BAT awards may no longer be appealable except in very limited situations. But that wasn’t always the case. From its inception in 2006 until 2010, the BAT included in every award a section titled “Appeal,” under which the following paragraph was included:
Awards of the FAT can only be appealed to the Court of Arbitration for Sport (CAS), Lausanne, Switzerland and any such appeal must be lodged with CAS within 21 days from the communication of the award. The CAS shall decide the appeal ex aequo et bono and in accordance with the Code of Sports-related Arbitration, in particular the Special Provisions Applicable to the Appeal Arbitration Procedure.
http://www.fiba.com/downloads/v3_expe/bat/110401_BAT_Standard_Clause.PDF. Also, prior to 2010, the BAT standard arbitration clause contained similar language outlining the appeal process.
However, in 2010 FIBA and the BAT removed the appeal language from the awards and the standard arbitration clause in an effort to maximize leverage against breaching teams. Not unsurprisingly many teams were intentionally breaching contracts, not participating in the arbitration, and appealing the BAT awards to postpone as long as possible payment of the award. Removing the appeal language from the FIBA regulations and the BAT awards made an appeal of the BAT award much more difficult, although not impossible. It is still possible to appeal BAT awards in some limited circumstances.
Removing the appeal language eliminated the possibility of appealing to the Court of Arbitration for Sport (“CAS”). CAS rules grant the CAS jurisdiction to hear disputes only in limited circumstances:
R27 Application of the Rules
These Procedural Rules apply whenever the parties have agreed to refer a sports-related dispute to CAS. Such reference may arise out of an arbitration clause contained in a contract or regulations or by reason of a later arbitration agreement (ordinary arbitration proceedings) or may involve an appeal against a decision rendered by a federation, association or sports-related body where the statutes or regulations of such bodies, or a specific agreement provide for an appeal to CAS (appeal arbitration proceedings).
http://www.tas-cas.org/rules. Thus by removing the language in the FIBA awards and in the BAT standard arbitration clause, FIBA effectively removed BAT awards from the jurisdiction of the CAS.
Without the CAS for appeals, the only remaining option is an appeal in Switzerland as provided in the Swiss Public International Law Act of 1987 (“PILA”). An English translation of the PILA can be found here. Specifically, Chapter 12 covers International Arbitration. Article 167(1) states:
The provisions of this chapter shall apply to arbitrations if the seat of the arbitral tribunal is in Switzerland and if at least one of the parties at the time the arbitration agreement was concluded was neither domiciled nor habitually resident in Switzerland.
So, unless the arbitration occurs between a Swiss respondent and claimant, all other BAT awards should be appealable under this provision. But the real problem is the scope of the appeal. Article 190(2) states:
[An arbitration award] can be challenged only:
a. If a sole arbitrator was designated irregularly or the arbitral tribunal was constituted irregularly;
b. If the arbitral tribunal erroneously held that it had or did not have jurisdiction;
c. If the arbitral tribunal ruled on matters beyond the claims submitted to it or if it failed to rule on one of the claims;
d. If the equality of the parties or their right to be heard in an adversarial proceeding was not respected;
e. If the award is incompatible with Swiss public policy (ordre public).
BAT awards can only be challenged in the five limited ways enumerated above by Article 190(2). It appears that FIBA has effectively eliminated any meaningful opportunity for appeals to be taken of BAT awards. This of course sounds great considering that the BAT was created by FIBA to limit the number of teams breaching contracts. According to one source 40% of all contracts were breached prior to the creation of the BAT. http://preciseadvisory.com/2012/10/22/international-basketball-arbitration-dispute-resolution-structures-within-fiba-and-the-nba/. One may also see the extent of the problem by looking at the roughly 300 awards issued by the BAT since 2006, the vast majority of which were awarded against teams.
In a future article, we will explore the potential danger of a system such as this where the rule of law is ex aequo et bono and no meaningful appeal process exists.