Royal Football Club Seraing: CAS awards face extra time in EU courts

In Royal Football Club Seraing (Case C-600/23), the European Court of Justice has ruled that arbitral awards from non-EU courts, including those from the Court of Arbitration for Sport, can be the subject of judicial review to ensure compliance with EU law. This ruling emerged from Royal Football Club Seraing's dispute with FIFA over third-party ownership regulations, highlighting the tension between sports governance autonomy and EU legal supremacy.

The dispute

In 2015, Royal Football Club Seraing (Seraing) entered into agreements with Doyen Sports Investment Ltd that transferred portions of the club's economic rights over specific players in exchange for EUR350,000 in financial payments. FIFA's Disciplinary Committee determined that the contracts violated FIFA's global prohibition on third-party ownership (TPO) of players' economic rights, imposing a four-period registration ban and a CHF150,000 fine.

After FIFA's Appeal Committee dismissed their challenge, Seraing escalated the matter to the Court of Arbitration for Sport (CAS) in Switzerland - FIFA's designated forum for final appeals. Seraing argued FIFA's TPO ban violated EU law principles including free movement of workers, services, and capital, as well as EU competition rules. While the CAS acknowledged the applicability of EU law to the dispute, it rejected Seraing's arguments, finding TPO restrictions justified and proportionate for preserving sporting integrity. Although the CAS reduced the registration ban from four to three periods, it upheld the financial penalty. Switzerland's Federal Supreme Court rejected Seraing's challenge to the CAS award.

The legal saga continued in parallel proceedings before Belgian courts. When Seraing challenged the CAS award domestically, the Belgian Court of Appeal ruled that the award possessed res judicata force, preventing the Belgian courts from ruling on its validity. This prompted the Belgian Court of Cassation to seek guidance from the European Court of Justice (ECJ, which is one of the courts within the Court of Justice of the European Union or CJEU) through a preliminary reference.

The ECJ's decision

The ECJ's response was unequivocal. The Court emphasised that effective judicial protection constitutes a fundamental pillar of EU law, enshrined in Article 47 of the EU Charter of Fundamental Rights. Member States must ensure individuals can access meaningful judicial review of decisions affecting their EU law rights. Crucially, this protection must include the possibility of review by a court or tribunal that meets the requirements of Article 267 of the Treaty on the Functioning of the European Union - specifically, one capable of making preliminary references to the ECJ to assess compliance with EU public policy principles and fundamental rights.

In applying these principles to arbitral awards, the ECJ distinguished between voluntary commercial arbitrations and mandatory arbitrations, but avoided making this a decisive factor. However, the Court did recognise the special “forced” nature of sports arbitration in which the agreement to arbitrate is essentially imposed by the sports association on the individual beforehand, which included the FIFA arbitration clause that provided for an exclusive appeal to the CAS. The ECJ then considered what effective judicial review of EU public policy requires in the context of these unilaterally imposed arbitrations. Accordingly, it established four key requirements:

• Indirect judicial review must be available to ensure awards comply with EU public policy principles. 
• Review powers must be comprehensive where awards involve EU public policy principles conferring individual rights. 
• Remedial power must be effective where a court has identified that an arbitration award violates EU public policy. Courts must be able to draw on all appropriate legal conclusions and take corrective action when inconsistencies are found, otherwise the judicial review would be meaningless.
• National courts must have power to impose interim measures that preserve the effectiveness of their final judgment. Courts must set aside any national laws that would prevent them from exercising this power.

These requirements strengthen EU oversight of foreign arbitration awards, particularly CAS awards, and establishes that CAS awards implicating EU public policy principles are subject to meaningful judicial review by national courts across the EU. Crucially, the review requirements significantly limit the res judicata effect of the award where EU law is implicated and enables enhanced scrutiny of awards from mandatory arbitration systems.

Legal and practical consequences

EU perspective

This ruling signals the ECJ's continued commitment to protecting the autonomy and supremacy of EU law, even in specialised areas like sports regulation. However, it took a carefully balanced approach that preserves CAS's legitimacy as the primary forum for sports disputes while ensuring effective EU law oversight. The Court rejected the Advocate General's more radical position, which questioned CAS arbitration's validity entirely and advocated for a full merits review. Instead, the ruling acknowledges that while sports associations often impose mandatory CAS arbitration clauses, this doesn't automatically undermine the legitimacy of such arbitration.

However, CAS awards involving EU public policy matters, such as competition law and free movement rules, remain subject to review by EU courts regardless of the CAS being seated in Switzerland, preventing EU legal standards from being circumvented through offshore arbitration. Ultimately, this means that sports clubs, players, and other parties can continue to challenge CAS awards in national courts across the EU, potentially reopening settled disputes and forcing sports bodies to reconsider their regulatory approaches.

Challenges to sports association rules that potentially abuse dominant market positions or restrict competition must now undergo public policy review by ordinary EU courts. This extends EU oversight into previously insulated sporting decisions and could revive debates on contentious issues such as FIFA's TPO ban.

English perspective

Since Brexit, English disputes cannot reach the ECJ unless they involve a European element that is processed through an EU national court. Consequently, English law alone governs the review of sports arbitral awards and provides significantly less protection than the ECJ now mandates.

Sports arbitration agreements in England typically exclude enhanced judicial review. In particular, English football's governing bodies - the Premier League, EFL, and FA - all exclude appeals on points of law. In sharp contrast to the European position, players in English leagues facing lifetime bans or clubs facing points deductions have no recourse to judicial review on legal grounds.

Section 69 of the Arbitration Act 1996 permits appeals on legal points only where the tribunal's decision was "obviously wrong" or involves "general public importance" with the decision being open to "serious doubt." The "obviously wrong" test is deliberately stringent and rarely satisfied. The "general public importance" gateway, while requiring only "serious doubt," remains a high hurdle for complex factual decisions. Crucially, sports associations routinely exclude Section 69 by agreement.

International Arbitration Framework

The global appeal of arbitration stems largely from the streamlined cross-border enforcement framework established by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). With 172 contracting states, arbitral awards benefit from significantly simpler international enforcement mechanisms compared to domestic court judgments. Under this framework, courts in contracting states are generally obligated to recognise and enforce foreign arbitral awards unless the resisting party demonstrates one of the Convention's narrowly defined grounds for refusal, including that enforcement would violate the enforcing country's public policy.

The ECJ adopted a measured approach to any conflict with the New York Convention, acknowledging the complex interplay between international arbitration obligations and EU fundamental rights. While noting that the New York Convention doesn't directly bind the European Union, the Court recognised that all Member States are parties to the Convention, as is Switzerland. Crucially, the ECJ identified a complementary rather than conflicting relationship: the Convention establishes that states must recognise foreign arbitral awards made under arbitration agreements, but this recognition obligation operates alongside a corresponding duty to conduct judicial review for public policy compliance. For EU Member States, this public policy review necessarily extends to ensuring consistency with EU public policy principles, creating a harmonious system where international arbitration commitments coexist with EU requirements for effective judicial protection of fundamental rights.

What lies ahead

This ruling curtails the long-standing assumption that CAS awards enjoy near-absolute finality across all jurisdictions, including EU Member States, and ensures that EU courts are the ultimate authority on matters of EU law in sports (and other mandatory) arbitrations. The extension of EU oversight into previously insulated sporting decisions also has the potential to place contentious issues such as FIFA's TPO ban back on the sports law agenda. 

For sports organisations, this ruling necessitates a fundamental reconsideration of dispute resolution strategies. FIFA, UEFA, and other governing bodies can no longer assume that CAS awards will receive automatic recognition in EU courts when EU law issues are at stake. This may prompt sports bodies to either modify their arbitration procedures to ensure EU law compliance or accept that their awards may face additional scrutiny in EU jurisdictions.

From a legal practitioner's perspective, the decision opens new avenues for challenging sports arbitration awards in EU Member States. Clubs, players, and other stakeholders who believe their EU law rights have been inadequately protected in proceedings before the CAS now have a clearer path to seek domestic judicial review. However, this also introduces uncertainty and potential delays in sports dispute resolution.

Find out more

If you would like to learn more about how this decision may affect you or your business, please contact a member of our Disputes and Investigations team.