EU law and international arbitration: RFC Seraing case

Overview

The origins of the case arise from the decision of the Court of Arbitration for Sport (which has its seat outside of the European Union in Lausanne, Switzerland) to uphold a sanction imposed upon a football club, RFC Seraing, for breaching FIFA’s ban on third party ownership (TPO) of players. In its decision, the CAS also rejected the EU law grounds raised by RFC Seraing against the TPO ban.

Separately, RFC Seraing challenged the lawfulness of the TPO ban against FIFA and other federations before the Belgian courts on the same grounds of EU law. In dismissing the appeal against FIFA, the Belgian courts considered that, under Belgian law, the arbitral award delivered by the CAS was legally binding and had probative value for the claims against other parties.

This application by the Belgian courts of the CAS award led to questions before the EU Court of Justice as to the recognition and enforcement of awards in accordance with the principle of effective EU judicial control.

The Challenge

The case had major implications not just for sports arbitration but the entire system of international arbitration. The case was directed to the Grand Chamber given its importance. It received significant attention from international arbitration practitioners given its impact for the recognition or enforcement of any award delivered outside the European Union.

The Approach

Benoît Keane drew from his extensive experience before the Court of Arbitration for Sport in his representation before the EU Court of Justice. It was explained that the CAS is obliged to consider EU law arguments when raised in accordance with Swiss Private International Law, as had indeed occurred in the proceedings involving RFC Seraing. The sports federations also outlined that international arbitration is essential to the uniform enforcement of sports rules and guarantees all athletes and clubs are treated in non-discriminatory manner before a neutral venue. A key submission of general application to international arbitration by the sports federations involved was to highlight to the EU Court of Justice that the recognition and enforcement of an international arbitral award may be challenged on grounds of EU public policy in accordance with the New York Convention.

The Outcome

The EU Court of Justice recognised the right of sports federations to rely upon arbitration to ensure the uniform handling of sports disputes or the consistent interpretation and application of the sports regulations. It also accepted that there is no requirement that the arbitration take place in the EU (though, of course, if can do so). Moreover, the EU Court of Justice ruled that effective EU judicial control can be enforced through the recognition or enforcement of international arbitral awards in the EU as well as through other mechanisms. The ruling was a landmark moment for not just sports arbitration but also international arbitration.