The case revolves around a commercial dispute between Viking Schaatsenfabriek B.V., a Dutch speed skate manufacturer, and the German Speed Skating Association during the 1998 Nagano Winter Olympics. Viking alleged that the German team used skate boot covers made by K2, an American company, to obscure Viking's logo on their skates, thereby depriving Viking of promotional benefits and misleadingly suggesting K2's involvement. Viking sought injunctive relief, citing violations of Article 61 of the Olympic Charter and Japan's Unfair Competition Law, particularly concerning the "Klap System," a folding blade technology developed by Viking and widely used at the Games.
The Court of Arbitration for Sport (CAS) ad hoc Division, comprising Prof. Richard McLaren, Mr. Jan Paulsson, and Mr. Jacques Baumgartner, ruled that Article 61 of the Olympic Charter was not intended to regulate commercial competition but rather to control the size and placement of manufacturer logos on equipment. The panel found Viking's claims of unfair competition required a more detailed factual analysis than was possible within the expedited ad hoc proceedings. It also noted that the K2 covers served a functional purpose by reducing wind resistance, as opposed to being purely promotional, and that no German medalists had used them, weakening Viking's argument.
The CAS panel denied injunctive relief, as the immediate races did not involve the disputed covers, and a decision could be issued before any further races. It clarified that Viking could pursue damages elsewhere but could not rely on the Olympic Charter for commercial disputes. The ruling highlighted the limitations of CAS ad hoc jurisdiction in resolving complex commercial issues during the Olympics, emphasizing that such claims should be addressed through appropriate legal channels outside the expedited arbitration process.
The Respondent argued that the K2 covers had a legitimate functional purpose, reducing wind resistance from skate laces, which skaters might otherwise address with tape. The Panel found this explanation plausible, especially since the most successful German skaters had not used the covers, undermining Viking's claim that they were solely for advertising. The Panel concluded that the K2 covers were genuine equipment and their use did not violate the Olympic Charter.
The Panel reiterated that Article 61 was designed to limit commercial identification on Olympic equipment, not to regulate commercial competition. It denied Viking's request for injunctive relief, as no violation of the Olympic Charter or other sports regulations was proven. Allegations under Japanese Unfair Competition Law were deemed insufficiently substantiated and unsuitable for resolution within the ad hoc proceedings. The decision was confined to the Olympic Charter, leaving Viking free to pursue other legal avenues elsewhere. The application for injunctive relief was rejected, and no order was made regarding costs. The Panel's ruling focused exclusively on the Olympic Charter, without addressing unfair competition laws. The case underscores the challenges of resolving commercial disputes within the expedited framework of Olympic arbitration.