Is the Pechstein Saga Coming to an End? German Federal Court of Justice Ruling on Claudia Pechstein v International Skating Union, June 2016

The court pointed out that the CAS operated on a closed list of arbitrators appointed by the International Council of Arbitration for Sport (ICAS), a body dominated by representatives of the International Olympic Committee (IOC), the National Olympic Committees (NOCs) and international sports federations (IFs).7 Furthermore, the interests of athletes had to be considered only with respect to one-fifth of the arbitrators to be appointed to the list.8 According to the court, such a procedure institutionalised a predominance of sports governing bodies, which jeopardised the independence of the arbitrators.9 Also, the court found it improper that the chairman of a threearbitrator panel in CAS appeal proceedings was appointed by the President of the CAS Appeals Division, the appointment procedure not being sufficiently transparent and the parties not being able to tell why a particular arbitrator had been appointed as chairman.10 Notwithstanding the above, LG München ultimately declared Pechstein's claim inadmissible on the basis of the res iudicata principle, the bar on rehearing a matter previously decided by a final and bindingjudgment or arbitral award.11 The court held that it was obliged to respect the CAS award on the basis of Article V of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the 'New York Convention').12 In this respect, the court found that Pechstein was prevented from arguing the invalidity of the arbitration agreement before German state courts, as she herself had initiated CAS proceedings in 2009 without raising an objection against the arbitration agreement, thus implicitly accepting its validity at the time.13 The decision by the Higher Regional Court of Munich Pechstein appealed the first-instance decision before the Higher Regional Court of Munich ('OLG München'). [...]OLG München disagreed with LG München's view that it had to recognise the CAS award pursuant to the New York Convention, finding that such recognition was contrary to German public policy,17 as it would 'perpetuate the abuse' of the ISU's dominant market position through the 'forced' arbitration agreement.18 The court's decision did not explicitly address the fact that Pechstein had not objected to the arbitration agreement in the appeal proceedings before the CAS in 2009. According to the court, the ISU had not abused its market power when requiring Pechstein to sign an arbitration agreement in favour of the CAS. According to the