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The Essendon 34: Can CAS’s decision be appealed?

Allistar Twigg new author
Roar Rookie
20th January, 2016
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The end of the Essendon saga looks to be nearing. (AAP Image/Julian Smith)
Allistar Twigg new author
Roar Rookie
20th January, 2016
163
7061 Reads

Does the finding of guilt of the 34 Essendon players by the Court of Arbitration for Sport (CAS) mean that they are forever drug cheats?

Commentators seem to see only two ways for the players to go from here: they can either appeal the CAS’s findings to the Swiss Federal Tribunal or sue the Essendon Football Club for breach of the club’s duty of care to them.

The commentators seem pessimistic about the likely outcome of the first option and the second option is fraught with difficulties, not the least of which is: even if the players are successful in obtaining judgments for their loss of earnings, reputation, etc, will Essendon be able to survive the financial onslaught? Either way, the players are unlikely to get back on the field anytime soon.

But there may be a third way: to apply to an Australian court to set aside the CAS’s decision.

The CAS process and decision are regarded as international arbitration and are subject to the International Arbitration Act 1974 (IAA). Under the IAA, the decision of an arbitrator such as CAS is final, save for a few narrow exceptions that allow the decision to be set aside. Those exceptions apply when the arbitration agreement is not valid under the law of Australia or the decision is in conflict with Australia’s public policy.

It is possible that the Essendon 34 could rely on those exceptions and make an application to set aside the decision of CAS.

The argument would be that the AFL’s arbitration agreement binding the players to the arbitration regime was either a misuse of the AFL’s market power or an unlawful restraint of trade on the players which makes the arbitration agreement unlawful under Australian law or which makes the decision of CAS against public policy.

First possible argument: Misuse of market power
The Competition and Consumer Act 2010 prohibits a corporation with substantial power in a market from taking advantage of that power to deter or prevent a person from engaging in competitive conduct.

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It could be argued that the AFL has misused its market power to force every one of its players into highly restrictive arbitration agreements which give the CAS the power that it has exercised in this particular case, preventing the Essendon players from playing professional football.

If this argument is successful, then the exceptions in the IAA could be used to set aside the decision of the CAS because the arbitration agreement is not valid under Australian law and/or the decision is against Australia’s public policy.

Second possible argument: Unlawful restraint of trade
In Australia, a contract that restricts a person from carrying on a trade or profession is invalid, unless the restraint is reasonable and not against the public interest. The arbitration agreement that binds the players can be said to constitute an unlawful restraint of trade because it gives the CAS the power to unreasonably prevent players from pursuing their livelihood under certain circumstances.

It is strongly arguable that, given the way the whole saga has played out, the finality of the CAS’s decision is neither in the players’ best interests nor in the public’s interest. It is also arguable that the AFL and WADA might have difficulty in showing that the bans on the players are ‘no more than is reasonably necessary’ to protect their legitimate commercial interests.

Again, if this argument is successful, then the exceptions in the IAA could be used to set aside the decision of CAS because the arbitration agreement is not valid under Australian law or the decision is against Australia’s public policy.

Overseas examples
There are two overseas examples supporting the suggestion that the recent decision by CAS might be appealed in an Australian court.

In 2009, Claudia Pechstein, a German police officer and speed skater, was found guilty of blood doping on the basis of changes in readings of samples taken over a period of time and noted in her Athlete Biological Passport; effectively, on circumstantial evidence (like the Essendon 34).

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The International Skating Union (ISU) banned her from all competitions for two years. She exhausted the appeals process at the CAS, who upheld the ban.

She subsequently appealed this decision to the Swiss Federal Tribunal (on the basis that the CAS is a Swiss legal body) and was rejected twice.

Her defence was that the abnormal blood values were caused by a disorder which she had inherited from her father, and she produced experts who testified to that effect.

For a number of reasons, including that her employment was put at risk by such findings, Pechstein sued the ISU in a German court, asking that the doping ban be overturned because of a breach of the applicable competition law and seeking compensation of €4.4 million in damages.

To the apparent dismay of the CAS, the Munich Higher Regional Court decided that her claim that her doping disqualification was unlawful could be tried within the German jurisdiction. It found that the ISU had a degree of market power, as against the athletes, and that requiring them to submit completely to the jurisdiction of the CAS without further recourse, whilst not necessarily coercion and therefore unenforceable per se, could amount to an abuse of that market power and be in breach of German competition law.

This decision appears to be fortified by an earlier decision of a German Court of Appeal (in SV Wilhelmshaven), where another CAS decision had been questioned for breaching relevant competition law and was not automatically thrown out by the German court. This was a case relating to an EU treaty regarding the free movement of workers within the European Union.

If German courts are prepared to accord its athletes justice, why not Australian courts?

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This article was co-authored by Allistar Twigg and Katerina Pshenichner, and originally published to shglawyers.com.au.

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