• Andriy Shulga

    Partner, ARBITRADE

ARBITRADE

Address: 4 I.Lepse Ave, Building 1,
5th Floor, Office 518,
Kyiv, 03680, Ukraine
Tel.: +380 44 454 0508
Fax: +380 44 454 0509
E-mail: info@arbitrade.ua
Web-site: www.arbitrade.ua

ARBITRADE is a boutique law firm specializing in international trade, international arbitration, litigation and complex negotiations/restructuring. We have a reputation of being a client-focused law firm that provides high quality services. ARBITRADE’s team is made up of highly-qualified and experienced dispute resolution lawyers.

The leading positions of ARBITRADE in international arbitration are confirmed by professional awards and international rankings, such as the Legal 500, Ukrainian Law Firms 2015, Best Lawyers International, ILO Client’s Choice, Who is Who International Arbitration. ARBITRADE has extensive experience in representing clients before leading international arbitral institutions in international commercial, investment, sports, maritime and commodities arbitration. As a GAFTA and FOSFA member, we are particularly well-equipped to advise on the structuring and drafting of sale and purchase agreements for soft commodities incorporating GAFTA and FOSFA standard contract forms.

The ARBITRADE team also has extensive expertise in representing clients before national courts in Ukraine in commercial and administrative disputes within many industries and fields of business. White collar crime defense, legal security for business, support in internal corporate investigations, and compliance are among the featured practices of the firm.

ARBITRADE is a long-term legal partner of the Ukrainian Chess Federation (UCF). We have represented the UCF at meetings of the General Assembly and the Executive Committee of FIDE (World Chess Federation), the General Assembly of the European Chess Union, including with regard to issues of sports jurisdiction over Crimea and disputed player transfers. ARBITRADE has also provided legal support to UCF in connection with the Women’s World Chess Championship Match 2016 which was held in Lviv, Ukraine.

As a law firm specializing in international trade and promoting bilateral trade between Ukraine and other European countries, ARBITRADE has developed strong connections with other law firms in many jurisdictions; we have also maintained a representative office in Bulgaria for a number of years. ARBITRADE is a member of the Norwegian — Ukrainian Chamber of Commerce (NUCC), the Bulgarian Chamber of Commerce and Industry and the Ukrainian Chamber of Commerce and Industry.

Contract with a Sportsman: What Should you Know?!

Today, many participants of sporting relations (sportsmen, coaches, doctors, sports clubs etc.) share the opinion that the field of sports is not sufficiently regulated at the legislative level, leading to numerous violations of the rights of sportsmen and other parties in the field. In this article I will attempt to somewhat dispel this myth and demonstrate the other side to the absence of “overregulation” in sports, in particular, using the example of a sports contract. It is the contract that serves as an instrument of regulating the relations between two equal parties. The contract sets out the rules of the game to be followed in the absence of detailed legislative regulation. It also provides advantages and deprives rights in case of future disputes.

The Legal Nature of a Sports Contract

A sports contract may be defined as a contract between two equal parties in the sphere of sports which regulates their relations connected with the preparation and participation in competitions with the aim of achieving sports results, sets mutual rules and obligations of the parties and is concluded for a fixed term. The closest definition to the above in our legislation is the definition contained in the Labor Code of Ukraine. Part 3 of article 21 of this Code provides that “A special form of an employment agreement is a contract in which its period of validity, rights, obligations and liabilities of the parties (including pecuniary liability), conditions of supply and organization of the employee’s labour, conditions of termination of the agreement, including premature termination, may be established by the agreement of the parties. The sphere of application of a labour contract is determined by the laws of Ukraine”.

In the opinion of the author of this article, this is the definition one should be guided by when assessing the legal nature of a sports contract. It shouldn’t be thought that the issue of contract is unregulated and unclear. On the contrary, Ukrainian legislators have granted the contacting parties in the sphere of sports the widest possible discretion in setting out the terms of cooperation between the sportsman and the employer with the aim of achieving high results and profits. And who knows whether it would be better if the state interfered more heavily with these relations. Therefore, the parties should use the freedom provided to them in determining their own rights and obligations towards each other.

Basics of Legal Regulation of the Sports Contract

The Decree of the Cabinet of Ministers of Ukraine of 19 March 1994 No.170 On the Ordering of the Use of Contractual Form of an Employment Agreement stipulates that the contractual form of an employment agreement should apply to employees at the time of recruitment for a position only in cases directly foreseen by legislation (clause 1). The conclusion of a sports contract is foreseen by the specialized Law On Physical Culture and Sports.

It should be noted that the specialized Law of Ukraine On Physical Culture and Sports does not contain a definition of an employment contract or an indication of terms that the latter may regulate. Yet, the Act directly connects the acquisition of the status of a professional sportsman with the conclusion of a sports contract, rendering such a contract extremely important. Namely, according to part 3 of Article 38 of the Act, a sportsman acquires the status of a professional sportsman from the moment of conclusion of a contract with the corresponding parties in the area of physical culture and sports on the participation in competitions between professional sportsmen. In light of this, it is important to remember that contracts should contain a clear reference to the participation of a sportsman in professional competitions. Separate contracts are to be concluded with members of the national teams of Ukraine, which is also foreseen by the Law (parts 7 and 9 of Article 37).

A Standard Form of an employment contract has been approved by the Order of the Ministry of Labor of Ukraine of 15 April 1994 No.23. It should be borne in mind that this form is not compulsory, but serves an information and auxiliary function, and the parties are free to use it in full or in part. Generally, the standard form of contract regulates the following issues: the scope of the work offered and the requirements of the quality and time limits of its performance, the duration of the contract, the rights, obligations and mutual liabilities of the parties, the conditions of payment for and the organization of labor, the conditions of termination of the agreement, social, physical and other conditions necessary for the performance of the parties’ obligations, taking into account the specificity of the tasks, professional peculiarities and financial possibilities of the enterprise, institution, organization or employer.

As mentioned above, this Standard Form of contract does not affect the principle of party autonomy, which parties should be guided by when negotiating the terms of the contract. The provisions on party autonomy are expressly foreseen in the Civil Code of Ukraine in Article 627, according to which the parties are free in the conclusion of an agreement, the choice of counterparty and in determining the terms of the agreement, taking into account the requirements of the Code, other acts of civil legislation, trade usage, requirements of reasonableness and justice. According to Article 6 of the Civil Code of Ukraine, the parties are free to conclude an agreement which is not foreseen by the acts of civil legislation but corresponds to the general foundations of civil legislation. The parties are free in an agreement foreseen by the acts of civil legislation to regulate their relations which are not regulated by such acts. The parties may deviate from the provisions of acts of civil legislation and regulate their relations at their own discretion. The parties may not deviate from provisions of acts of civil legislation if these acts expressly provide for this, as well as in the case where the compulsory nature of provisions of civil legislation for the parties follows from their content or from the nature of the relationship between the parties.

Party Autonomy

The latter principle of “what is not forbidden is allowed” applies to the terms of the employment agreement between the sportsman and the employer. Therefore, the parties should not be afraid to regulate in as much detail as possible all the issues that may be relevant to their cooperation. This ensures avoiding future claims and disputes. For instance, if the situation of financial difficulties of the employer was clearly regulated in employment contracts, there would be significantly fewer disputes between sportsmen and clubs.

Therefore, currently both civil law and employment law give the parties in the field of sports the broadest possible discretion to regulate the terms of their employment contracts. It should be noted that the Draft Labor Code of Ukraine currently being considered by the Verkhovna Rada of Ukraine does not change the position on party autonomy in employment contracts.

On the other hand, a sports contract cannot be considered an employment agreement in the classical sense attributed to it by the Labor Code of Ukraine. An employment agreement, in fact, does not regulate the relations between an employer and a hired employee, but fixes the hired employee with the employer. The requisite relations under an employment agreement are actually regulated by the Labor Code of Ukraine, which is designed to regulate employment at large state enterprises with a significant bias in favor of the employer, and does not answer the modern challenges raised by a relationship between two equal parties such as a professional sportsman and his/her employer.

Conclusions and Recommendations

To conclude, the author would like to urge all parties to relations in the sphere of sports to try and regulate their relations independently. As of today, all necessary conditions are in place to achieve this. What is needed is simply to work out in detail each provision of the contract and bear in mind all situations which may arise in the future within the context of your relations. Only then will the stability and confidence which are often lacking in relations between sportsmen and their employers appear.