Sidebar

26
Sat, Sep

Fifa: TTFA wants to have cake and eat it too; TTFA: Arbitration clause ‘unconscionable’
Typography

Should the Trinidad and Tobago Football Association (TTFA) be forced to abide by an arbitration clause that is explicit in its own constitution?

Or is the clause itself, which orders that all disputes with Fifa be sent to the Switzerland-based Court of Arbitration for Sport (CAS), ‘unconscionable’ by virtue of it being ‘forced’ on the TTFA; and a supposed attempt to nullify the local body’s own statutes?

Port of Spain High Court Judge Carol Gobin listened to counsel for both parties today in a four hour long virtual hearing. Justice Gobin promised a decision by 13 August.

The substantive matter before her is an injunctive relief by Fifa, the world governing football body, which asks the High Court to dismiss the TTFA’s case against its implementation of a normalisation committee and/or to compel the member association to return to the CAS.

Fifa, headed by president Gianni Infantino, is represented in the High Court action by attorneys Christopher Hamel-Smith SC, Jonathan Walker and Cherie Gopie from M Hamel-Smith and Co.

The TTFA, whose listed representatives in the matter are president William Wallace and vice-presidents Clynt Taylor, Susan Joseph-Warrick and Sam Phillip, is represented by Dr Emir Crowne, Matthew Gayle and Crystal Paul of the New City Chambers.

At the heart of the dispute is the Fifa Bureau of the Council’s decision, on 17 March, to implement a normalisation committee on the twin island republic—due, on the surface, to issues with the financial management of the local body.

The Bureau of the Council is headed by Infantino and the Fifa Council subsequently ratified its decision last month.

First, Hamel-Smith suggested that his legal opponents failed to prove that its case had been taken by those ‘empowered to make such a decision’.

He pointed to article 36(a) of the TTFA Constitution, which said that its board of directors ‘shall pass decisions on all cases that do not come within the sphere of responsibility of the General Meeting or are not reserved for other bodies by law or under this Constitution’.

Wallace, he contended, did not prove that the TTFA board agreed to embark upon a course that exposed its members to ‘severe consequences’.

Crowne’s response was curt, as he pointed to article 39.1, which states: ‘the president represents the TTFA legally’.

“If that is not an answer [to Wallace’s authority to commence legal action],” said Crowne, “then I do not know what is.”

Hamel-Smith contended too that the TTFA’s attempt to serve Fifa—based in Zurich, Switzerland—in its High Court action was ‘unlawful’ as Swiss law does not permit this to be done via email.

Crowne retorted that there was ‘no evidence of what Swiss law actually says’ on the matter and suggested the two bodies got along fine with emails during their short-lived CAS exchange.

It was not a point that appeared to particularly trouble Justice Gobin. The appropriateness of CAS as the forum for this dispute was far more pressing.

Hamel-Smith noted that Fifa has over 200 member associations, with most having different legal systems. Fifa’s request that all football nations agree to one body to handle disagreements, he suggested, was more sensible and practical than the alternative.

“There is nothing abusive or advantageous in Fifa wanting consistent laws to govern its associations,” he said.

Crowne argued that CAS’ ‘prohibitively expensive’ fees of 40,000 Swiss francs (TT$297,000) to adjudicate the matter—since his clients were initially asked to pay both its share of the arbitration fees and Fifa’s—had the effect of pricing the TTFA out of justice.

However, Hamel-Smith countered that, in its withdrawal from CAS, the TTFA’s legal team stated: ‘even if our clients applied to the CAS for legal aid, it would still not remedy the apparent institutional bias that has arisen’.

And Fifa official Miguel Lietard, in his affidavit, suggested that the TTFA’s share of the CAS costs, 20,000 Swiss francs or TT$148,000, was ‘equivalent to just one month’s base salary that Mr Wallace committed the TTFA to pay to the head coach of the Trinidad and Tobago Men’s National Football Team [Terry Fenwick]’.

So, Fifa argued that TTFA’s complaints about the CAS’ costs—having failed to apply for legal aid—was essentially a red herring.

“The true reason it didn’t proceed wasn’t because of Fifa not paying its share of the advance cost,” said Hamel-Smith. “[…] They formed the view that CAS was guilty of institutional bias and they didn’t want the matter to be settled there.

“This is the knob; this is where the varnish is removed.”

Hamel-Smith conceded that the CAS appeared akin to flippant in relaying information to the TTFA regarding, for example, Fifa’s longstanding agreement with the judicial body to pay its legal fees after matters are heard.
Fifa’s right to pay fees after the fact supposedly spares the governing body the grief of chasing down defeated legal opponents for money.

Similarly, the CAS explained that its norm is to have three arbitrators and, if the TTFA wanted just one, the onus was on their legal team to make a case for such.

Hamel-Smith suggested that the TTFA did not prove institutional bias; and, in fact, the CAS is a body of great international renown. However, even if Wallace did have concerns, he said it did infringe on their ability to get a fair shake there—as CAS administrators had nothing to do with the arbitration process.

The CAS, said Hamel-Smith, merely collected fees and administered the process. And the TTFA had not complained of any bias by the named arbiters.

“CAS is the administrative body and not the tribunal who will make the judgment,” said Hamel-Smith.

Crowne replied that CAS is ‘a private arbitration company’ that had given his legal team ‘genuine pause’ in its ‘disconcerting’ conduct. He argued that to proceed despite the alleged bias was to arguably ‘waive our right to object’ later on.

He described Fifa’s reliance on the CAS as ‘a completely lopsided scheme that works entirely in its favour’ and one which ‘cannot be a system that this court upholds’. And he attempted to make light of the proffered reason why the CAS wanted three arbitrators to hear its case—thereby tripling the costs—as opposed to one.

“My lady, this case is before you,” said Crowne, “does this mean there should be three judges hearing this dispute? No.”

Crowne insisted that ‘the Court will be sending the TTFA back to an unfair forum’ if it ordered their return to CAS. And he argued that forum non conviens (the court’s discretion to decide which forum is better suited to hear a case) ought to determine that Trinidad is the right venue for the dispute between the TTFA and the normalisation committee—both consisting of entirely local citizens.

“How is a body of non-Trinidad nationals the best forum to decide whether the appointment of this normalisation committee in accordance with Trinidad law or not?” asked Crowne, as he claimed that the TTFA Constitution—governed by an Act of Parliament—was the first applicable rule book before one sought to determine whether Fifa was right to intervene.

The TTFA Constitution only allows a president to be removed by a vote from its general membership. Hamel-Smith argued that Fifa’s Statutes override the TTFA’s and noted that even article 2.1(h) of the latter’s constitution states that its ability ‘to control and supervise’ the local game must be ‘in accordance with the relevant Statutes and regulations of FIFA and Concacaf’.

Hamel-Smith said the TTFA included this clause in its constitution of its own free will, as well as its willingness to utilise the CAS.

“Not only is there an arbitral agreement but the TTFA constitution itself includes the arbitration process,” said Hamel-Smith. “They want the benefit of being a member of Fifa; then of course it must accept the restrictions and commitment that come with that benefit.

“You can’t have your cake and eat it.”

He suggested that the question of forum non conveniens arose when a matter could potentially be held in more than one jurisdiction and not when there is a valid arbitration agreement in place.

“The parties have in fact made a choice [of the appropriate forum, through its arbitration clause],” said Hamel-Smith. “There must be a reason to override this when the two parties have agreed.”

Crowne suggested that it was not much of a choice for the TTFA at all.

He referenced a Canadian taxi driver, David Heller, who successfully overturned an arbitration clause with Uber—that mandated disputes to be heard in ‘a costly arbitration process in the Netherlands’—on the grounds that it was ‘unconscionable’ and therefore ‘unenforceable’.

“There was clearly inequality of bargaining power between Uber and Mr Heller,” stated the Canada Supreme Court’s ruling. “The arbitration agreement was part of a standard form contract. Mr Heller was powerless to negotiate any of its terms.”

Crowne compared the TTFA versus Fifa to Heller’s grapple with Uber; and pointed to article 59.2-3 of the Fifa Statutes, which states:

‘Recourse to ordinary courts of law is prohibited unless specifically provided for in the Fifa regulations… The associations shall insert a clause in their statutes or regulations, stipulating that it is prohibited to take disputes in the association or disputes affecting leagues, members of leagues, clubs, members of clubs, players, officials and other association officials to ordinary courts of law, unless the Fifa regulations or binding legal provisions specifically provide for or stipulate recourse to ordinary courts of law’.

Crowne accused Fifa of overplaying its hand in attempting to completely ouster local courts, with member associations powerless to resist.

“There is no voluntariness in adopting that—it is mandatory,” said Crowne. “[…] Our attack on the clause comes from the fact that it is forced on member associations, clubs, leagues, players and officials. By virtue of that, we say the clause is inoperable [and] cannot form the basis for a valid arbitration agreement.

“The crux of the matter is when Fifa says so, the world must bend to its whim. We say it is inappropriate [and] the clause itself is unconscionable.

“[…] No member association in the world can say they have any bargaining power period when it comes to Fifa.”

The judge was interested in the argument.

“They have raised a very important question as to whether Fifa can override statutory provisions,” said Justice Gobin. “By subscribing to the Fifa agreement, [the member association agrees] to give up the day to day management that its statutes vested in its general membership.

“Can any person enter into an agreement that amends its [own] statutes or overrides its statutory provisions? Is that an appropriate question for the Court of Arbitration [for Sport], as opposed to a court in Trinidad?”

Hamel-Smith countered that the normalisation committee had not replaced the TTFA’s general council but only its board. He used the analogy of a company going into receivership. The receiver replaces the company’s board but not its shareholders.

The normalisation committee, he suggested, was the ‘equivalent of the receiver manager’.

By 13 August, Justice Gobin will reveal which message she received favourably—in a legal tussle that is likely to have far-reaching implications for either party.

A TTFA defeat would mean curtains for Wallace, who has already resigned as Secondary Schools Football League (SSFL) president, after being advised to do so by his executive body.

A Fifa defeat could set a troublesome precedent against the governing body, as far as its relations with other member associations go. Secretary general Fatma Samoura warned already that Fifa will not recognise the TTFA if its resistance of the normalisation committee is heard in the High Court.

Crowne asked Justice Gobin to view that warning as the very sort of bullying stance that underpins Fifa’s relationship with its member bodies.

“It cannot be correct [for Fifa to say] that we will penalise you if a local court agrees to hear your grievance,” said Crowne.

In two weeks’ time, Madame Justice Gobin will decide whether the TTFA is compelled to abide by the arbitration process it begun and then abandoned with the CAS.

Or if the Port of Spain High Court is the best venue for justice in a high stakes legal sport matter.