Sports Arbitration: Federal Supreme Court Finds Against Pechstein, Upholds CAS Arbitration Agreement

von Peter Bert

The revolution in sports arbitration has been called off, at least for now: Today, the Federal Supreme Court (Bundesgerichtshof) reversed the much discussed judgment of the Munich Court of Appeals (Oberlandesgericht) in the case of Claudia Pechstein. Pechstein, the speed skater and five-time Olympic gold medalist, had sued the governing body of her sport, the International Skating Union (ISU) for damages suffered as a result of a doping ban Pechstein believes to be unlawful.The Federal Supreme Court ruled that the action was inadmissible in light of the arbitration Agreement between the athlete and the ISU.

As previously discussed here, the Munich Court of Appeals had held that Claudia Pechstein’s damages case against the ISU could go ahead in the state courts, the arbitration agreement that Claudia Pechstein had entered into with the ISU notwithstanding. The Court of Appeals had found the arbitration agreement to be invalid, because it constituted an abuse of a dominant market position within the meaning of Section 19 German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB). The Munich court relied, in its reasons, heavily on an alleged “structural imbalance” (strukturelles Ungleichgewicht) between sports associations on the one hand and athletes on the other hand under the existing system of sports arbitration, the Court of Arbitration for Sport (CAS).

The Federal Supreme Court agreed with the starting point that the ISU does have a dominant market position, given that has a monopoly on the organization of international speed skating events, such as world championships. However, looking at the various factors that need to be taken into account, the Federal Supreme Court finds that on balance, the ISU did not abuse that dominant market position by requiring athletes to enter into an arbitration agreement ...

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