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

Brexit and EU law: Beyond the Premier League (Part 2). By Marine Montejo

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre. 


Part 2. EU competition law and sports funding

The first analysed impact of Brexit on sport was the one regarding EU internal market rules and free movement. However, all sport areas that are of interest to the European Union will be impacted by the result of the future Brexit negotiations. This second part of the blog will focus on EU competition law and the media sector as well as direct funding opportunities keeping in mind that if the UK reaches for an EEA type agreement competition law and state aid rules will remain applicable as much as the funding programs.  More...


With or without them? Russia’s state doping system and the Olympic fate of Russian athletes. By Antoine Duval, Kester Mekenkamp and Oskar van Maren

On Monday 18 July 2016, Canadian lawyer Richard McLaren presented the Independent Person Report to the World Anti-Doping Agency (WADA), regarding the alleged Russian doping program surrounding the 2014 Sochi Winter Olympics. The report was expected to seriously threaten the participation of Russian Athletes to the rapidly approaching Rio Games, starting on 5 August. In the weekend prior to the report’s publishing, Reuters obtained a leaked letter drafted by the CEO’s of the US and Canadian anti-doping agencies, which according to the New York Times was backed by “antidoping officials from at least 10 nations— including those in the United States, Germany, Spain, Japan, Switzerland and Canada — and 20 athlete groups”, urging the International Olympic Committee (IOC) to ban all Russian athletes from the upcoming Olympics.

Source: http://ww4.hdnux.com/photos/50/23/01/10563667/3/920x920.jpg

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Brexit and EU law: Beyond the Premier League (Part 1). By Marine Montejo

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre.

The result of the Brexit referendum on 23 June 2016 took the European Union (almost) by surprise. A lot has been said and written about the impact of the United Kingdom leaving the EU. As in all other areas, the British sport sector will also face the effects of the modification of the relationship between the EU and its (probable) former Member State, the UK. It is nearly impossible to foresee all consequences as the UK has not even triggered article 50 TFEU yet to officially start the exit negotiations. However, as the UK position toward the EU will change in any case, this two-part blog aims to examine the main practical implications of such an exit for the UK, but also for the EU, in relation to the actual application of EU law in sport and the EU sport policy.

Unless stated otherwise, the use of the terms Brexit in this blog should be understood as a complete exit of the UK from the European Union. This blog focus in particular on this worst case scenario and its consequences for UK sport. However, it is highly improbable that the future Brexit negotiations with the EU will end up without some kind of special agreement between the two parties the first of which being an EEA type of agreement with full access to the internal market and applicability of EU law. 

The first part of this blog will examined the consequences for UK sport in terms of access to the EU internal market and the applicability of free movement principles. The second part is focused on specific impacts with regard of others domain of EU law for professional and grassroots UK sport.  More...

International and European Sports Law – Monthly Report – June 2016. By Kester Mekenkamp

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.   


The headlines

What a month June turned out to be. Waking up the morning after the 23rd, the results of the UK referendum on EU membership were final. The words of Mark Twain: “Apparently there is nothing that cannot happen today”, might provide the most apt description of the mood felt at the time.[1] The Leave campaign’s narrow victory has brought along tremendous economic, political and legal uncertainties for both the UK and the (other) Member States. To give but one example, with regard to the implications of Brexit on Europe’s most profiting football league, we recommend an older blog by Daniel Geey and Jonny Madill. More...


The EU State aid and sport saga: The Showdown

It’s been a long wait, but they’re finally here! On Monday, the European Commission released its decisions regarding State aid to seven Spanish professional football clubs (Real Madrid on two occasions) and five Dutch professional football clubs. The decisions mark the end of the formal investigations, which were opened in 2013. The Commission decided as follows: no State aid to PSV Eindhoven (1); compatible aid to the Dutch clubs FC Den Bosch, MVV Maastricht, NEC Nijmegen and Willem II (2); and incompatible aid granted to the Spanish football clubs Real Madrid, FC Barcelona, Valencia CF, Athletic Bilbao, Atlético Osasuna, Elche and Hércules (3). 

The recovery decisions in particular are truly historic. The rules on State aid have existed since the foundation of the European Economic Community in 1958, but it is the very first time that professional football clubs have been ordered to repay aid received from (local) public authorities.[1] In a way, these decisions complete a development set in motion with the Walrave and Koch ruling of 1974, where the CJEU held that professional sporting activity, and therefore also football, is subject to EU law. The landmark Bosman case of 1995 proved to be of great significance as regards free movement of (professional) athletes and the Meca-Medina case of 2006 settled that EU competition rules were equally applicable to the regulatory activity of sport. The fact that the first ever State aid recovery decision concerns major clubs like Real Madrid, FC Barcelona and Valencia, give the decisions extra bite. Therefore, this blog post will focus primarily on the negative/recovery decisions[2], their consequences and the legal remedies available to the parties involved.[3] More...

International and European Sports Law – Monthly Report – May 2016. By Marine Montejo

Editor’s note: This report compiles all relevant news, events and materials on International and European Sports Law based on the daily coverage provided on our twitter feed @Sportslaw_asser. You are invited to complete this survey via the comments section below, feel free to add links to important cases, documents and articles we might have overlooked.   


The Headlines

Challenged membership put a lot of emphasis on football federations in May. The Court of Arbitration for Sport (“CAS”) has rendered an award, on 27 April 2016, ordering the FIFA Council to submit the application of the Gibraltar Football Association (GFA) for FIFA membership to the FIFA Congress (the body authorised to admit new members to FIFA). The GFA has sought since 1999 to become a member of UEFA and FIFA. In May 2013, it became a member of the UEFA and went on to seek membership of FIFA. More...


Operación Puerto Strikes Back!

Forget the European Championship currently held in France or the upcoming Olympic Games in Rio. Doping scandals are making the headlines more than ever in 2016. From tennis star Sharapova receiving a two-year ban for her use of the controversial ‘meldonium’, to the seemingly never-ending doping scandals in athletics. As if this was not enough, a new chapter was added on 14 June to one of the most infamous and obscure doping sagas in history: the Operación Puerto.

The special criminal appeal chamber,  the Audiencia Provincial, has held that the more than 200 blood bags of professional athletes that have been at the center of the investigations since 2006 can be delivered to the relevant sporting authorities, such as the Spanish Anti-Doping Agency (AEPSAD), WADA, the UCI and the Italian Olympic Committee (CONI). In other words, there is now a good chance that the identities of the involved athletes might eventually be revealed.

Source: http://www.telegraph.co.uk/sport/othersports/cycling/9834122/Operation-Puerto-doctor-Eufemiano-Fuentes-treated-tennis-players-athletes-footballers-and-a-boxer.html

This case note will analyze the court’s ruling and summarize its most important findings. Given the amount of time passed since the scandal first came to light (2004), the blog will commence with a short background summary of the relevant facts. More...

FIBA/Euroleague: Basketball’s EU Competition Law Champions League- first leg in the Landgericht München. By Marine Montejo

Editor's note: Marine Montejo is a graduate from the College of Europe in Bruges and is currently an intern at the ASSER International Sports Law Centre.

On 3 June 2016, the Landgericht München (“Munich Regional Court”) ordered temporary injunctions against the International Basketball Federation (“FIBA”) and FIBA Europe, prohibiting them from sanctioning clubs who want to participate in competitions organized by Euroleague Commercial Assets (“ECA”). The reasoning of the Court is based on breaches of German and EU competition law provisions. FIBA and FIBA Europe are, according to the judge, abusing their dominant position by excluding or threatening to exclude national teams from their international competitions because of the participation of their clubs in the Euroleague. This decision is the first judicial step taken in the ongoing legal battle between FIBA and ECA over the organization of European basketball competitions.

This judgment raises several interesting points with regard to how the national judge deals with the alleged abuse of a dominant position by European and international federations. A few questions arise regarding the competence of the Munich Regional Court that may be interesting to first look at in the wake of an appeal before examining the substance of the case. More...

The Müller case: Revisiting the compatibility of fixed term contracts in football with EU Law. By Kester Mekenkamp

Editor’s note: Kester Mekenkamp is an LL.M. student in European Law at Leiden University and an intern at the ASSER International Sports Law Centre.

On 17 February 2016, the Landesarbeitsgericht Rheinland-Pfalz delivered its highly anticipated decision in the appeal proceedings between German goalkeeper Heinz Müller and his former employer, German Bundesliga club Mainz 05.[1] The main legal debate revolved around the question (in general terms) whether the use of a fixed term contract in professional football is compatible with German and EU law. 

In first instance (see our earlier blog posts, here and here), the Arbeitsgericht Mainz had ruled that the ‘objective reasons’ provided in Section 14 (1) of the German Part-time and Fixed-term Employment Act (Gesetz über Teilzeitarbeit und befristete Arbeitsverträge, “TzBfG”), the national law implementing EU Directive 1999/70/EC on fixed-term work, were not applicable to the contract between Müller and Mainz 05 and therefore could not justify the definite nature of that contract.[2] In its assessment the court devoted special attention to the objective reason relating to the nature of the work, declining justifications based thereupon.[3] Tension rose and the verdict was soon labelled to be able to have Bosman-like implications, if held up by higher courts.[4] More...

The BGH’s Pechstein Decision: A Surrealist Ruling



The decision of the Bundesgerichtshof (BGH), the Highest Civil Court in Germany, in the Pechstein case was eagerly awaited. At the hearing in March, the Court decided it would pronounce itself on 7 June, and so it did. Let’s cut things short: it is a striking victory for the Court of Arbitration for Sport (CAS) and a bitter (provisory?) ending for Claudia Pechstein. The BGH’s press release is abundantly clear that the German judges endorsed the CAS uncritically on the two main legal questions: validity of forced CAS arbitration and the independence of the CAS. The CAS and ISU are surely right to rejoice and celebrate the ruling in their respective press releases that quickly ensued (here and here). At first glance, this ruling will be comforting the CAS’ jurisdiction for years to come. Claudia Pechstein’s dire financial fate - she faces up to 300 000€ in legal fees – will serve as a powerful repellent for any athlete willing to challenge the CAS.More...



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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 Impact of the new FIFA Regulations for Intermediaries: A comparative analysis of Brazil, Spain and England. By Luis Torres

INTRODUCTION

Almost a year after their announcement, the new FIFA Regulations on working with Intermediaries (“FIFA Regulations”) came into force on 1 April 2015. Their purpose is to create a more simple and transparent system of regulation of football agents. It should be noted, however, that the new FIFA rules enable every national football association to regulate their own system on players’ intermediaries, provided they respect the compulsory minimum requirements adopted. In an industry that is already cutthroat, it thus remains to be seen whether FIFA’s “deregulation” indeed creates transparency, or whether it is a Pandora’s Box to future regulatory confusion.

This blog post will provide an overview of the new FIFA Regulations on working with intermediaries and especially its minimum requirements. Provided that national associations are encouraged to “draw up regulations that shall incorporate the principles established in these provisions”[1], three different national regulations have been taken as case-studies: the English FA Regulations, the Spanish RFEF Regulations and the Brazilian CBF Regulations. After mapping their main points of convergence and principal differences, the issues that could arise from these regulatory differences shall be analyzed.  More...

Blog Symposium: Why FIFA's TPO ban is justified. By Prof. Dr. Christian Duve

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective. 

Editor’s note: Finally, the last blog of our TPO ban Symposium has arrived! Due to unforeseen circumstances, FIFA had to reconsider presenting its own views on the matter. However, FIFA advised us to contact Prof. Dr. Christian Duve to author the eagerly awaited blog on their behalf. Prof. Dr. Christian Duve is a lawyer and partner with Freshfields Bruckhaus Deringer LLP and an honorary professor at the University of Heidelberg. He has been a CAS arbitrator until 2014. Thus, as planned, we will conclude this symposium with a post defending the compatibility of the TPO ban with EU law. Many thanks to Prof. Dr. Duve for having accepted this last-minute challenge! More...






Blog Symposium: Third Party Investment from a UK Perspective. By Daniel Geey

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 5: Why FIFA's TPO ban is justified.

Editor's note: In this fourth part of our blog symposium on FIFA's TPO ban Daniel Geey shares his 'UK perspective' on the ban. The English Premier League being one of the first leagues to have outlawed TPO in 2010, Daniel will outline the regulatory steps taken to do so and critically assess them. Daniel is an associate in Field Fisher Waterhouse LLP's Competition and EU Regulatory Law Group. As well as being a famous 'football law' twitterer, he has also published numerous articles and blogs on the subject.

 

What is Third Party Investment?
In brief Third Party Investment (TPI) in the football industry, is where a football club does not own, or is not entitled to, 100% of the future transfer value of a player that is registered to play for that team. There are numerous models for third party player agreements but the basic premise is that companies, businesses and/or individuals provide football clubs or players with money in return for owning a percentage of a player’s future transfer value. This transfer value is also commonly referred to as a player’s economic rights. There are instances where entities will act as speculators by purchasing a percentage share in a player directly from a club in return for a lump sum that the club can then use as it wishes. More...





Blog Symposium: The Impact of the TPO Ban on South American Football. By Ariel N. Reck

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

Editor’s note: Ariel N. Reck is an Argentine lawyer specialized in the football industry. He is a guest professor at ISDE’s Global Executive Master in International Sports Law, at the FIFA CIES Sports law & Management course (Universidad Católica Argentina) and the Universidad Austral Sports Law diploma (Argentina) among other prestigious courses. He is a regular conference speaker and author in the field of sports law.

Being an Argentine lawyer, Ariel will focus on the impact FIFA’s TPO ban will have (and is already having) on South American football.More...





Blog Symposium: Third-party entitlement to shares of transfer fees: problems and solutions - By Dr. Raffaele Poli (Head of CIES Football Observatory)

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 1: FIFA must regulate TPO, not ban it.
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

Editor’s note: Raffaele Poli is a human geographer. Since 2002, he has studied the labour and transfer markets of football players. Within the context of his PhD thesis on the transfer networks of African footballers, he set up the CIES Football Observatory based at the International Centre for Sports Studies (CIES) located in Neuchâtel, Switzerland. Since 2005, this research group develops original research in the area of football from a multidisciplinary perspective combining quantitative and qualitative methods. Raffaele was also involved in a recent study on TPO providing FIFA with more background information on its functioning and regulation (the executive summary is available here).

This is the third blog of our Symposium on FIFA’s TPO ban, it is meant to provide an interdisciplinary view on the question. Therefore, it will venture beyond the purely legal aspects of the ban to introduce its social, political and economical context and the related challenges it faces. More...






Blog Symposium: FIFA must regulate TPO, not ban it. The point of view of La Liga.

Introduction: FIFA’s TPO ban and its compatibility with EU competition law.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

Editor's note: This is the first blog of our symposium on FIFA's TPO ban, it features the position of La Liga regarding the ban and especially highlights some alternative regulatory measures it would favour. La Liga has launched a complaint in front of the European Commission challenging the compatibility of the ban with EU law, its ability to show that realistic less restrictive alternatives were available is key to winning this challenge. We wish to thank La Liga for sharing its legal (and political) analysis of FIFA's TPO ban with us.

INTRODUCTION

The Spanish Football League (La Liga) has argued for months that the funding of clubs through the conveyance of part of players' economic rights (TPO) is a useful practice for clubs. However, it also recognized that the practice must be strictly regulated. In July 2014, it approved a provisional regulation that was sent to many of the relevant stakeholders, including FIFA’s Legal Affairs Department. More...






Blog Symposium: FIFA’s TPO ban and its compatibility with EU competition law - Introduction - Antoine Duval & Oskar van Maren

Day 1: FIFA must regulate TPO, not ban it.
Day 2: Third-party entitlement to shares of transfer fees: problems and solutions
Day 3: The Impact of the TPO Ban on South American Football.
Day 4: Third Party Investment from a UK Perspective.
Day 5: Why FIFA's TPO ban is justified.

On 22 December 2014, FIFA officially introduced an amendment to its Regulations on the Status and Transfers of Players banning third-party ownership of players’ economic rights (TPO) in football. This decision to put a definitive end to the use of TPO in football is controversial, especially in countries where TPO is a mainstream financing mechanism for clubs, and has led the Portuguese and Spanish football leagues to launch a complaint in front of the European Commission, asking it to find the FIFA ban contrary to EU competition law.

Next week, we will feature a Blog Symposium discussing the FIFA TPO ban and its compatibility with EU competition law. We are proud and honoured to welcome contributions from both the complainant (the Spanish football league, La Liga) and the defendant (FIFA) and three renowned experts on TPO matters: Daniel Geey ( Competition lawyer at Fieldfisher, aka @FootballLaw), Ariel Reck (lawyer at Reck Sports law in Argentina, aka @arielreck) and Raffaele Poli (Social scientist and head of the CIES Football Observatory). The contributions will focus on different aspects of the functioning of TPO and on the impact and consequences of the ban. More...





The CAS and Mutu - Episode 4 - Interpreting the FIFA Transfer Regulations with a little help from EU Law

On 21 January 2015, the Court of arbitration for sport (CAS) rendered its award in the latest avatar of the Mutu case, aka THE sports law case that keeps on giving (this decision might still be appealed to the Swiss Federal tribunal and a complaint by Mutu is still pending in front of the European Court of Human Right). The decision was finally published on the CAS website on Tuesday. Basically, the core question focuses on the interpretation of Article 14. 3 of the FIFA Regulations on the Status and Transfer of Players in its 2001 version. More precisely, whether, in case of a dismissal of a player (Mutu) due to a breach of the contract without just cause by the player, the new club (Juventus and/or Livorno) bears the duty to pay the compensation due by the player to his former club (Chelsea). Despite winning maybe the most high profile case in the history of the CAS, Chelsea has been desperately hunting for its money since the rendering of the award (as far as the US), but it is a daunting task. Thus, the English football club had the idea to turn against Mutu’s first employers after his dismissal in 2005, Juventus and Livorno, with success in front of the FIFA Dispute Resolution Chamber (DRC), but as we will see the CAS decided otherwise[1]. More...

The UCI Report: The new dawn of professional cycling?

The world of professional cycling and doping have been closely intertwined for many years. Cycling’s International governing Body, Union Cycliste Internationale (UCI), is currently trying to clean up the image of the sport and strengthen its credibility. In order to achieve this goal, in January 2014 the UCI established the Cycling Independent Reform Commission (CIRC) “to conduct a wide ranging independent investigation into the causes of the pattern of doping that developed within cycling and allegations which implicate the UCI and other governing bodies and officials over ineffective investigation of such doping practices.”[1] The final report was submitted to the UCI President on 26 February 2015 and published on the UCI website on 9 March 2015. The report outlines the history of the relationship between cycling and doping throughout the years. Furthermore, it scrutinizes the role of the UCI during the years in which doping usage was at its maximum and addresses the allegations made against the UCI, including allegations of corruption, bad governance, as well as failure to apply or enforce its own anti-doping rules. Finally, the report turns to the state of doping in cycling today, before listing some of the key practical recommendations.[2]

Since the day of publication, articles and commentaries (here and here) on the report have been burgeoning and many of the stakeholders have expressed their views (here and here). However, given the fact that the report is over 200 pages long, commentators could only focus on a limited number of aspects of the report, or only take into account the position of a few stakeholders. In the following two blogs we will try to give a comprehensive overview of the report in a synthetic fashion.

This first blogpost will focus on the relevant findings and recommendations of the report. In continuation, a second blogpost will address the reforms engaged by the UCI and other long and short term consequences the report could have on professional cycling. Will the recommendations lead to a different governing structure within the UCI, or will the report fundamentally change the way the UCI and other sport governing bodies deal with the doping problem? More...

Book Review - Camille Boillat & Raffaele Poli: Governance models across football associations and leagues (2014)

Camille Boillat & Raffaele Poli: Governance models across football associations and leagues (2014)

Vol. 4, Centre International d'Etude du Sport, Neuchâtel, Switzerland, softback, 114 pages, ISBN 2-940241-24-4, Price: €24




Source: http://www.cies.ch/en/cies/news/news/article/new-publication-in-the-collection-editions-cies-governance-models-across-football-associations-an/

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Asser International Sports Law Blog | The Brussels Court judgment on Financial Fair Play: a futile attempt to pull off a Bosman. By Ben Van Rompuy

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 Brussels Court judgment on Financial Fair Play: a futile attempt to pull off a Bosman. By Ben Van Rompuy

On 29 May 2015, the Brussels Court of First Instance delivered its highly anticipated judgment on the challenge brought by football players’ agent Daniel Striani (and others) against UEFA’s Club Licensing and Financial Fair Play Regulations (FFP). In media reports,[1] the judgment was generally portrayed as a significant initial victory for the opponents of FFP. The Brussels Court not only made a reference for a preliminary ruling to the European Court of Justice (CJEU) but also imposed an interim order blocking UEFA from implementing the second phase of the FFP that involves reducing the permitted deficit for clubs.

A careful reading of the judgment, however, challenges the widespread expectation that the CJEU will now pronounce itself on the compatibility of the FFP with EU law. 


Background: the proceedings before the Commission

In May 2013, Daniel Striani, a Belgian football agent licensed by the Royal Belgian Football Association, lodged a complaint with the European Commission against UEFA. He requested the Commission to launch an investigation into the break-even requirement contained in Articles 58 to 63 of the FFP. According to Striani, the break-even requirement infringes the European antitrust rules (Article 101 and 102 TFEU) and the free movement rules.

The complaint put the Commission in a difficult position. It had repeatedly expressed political support for the principles underlying the UEFA FFP. In 2009, for instance, the Commission organized a conference on the subject matter and in 2012 then Commissioner for Competition Almunia issued a joint statement with UEFA president Michel Platini stressing that the FFP are “consistent with the aims and objectives of European Union policy in the field of State Aid”. Although the vague statements were carefully drafted to prejudice a proper legal assessment, the withdrawal of the Commission’s support would have been politically embarrassing.

The Commission, however, is not obliged to carry out an investigation on the basis of every complaint brought before it. Given its limited resources, the Commission uses prioritization criteria, set out in its Notice on the handling of complaints, to determine whether there is sufficient Union interest in pursuing a complaint.

In April 2014, the Commission informed Striani, pursuant to Article 7(1) of Regulation 773/2004, of its intention to reject his complaint. The Commission put forward three grounds for rejecting the complaint. First, the Commission considered that Striani lacked a legitimate interest to lodge a complaint. Only natural and legal persons that can demonstrate that they are “directly and adversely affected” by the alleged infringement are entitled to lodge a complaint.[2] Second, the Commission argued that Striani could secure the protection of his rights before a national court. Third, the Commission stressed that it had received only one complaint regarding the FFP.

Striani’s legal counsel, Jean-Louis Dupont, challenged the first and third grounds for rejecting the complaint. He reiterated the argument that the FFP directly affects football player’s agents. In response to the third ground, he submitted three further complaints on behalf of individual football fans, a players’ agent and the Manchester City FC Supporters Club. Evidently, the fact that only two months after lodging his complaint, Striani brought a civil action before the Brussels Court of First Instance (developing virtually similar arguments as set out in the complaint) made it difficult to counter the argument that the complainant could seek relief before national courts.

The European Commission eventually opted for the easiest way out. In October 2014, it formally rejected Striani’s complaint on the sole ground that “the Brussels Court is well-placed to handle the matters raised in your complaint. This is because your rights will be protected by that court in a satisfactory manner”. Hold that thought.


The civil action before the Brussels Court

While the complaint was unsuccessful, the proceedings before the Commission did make clear that Striani needed stronger arguments to demonstrate that he has standing to complain about the FFP’s compatibility with EU (competition) law. 

Striani essentially argues that the FFP break-even rule, by reducing the number of transfers, the level of the transfer fees and the players’ salaries, has a deflationary effect on the revenue of players’ agents. Since agents are thus only indirectly affected, substantial changes were made to the original claim to buttress the legitimate interest of the original claimant.

First, when Striani commenced his civil action before the Brussels Court in June 2013, he only sought one symbolic euro as compensation for the material damage that he had allegedly suffered. In September 2014, the amount of relief sought by Striani was changed to EUR 69.750 per year since the introduction of the break-even rule.

Second, a number of other claimants later joined the same proceeding. The Brussels court admitted the voluntary intervention of: (1) Dejan Mitrovic, a players’ agent domiciled in Belgium but licensed by the Serbian Football Association; (2) RFC Sérésien, a Belgian Second Division football club (now competing as Serain United); and (3) a total of 53 football fans (i.e. supporters of Paris Saint-Germain and Manchester City) domiciled in France and the United Kingdom. 


The judgment of the Brussels Court: an example of legal fiction

In its ruling of 29 May 2015, the Brussels Court declared itself incompetent to deal with Striani’s case because it has no jurisdiction.

Since UEFA challenged its competence when the litigation was initiated, the Court had to establish whether the requirements of international jurisdiction are satisfied. When an EU competition law action is brought against an undertaking having its seat in Switzerland, the jurisdiction of Member States’ courts is determined in relation to the Lugano II Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Lugano Convention).[3] The fundamental principle laid down in Article 2 is that the defendant should be sued where it is domiciled. Since the FFP were adopted by UEFA, the place of the event giving rise to the damage must be regarded as having taken place within Switzerland. Hence, in principle, only the Swiss courts have jurisdiction over the recovery of damages suffered by the alleged anti-competitive nature of the FFP.

Only by way of derogation, Article 5(3) of the Lugano Convention, applicable to torts (delict or quasi-delict), grants special territorial jurisdiction also to the courts where “the harmful event occurred or may occur”. This covers both place where the damage occurred (Belgium) and the place of the event giving rise to it (Switzerland).[4] It follows that the defendant may be sued, at the option of the applicant, in the courts of either of those places. According to settled case law, however, this exceptional attribution of jurisdiction requires the existence of “particularly close connecting factors” between the dispute and the courts of the place where the harmful event occurred or may occur.[5]

The Brussels Court disagreed with UEFA that the damage pleaded by Striani is speculative and purely hypothetical.[6] At the same time, it stressed that this damage is no more than the indirect consequence of the harm initially suffered by the clubs (participating in UEFA’s Champions’ League and Europa League competitions): “Neither the players nor the players’ agents are addresses of the FFP. Subsequently, players could only suffer indirect harm and agents only ‘very indirect’ harm”.[7] Given that jurisdiction by virtue of Article 5(3) of the Lugano Convention depends on the identification of direct harm, the Court concluded that the necessary connecting factors based on the defendant’s act are absent. In other words, because the FFP do not adversely affect Striani directly, he lacks standing to bring a damages action for breach of EU (competition) law before a Member State’s court.[8] This restrictive interpretation of Article 5(3) of the Lugano Convention is in line with the case law of the CJEU.[9] The Court did not discuss the standing of the other claimants that joined the proceedings.

Albeit having established that only the Swiss courts are competent as to the substance of the dispute, the Brussels Court decided to grant Striani the requested provisional measure, namely blocking UEFA from implementing the next phase of the FFP implementation (i.e. the reduction of the so-called “acceptable deviation” from EUR 45m to 30m). In a surprising move, the Court invoked Article 31 of the Lugano Convention for this purpose, which stipulates that:

“Application may be made to the courts of a State bound by (the Lugano) Convention for such provisional, including protective, measures as may be available under the law of that State, even if, under this Convention, the courts of another State bound by this Convention have jurisdiction as to the substance of the matter”.

The Court did not indicate why the urgency of the situation or the need to safeguard the legal and factual situation of Striani warranted this provisional measure (whose geographical reach is limited to the Belgian territory).[10] Instead, the Court decided to make a preliminary reference to the CJEU to reach a decision on the validity of the prescribed measure. The preliminary reference, another request of Striani when initiating litigation, essentially asks whether the FFP break-even requirement is compatible with Articles 63, 45, 56, 101 and 102 TFEU.

So in the end, the Brussels Court did not send Striani home empty-handed. Yet it would seem that his victory is merely a pyrrhic one. Since UEFA decided to appeal the judgment, both the provisional measure and the preliminary reference are suspended. Hence, UEFA can proceed with the next phase of implementation of the FFP as planned. Moreover, it is unlikely that the Brussels Court of Appeal would uphold the first instance decision. First, the use of Article 31 of the Lugano Convention to trigger a preliminary reference on the substance of the case – by a court that is incompetent to deal with it - is arguably a circumvention of the requirements for international jurisdiction (and thus a perforation of the general scheme and objectives of the Lugano Convention). Second, the granting of provisional measures on the basis of Article 31 is conditional on the existence of a connecting link between the subject matter of the measure and the territorial jurisdiction of the court ordering the measure.[11] In the absence of an alternative explanation, the Court thus contradicts itself because it found that particularly close connecting factors to take jurisdiction were absent.


Back to the European Commission?

The judgment of the Brussels Court puts the European Commission in an awkward position. Evidently, the Court was incapable of adequately protecting the rights of the complainant, as the Commission had argued when rejecting his complaint.

If Striani were to re-submit his complaint, it would be difficult for the Commission to argue once again that there is insufficient Union interest to conduct an investigation. It still could argue that Striani lacks legitimate interest because he is not directly affected by the alleged infringement. The fact that the Commission ultimately refrained from using this argument the first time may prove useful if a second rejection decision would be appealed before the General Court.

In any event, an authoritative assessment of the compatibility of the FFP with EU (competition) law is unfortunately not yet on the cards. Last week UEFA soothed several embittered clubs by deciding to relax some of the FFP rules. And it would be shocking if the action brought by Paris Saint-Germain fans and – this is not a joke – the ‘Association of Angry Fans against Financial Fair Play’ before the Paris High Court would overcome the jurisdictional obstacle that caused Striani to bite the dust.


[1] See e.g. The Guardian; Daily Mail; and The Independent.

[2] Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles 81 and 82 of the EC Treaty [2004] OJ L 123/18, Article 5(1).

[3] The Lugano Convention unified the rules on jurisdiction in civil and commercial matters and expanded the applicability of the Brussels I regulation (Council Regulation 44/2001) to the relations between Member States of the EU on the one hand and Norway, Iceland and Switzerland on the other.

[4] See e.g. Case C-352/13, Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV and Others, ECLI:EU:C:2015:335, para. 38.

[5] Idem, para. 39; Case C-228/11, Melzer v MF Global UK Ltd., ECLI:EU:C:2013:305, para. 26.

[6] Tribunal de première instance francophone de Bruxelles, Section Civile – 2013/11524/A – pp. 18, 21-22.

[7] Tribunal de première instance francophone de Bruxelles, Section Civile – 2013/11524/A – p. 18 («Que ni les joueurs, ni les agents de joueurs se sont donc visés. Que par conséquent, le préjudice qui pourrait en subir les joueurs ne peut être qu’indirect, et celui des agents de joueurs en quelque sorte ‘doublement’ indirect»).

[8] Tribunal de première instance francophone de Bruxelles, Section Civile – 2013/11524/A – p. 18 («Que par conséquent encore, l’article 5.3 ne peut fonder la compétences des juridictions belges et qu’il faut s’en tenir à la règle générale de l’article 2.1 qui renvoie aux tribunaux de l’Etat du défendeur, soit en l’espèce les juridictions suisses, pour juger du fond de l’affaire»).

[9] See e.g. Case 220/88, Dumez France SA and Tracoba SARL v Hessische Landesbank and others, ECLI:EU:C:1990:8; Case C-228/11, Melzer v MF Global UK Ltd., ECLI:EU:C:2013:305; Case C-352/13, Cartel Damage Claims (CDC) Hydrogen Peroxide SA v Akzo Nobel NV and Others, ECLI:EU:C:2015:335. Although CJEU only gives binding advice on the Brussels Convention and Brussels I and I bis Regulations, the case law is analogously applicable to the Lugano Convention (and is also taken into consideration when applying the Lugano Convention).

[10] C-261/90, Mario Reichert, Hans-Heinz Reichert and Ingeborg Kockler v Dresdner Bank AG, para. 34 (“The expression ‘provisional, including protective, measures’ … must therefore be understood as referring to measures which, in matters within the scope of the Convention, are intended to preserve a factual or legal situation so as to safeguard rights the recognition of which is sought elsewhere from the court having jurisdiction as to the substance of the matter”); Case C-391-95, Van Uden Maritime BV, trading as Van Uden Africa Line v Kommanditgesellschaft in Firma Deco-Line and Another, ECLI:EU:C:1998:543, para. 38 (“The granting of this type of measure requires particular care on the part of the court in question and detailed knowledge of the actual circumstances in which the measures sought are to take effect”).

[11] C-391/95, Van Uden Maritime BV, trading as Van Uden Africa Line v Kommanditgesellschaft in Firma Deco-Line and Another, ECLI:EU:C:1998:543, para. 40.

Comments (1) -

  • Thomas

    7/8/2015 3:26:05 PM |

    I disagree with the conclusion regarding the earlier decision of the Commission in this case.  The anticipated reference for a preliminary ruling does not mean that the European Commission's position is affected in any way.  Adequate juridictional protection does not necessarily imply that the national court must deal with the matter on its own.  On the contrary, should the interpretation of EU law be necessary for the ruling, the CJUE has to get involved.  

    As to what might happen before the Brussels court of appeal, it has already decided in an earlier decision regarding the sporting nationality of the football player Mohamed Tchité that the Brussels courts were not competent.  I was not overly convinced by the reasoning back then ... It will be interesting nonetheless.

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