AKT blog has previously touched upon BAT arbitration processes and will continue to do so in the future, but the topic of this first case analysis is the recent award in the BAT 1802-1803 BIG Management v Ivanov and Vasilevski case. To fully disclose, AKT managing partner Dr Ivan Todorovic and the author of this post Dr Velimir Zivkovic (as Of Counsel) have acted on behalf of Respondents in this case.

However, every effort is put to present the issues raised in the award in the most objective manner and without discussing the merits of the case of either side. The award itself is not yet public, but should become so in due course; however, BAT awards are not confidential unless there has been a specific order to that effect (as per BAT Arbitration Rules 16.5). It is both possible and warranted to discuss the award as no such order has been made.

It is particularly warranted as this award, rendered by Klaus Reichert SC, makes important pronouncements on a series on issues concerning jurisdiction of BAT, burden and standard of proof, and the interplay between BAT goals of affordable and quick procedure with due process. All of these stem from the central question – was there ever a BAT arbitration clause between the parties?

As noted by the Arbitrator, ‘[t]his arbitration presents a novel (in the Arbitrator’s experience of over 13 years conducting FAT/BAT arbitrations) jurisdictional issue’ (para 33 of the Award). The crux lies in the following – according to the Respondents, the contracts they signed with the claimant Agency did not contain BAT arbitration clauses. According to the Claimant, they did so. Two versions of contracts were thus presented to the Arbitrator, containing signatures only on the last page and being otherwise identical apart from the penultimate page which in Claimant’s version had a BAT clause (and a different termination one), and in Respondents’ contracts it did not (and had in both a more favourable termination clause on which they relied).

Additional factual complexity was that the Claimant relied on a PDF version of a contract that was sent via a WhatsApp group by the employee of the Claimant, Mr Trifunovski, who subsequently left its employment, but was the only Claimant’s representative present when the contracts were signed with the Respondents. Considerable effort during the proceedings went into attempts by Claimant to show that the PDF versions of the contracts received by Claimant’s director, Mr Patapatiou, and another employee, Mr Simonovski, indeed contained such a clause. The matter was undoubtedly complex in factual terms – as Arbitrator eventually deduced, the same relevant WhatsApp chat group showed considerable discrepancies when analysed on Mr Patapatiou’s and Mr Simonovski’s phone; Mr Trifunovski’s chat was unavailable, and he on his side claimed that the signed version was the one without the BAT clause. During the proceedings, Claimant also engaged an external IT expert who produced a report that, per Claimant, offered support for their view of which PDF files were sent. The Claimant also suggested that further graphological and IT expert inquiry should be ordered to help clarify the factual situation.

Ultimately, the Arbitrator decided that the Claimant was unable to prove that there existed a BAT clause in either of Respondents’ contracts and therefore declined jurisdiction over the dispute. Arbitrator’s reasoning offers clarifications for both those engaged in BAT (and more broadly) arbitration, and those active in the transactional sphere of sports law – agencies, managers, lawyers, and athletes themselves.
The first issue was basic, but of critical importance – what version of the contracts was ‘correct’? As noted, there had to be a ‘binary choice’ between them (para 36), as no compromise position could exist. Here the Arbitrator clarified the difficulties that the Claimant would have in passing the bar for proving the existence of any such clause and the veracity of ‘its version’ of contracts. These difficulties are instructive to those dealing with contracts in sport and should offer appropriate lessons. The first aspect is proving what was actually sent by the Claimant’s agent back to the Claimant, i.e. whether the PDF versions of contract sent via WhatsApp chat indeed had a BAT clause in them. This was the opportunity to address both burden and standard of proof issues. As per the Arbitrator, and the finding is hardly controversial, the Claimant bore at least the initial burden of proof to demonstrate the existence of a BAT clause on which the jurisdiction is based upon (paras 54-55). But the question then turned as to whether the Claimant could do so bearing in mind the factual matrix. As noted by the Arbitrator, he took a measured view of the ‘evidential mix’, which included seemingly favourable PDF versions found on Mr Simonovski chat, total absence of any files on Mr Patapatiou’s chat, and lack of any information forthcoming from Mr Trifunovski (paras 39-47). Taken as a whole, there were scarce grounds to make any conclusive finding as to what, if anything, was exchanged on the side of the Claimant.

But equally, if not more importantly, the Arbitrator noted that:

‘Even if the Arbitrator was prepared to accept conclusively that Mr. Trifunovski sent Agency PDFs which contained BAT clauses, at the very best that could only give rise to matters as between Agency and its “man on the ground” at that time. That, in and of itself, does not prove which terms were printed on the sheets of paper which he presented to Players.’ (para 53)

Put simply, the Respondents were at all times strangers as to what occurred on Claimant’s (Agency) side (paras 39, 49, 51 and 53) and even a rock-solid evidence of ‘favourable’ PDF documents would not legally alter the fact that this was still just an allegation of one of the parties in the dispute. In terms of standard of proof required to substantiate such allegations, the Arbitrator set out that:

‘one asks the question as to whether it is more likely than not (which would put the standard of proof at its most indulgent to Agency) that Players actually signed documents containing a BAT clause. Even if it were the case that it was shown to be equally likely that Players signed contracts with a BAT clause or signed contracts without such a clause, such an equality would necessarily, in the Arbitrator’s sole right to assess the evidence, compel the conclusion to deny jurisdiction. However, Agency’s case has not risen to demonstrating even such an equally likely outcome.’ (para 55)

It is clear then, that the bare minimum required when it comes to standard of proof would be a preponderance of evidence (more likely than not), but that this standard can be seen as ‘the most indulgent’ choice. It is prudent to assume that parties engaging in BAT would be well advised to make sure their evidence on this critical issue goes considerably beyond the mere preponderance of evidence.

The other aspect of the award, one of particular importance in light of the efforts to make international quicker and cheaper, is the Arbitrator’s clear rejection of proposed but disproportionately expensive evidentiary procedures. The Claimant proposed engaging a graphology expert, which the Arbitrator first observed as excessive as the signatures themselves were not in question (para 35) and noted that it would make little sense to ‘expensively investigate a matter of common ground’ (ibid). This is coupled with further recognition that both graphology expertise and criminal complaints about forgery are ‘both pointless and evidentially hollow’ (para 37) in this context.

Similarly, the Arbitrator felt little inclination to agree to further IT forensic analysis, prompted by the ‘Expert Report’ (para 52). In addition to such investigation leading to little new insight, it was also explicitly recognised that:

‘there is a question of proportion: investigating with independent IT expertise the trail of WhatsApp correspondence would likely involve significant sums of money and time (bearing in mind also the claims being made) to a highly uncertain end. This is not an efficient use of resources and irreconcilable with the express philosophy of the BAT Rules to provide a simple, quick and inexpensive means to resolve these disputes.’(ibid)

Contrasted with the oft-discussed readiness of arbitrators to be perhaps overly lenient to party proposals to avoid later allegations of due process breaches (aka ‘due process paranoia’) such pronouncements are welcome and are a good model to follow. This is especially so when the arbitral rules themselves (as in BAT Rules Preamble, Rules 0.1 and 0.2) call for a quick and inexpensive process. But it is not limited to this context, as not only most arbitral rules in any case call for effective process in their provisions, but also accords with the shifting attitude of arbitration practitioners and a desire for less time and cost involved across a range of arbitration areas.

What are the lessons to be learned for the sports law and arbitration community, but perhaps also beyond? One clear lesson is that securing the evidence of a commonly agreed text of the contract, containing the BAT clause, is imperative to foster certainty and avoid unnecessary procedures. The actual manner might vary across jurisdictions, but methods such as notarial authentication of contracts, secure electronic signature of all relevant pages, and/or physical signature of all these pages all come to mind.

Secondly, careful consideration is necessary as to what the BAT Rules ethos of efficiency and speed means for the way in which parties plan to argue their case. Clearly stated goals of keeping expenses down and deadlines short can (and should) make the parties rethink any suggestions for inquiries that are not absolutely essential for proving the factual matrix. The Arbitrator’s readiness in this particular case to reject ordering further expert evidence which is certainly not harmful, but is disproportionately expensive and of dubious utility, is to be welcomed. It can be commended also beyond the realm of BAT/sports arbitration into other spheres as a good antidote to the ‘due process paranoia’ and the fear of parties’ raising challenges concerning the conduct of the proceedings.

To sum up, there are some fairly well-known quips as to ‘what law is’. One famous one is that possession is 9/10 of the law. Based on the above, perhaps a more apt one is that ‘the law’ is what you can prove.

Velimir Zivkovic