Recognition and enforcement of a CAS decision in Greece

A recent judgment of the Thessaloniki 1^st Instance Court declared enforceable a CAS decision in Greece. This is a landmark ruling, not just for Greece, but probably for Europe too, if not globally. The judgment will surely be received positively by CAS, since it is implementing what has been repeatedly and widely supported, namely that CAS decisions are to be recognized and enforced according to the New York Convention. Still, from the Greek perspective there are some issues in need of clarification.

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The facts: A Bulgarian football player sought damages against a football club located in Thessaloniki on the basis of a contract of employment between the parties. The club refused to pay a certain amount with regard to wages and lease expenses. Apparently the Bulgarian player asked for the inclusion of an arbitration clause in favor of CAS, so as to avoid litigation pursuant to domestic law, which the club accepted. The Court of Arbitration for Sports issued its decision in 2009, according to which the club was obliged to pay the amount of 60.840 € for wages, lease expenses and arbitration costs to the player.

The ruling: The Thessaloniki 1^st Instance Court applied the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards [NYC], which has been ratified by Greece in 1961. The club was summoned properly by the applicant, but it did not appear in the hearing. In light of the above, the court did not enter into any examination of the requirements set forth by Art. V.1 NYC. On the other hand, it examined the impediments regulated under Art. V.2 NYC, i.e. arbitrability of the dispute and violation of Greek public policy. The court was very laconic in regards to the second ground for refusal: It simply stated that the recognition and enforcement of the award is not contrary to domestic public policy, thus reiterating the very wording of Art. V.2 NYC. Concerning the first ground, the court ruled in favor of the arbitrability of the dispute, referring to domestic case law, by virtue of which domestic cases of a similar nature are subjected to Greek sports arbitration, even if the amount requested emanates from an employment contract for a fixed term.

Comments: There is no doubt that a CAS decision is not per se contrary to domestic public policy. This is a widely recognized and globally accepted special tribunal dealing with sports disputes; it has been established in accordance to rule of law principles; its jurisdiction has been accepted by international and national sports federations. Hence, declaring a CAS award as contrary to public policy would require specific facts and circumstances, upon which the court could have refused its recognition and enforcement. However, the club was in default, and no such facts were evident from the file.

On the other hand, the court was aware that the dispute emerged from a contract of employment. Art. 867 b Greek Code of Civil Procedure is adamant in this respect: Labor law disputes are explicitly excluded from (domestic) arbitration. The court did not mention this provision. It only referred to pertinent case law, which considered the domestic dispute resolution model as consistent with the Greek Constitution. When it comes to describe the legal nature of this dispute resolution mechanism, things are getting complicated, and I would like to spare non-Greek readers from domestic peculiarities. The bottom line is that pursuant to present legislation, the Panels of the Hellenic Football Federation [HFF] are equaled to a permanent court of arbitration, in spite of constant opposite views from legal scholars, arguing that those panels lack legitimacy, and are violating the principle of the legally assigned judge, enshrined in Art. 8.1 of the Greek Constitution. The issue is still unresolved. A Supreme Court ruling from 1998 decided against the legitimacy of sports panels, but referred the matter to the plenary session. However, this hearing did never take place, because the parties settled their dispute in the meantime.  

As things stand today though, it would be inconsequent to accept the validity of decisions of the HFF panels on the one hand, and to refuse recognition and enforcement of foreign arbitral awards in the same matters on the other hand. In addition to the above, the rationale for excluding employment disputes is not evidenced in the case at hand: It was the weak party, i.e. the player, who embedded the CAS arbitration clause to the contract, not the club. Thus, the decision was right not to take into account of the domestic provision (Art. 867 b Greek CCivP).

Nevertheless, there’s one more thorn in the decision rendered: Pursuant to Art. 1.3 NYC, any state may declare that it will apply the convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration. The Hellenic Republic proceeded to a declaration, by virtue of which Greek courts are allowed to recognize and enforce only those foreign arbitral awards which are considered as commercial pursuant to Greek law. Hence, prima facie seems to be a problem with CAS awards dealing with employment disputes, since, a) the relationship between a club and a football player has been constantly labeled as a contract of employment by domestic courts, and b) Greece has explicitly excluded non-commercial disputes from the NYC ambit. It should be also that the Supreme Court refused twice to enforce foreign arbitral awards precisely on the grounds aforementioned (however not regarding sports disputes).

In light of the novelty of the matter, I see two options: First, overcome the declaration barrier by analogy to the domestic landscape, as described above; or second, apply the wording of the declaration strictly, and refuse recognition and enforcement of CAS awards, which will of course raise a number of issues towards CAS and international sports federations. Still, there’s a third option: To revoke or at least limit the radius of the declaration, so as to make an exception for CAS awards. However, for this to happen, it is the State which holds the reins. Until then, Greek courts have to find a way out of this conundrum…