In this article, Lavanya Verma discusses laws regulating sports league in India.

League and court battles

The ownership of the badminton league is already being fought in court while in the Indian Super League (ISL), the football league faced a major controversy when the ISL regulatory commission banned popular club FC Goa for ‘indiscipline’ and imposed a hefty fine of US$ 1.6 million on the club owners. The club had boycotted the final prize distribution ceremony last year after some players had made allegations against the match officials.

The FC Goa management had made adverse comments in the media disputing the result of league’s final last year. The team co-owner Dattaraj Salgaocar claimed that two penalties given against his team in the last five minutes changed everything. “It was a terrible referring, one-sided and it was already decided to give away the match to Chennai team,” he alleged.

Amidst all this, India remains at a low 162nd spot in FIFA rankings. So much so that a nation with huge population pool to nurture talent is often beaten by much smaller nations like Nepal and war-struck Afghanistan.

Interestingly, European and German clubs are far more popular in India than the Indian clubs. This is mainly due to live telecast of the FA Cup, the Bundesliga and other international fixtures. It has produced thousands of armchair football fans. But the sport has vanished from the masses. Most of the schools in India do not even have a playing field. And wherever there are fields they are dotted with cricket players. Hardly anyone plays football. The standard, therefore, remains low.

During the league seasons, there is always a fight between clubs or franchises of the league and the national coaches. While the franchises want players for League fixtures, coaches demand that they be in a coaching camp for national duty. The fight goes on with the standard of the game static.

Competition law and sports

While cricket is the king of sports in India, other team sports like football and hockey and recently even Formula 1 races are gaining popularity and viewership with large corporates evincing interest in sponsorship and willing to invest in building brands and some even acquiring popular overseas clubs that attract a young audience. IPL is now in its fifth season and its continued success has clearly demonstrated the commercial viability of franchisee, endorsement and broadcasting rights for club and league sports. The moot question therefore is whether league and club events can be held outside the National Sports Federation (NSF) and if yes, the real benefits of such events including increasing the popularity of such sports.

Sports events worldwide are organized in a pyramid structure, where a particular sport is governed and regulated by a single International Federation (IF) with various NSFs affiliated to it. The IF governs the regulatory aspect i.e. laying down the rules of the sport, eligibility criteria and playing conditions. The IF also makes the annual calendar for that sport and conducts the world championship and other international level events. A corollary at the national level would be that the NSF would follow the regulations of the IF as a condition of its membership and have exclusive powers to make the annual calendar, develop grass-root level of sport and conduct tournaments and training camps in the country.

The importance of the pyramid structure and the risk

to the sports due to multiple sport federations have been recognized by IOC and have been addressed in the European Commission’s Helsinki Report and the White Paper on sport. Integrity, uniformity and strict control over regulations ensure that non-discriminatory uniform rules are applied to the sport worldwide and encourage growth of the sports across the globe. It includes sporting sanctions like disciplinary action, suspensions, fines and bans for behavior contrary to the spirit of sports which lie at the core of the sporting movement and can be applied only within the sporting structure.

The directions of the Delhi High Court directing the Competition Commission of India (CCI) to undertake enquiry against the All India Chess Federation for preventing its players from taking part in a tournament outside its aegis, BCCI’s sanctions on the Indian Cricket League and the conduct of the World Series Hockey by the Indian Hockey Federation allegedly fall within the ambit of the IF/NSF trying to curb the advent of breakaway leagues through their rules.

The IF/NSFs’ rules restricting rival tournaments and release of players for these tournaments (e.g. India) have come under the scanner of competition/anti-trust laws like abuse of dominant position and anticompetitive agreements leading to unreasonable restraint on trade. The sports industry is unique because the pyramid structure which ensures monopoly is essential in maintaining the integrity of sport and unlike other industries, the industry thrives on competition rather than from the lack of it. This reasoning gives birth to the exception of ‘Specificity of Sport’ i.e. certain sporting activities are excluded from the purview of the competition laws. The European courts while creating this exception have divided the IF/NSF activities into two parts. The first being pure sporting functions whereas the second being activities having a substantial economic impact.

Pure sporting activities like laying down the rules of the sport, defining the size and weight of the ball and dimensions of the playing field are excluded from the ambit of competition laws. But activities of the IF/NSF having substantial economic impact are within the purview of the competition law.

The regulatory power of the IF/NSF if used to gain commercial and financial advantage would fall within this ambit provided the following conditions are satisfied:

• That the agreements are not anti-competitive i.e. they do not attempt/cause appreciable adverse effect on competition; and/or
• That they are not abusing their dominant position and are not imposing unfair or discriminatory conditions.

The European courts have held that these conditions in the sporting sector are satisfied when a particular rule though restricting competition has a larger public objective and this objective can be achieved only by applying certain restrictive rules that are essential for the integrity, continuity, organization and conduct of the sport at national and international levels, and the rule is applied uniformly and transparently.

The Competition Commission of India is faced with a similar task today to recognize the specificity of sport and carve out exceptions in the Indian scenario. The decision of the CCI will have a huge impact on the Indian sports industry as many a corporate await a chance to start their own breakaway leagues and commercially gain from the revenues generated from these leagues.

Sports and Competition Law

Two teams playing against each other are like two corporate firms producing a single product. The product is the game, weighted by the revenues derived from its play. In one sense, the teams compete; in another, they combine in a single firm in which the success of each branch requires efficiency. Unequally distributed playing talent can produce “competitive imbalance”. Remuneration of the team members largely depends on the level of competition between the teams in the particular sports. sport is generally organized in a kind of a ‘pyramid’ structure, with a single governing body controlling most regulatory and commercial aspects of each sport, the governing body appears to be de facto ‘dominant’ and therefore claims relating to the abuse of monopoly.

Sports governing bodies such as BCCI, often attempt to preserve for themselves the sole ability to regulate the sport and to organize events. In order to prevent the development of rival organizations, they have sought to tie players in by prohibiting them from competing in other events, on pain of exclusion from ‘official’ events, and such rules have been the subject of challenge under competition law.

When the Zee launched Indian Cricket League, the BCCI sacked Kapil Dev as chairman of the National Cricket Academy for aligning with ICL and barred all the 44 defecting players from playing for India or at the domestic level. It made clear that any cricketer who aligns with ICL will be banned for life from playing for India. Such practice on part of the BCCI may attract liability under the provisions of the Competition Act, 2002. As per Section 4(2)(c) of the Act if any enterprise “indulges in practice or practices resulting in denial of market access in any manner”, then it shall be liable for abuse of dominant position. Thus, such practice of banning players from domestic tournaments on account of joining the rival leagues may prove expensive for the BCCI, which may face a challenge on grounds of abuse of dominant position.

The denial of stadiums by the BCCI can attract liability for abuse of dominant position under s.4(2)(c) of the Competition Act, 2002 as by denying the use of essential facility under its control it raises the barriers to entry in the market for its competitors, resulting effectively in denial of market access. Operating from just one stadium in Panchkula (in Haryana near Chandigarh), the ICL clearly missed out on one of the integral aspects of leagues sports i.e. a fan base, since it is unable to capture home crowds for matches on account of non-access to the stadiums in the club’s cities.

Sports Law and Arbitration

Arbitration, a form of alternative dispute resolution (ADR), is a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the “arbitrators”, “arbiters” or “arbitral tribunal”), by whose decision (the “award”) they agree to be bound. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides. Other forms of ADR include mediation (a form of settlement negotiation facilitated by a neutral third party) and non-binding resolution by experts. Arbitration in India is governed by the Arbitration and Conciliation Act 1996 (“Indian Arbitration Act”), which is based on the UNCITRAL Model Law. The Indian Arbitration Act is broadly divided into two parts. Part I applies to arbitrations held in India, whether domestic or international, and Part II applies to arbitrations held outside India. Part II, incorporates the rules related to international arbitrations governed by the New York or Geneva Conventions. In sports, the disputes are first referred to the federations that govern a particular sport and subsequently the international authorities that govern the sport. e.g. in hockey disputes are referred to the Indian Hockey Federation and after that the International Hockey Federation.

At a time when sports are becoming more professional and the stakes are becoming higher than ever, dispute resolution takes on an increasingly important role. In many respects arbitration offers the most suitable solutions with regards to the rapidity, diversity, incontestability and professionalism of the decisions rendered. With regular increase in the number of sports-related disputes in the country, India requires an independent authority that specializes in sports-related problems and that is authorised to pronounce binding decisions. The disputes when referred to courts take a long time to come up with the final decision since the Indian courts are already piled up with a number of pending cases. There is a need to have an authority for sports that offers flexible, quick and inexpensive method of resolution of disputes. With the inauguration of India’s first arbitration centre in Delhi in 2009, India is recognizing the necessity of arbitration for quicker disposal of cases. The increasing use of arbitration in sport over the last decade has challenged the legal framework in which arbitration disputes are addressed in many jurisdictions.

Court of Arbitration for Sport

Arbitration exists in international sport through the Court of Arbitration for Sport. All international disputes relating to sports are referred to it. The most prominent sports dispute resolution forum is the Court of Arbitration for Sport (CAS) which has its headquarters in Lausanne, Switzerland. The CAS was created by the International Olympic Committee (IOC) in 1983. It also has two permanent outposts in Sydney, Australia and New York, USA. It has a minimum of 150 arbitrators from 37 countries, who are specialists in arbitrations and sports law. They are appointed by the International Council of Arbitration for Sports (ICAS) for a four year renewable term and need to sign a ‘letter of independence’. The CAS also has a permanent President who is also the President of ICAS.

The body was originally conceived by International Olympic Committee (IOC) President Juan Antonio Samaranch to deal with disputes arising during the Olympics. It was established as part of the IOC in 1984. However in a case decided by the CAS, an appealed was made to the Federal Supreme Court of Switzerland, challenging CAS impartiality. The Swiss court ruled that the CAS was a true court of arbitration, but drew attention to the numerous links which existed between the CAS and the IOC. The biggest change resulting from this reform was the creation of an “International Council of Arbitration for Sport” (ICAS) to look after the running and financing of the CAS, thereby taking the place of the IOC. CAS is placed under the administrative and financial authority of the International Council of Arbitration for Sport (ICAS).

Almost all international sports federations or associations which are part of the Olympic Games require sports disputes arising between themselves and sportspersons to be decided by the CAS. Sporting federations whose sports are not part of the Olympics such as Formula I where the FIA which is the governing body of motor sports has its own dispute settlement tribunal. Even some sports which are included in the Olympics have their tribunals like football where its governing body FIFA has its own tribunal. For example, in 1993, a claim of bringing Formula I into disrepute was brought against former FI champion Alain Prost and the Williams Renault Team. The matter was however, satisfactorily resolved by the FIA resulting in Prost escaping a possible ban from competing in the remaining FI races of that particular season.

A dispute may be submitted to the CAS only if there is an arbitration agreement between the parties which specifies recourse to the CAS. The language for the CAS is either French or English. In principle, two types of dispute may be submitted to the CAS:

1. those of a commercial nature, and
2. those of a disciplinary nature.

Commercial

The first category essentially involves disputes relating to the execution of contracts, such as those relating to sponsorship, the sale of television rights, the staging of sports events, player transfers and relations between players or coaches and clubs and/or agents (employment contracts and agency contracts). Disputes relating to civil liability issues also come under this category (e.g. an accident to an athlete during a sports competition). These so-called commercial disputes are handled by the CAS acting as a court of sole instance.

Disciplinary

Disciplinary cases represent the second group of disputes submitted to the CAS, of which a large number are doping-related. In addition to doping cases, the CAS is called upon to rule on various disciplinary cases (violence on the field of play, abuse of a referee). Such disciplinary cases are generally dealt with in the first instance by the competent sports authorities, and subsequently become the subject of an appeal to the CAS, which then acts as a court of last instance.

The CAS is governed by its own Statutes and Rules of Procedure namely the Statutes of the Bodies Working for the Settlement of Sports Related Disputes, Code of Sports Related Arbitration and Mediation Rules. According to Articles S12, S20, R27 and R47 of the Code, the Appeals Arbitration Procedure is open for the appeal against every decision rendered by a federation or club and not limited to disciplinary matters, especially doping cases. In addition, Article R57 empowers the CAS Panels not only to annul a certain decision, but also to replace a decision by a decision by a decision of the arbitrators, or to refer the case back to the issuing body. Moreover, Article R58 authorises the Panel to apply the ‘rule of law’ it deems most appropriate for the case. Thus the Panels may deviate from the laws of the country in which the federation is domiciled and reach a decision on the basis of laws of another country or other rules of law, such as general principles of law.

The CAS acquires its jurisdiction in a particular case only through the mutual consent of the parties involved. Currently, all Olympic International Federations and many National Olympic Committees have recognised the jurisdiction of the CAS and included in their statutes an arbitration clause referring disputes to it. The CAS hears approximately 200 cases per year. While it was the international response to the rise in the use of performance-enhancing drugs and the resulting doping cases that fueled the creation of the CAS, the Court is called upon to assist in a wide range of sport conflicts, including sponsorship disputes, the eligibility of a particular athlete in accordance with a sport’s constitution, as well as the resolution of disagreements concerning competition results. The determination of issues arising in doping cases remains a significant portion of the CAS caseload.

CAS and Mediation

In addition to arbitration CAS also offers mediation services to any requesting parties of a sports dispute. Unlike arbitration, the mediation process is not binding—the mediator will provide recommendations, with solutions suggested, but these are not imposed as a result as in the case of arbitration. Mediations are designed to permit the adverse parties an opportunity to air their grievances in an atmosphere aimed at conciliation of the dispute.

Advantages for referring cases to CAS

• Expertise in sports-related disciplines (there are more than 300 arbitrators from 87 countries qualified to hear CAS disputes) whereas a typical civil judge will not likely possess such sports-specific knowledge.
• Its arbitrators are all high level jurists and it is generally held in high regard in the international sports community.
• Procedure is flexible and informal.
• Expeditious proceeding as cases are heard and determined within a few months from the date of reference. During the Olympics, awards are required to be made within 24 hours.
• Lower legal cost to the participants
• Also provides mediation services
• CAS is a private procedure and therefore is conducted without the public or media interference. The arbitrators and CAS staff are obligated not to disclose any information connected with the dispute.

Important CAS rulings

• In 2003, Canadian cross country skier Becky Scott successfully appealed to the CAS with respect to her claim that she be awarded the 2002 Olympic gold medal in the 5-km pursuit event. Russian skiers Olga Danilova and Larissa Lazutina finished first and second respectively in the competition, with Scott in third place, and each athlete passed their post-event doping test. Danilova and Lazutina each failed a subsequent doping test administered in relation to another Olympic cross-country event, when the presence of a prohibited blood doping agent, darbepoetin, was detected in each skier’s sample. Scott appealed her 5-km race result on the basis that both Russian skiers were engaged in ongoing doping practices. The Scott ruling was the first time in Olympic history that a gold medal had been awarded to an athlete as a result of a CAS ruling.
• In 2005, the CAS arbitration panel ruled that American sprinter Tim Montgomery be banned from international competition for two years as a result of doping, in spite of the fact that Montgomery had never failed a doping test. The CAS ruled that it could find a doping violation on the basis of the third party evidence called against Montgomery, most of which connected Montgomery to the Bay Area Laboratory Cooperative (BALCO) athlete steroid scandal that had arisen in the United States in 2003.
• In February 2010 Five-time Olympic speedskating champion Claudia Pechstein lost her appeal against a two-year ban for blood doping. CAS dismissed the German’s appeal against a ban imposed by the International Skating Union.

Setting aside proceedings against CAS arbitral awards may only be filed with the Swiss Supreme Court due to the seat of CAS tribunals being in Lausanne.

Everything you need to know about sports legislations in India

Per se, there are no central or state legislation to regulate sports in India; the Ministry, which was set up by the government was responsible for achieving excellence in different sports events which were conducted in India and also to build a good infrastructure for sports. By and large, the administration of sports activities is in the hands of autonomous bodies, such as Sports Authority of India (SAI), Indian Olympic Association (IOA), Hockey India (HI) and Board of Control for Cricket in India (BCCI).

These governing bodies are recipients of government’s aid and are also registered under the Societies Registration’s Act of 1860.[3]

The following govern the whole of the Sports Law

National Sports Policy, 1984/2001

The main objective behind enacting this was to raise the standard of sports for the reason that it was degrading due to corruption, betting, etc. It was later realized that the Bill of the year 1984 was incomplete, and its implementation was not complete, and in a bid to revise the bill the same was reformulated in the year 2001.

The guidelines are three-fold:

• Firstly, to earmark the areas of responsibilities which different agencies have to undertake to develop and promote sports.
• To lay down the procedure to be followed by the autonomous bodies and federations to make the assistance and aid by the government available.
• And also identifying the sports federation that is eligible for coverage under these set guidelines.

It was only after this policy that the lawmakers realized the importance of sports and therefore ‘Sports’ was included in the Constitution in the State list of the Seventh Schedule (Entry 33). The central government by the provisions of this policy aims to achieve excellence in sports on the national and global plane and collaborates with the state government and other agencies to achieve it.

Sports Law and Welfare Association of India

It is a non-profit national organization that aims to understand, and work for the advancement of ethical sports law in India for promoting sports. The primary task of the organization is to provide consultancy services on different matters like Indian sports policy, sports injuries, health and safety in sports, IP issues in sports, etc. It also provides a forum for legal practitioners who represent different people, to set up rules for ethics for sports persons.

Sports Authority of India

The Sports Authority of India (SAI) is an apex National Sports body set up in the year 1984 by the Ministry of Youth Affairs and Sports for broad-basing and bringing excellence in sports across India as a whole. It is located across 9 regions at Bangalore, Gandhinagar, Chandigarh, Kolkata, Imphal, Guwahati, Bhopal, Lucknow and Sonepat; and two Academic institutions like Netaji Subhash National Institute of Sports (NSNIS), Patiala and Laxmibai National College of Physical Education. It also accounts for academic programs like coaching and physical education awareness programs.[4]

The Sports Broadcasting Signals (Mandatory Sharing with Prasar Bharati) Act

This Act was passed in the year 2007; its main objective was to provide access to listeners and viewers so as to encourage a larger audience. It shall cover the sporting events which are of national importance through mandatory sharing of sports broadcasting signals with Prasar Bharati and for matters related to it. The Act provides that no content right owner or holder or television or radio broadcasting service provider can carry out a live TV broadcast of important national sporting events. For doing this, it has to share its live broadcasting signal simultaneously (except advertisements) with the Prasar Bharati.

Role of different stakeholders

Ministry of Youth Affairs and Sports

• To lay down the conditions for eligibility of National Sports Federation to get recognition
• The conditions that have to be fulfilled by NSFs and other agencies if they wish to acquire government aid and support.
• To provide assistance to the NSFs if they carry out long-term development program.

National Sports Federation

The responsibility for the complete management, direction, supervision and regulation of the discipline and promotion, development and sponsorship of the discipline is on National Sports Federation. They are expected to discharge these responsibilities in consonance with the principles laid down in the Olympic Charter or the Charter of the Indian Olympic Association in compliance with Government guidelines applicable to NSFs.

SAI

For providing the necessary support to NSF for the identification, training, and coaching of sportspersons, also to improvise infrastructure, equipment, and such other facilities, the SAI plays a significant role. Further SAI will also be responsible for releasing funds to NSFs against proposals approved by the Government.  The release of funds to IOA shall, however, continue to be made by the concerned Ministry.[5]

National Anti-Doping Agency

The centre has set up a National Anti-Doping Agency (NADA) as an autonomous body. It consists of persons from government and non-government agencies, scientists as experts and also members from IOA. In the recent past, the controversy surrounding the intake of dope by sports persons is prevalent and in this light, NADA was set up. It shall carry out ‘in competition’ and ‘out of the competition’ testing on the sportsman. NADA helps in the regulation of sports activities so that it can be corruption-free and non-controversial.

Sports law of United States of America

The U.S.A. has a very systematic law for sports. They have not provided with single legislation, but have divided it into 3 categories-:

Amateur sports

It includes athletic activities from high school athletics to organize intercollegiate or international competitions which are often organized and managed by groups that make rules for eligibility and competition, and courts do not interfere with the actions of these groups as long as they abide by the rules. The Amateur Sports Act of 1978 created the Athletic Congress, a national body for governance of amateur athletes, which administers a fund that allows amateur athletes an option to get funds and sponsorship payments and also not lose their amateur status.

Professional sports

In the case of some professional sports activity, most sports leagues do have a standard player’s contract, and that shall be the guiding force behind a contract between players and owners.

International sports

The two main international sports events include the Olympics, sponsored by the International Olympic Committee, and the World Cup, which is sponsored by FIFA. The United States has done the charting of the United States Olympic Committee (USOC) in the year 1950.

Some jurisdictions have passed separate legislation relating to sports. For example, in India sports information is in the Concurrent list of the Seventh Schedule (entry 33) of the Constitution on which both the union and state legislatures are proficient to put together laws. There are 3 States; Rajasthan, Himachal Pradesh and Uttar Pradesh, which have enacted laws on regulating sports activity including registration, regulation and recognition of Sports Associations (Uttar Pradesh has since repealed the Act).

It is one of the main revenue generating industries of the world and with the propagation of the Internet and other forms of media, the sports industry is growing at a faster tempo. An industry of billions of dollars with an all-encompassing worldwide presence is bound to raise its own disputes. This has resulted in the growth and development of sports law as a separate regulation in its own right.