Lawyer dismantled transfer dispute between NAVI and Virtus.pro: “The industry has not yet reached legal maturity”

After the transition Bakyt Zayac Emilzhanova of Natus vincere in Virtus.pro among Dota 2 fans, a discussion erupted that the transfer market on the professional stage needs to be regulated. To understand this story and to understand if Valve really needs to take control of the situation, we turned to Denis Bushnev, project manager of the SCHNEIDER GROUP’s legal department, with a request to consider the Zayac case.

After reviewing the details of the transition, the expert confirmed the legal insolvency of the market for transfers in e-sports. According to Bushnev, “the industry has not yet reached legal maturity”

The expert noted that the main “legal force” in the relations between teams and players (as well as in solving transfer issues) were and remain individual agreements. However, in e-sports there are a number of nuances that complicate the work with these documents.

Denis Bushnev
Denis Bushnev:

“The e-sports market operates in an international environment where each country (even within the CIS) has its own unique legislation. What is possible under the laws of Ukraine is not always similarly applicable in Russia. It is possible that the Virtus.pro team also took advantage of this. <...>

Some teams may regulate relations with foreign law contracts – for example, if they are part of a holding company registered abroad. Such contracts may include items that are not available under the laws of Russia or another CIS country. English law allows the use of the non-competition rule, which may limit the ability of the dismissed employee to work for another team without the consent of the former employer. ”

Bushnev called the main difficulty the absence in e-sports of a single organization that would regulate relations between clubs and players. According to the expert, such a structure will inevitably appear in the industry – it is only a matter of time. Then the rules for all teams will be the same.

The project manager of the legal department of the SCHNEIDER GROUP suggested that now the role of such a regulator could be taken by the World Esports Association (WESA). However, its jurisdiction does not extend to all tournaments and not to all teams, which limits the organization’s capabilities. In addition, Bushnev noted that WESA will be able to obtain such powers only if all clubs, players and maintenance organizations begin to include in their contracts a clause that they agree to refer all potential disputes to the association.

Bushnev also remembered the global e-sports federation GEF, which was created in Singapore at the end of 2019. She was supported by Tencent Corporation, and the organization’s senior management team included former functionaries of the International Olympic Committee. The expert noted: “GEF can claim to create a unified framework for regulating the relationship between the parties in the e-sports market.”

At the same time, there is a chance that a conflict of interest will arise in the GEF, since Tencent is a shareholder of Riot Games. In this regard, Bushnev admitted that over time, the federation may begin to give priority to games from the developers of League of Legends.

The discussion that the e-sports transfer market needs to be regulated began after Zayac transferred to Virtus.pro. The player took advantage of the NAVI error and declared himself a free agent, which allowed VP to sign it for free. After that, the CEO of the Ukrainian club, Yevgeny Zolotarev, announced his intention to arrange a meeting of the leaders of e-sports organizations from the CIS in order to discuss the rules of conduct in the transfer market. It will take place on February 21 in Moscow.