Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

The Kristoffersen ruling: the EFTA Court targets athlete endorsement deals - By Sven Demeulemeester and Niels Verborgh

Editor’s note: Sven Demeulemeester and Niels Verborgh are sports lawyers at the Belgium law firm, Altius.

 

Introduction

In its 16 November 2018 judgment, the Court of Justice of the European Free Trade Association States (the EFTA Court) delivered its eagerly awaited ruling in the case involving Henrik Kristoffersen and the Norwegian Ski Federation (NSF). 

On 17 October 2016, Kristoffersen had taken the NSF to the Oslo District Court over the latter’s refusal to let the renowned alpine skier enter into a sponsorship with Red Bull. At stake were the commercial markings on his helmet and headgear in races organised under the NSF’s umbrella. The NSF refused this sponsorship because it had already granted the advertising on helmet and headgear to its own main sponsor, Telenor. Kristoffersen claimed before the Oslo District Court, that the NSF should be ordered to permit him to enter into an individual marketing contract with Red Bull. In the alternative, Kristoffersen claimed damages up to a maximum of NOK 15 million. By a letter of 25 September 2017, the Oslo District Court referred several legal questions to the EFTA Court in view of shedding light on the compatibility of the rules that the NSF had invoked with EEA law.

If rules do not relate to the conduct of the sport itself, but concern sponsorship rights and hence an economic activity, these rules are subject to EEA law. The EFTA Court ruling is important in that it sets out the framework for dealing with - ever more frequent - cases in which an individual athlete’s endorsement deals conflict with the interest of the national or international sports governing bodies (SGBs) that he or she represents in international competitions.More...


Season 2 of football leaks: A review of the first episodes

Season 2 of #FootballLeaks is now underway since more than a week and already a significant number of episodes (all the articles published can be found on the European Investigative Collaborations’ website) covering various aspect of the (lack of) transnational regulation of football have been released (a short German documentary sums up pretty much the state of play). For me, as a legal scholar, this new series of revelations is an exciting opportunity to discuss in much more detail than usual various questions related to the operation of the transnational private regulations of football imposed by FIFA and UEFA (as we already did during the initial football leaks with our series of blogs on TPO in 2015/2016). Much of what has been unveiled was known or suspected by many, but the scope and precision of the documents published makes a difference. At last, the general public, as well as academics, can have certainty about the nature of various shady practices in the world of football. One key characteristic that explains the lack of information usually available is that football, like many international sports, is actually governed by private administrations (formally Swiss associations), which are not subject to the similar obligations in terms of transparency than public ones (e.g. access to document rules, systematic publication of decisions, etc.). In other words, it’s a total black box! The football leaks are offering a rare sneak peak into that box.

Based on what I have read so far (this blog was written on Friday 9 November), there are three main aspects I find worthy of discussion:

  • The (lack of) enforcement of UEFA’s Financial Fair Play (FFP) Regulations
  • The European Super League project and EU competition law
  • The (lack of) separation of powers inside FIFA and UEFA More...

Supporters of the ISLJ Annual International Sports Law Conference 2018: Altius

Editor's note: In the coming days we will introduce the supporters of our upcoming ISLJ Annual International Sports Law Conference 2018 (also known as #ISLJConf18). To do so, we have sent them a tailored questionnaire aimed at reflecting both their activities and their expectations for the conference. It is a good opportunity for us to thank them for their enthusiastic support and commitment to international sports law research. We are very happy to finish this series of interviews with Sven Demeulemeester from Altius, a Belgian law firm based in Brussels with a very fine (and academically-minded!) sports law team. 


1. Can you explain to our readers the work of Altius in international sports law? 

Across different sports’ sectors, Altius’ sports law practice advises and assists some of the world’s most high-profile sports governing bodies, clubs and athletes, at both the national and the international level. The team has 6 fully-dedicated sports lawyers and adopts a multi-disciplinary approach, which guarantees a broad range of legal expertise for handling specific cases or wider issues related to the sports industry. We are proud to be independent but, in cross-border matters, are able to tap into a worldwide network.

2. How is it to be an international sports lawyer? What are the advantages and challenges of the job? 

Sports law goes beyond one specific field of law. The multiplicity of legal angles keeps the work interesting, even after years of practising, and ensures that a sports lawyer rarely has a dull moment. The main downside is that the sports industry is fairly conservative and sometimes ‘political’. While the law is one thing, what happens in practice is often another. Bringing about change is not always easy. 

3. What are the burning issues in international sports law that you would like to see discussed at the conference? 

 The much-anticipated overhaul of the football transfer system is eagerly anticipated and is worth a thorough debate, also in terms of possible, viable alternatives. The impact of EU law - both internal market rules, competition law and fundamental rights – can hardly be underestimated. Also, dispute resolution mechanisms within the realm of sports - and an accessible, transparent, independent and impartial sports arbitration in particular - will remain a ‘hot’ topic in the sector for years to come. Furthermore, ethics and integrity issues should remain top of the agenda, as is being demonstrated by the current money-laundering and match-fixing allegations in Belgium. Finally, in a sector in which the use of data is rife, the newly-adopted GDPR’s impact remains somewhat ‘under the radar’.

4. Why did you decide to support the ISLJ Annual International Sports Law Conference? 

The ISLJ Annual International Sports Law Conference is refreshing, both in terms of its topics and participants. The academic and content-driven approach is a welcome addition to other sports law conferences in which the networking aspect often predominates.

Supporters of the ISLJ Annual International Sports Law Conference 2018: LawInSport

Editor's note: In the coming days we will introduce the supporters of our upcoming ISLJ Annual International Sports Law Conference 2018 (also known as #ISLJConf18). To do so, we have sent them a tailored questionnaire aimed at reflecting both their activities and their expectations for the conference. It is a good opportunity for us to thank them for their enthusiastic support and commitment to international sports law research. We are very happy to continue this series of interviews with LawInSport, a knowledge hub and educational platform for the community of people working in or with an interest in sport and the law  (many thanks to LawInSport's CEO Sean Cottrell for kindly responding to our questions).


1. Can you explain to our readers what LawInSport is about?

LawInSport is a knowledge hub, educational platform and global community of people working in or with an interest in sport and the law.

Our objective is to help people ‘understand the rules of the game™’. What does this mean? It means people in sport having access to information that enables them to have a better understanding the rules and regulations that govern the relationships, behaviours and processes within sports. This in turn creates a foundation based on the principles of the rule of law, protecting the rights of everyone working and participating in sport.  

2. What are the challenges and perks of being an international sports law 'reporter’ ?

I do not consider myself a reporter, but as the head of an organisation that has a responsibility to provide the highest quality information on legal issues in sport,  focusing on what is important and not just what is popular, whilst trying to stay free from conflicts of interests. These two issues, popularism and conflict of interest, are the two of the biggest challenges.

Popularism and the drive to win attention is, in my opinion, causing a lack of discipline when it comes to factual and legal accuracy in coverage of sports law issues, which on their own may seem harmless, but can cause harm to organisations and individuals (athletes, employees, etc).

Conflict of interest will obviously arise in such a small sector, however, there is not a commonly agreed standard in internationally, let alone in sports law. Therefore, one needs to be diligent when consuming information to understand why someone may or may not hold a point of view, if they have paid to get it published or has someone paid them to write it. For this reason it can be hard to get a full picture of what is happening in the sector.

In terms of perks, I get to do something that is both challenging and rewarding on a daily basis, and as  a business owner I have the additional benefit of work with colleagues I enjoy working with. I have the privilege of meeting world leaders in their respective fields (law, sport, business, science, education, etc) and gain insights from them about their work and life experiences which is incredibly enriching.  Getting access to speak to the people who are on the front line, either athletes, coaches, lawyers, scientists, rather than from a third party is great as it gives you an unfiltered insight into what is going on.

On the other side of things, we get the opportunity to help people through either having a better understand of the legal and regulatory issues in sports or to understand how to progress themselves towards their goals academically and professionally is probably the most rewarding part of my work. 

3. What are the burning issues in international sports law that you would like to see discussed at the conference?

  • The long-term implications of human rights law in sport;
  • The importance of meaningful of stakeholder consultation in the creation and drafting of regulations in sport;
  • Effective international safeguarding in sport.

4. Why did you decide to support the ISLJ Annual International Sports Law Conference?

We support ISLJ Annual International Sports Law Conference as it is a non-profit conference that’s purpose is to create a space to explore a wide range of legal issues in sport. The conference is an academic conference that does a great job in bringing a diverse range of speakers and delegates. The discussions and debates that take place will benefit the wider sports law community.  Therefore, as LawInSport’s objective is focused on education it was a straight forward decision to support the conferences as it is aligned with our objectives. 

Supporters of the ISLJ Annual International Sports Law Conference 2018: Women in Sports Law

Editor's note: In the coming days we will introduce the supporters of our upcoming ISLJ Annual International Sports Law Conference 2018 (also known as #ISLJConf18). To do so, we have sent them a tailored questionnaire aimed at reflecting both their activities and their expectations for the conference. It is a good opportunity for us to thank them for their enthusiastic support and commitment to international sports law research. We are very proud to start this series of interviews with Women in Sports Law, an association launched in 2016 and which has already done so much to promote and advance the role of women in international sports law (many thanks to Despina Mavromati for kindly responding to our questions on behalf of WISLaw).


1. Can you explain to our readers what WISLaw is about?

Women In Sports Law (WISLaw, www.wislaw.co) is an international association based in Lausanne that unites more than 300 women from 50 countries specializing in sports law. It is a professional network that aims at increasing the visibility of women working in the sector, through a detailed members’ directory and various small-scale talks and events held in different countries around the world. These small-scale events give the opportunity to include everyone in the discussion and enhance the members’ network. Men from the sector and numerous arbitral institutions, conference organizers and universities have come to actively support our initiative.


2. What are the challenges and opportunities for women getting involved in international sports law?

Women used to be invisible in this sector. All-male panels were typical at conferences and nobody seemed to notice this flagrant lack of diversity. WISLaw created this much-needed platform to increase visibility through the members’ directory and through a series of small-scale events where all members, independent of their status or seniority, can attend and be speakers.

Another difficulty is that European football (soccer) is traditionally considered to be a “male-dominated” sport, despite the fact that there are so many great female football teams around the world. The same misperception applies to sports lawyers!

Last, there is a huge number of women lawyers working as in-house counsel and as sports administrators. There is a glass ceiling for many of those women, and the WISLaw annual evaluation of the participation of women in those positions attempts to target their issues and shed more light into this specific problem.


3. What are the burning issues in international sports law that you would like to see discussed at the conference?

The ISLJ Annual Conference has already set up a great lineup of topics combining academic and more practical discussions in the most recent issues in international sports law. 


4. Why did you decide to support the ISLJ Annual International Sports Law Conference?

The Asser International Sports Law Centre has promoted and supported WISLaw since the very beginning. The ISLJ Annual International Sports Law Conference was the first big conference to officially include a WISLaw lunch talk in its program, allowing thus the conference attendees to be part of a wider informal discussion on a specific topical issue and raise their questions with respect to WISLaw. Another important reason why WISLaw supports this conference is because the conference organizers are making sincere efforts to have increased diversity in the panels : this year’s ISLJ Annual International Sports Law Conference is probably the first sports law conference to come close to a full gender balance in its panels, with 40% of the speakers being women !

The proportionality test under Art. 101 (1) TFEU and the legitimacy of UEFA Financial fair-play regulations: From the Meca Medina and Majcen ruling of the European Court of Justice to the Galatasaray and AC Milan awards of the Court of Arbitration for Sport – By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar. He is also member of the IVth Division of the High Court of Sport Justice (Collegio di Garanzia dello sport) at the National Olympic Committee.

 

1. On the 20th July 2018, the Court of Arbitration for Sport (hereinafter referred to as “CAS”) issued its decision in the arbitration procedure between AC Milan and UEFA. The subject matter of this arbitration procedure was the appeal filed by AC Milan against the decision of the Adjudicatory Chamber of the UEFA Financial Control Body dated 19th June 2018 (hereinafter referred to as “the contested decision”). As many likely know, the CAS has acknowledged that, although AC Milan was in breach of the break-even requirement, the related exclusion of the club from the UEFA Europe League was not proportionate. To date, it is the first time the CAS clearly ruled that the sanction of exclusion from UEFA club competitions for a breach of the break-even requirement was not proportionate. For this reason the CAS award represents a good opportunity to reflect on the proportionality test under Art. 101 TFEU and the relationship between the landmark ruling of the European Court of Justice (hereinafter referred to as “ECJ”) in the Meca Medina and Majcen affair and the very recent case-law of the CAS. More...

The “Victory” of the Court of Arbitration for Sport at the European Court of Human Rights: The End of the Beginning for the CAS

My favourite speed skater (Full disclosure: I have a thing for speed skaters bothering the ISU), Claudia Pechstein, is back in the news! And not from the place I expected. While all my attention was absorbed by the Bundesverfassungsgericht in Karlsruhe (BVerfG or German Constitutional Court), I should have looked to the European Court of Human Rights in Strasbourg (ECtHR). The Pechstein and Mutu joint cases were pending for a long time (since 2010) and I did not anticipate that the ECtHR would render its decision before the BVerfG. The decision released last week (only available in French at this stage) looked at first like a renewed vindication of the CAS (similar to the Bundesgerichtshof (BGH) ruling in the Pechstein case), and is being presented like that by the CAS, but after careful reading of the judgment I believe this is rather a pyrrhic victory for the status quo at the CAS. As I will show, this ruling puts to rest an important debate surrounding CAS arbitration since 20 years: CAS arbitration is (at least in its much-used appeal format in disciplinary cases) forced arbitration. Furthermore, stemming from this important acknowledgment is the recognition that CAS proceedings must comply with Article 6 § 1 of the European Convention of Human Rights (ECHR), in particular hearings must in principle be held in public and decisions freely available to all. Finally, I will criticise the Court’s finding that CAS complies with the requirements of independence and impartiality imposed by Article 6 § 1 ECHR. I will not rehash the  well-known facts of both cases, in order to focus on the core findings of the decision. More...

ISLJ International Sports Law Conference 2018 - Asser Institute - 25-26 October - Register Now!

Dear all,

Last year we decided to launch the 'ISLJ Annual International Sports Law Conference' in order to give a public platform to the academic discussions on international sports law featured in the ISLJ. The first edition of the conference was a great success (don't take my word for it, just check out #ISLJConf17 on twitter), featuring outstanding speakers and lively discussions with the room. We were very happy to see people from some many different parts of the world congregating at the Institute to discuss the burning issues of their field of practice and research.

This year, on 25 and 26 October, we are hosting the second edition and we are again welcoming well-known academics and practitioners in the field. The discussions will turn around the notion of lex sportiva, the role of Swiss law in international sports law, the latest ISU decision of the European Commission, the Mutu/Pechstein ruling of the European Court of Human Rights, or the reform proposal of the FIFA Regulations on the Transfer and Status of Players. It should be, it will be, an exciting two days!

You will find below the final programme of the conference, please feel free to circulate it within your networks. We have still some seats left, so don't hesitate to register (here) and to join us.

Looking forward to seeing you and meeting you there!

Antoine

Football Intermediaries: Would a European centralized licensing system be a sustainable solution? - By Panagiotis Roumeliotis

Editor's note: Panagiotis Roumeliotis holds an LL.B. degree from National and Kapodistrian University of Athens, Greece and an LL.M. degree in European and International Tax Law from University of Luxembourg. He is qualified lawyer in Greece and is presently working as tax advisor with KPMG Luxembourg while pursuing, concomitantly, an LL.M. in International Sports Law at Sheffield Hallam University, England. His interest lies in the realm of tax and sports law. He may be contacted by e-mail at ‘p.roumeliotis@hotmail.com’.


Introduction

The landmark Bosman Ruling triggered the Europeanization of the labour market for football players by banning nationality quotas. In turn, in conjunction with the boom in TV revenues, this led to a flourishing transfer market in which players’ agents or intermediaries play a pivotal role, despite having a controversial reputation.

As a preliminary remark, it is important to touch upon the fiduciary duty of sports agents towards their clients. The principal-agent relationship implies that the former employs the agent so as to secure the best employment and/or commercial opportunities. Conversely, the latter is expected to act in the interest of the player as their relationship should be predicated on trust and confidence, as much was made clear in the English Court of Appeal case of Imageview Management Ltd v. Kelvin Jack. Notably, agents are bound to exercise the utmost degree of good faith, honesty and loyalty towards the players.[1]

At the core of this blog lies a comparative case study of the implementation of the FIFA Regulations on working with intermediaries (hereinafter “FIFA RWI”) in eight European FAs covering most of the transfers during the mercato. I will then critically analyze the issues raised by the implementation of the RWI and, as a conclusion, offer some recommendations. More...



Seraing vs. FIFA: Why the rumours of CAS’s death have been greatly exaggerated

Rumours are swirling around the decision (available in French here) of the Court of Appeal of Brussels in the case opposing RFC Seraing United to FIFA (as well as UEFA and the Belgian Football Federation, URSBFA) over the latter’s ban on third-party ownership. The headlines in various media are quite dramatic (see here and here), references are made to a new Bosman, or to a shaken sport’s legal system. Yet, after swiftly reading the decision for the first time on 29th August, I did not have, unlike with the Pechstein ruling of the Oberlandesgericht München, the immediate impression that this would be a major game-changer for the Court of Arbitration for Sport (CAS) and the role of arbitration in sports in general. After careful re-reading, I understand how certain parts of the ruling can be misunderstood or over-interpreted. I believe that much of the press coverage failed to accurately reflect the reasoning of the court and to capture the real impact of the decision. In order to explain why, I decided to write a short Q&A (including the (not water-proof) English translations of some of the key paragraphs of the decision).

 More...

Asser International Sports Law Blog | Overdue payables in action: Reviewing two years of FIFA jurisprudence on the 12bis procedure – Part 2. By Frans M. de Weger and Frank John Vrolijk.

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Overdue payables in action: Reviewing two years of FIFA jurisprudence on the 12bis procedure – Part 2. By Frans M. de Weger and Frank John Vrolijk.

Editor's Note: Frans M. de Weger is legal counsel for the Federation of Dutch Professional Football Clubs (FBO) and CAS arbitrator. De Weger is author of the book “The Jurisprudence of the FIFA Dispute Resolution Chamber”, 2nd edition, published by T.M.C. Asser Press in 2016. Frank John Vrolijk specialises in Sports, Labour and Company Law and is a former legal trainee of FBO and DRC Database.

This second blog will focus specifically on the sanctions available for FIFA under Article 12bis. It will provide explanatory guidelines covering the sanctions imposed during the period surveyed.


Introduction

The possibility to impose sanctions under article 12bis constitutes one of the pillars of the 12bis procedure. Pursuant to Article 12bis of the RSTP, edition 2016, the DRC and the PSC may impose a sanction on a club if the club is found to have delayed a due payment for more than 30 days without a prima facie contractual basis[1] and the creditor have put the debtor club in default in writing, granting a deadline of at least 10 days.[2] The jurisprudence in relation to Article 12bis also shows that sanctions are imposed ex officio by the DRC or the PSC and not per request of the claimant.

If the basic conditions for the application of Article 12bis are fulfilled, said provision provides for the following sanctions that may be imposed on the defaulting club:

1.    a warning;

2.    a reprimand;

3.    a fine; or

4.    a ban from registering any new players, either nationally or internationally, for one or two entire and consecutive registration periods (hereinafter: “the registration ban”).[3]

Based on the wording of Article 12bis, i.e. the use of the word ‘may’, it is left to the discretionary power of the DRC and the PSC to decide whether or not to impose a sanction on the debtor club.[4] However, this discretionary power has never been used in favour of a defendant in all the published DRC or PSC decisions under review. In other words, a sanction, going from a warning to a transfer ban of two entire and consecutive periods, was imposed in all decisions. Despite the fact that it follows from Article 12bis(4) that sanctions may apply cumulatively, this option was only used once.[5] It seems that it will come into play only if the debtor club did not comply with its obligations on multiple occasions and only after the maximum sanction of a transfer ban of two entire and consecutive periods has been imposed on the debtor club. The discretionary power under Article 12bis is different from the sanction of a transfer ban as laid down in Article 17(4) of the RSTP. The latter article states that the competent body ‘shall’ sanction, as opposed to Article 12bis, which states that the competent body ‘may’ sanction.[6]


 The Warning

Out of the 99 published 12bis decisions of the DRC, 17 warnings have been imposed. Additionally, seven warnings have been imposed out of the 38 published 12bis decisions before the PSC. As follows from the jurisprudence of FIFA,[7] (only) a warning will be given by the FIFA committees in the event two conditions are cumulatively met:

1.             the club (duly) replied to the claim; and

2.             it is not a repeated offence.

It is however important to note that the height of the outstanding amount of overdue payables is not correlated with the imposition of a warning. The outstanding overdue payables in the 24 proceedings ending with a warning range from an overdue payable of 3,468 Euros (hereinafter: “EUR”) in two decisions of the DRC,[8] up to an amount of EUR 1,000,000 in a PSC decision.[9]

The jurisprudence also points out that the debtor club must reply to the claim in order to contain the possible sanction to a warning. Although several decisions refer to the fact that the club should have “duly replied to the claim”,[10] other decisions do not mention “duly” and these consider it enough that the club only “replied to the claim”.[11] Despite this difference in terminology, we conclude that almost any form of reply provided by the debtor club will be considered sufficient. In fact, no distinctive value is ascribed to the word “duly”.

The respondents gave divergent reasons for their non-compliances. One club contested the applicability of Article 12bis,[12] other clubs stated to have administrative difficulties[13] or financial difficulties,[14] whereas others claimed that they were communicating with the player’s agent to settle the matter amicably.[15] Apart from the claim related to the applicability of Article 12bis, which was rejected because the claimant lodged his claim after the entry into force of Article 12bis RSTP,[16] all the arguments raised were not considered valid reasons for non-payment of the outstanding monies. Although the jurisprudence does not give an exact answer to the question what would be considered “a prima facie contractual basis”, it can be concluded that the aforementioned circumstances did not fulfil these criteria.

Notwithstanding the above, the condition of having “(duly) replied to the claim” has recently been tackled by the DRC. In its decision of 23 May 2016, the respondent replied to the claim per e-mail.[17] The DRC considered this reply not to be sufficient to fulfil the standards of “(duly) replied to the claim” because “the Respondent only replied to the claim by e-mail and e-mail petitions shall have no legal effect in accordance with art. 16 par. 3 of the Procedural Rules.” In other words, the respondent should have replied by fax or ordinary mail.

Additionally and in line with the above, the DRC or the PSC has only imposed a warning when there was no repeated offence. In other words, the respondent in a 12bis procedure must actually be considered as a “first offender” in order to (only) get a warning. From the 24 decisions in which a warning has been imposed, there is only one not fulfilling the abovementioned two conditions.[18] In this (PSC) decision, the respondent party did not reply to the claim. However, during the course of the proceedings the respondent made a partial payment to the claimant.[19] Therefore, the PSC decided to impose a warning on the respondent, irrespective of the absence of a reply. In light of this decision, it must be kept in mind that making a partial payment during the course of the 12bis proceedings might alleviate the duty to ‘reply to the claim’.


 The Reprimand

Only two of the decisions published by FIFA contain a reprimand.[20] One decision was issued by the DRC,[21] the other one by the PSC.[22]

In the DRC decision, overdue payables of EUR 40,000 were due to the claimant based on a termination agreement.[23] In its reply to the claim, the respondent admitted that it had to pay compensation to the claimant, but only until he would have found a new club. The respondent considered that, since the claimant found a new club immediately after the agreed termination, no compensation was due.[24] Notwithstanding this, the DRC judge considered that there was no documentary evidence with regard to the argument of the respondent. Therefore, the DRC judge considered that the respondent had delayed a due payment for more than 30 days without a prima facie contractual basis. Based on the foregoing paragraph and the fact that the respondent replied to the claim, one would think that a sanction in the form of a warning should be imposed on the respondent. However, the DRC highlighted that the DRC judge had already imposed a warning on the respondent previously. Thus, it referred to Article 12bis(6), which establishes that “a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty”.[25] Therefore, a reprimand was imposed.[26] In a similar decision of 26 May 2016, the PSC also imposed a reprimand.[27]

In conclusion, one could say that a reprimand is considered as a severe sanction and thus will not be imposed on a first offender. Although there have only been two (published) decisions of FIFA wherein a reprimand was actually imposed, one can expect that a reprimand will be imposed on a repeated offender who replied to the claim in his first and second 12bis procedure. The crucial advice that can be derived from the above analysis is that a respondent club should always reply in a 12bis procedure, because the warning and reprimand do not bring any financial or sportive consequences with it, contrary to the fine and the registration ban, which will be discussed hereunder.


The Fine
Introduction 

The only sanction that leads to direct financial consequences is the fine. The fine is a sanction that can be imposed in a 12bis procedure and needs to be paid by the debtor club to FIFA. As opposed to the warning and the reprimand, the jurisprudence shows that a fine will be imposed in the event that the respondent did not reply to the claim.

66 out of the 99 DRC and 29 out of the 38 PSC decisions involved a fine. After analysing the jurisprudence, we conclude that it is necessary to distinguish between a fine in a DRC procedure and a PSC procedure. In fact, the amount of the outstanding overdue payables differs considerably in both procedures.[28] Additionally, the level of the corresponding fines in DRC procedures compared to the PSC procedures are different.[29] The amounts of overdue payables in a 12bis procedure before the PSC are structurally higher than the amounts in a 12bis procedure before the DRC, while the amount of the fine is not structurally higher in a PSC procedure. Due to these differences between the DRC and the PSC, we decided to discuss the use of fines in the DRC and PSC procedures separately. Our aim was to determine how the judges define the level of the fine in a 12bis procedure. To do so, we use the so-called “category method”, which will be explained below.

Fines imposed by the DRC 

After analysing the decisions of FIFA in which fines were imposed, it seems that they do not correspond to a percentage of the outstanding overdue payables.[30] Instead, the level of a fine can be determined by means of several categories of fines. At least four general conclusions can be derived from the jurisprudence regarding the level of the fine for a defaulting club. 

Firstly, the level of the fine imposed by the DRC increases when the overdue payable is higher. Secondly, there are three categories of fines: i) a fine for the club which did not reply to the claim and is considered to be a first offender (First Category Offence);[31] ii) a fine for a club which did not reply to the claim and has been found by the DRC to have neglected its contractual obligations in the recent past (not being a 12bis procedure) (Second Category Offence) ;[32] and iii) a fine for a club which did not reply to the claim and has been sanctioned in a 12bis procedure previously (Third Category Offence).[33] Thirdly, the fine for a respondent club in a Second Category Offence is double the size of the fine for a respondent club in a First Category Offence.[34] Finally, the fine in a Third Category Offence is three times the size of the given fine in a First Category Offence.[35]

Based on our comprehensive study, we can conclude that the DRC determines the level of the fine by taking into consideration the above-mentioned three categories (First, Second and Third Category Offence) subject to an approximate range in relation to the outstanding amount due. Although the ranges are very hard to define with only 66 published DRC decisions yet, the below table sheds some light and provides for eight standard situations referring to various ranges of overdue payables: 

Situation

Range overdue payables  (in $/€)

Height of the fine (in CHF)

 

Situation 1

 

0,01 – 11,000

First Category  Offence: 1,000

Second Category  Offence: 2,000

Third Category  Offence: 3,000

 

Situation 2

 

11,001 – 20,000[36]

First Category  Offence: 2,000

Second Category  Offence: 4,000

Third Category  Offence: 6,000

 

Situation 3

 

20,001 – 50,000

First Category  Offence: 5,000

Second Category Offence: 10,000

Third Category Offence: 15,000

 

Situation 4

 

50,001 – 75,000

First Category Offence: 7,500

Second Category Offence: 15,000

Third Category Offence: 22,500

 

Situation 5

 

75,001 – 100,000

First Category Offence: 10,000

Second Category Offence: 20,000

Third Category Offence: 30,000

 

Situation 6

 

100,001 – 150,000

First Category Offence: 15,000

Second Category Offence: 30,000

Third Category Offence: 45,000

 

Situation 7

 

150,000 > at least 350,000

First Category Offence: 20,000

Second Category Offence: 40,000

Third Category Offence: 60,000

 

Situation 8

 

950,000[37] and higher

First Category Offence: 30,000

Second Category Offence: 60,000

Third Category Offence: 90,000

Figure 2[38]


Fines imposed by the PSC 

With regard to the PSC decisions, the authors tried to use the same method as for the DRC procedures. At first sight, it looks as if the PSC and the DRC use the same ranges for fines. However, the PSC decisions seem more arbitrary. It is therefore more difficult to draw definitive conclusions in relation to the PSC 12bis decisions. For example, in the decision of 12 October 2015, decided by a PSC’s Single Judge, a fine of CHF 15,000 was handed out to a first offender club with an overdue payable of EUR 1 million.[39] However, one can doubt whether this fine can be considered appropriate. In fact, a first offender club in another decision received the same fine, although with smaller overdue payables of EUR 200,000.[40] Another striking decision involves a fine of CHF 7,500 based on an overdue payable of USD 50,000.[41] In a comparable situation before the DRC, also with regard to a first offender, the club was sanctioned with a fine of CHF 5,000.[42] It is also remarkable that (only) in some cases the single judges did motivate the higher fines by mentioning the criteria for a Second- or Third Category Offence. After analysing these decisions more closely, one notices that two of the three Single Judges always mention the criteria of the Second- or Third Category Offence, while one only did it once (out of his six decisions). Because of this absence of motivation, one cannot definitely conclude whether these decisions fall into the Second- and Third Category Offence as defined in the context of the DRC’s jurisprudence. However, looking past these (minor) inconsistencies, we believe that most of the PSC decisions do fall within the ranges set out in Figure 2.[43] Additionally, one starts to see emerging an additional category, which is the fine of CHF 25,000. Figure 3 provides an overview of the height of the fines in relation to the various overdue payables in PSC proceedings.

 

Situation

Range overdue payable ($/€)

Height of the fine (in CHF)

 

Situation 1

 

0,01 – 11,000

First Category Offence: 1,000

Second Category Offence: 2,000

Third Category Offence: 3,000

 

Situation 2

 

11,000 – 20,000[44]

First Category Offence: 2,000

Second Category Offence: 4,000

Third Category Offence: 6,000

 

Situation 3

 

20,000 – 50,000

First Category Offence: 5,000

Second Category Offence: 10,000

Third Category Offence: 15,000

 

Situation 4

 

50,000 – 75,000

First Category Offence: 7,500

Second Category Offence: 15,000

Third Category Offence: 22,500

 

Situation 5

 

75,000 – 100,000

First Category Offence: 10,000

Second Category Offence: 20,000

Third Category Offence: 30,000

 

Situation 6

 

100,000 – 250,000[45]

First Category Offence: 15,000

Second Category Offence: 30,000

Third Category Offence: 45,000

 

Situation 7

 

250,000 – 500,000[46]

 

First Category Offence: 20,000

Second Category Offence: 40,000

Third Category Offence: 60,000

 

Situation 8

 

500,000 – 750,000[47]

First Category Offence: 25,000

Second Category Offence: 50,000

Third Category Offence: 75,000

 

Situation 9

 

750,000 and higher[48]

First Category Offence: 30,000

Second Category Offence: 60,000

Third Category Offence: 90,000

Figure 3


Transfer Ban

The toughest sanction that can be imposed by the DRC or the PSC in a 12bis procedure is the ban from registering any new players, either nationally or internationally, for one or two entire and consecutive registration periods. Contrary to the transfer ban enshrined in Article 17(4) of the RSTP, in a 12bis procedure a club can be banned from registering new players for the next one or two registration periods. This ban will be imposed if the amount due to the claimant is not paid by the respondent within 30 days as from the date of notification of an Article 12bis decision.[49]

Out of the 137 published 12bis decisions, 16 decisions (15 from the DRC, 1 from the PSC) indicated that a ban will be imposed if the amount due to the respective claimant is not paid by the respondent within 30 days as from the date of notification of the decision. Moreover, 13 decisions refer to a ban for one entire registration period. In three decisions the DRC decided to threaten a ban for the next entire two registration periods. 

What is striking is that in all decisions the respondents did not only not reply to the claim (or only after the investigation phase was closed which is equivalent to not replying)[50], but more importantly the respondents were found to have breached their financial obligations several times before. Either, the defaulting clubs were found to have delayed several outstanding payments for more than 30 days, or the respondent had (also) been found by the DRC as well as the DRC judge responsible for not complying with its financial obligations on various other recent occasions. We also encountered cases in which both conditions were met.[51]

Another striking element of the decisions in 12bis procedures is that the amount due is not deemed relevant to justify the imposition of a registration ban on the debtor club. In fact, a registration ban has been imposed with regard to an overdue payable of EUR 7,500,[52] but also regarding an overdue payable of EUR 250,000.[53]  

It seems that a ban for one entire period will be imposed in two situations:

1) the debtor club has been found by the DRC or the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis once, as a result of which a fine was imposed, and the debtor club has been found by the DRC to be responsible for not complying with its financial obligations towards players on various occasions in the recent past;[54] or

2) the debtor club has been found by the DRC or the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis twice, as a result of which a fine was imposed in at least one of the decisions.[55]

Put differently: the jurisprudence of the DRC and the PSC clearly shows a debtor club systematically receiving a registration ban for one entire period if the club had neglected its financial obligation towards players in more than one earlier decision by the DRC or the PSC, and if in these proceedings the respondent failed to reply to the claim and therefore received a fine from FIFA. What remains not entirely clear is what the DRC and PSC exactly mean by “various occasions in the recent past”. This could also refer to convictions in employment-related matters prior to the introduction of the 12bis procedure on 1 April 2015.

In the only PSC decision wherein a registration ban for one entire period was imposed, the debtor club had only once been found by the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis, as a result of which a fine was imposed.[56] The decision of the PSC did not mention that the respondent was responsible for not complying with its financial obligations towards players on various occasions in the recent past. This might suggest a differing interpretation between the DRC and the PSC.

The two years of jurisprudence further show that a registration ban for two entire and consecutive periods will be imposed when the debtor club has been found by the DRC or the PSC to have delayed a due payment for more than 30 days without a prima facie contractual basis twice, as a result of which fines (or even a registration ban of 1 period)[57] has been imposed and the debtor club has been found by the DRC to be responsible for not complying with its financial obligations towards players on various occasions in the recent past.[58]


Final Remarks 

The 12bis procedure can be considered as a powerful instrument for swift dispute resolution, which could be of great benefit to players and clubs. FIFA has put in place a fast track procedure and a strong enforcement system with respect to overdue payables by defaulting clubs towards players and clubs. So far, FIFA has contributed to the resolution of international disputes in 12bis procedures in a very efficient manner leading to a shortened timeframe for decisions, with an average duration of approximately two months.

The sanctioning power of FIFA is one of the fundamental strengths of the 12bis procedure. In all the 137 published decisions of the DRC and the PSC, a sanction was imposed on the defaulting clubs, varying from a warning to a registration ban. 

From the FIFA decisions, in which fines were imposed on defaulting clubs, it can also be derived that the level of the fine is determined by taking into consideration the earlier-mentioned three categories of wrongdoings (First, Second and Third Category Offence), subject to an approximate range in relation to the outstanding amount due. However, the 12bis decisions of the DRC so far are more systematic and predictable than the PSC’s. Finally, the heaviest sanction, the transfer ban, will only be imposed in case the defaulting club not only did not reply to the claims, but also breached its financial obligations several times in the past. Fortunately, FIFA does not shy away from using sanctions, but only clubs that went too far will face the more severe ones.

Although the conclusions drawn by the authors can help practitioners confronted to 12bis procedures, they are based only on the published jurisprudence between 1 April 2015 and 1 April 2017. It must be taken into account that FIFA committees might change their interpretation and implementation practice regarding the 12bis procedure in the future. However, the jurisprudence of FIFA committees reviewed and analysed in this article can at least shed some light on the functioning of FIFA’s 12bis procedure, and in particular on its effective sanctioning regime, over the last two years.


[1] Art. 12bis(2) RSTP, edition 2016.

[2] Art. 12bis(3) RSTP, edition 2016.

[3] Art. 12bis(4) RSTP, edition 2016.

[4] Art. 12bis(2) RSTP and Art. 12bis(4) RSTP, edition 2016.

[5] DRC 14 November 2016, no. op11161545-E. For a more detailed analysis of DRC decisions, the authors make reference to this more extensive ISLJ article.

[6] Although it follows however from a literal interpretation of Art. 17(4) RSTP that it is a duty of the competent body to impose sporting sanctions whenever a club is found to have breached an employment contract during the protected period, according to the CAS there is a well-accepted and consistent practice of the FIFA DRC not to apply automatically a sanction but to leave it to its free discretion to evaluate the particular and specific circumstances on a case by case basis. See CAS 2014/A/3765 Club X. v. D. & FIFA, award of 5 June 2015.

[7] See inter alia DRC 16 February 2016, no. op02161765.

[8] DRC 28 January 2016, no. op1501703 and DRC 28 January 2016, no. op01161539.

[9] See PSC 7 May 2015, no. op0515353. Even EUR 50,000 higher in PSC 2 June 2016, no. op0616540. The highest outstanding payable in a DRC decision is EUR 950,000. See DRC 11 September 2015, no. 09151030.

[10] See inter alia DRC 28 January 2016, no. op01161539.

[11] See inter alia DRC 13 January 2016, no. op0116826.

[12] DRC 15 October 2015, no. op1015914. See also CAS 2015/A/4153 Al-Gharafa SC v. Nicolas Fedor & FIFA, award of 9 May 2016 and CAS 2016/A/4387 Delfino Pescara 1936 v. Royal Standard Liège & FIFA, award of 8 July 2016. 

[13] PSC 9 July 2015, no. op0715599 and PSC 7 May 2015, no. op0515353.

[14] DRC 13 January 2016, no. op0116826, DRC 25 April 2016, no. op0416115, DRC 7 July 2016, no. op0716778, PSC 2 June 2016, no. op0616540 and PSC 13 September 2016, no. op09161090.

[15] DRC 16 February 2016, no. op02161765 and DRC 15 March 2016, no. op0316303.

[16] Also confirmed in CAS 2016/A/4387 Delfino Pescara 1936 v. Royal Standard Liège & FIFA, award of 8 July 2016.

[17] DRC 23 May 2016, no. op0516571. The DRC can be quite sceptical towards information that is contained in emails. See inter alia DRC 31 July 2013, no. 07133206.

[18] PSC 3 June 2015, no. op0615400.

[19] For a more detailed analysis of the DRC decision, see our pending ISLJ article.

[20] However, some decisions – wherein a heavy sanction such as a transfer ban was issued – refer to an earlier conviction of the debtor club wherein a reprimand was given. See inter alia DRC 26 October 2016, no. op10160931-E.

[21] See DRC 26 November 2015, no. op11151356.

[22] See PSC 26 May 2016, no. op05160482.

[23] DRC 26 November 2015, no. op11151356.

[24] DRC 26 November 2015, no. op11151356, paras. (II) 7 and 8.

[25] DRC 26 November 2015, no. op11151356, para. (II) 17.

[26] DRC 26 November 2015, no. op11151356, para. (II) 18.

[27] For a more detailed analysis of this decision, see our pending ISLJ article.

[28] For a more detailed analysis of DRC decisions in this regard, see our pending ISLJ article.

[29] Cf. DRC 28 January 2016, no. op01161541 and PSC 12 October 2015, no. op10151035. In the DRC decision, the debtor club had an overdue payable of USD 100,807. In this case, the DRC imposed a fine of CHF 15,000. In the PSC decision, the debtor club had an overdue payable of EUR 1 million. However, the PSC imposed the same fine of CHF 15,000.

[30] For a more detailed analysis of the “percentage method”, see our pending ISLJ article.

[31] If these criteria were cumulatively met, the jurisprudence points out that a fine was given by FIFA to a club in a 12bis procedure. A First Category Offence was also given to a debtor club who responded to the claim, but was already sanctioned with a warning and reprimand in earlier 12bis procedures. In that case, the warning and the reprimand sanctions were exhausted and, thus, a fine was ordered by the DRC.

[32] See inter alia DRC 18 May 2016, no. op0516646. For a more detailed analysis of the DRC decisions, see our pending ISLJ article.

[33] See inter alia DRC 3 July 2015, no. op0715641. For a more detailed analysis of the DRC decision, t see our pending ISLJ article.

[34] For a more detailed illustration of DRC decisions, see our pending ISLJ article.

[35] Idem.

[36] This range differs from the range the authors have set in a previous article (see Global Sports Law and Taxation Reports, ‘Overview of the jurisprudence of the FIFA DRC in 12bis procedures’, March 2017). This difference is based on recently published jurisprudence: see DRC 28 February 2017, no. op02172117-E.

[37] DRC 11 September 2015, no. 09151030.

[38] For a more detailed analysis of DRC decisions, see our pending ISLJ article.

[39] PSC 12 October 2015, no. op10151035.

[40] PSC 12 October 2015, no. op10151010. Even more striking is the fact that this decision was dealt with on the same date as the aforementioned decision in footnote 61 above, by the same Single Judge. Only two weeks later, in PSC 29 October 2015, no. op10151014, the PSC imposed a fine of CHF 25,000 with regard to an overdue payable of EUR 590,000 to a first offender club.

[41] PSC 9 July 2015, no. op0715584.

[42] DRC 5 October 2015, no. op10151049.

[43] Only PSC 12 October 2015, no. op10151035 seems to be the odd one out.

[44] See footnote  58.

[45] This border is brought to 250,000, based on PSC 16 November 2015, no. op11151300, wherein a fine based on a Third Category Offence of CHF 45,000 was imposed with an overdue payable of USD 250,000, which sets the border at approximately 250,000.

[46] This border is brought to 500,000, based on PSC 25 February 2016, no. op0216170, wherein a fine of CHF 20,000 based on a First Category Offence was imposed with an overdue payable of EUR 450,093, which sets the border at approximately 500,000.

[47] This border is brought to 750,000, based on the decision PSC 29 June 2016, no. op0616676, wherein a fine of CHF 30,000 based on a First Category Offence was imposed with an overdue payable of EUR 750,000. In a decision with an overdue payable of EUR 675,000 (PSC 24 November 2015, no. op11151385), a fine of CHF 50,000 based on a Second Category Offence was given, which sets the border at approximately 750,000.

[48] At least until an overdue payable of USD 1,367,500 falls within this category; see PSC 21 August 2015, no. op0815530.

[49] See inter alia DRC 8 September 2016, no. op0916308. However, this may differ in a situation where sanctions are imposed cumulatively.

[50] See DRC 8 September 2016, no. op0916308 and DRC 15 July 2016, no. op0716703.

[51] In the context of a retroactive application of Article 12bis, as discussed in the context of the CAS award of 17 June 2016 (see CAS 2015/A/4310 Al Hilal Saudi Club v. Abdou Kader Mangane, award of 17 June 2016), it can be questioned whether the decisions of FIFA bodies prior to the date of 1 April 2015 (which per definition were decisions in ‘regular’ FIFA proceedings) can be taken into account and held against the club in default. For a more detailed analysis of this legal issue of retro-active application, see our pending ISLJ article. See also Lombardi, P., Worlds Sports Law Report, September 2016, “Article 12bis of the FIFA Regulations: 18 months on”, p. 5.

[52] DRC 26 May 2016, no. op0516585.

[53] PSC 20 June 2016, no. op0616676.

[54] See inter alia DRC 8 September 2016, no. op0916308.

[55] See inter alia DRC 27 October 2015, no. op10151248, wherein the debtor club had received a fine in both earlier decisions. In DRC 17 October 2016, no. op10161355-E, the debtor club had only received a fine in the second decision.

[56] PSC 20 June 2016, no. op0616676.

[57] DRC 29 July 2016, no. op0716699. The previous decision, wherein a transfer ban for one entire period was imposed, is also published: DRC 4 February 2016, no. op02161733.

[58] See inter alia DRC 13 September 2016, no. op09161247.

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