The nature of the Hungarian Permanent Court of Sport

  • 2022/08/18
  • kutatocsoport5

Three regulations are relevant in the procedure of the Hungarian Permanent Court of Sport (hereinafter: HPCS). Act LX of 2017 on Arbitration (hereinafter: Vbt.), Act I of 2004 on Sports (hereinafter: Stv.), and the procedural regulations of the Hungarian Permanent Court of Sport, which explain the provisions of the Stv. It is clear that the concrete, sport-specific rules of procedure are found in the HPCS regulations. The detailed rules are found in the internal procedural rules of all Hungarian arbitration courts. They are easier to change than laws.

The court has changed since its inception. At first, it operated under the National Sports Federation, based on a recommended model regulation, then after the National Sports Federation ceased to exist, it was transferred to the Hungarian Olympic Committee (hereinafter: HOC), where it prepared its procedural regulations in 2011.

The HPCS operates under the auspices of the HOC, and its jurisdiction extends to non-Olympic sports excluded from the jurisdiction of the HOC, sports for the disabled, and leisure and student sports.

The HPCS can act in the following case groups per the classical arbitration authority, according to the parties' mutual declaration of submission:

  1. sports associations and their members, as well as in sports-related legal disputes between members. This provision covers all federations, not only the national sports federations.
  2. in sports-related legal disputes between sports federations and athletes and sports professionals,
  3. in sports-related legal disputes between sports organizations and athletes and sports professionals. It is important to note that this category does not include disputes between professional athletes who have an employment relationship with sports enterprises or employers, since only state labor courts can act in labor law disputes.
  4. in sports-related legal disputes between the HOC and its members. Among the public sports bodies, the law only mentions the HOC, but not the other three. According to the strict grammatical interpretation, this would exclude the other three public bodies from sports refereeing. It is worth noting that the Stv. did not establish the exclusive jurisdiction of the Court, so the agreement on dispute resolution between public bodies and their members enables the extension of dispute resolution to them as well.

Since the law talks about „sports-related legal disputes”, the question arises as to whether the HPCS is authorized to hear other sports-related legal disputes [e.g. legal disputes between two sports associations) in addition to the four cases just listed (a)-d)]. According to the general point of view, the list of sports laws is not an exhaustive list, the arbitration rules do not establish exclusivity.[1]

The articles of association of the sports association state in general terms or the individual agreement of the persons involved in the legal dispute that legal disputes must be referred to the HPCS. It is interesting that if a legal dispute arises between two members of a sports association, the general provision included in the articles of association of the sports association is not sufficient for their dispute resolution, but the defendant must expressly accept the arbitration procedure, so the individual agreement of the parties involved cannot be avoided.

Only in the procedural rules of the HPCS let a provision that the sports association can stipulate the arbitration procedure in its articles of association, i.e. in advance, in general, the application of the other two Hungarian arbitration courts cannot be stipulated. This is understandable, since in both commercial and agricultural matters the parties find themselves in a controversial situation on a case-by-case basis, and there are no legal entities similar to sports associations or sports associations.

The duration of the arbitration procedure shows serious differences in the case of the three arbitration courts. The acting council of the HPCS is appointed within 8 days, must hold a hearing within 30 days of its election, and, upon its completion, or within 15 days of its completion, complete the case with a decision. On the other hand, the Hungarian Commercial Arbitration Court and the Agrarian Arbitration Court should complete the procedure within 6 months from the establishment of the acting council. We can see that there are also differences in the deadlines, and the regulations of the HPCS define mandatory periods.

Stv. Paragraph (2) of Section 47 – which is also repeated in Section 1, Point 4 of the Rules of Procedure of the HPCS – is completely different from the classic principles of arbitration and allows unilateral appeal to the arbitration court in the following cases:

  1. In the matter of athlete certification, transfer, and related competition license issuance and revocation, if the two-stage procedure has already been conducted within the sports association. The text of the law does not state it clearly, as it includes the sports professional, but he cannot have a confirmation-transfer case.
  2. A second-degree sports association decision containing a serious disciplinary penalty according to Stv. Paragraph (2) of Section 14 can be appealed by the disciplinary party. The party here can be an athlete, a sports professional, or a sports organization.
  3. A sports organization can also unilaterally apply to the HPCS if the sports association denies it the right to start in the competition system.[2]

It is important that in all three cases there is a 30-day limitation period from the delivery of the decisions for submitting the claim. In these three cases, the claimant can choose between the state judicial process and the arbitration procedure, which is also unique, although it stems from the nature of these unilaterally initiated procedures.

In these case groups, the arbitration office uses an accelerated procedure, so the arbitration board must be appointed within 8 days of the receipt of the request, and it must hold a hearing within 15 days of the appointment and make a substantive decision within 15 days after the end of the hearing. The decision can take two directions: either the arbitral tribunal rejects the claim, or it accepts it, so it orders the sports association to proceed with a new procedure, or it can mitigate its decision.

The rules of procedure of the Permanent Arbitration Court of Sport emphasize that the principle of equal treatment and the complete exclusion of the public must apply during the procedure. This is not only specific to sports arbitration, it occurs in all arbitration proceedings. Interestingly, Section 35 of the procedural regulations of the Agrarian Arbitration Court describes that the presence of additional persons requires not only the consent of the parties but also the consent of the hearing board.

The defendant must submit a response to the plaintiff's claim, and also has the right to file a counterclaim and set-off objection. These are the effects and features of the civil procedure code on the arbitration procedure.

The parties can agree on the person of the arbitrator, in the absence of such an agreement, the president of the arbitration court appoints the arbitrator. In the case of a three-person panel, the plaintiff is entitled to nominate one judge in his claim and the defendant in his counterclaim (in the absence of this, the president nominates instead of the parties), and the two arbitrators appointed in this way jointly name the third member of the panel, who is also the panel will also hold the post of president. If the two arbitrators cannot agree on the person of the council president, then in this case too, the president will be entitled to appoint the president of the acting council. We can therefore see that the parties have a meaningful say in the determination of the composition of the acting arbitration court, but they do not have the opportunity to prevent its proceedings in the absence of a judge appointment, at most the proceedings can only be minimally extended

In the case of a substantive decision, the arbitral tribunal may issue a judgment or a partial judgment. It makes a non-substantive decision in the form of an order.

The rules of procedure of all three arbitral tribunals have procedural fee tables and arbitration fees. I present them only as examples:

  1. Commercial Arbitration Court: 2.4% for claims between 0-5,000,000 HUF, but a minimum of 40,000 HUF.
  2. Agrarian Arbitration Court: 2.4% for claims between 0-5,000,000 HUF, but a minimum of HUF 80,000 HUF.
  3. HPCS: 3.6% for claims between 0-5,000,000 HUF, but a minimum of HUF 120,000 HUF.

We can see that HPCS has to pay the largest amount of fees, but it should be noted that the Commercial Arbitration Court also has a uniform registration fee of 25,000 HUF, as well as that the Commercial Arbitration Court makes decisions in hundreds of cases every year, which makes it stand out among the arbitration courts.[3] The rules of procedure of the Agrarian Arbitration Court only mention the registration fee concerning the accelerated procedure.

With regard to public charges, all three regulations refer to Act XCIII of 1990 on Duties. there is a reference to the law. Accordingly, the arbitration fee is uniformly 1% of the value of the subject of the proceedings, but at least 5,000 HUF and at most 250,000 HUF. If the value of the procedure cannot be determined, the fee is 10,000 HUF. (This last sentence is not included in the rules of procedure of the Commercial Arbitration Court.)

Finally, let's look at the differences in jurisdiction between the International Court of Arbitration for Sport (hereinafter: CAS) and the HPCS because the two organizations show a definite difference.

The jurisdiction of the HPCS is significantly narrower than the jurisdiction of the CAS, so it does not contain legal disputes between sponsors and athletes or sports organizations. It is also worth mentioning that in cases related to the issuance of competition licenses, verification and transfer, sports disciplinary and starting rights, the Sports Permanent Court of Arbitration can act without the prior submission of the sports association, while the CAS procedure is clearly excluded in the absence of an express declaration of submission by the parties.[4]

Tamás Sárközy (former member of the Permanent Court of Arbitration for Sport) stated that the HPCS regulates a different area compared to other arbitration courts because in sports self-regulation is strong and there is no state coercion. According to him, the fastest arbitration takes place at the HPCS, although currently professional sports are based on employment contracts, so given these legal relationships, the jurisdiction of the Court of Arbitration does not cover, thus the number of cases brought before the Board is also low. Another reason may be that sports organizations do not fully understand the benefits of arbitration, so they do not turn to it.


For a list of references, click HERE.

Author: Levente Porcsin J.D., Ph.D. candidate, University of Debrecen, Marton Géza Doctoral School of Legal Studies

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