Weird case where Belgian competition authority reviews an arbitral award

I came across the interesting, but rather odd case, involving the Belgian Court of Arbitration for sports and the Belgian Competition Authority.

The facts are as follows. The Belgian football federation has a committee awarding licenses. To obtain a license football clubs need to meet various conditions, including proof of their financial stability for the season to come. The White Star is a Brussels-based football team that won the second division championship in 2015-16 and should therefore have played in the first division in 2016-17. The problem is that its financial situation was so dire that it did not meet the licensing conditions set by the Belgian football federation.

White Star appealed the decision before the Belgian Court of Arbitration for sports, which is the organ of appeal “imposed” by the federation. It rendered its award in May 2016. The award annuled the decision of the license committee of the Belgian federation, but refused to grant the license because the White Star did not meet the condition of financial stability. The White Star then decided to knock on the door of the Belgian Competition Authority to obtain provisional measures that would allow it to play in the first division championship in 2016-17 (and which would therefore effectively annul the award). Specifically, White Star argued that the refusal to grant a license to a football team amounted to a breach of competition law (refusing a license indeed leads to the exclusion of a “competitor”). This new effort proved again to be in vain in that the Competition Authority found that there was no prima facie evidence of a breach of competition law.

The interesting aspect of the case was that the Belgian Competition Authority did not hesitate to look into the validity of the arbitral award despite the submissions made by the Football Federation and Belgian Court of Arbitration for sports, according to which in Belgian law the only means to challenge an arbitral award (in this case the refusal to grant a license) is to initiate annulment proceedings before the Court of First Instance. Hence, the action initiated by White Star was inadmissible. In its decision, which is in French, the Belgian Competition Authority rejected that view finding in the process that the members of the Belgian Court of Arbitration for sports represented “undertakings” within the meaning of competition law (!), although it acknowledged that there was no sufficient evidence to recognize the tribunal arbitral itself was an undertaking or an association of undertakings …

The Authority considered that it is in charge of enforcing “public order” rules (i.e., competition rules) and that Belgian Court of Arbitration for sports was bound by such rules and that it should have applied them ex officio. The Authority therefore considered that it was competent to review the award and to set it aside if it had found that there was prima facie evidence of a breach of competition law, which – as noted above – was not the case here. Hence, the request for preliminary measures requested by White Star was rejected.

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