Ontario – Olympic athletes cannot relitigate sports arbitration dispute as tort action – #280

In Sokolov v. The World Anti-Doping Agency, 2020 ONSC 704, Mr. Justice Mario D. Faieta granted summary judgment on a jurisdictional issue, dismissing a tort claim made by athletes denied entry to the 2016 Olympic Games in Rio.  Faieta J. held that the athletes sought to litigate the same factual matrix which they had unsuccessfully arbitrated before the Court of Arbitration for Sport and that the “essential character” of the dispute was within the scope of the arbitration agreements.  Though he considered the arbitration agreements to be more like arbitration imposed by statute or adhesion contracts, he expressly considered the impact on international sports if he signalled a willingness of domestic courts to resolve matters otherwise reserved for more specialized tribunals.   

Faieta J. in his reasons identifies the key entities involved in international sports and the Olympic Movement itself, at paras 8-20.

At the May 17, 2016 request of the International Olympic Committee (“IOC”), the World Anti-Doping Agency (“WADA”) on May 18, 2016 appointed Prof. Richard McLaren (“McLaren”) and issued terms of reference including to (i) investigate whether the doping control process followed during the Sochi 2014 Olympic Games had been manipulated to conceal positive doping tests and (ii) identify any athlete who “might have” benefitted from such manipulation.   See para. 29 for more details on those terms.

During the course of McLaren’s investigation, Mr. Kirill Sveshnikov, Mr. Dmitry Strakhov and Mr. Dmitry Sokolov (“Plaintiffs”), three (3) cyclists, applied for entry to the 2016 Olympic Games in Rio (“Rio Games”) by signing a May 28, 2016 “Conditions of Participation – National Olympic Committee” form (“Entry Form”).  It contained the following arbitration clause:

Arbitration: The Court of Arbitration for Sport is exclusively competent to finally settle all disputes arising in connection with the participation in the 2016 Games which have not been resolved by sports governing bodies.

I agree that any dispute or claim arising in connection with my participation at the 2016 Games, not resolved after exhaustion of legal remedies established by NOC, the International Federation governing my sport, Rio 2016 and the IOC, shall be submitted exclusively to the Court of Arbitration for Sport (“CAS”) for final and binding arbitration in accordance with the Arbitration Rules for the Olympic Games, and the Code of Sports-related Arbitration.  The seat of arbitration shall be in Lausanne, Switzerland and the language of the procedure English.  The decisions of the CAS shall be final, binding and non-appealable, subject to the appeal to the Swiss Federal Court.  I hereby waive my right to institute any claim, arbitration or litigation, or seek any other form of relief, in any other court or tribunal.

In addition to the Entry Form, the Olympic Charter at article 61 also provides for arbitration:

1. The decisions of the IOC are final. Any dispute relating to their application or interpretation may be resolved solely by the IOC Executive Board and, in certain cases, by arbitration before the Court of Arbitration for Sport (CAS).

2. Any dispute arising on the occasion of, or in connection with, the Olympic Games shall be submitted exclusively to the Court of Arbitration for Sport, in accordance with the Code of Sports-Related Arbitration.

McLaren issued a July 18, 2016 report (“McLaren Report”) which concluded that the Moscow Anti-Doping Laboratory had concealed positive doping tests of its athletes but did not identify athletes implicated in the tests. WADA notified the Union Cycliste Internationale (“UCI”) that Plaintiffs had provided at least one (1) urine sample which tested positive for steroids concealed by the Moscow Anti-Doping Laboratory.

In response, the IOC announced on July 24, 2016 that it would not ban all Russian athletes from participating in the Rio Games provided they met two (2) conditions: their international sports federation was satisfied that the athlete was not “implicated” in the doping concealment scheme and had never been sanctioned for doping; and, that determination was upheld by an arbitrator appointed by the IOC.  See the fuller terms at paras 40 and an August 2, 2016 follow up clarification.

Regarding Plaintiffs, by July 27, 2016 letter, the UCI informed the IOC of its decision that the UCI was satisfied that Plaintiffs met the IOC requirements but an arbitrator, appointed from the CAS roster, overturned that decision on August 2, 2016.  See paras 42 and 45 respectively.  The IOC on August 3, 2016 denied Plaintiffs entry to the Rio Games.  See para. 46.

Plaintiffs applied for CAS arbitration on August 3, 2016 and named the IOC and UCI as respondents as well as the Russian Olympic Committee (“ROC”), WADA and McLaren as “other parties” on the basis that WADA and McLaren “may be adversely affected by any decision which CAS may issue in this matter”.  Plaintiffs later removed the IOC as a named respondent.  In that CAS arbitration, Plaintiffs sought a declaration for the following:

– the IOC decision of 24 July 2016 setting the new criteria for the Russian athletes to satisfy for acceptance of their entries to Rio 2016 is invalid and unenforceable;

– the UCI decision of 28 July 2016 and the relevant actions leading to [Plaintiffs’] ineligibility of participation at Rio 2016 shall be set aside and is unenforceable;

– [Plaintiffs] shall be declared eligible to participate at Rio 2016; and

– the IOC is obliged to accept the entry of [Plaintiffs] submitted by the ROC to compete at Rio 2016.

The contributions made and the status assumed by each of the parties to that CAS arbitration are set out at paras 51-58. 

By August 8, 2016 decision, the CAS dismissed Plaintiffs’ application, holding that the IOC, not UCI, had taken the decision to exclude Plaintiffs from the Rio Games.  The CAS dismissed the application on the basis that it could not maintain an appeal against an entity which was not a party to the proceeding.  See para. 60.

Plaintiffs filed an action in Ontario Superior Court on September 11, 2017 seeking $6 million in damages based on allegations of negligence, defamation, injurious falsehood, abuse of public office and conspiracy, $1 million in punitive damages and certain declaratory relief.

WADA and McLaren applied for under Rules 20 and 21 of Ontario’s Rules of Civil Procedure, RRO 1990, Reg 194 for summary judgment and for dismissal based on lack of jurisdiction.

Faieta J. identified three (3) issues, the first two (2) of which were: (i) is this an appropriate case for summary judgment – paras 67-76; and (ii) should the action be dismissed because the CAS has exclusive jurisdiction to determine the dispute – paras 77-107.

Faieta J. held that, contrary to the more limited reading urged by Plaintiffs, Goudie v. Ottawa (City), 2003 SCC 14 (CanLII), [2003] 1 SCR 141 supported using a motion for summary judgment to resolve disputed issues of jurisdiction. Rule 20.04(2)(a) provides that a court can grant summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to either a plaintiff’s claim or a defendant’s defence.

[73] There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment.  This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 49.  The question is whether the added expense and delay of fact finding at trial is necessary to a fair process and just adjudication: Hryniak, at para. 33.  The standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute: Hryniak, at para. 50.  Further, a judge is entitled to assume that the record contains all the evidence that the parties will present if there is a trial.  A party must put its best foot forward: Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839, at para. 33.

Based on the record before him, Faieta J. concluded that each of the parties had put its “best foot forward” and filed voluminous materials and many affidavits including expert reports on international sports governance and dispute resolution schemes.  Despite Plaintiffs’ argument that the facts were disputed in light of the experts disputing the scope of the arbitration clauses and whether Plaintiffs’ action could have been brought before the CAS, Faieta J. held that he could still determine the jurisdictional issue before the court.

WADA and McLaren relied on Weber v. Ontario Hydro, 1995 CanLII 108 (SCC), [1995] 2 SCR 929 to argue that a court has no jurisdiction to hear a dispute if its “essential character” is within the scope of the arbitration.  They argued that the “essential character” of the dispute before the court is the IOC’s decision to exclude Plaintiffs from the Rio Games and is therefore within the arbitration agreed to by Plaintiffs.  WADA and McLaren were unable to provide precedent for the application of Weber v. Ontario Hydro to disputes not governed by labour relations stations aside from provincial residential tenancies legislation.  Plaintiffs limited the case’s application to arbitration under collective agreements.

Faieta J. held that the arbitration clauses in issue were not freely negotiated but mandated by the Olympic Charter and the Entry Form which he likened, respectively, to a statute and to an adhesion contract.  In approaching the arbitration clauses in this manner, he distinguished Armstrong v. Northern Eyes Inc., 2000 CanLII 29047 (ON SCDC), aff’d [2001] O.J. No. 1085 (C.A.), relied on by Plaintiffs.

Like Weber v. Ontario Hydro, he saw no purpose in a concurrent jurisdiction between the arbitration and the courts which would “subvert” those matters governed by the legislation.

[83] In my view, this policy rationale equally supports the view that the CAS has exclusive jurisdiction over matters that come within the scope of the arbitration clauses at issue in this case. To rule otherwise would undermine the Olympic Charter and subvert the relationship between the IOC, the CAS, and the other members of the Olympic Movement.

Faieta J. examined the nature of the dispute and the nuances between the different claims and different relief sought in the CAS arbitration and before the court. He disagreed with Plaintiffs’ expert about the essential character of the disputes.

The legal issues (eligibility, defamation) do not define the essential character of the disputes.  Instead, it is the factual matrix of the dispute that govern their characterization.  In this case, the essential character of the dispute is the IOC’s decision, including whether the plaintiffs were wrongly implicated to have benefitted from the state-run doping scheme.

Based on his analysis of the facts, Faieta J. concluded that the “essential character” of the two (2) venues was the same.

[97] I find that the essential character of the dispute before this court, as reflected in the Amended Statement of Claim, is whether the plaintiffs were wrongly denied entry to Rio 2016 by the IOC on the basis that they were implicated as having benefitted from the state-run doping scheme.  In my view, the plaintiffs seek to re-litigate in this court the same factual matrix that was before the CAS.

Following that determination, Faieta J. examined the scope of the arbitration clause in the Olympic Charter and Entry Form and concluded that they represent a “general or universal resort to arbitration” for matters connected with Plaintiffs’ participation in the Rio Games for what he identified as “the following reasons”:

The arbitration clause in the Olympic Charter is clear that all disputes connected with the Olympic Games are to be arbitrated by the CAS.  The arbitration clause found in paragraph 5 of the one-page Entry Form signed by the each of the plaintiffs repeats this principle and expressly provides that disputes connected with participation at Rio 2016 are submitted exclusively to the CAS, that a decision of the CAS may only be appealed to the Swiss Federal Court.  Finally, I also note that paragraph 5 of the Entry Form states that “I hereby waive my right to institute any claim, arbitration or litigation, or seek any other form of relief, in any other court or tribunal”.

Faieta J. concluded that the action should be dismissed on the basis that the CAS has exclusive jurisdiction to determine the dispute in the litigation before the court.

In closing his reasons, Faieta J. squarely addressed the way Plaintiffs framed their litigation as a tort action but, despite having done so, it did not dissuade him from dismissing the attempt which he qualified as one to “relitigate” a prior arbitration.

[117] The essential character of this action, although framed in tort law against only WADA and McLaren but not the IOC, is the dispute that they were allegedly wrongfully denied entry to Rio 2016.  This was a dispute that the plaintiffs placed before the CAS for adjudication.  Having failed to obtain a declaration from the IOC that they be granted entry to Rio 2016, the plaintiffs should not be permitted to re-litigate the factual matrix of this dispute in this court by dressing up it up as a tort claim.  Had the plaintiffs, like other Russian athletes, successfully argued their case before the CAS, there would have been no basis to claim the damages sought in this action.

He also accepted the expert evidence tendered by WADA and McLaren about the effects of permitting the action to proceed.

To allow this action proceed would undermine the Olympic Movement and, in particular, the dispute resolution provisions found in the Olympic Charter by signalling to the international community that domestic courts are willing to entertain disputes that, at their core, are matters connected to the Olympic Games that should be determined exclusively by a specialized tribunal in accordance with the provisions of the Olympic Charter or other provisions approved by the IOC.

urbitral note – First, in hearing the motions, Faieta J. agreed that a court can hear a motion for summary judgment to decide a jurisdictional challenge.  Even though some facts were contested, he concluded that he was sufficiently informed to be able to decide the issues without need for a full trial.

Second, Faieta J. considered that the arbitration clauses binding the athletes were more like arbitration imposed by statute or adhesion contracts.

Third, Faieta J. expressly held that framing the claims in tort did not serve to sufficiently, if at all, detract from the factual matrix already disputed before the CAS.

Fourth, Faieta J. weighed the impact on international sports if, in allowing the court action to persist, an opposite result signalled a willingness of domestic courts to resolve matters otherwise reserved for more specialized tribunals.  He acknowledge Plaintiffs’ characterization of a “floodgates” argument as a “bold exaggeration” but, aware of that characterization, disagreed with it and instead quashed the potential for subverting a larger process.