Competency of National Dispute Resolution Chambers

1.    Introduction

The precise forum in which a football dispute should be decided at first instance – whether a civil court, a domestic employment tribunal, an arbitral panel established by a national federation, or a FIFA decision-making body – may not always be obvious.  Whilst arbitration is recognised as the principal mechanism for resolving football disputes – something that is enshrined within FIFA’s Statutes 1– the appropriate jurisdiction will largely depend on the nature of the dispute (though the characterisation of a dispute can, in itself, sometimes be a source of disagreement).

It is not unusual for parties to challenge the particular forum in which a claim is commenced – for instance, where the forum is deemed to lack competency (such that it could create concerns around the ultimate enforcement of an award), or for tactical reasons (e.g. if an alternative forum is deemed to have more a favourable procedural law, greater/lesser sanctioning powers, etc.).

An ever-increasing number of national football federations have implemented their own mechanisms for resolving football disputes, through the creation of (so-called) national dispute resolution chambers (“NDRCs”).  In this article, Henry Goldschmidt (Associate) examines the competency of NDRCs to deal with player-club employment disputes of an international dimension – a matter that has habitually reared its head before FIFA and the Court of Arbitration for Sport (“CAS”) in recent years.

2.    FIFA Regulations on the Status and Transfer of Players

Article 22(b) of the FIFA Regulations on the Status and Transfer of Players (“FIFA RSTP”)²provides as follows:

Without prejudice to the right of any player or club to seek redress before a civil court for employment-related disputes, FIFA is competent to hear:

[…]

b)  employment-related disputes between a club and a player of an international dimension; the aforementioned parties may, however, explicitly opt in writing for such disputes to be decided by an independent arbitration tribunal that has been established at national level within the framework of the association and/or a collective bargaining agreement. Any such arbitration clause must be included either directly in the contract or in a collective bargaining agreement applicable on the parties. The independent national arbitration tribunal must guarantee fair proceedings and respect the principle of equal representation of players and clubs;

(Emphasis added)

Specifically, in accordance with Article 24(1) of the RSTP, 3it should be FIFA’s Dispute Resolution Chamber (the “FIFA DRC”) that shall adjudicate cases that fall within Article 22(b). 4 However, as set out above, Article 22(b) of the FIFA RSTP allows for such cases to resolved by an “independent arbitration tribunal that has been established at national level within the framework of the association and/or a collective bargaining agreement” (i.e. an NDRC) to determine player-club employment disputes of an “international dimension”.  

 3.    International (or national) dimension?

What constitutes “international” in the context of Article 22(b) has been the subject of debate – but the consensus is that it is based on the national status of the parties to the dispute, rather than the national status of the dispute itself. 5 According to the Panel in CAS 2016/A/4846, this is the “common sense” interpretation. 6 In addition, the FIFA RSTP Commentary to Article 22(b) provides that the “international dimension is represented by the fact that the player concerned is a foreigner in the country concerned”.

Incidentally, where a player-club employment dispute is not of an international dimension and the contract is silent as to the jurisdiction:

(1) the statutes/regulations of an NDRC would usually provide that the NDRC is competent to deal with disputes where each party is subject to the national association’s jurisdiction (i.e. when the parties are (i) a club affiliated to the national association; and (ii) a player registered to that club);

(2) if there is no NDRC in place for a national association, or the player-club employment dispute falls outside its competence (e.g. if the player has not been formally registered with the club 7 ), the parties would need to seek recourse via an ordinary court.

The FIFA DRC cannot determine disputes that fall outside Article 22 of the FIFA RSTP and will thus never be competent to deal with a dispute of a (purely) national dimension, irrespective of what the parties agree amongst themselves.  8

4.  Competency requirements for an NDRC 

The mandatory criteria

Assuming the “international” element is satisfied, the following requirements must be met for an NDRC to be considered competent to determine player-club employment disputes: 9

(1) the NDRC is independent;

(2) the exclusive jurisdiction of the NDRC derives from clear and specific reference in the player’s employment contract;

(3) the NDRC chosen by the parties guarantees fair proceedings and respects the principle of equal representation of clubs and players. 

A party that disputes FIFA’s jurisdiction to determine a claim under Article 22(b) of the FIFA RSTP – or that otherwise claims that an NDRC has jurisdiction over the matter – bears the burden of establishing that the NDRC has jurisdiction over the dispute. 10

FIFA Circular No. 1010

In its Circular No. 1010 (dated 20 December 2005), FIFA clarified the minimum (international) procedural standards an arbitral tribunal must uphold in order to be classed as “independent” and “duly constituted”11 – namely: (a) the principle of parity when constituting the arbitration tribunal, 12 (b) the right to an independent and impartial tribunal, 13 (c) the principle of a fair hearing, 14 (d) the right to contentious proceedings, 15 and (e) the right to equal treatment. 16 

These five conditions have effectively become the yardstick with which NDRCs must comply in order to oust the jurisdiction of the FIFA DRC.  Indeed, the above principles are regularly cited in awards where the competency of an NDRC is under scrutiny. 17

FIFA’s NDRC Standard Regulations

In addition to the above, FIFA’s NDRC Standard Regulations (“NDRC Regulations”) were implemented by FIFA Circular No. 1129 (dated 28 December 2007) as guidelines for Member Associations for establishing a national dispute resolution system.  The NDRC Regulations – effective from 1 January 2008 – reflected the principles of the FIFA DRC and provide that the “NDRC shall apply the association’s statutes and regulations, in particular those adopted on the basis of the FIFA Statutes and regulations.” 18

The majority of cases where NDRCs are deemed to fall short (see below) of the prescribed independence and/or fairness mandate relate to the composition of the panel – something that is addressed in Article 3 of the NDRC Regulations:

Article 3 – Composition

1. The NDRC shall be composed of the following members, who shall serve a four-year renewable mandate:

a) A chairman and a deputy chairman chosen by consensus by the player and club representatives from a list of at least five persons drawn up by the association’s executive committee;

b) Between three and ten player representatives who are elected or appointed either on the proposal of the players’ associations affiliated to FIFPro, or, where no such associations exist, on the basis of a selection process agreed by FIFA and FIFPro;

c) Between three and ten club representatives who are elected or appointed on the proposal of the clubs or leagues.

2.       The chairman and deputy chairman of the NDRC shall be qualified lawyers.

3.       No club may have more than one member of the NDRC.

5.    Recent CAS jurisprudence

Article 59 of FIFA’s Statutes serves to recognise the CAS as the international ‘supreme court’ of football.19  FIFA has recognised the CAS since 2002 as the appeal body for decisions from the FIFA DRC (and the FIFA Players’ Status Committee).20 Below are examples of how the CAS has applied the rules, regulations and competency standards relating to NDRCs.    

Arbitration clause/agreement insufficient to confer jurisdiction on an NDRC 

As outlined above, it must be clear – from express reference in a player’s employment contract – that the chosen NDRC has exclusive jurisdiction over any dispute between the player and the club.  This requirement was affirmed by the Panel in CAS 2015/A/4333, 21 which held that an arbitration clause “has to designate a particular arbitral tribunal or at least an arbitral tribunal that is determinable by contractual interpretation” 22 – something that the parties had failed to do in the underlying employment contract. 

In CAS 2014/A/3864,23 the CAS considered whether two Romanian national arbitral bodies had jurisdiction to decide a dispute emanating from a Sporting Services Agreement (the “Agreement”) and Contract of Employment (the “Contract”) between a Portuguese player and Romanian club.  In that instance, the Sole Arbitrator held that the relevant dispute resolution clauses of the Agreement and the Contract referenced multiple fora (including a specific reference to FIFA), as purportedly capable of resolving contractual disputes – without explicitly determining one that would be competent, to the exclusion of others. 24

See also CAS 2014/A/3684 & 3693,25 where the Panel concluded that the standards of Article 22(b) of the RSTP were not met as the relevant employment contract did not contain any explicit reference to the competence of the Portuguese Joint Arbitration Committee (the “Portuguese NDRC”) or the applicable articles in the Portuguese Collection Bargaining Agreement.  26

NDRCs held to have lacked independence/fairness

As indicated above, the most frequent ground on which an NDRC is found not to have competency is on the basis of its composition – for instance, in CAS 2016/A/4846.27  In that case, although it was undisputed that the relevant employment contract contained a clear dispute resolution clause in favour of the National Soccer League Dispute Resolution Chamber (the “South African NDRC”), the Panel determined that the South African NDRC did not respect the mandated principle of equal representation of players and clubs as:28

(1) the South African NDRC Executive Committee was comprised of the chairperson of the National Soccer League South Africa (the “League”), seven additional persons elected by the clubs and the Chief Executive Officer of the League; and

(2) in addition, the South African NDRC did not comply with Article 3(1) of the NDRC Regulations, as the chairperson of the South African NDRC was appointed by the Executive Committee of the League and not by consensus of player and club representation.

In CAS 2014/A/3690,29 the Panel found that the Appellant (a Polish club) was unable to provide evidence that clubs and players were able to exercise equal influence over the compilation the arbitrators’ list of the Polish Football Court of Arbitration (the “Polish NDRC”).  In deciding that the Polish NDRC lacked the requisite “independence”, the Panel held:  30

Article 11 para. 1 of the Polish FA’s Resolution II/25 states that the [Polish NDRC] is “composed from 25 to 27 arbiters appointed by the Management Board of the Polish Football Association”.  As a result, given the clubs are direct members of the Polish FA (and can thus influence the composition of the Management Board) while the players are not, the Panel holds that such national arbitral tribunal cannot be considered as duly constituted pursuant to FIFA requirements and, thus, cannot be deemed as having jurisdiction to hear the present dispute.

In CAS 2018/A/565931(an award rendered in March 2019 that is, as yet, unpublished), the Panel (interestingly) did not come to a definitive conclusion as to whether the relevant arbitration clause expressly and clearly conferred exclusive jurisdiction on the relevant NDRC.  Instead, it was held that this could be “left open” on the basis that the NDRC was not deemed to respect the principle of equal representation of player and clubs – i.e. it lacked the requisite competency in any event. 32

In coming to that decision, although the Panel did not suggest that the proceedings before the NDRC were unfair or lacked the desired quality, it was considered that:33

(1) the sole fact that the president and vice-president of a panel are selected by the Board of Directors of the national federation raised doubts about their neutrality – particularly given that decisions of the NDRC are decided by a majority and the president has a casting vote;

(2) conversely, the players’ group did not seem to be able to exercise equal influence over the selection process and the composition of the arbitrators’ list (from which the president and vice-president were selected);

(3) as such, the appointment of the president was not in line with the minimum expectations of FIFA.

No recognition in the abstract

As indicated above, the burden of proof will be on the party challenging FIFA’s jurisdiction to determine an Article 22(b) dispute.  Further, there will be no recognition by the CAS in the abstract – in other words, analysis of an NDRC’s competence will be based on the particular context of the dispute at hand and the evidence/submissions of the parties.34

A clear example of this approach is evidenced in CAS 2014/A/3656, 35 when the Panel felt the Appellant Club did not provide sufficient evidence to demonstrate that the Appeals Committee for the Resolution of Financial Disputes of the Greek Football Federation (the “Greek NDRC”) was an independent arbitral tribunal guaranteeing fair proceedings and equal player/club representation.  This was notwithstanding that, two years prior, the CAS had held36 that the same Greek NDRC met the requirements to be competent in lieu of the FIFA DRC.

Whilst the Panel in CAS 2014/A/3656 considered (and duly referenced) the earlier decision, it did not consider itself to be in a position to reach the same conclusion: 37

… the Panel finds that based on the evidence at its disposal and because the Club did not duly inform the Player of the pending proceedings instigated against him by the Club before the [Greek NDRC]… it must be assumed, in the absence of proof to the contrary, that these principles were not complied with by the [Greek NDRC] in the present case.  Under such circumstances, the duty of the [Greek NDRC] to guarantee fair proceedings and equal representation cannot be assessed in the abstract, since doing so would require the Panel to ignore and disregard the fact that in this case the Player was not duly informed of the pending proceedings and will contradict the intention of Article 22(b) of the FIFA [RSTP].

(Emphasis added)

6.    Comment

When it comes to determining the appropriate jurisdiction of a player-club employment dispute of an international nature, the starting point should always be the contract itself – being what the parties agreed in writing.  It is apparent from recent CAS jurisprudence that the parties will need to expressly and clearly agree that the relevant NDRC has exclusive jurisdiction, if they wish to oust the FIFA DRC (i.e. “opt out” of the status quo). 

If that initial limb is satisfied, there are then very strict checks and balances that an NDRC must have in place to be deemed “competent” to decide a player-club employment dispute of an international dimension.  Whilst different parts of the world may have different understandings as to what constitutes judicial “independence”, the NDRC Regulations provide for a standardised framework of minimum standards expected of an NDRC.

It is evident from CAS jurisprudence that NDRCs are often held to have infringed the “principle of equal representation of clubs and players” – generally because the make-up of the NDRCs is disproportionately influenced by clubs.  As such, particular attention should be paid to Article 3(1) of the NDRC Regulations, to ensure:

(1)    parity with respect to the interests of clubs and players; and

(2)    balance with respect to the composition of the NDRCs.

Finally, the fact that no assessment will be made in the abstract should serve as a warning against any complacency on the part of a party seeking to challenge the jurisdiction of FIFA.  Indeed, one should never assume that, just because a particular NDRC has been deemed “competent” in the past, that it will again in future.  The jurisdiction of any given NDRC will be assessed in the context of the particular dispute, so it will be essential for the party disputing FIFA’s jurisdiction (and seeking to invoke the jurisdiction of an NDRC) to develop and corroborate its arguments on the issue as far as possible.