Branislav Krunic v. Football Association of Bosnia and Herzegovina

VI. JURISDICTION

37. Article R47 of the Code provides as follows:

“An appeal against the decision of a federation, association or sports-related body may be filed with the CAS insofar as the statutes or regulations of the said body so provide or as the parties have concluded a specific arbitration agreement and insofar as the Appellant has exhausted the legal remedies available to him prior to the appeal, in accordance with the statutes or regulations of the said sports-related body”.

38. The jurisdiction of CAS, which is not disputed, derives from Article 139 para. 4 of the BIHFF Regulations on the Registration, Status and Transfers of Players as well as from Article 67 of the FIFA Statutes. It is further confirmed by the order of procedure duly signed by the Parties.

39. At the hearing, Mr Adnan Dzemidzic suggested that there could be a third instance at the BIHFF level. The existence of such a body was not mentioned in the written submissions of the BIHFF and was also not established convincingly during the oral arguments. Furthermore, it appears to be inconsistent with the evidence of record:

• Pursuant to Article 13 of the Employment Contract, “Disputes arising from this Contract in the first instance are dealt with by the responsible Commission on the Status of Players association responsible for the registration, and in the second instance Commission on the Status of BIHFF”.

• In the present case, Mr Krunic filed his claim before the “Committee for Status of players of City Football Association”, which clearly stated in its decision that it was acting as “the first instance body”. This is furthermore confirmed in the Appealed Decision, which endorsed “the first-instance Decision […] in its entirety”.

• As the appeal body, there is no doubt that the “BIHFF Committee for Status of a Player” was acting as the second and the last instance court. In this regard, the Appealed Decision confirmed that it was “final”.

• Article 139 of the BIHFF Regulations on the Registration, Status and Transfers of Players only makes reference to two instances.

40. In light of the foregoing, the Sole Arbitrator has no difficulty to find that Mr Krunic had exhausted all the legal remedies available to him prior to his appeal filed before CAS.

41. It follows that the CAS has jurisdiction to decide on the present dispute. However and in view of the outcome of the present arbitration, the Sole Arbitrator invites Mr Krunic to explore the opportunity to file an application before such “third instance”.

42. Under Article R57 of the Code, the Sole Arbitrator has the full power to review the facts and the law.

VII. ADMISSIBILITY

43. It is undisputed that the appeal was submitted within the deadline provided by Article R49 of the Code as well as by Article 67 para. 1 of the FIFA Statutes.

44. The Sole Arbitrator therefore finds that the present appeal is admissible

VIII. APPLICABLE LAW

45. It is generally accepted that the choice of the place of arbitration also determines the law to be applied to arbitration proceedings. The Swiss Private International Law Act (hereinafter referred to as “PILA”) is the relevant arbitration law (DUTOIT B., Droit international privé Suisse, commentaire de la loi fédérale du 18 décembre 1987, Bâle 2005, N. 1 on Article 176 PILA; TSCHANZ P-Y., in Commentaire romand, Loi sur le droit international privé - Convention de Lugano, 2011, n° 1, p. 1627, ad Article 186 PILA). Article 176 para. 1 PILA provides that the provisions of Chapter 12 of PILA regarding international arbitration shall apply to any arbitration if the seat of the arbitral tribunal is in Switzerland and if, at the time the arbitration agreement was entered into, at least one of the parties had neither its domicile nor its usual residence in Switzerland.

46. The CAS is recognized as a true court of arbitration (ATF 119 II 271). It has its seat in Lausanne, Switzerland. Chapter 12 of the PILA shall therefore apply as at least one of the Parties in the present dispute has neither its domicile nor its usual residence in Switzerland.

47. Pursuant to Article 176 para. 2 PILA, the provisions of Chapter 12 do not apply where the parties have excluded its application in writing and agreed on the application of the third part of the Civil Procedural Code. There is no such agreement in this case. Therefore, Articles 176 et seq. PILA are applicable.

48. Article 187 para. 1 of the PILA provides - inter alia - that “the arbitral tribunal shall rule according to the law chosen by the parties or, in the absence of such a choice, according to the law with which the action is most closely connected”. This provision establishes a regime concerning the applicable law that is specific to arbitration and different from the principles instituted by the general conflict-of-law rules of the PILA.

49. According to the legal doctrine, the choice of law made by the parties can be tacit and/or indirect, by reference to the rules of an arbitral institution. In agreeing to arbitrate the present dispute according to the Code, the Parties have submitted to the conflict-of-law rules contained therein, in particular to Article R58 of the Code (CAS 2008/A/1705 para. 9 and references, CAS 2008/A/1639, para. 21 and references; CAS 2006/A/1141, para. 61).

50. 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 a 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 that the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

51. Article R58 of the Code indicates how the Panel must determine which substantive rules/laws are to be applied to the merits of the dispute. This provision recognizes the pre-eminence of the “applicable regulations” to the “rules of law chosen by the parties”, which are only applicable “subsidiarily”. Article R58 of the Code does not admit any derogation and imposes a hierarchy of norms, which implies for the Panel the obligation to resolve the matter pursuant to the regulations of the relevant “federation, association or sports-related body”. Should this body of norms leave a lacuna, it would be filled by the “rules of law chosen by the parties”.

52. The Parties in the present case are bound by the FIFA Statutes for two reasons. Firstly, and as exposed above, they made a tacit choice of law when they submitted themselves to arbitration rules, which contained provisions relating to the designation of the applicable law. Secondly, each Party is – at least indirectly – affiliated to FIFA (CAS 2008/A/1517 para. 7). Therefore, this dispute is subject, in particular, to Article 66 para. 2 of the FIFA Statutes, which provides that “[t]he provisions of the CAS Code of Sports-Related Arbitration shall apply to the proceedings. CAS shall primarily apply the various regulations of FIFA and, additionally, Swiss law”.

53. According to its Article 1, the Employment Contract “determine[s] [Mr Krunic’s and FC Borac’s] mutual relations, based upon the Regulations on registration of clubs and players, transfer and status of BIHFF, and upon Laws of BiH and entity laws”.

54. Therefore, in the present case and with respect to the applicable substantive law, subject to the primacy of applicable FIFA’s regulations, Swiss Law shall apply to the extent warranted. “Subsidiarily” only, “the Regulations on registration of clubs and players, transfer and status of BIHFF, and upon Laws of BiH and entity laws” are applicable.

55. It can be observed that the Parties adopted the same approach. As a matter of fact, during the hearing, the Parties made reference to various FIFA Regulations, namely to Article 67 of the FIFA Statutes, which provides for a 21-day deadline to lodge an appeal with the CAS.

IX. MERITS

56. Mr Krunic seeks as a relief an order from the CAS instructing FC Borac to pay in his favour outstanding wages, contributions towards a) his rents, b) his social and health insurances, c) his legal fees and other expenses incurred in connection with the present procedure.

57. At the hearing, the Sole Arbitrator asked Mr Krunic the reasons why he did not summon FC Borac to appear before the CAS and why he had only directed his appeal against the BIHFF and not against his former club.

58. Mr Krunic’s representative answered that according to the wording of Articles R47 and R48 of the Code, an appeal lodged with the CAS could only be directed against the federation, the decision of which was being challenged; i.e. the BIHFF.

59. The Sole Arbitrator finds that Mr Krunic’s proposed interpretation of Articles R47 and R48 of the Code is inconsistent:

• with the wording of these provisions, which do not limit the passive legal standing in any manner. On the contrary, Article R48 of the Code unambiguously states that there may be more than just one Respondent. In this regard, it is universally accepted that neither the Code nor the FIFA Regulations contain any specific rule regarding the standing to be

• with the principle of right to be heard. If only the federations could be called to participate in the proceedings before the CAS, then CAS decisions could only be directed against them and could certainly not be enforced against a third party, such as FC Borac. Any other conclusion would clearly infringe the third party’s right to be heard as it would never have the chance to defend itself, to comment on the appellant’s arguments, to submit evidence with regard to all relevant facts, etc.

• with the fact that, from the very beginning of the CAS existence, appeals concerning decisions rendered by sports-governing organizations have been brought before the CAS and directed not only against federations, but also against individuals (athletes, coaches, agents, referees, etc.) or legal entities (clubs, investment companies, etc.).

60. In light of the foregoing, Mr Krunic’s interpretation of Articles R47 and R48 of the Code must be discarded.

61. Bearing in mind that the relief sought is exclusively directed at FC Borjac, which is not a party to these proceedings, the question arises as to whether the Sole Arbitrator can still consider Mr Krunic’s appeal.

62. The standing to be sued is a matter of substantive law (ATF 128 II 50, 55; CAS 2008/A/1639, para. 11.2; DE LA ROCHEFOUCAULD E., Standing to be sued, a procedural issue before the Court of Arbitration for Sport (CAS), in CAS Bulletin 1/2010, page 51).

63. Under Swiss law, a decision by an association like the BIHFF may be challenged pursuant to Article 75 of the Swiss Civil Code (CC). Under the heading “protection of members”, this provision reads as follows: “Any member who has not consented to a resolution which infringes the law or the articles of association is entitled by law to challenge such resolution in court within one month of learning thereof”.

64. The Sole Arbitrator concurs with the views of a CAS panel in CAS 2008/A/1639, which held that (para. 11.5):

“The purpose of this provision is to protect the individual in its membership related sphere from any unlawful infringements by the association (cf ATF 108 II 15, 18). In view of this legislative purpose Art 75 CC is construed and interpreted in a broad sense (cf ATF 118 II 12, 17 seq.; 108 II 15, 18 seq; Handkommentar zum Schweizer Recht/Niggli, 2007, Art 75 ZGB marg. no. 6 seq; Heini/Portmann, Das Schweizer Vereinsrecht, Schweizerisches Privatrecht II/5, 2005, marg. no 278; Basler Kommentar ZGB/Heini/Scherrer, 3rd ed. 2006, Art 75 marg. no. 3 et seq.; Berner Kommentar zum schweizerischen Privatrecht/Riemer, 1990, Art 75 marg. no. 7 et seq, 17 et seq.; Fenners, Der Ausschluss der staatlichen Gerichtsbarkeit im organisierten Sport, 2006, marg. no. 208 ). In particular the term “resolution” in Art 75 CC does not only refer to resolutions passed by the assembly of an association but, instead, encompasses any other (final and binding) decision of any other organ of the association irrespective of the nature of such decision (disciplinary, administrative, etc.) and the composition of said organ (one or several persons)” (see also CAS

65. In the presence of a claim lodged on the ground of Article 75 CC, it is the association which has the standing to be sued (ATF 132 III 503; FOËX B., in PICHONNAZ/FOËX, Commentaire romand, Helbling & Lichtenhahn, Bâle, 2010, ad. Article 75, n 9, p. 537).

66. However, Article 75 CC “does not apply indiscriminately to every decision made by an association (Cf. for example BGE 52 I 72; BGE 118 II 12). Instead, one has to determine in every case whether the appeal against a certain decision by an association falls under Art. 75 Swiss Civil Code, i.e. whether the prerequisites of Art. 75 Swiss Civil Code are met in a specific individual case. If, for example, there is a dispute between two association members (e.g. regarding the payment for the transfer of a football player) and the association decides that a club (member) has to pay the other a certain sum, this is not a decision which can be subject to an appeal within the meaning of Art. 75 Swiss Civil Code. […] A dispute between two football clubs, i.e. two association members, therefore, is not a dispute which can be appealed against under Art. 75 Swiss Civil Code. The sports association taking a decision is not doing so in a matter of its own, i.e. in a matter which concerns its relationship to one of its members, rather it is acting as a kind of first decision-making instance, as desired and accepted by the parties” (BERNASCONI/HUBER, Appeals against a Decision of a (Sport) Association: The Question of the Validity of Time Limits stipulated in the Statutes of an Association, published in German in the review Sport 6/2004, p. 268 ff.; see also CAS 2008/A/1517 para. 23; DE LA ROCHEFOUCAULD E., op. cit., page 52).

67. In the present case, the Sole Arbitrator is called to adjudicate a monetary claimed raised by Mr Krunic against FC Borac based on an employment relationship entered into in 2011. The present matter is clearly not a membership-related dispute but is strictly of contractual nature. In other words, when it rendered its Appealed Decision, the “BIHFF Committee for Status of a Player” was acting within its jurisdiction as the competent body to adjudicate a contractual

litigation between a player and a club. It did not act like a court of first instance in a dispute, which could have had an impact a) either on the rights and duties of Mr Krunic or of FC Borac as members of the BIHFF or b) on the relationship of the BIHFF with either the player or the club.

68. In other words, it appears that Article 75 CC does not come into play in the present proceedings and that the Player had no ground to direct its appeal at the BIHFF in the present case, based on this provision.

69. In addition and pursuant to constant CAS jurisprudence, the defending party has standing to be sued (“légitimation passive”) if it is personally obliged by the “disputed right” at stake. In other words, a party has standing to be sued and may thus be summoned before the CAS only if it has some stake in the dispute because something is sought against it (CAS 2007/A/1329 and CAS 2007/A/1330 and references; DE LA ROCHEFOUCAULD E., op. cit., page 53).

70. In the present dispute, none of Mr Krunic’s prayers for relief was directed against the BIHFF, which, therefore, cannot be considered as the “passive subject” of the claim brought before the CAS by way of appeal. As a matter of fact, the rights of the BIHFF are not concerned by the Appealed Decision.

71. Based on the foregoing consideration, the Sole Arbitrator comes to the conclusion that the BIHFF does not have any standing to be sued and, therefore, cannot, as such, be identified as a respondent in the present proceedings. Mr Krunic directed his appeal at the wrong party and, therefore, the Sole Arbitrator cannot consider his requests for relief. Consequently, Mr Krunic’s appeal must be dismissed.