JOURNAL OF LAW AND PUBLIC POLICY

VOL-VI
A READER ON SPORTS & LAW
VOL-VI SPECIAL EDITION 2020

JOURNAL OF LAW AND PUBLIC POLICY

ISSN NO : 2350-1200

ARTICLES

Unethical Practices in Indian Sports: Issues and An Insight on the Menace of Drug Abuse in
Challenges Sports: With Special Emphasis on Sportsmen of
Dr. Ashish Dshpande North East India
Prakreetish Sarma & Neil Madhav Goswami

Competition issue in Sports: When Commerce

Trumps the Spirit of Sports Caster Semenya, Dutee Chand and the Question
Bhawna Gulati and Vipul Puri of Sex in Sport: A Critique of the Discourse on
Hyperandrogenism/Dsd in Female Athletes
Palash Srivastav and Harshi Misra
Fantasy Sports: at the Indian Crossroads
Praveen Tripathi and Aafreen Mitchelle
Collaco Arbitration and Sports Law: Scrutinising the
Dispute Resolution Process
Vaibhav Singh and Saurabh Tiwari

A READER ON SPORTS & LAW 2020

Taxation & Sports: Can one run a Mile
Rohith Kamath and Pranav Narsaria
Exploitation of Minors in Football:The Need to
Enact more Pactical Rules
Abuse of Dominance and Money Power in the Nandighosh Karan Nanda and Hitesh
Religion of the World – Football Mallick
Arijeet Bhattacharjee and Kavanya Surolia

National Law School of India University

Bengaluru
JOURNAL OF LAW AND PUBLIC POLICY
Special Edition
A Reader on Sports and Law
Vol. - VI 2020

JLPP - VI (2020)

National Law School of India University

Nagarbhavi, Bengaluru 5600242
Karnataka, India

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JOURNAL OF LAW AND PUBLIC POLICY
Special Edition
A Reader on Sports and Law
Vol. - VI 2020
Chief-Editor
Prof. [Dr.] Sairam Bhat
Professor of Law
Coordinator, Centre for Environmental Law Education, Research and
Advocacy, [CEERA], NLSIU

Editor
Mr. Praveen Tripathi
Ph.D. Scholar, NLSIU,
Assistant Professor, School of Law, Bennett University

Assistant Editor
Mr. Rohith Kamath
Ph.D. Scholar & Consultant, CEERA, NLSIU

Editorial Advisory Board

Prof. [Dr]. K. C. Sunny
Vice Chancellor, National University of Advanced Legal Studies, Kochi

Prof. [Dr]. Shashikala Gurpur

Dean-Law, Symbiosis International University

Prof. [Dr]. Sandeepa Bhat

Professor of Law, National University of Juridical Sciences, Kolkata

Prof. [Dr]. Bismi Gopakrishnan

Dean, M G University, Kottayam, Kerala

Prof. [Dr]. M R K Prasad

Dean-Law, Goa University, V. M Salgaocar College of Law

iii
Editorial Assistance

Ms. Madhubanti Sadhya

Teaching Associate, NLSIU

Mr. Raghav Parthasarathy

Teaching Associate, NLSIU

Mr. Vikas Gahlot

Teaching Associate, NLSIU

Ms. Geethanjali K V
Legal Associate, NLSIU

Ms. Lianne D’Souza

Reasearch Fellow, NLSIU

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Journal of Law and Public Policy
A Reader on Sports and Law Vol. VI - NLSIU 2020

CONTENTS

Editorial........................................................................................................ vii
ARTICLES
Unethical Practices in Indian Sports: Issues and
Challenges.................................................................................................... 1
Dr. Ashish Dshpande

Competition issue in Sports: When Commerce Trumps the Spirit of

Sports........................................................................................................... 15
Bhawna Gulati and Vipul Puri

Fantasy Sports: at the Indian Crossroads........................................................ 56

Praveen Tripathi and Aafreen Mitchelle Collaco

Taxation & Sports: Can one run a Mile.......................................................... 77

Rohith Kamath and Pranav Narsaria

Abuse of Dominance and Money Power in the Religion of the World –

Football........................................................................................................ 109
Arijeet Bhattacharjee and Kavanya Surolia

An Insight on the Menace of Drug Abuse in Sports: With Special Emphasis

on Sportsmen of North East India....................................................................... 129
Prakreetish Sarma & Neil Madhav Goswami
Caster Semenya, Dutee Chand and the Question of Sex in Sport: A Critique
of the Discourse on Hyperandrogenism/Dsd in Female Athletes.................... 147
Palash Srivastav and Harshi Misra

Arbitration and Sports Law: Scrutinising the Dispute Resolution Process........ 173
Vaibhav Singh and Saurabh Tiwari

Exploitation of Minors in Football:The Need to Enact more Pactical Rules........... 195

Nandighosh Karan Nanda and Hitesh Mallick

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EDITORIAL

Sports and Athletics encompass the favourite pass time of several millennial.
They have been pivotal in creating a global unison among diverse
cultures and economies, serving as a thread interwoven so as to connect
individuals from all walks of life. While they are successful in creating a
successful bonding factor, it is to be noted, that they may also be marred
with controversies, shortcomings and pitfalls. Law has been the wheel of
support that seeks to create a balance between right and wrong, in Sport and
Sporting Events. The need to maintain status quo in the interrelationship
between its various stakeholders is a precursor for maintaining the
integrity of sports. The emergence of Sports law, has involved questions
of Competition Law, Intellectual Property Law, Constitutional Law, and
other niche areas of Contracts such as endorsements, public policy, moral
and ethical conduct of players, etc. contested widely with diverging views.
The matters imperative for consideration inter alia is the submission and
challenges faced in Disputes Resolution through Court or Arbitration for
Sports, and the Implications of Minor Contracts in matters of Sports.

Game set and matchless: A reader on sports and law, Edited by Dr. R Venkata
Rao, et al., published in 2016 by National Law School of India University,
(NLSIU) Bengaluru has been pivotal in bringing out this special edition
of the Journal on Law and Public Policy. In pursuit of this Special Edition,
the Centre for Environmental Law, Education, Research and Advocacy,
(CEERA), a premier research and advocacy centre at NLSIU organised
a Two-Day National Seminar on Legal, Ethical and Contractual Issues in
sports in July, 2019, , which saw over hundred participants and enthusiasts
who presented their research works on allied areas of Sports Law and
Policy. This special edition of the Journal on Law and Public Policy is a
culmination of the finest papers received in the seminar.

Dr. Ashish Deshpande, in his contribution titled “Unethical Practices in

Indian Sports: Issues and Challenges”, discusses the vulnerability of sports to
various unethical and contributing factors that leave its image marred and

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 Editorial

tainted with controversies, identifying the need for a sui generis legislation
to safeguard the sanctity of sports and sporting events in India.

In“Competition Issue In Sports: When Commerce Trumps The Spirit Of

Sports”, written by Ms. Bhawna Gulati and Mr. Vipul Puri, based on their
research and their personal experiences as members of the Competition
Commission of India, have identified and examined various issues and
anti-competitive factors that may potentially have an adverse effect on
competition in the sports sector.

Dr. Sujith S. & Ms. Uma Devi S. have in their contribution titled “Implications
on Legal and Regulatory Framework of Sportscasting in India”categorically
discussed the legal intricacies that apply to broadcasting of sporting events,
the challenges faced in respect of neighbouring rights and delve into
matters that affect the legal and regulatory framework for broadcasting, of
sports and sports events while taking into account the need to safeguard
the public interest in the dissemination of the same.

In their Article titled “Fantasy Sports: At The Indian Crossroads”, Mr.

Praveen Tripathi and Ms. Aafreen Mitchelle Collaco identify the need for
regulation in the upcoming reality of fantasy sports, and deliberate the
dichotomy between “skill” v. “chance” phenomenon in online gaming
platforms.

Mr. Rohith Kamath and Mr. Pranav Narsaria, in their article “Taxation
and Sports: Can one run a mile?”, highlight the overall growth of sports
businesses and provide for a comprehensive overview of the taxation
regime in India, and go on to further deal with the various tax planning
techniques that may benefit the business of sports in India.

Mr. Arijeet Bhattacharjee and Ms. Kavanya Surolia, in their paper titled
“Abuse of Dominance and Money Power in the Religion of the World –
Football”, discuss the issue of abuse of money power and dominance in
football and the manner in which they affect the healthy competition. They
also discuss the UEFA Financial Fairplay Regulations of 2011, and make a
critical appraisal of the governance in regulation of the European Football.

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Mr. Harsh Malpani in his paper titled “Regulating Doping and Need For
Level Playing Field In E-Sports” criticises the minimal regulation that is
placed onto e-sports industry that has spurred over the past couple of years
taking the world by storm. His research provides a background on the
menace of doping and seeks to make a critical appraisal of existing anti-
doping regulatory regime in the e-sports industry.

Mr. Prakreetish Sarma & Mr. Neil Madhav Goswami, have in their research
titled “An Insight on the Menace of Drug Abuse in Sports: with Special
Emphasis on Sportsmen of North East India”, have made a comprehensive
analysis of the various challenges faced by sports personnel and their
desire to Performance enhancement supplements, triangulating them to
be victims of drugs, thereby necessitating the need for the development of
a sui generis law in the area.

In their paper titled “Caster Semenya, Dutee Chand And The Question
Of Sex In Sport: a critique of the discourse on Hyperandrogenism/DSD in
Female Athletes”, Ms. Harshi Misra & Mr. Palash Shrivastav have criticised
the criteria of sex determination of athletes, challenging the credibility
of scientific reasons for backing the regulations that seek to control the
amount of testosterone present in the bloodstream of female athletes, as
laid out in IAAF Eligibility Regulations for the Female Classification of
2019.

Mr. Vaibhav Singh & Mr. Saurabh Tiwari, in their paper on “Arbitration and
Sports Law: Scrutinising the Dispute Resolution Process”vehemently support
that arbitration has enormous potential to materialise into a platform for
resolving sports-related disputes and relieve the athletes of going through
the traditional method of courts and trials in case a dispute arises. The paper
discusses the limitations as to Court interferences and other interconnected
matters that impact successful arbitration of sport-related disputes.

Mr. Nandighosh Karan Nanda & Mr. Hitesh Mallick have expressed their
views on the misconduct involving the transfer and registration of minor
players and various other regulatory impediments thereat. Their paper
titled Exploitation of Minors in Football: The Need to enact more practical

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rules” makes a critical observation on the existing regulatory shortcomings

in the investigation process in FIFA, and associated events.

On an overall, this special edition caters to serve as a precursor for greater

research towards strengthening of the governing/nodal bodies and enhance
the capacity of the regulatory bodies to develop a robust mechanism that
allows for the growth of Sporting Events and activities, with flexibility and
agility, as that of the Athletes.

We express our profound indebtedness to Dr. Sudhir Krishnaswamy, Vice-

Chancellor, National Law School of India University, for his overwhelming
support and encouragement for research-oriented activities of CEERA.

Lastly, as the Chief Editor, I commend the efforts of Mr. Praveen Tripathi,
Research Scholar, NLSIU & Asst. Professor, Bennett University and Mr.
Rohith Kamath, Research Scholar, NLSIU & Consultant, CEERA, for
effectively coordinating the organisation of the Two-Day Seminar in July
2019, and their contribution as Editors of the transcripts received from the
Authors.

Dr. Sairam Bhat

Professor of Law, NLSIU
Chief-Editor, JLPP

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A Reader on Sports and Law Vol. VI - NLSIU 2020

UNETHICAL PRACTICES IN INDIAN SPORTS:

ISSUES AND CHALLENGES
Dr. Ashish Deshpande*
INTRODUCTION
“Sport has power to change the world. It has power to inspire. It has power
to unite people in a way that little else does. It speaks to youth in a language
they understand. Sport can create hope where once there was only despair. It
is more powerful than government in breaking down racial barrier” - Nelson
Mandela1

Sports is one of the modes of physical exercise which connects the world
and civilisation. The International Charter of Physical Education and
Sports, one of the initiatives of United Nations Educational Scientific and
Cultural Organization (UNESCO), through Article 1, confirm that the
practice of physical education and sports is a fundamental right for all.2 The
Right to develop ’one’s physical, intellectual and moral powers requires,
according to UNESCO International Charter of Physical Education,
physical activities and sports, access to physical education and sports as
an assured right to all human beings.3 Entry 33 of the State List under the
Indian Constitution covers powers to enact laws on sports with the state
government.4The National Sports Day in India is celebrated on 29th August
of every year, which is the birthday of Dhyan Chand. There are rules and
regulations in each play—a list of do’s and don’ts to maintain the dignity

1 Sports Law in India, Policy, Regulation and Commercialization (Lovely

Dasgupta and Shameek Sen eds., Sage Publication India Limited, 2018)
2 United Nations Education, Scientific and Cultural Organization,
International Charter of Physical Education and Sports (Adopted by
General Conference at its 20th Session, Paris - 21 November 1978).
3 Ibid. See, Preamble, International Charter of Physical Education in
Sports.
4 Constitution of India, 1950, Seventh Schedule, State List, Entry 33

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Unethical Practices in Indian Sports: Issues And Challenges

of those sports. Hockey, Badminton, Cricket, Football are common sports

all over the globe, which are very popular. Every nation has its national
games. Like, hokey is a national sport for India. Cricket is the national sport
of Australia and England; football is the national sport of Brazil, Israel, and
Italy, Lacrosse is of Canada and alike. As per the jurisprudential theory,
Sports is one of the activities that generate pleasure and promotes health.
Multiple factors roam around sports like environment, entertainment,
career, health, media, travel agencies, etc. So, to build the whole trust of
all those ancillary factors close to sports, there is a dire need to embed
ethical values in the sports. Different occasions, based on special events,
those sports are being played and celebrated. India celebrates certain days
which directly and indirectly connects with sports.5

India is a union of states wherein unity in diversity reflects. India follows

multiculturalism.6 There are multiple cultures and, in those cultures, and
their different subgroups. Indian provinces are blessed with provinces
with unique natural resources compatible with play. It includes hills and
mountains, seashores, jungle, mud, massive raining zones, etc. unique and
special features. So, based on natural shape and philosophy in that area,
sports culture is developed in the specific regional zones. Some of the
sporty activities like bullock kart races or buffalo race may be dangerous.
So, the state government and occasionally judiciary pitch in to sort those
critical issues out. Ministry of Sports and Youth Affairs deals with Sports in
India. This ministry deals with different programs for youth development
and to nourish the sports environment.7

5 Example: 29th of August is the National Sports Day, 21st June is the
International Yoga Day.
6 Sukhdev, A Study of Multi Culturalism in India, III(9) International
Journal of Research and Scientific Innovation (2016)
7 See generally, (May 4, 2020, 11:50AM), https://yas.nic.in/sports/
khelo-india-national-programme-development-sports-0.

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With this view, author descriptively analyses the importance of ethics in

sports area in addition to legal aspects of sports and highlights issues and
suitable solutions to inculcate ethical spirit in sports in India.

SPORTS ETHICS AND FAIR PLAY

Ethics, in other words, Niti is the soul of every profession. In all sectors,
maybe agriculture, business, profession, occupation, service, ethics play a
dynamic role. Various federations, boards, and councils deal with ethical
rules for their specific sectors. All ethical standards are not expressed,
but they are implied too. Most of those rules are customary rules. The
concept of ethics is a subjective one which depends upon the fact and
circumstances of the case. State-wise, also, the idea can be different. Ethics
refers to principles, basis, foundation, a set of archetypes, models, and
values that form the character of each person, and they translate through
action into their ways of beings. Ethics is thus the set of norms of behaviour
and way of life through which human beings tend to realise the value of the
” good’.8In India, to imbibes ethical aspects in life, from childhood itself,
stories are being told and narrated to promote and preserve moral values in
the next generation. Ramayana, Mahabharata, Isap Niti, Chankyaniti, etc.
dynamic sources tell us the importance of values in day to day life. Ethics or
value education is one of the compulsory courses in some parts of Indian
secondary schools as well to generate and promote morality and culture in
the minds of the next generation of society.

There are certain rules and skill set applicable for the specific sports.9

8 For example: See, Ethics in Sports, Guidelines for Teachers (National

Plan Portugal) (May 4, 2020, 11:55 AM), http://www.pned.pt/
media/31479/Ethics-in-Sport-Guidelines-for-Teachers.pdf.
9 See generally, A Handbook for Teaching Sports (VSO Books) (May 4,
2020, 11:55 AM), http://www.arvindguptatoys.com/arvindgupta/vsosports.
pdf.

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Unethical Practices in Indian Sports: Issues And Challenges

Continuous breathless pronunciation of the word Kabbadi is the test in

Kabbdi. In Kho-Kho, particular position of seating and pushing other
participant matters, in Kusti,the skill of touching back of another participant
matters. Boat races, Kabaddi, Kho-Kho, Atya patya, ball badminton,
bambaram, buffalo racing in Kerala, bull surfing, Chaturanga, Dhopkhel,
fighter kite, Gillidanda, Hori Habba, Insuknawr, Jallikattu, Kuttiyum
kolumLagori, Langdi (Sport), Mallakhamba, Mukna, Pehlwani, Punjabi
kabaddi, Singapi, Surr, Tennikoit, Vajra-mushtiVallam Kali,Yubi lakpi.

State-wise in the state of Maharashtra, Gudhipadwa, Krishn Jnmastami,

Ganesh Chaturthi, Navratriis the auspicious occasions on which sports
activities are carried out. Certain religious feelings are associated with
sports—Mela for races and rustling, Sankranti for Kites.Few sports are
being played without equipment; few played with types of equipment, few
needs animals, few need not have animals.

Each sport has its beauty. Based on customary rules, those plays are carried
out in a very enthusiastic manner. The new generation in India is much
into technology and less in the fieldwork. However, if we dig out the glory
of Indian sports, we have a lot of regional sports which is known to every
Indian. Mallakhamba is one of them. In Kerala, Kalaripayattu is a popular
event with the use of sword and dhaal. Many traditional sports in India
has lost space on account of legislative changes made at various level. As
per the Arms Act, the use of the sword is banned in public places. Bullock
Kart race is a matter of debate in Maharashtra as the state legislation bans
on the same. Wrestling or Mally Yudhhya is one of the popular Panjabi and
Maharashtrian Sports events. Again, there are specific rules as to the mode
of touching back on the floor and use of nails and fingers.

Yubi Labi in Manipur, Camel Racing in Pushkar, Kambala in Karnataka,

Jallikattu in Tamil Nadu, Insuknawr in Mizoram, Dhopkhel in Assam, etc.
are the popular sports all over India. The sporty spirit is not the only thing

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required for pure sports. It should be natural. Sports should be played by

merited candidates who are free from any external factors. Skill and power
should be examined in pure sports rather than influence and references —
personal physical strengths and mental ability to be tested.

ETHICAL ISSUES AND CHALLENGES IN SPORTS

(a). Biased Selection Process:
Sports is not a prerogative of every individual. It requires personal interest,
physical ability, and skill set to represent the team. Despite physical capacity
and interest, if the skill set is missing, there is no use. So, everybody
cannot be a player and also a part of the team. There are traditional and
statutory rules for the selection process. So, in case of the biased selection
process, the authenticity or calibre of the candidate can be a big question
mark before the sports. There is a possibility of biases of team leader or
any influential player in the team. Various rules and regulations regulate
the selection process. Every federation at the state and national level are
governed under Rule 2011 and 2013 respectively. The specific procedure to
be followed by the stakeholders. However, if the selection is not made on
proper criterion or strategy, it affects the quality of the play and ultimately
loses public trust towards that play.

(b). Political interference:

India is the biggest democracy in the world. There are local autonomous
bodies created under the Indian Constitution ex officio be a part of sports
tournaments. Many politicians are also actively involved in sports. Even,
the schools and colleges of politicians may prejudice the specific team or
teams in the particular constituency. So, unfortunately, many times, that
political interference comes in unwanted situations and createsa nuisance
to fair play. Grampanchayat Members, Cooperators, Member of Legislative
Assembly, Member of Parliament, etc. take an active part. On account of

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Unethical Practices in Indian Sports: Issues And Challenges

birthday celebrations, sponsorships are offered by the political parties, and

indirectly politics come in the picture. In the name of local autonomous
bodies and local representatives of the state and central government,
political parties pitch in the sports tournaments. The moment politics
comes in any aspect, the real fun of sports and natural process gets affects.

(c). Doping:
As per the English Cambridge Dictionary, Doping means an act of giving
a person or animal drug to make them perform better or worse in a
competition. Players’ skill set and physical strength are tested only are he or
she projects in the sports. However, in case some additional influential factor
is included, then it will not be the original natural game. Unfortunately, to
get fast results, quick name, and fame, participant players, get into doping.
That doping affects not onlythe health of individual players but also the
dignity of the sports in toto. Unfortunately, India has ranked third in the
use of Doping substances.10 Doping is undoubtedly not a good sign for the
bright future of Indian Sports. If such negative aspects lead to a debarring
specific athlete from specific sports. Moreover, Wrestler Narsingh Yadav
was also banned by Switzerland, and in 2018, Maria Sharapova was
provisionally suspended after failing drugs in the Australian Open.

To avoid doping practices, The Word Anti Doping Act (WADA), and at the
national level, The National Anti Doping Act are active at the national and
international level. The use of drugs is a curse in sports.11 There are instances
of physical damage as well as psychological issues due to the use of doping
on athletes’ health. For example, Lower blood pressure, slow heart rate,

10 K.P. Mohan, Why India Should Criminalise Doping in Sports (2017)

(May 4, 2020, 11:50AM), https://thewire.in/law/criminalising-doping-sports.
11 Dhruv Mahendru et al., Drugs in Sports: The curse of doping and role of
pharmacologist 51(1) Indian Journal of Pharmacologist (2019) (May 4,
2020, 11:50AM), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6444838/.

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A Reader on Sports and Law Vol. VI - NLSIU 2020

sleep disorder, spam of airways, etc. are physical issues. In addition to this,
in psychological aspects, there can be an increase in stress on heart, blood
clotting, stroke, and alike. Australia, America, and all over the continents
have their specific policies to cope with dopping from time to time.
III(d). Influenced umpires:
For competent judging position, umpires need to be with clean hands.
There is a different level of referees at various stages. So, at each stage, there
may be malpractices by influenced umpires, which affects the natural flow
of play.

(e). Sexual Discrimination:

As per the Universal Declaration of Human Rights 1948, everyone is bornfree12
andMen and women should be treated equally. Discrimination based on
sex is prohibited. Considering the rampant gender discrimination,the
government has made specific parameters which empower state and the
central legislation to enact special rules and regulations for women. In the
representation of women in local autonomous bodies as well, women are
considered specially. India is a dominating male nation. Still today, men are
preferred as sporty comparing to women. However, at the selection process,
representation, nomination, celebration, etc. connecting to sports, there
are instances of sexual discrimination. Art 14 of the Indian Constitution
prefers equality protection of the law.Article 15(3) gives prerogatives to the
state as well as central government to enact special rules and policies for
vulnerable groups in the society. There is a thirty-three percent reservation
too in local autonomous bodies of the nation to give more participation of
women in the governance. India is a patriarchal society. Male domination,
in one of the dimensions, denotes the suppression of women. So, to control

12 See Amnesty International, We are all born free (Frances

Lincoln Publishers Ltd, 2015)

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Unethical Practices in Indian Sports: Issues And Challenges

women at a certain level, sexual discrimination is rampant.

(f). Sexual Harassment:

Dignity and Safety atmosphere is indispensable for a human being. As
per the Human Rights perspective, sexual harassment at workplace is one
of the callous act which affects the dignity of women; Sports industry is
also not an exception for such unwelcome instances. Because of multiple
chances of male interference in the sports, it maybe in the capacity of
the trainer, management, jury, co-player, etc. there are only chances of
sexual harassment that affect the human dignity of women. Ranjita Devis
Case (2010) is one of the leading cases relating to sexual harassment of
athletes. There was inappropriate and shameful behaviour from the coach.
In that case, the hokey coach Mr M K Kaushik was charged with sexual
harassment,wherein later, he resigned and quit form the post of Indian
national women team head coach.13 Sexual harassment is a subjective one
and has many dimensions. It is not only constrained to actual touch, but it is
also extending to showing pornography, talking in an unwelcome manner,
and promises for promotion or demotion, etc. modes. Many times, female
participants become a victim of sexual harassment at different levels by
different people in the sports industry. As per norms in the Prevention
of Sexual Harassment Act, 2013, there are mandates on each employer
to prevent and resolve through complaint mechanism specific issues
connected with Sexual Harassment.
III(g).Corruption:
Corruption is one of the stigmas in public as well as the private sector. This
concept is not only connected with monitory aspects, but it can be of -non-
monitory elements as well. It disturbs all major Indian sports, including

13 Vidushpat Singhania et.al., Current Issues within Sports Laws in India,

Sport Laws in India: Policy, Regulation and Commercialization (Lovely
Das Gupta and Shameek Sen eds., Sage Publication, 2018).

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cricket, hockey, weight lifting, and athletics.14To book grounds, nomination

as a player or jury or trainer, corruption is one of the hindrances. In
spite of the Prevention of Corruption Act, 1988, there are instances of
fraud at public as well as private sectors, which affects the dignity of the
sports. The stakeholders and corruption are repeatedly using lacunas, and
exceptionsare practices.
(h). Favoritism:
Certain community people or class of people prefer individual players
to be in the team despite their shortcomings in sporty standards. Such
a kind of bias affects the chance of deserving candidates to participate in
the team. Favouritism based on a specific class, caste, community, sex. If
such informal and irrational criteria would lead to injustice to deserving
candidates from the play.
SOLUTIONS
a). A strong and comprehensive legal framework to cover sports issues:
In India, legislative protection to the sports industry is pluralistic. The
Indian Penal Code, Torts, Indian Contract Act, The Consumer Protection
Act, etc. statutes, directly and indirectly, protect sports. However, there is
no exhaustive legal protection available exclusively to Indian Sports. Indian
sports legislation is not comprehensive to cover each dimension of minutes
in sports. So, there is a dire need of a robust legislative framework. Different
issues have specific solutions. However,many unaddressed problems need
to be resolved by a comprehensive legal framework at the national level. To
enhance the player’s interest in sports and to build the confidence of sports
as a unique career option, there is a dire need for comprehensive sports

14 Khan Muneer Aslam, Corruption in Sports in India 7(1)

International Journal of Scientific and Research Publications (2017)
(May 4, 2020, 11:50AM), http://www.ijsrp.org/research-paper-0117/
ijsrp-p6111.pdf.

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Unethical Practices in Indian Sports: Issues And Challenges

legislation.15

(b). Adoption of the National Sports Ethics Commission Bill, 2016:

There is a proposal for one consolidated comprehensive Sports Ethics
Commission Bill, 2016. This Bill is under United Nations Resolution 58/5
adopted by the General Assembly in the year 2003, which has recognised
sport to promote education, health, development, and peace. International
Convention to this effect is adopted in 2005 at Paris provides for action
against doping, and India has ratified the same convention on 10th
September 2007. This is basically for constitution of a National Sports
Ethics Commission to ensure ethical practices and fair play. Itestablished
to eliminate doping practices, match-fixing, fraud of age, fraud of age,
sexual harassment in sports, and matters connected therein. This Bill has
proposed to have Federation Committee. Those committees should enact
their own rules of ethics within one year from its formation. And it should
periodically submit records to the National Sports Ethics Committees as
and when required. It should also report all the offences to the National
Commission for necessary action. Those federations are also bound to
adhere to ethical practices dictated by the Commission periodically. The
Union Government is under obligation to establish The National Sports
Commission within six months from the enactment of this statute. To
expedite work effectively, the Commission can recruit staff. It can also
involve experts in sports on a contract basis. The Commission can take sou
moto cognisance of issues on sports ethics. It must prepare annual reports.
It cans ask the specific federations for amendments in the Code of Ethics.
It has all powers of Civil Courts. All the pending cases relating to sports

15 Sachin Deshmukh and Abhay Jaghav, Regulating Sports and Games in

India- Need of Comprehensive Legislation 3(1) International Journal of
Yoga, Physiotherapy, and Physical Education (2018) (May 4, 2020, 11:54
AM), http://www.sportsjournal.in/archives/2018/vol3/issue1/2-6-43

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shall be transferred to the Sports Commission. No Civil Court is authorised

to interfere in the routine of Sports Commission. An aggrieved person
can go to the Supreme Court of India in Appeal. There is a provision of
punishment for sexual harassment as per Prevention of Sexual Harassment
at Workplace Act, 2013. It has given clear cut definitions of Match Fixing
along with punishment for it. Besides, there is a penalty for false age and
doping. Such offenders will be disqualified from participating in future
sports as well. All the official sports federation in India is bound to adhere
to the rules and regulations. In case of failure to respect, there is a provision
of hefty fine to the specific federation. However, there is an exemption for
acts or omissionsdone in good faith. The Central Government is entitled to
remove doubts in this regard and to make rule.
(c). Awareness in society about sports ethics and execution of sports
legislation:
In India, legal awareness is one of the hindrances. One side, ignorance of
the law is no excuse, and on the other hand, there is no proper awareness
amongst all segment of society. Laws should be well known to all, but
unfortunately, many of the people do not aware offundamental laws in
India. All stakeholders should conduct this awareness campaign in society
with the help of social media and NGOs and local autonomous bodies.

(d). Ethical lessons for budding payers from schools and universities:
People who possess fearlessness, purity of heart, steadfastness, benevolence,
control on senses, worship, the study of scriptures, austerity, uprightness,
non-violence, truthfulness, freedom from anger, renunciation, tranquillity,
compassion to living beings, freedom from sensuality, vigour, patient,
harmlessness, freedom from vanity are present in those born to a divine
heritage.16 Values are classified into three classes. There can be personal

16 Chitra Lakshimi, Value Education : An Indian Perspective on the Need

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Unethical Practices in Indian Sports: Issues And Challenges

values, neighbourly, and the community.

Ethics and value education is a heart of the past, from Ramayana;

Mahabharata till modern period, principles of non-violence has been
taught and also followed. Panchtantra stories highlight different valuesof
educations in various modes of life. If all individuals followed ethical
principles, it would be the strength of society. Schools and colleges should
teach sports ethics from the very beginning. Such kind of lessons will help
kids to think positively about sports as a career option. Compulsory courses
with internal marking, based on skill learning, will enhance student’s
interest in fair play. Each age is meant to play specific sports, so, based
on their age, specific sports ethics should be covered with practical and
theoretical dimensions.
(e). Neutral Media:
Media is the fourth pillars of democracy. So, its status is as good as a
legislative, executive, and judicial wing in the states. People trust the news
more than what is written in the black and white letters of the law. So, the
media should promote genuine players who religiously follow sports ethics.
Since ethics is subjective, which depend upon fact and circumstances of
each case. So, based on real facts, stories to be promoted. Also, to prohibit
malpractices in sports, there a dire need to highlight unethical practices
before society and demote such malpractices.

It is not only limited to newspaper, but it covers television, information

on the public domain, cinema, etc. As a form of communication, it plays

for Moral Education in a time of Rapid Social Change, 10 (3) Journal of

College and Character (2009)(May 4, 2020, 11:54AM), https://www.
tandfonline.com/doi/pdf/10.2202/1940-1639.1077.

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a dynamic role in the sports industry. It is not only limited to furnishing

information but is one of the means of entertainment. Social media is used
in a more significant extent as a form of the tweeter, Whatsapp, Facebook,
etc. by the players as well as club members and management for exchange
of information. Aggressive and fair media can bring miracles. It can convey
the right role model to the people. It promotes fair play and can inspire the
spirit of clean sport. It can encourage education of ethical and legal rules
too through communication. 17
(f). Strict Control of Sports Federations:
The Ministry of Sports and Youth Development, Government of India has
recognised sports federations and bodies.18 There are 56 different disciplines
along with names, presidents and secretaries. It is available on the public
domain along with contact details of those federations. For smooth sports
governance, there are different models like Ministry of Youth Affairs
and Sports (MYAS), Indian Olympic Association (IOA), State Olympic
Association (SOA), National Sports Federation (NSF), Sports Authority
of India (SAI), etc. stakeholders are working hand in hand.19In order to
monitor specific sports events, particular federations are created by 2011
and 2013 Sports Codes. However, there is a need for controlling those
sports federations under one umbrella.

(g). Generous honorarium to athletes, jury, and trainers:

17 Rajesh Kumar and Preethi, Effect of Media on Sports, 5(2)

International Journal of Physical Education, Sports and Health
338(2018), (May 4, 2020, 11:55 AM), http://www.kheljournal.com/
archives/2018/vol5issue2/PartF/5-2-49-296.pdf.
18 See generally, (May 4, 2020, 11:55AM), https://yas.nic.in/sports/
support-organisations-1.
19 Jitendra Choudhary and Jayat Ghosh, Governance of Sports in India
(2013) (May 4, 2020, 11:55AM), https://tejas.iimb.ac.in/articles/Tejas_
September%20Edition_Article%201.pdf.

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Unethical Practices in Indian Sports: Issues And Challenges

Money is one of the essential requirements of all human beings. For extra
money, there are tendencies of stakeholders who are directly and indirectly
involved in the sports to indulge in malpractices. So, in case, proper
remuneration is given, there are fewer chances of corrupt practices for sure.
Ministry of Sports and Youth Affairs, Government of India, through its
revised scheme of human resource development,20 has specific favourable
provisions governing ample consideration to all stakeholders involved in
the sports in India.
CONCLUSION
The sports industry in India needs comprehensive legal and ethical
enactment for a bright future. Full awareness and adherence to ethical and
legal regulations and self-ruling by each stakeholder involved in the sports
is the solution to adhere to ethics in the sports. All the stakeholders should
be with a clean hand and have zero-tolerance in all aspects of unethical
practices. Lessons to be given to the persons who do not follow the rules.

****

20 See generally, (May 4, 2020, 11:55AM),https://www.yas.nic.in/sports/

scheme-human-resources-development-sports-0.

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COMPETITION ISSUE IN SPORTS: WHEN

COMMERCE TRUMPS THE SPIRIT OF
SPORTS
- Bhawna Gulati1* and Vipul Puri2**

INTRODUCTION
The word ‘sports’ is defined in the Oxford Dictionary as ‘an activity
involving physical exertion and skill in which an individual or team competes
against another or others for entertainment’. The definition emphasises
three elements of ‘sports’ viz., physical exertion/skill as an action on the
part of participants or players of the sport, competition as a medium
for demonstration of activities and all this with the broader objective of
entertainment.

Of the three essential elements of ‘sports’ as contained in the definition,

while the application of skills/physical exertion may be said to form the
core of all sports activities, the emphasis on competition and entertainment
may vary across sports activities. Sports activities are generally classified as
‘recreational sports’ and ‘competitive sports’ with the former emphasising
on the entertainment aspect and latter going beyond the fun part towards
professional, performance-oriented competitiveness.

1 *
Joint Director (Law), Competition Commission of India (CCI),
presently posted in the Antitrust Division of CCI.
2 **
Joint Director (Financial Analysis), CCI, currently on deputation
to Telecom Regulatory Authority of India (TRAI) as Joint Advisor.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

While there is no apparent need for any strict regulation for recreational
sports, certain rules must govern competitive sports to ensure the
fairness of competition. An immediate question which arises is if there
is a need for regulation, which should be entrusted with this work/
task/ responsibility? A prompt and obvious answer would be that there
can be a sport governing body for each sport which should frame the
rules and regulations governing various aspects of the sport. However,
this aspect of a governing body further raises multiple related questions
viz., what if we have more than one governing body creating its sports
ecosystem?3 What if the rules made supposedly for ensuring the fairness
of sport is not fair to the players?4 What if the sports regulators, who
are primarily entrusted with the administrative work, start indulging
in the monopolisation of sport?5etc. The issues may not only emanate
from the regulator’s side but can also arise from the players who are an
equal participant in the system.

In some cases, it is the players who may be striving to gain a position

to exercise influence on the rules or the regulators by forming
associations.6At the same time, the interaction between multiple

3 The Professional Chess Association (PCA) was in existence between

1993 to 1996 as a rival organization to FIDE, the international chess organization.
There was a dispute between Hockey India and Indian Hockey Federation for
being the national governing body for hockey in India.
4 The Competition Commission of India has investigated against the
alleged anti-competitive practices of Hockey India (CCI Case No. 73 of 2011) and
All India Chess Federation (CCI Case No. 79 of 2011) in this regard.
5 The Competition Commission of India has investigated against the
Board for Control of Cricket in India in this regard, in Surinder Singh Barmi and
The Board of Control for Cricket in India, (CCI Case No. 61 of 2010), decided on
29.11.2017.
6 The players of a sport organize themselves as player associations and
now UNI World Athletes has been established as a global collective of athletes,
organized primarily through major player associations.

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stakeholders within the sports ecosystem may have intended/

unintended effects on other stakeholders. These may include viewers
who are the end consumers of sporting events or the firms in related
markets such as media companies which engage in the broadcasting of
sports events etc.

The issues raised above have myriad dimensions. However, the scope of
this paper is limited to examination of the organisational structure of
competitive sports and identification/analysis of the issues which may
potentially have an adverse effect on competition in the sports sector
emanating from the said organisational structure. Further, to the greatest
extent possible, the discussions focus on the specifics of the Indian sports
sector and the decisional practice of the Competition Commission of India
(hereinafter, ‘CCI’).

The competitive dynamics in the market are primarily determined, or

impacted, by structural as well as behavioural factors. Section II of this
paper/article examines the organisational structure of competitive sports
and its implications on the value chain of sporting events. Section III
identifies the specific competition issues for examination and Sections IV,
V and VI discuss the issues identified viz., jurisdictional issues, the impact
of monopoly in the regulation of sports and that in the organisation of
various sporting events, followed by concluding remarks.

ORGANISATIONAL STRUCTURE OF COMPETITIVE

SPORTS AND ITS IMPLICATIONS ON THE VALUE
CHAIN OF SPORTING EVENTS
Any discussion on the organisational structure of competitive sports
mandates an examination of the working of the International Olympic
Committee (IOC), responsible for governing the organisation of the

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

Olympic Games. IOC has issued an Olympic Charter (OC) which codifies
the fundamental principles and bye-laws adopted by the IOC. Among
other aspects, the OC identifies three main constituents of the Olympic
Movement viz., the IOC itself, the International Sports Federations (IFs)
and the National Olympic Committees (NOCs). It is important to note
that the IFs and NOCs are generally formally recognised by the IOC.
While IFs are recognised for administering sport at world level, the role
assigned to recognised NOCs is the development and promotion of sports
in their respective countries, following the OC. The statutes, practice and
activities of the IFs and NOCs have to conform with the OC. In practice,
this system is followed by most of the sports bodies, Olympic sports as
well as other sports with little or no modifications. For example, in cricket,
International Cricket Council (ICC) is at the top, which is akin to an IF.
There are continental federations such as Asian Cricket Council followed
by recognised national bodies akin to NOCs such as Board of Control for
Cricket in India (BCCI) followed by State-level bodies recognised by BCCI
and so on.

The aforesaid constituent system gives rise to the following implications on

the value chain of sporting events:

(a). The Pyramidal structure of sports governance:

The organisational structure described above wherein a single national
association per sport operates under the umbrella of a continental or
a worldwide federation is popularly called as the pyramid regulatory
structure. The pyramid structure also takes within its fold, the regional
sports federations affiliated to national association or clubs etc. affiliated
to regional sports federations. All member bodies working under the
umbrella of a worldwide federation for a particular sport (and under IOC
for Olympic sports) are generally required to ensure that their statutes,

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practice and activities conform with that of the worldwide federation (and
the Olympic Charter in case of Olympic sports). By requiring consistency
of statutes, practice and activities with that of the worldwide federation, the
pyramid structure ensures a standard code of sports governance across all
the levels of the pyramid. This standard code may include technical rules of
the sport, rules regarding the conduct of players such as compliance with
doping rules etc.

(b). Exclusivity in the organisation of representative sporting events:

The sporting events may be classified as representative sports or what are
also called as official sports and non-representative sports. Representative
sports include events which feature teams selected by the members in a
pyramidal structure. As per the OC, the NOCs have the exclusive authority
for the representation of their respective countries at the Olympic Games
and the regional, continental or world multi-sports competitions patronised
by the IOC. The other non-Olympic sports also confer similar exclusivity
to their affiliated or recognised national bodies for the representation of
their respective countries.

Similarly, the participating teams selected by regional, state, district bodies

directly or indirectly affiliated to the recognised national organisation
represent the respective region, state or a district, and so on. This
representative system gives rise to classification of sports tournaments
as international (where national representative teams compete with each
other), national (where state representative teams compete with each
other) and so on. All the representative sports activities are organised by
the members in the pyramidal structure.

II(c). Exclusivity or control over the organisation of non-representative

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

sporting events:
In addition to the representative sporting events, sporting events can also
be organised in a manner where the participating teams are not the official
representatives of a particular country or state etc. Such events are generally
organised in the form of sports leagues. Since these events do not feature
teams selected by pyramid members, these events can also be organised
by agencies other than the designated sports regulators. However, for
the organisation of sports events, the organiser may need access to the
sports infrastructure and the players, necessitating the need for organiser’s
interface with the sport’s regulator.

Given that generally the sports infrastructure is owned/controlled by sports

regulators and players may also be bound by their respective contracts with
the sports regulators, this interface is inevitable. As the sports regulators
consider themselves as the custodian of respective sport, apart from being
engaged in organisation of non-representative sporting events, they have
also put in place a framework of the “approved” or “sanctioned events”
and “non-sanctioned events”. The net result of this classification is that
while the sanctioned events may get access to the desired infrastructural
facilities and players, no such facilities will be extended to non-sanctioned
events, making the organisation of such events a practical impossibility.
This framework allows them to exercise complete control over critical
inputs and in turn over organisation of non-representative sporting events
as well.
IDENTIFICATION OF ISSUES FOR EXAMINATION
The primary issue arises from the organisational structure of competitive
sports. It follows from the discussion above that there is monopoly/
control of sports regulatory bodies in both the governance and
organisational aspects of both the representative and non-representative
sporting events, which needs to be examined for the likelihood of

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leading to competition law issues. The economics of competition law

emphasises that monopolies are not bad per se, and in specific markets,
most efficient results can only be achieved in monopoly form of market
structure. Thus, particular markets which are served most cheaply by
one firm, and such markets are referred to as the natural monopolies.7
The competition laws across the world, considering the likelihood of
efficiencies in operations, also do not frown upon monopolies just
because of their existence and apply the provisions of competition
law on a ‘rule of reason’ basis. Thus, the monopolies in governance/
organisation of sports events also warrant an objective examination in
light of the specificities of the sports sector.

However, before proceeding ahead, another issue of jurisdiction needs

to be examined. The competition laws in general, and cases falling under
Section 4 of the Act which prohibits the abuse of dominant position,
in particular, work on the test of engagement of the relevant entity in
“economic activities” for deciding on jurisdiction. The Act considers the
issue of jurisdiction based on the entity fulfilling the criteria of being an
“enterprise” as defined in the Act. Thus, the international approach and the
India position in this regard is also to be examined.

Based on those described above, the following issues have been analysed
in this paper.
a. Examination of jurisdictional issues in relation to sports
regulatory bodies;
b. Examination of monopoly in regulation/governance of
sports activities;
c. Examination of the organisational aspect of sports regu-

7 Also see, FastTrack Cabs Pvt. Ltd. v. ANI Technologies, CCI Case No.
6&74 of 2015, decided on 19.07.2017.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

lators.

(a). Examination of jurisdictional issues about sports regulatory bodies:

The first test for any entity to be subjected to the jurisdiction of
competition law in India is whether the same qualifies to be an
“enterprise”8 as defined in the Act. In all the cases dealt by CCI in the
sports sector,9 thefirst defence unfailingly taken by the sports federations/
bodies has been that they do not qualify to be an ‘enterprise’ within the
meaning of Section 2(h) of the Act. This completely insulates entity
from the application of Section 4 of the Act. They rested their defence
on the two-pronged argument—firstly, that they operate in the form of
non-profit entities and secondly, they do not engage in any economic
activity.

As regards the non-profit objectives, the arguments given by the sports

8 Competition Act 2002 Section 2(h) of the Act- enterprise as a person or a

department of the Government, who or which is, or has been, engaged in any
activity, relating to the production, storage, supply, distribution, acquisition or
control of articles or goods, or the provision of services, of any kind, or in
investment, or in the business of acquiring, holding, underwriting or dealing
with shares, debentures or other securities of any other body corporate, either
directly or through one or more of its units or divisions or subsidiaries, whether
such unit or division or subsidiary is located at the same place where the enterprise
is located or at a different place or at different places, but does not include any
activity of the Government relatable to the sovereign functions of the Government
including all activities carried on by the departments of the Central Government
dealing with atomic energy, currency, defence and space.
9 In the first decade of its enforcement, the Commission has dealt with 4
cases against 3 sports authorities—Board of Control for Cricket in India (BCCI),
Hockey India (HI) and All India Chess Federation (AICF). The focal point in all
these cases remained the conflict of interest issue given which the sports
federation/authority, while discharging its role as the regulator of sports, was
guided by its economic/commercial interest.

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bodies have centred on their institutional form and consequent ploughing

back of all their revenue in the development of the sport. While defining
‘enterprise’, CCI has consistently considered the functional aspect of an
entity rather than institutional aspects. Thus, the assessment focuses at
the nature of the activity in question. Instead of going into the form of
the entity/organisation which is carrying out that activity. Accordingly,
CCI has considered the “non-profit” institutional form as irrelevant to the
determination of an entity as an “enterprise”.

As regards consequent implication of non-profit institutional form

requiring ploughing back of revenues, CCI has noted that though these
sports federations may be ploughing back all their revenue into the
development of the sport, this does not change the nature of economic
activities performed by them. As long as a person is engaged in an activity
which requires it to have an interface with the market as well as with other
alternatives for the product or service in question, it would be considered
as an enterprise, irrespective of whether it is operating with or without
profit motive.

Thus, the actual question relevant to the issue of jurisdiction is whether

the activities undertaken by the sports bodies have an interface with
the market or not. In this regard, it is to be noted that these entities
are performing diverse roles in the value chain mentioned earlier, their
actions are not only limited to sports governance/regulation but also the
organisation of sporting events. While assessing the claims of BCCI, HI
(Hockey case), AICF (Chess case), in the several cases against them, the
Commission emphasised the nature of the activity performed by them.
As regards BCCI, the Commission noted that ‘[i]n addition to being the
custodian of cricket in India, BCCI also organises different formats of cricket
matches/ tournament. By organising such matches/tournament, it generates
income’. CCI relied upon BCCI’s financial statements which revealed

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

substantial revenues being generated by it from granting media rights

to broadcasters, entering into franchise arrangements with business
houses, raising sponsorship, etc. Just because such revenue is ploughed
back into cricket and allied activities; that does not imply that the said
activities of BCCI are not economic. Similar observations were made
in the Hockey case and Chess case.10

Considering that the sports regulatory bodies are also carrying on the
organisational activities in addition to governance functions, these entities
do constitute an enterprise and are subject to the jurisdiction of competition
law in India.

It is important to note that the fact of the sports governing body being
engaged in organisational activities is an essential factor in characterising
the body as an “enterprise”. A related question which arises is that do the
competition law authorities restrict themselves to the examination of issues
which centre only on the commercial organising aspect? Alternatively,

10 AICF argued that the sport of chess does not generate interest of viewers
and there is no income earned through sale of tickets, television rights or
advertisements. Further, it was urged that AICF only monitors and regulates
these tournaments and strictly keeps itself out of the economic activities
associated with organisation of tournaments. The Commission, however, did not
buy any of these arguments and held AICF to be an enterprise, observing that
AICF being the only organisation from India to be recognised by and affiliated to
FIDE, has been mandated to organise national and international championships
in terms of its Constitution and bye laws. Since AICF claimed that it was not
organising these events as such, the Commission went one step further in
observing that “[….] in terms of Section 2(h) of the Act, a person would be an
enterprise, irrespective of whether the activities mentioned therein are carried
out directly or indirectly through units, divisions or subsidiaries. Thus, if AICF
conducts chess events through or in collaboration with the State associations/
club, these would be deemed to have been organised by AICF making it an
enterprise.” In addition to the above, the financial statements of AICF also
revealed that it received income from sale of advertisement space, sale of media
rights and sponsorship, as opposed to the claims made by it.

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once a sports body is held as an enterprise, all the aspects of its functioning
become amenable to review from the competition law perspective. In other
words, after concluding that sports bodies are an “enterprise” and subject
to competition law in India, the next aspect which warrants examination is
that considering the twin roles of regulation and organisation. Should an
exception be made for the regulatory role played by these bodies and the
consequent purely sporting rules made by them be kept outside the ambit
of competition law?

The authors are of the view that there is a strong case for not subjecting
purely sporting rules to review under competition law. However, the issue
which complicates the situation is that the strictly sporting rules or purely
regulatory functions of a sports governing body are so strongly intertwined
with the commercial aspects that granting such immunity can create a
regulatory gap. Thus, a middle path which can be followed is to subject
all the functions/rules of sports governing body to competition law and
duly consider the specificities of the sporting rules while deciding on the
contravention of the law.

These aspects have been tested in other jurisdictions, primarily

Europe. The earlier position taken by the courts in Europe did favour
the immunity of sports governing bodies from the application of
competition law in so far the issue was purely sporting rule.11 However,
the same has changed with the decision in Meca-Medina12 case. In
Meca-Medina case, two professional swimmers were banned for using

11 Case 36/74, Walrave & Koch v. Association Union cycliste internationale

[1974] ECR 1405 and Case C-51/96 and C-191/97, Deliège [2000] ECR I – 2549,
para 64 (“Deliège”).
12 Case C-519/04 P, Meca-Medina and Majcen v. Commission, Judgement
of 18 July 2006.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

a prohibited substance by the International Swimming Federation

(FINA) Doping Panel. The European Court of Justice (ECJ) in this
case, decided on the lines that a sporting rule (i.e., a purely sports
governance issue) may also have economic implications. Therefore it
may need to be tested for inherence and proportionality to the objectives
pursued. The effect of this judgement is far-ranging as it brings at least
prima facie all the sporting rules within the jurisdiction of competition
laws. There has been some criticism of Meca-Medina judgement as well,
and it has been felt that it overturned the previous position taken by
the European Commission and ECJ.13 As per the previous position of
law under which purely sporting rules were explicitly considered as
non-economic and kept outside of the purview of common law and
competition law. However, that approach adds an element of ambiguity
and uncertainty in the functioning of sports governing bodies.

It is essential to understand what could have brought about such a

significant change in jurisprudence which subjected all decisions of
sports bodies to competition review. One underlying reason could be
the fact of intertwined regulatory-commercial functions discussed
above which was a factor even at the time of earlier decisions, and
second and more relevant to the change could be the changing
character of sports in a commercial sense. In previous times, when
commerce in sports had not gained so much relevance, pure sporting
rules may not necessarily have significant economic implications to
justify their subjection to competition law scrutiny. Contrary to this,
in recent times, the commerce of sports has surpassed the spirit of
sports. This reflects in the size of the “sports market” and nature of

13 Decision in Case 36/74, Walrave & Koch v. Association Union cycliste

internationale [1974] ECR 1405 and Deliege Case C-51/96 and C-191/97, Deliège
[2000] ECR I – 2549, para 64 (“Deliège”).

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complaints being received by competition agencies across the world.

Thus, Meca-Medina may be considered more as a ruling influenced by
the change in circumstances surrounding the sports sector than a shift
in the position of the competition regulator. Under the circumstances,
it appears prudent to subject all the rules to scrutiny under competition
law. This rigour of European Courts to subject sports regulators and
their activities to competition law was reemphasised and reflected in
later cases14 also. Thus, the international position which emerges is
that the sports bodies should be and can be subjected to jurisdiction
on competition laws even for decisions strictly taken as a part of sports
governance. At the cost of repetition, however, it is reiterated, that the
contravention analysis needs to factor the specificities of sport.

The aforesaid approach is in sync with the decisional practice of the

Commission. In the Chess case, the Commission categorically held
that the ‘system of approval under the pyramid structure of sports
governance is a normal phenomenon of sports administration.
However, rules governing the players and the organisation of sports
events/ tournaments often create a restrictive environment for the
economic activities that are incidental to the sport. Unlike other abuse
cases, these could be justified if it is demonstrated that the restraint

14 See, MOTOE case and International Skating Unions Case (ISU Case). In
ISU Case, ISU eligibility rules allowed ISU to impose severe penalties, including
a lifetime ban from all major international speed skating events, on speed skaters
for participating in competitions that are not approved by the ISU. ISU had
discretion to impose such penalties, even if the independent competitions pose
no risk to legitimate sports objectives, such as the protection of the integrity and
proper conduct of sport, or the health and safety of athletes. European Commission
found such rules to be restrictive of the commercial freedom of athletes who are
prevented from participating in independent skating events. Further the eligibility
rules were found to be preventing independent organisers from putting together
their own speed skating competitions because they are unable to attract top
athletes.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

on competition is a requirement to serve the development of sport or

preserve its integrity.15
•

In Hockey case, names of individual players were not included in the

‘48 probables’ for the camp held at Bangalore for preparation and for
selection of the Indian team which went to London to play four (4)
nation test match etc. Selection of players is essentially a regulatory
issue. Still, given the allegations that the intent was to penalise players
who participated in a competitive league (viz. World Hockey Series/
WSH) and to exclude such competitive leagues, the Commission/
CCI analysed the case on merits instead of exempting HI from its
jurisdiction for discharging a purely regulatory function.16

The aforesaid observations of CCI and the international decisional practice

unambiguously indicates that the sporting federations/bodies are subject
to the provisions of competition law. This is attracted not only where they
compete with the other economic agents as an organiser of leagues/events/
tournaments but also for their purely sporting rules which may potentially
affect the economic activities carried out by other participants in the sports
ecosystem.

15 See, Hemant Sharma & Ors. v. All India Chess Federation, CCI Case No.
79 of 2011, decided on 12.07.2018 para 53.
16 CCI, however, on merits was satisfied that the exclusion of certain players
from the selection of probables for the Indian team was not account of their
participation in WSH. Rather, the exclusion was on account of non-participation
in training camp, which was mandatory. Such finding appears to be a passive
acceptance of the exclusive jurisdiction of the sports bodies to take decisions
relating to purely sporting rules.

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(b). Examination of monopoly in regulation/governance of sports

activities
The monopoly in regulation is an age-old concept. Such monopolies
are pervasive across sectors and sports is no exception. One view as
regards such a monopoly is that the conferment of legal monopoly
status to regulatory agencies, including sports federations, may lead to
problems similar to the monopoly on the market side. This takes away
the competitive pressure on regulatory agencies required to improve
their working; it may adversely impact the quality of regulation17. The
converse view is that the monopoly in regulation is most suitable for
achieving the overall objectives of regulation. It leads to standardisation
of regulatory approach, non-discrimination between various regulated
entities, orderly growth of the concerned sector and prevention of
wastage of resources on duplicate bodies meant to perform the same
role. In the context of sports, the monopoly in the regulatory sphere
assists in the prevention of conflict within the sport. This is essential
for the selection of national athletes and teams, and the identification
of champions at each level of the sport, besides preserving the integrity
and uniformity of sports.18 The peculiar character of sports necessitates

17 Howard Baetjer, Jr., a lecturer in the department of economics at Towson

University in an article notes, “The legal monopoly status of government
regulatory agencies is a problem. It means that when and if these agencies do a
bad job of assuring quality in their industries, the public is stuck and they have
nowhere to turn, so there are no systemic forces at work to improve the agencies’
performance or replace them with better quality-assurance providers”. Howard
Baetjer, Jr., Government Regulators are Monopolies, FEE (August 02, 2016) (May
5, 2020, 12:05 PM) https://fee.org/articles/government-regulators-are-
monopolies/.
18 Rishika Mendiratta, Demarcating a fine competitive balance: Exploring
the monopolistic rationale of sports governing bodies in India KHELADHIKAR
(August 16, 2018) (May 5, 2020, 12:05 PM) https://kheladhikar.com/2018/08/16/
demarcating-a-fine-competitive-balance-exploring-the-monopolistic-rationale-
of-sports-governing-bodies-in-india-part-1/.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

pyramid structure and consequent monopoly in regulation. Given these

characteristics, the pyramid structure helps in maintaining singularity
of governance principles and rules, both on and off the field. (including
the rules of play, anti-doping regulations, anti-corruption regulations
etc.) Further, it also aids in the equitable distribution of revenue from
the elite to the grassroots level, encouraging participation, development
and competitive balance.

For these reasons, there does not seem to be any discernible harm to the
competition process because of monopoly in regulation. It indeed would
be antithetical for a sport to have multiple regulators laying down their
own set of rules for the sport and administering the sport in their different
ways. This plurality of rules would surely lead to the elimination of viewer
interest in the sport.Thus, given the objectives sought to be achieved, there
does appear to be significant arguments in favour of monopoly in sports
regulation, flowing from the pyramid structure. However, as stated above
in discussions on the aspect of jurisdiction, the behavioural aspects are
also relevant, and the decisions of the sports governing bodies which may
be purely sporting may also in some cases pose competition issues and
therefore may require examination.

(c). Examination of Organizational Aspect of Sports Regulators

After examination of the pyramidal structure, the next aspect of being
examined is whether the regulators of sport should at all be engaged in the
organisation of sporting events. Generally, the regulators do not engage in
commercial activities, and their activities are limited to regulating the sector
in a manner which facilitates the development of the sector and preserves
the interest of all the stakeholders, be it the consumers or the service
providers/sellers of goods. However, it is essential to note that generally, the
regulators are also not tasked with funding the growth and development of
the sector which they regulate. The fact that sports regulators are tasked (or

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instead they have tasked themselves) with the additional object of funding
the development of the sport make their case distinct from other general
regulators and therefore needs to be examined in the context of the same
spirit.

As stated above, the primary rationale for organising events from the
viewpoint of sports regulators is ensuring the availability of funds required
to promote and develop the sport. The organisation of the sporting event
implies revenue generation for the organiser through multiple sources of
revenue associated with the organisation of sporting events viz., revenue
from sponsors of a sporting event, revenues from media companies
engaged in the broadcasting of sporting event, revenues from the sale of
official merchandise etc.

To better understand the stakes involved, it would be appropriate to consider

the evolution of commerce of sports over a period of time. In earlier days,
the sports events generally organised were representative events, and the
extent of commerce in sports was minimal, or in other words, there were no
active “markets” for sports. To illustrate this point, the example of cricket
can be given. In the year 1983, BCCI had to organise a fundraising concert
featuring Lata Mangeshkar, a renowned Indian singing artist, to reward the
players with a number of Rs. 1 lac each, after India won the World Cup. In
contrast to the same, each member of the Indian team which won the T20
World Cup in 2007 received Rs. 80 lakh from BCCI. The rights for the 1999
World Cup were sold for $12 million while the combined rights for the
2003 and 2007 World Cups were sold for $250 million.

Further, not only the commerce of representative events increased

manifold, the sports regulators also started organising the non-
representative events on a grand scale. BCCI forayed into IPL, and Sony
Entertainment Television paid $1.026 billion for television rights for

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

the first ten years of the IPL.19 Similarly, Hockey India, the governing
body for the sport in India started Hockey India League, and All India
Football Federation began the Indian Super League and so on.

Though there is a need of sports regulatory bodies for access to funds, it

is equally critical to mention that the organisational aspect which leads
to a unique situation where a regulator is a commercial beneficiary of the
object of its regulation. This situation may imply that the regulator itself
may monopolise the organisation of all sporting events (representative or
non-representative) by using the regulatory framework. In competition
law parlance, the regulator may gain a dominant position in the market for
organisation of sports events by it being in a position to determine the very
factors on which a new player may enter the market for organising such
sporting events and compete with it. The sports regulator may choose to
create permanent entry barriers or may provide for a regulatory framework
which makes the entry of a new player possible on paper but acts in a
manner which denies entry in practice. Given the dual roles performed
by one body, one regulatory and the other commercial, it may be difficult
to segregate motives for regulatory prescription and/or intervention.
This situation arising from an inherent conflict of interest may lead to
such a situation which may be regarded as one of “inevitable abuse”. The
ever increasing financial stakes further strengthen the likelihood of such
“inevitable abuse” in the conduct of sports governing bodies.

Further, under the guise of development of sports regulator may adopt

a protectionist approach. They may justify their restrictive conditions by

19 Samanth Subramanian, 1983 Win Started it, but Cricket became Big biz
only After 1999, MINT (June 24, 2008) (May 6, 2020, 11:15 AM) https://www.
livemint.com/Consumer/v6SAzXt6FJxOEObnhRh8kI/1983-win-started-it-but-
cricket-became-big-biz-only-after-1.html.

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arguing that free/unbridled entry may have an adverse effect on the sport.
Moreover, by not doing so, the sport may lose the standardisation in terms
of rules, or that there may be overexploitation of sport leading to drop in
viewer interest, or that the players may participate in events organised by
private players for commercial reasons disregarding the representative
sports etc. Some of the justifications mentioned above have also been
relied upon by sports federations/bodies while defending their respective
positions in cases before CCI.

Thus, based on the aforesaid discussion, it is noted that there are pros and
cons of the sport’s regulator also being a commercial organiser. In such a
situation, it is imperative to undertake a finer analysis of the issues and
to explore the possibility of the most efficient outcome considering every
aspect.

In a case decided by CCI against BCCI, it was categorically observed that

competition cases relating to sports federations usually arise due to the
conflict between their regulatory functions and their economic activities.
The main issue, in that case, pertained to a restrictive clause that was
inserted in the Indian Premier League (IPL) Media Rights agreement
entered into by BCCI with the broadcasters of IPL. Under said clause BCCI
undertook that “it shall not organise, sanction, recognise, or support during
the Rights period another professional domestic Indian T20 competition that
is competitive to the league”. This, as per the allegations, foreclosed entry
and led to the denial of market access to other competitive leagues.
•

Applying the reasonability test20, CCI recognised that though free entry

20 In the said BCCI case (Case No. 61/2010), CCI observed that for a
meaningful analysis ‘[i]t is necessary to appreciate whether the impugned clause
in the IPL Media Rights Agreement and the impugned rules of the BCCI rules are

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

is one of the necessary conditions for competition to flourish, given

the specificities of specific sectors,21 entry may be subject to regulatory
requirements. Thus, the effects of such entry rules specified by the
regulator must be evaluated on a case-by-case basis taking into account
the legitimate regulatory goals such as quality, safety, orderly growth
of sports etc.22 In BCCI case, the CCI decided that the aforesaid clause
in the Media Rights Agreement imposes insurmountable entry barrier
in contravention of competition law and the same restriction cannot be
justified considering the specificities of sport.
•

in place to serve the development of the sport or preserve its integrity or otherwise.
If the impugned restrictions impede competition without having any reasonable
justification for protection of the legitimate interest of the sport, the same would
fall foul of competition law.]
21 In Hockey India case, CCI provided detailed observations on specifies of
sports, ‘[s]port has certain specific characteristics, which are often referred to as
the „specificity of sport‟. These specificities can be on the aspect of sporting
activities and of sporting rules such as separate competitions for men and women,
limitations on the number of participants in competitions, or the need to ensure
uncertainty concerning outcomes and to preserve a competitive balance between
clubs taking part in the same competitions. The specificities can also be with
respect to a structure notable among them are: the autonomy and diversity of
sport organisations, a pyramid structure of competitions from grassroots to elite
level; organised solidarity mechanisms between the different levels and operators;
the organisation of sport on a national basis; and the principle of a single
Federation per sport.’
22 In the said BCCI case (Case No. 61/2010), CCI held that ‘the impugned
clause in the IPL Media Rights Agreement and Rule 28(b) create an insurmountable
entry barrier in the relevant market for organization of domestic professional
cricket leagues. In the absence of any plausible regulatory rationale or necessity
of the same for promotion of the sport, the anti-competitive effect of the impugned
clause is indubitable. Based on the foregoing assessment, the Commission
concludes that the representation and warranty given by BCCI in the IPL Media
Rights Agreement..………amounts to denial of market access for organization of
professional domestic cricket leagues/ events in India, in contravention of Section
4(2)(c) read with Section 4(1) of the Act.’

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In Hockey case, the issue centred on the alleged exclusion of individual

players from the selection of probables for the Indian team on account
of their participation in a non-sanctioned event (WSH). The issue before
the Commission was whether HI is misusing its regulatory powers and
promoting its Hockey League to the exclusion of WSH. Thus, engaging in
practices resulting in a denial of market access to rivals, in contravention of
Section 4(2)(c) of the Act. The Commission, on perusal of the evidence on
record, was satisfied that the exclusion of certain players from the selection
of probables for the Indian team was on account of their non-participation
in training camp, which otherwise was mandatory, and not owing to
their participation in WSH. Another allegation in Hockey case was that
HI was using its dominance in conducting international events in India
to enter into the market of holding a private event. Applying the inherent
proportionality test, CCI found no contravention against HI.
•

Interestingly, after CCI gave its finding in the BCCI case23, another
information was filed against it by Pan India Infraprojects Private
Limited. Though the first case against BCCI alleged a general denial
of market access to players interested in the organisation of private
cricket leagues, the subsequent case (hereinafter, referred to as the ICL
case) filed against it focused specifically on the conflict between IPL
and the Indian Cricket League (ICL) which was launched by Pan India
Infraprojects Private Limited24 in the year 2007.
•

23 Though the earlier decision vide which CCI found BCCI to be liable for
contravention was remanded back by erstwhile Hon’ble Competition Appellate
Tribunal. However, vide its order dated 29.11.2017, CCI confirmed the stand
taken by it in its earlier order.
24 Formerly known as M/s Essel Sports Private Ltd.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

ICL was the first of its kind tournament in India which ran successfully
for two seasons before the third season was allegedly thwarted on
account of abuse of regulatory power by BCCI. Supposedly, IPL,
promoted/organised by BCCI, was only a belated move to adopt a
similar format of the game which took away the first-mover advantage
from ICL. BCCI allegedly issued several warning letters to players,
office bearers and affiliated entities and to stadiums restricting them
from participating in any unauthorised tournament/matches, failing
which they were liable to lose their benefits and privileges. Besides, as
per the allegations, BCCI also adopted other strategies to frustrate the
organisation of private cricket league by any competitor.25 Meanwhile,
in June 2009, ICC amended its regulations intending to grant complete
discretion to BCCI in the process of approving unofficial cricket events,
i.e. events not organised by ICC or its members. Such amendment was
allegedly influenced by BCCI to obstruct ICL and any other emerging
rival cricket league. Rule 32, which explains the concept of ‘unofficial
cricket event’, was amended and a section on ‘Disapproved Cricket’
was inserted. Because of this amendment/modification, any cricket
match not approved by the member in whose territory it is being played
will be deemed as ‘disapproved cricket’, and thus denying it the access
to the infrastructure, players etc.

Further, this case also brought another interesting allegation of how BCCI
blacklisted the Informant from participating in the bids for allocation of
media/broadcasting rights for IPL, owing to some pending litigation filed
by Pan India against BCCI, by putting restrictive conditions in the tender.

25 For Instance, as per the allegations, BCCI imposed a virtual ban on

players and also pressurized various PSUs and companies to terminate the
employments of players associated with ICL.

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Pan India has alleged that such conditions were specifically targeted to it
due to its involvement in establishing a competing professional cricketing
league (i.e. ICL). As the case is still pending with CCI, authors refrain from
commenting any further on the allegations in the instant case.

These cases bring into sharp focus the issue of the level playing field
in markets where the sports federations/bodies are entrusted with
dual roles. Wherein independent judgment as a sanctioning authority
becomes subservient, or at least is perceived to be subservient, to its
economic interest as an organiser of competitive leagues/events/
tournaments. It is interesting to note that in Hockey case, despite not
finding any behavioural/conduct related violation, CCI commented
on the structural aspect while stating that the ‘present system itself, with
the possible conflict of interest between the “regulatory” and “organising of
events” roles of Hockey India, has raised certain potential competition concerns
in the mind of the Commission.26
•

On the remedial aspect, on one end of the spectrum, there can be an

ideal organisational structure which resolves the aforesaid conflict of
interest by completely segregating the regulatory role from the commercial
aspects of sports. The primary opposition to this idea stems from the
need for ensuring the availability of funds to the sport’s regulator for the
development of the sport. However, this objection has no sound basis, and
it is a misnomer that a regulator has to engage in commercial operations
to raise funds compulsorily. The non-sport regulators also need to raise

26 CCI specifically observed that ‘circumstantial evidence which, though

not establishing violation of the Competition Act, further persuades the
Commission about the inherent potential of violation, and the need for clear
articulation and separation of the two roles of HI’.

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

funds, albeit for a limited objective of funding their activities and to this
endeavour, they use various revenue instruments viz., license fees, the fee
for regulatory services etc. The similar revenue streams can be allowed to
accrue to the sports bodies, thus leading to complete segregation of roles
and yet ensuring the availability of funds for the development of the sport.

In the aforesaid suggested model, the sports bodies should give up the
organisational role encompassing both the representative and non-
representative events. However, it is equally important to note that the
organisational structure wherein the sport’s regulator performs both the
regulatory and commercial functions cannot be per se considered against
the letter of competition law. Thus, as stated above, though complete
segregation can bean ideal solution, yet another model can be proposed
which duly accounts for specificities of sports and also resolves competition
concerns. There are certain specificities of organising representative sports
events. Teams in such events represent the pyramid members themselves
which implythe representation of a state or a nation and therefore such
events necessarily derive their value being monopoly events. There cannot
be any possibility of having more than one event at the same level for
representative events. Thus, there may be some justification for sports bodies
to play the role of the monopoly organiser itself. However, there seems to
be no justification whatsoever for these sports bodies to monopolise the
market for non-representative events. Thus, a more practical, the approach
may be to reserve the right to organise the representative sporting events
exclusively for the sports bodies.

However, another approach which can be considered is to allow the sports

bodies to organise both representative and non-representative sporting
events but making it incumbent for them to act as an impartial regulator
devoid of any self-economic/commercial interest when it comes to deciding
on the issue of organisation of sporting events by third-party organisers.

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To this effect, they would have to put in place adequate safeguards in its
processes and procedures to remove any perceived, potential, or actual
conflicts of interest caused due to the dual role performed by it.

CONCLUDING REMARKS
The paper succinctly captures the competition law jurisprudence that has
evolved so far with respect to the sports sector. Generally, competition
laws apply to only economic activities of an enterprise and exempt the
non-economic functions; there can be an argument that purely regulatory
functions, being devoid of economic nature should not be subjected to
competition law. However,the strictly sporting rules or purely regulatory
functions of a sports governing body are so strongly intertwined with the
commercial aspects that granting such immunity can create a regulatory
gap. The decisional practice of the Commission as well as the international
jurisprudence supports the view that though sports bodies discharge
certain functions which are purely regulatory. The potential ability of such
rules to have implications on the commercial sphere brings them within the
ambit of competition laws, not only for such economic activities but also
for the discharge of purely regulatory functions. Indeed, while analysing all
such cases, a cautious approach needs to be adopted that interweaves the
competition analysis with the specificities of sports to optimal enforcement/
outcomes.

Generally, the sports bodies perform three types of functions: governing

the regulatory aspect of the sports, organisation of representative
sporting events and organisation of non-sporting events. While efficiency
considerations tilt the balance in favour of having a monopoly of the sports
body for the purely regulatory functions, the organisation of sporting
events has its pros and cons. The discussion in the paper brings out
that considering the increasing commerce in sports and the consequent

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Competition Issue in Sports: When Commerce Trumps the Spirit of Sports

possibility of trumping of the spirit of sports, a remedial framework is

required. Though complete segregation of regulatory functions from
commercial functions may be the ideal situation, there appears to be
some valid justification for having a monopoly of the sport’s regulator in
the organisation of representative sporting events. For non-representative
events, the sport’s regulator should not participate as an organiser as its
mere presence in the market is sufficient to raise conflict of interest issues.
As regards the controlling/regulatory concerns expressed by sporting
authorities, in view of the authors, such concerns are somewhat illusory
given that separation of roles would allow the sports regulators to regulate
all these aspects in an even more robust manner. The sports regulators
have already started putting in place the system of sanctioned and non-
sanctioned events, which, however, at present, is shadowed by the conflict of
interest. Separation of functions will help in achieving the same objectives
as the present framework with additional merit of the sport being free of
the evil of potential abuse of dominance by the sports regulators. In the
event, it is not considered appropriate to per se prohibit sports bodies from
organising non-representative sports events, the minimum which could be
required from them is to put in place a safeguard mechanism to ensure that
a conflict of interest does not influence the decisions.

***

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Journal of Law and Public Policy
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IMPLICATIONS ON LEGAL AND

REGULATORY FRAMEWORK OF
SPORTSCASTING IN INDIA
Dr. Sujith S1* and Uma Devi S2**

A PREFATORY
Sports have been instrumental as a medium of enthusiasm and celebration
for the human race since time immemorial. Sports and sporting events have
witnessed revolutionary changes in the wake of technological advancements
and globalisation. The progressive improvements in the communication
and information technologies in the broadcasting of sports have proffered,
diminution of the gap between the sports, media and the people. For
example, the rural traditional sporting events have been explored in the
virtual spheres as more digitised and accessible to the people worldwide.
Thus, making the sports to move from its traditional ambit of recreational
activity to the realm of entertainment and business. These changes tend to
facilitate more value to sports and sporting events as an economic good.

Being a good of economic value, the aspects of branding, franchising,

merchandising, licensing, makes sports involving in it or within its ambit
the application of intellectual property rights. Both industrial properties
and non-industrial IPs can be applied in Sports. In the case of patent laws,
it deals with the encouragement of technological advancements in sports
and sporting events whereas trademarks and designs gear a particular
characteristic to events, teams and players. Trademarks in the sports
business also tend to create brands, logos, taglines, captions. Copyright law

1 *
Director (I/C), Centre for Sports Law, NUALS Kochi.
2 **
Research Scholar, NUALS Kochi.

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Implications on Legal and Regulatory Framework of Sports casting In India

also casts protection of expressions of ideas in literary, musical-dramatic,

photographs, sound recording and cinematographic films. Copyright
provides the owner with the right to sell, reproduce, make copies, do
derivative works, licence and assign work. Sports and sporting events
have been created mostly over copyright regime. Broadcasting rights are
another set of proprietary intellectual right created under the Copyright
Act, 1957. For most of the sports organisations, the sale of broadcasting
rights and media rights now is the most significant source of revenue,
generating enormous funds. With this background, authors are trying to
probe into the convolutions on the rights of the broadcasters in sports, and
thereby conceding to the fact of their active and unavoidable involvement
and importance in the sphere of sports and sports events.

BROADCASTING IN INDIA
Broadcasting can be commonly be understood as the means to give off
or to send images, sounds, etc., through space using radio waves. The
public receives these waves by way of different receptor technologies such
as television, radio etc. Telegraph, telephone and wireless communication
were the earlier means of broadcasting technologies.

There are numerous laws in the regulatory sphere which provides

broadcasting and access to the broadcast. The Indian Telegraph Act,
1885 (hereinafter “Telegraph Act”)is the first legislation to provide a
legal framework for almost all sorts of communication technologies,
including broadcasting.3 The Telegraph Act granted monopoly rights to
the government in broadcasting. Establishment of Telecom Regulatory

3 Siddharth Narrain, A Broad Overview Of Broadcasting Legislation In

India, ALTERNATIVE LAW FORUM BANGALORE (May 6, 2020, 11:15 AM)
http://indiatogether.org/uploads/document/document_upload/2139/
blawbackgrounder.pdf.

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Authority of India (hereinafter “TRAI”)was another remarkable

initiative taken by the Government of India in the year, 1997 to regulate
telecommunication services including broadcasting and cable services.
Broadcasting was not included in the Telecom Regulatory Authority of
India, Act, 1997 (hereinafter “TRAI Act”) but was notified later under
the definition of telecommunication services4. Licensing provisions were
also provided like wireless operating licenses. Apart from this, The Indian
Wireless Telegraphy Act, 1933 (hereinafter “Telegraphy Act”) regulates
wireless communications including television and radio services. Users
are required to obtain wireless licenses for possessing and using wireless
equipment. Sports broadcasting companies are required to obtain two
types of licenses under the present statutory scheme, viz., the grant of
permission to offer broadcast services under the Telegraph Act and licenses
for operating of wireless under the Wireless Telegraphy Act.

Another legislation on broadcasting is Prasar Bharati (Broadcasting

Corporation of India) Act, 1990, (hereinafter “Prasar Bharti Act”) which
constitutes an autonomous broadcasting corporation to manage and
conduct public broadcasting through Doordarshan and All India Radio.
The sports broadcasting companies, including various channels of sports
who have broadcasting rights, is required under the Prasar Bharti Act to
share the content with Prasar Bharati. This sharing of content is applicable
for feeds of sporting events of national importance, which is held within
India or abroad. This sharing is done for terrestrial transmission and DTH
broadcasting (free-to-air) by Prasar Bharati. The nature of the events, like
whether it is of national importance or otherwise will be decided by the
Ministry of Information and Broadcasting in consultation conjointly done

4 See, Ministry of Communications, Broadcasting Services and Cable

Services Notified as Telecommunication Service, S044 (E), Fno13-1/2004-Restg, 9
January 2004.

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Implications on Legal and Regulatory Framework of Sports casting In India

with three agencies, viz., the Ministry of Sports and Youth Affairs, Prasar
Bharati and the Sports channels.

BROADCASTER’S RIGHTS
The broadcasters and broadcasting organisations play an essential role in
contributing exclusive right over the distribution of sports and sports events
in public. The intellectual property right conveys exclusive proprietary
rights to the author for his work.5 This exclusive right includes the right to
distribute and disseminate the work to the public as well. Right to broadcast
is one of the rights of the author of the work to communicate to the public.
This right is held irrespective of the right of issuing copies of such work.

‘Communication to the public’ means making any work available for being
seen or heard or otherwise enjoyed by the public directly or by any means of
display or diffusion.6 The definition covers dissemination of work through
wireless, or wireless distribution means. ‘Work’ here means any literary,
dramatic, musical or artistic work or a cinematographic film or a sound
recording.7 The right to broadcast the work is only vested with the author.
The author’s work is converted into broadcast signals to distribute it. The
above-said right to broadcast the contents and the signals can be said to be
‘communication to the public’.

The author’s right to broadcast can be utilised by him with the help of
different agencies that usually act as intermediaries between the author
and the public for distribution of work. These agencies offer large scale
commercial publication of the works. Such agencies are generally held

5 The Indian Copyright Act 1957- Section 14.

6 The Indian Copyright Act 1957- Section 2(ff).

7 The Indian Copyright Act, 1957 Section 2(y).

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as broadcasting organisations. The broadcasting organisations will be

assigned or are given licenses for broadcasting by the author. Rights of these
broadcasting organisations are also set out in the Indian Copyright Act,
1957 as neighbouring rights for 25 years for the work. The neighbouring
rights include the right of reproduction of works of author and such other
allied rights as are set out under the Copyright Act. Since the contents
of the work are within the ambit ofan exclusive right of the author, and
broadcasting organisations simply have the right to distribute the content
without right over the signal.

Internationally, various efforts have been put forth to address the right
of the broadcasters. Under the Rome convention, 19618, the rights for 20
years to authorise rebroadcasting, “fixation” (recording), reproduction and
communication to the public of their broadcasts. Earlier, the government
of India had a monopoly over broadcasting. The private organisations
were only having a chance for commercial advertising and sponsorship
of programmes. The positive responses by the judiciary in the matter of
Secretary, Ministry Of I&B v. Cricket Association of Bengal,paved the way
for opening up of broadcasting regime over to private organisations.9 In
the said case, the Supreme Court negated the concept of monopoly over
broadcasting and recognised the right of a citizen to broadcast. Generally,
broadcaster’s rights include: broadcasting, rebroadcasting, fixation,

8 The International Convention for The Protection Of Performers,

Producers Of Phonograms And Broadcasting Organizations (Rome Convention),
1961- the convention does not protect pre-broadcast signal rights as they are not
intended for public dissemination.
9 Secretary, Ministry of I&B v. Cab, (1995) 2 SCC 161, wherein the SC held
that the every citizen has a right to telecast and broadcast to the viewers/listeners
any important event through electronic media, television or radio and also
provided that the government had no monopoly over such electronic media as
such monopolistic power of the government was not mentioned anywhere in the
constitution or in any other law prevailing in the country.

45
Implications on Legal and Regulatory Framework of Sports casting In India

reproduction etc.

BROADCASTING IN SPORTS
In India, the sports sector is governed by laws including National Sports
Policy, Sports Law and Welfare Association of India, Sports Authority of
India and the Sports broadcasting law. The sports broadcasting law was
a significant contribution towards securing the broadcasters’ rights over
the sports and sports events. Considering its nation-wide importance the
Parliament of India has passed the Sports Broadcasting Signals (Mandatory
Sharing with Prasar Bharati) Act, 2007(hereinafter “SBS Act’). The object of
the SBS Act is to provide access to sports events of national importance. The
Act ensures this through the mechanism of sharing of sports broadcasting
signals with Prasar Bharati. In this Act, ‘broadcaster’ means any person
who provides a content broadcasting service and includes a broadcasting
network service provider when he manages and operates his television or
radio channel service.10 According to Section 3 of the SBS Act, puts an
obligation on every owner or holder of rights concerning the content and as
well as the provider of television or radio broadcasting services shall share
they are broadcasting sports events of national importance with Prasar
Bharati whenever they are going for live broadcasting in Indian territory.
The provision is significant once we see into the judicial disposition of the
Apex Court in Secretary, Ministry of Information & Broadcasting, Govt. of
India and Others v. Cricket Association of Bengal and Other11 that the right
to use airwaves and the content of the programmes has to be used in the
best interest of the society, which thereby necessitates the need to regulate

10 The Sports Broadcasting Signals (Mandatory Sharing with Prasar

Bharti) Act 2007_Section 2(1) (a).
11 Secretary, Ministry of Information & Broadcasting, Govt. of India and
Others v. Cricket Association of Bengal and Other (1995) 2 SCC 161

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it to prevent the monopoly over information. The airwaves are public

property. The concentration of the right to broadcasting in the hands of
few say for instance, within the central agency or any private players will
hitherto pause potential danger for the dissemination of information and
affects consumer interests and broader public conscience.

The ‘live broadcasting’ under Section 3 can be employing cable or through

DTH network or can be in the form of on radio commentary broadcasting.
This sharing of live broadcasting shall be in such a way to enable them for re-
transmission of the same on Prasar Bharati’s terrestrial or DTH networks.
The SBS Act states that this sharing should be done without advertisements.
However, an exception to Section 3 provides that where the broadcasting
service provider can share the live feeds even with advertisements based
on sharing of revenue. The revenue from advertisements of broadcasting
shall be shared between the owner and holder of the content and Prasar
Bharati in not less than 75:25 proportion for television coverage and 50:50
for radio coverage. The SBS Act also empowers the Central Government
to impose penalties for the violation of the provisions of the Act, including
suspension of registration or licences, revocation of licences etc., and
pecuniary penalty up to Rs. 1 Crore12.

In 2017, the Supreme Court of India, in Union of India v. Board of Control

for Cricket in India & Ors.13, while considering the SLP before it, upheld
the decision of the Delhi Court wherein the High Court has prohibited the
sharing of a live feed of cricket by Prasar Bharati with other cable operators
through Doordarshan Channel. ESPN and STAR had exclusive rights over

12 Aswathy Sujith, Sports And Intellectual Property Rights-An Overview of

the Indian Standards, 2(5) Journal Of Legal Studies And Research 58
(2019).
13 Union of India v. Board of Control for Cricket in India & Ors Civil
Appeal No. 10732-10733 of 2017, (Supreme Court of India).

47
Implications on Legal and Regulatory Framework of Sports casting In India

the live feed of cricket broadcast. According to Section 3 of the SBS Act,
ESPN and STAR have to mandatorily share the live broadcasting signals of
sporting events of national importance with Prasar Bharati. The court here
found that Section3 only authorise Prasar Bharati to share re-transmission
of signals through its terrestrial and Direct to Home networks rather than
sharing it with other cable operators. In this case, the validity of Section
3 of the SBSAct was not challenged by ESPN and STAR. Here, the BCCI
(Board of Cricket Control of India) has issued licenses to broadcast live
feeds to Doordarshan and other media operators. The court stated that the
object behind the SBS Act is to provide access to sporting events of national
importance to the public at large through the mandatory sharing of signals
of sports broadcasting. The sharing should be done with Prasar Bharati as
per revenue sharing prescribed by law. The court further stated that the SBS
Act, 2007 provides that such sharing to Prasar Bharati is to enable them
to share it only with the terrestrial and DTH operators or networks only.
However, this right is subjected to the provisions of the Cable Act, 1995.
Moreover, according to Section 8 of the Cable Act, 1995 it also imposes
an obligation on the cable operators to transmit Doordarshan and such
other channels which are operated by the Government of India as notified
thereunder.

In ESPN Software India Pvt. Ltd. v. Prasar Bharati & Another14, the Delhi
High Court considered the constitutionality of Rule 5 of the SBS Rules,
200715 conjointly with Section 3 of the SBS Act, 2007. The court while
upholding the validity of the provisions held that there shall be sharing of
broadcast signals of sports events with Prasar Bharati without including
advertisements even though such advertisements are included by the

14 ESPN Software India Pvt. Ltd. v. Prasar Bharati & Another

WP(C)3611/2013 (High Court of Delhi).
15 Sports Broadcast Signals (Mandatory Sharing with Prasar Bharati)
Rules, 2007.

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Journal of Law and Public Policy
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content owner himself or by the broadcast service provider.

In Star Sports India Pvt. Ltd. v. Prasar Bharti & Ors.16, the decision passed
by the Delhi Court in ESPN case17 was challenged, on Section 3 of the
SBS Act, 2007 wherein the appellant STAR Sports shared some contents
with Prasar Bharati of world feed that is which includes the live play of the
event - Live feed. These feeds contained some additional feature including
those which enhances viewer’s interest. The Prasar Bharati challenged such
features as advertisements and hence violative of Section 3 of the SBS Act,
2007. The appellants contended that the onus of every broadcasting agency
is to transmit as received from the content owner of which the appellants
are not obliged to remove or alter what has been received, as they had no
control over the live signals received.

And further, the features were improvements which can be termed as ‘On-
Screen credits- for example logos etc. made by the event organisers only
which thereby cannot be treated as advertisements at all. Hence, Rule 5
of the SBS Rules are ultra vires of Section 3 for prescribing mandatory
removal of commercial advertisements by the agencies themselves. The
court rejected the contention of appellants that they had no control over
the signals received from the content owner or holder and that it violates
the contractual terms of the copyright owner of the broadcast. The court
finally held that the live feeds should be shared without any logos or features
even if the content holder or owner is including such since it constitutes

16 Star Sports India Pvt. Ltd. v. Prasar Bharti & Ors.Civil Appeal No.5252
OF 2016 (Supreme Court of India).
17 WP(C)3611/2013, (High Court of Delhi).

49
Implications on Legal and Regulatory Framework of Sports casting In India

advertisements under Section 3 of the SBS Act.

(a). Internet broadcasting in Sports:

More significant advancements in the technology, especially in cases
of broadcasting over the internet and live streaming are alarmingly
increasing day-to-day. The broadcasting over the internet realm is devoid
of any regulations. Broadcasting over the internet was not earlier covered
under the Indian Copyright Act, 1957. The legal regulation of internet
broadcasting came up only in the year 2016, where under Section 2(ff) of
Copyright Act, internet broadcasting was included under communication
to the public.18 Under Section 31D of the Copyrights Act, statutory licenses
can be issued to any broadcasting organisations for the copyrighted works.

Further Section 31D (3) states that there shall be the difference in the
payment of royalties for any broadcasting organisations of television and
radio broadcasting. The statutory licences issued under Section 31D is for
broadcasting by appropriately authenticating the valid source of the work,
i.e., like the author. The work should be given credit without making any
material alterations whenever and wherever it is reproduced and at the time
of broadcast. Internet broadcasting is included under the said provision is
still a question that we should further ponder on.

(b). Implications of Unauthorised Use:

The Copyright Act permits fair use of the copyrighted works. In the context
of copyright due to the rapid advancements in technology and the booming
up of sports as a significant entertainment business, the author’s works are

18 DIPP, Office Memorandum dated September 5, 2016 (May 6, 2020,

11:41AM) https://dipp.gov.in/sites/default/files/OM_
CopyrightAct_05September2016.pdf.

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Journal of Law and Public Policy
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most often threatened by way of signal and content piracy, unfair dealings,
etc. Signal piracy happens when a person decodes an encrypted signal
without authorisation. It can be during a standard transmission or from a
stolen event. This might eventually slow down the reception of the signal or
interfering with the quality of the broadcast for which one has paid.19If that
happens in the sports sector, then signal piracy can cost significant profits
to unauthorised users.

Piracy can be in different forms, viz., satellite piracy, content piracy etc.
Satellite piracy has been identified to have three methods of stealing; one
is that where the cable operators are stealing signals using satellite dishes
and set-top boxes and distributing those over the cable systems. Variations
are possible in individuals using assemble dish and STB signals. The most
common method, however, is to hack access cards (in STBs) and steal pay
per view signals, either for individual use or broadcasting.20Signal piracy
leads to violation of broadcaster’s rights and will drag them to financial
instabilities. In most of the sports events, live streaming is the primary
income-generating venture for the broadcasters. Signal piracy results in the
illegal transmission of broadcast by one sender to the unintended sender
within a network or outside the network. Such instances are rampant in
major sports events like, for example, in 2008 Beijing Olympics illegal
broadcasting and re-transmission of sports telecasts over the internet was
detected. 21

19 Also See, (May 6, 2020, 11:41AM) https://www.icsworld.com/Private_

Investigation_Case_Types/Signal_Piracy_Investigation.aspx.
20 Rajesh S Kurup, Satellite piracy sends strong signals to India, Business
Standard, January 20, 2013 (May 6, 2020, 11:41AM) https://www.business-
standard.com/article/technology/satellite-piracy-sends-strong-signals-to-
india-109060900070_1.html.
21 Seetharamani Sharma, Signal Piracy: A threat to Asia Pacific Broadcasters,
Wipo Magazine (February 2018)

51
Implications on Legal and Regulatory Framework of Sports casting In India

In India, similarly, the instance of Indian Premier League in 2017

wherein the official sports broadcasting was with STAR sports is regularly
undermined by unauthorised online transmission of cricket matches.
These matches were telecasted illegally on the internet via different remote
servers.22 Therefore, India is not an exception to the rampant signal piracy.

In the international forums, various efforts have been taken to address

this issue of signal piracy and to protect the neighbouring rights of the
broadcasting organisations. For instance, WIPO, in the year 2006, brought
about a draft proposal to provide a stringent and efficient legal structure for
curbing unauthorised use, especially the cases of piracy. As an extension to
the draft a Study on the Socio-economic Dimension of the Unauthorised Use
of Signals (2009-10), was conducted for providing an overview of possible
effects and implications of the treaty. The study identifies the broadcast
sector having the impact of technologies and the potential ramifications
of unauthorised use of broadcast and also the socio-economic impact of
the treaty on different stakeholders. Nowadays, the form and nature of
piracy itself vary. The pirates are often not held liable as they are not usually
identified. It remains an unsolvable puzzle for the investigators as it takes
new forms and shape and also remains as unpredictable.

Piracy is often identified as the result of disparities that exist in socio-

economic setup and also due to the unequal distribution of technologies
among people. The distinctiveness of the content and competition among
the market players forms the basis for piracy both in content and signals,
especially in sports. This may be due to copyrighted materials being not
available as on-demand, or maybe due to policy barriers or due to stringent
regulations such as censorship or it may also be due to inadequate legal
protection for the broadcasters. In the entertainment market, signal

22 Id.

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Journal of Law and Public Policy
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piracy arises due to the large gap in the demand of the consumers, and the
accessibility and affordability of the content of the broadcast.23

Even though we have different international and national laws to regulate

the broadcasting sector,24 these instruments play a limited role in protecting
the rights of the broadcasters. The issues like protection of pre-broadcasters
rights, limited protection to simultaneous rebroadcasting of a broadcaster
etc. are not envisioned under the existing laws. The online piracy over
signals happens when there is the simultaneous recording of the content
and transmitting in its different platforms, including the internet, cable,
terrestrial network, DTH etc. Of about the pre-broadcasting signals, they
are more susceptible to piracy than a traditional broadcast signal.25 The live
streaming and the unauthorised transmission by the use of the internet are
the most crucial episodes in broadcasting.

THE IMPACT
The crucial role of the regulator is to preserve the interest of authors and
the consumers at par without compromising the rights of the broadcasters.
The impact of broadcasting on the freedom of expression by sustaining the
right to development through innovative measures is vast, and at the same
time, accessibility and affordability is another issue concerning consumers
and other stakeholders.

Sports and media in a closer look are whole realms in terms of the

23 PN Vasanti, Curbing broadcast signal piracy, Live Mint, October 28,

2010, (May 6, 2020, 11:41AM), https://www.livemint.com/
Opinion/1TzTJiDuFQibtrAdbx4owL/Curbing-broadcast-signal-piracy.html.
24 For instance, See Rome Convention For The Protection Of
Performers And Broadcasting Organisations 1961.
25 Infra, Note 19.

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Implications on Legal and Regulatory Framework of Sports casting In India

entertainment business. For sports broadcasting, the author only has

authority over the content as it is his exclusive right. The potential value of
the content depicts the scope of revenue it can generate, this is why sports
events which have the majority of the world population as its followers are
so commanded over by the entertainment industry. Prying and snooping
in sports reaps broader public and thus a more significant economic
advantage for the sports broadcasting organisations.

The commercialisation of broadcast has the potential of booming the media

environment, especially in sports and sporting events. Still, at the same
time, the issues like piracy, theft and unauthorised use must be curbed to
give protection to the broadcasters. While introducing different measures,
including technical and technological solutions to the problems, still law
tries to strike a balance between the interests of the public and the rights of
the broadcasters.

The human rights, social, political and economic implications of

Sportscasting depicts a broader picture of demand of a more significant
amount of control of the sector. Consumer interests and public conscience
in terms of dissemination of information is a decisive factor. Primarily,
there is a need for balancing the rights of the broadcaster’s rights and
consumer interests. The provisions of payment of damages for consumer
rights violations are not much explored. Irrespective of jurisdictions the
sports industry is growing, and at the same time, the social and political
obligations of the sports industry for Sportscasting is enormous. The
content of the broadcasting should be accepted when it comes to public
interference. The freedom of broadcasters lies in a broader platform
between authoritarian and libertarian concepts. In a social perspective, the
rights of the performers are not extended to Sportspersons.

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A Reader on Sports and Law Vol. VI - NLSIU 2020

Further, Intellectual property regime has proved to be a more suitable

measure to preserve the rights of the broadcasters at the same time the SBS
Act was conducive enough to attribute the notions of access to information.
In this digital era, the precepts of fair use should be applied to fill in the
gaps for both facilitating the access to works and access to information.
The regulatory framework hitherto conveys a broader scope of control
of Sportscasting. However, it cannot be exhaustive in itself. The law and
regulatory framework have to procure ways to tackle the social, political
and economic problems affecting the broadcasting realm at the same time
protecting the rights of consumers and the public at large.

***

55
 FANTASY SPORTS: AT THE INDIAN
CROSSROADS
Praveen Tripathi1* and Aafreen Mitchelle Collaco2**

INTRODUCTION
Fantasy Sports in India has recently witnessed a boom in the online gaming
sector. In 2019 alone, the Media and Entertainment sector reached $25.7
billion, where the online gaming sector retained its position as one of the
fastest-growing segments.3 There has been a significant growth of 43 per
cent in the online gaming segment. Expectations are that online gaming
in India would reach Rs.187 billion by 2022.4 With gaming websites like
Mobile Premier League5 and Dream116 taking the lead, it is imperative to
have specific regulations around these fantasy and online sports.

Despite the phenomenal growth and potential, the regulation of fantasy

sports in India is still a dream. Fantasy sports are a form of games in which
participants assemble virtual teams of athletes and compete on the athletes’
real-world statistical performance. The concern of law for fantasy sports

1 *
Assistant Professor, School of Law, Bennett University, Greater
Noida.
2 **
Assistant Director, University Engagement and Partnership, LSAC
Global.
3 Animation Xpress (2020), FICCI: Online gaming sector expected to reach
Rs 187 billion by 2022 at a CAGR of 43 per cent , FEDERATION OF INDIAN
CHAMBERS OF COMMERCE AND INDUSTRY (May 6, 2020, 11:44
AM), http://www.ficci.in/ficci-in-news-page.asp?nid=21022.
4 Id.
5 See generally, (May 20, 2020, 11:44 AM), https://www.mpl.live.
6 See generally, (May 20, 2020, 11:55 AM), https://www.dream11.
com.

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Journal of Law and Public Policy
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arises, due to the involvement of the online exchange of money. It is still

at the crossroads of battling with state regulations and litigation, to which
even the courts though trying to come with solutions, however, it does not
answer governance issues. As the typical question which arises in the legal
framework of fantasy sports is based upon the classification of games as
“wagers/gambling”. This rest upon the debate between “skill” or “chance”.
While the games of skills are permitted under the law, the same is mostly
unregulated.

On the other hand, games of chance are strictly prohibited and punishable.
Historically, gambling is considered a sinful and pernicious vice, and
the same practice was discouraged. This approach of law is based on
the historical treatment of gambling as a sinful and pernicious vice and
deprecated its practice.7 This treatment seems quite contradictory, as,
throughout history, one can notice the popularity of different forms of
gambling prevalent in India.

The regulatory framework of the fantasy sports in India is mostly self-

regulated within the bounds of the limited jurisprudence as established
under Public Gambling Act, 1867. Few precedents on the interpretations
of its provisions and pari materia statutes have been applied to the online
games and their business. Due to this outdated jurisprudence, it is even
more imperative to carefully examine the challenges and opportunities
the establishment of ‘Fantasy Sports’ brings to India. Its resemblance to a
wagering contract and at the same time falling as an exemption under the
current regime gives rise to public policy concerns.

7 The State of Bombay v. R. M. D. Chamarbaugwala, AIR 1957 Bom

699

57
Fantasy Sports: at the Indian Crossroads

This paper aims to examine the current regime governing the legality of
the Fantasy Sports in India, by comparing the antedate jurisprudence on
the present day’s technological advancements. In this endeavour, we first
introduce the operation and governance of fantasy sports in India. Then
we divide out discussion outlining the traditional understanding of “skill”
v. “chance” and its application to the following technological and economic
development scenario of Fantasy Sports, to evaluate the appropriate way
forward.

FANTASY SPORTS AND SELF- REGULATORY BODIES

Fantasy Sports is an ad hoc system of gaming to physical sports, wherein
users assume greater control in their choice of sportspersons and then
compete with their drafted team in online contests. The users act as the
owner of the professional sporting team by assembling their team in
virtual space against other users in a specific tournament or time frame.
In drafting their team, users rely on the statistical knowledge of players
performance in real life and expectations from the players in future. Contest
results are based on the real-life performance of the sportsperson, wherein
fantasy points are generated based on the real-life statics of individual
sportsperson’s performance. (For example, the Dream11’s cricket segment
provides following points system for batting – Run = +1; Boundary Bonus
= +1; Six Bonus = +2; Half Century Bonus = +8; Century Bonus = +16;
Dismissal for a duck = -2).8 The team with highest cumulative fantasy
points in a pre-defined tournament or time frame is deemed as the winner.
Users need to demonstrate their skill in the selection of a team with players
who earn the highest points to stay on top of the ladder board.

8 See, Dream11 Poitns system in Cricket, DREAM 11, (May 20, 2020,
11:57 AM), https://www.dream11.com/games/point-system#cricket.

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Journal of Law and Public Policy
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Further, this skill is required to be demonstrated throughout the

tournament or timeframe, and users can edit their line-up within the set
deadline to improve their teams’ cumulative points. However, in doing so,
they are required to stay below specified budget credits. Thus, users must
select those sportspersons who provides maximum points and not just the
top costly players.

Similar to the governance of the real sports events by various sports

federation, Fantasy Sports contests are also governed through their fantasy
sports organisations established by members who have stakes or interest
in these businesses. To name a few - the Rummy Federation,9 Federation
of Indian Fantasy Sports,10 and All India Gaming Federation,11 which are
self-regulatory bodies registered under the Societies Registration Act, 1860
for the development of their games. Since there is no specific legislation
regulating fantasy sports in India, the online and fantasy sports industry
have taken steps to govern itself. For instance, the Federation of Indian
Fantasy Sports (hereinafter “FIFS”) has prepared a Charter for Online
Fantasy Sports Platform (hereinafter “Charter for OFSP”).12 The charter
aims at creating best practices and set up a minimum standard in the
Indian Online Fantasy Sports Platforms (hereinafter “OFSP”).13

The lack of a specific legislative framework to govern Fantasy Sports in

India has led to self-regulation by its member’s association. Self-regulation
is an essential regulatory process whereby a specific set of rules and code

9 See generally, (May 20, 2020, 11:57 AM) https://www.trf.org.in.

10 See generally, (May 20, 2020, 11:57 AM) https://fifs.in.
11 See generally, (May 20, 2020, 11:57 AM), https://www.aigf.in.
12 Federation of Indian Fantasy Sports, Charter for Online Fantasy Sports
Platform, (May 20, 2020, 11:57 AM), https://fifs.in/charter/.
13 ¶ 1.1.2 of FIFS Charter for OFSP

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Fantasy Sports: at the Indian Crossroads

of conduct are laid down for the Fantasy Sports sector. Self-regulation is
found to be an appropriate measure in setting industry or sectoral norms,
in the absence of or in addition to existing law.14 In self-regulatory bodies,
policymakers and stakeholders can work collectively to achieve essential
reforms in Online Fantasy Sports Platform for an industry, which calls for
quick action and support. As the field of operation of Fantasy Sports involves
more significant technical superiority and innovations, it is appropriate
that members establish a standard code for themselves without much of
governmental interference for the common good of the sector which is
still in its development phase.15 The Government should not impose a top-
down approach; instead, it should embrace a collaborative outlook as this
sector is in its nascent stage of development. Since Fantasy Sports is service
offered by various entities, it caters to a higher standard of consumer
satisfaction. The same can only be achieved if these self-regulatory bodies
set a minimum standard to keep the trust of the consumer16 and an
appropriate dispute resolution mechanism.17

In the absence of specific law, the self-regulatory role is carried out within
the bounds of the general laws. The applicability of the same is apparent in
various sectors. For example, a society or company involved in the business

14 See generally, Anil K. Gupta and Lawrence J. Lad, Industry Self-

Regulation: An Economic, Organizational, and Political Analysis, 8 The Academy
of M anagement R ev. 417 (1983); See also, Daniel Castro, Benefits and
Limitations of Industry Self-Regulation for Online Behavioral Advertising, ITIF 1.
15 Ibid Daniel; See also, P. Grajzl & P. Murrell, Allocating Lawmaking
Powers: Self-regulation vs Government Regulation, 35 Journal of Comparative
Economics 520-545 .
16 Industry Self-regulation: Role and Use in Supporting Consumer Interests,
OECD 5 (2015) (May 20, 2020, 12:07 PM) http://www.oecd.org/
officialdocuments/publicdisplaydocumentpdf/?cote=DSTI/CP(2014)4/
FINAL&docLanguage=En.
17 See, FIFS Ombudsman Rules (2020) (June 04, 2020, 6:57 PM)
https://fifs.in/ombudsman/.

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Journal of Law and Public Policy
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of Fantasy sports should be incorporated with an objective as stated under

the Society Registration laws, Company law and Contract law. The same
should not be opposed to public policy. Further, while carrying out the
business, general laws relating to Information Technology and Intellectual
Property Rights will be applicable as well. Certain self-regulatory bodies
might even attract anti-competitive concerns; therefore, they are still
bound by the general law of the land. In addition, since Fantasy Sports
will be considered as services, the consumer redressal mechanism must be
adopted under appropriate consumer protection laws.18

Fantasy Sports usually involves a Pay-to-play format. The format revolves

around an entry fee paid by users which are further distributed amongst the
users on the platforms.19 According, to FIFS the member who offers its pay-
to-play OFSP should restrict its players to Indian users.20 No international
payment or transactions would be processed in respect of users’ deposits
or as a prize or platform fee.21 Measures such as these, ensure the safety
of online users and e-transactions. These associations aim to create an
environment which nurtures credibility and integrity for OFSP in India.

Since the format of fantasy sports is built upon the basis of statistical
information, OFSP will have to ensure that contest in a pay-to-play format,

18 Id.
19 ¶ 1.3.3 of FIFS Charter for OFSP (March, 2020); Gurdeep Singh
Sachar v. Union of India and Others Bombay High Court, Criminal PIL
Stamp No. 22 of 2019 - “the amounts pooled in the escrow account is an ‘actionable
claim’, as the same is to be distributed amongst the winning participating members as
per the outcome of a game. But, as held hereinabove since the activities of the respondent
No.3 do not amount to lottery, betting and gambling, the said actionable claim would
fall under Entry 6 of the Schedule III under Section 7(2) of CGST Act. Therefore, this
activity or transaction pertaining to such actionable claim can neither be considered as
supply of goods nor supply of services, and is thus clearly exempted from levy of any
GST.”
20 ¶ 1.3.3 of FIFS Charter for OFSP (March, 2020)
21 ¶ 1.3.3 of FIFS Charter for OFSP (March, 2020).

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Fantasy Sports: at the Indian Crossroads

relates to a minimum of one complete real-world sports match and any

contest based on part or portion of a stand-alone real-world match is not
allowed.22 Further, as per the recent amendment in the charter, OFSP can
offer the contest based on real-world matches which are officially sanctioned
by international, national or state sports federation or association. However,
an amateur, university, college, high-school or other sports match (whether
such match is officially sanctioned or not) where the participants are
required to be under the age of eighteen (18) years are excluded from the
purview of the real-world matches.23

The Charter of OFSP also sets out the requirement of “skill predominant”
for making any contests offered on an OFSP to be legal.24 In furtherance to
its legality clause, the charter requires that the winning outcomes be based
on relative knowledge and skill of the user, based on accurate statistical
results and elements of players’ or athletes’ performances. Further, the
operation of these platforms is geographically restricted in India, with
restrictions as prescribed by respective state legislation.25

Though, all reasonable precautions are taken by such self-regulatory bodies

to avoid their Pay-to-Play Fantasy Sports as being termed as “gambling”;26
still, there were series of litigations claiming that these online contests are

22 ¶ 1.3.7 FIFS Charter for OFSP (March, 2020); See also, William R.
Eadington, Gambling And Society: Interdisciplinary Studies On The Subject Of
Gambling SPRINGFIELD “These forms of fantasy sports resemble gambling,
defined as “staking something of value on the outcome of an uncertain
contingency”
23 ¶ 1.3.8 of FIFS Charter for OSFP (March, 2020)
24 ¶ 1.3.1 of FIFS Charter for OSFP (March, 2020)
25 The Assam Game and Betting Act, 1970, The Orissa (Prevention
of) Gambling Act, 1955 and Telangana Gaming Act 1974 prohibits any sort
of gaming for money.
26 See, (June 04, 2020, 6:57 PM) https://www.dream11.com/about-us/
legality. See also, ¶ ¶ 1.3.25 and 1.3.26 of FIFS Charter for OSFP (March,
2020)

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not illegal in any form.27 However, critics are also questioning the structure
of the games as it promotes gambling style rules and rewards.28 Sports
enthusiast might get attracted to such a format as it seems to be a safer
alternative to traditional betting. At the same time, such activities might
open flood gates for other online gambling activities.

SKILL V. CHANCE DEBATE: THE

TRADITIONAL VIEW
The judicial decisions on gambling in common law are based on the premise
that any act of gambling or betting should be discouraged in society. A
contract related to gambling is assessed on three elements- consideration,
prize and chance.29 While prize and consideration do not raise any concerns,
major litigation revolves around the fact whether a game is dependent
upon the third element, i.e. “chance” in contradistinction with “skill”. This
factor also distinguishes between gambling and trade. Gambling inherently
contains a chance with no skill, while trade contains skill with no chance.30
The element of chance has received the most scrutiny in determining
whether a game would be considered as one leading to gambling. If the
game is shown to be involving skill, it will be qualified as non-gambling;
otherwise, it is labelled as gambling.

27 Varun Gumber v. Union Territory of Chandigarh, 2017 Cri LJ 3827;;

Chandresh Sankhla v. State of Rajasthan, 2020 SCCOnline Raj 263
28 See, Wendy L. Stuhldreher et al, Gambling as an Emerging Health
Problem on Campus, 56(1) Journal of American College Health 75–88
(2007); and Douglas M. Walker, and A.H. Barnett, The Social Costs of Gambling:
An Economic Perspective, 15(3) Journal of Gambling Studies, 181–212 (1999).

29 See, Humphrey v. Viacom (Humphrey, 2007 U.S. Dist. LEXIS 44679) at

19; See also, I Nelson Rose and Martins D Owens, Internet Gaming Law
(Mary Ann Liebert Inc., 2005).
30 See generally, Pollock & M ulla, The I ndian Contract Act,1872
(15th ed, Lexis Nexis)

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Fantasy Sports: at the Indian Crossroads

In the context of Indian law, the debate on “skill” or “chance” originates

from the Public Gambling Act, 1867 (PGA). The PGA prohibits an act
of gambling in a public forum. Further, it makes the maintaining of a
‘common gaming house’ punishable.31 However, Section 12 of PGA carves
out an exception on its applicability for a ‘game of mere skill’. Due to this
legislative scheme of the PGA, the primary question which arises in most
litigation is a dilemma around the interpretation of ‘game of skill’ and ‘game
of chance’.

The regulation of Fantasy Sports in India is depended on the principle of

“Functional Equivalence” wherein the laws which were regulating offline
fantasy sports like “horse racing” are extended to online fantasy sports as
well. The crucial statute governing sports betting in India at the Central
level is PGA, enacted during the pre-internet era. Hence it seems to be
an outdated regime to govern fantasy sports. Since the scope of these
legislations is limited to games played in offline modes.

Under the Seventh Schedule of the Indian Constitution, the state

governments are empowered to enact laws on “betting and gambling”.32

31 See, Section 3 and 4 of Public Gambling Act, 1867.

32 Entry 34 and 62 of List III. Few states have adopted the Central
Legislations like Chhattisgarh; Dadra & Nagar Haveli; Haryana; HP; MP;
Manipur; Punjab; UP; Uttarakhand. Others have enacted their own specific
legislations like Andhra Pradesh Gaming Act, 1974; Arunachal Pradesh Gambling
(Prohibition) Act, 2012; Bengal Public Gambling Act, 1867 (applicable in Bihar
and Jharkhand); Delhi Public Gambling Act, 1955; The Goa, Daman and Diu
Public Gambling Act, 1976; The Bombay Prevention Gambling , (Gujarat
Amendment) Act, 1964; The Bombay Prevention Gambling , (Gujarat
Amendment) Act, 1964; Karnataka Police Act, 1963; Kerala Gaming Act, 1960;
Bombay Prevention of Gambling Act, 1887 (applicable in Maharashtra); The
Meghalaya Prevention of Gambling Act, 1970; The Pondicherry Gaming Act,
1965; Rajasthan Public Gambling Ordinance, 1949; Tamil Nadu Gaming Act,
1930; Tripura Gambling Act, 1926; West Bengal Gambling And Prize
Competitions Act, 1957.

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However, until now, only Sikkim33 and Nagaland34 have laid down
dedicated laws for the governance of Online Games. Some states in India
follow much stricter rules for wagering contracts where the prohibition is
made even if the dominant factor is a skill. For instance, in Assam, Orissa
and Telangana, even if the game involving money, which would constitute a
mixture of chance and skill will not be permitted to continue.35 Since there
is no clarity on the applicability of PGA on online games, and it creates a
significant lacuna in governing the online gaming and fantasy sports in
India.

In State of Bombay v. R.M.D. Chamarbhaugwala,36 while observing the

nature of prize competitions which would be qualified as gambling37
Supreme Court relied on “skill element” to distinguish it from gambling.
It was held that “in order to avoid the stigma of gambling, a competition
must depend to a substantial degree upon the exercise of skill. Therefore,
a competition where the success is not dependent upon the substantial
degree of skill, it will be recognised as gambling.”38 However, in this case,
the requirement of “skill” involved should be substantial. The courts have
still not laid what element would construe to make a skill a “substantial”
one. Further, with respect to forecast games, which can be more closely
compared to Fantasy Sports, it was contended that the forecast of such
events might not depend on chance. As in order to win, the player needs to
accurately exercise knowledge and skill-based on certain statistics of past

33 The Sikkim Online Gaming (Regulation) Act, 2008.- The objective

of the regulations was to control, regulate and tax online games.
34 The Nagaland Online Games of Skill Act, 2017. Act provides for
licensing and regulation of online games of skills in Nagaland
35 The Assam Game and Betting Act, 1970, The Orissa (Prevention
of) Gambling Act, 1955; Telangana Gaming Act 1974.
36 State of Bombay v. R.M.D. Chamarbhaugwala 1957 SCR 874.
37 Section 2(d) of the Prize Competition Act, 1948
38 Supra note 34, at ¶ 17.

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Fantasy Sports: at the Indian Crossroads

events. However, the court held that “it may be an expert statistician to form
an idea of the result of an uncertain future event, but it is difficult to treat
the invitation to the general public to participate in these competitions as an
invitation to a game of skill. The ordinary common people who usually join
in this competition can hardly be credited with such abundance of statistical
skill as will enable them, by application of their skill, to attain success.”39 In
its essence, the court though recognised the “skill” element as an essential
condition for a game to not amount to gambling, but such skill whether
possessed by all participants is also considered as a factor in determining
the nature of the game is still unclear.

The court further goes on to state that the businesses which involve
substantial skill do not constitute to be gambling activities. Thus, the
businesses can seek protection under Article 19(1)(g) of the Indian
Constitution.40 Keeping this background in mind, one can examine other
games like rummy or horse racing as games involving substantial skill.
Subsequently, the issue of “skill element” and its interface with gambling
arose in State of Andhra Pradesh v. K. Satyanarayana, (Rummy Case),41
and Dr. K.R. Lakshmanan v. State of Tamil Nadu, (Horse Racing Case).42
However, these cases can be distinguished from R.M.D. Chamarbaugwala
Case on the account that these cases were based on interpretation of phrase
“mere skills” and “mere chance”, while the latter case was based on the
“substantial degree of exercise of skill.”

In the Rummy case the Supreme Court, while assessing the card game
“Rummy”, held that the game is not entirely a game of chance like the

39 Supra note 34, at ¶ 20.

40 Supra note 34, at ¶ 41.
41 State of Andhra Pradesh v. K. Satyanarayana AIR 1968 SC 825.

42 Dr. K.R. Lakshmanan v. State of Tamil Nadu AIR 1996 SC 1153.

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“three-card” game.43 The court, further held that “the game requires a
certain amount of skill as the fall of the cards is memorised by the players,
and the building up of rummy requires considerable skill in discarding or
holding of the cards.”44 Though the element of chance is in the form of
distribution of cards and shuffling of the pack, however, the same cannot
constitute the game of rummy as being a game of chance. Hence, the court
held that rummy is “mainly and preponderantly a game of skill”. Success in
the game not dependent upon chance, but on the skill demonstrated by the
player during the game. Thus, concluding that, the skill predominance is an
essential factor determining the results of the game.

Similarly, in the Horse Racing Case, the question relating to betting on horse
racing arose as a game of skill or chance. The court, using Encyclopedia
as external aid, observed that “horse racing is a systematic sport requiring
participants to have full knowledge of the horse, jockey, trainer, owner, turf
and the composition of the race.”45 Thus, in order to gain success in horse
racing, the bettors are required to demonstrate substantial skill while
participating. The court further distinguished betting on horse racing from
gambling. Gambling is purely based on chance. The success of gambling can
be determined entirely or partly by lot or sheer luck. Though in the game
of skills, the element of chance cannot be eliminated, however principally
success is dependent upon the superior knowledge, training, attention,
experience and adroitness of the player.46 Thus, in evaluating whether the
character of game is based on “Chance” or “Skill”, the dominant factor of

43 Like Flush, Brag etc.

44 State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825
¶12
45 Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153 ¶
23: The breed of the horse, upbringing, training and the past record of the
racehorses are prominently published and circulated for the benefit of the
prospective bettors.
46 Supra note 43, at ¶ 3.

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Fantasy Sports: at the Indian Crossroads

skill or chance needs to be taken into consideration. Where the game is

purely based on chance, it is considered gambling. If the game is purely
skill-based, it is then permitted by law. However, if a game is a mix of
chance and skill, then the dominant factor test is taken into consideration.

In addition to this, the court also stated that the expression “mere skill”
constitutes to mean a “substantial degree or preponderance of skill”. This
brings us to the same interpretation as observed in R.M.D Chamarbaugwala
case. Hence the issue, whether players participating in games should possess
these skills or not makes it an essential factor to succeed in the game, as
certain games require more persuasive skills to be demonstrated.

This substantial degree of skill test was latter applied in the matter of
Dominance Games Pvt. Ltd. v. State of Gujarat, (Poker Case),47 wherein
the question before Gujarat High Court was whether Poker is a game
based on Skill or Chance. The court relied on the test laid down in R.M.D
Chamarbaugwala Case48 and Rummy Case49 and held that Poker does
not involve a substantial degree of skill.50 The court further noted that the
method in which Poker is played. It observed that there are two stages to a
game of Poker. The first stage involves the distribution of cards, over which
the better has no control. The second stage of the game, when the cards are
opened, the complexion of game changes with every turn of the card and
betting.51 It is in this second stage that the court observed and stated, “the
skill involved is judging other players poker face with the strategy of inducing
them to play and bet more, cannot be said to be a skill…inducing other with

47 Dominance Games Pvt. Ltd. v. State of Gujarat,2 LNIND 2017

GUJ 3940
48 Supra note 34.
49 Supra note 39.
50 See also, D. Krishna Kumar v. State of A.P. 2003 Cri. L.J. 143 - game
of rummy is to be treated as a game of skill only.
51 Supra note 45 at Page 56 -58.

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poker face to bet would be a part of bluffing or deception, cannot be termed

as skill as it is not a game of skill but it is a game of deceiving, bluffing and
duping other players.”52 The court’s decision seems logical because if bluffing
or deceiving would have been construed as skill, and this would have posed
several questions to the offence of fraud or cheating. Thus, in order to apply
the “substantial degree of skill” test, it is essential to examine is whether the
player has control over the game or whether he can change the game to his
advantage. If the answer to the question is in affirmative, then such a game
will be a game of skill.

Some of the most popular games in India have been Poker, Rummy, Teen
patti and other sports betting activities. Technology has introduced online
versions of the same, making the accessibility and reach of these platforms
easy. Games such as chess, which are determined by skill, are considered
lawful.53 However, when it comes to games such as Poker, the courts seem
to be in a dilemma to consider it a game of chance or skill. In Indian Poker
Association & Ors. v. State of Karnataka,54 the court stated that “if the game
of poker is played as a game of skill, the license is not contemplated.” When
it comes to online versus offline games, the essential factor to take into
consideration is the physical presence of the players. One can judge and
utilise skills by being observant and being physically present in the game.
However, the same may not be possible on an online version of the game.
This would most definitely eliminate the dominance of skill which one
could employ in the offline version.

52 Id.
53 Anthony N. Cabot and Louis V. Csoka, Symposium: The Games
People Play: Is it Time for a New Legal Approach to Prize Games?, 4 Nev. L.J. 197,
202 (2004).
54 Indian Poker Association & Ors. v. State of Karnataka Writ Petition Nos.
39167 to 39169 of 2013 decided on October 8, 2013.

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Fantasy Sports: at the Indian Crossroads

SKILL V. CHANCE DEBATE RE-OPENED

From the outset, it seems that one can apply the Skill or Chance test to
any such games. However, the bigger question being that can one put the
traditional betting games such as horseracing, poker or rummy and fantasy
sports on the same pedestal? If so, then why differential treatment be given
to online fantasy sports by stating it as a game of chance and not skill. The
games which fall under the purview of ‘the game of chance’ are concerned
as acts of gambling and hence prohibited by statutes passed by the state.
However, a game which involves a certain degree of skill will fall outside
the ambit of gambling laws.55 Hence, creating a grey area for online fantasy
sports platforms in India. The next question which arises is whether online
fantasy sports is a game of skill or chance?

For a while, it was felt that issue revolving around the legality of fantasy
sports with respect to its character (skill or chance) is resolved with the
decisions passed by the Punjab and Haryana High Court,56 Bombay High
Court,57 and Rajasthan High Court.58 In all instances, the High Courts have
considered fantasy sports as a predominant skill game. However, in recent
stay order by Supreme Court59 against the decision of Bombay High Court,

55 Section 12, the Public Gambling Act 1867.

56 Varun Gumber v. Union Territory of Chandigarh, 2017 Cri LJ
3827.
57 Gurdeep Singh Sachar v. Union of India and Others Bombay High
Court, Criminal PIL Stamp No. 22 of 2019; See also, Surbhi Kejriwal and Ayush
Nanda, Now that online fantasy sports have got a legal nod, July 29, 2019, Live
Mint (June 04, 2020, 6:57 PM) https://www.livemint.com/opinion/online-
views/opinion-now-that-online-fantasy-sports-have-got-a-legal-
nod-1564420102735.html.
58 Chandresh Sankhla v. State of Rajasthan, 2020 SCCOnline Raj
263.
59 Kashish Bhatia and Shruti Baid, Legality of Online Fantasy Sports
League Games in India – Recent Developments, May 20, 2020, (June 04, 2020,
6:57 PM) https://www.azbpartners.com/bank/online-fantasy-sports-

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the debate on “Skill v. Chance” has been re-opened, and the matter is still
to be heard and decided by the Supreme Court of India.

In Varun Gumber v. Union Territory of Chandigarh,60 where the P&H HC

relying on the R.M.D. Charbaugwala case,61 held that “…‘mere skill’ in context
of this case would mean -(i) the competition where the success depends on a
substantial degree of skill, and it will not fall into the category of gambling; (ii)
despite being an element of chance, if the game is preponderantly a game of
skill it would nevertheless be a game of mere skill.” 62 Based on this principle,
the court held that fantasy sports contests offered by Dream11 are a ‘game
of skill’ as the users are required to apply “considerable skill, judgement and
discretion while drafting their fantasy team.” 63 Secondly, online users are
required to study the rules of the game and the point system deployment by
fantasy operators.64 This approach might seem to be a welcome move from
the courts. However, the same is limited only to the Dream11 fantasy sports
format only. There is still ambiguity whether the same test can be applied to
other online fantasy sports platforms in India. Appeal from the instant case
was preferred in the Supreme Court, but the same was dismissed.65 Hence,
for the time being, this judgment is the final authority on the validity of
Fantasy Sports format of Dream11.

Later, the legality of Dream11 fantasy sports was challenged in the Bombay
High Court, in a Criminal PIL filed by Mr Gurdeep Singh Sachar.66 Here

league-games-in-india-recent-legal-developments/.
60 Supra note 54.
61 Supra note 34.
62 Supra note 54 at ¶ 18.
63 Supra note 54 at ¶ 19.
64 Supra note 54 at ¶ 19; (Point system includes anticipated statistics for
skills such as batting average, ruls, economy rate, striker rate etc.)
65 Diary No.27511/2017 as cited in Chandresh Sankhla v. State of
Rajasthan, 2020 SCCOnline Raj 263.
66 Gurdeep Singh Sachar v. Union of India and Others Bombay High

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the petitioner has questioned the legality of fantasy sports on the definition
of the term “betting” and “gambling” as defined under the Section 65B(15)
of Finance Act, 1994. The Bombay High Court, relying on the precedent
and acknowledging the decision of Varun Gumber Case,67 applied the test
of “game of chance” or “game of skill” and held that it is in line with the
decision of P&H HC. The court stressed upon the fact that the result of the
fantasy game contest is not dependent upon the winning or losing of any
team in the real-world game on any given day. In line with this requirement,
even the Fantasy Sports Associations have, under their charter, restricted
the result based on any single event or day.68

Again, fantasy sports’ legality was brought to question in Chandresh

Sankhla v. State of Rajasthan.69 However, by this time, the appeal against
the Bombay HC decision was also dismissed.70 Thus, the Rajasthan HC
applied the previous judgment as examined above to interpret the pari
materia provisions in Rajasthan Public Gambling Ordinance, 1949 and
held in favour of Dream11 as being a “game of skill”. The court considered
the subject matter no more a res integra as the various prior High Court
decisions and consequent dismissal of the special leave petition by Supreme
Court. In the instant case, the court also relied on the order allowing Union
of India to file a review petition in Bombay High Court, in the Gurdeep
Sigh Sachar Case, wherein SC restricted the scope of the review only to
the issue of GST and not to revisit the issue of gambling. Recently, State
of Maharashtra preferred an appeal against the decision of Gurdeep Singh
Case. The same is now admitted and pending in the Supreme Court.71

Court, Criminal PIL Stamp No. 22 of 2019: PIL involved the question of legality
of fantasy sports and also on evasion of Goods and Service Tax.
67 Supra note 54.
68 See, ¶ 1.3.7 of FIFS Charter for OFSP
69 Chandresh Sankhla v. State of Rajasthan 2020 SCCOnline Raj 263
70 SLP (Criminal) Diary No.35191/2019
71 Supra note 57 (Kashish and Shruti)

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Thus, what the Raj. HC relied on as “no more res integra” is sub judice and
the debate is re-opened again.

Though, the position of law in India with respect to fantasy sports (online
or offline) seems reasonable and in line with the public policy of the
country. However, there are certain studies conducted in other jurisdictions
which cast doubt on account of public policy due to its ‘quasi gambling’
nature. Arguably, the concern is about the consumers, such a minors and
college students.72 In raising their concerns, studies equate fantasy sports
with gambling and argue on the harmful social cost of gambling.73 It is
suggested that, as the effect of gambling, due to materialistic desires, a
player in online Fantasy sports is not able to monitor his spending, and an
online mode, this lack of monitoring is higher than offline mode.74 Adding
to these, critics also argue the deteriorating health and mental conditions75
and loss of productivity at the workplace.76

Most studies which highlight the negative impact are related to daily
fantasy sports, wherein the winning is dependent upon the single event or
a day’s event. It is an established position in India, that fantasy sports, in
order to avoid the nature of gambling must be based upon the “skill” and
in addition to skill component, as highlighted by Bom. HC, daily fantasy

72 Supra note 67 - ¶ 3 (Petitioners Contentions); See also, Beth Teitell,

Fantasy Football Gaining in Popularity with Kids: Bragging Rights Are Main Draw,
Boston Globe, October 22, 2012, (June 4, 2020, 7:15 PM) https://www.
bostonglobe.com/metro/2012/10/22/fantasy-football-scores-with-more-kids/
jCONWVYJUC2WtbdYPVTc8N/story.html.
73 See, Brendan Dwyer et al, Daily Fantasy Football and Self- Reported
Problem Behavior in the United States, 34(3) Journal of Gambling Studies
689–707 (2018).
74 Jennifer C. Siemens and Steven W. Kopp, The Influence of Online
Gambling Environments on Self-Control 30(2) Journal of Public Policy &
Marketing 279–93 (2011).
75 Supra note 26 (Stuhldreher et al)
76 Supra note 26 (Walker and Barnett)

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sports is not being recognised in India.77 It cannot be denied that the

legislation matching to the public policy of the country is a little outdated.
The economic and technological development is interpreted along with a
150-year old British law.

Under the common law of England, bets were legally enforceable, however
with the enactment of Gaming Act, 1845 gaming and wagering were
declared as null and void. There were multiple revisions in their gambling
enactments in the last two centuries, and finally, by repealing all enactments,
Gambling Act, 2005 was enacted providing enforceability to gambling-
related contracts.78 This change restored the common law position prior
to 1845.79 It seems that the effect of this change is broadly to restore the
common law, which was broad that bets were legally enforceable. Under
Gambling Act, 2005, gambling is now permitted under a licensing regime
and a licensing authority is also constituted.80 Under its licensing principles,
the UK Law has distinctly recognised the general public policy concerns
and has addressed the same. The Licensing principles discourage gambling
leading to crime and disorder, the place and manner of conducting the
gambling should open and fair, and most importantly protecting the interest
of children and a vulnerable person from being exploited.81 This law also
takes into consideration the online gaming by regulating it through the
provisions relating to “remote gambling”.82 With the licensing regime, the

77 Supra note 64; See also, ¶ 1.3.7 of FIFS Charter for OFSP
78 Section 335(1) of the Gamling Act, 2005 (UK).
79 M P Furmston, Butterworths Common Law Series: The Law of
Contract 1115 (4th Edn, LexisNexis).
80 Section 2 of the Gambling Act, 2005 (UK).
81 Section 1 of Public Gambling Act, 2005 (UK)
82 Section 4 of the Gambling Act, 2005 (UK) - (1) In this Act “remote
gambling” means gambling in which persons participate by the use of remote
communication. (2) In this Act “remote communication” means communication
using - (a) the internet; (b) telephone; (c) television; (d) radio, or (e) any other kind
of electronic or other technology for facilitating communication.

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UK has allowed both “game of chance” and “game of skill”.83 However, the
legislative scheme maintains that games of “mere skill” do not fall under
the preview of gambling. Whether a game is a game of skill or chance, the
question will be determined on the facts and circumstances of each case.84
Hence, there is a possibility that online fantasy sports which satisfy the
game of skill test may not be governed by PGA and can continue to operate
legally throughout India.

CONCLUSION
Fantasy sports is here to stay. It promotes social interactions and at the
same time, brings economic incentives to various stakeholders. The authors
believe that the same should not be restricted; rather it should be regulated
or licensed. If a game or rummy and betting on horse racing can fall under
the purview of games of skill, why should online fantasy sports be looked
from a different lens? Holding the wagering or betting of horse racing as a
game of skill clearly shows the state’s leaning towards the use of such games
as an economic activity. It contributes to the social-economic well-being of
society.

Similarly, the online fantasy sports in India also generate public revenue.
Hence, one can notice the mobility of self-regulated gaming industries
which govern fantasy sports in India. There is a scope of innovation and

83 Section 3 of the Gambling Act, 2005 (UK) - In this Act “gambling”

means (a)gaming (within the meaning of section 6); Section 6 defines ”gaming“
and ”game of chance” as - “gaming” means playing a game of chance for a prize;
and “game of chance” (a) includes - (i) a game that involves both an element of
chance and an element of skill; (ii) a game that involves an element of chance that
can be eliminated by superlative skill; and (iii) a game that is presented as
involving an element of chance, but (b)does not include a sport.
84 See, Manoranjithan Manamyil Mandram v. State of Tamil Nadu,
AIR 2005 Mad 261.

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technological advancements in the online gaming platform, and thus the

measures should be directed towards orderly development of Fantasy
Sports market. Every game is tailored made to suit one’s fantasy. Hence,
applying the traditional “game of skill or chance” test will not be the right
approach.

Secondly, self-regulation becomes an essential measure in times when

ambiguity exists in the legal regime. It becomes a useful tool for governing
sectors which are somewhat at an early stage. This not only helps in
understanding the need of the stakeholders but also helps in promoting
new business ideas and innovations.

Thirdly, the authors also believe that the Central Government may pass
legislation under its residuary legislative powers as enshrined under Article
248 of the Indian Constitution.

For now, the regulation on fantasy sports still seems to be a grey area for
Indian Legislators. However, looking at the global trend and growing online
presence, India might as well shift to robust regime to govern fantasy sports
as seen in the UK. The courts, too, need to shift gears from the traditional
approach of wagering contracts and apply test which might cater to the
online fantasy sports. It is time to take useful measures to improve the
Fantasy Sports industry in India, and not leave it to “Chance”.

***

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TAXATION & SPORTS: CAN ONE RUN A

MILE
Rohith Kamath1* & Pranav Narsaria2**

LEVEL PLAYING FIELD: SPORTS

BUSINESSES & TAXATION

Sports and Games, including Athletics, have been one of the favourite
hobbies of rations, young and old. Globalization and the need for
entertainment, has contributed in growth of diverse formats of a game, in
the form of Leagues, Tournaments and expanded the business prospects
therein.

Consequently, the activities associated with Sports have grown multi-fold,

spanning from a transcendental paradigm to one of Economics, Business,
Profits, and Entertainment.

Unlike, other businesses, sports industry require the cooperation of

its competing teams. Cooperation and Integrity hold dearer to any
other competing interest in the case of businesses in Sports. The level of
cooperation by the players determines the success of a sporting event or a
game, including the Olympics, depends upon the level of cooperation by
the players. Moreover, as such, it deserves to be recognized as a separate
industry.

1 *
Advocate & Associate Company Secretary, Rex Law Chambers,
Bengaluru; Consultant, CEERA, NLSIU.
2 **
Intern, CEERA, NLSIU. Graduate B.A. LL. B, Gujarat National
Law University, Gandhinagar.

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Taxation & Sports: Can One Run a Mile

Media coverage and exposure to even the midget edition of sports and
games is high and, on the rise, owing to most popular dailies having a
dedicated Sports column. This effectively increases the sports business
with a simultaneous increment of tax income from sports. For instance,
being one of the world’s richest Sports Bodies in the World, ‘The Board
of Cricket Control of India’, (hereinafter, “BCCI”) has made a remittance
of INR 2,50,00,00,000/- as its payment for Advance Tax, for the revenues
earned in 2019-2020.3

SCORE AND EARN: IMPLICATIONS

UNDER THE INCOME TAX ACT, 1961
Tax implications are a burden that can never be absolved. Tax may be said
to be the sine qua non of income earned or deemed to be earned unless
expressly excluded. In India, the constitutional structure paves the way
for the scheme of taxation. The seventh schedule divides the subjects into

3 Details of payments made above Rs. 25 Lakh during the month of March
2020, Board of Control for Cricket in I ndia (May 8, 2020, 11:42 AM)
https://www.bcci.tv/articles/2020/news/147256/details-of-payments-
made-above-rs-25-lakh-during-the-month-of-march-2020.

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three lists. The Union alone has the power to make laws on the entries
under List 1, List 2 specifies the subjects on which the States can make laws
and finally, List 3 specifies the entries on which, both the Union and the
States can make laws. Entry 82 of List I makes the Union competent to
enact a law for taxing any income other than agricultural income.4 As such
Sports Businesses and associated Income is a subject matter that the Union
Government is competent to regulate through the imposition of taxes.

The Income Tax Act, 1961 (hereinafter referred to as the Act) enacted by
the parliament is the law that regulates incomes of businesses in sports.
While the broad scheme of the legislation, the sources of Income have been
categorized under 5 heads, namely: -
• Income from Salary
• Income from House Property
• Income from Business or Profession
• Capital gains

Income from other sources

In the administration of taxation for businesses engaged in sports, the

first step must involve the determination of the relevant head under which
income earned may be categorized and after that based on standard and
statutory deductions as provided under the Income Tax Act, 1961 the
taxable income is determined thereof. The tax slab determined annually by
the relevant Finance Act would determine the tax payable.

Certain categories of income are exempted from the purview of taxation

under the Act, which would be dealt with in the last leg of this paper. Section
116 of the Act provides for the constitution of authorities under the Act,

4 I ndian Const. art. 246.

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Taxation & Sports: Can One Run a Mile

including the creation of the Central Board for Direct Taxes5 (hereinafter,
“the Board”). According to Section 119 of the Act the Board is empowered
with the power to, “issue such orders, instructions and directions to other
income-tax authorities as it may deem fit for the proper administration of
this Act.”6 In exercise of such powers, the Board has issued specific orders,
circulars etc. that deal on the taxation of federations and sports associations.

Keeping in mind the broad perspective, and towards ensuring an oriented

approach in dealing with Income from sports activities, the researchers
of this paper will deal with the treatment afforded to the income from
following activities in the field of sports:
• Sportspersons and their match fees
• Sportspersons and the royalty fees from advertisements
• Income from sports academies and training centers
• Income from ticketing activities of sport events

(a) Sports Persons and their Match Fees

Match fee refers to an amount of compensation a sports person receives for
playing one match or series of matches. It is pertinent to note that under the
Income Tax Act, 1961 there exists differential treatment towards resident
and non-resident sports persons. The match fees for a Resident sports
person would qualify as his income under the head of “profit from business
or profession as per section 28 of the Act,7 whereas the match fees in the
case of Non-Resident players will be treated under the special provision
of section 115BBA. Pursuant to section 115BBA, any income accrued by
way of participation in India in any game or sport, from advertisement or
contribution to any newspapers, magazines or journal of any articles shall

5 Income Tax Act 1961 § 116.

6 Income Tax Act 1961 § 119.
7 Income Tax Act 1961 § 28.

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be taxed.8 With the Indian Premier League and Indian Super League taking
the limelight in sporting activities, the earnings by sports persons both the
Resident and Non-Resident players are dealt therewith accordingly.

Furthermore, Section 194E of the Act provides for tax deduction at source,
whereby any income payable to non-resident under Section 115BBA, shall
10% of the income tax shall be deducted at the time of payment. As per the
provision non-resident sportsperson includes an athlete, who is not a citizen
of India or a non-resident sports association or institution.9 Accordingly,
Franchise Owners such as Chennai Super Kings, Kolkata Knight Riders,
Chennaiyin FC, Goa FC are bound to retain 10% of the payments made
thereof to their foreign players as TDS.

An aspect to remember and ponder on taxation of foreign players is that

the Double Tax Avoidance Agreements executed between India and their
respective countries also come into the play and have an impact on the
taxation. However, this aspect will be covered by the authors in the last leg
of the paper.

With regards to the fees payable to a Resident sports person, Section 194J
provides that, any person, not being an individual or a Hindu undivided
family, who is responsible for paying to a resident any sum by way of fees for
professional services” shall have to deduct tax at source.10The explanation
clause of this section allows the Central Board of Direct Taxes (CBDT) to
notify services which would qualify as “professional services” under this
section and by way of this power, the CBDT has notified that the services

8 Income Tax Act 1961 § 115BBA.

9 Income Tax Act 1961 § 194E.
10 Income Tax Act 1961 § 194J.

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Taxation & Sports: Can One Run a Mile

of sportspersons, coaches and umpires would qualify as “professional

services” and liable for TDS.11

In a country like India, where sports are adorned the status of religion, it is
but necessary to note that there is a special status for the Sports in the Act,
as there is provision for the central government to exempt any international
sporting event being held in India from being taxed, provided they meet
the conditions stipulated in Section 10(39), in accordance of which the
government is empowered thereof. The conditions for such exemption are
as follows:
• Approved by the international body regulating the international sport
relating to such an event.
• Has participation by more than two countries.
• Is notified by the Central Government in the Official Gazette for the
purposes of this clause.12

In a recent judgment, the Supreme Court of India was tasked with

determining whether certain payments made by the Pakistan-India-
Sri Lanka Joint Management Committee to the ICC would come within
the ambit of section 194E and liable to have tax deducted at source. The
Court, after referring to section 115BBA, held that the payment by the
Joint Committee qualified as a payment made under it, and would thus
be liable to have tax deducted at source by the Committee.13 While the
matter in hand dealt with the payment made by a Committee to the ICC, it
is reasonable to ascertain that the ratio would in most certainty apply to a
payment made to the players.

11 Central Board for Direct Taxes, Notification no. 88/2008/F.No.

275/43/2008/2008-IT(B), dated 21st August 2008.
12 Income Tax Act 1961 § 10(39).
13 Pilcom v. C.I.T., Civil Appeal 5749 of 2012 SC (Decided on April 29,
2020)

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(b). Sports Persons and Royalty-Fee From Advertisements

As in the case of sports, tax too has its way of exerting pressure. Section
9 of the Act, a deeming provision extends the ambit of tax to income by
way of royalty as well as the income by way of fees for technical services.14
Thus any royalty paid to a sportsperson for advertising in India, whether
a resident or a non-resident would be deemed to be income which has
accrued and arisen in India and would thus be liable for taxation in India.

However, it leads us to the query, whether this income such income

earned by way of Royalties is treated as income from ‘profession’ or as
‘income from other sources.’ This distinction becomes overarching,
as the classification, entails for deductions specific to such category.
For instance, Section 80RR allows any individual resident in India,
who is an author, playwright, artist (musician, actor or sportsman) to
claim deductions on any income derived by him in the exercise of his
profession,15at the following rates: -
• sixty per cent of such income for an assessment year beginning on the 1st
day of April, 2001.
• forty-five per cent of such income for an assessment year beginning on the
1st day of April, 2002.
• thirty per cent of such income for an assessment year beginning on the 1st
day of April, 2003.
• fifteen per cent of such income for an assessment year beginning on the 1st
day of April, 2004.

14 Income Tax Act 1961 § 9.

15 Income Tax Act 1961 § 80RR.

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Taxation & Sports: Can One Run a Mile

In an interesting case wherein the assessee, Mr. Sachin Tendulkar, the

living God of Cricket. On a lighter note, it may be assured again that Tax
Statutes leave no qualms, even in taxing the divinity. The question before
the Tribunal was as to whether the income which Mr. Tendulkar earned
from his advertisement endorsements could be treated as income derived
from his profession as an artist so as to allow him to claim deduction under
section 80RR of the Act or not. As such, the issue in the case was whether
the income of the assessee could be treated as income derived by him in the
exercise of his profession or not. In answering the question in the assessee’s
favour, the tribunal held that “the assessee, while appearing in advertisements
and commercials, has to face the lights and camera. As a model, the assessee
brings to his work a degree of imagination, creativity and skill to arrange
elements in a manner that would affect human senses and emotions and to
have an aesthetic value…..we are of the considered opinion that the income
received by the assessee from modelling and appearing in T.V. commercials
and similar activities can be termed as income derived from the profession
of an artist“ The tribunal also held that the sportsmen can have more than
one profession and thus any sportsperson who endorses products can treat
the income as income derived from his profession.16

(c). Income from Sports Academy and Training Centers

According to Section 11 r/w sections 12A and 12AA of the Act Sports
Academies and Training Centers are permitted to register themselves as
charitable trusts in order to have their income exempted from taxation.
However, it is pertinent to note that every academy cannot claim such a
benefit. The Supreme Court has laid down the test for determining the
registration of an organization as a charitable trust in the following words,
“The test which has, therefore, to be applied is whether the object which is said

16 Shri Sachin R Tendulkar v. The Asst. Commissioner of Income Tax,

[2011] 11 taxmann.com 121 (Mumbai).

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to be non-charitable is a main or primary object of the trust or institution

or it is ancillary or incidental to the dominant or primary object which is
charitable.”17

If the main object of the institution is held to be non-charitable, then the

institution will not be allowed to claim any exemption on its income, and the
same would become taxable under section 28 of the Act as Income arising
out of business or profession.18 The Income Tax Appellate Tribunal was
tasked with applying this test to determine whether the Mumbai Cricket
Association (MCA)was liable to have its registration under section 12A
set aside for having engaged in commercial or non-charitable activities.
The facts of the case were that the MCA entered into an agreement with
a company for developing a world class indoor training academy (ICA)
at one of MCA’s grounds. Under the terms of the agreement, the company
would construct the facility and utilize the same for 17 years and then hand
them over to MCA. The company was required to pay MCA a consideration
of INR750 million for the same. MCA contended that the company would
undertake the entire management of the ICA and as such there was no
commercial activity of its own. However, the Tribunal rejected this
argument and held that, as per the agreement, the managing committee of
the ICA was always going to be under the control of MCA. Thus even if the
operation of ICA was being done by the company, its real control vested
with MCA alone. The Tribunal thus proceeded to cancel the registration of
MCA, and their income was held to be taxable.19

17 Additional Commissioner of Income Tax v. Surat Art Silk Cloth

Manufacturers, 1980 AIR 387.
18 Income Tax Act 1961 § 28.
19 Mumbai Cricket Association v. Director of Income Tax (Exemption),
[2012] 138 ITD 338 (Mum).

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Taxation & Sports: Can One Run a Mile

In addition to the above, Section 35AC of the Act allows the central
government to allow for expenditures made by way of “payment of any
sum to a public sector company or a local authority or to an association or
institution approved by the National Committee for carrying out any eligible
project or scheme” to be treated as a deduction under the Act.20 Under this
section, the government can allow for expenditure made on the creation
of any sports training facility or ground etc. to be a valid deduction
as they did in the case of expenditure incurred on a sports facility in
Hyderabad.21However, any such income generated by these facilities would
be taxable as the income from business and profession, unless such facility
is registered as a charitable trust under the Act.

(d). Income From Ticketing Activities of Sport Events

In India the major cricket grounds are managed by different cricket
associations, for example, the Wankhade Stadium in Mumbai is managed
by the Mumbai Cricket Association, while the Karnataka State Cricket
Association manages the M Chinnaswamy Stadium. In the case Indian
Premier League, the tournament tickets are sold by the BCCI and the
different franchisee owners, and a share of the revenue generated is paid
to the different cricket associations in accordance with their agreements.

So far, the BCCI has managed to claim exemptions from being taxed as
it is treated as a charitable trust under Section 11 of the Act. , and in a
plea before the ITAT, Chandigarh has stated that the challenge to its
registration is pending before the Bombay High Court.22 However, despite
all submissions the Income Tax Appellate Tribunal proceeded to cancel

20 Income Tax Act 1961 § 35AC.

21 Income Tax Department, Notification number S.O. 552 (E),
2/7/1998
22 Punjab Cricket Association v. Assistant Commissioner of Income
Tax, [2019] 109 taxmann.com 219.

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the registration of the Punjab Cricket Association as a charitable trust for

generating revenue from the IPL. In coming to its decision, the Tribunal
observed that,

“it is apparent that the assessee, herein, is involved in commercial activity in

a systemic and regular manner not only by offering its Stadium and other
services for conduct of IPL matches but by actively involving in the conduct
of matches and exploiting its rights commercially in an arrangement arrived
at with the BCCI. Even there is no denial or rebuttal by the appellant to the
contention that the IPL is purely a large scale commercial venture involving
huge stakes, hefty investments by the franchisees, auction of players for huge
amounts, exploiting to the maximum the popularity of the game and the love
and craze of the people in India for the cricket matches. From the discussion
made above and considering the stand of the BCCI and further from analysis
of the Tripartite Agreement, it is clearly revealed that the assessee/appellant
is systematically involved in the conduct of IPL matches. It is not a simple
case of offering of its stadium on rent to BCCI for conduct of the matches.
The assessee association not only being the member of the BCCI which is
the AOP of the assessee along with other members, but also, is individually
involved in a systematic and regular manner in commercial exploitation of
the popularity of cricket matches and its infrastructure.”23

The Central Board of Direct Taxes had also issued a press note withdrawing
the tax exemptions given to Saurashtra Cricket Association, Baroda
Cricket Association, Kerala Cricket Association and Maharashtra Cricket
Association for engaging in commercial activities.24

23 Id.
24 Central Board for Direct Taxes, press note dated 9th January 2014.

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Taxation & Sports: Can One Run a Mile

Saurashtra Cricket Association, along with other associations, challenged

this decision, and both the Income Tax Tribunal and the Income Tax
Appellate Tribunal decided in the Association’s favour and set aside the
withdrawal. In doing so, it took a different approach from the one taken by
the ITAT Punjab. It held that

“the difficulty for the case of the revenue before us, however, is that these
matches are not being organized by the local cricket associations. We are told
that the matches are being organized by the Board of Cricket Control of India,
but then, if we are to accept this claim and invoke the proviso to Section 2(15)
for this reason, it will amount to a situation in which proviso to Section 2(15)
is being invoked on account of activities of an entity other than the assessees-
something which law does not permit.”25

In light of the above, it will be interesting to see the approach that the
Bombay High Court takes and whether it cancels the registration of the
BCCI, as thus far it is not being taxed for the income generated by it through
sale of tickets in the IPL or in other events. As such, Income earned by way
of tickets sold by the franchise owners, then the same would be treated
as their income from profession or business and be liable for tax under
section 28 of the Act.26

LEARNING THE ROPES: IMPLICATIONS

UNDER THE GOODS & SERVICE TAX LAW
With the Constitution (One Hundred and First Amendment) Act, 2016,
national uniform legislation on the areas of taxation for goods and services
has been introduced. This new national Goods and Service Tax regime

25 Gujarat Cricket Association v. Joint Commissioner of Income Tax

(Exemption), [2019] 101 taxmann.com 453 (Ahmedabad - Trib.).
26 Income Tax Act 1961 § 28.

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created a far-reaching impact on all businesses, including those operating

in the field of sports in India, such as the sale of sporting equipment, player
contracts, tickets for sporting events, franchising fees, promotional fees,
broadcasting fees, training in sports etc.

The Central Goods and Services Tax Act, 2017 (hereinafter referred to as
“the Act”) prescribes that the tax is to be levied at the time of supply of the
goods or services. To avoid ambiguity, the Act describes what constitutes
supply under Section 7 of the Act.27 and defines ‘Goods’ and ‘Services’
“Goods” is defined under section 2(52) of the Act to mean, “..every kind of
movable property other than money and securities but includes actionable
claim, growing crops, grass and things attached to or forming part of the land
which are agreed to be severed before supply or under a contract of supply”28 It
is pertinent to note that all sporting equipment such as cricket bats, cricket
balls, pads, Football, Shin-Guards, shoes, Racquets etc. are goods. The GST
regime entails a negative list for taxation, and thereby unless specifically
excluded are amenable to the tax regime.

On the other hand, “Services” are defined under section 2(102) of the Act
to mean, “anything other than goods, money and securities but includes
activities relating to the use of money or its conversion by cash or by any other
mode, from one form, currency or denomination, to another form, currency
or denomination for which a separate consideration is charged”29 Services
such as those provided by players, umpires and coaches would be covered
under this definition. They are taxable unless excluded from the negative
list for taxation.

27 The Indian Constitution (One Hundred and First Amendment) Act,

2016.
28 Central Goods and Services Act 2017 § 2(52).
29 Central Goods and Services Act 2017 § 2(102).

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Taxation & Sports: Can One Run a Mile

The terms “Goods”, “Services” and “Supply” oft had been a bone of
contention. For instance, the Authority of Advance Ruling, Punjab decided
an interesting question of whether the supply of complimentary tickets of
an IPL game without any consideration would attract levy of GST or not.
A ‘ticket’ qualified as a ‘good’, however, the question was whether in case of
complimentary tickets, there was a valid “supply” under the Act, for there
to be a tax liability. The Applicant argued that GST would not apply to
supply without consideration and pointed out that in the earlier indirect
tax regime, the distribution of complimentary tickets did not attract
liability. The Authority while rejecting the argument of the Applicant
referred to section 7(1)(a)30 read with section 2(31)(b)31 to state that supply
pre-conditions a consideration having monetary value or forbearance. The
Authority held that this would cover the supply of complimentary tickets as
the act would qualify as forbearance by tolerating persons who are receiving
the services provided by the applicant without paying any money.32 Thus
franchises handing out complimentary tickets would also be required to
pay GST.

Apart from the simple supply of goods and services, the concept of mixed
and composite supply is provided under the Act.33 ‘Composite supply’ is
defined under section 2(30) to mean, “a supply made by a taxable person to
a recipient consisting of two or more taxable supplies of goods or services or

30 Central Goods and Services Act 2017 § 7(1)(a) defines supply to

include, “all forms of supply of goods or services or both such as sale, transfer, barter,
exchange, licence, rental, lease or disposal made or agreed to be made for a consideration
by a person in the course or furtherance of business”
31 Central Goods and Services Act 2017 § 2(31) defines consideration
to mean, “the monetary value of any act or forbearance, in respect of, in response to,
or for the inducement of, the supply of goods or services or both, whether by the recipient
or by any other person..”
32 K.P.H. Dream Cricket (P.) Ltd., In re, [2018] 98 taxmann.com 243
(AAR-PUNJAB).
33 Central Goods and Services Act 2017 § 8.

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both, or any combination thereof, which are naturally bundled and supplied
in conjunction with each other in the ordinary course of business, one of which
is a principal supply”34 An example of this would be the services offered by a
player under the contract to his team. His services would not be limited to
playing a match, but would also envisage other activities such as promotion
of the team etc., and these additional services would be supplied by the
player in conjunction with his primary service, i.e., of actually playing the
sport.

Mixed supply is defined under section 2(74) to mean, “two or more

individual supplies of goods or services, or any combination thereof, made in
conjunction with each other by a taxable person for a single price where such
supply does not constitute a cosupply”35 For example, the sale of a cricket kit,
which would include different goods such as cricket bats, balls, helmet, pads
etc. capable of being sold individually or bundled in the normal course of
business. A supply of a cricket kit would not qualify as a composite supply,
because there was no primary good amongst the various goods which are
bundled and sold together.

The method of levying tax on mixed and composite supply of goods is

provided under Section 8 of the Act. For composite supply, the tax will
be levied as per the applicable rate on the principal good/service. Thus,
in the example of the player’s contract above the principal service would
be playing the sport and taxable accordingly. In the case of mixed supply,
the tax is levied as per the highest applicable tax rate from amongst the
goods. So, if in the cricket kit, the applicable tax rate for cricket bats is 12%,
whereas on the gloves it is 18%, then tax will be levied as per the higher
rate, i.e. 18%.

34 Central Goods and Services Act 2017 § 2(30).

35 Central Goods and Services Act 2017 § 2(174).

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Taxation & Sports: Can One Run a Mile

(a). Applicable Rate of Taxation

Sports goods and Sports services are not taxed uniformly at a fixed rate. The GST
rates for different sporting goods are provided in Chapter 95 of the Harmonized
System Nomenclature36 for GST in India which provides the taxation rate for
sporting goods and toys and Chapter 42 covering articles of leather. The rates
range between 12-28%, which is a sharp rise from the rates applicable under the
earlier regime.37 Against this, the sports goods manufacturers petitioned for a
reduction of the GST rates. Nevertheless, the GST council had refused to revise
the rates. Currently, the taxing rate for different goods is as given below:

Goods
HSN Code Description Rate
4203 Gloves specially designed for use in sports 12%
9504 Playing cards, chess board, carom board and other 12%
board games, like ludo, etc. [other than Video
game consoles and Machines]
9506 Sports goods other than articles and equipments 12%
for general physical exercise
9507 Fishing rods, fishing hooks, and other line fishing 12%
tackle; fish landing nets, butterfly nets and similar
nets; decoy “birds” (other than those of heading
9208) and similar hunting or shooting requisites
9506 Swimming pools and padding pools 18%

36 GST Rate & HSN Code for Children Toys, Table & Board Games & Sports
Goods - Chapter 95, Cleartax (May 15, 2020, 04:02 pm) ht t ps://cl ear t ax.
in/s/children-toys-table-board-games-sports-goods-gst-rate-hsn-code.
37 West UP’s sports industry disappointed, Times of I ndia (May 15, 2020,
04:02 pm) https://timesofindia.indiatimes.com/city/meerut/west-ups-
sports-industry- disappointed/articleshow/70098148.cms.

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9506 Articles and equipment for general physical 28%

exercise, gymnastics, athletics, other sports
(including table-tennis) or outdoor games, not
specified or included elsewhere in this chapter
9508 Roundabouts, swings, shooting galleries and other 28%
fairground amusements; [other than travelling
circuses and travelling menageries]

Apart from sporting goods, there are a variety of sports-related services which
are covered under the GST regime, and which are identified with a Services
Accounting Code.38 They are enumerated in the table given below:

Services
SAC Code Description Rate
9985 Services by way of sponsorship of sporting events Nil
organised :
(a) by a national sports federation, or its affiliated
federations, where the participating teams or individuals
represent any district, State, zone or Country.
(b) by Association of Indian Universities, Inter-University
Sports Board, School Games Federation of India, All
India Sports Council for the Deaf, Paralympic Committee
of India or Special Olympics Bharat.
(c) by the Central Civil Services Cultural and Sports
Board.
(d) as part of national games, by the Indian Olympic
Association; or
(e) under the Panchayat Yuva Kreeda Aur Khel Abhiyaan
Scheme

38 Ankita Khetan, SAC Code Rates, Studycafe (May 15, 2020, 04:02
pm) https://studycafe.in/2017/07/sac-codes-gst-rates-for-services.html.

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Taxation & Sports: Can One Run a Mile

9996 Services provided to a recognised sports body Nil

by-

(a) an individual as a player, referee, umpire,

coach, or team manager for participation in a
sporting event organised by a recognized sport
body;

(b) another recognised sports body

9996 Services by way of training or coaching in Nil
recreational activities relating to: (a) arts or
culture, or

(b) sports by charitable entities registered under

section 12AA of the Income-tax Act.
9996 Services by way of right to admission to, - Nil

circus, dance, or theatrical performance

including drama or ballet;

award function, concert, pageant, musical

performance or any sporting event other than a
recognized sporting event;

recognised sporting event; where the

consideration for admission is not more than Rs
250 per person in (i), (ii) and (iii) above.
9996 Services by way of admission to entertainment 28%
events or access to amusement facilities
including exhibition of cinematograph films,
theme parks, water parks, joy rides, merry-go
rounds, go-carting, casinos, race-course, ballet,
any sporting event such as IPL and the like;

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998895 Sports goods manufacturing services 18%

999292 Sports and recreation education services 18%
995415 indoor sports or recreation installations (ice 18%
rinks, gymnasia, indoor tennis courts, general-
purpose sports halls, boat sheds, boxing rings,
etc.
999651 Sports and recreational sports event promotion 18%
and organization services
999652 Sports and recreational sports facility operation 18%
services
999659 Other sports and recreational sports services 18%
999661 Services of athletes 18%
999662 Support services related to sports and recreation 18%
995428 General construction services for outdoor 18%
sports and recreational facilities

It is pertinent to note that the aforesaid lists are merely illustrative, and
there exists other sports related goods and services which are allotted their
own codes.

b). Should Sports Businesses undertake registration under GST?

The Act warrants the supplier to collect the tax on behalf of the Government
and deposit the same with the Government. To facilitate this, registration
of any business entity under the GST Law implies obtaining a unique
number from the concerned tax authorities for the purpose of collecting
tax on behalf of the government and to avail Input tax credit for the taxes
on his inward supplies. Without registration, a person cannot collect the
GST or claim any input tax credit of tax paid by him.39

39 GST Registration under GST Law, Central Board of I ndirect Taxes

and Customs (May 15, 2020, 04:02 pm) ht t ps://www.cbic.gov.in/
resources//htdocs-cbec/gst/Registration_under_GST_Law_new.pdf.

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Chapter VI of the Act provides for mandatory and voluntary registration

of companies and other businesses. Under this chapter, it is mandatory for
the following persons to register: -
• Businesses engaged in the supply of goods or services or both, having
an aggregate turnover of Rs. 20 lakhs (Rs. 10 lakhs for business is in
the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram,
Nagaland, Puducherry, Sikkim, Telangana, Tripura, and Uttarakhand);
• Every person who is registered under an earlier law (i.e., Excise, VAT,
Service Tax etc.);
• When a business which is registered has been transferred to someone/
demerged, the transferee shall take registration with effect from the date
of transfer;
• Businesses engaged in inter-state supply of goods;
• Casual taxable person;
• Non-resident taxable person;
• Agent of a supplier;
• Input Service distributor;
• Person liable to pay tax under the reverse charge mechanism.40

The first four headings are self- explanatory, and if a sports company, etc.
qualifies under any of them, they would have to mandatorily register under
the Act. The remaining headings are elucidated below:

A casual taxable person is defined under section 2(20) of the act to mean,
“a person who occasionally undertakes transactions involving supply of
goods or services or both in the course or furtherance of business, whether
as principal, agent or in any other capacity, in a State or a Union territory
where he has no fixed place of business.”41 So if a bat manufacturer based

40 Central Goods and Services Act 2017 § 22.

41 Central Goods and Services Act 2017 § 2(20).

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out of Rajasthan was to supply his goods to Pune or Mumbai where he did
not have any office or factory, then he would be treated as a casual taxable
person.

A non-resident taxable person is defined under section 2(77) of the act

to mean, “any person who occasionally undertakes transactions involving
supply of goods or services or both, whether as principal or agent or in any
other capacity, but who has no fixed place of business or residence in India.”42
An example of this would be a foreign coach who has come to India as a
coach for a tournament like the ISL or IPL.

Input Service Distributor is defined under section 2(61) to mean, “an

office of the supplier of goods or services or both which receives tax invoices
issued under section 31 towards the receipt of input services and issues a
prescribed document for the purposes of distributing the credit of central tax,
State tax, integrated tax or Union territory tax paid on the said services to
a supplier of taxable goods or services or both having the same Permanent
Account Number as that of the said office.”43To understand this concept,
let us take the example of a company manufacturing bat, this company
has two factories, one in the state of Maharashtra and another in the state
of Gujarat. Now this company’s head office is in Delhi, and the head office
engages the services of an advertisement company to market the bats being
made in Maharashtra and Gujarat. In this case since there is no direct link
between the factories and the advertisement agency, the head office will be
registered as an input service distributor and it will collect the input tax
credit from the agency and then distribute the benefit of the same to the
factories.

Reverse charge is defined under section 2(98) of the Act to mean, “the

42 Central Goods and Services Act 2017 § 2(77).

43 Central Goods and Services Act 2017 § 2(61).

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liability to pay tax by the recipient of supply of goods or services or both

instead of the supplier of such goods or services or both under sub-section (3)
or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of
section 5 of the Integrated Goods and Services Tax Act.”44 Section 9(3) of the
Act refers to the supply of those goods or services which are specified by the
government45, and section 9(4) refers to the supply of any goods or services
by a person who is not registered under the Act.46 Sponsorship services are
one example of services specified under section 9(3).47. Thus the IPL teams
which get sponsorships from corporates pay the GST under the reverse
charge mechanism and need to register under the Act mandatorily. For an
illustration of reverse charge under Section 9(4), we can take the example
of company manufacturing bats. In our case, a company is supplying
wood to the manufacturer, and this supplier is not registered under the
Act, then the GST will be paid as per the reverse charge mechanism by the
manufacturer.

Section 122 of the Act provides the penalty for a person who are required
to register but do not do so.48 The penalty is Rs. 10,000 or amount of tax
evaded whichever is higher.
(c). Benefits that Entail on Registration
Registration under GST Law has its perks and benefits, of which the
foremost is the avail of Input Tax Credit. This is a concept unique to the
Act and is a method developed to do away with the cascading effect of
taxation. The Act defines “input tax” under section 2(62) to mean, “the

44 Central Goods and Services Act 2017 § 2(98)

45 Central Goods and Services Act 2017 § 9(3).
46 Central Goods and Services Act 2017 § 9(4)
47 Services under Reverse Charge as approved by GST Council, GST Council
(May 15, 2020, 04:02 pm) ht t p://gst council .gov.in/sit es/def aul t /f il es/
gst%20rates/list-of-services-under-reverse-charge-2.pdf
48 Central Goods and Services Act 2017 § 122.

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central tax, State tax, integrated tax or Union territory tax charged on any
supply of goods or services or both made to him and includes—
• the integrated goods and services tax charged on import of goods;
• the tax payable under the provisions of sub-sections (3) and (4) of section
9;
• the tax payable under the provisions of sub-sections (3) and (4) of section
5 of the Integrated Goods and Services Tax Act;
• the tax payable under the provisions of sub-sections (3) and (4) of section
9 of the respective State Goods and Services Tax Act; or
• the tax payable under the provisions of sub-sections (3) and (4) of section
7 of the Union Territory Goods and Services Tax Act”49

Section 2(63) of the Act defines “input tax credit” to mean, “the credit of
input tax.”50However, in order to avail an input tax credit, the following
pre-conditions are to be met therein:
• Possession of a valid tax invoice (of purchase) or debit note issued by
registered dealer
• Receipt of the goods/services
• Tax charged on your purchases has been deposited/paid to the
government by the supplier in cash or has been subject to input tax
credit
• GST returns have been filed by the Supplier, and such supplier is not in
default51

The rationale of these requirements is to ensure that the government has

received the tax the consumer paid for goods and services before it allows
you to credit the tax that you have collected. Given below is an illustration
of the concept:

49 Central Goods and Services Act 2017.§ 2(62).

50 Central Goods and Services Act 2017 § 2(63).
51 Central Goods and Services Act 2017 § 16.

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Understanding Input Credit for a Registered Manufacturer/Service

Provider
Tax Paid on Input Material 1 INR. 1000
Tax Payable on Input Service 2 INR. 100
Tax Payable on Output INR. 2500
Input Credit INR. 1,000 + INR. 100 = INR 1,100

An example of a cricket bat manufacturer further clarifies this concept of

‘Input tax credit’ in a sports business. As per the GST regime, a tax is levied
on the supply of goods and services, accordingly, a manufacturer pays tax
on the received raw materials and collects tax on the bats sold. This tax
amount received on sale is treated as input tax under the Act and can be set
off against the tax paid to avoid paying tax twice.

Moreover, there are also certain goods and services on which no input tax
credit can be availed, and these are enumerated in the following list: -
• motor vehicles and other conveyances
• food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery
• Works contract services when supplied for construction of an immovable
property
• goods or services or both received by a taxable person for construction of
an immovable property
• GST Paid on invoices where service provider opting for composition levy.
• Goods or services or both received by a non-resident
• Goods or services or both used for personal consumption
• Goods lost, stolen, destroyed, written off or disposed of by way of gift or
free samples52

52 Central Goods and Services Act 2017 § 17.

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It is reasonable to ascertain that an event manager who organizes IPL cannot

set off the tax credit received from the ticket sales against the tax output
spent on procuring popcorn and other similar foods and beverages to sell
at a match. Similarly, a sports club cannot set off the tax credit received on
from the club membership fees against the tax output spent on availing
services for maintenance of gym equipment, etc.

PLANNING OF TAXES: LONG SHOTAND SURE SHOT

While evasion of taxes is a crime, planning of taxes, allows you to run
between wickets. This section will deal with the applicability of Double
taxation Avoidance Agreements (DTAA) and the over-extensive use of
the idea of registration of sports facilities as charitable trusts for claiming
exemption under the Income Tax Act, 1961 (hereinafter referred to as the
Act).

(a). Double Tax Avoidance Agreements and Tax Reliefs

India hosts several international sporting events, and similarly, Indians
participate in several sporting events held abroad. In this respect, the
question of double taxation comes into the picture, and the double
tax avoidance agreements (DTAAs) executed between India and other
countries gain significance.

A DTAA is a tax treaty entered into between two or more countries to avoid
taxing the same income twice. They apply when a taxpayer is a resident of
one country but is earning his income in another country; the tax rates and
jurisdiction etc. are agreed under the DTAAs.

All the Model Tax Conventions also follow the same principle that the income
of sportspersons will be taxed at source.53 The Income Tax Department had

53 OECD Model Tax Convention on Income and on Capital, 2017 and

The United Nations Model Double Taxation Agreement between Developed
and Developing Countries 2017.
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issued a circular in 2000 laying down the guidelines for taxing the income
of sportsmen, in which it clarified that, “The income earned by non-resident
sportsmen, who are not citizens of India or the income earned by non-resident
sports association or institutions is required to be determined in accordance
with the provisions of section 115BBA of the Income-tax Act, 1961. In the
case of the sportsmen, this would include the income by way of participation
in India in any game or sport, from advertisement or contribution to any
newspapers, magazines or journal of any articles relating to sport or game
in India. The tax should be deducted at source under section 194E from
such payments. The provisions of section 115BBA would be applicable to
the guarantee money receivable by the non-resident sports association. The
payment by way of guarantee money to non-resident sport associations needs
to be considered in terms of the Article on “Other income” or on “Income not
expressly mentioned” of the relevant DTAA.”

An example of the scheme of taxation of such income under different

DTAAs is as follows:

U.K. Taxable in India, as per article 23.3

U.S.A Taxable in India, as per article 23.3
Japan Taxable in India, as per article 22.3
Australia Taxable in India, as per article XXII (2)
New Zealand Taxable in India, as per article 22
Sri Lanka Taxable where the sports association/institutions are
resident, as per article 22.1
(b). Registration as a Charitable Trust
Section 12 of the Act provides that, “any voluntary contributions received by
a trust created wholly for charitable or religious purposes or by an institution
established wholly for such purposes (not being contributions made with
a specific direction that they shall form part of the corpus of the trust or
institution) shall for the purposes of section 11 be deemed to be income derived

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from property held under trust wholly for charitable or religious purposes and
the provisions of that section and section 13 shall apply accordingly”54

Section 12A provides the conditions for applicability of exemptions

under section 11 and 12, and section 12AA provides for the procedure for
registration as a charitable trust55

Section 11 of the Act exempts the aforementioned income from being

taxed.56 Furthermore, services provided by a charitable trust which is
registered under 12AA will be exempted from the liability under the
Central Goods and Services Act as well.57

Now section 2(15) of the Act defines “charitable purpose” to include, “relief
of the poor, education, medical relief, [preservation of environment (including
watersheds, forests and wildlife) and preservation of monuments or places
or objects of artistic or historic interest,] and the advancement of any other
object of general public utility

Provided that the advancement of any other object of general public utility
shall not be a charitable purpose, if it involves the carrying on of any activity
in the nature of trade, commerce or business, or any activity of rendering any
service in relation to any trade, commerce or business”58

The question which arises is as to whether activities of sports associations

and clubs come within the ambit of ‘general public utility’ or not. The
Income Tax Department had issued a circular clarifying that promotion of
sports and games can be a charitable purpose.59

54 Income Tax Act 1961 § 12.

55 Income Tax Act 1961 § 12A.
56 Income Tax Act 1961 § 11.
57 Income Tax Act 1961 § 12AA.
58 Income Tax Act 1961 § 2(15).
59 Income Tax Department, Circular No. 395 [F. No. 181(5) 82/IT
(A-1)], dated 24th September 1984.

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In a landmark case of ITAT Pune, it was observed that, “The Standing

Counsel submitted that sports and games were not of any utility because they
were not a necessity. I am not in inclined to accept this argument. In my view,
utility first of all, means usefulness and not necessity. Secondly, it would be too
narrow a view to take. For any community or society in general, sports and
sportsmanship are definitely useful and are of great value. For these reasons I
am of the view that the object of the assessee i.e., promotion of sports, games,
gymnastics and sportsmanship must be said to be an object of general and
public utility i.e., a charitable purpose within the meaning of Sec. 2(15)”60

Over the years there have been numerous cases wherein the registration
of several cricket associations has been revoked by the authorities for
engaging in commercial activity. One such case was that of the Tamil
Nadu Cricket Association, whose registration had been revoked for
purportedly engaging in commercial activity by receiving subsidies from
BCCI, providing its stadiums for conducting IPL matches, income from
ticket sales, advertisements and subscriptions. The Madras High Court
concluded that these activities were incidental to the main charitable
purpose of the Association and not sufficient to revoke its registration. It
held that, “We do not think that by the volume of receipt one can draw the
inference that the activity is commercial. The Income Tax Appellate Tribunal’s
view that it is an entertainment and hence offended Section 2(15) of the Act
does not appear to be correct and the same is based on its own impression on
free ticket, payment of entertainment tax and presence of cheer group and
given the irrelevant consideration. These considerations are not germane in
considering the question as to whether the activities are genuine or carried
on in accordance with the objects of the Association. We can only say that
the Income Tax Appellate Tribunal rested its decision on consideration
which are not relevant for considering the test specified under Section 12AA

60 Income-Tax Officer v. Deccan Gymkhana, 1989 30 ITD 16 Pune.

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(3) to impose commercial character to the activity of the Association. In the

circumstances, we agree with the assessee that the Revenue has not made out
any ground to cancel the registration under Section 12AA (3) of the Act.”61

This ratio was also followed by the Delhi bench of the Income Tax Appellate
Tribunal to uphold the registration of the Delhi and District Cricket
Association as well as the All India Football Federation, as the commercial
activities of sponsorship, ticket fees etc. were incidental to the charitable
objectives of the trusts.62 The Pune Bench of the Tribunal also came to a
similar conclusion with regards to the Maharashtra Cricket Association to
hold that, “the nature of receipt is such that it is intrinsically linked to the
charitable activities of assessee carried on by the assessee and hence, the same
cannot be held to be taxable in the hands of assessee.”63

An interesting shift was made in the case of the Chandigarh Lawn Tennis
Association by the Chandigarh Bench of the Tribunal. Here the Tribunal
was tasked with interpreting the second proviso to section 2(15) of the Act
which provides that the first proviso of the section would not apply when
the income generated from commercial activities was less than Rs. 10 lakh.
In interpreting the effect of this proviso, the Tribunal held that, “proper
construction will be that the institution carrying out the object of advancement
of general public utility which involve the incidental or ancillary activity in the
nature of trade, commerce or business and generating income therefrom, the
income to such an extent as is limited by the second proviso to section 2(15)
should be taken as exempt being treated as income from charitable purposes
as per the relevant provisions of sections 2(15), section 10, section 11, section

61 Tamil Nadu Cricket Association v. Director of Income Tax

(Exemptions) and Ors., [2014] 360 ITR 633 (Mad).
62 DDIT (E) v. All India Football Federation, 2015 (43) ITR (Trib) 656
(Delhi) and Delhi and District Cricket Association v. DIT (E), (2015) 168
TTJ (Delhi) 425.
63 Maharashtra Cricket Association v. The Commissioner of Income
Tax-I, ITA No. 1177/PUN/2013.

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12 or section 13, as the case may be and wherever applied. The other income
which is not from the commercial activity, such as, by way of voluntary
donations, contributions, grants, or nominal registration fee etc. or otherwise
will remain to be from charitable purposes and eligible for exemption under
the relevant provisions. However, the income from activity in the nature of
trade, commerce or business over the above limit prescribed from time to time
as per the second proviso to section 2(15), should be treated as income from
the business activity and liable to be included in the total income.”64

This decision was heavily relied on by the bench in its decision on the
exemption granted to Punjab Cricket Association. In this case, the Tribunal
departed from the earlier decisions of the other Tribunals and held that
the BCCI was nothing more than an association of persons comprising of
the various state cricket associations, it refused to allow the defense that
the commercial activities pertaining to the IPL were conducted by BCCI
and not by the Punjab Cricket Association. It held that, “what cannot be
done directly, that cannot be done indirectly also. If an institution claiming
charitable status being constituted for the advancement of other objects of
public utility, as per the provisions of law, is barred from involving in any
commerce or business, it cannot do so indirectly also by forming a partnership
firm or an AOP or a society with some other persons and indulge in commercial
activity. Any contrary construction of such provisions of law in this respect
would defeat the very purpose of its enactment.” It further held that even if
the argument of incidental activities of the Associations was accepted, then
the decision in the Lawn Tennis Association would come into the picture
and the income over and above Rs. 10 lakh would be taxable as business
income.65 In light of the aforementioned decisions, it has to be seen that
the view taken by the Chandigarh Bench of the Tribunal is an exception to

64 Chandigarh Lawn Tennis Association v. Income Tax Officer,

(Exemptions), Ward, Chandigarh, [2018] 95 taxmann.com 308 (Chandigarh
- Trib.).
65 Punjab Cricket Association v. Assistant Commissioner of Income-
tax, Circle 6(1), Mohali, [2020] 180 ITD 347 (Chandigarh - Trib.).

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the rule, and until now the majority of the courts have refused to interfere
with the registration afforded to the sports associations. It remains to be
seen as to whether the Punjab Association case will be overruled or if it
will be a new beginning in the field of sports and taxation. Till now the
sports associations have been largely successful with their tax planning
by showing their income earned under sponsorship, ticket revenue etc. as
incidental to their charitable purpose, however, the two decisions of the
Chandigarh bench of the Tribunal can potentially put a spanner in the
works of the associations.

(c). Crossing Goal Lines: To set the Ball Rolling

The researchers in this paper have attempted an overview of the tax
implications in the field of sports in India, by making a acritical appraisal
of the direct as well as indirect taxation regime in sports businesses, while
the indirect tax regime has been revamped with the introduction of the
Goods and Service Tax Act, a similar revamp of the direct tax regime is
well around the corner. Whilst it may be argued that just as the Kelkar
Committee Report submitted 15 years ago, the 2008 draft of a direct tax
code which never saw the light of day, it is but to wait and watch. The
current government also set up a committee to work on the code, and a
report was also submitted in 2019 to the government, however, this report
has not been made public yet. Considering recent events, the Direct Tax
Code remains a long way away, and the Income Tax Act will continue to
govern the direct tax regime in the country. In this article we have seen
the different provisions of the Income Tax Act, 1961 and the Central
Goods and Services Act, 2017 which will apply to different sports-related
activities, we have also seen the possible deductions and exemptions which
are available to the assesses under the Acts, under both these Acts, if the
sports associations can successfully register themselves as a charitable trust,
then they can claim exemptions under both the Acts, however in light of
the recent decisions of the Chandigarh Bench of the Income Tax Appellate
Tribunal, this may become much more difficult in the future.

***
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ABUSE OF DOMINANCE AND MONEY

POWER IN THE RELIGION OF THE
WORLD – FOOTBALL
Arijeet Bhattacharjee1* and Kavanya Surolia2**

INTRODUCTION
Since ancient times sports has played a very absorbing role in the sphere
of life. Sports has always been a significant activity which humans have
relished. Sports form an integral part of everyone’s lives which makes it a
good topic of discussion. One of the most celebrated sports in human history
is football. The beautiful game has always attracted massive popularity due
to its simplistic nature. It formally evolved itself towards the end of the
19th century when in England the sport’s first formal association (Football
Association England) was formed which also became its first governing
body.3 The game of football evolved a lot over the period and it slowly kept
on growing until it reached the stage that it is at, as of today. All of it initially
started in the year of 1938 with the introduction of Football on television,
with the FA Cup Final of that year becoming the first football event to be
screened on television.4 This provided a significant boost to the viewership
of football as the global people could watch the game from their own

1 *
Student, B.A.LL. B (H), Maharashtra National Law University,
Nagpur.
2 **
Student, B.A.LL. B (H), Maharashtra National Law University,
Nagpur.
3 History of Football – The Origins (May 6, 2020, 11:41AM),
https://www.fifa.com/about-fifa/who-we-are/the-game/.
4 Football and Television: A Natural Partnership (May 6, 2020,
11:41AM), https://www.fifa.com/about-fifa/who-we-are/news/football-
and-television-natural-partnership-72042.

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Abuse of Dominance and Money Power in the Religion of the World – Football

homes. This resulted in the evolution of football which eventually became

a matter of big money surrounded by brand endorsements, sponsorship
and investments. Football originally had only the entertainment aspect, as
people played football mostly for leisure. But as football grew, it changed
a lot, and towards the end of the 20th century, football spread rapidly
throughout the world. People now took up football as their profession.
The entire economy of football transfers developed, and vast amounts of
money started being involved. All these changes brought football to what
it is today, that is, the most-watched sport in the world.5 Football virtually
became a religion for people, with the following football daily and it
became an integral part of their lives. The sport attracted huge investments
by clubs, their owners and their sponsors for participating in the transfer
market and buying established players as well as young prospects into their
squads. This concept of transfers of players between clubs gained a lot of
popularity, and it slowly became one of the main aspects of the sport. A
lot of clubs started spending a lot of money on players, and this called for
some kind of rules governing these transfers. Owing to which, the Union
of European Football Associations (hereinafter “UEFA”), introduced the
Financial Fair-Play Rules in 2010 (hereinafter “FFP”), for governing and
safeguarding the interests of clubs in the field of transfers. This field also
transformed a lot with clubs today splashing the cash on young prospects.
This came to a point where clubs started misusing their funds and influence
to get all the best players in their teams and perform well. As this is wrong,
the FFP rules were required and still need a lot of work. As clubs spent
so much on these young players, it also affected the lives of these young
players, which sometimes spoiled their careers. These aspects of financial
regulations related to transfers, to this day, remains a new sphere of football

5 Nielsen Sports, World Football R eport 2018 (May 6, 2020,

11:41AM), https://nielsensports.com/wp-content/uploads/2014/12/
Nielsen_World-Football-2018-6.11.18.pdf.

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which can be improved to a great extent to ensure fair-play in the sport and
to avoid the abuse of dominance by big guns of the game.

Thus, the focus is on providing a basic understanding of the rules regarding

the football transfer market by understanding the history of the transfer
market, its evolution. Moreover, elucidate upon the FFP Regulations.
Researchers has tried to find out how football has evolved along with the
evolution of transfer markets and player contracts, what are the current
regulations related to player contracts, what are the FFP rules and how do they
work, have there been any recent breaches of the FFP regulations and if yes,
what are those if there have been any other recent developments in this field
and finally what measures can be taken to improve the scenario of abuse of
dominance.

PROFESSIONALIZATION OF THE GAME

The earliest traces of the formal game of football can be seen in 12th century
England. This rudimentary form of the game had very less difference from
the set of rugby, with the players carrying the ball to its target by any means
necessary. There were no formal rules and players used brute force to get
the goals - number of players in each team; the period of each game; and
other rules were not decided at this stage. These formal rules were for the
first time formulated with the establishment of The Football Association,
England, in 1863, which was the first association for football in the world.6
Thus, began the evolution of sport in terms of the rules and regulations of the
technical aspects of it. The first football clubs came up in the form of teams
consisting of former school students, but the first professional football club
was the English club - Notts County Football Club which was established

6 The History of the FA, (May 6, 2020, 11:41AM), http://www.thefa.

com/about-football-association/what-we-do/history.

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Abuse of Dominance and Money Power in the Religion of the World – Football

in 18627 and exists today too. As all these changes took place, the concept
of the competition came into the picture. With the commercialisation of
tickets for the matches, the clubs had the incentive to win the matches and
earn more money. The increased income of clubs now allowed them to start
paying players to play for them. This system slowly matured into the system
of transfers that we see today. The first football league was played in 1888 in
England with 12 clubs participating in it.8 However, the first cup competition
of football was the Football Association Challenge Cup in 1871.9 In 1883
the first international tournament was held. As we can see, football until
now had majorly been a British sport. However, the sport gradually spread
to other European nations and South American nations. As this spread
took place, The Fédération Internationale de Football Association (FIFA)
was established in 1904, which was the first international association of
the sport.10 Football was recognized as an official sport of the Olympics in
1908,11 which remained the most prestigious international football event
until the dawn of the FIFA World Cup in 1930.12 Other domestic leagues

7 Sam Brodbeck, How Notts County – The Football League’s Oldest Club
– Became Its Biggest Basketcase (May 6, 2020, 4:28 PM) https://www.telegraph.
co.uk/football/2019/02/01/notts-county-football-leagues-oldest-club-
became-biggest/.
8 125 Year s of t he Foot bal l League and t he Top Fl ight – Which
Team Comes Top?, The Guardian, (May 6, 2020, 4:28 PM) ht t ps://www.
theguardian.com/football/datablog/2013/apr/17/football-league-125-
years.
9 See, (May 7, 2020, 03:41 PM) ht t p://www.t hef a.com/news/2016/
nov/02/history-of-the-fa-cup.
10 See, (May 7, 2020, 03:42 PM) https://www.fifa.com/about-fifa/
index.html.
11 See, FIFA Facts (May 7, 2020, 03:41 PM) https://www.fifa.com/
mm/document/fifafacts/mencompoly/51/98/60/ip-208_01e_oly_men.
pdf.
12 See, History of First FIFA World Cup (May 7, 2020, 03:42 PM)
https://www.fifa.com/about-fifa/who-we-are/history/first-fifa-world-cup.
html.

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were also developed during the time, with the English Football League being
established in 1888. These leagues also expanded into separate divisions
as more and more teams started participating. People started investing in
football and stadiums began coming up. The most remarkable of the first
stadiums to come up was the Maracanã Stadium in Rio de Janeiro, Brazil,
which had a capacity of 2,00,000 people. The passion for the game amongst
the fans also developed a lot over this time. The first Champions League
was played in 1992,13 which is considered today as the biggest club football
competition in the world. Earlier, very few national football teams existed.

Nevertheless, this changed as football started becoming more and more

famous. Today FIFA has 211 natioassociations under it which are divided
into six confederations.14 This was how the game was professionalized and
brought to the position and stature as it stands today.

The other aspect of the evolution of football is the economic side of the
game, which relates to player contracts, sponsorships and mainly, the arena
of player transfers. Player Contracts have developed a lot throughout the
years. It was in the year 1885 when the concept of Professionalism was
first legalised in Football by the Football Association.15 The main aim
was to stop players from moving club to club and instead have made the
system stable by having them signed for a particular club before the start
of the season. Soon after this, the first-ever professional league was set up
in the year 1888, and this changed everything. A new rule was imposed
in the 1893-1894 season which restricted a player from joining another
club until his existing club provided the permission. Even after completion

13 See, About UEFA Champions League (May 7, 2020, 03:43 PM)

https://www.uefa.com/uefachampionsleague/about/.
14 See Associations, (May 7, 2020, 03:43 PM)https://www.fifa.com/
associations/.
15 See, (May 7, 2020, 03:43 PM) http://www.thefa.com/about-football-
association/what-we-do/history.

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of Player Contract, they were tied with the same club and were neither
played nor paid, thus stuck in an adverse situation. Thus, the clubs realised
that they could make a profit out of this situation by demanding Money
as a consolation fee for permitting the player to join any other club. This
thus started the Transfer system. Throughout more than 100 years, various
regulations were tried and tested to limit the transfer fee of players and thus
to regulate the transfer window. Still, most of them failed as clubs always
found a loophole in the regulations. The transfer system was changed
altogether in the year 1995 with the ‘Bosman Ruling’16 in which the
European Court of Justice held that a player should be allowed to move for
free at the end of their contract. This has played a significant role in shaping
the way transfers take place in the modern era. Another significant change
took place in 2002, when UEFA introduced the concept of the ‘Transfer
Window’, which allowed clubs to deal matters relating to transfer in a select
period of the window only, and not before or after that. Much business
nowadays usually takes place on the Transfer deadline day. Any deal which
is agreed upon outside the transfer window is made official on the first day
of the next window, and the player movement takes place after that only. A
recent significant development which took place in transfer history is the
introduction of Financial Fair Play by UEFA in the year 2010. The purpose
was to limit the amount clubs spent on players and thus to make sure that
the competition is not killed off in the beautiful game.

FINANCIAL FAIR PLAY: A SAFEGUARD

FOR COMPETITION?
Football a game meant for entertainment is undoubtedly becoming more
and more lucrative for the rich clubs only. Rich owners look towards their

16 Union des Associations Européennes de Football v. Jean-Marc

Bosman, Case C-415/93, European Court of Justice, 1995.

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clubs as a business model and seek for-profit multiplication. Thus they invest
more and more so that the club return more and more revenue by winning
competitions. These rich businessmen have hampered the competitive
spirit of the game and have turned it into a mere business avenue. The
ladder used is Money Power which is undoubtedly dominating the game
on its own. One of the prime examples being of Paris Saint Germain. The
Parisian club has undoubtedly injected much money into the transfer
market in recent times and has undoubtedly killed off the competition,
especially in the French domestic league. The club was taken over by Qatari
giants – ‘Qatar Sports Investments’ in 2011,17 and since then the Parisian
club has won the domestic competition 6 out of 8 times and all thanks to
the substantial financial aid received by them. All these activities kill the
competitive nature of the game with these big clubs creating a monopoly in
the market and procuring the best players with lucrative offers and bagging
all the gold for themselves. Another prime example of this situation was the
case of Manchester City F.C. in 2008. The club had been struggling in the
domestic competition for quite some time and had finished the 2007-2008
season in the ninth position. In 2008, it was taken over by Sheikh Mansour
bin Zayed al-Nahyan, who belonged to the ruling dynasty of Abu Dhabi.
He injected £1.2 billion into the club’s funds, which consequently took
them to the position of the Premier League (The English Domestic League)
champions in 2012.18 This is a clear abuse of monetary power by the club,
which allowed them to spend exorbitantly on world-class players and get
to the top. Manchester City, after the takeover, has won the league three

17 John Sinnot, Qatari Takeover Heralds New Dawn For Paris Saint-
Germain, BBC SPORT, August 3, 2011 (May 7, 2020, 03:57 PM) https://
www.bbc.com/sport/football/14393012.
18 David Conn, How Sheikh Mansour’s Decade Long Spree Made Manchester
City Aristocrats, The Guardian, May 5, 2018) https://www.theguardian.
com/football/blog/2018/may/05/how-sheikh-mansour-decade-long-spree-
turned-manchester-city-into-aristocrats.

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times and have performed well in the champions league scenario too. Such
activities by football clubs called for a change in the system of transfers and
the regulations related to it. After due delegations and recommendations,
UEFA came up with the Financial Fair-Play Regulations (FFP) in 2010
to curb such activities by the clubs and to promote fair-play and healthy
competition in the game. The FFP rules have had a long history of
transformation, which have evolved a lot to regularize the football market.

The entire story of transformation in the transfer system in football began

with the ‘Bosman Ruling’ of the European Court of Justice in 1995.19 In this
case, Bosman was a player who played for the team Liège in Belgium. He
wanted a move to the club Dunkerque of France. His contract had ended,
but the regulations of that time compelled him to stay at Liège until the
other team paid the transfer fee for him. It was held by the ECJ that this
was a restriction on the movement of workers in the European Union and
that players should be allowed to move to other clubs for free at the end of
their contracts. This judgement revolutionized the player market as clubs
now resorted to selling their players before their contracts ended, for more
profits instead of selling them for free. The players also can now use this
rule as leverage to demand more salaries and wages by threatening the
clubs to run down their contracts and reduce their value. This compels
clubs to offer these players newer, more lucrative contracts to retain them
in their teams. This ruling paved the way for the modern transfer system,
which was a good thing. However, it also provided the basis for the misuse
of money and spoiling of competition in the sport, as the values of players
kept getting inflated and clubs with more money were able to buy players
from other clubs who wanted to earn this money instead of letting them
go for free.

19 Union des Associations Européennes de Football v. Jean-Marc

Bosman, Case C-415/93, European Court of Justice, 1995.

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After this ruling there were a lot of deliberations regarding the regulation
of transfers and the ‘FIFA Regulations on the Status and Transfer of Players’
was established. This informal agreement laid down certain specific rules
regarding transfers and player contracts which reformed the market.
Articles 18(2)20 and 18(3)21 talked about the length of the player contracts
and when another club can contact a player. Article 1322 and states about how
the transfer of a player can take place only by mutual agreement between
the player and both the clubs. Moreover, if any other case, there must be
‘just cause’ for the transfer of the player without mutual agreement, under
Article 14.23 Many other such provisions provided rules and regulations
for player contracts and transfers in the player market. This agreement also
enclosed the sanctions which players and clubs might have to pay in case
of breach of the rules.

20 Article 18(2) of RSTP: Special provisions relating to contracts

between professionals and clubs - ‘The minimum length of a contract shall
be from its effective date until the end of the season, while the maximum
length of a contract shall be five years. Contracts of any other length shall
only be permitted if consistent with national laws. Players under the age of
18 may not sign a professional contract for a term longer than three years.
Any clause referring to a longer period shall not be recognised.’
21 Article 18(3) of RSTP: Special provisions relating to contracts
between professionals and clubs - A club intending to conclude a contract
with a professional must inform the player’s current club in writing before
entering into negotiations with him. A professional shall only be free to
conclude a contract with another club if his contract with his present club
has expired or is due to expire within six months. Any breach of this provision
shall be subject to appropriate sanctions.
22 Article 13 of RSTP: Respect of contract - A contract between a
professional and a club may only be terminated upon expiry of the term of
the contract or by mutual agreement.
23 Article 14 of RSTP: Terminating a contract with just cause - A
contract may be terminated by either party without consequences of any
kind (either payment of compensation or imposition of sporting sanctions)
where there is just cause.

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This brought about a significant change in the transfer system as it

became organized and the parties to the contracts now had a fear of
sanctions. However, even after these regulations, the issue of the spoiling
of competition still prevailed in the football scene. As players became
bound by their contracts, their value increased in the market, and only
a few elite clubs could attract these players due to their monetary power.
These clubs did not allow other, rather smaller clubs to get in the main
scene as all the best talents were attracted to such lucrative contract offers,
hampering competition to a great extent. This led to the formation of the
UEFA Financial Fair play Regulations.

The UEFA’s Financial Fair Play Regulations were launched in 2010 with
the primary aim to make sure that clubs spend rationally and in a more
disciplined way, and to protect long-term viability and sustainability of
Club Football in Europe.24 UEFA also kept a vision to make sure that the
clubs avoid spending more than what they received as revenue so that Clubs
remain financially stable and credible and do not fall into debt traps.25
a). Break-Even Rule
FFP’s central principle is that clubs should spend as per their income,
i.e. the clubs should stay within their means. This rule is also called the
‘Break-Even’ rule.26 The Break-Even rule is an effort to make sure that clubs

24 Article 2 of UEFA Club License and Financial Fair Play Regulations:

Objectives - To introduce more discipline and rationality in club football
finances. Also, to protect the long-term viability and sustainability of
European club football.
25 Article 2 of UEFA Club License and Financial Fair Play Regulations:
Objectives - To improve the economic and financial capability of the clubs,
increasing their transparency and credibility. Also to place the necessary
importance on the protection of creditors and to ensure that clubs settle their
liabilities with employees, social/tax authorities and other clubs punctually.
26 Article 58 to 64 of UEFA Club License and Financial Fair Play
Regulations.

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at the end of the day balance their books out. The Break-Even rule was
introduced as a requirement for clubs in the year 2013. This rule states that
the clubs should not spend more than what they earn. The clubs’ revenues
and expenditure are assessed based on three years. The body which keeps
this rule in check is the Club Financial Control Body (CFCB) which was
set up in 2012 by UEFA to keep clubs on track with the FFP rules and
to impose sanctions in cases of breach. The break-even rule is explained
in Article 60 of the Regulations as “the difference between relevant income
and relevant expenses” which need to be balanced. The clubs need to spend
only as much as they earn and not more than that. The expenditure must
be equal to their income in the three-year given period. However, under
this rule, all revenues and expenses are not taken into account. The income
head includes factors like ticket sales, broadcasting rights, sponsorship
deals and player transfers. The significant chunk of expenditures taken into
account by UEFA include signings and salaries. However, other expenses
related to training, infrastructure, youth sector, investment in social
avenues are not taken into consideration as expenditures. This promotes
the youth development sector of the clubs as they would resort to invest
in their homegrown talents as these expenses would not be calculated
under the break-even rule. Under this rule, UEFA has allowed that the
clubs can spend up to €5million more than what they have earned in the
assessment period. However, this limit can also be increased if the money
is being directly injected by the club owner or a related party. This limit on
investment injection by owners was €45m up until the season of 2014/15
after which it was reduced to €30m. This is the entire synopsis of the break-
even rule which is the crux of the FFP regulations given by UEFA in its
UEFA Club License and Financial Fair Play Regulations. Non-compliance
with the FFP rules also attracts sanctions by the UEFA, which include
warnings, point deductions, fines, restriction on the number of players.
These FFP rules have been revolutionary in the field of transfers in football
as they have regularized the transfer scenario in its entirety. However, still,

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these rules can be bettered as in the recent times, there have been instances
of breaches of these rules, and in these cases, UEFA has been rather lenient
in the view of the researchers.

Since the inception of these regulations, many clubs have faced the wrath
of it for breaching its Financial rules, the most notable offenders being
Manchester City and Paris Saint Germain. Manchester City was found
guilty of violating the FFP regulations after it posted combined losses of
almost £149m and thus was fined for £49m. Their squad was reduced to
21 members for the upcoming seasons in European competition.27 Paris
Saint Germain was also punished in the same year for a breach in the terms
prescribed, PSG was fined for €60m, and the squad was limited up to 21
players for the upcoming European seasons.28 However, the weakness of
UEFA and its FFP can be seen when it entered into negotiations with both
Manchester City and PSG to ease of their bans and thus City was paid
back £33m,29 and PSG was relaxed up to the amount of €40m.30 This is
the arena of the FFP regulations which need to be worked upon as such

27 See, Manchester City Fined and Squad Capped for FFP Breach, BBC
Sports, May 16, 2014, (May 07, 2020, 11:07 PM) https://www.bbc.com/
sport/football/27445475.
28 Lawrence Ostlere, PSG Win Appeal to Shut Down UEFA’s Investigation
into Alleged FFP Breach After CAS Sides with the club, Mar ch 19, 2019 (May 07,
2020, 11:07 PM) https://www.independent.co.uk/sport/football/european/
psg-ffp-appeal-uefa-paris-saint-germain-decision-upheld-cas-a8830166.
html.
29 James Robson, UEFA Refund Manchester City after Controversial
Financial Fairplay Sanctions, M anchester Evening N ews, Apr il 21, 2017,
(May 07, 2020, 11:07 PM) https://www.manchestereveningnews.co.uk/
sport/football/football-news/man-city-ffp-refund-uefa-12928418.
30 Lawrence Ostlere, PSG Win Appeal to Shut Down UEFA’s Investigation
Into Alleged FFP Breach after Cas Sides with the Club, I ndependent, Mar ch 19,
2019, (May 07, 2020, 11:07 PM) https://www.independent.co.uk/sport/
football/european/psg-ffp-appeal-uefa-paris-saint-germain-decision-
upheld-cas-a8830166.html.

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lenient actions by the UEFA might lead to a loss in authority and repeated
breaches of the regulations in the future.

EFFECT OF BIG MONEY TRANSFERS

ON YOUNGSTERS
Having a Big Price-Tag means massive media and Fans attention, and that
means more pressure. Rich Clubs often use their tremendous spending
capabilities to scout and lure away young talents who have the potential
of becoming big, and this more often than not plays adversely on the
youngsters’ mind. There have had been various such instances where big
clubs lured away different young talents who just were not able to deliver.
This may be because they were exposed to a higher expectation level before
it was expected, and this has often led to the destruction of their career.
Many Young prospects have become prey to this, one of the examples being
that of Jack Rodwell. One player who was hyped to become a footballing
great shortly but was never able to live up to those expectations, who just
at the age of 21 joined the Premier league mammoths Manchester City for
a staggering £12m.31

Another example is that of Robson De Souza known as ‘Robinho’, who was

only 19 when he moved to the ‘Galacticos’ Real Madrid and was about
to touch the peaks of his career. However, this could not happen when
after only three years due to his greed for money, he chose to move to
Manchester City for a staggering £32.5m. This transfer was done on the
same day Manchester City was taken over by Sheikh Mansour bin Zayed
al-Nahyan, who belonged to the ruling dynasty of Abu Dhabi, who injected
much money into the club making it a European powerhouse in terms

31

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of Financial Capacity.32 He was never able to live up to his price tag and
often had problems with the management, which was the beginning of his
decline. After failing at Manchester City, he moved to various random clubs
throughout his career. All these examples prove how Big Money transfers
often impede the growth of young talents.

Not only are young talents preyed by greed for money, but also some
established players often destroy their careers due to it. The prime example
being of Oscar dos Santos Emboaba Júnior who during the prime of
his footballing career, at the age of just 25 years old, decided to move to
the Chinese Super League from The English Premier League which is a
considerable degradation in quality standards. Oscar moved for £60m33 in
which he sacrificed quality football and put money above his game. He is
often considered to be way too good for the Chinese football league.

The fact that the break-even calculation of the FFP rules does not include
expenses on youth academy growth as an item under the estimates of the
break-even rule as an expenditure. This was done by UEFA to promote
clubs to invest in their youth academies instead of looking for other youth
prospects and acquiring them for lots of money. Young players are usually
not that experienced in managing their careers, and in the influence of
agents, they move to big clubs for bankable offers. This more often than
not spoils their careers as they now have to live up to the big price tag.
This needs to be stopped, and young players should concentrate more on
improving their game instead of Big attractive offers from big clubs. These

32 Arab Group Agrees Man City Deal, BBC Sports, September 1, 2008
(May 07, 2020, 11:13 PM) http://news.bbc.co.uk/sport2/hi/football/
teams/m/man_city/7591735.stm.
33 Dominic Fifield, Chelsea Ready to Sanction £60m Sale of Oscar to
Shanghai SIPG December 13, 2016 (May 07, 2020, 11:13 PM) https://www.
theguardian.com/football/2016/dec/13/chelsea-ready-to-sanction-60m-
sale-of-oscar-to-shanghai-sipg.

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clubs also need to be regulated to a more significant extent to prevent them

from indulging in such activities.

(a). Recent Developments

Two cases have currently occupied the world of Financial Fair Play and
the transfer window. The first being of AC Milan who has been handed a
ban from playing in European Competitions for the upcoming 2019-20
season.34 AC Milan has been given the ban for breaching the Financial Fair
play’s Break-Even by failing to comply with its regulation between the years
2015 and 2018. Milan could have been banned for two years, but yet again
UEFA has shown the softer side and has negotiated to only a one-year ban.

The second incident is of Chelsea who was handed a two consecutive

transfer window ban for breaching Article 18bis35 which talks about third
party influence twice and also for violating Article 1936 which talks about
protection to minors 29 times.37 Chelsea’s ban has been halved after their
successful appeal at the Court of Arbitration for Sports.

34 AC Milan Banned From Europa League Next Season over Financial Fair
Play Breaches, BBC Sports, June 28, 2019 (May 07, 2020, 11:13 PM) https://
www.bbc.com/sport/football/48801681.
35 Article 18bis of RSTP: Third-Party Influence on clubs- 1. No club
shall enter into a contract which enables the counter club/counter clubs,
and vice versa, or any third party to acquire the ability to influence in
employment and transfer-related matters its independence, its policies or
the performance of its teams. 2. The FIFA Disciplinary Committee may
impose disciplinary measures on clubs that do not observe the obligations
set out in this article.
36 Article 19 of RSTP: Protection of Minors- International transfers of
players are only permitted if the player is over the age of 18.
37 Tom Doyle, Chelsea Transfer Ban Explained: What we Know so far about
FIFA Blocking New Signings for two Windows, Evening Standard June 23,
2019 (May 07, 2020, 11:20 PM) https://www.standard.co.uk/sport/football/
chelsea/chelsea-transfer-ban-explained-what-we-know-fifa-blocked-
signings-two-windows-sell-players-a4173781.html.

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These two instances show that the football authority has now begun to take
cases related to transfer protocol breaches seriously. Authority has decided
to give harsh and exemplary punishment to the offenders to make a strong
statement that, no more mockery of the spirit of the game will be further
tolerated.

Also, in a more recent case, Manchester City has been found guilty of
committing “serious breaches” of the FFP regulations and has been handed
a two-season ban from UEFA Champions League and fined €30m, the club
had overstated its sponsorship revenue, in the accounts and information
submitted in 2012 and 2016.38 Although, Manchester City has denied
any wrongdoing and has appealed against the decision to the Court of
Arbitration for Sports. This incident shows that UEFAs governing body is
now taking the matters related to FFP seriously.

Chinese Superleague has recently implemented New salary caps in a bid to

make the league more sustainable as it is expected to attract new investors
and also act as a driving force for Chinese players to work hard and get
moves to play abroad which will ultimately benefit the Chinese national
team.
CONCLUSION AND SUGGESTIONS
The UEFA FFP rules and the FIFA RSTP regulations have come a long way
in paving the pathway for a proper and organized method of transfers and
other related aspects like player contracts. These regulations were required
because the entire system of transfers, without these regulations, would go
to an extent where every big club would spend big money to attract the best
players and best young talents, to secure the silverware. This would be very

38 See, Club Financial Control Body Adjudicatory Chamber decision on

Manchester City Football Club, UEFA. (May 07, 2020, 11:22 PM) https://www.
uefa.com/insideuefa/about-uefa/news/newsid=2638659.html.

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wrong as it would kill the competitive spirit of the game and only a few big
clubs would be able to win the significant leagues and tournaments. The
clubs would not trust their homegrown academy talents and would instead
prefer the easy way out by splashing the cash and getting the gold.

There have been instances like this in the recent past where clubs found
loopholes to the rules laid down and got what they wanted without
attracting any penalty. One of these was when Paris Saint Germain virtually
signed two big-money transfers in a single season. In the 2017/18 season,
PSG sealed a deal to buy Neymar Jr. from F.C. Barcelona for a staggering
total of €222m.39 In the same season, they wished to sign Kylian Mbappe
from A.S. Monaco. But they were restrained by the financial fair-play rules
as they would have broken the break-even rule if they did so. So, to make
this a possibility, they virtually paid no amount to buy Mbappe in the same
season and instead got him on loan with an option to buy at the end of the
season. After the loan period finished, PSG completed the transfer of Kylian
Mbappe from A.S. Monaco for a total amount of €145m, with various other
bonuses added to it.40 This was a severe breach of the spirit of the game as
PSG purchased two great talents for vast amounts of money virtually in the
same year without attracting any sanctions.

A lot of such modern-day examples can be seen in which vibrant clubs

spend much money to buy the best young talents in the world. This can

39 Julien Laurens, Neymar: How The Record-Breaking €222m Move To PSG

Unfolded, The Guardian, August 4, 2017, (May 07, 2020, 11:22 PM) ht t ps://
www.theguardian.com/football/2017/aug/04/neymar-how-record-
breaking-move-to-psg-unfolded.
40 Jason Burt, Revealed: How Psg Managed To Sign Kylian Mbappe On
Loan For A Year Without Having To Pay Monaco A Single Penny, The Telegraph
1st September 2017, (May 07, 2020, 11:30 PM) https://www.telegraph.co.uk/
football/2017/09/01/psg-managed-sign-kylian-mbappe-loan-year-without-
having-pay/.

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be seen in the cases of the Purchase of Kylian Mbappe by PSG from A.S.
Monaco, the purchase of Ousmane Dembele by F.C. Barcelona from
Borussia Dortmund, and the most recent signing of the Portuguese 19 years
old Joao Felix by Atletico Madrid from Benfica. These big clubs invest vast
amounts of money on these young prospects as they perform well at such
a young age, which shows significant room for improvement and proves to
be a good investment in the long run. However, this, in most of the cases
hampers the growth of the young talents and also, in the process spoils the
spirit of the beautiful game.

To curb such violations of the essential nature and spirit of football, the
researchers have come up with a few suggestions which might help in
controlling these foul activities and improving the business aspect of the
sport healthily.

(a). The Strict Appliance of Rules and Sanctions by the Associations

The rules and regulations that have been carefully laid down by the various
football associations in the world must be followed in a relatively strict
manner. The sanctions that are imposed on teams for breaching the laws
must be harsher and more definite. As in the cases discussed earlier in
the research paper, the authorities have been quite lenient to the clubs
breaching the rules. In the circumstances of the fines imposed on PSG
and Manchester City for breach of FFP regulations, it was seen that
UEFA had later negotiated with the clubs and had reduced their penalties
to a significant extent. Even in the case of the ban on A.C. Milan from
participating in European competitions, UEFA negotiated with the club
and reduced the ban from two years to just one year. This should not be
done, and the rules should be applied in a relatively strict manner so that
the clubs have a fear of sanctions and resist from doing so in the future.
Harsh punishments act as a deterrent for other clubs to break the laws.
(b). Agent Regularization

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Agents play a considerable role in deciding the future and the careers of
players as they are the ones that negotiate and deal with all the related
paperwork. These agents often, for their benefit, try to lure players to big-
money transfers. Young players, who do not have much experience, fall trap
to these offers and end up signing for the big clubs which pay more money
and, in the process, sacrifice regular football and talent growth. Another
prevalent practise followed by quite some of the agents in the practice of
‘Tapping up’ players is to sign for a club without the knowledge of the club
with which plays is currently assigned.41 This is a way to attract players in
the wrong way. The agents should be regularized, and FIFA and the other
associations should set up proper laws relating to the business of Agents.
A body can be set up to look into the matters regarding agents in order to
ensure competition in the game.

(c). Domestic rules regarding fair-play

The Financial Fair-play regulations are regulations set by UEFA, which is
the governing body only for the European competitions. Due to this, the
sanctions that they impose can only ban the clubs from participation in
European competitions for a specified period. Such similar rules should be
brought in and/or made strict even in the domestic league scenario so that
clubs have more of fear before indulging in these activities.

(d). Salary Caps

Salary caps are a relatively well-known concept. In this concept, there
is a fixed percentage of the income that the clubs can allot to the player
wages. If such an amount is fixed, then the clubs would have to think twice

41 Stuart James, Tapping up Remains Rife in Football with Little Appetite for
Change among Clubs, The Guardian, June 28, 2017 (May 07, 2020, 11:30
PM) https://www.theguardian.com/football/2017/jun/28/tapping-up-part-
of-game-stoke-chairman-peter-coates.

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Abuse of Dominance and Money Power in the Religion of the World – Football

before reckless spending because even if they can afford the transfer fee of
the players, they would have to keep an eye on managing the wages of all
the players in the team under the fixed cap. This would promote healthy
competition and growth of the youth academies of the clubs.
(e). Keeping a Check on Unfair Practices which Boost Revenue
Activities like increased ticket pricing and expensive sponsorship deals
boost the revenues of the clubs, which makes it easier for them to achieve
the break-even calculations. One such act was the example of PSG when
they received sponsorship from ‘Qatar Tourist Authority’ which is a
general sense was ultimately associated with ‘Qatar Sports Initiative’ which
owns the club. This was a way to bring in revenue in an unfair manner and
balance the break-even calculations. These acts should be regulated and
investigated by the authorities, and strict action should be taken.

Many clubs in this manner have abused their stature, and their monetary
strength to attain monopoly in the player transfer market, and ultimately
in the competitions also. As these activities keep happening, the
competitiveness of the sport dies slowly and the abuse of the dominance
by select giants in the scene takes place which spoils the entire essence
of the beautiful game. These activities allow only a few big guns to get
the best teams, the best players and in turn the silverware too. These acts
also hamper the growth of the young players and spoil their careers in
the long run. The existing regulations have controlled such instances to a
comprehensive manner, but there still is room for a lot of improvement as
brazen disregards of the rules have been showcased time and again by many
clubs. These need to be reformed and improved to safeguard the integrity
of the institutions and to protect the game and its credibility. Football truly
is a religion in today’s world, and to keep the game entertaining and to keep
the dreams of the players alive, reform is required.

***

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AN INSIGHT ON THE MENACE OF DRUG

ABUSE IN SPORTS: WITH SPECIAL
EMPHASIS ON SPORTSMEN OF NORTH
EAST INDIA
Prakreetish Sarma1* & Neil Madhav Goswami2**

A BRIEF HISTORY OF DOPING AND

THE ROLE OF WATCHDOG BODIES
When we talk about sports, the very first vision which comes in front of us
is the enormous amount of benefits encircling it. Still, there is a negative
string which is associated with this activity, and that is an abuse of drugs by
the performers. It dates back to the Greek Olympics, where athletes were
seen indulging in enhancing their performance by using natural materials
such as brandy, wine creations and ate hallucinogenic mushrooms and
sesame seeds to enhance performance. As time passed the abuse related
to drugs did not die down, rather synthetic forms of it came up in the
forefront.3 The Ban on such Drug Abuse is not only to maintain the sanctity
attached to it, but it has been advocated by Stakeholders such as WADA
(World Anti- Doping Agency) that health of the sportsmen are at peril
and such abuse could lead to fatal health or even death. There is a Code
laid down by WADA in this regard.4 The first instance of drug testing was

1 *
Student, LL.M., Royal Global University Assam.
2 **
Student, BA LL.B., National Law University and Judicial
Academy, Assam.
3 Claudia L Reardon & Shane Creado, Drug abuse in athletes, Dove Press
(May 07, 2020, 11:30 PM) https://www.dovepress.com/drug-abuse-in-athletes-
peer-reviewed-fulltext-article-SAR.
4 Dag Vidar Hanstad & Ivan Waddington, Sport, Health And Drugs: A
Critical Re- Examination Of Some Key Issues And Problems, Sementic scholar
(May 07, 2020, 11:53 PM) https://pdfs.semanticscholar.org/f38b/

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observed in the year 1966 in the European Championships, and exactly

after two years the International Olympic Committee (IOC) took a leap
forward and started drug tests at both the summer and winter Olympics.
Moreover, as the menace of Anabolic steroids were on an all-time high
a decade later that is in the year, 1976 IOC came up with its version of
documented prohibited substances list. France became the first country to
set the temperament towards anti-doping, and in the year 1963 became the
first country to have its anti-doping legislation. However, such steps were
restricted per se.5

People from the North-Eastern part of India are Historically meat-eaters,

and due to heavy landslides and other environmental catastrophes which
are prevalent due to hilly and rough terrain, people are dependent on meat
consumption. However, this is where the problem lies. Because several
hundred substances or chemicals substances are used to treat animals,
these include antimicrobial agents, such as in the case of Pig which is a
popular meat in the North-Eastern part of India. When a human being
consumes the meat,likely, it could very much lead to the accumulation of
drugs in the body, and this can also be seen in the case of milk intake as
these chemicals or drugs used to protect, treat animals could remain in the
tissues of these animals. Thus we can rightly deduce that even sportspeople
who form a part of the population do consume such food items, and most
of the tribal populations are staunch meat-eaters. Furthermore, at times
the sportsmen who might be accused of drug abuse charges could plead
innocence on such grounds.6

There were concentrated efforts on the parts of a few councils and countries

b44ddd3e5a1e46735b32e61f8deb8beaee89.pdf.
5 Id at p-1.
6 See, (May 07, 2020, 11:53 PM) http://www.fao.org/3/T0562E/T0562E05.
htm.

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to do away with menace generated by drug abuse in sports, but as there was
no uniformity or proper legislation or law dealing with the issue, there was
a grey area engulfed with the issue. Hence this opened the floodgates for
a watchdog at the International level and hence the World Anti- Doping
Agency (WADA) was established in 1999. All the stakeholders came together
to witness the First World Conference on Doping in Sports in Lausanne,
Switzerland which came to be known as the Lausanne Declaration on
Doping in Sport. Moreover, this conference laid the foundation for the
first independent international anti-doping agency was formed with the
common cause to fight against doping in sports.7

WADA undertakes a wide array of activities to act as a Global

Guardian to promote the idea of drug-free scenario in sports. Some
of the measures include having a documented code in itself, and it has
devised six international standards in itself some of which include
testing; laboratories, Therapeutic Use Exemptions, the protection
of privacy and personal information and code compliances by
Signatories. WADA has taken the onus to achieve the goal of drug-
free sport, and for which it has taken steps such as constituting Court
of Arbitration for Sport (CAS). Which involves non-analytical use
such measures devised to bring about advances in issues related to
the dispute in sports. Such as providing measures such as alternate
dispute resolution or providing a safety valve with a three-time test it
all boiled down towards betterment in sports.8

India came up with its version of a regulatory body to prevent and keep a
check upon issues related to Drug Abuse, and this led to the formation of

7 See, (May 07, 2020, 11:53 PM) https://www.wada-ama.org/en/who-we-

are.
8 Id.

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the National Anti-Doping Agency (NADA).9 NADA, just like WADA, has
proper mandates and compliances such as the list of banned substances.
Apart from that, they too have a relaxation in the form of Therapeutic
Use Exemptions. Which allows athletes to use banned substances under
WADA’s banned substance list for a genuine medical reason. Apart from
that, athletes are accorded their due share of rights and responsibilities.
Athletes are granted with rights in doping control centre such as providing
interpreters, someone to accompany them; there isa special provision
for modifications to standard sample collection procedures for disabled
athletes. Flexible provisions are provided in case of in and out of competition
sample rules, and utmost care is taken by the authorities while collecting
and identifying samples. Sample both in the form of Blood and Urine
could be collected in compliance with WADA’s mandate.10

Thus the concentrated efforts taken by NADA is somewhat similar to

WADA, as NADA attempts to establish a drug-free sports environment
in the nation with both cautious and flexible method to work in the best
interest of sports and athletes per se. Even after such efforts, we see that there
are multiple cases of Drug Abuse by Athletes. There is a dilemma attached
with drug abuse cases in sports where former President of Federation of
Sports Medicine Mr P.S.M Chandran went onto say that doping is not an
easy ball game. Many factors engulf it, such as taking of steroid, the dosage.
Everyone involved with it such as doctors, coaches all have a role to play
in it, and when a player pleads ignorance or lack of knowledge, he is to be
believed. The problem is related to the North-Eastern part of India where
facilities and exposure are comparatively less as compared to other parts
of India. Although, this part of the country, produces some of the finest
sportsmen due to lack of know-how and lack of adequate know-how the

9 See, (May 07, 2020, 11:54 PM) https://www.nadaindia.org/en/testing.

10 Id.

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athletes are at a loss out and fall prey mostly due to lack of knowledge,
sportsman such as SanjitaChanu who is a two-time commonwealth
championship has faced similar charges.11

ADDRESSING THE GREY AREAS

AND THE ROAD AHEAD
In Andrea Raducan v. International Olympic Committee (IOC),12 the CAS
handled one of its most controversial cases to date. Andrea Raducan
was a gold-medal-winning gymnast in both the team and the all-around
competition for the Romanian national team. While competing for the
all-around title, after winning the team gold medal, Raducan complained
to the team doctor that she was not feeling well. The doctor gave her a
Nurofen Cold and Flu tablet, which she took in his presence on two
different occasions. After winning the all-around title, she was sent to
supply a urine sample in accordance with Olympic Doping Control. The
tablets she received were found to violate the doping rules, and the CAS
ruled in favour of the IOC decision, stripping the medals that she received,
and testing positive for the banned substance. The court stated, “The Panel
is aware of the impact its decision will have on a fine, young, elite athlete.
It finds, in balancing the interests of Miss Raducan with the commitment
of the Olympic Movement to the drug-free sport, the Anti-Doping Code
must be enforced without compromise.”13

Drug tests in today’s day and age go beyond mere testing of whether

11 See, Rudraneil Sengupta, Doping Scandal Exposes Systemic Flaws, Live

Mint, July 7, 2011 (May 07, 2020, 11:54 PM) https://www.livemint.com/Politics/
FbfRrb5SJVR4lhUukVEJJJ/Doping-scandal-exposes-systemic-flaws.html.
12 Andrea Raducan v. International Olympic Committee (IOC) CAS
2000/011.
13 Glenn M., Wong, Essentials of Sports Law, 204 (4th Ed. Praeger
2010).

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the athlete is on drugs. As they also encompass the identification of

recreational drugs, birth control drugs and others as the list of prohibited
substances published by the World Anti-Doping Agency (WADA) as well
as the National Anti-Doping Agency (NADA) keeps on growing at an
unprecedented rate. In the case of Peruvian footballer, Paulo Guerrero, the
striker ran the risk of missing out on perhaps one of the highlights of a
footballer’s career, the FIFA 2018 WC. Due to the confusion around his
participation, which stemmed from a failed drug test where Guerrero was
found guilty of consuming a prohibited substance while ingesting cocoa tea.
Because both Raducan and Guerrero were playing at a professional level for
quite a few years, it is therefore quite reasonable for both the athletes under
the question to be quintessentially aware of their nutrition. However, there
has often been a tendency to sacrifice the player to protect the sanctity of the
sport. There is no blanket ban on using dietary supplements or nutrients.
However, there have been several instances of nutritional supplements
containing prohibited substances but are not declared by the manufacturer.
WADA does not accept this as an adequate defence, and hence the onus is
on the athletes to choose their supplements.14

There has been a rise in teams in football and other sports appointing
nutritionists who are assigned with ensuring that such cases do not happen.
However, the same cannot be said for athletes everywhere, especially
in Northeast where athletes do not have a tailor-made or supervised
nutrition program. This, in turn, leaves them susceptible to testing positive
for substances which they might have consumed without knowing the
composition of their diet. This is a trend which starts at the grass-root
level itself in India as young and upcoming athletes are not aware of the

14 Deepalakshmi K., The dope on doping in sports, The Hindu, March 25,
2014 (May 08, 2020, 12:01 AM)https://www.thehindu.com/sport/other-sports/
all-you-need-to-know-about-doping-in-sports/article14511264.ece.

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importance of diet and nutrition as part of their training. Therefore when

they become part of a professional set up, they are faced with the dilemma
of almost every aspect of their diet and nutrition, affecting their on-field
performance and eligibility. The first edition of the Khelo India Games,
2018 for fewer than 17 athletes saw 12 doping failures, which included
five gold medalists.15 The situation, however, did not improve, with the
latest edition of the Games bearing similar results when it came to tests as
participants across multiple sports tested positive.

Northeast is home to a host of upcoming athletes including the likes of

Hima Das who have gone on to show their abilities at the pinnacle of world
sports. The region has the potential to become one of the sports capitals
of India, yet it is marred by the lack of a holistic approach when it comes
to sports at the grass-root level. Therefore it is necessary to ensure that
the coaches at the grass-root level who are the first point of contact for
young players are made aware of the relevant anti-doping provisions. It
is also necessary to take into account the unique geographical position of
Northeast India and the cultural practices which exist in the region. Young
and upcoming athletes often use traditional remedies and medicines made
from the various medicinal herbs in the area which might contain traces
of substances which are banned by the WADA. While the National Anti-
Doping Agency does list research on this arena on its website, however,
there is a lack of research on what effect these traditional remedies and
medicinal herbs might have on the performance and physical conditions
of a player. The most important question of all, whether their composition
contains any of the substances from the ever-growing list. Therefore, there
is a need to groom athletes at the grass-root level which will go on to ensure

15 Sabi Hussain, Doping: NADA List Reveals New Names, The Times of
India, June 28, 2019(May 07, 2020, 12:03 AM) https://timesofindia.indiatimes.
com/sports/more-sports/others/doping-nada-list-reveals-newnames/
articleshow/69835570.cms.

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that when they make the transition from playing a sport at the district
level to the national and the international level, they are well equipped to
embrace the changes in lifestyle and habits that come with them whilst they
also have an inbuilt awareness of their consumption habits.

The Khelo India Games were one of the first instances where tests were
conducted on youth level players, and the results show that doping has
engulfed even the youth. When it comes to doping tests in India, the
National Anti-Doping Agency has a well-structured mechanism which
consists of an Anti-Doping Appeal Panel and Anti-Doping Disciplinary
Panel which is responsible for enforcing the National Anti-Doping Rules.
As the nationally appointed watchdog, NADA is also entrusted with
executing the ‘Awareness and Outreach Program’ of the WADA which
is aimed at educating athletes, coaches on the nuances of doping and its
consequences. There is a need to develop a systematic strategy which
ensures that all national sports federations supervise the regional and
district federations and create awareness by not only involving coaches and
supporting staff but also extending it to parents and other stakeholders.
Moreover, to ensure the efficiency of these programs,the medium through
which message, if conveyed, has to be of extensive focus. This can be done
by having region-based instruction videos which ensure that there is a
uniformity in the source of information and the data used while involving
successful sportspersons from the region, which could be used to convey
the messages better. Moreover, the National and World Anti -Doping Code
along with other relevant cases and NADA rulings should be translated
into significant languages which can be further translated into the various
languages of Northeast such as Assamese, Khasi among others.

Another traditional aspect of WADA policy is that, despite a few references

to athletes’ support staff within the WADA Code, the central focus of
WADA policy remains almost unremittingly on the individual drug-using

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athlete.16 This was true even in the case of Raducan, who became the focus
of the investigation and later the sanctions. Given this situation, it is perhaps
not surprising that, notwithstanding the ever closer control of athletes’
behaviour, and limited success which WADA policy may have had in terms
of catching and punishing individual drug-using athletes. It is clear that the
anti-doping controls established by WADA have had very little success in
breaking up the complex, highly organised and institutionalised networks
of relationships which characterise the use of drugs not only on the national
level but, increasingly, on an international and global scale too.17

There have been several instances where complicated networks of doping

have been unearthed where coaches, physicians and pharmaceutical
companies have all been involved in these networks. Sandro Donati,
who has worked extensively on fighting corruption and the use of drugs
in sports has revealed that the illicit use of drugs is not something which
can be understood as the action of individual drug-using athletes. There
are very complex and extensive networks of people involved in fostering
and concealing the use of drugs in sport.18 A recent, indication of the
complexities of the networks in which drug-using athletes are involved
came to light following the Mitchell inquiry into the use of anabolic steroids
in Major League Baseball. In this context, the Signature Compounding
Pharmacy in Orlando, Florida, was found to be at the centre of an extensive
network which generated substantial funds by selling performance-
enhancing drugs. This network, it was revealed, involved not only athletes
but also well-organised groups of pharmacy workers and physicians who
were involved in a complicated method of selling performance-enhancing

16 Ivan Waddington & Andy Smith, An Introduction to Drugs in

Sport: Addicted to Winning, 211 (Routledge, 2009)
17 Id.
18 Id.

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substances illegally over the internet.19Although sports physicians are often

seen as experts who play a front-line role in the fight against ‘drug abuse’
in sport, a closer examination of the development of sports medicine over
the last fifty years suggests that the relationship between sports medicine
and the use of drugs is somewhat more complicated. In this regard, it
has been argued that the growing involvement of sports physicians in
the search for record-breaking and competition-winning performances,
especially since 1945, has increasingly involved them not merely in the
search for improved diets or training methods, but also the development
and use of performance-enhancing drugs and techniques. The other side of
sports medicine of which have subsequently come to be defined as forms
of cheating.20 There is a need for the International Federation for Sports
Medicine and other National Medical Organisations to draft a policy
regulating the practice of doctors and physicians involved in sports and
coming up with necessary sanctions for doctors and physicians who fail to
uphold the sanctity of sports.

There is considerable variation in the use of drugs by athletes across various

sports. For instance, in some sports, the use of performance-enhancing
drugs is widespread; as we have seen, this is the case in cycling, where the
most widely used drugs are Erythropoietin (EPO), anabolic steroids and
amphetamines. In sports such as archery and shooting, those who do use
performance-enhancing drugs are not likely to use those drugs favoured
by endurance athletes but are much more likely to use beta-blockers.21
Given this variation in the use of drugs, what needs to be considered is
that instead of having a single anti-doping policy, the possibility of a sports
specific approach to understanding the pattern of drug use across sports

19 Id p. 212.
20 Id, p. 99.
21 Id, p.232.

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while also recognising the network and practices that are involved. This, in
turn, can lay the foundation for the sport-specific anti-doping policy.

It might be objected that such a policy would establish a new – and, it might
be argued, a dangerous – principle of anti-doping policy. The principle that
athletes in different sports might be treated differently with anti-doping
controls. Such a view is, however, mistaken. The principle that athletes
in various sports might be subject to different controls is not new, for it
was a well-established principle in the anti-doping regulations of the IOC
and this has been carried over into WADA regulations.22 For instance, the
prohibited list of 2008 published by the WADA contains a list of substances
banned in particular sports. Even alcohol is featured on the list for sports
such as automobile racing, motocross etc. but it does not feature on the
general list of banned substances. Development of a sport-specific policy
must not be equated with a diminishing of anti-doping policies but rather
having sanctions in one sport which do not necessarily apply to the other.
Unless sanctions are appropriate, there are fewer chances that they will be
effective.

ISSUES OF ETHICS IN SPORTS: THE

NEED FOR DRAWING A FINE LINE
There can be no denial of the fact that every Profession or work requires
some amount of Ethics which helps in upholding the sanctity attached to
that field and similar is the case in sports. There are specific rules or decorum
that is requisite. However, when it comes to finding out the veracity in
matters of charges such as Doping in Sports, the means and the method of
test is also a debatable issue.As can be observed in the Krabbe case,23 where

22 Id.
23 IAAF Disciplinary Proceedings Against Kartin Krabe(1992) unreported.

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fingers were being raised against the rules of the German Federation when
it had carried out it is out of competition test, and a similar fate was seen in
the case of Atlanta Olympics,24 where the question was raised in respect of
clenbuterol in the weightlifter’s case and Bromantan in the case of Russian
swimmers.These incidents indicate towards the very fact that Ethics and
maintenance of fair play are not only limited to the participating Athletes,
but it very well includes the sOrganising bodies, Policymakers as well.

Most of such issues related to the infringement of Ethics in various forms

such as Substance Abuse are tried in appropriate forums. Tribunals such as
CAS and there are many such as Sir Nicholas Browne- Wilkinson,25 who
had in the Landmark case, had gone on to say that Sports shall be better
served if people did not challenge the decision of the regulatory bodies.
Yes, it is very much right that the decision-makers are competent, but it is
very much possible that they too could have an error in their Judgment.
Hence an athlete should be given a right to appeal till the last of appeal gets
exhausted.

One cannot deny a simple fact that sanctions sometimes become necessary
to act as a deterrent.Those substances which are said to be more adverse to
the health of the athlete is said to attract more penalty such as the use of
Anabolic steroids and prohibited techniques such as Blood Doping and use
of EPO.Moreover, as rightly observed,26in the instant case, some amount of
penalties are a pre-requisite to remove cheating from sports.

One of the most important questions to be tackled is the loss of reputation

24 CAS Arbitartion( Atlanta) No 003-4

25 Cowley v. Heatley (1986) The Times, 14 July
26 Edwards v. BAF and IAAF(1997) Eu LR 721 (CHD)

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it is often seen that more money is often spent by the bodies while
conducting tests rather than conducting awareness programs or educating
the athletes which shall help them in deciphering between right and wrong
and Drawing the Line.27

THE QUESTION OF CRIMINALISING

DOPING IN SPORTS
In recent years, there has been a rise in the push for criminalisation of
doping in sports. With countries increasingly pondering upon the
feasibility of and the necessity to criminalise the act of doping. WADA and
its affiliated NADAs do not have broad legislative or police powers and
have no jurisdiction outside of sport. Anti-doping agencies must follow
local laws and coordinate with police forces and other agencies for some
investigative work. National laws against doping, however, mean that
athletes are treated differently depending on their nationality. As a non-
governmental entity, WADA cannot ensure national laws are consistent
or fairly applied. Enforcement may be uneven given differences in police
purview, judicial processes, and varying requirements for evidence.28

In general, criminal law involvement in fighting doping in sport may

be performed in two ways. The first one is about using existing general
criminal laws; in other words, some actions related to doping in sport
may be treated as crimes under various criminal legislation. For example,
criminal codes, drug and therapeutic goods statutes, customs legislation.
The latter considers specific anti-doping laws enacted by states that

27 See generally, Michele Verroken, A Time For Re- Evaluation: The

Challenge To An Athlete’s Reputation In Drugs And Doping In Sports
(John O’Leary ed., Cavendish Pub., 2001).
28 See, A.D. Henning and P. Dimeo, The new front in the war on doping:
Amateur athletes, 51 International Journal of Drug Policy 132 (2018).

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criminalise doping as it is understood in WADC. For example, Austria,

China, Cyprus, Denmark, Greece, Hungary, Iceland, Luxembourg, Mexico,
New Zealand, Norway, Portugal, Romania, San Marino, Serbia, Spain
and Sweden criminalise trafficking of WADC Prohibited Substances and
Methods.29

Kenya, which is a constant contender in track events, was declared non-

compliant to the World Anti-Doping Code. As a result, they ran the risk
of being excluded from the Rio 2016 Olympics. In response to this, Kenya
passed anti-doping legislation to be WADA compliant. The Kenyan anti-
doping law is, therefore, an urgent attempt by the government to restore
confidence in its athletes and meet WADA standards. It outlines plans for
an independent agency with broad investigative powers and new minimum
jail terms for suspected dopers. Under the new laws, Athletes found guilty
of using banned substances will now face a minimum fine of 100,000
Kenyan shillings (£672) and a possible jail term. Medical personnel found
to be supplying or colluding with athletes and coaches will be liable for a
fine of at least 3,000,000 shillings (£20,189), and a possible three-year jail
term. The law also led to the establishment of a tribunal to arbitrate doping
cases and the hiring of anti-doping compliance officers.30

Although no legislation in the United Kingdom explicitly criminalises

doping, multiple legislations make many of the offences. For instance, the
Misuse of Drugs Act, 1971, deals with a host of substances which feature on

29 S. Zaksaite and H. Radke, The interaction of criminal and disciplinary

law in doping-related cases, 14(1-2) The International Sports Law Journal
123 (2014) (May 08, 2020, 12:01 AM) https://link.springer.com/
article/10.1007%2Fs40318-014-0045-5.
30 Frankline Sunday, Kenya passes new anti-doping law to avoid Olympic
ban, The Guardian, June 23, 2016, (May 08, 2020, 12:01 AM) https://www.
theguardian.com/world/2016/jun/23/kenya-passes-new-anti-doping-law-to-
avoid-olympic-ban.

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the WADA banned list that is not either licensed as prescription medicines
(where the Medicines Act 1968 applies) or recognised as food additives or
over-the-counter drugs (like ephedrine). For example, synthetic anabolic
steroids are controlled as Class C substances under the Misuse of Drugs
Act 1971.31

India has often featured high up on the global list of dope offenders, and
therefore the question of criminalising doping in India has been raised
from time to time. The Justice MukulMudgal Committee, under whose
supervision the draft ‘National Anti-Doping Legislation 2018 was drafted
contains various nuances which show that there is a strong possibility of
doping becoming a criminal offence shortly. Articles 13(2) and (3) of the
bill recommend jail terms for those involved in supplying banned drugs to
athletes. In addition to this, the draft has numerous provisions which stand
out; it has a provision which states that any person who fails to comply
with the duty of this act shall be fined, which may extend to Rs.20,000 for
the first offence. If the offence is repeated, it may extend to Rs.2 lakh for
each offence. According to the draft, “any person who indulges in supply of
prohibited substance to an athlete on a regular basis for commercial purposes
shall be guilty of the offence of trafficking and shall be punished with simple
imprisonment which may extend to one year and shall also be liable for a fine
which may extend to Rs.10 lakh.” The draft adds: “Any person who is part of
an organised crime syndicate shall be punished with simple imprisonment
which may extend to four years and shall also be liable for a fine which may
extend to Rs.10 lakh.

31 Department for Digital Culture, Media & Sport, Government

of United Kingdom , Review of Criminalisation of Doping in Sport 16
(October 2017) (May 08, 2020, 12:10 AM) https://assets.publishing.service.gov.
uk/government/uploads/system/uploads/attachment_data/file/654240/
Review_of_Criminalisation_of_Doping_in_Sport.pdf.

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Moreover, the draft has called for the formation of an Ethics Commission,
which will have three members to deal with doping offences.32As per this,
any attempt to indulge in the supply of prohibited substances to an athlete
or having links to an ‘organised crime syndicate involved in doping will
attract a jail term of up to four years or result in Imposition of a hefty
fine of Rs.10 lakh. Moreover, the National Anti-Doping Agency (NADA),
can refer the matter to the Central Bureau of Investigation (CBI) it has a
suspicion that an organised doping syndicate is involved in the supply of
prohibited substances to sportspersons. However, the draft of which has
been distributed by NADA among the stakeholders to get their suggestions
has generated much heat between the ministry and the IOA over some of
the clauses. The IOA has raised serious objections to the presence of Union
Sports Minister and the other ministry officials in the proposed ‘Governing
Body and the ‘Executive Committee to be constituted by the. According
to the IOA, the current draft contains overreaching direct government
authority in the establishment and functioning of the NADA. The IOA has
also objected to NADA constituting the Anti-Doping Disciplinary Panel
(ADAP) and Anti-Doping Appeals Panel (ADAP) which is the “clear case
of conflict of interest in the current ways of functioning.”33

Although criminalisation in other countries has proven effective in

ensuring that it is not only the athlete who bears the brunt of his/her action,
the support staff and all other guilty parties are held accountable. There
is a need to work out the various nuances of the draft legislation because

32 Sabi Hussain, Suppliers of dope to athletes could be sent to jail now, The
Times of India (August 7, 2018) (May 08, 2020, 12:10 AM) https://timesofindia.
indiatimes.com/sports/more-sports/others/suppliers-of-dope-to-athletes-
could-be-sent-to-jail-now/articleshow/65300853.cms.
33 Sabi Hussain, NADA wants legislation to criminalise doping, The Times
of India (February 12, 2019). (May 08, 2020, 12:10 AM) https://timesofindia.
indiatimes.com/sports/more-sports/others/nada-wants-legislation-to-
criminalise-doping/articleshow/67953376.cms.

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there is an urgent need to regulate the practices of not only the individual
athletes but all other stakeholders. Otherwise, criminalisation of doping
would not suffice in ensuring free and fair sport. At the same time, false
implication, sabotage and other factors need to be taken into account as the
stakes increase with criminalisation and therefore affect the prospects of
an athlete’s career, especially in India, which lacks awareness about doping
even among elite athletes. For example, the recent case of young Indian
cricketer Prithvi Shaw who was banned after testing positive for a banned
substance commonly found in cough syrups. Therefore, finding a way to
balance the severity of the anti-doping laws, both in the context of proving
and sanctioning, with the proper use of human rights/due process of law/
natural justice principles that are typical for criminal law seems to be a
challenge. It is essential to ensure that the two systems of law (criminal and
disciplinary law and procedure) can interact not only effectively but in a
fair manner.34
CONCLUSION
Doping has become one of the biggest challenges in sports in recent years.
With India aiming to become one of the global superpowers in sports, there
has to be a significant improvement in how sportspersons perform in anti-
doping tests. The lack of exposure to the ethics of sports and other relevant
information is one of the biggest challenges that the region of Northeast
and its upcoming athletes are facing. The region continues to produce a
host of young and promising sportspersons, and therefore there is a need
to ensure that the potential does not go to waste. As seen in the case of
Raducan and Guerrero, the stakes are too high, and even though both
were athletes who were well aware of the consequences of testing positive,
they could not overcome it, leading to a fall from grace. Anti-doping
has predominantly about the detection of doping in sports and resultant

34 Supra note 27 at 127.

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punishment rather than prevention. The lack of a holistic approach to sports

has to be overcome in order to address issues relating to both performance
and ethics. Lack of infrastructure, proper nutrition coupled with lack of
awareness leave athletes in the dark about their own body and health. An
increase in pressure has led to athletes altering not only their physical
capabilities but also their mental health to sustain pressure and survive cut-
throat competition which makes them dependent on these drugs. Mental
health of athletes is another arena that needs adequate policy review. There
is a need to review the policies from time to time to ensure that they are
appropriate. This can improve efficiency, especially in countries like India
where there is much regional disparity which needs to be addressed at the
earliest. Athletes in India are on the cusp of a new horizon with regards to
doping with the prospect of doping being criminalised shortly. Therefore,
there is a need to understand the overarching problems and also take into
account regional disparities so that new policies and legislations answer
age-old questions while also taking into account the challenges of the
future.

***

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CASTER SEMENYA, DUTEE CHAND

AND THE QUESTION OF SEX IN SPORT:
A CRITIQUE OF THE DISCOURSE ON
HYPERANDROGENISM/DSD IN FEMALE
ATHLETES
Palash Srivastav1* and Harshi Misra2**

INTRODUCTION

“It is not just about the right to compete in sport.

It is about the right to be human.”3
Caster Semenya, South African Track Athlete

With these memorable words, Caster Semenya had summarised what

she and several other athletes were fighting for in various social and legal
arenas. The International Athletics Associations Federation (hereinafter
‘IAAF’) has, for the last two decades, sought to regulate the number of
testosterone female athletes’ bodies are legitimately “allowed” to produce.
Any female athlete who breaches the prescribed threshold on account
of intersex conditions4 is a “biological male” per the IAAF, despite how

1 *
Student, B.A.LL.B. (H), National Law School of India University,
Bengaluru.
2 **
Student, B.A.LL.B. (H), National Law School of India University,
Bengaluru.
3 Shannon Kim Wagner, The misogyny and racism of athletics regulations,
The Telegraph, June 28, 2019, (May 08, 2020, 12:11 AM) https://www.
telegraphindia.com/opinion/the-misogyny-and-racism-of-athletics-regulations/
cid/1693297.
4 Sex of an individual can be characterized as gonadal, chromosomal,
genital, genetic, hormonal and phenotypic. Intersex persons are those persons
who have variations in their sexual characteristics. Such individuals are also
referred to as individuals with differences in sexual development.

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the affected athlete herself identifies. IAAF’s attempts at regulating and

medicalising the female body have been widely criticised by scientists,
medical professionals, policymakers, and bioethicists. Prominent athletes,
such as Dutee Chand of India and Caster Semenya of South Africa, have
come out and challenged IAAF’s discriminatory regulations in court.

Recently, the Court of Arbitration for Sport (hereinafter ‘CAS’) upheld the
validity of regulations prescribed by the IAAF that seek to regulate the
amount of circulating testosterone present in the bloodstream of female
athletes. With these regulations coming into force from May 2019, the
debate on the necessity of such regulations, their impact on female athletes,
and the role of courts and self-governing bodies (hereinafter ‘SBGs’) in sport
to protect and respect human rights of athletes has once again occupied
centre stage. While the IAAF and a motley of athletes and scientists have
come out in support of such regulations, some very persuasive arguments
have been made by their opponents critiquing the substantive content of
these regulations, and the very requirement of sex-testing in sport.

This paper seeks to analyse the IAAF Eligibility Regulations for

the Female Classification (Athletes with Differences of Sexual
Development) (hereinafter ‘2019 Regulations) from two major
perspectives – it critiques the science behind the regulations, and it
looks at their interface with human rights. A succinct summary of
sex-testing provides the context of the critique in sport and the issues
it has historically raised. A brief summation of the rulings of CAS in
Dutee Chand v. AFI & IAAF5 and Mokgadi Caster Semenya & ASA
v.IAAF6 is made to explain the issues. This paper seeks to unravel the

5 Mokgadi Caster Semenya & Athletics South Africa v. International

Association of Athletics Federations, CAS 2018/O/5794 & CAS 2018/O/5798
(Court of Arbitration for Sport 2019) [hereinafter Caster Semenya].
6 Dutee Chand v. Athletics Federation of India & The International

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myth that testosterone is a “male” hormone, thereby destabilising the

very premise of all such regulations.

Given the contested science which forms the basis of these regulations, and
given that female athletes with elevated levels of endogenous testosterone
do not enjoy a significant performance advantage over other female athletes,
the 2019 Regulations need to abolish expeditiously. Similarly, given their
disproportionate impact on women’s physical and mental health, and their
tension with the promise of non-discrimination codified in international
human rights law and Constitutions of SBGs alike, it is argued that the
2019 Regulations are not a reasonable, necessary and proportionate means
of ensuring fairness in women’s sport; in fact, they militate against this
objective. Ms. Semenya’s challenge to the validity of 2019 Regulations before
the Swiss Federal Supreme Court (hereinafter ‘Swiss Court’) has allowed
for a review of the CAS ruling on the grounds of “public order”, which
encompasses human rights. The Swiss court should utilise this opportunity
to strike down the 2019 Regulations, and deal a definitive blow to all forms
of sex-testing in sport, and an outdated practise whose time has come.

AN OVERVIEW OF THE EXISTING LAW

ON SEX-TESTING IN SPORT
Ever since female participation has been allowed in the sport, the
boundary of who qualifies as female has been strictly policed by SBGs such
as the IAAF. The alleged objective behind this regulation is that women
constitute a ‘protected class’ in sport and to ensure fair competition, men
masquerading as women and women with biological advantages similar

Association of Athletics Federations CAS 2014/A/3759 (Court of Arbitration for

Sport 2019) [hereinafter Dutee Chand].

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to those enjoyed by men need to be excluded from women’s sporting

events. A peculiar aspect of sex-testing that comes forward from a closer
historical examination which qualifies as a man/woman changes based
on benchmark being applied.7 This section broadly seeks to lay down the
practices and methods adopted by SBGs over the years to ascertain the sex
of the participating athletes and to explain the current position of law on
determining femininity in sport.

(a.) Brief History of Sex - -Testing in Sport:

The policing of the boundaries of sex in sport has taken three broad forms
– a physical examination of the genitalia of the athletes, chromosomal
testing of the athletes and most recently, monitoring the endogenous levels
of testosterone naturally produced by the athlete.8 All these tests have been
criticised for lagging behind best medical practices, and for lacking scientific
merit.9 Physical examinations date back to the 1936 Berlin Olympics10 and
involved naked parades in front of medical professionals.11 Though mostly
reduced to visual inspections, in cases where the genitalia of the female
athlete appeared ‘anomalous’, a gynaecological examination of the athlete
could also be conducted.12 This method of ascertaining the sex of female
athletes was heavily criticised as it violated the dignity and privacy of the
female athlete.

7 The problem with sex testing in sports, YouTube Vox June 29, 2019 (May
08, 2020, 12:11 AM) https://www.youtube.com/watch?v=MiCftTLUzCI.
8 Annie Bach Yen Nguyen, Fairness at a Price: Protecting the Integrity of
Athletic Competitions at the Expense of Female Athletes, 8 Notre Dame J. Intl.
Comp. L. 54, 55 (2018).
9 Erin Elizabeth Berry, Respect for the Fundamental Notion of Fairness of
Competition: The IAAF, Hyperandrogenism and Women Athletes, 27 Wis. J. L.
Gender, & Soc’y 207, 208 (2012).
10 Id., at 209.
11 Supra note 6, at 57.
12 Supra note 7, at 210.

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Visual examination of female athletes and forming an opinion about

their femininity was bound to be influenced by what the examiner felt
was ‘feminine’, and allowed for the introduction of subjective views of the
examiner in an allegedly neutral process. Moreover, any athlete who could
not clear the test was bound to undergo severe emotional trauma and social
stigmatisation. A prominent case which tolled the death knell for physical
examination of female athletes was that of Ewa Klobukowska, a Polish
sprinter who failed her physical test and was resultantly disqualified from
professional sport.13 She later went on to have a child. By now, the problems
with physical examination were apparent as was its unscientific nature.

The Barr Body Test/Analysis (hereinafter ‘Chromatin test’), which tested

the chromosomes of the athletes to determine their sex, was introduced
in 1967 by the IAAF as an allegedly neutral, scientific way to determine
the sex of an athlete.14 The test was introduced at the peak of the Cold
War, under the pretext of disallowing “hypermasculine” female athletes
from the Eastern Bloc from participation.15 The test was less invasive in
the sense that it only required a buccal smear to be taken from the athlete,
which was later tested for chromosomes. Though definitely a superior test
as opposed to visual inspections, chromatin test had severe limitations of
its own. Chromatin test could not account for genetic anomalies which
conferred no competitive advantage on the athlete.16 Thus, it categorised
individuals with a 46 XXY genotype with male characteristics as female,
even though these athletes had always identified as men. Similarly, athletes
with female anatomies but genetic abnormalities could be characterised as
a male under this test.

13 Supra note 7, at 211.

14 Supra note 7, at 211.
15 Supra note 6, at 57.
16 Supra note 6, at 61.

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A prominent case which highlighted the problems with sex-testing using

the chromatin test was that of Maria Jose Martinez Patino, a Spanish athlete
was disqualified for three years from track events as she failed the test at
the World University Games.17 After the test, Ms. Patino’s sex became a
subject of public speculation and caused her significant loss and trauma.18
Ms. Patino fought the determination of the IAAF, successfully arguing that
she suffered from Complete Androgen Insensitivity Syndrome (hereinafter
‘CAIS’)19 and therefore derived no competitive advantage from her genetic
composition.

This challenge to the test triggered yet another debate in public about
the efficacy and the need for sex-testing in sport. The IAAF organised
symposiums on the issue of sex-testing and the techniques employed
for the same. The overwhelming consensus at the symposiums was that
the purpose of sex-testing was only to identify and disbar male athletes
masquerading as female athletes.20 If an athlete both legally and psycho-
socially identified as female all her life, then she should not be subjected
to such sex-testing.21 Though the IAAF did not pay much heed to these
symposiums, it did away with blanket sex testing of female athletes, only
allowing for an on-site determination of the sex of the athlete by a medical
expert on a case-by-case basis. By 1999, sex testing using the chromatin test
was entirely done away with.22

In 2006, the IAAF introduced its “Policy on Gender Verification” (hereinafter

17 Supra note 7, at 212.

18 Maria Jose Martinez-Patino, A woman tried and tested, 366 The Lancet
538 (2005).
19 CAIS is a condition where tissues are unable to process the testosterone
produced by the body.
20 Supra note 7, at 213.
21 Supra note 7, at 213.
22 Supra note 7, at 213.

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‘Policy’) which barred mandatory sex-testing.23 However, it provided for the

steps to be taken in cases of “gender ambiguity”. Suspicion about the sex of
an athlete could easily be raised under the Policy, triggering an investigation
into the gender of the athlete by an investigating authority.24 This often led
to witch-hunts and whisper campaigns against exceptional female athletes.
A now-infamous incident of sex-testing from this era was one involving
Caster Semenya, a South African athlete who was investigated by the IAAF
soon after her participation in African Junior Championships of 2009. An
IAAF official publicly admitted that Ms. Semenya was being investigated
under the Policy, causing a severe breach of Ms. Semenya’s privacy.25

Soon after the incident, Ms. Semenya was allowed to compete in international
events. However, the fiasco alerted the IAAF that it required a consistent
policy to handle all cases of “hyperandrogenism”.26 In 2011, the IAAF
Regulations Governing Eligibility of Females with Hyperandrogenism to
Compete in Women’s Competition (hereinafter ‘2011 Regulations’) were
introduced that prescribed a threshold of 10 nmol/L of testosterone for
female athletes. These regulations were successfully challenged before
the CAS in Dutee Chand. The 2011 Regulations were followed up by the
2019 Regulations, and a challenge to their validity was dismissed in Caster
Semenya.

Both the 2011 and 2019 Regulations explicitly state that they do not intend
to test the gender of the athlete, but only her testosterone levels.27Mostly

23 Supra note 7, at 215.

24 Supra note 7, at 215.
25 Caster Semenya, at ¶74.
26 Hyperandrogenism is a medical condition wherein females produce
testosterone in the “male” range.
27 Eligibility Regulations for the Female Classification (Athletes with
Differences of Sexual Development), Section 1.1(e) (2019) [hereinafter 2019
Regulations].

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similar to the 2011 Regulations, the major differences between the 2011
and 2019 Regulations are that – (a) while the 2011 Regulations applied
to all athletics events, the 2019 Regulations only apply to international
competitions run between 400 metres – 1 mile (both inclusive); (b) while
the 2011 Regulations prescribed the threshold of acceptable testosterone in
female athletes at 10 nmol/L, the 2019 Regulations prescribe a threshold
of 5 nmol/L; and (c) while the 2011 Regulations applied to all athletes
with hyperandrogenism, the 2019 Regulations shall only to athletes with
Differences in Sexual Development (hereinafter ‘DSD’), meaning thereby
that hyperandrogenism caused due to any reason other than an intersex
disorder would not be covered by the 2019 Regulations.28

Under the 2019 Regulations, the athlete has to have one of the DSDs
mentioned in clause 2.2(a)(i), have testosterone levels of over 5 nmol/L,
and have “sufficient androgen sensitivity” to have a “material androgenising
effect” to qualify as a “relevant athlete” to which the regulations apply.29 An
assessment of material androgenising effect is a highly subjective exercise,30
with female athletes with a deep voice, hirsutism, or athletic musculature
often being considered to be “androgenised”.31 If the athlete herself declares
her condition to the IAAF, or if the IAAF Medical Manager has “reasonable
grounds” to believe that an athlete suffers from elevated levels of endogenous
testosterone, investigation under the 2019 Regulations can be initiated. An
interesting aspect of both of these regulations is that they have mostly been
used to disqualify athletes from the Global South.32

28 Section 2.2(a)(i) of 2019 Regulations.

29 Section 2.2(a) of 2019 Regulations.
30 Katrina Karkazis and Morgan Carpenter, Impossible “Choices”: The
Inherent Harm of Regulating Women’s Testosterone in Sport, 15 Bioethical
Inquiry 579, 582 (2018).
31 Stephane Bermon et al., Serum Androgen Levels in Elite Female Athletes,
99 J. Clin. Endocrinol. Metlab. 4328, 4332 (2014).
32 Supra note 5.

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(b). Dutee Chand and Caster Semenya Rulings: A Brief Summary

Dutee Chand was an Indian athlete who was disqualified by the Athletics
Federation of India (hereinafter ‘AFI’) after doubts were raised regarding
her sex by other athletes and by the Asian Athletics Association. Chand
challenged the decision of the AFI, as well as the 2011 Regulations, before
the CAS. Throughout arguments, the IAAF and its witnesses had argued
that men and those with testosterone levels comparable to men enjoy a
performance advantage of 10-12% over similarly placed female athletes.33
However, the CAS observed that from anecdotal evidence, it had been
averred by doctors that at best a hyperandrogenic female athlete enjoys an
advantage of only 3% over her counterparts.34 While suspending the 2011
Regulations for two years, CAS observed that there is no evidence available
of the extent of an advantage enjoyed by female athletes with elevated levels
of endogenous testosterone over other athletes. Thus it cannot be said that
the 2011 Regulations are reasonable, necessary and proportional to the
goal of protecting fairness and integrity in women’s sport.35 In this period
of two years, IAAF could file new medical evidence on the degree of the
advantage of women with elevated endogenous levels of testosterone have
over other women. If the IAAF could not file any new evidence within this
period, the 2011 Regulations shall be declared void.

After that, IAAF commissioned a study which positively correlated levels

of athletic performance and levels of endogenous testosterone and made it
the bedrock of the 2019 Regulations.36 Scientists and medical professionals

33 Dutee Chand, at ¶522.

34 Dutee Chand, at ¶522.
35 Dutee Chand, at ¶522.
36 Stephane Bermon & Pierre-Yves Garnier, Serum androgen levels and
their relation to performance in track and field: mass spectrometry results from
2127 observations in male and female elite athletes, Br. J. Sports Med. 1 (2017)
[hereinafter BG17].

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associated with the IAAF also published their studies of how endogenous
testosterone positively affected athletic performance.37 The IAAF allowed
for the 2011 Regulations to lapse and published the 2019 Regulations,
which were brought into force from 08 November 2018. Caster Semenya
challenged the validity of these regulations before the CAS, and their
application stayed till a final decision was reached in the matter.

BG17, the study on which IAAF relied primarily in defence of its 2019
Regulations, is a highly reviled study in academic circles. Even with all of
its methodological flaws (discussed in detail in the next section), it could
at best be used to show that testosterone was one of many biological and
endocrinal factors which contributed to an alleged 1.8%-2.8% performance
advantage enjoyed by hyperandrogenic athletes.38 Relying on BG17, CAS
went on to hold that “determinative” advantage is enjoyed by an athlete who
suffers from DSD.39 In this case, CAS goes astray of its ruling in Dutee Chand,
which had stressed on the presence of a quantifiableunfair advantage to the
athlete while suspending the operation of 2011 Regulations.40 Here, despite
lack of any such advantage being demonstrated, 2019 Regulations are upheld
by the CAS. Lack of quantifiable unfair advantage notwithstanding, CAS
upheld the 2019 Regulations as a necessary, reasonable and proportionate
means of securing integrity in female athletics and to treat females as a
“protected class” in sport.41

37 For a succinct literature review of this research, refer to the Explanatory

Notes to the 2019 Regulations, (May 08, 2020, 12:11 AM) https://www.iaaf.
org/download/download?filename=b6f96abb-91fb-40c1-8fbb-
82375efa75f7.pdf&urlslug=Explanatory%20Notes%3A%20IAAF%20
Eligibility%20Regulations%20for%20the%20Female%20Classification.
38 Supra note 34, at 5.
39 Caster Semenya, at ¶538.
40 Dutee Chand, at ¶528.
41 Caster Semenya, at ¶626.

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The 2019 Regulations have come into force with effect from May 8,
2019. While the application of the 2019 Regulations to Ms. Semenya was
temporarily suspended by a super-provisional order of the Swiss Court
during the pendency of her appeal against the CAS decision,42 a single judge
bench of the court has recently suspended this order, asserting that neither
the alleged violation of principle of non-discrimination nor of “public
order” (encompassing a right to personality and human dignity) appears
“with high probability to be well-founded” (emphasis their own).43 If this
order is a portent of further developments in this case, then the possibility
of Semenya winning on appeal seems weak.

The Swiss Court has stated its position that it is not going to review the
science backing the 2019 Regulations, taking the CAS’s treatment of the
same as authoritative.44 Of the 210 appeals from the CAS to the Swiss
Court, only ten have been fully upheld.45 Most of these appeals succeeded
on the question of jurisdiction, which is a question the Swiss Court is keen
to examine in the present case.46 If this appeal fails, Ms Semenya might
still have legal recourse available through an appeal to the European Court
of Human Rights, but such appeals take long, and the said court issues

42 Caster Semenya: IAAF requests overturning of order allowing athlete to

compete without hormone suppressants, The Independent, June 26, 2019 (May
08, 2020, 12:11 AM) https://www.independent.co.uk/sport/general/
athletics/caster-semenya-iaaf-hormone-suppressants-ruling-a8974926.
html.
43 Press Release, Swiss Federal Supreme Court, The DSD Regulations are,
for the time being, again applicable to Caster Semenya, 3 (July 30, 2019)
[hereinafter Press Release].
44 Id., at 2.
45 Press Release, supra note 41
46 Amby Burfoot, After Latest Swiss Court Ruling, the Odds Are Against
Caster Semenya, LetsRun, Aug. 2, 2019 (May 08, 2020, 12:11 AM) https://www.
letsrun.com/news/2019/08/after-latest-swiss-court-ruling-the-odds-are-
against-caster-semenya/.

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temporary orders only in exceptional cases.47 Ms. Semenya in all likelihood

would want to avoid such an outcome, and thus would want the Swiss
Court ruling in her favour so that she can start competing in her choice of
events as soon as possible.

SCIENTIFIC INTEGRITY AND

THE 2019 REGULATIONS
The 2019 Regulations were brought in ostensibly based onrobust and
credible science. However, the studies on which the regulations are based
have been heavily criticised and various legitimate questions have been
raised about their independence. This section critiques the most prominent
studies backing the 2019 Regulations on the ground that they do not satisfy
the requirement of rigour expected of scientific studies. In the alternative,
it is argued that even if the contested findings of these studies are assumed
to be accurate, they do not satisfy the test of a quantifiable unfair advantage
as laid down in Dutee Chand and thus do not support the stated rationale
of 2019 Regulations.
(a). Methodological Errors in the Studies Relied Upon by the IAAF:
BG17, the study most prominently relied on by the IAAF to support the
2019 Regulations, asserted that females with the highest concentration
of free testosterone (fT) experience advantage of 1.8%-4.5% in athletics
events.48 It is interesting to note that hammer throw, the event in which
the highest advantage (4.53%) was experienced by female athletes, has
not been restricted by the IAAF. Instead, events in which female athletes
with elevated levels of endogenous testosterone experienced an advantage
between 1.7%-2.7% have been restricted. Even if it is assumed that athletes

47 Id.
48 Supra note 34, at 5.

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with DSD actually experience the entirety of this advantage on account of

elevated levels of testosterone, it is not uncommon to experience similar or
more significant advantages on account of access to professional training,
proper nutrition or even adequate sleep.49

Professor Roger Pielke, a renowned sports policy expert, has succinctly

pointed out the grave methodological flaws of BG17 and has called for the
retraction of the paper.50 He pointed out that the data on which BG17 relies
has not been subjected to peer-review. He requested the data from IAAF
to independently corroborate its findings and was supplied a sub-set of
the original data.51 On the basis of the data supplied to him, he observed
that BG17 suffered from the problem of “duplicated athletes, duplicated
times and phantom times”.52 He also highlighted the fact that problematic
data formed 17%-33% of values used in BG17.53 In his cross-examination
during the hearings in Caster Semenya, Dr. Bermon admitted that he
exaggerated his findings in BG17.54 Given that BG17 was funded by IAAF
among others, IAAF should not have been allowed to place reliance on
BG17 in defence of its regulations.55 Given that BG17 was the primary
piece of evidence in IAAF’s kitty, doubts relating to its scientific merit and
the credibility of its results deal a significant blow to the case for the validity
of the 2019 Regulations.

After heavy criticism of BG17 by various scientists, policymakers

49 Lisa M. Guth & Stephen M. Roth, Genetic influence on athletic

performance, 25 Curr. Opin. Pediatr. 653 (2013).
50 Roger Pielke Jr. et al., Scientific integrity and the IAAF testosterone
regulations, The International Sports Law Journal 1 (2019).
51 Id., at 3.
52 Supra note 48, at 4.
53 Supra note 48, at 4.
54 Caster Semenya, at ¶349.
55 Supra note 48, at 8.

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and bioethicists, BHKE18 was published to qualifiedly admit to some

methodological errors committed in BG17, while asserting that the
conclusion from the study, which is that endogenous testosterone is
positively correlated with athletic performance, continued to hold.56
BHKE18 revised the athletic advantage enjoyed by female athletes with
elevated levels of endogenous testosterone to around 2.3% on an average.57
It is to be noted that this advantage is not high enough to qualify as an
unfair competitive advantage mandating regulation by the IAAF. While a
lot of the studies linking higher testosterone levels and athletic performance
are quick to point out the fact that athletes with DSD are overrepresented
at the elite levels of athletic performance, they often ignore the fact that
women with CAIS are also overrepresented in the top echelons of athletic
performance, and there is a high likelihood of overlap between the two
populations. The argument being made is that even if these women “suffer”
from high levels of testosterone production, more often than not, their
bodies are unable to process this testosterone.

The link between endogenous testosterone levels and athletic performance

has been highly contested, and it has not been borne out even in studies
conducted by medical professionals associated with the IAAF. Thus, a
study led by Professor Eklund, a proponent of the 2019 Regulations, and
others finds that testosterone levels between female athletes and female
non-athletes remain the same and that no correlation could be found
between serum testosterone and athletic performance.58 A study by Dr
Bermon found the testosterone levels between female athletes and non-

56 Stephane Bermon et al., Serum androgen levels are positively correlated

with athletic performance and competition results in elite female athletes, Br. J.
Sports Med. 1 (2018) [hereinafter BHKE18].
57 Id.
58 Emma Eklund et al., Serum androgen profile and physical performance in
women Olympic Athletes, Br J Sports Med 1 (2017).

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athletes to be in the same range.59 In his study, after removing athletes with
DSD and athletes who were doping, Dr Bermon still found 9 females with
testosterone levels above 3 nmol/L (considered to be the upper range of
testosterone levels in females) and 3 women with testosterone levels above
10 nmol/L.60 These studies allow us to ferret out two crucial inferences – if
the testosterone levels of female athletes and non-athletes is in the same
range, some factor other than testosterone levels is likely to account for the
sporting excellence of female athletes, and; there is a great deal of variation
in the female levels of testosterone, and it is unwieldy to try to define an
“ideal” range of testosterone for females.
(b). Problematic Connection Drawn Between Testosterone and
Masculinity:
Testosterone, a biological fact, has often been uncritically associated with
masculinity, a social construct. Even in its judgment in Caster Semenya, the
CAS holds that testosterone is a “male” hormone.61 However, testosterone is
a hormone linked with competition (and not masculinity) and is produced
in both males and females. Given the overlap in testosterone levels of men
and women, it is imprudent to divide male and female categories in sport
based on the hormone.

Professor Healy in his study on 454 male and 239 female athletes found
that 16.5% male athletes at elite levels had ‘low’ levels of testosterone,
whereas 13.7% female athletes at elite levels had high levels of testosterone,
with a complete overlap existing between the testosterone values of male
and female athletes.62 Professor Healy posits that athletic performance is
affected not by testosterone but by lean body mass (hereinafter ‘LBM’), and

59 Supra note 54, at 4333.

60 Supra note 54, at 4333.
61 Caster Semenya, at ¶520.
62 M.L. Healy et al., Endocrine profiles in 693 elite athletes in the post-
competition setting 81 Clinical Endocrinology 294, 294 (2014).

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female athletes have 85% of LBM of male athletes thereby accounting for
the differences in their performance.63 In fairness, however, the Healy study
begs the question – what causes to men have higher LBM than women?
The study has also been persuasively criticised for its methodology,64 and
only limited reliance should be placed on the conclusions it draws.

It can thus be argued with reasonable certainty that testosterone is not a

good determinant of “maleness”, and the science that has been employed
in support of the 2019 Regulations is either seriously methodologically
flawed or does not demonstrate an unfair competitive advantage enjoyed
by female athletes with elevated endogenous testosterone levels over other
female athletes.

HUMAN RIGHTS SCRUTINY OF

THE 2019 REGULATIONS
Soon after the Caster Semenya decision, United Nations Human Rights
Council (hereinafter ‘UNHRC’) issued a statement asserting that
regulations that discriminate against female athletes on the basis of their
endogenous levels of testosterone are in contravention of International
Human Rights Law (hereinafter ‘IHRL’) and called upon states to ensure
that the regulations developed by SBGs operating within their territory were
in accordance with IHRL.65 The World Medical Association (hereinafter
‘WMA’) has also publicly spoken out against the 2019 Regulations, calling
on medical professionals to not enforce the regulations.66Global outrage
has thus emerged which sees the 2019 Regulations and the Caster Semenya

63 Id., at 298.
64 Caster Semenya, at ¶456.
65 United Nations Human Rights Council, Elimination of discrimination
against women and girls in sport, A/HRC/40/L/10/Rev.1 (Mar. 20, 2019).
66 Supra note 5.

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decision as an affront to human rights of athletes such as Ms. Semenya.

The 2019 Regulations, apart from being based on questionable science, also
violate various human rights of the affected athletes. A recurrent problem
with the application of IHRL to regulations developed by non-state actors
such as IAAF has been their ability to wriggle out of such obligations citing
their independence from state machinery,67 and the special margin of
deference allowed to them on account of their regulatory function68. The
CAS primarily deals with commercial disputes in sports and thus is either
unwilling to or inept at applying IHRL to sensitive situations where human
rights of the athletes may be implicated.69 A persuasive critique of the Caster
Semenya judgment points out that CAS is a private arbitration court and
therefore not liable to consider issues of public policy as a matter of law.70
This section aims to develop a critique of the 2019 Regulations because
they violate the athlete’s right against discrimination and to be treated
fairly in sport, and that the regulations are not reasonable, necessary and
proportionate to the goal of protecting fairness and integrity in women’s
sport.

(a). Right Against Discrimination in IHRL and The Case of Affected

Athletes
The 2019 Regulations have been criticised because they unduly discriminate
against female athletes with elevated levels of endogenous testosterone. The
argument that has been made in both Dutee Chand and Caster Semenya

67 Caster Semenya, at ¶74.

68 Caster Semenya, at ¶551.
69 Daniel West, Revitalising a phantom regime: the adjudication of human
rights complaints in sport, The International Sports Law Journal 1, 6-7
(2019).
70 Ronald Katz, Why Is a Private Sports Court Deciding Who is Female,
The Nation, June 17, 2019 (May 08, 2020, 12:11 AM) https://www.thenation.
com/article/caster-semenya-testosterone/.

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is two-fold – (a) that the regulations are discriminatory because they

only apply to women and not to men; and (b) that the regulations are
discriminatory because even within women, they only apply to a specific
subset of the population based on a biological trait. The IAAF has defended
the regulations from the argument (a) stating that the regulations exist to
police the divide between male and female, and given that there is no “super
male” category in sport, these regulations need not be applied to men.71
This argument suffers from two obvious fallacies – first, sex-determined
levels of testosterone is a fragile concept, and; second, even assuming that
it is possible to scientifically distil the “correct” male and female categories
of testosterone which show zero overlaps, male athletes with extremely
high levels of testosterone would, following IAAF’s reasoning, experience
an ‘insuperable’ advantage over other male athletes. IAAF’s defence to the
argument (b), endorsed by CAS in Caster Semenya, is that female athlete
are a protected class, and such discrimination is reasonable, necessary and
proportionate to the goal of ensuring fairness in women’s athletics.

Non-discrimination is a minimum core obligation of all States under Art.

2 of the International Covenant on Civil and Political Rights (hereinafter
‘ICCPR’). This means that the obligation must be immediately implemented
by the States without any reservations to the same. The right to non-
discrimination under the ICCPR can be enforced vertically (against state
authorities) in all cases, and horizontally (against non-state actors) in some
cases.72 Monaco, the country where IAAF is headquartered, is a signatory
to the ICCPR, having ratified the same in 1997. It is the duty of the State of
Monaco to ensure that IAAF does not implement and enforce regulations

71 Dutee Chand, at ¶213.

72 UN Human Rights Committee (HRC), General comment no. 31 [80],
The nature of the general legal obligation imposed on States Parties to the Covenant
(May 26, 2004, CCPR/C/21/Rev.1/Add.13) (May 08, 2020, 12:11 AM) https://
www.refworld.org/docid/478b26ae2.html.

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that unduly discriminate against a section of the athlete population, a

position further buttressed by the statement of UNHRC discussed above.

The 2019 Regulations impair the right of female athletes to participate in

sport on an equal basis with male athletes because of their testosterone
levels, and the same may constitute “discrimination against women” as per
Article 1 of Convention on the Elimination of All Forms of Discrimination
against Women (hereinafter ‘CEDAW’). CEDAW also imposes a duty on
Monaco to eliminate any discrimination against women being practised
by any “person, organisation or enterprise” operating within the territory
of Monaco.73 Article 13(c) of CEDAW explicitly recognises the right of
female athletes to participate in recreational activities, such as sports, on
an equal basis with men. A similar commitment to non-discrimination,
albeit on the grounds of “race, colour, descent or national or ethnic origin”
can be found in International Convention on the Elimination of All Forms
of Racial Discrimination (hereinafter ‘CERD’).74 As has been observed,
such regulations disproportionately target female athletes from the Global
South,75 in violation of the aforementioned provisions of CERD and
CEDAW.
(b). The Human Right to Non-Discrimination in IAAF and IOC
Constitutions
The IAAF is recognised by the International Olympic Committee
(hereinafter ‘IOC’) as an “International Sports Federation” to regulate the
sport of athletics.76 Membership of the “Olympics Movement” requires the

73 Convention on the Elimination of All Forms of Discrimination Against

Women, Dec. 18, 1979, 1249 U.N.T.S. 13, art. 2(e).
74 International Convention on the Elimination of All Forms of Racial
Discrimination, Mar. 7, 1966, 660 U.N.T.S. 195, art. 2.
75 Supra note 5.
76 IAAF Constitution, art. 1.3.

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IAAF to comply with the Olympic Charter,77 which recognises the practice
of sport as a human right. Olympic Charter asserts that every individual
must have the “possibility of practicing sport without discrimination of any
kind”, in the spirit of “friendship, solidarity and fair play”.78 The Charter also
bars discrimination of any kind based on sex.79 The Olympic Charter is
the higher ranking rule when compared to the 2019 Regulations, and thus
in case of any conflict between them, the regulations must make way for
the Charter.80 It appears that the Olympic Charter considers fair play and
non-discrimination as corresponding values, and on the face of it, does not
allow for any derogation from these principles.

Recently, IAAF replaced its old Constitution (hereinafter ‘2017

Constitution’) with a new Constitution (hereinafter ‘2019 Constitution’).
The non-discrimination clause in the 2019 Constitution is somewhat
vaguely worded, as opposed to the more explicit definition given under
the 2017 Constitution. Article 4(4) of the 2017 Constitution of the
IAAF provided that it was an objective of the IAAF to ensure that “no
gender, race, religious, political or another kind of unfair discrimination
exists” (emphasis mine) or “is allowed to develop in Athletics”. The 2019
Constitution substantially rewords this promise of non-discrimination.
Whereas the 2017 Constitution prohibited “unfair discrimination”, the
2019 Constitution bars “unlawful discrimination”.81 While unfairness has a
broader orbit in as much, it can include extra-legal considerations within its
fold, and unlawfulness has a narrower realm being focused solely on legal
concerns. Another implication of the new phrasing is that no matter how

77 Olympic Charter, Fundamental Principles of Olympism, Principle 7.

78 Olympic Charter, Fundamental Principles of Olympism, Principle 4.
79 Olympic Charter, Fundamental Principles of Olympism, Principle 6.
80 United States Olympic Committee v. International Olympic Committee,
CAS 2011/O/2422 (Court of Arbitration for Sport 2011).
81 2019 Constitution, art. 4.1(j); 2017 Constitution, art. 4(4).

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discriminatory the regulations, they will be allowed to stand with impunity

as long as a court such as the CAS does not declare them “unlawful”. Given
CAS’s ineptitude in dealing with human rights issues, it is highly likely that
even regulations which are patently discriminatory and violative of IHRL
norms will prevail for long durations.

(c). Reasonableness, Necessity and Proportionality of the 2019

Regulations
IAAF, during arguments in both Dutee Chand and Caster Semenya, had
argued that a majority of female athletes were in favour of the regulations
in question. Though heavily contested by the litigating athletes,82 even if it
is assumed to be true this position of the IAAF ought not to add any weight
to the plea on the validity of the regulations. As the regulator of the sport
of athletics, it is the IAAF’s duty to formulate regulations based on credible
science and not on majoritarian positions.83 Just like racial minorities
should not be disbarred from competing directly because the majority
finds it just so to do, sexual minorities should also not be disbarred based
on whims of the majority.

During the stage of the arguments, Ms. Semenya explained how taking
medication to reduce her testosterone levels made her feel dizzy and caused
emotional trauma to her,84 claiming that she was used as a guinea pig by
the IAAF.85 Proponents of the 2019 Regulations were quick to point out
the decline in Ms. Semenya’s performance shortly after she started taking
medication as indirect evidence of a correlation between testosterone levels
and athletic performance. However, there is no evidence linking the drop

82 Dutee Chand, at ¶355.

83 Shawn Crincoli, The IAAF Hyperandrogenism Regulations and
Discrimination, 9 World Sports Law Report 3, 5 (2011).
84 Caster Semenya, at ¶78.
85 Caster Semenya, at ¶83.

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in her performance to decreased testosterone levels in her body. It is highly

likely that her performance suffered not due to her reduced testosterone
levels, but because of the side effects of the drugs, she was made to take as
a pre-condition for participation.

Medical professionals have consistently argued that higher testosterone

levels in females is typically not a health risk, and in most cases does not have
to be treated.86 On the contrary, the high doses of contraceptive medication
that female athletes are made to ingest to control their testosterone levels put
such athletes at an increased risk of internal clots, such as lung clots, which
can prove fatal in some instances.87 The WMA has also called for a ban on
non-prescriptive usage of contraceptives, arguing that this interferes with
the biological cycles of women.88 The harm that the athlete subjected to, to
maintain an illusory level playing field is disproportionate to any legitimate
aim such regulations seek to achieve.

To take the argument made above to its logical conclusion, many

bioethicists and other experts argue that even if endogenously produced
testosterone confers some substantial competitive advantage on some
women, it would be unfair to bar them from competing solely on those

86 Katrina Karkazis et al., Out of Bounds? A Critique of the New Policies on

Hyperandrogenism in Elite Female Athletes, 12 The American Journal of
Bioethics 3, 12 (2012).
87 Julian Savulescu, Ten ethical flaws in the Caster Semenya decision on
intersex in sport, The Conversation, May 10, 2019 (May 08, 2020, 12:11 AM)
https://theconversation.com/ten-ethical-flaws-in-the-caster-semenya-
decision-on-intersex-in-sport-116448?utm_source=twitter&utm_
medium=twitterbutton.
88 Bruce Kidd, The new rule for female athletes is a green light for
discrimination in sport, The Telegraph May 9, 2019 (May 08, 2020, 12:11 AM)
https://www.telegraphindia.com/opinion/the-new-rule-for-female-athletes-
is-a-green-light-for-discrimination-in-sports/cid/1690163?ref=also-read_
story-page.

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grounds.89 In sport, the genetic variation which confers a unique physical

advantage on athletes is the norm, and not the exception.90 Michael Phelps,
the most successful Olympics athlete of all time, was suspected of suffering
from Marfan syndrome, a biological condition which gives one extremely
long limbs crucial for success in swimming.91 Eero Antero Mantyranta,
an accomplished Finnish cross-country skier, suffered from hereditary
polycythaemia which allows him to produce significantly more red
blood cells than the average human being, conferring on him significant
endurance benefits.92

Elite athletes are genetic outliers,93 and it is logically absurd to celebrate

genetic variations of one kind while demonising those of another type for
no principled reason. Athleticism is often at loggerheads with stereotypical
notions of femininity, as success in athletics requires traits generally
considered to be masculine.94 It is only because athletes like Dutee Chand
and Caster Semenya do not fit into the stereotypical notions of femininity
that they are lampooned as “biological males”.95 Even if their natural levels
of testosterone confer a performance advantage, it is unethical to curtail

89 Sarah Teetzel, The Onus of Inclusivity: Sport Policies and the Enforcement
of the Women’s Category in Sport, 41 Journal of the Philosophy of Sport 113
(2013).
90 Roger Pielke Jr., Sugar, spice and everything nice: how to end ‘sex testing’
in international athletics, 9 International Journal of Sports Policy and
Politics 649, 665 (2017).
91 Is it a genetic flaw that makes Phelps the greatest?, The Sydney Morning
Herald, Aug. 16, 2008 (May 08, 2020, 12:11 AM) https://www.smh.com.au/
sport/is-it-a-genetic-flaw-that-makes-phelps-the-greatest-20080816-gdsqwk.
html.
92 Supra note 88, at 665.
93 Silvia Camporesi, A question of ‘ fairness’: Why ethics should factor in the
Court of Arbitration for Sport’s decision on the IAAF Hyperandrogenism
Regulations, Br. J. Sports Med. 1, 1 (2018).
94 Supra note 86, at 7.
95 Caster Semenya, at ¶285.

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their participation for that reason as the sport is about celebrating the
genetic outlier, and because these women have not cheated. Simply put, it
is unfair to ask women to alter their natural biology as a pre-condition for
participation artificially.96

From the above-going discussion, it thus appears that the 2019 Regulations
are not reasonable, necessary and proportionate to the aim of protection
of fairness in women’s sport. The regulations violate the promise of non-
discrimination contained in IHRL and the constitutional documents of
bodies governing the international sport. Anti-discrimination and fairness
are twin values of IHRL shared by sports law and governance, and the 2019
Regulations fall foul of both values.

CONCLUSION
This paper sought to critique the 2019 Regulations of the IAAF on two
principal grounds – (a) that they are based on contested science, and; (b)
that they violate human rights of the athletes on whom it applies. Even
if we take the science behind the 2019 Regulations on face value, it does
not demonstrate an unfair competitive advantage which necessitates the
regulation of athletes with elevated endogenous testosterone levels. Non-
discrimination and fairness are two corresponding values in sport, and the
commitment against discrimination is also a non-derogable fundamental
right under IHRL. The 2019 Regulations violate the promise of equal
access to sporting opportunities and are not a reasonable, necessary
and proportionate means to ensure fairness in women’s sport. Given the
emotional trauma, social stigmatisation, and physical suffering that female
athletes are subjected to account of these regulations, these regulations
must be immediately abolished. Ms. Semenya’s appeal against the decision

96 Supra note 91, at 1.

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of the CAS to the Swiss Federal Tribunal must consider the full extent of
the effect of the 2019 Regulations on women’s lives, and it must also grapple
with their sexist, stereotypical basis. This paper vehemently argues against
the 2019 Regulations and hopes that the Swiss Court strikes them down.

The history of sex-testing in sport from the early 20th century to the present
day demonstrates that these measures are unnecessary and antithetical to
the spirit of fairness in sport. Given increased media scrutiny of athletes’
lives and performances, it is next to impossible in the present day and age for
a male athlete to masquerade as a female athlete. In her best performances,
Ms. Semenya is at best 2% faster than her competitors, which is a figure quite
less than the projected 10-12% advantage enjoyed by male athletes over
female athletes. Testosterone is only one unit in a complex neuroendocrine
system responsible for athletic performance, and it is an impossible task to
indisputably distil the performance advantage that can solely be attributed
to testosterone.

With IHRL gaining prominence the world over and being applied in
multiple settings, there is no reason why sports disputes should be immune
to adjudication based on human rights claims of affected parties. The IAAF
Regulations interfere with women’s human right to non-discrimination.
Even the consultation process which preceded the drafting of the 2019
Regulations did not involve intersex populations in a meaningful manner,
even though the regulations are specifically targeted at them. It is imperative
that the IAAF and other SBGs be monitored in their practices through
IHRL standards and norms, and courts such as CAS which are often courts
of last resort for athletes be proactive in identifying and adjudicating on the
human rights issues involved.

It is now high time that we do away with the practice of sex-testing altogether,
which has indiscriminately targeted female athletes from the Global South
often because of their sporting success, and their refutation of stereotypical

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notions of femininity. Any regulations which govern the ability of athletes

to participate meaningfully in sport must be based on the best available
science, and not on prejudices cloaked as science. Inclusiveness, solidarity,
fair play and spirit of friendship are fundamental values of sport, and their
import cannot be fully realised till the day SBGs enforce discriminatory
practices such as sex-testing.

***

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ARBITRATION AND SPORTS LAW:

SCRUTINISING THE DISPUTE
RESOLUTION PROCESS
Vaibhav Singh1* and Saurabh Tiwari2**

INTRODUCTION
Given that the Sports industry is evaluated to represent somewhere in the
range of 3-6 per cent of world trade, it should not be a surprise that it is a
significant source of legal disputes. These disputes would require special
attention and a medium which provides hassle-free solutions. Arbitration
has been hailed as a strategy for alternative dispute resolution capable of
releasing the weights on an over-burden court system while offering a
speedier, more affordable field in which to solve differences. In the course of
the last two decades, employers in a wide range of enterprises have turned
to arbitration to settle disputes about everything from salaries to sexual
misconduct to wrongful discharge. Although not the first to jump on the
arbitration bandwagon, proficient athletic teams have been among the most
apparent employers of this type of dispute resolutions. Some would contend
that this blending has delivered splendid results.3 Arbitration is speedy,
moderately private, and sets no legal precedent perfect for both the owners
and players in an industry where drawn-out and exceptionally public fights
in court can pulverise reputations and devastate firmly scheduled athletic
seasons. Others point to sports arbitration’s failures, counting the baseball
strike, the NBA lockout, and the Sprewell episode in which a basketball
player attacked a coach. However, the authors have primarily focused

1 *
Student, B.A.LL.B., National Law University, Odisha.
2 **
Student, B.A.LL.B., Dr. Ram Manohar Lohiya National Law
University, Lucknow.
3 Employment Arbitration (and) Professional Sports: A Brilliant Pairing
or a Bad Idea, 6 U. Chi. L. Sch. Roundtable 53 (1999).

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upon those concepts and ideas which will help in materialising

and maximising the potential of arbitration as a sports dispute
mechanism. The concepts of Collective Bargaining Agreement and
final-offer arbitration have been discussed extensively to showcase
the effectiveness with which they have helped in eliminating certain
anomalies in the field of sports. Need for consolidation of different
disparate authorities and the role of courts have been demonstrated
through various case laws. Finally, specific suggestions have been
provided, which can help in enhancing the real value of arbitration
and culminate into one of the purest platforms for resolving sports
disputes with ease. Thus, the following research article will encompass
the real blue facets of the arbitration being used as a mechanism to
resolve sports-related disputes while explaining why it is the need of
the hour.

COLLECTIVE BARGAINING AGREEMENT

AND ARBITRATION CLAUSE
Being a sportsperson has consistently been an extreme occupation. People
expect them to be on top of their game at whatever point they venture on
the field alongside the additional weight of performing for their respective
teams. Additionally, the players need appropriate inclusion and help with
any legitimate legal disputes which might emerge. These disputes can
incorporate the differences between the association and the players, the
controlling authority and the players, etc. The customary methodology
towards solving such disputes can be a dreary one, particularly for a
sportsperson who is already loaded with the weight of performing on the
field. To diminish this quandary, arbitration provisions can be found in
Collective Bargaining Agreements to handle the detours which result in
mishaps.

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Collective Bargaining Agreement (hereinafter CBA), with regards to

professional sports, is the agreement reached between a specific league’s
players and the proprietors of that particular league. These agreements,
for the most part, contain an Arbitration clause which manages injury
and non-injury complaints and compensation arbitration. Sports such as
basketball, baseball, football and professional hockey have significantly
used these agreements in making a harmonious connection between the
players and the league proprietors. The striking element of most CBAs is
that the complaint, contract or compensation questions are settled with
binding arbitration. The expression “baseball arbitration” has its inception
from a new strategy wherein the compensation or salary disputes of the
baseball players were settled through the technique of arbitration. The
arbitration which happens as indicated by the CBA, more often than not
requires the gatherings to submit to the referee a sum which speaks to
the last, best offer. It is significant for the gatherings to present proposals
which speak to a high amount since the arbitrator needs to pick one of the
submitted figures.

Sports groups, for example, National Basketball Association (NBA),

National Football League (NFL), and Major League Baseball (MLB)
which have gained popularity across the world have depended vigorously
upon CBAs to guarantee a smooth situation for the players. For example,
the CBAs between the MLB Players Association and the Major League
Clubs give the parties the chance to request the American Arbitration
Association’s help to pick an arbitrator if either party cannot consent to
an arbitrator (most recent by January 1 of any year of the agreement).4
This kind of arbitration may look like labour arbitration; however, in such
arbitrations, the arbitrator is not permitted to provide solutions or give his

4 Id.

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opinions.5 The CBA just requires the last, best offer from either party. On
certain occasions, such a system produces surprising outcomes. However,
the conventional idea of such a usual methodology induces the members to
bargain in accordance with some essential honesty, consequently bringing
about higher settlements. With regards to the CBA among NBA and the
players association, complaint or grievance issues are determined by an
arbitrator. At the same time, a chosen few articles inside the CBA is controlled
by a system arbitrator. Issues such as income, salary cap and minimum
team salary are under the domain of Arbitration under CBA. Be that as it
may, some disciplinary bearings coordinated by the NBA Commissioner
are authoritative upon the players subject to final determination done
by the system arbitrator. Similarly, in case of CBA between NFL Players
Association and the league accommodates arbitration if there should be an
occurrence of salary disputes and whether an injury which kept a player
from playing was sustained because of play.6 In this way, it is evident that the
Arbitration clause in the CBAs has affected the manners by which disputes
are being settled in the significant Sports leagues around the globe.

If we take a gander at the Indian situation, CBAs are yet to wind up as

being prevalent. For example, in the Indian Premier League (IPL), there is
an auction system which ought to be supplanted with an exhaustive draft
system.7 There is a need to acquire the CBAs to evacuate the artificially
imposed wage ceiling on the uncapped players, i.e. the ones who are yet

5 Using ADR to Resolve Collegiate, Professional and Sports Business

Disputes, July 14, 2019 (May 08, 2020, 12:48 AM) https://www.adr.org/sites/
default/files/document_repository/Using%20ADR%20to%20Resolve%20
Collegiate%20Professional%20and%20Sport%20Business%20Disputes.pdf.
6 Id.
7 Sanjeev K Samyal, IPL Considering Draft System To Ensure Player
Continuity In Teams, Hidustan Times, Jan 28, 2018 (May 08, 2020, 12:48 AM)
https://www.hindustantimes.com/cricket/ipl-considering-draft-system-to-
ensure-player-continuity-in-teams/story-s5u5cfhWNzWGW78NZhx3wL.html.

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to make their debut for their national teams. Besides, different games in
India have scarcely received or even taken a gander at including CBAs to
the contract regime. Therefore, it is high time to bring in CBAs across the
different sports leagues which are popular in India so that the associations
are compelled to arrive at an agreement which will benefit players at every
professional level based on their experience as well as seniority. The sports
culture in India has, in any case not demonstrated productive for other
games apart from cricket. Acquiring CBAs would, in any event, give the
athletes the chance of having appropriate compensation, better answers
for injury grievances and simultaneously. This would push them not to
experience the monotonous method built up by the law in India to resolve
sports-related disputes.

ANSWER TO CURB MONOPOLY

EXERCISED IN SPORTS
Monopoly has become a common issue in the field of sports and tends
to overpower the true spirit of sportsmanship. It comes into existence
when an organisation is given the responsibility of handling a particular
area of sport.8 To overcome this, the concept of “final offer” can be used
as it provides a viable solution while ousting the monopoly in existence.
Final Offer or ‘Pendulum Arbitration’ is an interest arbitration in which
the arbitrator chooses one of the parties’ proposals on the disputed issues.
This is different from the traditional interest arbitration in which both the
parties present evidence and documents while the arbitrator acts as a fact-
finder to render an award. For instance, in collective labour bargaining, a
trade union may demand an increase of up to 10% while the management

8 Marios Papaloukas, Monopoly: An Inherent Feature of the Sports Market

or the Result of Sports Autonomy?, in 17th International Sports Law
Congress (2011).

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may offer an increase of 5%. In such a case, the arbitrator will have to
choose between 5-10%. This type of arbitration has been successfully
implemented in disputes about baseball and since then has found its way
into other sports with a relatively higher settlement ratio as compared to
the traditional methods.9

The classic case of monopoly exercised by a particular organisation resulting

in misuse of power is by the BCCI in India. In all these years, we have
seen how the BCCI has gotten a patent over cricket. It has uncontrollably
managed the game and at the same time directed it as and when it considered
fit. This unbreakable, solid syndication has prompted a ton of one-sided
choices in the field of cricket which has affected the sportsmen playing the
game and the game in general. BCCI has the power from picking players
and umpires for the national group, planning the fundamental guidelines
and guidelines for the game to precluding players which may impacts his
or her vocation to the degree that he or on she may need to quit playing
it.10 It assembles arenas, screens the working of cricket institutes, underpins
the state associations and affiliations, outlines annuity plans and supports
consumptions of coaches, mentors and others. It additionally sends or
loans the telecast and broadcast rights and even gathers the confirmation
expenses for the spot where the matches are led.

Taking a gander at all the forces and capacities that the BCCI has and
that there is no restriction to its choices, decentralisation of intensity is
of principal significance now. There are no means or endeavours made by
the legislature to end this restraining infrastructure. The capacities which

9 Danilo Ruggero Di Bella, “Final-Offer Arbitration”: A Procedure to save

time and Money? (2019) (May 08, 2020, 12:48 AM) http://arbitrationblog.
kluwerarbitration.com/2019/01/25/final-offer-arbitration-a-procedure-to-
save-time-and-money/.
10 Manvi Bhandari, Arbitration in Sport Dispute Resolution in India 1
IJRESM 483 (2018).

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are performed by the BCCI are open capacities despite the fact that it is a
private entity.11 One such case of BCCI’s syndication which we have found
in the past is when ICL that is the Indian Cricket League would have been
presented as an open door for all the cricket fans to feature their ability.
A cricket competition named ICL was begun by Essel Sports Private Ltd
(ESPL) which included both Indian and foreign players. The BCCI did not
bolster this competition and utilised its capacity and impact and advised
the different state organisations to blacklist the same. BCCI despite having
sufficient funds to accommodate such a competition would not make it
work and restricted players from partaking in ICL. It likewise constrained
the board individuals to make severe move against their separate players
associated with the ICL. Because of all these exacting standards of the
BCCI, absence of support and assets, the ICL was sidelined. A petition was
filed against the BCCI in the Delhi High Court as it was undermining the
players to not participate in the otherwise their license would be in question,
and they will not be allowed to partake in the worldwide matches.12 To stop
the ICL, the BCCI even out-contracted cricket arena which was under the
state government.13 These practices were likewise challenged in the court.
The court decided in favour of ICL and offered notification to BCCI, state
cricket affiliations and corporate supporters against ending legitimate
contracts of players joining the ICL.

It is at this juncture where the concept of final-offer arbitration can be used

to tackle the problem of monopoly being exercised by BCCI. At the point
when such a resolution is executed wherein the BCCI needs to experience

11 Dr. M Suresh Benjamin & Sanu Rani Paul, Legal Status of BCCI as
Instrumentality of State under Article 12 of the Indian Constitution, 1 Nalsar L.
Rev 6 (2013).
12 Delhi HC orders Companies to let players join ICL, (Aug 27, 2007) (May
08, 2020, 12:48 AM) http://in.reuters.com/article/idIN India-29170020070827/.
13 Id at 8.

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arbitration and not make choices as indicated by its impulses and likes, it
would cut down the monopoly significantly. An outsider inclusion would
acquire decency and would not give one a chance to overwhelm over the
other.
CONSOLIDATING DIFFERENT AUTHORITIES
International sports law and the mechanism governing the general process
constitutes a complex structure of institutions and governing bodies at
the national and international level. The complex structure comprises of
national sports organisations and governing institutions, International
Olympic Committee (IOC) and their national constituents, i.e. the National
Olympic Committees (NOC’s), International Sports Federations (IF’s)
and the different judicial authorities involved as the Court of Arbitration
for Sports (CAS), International Council of Arbitration for Sports (ICAS),
national courts and tribunals, national arbitral tribunals, and other
international and regional authorities (in the case of the European Union).
They are all captains in their particular arena and play by their own rules.
However, if we want sports to transcend national boundaries and have an
internationally uniform system, we need to address this hiatus between the
operational authorities in this arena. The challenge that comes up is the
consolidation of these authorities in a more coherent and most importantly,
uniform process.

It is essential to clarify that the authors here are not advocating let
alone expecting instant uniformity and coherence. In the absence of
supranational law and an international sovereign, the expectation of
uniform international laws has a limited scope. An initial step in the
direction to promote uniformity in this field would be to reconcile and
give a uniform anvil for testing the similarly placed cases and scenarios.
Further, harmonise and reconcile the procedures and the rules of different
sanctioning authorities and most importantly defining the arena in which
each performs, i.e. demarcating their spheres of authority.

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Dispute resolution in this complex structure is pluralistic and constitutes

of overlapping Venn diagrams. In the following section, the authors would
highlight the hiatus and the problem created by the plurality within the
complex framework with the help of case laws-

Foschi Case14- Jessica Foschi was subject to the authority of the United
States Swimming Inc. (USS- a corporation which regulates the conduct
and administration of swimming and swimming events in New York and
throughout the United States of America). The USS is a member of the
USOC, which is a corporation established by federal law, incorporated in
1950 by an act of Congress. It is also the ultimate body concerning the USA’s
representation in the Olympic Games. USOC also performs drug testing
on behalf of the USS. In 1995 post the national competitions Foschi’s urine
samples tested positive for the anabolic steroid mastertone. The USS panel
hearing the issue accepted the evidence and affirmed doping but at the same
time declared that Foschi had “no knowledge of how the banned substance
entered her body.” Later the appeals body affirmed the determination of the
USS panel and imposed limited sanctions on Jessica Foschi which included
two-year probation and a warning that any subsequent event of doping
would result in a complete ban. After this, the USS imposed an outright
ban on Jessica, for the competition, but reversed itself by reinstating the
earlier limited sanctions.

However, she was allowed to participate in the qualifiers for the Olympics,
where the question of her eligibility was vexed when she failed to qualify for
the team.Foschi filed a demand for arbitration in the American Arbitration
Association (AAA) under the Ted Stevens Olympic and Amateur Sports
Act, 1978.15 She challenged the sanctions remaining on her and most

14 Foschi v. United States Swimming Inc, 916 F Supp 232 (E.D. NY 1996).
15 Amateur Sports Act, 36 USC (1998).

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importantly challenged the threat of life ban, which was looming

on her career in case she is ever again found engaged in doping. The
arbitral tribunal ruled in favour of Foschi, rescinding all the sanctions
against her and rejected the strict liability rule of FINA (Federation
Internationale de Natation Amateur, the international federation
whose anti-doping rules govern the USS). The tribunal found that
the sanctions were arbitrary, capricious and violated the fundamental
fairness. The panel noted that the USS did not contest Foshi’s apparent
innocence of the circumstances under which the controlled substance
entered her body and hence to ignore her apparent innocence would
not be in the interest of justice.

The arbitral tribunal further acknowledged that rejecting the strict liability
rule of FINA left emptiness in both USS and FINA rules. However,
it clarified that there was no authority for imposing such penalty (as in
this case) on the athletes as per the existing rules, even though the same
looks like an excellent compromise. AAA while coming to this conclusion,
also relied on the advisory opinion given in a similar comparable case of
Australian swimmer Samantha Riley. The Foschi case may be another case
of conflict between the national tribunal and International Federation but
serves the purpose of reflecting the plurality existing in the International
Sports Law and the disputes which the pluralistic regime entails.

Nagra Case16- Yet another example of how the pluralist regime can
frustrate the entire dispute resolution and the aim of timely justice.
The case of a Canadian Athlete Pradeep Singh Nagra, who wore a
beard because of the religious intricacies, and the rules and regulations
of CABA (Canadian Amateur Boxing Association) and IABA

16 Nagra v. Canadian Amateur Boxing Association, No.99 CV- 180990

(Ont. Super. Ct. 2000).

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(International Amateur Boxing Association) both required the boxers to

be cleanly shaven. Fearing his disqualification, Mr Nagra ‘apparently’
avoided the established administrative process and proceeded directly
to the Canadian Courts. After two rounds of litigation and considerable
time, and amongst the pressure of further suits by the World Sikh
Organization the court ruled in favour of Nagra and declared the
IABA and CABA regulations to be violative of Canadian Human
Rights law. Although, the decision is fair and justified, but the focal
point of the case is that the well-established mechanism of dispute
resolution within the organisation was purposely avoided. Any branch
of law exhorts, if not, mandates the exhaustion of administrative and
organisational remedies before going to the court. In the present case,
there was a strong probability that the rule might have been waived off
by the IABA or CABA, saving much time for the athlete while at the
same time building the confidence of the athletes in the administrative
procedure.

Pistorius v. IAAF17- This case dealt with the scenario of a disabled athlete
competing with other able-bodied athletes. Mr Pistorious had been an
amputee since 11 months of age and had been using prosthetic legs to
compete internationally in 100, 200, 400-meter sprint events. The appeal
was made against Decision No. 2008/01 of the IAAF Council dated January
14 2008, which held that the use of prosthetic legs ‘cheetah’ gave Pistorious
and edge over the other able body athletes and was in violation of the
IAAF amended competition rule 144.2(e). For a matter of record, the rule
144.2(e) stated that;

“For the purposes of this Rule, the following shall be

considered assistance, and are therefore not allowed

17 Pistorious v. IAAF, CAS A/1480 (2008).

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:…( e) Use of any technical device that incorporates

springs, wheels, or any other element that provides the
user with an advantage over another athlete not using
such a device”

At the German Sport University in Cologne, a biochemical study was

conducted on the instruction of IAAF, to determine if Oscar’s prosthetic
legs gave him an advantage over other able-bodied athletes. It is pertinent to
note here that the basic notions of procedural justice were also disregarded
as Dr Robert Gailey (a scientist who was nominated by Pistorius to
participate in the Cologne testing) as he was allowed to participate only as
an observer and was allowed no input in the process. However, the cologne
tests and the subsequent sanctions of IAAF were successfully challenged
on the ground that there was no evidence to prove the fact that the use
of a particular prosthetic gave Oscar an edge over the non-users. Further,
the fact that Oscar was consuming the same amount of oxygen at the sub-
maximal sprinting speeds as other able-bodied runners provided the force
to Oscar’s above argument.

CAS held that there was no evidence to show the alleged advantage as per
Rule 144.2(e) and that there were “glaring due process flaws in the process”
which had resulted in the IAAF council’s decision of ban on Oscar from
IAAF sanctioned events. CAS further held that when the case related to the
eligibility of an athlete to participate, then it was mandatory that convincing
scientific evidence is to be provided to prove that the athlete gained a ‘net
competitive advantage’ over other athletes. CAS also commented on the
standard of proof needed in such similarly placed matters.

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Dutee Chand v. AFI & IAAF18- The case related to the challenge to
the validity of IAAF Regulation governing eligibility of Females with
Hyperandrogenism to compete in women’s competition (hereinafter
Hyperandrogenism regulations) by a 19 year old Indian athlete Dutee
Chand. Dutee was suspended from participating in any national or
international athletic events by AFI (Athletic Federation of India) and
SAI (Sports Authority of India) because the naturally occurring hormones
in her body were found to be above the prescribed limit under the IAAF
Hyperandrogenism Regulation. An application for arbitration was
made before the CAS, and it was observed by the tribunal that CAS had
jurisdiction to hear the case because both IAAF and AFI had submitted
to the jurisdiction of CAS.19 The claimant argued that she had not done
any external doping, and the hormones are occurring inside her body and
are a part of her body. Furthermore, experts have had their reservation
concerning the effects of the hormone reduction medical processes on
the body of the athlete, and no conclusive evidence exists to delineate the
effects of such forced reduction on the body.

Ms. Chand submitted before the tribunal that “Athletes are not prohibited
from competing in sport because they possess other natural genetic
advantages — for example height, lung capacity, foot size or visual acuity
above a certain limit. On the contrary, athletes who achieve sporting success
are usually those who fall outside normal parameters.” Going by the logic
given by IAAF under the Hyperandrogenism regulations the basketball
players having bigger hand size should be prohibited from participating
in the games because this would not be fair with the other players as they
will be naturally having better control over the ball. IAAF agreed that the
Hyperandrogenism regulations amounted to discrimination on the basis

18 Dutee Chand v. AFI & IAAF, CAS A/3759 (2014).

19 Id at 426, 436.

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of sex as there was no such regulation for the males. Hence, the burden on
IAAF was to show that the discrimination was justified.

The tribunal held that IAAF had not been able to justify the discrimination
under the garb of fair play cry and that there was “insufficient evidence
about the degree of the advantage that androgen-sensitive hyperandrogenic
females enjoy over non-hyperandrogenic females.”20 The tribunal took note
of various international studies and authors conducted in this regard and
held that the evidence was insufficient. The tribunal held the regulations
to be against the spirit of the Olympic charter that “Every individual must
have the possibility of practising sport, without discrimination of any kind”.21
Based on these observations, the panel suspended the Hyperandrogenism
regulations for two years. It was the effect of this ruling that the IAAF
amended its regulations and backed the same with specific scientific data.

The above catena of decisions brings out the plurality and ambiguity
prevailing in the international forum. Which rule is to be applied, which
process to be taken up, which authority is going to hear the dispute? These
case laws go on to show that there exists no straightjacket formula. However,
through the cases, the role of CAS as an International Court for sports
has been highlighted and CAS post the amendments have had substantial
autonomy and has decided cases having international implication on
Sports law. In view of the authors, to bring a global uniformity in rules
there needs to be an International Court which shall lay down a guiding
route for the national bodies which even if governed by different rules shall
test their decisions on the anvil of the international resolutions. CAS fits
this role aptly, and as the influence of the CAS decisions grows, they would
provide ‘lex specialis’ to guide the arbitral decisions within the general

20 See, Para 522 of the arbitral award, (July 15, 2019) (May 7, 2020, 03:41
PM) http://www.doping.nl/kb/3317/CAS/Dutee/Chand/ vs/AFI/IFFAI.pdf
21 Rule 4, Olympic Charter.

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process of international sports law. The authors propose that steps must
be taken for the development of ‘Lex Sportiva’ by the CAS decisions and
in moving towards certainty and uniformity. The internationalisation of
sports-related arbitration would provide an efficient regime would help
not only the international disputes, say for that matter between athlete
representing a nation and foreign chartered sports federation, but would
also assist in the domestic matters. For developing ‘lex Sportiva’ it must be
ensured that the decisions of CAS and another international body shall be
published and provided for in the public domain, in languages other than
French and English.

EXTENT UP TO WHICH THE COURTS

SHOULD INTERFERE
This section of the article would focus on the role that the courts have in
sports-related matter and would decipher as to what has been the trend and
extent of court intervention in sports-related disputes. In this part of the
article, the authors would do some globe-trotting and would come up with
the approach of the courts in different jurisdictions with regards to sports-
related disputes. The section would also give an insight into the standard of
review opted by the courts worldwide.

England- The courts in England have developed a legal tradition that the
courts do not generally intervene in sports disputes. These disputes are
left to be decided by the regulating authorities and special international
procedures so established by these authorities which are considered to
be “far better fitted to judge than the courts.”22 The approach of the courts
can be summed up by Lord Denning’s observation in the English case of

22 Vice Chancellor Megarry in the case of McInnes v. Onslow-Fane, 1 WLR

1520, 1535 (1978).

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Enderby Town Football Club Ltd v. Football Association Ltd: “[…] justice
can often be done in domestic tribunals better by a good layman than a bad
lawyer.”23 Hereby domestic tribunals Lord Denning meant the bodies which
are outside the hierarchy of the courts and include sports authorities. Thus,
the courts in England understand that the non-interference of the courts
would better serve sports. However, it is pertinent to note that the courts
in England do not have complete apathy to sports-related matters and
have interfered in cases where there has been a breach of natural justice or
restraint of trade. Concerning matters related to non-observance of natural
justice the English Court of Appeal24 has laid down some general principles
which are to be followed by the concerned sports authorities:-
• The complete notice of the case, which is to be answered by the accused is
to be provided to him beforehand.
• The accused should be allowed to present evidence, witnesses’ evidence
and cross-examine the witness of the prosecution.
• Moreover, there should be a right to a fair hearing and a reasoned decision
by unbiased and impartial tribunals as justice must not only be done but
must also be seen to be done.

For the restraint of trade issue, the English courts interfere when any
restriction goes beyond what is necessary to achieve some necessary and
desirable aim. The doctrine was discussed in the landmark judgment of
Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co.25 , and the
following was observed- “The public have an interest in every person’s carrying
on his trade freely; so has the individual. All interference with individual
liberty of action in trading and all restraints of trade of themselves, if there

23 Enderby Town Football Club Ltd v. Football Association Ltd, 1 Ch 591,

605 (1971).
24 Flaherty v. National Greyhound Racing Club, EWCA Civ. 1117 (2005).
25 Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co, AC 535
(1894).

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is nothing more, are contrary to public policy.” Thus any ban or restriction
placed upon any athlete by the sports regulation authority be it national or
international shall meet the criterion of reasonableness in their scope in
terms of time, area and extent.

United States of America- A similar position exists in the United States

of America. The position of the courts on intervention and their role can
be succinctly summarised through the observation of the Federal District
Court in Harding v United States Figure Skating Association26 where it was
held that-

“The courts should rightly hesitate before intervening in disciplinary hearings

held by private associations […]. Intervention is appropriate only in the most
extraordinary circumstances, where the association has clearly breached its
own rules, that breach will imminently result in serious and irreparable harm
to the plaintiff, and the plaintiff has exhausted all internal remedies. Even
then, injunctive relief is limited to correcting the breach of the rules. The court
should not intervene in the merits of the underlying dispute.”

European Civil Law Countries- Generally speaking, the stance of the

courts in the majority of European civil law nations is that the courts are
amenable to the settlement of disputes by the parties by the use of alternate
dispute resolutions. Concerning sports, the courts will not generally
interfere with disputes relating to the “rules of the game” of the sports
concerned. A more extensive understanding of the legal scenario in sports
law can be taken by reference to one of the most advanced legal systems
of Europe, i.e. Switzerland. The Swiss federal Code27 in its provisions
provides that a decision of the CAS is taken to be an arbitral award under

26 Harding v. United States Figure Skating Association, 851 F Supp 1476

(1994).
27 Art. 190(2) of Swiss Federal Code on Private International Law.

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the Swiss law and can be challenged only on restrictively limited grounds.
These grounds include the irregular appointment of the arbitrator, lack of
jurisdiction, against Swiss public policy, and where party’s right to equality
of hearing was not respected. Thus, the global position is somewhat
uniform in the civilised jurisprudence that the courts interfere only in
limited circumstances.

SUGGESTIONS FOR ARBITRATION IN

RESOLVING SPORTS-RELATED DISPUTES
The authors would now provide specific suggestions which can help in
bettering the future of arbitration in resolving the disputes related to sports.

The CAS Statute and Regulations were amended by the IOC on September
20, 1990, but has failed to create an independent CAS as the President of the
CAS shall also be a member of IOC according to Article 6 of the statute.28
There is a need for CAS to be a completely independent body which would
mean that its President should be knowledgeable in the field of Sports
and at the same time unaffiliated with the IOC. Furthermore, if CAS is to
become a truly independent tribunal, it will not have 30 of its 36 members
chosen by the IOC, 15 of which include IOC members. Therefore, the need
for an independent CAS is imperative, and the independence has to be
absolute with supervision being exercised by a higher authority.29

There is a need to lessen the powers granted to the IOC such as its election
process, self-governance and self-perpetuation as it answers to no higher
authority and is free to make decisions without appeal to other bodies. Even
the United Nations has no control over the IOC owing to the provisions

28 David J. Ettinger, The Legal Status of the International Olympic

Committee, 4 Pace Y.B. Int’l L. 97, 112 (1992).
29 Id.

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of Article 71 of the United Nation Charter. In such a scenario, even the

arbitration cases about sports disputes are met with abrupt endings. A
feasible way to counter this is the establishment of an “International Sports
Court”30 which would be analogous to International Court of Justice and
this institution would be the highest authority in terms of sports disputes
and would also supervise the actions of CAS. This would provide comfort
to any athlete on foreign soil and would protect and individual’s right to
due process.31

Another way to lessen the powers of IOC about adjudicating a dispute

which involves the IOC must include this clause:

“Any dispute arising from the present contract which the parties are unable to
settle amicably, shall be settled exclusively and definitely by a tribunal-of one
or three members-constituted in accordance with the Statute and Regulations
of arbitration of the Court of Arbitration for Sport (CAS). The parties
undertake to abide by the provision of the said Statute and Regulations and
execute in good faith the award to be rendered. They agree to establish the
seat of the tribunal in ... and to apply . . . law.”

Language and time effectiveness is another issue which needs to be looked

at when we talk about the necessary changes to be brought in. Working
languages for CAS is French and English, but there are various other
languages which the athletes are well-verse. Therefore CAS should ensure
that the translation costs should be borne by the parties or CAS itself. Time
effectiveness is of utmost importance because no amount of money can
substitute a medal in the Olympics or any international/national sporting
event. Hence, a specific period should be allotted by the CAS to speed up

30 Louis Henkin et al, International Law 318(2nd ed. 1987).

31 James AR Nafziger, International Sports Law: A Replay of Characteristics
and Trends, 86 AM J. Int’l L, 496-500 (1992).

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the Arbitration proceedings and allow the athlete to participate in time.32

• Ad-Hoc tribunals should be brought into games. In 1994, at the Paris
convention, all the International federations said that the decision of CAS
would bound them. However, none of these federations has delivered on
their promise. None of them quickly changed their rules to ensure that
CAS had the power of overruling their decisions. Hence, to counter this,
ad hoc tribunals can be brought into existence to prevent an athlete from
knocking at the doors of different organisations.33

• Quality of arbitrators being picked for a sports dispute needs to be properly

scrutinised. In most of the cases, people appoint arbitrators which they
want to be represented by, but there is an imperative need to know about
the different sport knowledge cases, and hence, the arbitrators need to be
adequately trained before appearing in such arbitration proceedings.

• The scope of lex Sportiva needs to be enhanced by ensuring greater and

equal accessibility to the opinions and judicial precedents of CAS, and
this has to be done by ICAS. Furthermore, there is a need to provide more
commentaries on the judicial pronouncements and opinions of CAS, and
this can be done by law students, scholars and professors which would
give a better insight than the lawyers who give their opinions on why they
were wronged. A critical component of a meaningful lex sportive and a
dynamic legal system must include this type of commentary.

• Online Arbitration should be used extensively for an efficient proceeding.

The most significant advantage is the fact that it saves time as well
as travel costs. Further, it serves as the best platform if the parties are
not comfortable in meeting each other and would instead prefer a non-
confrontational method. The issue of jurisdiction is avoided because the

32 Michael Lenard, The Future of Sports Dispute Resolution, 10 Pepp. Disp.

Resol. L.J. 173, 182 (2009).
33 Id.

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parties to the dispute will submit to an online provider and lastly it records
the evidence, statements, correspondence, pleadings and any other such
visual or oral communication electronically.

• To solve the problems between the owners and the players in a professional
sport would require the fundamental concept of “fairness” being
appropriately utilised. There must be parity between both the groups,
i.e. the players and the owners. This parity can be achieved via the use
of Grievance Arbitration34 as it provides meaningful remedies to resolve
collective disputes, thereby, not letting these ordinary disputes to pile
up and wreak havoc in the future. This is evident from the fact that the
inclusion of the Arbitration clause in the CBAs has settled a large number
of cases in the past few years. Hence, Grievance Arbitration can be used
to develop amicable relations between the owners and players, resulting in
a lesser number of disputes.

• To further improve the use of arbitration in sports leagues will require the
termination provision to be used by the players as well. As a general rule,
the owners have the power to cancel the contract and to allow mutuality
about employment relations a player must have the same right. This
enables the player to take his services elsewhere if he is mistreated.

Therefore, these suggestions could bring in the necessary and essential

changes to provide a better future for arbitration in solving the disputes
related to sports.

***

34 James B. Gessford, Arbitration of Professional Athletes’ Contracts: An

Effective System of Dispute Resolution in Professional Sports, 55 Neb. L. Rev. 362
(1976).

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EXPLOITATION OF MINORS IN
FOOTBALL:THE NEED TO ENACT MORE
PRACTICAL RULES
Nandighosh Karan Nanda1* and Hitesh Mallick2**

INTRODUCTION
As football gets competitive each year, clubs get fierce with signing players
that better their chances at competing for major trophies. Moreover, most
clubs are willing to pay any amount of money to get the best players to
represent them. Real Madrid signed Eden Hazard from Chelsea for a
massive fee of 100 million euros.3Manchester City and Paris Saint Germain
have invested vast amounts of money ever since their takeover in 20084
and 20115 respectively. However, these big clubs and small alike have also
invested in their youth Set-ups. Manchester City spent 200 million pounds
for their new football academy set up to produce and nurture young players.
6
Paris Saint-Germain had announced of their intentions to open six soccer

1 *
Student, B.B.A.LL.B, National Law University Odisha.
2 **
Student, B.B.A.LL.B, National Law University Odisha.
3 See, Eden Hazard: Profile (May 08, 2020, 12:48 AM) https://www.
transfermarkt.com/eden-hazard/profil/spieler/50202.
4 See, Manchester City: Timeline of a transformation since 2008 Sheikh
Mansour Takeover, BBC (August 31, 2018) (May 08, 2020, 12:48 AM) https://
www.bbc.com/sport/football/45372362.
5 Mark Walker, Leeds United news: Club not in talks with PSG owner
Nasser Nasser Al- Khelaifi over takeover, Independent, June 4, 2019, (May 08,
2020, 12:48 AM) https://www.independent.co.uk/sport/football/football-
league/leeds-united-news-takeover-rumours-psg-nasser-al-khelaifi-talks-
now-a8943451.html.
6 Jamie Jackson, Manchester City’s new 200 million pounds football
academy leaves club with no excuses, The Guardian, December 8, 2014(May 08,
2020, 12:48 AM) https://www.theguardian.com/football/2014/dec/08/
manchester-city-200m-football-academy-sheikh-mansour-pablo-zabaleta.

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Exploitation of minors in football: The need to enact more practical rules

schools in Turkey to raise players for their youth set-up with an investment
of close to a million Dollars etc. All big clubs invest heavily in their youth
set-ups, soccer schools and scouting to produce and find talented young
players.

However, why do these big clubs, even with their vast resources, invest in
academies when they can go ahead and buy players? There could be two
reasons for this notwithstanding UEFA’s homegrown players rule. Firstly,
younger players usually have a higher ceiling if appropriately trained, i.e.
they can achieve much more than established players if nurtured properly;
and secondly, clubs can earn massive profits by selling young players as the
minimal amount is invested in acquiring these players. Southampton made
a business model out of this. According to the CIES Football Observatory’s
study that was published in 2015 showed that their youth academy had
accumulated more than 90 million euros through selling their youth stars.7
However, this also means that clubs could take some unethical measures
to recruit young players for cheap because young players, while having the
best chance at profitability also are the most vulnerable to exploitation.
Moreover, if the current scheme of things is any proof, big clubs do not
shy away from violating FIFA norms meant for safeguarding the rights of
a minor.

Earlier this year, Chelsea was faced with a transfer ban and a hefty fine
for violating rules relating to safeguarding rights of a minor in football.
Which means they were not going to be able to register any new players
for two successive seasons. Chelsea is not the first team to have been in

7 Paul Thompson, Southampton has Europe’s most profitable youth

academy, GOAL (2015) (May 08, 2020, 12:48 AM) https://www.goal.com/en-
us/news/69/transfer-zone/2015/03/13/9775302/southampton-has-europes-
most-profitable-youth-academy.

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this situation. The big three of Spain’s La Liga, FC Barcelona,8 Real Madrid
and Atletico Madrid have all been in this situation as well where they faced
transfer bans for not conforming to FIFA’s. Regulations on the Status and
Transfer of Players (hereinafter “RSTP”). Not only these clubs but their
respective national associations were also fined for tacitly approving the
wrongdoing of clubs competing in their league. However, what are these
rules that Chelsea or Barcelona or the Madrid Clubs did not conform? Are
there any special rules that are to be kept in mind while signing young
players?

NEED FOR SAFEGUARDING

MINOR RIGHTS: HISTORY
With the start of commercialisation of football, there were a few problems
that persisted. The problems were brought out, deliberated and then ironed
out by the ruling in the case of Union Royale Belge des Sociétés de Football
Association ASBL v. Jean-Marc Bosman.9

In this case, Jean-Marc Bosman was a professional football player who had
signed for Liege but was entering his final months of the contract. His time
at Liege had not worked as well as he had hoped for and thus he was tempted
when an improved offer came from French second division side, Dunkirk.
Before the ruling in Bosman’s case, the standard was that even after the
expiry of the contract of a player, the player could not leave without the
club’s permission. It had to be through the consent of the club he belongs,

8 Ben Rumsby, Barcelona handed one year transfer ban for breaking rules
over International transfer of Under 18s, The Telegraph, April 2, 2014(May 08,
2020, 12:48 AM) https://www.telegraph.co.uk/sport/football/teams/
barcelona/10739015/Barcelona-handed-one-year-transfer-ban-for-breaking-
rules-over-international-transfer-of-under-18s.html.
9 Union Royale Belge des Sociétés de Football Association ASBL v. Jean-
Marc Bosman 1995 E.C.R. 1-04921

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Exploitation of minors in football: The need to enact more practical rules

where it decides to let the player go for free or if the buying club would pay
the amount demanded by the selling club.10 In this case, Bosman was not
given permission to leave and owing to the supposedly high demand of
Liege, Dunkirk was not willing to pay either. The transfer did not happen,
and the lawsuit followed. The court removed the club’s power to dictate
what a player can do following the conclusion of his/her contract, i.e., the
player can move freely once the contract has not been renewed. Secondly, it
also removed the three-plus two rule which mandated that a club can only
field three foreign players when playing in European Competitions and
along with that an additional two players who have been brought through
the academy.

The abolition of the 3+2 rule saw an 1800 per cent rise of foreign players in
the Premier League in four years post the Bosman Ruling.11 Clubs started
to sign agreements with EU associations with flexible nationality and work
permit rules and hence tapping into Non-EU talent pools, and clubs also
started signing deals with Non-European Clubs to sign players from a vast
Non-EU talent pool signalling an increased investment in foreign youth.12
This meant that the clubs did not have to spend on their academies; instead
they could just buy players for a cheaper amount.13

10 Gerard Brand, How the Bosman rule changed football - 20 years on, Sky
Sports, Dec 15, 2015, (May 08, 2020, 12:50 AM) https://www.skysports.com/
football/news/11095/10100134/how-the-bosman-rule-changed-football-20-
years-on.
11 Simon Gardiner & Roger Welch, Show Me the Money’: Regulation of the
Migration of Professional Sportsmen in Post-Bosman EuropeinProfessional Sport
in EU: Regulation and Deregulation (Andrew Caiger& Simon Gardiner
eds., 2000).
12 Christina Lembo, FIFA Transfer regulations and UEFA Player Eligibility
Rules: Major Changes in European Football and the Negative Effect on minors, 25
Emory International Law Review 539 (2011).
13 Id.

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Therefore it became imperative that the Footballing authorities frame rules

to regulate this practice which could potentially harm young players. FIFA’s
Regulations for the Status and Transfer of Players was the result of an informal
agreement reached between the European Union, FIFA and UEFA. The
international bodies thought fit to discuss the whole international transfer
system, and one of the outcomes was that International transfers of minors
were now subject to some agreed conditions. The football authorities had
to formulate and enforce a code that guarantees the sporting, training and
academic education to minor players.14 The introduction of RSTP was also
aimed at striking hard against trafficking of children or abuse in the process
of transfer.15 This gave rise to the first RSTP statute of 2001, which was
meant to bring in reform to existing transfer policies. The RSTP regulations
have been amended a few times, and it is because of the increase in transfer
activities that such a dynamic approach has been chosen.16

EVOLUTION OF THE RSTP REGULATIONS

THROUGH THE YEARS
In this section, we shall look at how FIFA has reformed RSTP to provide
a better mechanism for protection of interests of minors throughout the
years. Some amendments to the RSTP did not concern minors, and hence,
they shall not be discussed.

14 Outcome of discussions between the commission and FIFA/UEFA on

FIFA regulations on International Football transfers, European Commission,
Mar. 5, 2001 (May 08, 2020, 12:54 AM) http://europa.eu/rapid/press-release_
IP-01-314_en.html.
15 Serhat Yilmaz et al., Children’s rights and the regulations on the transfer
of young players in football, International Review for the Sociology of
Sport (2018).
16 Protection of Minors FAQ, FIFA, Sep 2016, (May 08, 2020, 12:54 AM)
https://img.fifa.com/image/upload/xbnooh14lcaxzadstknx.pdf.

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RSTP (2001) was the first time FIFA had codified and organised regulations
under Article 5 of FIFA statutes laying down rules of transfer. Furthermore,
it also brought in the very first provisions regarding a protection system
for the international transfer of minors. It defined the age group of under
eighteen (18) as minors for the regulations and also stated that players
within the EU/EEA could be transferred subject to some conditions. RSTP
stipulated that the maximum commitment that a minor can make to a
particular club is three years, i.e., the most extended contract a particular
minor could sign with a club with is three years.17

Then RSTP was amended again in 2005, as the first-ever RSTP was seen as
a bit challenging to comprehend and thus apply. Therefore, the amendment
of 2005 was more to create a user-friendly mechanism. It also made
some changes to the provisions regarding the protection of minors.18 The
significant difference between RSTP 2001 and RSTP 2005 is that while in
2001 regulations an association in EU/EEA could make provisions as to
the minimum age at which a player could transfer in the EU, but in 2005
it was cemented that the minimum age shall be 16.19 This may be because
of irregular rules of contract law owing to the age of minority within the
European Nations.20 There were four additional requirements that the
buying club had to observe which are similar to the requirements in place
today and will be discussed in the latter part of the paper.

17 FIFA Regulations on Status and Transfer of Players, 2015 (May 08, 2020,
12:55 AM) https://resources.fifa.com/image/upload/regulations-on-the-
status-and-transfer-of-players-2018-2925437.
pdf?cloudid=c83ynehmkp62h5vgwg9g.
18 Supra note 11.
19 Supra note 9.
20 Id.

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After 2005 regulations, the following significant amendment concerning

minor rights came in 2009 primarily because most associations were
negligent in applying the provisions.21 FIFA became tighter sealed with
these amendments concerning international transfers. First of all, it
was stipulated that every single international transfer of minor shall
be on approval of Sub-Committee duly appointed by the Players Status
Committee.22 It was also tasked with checking every first registration,
i.e., a player who has previously not been registered with a club and is
not of the nationality of the respective association in which he wishes to
be registered.23 The regulations also added Article 19(bis) to address the
loophole of unregistered academies. Now, each minor player that attends
an academy shall report to the national association under which National
Association it operates. This is irrespective of the fact that the academy
does not take part in a national championship or has any link to a club
participating in the national championship, whether it be legal, financial
or de facto.24

The next two amendments of 2015 and 2016 brought in the provision of
reducing the age limit for which an International Transfer Certificate is
issued. As per Article 9 of the RSTP, for any transfer of a football player
to take place from one football association to another, an International
Transfer Certificate (ITC) has to be issued by the association from which

21 Kester Mekenkamp, FIFA’s provision on protection of minors Part- 2: The

2009 reform and its aftermath, Asser International Sports Law Blog,
December 14, 2016(May 08, 2020, 12:54 AM) https://www.asser.nl/SportsLaw/
Blog/post/fifa-s-provision-on-the-protection-of-minors-part-2-the-2009-
reform-and-its-aftermath-by-kester-mekenkamp.
22 Laura McCallum, The Legislative History of FIFA’s transfer system, Edge
Hill University Files, September 1, 2017, (May 08, 2020, 12:54 AM) https://
www.edgehill.ac.uk/law/files/2017/09/LM-Presentation-Transfer-System.
pdf.
23 Id.
24 Supra note 16.

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the player is being transferred to the destination association, i.e., the

association which governs the destination club. It has been clarified that
the onus is on the National Associations to ensure procedural requirements
and regulatory framework for the protection of minors are respected.

Before the 2015 amendment, an ITC was not required for transfer of
players below the age of 12 years. However, this age was reduced to 10
years in the 2015 amendment. As far as the reduction in age from 12 to 10
for the requirement of an ITC, this was done due to the increased number
of international transfer of players aged below 12.25 We further understand
that this would also help prevent trafficking and exploitation of minors as
FIFA is kept in the loop for every single transfer.

The amendments required that every transfer for whom an ITC is required,
a subsequent approval from FIFA and an implementation of a five-year
rule is also required. The five-year rule says that if a minor has lived in a
country for five years and wishes to be registered with the association of
that country, then that is subject to the approval of the sub-committee.26

LAWS RELATING TO MINORS IN FOOTBALL

This section will be divided into two parts. First part will cover what a minor
means in football and what is the minimum age requirement for a player to
be offered a professional contract from a football club. The second part will
cover obligations on the part of the club to register an international transfer
of a minor and the steps taken under RSTP to prevent abuse of the process.

(a). Definition of a Minor

25 Circular Letter No. 1468, FIFA (Jan. 23rd, 2015).

26 Minor Player Application Guide, FIFA, Feb. 16, 2018 (May 08, 2020,
12:54 AM)

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The definition of a minor and their capacity to enter into contract differs
across countries. In the United Kingdom, anyone under the age of 18 years
is considered a minor. A minor’s agreement in the United Kingdom is
voidable the option of the minor.27 Thus, a contract with a minor is binding
on the adult but not on the minor, subject to some exceptions which are a
contract of service, apprenticeship and education.28 There arises the concept
of necessaries. Under this concept, a minor is bound under a contract
made for his benefit. In the case of Proform Sports Management Limited v.
Proactive Sports management limited and Paul Stretford,29 it was held that
Wayne Rooney was not bound by the contract which he signed when he
was 15 years old as it was a contract of representation by the football agent
who was not deemed as something beneficial. It was a trading contract and
hence avoidable. In the case, Proform Sports Management Limited (the
claimant) entered into a representation agreement with English footballer
Wayne Rooney. Six months before the expiration of this agreement, the
player and his father wrote to the claimant stating that they would not
renew the agreement when it expires. The defendants in this case, i.e.
Proactive Sports Management limited was owned by Paul Stretford
(Wayne Rooney’s father). On the expiration of the agreement with the
claimant, Wayne Rooney entered into a representation agreement with the
defendants. The claimants sued the defendants for unlawful interference
with and/or inducing of a breach of contract. The defendants filed for
summary judgment because inducing the breach of a voidable contract
with a minor did not attract any liability. The ruling also laid down the
principle that a player’s contract with the Football Club is one which can
be considered as a contract of necessaries as the football club provides the

27 Nicola Laver, Entering into a contract with a minor, In Brief (May 08,
2020, 12:57 AM)
28 Id.
29 [2007] 1 All ER 542.

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Exploitation of minors in football: The need to enact more practical rules

player employment.

There is no fixed age as to when a club can provide the player with a
professional contract. In England, a player aged 16 years can earn a
scholarship contract from a football club and then from the age of 17 years,
the club can offer him a professional contract, while in Italy no club is
allowed to offer a player under the age of 18 years, a professional contract.
There is a disparity in rules as to when a player can be offered a professional
contract, and it differs from nation to nation.
(b). Rules for an International Transfer of Minors
Article 19 of FIFA’s RSTP provides that no player under the age of 18
years is eligible for an International transfer. However, there are some
exceptions to this rule which are discussed below:

The Parent Exception: Article 19(2) (a) provides “The player’s parents
move to the country in which the new club is located for reasons not
linked to football”.30 This exception permits the International Transfer
of a player aged under 18 years if his parents move to the country
where the club is located for reasons utterly unrelated to football.
This exception is often the most misused provision of FIFA RSTP
while completing International transfers of minors. The reason is
quite simple. FIFA cannot establish a link between the Parents’ new
employers and the new club where the minor is being transferred.
The landmark and the most cited judgment of this exception is
the case of Caballero v. FIFA.31 In the instant case, sixteen-year-old
Paraguayan footballer Carlos Javier Acuna Caballero was signed by

30 Article 19(2) (a), FIFA Regulation on Status and Transfer of Players,

2019.
31 Carlos Javier Acuna Caballero v. FIFA &Asociacion Paraguaya de Futbol,
CAS/2005/A/956.

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Spanish first division club Cadiz CF after he had impressed in an

Under-20 FIFA tournament. However, it was discovered that mother
and brother of Caballero recently moved to Spain and his mother
took an employment contract with a restaurant. This happened a
week after signing (on behalf of her son) the contract with Cadiz
C.F. The Paraguayan Football Association refused to grant him an
International Transfer Certificate required for the completion of the
transfer, citing Carlos’ age as a primary concern. The matter went to
the CAS wherein FIFA’s decision of not allowing Carlos to register
with Cadiz C.F was upheld because of the following reasons:

(i) FIFA’s rules regarding the same protect any disruption in

the lives of such minors in case their Football career fails
after such an International transfer. So, it can be said
that such laws pursue a legitimate object.

(ii) Secondly, reasonable exceptions are provided in such

law, which means that they are proportionate to the ob-
ject sought.32

The EU Exception:33 The transfer takes place within the territory of

the European Union (EU), or European Economic Area (EEA) and
the player is aged between 16 and 18. In this case, the new club must
fulfil the following minimum obligations:

(i) It shall provide the player with an adequate football educa-

tion and/ or training in line with the highest national stan-
dards.

32 Supra note 8.
33 Article 19(2) (b), FIFA Regulation on Status and Transfer of Players,
2019.

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Exploitation of minors in football: The need to enact more practical rules

(ii) It shall guarantee the player an academic and/or school

and/or vocational education and/or training, in addition to
his football education and/or training, which will allow the
player to pursue a career other than football should he cease
playing professional football.

(iii) It shall make all necessary arrangements to ensure that the

player is looked after in the best possible way (optimum liv-
ing standards with a host family or in club accommodation,
the appointment of a mentor at the club, etc.).

(iv) It shall, on registration of such a player, provide the relevant

association with proof that it is complying with the afore-
mentioned obligations.

The object of this exception is to provide an alternative career to a football

player if his career does not transpire as expected. This concept of ‘dual
career’ is essential to FIFA because it acts as a security for the immigrant
player from falling prey to socio-economic problems.

The association where the player’s club is registered has the responsibility
of carrying out investigations to ensure that the clubs continue to comply
by the provisions of Article 19 of the RSTP to ensure the development of
the players registered with them.34 This provision cast a responsibility on
the Football Association of the country. However, the EU exception has
always been subject to immense scrutiny and controversies owing to two
reasons. Firstly, it is exclusively favourable to clubs in EU and EEA by giving
those clubs a chance to transfer such players which others clubs, competing

34 Burcin Celen et al., International Transfer of Minors: Recommendations

to Improve the Protection of Young Players in the Current Transfer System, CIES,
July 16, 2010(May 08, 2020, 12:57 AM) http://www.ciesuni.org/sites/default/
files/international-transfers-of minors.pdf.

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against such clubs in various competitions, cannot transfer.35Secondly, this

rule is discriminatory on the face of it, against players from a Non-EU or
EEA country as he would not receive the same level of protection as players
who fall in the said category.

The Border Exception:36 Article 19(2) (c) of the RSTP states that -

“The player lives no further than 50km from a national border and the club
with which the player wishes to be registered in the neighbouring association
is also within 50km of that border. The maximum distance between the
player’s domicile and the club’s headquarters shall be 100km. In such cases,
the player must continue to live at home and the two associations concerned
must give their explicit consent.”

This provision allows the players from a few particular countries to choose
the club they would like to play for as the nearest club in their country
is often at more distance than a club across the border where the player
wishes to play.37 This provision is quite easy to implement and negates any
possibility of any trafficking happening.

Apart from the exceptions listed down in Article 19(2), a few additional
exceptions are also applicable in cases which involve students. According
to the CAS, the exceptions listed down in Article 19(2) are ‘not exhaustive’.
The additional exceptions are as follows:

(i) If the player concerned can establish beyond a reasonable

doubt that the reason for his movement to another country
was purely academic and not related to football, then the

35 Id.
36 Article 19(2) (c), FIFA Regulations on Status and Transfer of Players,
2019.
37 Supra note 26.

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International transfer of such a player can be allowed.

(ii) “The international transfer is also allowed in cases in which

the Association of origin and the new club of the players con-
cerned have signed an agreement within the scope of a devel-
opment program for young players under certain strict con-
ditions (agreement on the academic and/or school education
in which authorisation granted for a limited period).”38

ADDITIONAL SAFEGUARDS PRESENT

TO PROTECT MINORS
FIFA’s Transfer Matching System (hereinafter “TMS”) was approved at
the 57th FIFA congress in Zurich in 2007.39 The objectives of enacting this
provision are as follows:

(i) To provide all available details of a transaction to football’s

governing authorities when an International transfer of a
player takes place.

(ii) To increase the transparency in the entire process of a player

transfer.

(iii) To detect any discrepancy in a transfer or take notice of a

fraudulent transfer.

(iv) To protect the interests of a transferred player and ensure

that clubs that trained young players receive their compen-
sation due to the players’ new clubs.

38 FC Midtjylland A/S v. FIFA, CAS 2008/A/1485.

39 Circular Letter No. 1205,FIFA (Sept. 23, 2009).

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(v) To modernise the process of player transfers by having in

place an online system which replaced the lengthy and er-
ror-prone paper contracts and fax machines.

The TMS puts an obligation on football association of the country and club
for putting correct information related to a transfer in the system.40 All
member associations of FIFA are required to keep all information related
to a transaction like details of the player; clubs; agent; etc., up to date.41 This
information helps the TMS compliance and monitoring team to decide
whether the information entered is correct, the legitimacy of transfer and
to identify any other potential irregularities.

The TMS requires the clubs to enter the following information

regarding a transfer into the system:

(i) The names of the clubs and member associations involved;

(ii) Personal details (Name, Date of Birth, Nationality etc.) of

the player being transferred;

(iii) Nature of transfer in question is a permanent transfer, a loan

or a trade;

(iv) Details about the financials involved in a transfer like - trans-

fer fees; agent commission; training compensation; payment
schedules and other details related to the payment.

40 The TMS Explained, FIFA, Sept 30, 2010, (May 08, 2020, 12:57 AM)
http://www.fifa.com/aboutfifa/organisation/footballgovernance/news/
newsid=1310345/index.html.
41 Id.

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FIFA has tried its best to prove that the above procedure is infallible and
the details entered are correct as it requires the clubs involved to upload
a series of documents (including the copy of the player’s new contract of
employment, the transfer agreement between the clubs, proof of payment
etc.) to prove that the information entered are legitimate and authentic.
Once the procedural requirements are complied with, the system generates
the International Transfer Certificate (ITC) to complete the entire transfer.
This system is as opposed to earlier mailing or the faxing of the ITC between
clubs.

FIFA Players Status Committee (hereinafter “PSC”) appoints a subcommittee

to review the application for the transfer of minor for ensuring that the
requirements and paperwork are up to the mark. Recently, the transfer of
Manchester City star Jadon Sancho to Borussia Dortmund was held up
to ensure that the teaching facility for Sancho was up to the mark.42 This
process clearly shows the importance that FIFA gives to the academic
element while deciding on the transfer of a minor. It is only after, sub-
committee approves the application for the transfer of minor, a request for
the International Transfer Certificate (ITC) can be made.

Article 9 of the FIFA RSTP says “Players registered at one association

may only be registered at a new association once the latter has received an
International Transfer Certificate (ITC) from the former association. The
ITC shall be issued free of charge without any conditions or time limit. Any
provisions to the contrary shall be null and void. The association issuing the
ITC shall lodge a copy with FIFA.”43

42 James Severn and William Wilson, A guide to FIFA rules on the

International Transfer of minors, Thomas Cooper, January 2, 2018, (May 08,
2020, 12:57 AM) https://www.thomascooperlaw.com/guide-fifa-rules-
international-transfer-minors/.
43 Article 9, FIFA Regulation on Status and Transfer of Players, 2019.

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Said provision means that the new association cannot register the player in
question unless and until the ITC is received. The primary purpose of an
ITC is to determine the training compensation payable for players. Earlier
the compensation was calculated from the age of 12 to the age of 23after
the player signed his first professional contract. Every professional transfer
of the player ends with a season of the player’s 23rd birthday. However,
effective from 1st March 2015 (the 2015 amendment of the FIFA’s RSTP),
FIFA has now reduced the age limit for the requirement of an ITC from 12
years to 10 years, and therefore, now, the compensation has to be calculated
from the age of 10 to the age of 23.

THE CASE OF FOOTBALL CLUB BARCELONA

AND REAL MADRID FOOTBALL CLUB
Real Madrid and Barcelona have presented two of the most critical cases in
the field of Article 19, and the sanctions are given to them were exemplary
in the sense that two of the biggest clubs were punished strictly. Before
going into the cases, it is essential to understand one structural and
administrative fact about the Spanish sporting system, i.e., the way Spanish
law governs its sporting bodies inside of the state.

According to Article 148 of their constitution and the law of sport (ley
10/1990), Spanish governs its sport through 17 individual regional
associations (“Comunidades Autónomas). These associations have
territorial competence throughout their region, and they can also license
and register players and the registration by these regional bodies is
mandatory if the players are to participate in regional competitions. The
clubs have to affiliate \ their regional associations mandatorily. The players
are registered with the national body for football (Real Federación Española
de Fútbol) if they wish to play in the national competitions. The clubs and
players also have to abide by the rules and regulations of these regional

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associations.44

a). The Barcelona Case {Fútbol Club Barcelona v. Fédération

Internationale de Football Association (FIFA)}45
The brief facts of the case were that FC Barcelona (FCB) and the national
federation, Real Federación Española de Fútbol (RFEF) were investigated
for the transfer and registration of 31 players. Post investigation they were
subsequently charged for the violation of Article 5, Article 9.1, Article 19
and Article 19bis of RSTP.46 FIFA Disciplinary Committee formally placed
sanctions, and then FCB appealed to the FIFA Appeal Committee. The
Appeal Committee dismissed their appeal and forced them to go to the
Court of Arbitration for Sport.

On violation of Article 5 of RSTP which talks about mandatory registration

to participate in organised football, FCB pleaded that the players were
registered with their regional federations of Catalonia as part of Spain’s
constitutional framework which required that players should only be
registered with the national federation if they take part in national
competitions. They also claimed that FIFA had accepted these parts of the
statutes of the RFEF. To this, FIFA contended that these registrations are
insufficient as these regional bodies are not registered with FIFA like RFEF.
In the end, they were not found guilty of breaching Article 5 because they
could not register directly with the RFEF because of Spanish rules. The

44 See, Serhat Yilmaz, Protection of minors: lessons about the FIFA RSTP
from the recent Spanish cases at the Court of Arbitration for Sport, The
International Sports Law Journal (2018).
45 Fútbol Club Barcelona v. FIFA, CAS 2014/A/3793.
46 Enric Ripoll Gonzalez, The transfer of minors and the need for legal
certainty- Analysis of the Barcelona, Real Madrid and Atletico Madrid CAS
awards, LawInSport, Dec. 5, 2018(May 08, 2020, 12:59 AM) https://www.
lawinsport.com/topics/item/the-transfer-of-minors-and-the-need-for-legal-
certainty-analysis-of-the-barcelona-real-madrid-atletico-madrid-cas-
awards.

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panel defined the association under article 5 meant National Associations,

associations registered under FIFA and not regional Associations.

On the violation of Article 9, which talks about obtaining an International

Transfer Certificate from other associations before the player’s registration,
the club stated that children under 12 years of age do not require an
International Transfer Certificate. The pleading was helped by a confusion
provided by the official commentary for the 2005 regulations where it said
that the provision for ITC only exists for children above the age of 12 but
also stated that the content of the RSTP does not apply to those under
12 years of age.47 CAS said that though the article states that there is no
obligation for the request of ITC for children under the age of 12, but that
does not mean that they can be transferred as Article 19.1 prevents it.

On violation of Article 19 which talks about the prohibition on the

international transfer of minors, CAS found that FCB had breached the
regulations and since the clubs can initiate the process of a transfer they
must be the ones to observe the ban on the international transfer of minors.
Barcelona had not followed the legal safeguards.

On violation of 19bis, which require the clubs to report all minors attending
their academies, it was found that just registration with the associations is
not enough and that reporting to the national association is an independent
task and must be followed. CAS also added that this sanction was procedural
and that they do not doubt the quality of the conditions of La Masia, the
academy of FCB.48

47 Id.
48 John Shea, Six key lessons for clubs on the protection of minors from the
FC Barcelona and the Real Madrid appeals, LawInSport, August 1, 2017 (May
08, 2020, 12:57 AM) https://www.lawinsport.com/topics/articles/item/six-
key-lessons-for-clubs-on-the-protection-of-minors-from-the-fc-barcelona-
real-madrid-appeals?highlight=WyJyc3RwIiwiJ3JzdHAnIiwicnN0cCdz

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(b). The Real Madrid Case {Real Madrid Club de Fútbol v. FIFA}49

When the case of Real Madrid50 came for adjudication came before the sole
arbitrator, it mainly had four issues to decide on which are as follows:

(i) Applicability of Article 19 of the RSTP to minors below the

age of 12 years

(ii) Difference between reporting and registering minors present

in the academies of the clubs under the provisions of Article
19 bis of the RSTP and the registration of such minors with
the respective Football associations of the country.

(iii) Liability of the Football Associations of the respective coun-

tries concerning the compliance with FIFA RSTP’s estab-
lished regulatory framework and,

(iv) Liability of both, the clubs and the respective associations

under Article 5 of the RSTP with respect to registration of
minors.

Regarding the applicability of Article 19 of the RSTP to minors below

the age of 12 years, the sole arbitrator in Real Madrid’s case was
critical of FIFA for its ambiguous rules and failure to provide with
a clarification to the respective associations. In fact, before Circular
No. 146851, there existed no particular rule or law of FIFA, which
clearly stated the applicability of Article 19 of the RSTP to players
under the age of 12 years. The sole arbitrator, therefore, very rightly,
in the authors’ opinion, refused to apply the reasoning of the panel of

Il0=#_ftn15
49 Real Madrid Club de Futbol v. FIFA, CAS 2016/A/4785.
50 Id.
51 Circular Letter No. 1468, FIFA (Jan. 23, 2015).

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arbitrators in the case of FC Barcelona52 and thus concluded that Real

Madrid had not done anything irregular concerning the provisions
of Article 19 of RSTP while registering 4 players below the age of 12
years, with the club.

As far as the second issue is concerned, Real Madrid argued that the
registration of the players with the respective regional associations was
sufficient to comply with the provisions of Article 19 bis of the RSTP
regarding registration as well as reporting of the players. However, the sole
arbitrator rejected the club’s arguments to conclude that the requirement
of reporting the player under Article 19 bis is different from the one of
registration of the player under Article 5 of the RSTP and held the club
guilty of violating the reporting requirements under Article 19 bis.

When the question of liability of the national football association (Real

Federacion Espanola de Futbol or the “RFEF”) with regards to compliance
with the regulatory framework in FIFA’s RSTP came up before the sole
arbitrator, he noted that the RSTP’s goal is to oversee and govern the
International transfer of players which, of course, takes place between the
national associations of the countries in question. This clearly means that
all affairs regarding the transfers and first registrations of minors must
remain in the hands of the national associations instead of being delegated
to the regional associations, as was the case in Spain.53

About the liability of the club and the respective national association under
Article 5 of the RSTP, the sole arbitrator accepted Real Madrid’s argument
that registration of the minors with the regional association was acceptable
because of the national regulations. This was because the registration of
players with the regional association was mandatory for them to play in

52 Supra note 38.

53 Id.

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the regional competitions as such regional associations enjoy exclusive

competency under the Spanish law. Secondly, the regional association in
the case of Real Madrid had immediately informed the RFEF about the
registration of minors by Real Madrid. This act, according to the sole
arbitrator, was considered to be sufficient enough to comply with the
registration requirements of Article 5 of the RSTP.

CONCLUSION AND SUGGESTIONS

FIFA, as we saw, has been quite active in amending the RSTP provisions
through these years to afford more and more protection to minors.
Furthermore, it has been an excellent move to keep the law dynamic and
up with the time as clubs and academies try to circumvent laws meant to
protect the most vulnerable. However, as with every law, loopholes are
found out, and the efficiency and intensity of legislation are lessened.

For example, the usual punishment for Article 19 of RSTP has been transfer
ban just like we have seen in the cases of Chelsea54 or Barcelona.55 But there
is a significant time gap between the investigation period and when the
judgment is actually made towards a transfer ban. For example, in the case
of Chelsea, the investigation allegedly went on for three years as reported
by French Website, Mediaparts.56 So, the considerable gap informally gives

54 Tom Doyle, Chelsea Transfer Ban Explained: What we know so far about
FIFA blocking new signings for two windows, Evening Standard, June 23, 2019
(May 08, 2020, 01:01 AM) https://www.standard.co.uk/sport/football/
chelsea/chelsea-transfer-ban-explained-what-we-know-fifa-blocked-
signings-two-windows-sell-players-a4173781.html.
55 Chelsea Transfer Ban: Previous sanctions imposed by FIFA, Irish
Examiner, February 22, 2019(May 08, 2020, 01:02 AM) https://www.
irishexaminer.com/breakingnews/sport/soccer/chelsea-transfer-ban-
previous-sanctions-imposed-by-fifa-906431.html.
56 Chelsea: FIFA allegedly recommends Blues handed two- year transfer ban

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the accused club a reasonable amount of time to sort their transfer business
given a looming transfer ban, i.e., register players before the application
of the transfer ban. So, in reality, the blow of the transfer ban is not felt as
much. While this practice cannot be proved beyond a reasonable doubt,
but a safe assumption can be made. Moreover, maybe that is why Chelsea
did not wait for the summer transfer window of 2019 to formalise the
transfer.57 A provision should be made with regard to this.

In our opinion, FIFA should make the investigation process and period
more transparent. Through that, FIFA could introduce rules that affect
transfers made by the club when it is formally investigated. We would suggest
that FIFA divides the investigation process into two parts. A preliminary
investigation where FIFA just investigates on a prima facie form and when
there is a material substance found against a club, proceed to a more
advanced form of investigation where FIFA notifies the club in a public
manner. During that period, the club in question should not be allowed to
make permanent transfers, instead just temporary loan deals amounting to
a maximum of a year. Completely disallowing transfers would weaken the
club against its competitors, so loan deals allow the club to strengthen, but
since it is a loan deal, the club is not allowed to benefit from their possible
violations and also deter prospective players from considering a club who
do not conform to the established legal standards. This step might make the
big clubs much more severe about the regulations regarding minors. Yes,
this might seem a bit unfair to the clubs, but Article 19 has been brought

after signing of minors, BBC, Nov. 15, 2018(May 08, 2020, 01:02 AM) https://
www.bbc.com/sport/football/46218627.
57 Roger Gonzalez, Chelsea Transfer Ban: What does the two window
punishment mean for Eden Hazard, Christian Pulisic and more, CBSS Sports,
February 22, 2019 (May 08, 2020, 01:02AM) https://www.cbssports.com/
soccer/news/chelsea-transfer-ban-what-does-the-two-window-punishment-
mean-for-eden-hazard-christian-pulisic-and-more/.

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Exploitation of minors in football: The need to enact more practical rules

in to prevent social evils like child trafficking, the ramifications of which

travel beyond the sport. So, FIFA has to take a stern stand.

And FIFA has to impart a stricter form of punishment to the associations.

While FIFA fines these associations, like the Football Association in
the Chelsea case,58 there needs to be something more severe. We would
suggest that the league be sanctioned with one less spot in the European
Competitions, the season succeeding the season when the final order was
passed.

Another suggestion that we wish to make is that FIFA should ensure that
all the National Associations have similar rules concerning the minimum
age at which a club can offer a player a professional contract. Because this is
one loophole that clubs have exploited for a very long time like the clubs of
England who can offer a professional contract at the age of 17 as against say
Spain or Italy where clubs can only offer professional contracts when the
players turn 18 years old.59 This can hurt the league that is selling players as
the clubs do not receive enough compensation for a promising player60 and
may resort to more unorthodox methods.

While these suggestions are merely theoretical and the practical effects
can never be measured because the kind of legal resources, it would take
them very little time to find loopholes within the system if the cases of Real

58 Chelsea FC, The Football Association sanctioned for International Transfer

of minors, FIFA, February 22, 2019, (May 08, 2020, 01:23 AM) https://www.fifa.
com/about-fifa/who-we-are/news/chelsea-fc-the-football-association-
sanctioned-for-international-transfers-of-mi.
59 Matt Rogers, The business of transferring minors in football - Can more
be done to protect young footballers?, LawInSport (Oct. 23, 2015) (May 7, 2020,
03:41 PM) https://www.lawinsport.com/topics/sports/item/the-business-of-
transferring-minors-in-football-can-more-be-done-to-protect-young-
footballers.
60 Id.

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Madrid or Barcelona or Chelsea are of any reference. However, one thing is

for sure that there is a need for stricter regulations. FIFA has to put its foot
down and make sure the ethical and the legal standards are always met so
that the values of the game are always conserved.

***

219
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