Thursday, 17 August 2017

SEA Games 2017 : 3 Sports Law issues you may wish to know about

Every two years, South East Asia hosts a regional sports carnival better known as the Southeast Asian Games (SEA Games). The Southeast Asian Games originated from the South East Asian Peninsula Games (SEAP Games). The SEAP Games was conceptualised by Luang Sukhum Nayaoradit, former Vice President of the Thailand Olympic Committee and in June 1959, the SEAP Games Federation Committee was formed. The founding members consisted of Myanmar, Cambodia, Laos, Malaya (now Malaysia), Thailand and Vietnam. The first SEAP Games was then held in Bangkok from 12 - 17 December 1959.

After the 8th SEAP Games in 1975, Brunei, Indonesia and Philippines were admitted into the federation and the SEAP Federation was then renamed the Southeast Asian Games Federation (SEAGF). Subsequently the Games were also renamed  the Southeast Asian Games (SEA Games).

This year in 2017, our home country Malaysia will host the 29th SEA Games; themed “Rise Together”. From a Sports Law point of view, the Games brings to the fore, rules and regulations which are normally associated with a regional sports event. In this article, we wish to tackle 3 issues about the SEA Games from the Sports Law perspective.

1.     Eligibility

Under Article 31 of the SEAGF Charter and Rules, the rule only allows the nationals of the country in National Olympic Committee (NOC) to represent the NOC in the Games. All disputes relating to the determination of the country shall be resolved by the Executive Committee in accordance to the By-Law to Rule 46 of the Olympic Charter.

According to the SEAGF directive, the member nations of Southeast Asia consists of Malaysia, Philippines, Singapore, Vietnam, Cambodia, Timor Leste, Myanmar, Laos and Brunei. This explains that only the nationals of the countries aforementioned may be eligible to participate in the Games as they are part of the NOC. An athlete who is holding a status of Permanent Resident (PR) is not explicitly allowed to represent the country in which they hold a PR.

However, Article 31 provides that should there be a dispute on the nationality of the athlete, the Executive Committee shall have the final say by referring to the By-Law to the Olympic Charter. With reference to By-Law to Rule 41 of the Olympic Charter; if a competitor who is a national of two or more countries at the same time, the athlete has the option of representing the country of the athlete's choice. Therefore technically if an athlete holds more than one nationality and one of it belongs to the Southeast Asian member nation, the athlete may be eligible to participate in SEA Games.

2.              Doping

Generally in any sporting event, the relevant doping agency will put into place a system of tests and enforcement against usage of drugs to enhance performance. The principal authority for anti-doping in  sports is the World Anti-Doping Agency (WADA).

WADA releases a list of performance enhancing drugs which are prohibited / banned. WADA also legislates a set of rules which are generally applied, enforced and engaged in at all international sporting events. The pertinent aspects of the rules involves impromptu tests on athletes, consequences of a positive finding of drugs and the adjudication which follows the finding of a positive test.

According to the SEA Games technical handbooks for various sports, anti-doping control during the SEA Games will be taken charge of by the Malaysia Organising Committee for Kuala Lumpur 2017 (MASOC) under the guidance of SEAGF. Through the collaboration between MASOC and SEAGF, the World Anti-Doping Code (WADA Code) will be applied for the SEA Games. MASOC will strictly abide to WADA’s directions relating to the prohibited list of medication, standard procedures for tests and analysis. MASOC will also be setting up a doping control station at the competition venue similar to what we see commonly practised during the Olympic Games or any other world class sporting event, to provide immediate support for anti-doping operations during the Games.

Therefore, as a doping offence is one of strict liability; if an athlete is found to have failed a doping test conducted by MASOC in accordance to the WADA Code, the athlete may be found liable for the offence. An athlete who is found positive may be stripped off any medal won and/or be immediately removed from the Games. Nevertheless, the athlete has the right to lodge an appeal which may be resolved by a special arbitration panel.  

3.         What will happen if there is a dispute during the SEA Games?

Speaking about the formation of tribunal above, The Malay Mail on 10th January 2017 had published that “the Olympic Council of Malaysia (OCM) has for the first time introduced the Kuala Lumpur Regional Centre for Arbitration (KLRCA) as an independent body that will adjudicate cases arising during the Kuala Lumpur Sea Games”. The formation of this tribunal particularly the involvement of KLRCA  augurs well for the development for the dispute resolution in sports.  

According to The Malaysian Digest on 21st March 2017, “the role of such arbitration panel is to solve and make decisions on disputes immediately. The objective should be to resolve issues in 24 hours, just like in Olympics, Asian Games and Commonwealth Games and will only be in service for the Games”. Thus, if any dispute arises during the Games, the matter will not need to resort to the common court system but the tribunal panel shall assume the responsibility to tackle such issues efficiently.

Meanwhile, Malaysian Digest has also mentioned in press statement aforementioned, in order to maintain the impartiality and efficiency of the panel for the tribunal, it must consist of 3 members from Malaysia and one each from Philippines, Indonesia, Cambodia and Vietnam. This seeks to ensure the diversity of the panel to prevent partiality.

When deliberating and deciding a dispute, the tribunal panel will adhere to the sporting-dispute standard of proof of “comfortable satisfaction”. This is illustrated in the cases of Veronica Campbell-Brown v The Jamaica Athletics Administrative Association (JAAA) and International Association of Athletics Federation (IAAF), where the panel held that the standard of proof is comfortable satisfaction. Effectively, the standard requires the complaining parties to establish sufficient evidence which would comfortably satisfy the panel. Generally, this standard is seen to be higher than the civil standard of “balance of probability” but somewhat lower than criminal standard of “beyond reasonable doubt”.


Sporting events are well known for being a bridge to fill gaps between people or nations. It is a language which is borderless and it connects the community towards unity. For the 29th SEA Games in Kuala Lumpur 2017, “Rising together” serves as the theme of the Games and that cultivates togetherness among Malaysians.

In addition, the strong anti-doping culture prevalent in SEAGF also augurs well for the development of anti-doping rules. With the abovementioned tribunal in place, any dispute pertaining to anti-doping issues can be dealt in a proper Sports Law manner as opposed to ad hoc hearings.

We look forward to a strong entertaining SEA Games but over and above that, we also look forward towards further improvement and enhancement of Sports Law through this SEA Games.

May the best team win!

Richard Wee, Lesley Lim, Justine Tong

Friday, 14 July 2017

The True Test of Fitness Centres in Malaysia

The recent sudden closure of True Fitness caused much havoc amongst gym users. True Fitness was established in Malaysia 12 years ago and this came to an end on 10 June 2017. Needless to say, members of True Fitness were taken by surprise by this unexpected closure which caused them great displeasure. Some members had been part of True Fitness since its early days, some even paid a large lump sum up front to use its facilities and some had joined the gym just before its closure.
            This review from a sports law perspective intends to offer a peek into some of the top issues to consider in order to protect members of a fitness centre and also, to prevent such a sudden closure from happening to other fitness centres in the future. 

1.     Is Fitness a Sport?  
-       Sport is defined as ‘an athletic activity requiring skill or physical prowess and often of a competitive nature’. The word ‘sports’ usually makes reference to activities like basketball, football or badminton. However, when the word ‘fitness’ is mentioned, it is commonly referred to as a hobby or some sort of physical activity to strengthen the musculoskeletal system. This conception however, should change as ‘fitness’ itself should be a sport on its own. If and when fitness is acknowledged as a sport, rules and regulations will need to be in place to control and regulate its activities.
Take CrossFit for instance. CrossFit has made a name for fitness as a sport because of the various competitions that they organise and the sport is regulated on an ad-hoc basis. CrossFit athletes are subjected to certain rules and regulations and competition standards, all enforced separately. Since majority of the competitions take place over a short span of 1 - 2 days, the high cost of placing sport governance means that the rules are enforced loosely and ineffectively.
-       From the Sports Law point of view, defining fitness as a sport would mean that the governance of fitness centres may fall under the ambit of Ministry of Youth & Sports. If that is the case, the Ministry may be able to step in to supervise this activity. At this moment, the membership of this fitness centre seems to be governed by the Domestic Trade, Co-operative and Consumerism Ministry which would lead to a governance and regulation with regards to the business of fitness centres. However, over and above the Domestic Trade, Co-operatives and Consumerism Ministry, if the issue of fitness centres falls within the realm of sports, the Ministry of Youth and Sports can govern and regulate the activity of fitness centres as a whole. 

2.     Football has FAM, Badminton has BAM, Fitness has???
-       Should an association or organisation be established to govern fitness centres? Possibly. Having an organisation overlooking fitness competitions and fitness centres would create a transparent governing system. This proposed organisation may have regulatory characters and enforcement powers which could form a uniformed method of maintaining and running a fitness centre.
-       In Malaysia, the Sports Commissioner’s Office acts as a ‘watchdog’ to regulate rules for all registered sports associations. With the involvement of the Sports Commissioner’s Office, the owner of fitness centres would then have to adhere to several rules before setting up a gym which would inevitably protect fitness centre members. However, the Sports Commissioner’s Office under the Sports Development Act 1997 is predominantly involved in the governance of sports-related clubs and/or associations. Sport events and tournaments may also fall within the watchful eyes of the Sports Commissioner’s Office. Perhaps the Sports Commissioner’s Office may not be the ideal office to regulate fitness centres as fitness centres are generally different in terms of character and purpose as opposed to sports clubs or sports tournaments.
If the ministry wishes to utilise a readymade and pre-existing authoritative organisation to govern the fitness centres, an amendment to the Sports Development Act 1997 to extend the powers of the Sports Commissioner’s Office to fitness centres may be another option. 

3.     Fees Before Flex
-       Joining a fitness centre or a gym is a double-edged sword. One can now get fit but one might also get stuck in a binding contract that at times, feels like forever. Just like the recent closing down chaos of True Fitness, members were not able to use the centre’s facilities although membership fees were fully paid for the remaining period of the year or even for years to come. The method of payment ought to be regulated by a proposed association or organisation mentioned earlier in the above paragraph.  This would ensure that gym goers will not be left in a state of limbo when the gym suddenly shuts down without any preliminary warnings.
-       Another option to explore is to impose rules on companies running fitness centres to subscribe to insurance specifically to protect membership fees. Such an insurance could reduce the impact of closure and could be activated when sudden closure of fitness centres occurs. 

4.     ‘Trust’ Fitness
-       A gym membership is a contract which allows members to use the facilities, effectively it is a ‘licence’ to enter a gym.  Due to this legal concept of ‘licence to enter’, gym owners could expel an individual should that individual be in contravention of any particular rule. The recent sudden closure of True Fitness to its gym members without proper notice and effective exit mechanism of its membership has amounted to a PR disaster and this will very likely attract legal suits against the gym.
-       When a member pays for his/her gym membership, he/she is akin to a trustee. Where an express trust (such as the trust between True Fitness and its members) fails, a resulting trust (an equitable reversion) takes place to return the undisposed beneficial interest to the settlor.
-       Debtors ought to segregate the creditor’s money from the debtor’s general assets so that in the event the debtor becomes insolvent, the creditor’s money is refundable. If the trust fails (which it has in this case of True Fitness), then the amount paid becomes the subject to a resulting trust in favour of the members who had originally advanced the credit/monies.
-       As True Fitness can no longer give its members the agreed beneficial interest in exchange for receiving membership money, the consideration paid should result back to the members.

If the fitness industry in Malaysia is regulated by proper rules and governed by organisations/associations just like the sports industry, members would automatically be protected. Currently, there is still a lack such regulation (as discussed above), therefore members have little option but to fall back on the vague and inaccurate laws set out by the Domestic Trade, Co-operatives and Consumerism Ministry.

By Richard Wee, Lesley Lim, Vincent Lim

Friday, 23 June 2017

Axiata Arena : new dawn in Stadium Naming Rights in Malaysia #SportsLaw


Alongside the growth of the sports industry in recent times, there has been a trend for corporations and individuals of means to invest in sport stadiums through naming rights, a form of collaboration between two parties resulting in a company name being synonymous with a sporting team for a set period of time in exchange for a financial payment.

England has the 02 Arena while Shanghai has the Mercedes Benz Arena. Now, Malaysia has its very own multi-sport stadium, the Axiata Arena. Axiata Group Berhad has secured the exclusive sponsorship to work jointly with the Malaysia Stadium Corporation (Perbadanan Stadium Malaysia) on the redevelopment, modernisation as well as the rebranding of the Putra Indoor Stadium to Axiata Arena, making a mark in history as Malaysia’s first corporate named stadium.

A 10-year agreement worth RM55 million between the Malaysia Stadium Corporation and Axiata Group Berhad has been reached. The Malaysia Stadium Corporation will continue to be responsible for the maintenance while other upgrades will be to the extent of which Axiata had agreed upon as per the terms and conditions of the agreement.

According to the Youth and Sports Minister Yang Berhormat Khairy Jamaluddin during the Media Launch of Axiata Arena on 16 January 2017, finer details of the agreement are being worked on and YB also hopes that the stadium will have an impact in promoting Kuala Lumpur as a sports hub in the region. He said, “fans can now fully focus on supporting their team and this new development will ensure the ultimate fan experience”.  YB Khairy further added that the Axiata Arena will be the crown-jewel for the redevelopment of Bukit Jalil Sports Complex which will be known as KL Sports City by July 2017. Sports like badminton can be observed in this arena as this venue will be used as the main stadium for various sporting events during the 29th SEA Games and 9th  ASEAN Para games this August. 

Besides adding a nice ring to the refurbished stadium (AA - ‘Axiata Arena’), Axiata Group Berhad is also one of the largest Asian telecommunication companies, operating in Malaysia under the brand name ‘Celcom’, which is no foreign name to Malaysians. As Tan Sri Jamaludin Ibrahim had stated in the recent Axiata Arena press conference, Axiata wishes to “step up further to the next level of branding (as well as) help the government in the area of sports and be a part of the process (to boost Axiata Arena to the international stage)”, on par with world renowned stadiums such as Alliance Stadium in Germany and Etihad Stadium in United Kingdom. Needless to say, brand awareness is particularly important in the competitive telecommunications industry. Axiata will be able to build upon their community image and establish greater local creditability and acceptance as a result of being a party to the first Naming Rights Agreement in Malaysia. This was in fact the main reason for Emirates Airlines’ decision to sponsor Arsenal FC’s stadium back in 2009. The agreement proved to be a good investment when Emirates’ sales sky-rocketed past expectations since the agreement came into effect. Axiata’s representatives also mentioned that the agreement would give them a better presence against their competitors. The Malaysia Stadium Corporation also notes that the Naming Rights Agreement will ensure a stable financial backing for the advancement of Axiata Arena’s facilities in preparation for the SEA Games in August this year.

As with any agreement or contract, the success of the partnership lies not only in headlines and exposure but more importantly, in the details which are considered when drafting the agreement itself. This is where lawyers go through lengthy discussions and negotiations until a final agreement with terms which are favourable to both parties is achieved.

Based on the images shared during the Media Launch of Axiata Arena, it looks like Axiata’s logo will be displayed on the outside of the stadium (as seen in the picture above), but Axiata will most likely also request for their logo to be displayed inside the stadium – on the perimeter boards, on the roof and all other prominent positions – and if so, should thereby include such right in the agreement. On the same note, Axiata may also obtain a licence for the relevant Intellectual Property rights in order to use the stadium/arena’s footage (still and moving) and players or crowds in the company’s own advertisements. Another important aspect of the agreement is the protection of the exclusive rights to use the brand and the avoidance of detraction of the brand. Elements such as colours used on logos/words when on ground or  on tickets is vital for maximum benefit and thereby may be included in a schedule as part of the agreement.

Deciding on an appropriate payment mechanism is another aspect within lawyers’ jurisdiction. Be it a lump sum payment upfront, lump sum payment with ongoing annual payments, yearly payments, yearly payments with a bonus for success, or payment with additional payment in kind; the payment structure for the agreed RM55 million is dependent upon the situation of Axiata Arena, such as whether or not a larger lump sum payment upfront would be necessary to aid in the upgrading work.

As a final consideration, both parties should include a specific termination right in the agreement as a precaution should the mutually beneficial circumstance change. The Malaysia Stadium Corporation will want to ensure that they can terminate the agreement if or when Axiata defaults on its payment, while Axiata may want to terminate the agreement in the event of Axiata Arena’s failure to achieve success. The Malaysia Stadium Corporation may also wish to include the right to terminate the agreement where there is a higher offer from an alternative sponsor. Although it is seemingly unfair to Axiata, such clause may be agreed upon  the sponsor being granted the right of first refusal or an assurance that the Malaysia Stadium Corporation’s right to terminate may only become effective within the last two years of the agreement.

While not being a favourite idea to all, the reality is an old and inadequate stadium may remain status quo without the influx of a sponsor’s money. As YB Khairy Jamaluddin noted in the recent Axiata Arena Media Launch, “the average Malaysian would term Bukit Jalil as the nation’s sporting stadium but it does not reflect that. (People) get out as soon as possible because there is nothing to do there”. Conversely, sponsors are always looking to maximise their brand awareness through high profile institutions. Hearing Axiata’s name repeatedly over the television, radio, internet and newspapers alongside the SEA Games and ASEAN Paralympic Games this year is definitely an attractive upside. 

Looks like it will turn out to be a win-win situation for both parties after all.

By: Richard Wee, Lesley Lim, Vincent Lim*

*We are proud to be associated with this transaction and hope this be the beginning of many other similar renaming exercise in future.