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Everything About Sports Governance In India

Everything About Sports Governance In India

Sports Governance in India: Indian courts view sports as matters of public interest and view them as an essential component of Indian culture, emphasizing the positive effects that sports have on social interactions, mental and physical health, and overall quality of life.

According to the Indian constitutional framework, governments have the authority to regulate a variety of issues, including sports governance. Several Indian states, including Rajasthan and Haryana, have passed legislation about a variety of sports-related issues, including the establishment, regulation, and promotion of local, district, and state-level sports groups. Some states have created laws outlining their goals for sports in their jurisdictions.

However, the central government is responsible for overseeing national and international sports. Many sporting associations and federations working under the Ministry of Youth Affairs and Sports (MYAS) oversee the management of sports in India.

Everything About Sports Governance In India

Organisational form

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Under the auspices of MYAS, the Department of Sports (DOS) is tasked with establishing rules and regulations, specifying the prerequisites for national sports federations (NSFs) to become eligible, and figuring out how much money they can receive in grants and other forms of financial support. In addition, DOS is in charge of overseeing esports as a component of multi-sport events, the Sports Authority of India’s operations, and the participation of foreign and Indian sports teams in international competitions held in India. MYAS receives advisory support from the All India Council for Sports.

Under the DOS, the SAI functions as a separate entity. Talent scouting, national team training and preparation, sports infrastructure development, international events, and the execution of numerous DOS projects are among its goals. DOS and SAI collaborate with state governments, federations, and bodies at the state and local levels, the Indian Olympic Association (IOA), and NSFs.

Overseeing the representation of athletes or teams in international multi-sport tournaments such as the Asian Games, Commonwealth Games, and Olympic Games is the IOA, an autonomous body.

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State Olympic associations (SOAs), district associations, certain multi-sport organizations, and NSFs are among its members; these entities function at the state and district levels to advance the goals of the IOA. It is recognized as a society under the Societies Registration Act 1860 and serves as the governing body of the Olympic movement in India.

The primary sports governing bodies in India are known as NSFs, and they are in charge of overseeing and managing each of their particular sports. In India, there are about sixty NSFs. Each NSF is associated with a certain sport. District and state-level sports associations are connected to their corresponding NSFs. NSFs are obliged to be connected to the international federations that are relevant to them, and they function as societies or trusts. 

NSFs are autonomous organizations that manage their internal affairs without interference from the government. However, in carrying out their duties, NSFs must abide by the regulations set forth by MYAS from time to time as well as the guidelines of the Indian Olympic Association or any applicable international federation.

Furthermore, a few non-Olympic sports have their own governing organizations. The Board of Control for Cricket in India (BCCI), for example, oversees cricket in India and runs the sport independently without financial support from the government. Despite not being an NSF, the BCCI competes in international events because it is a member of the International Cricket Council. 

However, clearance from DOS, the Ministry of External Affairs, and the Ministry of Home Affairs is required for matters about international cricket. Furthermore, the Indian Supreme Court ruled that the BCCI’s decisions are subject to judicial scrutiny within the country’s constitutional framework since they carry out public tasks, such as choosing the country’s national cricket team. 

In India, non-sporting organizations and sports bodies are primarily established as societies with non-profit goals, while some are also established as businesses. 

Corporate governance

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The Basic Universal Principles of Good Governance of the Olympics and Sports have served as the foundation for policies designed to advance good governance in sports.26 At the national level, steps are being taken to combat age fraud in sports, prohibit sexual harassment of women in sports, and recognize the NSF annually to maintain their responsibility and transparency.27 Furthermore, each of the aforementioned autonomous organizations—including NSFs and the BCCI—has its own governance standards. The All-India Football Federation (AIFF), for example, has a code of ethics that contains guidelines for behavior and anti-bribery clauses.28 The BCCI’s constitution includes regulations on conflict of interest and good governance, among other things. 

Corporate Liability

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Non-standard financial practices (NSFs) may have repercussions, such as the suspension or eventual revocation of their NSF operating permits.

Furthermore, under the applicable law, such as the Societies Registration Act 1860 (read with state-specific rules) or the Companies Act 2013, liability may arise upon the sports body (if it is a body corporate) as well as responsible individual members thereof, depending on the nature of irregularity (e.g., fraud, embezzlement of funds, corruption, or negligence).

The applicable sports federations’ charter documents also specify liability. For example, under the Hockey India Code of Conduct and Sanctions, members of Hockey India are jointly and severally accountable for any infraction of the Hockey India legislation or rules and regulations. According to the BCCI’s constitution, members are accountable for misbehavior or actions that harm the organization’s and cricket’s interests.

The dispute resolution system

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Access to courts Internal grievance redressal mechanisms

The internal grievance redressal or dispute resolution system established by the relevant governing bodies is the first forum open to an aggrieved party against decisions made by sports governing bodies.

NSFs and the IOA are required to abide by the National Sports Development Code of India 2011 (the Code), which stipulates that NSF shall set up an unbiased grievance redressal system for players. In the form of appeals or reviews, such machinery may offer several tiers of conflict resolution platforms inside the relevant NSF. A few NSFs have taken the initiative to see to it that this kind of system is in place. For instance, AIFF mandates that its members include provisions in their contracts granting AIFF judicial bodies exclusive jurisdiction.

The International Council of Arbitration for Sport (ICAS) and the Court of Arbitration for Sports (CAS) can hear appeals of the judgments made by the disciplinary committee established by the AIFF. Hockey India has a system in place for referring disagreements to its inquiry committee, the judgments of which can be challenged before the executive board and ultimately the Congress.

Furthermore, the IOA offers a conflict resolution process handled by the disputes commission, whose rulings can be appealed to the arbitration commission and ultimately to the Court of Appeals. These forums have authority over NSFs, SOAs, and other IOA members in addition to the IOA itself. A governing body may, however, only use the arbitration commission under the terms of the relevant arbitration agreement or its regulations.

In addition, the BCCI has set up a grievance redressal system and an ombudsman for impartial dispute resolution. The types of grievances that can be brought before the ombudsman are specified in the BCCI constitution. Furthermore, grievances concerning conflicts of interest are directed to an ethics officer.

Recourse to CAS

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In some situations, a party may file a dispute with the Swiss Arbitration Commission (CAS), the highest authority in international sports. But only if the relevant NSF’s rules and regulations—like those of the AIFF, for example—allow it or if there is a separate arbitration agreement in place—may the jurisdiction of CAS be used. Since the National Anti-Doping Rules 2021 allow for an appeal to CAS, parties involved in doping issues may invoke the jurisdiction of CAS. Since most NSFs do not offer CAS remedies, the Delhi High Court has requested that the Indian government take into consideration ordering NSFs to include this in their regulations.

In response, MYAS published a circular asking NSFs to think about two things: 

(1) creating efficient, open, and just grievance redressal processes for the quick resolution of disputes; 

(2) adding a clause that permits disputes to be brought before CAS or ICAS. However, even in cases where using CAS is feasible, financial constraints may render doing so unfeasible, particularly given that many Indian athletes come from lower-income families.

Recourse to the writ jurisdiction of Indian courts

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According to the Indian constitutional framework, anybody who believes that the state or one of its agents has violated their legal or fundamental rights may file a complaint with the Supreme Court or state high courts. Furthermore, courts have consistently held that private sports organizations are subject to writ jurisdiction since they carry out crucial public functions that are comparable to state functions, such as managing sports, a vital public function that has an impact on Indians’ quality of life. As NSFs, the IOA, SOAs, and district-level organizations are state entities and receive government funding in addition to carrying out public functions, they fall under the court’s writ authority.

Even though sports governing bodies’ decisions and actions may be subject to writ jurisdiction, courts are usually reluctant to get involved in what they view as executive decisions, and their review authority is usually limited to the legality of the decision-making process. When there is a claim of arbitrariness, courts have used the reasonableness requirement of the Wednesbury principles to decide whether to exercise discretion. 

Courts usually only get involved when a decision is irrational, violates procedural rights, or offends the court’s conscience. For example, decisions made by governing bodies regarding team selection, athlete suspension, disciplinary actions, award presentation, and other matters have historically been viewed as solely falling under their purview. 

However, the threshold for interference under writ jurisdiction may be met, for example, in the following situations: 

(1) the governing bodies’ decisions or actions are dishonest, arbitrary, or violate constitutional guarantees; 

(2) the governing bodies’ discretion has been used in a way that is arbitrary, capricious, perverse, or at odds with established practices or principles; or 

(3) The governing bodies have disregarded natural justice principles while carrying out administrative or quasi-judicial functions.

Sports arbitration

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The Arbitration and Conciliation Act 1996 (the Arbitration Act) governs arbitration in India. Unless otherwise prohibited by law or court order, disputes of both a civil and business nature may be arbitrated. Sports-related issues can normally be directed to arbitration since they are typically handled in person. In reality, the Indian government has promoted the arbitration of problems about sports and, in 2021, founded the Sports Arbitration Centre of India (SACI).

 Supported by the Ministry of Law and Justice, SACI is meant to function as an impartial authority that settles disputes quickly and openly.

Conditions for a valid arbitration agreement

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An arbitration agreement has to be in writing and can be either a stand-alone agreement or a section of a contract. In sports disputes, an arbitration agreement usually takes the form of an arbitration clause in individual contracts between athletes or other stakeholders and the governing bodies, or it can be found in the rules and regulations of the relevant governing body, which athletes will be bound by as a condition of joining the governing body.

Interim protection pending arbitral proceedings

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The Arbitration Act grants judges broad authority to provide temporary remedies. This includes the power to appoint a receiver, secure the amount in dispute, or impose any other temporary action that would seem appropriate and practical for safeguarding the arbitration’s subject matter. The plaintiff must establish a prima facie case, a balance of convenience in its favor, and irreparable harm to it if the relief is denied, according to general requirements that must be met in India.

Enforceability

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Arbitral tribunal decisions can take two forms: domestic awards, which come from arbitrations held in India, or international awards, which come from arbitrations held in nations that are signatories to the Geneva or New York Conventions. As a court order, both of these awards are enforceable.

There are few grounds available for contesting an award once it has been granted. Judges cannot assess the merits of the disputes in such a challenge and will not get involved unless the arbitral tribunal has adopted a position that is contrary to what a reasonable or fair-minded person would have believed. The following are the restricted grounds for contesting a domestic award:

  1. incapacity of parties;
  2. the invalidity of the arbitration agreement;
  3. non-compliance with the principles of natural justice;
  4. scope of reference being exceeded or the procedure not being followed;
  5. if the subject matter of the dispute is non-arbitrable;
  6. if the arbitral award conflicts with the public policy of India; and
  7. if the award is vitiated by patent illegality.

As regards a foreign award, courts can refuse enforcement if:

  1. the parties were incapacitated;
  2. the arbitration agreement is invalid;
  3. a party was not given proper notice of the appointment of an arbitrator or the proceedings;
  4. it is beyond the scope of reference;
  5. the composition of arbitral authority or procedure was not followed; or
  6. An award has been set aside in the country in which it was passed.

If the dispute’s subject matter is not arbitrable or if enforcing it would go against Indian public policy, courts may also decline to enforce it.

Dispute resolution system

Organization of sports events

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i The relationship between organizer and spectator

In India, the relationship between the host and the guest is contractual. The terms and conditions of ticket purchases, which may include provisions reserving the right of access, stating that tickets are non-transferable, and disclaiming the organizer’s liability about the event, usually identify the organizer (who need not be an NSF).

ii Relationship between organizer and athletes or clubs

When it comes to franchise-based leagues, the league operators sign contracts with teams or sportsmen to bring them on board for a league or competition. Organizers frequently host auctions where they solicit bids for league franchisees. To build their teams, the organizers also invite teams to submit bids for players, both domestic and foreign. Under the provisions of a current contract, the players represent their teams. In certain instances, joining the organizing organization is a condition of the franchise agreement.

iii Liability of the organiser

Generally speaking, the terms and conditions that come with buying a ticket release the organizer from any obligation for damages or injuries.

On the other hand, officials have a responsibility to protect athletes and spectators. Liability may result from the organizer’s negligent acts (such as a safety or security breach) in which they neglected to take the required or reasonable precautions. Claims against the organizers may also arise from service deficiencies (such as the absence of facilities provided) under Indian consumer laws. Criminal culpability may apply in some situations. For instance, the Tamil Nadu Cricket Association was ordered to file a criminal complaint because they were putting spectators’ lives in danger by holding matches in a stadium that was structurally unstable.

In addition, organizers must abide by regulations about lawful assembly, upholding public order, and protecting the environment, particularly noise pollution.

iv Liability of the athletes

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Athletes’ culpability usually stems from their contract conditions with the sports federation or team, or the laws and regulations of the sport’s governing organization. Furthermore, as Indian federations are associated with international federations, the code of conduct of those organizations typically applies. For instance, by the International Cricket Council’s Code of Conduct, players may face fines or suspensions for actions like intimidating, threatening, or physically attacking another player, match official, or spectator. In a similar vein, violators of the FIFA Code of Conduct risk disciplinary punishment if they insult or discriminate against other players, among other offensive behaviors.

Furthermore, depending on the specifics of the offense, responsibility under India’s criminal or civil laws may also exist.

v Liability of the spectators

To be allowed to watch a game, spectators must abide by the regulations and guidelines set forth by the event organizers. The organizers retain the authority to impose restrictions on a spectator or to refuse admission. In addition to facing civil or criminal penalties, instances of misbehavior, nuisance, causing disturbance, or unauthorized entry onto the playing field may result in expulsion from the event.

vi Riot prevention

Organizers frequently use private security services or state police85 for security measures, even though it’s not required by law. Some event planners create a crisis management strategy to address crowd control issues in scenarios like chaos within the stadium.

Commercialization of sports events

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i Types of and ownership in rights

A sport or sporting event carries a multitude of financially exploitable rights. These include the rights to broadcast on various platforms (such as digital, satellite, etc.), to franchise teams in leagues like the Indian Premier League (IPL), Pro-Kabbadi League, etc., to sponsor teams (such as exclusive, title, jersey, or equipment sponsors), to merchandise, to gamification, and to personality. Many federations (including the BCCI) grant permission for merchandise to use athlete photos captured during a match or match excerpts, along with rights related to gamification, fantasy sports, and NFTs.

These rights are given under agreements with the federations (like the BCCL for the IPL) or the event organizers (like Mashal Sports, who run the ProKabaddi league).89 The agreements specify terms for payment, the duration of the rights granted, grounds for termination, and other details. Restrictions on the transferability of rights are common because of the nature of the rights, the procedures used to issue them, and the significance associated with them.

ii Rights protection

Unauthorized use of intellectual property may give rise to infringement or passing off claims, which could subject the infringer to legal consequences. Injunctions, damages, and remedial orders for the seizure and destruction of the infringing material are some examples of remedies. In the event of copyright and trademark violations, criminal prosecution may also be pursued.

iii Contractual provisions for exploitation of rights

From the standpoint of paperwork, there are subtleties under Indian law that must be taken into consideration. The Copyright Act, for example, mandates that the period and territory of an assignment or license be specified; otherwise, these would be assumed to be five years and India, respectively. 

Furthermore, unless otherwise specified, rights that have been assigned or licensed return to their grantor if the assignee or licensee does not use the rights for their intended purpose within a year of the rights being granted. Under Indian law, issues about royalty payment (particularly for music) are intricate and require careful handling.

Professional sports and labor law

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i Mandatory provisions

Sports federations typically hire athletes on a contractual basis. Athletes and NSFs like the Wrestling Federation of India (WFI) sign direct contractual agreements. These agreements specify, among other things, the length of the contract, the pay scale, and the grounds for termination. WFI has allowed wrestlers to make agreements with other parties as well, as long as WFI approves of the arrangement and is included as a party.

The BCCI publishes a player contract list each year for cricket, on which players are ranked differently. This determines their annual retainer salary. In football, the terms of a professional player’s engagement are outlined in a contract they have with the team that employs them.

ii Free movement of athletes

Athletes may be subject to special contractual requirements from federations. In football, for example, a player may register with one club at a time and with a maximum of three clubs in a season; yet, the player may only play for two clubs in certain circumstances. Additionally, some restrictions prevent termination throughout the season.

The internal rules of the contests run by the Indian sports federations usually control the movement of international athletes. For example, the IPL’s playing conditions rules limit the number of international players to four in the starting eleven for each match. To participate in Indian sporting competitions, foreign athletes must get a no-objection certificate from some domestic leagues.

iii Application of employment rules of sports governing bodies

Players’ terms of engagement (which include benefits and entitlements) derive from their agreements with the sports federation or the team owners; they are not employees in and of themselves. Certain perks are offered to players by the federations; for example, the AIFF Transfer Regulations have stipulations for maternity leave for female players. Cricket players and umpires can apply for a provisional pension from the BCCI. In addition, the government offers athletes incentives, special leave, and reserved positions in certain jobs for sports personnel.

Everything About Sports Governance In India: Sports and antitrust law

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Under the Competition Act of 2002, the Competition Commission of India (CCI) regulates combinations and forbids anti-competitive practices, the misuse of a dominant position by any business or organization, and practices that have or may hurt competition. The following lists the sports federations whose operations the CCI has previously monitored.

Concerning the IPL’s administration and anomalies in the sales of IPL-related rights, including franchise, media, and other sponsorship rights, accusations were made against the BCCI. 

The CCI concluded, among other things, that the BCCI’s decision to forbid an IPL-rivalling cricket match would amount to an abuse of power since it would deny other leagues access to the market.

Marathon events could no longer be organized without the approval of the Athletics Federation of India (AFI). The question of whether this constituted an abuse of power or was anti-competitive was taken up by the CCI. However, after the AFI changed the restriction clause, the case was dropped.

Chess players are prohibited from competing in events that are not approved by the All India Chess Federation (AICF) due to a condition that was added to their tournament form. The CCI concluded that this restrictive condition restricted player distribution in the chess tournament market and prohibited competing tournaments from entering the market. For abusing its dominance and engaging in anti-competitive behavior, the CCI issued an order against the AICF.

Everything About Sports Governance In India: Sports and taxation

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The tax rate on income received by non-resident sportsmen (including athletes) who are not Indian nationals through sports participation, advertisements, or article contributions in Indian newspapers, magazines, journals, etc. is twenty percent. Twenty percent tax is also applied to income obtained by non-resident referees or umpires for any sport played in India, as well as income generated by non-resident sports associations or institutions in the form of a sum promised to be paid. If a person stays in India for more than 182 days within a fiscal year, they are considered residents and are subject to taxation under standard tax laws.

Any expenses paid in generating such revenue are not eligible for deduction, and the payer is required to withhold and deposit tax with the Indian Treasury. Beneficial clauses, however, might be relevant if they are part of a double taxation avoidance agreement signed with the nation where the athlete, sports organization, or referee resides.

The goods and services tax (GST) would be levied based on the type of underlying supply that is received in exchange for consideration, as seen from an indirect tax standpoint. Nonetheless, two exceptions have been made: 

(1) services given by athletes to a recognized sports organization in exchange for their participation in a recognized sports event; 

(2) services given by a recognized sports organization to another recognized sports organization.

Everything About Sports Governance In India: Outlook and conclusions

India is a sports-loving nation that is obsessed with cricket. With the popularity of the IPL in a nation where cricket is nearly worshipped, the sports industry in India has grown dramatically in recent years. This increase is demonstrated by the emergence of franchise sports leagues, player salaries, and athlete recognition both domestically and abroad. At the same time, new sports-related businesses like fantasy leagues and e-gaming are becoming more and more popular. As a result, business interests in the sports sector are expanding rapidly. It follows that disagreements over related matters, such as media and broadcasting rights, team composition, and contractual duties between parties, would inevitably become more frequent. 

The way that sports regulating bodies operate is likewise coming under more and more scrutiny. The Indian government and judiciary are placing a strong emphasis on quick, transparent, accountable, and effective dispute-resolution procedures. This includes a move toward arbitration and a heightened awareness of accountability and transparency in the management of sports governing bodies. The result is a change in the sports law landscape in India that takes these changes into account.

 

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