Secretary General of the FIA ICA slams manufacturers' comments

22/05/2005
NEWS STORY

David Ward, the Secretary General of the FIA International Court of Appeal, has issued the following statement into recent statements by the leading manufacturers in F1, following the BAR appeal.

1) Introduction

On May 9th five major car manufacturers (1) issued a statement which included the following paragraph:

"Following the events of the past week in Formula One, the manufacturers again confirmed that the issue of sporting governance is central to the comprehensive set of governing principles which the manufacturers unanimously agreed in January 2005. One of their objectives is to have a definitive interpretation of the applicable regulations through an independent, readily accessible and swift appeals process, administered by an internationally recognised body, in accordance with the practice of other major sports".

The manufacturers' statement clearly implies that the FIA International Court of Appeal (ICA), which had considered the Imola - BAR Honda case in the week before, is neither independent nor follows the practices of other major sports. This attack is misconceived and reveals a lack of understanding of both the structure of the FIA and the general principles of sports governance.

This paper, therefore, describes the main requirements of contemporary sports governance and demonstrates that in all respects the statement of the five manufacturers is wrong and constitutes an unwarranted and unfair attack on the members of the ICA who serve in an elected and entirely voluntary capacity.

2) Developments in Sports Governance – the Nice Declaration

Over the last five years there have been significant developments in sports governance largely stimulated by the application of European Community law to sport and, in particular, to sports governing bodies. This process culminated in the adoption by the European Council meeting in Nice during the French Presidency in December 2000 of a Declaration "On the specific characteristics of sport and its social function in Europe, of which account should be taken in implementing common policies".

This Declaration by Heads of Government of the European Union (EU) sets out the general principles by which the EU institutions should deal with sport, in particular, when applying internal market and competition rules. The adoption of the Declaration was an initiative promoted by President Jacques Chirac and supported by international sports federations, such as the International Olympic Committee, UEFA, and the FIA.

As regards sports federations the Nice Declaration includes the following:

Role of Sports Federations

7. The European Council stresses its support for the independence of sports organisations and their right to organise themselves through appropriate associative structures. It recognises that, with due regard for national and Community legislation and on the basis of a democratic and transparent method of operation, it is the task of sporting organisations to organise and promote their particular sports, particularly as regards the specifically sporting rules applicable and the make-up of national teams, in the way which they think best reflects their objectives.

8. It notes that sports federations have a central role in ensuring the essential solidarity between the various levels of sporting practice, from recreational to top-level sport, which co-exist there; they provide the possibility of access to sports for the public at large, human and financial support for amateur sports, promotion of equal access to every level of sporting activity for men and women alike, youth training, health protection and measures to combat doping, acts of violence and racist and xenophobic occurrences.

9. These social functions entail special responsibilities for federations and provide the basis for the recognition of their competence in organising competitions.

10. While taking account of developments in the world of sport, federations must continue to be the key feature of a form of organisation providing a guarantee of sporting cohesion and participatory democracy.

The Nice Declaration, therefore, recognises the competence and autonomous role of sports federations provided that they respect principles of transparency democracy and solidarity between different levels of the sporting practice. The EU institutions are now following these general principles in the application of Community law to sport and case law exists arising from decisions of the European Court of Justice that also recognises the legitimate rule-making role of governing bodies (e.g. the Deliege case ECJ C-51/96&97- April 11th 2000).

3) The Statement of Good Governance Principles (EOC/FIA)

In response to the Nice Declaration sports federations have also taken their own initiatives to promote good governance in sport. In 2000 the European Olympic Committee and the FIA together developed a ‘Statement of Good Governance Principles' for Sports Governing Bodies. The Principles were debated in February 2001 at a major conference in Brussels attended by over 170 delegates, representing all major sports, National Olympic Committees and national sports ministries and co-chaired by Dr Jacques Rogge and Max Mosley.

Commenting on the outcome of the conference, Dr Rogge, now President of the International Olympic Committee said: "The statement of good governance which resulted from this conference is an answer to public authorities and stakeholders in sport guaranteeing that sports bodies which pledge to respect those principles are standing for certain fundamental standards in the running of their sport".

The Statement of Good Governance Principles (SGGP) states inter alia that:

"Good governance requires that there should be a separation between the roles of:

1. Making and amending sporting rules as the primary legislative function,

2. Making and reviewing executive functions regarding the management of financial resources and organisation of sporting events, and

3. Resolving disputes between members, sporting participants and other relevant third parties". (SGGP section 3.2)

The Statement also includes specific recommendations on appeals processes as follows:

Governing bodies shall ensure that a procedure exists for resolving differences. Such procedures might include access to internal or external appeals or access to arbitration (whether ad hoc or through a recognised body such as the Court of Arbitration for Sport in Lausanne) or a combination of such procedures. In all cases procedures should be fair, transparent, accessible and efficient. In addition, no person sitting in any decision-making capacity on an arbitration or appeal board or panel should have any interest in the outcome of any dispute.

In addition to providing for access to such procedures, governing bodies will do nothing to prevent any party from seeking any remedy that they might have under national or international law. (SGGP section 3.6)

4) The Aarhus Declaration on Volunteer Work in Sport

A further relevant development in sports governance was the adoption in November 2003 by the EU Council of Sports Ministers meeting in Aarhus Denmark of a Declaration on Volunteer Work in Sport. This declaration highlights the importance promoting volunteers in sport and of respecting the "the rights of sports organisations to set and prioritise their own missions and sports rules". The Declaration also confirms that "it is the members and participants who, through the exercise of their democratic rights, make the decisions that affect the operation of their clubs and associations."

5) The FIA, Sporting Governance, Competition Policy and the ICA

The FIA's Statutes, Rules, the International Sporting Code and the International Court of Appeal are entirely consistent with the Nice Declaration, the Statement of Good Governance Principles and with the Aarhus Declaration. The FIA has in fact taken a leading role, together with the other major sports federations, in the debate about sports governance. And this engagement has resulted in practical changes to the FIA's decision-making systems. To date we remain unaware of any substantive contribution to the wider development of sporting governance made by the manufacturers that issued the statement on May 9th.

Not only are the FIA's policies and rules entirely consistent with best practice in sports governance but also with European Union competition law. In 1994 the FIA made a voluntary notification to the Brussels competition authorities, this process culminated in a thorough review of all the relevant rules and statutes applied by the FIA, and resulted in a number of positive changes leaving the FIA with a set of rules which the then Competition Commissioner Mario Monti described as a "good example" for sports federations to follow.

Those changes included strengthening the FIA's appeals procedure by increasing the transparency of the ICA and removing any barriers to challenging decisions of the ICA in the civil courts (where this is possible under national law).

Additional positive changes to the ICA have included making the hearings open to the media, increasing the number of judges elected to the Court and making the position of Secretary General of the Court elected and, therefore, no longer part of the internal management of the FIA.

The FIA does not utilise the facilities of the Court of Arbitration for Sport (CAS) in Lausanne. This is because the FIA believes that a combination of legal qualification and specific motor sport expertise is a vital necessity for its appeal court judges given the technical complexity of the sport. The judges of the ICA are independent and highly specialised jurists and motor sport experts and are therefore better placed than any other body in existence to adjudicate over matters relating to motor sport. ICA hearings are also frequently required to be held at short notice between rounds of championships, whereas the normal CAS appeal procedure may take four months.

In any case having the CAS or any other internationally recognised body as the only body competent to give "a definitive interpretation of the applicable regulations" as suggested by the manufacturers could give rise to significant competition laws problems, which is why the FIA has, in agreement with the European Commission, left open the possibility for challenges to the ICA's decisions before domestic courts, where this is possible under national laws.

It is noteworthy that this is not the first time that a competitor having lost an appeal before the ICA has resorted to questioning its independence. In March this year a competitor appealed an ICA decision to the Tribunal de Grand Instance de Paris on such grounds (amongst others). The French court very specifically confirmed the independence of the ICA in dismissing the competitor's appeal in its entirety. (Judgement of the Tribunal De Grande Instance De Paris – Societe Coli and Cie, March 29th 2005).(2)

6) Conclusion

The ICA procedures are independent, fair and transparent. They are also efficient and capable of providing swift decisions which can be challenged in the civil courts. Given that National Sporting Authorities and National Motoring Organisations are the bodies that act for appellants and respondents when appeals are brought before the ICA, both the Judges and Secretary General are, in fact, elected by, and exclusively accountable to the users of the Court.

The ICA is, therefore, constituted in a manner that is entirely consistent with the Nice Declaration, the Statement of Good Governance Principles, the Aarhus Declaration and the requirements of the EU competition law. Its independence has also been recognised by the civil courts.

Motor sport depends at all levels on the commitment of volunteers to organise competitions and to sustain the fairness and safety of motor racing. The ICA is part of that volunteer effort and serves many motor sport disciplines. (Since 2000 it has dealt with 43 cases of which just six involve Formula One). The ICA's Judges cannot comment on cases that they have heard. They are, therefore, unable, to defend themselves from unwarranted and unfair attacks made by competitors that would not be tolerated in any major sport.

It is one thing for the manufacturers to complain about the way in which the FIA develops its sporting and technical regulations, or to argue about the commercial agreements involving Formula One. However, it is quite another matter for the manufacturers to imply that volunteer judges elected to serve in an appeal court,
established in the FIA Statutes by the National Sporting Authorities and National Motoring Associations, do not act independently.

To maintain such a critique without the slightest evidence amounts to a fundamental attack on the basic organisational structure of the sport. It is a stance that directly conflicts with the requirements of the Nice Declaration which recognises that federations "must continue to be the key feature of a form of organisation providing a guarantee of sporting cohesion and participatory democracy" and clearly demonstrates that the manufacturers have, at best, a limited understanding of the principles of contemporary sports governance.

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Published: 22/05/2005
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