Bulgarian Sport Shooting Federation (BSSF) v. Bulgarian Shooting Union (BSU), International Shooting Sport Federation (ISSF)

V. JURISDICTION

55. Article R47 of the Code reads as follows: “An appeal against the decision of a Federation Association or sports-related body may be filed with CAS if the statutes or regulations of the said body so provide or if the parties have concluded a specific arbitration agreement and if the appellant has exhausted the legal remedies available to him prior to the Appeal, in accordance with the statutes or regulations of that body”.

56. The jurisdiction of CAS derives from article 1.3.16.1 of the ISSF Constitution which reads as follows: “Any dispute arising from the present statutes and regulations of the ISSF which cannot be settled amicably, must be settled finally by a tribunal composed in accordance with the statute and regulation of the Court of Arbitration for Sports to the exclusion of any recourse to ordinary courts. The parties undertake to comply with the Statute and Regulations and to accept in good faith the award rendered and in no way hinder his execution”.

57. The decisions pursuant to article R47 of the Code in the case at hand are the ones taken by the General Assembly of the ISSF on 2 December 2014 to expel the BSSF as its member and to admit the BSU as its new member. As the CAS concluded in its Preliminary Award, the decisions on the subject rendered by the Administrative Council of the ISSF as first instance did not constitute final decisions because they could have been appealed to the General Assembly of

58. The Panel has noticed that the Appellant appealed against its expulsion from the Bulgarian Olympic Committee before a state court in Bulgaria. Those pending court proceedings have no effect on the jurisdiction of the CAS as the latter is authorised to decide on its own jurisdiction concerning the dispute at stake between the Parties (art. 186(1) of the Swiss Private International Law Statute). The Bulgarian Olympic Committee is not a Party to the case at hand.

59. It follows that the CAS has jurisdiction to decide on the present Appeal against the decisions of the General Assembly of the ISSF dated 2 December 2014 (hereinafter the “appealed decisions”).

VI. ADMISSIBILITY

60. The Statement of Appeal was filed on 19 December 2014, i.e. within 21 days from the notification of the decisions of the General Assembly of the ISSF held on 2 December 2014 pursuant to article R49 of the Code. The Appellant submitted that he had attended the General Assembly of the ISSF on 2 December 2014, but never received the decision taken regarding its expulsion.

61. No further recourse against the appealed decisions taken by the General Assembly of the ISSF on 2 December 2014 are possible within the structure of the ISSF.

62. The present appeal is therefore admissible.

VII. APPLICABLE LAW

63. Article R58 of the Code provides the following: “The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in the absence of such choice, according to the law of the country in which the federation, association or sports.related body which has issued the challenged decision is domiciled or according to the rules of law the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

64. Consequently, the Panel shall decide the present dispute according to the rules and regulations of the ISSF, and, subsidiarily pursuant to the laws of Germany.

65. The Appellant submits that “with respect of the Appellant’s legal status and effect to it by the decision of the BOC and with respect of the legality of BOC’s decision and consequences thereof Bulgarian substantive and procedural law is applicable”. The Panel shall deal with this issue in the context of the discussion on the merits.

VIII. MERITS — A. The main issues

66. The main issues to be resolved by the Panel are: a) Construction and interpretation of the ISSF Constitution relating to admission and expulsion. b) Has the right to be heard been violated at the level of the Federation? c) Has the Appellant validly been expelled from membership with the ISSF? d) Has the Second Respondent become a member of the ISSF?

a) Construction and interpretation of the ISSF Constitution relating to admission and expulsion

aa) The Rules

67. The relevant provisions of the ISSF Constitution read as follows: “1 PURPOSE 1.1 Promotes and guides the development of the shooting sports, without discrimination on political, racial or religious grounds and strengthens bonds of friendship between shooting associations of all nations. […] 1.1.3.3 Co-operates with the organizing committee of the Olympic Games in carrying out the organization of the shooting events and, as delegated by the IOC, supervises and controls all technical arrangements. 1.1.3.4 Organizes World Championships. 1.3 MEMBERSHIP 1.3.1 The Federation must be composed of those National Shooting Organizations, which are duly recognized by the Federation as the sole controlling body of shooting sports, and further recognized by and affiliated with their National Olympic Committee. 1.3.2 The National Olympic Committee of the country must be a full member of the International Olympic Committee. 1.3.3 Membership is open to one (1) Federation from each country. Countries with two (2) member federations recognised prior to 1989 may retain dual membership, but no new applications for membership may be accepted from more than one (1) federation per country. […] 1.3.5 Membership is decided by majority vote of the Administrative Council and new members are reported to the General Assembly. […] 1.3.15 Suspension and Expulsion 1.3.15.1 A member may be suspended if, in the opinion of the Administrative Council, the ISSF is better able to achieve any of its purposes by the suspension of a member; 1.3.15.2 A member may be expelled from the Federation for an action contrary to the Constitution or the General Regulations. […] 1.6 THE GENERAL ASSEMBLY […] 1.6.7 Functions of the General Assembly: […]

1.6.7.5 Decisions on appeals regarding membership status […]”.

68. The Appellant submitted that article 1.3.1 of the ISSF Constitution “refers to the preconditions for admitting a member”, but cannot be the basis to expel a member. The sole basis to expel a member is provided for in article 1.3.15.2 and requires that “an action contrary to the Constitution or General Regulations” has been committed.

69. The First Respondent submitted that the Appellant had been expelled pursuant to articles 1.3.1 and 1.3.15.2 of the ISSF Constitution, because the Appellant had lost its sports licence and its affiliation with the Bulgarian National Olympic Committee. Contrary to the view taken by the Appellant there is no “action” necessary to expel a member.

70. The Second Respondent submitted that the ISSF had the full right to exclude the Appellant “because the latter does not longer meet the criterion set in article 1.3.1 of the ISSF Constitution, namely it is not the National Shooting Organization, recognized by and affiliated with the National Olympic Committee and further it is not the sole controlling body of Shooting Sports in Bulgaria”.

ab) Expulsion Clause (Art. 1.3.15.2 of the ISSF Constitution) is not applicable

71. In view of the issue concerning the interpretation of article 1.3.15.2 of the ISSF Constitution, the Panel needs to refer to German law and to the CAS jurisprudence.

72. According to German law, the wording should primarily govern the construction of statutes (Munic Commentary to the BGB, 6th ed. 2012, at para 25 N 23), not the rules of the (German) Bürgerliches Gesetzbuch regarding contracts. According to CAS jurisprudence, “the interpretation of the statutes and rules of a sport association has to be rather objective and always to start with the wording of the rule, which falls to be interpreted. The adjudicating body — in this instance the Panel — will have to consider the meaning of the rule, looking at the language used, and the appropriate grammar and syntax. In its search, the adjudicating body will have further to identify the intentions (objectively construed) of the association which drafted the rule, and such body may also take account of any relevant historical background which illuminates its derivation, as well as the entirely regulatory context in which the particular rule is located” (CAS 2010/A/2071 at para 20).

73. Article 1.3.15.2 of the ISSF Constitution provides for the expulsion of a member “for an action contrary to the Constitution or the General Regulations”. Clearly, this wording of the expulsion clause does not cover the withdrawal of the sports licence by the Bulgarian authorities nor its loss of membership with the Bulgarian Olympic Committee. The Appellant is right in submitting that the absence of the conditions for membership according to article 1.3.1 of the ISSF Constitution cannot be considered “an action contrary to the Constitution or the Regulations”. Therefore, the Panel takes the view that the wording of article 1.3.15.2 of the ISSF Constitution did not allow the General Assembly of the ISSF to expel the Appellant on the grounds that it had lost its membership with the Bulgarian Olympic Committee.

74. In a next step, the Panel will examine whether the expulsion from membership could be based on other criteria explicitly or implicitly contained in the ISSF Constitution other than the wording of article 1.3.5.12 of the ISSF Constitution.

ac) Expulsion for valid reasons

75. There is no explicit provision in the ISSF Constitution providing for the expulsion of a member which has lost its recognition by and its affiliation with the National Olympic Committee. However, the Panel will examine whether, pursuant to article 1.3.1 of the ISSF Constitution and German law, the loss of membership with the National Olympic Committee may be considered a valid reason to expel a national shooting and rifle organization such as the Appellant from membership with the ISSF.

76. Like in every sports association, the core provision of the ISSF Statutes relates to the composition of members. Who can be a member? This question is answered by article 1.3.1 of the ISSF Constitution which opens membership to national shooting organizations recognized by the ISSF as the sole controlling body of shooting and further recognized by and affiliated with the National Olympic Committee.

77. It is very important to note that the rule governing the composition of membership pursuant to article 1.3.1 of the ISSF Constitution is in line with the rules and regulations of the Olympic Movement. Rule 25 of the Olympic Charter is headed “recognition of international federations” and provides the following:

• “In order to develop and promote the Olympic Movement, the IOC may recognize as IFs international non-governmental organizations administering one or several sports at world level and encompassing organizations administering such sports at national level.

• The statutes, practice and activities of the IFs within the Olympic Movement must be in conformity with the Olympic Charter, including the adoption and implementation of the World Anti-Doping Code. Subject to the foregoing each IF maintains its independence and autonomy in the administration of its sport”.

78. In its preamble, the ISSF Constitution, in conformity with Rule 25 of the Olympic Charter, provides the following: “[…] The International Shooting Sport Federation is formally recognized by the International Olympic Committee as the sole controlling body of International Amateur Shooting Sports at international and worldwide levels of competition”.

79. As a matter of fact, the preamble of the ISSF Constitution follows the Olympic Charter by explicitly referring to the ISSF’s recognition by the International Olympic Committee as “the sole controlling body at international and worldwide levels of competition”.

80. It is fair to state that article 1.3.1 of the ISSF Constitution on the composition of membership is part of the system of worldwide sport in so far as the sport of shooting is governed by the Olympic Movement. The Panel takes the view that it is in the interest of the sport of shooting and the athletes practicing this sport that the national federations are “recognized and affiliated with their National Olympic Committees”, as article 1.3.1 of the ISSF Constitution explicitly states.

81. Following a systematic approach in constructing and interpreting article 1.3.1 of the ISSF Constitution on membership and article 1 of the ISSF Constitution on the purpose of the ISSF, the Panel concludes that the recognition of the national shooting and rifle organization by and its affiliation to the National Olympic Committee and to the Olympic Movement is a sine qua non-condition for membership with the ISSF.

82. Clearly, a national shooting and rifle organization which does not meet the requirement of membership pursuant to article 1.3.1 of the ISSF Constitution anymore does not automatically loose its membership status with the ISSF. However, it must be examined whether it may be expulsed for valid reasons and, if so, whether the loss of membership status with a national Olympic committee, in the present case the Bulgarian Olympic Committee, may be a valid reason for expulsion. This analysis requires to rely on German law, which is applicable subsidiarily to the Rules and Regulations of the ISSF.

ad) German law

83. Article 9(1) of the German Constitution (“Grundgesetz”) guarantees the freedom of association and reads as follows: “All Germans have the right to form corporations and other associations”.

84. Under German law, the meeting of the members is the highest organ of an association.

85. According to German law, a member of an association can be expelled for valid reasons, even if the statutes of the association do not provide so, subject to judicial review (BGH [Federal Supreme Court], Urteil vom 7-10-1991-II ZR 51/91; NJW-RR 1992 507). The reason for expulsion must be specified, and fault by the expelled member is not required.

86. A valid reason for expulsion must not be easily accepted and requires that the interest of the ISSF to strictly apply the core provision on membership outweighs the individual interest of a national shooting and rifle organisation to keep its membership with the ISSF. This is obviously the case where the national shooting and rifle organization does not meet the membership requirement of article 1.3.1 of the ISSF Constitution anymore. Under such circumstances, it would be unreasonable for the ISSF to maintain the status of membership of a national organization.

ae) Conclusion

87. The Panel reaches the conclusion that, according to the ISSF Constitution and German law, a national shooting and rifle organization which has lost its recognition by and its affiliation with the National Olympic Committee may be expelled for valid reasons, provided that the proceedings leading to the expulsion meet the requirements of due process.

b) Has the right to be heard been violated by the ISSF?

88. The Appellant submitted that its right to be heard has been violated by the Administrative Council and the General Assembly of the ISSF. It monitored that the document submitted to the delegates of the General Assembly did not include “the whole statement of Appeal before the ISSF General Assembly which included 15 exhibits attached”. The summary presented to the delegates “did not contain all legal and factual reasoning of the Appellant”.

89. The Appellant submitted that the voting at the General Assembly was politically manipulated. Instead of submitting the Appellant’s appeal to the General Assembly, as provided for in article 1.6.7.5 of the ISSF Constitution, the Administrative Council submitted its own version of the question to be decided on.

90. The First Respondent submitted that there has been no violation of Appellant’s procedural rights, neither in the proceedings before the Administrative Council nor in the proceedings before the General Assembly. Should the Appellant’s procedural rights been violated by the ISSF Administrative Council, such defect would have been cured by the proceedings of the General Assembly. As Mr. Schreiber explained in his witness statement “at least 150 to 200 delegates raised a green card [in favor of the expulsion of the Appellant and admitting the BSU as a new member] and “only ten delegates raised a red card [refusing the expulsion of the Appellant and admitting the BSU as a new member]”.

91. The competence of the General Assembly to rule as an appeals body on the expulsion of a member pursuant to article 1.3.15.2 of the ISSF Constitution is not disputed. However, the Parties are in dispute whether the process of expulsion was conducted in a fair way.

92. Even if the Appellant’s rights had been violated by the General Assembly of the ISSF, the proceedings at the CAS would have a curing effect.

93. According to article 57 of the Code, the Panel has full power to review the facts and the law. The Panel notes that neither party has raised any objection against how the arbitration proceedings have been conducted by the Panel. Particularly, it is to be noted that the Parties explicitly decided that no hearing was necessary and that the dispute should be decided on the basis of the written submissions only.

94. The Appellant submitted that the ISSF “should have awaited with the Court procedures [pending before Bulgarian state courts against the Appellant’s expulsion from the Bulgarian Olympic

Committee] are finalized”. However, there is no explicit language in the Rules and Regulations of the ISSF to this effect.

95. In its interpretation of the ISSF Constitution, the Panel reaches the conclusion that the affiliation of the National Shooting and Rifle Organization to the National Olympic Committee must be a condition sine qua non for membership to the ISSF. The Appellant lost its affiliation with the Bulgarian Olympic Committee and does, therefore, not qualify anymore as a member of the ISSF.

96. The First Respondent filed an “Anticipated Witness statement” on the discussions at the General Assembly of the ISSF of 2 December 2014, which is considered by the Panel a party’s statement. According to this document, the events can be summarized as follows:

• The Appeal against the decisions of the Administrative Council dated 25 November 2013 was dealt with under point 7 of the Agenda.

• The Secretary General established the roll call of the General Assembly at 289 votes.

• The Secretary General opened the discussion on the Appellant’s case and explained the format in which the Appellant’s appeal would be heard. At no time during the General Assembly, the Appellant, who was represented by Mr. Hristo Ivanov Gradinarski, objected against the format explained.

• The representative of the Appellant took the floor for approximately 7.30 minutes.

• Following the discussion including a presentation by Counsel for the ISSF the following question was submitted to the delegates to be answered with either “yes” or “no”: “Does the General Assembly approve the Administrative Council decision to expel the Bulgarian Shooting Sport Federation and accept the Bulgarian Shooting Union as an ISSF member federation in accordance with the ISSF Constitution (1.3.1) and the Bulgarian Olympic Committee decision to recognize the Bulgarian Shooting Union as its sole governing body for rifle and pistol shooting?”

97. Approximately 150 to 200 delegates raised a green card, indicating that they voted “yes”, only 10 delegates raised a red card, indicating they voted “no”. The exact number of “votes in favour” were not counted, as article 1.6.13.1 of the ISSF Constitution required only a simple majority.

98. The Appellant raised a series of objections against how the meeting at the General Assembly was conducted:

• The Appellant’s complete statement of appeal before the ISSF General Assembly and the attachments to it have not been submitted to the General Assembly delegates. Instead, the delegates received a summary prepared by Counsel for the First Respondent, which did not contain all legal and factual points raised by the Appellant.

• The question put to the delegates for vote was worded by the Administrative Council of the ISSF and not by the Appellant, who sought the following relief:

“[…] ISSF to issue a final Decision to the effect that revokes the appealed Decision of 25 November 2013 of ISSF Administrative Council to expel the Appellant on the consecutive decision for approval of the Bulgarian Shooting Union as member of the ISSF […]”.

• By putting another issue to the delegates, the Administrative Council of the ISSF “had in bad faith mismanaged the process of appeal”.

• The decision of the General Assembly has not said anything on: “a) The BSSF expelling from BOC is final; and b) the designation of BSU by BOC is legal; and c) does the ISSF Constitution allow such expelling […]; d) whether ISSF Administrative Council had the necessary factual legal grounds to take the decision, etc”.

99. The Appellant submits that the General Assembly should have voted on the Appellant’s appeal and relief sought.

100. The Appellant argued that the proceedings at the level of the ISSF should have been conducted in the same way as court proceedings, the Administrative Council as the first instance and the General Assembly as the second instance. However, the Appellant did not substantiate its submission that the ISSF should have followed specific procedural rules supporting its argument.

101. Even if one would assume that procedural rules have been violated in rendering the appealed decisions, quod non, such defects could have been cured by the Panel pursuant to article R57 of the Code.

102. In line with German law, the Panel takes the view that it is within the discretion of the President of the General Assembly to phrase the question to be put to the delegates if the question is clear enough as to allow the addressees to understand it. In particular, the members of a general assembly may be asked whether they approve or deny the question submitted (see REICHERT, Vereins- und Verbandsrecht, 12th ed. 2010 at para 1772 at page 309).

103. In the case at hand, the question put to the delegates was understandable, and nobody including the representative of the Appellant raised any objection.

104. The Panel takes the view that the result of the vote was clear. According to German law, it is legal to count the votes pursuant to the so-called distraction method (“Subtraktionsmethode”) if this method allows to determine the result of the vote (BGH [Federal Supreme Court] in BGHZ 152, 63 = NJW 2002, 3629; PALANDT/ELLENBERGER, BGB, 73th. ed. 2014, at para 32 N1).

105. Notwithstanding the above, as the Appellant rightly pointed out, it is somewhat disturbing that more than half a year after the General Assembly there are no minutes available yet. However, for the purpose of deciding this Appeal, it is sufficient to know that the Appellant has not raised

any objection to the fact that the vast majority of the delegates had voted “yes” on the issue submitted by the Secretary General.

c) Has the Appellant validly been expelled from membership with the ISSF?

106. The Panel concludes that the decision of the General Assembly of the ISSF dated 2 December 2014 to expel the Appellant for valid reasons was legal.

107. The Panel notes the fact that, at the time when the General Assembly took the decision to expel the Appellant, i.e. on 2 December 2014, the Appellant had lost its membership with the Bulgarian Olympic Committee.

108. The underlying facts in the case at hand differ from the facts in CAS 2010/A/2275 referred to by the Appellant in so far as in the latter case the purported reason for expulsion, i.e. bankruptcy proceedings, was no longer accurate: the bankruptcy proceedings had been lifted at the time of the federations’ decision on the expulsion.

109. The Panel rejects the Appellant’s submission that the First Respondent should have awaited the outcome of the state court proceedings in Bulgaria on the appeal against the decision of the Bulgarian Olympic Committee to expel the Appellant from membership. The Panel notes that the Appellant has not filed a request to stay the present proceedings and confirms that the pending court proceedings in Bulgaria have no effect on the jurisdiction of the CAS to decide on the present dispute.

110. The Panel must decide the dispute based on the facts established at the time when this award is rendered. Should the Bulgarian State Court uphold the pending appeal against the expulsion of the Appellant from the Bulgarian Olympic Committee, such verdict has no influence on the proceedings and the dispute at hand. However, in case the decision of the Bulgarian Olympic Committee to expel the Appellant were lifted, nothing would prevent the Appellant from filing a request with the ISSF for re-admittance as a member, subject to the Regulations and the Rules of the ISSF.

d) Has the Second Respondent become a member of the ISSF?

111. The Appellant submitted that the Second Respondent could not have been elected “as the [state] procedures for revoking of the BOC resolution to expel BSSF were pending”. All procedures “before the ISSF bodies and CAS” should have been terminated before the Second Respondent was admitted.

112. The First Respondent submitted that the Second Respondent fulfilled all requirements to become a member of the ISSF, and its admittance by the Administrative Council and the General Assembly of the ISSF was valid.

113. The Second Respondent submitted that it met all requirements for membership with the ISSF, which admitted the Second Respondent following the expulsion of the Appellant.

114. The Panel takes the view that, at the time the Second Respondent was admitted as a member of the ISSF, the Appellant was not anymore a member of the ISSF.

115. The Panel refutes the Appellant’s submission that the ISSF should have awaited the outcome of the state court proceedings regarding the BSSF’s expulsion from the Bulgarian Olympic Committee and refers to its findings above.

116. The Panel concludes that the Second Respondent has been validly admitted as a member of the ISSF, and, consequently, the Appeal regarding the decision of the General Assembly of the ISSF dated 2 December 2014 to admit the Second Respondent as a new member of the ISSF is to be dismissed.

B. Conclusion

117. The Panel holds that the decisions of the General Assembly of the ISSF dated 2 December 2014 to expel the Bulgarian Sport Shooting Federation (BSSF) and to admit the Bulgarian Shooting Union (BSU) are valid and legal. The expulsion of the Appellant from membership by the Bulgarian Olympic Committee constitutes a valid reason pursuant to German law to expel the Appellant as a member of the ISSF pursuant to article 1.3.1 of the ISSF Constitution.