INTRODUCTION
The legend of Kerry Packer is well known to every cricket lover in the world. Through his World Series Cricket (‘WSC’) Packer introduced to the world, international cricket as it is today. Cricketers are demigods and handsomely paid, all courtesy Packer. WSC inventions are ubiquitous in cricket, be it the day and night games, the coloured dressing, helmets, white balls or revolutionary broadcasting of the Sport itself. (Williamson) Packer’s marketing wrecked havoc at Cricket Australia. This was the first time a real competitor to the Governing bodies and the International Cricket Council (‘ICC’) had emerged. The ICC had retaliated by indefinitely banning all 34 first class cricketers who had signed up to play in Packer’s unsanctioned tour.
In the case of Greig v Insole ([1978] 1 W.L.R. 302), the English High Court applied the common law doctrine of restraint of trade to restrictions imposed in the context of sports. The ICC argued that it was legitimate of them to ban such players in order to properly organise and administer cricket. The Court agreed that it was the ICC’s preprogative to protect it’s annual calender and related revenue but they ruled the total and retrospective ban from first class cricket on Packer’s contract players as unreasonable and unjustified.
Through this short note we will look at Packer’s contemporaries in a number of sports in India and see how sports’ governing bodies have responded to the same threat, decades later. We will examine through the crevice of competition law, their (Governing bodies in sports) constitution and functioning.
NATURE AND OPERATION OF GOVERNING BODIES IN SPORT
Sports law has a progressivly international regime and one that incorporates within itself labor laws, contract laws, criminal laws, administrative laws, competition law, intellectual property rights, law of tort, media laws among others. These laws come into play when greater issues of public order, drugs, safety, disciplinary measures, conduct and broader issues like restraint of trade, anti competitive behaviour, match fixing and the commercial exploitation of sports are being deliberated over.
Traditionally, these issues were irrelevant as sports was a leisure activity and one which the community participated in after a tiring day at the factory. Subsequently, when sports started to get regulated to maintain this traditional autonomy and separation from politics the Olympic Charter restricted government influence of sports federations. This autonoumous characteristic of sports’ regulators and governing bodies was reiterated in Aparthied South Africa. Politics and sports were innstrinsically entwined in South Africa and the Government used sport as an instrument of separation. However, this global framework of sports governance ensured an international boycott of the country and was one of the instrumentalities that led an isolated Aparthied South Africa into submission. (Mail and Guardian) The International Olympic Association (‘IOA’) is at the centre of this framework.
In India, Sports is a state subject[1] and bodies are registered as societies.[2] State Olympic Associations (‘SOAs’) and National Sports Federations (NSFs) promote sports and organise events. Government plays an active role in Sports through the Ministry of Youth Affairs and Sports (‘MYAS’). They provide infrastructure and financial assistance to NSFs and SOAs. For non-Olympic Sports there are equivalent Federations like the Board of Control for Cricket in India (‘BCCI’) that are direct affiliates of their respective international federations. These federations follow a pyramid structure for organising sport. (Singhania) The EU through its Helsinki Report[3] acknowledges that to maintain the integrity and uniformity of sports and in sports, there is a requirement of singularity of governing bodies. Governing bodies also claim the exception of ‘Specificity of Sport’ and say that certain sporting activities have to be excluded from competition law analysis. The EU Courts in the Meca-Medina case ((2006) ECR I-6991) have divided activities as those that are pure sporting functions and those that have a substantial economic impact. The latter would fall within the purview of competition law. The former according to the courts, though restricting competition, has led to achieving of a larger public objective of protecting the integrity of sports in the world. They also decided that if the anti-doping legislation had been discriminatory in its nature then that would not escape Treaty provisions.
THE INDIAN SCENARIO
The Competition Commission of India (‘CCI’) is yet to come up with a judgment on these lines or even discuss granting sports special exemptions. Majority of complaints with respect to anti competitive practices relate to Sections 3and 4 of the Competition Act of India. Several sports’ governing bodies have come under the radar of the CCI over the past decade. In the recent case of D. Pillay v M/S Hockey India (CCI, 73/2011)CCI held that such societies under Section 2 would constitute a person and hence if they involve themselves in anti competitive practices, they can be prosecuted by the CCI. In this particular case it was alleged that HI denied market access to Indian Hockey Federation’s (‘IHF’) organisers, players, sponsors and broadcasters and also imposed unfair code of conduct agreements onto the players who played in the rival League (Anti competetive agreement under Section 3). The CCI concluded that there was dominance enjoyed by HI as the sole regulator of the sport in India but that no abuse of this dominance took place. Heavy reliance was placed on the proportionality test adopted by the European Court of Justice (‘ECJ’) in Meca-Medina. The code of conduct agreement was held proportionate to HI’s objectives.
A similar analysis has also been conducted in Steel Authority of India Limited (‘SAIL’) v Jindal Steel case (SAIL v Jindal), where the Commission held that as 25 percent of the market was non- Indian Railways (‘IR’) that a Memorandum of Understanding (‘MOU’) between SAIL and IR could not be anti competetive. The standard that had been provided for in the Supplementary order accompanying the majority order is one that we should be admiring. This made use of the best practice recommendations. The order acknowledges the fact that SAIL and IR are not in contravention of Sections 3 and 4 of the Act and holds that there is no competition in the market of railway service because of government policy. It recommended that the Ministry of Railways and IR should carry out a comprehensive review of the MOU as the market in the present had other new producers who were capable of supplying rails to IR. A similar reasoning has been adopted in the HI case as well. The Commission did call out HI on the point that it was the sole regulatory body in India for the sport and hence should put in place an effective internal control system to ensure that its regulatory powers cannot be abused when considering and deciding on any matters relating to its commercial activities. They added that HI should set up a streamlined, fair and transparent system for issuing no-objection certificates to players for participating in events organised by foreign teams or clubs. In another case based on a similar premise, the Delhi High Court has asked the CCI to see if the All India Chess Federation is abusing its dominant position by “prohibiting players from associating themselves with other chess federations. ” (The Economic Times)
Nevertheless, the most important case in this series is that if S. Barmi v BCCI. (CCI, 61/2010) Here the Commission takes note of the pyramid structure and accepts that monopoly of sports federations is a natural outcome of the makeup. However, they point to the fact that BCCI extended its monopoly to the new cricket format of the Indian Premier League (‘IPL’) and consequently used its regulatory powers to further and protect commercial interests. This they concluded was a situation wherein the regulator was the beneficiary and that this violates the Act. The Statement of Good Governance Principles and ICC Byelaws were refered to, to surmise, “there should be a clear demarcation between the governing body’s governance function and any commercial activities.”[4] The BCCI’s treatment of the Indian Cricket League was held as abuse of its dominant position and as contravening Section 4(2)(c). However, this judgment has been deemed unsustainable by the Competition Appellate Tribunal as it feels that the Commission did not follow the principles of natural justice as it had relied on undisclosed evidence. (Financial Express)This was an important judgment and one that was leading governing bodies in sports towards the principle of accountability. Post this judgment, of late there has been a tiff between the Sports Ministry and the Athletics Federation of India (‘AFI’). The Ministry has complained to the CCI that the AFI is trying to kill the growth of athletics at grassroots level by assigning to itself the power to approve of any marathon event. If the AFI does not give permission, the same would not be able to take place. (DNA)This last incident speaks to the entrenched involvement of politicians and politics in Governing Bodies.
THE WAY FORWARD
As time passes, more issues with respect to governing bodies are coming to the fore and there is this imminent need to reevaluate our Sports Policy to ensure better governance and zero anti competitive practices. If our sports’ governance bodies were to be made accountable and their workings transparent then corrupting practices that lead to anti competitive behaviour could be checked into balance. To bring about accountability it is important to have an independent regulator of sports in India. This authority could function like the Telephone Regulatory Authority of India to regulate governing bodies in sports and ensure that a fair and transparent ‘level playing field’ exists and competition thrives in that arena.
Such a change could be brought about through the introduction of an Act on the lines of the Australian Sports Commission Act of 1989 which was enacted to establish the Australian Sports Commission (‘ASC’). The ASC is a statutory authority of the Australian Government and is responsible for advancing an active national sports system that offers improved participation in quality sports to all Australian citizens. The ASC works with a range of national sporting organizations, state and local governments and schools to ensure that sport is accessible. Along with this a dispute resolution body on the lines of the Appellate Sports Tribunal (as is proposed in the Draft Sports Bill of 2013) could be formulated to ensure checks and balances within the system.
As the commercial value of Sports through broadcasting, merchandising, ticketing etc. is increasing, a Sports Tribunal along with an independent regulatory authority could help in delineating economic functions of governing bodies from their pure sports’ related functions. This would further deplete the chances for their ever being abuse of dominance within this pyramidical formation.
CONCLUSION
Regulation of sports’ governing bodies at the national level is a tall order and one that would not only require tremendous political will but also cooperation at the international level. Representation in sports and victory at sporting events like the Olympics, FIFA World Cup, World Cup Cricket among others is often equated to national pride and success. This was most visible during the Cold War. All through the War, the United States and the United Socialst Soviet Republics expended a considerable amount of their energy and resources at upstaging the other, at the Olympics. China has taken this tradition into the twenty first century. To legitimately continue these legacies and to maintain ‘Specificity of Sports’ sporting bodies and federations need to function in an accountable, fair and trasparent manner. If these bodies continue to abuse dominance from their natural monopoly status, they will soon find themselves embroiled in competition law disputes sans immunity.
WORKS CITED
Williamson, Martin. World Series Cricket: A Brief History. http://www.espncricinfo.com/worldseries/content/story/72632.html (accessed July 15, 2015).
Greig and Others v. Insole and Others. [1978] 1 W.L.R. 302 (House of Lords, 1978).
Mail and Guardian. “Apartheid: The Political Influence of Sport,.” 16 January 2007. http://mg.co.za/article/2007-01-16-apartheid-the-political-influence-of-sport (accessed July 5, 2015).
Singhania, Vidushpat. “ League Sports: Applicability of Competition Law,.” LKS. http://www.lakshmisri.com/News-and-Publications/Archives/Publication/League-sports-Applicability-of-competition-law (Last visited on July 5, 2012). (accessed July 6, 2015).
David Meca Medina and Igor Majcen v. Commission. (2006) ECR I-6991
Dhanraj Pillay v. M/S Hockey India. Case No. 73/2011
SAIL v Jindal Steel . 2010 8 UJ SC 4093
The Economic Times. Competition Commission of India to referee Indian hockey slugfest. 19 November 2011. http://articles.economictimes.indiatimes.com/2011-11-19/news/30419506_1_hockey-india-competition-act-international-hockey-federation.
Surinder Barmi v. BCCI. Case No.61/2010 (Competition Commission of India).
Financial Express. Relief for BCCI as COMPAT Sets Aside Legally Unsustainable Penalty. 24 February 2015. http://www.financialexpress.com/article/industry/companies/relief-for-bcci-as-compat-sets-aside-legally-unsustainable-penalty/46742/ (accessed July 6, 2015).
DNA. Sports Ministry and AFI Spar over Marathon Diktat. 20 June 2015. http://www.dnaindia.com/sport/report-sports-ministry-afi-spar-over-marathon-diktat-2097186 (accessed July 16, 2015).
This post has been written by Ishita Mishra who is now a fifth year law student but had written this in her second year at the West Bengal National University of Juridical Sciences. NOTE: This is a repost from 2015 as the previous link could not be found.
[1] The Constitution of India, 1950, Schedule VII, List II, State List, Item 33.
[2] Societies Registration Act XXI of 1860.
[3] Report from the Commission to the European Council, The Helsinki Report on Sport, COM(1999) 644 final (December 10, 1999).
[4] Id.
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