Case C-600/23 - Royal Football Club Seraing v. FIFA, UEFA et al, Opinion of AG Ćapeta of 16 January 2025
The judicial protection of EU-based rights and the definition of a ‘court or tribunal’ under the EU Charter – An effort to pierce the veil of res judicata in sports arbitration?
The recent opinion of the AG in the Seraing saga (see my older notes on the procedural history and the various decisions in this matter until 2018 here) undeniably created a turbulence in the long-haul flight of res judicata in international arbitration, a widely-recognized principle in every state that has adhered to the New York Convention of 1958 (NYC58). This cardinal principle of legal certainty traditionally grants a final and binding effect not only to final judgments passed by state courts, but also by tribunals that qualify as arbitral tribunals and whose decisions are asimilated to state court judgments. However, the recent Opinion of the AG Ćapeta in the Seraing case wants to revisit, to say the least, the binding effect of a very specific category of arbitral awards, namely in case of challenge of the regulatory framework of sports governing bodies and their compliance with EU law.
In essence, the AG Opinion reiterates numerous issues that have already been confirmed in other recent sports-related judgments, in particular the International Skating Union (ISU) judgment (C 124/21):
- – sport is an economic activity (§39) – its practice is subject to the provisions of EU law applicable to that economic activity;
- – FIFA rules require any dispute related to the challenge of its regulatory framework to be brought to the Court of Arbitration for Sport (CAS), rendering CAS arbitration in those (limited, as will be shown below) cases ‘mandatory’;
- – EU law guarantees the right to effective judicial protection (Art. 47 Charter) (§41);
- – Judicial protection of EU-based rights must be protected by a ‘court or tribunal’ under Article 267 TFEU (§ 43) and CAS / SFT are not such courts.
As a reminder, in the Seraing case, the Belgian courts granted res judicata effect to a CAS award based on their own national law and could subsequently not review the alleged breaches of EU law, which were dismissed in said award. According to AG Ćapeta, the res judicata rule anchored in Belgian law (and in almost all legal orders) is in ‘straightforward’ breach of the EU law principle of judicial protection to the extent that the CAS cannot be assimilated to a court in the sense of the TFEU (§ 49).
In view of the above, does the ‘mandatory’ character of sports arbitration warrant a limitation of res judicata and an enhanced review of CAS awards under EU law ?
After a reminder of the lengthy procedural history of this case, AG Ćapeta goes on to describe the FIFA system and the CAS jurisdiction established therein, that the AG considers to be ‘exclusive and mandatory’ (§ 55). This however, seems to ignore that exclusion of state courts jurisdiction in favor of arbitration is a core characteristic of arbitration clauses, either free of mandatory.
The AG also draws the parallel between human rights and EU law granting a rather broad effect to the Semenya v. Switzerland ECtHR judgment, when it says that the EctHR ‘found the review of a CAS award performed by the Swiss Federal Tribunal so limited that it was not capable of ensuring fundamental rights protection’ (§ 60). The findings of the ECtHR were indeed case specific and did not relate to the application of EU law.
Referring to previous judgments (inter alia the Achmea judgment, (C 284/16) and building upon the ISU judgment, the AG suggests a specific interpretation for mandatory arbitration.
Importantly, AG Ćapeta draws the distinction beween the Eco Swiss judgment (C 126/97) and the Seraing case: arbitral awards in commercial arbitration, albeit not ‘decisions’ in the sense of the TFEU a) are based on voluntary agreements and b) the lack of preliminary reference by a national court is ‘remedied’ by the need of exequatur based on the NYC58 as commercial arbitral awards are not self-enforceable.
On the other side, the AG says, following the analysis in the Mutu and Pechstein ECtHR judgment, the FIFA arbitration clause leads to a mandatory arbitration and this would impact on the width of judicial review needed and guaranteed under the current CAS regime. Other than in commercial arbitration, CAS awards do not require exequatur (and hence control by national courts) as they are issued in the self-enforcing football ecosystem (§ 77-78).
In my opinion, however, the self-enforcing character of CAS Awards by FIFA, undeniably one of the most potent practical advantages of sports / football arbitration, does not preclude recourse to the NYC58 recognition and enforcement mechanism and is not directly related to the issue of effective judicial review.
The AG then draws the distinction between this case and the Achmea judgment (related to the exclusion of possible EU law infringements from the system of judicial review in investment arbitration). Reiterating the utility of sports arbitration and the private character of sports governing bodies, AG Ćapeta repeats that the only connecting point between the two cases is the importance of effective judicial protection and the uniformity of EU law.
Finally, AG Ćapeta considers that the mandatory – and the self-enforcing character of sports arbitration (as opposed to voluntary commercial arbitration) warrant a specific assessment in light of the principle of effective judicial protection, both regarding the access to courts and the scope of judicial review (§ 95).
Building upon – and going some steps further from – the ISU judgment, AG Ćapeta suggests the adoption of a specific approach for mandatory arbitration. She considers that there should be a way to seek annulment of CAS awards that infringe EU law, since seeking damages cannot remedy the lack of effective judicial review (as already found in the ISUjudgment).
Therefore, AG Ćapeta considers that res judicata cannot stand in the way of a CAS award containing a finding on EU law and that national courts should be able to review FIFA’s rules against EU law (§ 107).
An equally thorny issue in the AG Seraing Opinion is the limited scope of review in sports arbitration. While in the Eco Swiss case the Court found that judicial review can be limited to issues of public policy (hence rules of higher public importance), AG Ćapeta considers that in mandatory sports arbitration national courts should be able to conduct a review of all EU issues.
Referring to the NYC58, which is taken into account by the Court based on the principle of good faith, AG Ćapeta initially expresses doubts as to its applicability (particularly regarding Article II (1) on the ‘free’ and ‘consensual’ submission of a dispute to sports arbitration) (§ 118). However, the NYC58 has been applied for years in all sorts of ‘mandatory’ arbitration without raising issues linked to the ‘free’ and ‘consensual’ submission.
She then considers that, if the NYC58 applies to CAS arbitration, its provisions on judicial review of public policy should include the principle of effective judicial protection under EU law and – in turn – ensure a full review of the CAS Award, granting direct access to challenge FIFA’s rules and their compatibility with all relevant EU law provisions (hence not the ones limited to public policy).
This approach arguably aims at (overly, in my opinion) broadening the traditionally limitative notion of public policy under the NYC58, suggesting a full review of all EU rights through the backdoor of effective judicial protection.
In conclusion, the AG opines that EU law is indeed breached when an arbitral award is granted res judicata without the possibility of subsequent review by a Member State, able to refer a question to the ECJ for a preliminary ruling.
With respect to the second question (whether a rule of national law granting rebuttable probative value to an arbitral award is in conformity with Article 267 TFEU when the control was carried out by a court of a third country), AG Ćapeta unsurprisingly accepts that said rule does not directly affect effective judicial protection, also because it is only applicable to questions of fact.
Overall, and even though AG Ćapeta seemingly wants to open the Pandora’s box in sports arbitration with the key of effective judicial protection under EU law, some issues must be put in perspective:
- – first, the core argument of the Opinion, namely the lack of effective judicial protection due to the fact that the CAS is based in a non-EU member and can therefore not request a preliminary ruling, has alredy been mentioned by the ISU judgment (which pinpointed the ISU EU Competition law ‘immunity’ through CAS and the need to review questions of EU public policy; ISU judgment § 184, 188, 202). In this regard, UEFA has already reacted by offering an alternative seat of the CAS in Ireland for specific questions touching upon EU competition law.
- – second, the Court (which is not bound by the Opinion) will ultimately have to strike the right balance between effective judicial protection and the (rather expansionist) broadening of the scope of ‘public policy’ under the NYC58, which would open the door to claims regarding all EU rights, and not only the hard core of what would constitute EU ‘public policy’.
- – third, and amidst the expected reforms following the Diarra judgment, it should be reminded that the Opinion only refers to a small pool of disputes that are ‘mandatorily’ brought before the CAS, namely challenges of regulations of sports governing bodies (in casu FIFA). However, the vast majority of FIFA-related cases brought before the CAS are not related to disciplinary matters or challenges of FIFA’s regulations but are rather horizontal disputes, i.e. disputes between football clubs and players in a wide variety of purely contractual matters. To the extent that AG Ćapeta’s main arguments are based on the ‘mandatory’ character of sports arbitration, the horizontal disputes are traditionally considered by the SFT as ‘voluntary’ arbitration and would therefore not be affected by the Opinion (see also my note on SFT judgment 4A_600/2020).
