The Sports Law Review: Colombia

The dispute resolution system

There is not a national sports tribunal or court in Colombia, even though it was created in 1968 through Decree 2743 and afterwards explained through Decree 2845 of 1984 and Law 49 of 1993. The Constitutional Court of Colombia through ruling C-226 of 1997 determined that a national sports tribunal would reflect the exercise of a public prerogative and would interfere the constitutional right of a person to practice sports.

Ruling C-226 of 1997 declared unconstitutional the creation of a national sports tribunal or court as an administrative entity, but mentioned that each federation can establish its own disciplinary tribunals as from the principle of free will to determine the organs of private entities through its by-laws.

i Access to courts8

Decree 2845 of 1984, Article 56 establishes the hierarchy of the disciplinary tribunals among federations: each club must establish its own disciplinary committee; each league must set up a committee for its members and for clubs; and each federation must settle the disciplinary committee. In any case, the rights to contradict, defence, technical assistance, due process, etc., must be fulfilled.

Most international federations are obliged to have the Court of Arbitration for Sport (CAS) as an appeal body for the decisions issued by national federations. This is the case, for example, of the Fédération Internationale de Football Association9 (FIFA) statutes or the Fédération Internationale de Natation10 (FINA) constitution for all of its member associations (including the Colombian recognised ones); however, it is a new tendency for national federations to deny and challenge the jurisdiction of the CAS as an appeal body for the decisions issued by those federations.

The football federations have forbidden their members from attending courts for sports-related matters owing to disciplinary issues or specific contractual problems that could arise from the relationship between clubs and players; if a club or league seeks the ordinary administration of justice, it may be subject to a disciplinary sanction duly established in the disciplinary code.

Other federations might request ordinary courts to solve issues derived from the breach of the fundamental rights related to the disciplinary proceedings, since most of them do not have professional athletes and players.

The disputes that might arise from image rights or trademarks could be solved by the ordinary tribunals or through arbitration, but it is correlated to how the topics were discussed and negotiated within a contract.

ii Sports arbitration11

It is possible for parties to settle in contracts regarding commercial topics as image rights, sponsoring, and the labour issues expressly allowed by Law 1563. Social security matters are explicitly prohibited from being decided in arbitral tribunals and must be decided by the ordinary labour courts.

Further, for a private convention established in the Colombian Football Federation, the sports-related matters (contractual, labour and disciplinary) must be ruled by their internal jurisdictional bodies.

The arbitration can be reached across three types of agreements:

  1. an arbitral agreement, drafted as a contract or regular agreement;
  2. an arbitral clause contained in a specific contract or agreement as an accessory obligation (the principal obligation shall be the object of the agreement); or
  3. a compromise, which would be adopted after a regular proceeding was started before ordinary courts.

These all require the express will to submit the claims before an arbitral court and the resignation to file the procedure before an ordinary court, the problem or contract for which the parties resign the right to file the proceeding before state courts, and, of course, the specification of the parties.

Regarding interim measures, the court chosen to settle the dispute ought to decide on this matter; according to Article 32 of Law 1563, the arbitral court has to request the ordinary court (according to the rules of competence of the ordinary jurisdiction) in the city where the interim measures have to be performed, to proceed. For example, if there is an interim measure regarding real state property, the ordinary court where the real state property is located must order the inscription of that interim measure before public registration.

iii Enforceability

The enforceability of a decision from a sports governing body depends on which sports entity has rendered that decision. Colombia does not have a national tribunal and its jurisdiction over entities belongs to the National Sports System.

Most decisions taken involve disciplinary matters, either for the athletes or the officers. Therefore, each entity has to enforce the sanctions. Ordinary courts, such as the Constitutional Court, do not intervene in internal proceedings or rulings of the disciplinary bodies unless an affected party claims a violation of a constitutional right, such as due process.

Other matters are not usually discussed before a judicial body within private sports entities, but it is possible to quote, as an exception, the football federation that is entitled to decide through its jurisdictional bodies (the National Dispute Resolution Chamber and the Player Status Committee) some specific cases related to football as an industry and as a business. This federation, following the obligations acquired to obtain the membership and belong to FIFA as international and ruling federation, forbids its own members to review football affairs (even contractual) before an ordinary court. If the member breaches that obligation, that member might be subject to a disciplinary proceeding. Those decisions are enforced by the Disciplinary Committee.

Sports and antitrust law

Antitrust law has been highly improved in Colombia through the years, taking into consideration the country's laws only date back to 1959 regulating these matters. For the specific case of sports, Law 181 of 1995 has expressly ruled that not a single person (natural or entity) can have the controlling votes over more than one club from the same discipline, either directly or through third parties.

The problem about piracy of merchandising can also be treated under the prohibition to exploit third parties reputation or to confuse consumers about the origin of the goods sold. But it has been seen that criminal complains satisfy more the affected parties than the antitrust complains (even when this kind of claims could mostly be resolved faster than a criminal claim).22

During the past three years, the Superintendence of Industry and Commerce (SIC) has been investigating presumptive antitrust conducts committed by the Colombian Football Federation and a couple of ticketing entities regarding the issuance and commercialisation of the tickets for the games of the National Team, regarding a presumptive arrangement in between them to offer the tickets to consumers at higher prices than the ones publicly offered by the national federation, through a system of resell (grey markets). Since it is one of the powers of state authorities (to watch and review stakeholders that distribute some goods and that have the capacity to determine the prices), during the first week of the month of July, the first instance of the SIC found the Colombian Football Federation guilty and imposed a fine of about US$4.7 million. The national federation has since filed a claim before the Organisation for Economic Co-operation and Development (OECD) against the investigator, so this case remains ongoing.

Sports and taxation

Under the Taxation Code, there is a big difference between residents and non-residents for taxation purposes. A resident is anyone that has been living in Colombia for more than 180 days or on a non-continuous basis over 365 days.

An athlete that arrives in Colombia territory for a major sports event would be subject to receive taxable income (as the payment for its personal services) but through withholding tax. The income would derive from the personal rendering of services inside the country. The withholding tax is 20 per cent for payments made overseas.

Article 592 of Taxation Code provides in which cases the tax return filling is necessary: if the gross income is lower than 1,40023 units of tax value (UVT)24, or if the income was not subject to withholding tax, the non-resident25 would have to declare the total income received from national source.

Colombia has made several efforts to execute double taxation treaties and usually provides that the taxation authority entitled to receive the taxation as of income derived from rendering personal services should be the country of residence of who renders such services and not the country where the services where received. This means it is necessary to review on a case-by-case basis if the athlete is subject or not to withholding tax, if there is a possibility to receive tax credit after a withholding was performed, etc.

Outlook and conclusions

Despite Colombia being a country with some of the world's highest calibre athletes,30 the national budget for developing the sports industry and aiding amateur sports still is very low. It is well known that the country has suffered economic problems, poverty and violence, but it is also known that promoting sports and culture can help prevent violence and drugs abuse.

The United Nations Children's Fund (UNICEF) has mentioned31,32 that sports constitute a key factor in the health, happiness and welfare of children and youth, and it has been demonstrated that sports can not only help prevent violence but teach children the importance of team work, discipline and respect towards others.

International federations such as FIFA have been trying to introduce programmes such as Forward 2.0 to provide means for the development of amateur football as the basis for the professional industry.

Footnotes

1 César Mauricio Giraldo Hernández is a partner and Maria Cristina Delgado-Aycardi is a senior associate at GHER Sports Colombia.

2 According to the Constitutional Court in Colombia, the practice of sports is a fundamental right (Constitutional Court of Colombia, ruling T-242 of 2016) granted to all citizens. The practice of sports is granted by Colombia as a state, making efforts to promote either its practice and association through sports organisations, for the effective accomplishment of the constitutional rights of the people. The Constitutional Court of Colombia is the highest tribunal in charge of the protection of the fundamental rights granted to all inhabitants of Colombia and the protection of the Constitution's integrity, through the interpretation of the rules of lower category (laws, presidential decrees, etc.).

3 The good-standing certificate for this specific case is the reconocimiento Deportivo issued by the dependence of the Municipality, which incorporates the club or the league to the National Sports System.

4 Colombia is organised as a unitary republic, under the central model of government: central government and local administrative organisation: departments (set of cities) and municipalities (cities).

5 Colombia is administratively organised as a unitarian republic, divided by departments and municipalities. The leagues have to be affiliated with the relevant departmental administrative entities.

6 The Superintendence of Companies is a government agency that supervises companies and the fulfilment of corporate and legal obligations.

7 The Superintendence of Companies, as well as most government entities, can provide interpretation to regulations, when requested by citizens. For a specific case, the Superintendence of Companies clarified the applicable regime to non-profit organisations, through document 220-053767 from 14 March 2016.

8 As general rule, every person has access to court, regarding the right of administration of justice (constitutional and fundamental human right). Nevertheless, each federation has its own disciplinary tribunals and sometimes (such as in the case of the Football Federations worldwide) each federation has its own administration of justice system, outside the ordinary courts.

11 In 2012, Colombian Congress passed Law 1563, the national and international arbitral statute, as an alternative mechanism to solve conflicts that can be freely arranged and decided by third parties invested with the faculty to administrate justice. The basic principles to obtain an arbitral award are: (1) the free will of the parties to solve the dispute outside the regular system of justice; (2) the independence of the judges chosen to settle the dispute; (3) the temporal faculty to administrate justice; (4) the exceptional cases that could be settled by a arbitral court; and (5) the procedural character of the arbitral proceedings, since it must respect the rules of due process and the tribunal, and the parties have to follow the process regulations (Constitutional Court of Colombia, ruling C-538 of 2016).

12 The organisation of sports events falls into the rules of consumer protection, and the organisation itself (city permits and requirements) depends on the rules locally established for large events. A public major event is defined by the general Circular of 2001 issued by the Superintendence of Industry and Commerce, as 'all forms of collective recreation, congregating the attending people, to express its emotions, enjoy artistic expressions, where the invitation to the public is open, general and undifferenced'.

14 For sake of clarity, any protected right is called a 'right'; for example, and in the terms of the Criminal Offences Code: life, freedom, any assets, property. In Spanish, it is referred to as 'bien jurídico tutelado'.

15 Article 358 of the Criminal Code.

16 There are several types of commercialisation of sports events (among others). The most used are the following: sponsorship; merchandising; and broadcasting rights.

18 Currently there is an alliance signed between several private broadcasters called 'Alianza contra la Piratería de Televisión Paga' to try to show the importance of having laws to protect those broadcasters and its rights, because it represents not only income for them, but for the states represented in taxes not collected: https://www.alianza.tv/es/#:~:text=La%20Alianza%20contra%20la%20Pirater%C3%ADa,FTA%20(Free%20to%20Air).

19 Article 271.

20 As described in Section I of this chapter, sports in Colombia are divided into amateur and professional categories. Amateur sports do not admit payments in favour of the athletes and the professional is assumed as the relevant class under a labour contract.

21 Law 181 of 1995 in Article 16 describe the definitions of, among others, professional and amateur sports. Professional practice implies the payment of a salary and subordination of the athlete (or employee) to the orders of the employer. That subordination implies the obligation to obey the internal rules of the employer and follow orders (technical and tactical orders, for example).

22 The antitrust rules also seeks to prevent the abusive use of a dominant position, Decree 2153 of 1992 includes (among others) to sell in different conditions in order to diminish or eliminate competence; to obstruct or impede to third parties to access markets or channels of commercialisation; and to promote mergers and acquisitions of enterprises to control the industry unless it is demonstrated and proven to benefit the markets of such mergers and acquisitions.

23 About US$14,000.

24 Taxation unit established to unify concepts to make easier to understand tax duties.

25 There is a special provision but applied only to artists and production, but it has not yet reached the sports events and activities.

26 Specificity is a sporting principle applied globally and recognised in Colombia first through ruling C-320 of 1997 of the Constitutional Court, determining that it is perfectly possible to establish rules responding to specific sporting issues (not only through competence but to the industry).

27 Ruling C – 376 of 2009 of the Constitutional Court of Colombia.

28 Highlights include: (1) illegal games are those provided by operators not duly authorised by Coljuegos, and players using these illegal operators are jointly liable for any fines that could be imposed on the operator; (2) sports betting is called 'novel games' since they differ from lotteries and bingo; and (3) the licensee permitted to promote betting games must donate some funds to the health system (which is to justify the establishment of a state entity to control betting).

29 Three types of payments must be performed to Coljuegos, the entity in charge issuing licences to perform activities of betting, to obtain the licence and operate: (1) annually, there has to be paid a contribution equal to 811 minimum wages; (2) 15 per cent of gross income less the prices dully paid for each game performed; and (3) administrative expenses equal to 1 per cent of the amount paid according to (1).

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