European Court of Justice hands down decision in the matter of Royal Football Club Seraing (Case C-600/23)
EU Court Ruling: CAS Awards Subject to Judicial Review on Public Policy Grounds
In a landmark decision, the European Court has clarified that arbitral awards made by the Court of Arbitration for Sport (CAS) must be subject to effective judicial review by courts within the EU. This review is necessary to verify the consistency of CAS awards with the principles and provisions of EU public policy, particularly when disputes concern the pursuit of sport as an economic activity within the EU and issues touching on fundamental EU rights or EU public policy areas such as competition law and the free movement rules.
The EU's approach to this judicial review is principled and of broader importance for arbitration, including commercial arbitration. It reaffirms the duty of national courts in the EU to review arbitral awards on public policy grounds, a review that must be "effective." The scope of this review is limited to assessing compliance with EU public policy, not a full merits review of the CAS award. This ensures respect for CAS arbitration's legitimacy and its role in uniform sports dispute resolution, while preserving a minimum level of judicial supervision to uphold the rule of law in the EU.
National laws or sports association rules that prevent effective judicial review of CAS awards must be disapplied by national courts. Individuals must be able to obtain in-depth judicial review, including interim relief measures, through national courts capable of referring questions to the Court of Justice of the European Union (CJEU) for preliminary rulings to ensure EU law compliance.
Although CAS awards are considered final and binding internationally, this finality cannot prevent judicial review within the EU when EU public policy issues arise. National courts can set aside or disapply CAS awards inconsistent with EU public policy.
The approach aligns with the New York Convention on recognition and enforcement of foreign arbitral awards, and respects CAS’s role as a specialized tribunal while ensuring EU law supremacy within its jurisdiction.
Any challenges to rules and decisions of sports associations that are considered an abuse of their dominant position, for example, or a restriction on competition, such as challenges to authorization rules for alternative competitions, must be reviewed on public policy grounds by ordinary courts in the EU. If an arbitral award concerns the pursuit of sport as an economic activity in the EU, and no direct legal remedy before a court of a Member State exists, there must still be a route for indirect effective judicial review in a Member State.
The Court made it clear that if the dispute involved matters of EU public policy such as competition law, or the four freedoms, a challenge can be brought before a domestic court in the EU and the CAS award should be reviewed on public policy grounds. The Court observed that Article 19(1) TEU does not require direct legal remedy within the EU for challenging arbitral awards, but it is possible if the association provides for it.
The Court refrained from seriously undermining CAS, acknowledging the compulsory nature of CAS arbitration clauses imposed by a number of sports associations on individuals for settling their disputes with the association. The first reaction of CAS to the Court's ruling was positive, focusing on the finding in favor of CAS's legitimacy as the forum for resolving sports-related disputes.
The Court's approach shifts the focus away from where the seat of arbitration is located and onto the effectiveness of judicial control and oversight under EU law, also in sports-related matters. The findings seem to specifically concern ensuring the consistency of arbitral awards with the principles and provisions of EU public policy, rather than any EU-law related rule.
- This landmark EU Court decision emphasizes the need for effective judicial review of arbitral awards made by the Court of Arbitration for Sport (CAS), even in international settings.
- The review ensures compliance with EU public policy, specifically in areas like competition law, free movement rules, and fundamental rights.
- National laws or sports association rules that inhibit this review must be disregarded by national courts to allow for in-depth judicial scrutiny.
- Despite CAS awards being final and binding internationally, EU public policy issues necessitate judicial review within the EU.
- National courts can set aside or disapply CAS awards inconsistent with EU public policy, aligning with the New York Convention on foreign arbitral awards.
- Challenges to rules and decisions of sports associations concerning competition law, such as restrictions on competition, must be reviewed on public policy grounds by domestic courts.
- The ruling indicates that a challenge can be brought before a domestic court in the EU if the dispute involves matters of EU public policy like competition law or the four freedoms, regardless of the existence of a direct legal remedy within the EU.
- CAS's role as a specialized tribunal for sports dispute resolution is respected in this ruling, while ensuring EU law supremacy and effective judicial control within its jurisdiction.
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