Sports Arbitration in the International Arena

with Reference to Heinz Muller & Pechstein Case

Disputes in sports can be purely commercial or contractual, and while some are regulatory,
others can be Qausi- Criminal. Sports dispute resolution does not necessarily have a fixed
hierarchy or method. Parties involved in sports firstly, by complaining to the internal authorities
available within the sporting federations; secondly, by instituting a writ petition or civil/ criminal
case in a court of law; and thirdly, through ADR.

The modern method of resolving disputes (ADR) encompasses any or all methods of resolving
disputes in sports otherwise, then through the traditional method or normal trial, through courts.
This is the main reason why Arbitration in sports is growing in importance. More and more
governing bodies are including within their rules, a clause to resolve disputes through arbitration.
For example, take the Indian Super League which provides for resolving of any dispute only
through arbitration at the first instance.

The case of Heinz Muller, a former goalkeeper of FSV Mainz 05, a German football club, was
bit of a wakeup call for the footballing world. Here, at first the Mainz labor court decided that
Muller had to be awarded an indefinite-term contract after his first three-year contract was
prolonged by FSV Mainz 05, according to law his short-term contract was illegal, and this
resulted from EU Council Directive 1999/70/EC that is implemented in every EU state. The
implementation can differ, but there will always be a moment when fixed term labor contracts
convert into indefinite term contracts.

If we look at the European level there has been no agreement to exempt football from EU
Council Directive 1999/70, although this could have been an option. The directive clearly opens
the opportunity for agreements between the social partners in this aspect. But, in the appeal
further it was held that the EU Directive on fixed term work, were not applicable to the contract
between Muller and Mainz 05 and therefore couldnt justify the nature of that contract.1 In its
assessment the court devoted special attention to the objective reason relating to the nature of the

1
FIFPro Press Release, Mller case is a wake-up call for football, 8 April 2015. (Available at:
https://www.fifpro.org/news/mueller-case-is-a-wake-up-call-for-european-football/en/).
work, declining justification based thereupon.2 It was thought that the verdict will soon be
labeled to have Bosman like implications, if held up by higher courts.3

But, the Landesarbeitsgericht Rheinland- Pflaz has taken a different road, one going in the
opposite direction, by deciding that the contested fixed term contract period between a
Bundesliga Football Club and a professional player can in fact be justified on the objective
reason of the nature of the work4, which the court had discussed in length, substantiating this
claim.

Moving to the Pechstein Case, Claudia Pechstein is a German athlete (speed skater) and also
their most successful Olympic Champion of all times with 9 Olympics Gold Medals.5

The disciplinary commission of the International Skating Union banned her for a period of two
years for violating ISU Anti-Doping Rule 2.2, (for use of a prohibited method which increases
her capacity to produce more red blood cells, for removing fatigue).

She approached CAS in an appeal against the decision of the ISU disciplinary committee dated
1st July 09. The results obtained by her in the ISU Championships were disqualified with related
forfeiture of any medals, points and prizes.6 This was the first instance when CAS relied upon
merely circumstantial evidence in coming to a decision, which was contested by Pechsteins
lawyer as being highly indirect and were hence termed dubious in nature.7

The athlete voluntarily approached the CAS under the arbitration clause in her underlying
contract with the National and International Federation. In further appeal to the Swiss Federal
Tribunal8, Pechstein submitted that the Federal Tribunal should annul the CAS award and refer it
back to the Arbitration Tribunal for a new decision.

2
P. Drabik, Compatibility of fixed-term contracts in football with Directive 1999/70/EC on fixed-term work: the
general framework and the Heinz Mller case, Int Sports Law J (2016).
3
Successful lawsuit threatens time-limited contracts in football http://www.dw.com/en/successful-lawsuit-
threatens-time-limited-contracts-in-football/a-18341045.
4
Landesarbeitsgericht Rheinland-Pfalz: Urteil vom 17.02.2016 4 Sa 202/15 (Appeal decision Heinz Mller case),
II.1.b
5
(Available at: www.claudia-pechstien.de/olympia.php).
6
(Available at: www.spiegel.de/media/media/21131.pdf).
7
(Available at: www.spiegel.de/sport/wintersport/eisschnelllauf-olympiasiagerian-pechstein-wegen-blutdpoings-
gesperrt-a-634241.html).
8
(Available at:
www.swissarbitrationdecisions.com/sites/default/files/10%fevrier%202010%204A%20612%202009.pdf)
She made an application for suspending her ban so that she could participate in various
competitions, but the same was rejected even before her legal challenge was adjudicated in its
entirety, as the tribunal believed it was more likely that she wouldnt succeed.

During the Second Appearance in front of the Swiss Federal Tribunal9,Pechstein in a request for
revision submitted that the Federal Tribunal should annul the CAS award and send the matter
back to CAS for a new decision. However, the same request for revision was rejected. Following
2011, her ban came to an end and she started an action for damages by seeking declaration of
illegality of a fine imposed on her in 2009 for doping suspension. The Court opined that the
Arbitration Agreement in the athletes form was forced as she didnt have any other option but to
sign it to take part and compete in the events, which were organized under their aegis.

Pechstein appealed the ruling of the Munich Regional Court to the Higher one and the Court
subsequently overturned the lower Courts decision, finding the Arbitration agreement in favor
of CAS and the CAS award issued based on that agreement, violated mandatory German cartel
law, which prohibits an abusive conduct by companies that have a dominant position on a
market.10

Pechstein case has been compared in contemporary fraternity with the Gundel Case, which
brought about structural and organizational reforms in the CAS as well as making massive
procedural changes in its rules and procedures. If the award is upheld in the German Federal
S.C., then CAS awards would be made unenforceable in Germany and it may affect other
jurisdictions as well. Thus, it would effectively disrupt the otherwise stable mechanism for
global sports disputes resolution. CAS even released a statement to that effect.11

Here, the structural independence of CAS can be made more warranted to dilute the effect of
forced arbitration clauses.

9
(Available at: isuprod.blob.core.windows.net/media/102869/28-septembre-2010-4a-144-2010.pdf)
10
(Available at: www.lawinsport.com/articles/item/a-guide-to-the-higher-regional-court-s-decision-in-the-pechstein-
case#references).
11
(Available at: www.tas.cas.org/fileadmin/user_upload/CAS_statement_ENGLISH.pdf).