Sport is now a global business worth more than 3% of world trade and 3.7% of the combined GNP of the twenty-seven Member States of the European Union. So, there is much at stake, both on and off the field of play!
It is not surprising, therefore, that sports-related business disputes are on the increase, especially in the present economic climate. The sporting world, in general, prefers to settle their disputes by some form of ADR (Alternative Dispute Resolution). Over its twenty-seven years of operations, the Court of Arbitration for Sport (CAS), based in Lausanne, Switzerland, is proving to be a popular and effective forum for settling sport-related disputes by Mediation or Arbitration or a combination of the two processes: 'Med-Arb'.
Rather than leaving questions of dispute resolution to be decided when sports disputes arise, it is advisable to include an express arbitration clause in the Sports Agreement or Contract concerned. This introduces certainty and does not rely upon the parties agreeing to some form of ADR at the time a dispute arises - one party may be in agreement, whilst the other is not!
When drafting such clauses, it is also advisable to include as much detail in them as possible. For example, the venue and language of the Arbitration; who appoints the Arbitrator(s); the procedure to be followed; and the applicable law; to avoid the arbitration clause being held to be void for uncertainty.
Although in this connection, it may be mentioned that a reference to settle disputes by ADR through a CEDR (Centre for Effective Dispute Resolution, which is based in London) procedure contained in a commercial agreement was judicially held not to be void for uncertainty, despite its brevity. See the English High Court case of Cable & Wireless plc. v. IBM United Kingdom Ltd. (1) in which the Judge held that the parties had shown a clear intention to be bound to a process of ADR for the settlement of their disputes under the agreement! The actual ADR clause in dispute provided as follows:
"If the matter is not resolved through negotiation, the Parties shall attempt in good faith to resolve the dispute or claim through Alternative Dispute Resolution (ADR) Procedure as recommended to the parties by the Centre for Dispute Resolution. However, the ADR procedure which is being followed shall not prevent any Party or Local Party from issuing proceedings."
Again, in another earlier case, an exchange of telexes between two firms of Brokers in Paris containing the following rather brief statement: "English law - arbitration, if any, London according to ICC rules" was held to be a valid arbitration agreement, providing for arbitration in London under the ICC Rules with English Law as the proper law of the contract. (2)
Of course, as previously mentioned, such a short form of arbitration clause is not to be recommended, in practice.
Each of the international and national arbitral bodies has their own standard Arbitration and Mediation reference clauses and these should be incorporated in the corresponding commercial agreements if the parties wish to use them.
In the case of sports disputes, the Court of Arbitration for Sport offers the following standard 'Med-Arb' clause - a popular form of ADR: Mediation to identify the issues, and, if not successful, (3) arbitration to settle them - for inclusion in sports-related Commercial Agreements: (4)
"Any dispute, any controversy or claim arising under, out of or relating to this contract and any subsequent of or in relation to this contract, including, but not limited to, its formation, validity, binding effect, interpretation, breach or termination, as well as non-contractual claims shall be submitted to mediation in accordance with the CAS Mediation Rules.
If, and to the extent that, any such dispute has not been settled within 90 days of the commencement of the mediation, or if, before the expiration of the said period, either party fails to participate or continue to participate in the mediation, the dispute shall, upon filing of a Request for Arbitration by either party, be referred to and finally settled by CAS arbitration pursuant to the Code of Sports-related Arbitration. …