06 Jul 2014
Sports law in the United Arab Emirates
The Middle East and sporting events have enjoyed great success associating with each other. It therefore does not come as a surprise that a recent study indicated that the EMEA (Europe, Middle East and Africa) market is currently ranked as the second largest sports market in the world, and is estimated to be worth a staggering $44.8 Billion, which represents nearly a third of the global sports industry market. The very same industry is also expected to see revenue growth continue at 4.6 per cent per annum.
The stature of sports and sporting events in the Middle East received further embellishment when the State of Qatar was awarded the honour of hosting the FIFA 2022 Football World Cup. However among the Gulf Cooperation Council ("GCC") nations the United Arab Emirates ("UAE") has always been the clear leader when it comes to the adoption and promotion of sporting interests in the region. The two cities of Dubai and Abu Dhabi alone play host to some of the sporting world's most prestigious events. These include the world’s richest horse race, the only sunset Formula One circuit, PGA ranked golf tournaments, ATP tennis tourneys, international marathons and the recent Indian Premier League cricket tourney to name a few as far as events are concerned. The UAE also headquarters of some of world sports' prestigious regulatory bodies such as the International Cricket Council. Quite simply, one would find it very difficult to name an international sport which does not have a representation, participation or association with in the UAE.
This being the case it is but natural that the practice of a specialized segment of sports law is also primed for strong growth in the UAE. As various UAE based business houses and individuals continue to pour out investments into global sports ventures particularly into sporting infrastructure and the sponsorships of tournaments, teams and key players and given the large sums of money involved in making these investments, it is necessary to safeguard such interests in all matters involved. Therefore there is a growing need to provide specialist advice on sports related areas of law including but not limited to sponsorship issues, venue construction matters, regulatory and compliance issues, complaints filing, anti-doping appeals and other sports related litigious matters.
Basics of Sports Law Practice
As with most industries, the legal side of the sports industry can be divided broadly into two: transactional and litigious.
With sports, the transactional practice areas are typical corporate-commercial work which involves negotiating, drafting and vetting sponsorship agreements (both for athletes and the clubs), club tours contracts, building or infrastructure construction contracts, financing or credit arrangements and also any sort of corporate-commercial transaction which would involve supply of services and materials to large sporting events. Generally these are undertaken by corporate attorneys who have been exposed to the sporting side whether in the construction of a stadium, negotiating and player transfer or sponsorship contract or setting up a sporting league like the Indian Premier League for cricket in India. Lawyers undertaking such tasks would have to keep in mind the peculiar nature, regulations and customs of the area of sport in which they are advising in, besides the normal corporate and commercial know how and skill set.
The litigation aspect of sports has to do mainly in instituting or resolving conflicts that arise between players, clubs, organizations under sponsorship contracts or otherwise; filing regulatory appeals or appeals against suspensions, de-affiliations, anti-doping and other substance use appeals; challenges relating to the interpretation of rules and regulations of the governing bodies of certain sports etc.; making official complaints to sporting bodies or authorities or raising petitions and claims before a court of adequate jurisdiction.
Sponsorships in the UAE
As mentioned earlier, the UAE has a very large sports market and an increasing number of international sporting events are being hosted and promoted in and by the UAE. In such cases sponsorship related opportunities and the inevitable challenges related to such endeavours are also on the rise in the UAE.
"It is common knowledge that by sponsoring the best of world sportsmen, sporting teams and sporting events, the reputation of the UAE is enhanced on the world stage."
However a serious downside to this exercise is easily seen from the various sporting scandals breaking out across the world in different sporting disciplines such as the Lance Armstrong doping incident, the Tiger Woods infidelity claims to name a couple of the sporting scandals that have made international news headlines. This means that a sponsor by virtue of having sponsored or endorsed the errant athlete or team could easily have its own reputation, good will and brand name tarnished for good and such damage is not something that can easily be restored by payment of money. In such cases again, utmost care is needed to protect the interests (present and future) of the sponsor right from the time when such sponsorship is being discussed. Adequate positive and negative due diligence needs to be performed such that all possible scenarios are examined in detail before any commitment to the sponsored individual or organization is made. Once the decision to go ahead with the sponsorship is reached, adequate provisions must be included in the sponsorship contract that will further protect the sponsors’ interests. These would include but not be limited to strict morality clauses, perennial representations and warranties, sponsor friendly dispute resolution clauses, reasonable and calculated liquidated damages as well as other remedial clauses.
Sports Regulations in the UAE
There is an increasing awareness within and outside the field of sports that the growth of sporting industries particularly in emerging economies like the UAE, must come hand in hand with the development of transparent and sustainable regulatory structures that adhere to international standards of best practice. An example to this effect is from the UAE Football Association ("UAE FA") which was established pursuant to Ministerial Resolution No. 17 of 1972, The UAE FA issued the Statute of the UAE Football Association which is widely considered as the main piece of legislation regulating the sport of football in the UAE and the same is consistent with the international rules and regulations expounded by FIFA and the world football leagues. It is also poignant to note that the UAE is currently formulating a legislation that governs safety in sporting venues.
Nevertheless, presence of regulations alone would not suffice and there is a lot of coordination that is needed between the local legislations and international sporting regulations. The processes introducing and implementing sports regulations must be thought out carefully and must be incompliance with established international regulations and processes. This too is also possible only if the region has adequate resources to skilled sports law practitioners and specialists that would help facilitate the growth of robust and enduring regulatory regimes in the UAE.
An area where the UAE is a clear front runner is in the establishment of a globally respected centre of dispute resolutions in the sports industry. A Court of Arbitration for Sports (CAS) dispute centre is currently being established in Abu Dhabi. CAS is an international body established to settle disputes related to sports and is independent of any sports organization. With the opening of CAS, the UAE could soon be seeing a large number of high profile global sports dispute cases being solved in the Country. In addition to CAS, there is also a draft law in the UAE facilitating the establishment of an Emirates Sports Arbitration Centre. This would further help accelerate the position of UAE as a jurisdiction with world class facilities and expertise to decide technically challenging disputes that would often arise in the field of sports. However once again the presence of such centres under pin the fact that there must be necessarily be legal representation available in the UAE who are skilled in the subjects of sports law so that the CAS and other forum users can be confident that their matters will be handled professionally in the jurisdiction.
There are many reasons why sports law and sports law practice will grow and develop in the UAE. Given the pace of the investment, interest and participation of UAE in the global sporting arena, specialized legal resources must be made available to relevant individuals and sporting bodies in the UAE such that each sporting transaction is able to cross the finish line smoothly.