Arbitration of football contracts disputes in Turkey

by N. Emre Bilginoglu[1]

 

Introduction – Turkish football

Since the Turkish national team earned the third place in the FIFA World Cup 2002 and played semi-finals in EURO 2008, the Turkish Super League has been one of the rising stars of European football. The majority of the national team’s players are from Beşiktaş JK, Fenerbahçe SK, Galatasaray SK and Trabzonspor. These powerhouses of the Turkish Super League have also improved their performance in European competitions since the beginning of the 21st century.

In 2000, the Turkish side Galatasaray SK won the UEFA Europa League trophy and the European Super Cup by beating football giants Arsenal and Real Madrid respectively. Galatasaray’s eternal rival, Fenerbahçe SK, played in the quarter finals in the European Champions’ League in 2008 and the semi-finals in the UEFA Europa League in 2013. Since 2000, Fenerbahçe SK has been the most successful club in the Turkish Super League, finishing the league in the first or in the second place among 18 teams for 14 times in the last 16 seasons. The team is worth € 160 million, the most valuable in the league. Beşiktaş JK, the current champion of the Super League, is another major contender in the league playing on their home ground, the Vodafone Arena, filled with some 42 thousand supporters.

The Turkish Super League ranks as one of the prominent football leagues in Europe, considering that it is worth approximately € 911 million. Istanbul, the biggest city in Turkey, which has a population of fifteen million inhabitants, is the home of five of the eighteen teams that make up half of the total market value.[2]

The enormous market value brings forth a myriad of disputes, mainly between the clubs against the players, the coaches and the agents. These actors of the Turkish football industry are from all countries. Turkish Super League teams are allowed to register 14 foreign players and have 11 foreign players in the match list of 18 players. Therefore, they are allowed to field 11 foreign players in a match. In the last few years, the Turkish Super League started to become one of the favourable alternatives for world class players. Roberto Carlos, Drogba, Guti, Quaresma, Nani, Bosingwa, Mario Gomez, Van Persie, Sneijder, Kuyt, Cardozo, Podolski were some of the well-known players who chose to play or who still play in the Turkish Super League. The tax rate imposed on Turkish Super League players is 15%, the lowest in Europe after Bulgaria. The tax rate imposed on coaches is 35%. Apart from low tax rates and relatively high wages, Turkish clubs are preferred by foreign players because of their competitiveness.

Like foreign investors, all foreigners of the sports industry look for some legal security before signing a contract. FIFA ensures legal protection for foreign actors of the football industry in a certain way, providing players and coaches with legal remedies for employment-related disputes of an international dimension. The legal system of the FIFA member association should also provide a reasonable legal remedy for its national actors.[3]

The Turkish Football Federation (TFF) chose to provide an arbitration court for the resolution of disputes arising from football contracts. Arbitration is, indeed, growing exponentially as a method of dispute resolution.[4] The renowned alternative dispute resolution mechanism is especially preferred in disputes arising from sports contracts, where both a rapid and a confidential resolution is of the essence.[5] The TFF Dispute Resolution Board provides a decision in only four months, which is a lightning speed compared to the courts. This article aims to give the reader an insight into the arbitration of football contracts disputes in Turkey.

 

Arbitration of football contracts disputes

Legal basis

In August 2015, the TFF made certain important changes in its Statute and guidelines. Since those changes, disputes arising from contracts between football clubs, players, coaches and agents are resolved within the TFF Dispute Resolution Board (“UCK”).[6] Therefore, applying to State courts for these disputes (the previous way of resolving disputes) is now impossible. When lawyers file a lawsuit regarding a football contract, courts deny jurisdiction. This denial of jurisdiction is, in fact, a legal issue.

Art. 59 of the Turkish Constitution states that disputes related to sports administration and disciplinary matters should be resolved by mandatory arbitration.[7] This article was added to the Constitution as law makers wanted to secure the legal basis for arbitration in sports. Consequently, decisions related to sports administration and disciplinary matters cannot be appealed to any court of the judiciary. The scope of this article does not include employment-related disputes, as also emphasised in the reasoning of the article.

Art. 9 of the Constitution declares that judicial power shall be exercised by independent courts. UCK, which is not a court, hears disputes arising from football contracts because of the regulations of the Turkish Football Federation. Therefore, a regulation of the Turkish Football Federation violates the Constitution. However, this violation against Kelsen’s “Pure Theory of Law” does not seem to change in the near future, given that many are grateful for the rapid resolution of disputes.

Decisions of the UCK may only be appealed to the Arbitral Tribunal of the Turkish Football Federation. The lack of a judicial review for these decisions is disconcerting. I believe the involvement of the Swiss Federal Tribunal in the CAS process could serve as a good model. CAS decisions may be appealed to the Swiss Federal Tribunal but there is no court in Turkey to appeal to once the Arbitral Tribunal decides on the matter. A general court or the Turkish Court of Cassation must review the decisions of the Arbitral Tribunal regarding disputes on football contracts. Decisions of the Arbitral Tribunal related to sports administration and disciplinary matters are accurately not appealable, as stated by art. 59 of the Constitution. However, art. 59 of the Constitution does not include personal actions. Art. 9 of the constitution declares that the judicial power shall be exercised by independent courts. The right to access to courts that is granted by the Constitution cannot be breached by an amendment of the Turkish Football Federation. Therefore, courts are wrong for denying jurisdiction for disputes arising from football contracts.

 

 

Turkish Football Federation Dispute Resolution Board (UCK)

Disputes arising from contracts between football clubs, players, coaches and agents are resolved within the UCK. Disputes regarding sporting sanctions and training compensations are also within the scope of the UCK.[8] Therefore, UCK is in charge of resolving every contractual dispute related to football.

The UCK consists of a “Board of Presidents” and arbitrators. There are five members in the board of presidents. In each arbitration, one of these five members are notified and appointed by the coordinator of the UCK. The coordinator is a law graduate, who is employed by the TFF. The coordinator basically works as the director of administrative affairs and he is responsible to the Board of Presidents.

The UCK carries out a simple arbitration process and it involves two arbitrators appointed by the parties and the appointed member of the board of presidents acts as the chair arbitrator. The applicant is responsible for the application fee (3% of the disputed amount) and paying the arbitrators’ fees, which are decided by UCK (between about € 450 and € 1,500 per arbitrator). The UCK decides within four months (they have the right to extend the time limit for a month based on justified grounds).

The proper composition of the UCK is an important condition for fair and equitable proceedings.[9] Arbitrators are nominated by the Foundation of the Clubs, the Association of Football Players and the Association of Coaches. These three institutions may nominate up to 25 arbitrators each. However, the TFF board of directors appoints the arbitrators from the list of nominees, thus casting a shadow on the independence and the impartiality of the arbitral tribunal – crucially important for the right to a fair trial.[10] There are numerous links between the UCK and the Turkish Football Federation. The Federation finances the UCK and it can modify the Statutes of the UCK and it appoints the arbitrators of the UCK. The current formation of the UCK resembles CAS before the Gundel reforms.

Due to confidentiality reasons, decisions of the UCK are not published. This is problematic since the decisions of different tribunals may be different, whereas a certain amount of predictability is surely needed. The members of the board of presidents could very well establish precedents and applicants could have been aware of how the tribunal would decide on the matter.

 

Players

The rights and obligations between clubs and players are determined by an employment agreement.[11] In Turkey, labour courts have jurisdiction on disputes arising from employment agreements. However, the Turkish Labour Code does not apply to players, thus surprisingly excluding the jurisdiction of labour courts for disputes regarding them. Art. 4 of the Labour Code states that the Code does not apply to athletes. The reason behind this exclusion is not to grant certain rights and benefits to athletes, such as severance payments. Before the amendments of August 2015 came into force, disputes regarding players were resolved in the general courts, not in labour courts. The debate whether general courts or labour courts have jurisdiction is now obsolete, as the players have to apply to the UCK for the disputes arising from football contracts.

The FIFA DRC adjudicates on cases regarding employment-related disputes between a club and a player of an international dimension; therefore, foreign players do not have to apply to the UCK. In a case of dual citizenship (the player was British/Turkish), CAS decided that someone, who benefits from Turkish citizenship should also accept its possible burdens, thus refusing jurisdiction.[12]

Arbitration is indubitably more preferable compared to the courts for players. The UCK decides within four months and the decision is enforced by the TFF right away. This promptness surely provides an advantage for players. Nevertheless, arbitrators’ fees are a hefty burden for destitute amateur players or pro players of the third league. On the contrary, application fees that are three percent of the disputed amount is a supernumerary amount for high earning players. High arbitration cost is a concern, as it is strictly related to right of access to the courts. Costs should not victimise the plaintiff. Therefore, the author of this article would recommend to change the fixed application fee and determine the fee on a pro rata basis.

 

Coaches

The FIFA PSC (Players’ Status Committee) adjudicates on disputes between a club and a coach of an international dimension. Turkish coaches working in Turkey do not have that option. Before the implementation of the mandatory arbitration, labour courts had jurisdiction over the disputes arising from employment agreements of coaches. As of January 2017, three clubs in the Turkish Super League employ foreign coaches. As of August 2015, coaches may only apply to the UCK for disputes arising from their contracts.

The Turkish Super League clubs do not prefer stability with regard to their coaches, as only one team in the league started the 2016-2017 season with the same coach for the third consecutive year. Coaches seem content with the rapid resolution of their contractual disputes and the confidentiality provided by arbitration, however, arbitrators within UCK are seldom appointed by them.

 

Agents

The FIFA Regulations on the Status and Transfer of Players state that the PSC has no jurisdiction to hear any contractual dispute involving intermediaries. Agents, foreign or not, have to apply to the UCK for disputes arising from their contracts. This is overall problematic for agents, because they do not have any say on the appointment of arbitrators. Therefore, the independence and the impartiality of the UCK raises suspicions, especially for agents. It is highly recommended for foreign agents to work with Turkish lawyers doing business in Turkey. If not, they will have to hire one at some point.

 

The Turkish Football Federation Arbitral Tribunal

The decision of the UCK may be appealed to the Turkish Football Federation Arbitral Tribunal. The body is the highest board of appeals in the Turkish Football Federation. All appeals against decisions of the UCK, of the Disciplinary Board and other decisions are lodged with the Arbitral Tribunal. However, this appeal does not obstruct the enforcement of the award of the UCK. Although the Statute of the Turkish Football Federation recognises the competence of CAS, it also declares that the decisions rendered by the Arbitral Tribunal cannot be reviewed by CAS.[13]

The Arbitral Tribunal comprises six members and a chairman; all law graduates with an experience of at least five years. The appointment of these seven is done by the nomination of the president of the TFF and the decision of the board of directors of the TFF. Their tenure is limited by the tenure of the president of the TFF.

Like the UCK, decisions of the Arbitral Tribunal are published without reasoning. Hence, it is impossible to know both the facts of the case and how the arbitral tribunal reached a verdict. This negatively impacts the predictability of the UCK and the Arbitral Tribunal. However, as a practising lawyer, the author of this article may remark that the current Arbitral Tribunal has been consistent in its decisions. This is due to its experienced members, who are professors and experienced attorneys-at-law.

 

Conclusions

Arbitration truly offers a structure that is football-oriented and more aware of the realities of modern football”, as stated in the preamble of FIFA NDRC Standard Regulations. “National” arbitration of football related disputes is evolving. The fact that this is genuinely a developing method of dispute resolution should encourage practitioners to improve their national legal systems. Practitioners and those who are in the football business may quite easily benefit from such improvement because it would only influence the business positively. In the Turkish context, the author of this article would advise the following.

–  Firstly, decisions not regarding disputes related to sports administration and disciplinary matters of the Arbitral Tribunal should be appealable. This would provide the right of access to the court, as granted by the Constitution.

–  Secondly, the independence and the impartiality of the UCK is still a problematic issue that needs to be tackled. The UCK should not be within the structure of the Turkish Football Federation. The process of the appointment of arbitrators should be revised. Clubs, players, coaches and agents must have an equal say in the matter.

–  Thirdly, if reasons for the UCK and the TFF Arbitral Tribunal decisions were given, this would provide more confidence in the system.

–  Fourthly, the application fee of the UCK should be changed. The application fee is not meant to create an undue burden on the applicant. The application fee could be determined on a pro rata basis.

The current Turkish system is preferable to an everlasting court process. The court process takes a minimum of two years. Just four months to receive an award and the assurance of the enforcement of the award by the Turkish Football Federation is quite encouraging. Mandatory arbitration of the UCK is very recent and, hopefully, the novel system will evolve to fulfil the criteria of FIFA.

 

[1] Nurettin Emre Bilginoglu, LLM, attorney-at-law Istanbul, Turkey; e-mail emre@caglayanyalcin.com. His book entitled Arbitration on Football Contracts was published in 2015.

[2] www.transfermarkt.com/super-lig/startseite/wettbewerb/TR1 (accessed 1 March 2017).

[3] Preamble of the FIFA National Dispute Resolution Chamber Standard Regulations points at this issue: “Currently, only a limited number of member associations have a national dispute resolution chamber or a body structured along similar lines that fulfills the criteria of article 22 paragraph b) of the Regulations on the Status and Transfer of Players. This means that the vast majority of international employment-related disputes fall within the jurisdiction of the FIFA Dispute Resolution Chamber and that the majority of “national” cases may not find appropriate solutions.

[4] See Ashford, Handbook on International Commercial Arbitration (JurisNet LLC, New York 2014) and Karton,  The Culture of International Arbitration and the Evolution of Contract Law (Oxford University Press, Oxford 2013).

[5] See Rigozzi, L’arbitrage international en matière de sport (Helbing & Lichtenhahn, Basel 2005).

[6] See N. Eksi,) Spor Tahkim Hukuku (Beta, Istanbul 2015) and N. Bilginoglu, Resolution of Disputes Arising From Football Contracts (Beta, Istanbul 2015).

[7]ARTICLE 59 – The State shall take measures to develop the physical and mental health of Turkish citizens of all ages, and encourage the spread of sports among the masses. The state shall protect successful athletes.” (Paragraph added on 17 March 2011; Act No. 6214). “The decisions of sports federations relating to the administration and discipline of sporting activities may be challenged only through compulsory arbitration. The decisions of the TFF Board of Arbitration are final and shall not be appealed to any judicial authority.

[8] See De Weger, The Jurisprudence of the FIFA Dispute Resolution Chamber (T.M.C. Asser Press 2016) for extensive information on sporting sanctions and training compensations.

[9] CAS 2015/A/4172 Association of Unions of Football Players and Coaches v. Football Union of Russia.

[10] Although the formation of the arbitral tribunal was different, see CAS 2006/O/1055 Del Bosque, Grande, Miñano Espín & Jiménez v. Besiktas. For European Court of Human Rights decisions, see Terra Woningen B.V. v. Netherlands, Application N: 20641/92, Date: 17 December 1996; Tsfayo v. UK, Application N: 60860/00, Date: 14 November 2006.

[11] De Weger (2016), p. 132. For the German practice, see C. Frodl  (2016); Neuer, Hummels, Muller, Gotze & Co, “The legal framework governing industrial relations in German professional football”, in: International Sports Law Journal (2016) 16:3-21.

[12] CAS 2010/A/1996 Omer Riza v. Trabzonspor Kulübü Dernegi & Turkish Football Federation (TFF).

[13] “[…] the TFF Statutes and the Turkish Football Law expressly exclude any appeal against national arbitral tribunals’ decisions, i.e. against such a decision like the Appealed Decision which is the object of the present case. The particular trumps the general. Therefore the argument of the Player that he has an express right of appeal to the CAS under the TFF Statutes must be rejected.” CAS 2010/A/1996 Omer Riza v. Trabzonspor Kulübü Dernegi & Turkish Football Federation (TFF).