COVID-19 has caused financial difficulties for many in sport during the past few weeks, and especially football clubs given the current postponement of the season. It will, therefore, be no surprise if some parties will attempt to use COVID-19 in order to avoid contractual liabilities in the coming months.
The principle of pacta sunt servanda, simply meaning that agreements which are legally binding must be performed, is a fundamental feature of legal systems around the world and is enshrined in Court of Arbitration for Sport (“CAS”) jurisprudence. In accordance with that principle, it is, therefore, well established that lack of financial means to satisfy a contractual obligation of payment does not excuse the failure to make the required payment (see P.24 CAS 2005/A/957 Clube Atlético Mineiro v. FIFA). However, in certain limited circumstances, a party could be excused for a breach of contractual obligation under the legal concept of force majeure.
The concept of force majeure varies significantly across jurisdictions. For example, some jurisdictions have specific definitions of force majeure within legislation which apply even if a contract does not contain a force majeure clause or imply force majeure terms into contracts. Under English law, however, force majeure is not defined in legislation and parties can only rely on the doctrine if it is expressly provided for in the contract.
Ultimately, specific national laws and/or the relevant contractual provisions (including sporting rules) will determine whether force majeure can be relied upon to avoid a contractual obligation. FIFA's Statuses recognise CAS as the relevant arbitral body to resolve disputes relating to international football disputes between FIFA, its member associations, confederations, leagues, clubs, players, officials, intermediaries and licensed match agents and requires CAS to apply the various FIFA regulations and, additionally Swiss law. As such, a consistent body of CAS jurisprudence on force majeure, reflecting FIFA’s regulations and Swiss law, has developed. This is very relevant in the COVID-19 era and provides an insight as to how CAS will determine future football disputes where a party relies on force majeure (arising from the challenges COVID-19 is presenting) as an excuse for failing to comply with contractual obligations.
This article explores the CAS jurisprudence on force majeure in football disputes, which, although CAS doesn’t operate a rule of binding precedence, will helpfully determine the likelihood of parties successfully invoking this argument as a result of COVID-19 in future cases.
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