BASKETBALL ARBITRAL TRIBUNAL (BAT)
Mr. Klaus Reichert SC
in the arbitration proceedings between
Mr. Andrew Betts -Claimant 1 –
Bill A. Duffy International Inc.
507 N. Gertruda Ave, Redondo Beach, CA 90277, USA
represented by Mr. Billy J. Kuenzinger, Esq, BDA Sports, 700 Ygnacio Valley Rd Suite 330, Walnut Creek, CA 94598, USA
Aris B.S.A. 2003
Grigoriou Lambraki 2, 54638 Thessaloniki, Greece
1. The Parties
1.1 The Claimants
Mr. Andrew Betts (hereinafter referred to as “Claimant 1”) is a professional basketball player, who was retained by the Respondent, Aris B.S.A. 2003, for the 2009-2010 season.
Bill A. Duffy International Inc. (hereinafter referred to as “Claimant 2”) is a basketball agency which represented Claimant 1 leading to the latter’s retainer by the Respondent.
1.2 The Respondent
3. Aris B.S.A. 2003 (hereinafter referred to as “the Respondent”) is a professional basketball club in Thessaloniki, Greece.
2. The Arbitrator
4. On 21 February 2012, Prof. Richard H. McLaren, President of the Basketball Arbitral Tribunal (the “BAT”), appointed Mr. Klaus Reichert SC as arbitrator (hereinafter the “Arbitrator”) pursuant to Article 8.1 of the Rules of the Basketball Arbitral Tribunal (hereinafter the “BAT Rules”). None of the Parties has raised any objections to the appointment of the Arbitrator or to his declaration of independence.
3. Facts and Proceedings
3.1 Summary of the Background and the Dispute
5. On 6 May 2009, the Claimants and the Respondent entered into an agreement whereby the latter engaged Claimant 1 to play basketball for the 2009-2010 season (“the Agreement”). His salary was agreed at EUR 250,000.00 net, payable in ten equal monthly instalments from 30 September 2009. The Agreement (Article 2) also provides for a “Representative’s Fee” of EUR 25,000.00 payable to Claimant 2 by the Respondent.
6. Claimant 1 was paid EUR 155,000.00 by the Respondent on various dates from 1 October 2009 to 10 July 2010 (together with an amount of EUR 2,890.00 as an amount for pre-paid plane tickets) and nothing further. The fact that the Respondent has not made all the payments to Claimant 1 and has not made any payment to Claimant 2 is what has triggered the Claimants’ Request for Arbitration.
3.2 The Proceedings before the BAT
The Claimants filed a Request for Arbitration dated 16 January 2012 in accordance with the BAT Rules.
The non-reimbursable handling fee in the amount of EUR 3,000.00 was paid on 26 January 2012.
On 27 February 2012, the BAT informed the Parties that Mr. Klaus Reichert SC had been appointed as the Arbitrator in this matter. Further, the BAT fixed the advance on costs to be paid by the Parties as follows:
“Claimant 1 (Mr. Andrew Betts) EUR 3,000
Claimant 2 (Duffy International Inc) EUR 1,000
Respondent (Aris B.S.A. 2003) EUR 4,000”
The foregoing sums were paid as follows: 8 March 2012, EUR 4,000.00 (Claimants’ share) paid by Claimant 2; and 3 April 2012, EUR 4,000.00 (Respondent’s share) paid
by Claimant 2.
Despite being duly notified of the proceedings, the Respondent did not file an Answer and did not participate in this Arbitration.
On 4 April 2012, the Parties were invited to submit their statements of costs and were notified that the exchange of documentation was closed in accordance with Article 12.1 of the BAT Rules. No statements of costs were submitted by the Parties within the time allowed.
4. The Positions of the Parties
The Claimants’ position is quite simple. They entered into the Agreement with the Respondent but they were not paid in full, and not at all in the case of Claimant 2. They wish to have the whole of the agreed sums paid to them.
The Respondent has not participated in this Arbitration and therefore no position on its behalf is discernible.
5. The Jurisdiction of the BAT
As a preliminary matter, the Arbitrator wishes to emphasize that, since the Respondent did not participate in the arbitration, he will examine his jurisdiction ex officio, on the basis of the record as it stands1.
Pursuant to Article 2.1 of the BAT Rules, “[t]he seat of the BAT and of each arbitral proceeding before the Arbitrator shall be Geneva, Switzerland”. Hence, this BAT
ATF 120 II 155, 162.
arbitration is governed by Chapter 12 of the Swiss Act on Private International Law
The jurisdiction of the BAT presupposes the arbitrability of the dispute and the
existence of a valid arbitration agreement between the parties.
The Arbitrator finds that the dispute referred to him is of a financial nature and is thus
arbitrable within the meaning of Article 177(1) PILA2.
The jurisdiction of the BAT over the Claimants’ disputes results from the arbitration
clause contained under “10. IN EVENT OF DISPUTE” of the Agreement, which reads
as follows (in relevant part):
“Any dispute arising from or related to the present contract shall be resolved by arbitration, and shall be submitted to the FIBA Arbitral Tribunal (FAT) in Geneva, Switzerland and shall be resolved in accordance with the FAT Arbitration Rules by a single arbitrator appointed by the FAT President. The seat of the arbitration shall be Geneva, Switzerland. The arbitration shall be governed by Chapter 12 of the Swiss Act on Private International Law (PIL), irrespective of the parties’ domicile. The language of the arbitration shall be English. Awards of the FAT can be appealed to the Court of Arbitration for Sport (CAS), Lausanne, Switzerland. The parties expressly waive recourse to the Swiss Federal Tribunal against awards of the FAT and against decisions of the Court of Arbitration for Sport (CAS) upon appeal, as provided in Article 192 of the Swiss Act on Private International Law. The arbitrator and the CAS upon appeal shall decide the dispute ex aequo et bono.”
The Agreement is in written form and thus the arbitration clause fulfils the formal
requirements of Article 178(1) PILA.
With respect to substantive validity, the Arbitrator considers that there is no indication
in the file that could cast doubt on the validity of the arbitration clause under Swiss law
(referred to by Article 178(2) PILA).
Decision of the Federal Tribunal 4P.230/2000 of 7 February 2001 reported in ASA Bulletin 2001, p. 523.
The jurisdiction of BAT over the Claimants’ claims arises from the Agreement. The wording “[A]ny dispute arising from or related to the present Agreement …” clearly covers the present disputes.
For the above reasons, the Arbitrator has jurisdiction to adjudicate the Claimants’ claims.
6.1 Applicable Law – ex aequo et bono
23. With respect to the law governing the merits of the dispute, Article 187(1) PILA provides that the arbitral tribunal must decide the case according to the rules of law chosen by the parties or, in the absence of a choice, according to the rules of law with which the case has the closest connection. Article 187(2) PILA adds that the parties may authorize the Arbitrators to decide “en équité” instead of choosing the application of rules of law. Article 187(2) PILA is generally translated into English as follows:
“the parties may authorize the arbitral tribunal to decide ex aequo et bono”.
24. Under the heading “Applicable Law”, Article 15.1 of the BAT Rules reads as follows:
“Unless the parties have agreed otherwise the Arbitrator shall decide the dispute ex aequo et bono, applying general considerations of justice and fairness without reference to any particular national or international law.”
25. As stated above, the Agreement clearly stipulates that: “[T]he arbitrator and CAS upon appeal shall decide the dispute ex aequo et bono”.
26. The concept of “équité” (or ex aequo et bono) used in Article 187(2) PILA originates from Article 31(3) of the Concordat intercantonal sur l’arbitrage3 (Concordat)4, under which Swiss courts have held that arbitration “en équité” is fundamentally different from arbitration “en droit”:
“When deciding ex aequo et bono, the Arbitrators pursue a conception of justice which is not inspired by the rules of law which are in force and which might even be contrary to those rules.”5
This is confirmed by Article 15.1 of the BAT Rules in fine, according to which the Arbitrator applies “general considerations of justice and fairness without reference to any particular national or international law.”
In light of the foregoing considerations, the Arbitrator makes the findings below.
The doctrine of pacta sunt servanda (which is consistent with justice and equity – parties who make a bargain are expected to stick to that bargain) is the principle by which the Arbitrator will examine the positions of the parties.
It is plain to the Arbitrator that the Claimants entered into the Agreement with the Respondent in the full and legitimate expectation that the obligations owed to them by the Respondent would be duly performed. Claimant 1 was paid, in part, for his services, but not in the full amounts agreed. Claimant 2 was not paid at all.
The Arbitrator therefore considers, upon examination of the materials before him that the Claimants must succeed in their claims in the following manner:
3 That is the Swiss statute that governed international and domestic arbitration before the enactment of the PILA (governing international arbitration) and, most recently, the Swiss Code of Civil Procedure (governing domestic arbitration).
4 P.A. Karrer, Basler Kommentar, No. 289 ad Art. 187 PILA.
5 JdT 1981 III, p. 93 (free translation).
Claimant 1 -EUR 92,110.00, net, for unpaid salary – its non-payment by the Respondent entitles Claimant 1 to the relief he seeks in this regard; and
Claimant 2 -EUR 25,000.00, net, for agent fees – its non-payment by the Respondent entitles Claimant 2 to the relief it seeks in this regard.
Article 17 of the BAT Rules provides that the final amount of the costs of the arbitration shall be determined by the BAT President and that the award shall determine which party shall bear the arbitration costs and in what proportion; and, as a general rule, shall grant the prevailing party a contribution towards its reasonable legal fees and expenses incurred in connection with the proceedings.
On 2 May 2012 -considering that pursuant to Article 17.2 of the BAT Rules “the BAT President shall determine the final amount of the costs of the arbitration which shall include the administrative and other costs of BAT and the fees and costs of the BAT President and the Arbitrator”, and that “the fees of the Arbitrator shall be calculated on the basis of time spent at a rate to be determined by the BAT President from time to time”, taking into account all the circumstances of the case, including the time spent by the Arbitrator, the complexity of the case and the procedural questions raised -the BAT President determined the arbitration costs in the present matter to be EUR 3,800.
Considering that the Claimants prevailed in all of their claims, it is fair that the fees and costs of the arbitration be borne by the Respondent and that it be required to cover its own legal fees and expenses as well as those of the Claimants.
The Claimants have not sought any legal fees in their Request for Arbitration and the only relief which the Arbitrator will award in this regard is a figure reflecting the nonreimbursable handling fee of EUR 3,000.00, which is to be borne by the Respondent.
Given that the Claimants paid an advance on costs of EUR 8,000.00, as well as a nonreimbursable handling fee of EUR 3,000.00 (which will be taken into account when determining the Claimants’ legal expenses), the Arbitrator decides that in application of article 17.3 of the BAT Rules:
BAT shall reimburse EUR 4,200 to the Claimants, being the difference between the costs advanced by them and the arbitration costs fixed by the BAT President;
The Respondent shall pay EUR 3,800 to the Claimants, being the difference between the costs advanced by them and the amount they are going to receive in reimbursement from the BAT;
(iii) The Respondent shall pay to the Claimant EUR 3,000.00 (for the nonreimbursable handling fee) representing the amount of their legal expenses.
For the reasons set forth above, the Arbitrator decides as follows:
Aris B.S.A. 2003 shall pay Mr. Andrew Betts EUR 92,110.00, net, in respect of unpaid salary.
Aris B.S.A. 2003 shall pay Bill A. Duffy International Inc. EUR 25,000.00, net, in respect of unpaid agent’s fee.
Aris B.S.A. 2003 shall pay Mr. Andrew Betts and Bill A. Duffy International Inc. EUR 3,800.00 as reimbursement for their arbitration costs.
Aris B.S.A. 2003 shall pay Mr. Andrew Betts and Bill A. Duffy International Inc. EUR 3,000.00 as reimbursement for their legal expenses.
Any other or further requests for relief are dismissed.
Geneva, seat of the arbitration, 7 July 2012
Klaus Reichert SC (Arbitrator)