Sprung Link Text
For sports professionals and fans (whether in the stands or in front of their TVs), springtime usually means the return of several major sporting events, such as the NBA’s regular season, the Formula 1 world championship, the UEFA Champions League and Europa League knockout phase, the Six Nations rugby tournament, classic cycling races like “Milan-San Remo” or clay court tennis tournaments in places like Monte Carlo or Paris (Roland-Garros). But in the Spring of 2020, the global spread of the COVID-19 pandemic and the measures taken by governments to address it started having a significant impact on these events.
Indeed, by mid-March, almost all domestic and international sports competitions across the world had been suspended, postponed or cancelled entirely. In view of the unprecedented circumstances, decisions were made to reschedule for 2021 the European and South American football (or soccer, for United States readers) championships and the Tokyo Olympic Games originally scheduled to take place this summer. Other annual sporting events that could not be postponed have been cancelled: for example, in the case of Wimbledon—where tennis is famously played on outdoor grass courts—it was deemed impracticable to hold the tournament at a moment other than in July. It has been reported, however, that Wimbledon’s organizers have secured pandemic insurance since 2003 (following the SARS virus outbreak) and will thus receive some measure of financial relief following the cancellation of this year’s tournament.
In addition to the direct economic impact in the absence of insurance for business interruptions or event cancellations, however, any decisions to suspend, postpone or cancel sports competitions can be expected to give rise to various types of disputes. Such disputes may concern the non-performance of obligations relating to ticketing or to contracts with employees, sponsors, broadcasters, etc. In these circumstances, in order to avoid a characterization of breach of contract, an affected party might claim that the pandemic and its impact on that party’s ability to fulfil its obligations have created a situation of force majeure under the governing law of the relevant contract.
A previous Note titled “COVID-19: Force Majeure Event?” considered how force majeure provisions in commercial contracts governed by English law and PRC law, as well as the related common law doctrine of frustration, may be applied in the context of the COVID-19 pandemic. That Note was later complemented by another Note on “Force Majeure and Imprévision Under French Law,” an assessment of force majeure and the doctrine of imprévision under French law. This Note describes how force majeure has been considered and applied in sports-related disputes before major international sports tribunals, namely FIFA’s decision-making bodies, the Court of Arbitration for Sport and the Basketball Arbitral Tribunal.
The Fédération Internationale de Football Association (FIFA) is the highest governing body of world football. Founded in Paris in 1904, today its headquarters are located in Zurich, Switzerland. In its capacity as the organizer of international football, FIFA establishes fundamental principles and basic rules that apply to all participants in professional (and also amateur) football.
In this respect, the FIFA Regulations on the Status and Transfer of Players (RSTP) provide “global and binding rules concerning the status of players, their eligibility to participate in organized football, and their transfer between clubs belonging to different associations.” (Article 1.1). The RSTP notably governs vital aspects of football law by regulating player and coach employment contracts and transfer agreements on an international scale. For example, the RSTP provides that clubs are required to comply with their financial obligations towards players, coaches and other clubs. They also establish that employment contracts may only be terminated upon expiry of the contractual term or by mutual agreement, unless either party has “just cause” to terminate a contract. In the event of a breach of these provisions, the RSTP set out the sanctions that may be imposed by FIFA’s decision-making bodies, namely the Players’ Status Committee (PSC) and the Dispute Resolution Chamber (DRC), within their respective scopes of jurisdiction. (Articles 23-24).
Since their creation, the PSC and the DRC have rendered several thousand decisions, some of which are published on FIFA’s website. From this publicly available set of case law, it appears that several parties have, in the past, brought force majeure claims before these bodies in order to be released from performing their contractual obligations.
For example, in a decision rendered in 2007 (Club P v. Player R & Club Z), an Egyptian player argued that his arrest during a 10-day holiday in Egypt and the obligation imposed on him by the Egyptian authorities to join the army for three years, without being able to travel abroad, constituted a situation of force majeure that justified the unilateral termination of his contract with a Greek club. In considering the player’s argument, the DRC first observed that “as a general rule, [force majeure] is applicable to unpredictable situations, facts or circumstances that are extraordinary and unexpected such as, a natural disaster or an earthquake.” The DRC ultimately dismissed the Egyptian player’s force majeure argument, considering that the player had “the responsibility to know his civil obligations” and that the obligation to perform military service based on the domestic law of his own country was “completely foreseeable.” The decision was then upheld by an appellate panel constituted by the Court of Arbitration for Sport. (See S. & Zamalek SC v. PAOK FC & FIFA, Arbitration CAS 2008/A/1448, Award of June 25, 2008).
Force majeure appears to be applied very restrictively by both of FIFA’s decision-making bodies. A review of the case law publicly available on FIFA’s website as of the date of this Note shows that neither the PSC nor the DRC has ever accepted an argument alleging a situation of force majeure. To illustrate further:
The issue of whether the PSC and the DRC would consider the COVID-19 pandemic to constitute a force majeure situation has been anticipated by FIFA.
Under Article 27 of the RSTP, “[a]ny matters not provided for in these regulations and cases of force majeure shall be decided by the FIFA Council whose decisions are final.” (emphasis added). On April 7, 2020, in accordance with this provision, the Bureau of the FIFA Council expressly recognized that the disruption to football caused by COVID-19 was a case of force majeure:
“The COVID-19 situation is, per se, a case of force majeure for FIFA and football.” (FIFA guidelines to address legal consequences of COVID-19).
Further, the Bureau of the FIFA Council approved some general interpretative guidelines to the RSTP. These guidelines address, inter alia, the situation in which agreements cannot be performed as originally agreed by the parties due to the COVID-19 pandemic. In this context, according to the guidelines, the PSC and the DRC will only recognize unilateral decisions by clubs to amend terms and conditions of employment contracts where those decisions “were made in good faith, are reasonable and proportionate.” With this approach, FIFA seems to be attempting to protect jobs as much as possible and also to prevent the abusive behavior that could arise in circumstances in which a situation has already been qualified as a force majeure event.
The Court of Arbitration for Sport (CAS) is a sports-specific arbitration institution based in Lausanne, Switzerland. CAS was established in 1984 at the initiative of the International Olympic Committee (IOC), in order to resolve disputes arising in the context of sports with a flexible, quick and inexpensive procedure.
Along with its Ordinary Arbitration Division (dealing mainly with commercial contract disputes) and the Anti-Doping Division, CAS has established an Appeals Arbitration Division that constitutes panels whose responsibility is to resolve disputes related to disciplinary or non-disciplinary decisions issued by federations, associations or other sports-related bodies. Nowadays, almost all international sports federations (such as FIFA) have recognized the jurisdiction of CAS and provided in their statutes or regulations, or even in specific agreements, an arbitration clause referring disputes to CAS.
When a decision is appealed to the Appeals Arbitration Division of CAS, the CAS panel primarily decides the dispute according to the rules and regulations of the relevant sport. To fill in any possible gaps, Swiss law will often be applied, either as the law chosen by the parties and/or because the relevant federation, association or sports-related body is domiciled in Switzerland (as is the case with FIFA and the IOC).
In the specific context of these CAS appeal proceedings, force majeure arguments have been raised by members of sports teams (such as players or coaches) and international federation members (such as clubs or national federations) in order to avoid the consequences of breaches of sports rules and regulations. An examination of publicly available awards from such proceedings reveals that the concept of force majeure is considered to be “widely and internationally accepted and, in particular,  valid and applicable under Swiss law” and “a well-established doctrine” in CAS case law. (Club Atlético Mineiro v. FC Dynamo Kyiv, Arbitration CAS 2015/A/3909, Award of October 9, 2015. See also Zamalek Sporting Club v. FIFA, Arbitration CAS 2018/A/5779, Award of October 31, 2018).
For an event to qualify as force majeure, in absence of a specific applicable provision on this issue, CAS panels usually require “an objective, rather than a personal, impediment, beyond the control of the ‘obliged party’, that is unforeseeable, that cannot be resisted, and that renders the performance of the obligation impossible.” However, “the conditions for the occurrence of force majeure are to be narrowly interpreted, since force majeure introduces an exception to the binding force of an obligation.” (PAOK FC v. UEFA, Arbitration CAS 2006/A/1110, Award of August 25, 2006 (operative part of July 13, 2006). See also FC Dnipro v. Football Federation of Ukraine (FFU), Arbitration CAS 2013/A/3471, Award of June 16, 2014 (operative part of March 24, 2014); SA Royal Sporting Club Anderlecht (RSCA) v. Matías Ezequiel Suárez & Club Atlético Belgrano de Córdoba (CA Belgrano), CAS 2018/A/5607 & Matías Ezequiel Suárez & CA Belgrano v. RSCA, CAS 2018/A/5608, Award of January 22, 2019).
An event of force majeure has been found in only one of the publicly available decisions from CAS appeal proceedings. In that case, which concerned an employment dispute between a Spanish coach and an Egyptian football club, the club appealed to CAS a decision rendered by FIFA’s PSC. The sole CAS arbitrator, for the most part, upheld the PSC’s decision, considering that the club had breached the employment contract unilaterally and prematurely, without just cause, and therefore the Spanish coach had a claim to compensation for what he would have earned until the expiration of the period fixed in the agreement, namely until the end of the 2012/2013 football season. However, the arbitrator found that due to the exceptional circumstances relating to the Egyptian revolution—which constituted a force majeure event—the season had ended in April 2013 and the Egyptian League championship had been cancelled. As a result, the club’s contractual liability was limited to the period before the force majeure event:
“[T]he Egyptian civil war is an event of force majeure, which is beyond the Parties’ control, which the Parties could not have reasonably provided against before entering into the contract, which could not reasonably have been avoided or overcome, and which is not attributable to any of the Parties. Under these circumstances, the Sole Arbitrator finds that the events which put an end to the 2012/2013 season and which admittedly occurred on 1 April 2013, prevented the Appellant from performing all or part of its contractual obligations. As a result and as of 1 April 2013, the Appellant must be released from further performance of the obligations concerned.” (Alexandria Union Club v. Juan José Sánchez Maqueda & Antonio Cazorla Reche, Arbitration CAS 2014/A/3463 & 3464, Award of August 26, 2014 (emphasis added)).
The COVID-19 pandemic or any measures related to the pandemic would similarly need to be examined under the criteria established by CAS jurisprudence. COVID-19 itself is beyond a party’s control and may be considered as an unforeseeable event. The key issue would likely be whether the performance of a party’s obligation was impossible as a result of the pandemic.
A highly analogous issue arose previously in a dispute between the Royal Moroccan Football Federation (FRMF) and the African Football Confederation (CAF). That case concerned the FRMF’s unilateral withdrawal from organizing and hosting the 2015 edition of the African Cup of Nations in Morocco due to the spread of the Ebola virus epidemic. The CAF imposed sanctions on the FRMF, which the FRMF then appealed to CAS. The CAS panel dismissed the force majeure argument raised by the FRMF, holding that the organization of the competition was not impossible but only “difficult.” Indeed, the panel noted that the fact that Equatorial Guinea had succeeded in organizing the competition (on the same dates on which FRMF has previously agreed to do so) by taking appropriate sanitary measures with the CAF’s assistance demonstrated that a solution was possible. However, taking into account the particular circumstances of the case—including the serious danger posed by the Ebola virus—the panel substantially reduced the sanctions initially imposed by the CAF. (See Fédération Royale Marocaine de Football (FRMF) v. Confédération Africaine de Football (CAF), Arbitration CAS 2015/A/3920, Award of November 17, 2015 (operative part of April 2, 2015)).
The Basketball Arbitral Tribunal (BAT) is another sport-specific independent body created by the International Basketball Federation (FIBA) in 2006.
BAT has its seat in Geneva, Switzerland, and provides services for the quick and simple resolution through arbitration of contractual (i.e., non-disciplinary, non-technical and non-eligibility-related) disputes arising in the world of basketball. In BAT proceedings, unless the parties agree otherwise, the deciding sole arbitrator shall adjudicate the dispute ex aequo et bono, applying general considerations of justice and fairness without reference to any particular national or international law.
From the case law publicly available on the FIBA website, it appears that BAT arbitrators qualified an event as force majeure in only one award. In that case, in early 2014, a Lebanese player unilaterally terminated his employment contract with a Lebanese club after months of non-payment of his salary. In response, the club contended that, because the top professional league of the Lebanese basketball championship had been postponed (due to problems within the Lebanese Basketball Federation and its dispute with FIBA), the club—like other clubs in Lebanon—had begun to experience difficulties during the 2012/2013 season and found itself in a situation of force majeure during the entire second half of 2013. The sole arbitrator accepted the club’s argument, holding as follows:
“[T]he Arbitrator finds that the Club has established the existence of a type of force majeure having disrupted and negatively affected its organization and activities during at least the first half of the 2013-2014 season, i.e. from August to December 2013, since the Club had no responsibility for and no control over the postponement of the Lebanese first division basketball championship during that period. Furthermore, that disruption will necessarily have complicated the Club’s financial situation due to absence of official games and the requirements of sponsors.” (Anis Georges Feghali v. Cercle sportif maristes, Champville club, BAT 0529/14, Award of July 31, 2014 (emphasis added)).
The parties having expressly agreed that their dispute would be adjudicated ex aequo et bono, the arbitrator declined to release the club from all of its obligations but took into account, inter alia, the existence of a force majeure situation in assessing the amount to be awarded to the player.
On April 20, 2020, in view of the impact of the COVID-19 crisis on contracts between basketball clubs and their players/coaches, BAT published the “COVID-19 Guidelines,” which were issued by BAT’s President, Vice-President and Arbitrators. These guidelines aim to address specific substantive issues, such as the contractual consequences arising out of competitions being suspended or prematurely terminated as a result of the pandemic. To that end, the guidelines set out certain (non-binding) principles, which are presented as being “just and fair solutions, under the ex aequo et bono standard, to those substantive issues.” For example, amicable settlements are strongly encouraged to resolve disputes arising out of the COVID-19 crisis, the pandemic does not give either party just cause to unilaterally terminate a contract, and, depending on the circumstances, specific adjustments should be made to parties’ contractual obligations.
In this respect, a BAT award rendered on May 14, 2020, rejected a force majeure argument raised on the basis of the COVID-19 pandemic. In that award, the arbitrator found that the unilateral termination by a Polish club (in October 2019) of an employment contract with a basketball player (concluded in July 2019, for one season) was without just cause and, therefore, decided that the club should pay, inter alia, the outstanding salary of the player for the remainder of the 2019/20 season. In considering the amount of salary to be paid, the arbitrator dismissed the club’s argument that both the declaration of the state of emergency in Poland and the decision of the Polish League to end the basketball season due to the COVID-19 pandemic, on March 17, 2020, constituted a force majeure event that would release the club from its contractual obligations from that date on. Notably relying on the BAT’s COVID-19 Guidelines, the arbitrator observed that the club’s breach had occurred months before the COVID-19 crisis and that “[t]he pandemic and its consequences did not cause or contribute to the breach, nor is it alleged to have caused or contributed to the breach.” (Greg Surmacz v. BM Slam Stal S.A., BAT 1482/20, Award of May 14, 2020).
The assessment of whether knock-on measures or events related to COVID-19 meet the conditions established by international sports tribunals to qualify as force majeure will need to be carried out on a case-by-case basis.
As an initial matter, the impact of the COVID-19 pandemic will have to be considered in the specific context underlying a given dispute. Moreover, the first sets of guidelines published by FIFA and BAT in April (discussed above) give a sense of the factors taken into account when assessing the merits of an argument based on force majeure. A party affected by the COVID-19 pandemic should take steps to record and document the steps it is taking to prevent or mitigate the impact of the pandemic on its ability to perform its obligations under the contract in question. Finally, a party should exercise caution in relying on force majeure, because a meritless claim of force majeure could have serious consequences, including a determination that a contract has been breached or repudiated. In such circumstances, the other party may be entitled to claim damages or to terminate the contract.