Slam dunk justice: The BAT’s game-changing Payment Order Procedure for basketball disputes

On 17 January 2024, the Basketball Arbitral Tribunal (BAT) presented a new edition of its BAT Arbitration Rules (BAT Rules)1, which entered into force as of 1 February 2024. A major amendment made to the BAT Rules concerns the reshaped Article 19 and the new Payment Order Procedure (POP) introduced therein. For those unfamiliar with this, it is described by BAT as ‘comparable to default judgements before state courts’.2

The establishment of BAT by the International Basketball Federation (FIBA) in 2007 undoubtedly revolutionized the resolution of contractual disputes in basketball. Since then, BAT has not only become a go-to dispute resolution body in the basketball world, but its case law significantly affects the process of drafting basketball contracts. Due to the combination of innovative solutions – both with respect to the procedure and law applicable to the merits – implemented in the BAT Rules, BAT turned out to be relatively fast, simple, cost-efficient, and concurrently just dispute resolution body. Furthermore, some of these innovative solutions of BAT mechanism has been adopted by other sports bodies for the settlement of the disputes.

The introduction of POP fits well into the cutting-edge formula of BAT. After all, it is arguably the first of its kind in international and sports arbitration3. Most importantly, this groundbreaking step of BAT aims at answering the needs of the basketball community. The POP is built upon the concept of simplified judicial mechanisms, well-established in several state jurisdictions. Its primary idea is to bring a quick decision on a submitted claim, based just on the fulfillment of formal requirements and without examining the merits of the dispute. The POP may be applied only with respect to certain claims, considering the parties and amount in dispute. At the same time, POP may either result in a definitive decision or – due to an objection by the respondent – turn into fully-fledged dispute resolution process. Such a legal construction aims on the one hand at reducing the overall costs of the arbitration proceedings, while on the other implementing a more equitable distribution of the overall financial load between the parties.

This article discusses:

• Background to BAT and the origin of the POP
  • Broadening the access to BAT in low value disputes
• When can the POP be used?
  • The need for a valid POP clause
  • Will BAT accept the POP for contracts pre-dating 1 February 2024?
  • The EUR 15,000.00 limit
  • No multi-party claims; respondent must be a single legal entity
  • Cannot be used for multiple claims arising from different legal relationships
• How the POP process works
  • Triggered by filing a Payment Order Request
  • Immediate decision by BAT President
  • Issuing of a Provisional Payment Order and Respondent’s right to file an objection
  • Issuing of a Final Payment Order (if no objection)
  • Process if the Respondent objects
• The legal effects of POP decisions
  • Is an FPO a genuine arbitral award for the purposes of PILA and NYC Convention?
  • Could the POP’s simplified procedure be grounds for challenge?