Sports Arbitration Tribunal (TAD) Law – mandatory arbitration – appealing against decisions of arbitration tribunals
Right of access to the courts;
Exclusive or partially exclusive jurisdiction;
Ability to appeal against arbitration decisions.
RULING No. 781/13
20 of November of 2013
The Court was asked to review the constitutionality of a set of norms included in the Sports Arbitration Tribunal (TAD) Law. These norms limited access to the TAD’s appeals chamber to challenges against arbitration panel decisions: (a) in disputes that had been submitted to mandatory TAD arbitration and involved the possible imposition of sanctions for disciplinary infractions provided for by law or by the applicable disciplinary regulations; or (b) that contradicted another decision which had already transited in rem judicatam and had itself been given by an arbitration panel or the TAD appeals chamber. In addition, the norms only allowed decisions taken by the TAD appeals chamber to be challenged before the Supreme Administrative Court (STA) in the form of an appellate review, and then only when this involved asking the STA to consider a question whose legal or social importance meant that it was of fundamental importance, or when admission of an appeal to the STA was clearly necessary in the interest of a better application of the law. The way in which these norms defined the possibility of appealing against arbitration decisions to state courts represented a breach of the right of access to the courts, both because of the limitations on the nature of the decisions, and because the requisites for a request for appellate review to be admitted are exceptional. The Constitutional Court therefore declared these norms unconstitutional with generally binding force.
The Court was of the view that it is permissible for disputes whose object is an act or omission by a federation or other sporting body in the exercise of powers of a public nature, to be submitted to mandatory TAD arbitration. However, provision must be made for mechanisms that give the state courts the last word in the resolution of such disputes.
Where mandatory arbitration is concerned, the TAD’s jurisdiction encompasses disputes arising from acts or omissions by federations, professional leagues and other sporting bodies. The Law said that many of these disputes can only be heard by a single TAD instance – the arbitration panels – and that the latter’s decisions in them could not be appealed to either the TAD’s own appeal instance, or the state courts.
The fundamental right of access to the courts requires that the parties be able to debate the merit of an arbitration decision in a state court, and that there be no restriction on the right of access to the courts as the result of an absence of mechanisms for gaining access to state justice. It is necessary for there to be a mechanism whereby a judicial state organ can re-examine common situations in which a private individual wishes to challenge a decision on the essence of the question, or a decision which, while it does not go to the heart of the matter, does terminate the arbitration process. There must be mechanisms that enable state courts to have the last word on the resolution of disputes that are submitted to mandatory TAD arbitration.
The Constitutional Court said that the fundamental right of access to the courts tends to constitute a guarantee that access can be had to the state courts in particular – a tendency that results from the necessary link between the right of access and the principle that jurisdiction is reserved to those courts. It is only permissible for an arbitration-based jurisdiction to be exclusive when access to the arbitration tribunal is free and voluntary.
In the case of a mandatory arbitration-based jurisdiction, the impossibility of appealing against arbitration decisions represents a clear violation of the right of access to the courts, not only because the jurisdiction is mandatory, but also due to the nature of the rights and interests in play and to the fact that what is at stake is the exercise of delegated powers of authority.
The Court noted that, except with regard to certain “matters of noteworthy importance and complexity”, the last word in the resolution of disputes submitted to mandatory TAD arbitration was still not in the hands of the state courts (this had already been the case with the norms in the earlier Decree creating the TAD, which had previously been the object of prior review proceedings in which the Court found them to be unconstitutional). It said that the mechanisms for guaranteeing access to state justice continued to be insufficient, in that they did not provide for a mechanism that would allow decisions to be re-examined before a state judicial organ in common situations in which a private individual wants to question a decision in which an arbitration body has pronounced itself on the essence of the case or terminated the proceedings.
The provision for a single form of appeal to the state courts, and on top of that, the fact that that appeal is primarily an objective one which is not in principle designed to defend those rights and interests of private persons to which the law affords its protection, is in breach of the fundamental right of access to the courts; and this because, among other things, the purpose of the latter right is to protect subjective legal positions that cannot be left unprotected simply because they are not socially or legally very important. What is more, the appellate review does not allow the parties to debate the merit of the factual matter which the arbitration jurisdiction has deemed established. This thus meant that as a rule, the last word with regard to judgements of what are or are not proven facts would pertain to the arbitration jurisdiction and not the Supreme Administrative Court; and this in turn signified that to this extent, the appellate review would also fail to overcome the insufficiency of the mechanisms that allow access to state justice – an insufficiency which the Constitutional Court had already pointed to in its ruling in the earlier prior review case.
The President of the Republic asked for an ex post hoc review of norms included in the Law that both created the Sports Arbitration Tribunal (TAD) and approved the Law governing it. The constitutive Law was passed by the Assembly of the Republic after the Court had declared the unconstitutionality of a norm in a prior review of an earlier Decree with the same purpose, which had then been vetoed by the President and sent back to the Assembly for reconsideration.
The petitioner in the present case argued that these new norms were also unconstitutional, because they disproportionately restricted the right of access to the courts and to effective jurisdictional protection.
The Constitutional Court noted that a comparison of the text of the articles that had been submitted to prior review with those before it in the present case showed that norms which had played a key part in the earlier finding of unconstitutionality had not been sufficiently amended.
The Court restated the understanding it had voiced in the prior review of the earlier Decree creating and governing the TAD: the creation of arbitration tribunals must take other constitutional principles into account – namely the guarantee of access to the courts and the guarantee that jurisdiction is reserved to those courts. The fact that resort to a state court is the main means of access to the law signifies that the formation of arbitration tribunals can be subject to certain limits based on that reserved jurisdiction.
The Court emphasised that, although the possibility of resorting to arbitration in the administrative dispute field can sometimes apply to disputes that involve the exercise of the Administration’s powers of authority, the solution adopted in the TAD Law was different, because it said that mandatory arbitration was the only way in which the applicable disputes could be resolved; and no exception was made with regard to administrative acts that might come before an arbitration tribunal, because this mandatory system encompassed every act undertaken as part of the exercise of powers of authority, including those that entail the imposition of sanctions.
The Court accepted that, with the exception of the cases in which the Constitution exclusively reserves jurisdiction to the courts, it is permissible for the right of access to the latter to only be provided at the appeal level. In such cases one could say that there is a partially exclusive jurisdiction. However, in the present case there were special difficulties, because it concerned a mandatory form of arbitration, and the administrative authority involved in the arbitration process is a private entity that only intervenes in the performance of a task which possesses a public interest as a result of a transfer of the exercise of powers that belong to a public entity.
The Constitutional Court considered that it was unacceptable for the state to delegate powers of authority to a private entity, thereby effectively bringing about an organic privatisation of the Administration’s responsibility to perform a given public task, while simultaneously renouncing any jurisdictional control by state courts of the merit of the administrative decisions taken within the legal framework of that delegation of competences.
The Court noted that, notwithstanding the reformulation of the norms that had already been the object of prior review, the principle of necessity (as a material precondition for constitutional rights, freedoms and guarantees to be restricted) meant that it was still questionable whether pursuit of the objective of giving the country’s sport a faster, more specialised system of justice justified not only submitting disputes linked to the legal rules governing sport first and foremost to an arbitration tribunal, but also only making provision for appeals to state courts in exceptional cases.
Two Justices dissented from the Court’s decision. One accepted that the Constitution does to some extent prefer a justice that tends to be exercised by the state, namely when what is at stake is the judicial control of delegated powers of authority, but did not agree with the conclusion that the imposition of arbitration tribunals (i.e. making resorting to them mandatory) is only permissible if provision is made for the possibility of appealing against their decisions before state courts. The other dissenting Justice emphasised her view that although arbitration tribunals do not fit within the definition of courts as ‘entities that exercise sovereignty’ and are not state organs, they must be classified as ‘courts’ for other constitutional purposes, inasmuch as the Constitution defines them as such and says that they constitute an autonomous category of courts. As such, they themselves form part of the constitutional guarantee of access to the law and the courts.
Rulings nos. 52/92 (05-02-1992); 197/2009 (28-04-2009); and 230/2013 (prior review of the Decree of the Assembly of the Republic that created the Sports Arbitration Tribunal).