CAS mediation conference Lausanne 16 May 2014

Overview of the different mediation clauses and examples tailored to sports federations

 by Prof. Dr. Ian Blackshaw

 

 

Introductory remarks

Mediation is proving to be an expeditious and cost effective way of settling all kinds of disputes, including sports-related ones. Its particular advantages have already been well rehearsed in this conference.

Well aware of these advantages, the Court of Arbitration for Sport (CAS) introduced mediation for the benefit of sport on 18 May 1999.[1] And, as Ousmane Kane, the former Senior Counsel to the CAS and, during his tenure as such, responsible for mediation, remarked at the time:

The International Council of Arbitration for Sport took the initiative to introduce mediation alongside arbitration. As the mediation rules encourage and protect fair play and the spirit of understanding, they are made to measure for sport.”[2]

 

Art. 1, para 1 of the CAS Mediation Rules (Rules) (the latest version of which dates from 1 September 2013[3]) defines mediation in the following terms:

CAS Mediation is a non-binding and informal procedure, based on a mediation agreement in which each party undertakes to attempt in good faith to negotiate with the other party, and with the assistance of a CAS mediator, with a view to settling a sports-related dispute.

 

Mediation agreements

In order for parties to refer their disputes to CAS mediation, it is necessary for them to agree to do so and enter into a so-called mediation agreement. In other words, like other forms of Alternative Dispute Resolution (ADR), mediation is based on the mutual consent (“consensus ad idem”) of the parties in dispute.

Art. 2 of the Rules defines a “mediation agreement” as follows:

A mediation agreement is one whereby the parties agree to submit to mediation a sports-related dispute which has arisen or which may arise between them.

A mediation agreement may take the form of a mediation clause inserted in a contract or that of a separate agreement.”

In other words, for a dispute to be settled by mediation, an express reference clause or an “ad hoc” agreement for mediation (see later) is required.

 

Disciplinary disputes

As will be seen from the Rules, CAS mediation is generally offered for disputes falling within the purview of the CAS Ordinary Division (any sports-related dispute that is not an appeal from the decision of a sports’ governing body or the World Anti Doping Agency) and does not, in general, apply to disciplinary matters, such as doping issues, match-fixing and corruption.

However, the Rules now expressly provide that, in appropriate cases and where the parties expressly agree, it may be possible to invoke CAS mediation for the settlement of other disciplinary disputes (see art. 1).

See further on this subject, the recent article by Jacqueline Brown, entitled “Mediation of Disputes in Equestrian Sports: An English Perspective”[4], in which Brown makes the following pertinent comments:

The reservation about mediating disciplinary matters […] perhaps stems from a perception of conflict were they to “bargain” on sanctions […] many other facets of disagreement there may be in a disciplinary case and which need to be resolved before a decision can be made on sanction. There is, for example, often disagreement upon the facts which surround the alleged offence; there may also be points of legal construction of the meaning and effect of the rules; and there may even be broader legal issues such as Human Rights or European legislation to be tackled, before a tribunal can reach its decision and consider the appropriate level of sanction.”

For the reasons mentioned later, it would be advisable to include an express reference to CAS mediation in sports bodies’ disciplinary rules and regulations framed in respect of such particular situations that may arise in a given dispute, but, again, expressly excluding any mediation over sanctions.

For example and merely for general discussion and consideration, such an express reference to CAS mediation in disciplinary cases could be couched along the following lines:

Any dispute, any controversy or claim arising under, out of or relating to these Disciplinary Rules and Regulations, such as their legal construction and effect, the facts of the case, and any issues arising under, for instance, human rights and/or European Union legislation, but save and except any issues arising under, out of or relating to any of the sanctions for breach of these Disciplinary Rules and Regulations as prescribed hereunder, which it is hereby agreed and declared by the parties, who are subject to them, are non-negotiable in all cases, shall be submitted to mediation in accordance with the CAS Mediation Rules.

However, it should be noted that, in any case, mediation is a useful way of settling disputes relating to any commercial and financial fallout resulting from decisions in disciplinary cases, for example, loss of lucrative sponsorship and endorsement contracts, particularly where the sports person concerned has been wrongly accused of being, say, a drugs cheat, For example, Dianne Modahl would probably have been better advised to try to settle her claims for compensation against the British Athletic Federation through mediation rather than through the courts in which she lost at considerable expense.[5]

 

CAS model mediation clauses

If the parties in dispute prefer to settle their differences by mediation – and many do because of the special characteristics and dynamics of sport[6] – the CAS model mediation clause is as follows:

Any dispute, any controversy or claim arising under, out of or relating to this contract and any subsequent of or in relation to this contract, including, but not limited to, its formation, validity, binding effect, interpretation, breach or termination, as well as non-contractual claims shall be submitted to mediation in accordance with the CAS Mediation Rules.

If mediation proves to be unsuccessful, although mediation providers usually claim a success rate of around 85% in appropriate cases, the CAS recommends the following additional clause to be inserted in a contract to cover the above contingency:

If, and to the extent that, any such dispute has not been settled within 90 days of the commencement of the mediation, or if, before the expiration of the said period, either party fails to participate or continue to participate in the mediation, the dispute shall, upon the filing of a Request for Arbitration by either party, be referred to and finally settled by CAS arbitration pursuant to the Code of Sports-related Arbitration. When the circumstances so require, the mediator may, at his own discretion or at the request of a party, seek an extension of the time limit from the CAS President.”

Thus, the CAS offers disputing parties the possibility of a “med-arb” dispute resolution process: mediation to identify the issues; and, if necessary, arbitration to settle them.[7] This can prove, in practice, to be a very pragmatic and effective method of dispute resolution, especially in relation to sports-related commercial disputes, as sport is now worth more than 3% of world trade.

Whilst on the subject of how to refer disputes for settlement by mediation, it may be noted, en passant, that in a landmark ruling in the English Courts in the case of Cable & Wireless PLC v. IBM United Kingdom [2002] 2 All ER (Comm) 1041, Mr Justice Colman held that an agreement to refer disputes to mediation is contractually binding. In this case, IBM called on Cable and Wireless to mediate a dispute that had arisen under a contract in which the parties had agreed to mediate future disputes. Cable and Wireless refused to do so, claiming that the reference to mediation in the contract was legally unenforceable because it lacked certainty and was like an unenforceable agreement to negotiate. The judge rejected this argument, holding that the agreement to try to resolve a dispute, with identification of the procedure to be used, was sufficient to give certainty and, therefore, legal effect to the clause.

It may be added that, in England too, parties, who, under Court rules, refuse, without good reason, to try – or even consider the possibility of mediating – to settle their disputes by mediation at an early stage in the litigation process, may run the risk of being denied their legal costs if ultimately successful, contrary to the normal rule that “costs follow the event”.[8]

 

Sports bodies’ mediation clauses

Because of its popularity in the sporting world, many international and national sports federations are now including specific provisions for arbitration and mediation of appropriate sports disputes in their sports marketing agreements, such as sponsorship and broadcast agreements and also in their statutes, constitutions, rules and regulations.[9] In fact, they should be encouraged to do so, for the reasons mentioned below.

As to the legal validity of such a so-called CAS Arbitration or Mediation “clause by reference” in such statutes and constitutions, see the decision of the Swiss Federal Tribunal of 31 October 1996 in the case of N. v. Fédération Equestre Internationale.[10] In that case, the Court held that by agreeing to abide by the rules of the Fédération, which included a provision to refer all disputes exclusively to the CAS, the sports person concerned was bound to submit the dispute to the CAS, even though he had not expressly agreed to CAS arbitration or mediation. So-called “sports association law” applied in such a case.

Thus, there is a legal precedent which provides a sound basis for sports bodies – at the international and national levels – including express provisions for referring disputes to CAS mediation in their rules and regulations.

 

Express mediation clause or “ad hoc” reference to mediation?

As mentioned above, mediation is a consensual dispute resolution process and the necessary agreement to refer disputes to mediation may be evidenced by either an express mediation clause included in sports governing bodies’ statutes and regulations or in sports marketing contracts, such as host city, broadcast, event management and sponsorship agreements, or in “ad hoc” agreements entered into by the parties at the time a dispute arises between them.

In practice, it is preferable to foresee mediation in advance and provide for it with an express mediation clause, rather than to rely on an “ad hoc” agreement at the time a dispute arises.

Leaving matters to be decided until a dispute arises may be pragmatic and may be attractive from the point of view of leaving one’s options open, but is less secure, from a legal point of view, as one party at that time may be agreeable to referring their dispute to mediation, whilst the other party is not so agreeable. The agreement must be mutual to be legally enforceable and, therefore, in such a case, there would be no binding legal obligation for mediation of the dispute.[11]

 

CAS Conciliation

For the sake of completeness, it should be mentioned that, under the CAS Ordinary Arbitration Procedure, the President of the Division, before the transfer of the file to the Panel, and thereafter the Panel may, at any time, seek to resolve a dispute by conciliation.[12]

Any such settlement may be embodied in an arbitral award rendered by consent of the parties.[13]

Conciliation is a kind of mediation in which the conciliator enjoys wider powers to influence the outcome of the process and is expected to offer (ex officio) possible solutions to the parties for settling their disputes.

 

Concluding remarks

CAS Mediation is proving to be a relatively inexpensive and expeditious way of settling sports-related disputes, including commercial ones with an international dimension.

Mediation, in general, offers the parties in dispute a win-win outcome and also facilitates the preservation of sporting and business relationships, as has been demonstrated in a number of cases, including the Richie Woodhall and Frank Warren dispute (referred to in footnote 6). In fact, in that case, following the settlement of their dispute by mediation, Woodhall went on to box again for Warren!

So-called “ad hoc” mediation arrangements are to be avoided, wherever possible, as they rely on the mutual agreement of the parties in dispute, which may not always be forthcoming. As mentioned, one party may wish to settle the dispute by mediation whilst the other may not. It is, therefore, preferable and prudent to provide for an express reference to CAS mediation in the statutes, constitutions, rules and regulations of international and national sports governing bodies and also in their corresponding sporting commercial agreements, such as host city and sponsorship contracts, to avoid such an impasse.

Mediation also confines the settlement of sporting disputes “within the family of sport” which offers many practical advantages to the parties.

Finally, it is submitted that the CAS is very well placed to provide a mediation service for the world of sport that is not only fit for purpose but also second to none!

 

 



[1] There are currently some 65 CAS mediators.

[2] On the value of mediation generally for settling sports disputes, see Prof. Ian S. Blackshaw, Mediating Sports Disputes – National and International Perspectives (TMC Asser Press, The Hague, The Netherlands 2002); and on CAS Mediation, see Ian Blackshaw, “Settling sports disputes by CAS mediation”, in: CAS Newsletter No. 3 – November 2005, at p. 4-7; and also Prof Ian S Blackshaw, Sport, Mediation and Arbitration (TMC Asser Press, The Hague, The Netherlands 2009).

[3] See Ian Blackshaw, “The Court of Arbitration for Sport Updates its Mediation Rules” in: AIA Newsletter, December 2013 and, in particular, the general conclusion: “The new Rules add some legal and procedural clarity to CAS Mediations and, as such, are to be welcomed.”

[4] GSLTR 2014/1.

[5] Modahl v. British Athletic Federation [2001] All ER (D) 181 (Oct). See also I. Blackshaw, “Modahl Loses Appeal For Compensation”, in: Sports Law Bulletin, Vol. 4 No. 6, November/December 2001, at p. 1, 3 and 4. See further on this subject: Prof. Ian Blackshaw, “Doping: The Commercial and Financial Effects and How Best to Deal with Them”, in: GSLTR 2011/3 at p. 5-7.

[6] See the case of Richie Woodhall and Frank Warren involving, in a sporting sense, a time-critical dispute under certain management and promotion agreements entered into between them, which was settled within 72 hours by mediation, discussed at p. 182 in “Mediating Sports Disputes – National and International Perspectives” by Prof. Ian S. Blackshaw (TMC Asser Press, The Hague, The Netherlands 2002).

[7] See Ian Blackshaw, “Settling Sports Business Disputes by “Med-Arb” in the Court of Arbitration for Sport”, in: AIA Newsletter, September 2011.

[8] See Susan Dunnett v. Railtrack PLC [2002] EWCA Civ 302; and Leicester Circuits Limited v. Coats [2003] EWCA Civ 333. But see also Halsey v. Milton Keynes General NHS Trust and Steel v. Joy and Halliday [2004] EWCA Civ 576; [2004] 4 All ER 920, collectively known as the “Halsey case” and described by Lord Phillips of Worth Matravers as “the most important English judgement about ADR”.

[9] For example, the International Skating Union has recently introduced a requirement for parties to enter into negotiations to try to settle their disputes amicably, before resorting to other means of dispute resolution. A close step towards mediation which is a form of assisted negotiation. Also, according to Omar Ongaro, the head of Players’ Status and Governance, FIFA regularly asks parties in disputes to try to settle them by mediation and he also points out that mediation in certain specific cases could possibly reduce the workload of FIFA’s decision-making bodies. For example, approximately 2,000 procedures (including claims for training compensation and the solidarity contribution pursuant to the FIFA Status and Transfer of Players Regulations) are opened each year! Further, the IOC includes in their Broadcasting Agreements an express Mediation Clause referring disputes to the CAS, in accordance with the CAS Mediation Rules, but, to date, there have not been any such mediations. However, the IOC, according to Howard Stupp, its Director of Legal Affairs, is “looking deeper at the potential benefits of Mediation” (for example, for disputes regarding (non) recognition by the IOC or NOCs) and, in general, considers that mediation is “worthwhile when the case is susceptible of Mediation and the parties approach Mediation with an open mind”.

 

[10] Nagel/FEI, CAS-Digest I, p.585.

[11] For further information on this subject, see chapter 17 on “Alternative Dispute Resolution” in: Prof. Ian S. Blackshaw, Sports Marketing Agreements: Legal, Fiscal and Practical Aspects (TMC Asser Press, The Hague, The Netherlands 2012).

[12] Art. R42 of the CAS Code of Sports-related Arbitration (latest version effective as of 1 March 2013).

[13] Ibid..

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