements and facts.[35]

 

The rules governing third-party intervention have been amended to allow for a clearer process. A third-party wishing to participate in the proceedings shall file a request for intervention within ten days from the moment the arbitration has become known to the intervener, but before the hearing or before the closing of the evidentiary proceedings if no hearing is held.[36] Previously, the time limit was the same as the time limit for the filing of the respondent’s answer. Discretion is expressly granted to the Panel to determine the status and the rights of the third party intervening or joined after consultation with the parties.[37]

 

In order to guarantee more transparency of the process and enable arbitrators to be better informed when making their decisions, the filing of amicus curiae briefs may be allowed by the Panel after consultation with the parties.[38] Although amicus curiae briefs had already been considered by some Panels before this amendment, it is wiser to have clarified this possibility to avoid any uncertainty as to the admissibility of such third-party briefs.

 

No longer any consultation procedure

 

In the prior versions of the Code, the major sports bodies (such as the IOC, the NOCs, the IFs, WADA, etc.) could request an advisory opinion from the CAS about any legal issue arising in sports. The advisory opinions were non-binding. This consultation procedure was rarely used, and, according to official information on the CAS website[39], this led the ICAS to remove the relevant section from the Code.[40]

 

An issue recently arose in relation to the so-called Osaka Rule of 2008 (Rule 45 of the Olympic Charter prohibiting athletes from participating in the Olympic Games if they have been suspended for more than six months for an anti-doping rule violation). The CAS had originally given a favourable advisory opinion supporting this rule in consultation proceedings. However, in an award dated 4 October 2011 in an arbitration between the United States Olympic Committee and the IOC, a CAS Panel found that the Osaka Rule was in breach of the WADA Code and declared the rule to be invalid and non-enforceable.[41] Such a contradiction between an advisory opinion and a subsequent award highlighted the weakness of the consultation procedure. In addition, providing opinions on any kind of legal issue is a difficult and lengthy task, and in the light of the increasing number of tasks the CAS is requested to perform, this may well have been a reason for dropping this procedure.

 

Costs

 

Several major rules and principles regarding costs have been amended.

 

Since 2004, disciplinary cases of an international nature had been administered by the CAS without charge (except the Court Office fee to be paid by the appellant when filing his appeal). In the 2010 revision, the scope of the “free-of-charge” rule for appeal proceedings in disciplinary cases became limited to appeals directed against decisions made by or on behalf of international federations or sports bodies.[42] This regime was questionable insofar as it could create some imbalance. National federations are allowed to designate the CAS as the appeal authority in cases involving national-level athletes.[43] In those cases athletes competing at the national level could have to bear the arbitration costs even in doping matters, whereas proceedings involving an international-level athlete would be free of charge. The limitation to disciplinary cases (introduced in 2004) also creates differences of treatment: an athlete having a dispute with his federation on a selection matter has to bear costs that an athlete being suspended for violation of anti-doping rules would not have to bear.[44]

 

The 2012 amendments went even further. Under the new regime, only appeals against decisions made by international federations remain free of charge.[45] In cases where the decision appealed is made by a national federation, even acting on behalf of an international federation, the arbitration costs have to be borne by the parties. From the perspective of CAS, this change may be seen as a means of managing costs more efficiently. Since the appeals caseload is increasing significantly, the CAS had to save money somewhere. From the athletes’ perspective, however, it is not certain whether this new regime is suitable, as the resolution of sports disputes will be more expensive. In doping matters, this might lead to a difference of treatment (in terms of the costs to be borne) between athletes in areas where the international federation makes disciplinary decisions itself (free of charge) and those in areas where the international federation has chosen to delegate the disciplinary proceedings to the athlete’s member federation (advances on costs to be made and final costs to be borne in principle by the losing party).

 

Restricting the “free-of-charge” rule in appeal proceedings may raise another issue. Some submit that the no-cost principle for CAS appeals is an important component of the bargain to impose arbitration on athletes, and that it therefore ensures the validity of arbitration agreements in the regulations of sports federations. In case an athlete is required to pay an advance on costs and cannot afford it, the question is whether he is deprived of his right to access justice (in case the athlete could start a court action at no costs or limited costs, especially if he is granted legal aid, but is prevented from doing so by the arbitration agreement imposed by the sports federation and prevailing over court litigation).[46]

 

A possible solution that the CAS is considering in order to address this issue is the setting up of a legal aid fund for athletes in CAS appeal proceedings. New guidelines on legal aid are also in preparation for release some time in 2012. These guidelines will include criteria for accessing the legal aid fund created to facilitate access to CAS arbitration for athletes without sufficient financial means.[47] To date, the granting of legal aid has been subject to a decision by the CAS President, based on unofficial criteria and procedures.

 

The provisions of the Code governing costs have also been amended to bring concrete solutions to problems encountered in practice. The file is not transferred to the arbitrators if no party pays the advance on costs.[48] An option is given to the respondent to request that the time limit for the filing of the answer be fixed after the payment of the advance on costs by the appellant.[49] When arbitration proceedings are terminated before a panel has been constituted, a ruling will be made by the Division President in a termination order, with the possibility of ordering the payment of legal costs if so requested by a party and after all parties have been given the opportunity to file written submissions on costs.[50]

 

Conclusion

 

As to the method, it is not very frequent that a set of arbitration rules is amended three times within a short period, leading to three different versions over the course of three years. Furthermore, in the case of the CAS, the latest revision was simply announced on the CAS website in mid-December 2011 for entry into force only some two weeks later. To the extent possible, an arbitration institution should strive to limit amendments to its rules and make revisions at regular intervals (such as, for instance, every five years if at all necessary). The absence of amendments for a long period, followed by successive revisions at very short intervals may affect the credibility of the arbitration institution and its rules.

 

As to the content of the revisions, most of the amendments seem justified and aim at offering more flexibility or more strictness as the case may be. The general objective to have clear, precise and efficient rules is most welcomed and serves to avoid any risk of uncertainty in the application of the Code. A feature of CAS arbitration is that it has a large number of cases involving individuals (athletes), which makes it not only useful but even necessary to have rules that are transparent (hence the need for codifying practices), self-explanatory and user-friendly in the sense that all parties navigating the Code should be able to understand these rules.

 

The amendments to the cost regime seem more of a “political” nature. On the one hand, there is a legitimate concern of the part of the CAS to control its costs in the context of a significant increase in the number of appeals brought before it. On the other hand, athletes should not be prevented from exercising their rights because they cannot afford the process. In this respect, the planned legal aid fund is an interesting tool to counter-balance the restrictions on the free-of-charge proceedings. Since the possibility to benefit from the appeal procedure at no costs has become more narrow with the revisions of 2010 and 2012, the CAS must make a move to satisfy the sports community and avoid a discriminatory effect between litigants depending on the nature of the dispute.

 



[1] Dr. iur., LL.M., Lenz & Staehelin, Geneva, xavier.favre-bulle@lenzstaehelin.com. I would like to thank Mr. Fabrice Benjamin, LL.B. (Paralegal) of the Sports Law Group of Lenz & Staehelin for his assistance in the preparation of this article.

[3] See also e.g. Matthieu Reeb, “Les modifications essentielles apportées au Code de l’arbitrage en matière de sport entre le 1er janvier 2010 et le 1er janvier 2012”, in: Rigozzi/Bernasconi (eds.), CAS Jurisprudence and New Developments in International Sports Law, Bern 2012, p. 1 ff ; Antonio Rigozzi, “The recent revision of the Code of sports-related arbitration (CAS Code)”, in: Jusletter, 13 September 2010 ; Lenz & Staehelin Sports Law Newsletter March 2010 and Newsflash January 2012.

[4] Article S6.

[5] Article S14.

[6] Article S14 (2012 amendments).

[7] Article 12 of the Arbitration Rules for the Olympic Games.

[9] ATF 129 III 445.

[10] 4P.105/2006.

[11] 4A_506/2007.

[12] Appendix II (2010 amendments).

[13] Article R68 (2010 amendments).

[14] Articles R39 and R55 (2012 amendments).

[15] Article R37(2010 amendments).

[16] Article R52 (2010 amendments).

[18] Article S20 in conjunction with R38 (Ordinary Arbitration Procedure) and R47 (Appeal Arbitration Procedure).

[19] Article R31 (2010 amendments).

[20] Article R44.2 (2012 amendments).

[21] Articles R44.1, R51 and R55 (2010 and 2011 amendments).

[22] Articles R44.1, R51 and R55 (2010 and 2011 amendments).

[23] Article R32 (2010 amendments).

[24] Article R56 (2010 amendments).

[25] Articles R40.3 and R54 (2010 amendments).

[26] Article R43 (2010 amendments).

[27] Article R31 (2010 amendments).

[28] Article R32 (2010 amendments).

[29] Article R51 (2010 amendments).

[30] Article R59 (2010 amendments).

[31] Articles R46 and R59 (2010 amendments).

[32] Article R55 (2010 amendments).

[33] Article R52 (2010 amendments): if a party appeals against a decision which is already subject of a pending appeal before the CAS, the President of the Panel, or if he has not yet been appointed, the President of the Division, may, after consulting the parties, consolidate the two proceedings.

[34] Antonio Rigozzi, “The recent revision of the Code of sports-related arbitration (CAS Code)”, in: Jusletter 13 September 2010, p. 9.

[35] Article R39 (2012 amendments).

[36] Article R41.3 (2010 amendments).

[37] Article R41.4 (2010 amendments).

[38] Article R41.4 (2010 amendments).

[40] Articles R60 ff., as well as Article S12(c) (2012 amendments).

[41] U.S. Olympic Committee v. International Olympic Committee, CAS 2011/O/2422. See also the most recent award made on 30 April 2012 in British Olympic Association (BOA) v. World Anti-Doping Agency (WADA), CAS 2011/A/2658.

[42] Article R65.1 (2010 amendments).

[43] See Article 13.2.2 of the WADA Code.

[44] Antonio Rigozzi, “The recent revision of the Code of sports-related arbitration (CAS Code)”, in: Jusletter 13 September 2010, p. 9.

[45] Article R65.1 (2012 amendments).

[46] Antonio Rigozzi, “The recent revision of the Code of sports-related arbitration (CAS Code)”, in: Jusletter 13 September 2010, pp. 9-10.

[47] Article S6(9) (2010 amendments).

[48] Articles R40.3 and R54 (2010 amendments).

[49] Articles R39 and R55 (2010 amendments).

[50] Articles R64.1 and R65.2 (2012 amendments).

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