Sports Legislation and the Sports Arbitral Court (CAS)

In the course of time, sports have become a worldwide phenomenon, providing a considerable increase in business interests and, as such, it could not remain far from legal regulations. Thus, it was necessary to accept and respect a specific legal structure concerning sports.

In Brazil, sports legislation started to be systemized in 1941 by Executive Decree 3,199, which remained effective until the coming of Executive Decree 6,251/75. In this period of military dictatorship, it was the State that established the rules, and sports entities had no autonomy.

However, Brazilian sports legislation had significant progress only as of the enactment of the Brazilian Constitution of 1988, the first to deal with the theme. It was established that it is incumbent upon the Union, the States and the Federal District to concurrently legislate on sports. This legal diploma also established that the judiciary branch will only admit actions related to discipline and competitions after recurrence to all sports jurisdictions, as well as established it is the State’s responsibility to promote sports practice as a right to all individuals, observing: I. the autonomy of leading sports entities as to their organization and operation; II. the allocation of public resources to sports; III. differentiated treatment to professional and non-professional sports practice; IV. protection and promotion to sports manifestations created nationally.

After reaching the constitutional level, a new legal cycle focused on sports started, inaugurated with Law no. 8,672/93, better known as the Zico Law. This law pursued to adapt the Brazilian legislation to the modern sports development all over the world. It proposed the “club company”, made sports investment partnerships easier, established autonomy and legal procedures for sports law.

This Law was effective up to 1998, when Law no. 9,615 became effective (the Pelé Law), published when athlete Pelé was Extraordinary Minister of Sports.

Law no. 9,615/98 revoked Law no. 8,672/93 and during years it underwent many changes. It is currently the law which rules Brazilian sports, introducing significant changes, such as: the extinction of the pass1, creation of criminal sports clause and establishment of the corporate transformation of sports clubs.

It is also registered that this legislation identifies the sports fundamental principles; defines the nature and functions of sports; presents the Brazilian sports system; regulates professional sports practice; establishes sports order; disciplines sports justice and determines resources for sports; as well as establishes other rules for sports in general.

The legal structure of Brazilian sports also comprises:

Ø         Law no. 6,354/76 – Provides for work relations of professional soccer athletes;

Ø         Law no. 8,650/93 – Provides for work relations of professional soccer coaches;

Ø         Law no. 10,220/01 – Defines rodeo cowboys as professional athletes;

Ø         Decree no. 3,944/01 – Provides for professional leagues;

1 Pass: figure of the Brazilian Sports Right which configured the relation between soccer professional athletes and the employer (club), after the extinguishment of the labor agreement.

Ø         Decree no. 4,201/02 – Provides for the CNE – National Sports Council;

Ø         Law no. 10,671/03 – Institutes Fans’ Defense Statute;

Ø         Resolution no. 1 as of December 23, 2003 which approved the Brazilian Code of Sports Justice to which all sports competitions are subject;

Ø         Law no. 10,891/04 – Institutes athlete financial support in the national sports scenario. An incentive to athletes who practice return sports2;

Ø         Decree no. 5,000/04 – Revokes Decree no. 2,574/98 which regulated Law no. 9,615/98.

Ø         Law no. 11,345/06 with amendments to Law 11,505/07 – Provides for the institution of prognostic contest destined to the involvement of sports practice, the participation of soccer sports entities in this contest and the division into installments of tax debt and debt related to FGTS – Employee’s Severance Fund (Timemania).

Ø         Law no. 11,438/06 – Provides for incentives and benefits to promote sports activities.

Lastly, we know that in the legal system there are acts which even not being laws produce the same effects. In addition to statutory laws, here are all those from sports entities, all those from sports entities, with restricted efficacy, obligating only those related to these entities. Regarding soccer, for instance, are FIFA’s statutes and regulations.

Concerning international rules, one should bear in mind that the Brazilian Constitution of 1988 in article 217, I establishes that sports administration entities are autonomous as to their organization and operation. As to soccer, CBF, entity responsible for this type, is free to associate to other sports entities and decided to associate to FIFA, is consequently obliged to respect its regulations and guidelines.

In addition, Law no. 9,615/98 in article 1, paragraph I, expressly hosted the application of international rules, establishing that the “formal application of sports practice is regulated by national and international rules of sports practice of each type accepted by the respective national entities of sports administration.”

Thus, it is unarguable that national associations, clubs and athletes shall respect and comply with regulations of respective international federations.

In view of this scenario of national and international sports regulations, as well as considering the peculiarities of issues related to sports, it is highly necessary to have a court which may deal with subjects related to sports in a specific manner.

One should bear in mind that in a conflict, when the parties are not domiciled in the same country, many problems may arise. The first task is to determine which court is qualified and then which law applies to the dispute. The party which is taking the initiative in a foreign country has to overcome the difficulties as to the language and the system of procedures in the country. In addition, disputes related to sports are generally complex and require specific knowledge on the issue that an ordinary judge many times do not have.

In view of this reality, in 1984, CAS – Comi of Arbitration for Sport – was created, also known as TAS – Tribunal Arbitral du Sport, an arbitral court comprised by specialists in sports laws which provides the solutions of conflicts related to sports by means of arbitration or mediation, making procedures adapted to specific needs of world sports available.

2 Law no. 9,615/98, article 3, III — return sports, practiced according to general rules in this Law and sports practice rules, national and international, aiming at obtaining results and integrating people and communities with other nations’.

CAS is responsible for solving legal disputes related to sports by means of arbitration, operating as a “Supreme Court” in which cases related to sports are judged in last resource. This causes the arbitral sentence to have compulsory application and be insusceptible of appeal. CAS also provides the solution of disputes in amicable bases, as well as it delivers an “Opinion” as to legal sports issues.

CAS is qualified to resolve any dispute involving problems related to sports, as well as financial problems occurred in view of sports practice or development.

As to the procedures adopted by CAS, concerning disputes arising from legal/contractual relations, the procedure applied is the ordinary (or mediation) procedure. Concerning disputes resulting from decisions from courts or sports organizations, the appeal procedure is applied. Lastly, there is an advisory procedure which allows certain organizations to request an “Opinion” from CAS, in the absence of any dispute, in any legal issue referring to sports practice or development, or any other activity related to sports.

Ø Ordinary Arbitration Procedure: applied to disputes arising from legal relations, in which the parties agree to submit such a dispute to CAS by means of a contractual clause (“Arbitral Clause”) or an agreement executed after the dispute started (“Arbitration Agreement”).
It involves disputes related to the execution of agreements, such as those related to the transfer of players; relationship among players or coaches and clubs (Labor Agreement); relationship among players and agents (Agency Agreement); sponsorship (Sponsorship Agreement); sales of television rights (Television Rights Agreement); representation of sports events among others;

Ø Arbitration Procedure by Appeal: applied to all disputes arising from decisions taken in internal courts or similar entities of sports federations, associations or other sports entities, when statutes and regulations of these entities or specific arbitration clause establishes CAS’s competence. Federations, associations or other sports entities are recommended to indicate the legal jurisdiction of CAS in their decisions.

Ø Advisory Procedure: COI, International Federations, associations recognized by COT, among others, may request an “Opinion” from CAS on legal issues related to the sports. This request will be appreciated by a Board, chosen by the Chairman of CAS and comprised by one or three arbiters. The Panel may, at any moment, request more information to issue its final decision. The opinion may be issued with the consent of the person who requested it. However, under no circumstance should this opinion constitute an arbitral sentence, and it is not compulsory.

Ø Mediation Procedure: mediation is an informal procedure which is not compulsory. The parties, based on the mediation agreement and advised by the mediator of CAS, undertake to negotiate, in good faith, in order to solve the sports dispute. The party interested in instituting the mediation procedure sends a request, in written form, to the office of CAS. Subsequently, the mediator is chosen by the parties in the list of CAS or, in the absence of the agreement, by the Chairman of CAS. The procedure is conducted in a manner agreed between the parties or determined by the mediator. In order to reach a solution, the mediator may propose solutions, however, he or she shall not impose a solution to the dispute. If successful, mediation is concluded with the execution of the agreement by both parties.

The procedures of CAS are prepared so as to avoid superfluous formalisms, making access and conclusion of the litigation easier.

A party may access CAS in an ordinary form or by means of appeal (view ordinary procedure and procedure by appeal, respectively). The contrary party, then, presents a position in written form. A second exchange of proposals in writing may be requested. Finally, the parties are called for a hearing in order to be heard and present their evidences and final pleadings. Subsequently, the decision is provided.

CAS exercises its function by intermediation of arbiters, nearly 260 throughout the world, “personalities with legal qualification and which have competence recognized as to sports issues” which count on the support of the General Secretariat of CAS to carry out the procedures.

The parties choose, from a list available in the CAS website, the arbiters which will carry out the dispute, as well as the language. As a rule, it should be English or French, however, the parties may chose to use another language, then parties and arbiters should agree with the language chosen.

The parties may present alone before CAS or be represented by one person chosen who may be or not be an attorney. It is advisable to be an attorney and, preferably, a specialist in sports events, arbitration of CAS and knowledge of another language.

In the world of sports, the fast solution of disputes in indispensable. In this regard, amicable solutions to the conflict are frequently stimulated during the arbitration procedures before CAS. Anyway, the procedures are flexible for the solution to be achieved quickly. It takes CAS an average of 6 months to pronounce a decision. In some cases, the decision may be pronounced in up to 24 hours (example: Ad Hoc courts).

In other words, CAS’s decision is unappealable and commits the parties as soon as it is announced, except for some possibilities of appeal.

Lastly, it is convenient to highlight that it in an unambiguous opinion that the sports industry has been developing fast and, as a result, the need for legal intervention has considerably increased. Due to such reasons, good worldwide legal structuring, as well as an international Arbitral Court (CAS) which offers specialized knowledge, safety and agility to solve conflicts related to world sports is essential.