THE IMPACT OF COVID-19 ON FOOTBALL: A TIGHT CORNER-PART 1
Updated: Jul 10, 2020
This two-part blog piece is part of our COVID-19 series and has been authored by Gursimar Setia.
Gursimar is a third-year student of the B.A. LL.B. course at West Bengal National University of Juridical Sciences, Kolkata.
In this series, the author intends to carefully evaluate the legal recourse available to deal with such unforeseen events that are capable of having an adverse effect on commercial dealings. This part briefly lays out the legal issues that parties may encounter and introduces 'Contractual Stability Clauses' which form the backbone for adjudication of contractual disputes in Football.
INTRODUCTION
The ongoing Covid-19 pandemic has brought the world of sport in a quandary, leaving organizers with tough choices. UEFA and CONMEBOL have already postponed the European Championships and Copa America respectively to 2021. European leagues have either been suspended or cancelled, although Bundesliga has resumed and the Premier League is scheduled to restart soon. Meanwhile, in India, the I-League’s 2019-20 season has ended prematurely. Not only has the Coronavirus robbed the ordinary public of the beautiful game, but it has exposed people working in the sports and entertainment industries to an unprecedented crisis.
The sport involves contracts of various types with players, staff, clubs, and commercial partners which, in light of COVID, are increasingly witnessing non-performance. Clubs across the world are finding it increasingly difficult to continue paying their players due to their revenue streams drying up completely. Some clubs have mutually agreed with players to reduce wages or to terminate contracts. There are going to be cases where the parties are not able to agree on terms to alter or terminate contracts mutually. Non-payment or delay in payment of salaries in these cases is inevitably going to end up in employment disputes. For instance, FC Sion has unilaterally terminated contracts of several players, leading to appeals before FIFA’s Disputes Resolution Chamber [hereinafter "DRC"].
Complications have also arisen from the extension of the football season beyond the original dates to accommodate for the remaining fixtures. Some of these contracts will run down before the fixtures are held, leading to contractual disputes. Moreover, the opening of player registration periods [hereinafter "Transfer Windows"] before the end of the season will further complicate matters as players will be free to join other clubs on the expiration of their contracts. These issues can potentially tarnish the integrity of competitions.
AVAILABLE REMEDIES AND JUST CAUSE
Parties may refer the case to national arbitration before the respective member associations as per its rules and regulations, or the DRC in case the dispute is of an “international dimension” as per Article 22(b) of the FIFA Regulations on Status and Transfer of Players [hereinafter "RSTP"].[i] In case the parties are not satisfied with such resolutions, they can appeal from the decisions of member associations and the DRC before the Court of Arbitration of Sport [hereinafter "CAS"].[ii]
Under certain conditions disputes of an 'international dimension' may also be settled by an independent arbitrator per Article 22(b) of RSTP.[iii] Although recourse to ordinary courts is generally prohibited,[iv] parties have a right to approach them under Article 22 of RSTP, which provides for a player to approach a civil court for employment-related disputes.[v]
Notwithstanding the forum, RSTP’s contractual stability clauses are essential in the discussion because Article 1(3) of the same mandates all member associations to include these provisions in its regulations. Moreover, Article 57 of the FIFA Statutes also requires the CAS to apply RSTP. Hence, all legal questions pertaining to players’ contracts are to be resolved in accordance with the RSTP.
As per Article 14 of the RSTP, a contract can be unilaterally terminated by either party where there exists a ‘just cause’.[vi] The term ‘just cause’ has not been defined but CAS jurisprudence can be relied upon for this purpose. The CAS in FK Olimpik Sarajevo held that financial distress or inability to pay wages by a club does not constitute just cause.[vii] This entails that clubs cannot evade sporting sanctions or payment of compensation to players, even at a time when their finances are under immense strain. However, the prevailing jurisprudence on the application of ‘just cause’ may be susceptible to variations given the extraordinary circumstances. In the subsequent post, the author will evaluate the relevance of a Force Majeure clause and FIFA’s COVID-19 Guidelines, which may prove to be essential tools in assisting parties to resolve contractual disputes.
[For reading the Part 2 of this blog-piece, Click Here!]
The author can be reached for comments on his email at simars@nujs.edu
Cite as: Gursimar Setia, The Impact Of COVID-19 on Football: A Tight Corner , Extra-Cover: The Sports Law Blog of India (20th Jun 2020), Accessed at https://www.extra-cover.org/post/the-impact-of-covid-19-on-football-a-tight-corner-part-1 [Date of Access].
End-Notes [i] FIFA Regulations on the Status and Transfer of Players, 2020, Article 22(b). [ii] FIFA Statutes, 2019, Article 58. [iii] RSTP (n 2), Article 22(b) (“disputes of an international dimension can be 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.”). [iv] FIFA Statutes, 2019, Article 59(2). [v] RSTP (n 1), Article 22. [vi] Ibid, Article 14. [vii] FK Olimpik Sarajevo v. Fédération Internationale de Football Association (FIFA), Football Association of Bosnia and Herzegovina, NK Sesvete and Croatian Football Federation Arbitration CAS 2017/A/5496.