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 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.

2. According to the contested decision, AC Milan was guilty for failing to comply with Articles 58 to 63 of the UEFA Financial fair-play regulations on the break-even requirement. As a consequence the Adjudicatory Chamber has excluded AC Milan from participating in the next UEFA Europe League for which AC Milan has already qualified (2018-2019) at the end of the 2017-2018 Italian football championship. The appeal filed at the CAS by AC Milan was mainly aimed at seeking the annulment of the contested decision and ordering UEFA to enter into a settlement agreement.

3. The theory of proportionality test under Art. 101(1) TFEU in sports matters goes back to the ECJ’s ruling in the 2006 Meca Medina and Majcen case, while, in general terms, this theory was enunciated by the ECJ for the first time in the 1994 DLG case and then repeated in the 2002 Wouters and Others case although in a slightly different way.

In the DLG case the ECJ has ruled that:

«in order to escape the prohibition laid down in Article 85(1) of the Treaty, the restrictions imposed on members by the statutes of cooperative purchasing associations must be limited to what is necessary to ensure that the cooperative functions properly and maintains its contractual power in relation to producers (…). In addition, it is necessary to establish whether the penalties for non-compliance with the statutes are disproportionate to the objective they pursue and whether the minimum period of membership is unreasonable». 

Eight years later, in the Wouters and Others case the ECJ established the following principles:

(i) not every agreement between undertakings or every decision of an association of undertakings which restricts the freedom of action of the parties or of one of them necessarily falls within the prohibition laid down in Art. 101(1) of the Treaty;

(ii) for the purposes of application of that provision to a particular case, account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects; and

(iii) it has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives.

Unlike the DLG case, in the Wouters and Others ruling the ECJ did not expressly refer to the concept of proportionality, but preferred to recall the concept of inherent restrictions. However, from the overall wording of the ECJ, it is clear that in both cases it tried to apply in the antitrust sector the same theory of mandatory requirements developed in relation to the internal market.

4. On the contrary, in the Meca Medina and Majcen case, the ECJ expressly referred to the concept of proportionality. In particular, the ECJ has literally quoted the passage of the Wouters and Others ruling where it is stated that:

«not every agreement between undertakings or every decision of an association of undertakings which restricts the freedom of action of the parties or of one of them necessarily falls within the prohibition laid down in Article 81(1) EC. For the purposes of application of that provision to a particular case, account must first of all be taken of the overall context in which the decision of the association of undertakings was taken or produces its effects and, more specifically, of its objectives. It has then to be considered whether the consequential effects restrictive of competition are inherent in the pursuit of those objectives (Wouters and Others, par. 97)». 

However, unlike the Wouters and Others case, the ECJ has added that the effects restrictive of competition must also be proportionate to the objectives pursued.

More specifically, in anti-doping issues the test of proportionality is a means to avoid the risk that a given rule (and the sanctions imposed in case of a breach of it) may prove excessive by virtue of:

(i) firstly, the conditions laid down for establishing the dividing line between circumstances which amount to doping in respect of which penalties may be imposed and those which do not, and

(ii) secondly, the severity of those penalties (in the case at issue the penalty was a two year suspension).

Regarding the first point, the ECJ has underlined that the dividing line was determined by the threshold of 2 ng/ml of urine above which the presence of Nandrolone in an athlete's body constitutes doping. Based on documents before the Court, the ECJ could conclude that the average endogenous production observed in all studies then published was 20 times lower than 2ng/ml of urine and that the maximum endogenous production value observed was nearly a third lower. As a consequence, the ECJ rejected the argument according to which the threshold was set at such a low level that it should have been regarded as not taking sufficient account of the phenomenon of the endogenous production of Nandrolone.

Regarding the second point, instead, the ECJ simply observed that: 

«since the appellants have, moreover, not pleaded that the penalties which were applicable and were imposed in the present case are excessive, it has not been established that the anti-doping rules at issue are disproportionate».

This is the most critical passage of the ruling as one could wonder what would happen if the plaintiffs had contested the proportionality of the penalties. In such a case the ECJ should have examined the substance of the plea and stated whether the two year suspension was proportionate or not. However, in the event that the ECJ had come to the conclusion that the penalty was not proportionate, the anti-doping rules at issue should have been declared null and void unless it was possible to prove that the conditions of Art. 101 (3) TFEU were fulfilled.

The same reasoning was applied by the EU Commission in the ISU decision concerning the Eligibility rules enacted by the International Skating Union. In its decision, the Commission clearly underlined that:

«even if the Eligibility rules and their consequential effects restrictive of competition were inherent in the pursuit of any legitimate objective, the sanctions imposed on athletes in case of breach of the Eligibility rules are manifestly disproportionate» (par. 260).[1]

Thus, in sports matters there seem to be no doubt that the proportionality test must involve also the sanctions imposed on athletes. As already said, in the ISU decision, the Commission has clearly underlined that the Eligibility rules were not proportionate to achieve legitimate objectives in particular in view of the disproportionate nature of the ISU’s ineligibility sanctions. More specifically the Commission has pointed out that:

«the 2014 Eligibility rules provided for the heaviest sanction of a lifetime ban, even for the first infringement of the Eligibility rules, without taking into consideration the circumstances of the case (…). For the purposes of the assessment of the proportionality of the Eligibility rules it is however not relevant how many times the ISU has actually imposed sanctions. The fact that a lifetime ban was imposed only once on an athlete may even underline the strong deterrent effect of the sanctions. Although the sanctions system has been modified in the General Regulations 2016, the sanctions remain disproportionately punitive, as they provide for periods of ineligibility that go up to five years for negligent participation in unauthorized events, up to 10 years for athletes that knowingly participate in unauthorised events and a lifetime ban for athletes participating in unauthorised events endangering, inter alia, the ‘ISU jurisdiction’. These are disproportionately heavy sanctions in particular in view of the fact that on average a professional athlete's entire career is around eight years long. Also the imposition of a five-year ban is therefore likely to impact very heavily on an athlete's career who, after years of training and sacrifices, loses the possibility to gain income through the participation in the ISU's international events». 

This reasoning clearly shows that the Commission has considered the sanctions imposed to be disproportionate, not simply the rule forbidding participation in unauthorized events.

5. To date, neither the EU Commission nor the ECJ has had the opportunity to comment on the compatibility of the UEFA Financial Fair-play rules with EU Competition law. Indeed, regarding the Striani affair, the Commission has dismissed the complaint on procedural grounds only (the lack of Community interest), while the ECJ has declared a reference for preliminary ruling send by a Belgian court manifestly inadmissible and therefore did not rule on the substance of the case. As a consequence, to date there is no European formal decision that has assessed the compatibility of UEFA Financial Fair-play rules with EU law.

This opportunity, however, was offered to the CAS in the context of the Galatasaray/UEFA award (2016/A/4492). To fully understand the case one must go back to the 2nd March 2016 when the Adjudicatory Chamber of the UEFA Financial Control Body issued a decision in which it decided that Galatasaray has failed to comply with the terms of the Settlement Agreement and imposed on Galatasaray an exclusion from participating in the next UEFA Club competition for which it would otherwise qualify in the next two seasons.

On the 11th March 2016, Galatasaray filed an appeal with the CAS to challenge the decision of the Adjudicatory Chamber of the UEFA Financial Control Body. Basically, the arguments put forward by Galatasaray were based:

(i) on the alleged incompatibility of the break-even rule with EU law (namely, Art. 101 TFEU on cartels, Art. 102 TFEU on abuse of dominant position, Art. 63 TFEU on free movement of capital, Art. 56 TFEU on free movement of services and Art. 45 TFEU on free movement of workers); and, in the event the first argument is rejected,

(ii) on the alleged disproportionate nature of the sanctions imposed by UEFA.

It is very interesting to note that from the point of view of Galatasaray the incompatibility of the break-even rule with EU law is something different and completely divorced from the proportionate character of the sanction. Indeed, the latter argument is invoked only in the event the first argument is rejected. In other words, according to this line of defence, the compatibility of the break-even rule with EU principles must be assessed only on the basis of the alleged restrictive effects on competition and the (alleged legitimate) objectives pursued, without considering the sanctions imposed.

In line with this approach, the CAS examined the two arguments put forward by Galatasaray separately. Regarding the relationship between the break-even rule and EU Competition law, the CAS reasoning can be summarized as follows:

(i) UEFA Financial fair-play regulations have neither the object nor the effect of restricting competition because: (a) UEFA Financial fair-play regulations do not prevent the clubs from competing among themselves on the pitch or in the acquisition of football players; (b) they prevent the distortion of competition by overspending; (c) clubs are free to pay the players as much as the wish provided that salaries are covered by revenues; (d) large dominant clubs have always existed and will always exist and therefore the alleged ossification of the structure market is a nonsense; (d) overspending is not completely prohibited because the break-even rule only applies over rolling periods of three years; and

(ii) in any case, even assuming that the break-even rule has anticompetitive effects, the objectives sought by UEFA Financial fair-play regulations do appear legitimate and their alleged restrictive effects inherent to the achievement of those objective. Put simply: if UEFA intends to control the level of indebtedness of European football clubs, the imposition of limits to spending beyond revenues is a natural element of a financial discipline seeking that objective.

By contrast, regarding the proportionality of the sanction imposed by the UEFA, the reasoning of the CAS is completely based on external factors which allegedly affected the finances of Galatasaray (i.e., the Syrian refugee crisis, the terrorist attacks in Turkey, the Turkish major match-fixing scandal, the exchange rate and rate fluctuations, the national economic downturn in Turkey, the inefficiencies of the market and the management changes). However, according to the CAS, this argument cannot be accepted because the club failed to provide the Panel with the accounting evidence of how and in which proportion each of these factors would have caused the break-even deficit. Moreover, the CAS has underlined that the sanction was not disproportionate because:

(i) it was imposed as a sanction for a second violation (i.e., after the Settlement Agreement which presupposes the previous violation of the rules on financial fair play);

(ii) an exclusion limited in time (one season) from the UEFA competitions is consistent with the principle of equal treatment and fair competition, as it protects the club respecting the UEFA Financial Fair-play regulations and does not prevent future compliance with them.


It follows from the foregoing that, according to the CAS the proportionate character of sanctions listed in the UEFA Financial Fair-play regulations cannot affect the evaluation of the legitimacy of these regulations under Art. 101 TFUE.

6. To some extent the AC Milan/UEFA case is similar to the Galatasaray case. Both clubs have failed to comply with the break-even requirement; both clubs have been sanctioned with the exclusion for one season from the UEFA competitions; both clubs have contested the proportionality of the sanction. Unlike Galatasaray, however, AC Milan was denied the possibility to enter into a Settlement Agreement[2]. On the contrary, it is worthy to note that the CAS has confirmed the decision of the Adjudicatory Chamber of the UEFA CFCB, which was rendered on the 19th June 2018, establishing that AC Milan had failed to fulfil the break-even requirement. However, it has annulled the decision to the extent that it has excluded AC Milan from participating in the next UEFA Club competition for which it would otherwise qualify in the next two seasons (i.e., the 2018-19 and 2019-20 seasons), arguing that the sanction was not proportionate. As a consequence, the CAS has referred back the case to the Adjudicatory Chamber to issue a proportionate disciplinary measure. The press release issued on the 20th July 2018 (the full text of the award is not yet available) indicates that the decision to annul the sanction and refer back the case to the Adjudicatory Chamber is based on the following arguments:

(i) some important elements regarding the financial situation of the Club and the recent change in the Club’s ownership have not been properly assessed by the Adjudicatory Chamber, or could not be properly assessed at the moment when the contested decision was rendered;

(ii) the Adjudicatory Chamber is in a better position than the CAS Panel to issue a new proportionate disciplinary measure on the basis of the current financial situation of the Club.

Despite the differences between the two cases, it is interesting to note that in the Galatasaray case the CAS assessed the sanction imposed by the Adjudicatory Chamber on the merits and found it proportionate. To the contrary, in the AC Milan case the CAS has assessed the sanction on the merits only to state that it was not proportionate, but refrained from saying which other sanction could be considered proportionate, arguing that the Adjudicatory Chamber is in a better position than the CAS to issue a new proportionate disciplinary measure. In other words, the CAS seems to say that it has no problem to assess the proportionality of a given sanction ; however, if it deems that the sanction is not proportionate, it is not for the CAS to replace the penalty imposed with another sanction.

7. Comparing the awards in the Galatasaray and AC Milan cases with the ruling in Meca Medina and Majcen affair some aspects deserve to be underlined. First of all, according to the case-law of the ECJ in sports matters, the evaluation of the restrictive effects of a rule necessarily presupposes the analysis of the proportionate character of the sanction imposed in the event of violation of that rule. On the contrary, according to the case-law of the CAS the analysis of the proportionate character of a sanction necessarily presupposes a positive evaluation of the legitimate character of the objectives pursued by the rule and its inherence to those objectives. In other words, it seems that according to the CAS the disproportionate nature of a sanction is not capable of affecting the legitimacy of the rule whose violation determined that sanction. Although the full text of the award is not yet available from the AC Milan/UEFA case it emerges that the disproportionate nature of the penalty imposed only resulted in the referral of the case to the Adjudicatory Chamber for the imposition of another sanction. Although apparently in line with the Wouters and Others case, this approach is clearly in contrast with the Meca Medina and Majcen case and, more generally, with the whole theory of mandatory requirements in the field of the internal market.

To this regard it is of paramount importance not to underestimate the fundamental difference between rules which are applied a priori and rules that are applied a posteriori. As also recognized by the CAS in the well-known ENIC case:

«rules that are applied a priori tend to prevent undesirable situations which might prove difficult or useless to deal with afterwards, rather than imposing a penalty on someone guilty of something. On the other hand, rules that are applied a posteriori are bound to react to specific behaviours. For example, under EC law and several national laws, rules on mergers are applied a priori, whereas rules on abuses of dominant position are applied a posteriori. Merger operations are checked before they actually take place, and are blocked if the outcome of the merger would be the establishment of a dominant position because of the possible negative consequences on the market and not because the individuals owning or managing the merging undertakings are particularly untrustworthy and the company after the merger is expected to abuse of its dominant position (…). All such a priori rules are applied on a preventive basis, with no appraisal of any specific wrongdoing and no moral judgement on the individuals or companies concerned. On the other hand, rules setting forth obligations and corresponding penalties or sanctions, such as criminal or disciplinary rules, can be applied only after someone has been found guilty of having violated an obligation». 

In this context it is clear that rules applied a posteriori (such as the UEFA Financial Fair-play regulations) consist of both the obligations set forth and the corresponding sanctions. In addition, it is not possible nor correct to arbitrarily separate the obligation from the sanction. Indeed, the fact that in the Meca Medina and Majcen ruling the proportionality test was referred precisely to the restrictive effects and not to the prohibition of doping cannot be ignored. The prohibition of doping as such, without the corresponding sanctions, does not have any restrictive effect on competition.

Secondly, the sanctioning system envisaged by the UEFA does not provide clear and transparent criteria as to how the sanctions are to be applied. There is no scale to measure and define the seriousness of the violation and no provision illustrating the relationship between the violation and the sanction that can be imposed. It is interesting to note that the same reasoning was applied by the EU Commission in the ISU decision. And everyone knows the outcome of this case.

Thirdly, the choice of the CAS to refer back the case to the Adjudicatory Chamber could mean that the AC Milan/UEFA case is not yet closed definitively. According to Art 29 of the Procedural rules governing the UEFA Club Financial Control Body in case of a breach of the UEFA Financial Fair-play regulations the clubs may be sanctioned with the following measures: a) warning, b) reprimand, c) fine, d) deduction of points, e) withholding of revenues from a UEFA competition, f) prohibition on registering new players in UEFA competitions, g) restriction on the number of players that a club may register for participation in UEFA competitions, including a financial limit on the overall aggregate cost of the employee benefits expenses of players registered on the A-list for the purposes of UEFA club competitions, h) disqualification from competitions in progress and/or exclusion from future competitions, i) withdrawal of a title or award. If the exclusion from UEFA competitions is certainly one of the most serious sanctions, there are other particularly serious penalties, such as the prohibition on registering new players in UEFA competitions or the restriction on the number of players that a club may register for participation in UEFA competitions. Consequently, since the seriousness of the ascertained infringement seems to exclude that the Adjudicatory Chamber may decide to apply a very minimal sanction (such as a warning or a reprimand), it cannot be excluded that the new sanction will also be perceived as excessive and therefore disproportionate. And in this case, at least in theory, nothing could prevent AC Milan from appealing to the CAS by challenging again the disproportionate character of the (new) sanction.

8. The Meca Medina and Majcen ruling presents many ambiguities and for this reason is rightly criticized. To say nothing else, it cannot be ignored that the extension of the proportionality test also to the sanctioning system provided for by sports regulations raises at least two fundamental problems: (a) firstly, to establish which criteria are to be used to determine the proportionate character of the sanctions; and (b) secondly, the opportunity to invest judges or arbitrators of such a task. However, the recent case-law of the CAS on the proportionality test of UEFA Financial Fair-play regulations seems to reveal no less serious concerns and perplexities.


[1] For more details, see my blog and Ben Van Rompuy’s blog.

 

[2] As a consequence one could argue that the decision of the panel to find that the sanction is disproportionate is probably connected to the fact that Milan was not offered a settlement.

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Asser International Sports Law Blog | Policing the (in)dependence of National Federations through the prism of the FIFA Statutes. By Tine Misic

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

Policing the (in)dependence of National Federations through the prism of the FIFA Statutes. By Tine Misic

…and everything under the sun is in tune,

but the sun is eclipsed by the moon…[1] 


The issue

Ruffling a few feathers, on 30 May 2015 the FIFA Executive Committee rather unsurprisingly, considering the previous warnings,[2] adopted a decision to suspend with immediate effect the Indonesian Football Federation (PSSI) until such time as PSSI is able to comply with its obligations under Articles 13 and 17 of the FIFA Statutes.[3] Stripping PSSI of its membership rights, the decision results in a prohibition of all Indonesian teams (national or club) from having any international sporting contact. In other words, the decision precludes all Indonesian teams from participating in any competition organised by either FIFA or the Asian Football Confederation (AFC). In addition, the suspension of rights also precludes all PSSI members and officials from benefits of any FIFA or AFC development programme, course or training during the term of suspension. This decision coincides with a very recent award by the Court of Arbitration for Sport (CAS) in this ambit, which shall be discussed further below.[4]

The former decision, substantiated upon the alleged governmental infringement of the independence of PSSI, is the latest in a line of similar decisions adopted by FIFA in recent years. It succeeds inter alia the suspension of the Nigerian Football Federation and subsequent non-recognition of its General Assembly decisions,[5] and the suspensions of the Cameroonian Football Association[6], the Football Federation of Belize,[7] the Kenya Football Federation,[8] and the Islamic Republic of Iran Football Federation.[9]

The common denominator of all these decisions is the alleged impediment of third parties, usually governments or their related bodies, in the affairs of national football associations. In the Indonesian case, the trigger was the imposition of additional licensing criteria for football clubs by BOPI, an agency of the Indonesian Ministry of Youth and Sports, which resulted in two clubs (Arema and Persebaya) being precluded from competing in the Indonesian Super League (ISL) and subsequent measures adopted by the ministry aimed at relieving PSSI of all of its responsibilities.[10] While in the Nigerian case, an initial High Court injunction prevented the elected Executive Committee from taking office, and a later intervention from the Nigerian Department of State Security Service (SSS), resulted in the suspension of the Nigerian Football Federation[11] and subsequently in the non-recognition of its General Assembly decisions,[12] the other cited cases include violations in the form of, among others, “blatant government interference”,[13] non-provision of security services from government forces,[14] and violation of the independence of the decision-making process of the national football governing body.[15] 


Grounds for intervention by FIFA

The normative basis for the aforementioned interventions lies primarily within Articles 13, 14 and 17 of the FIFA Statutes.[16] The Members’ obligation of an independent management of their affairs is embedded in Article 13(1)(i), which states that: ”Members have the following obligations... to manage their affairs independently and ensure that their own affairs are not influenced by any third parties...” Strengthening that notion, Article 17(1) provides that: “Each Member shall manage its affairs independently and with no influence from third parties.” Furthermore, the second paragraph of Article 17 explicitly points out that all the bodies need to be elected or appointed within each respective Member, which prima facie appears even more stringent than Article 7 bis of the UEFA Statutes, that constitutes:”...their executive body is freely elected and that their other bodies are elected or appointed in a completely independent way.”[17]

Enjoying full discretion that stems from its Statutes, FIFA acts upon information received about the alleged violations, usually from the Members themselves. Prior to the adoption of a decision, a “prevention” phase takes place, during which FIFA, through means of correspondence with respective Members or/and third parties involved, addresses the alleged infringements and usually allows for a deference period for compliance with specific conditions. Members and/or third parties are warned that non-compliance may result in possible sanctions. Article 13(2) of the Statutes expressly provides that: “Violation of the above-mentioned obligations by any Member may lead to sanctions provided for in these Statutes.”

One of the most daunting repercussions FIFA may avail itself of is the suspension of a Member. In accordance with Article 14(1) of the Statutes, the primary responsibility for suspending a Member lies with the Congress. However, and as seen in the cases cited above, when violations are deemed to be so serious to require prompt attention, the Executive Committee or even the Emergency Committee may step in and adopt the relevant decision.[18] If not lifted beforehand, such a decision must be confirmed by a three-quarter majority at the next Congress, otherwise it is automatically lifted. A suspension leads to a loss of all membership rights, which effectively prevents other Members from entertaining any sporting contact with the suspended Member. Moreover, the suspension does not preclude the Disciplinary Committee from imposing further sanctions (e.g. fines, return of awards, deduction of points, etc.).[19]

Another measure for addressing an eventual non-compliance with the obligation of independent management of affairs is the non-recognition of wrongfully elected bodies or decisions passed by such bodies in accordance with Article 17(2) of the Statutes. In other words, FIFA has the authority not to recognize an election of a body of one of its Members, if such an election lacks uncompromised independence vis-à-vis third parties, as was the case with the Nigerian Football Federation.

Lastly, it is also worth mentioning that sanctions may be imposed regardless of the grounds and fault for interference of third parties since Article 13(3) of the Statutes, by going beyond the actual interference, provides that: “Violations of par. 1(i) may also lead to sanctions even if the third-party influence was not the fault of the Member concerned.” This basically means that FIFA shall not entertain explanations of third party interventions that may possibly even be justified under the provisions of national law. 


To comply, or not to comply – the CAS escape route

Since a suspension decision virtually ostracises and isolates a Member, a valid point to raise is, whether apart from yielding and fulfilling the imposed conditions, other means remain available to the disgraced Member to challenge such a decision. The same could be said for the situation pertaining to the non-recognition of elected bodies of particular Members.

In accordance with Article 66 of the Statutes any dispute arising between FIFA and its Members shall be resolved by CAS applying the relevant FIFA regulations and subsidiarily Swiss law. The exclusive jurisdiction of CAS is further strengthened in Article 67 of the Statutes which also outlines the procedural requirements for an appeal against a final decision passed by one of the FIFA bodies. Moreover, the Members explicitly agree not to avail themselves of recourse to ordinary courts of law, which significantly narrows their options down.[20]

Given that jurisprudence in named cases is relatively scarce, it is worth having a closer look at the above mentioned award rendered by CAS in the joined cases brought before it by the Nigerian Football Federation.[21] Notwithstanding the previous FIFA decision to suspend the appellant, which was later lifted, the form of relief sought with the appeal was the annulment of two decisions in the form of letters, addressed at the appellant by FIFA. Considering the Court’s conclusion, stemming from the relevant CAS jurisprudence,[22] to dismiss the appeal against the second letter because it did not constitute an appealable decision since it did not contain a ruling affecting the rights of the appellant, hence lacking the animus decidendi,[23] the onus of the award was on the first challenged letter.

In its preliminary remarks the Panel narrowed down the subjective and the objective scope of the review saying that it:”...may only assess de novo, putting itself in FIFA’s place, whether FIFA had sufficient factual and legal grounds, in terms of Article 17 of its Statutes, to adopt the decisions allegedly set forth in the letters challenged by the Appellant.[24] By abstaining from assessing the eventual legality of the third party infringement, and despite harbouring some doubts about the (non)compliance of the elections with the national law, it further stated that:”...this Panel may not assess the validity of the various NFF elections on the basis of the NFF rules or of Nigerian law, because such appraisal falls outside the scope of FIFA’s authority under Article 17 of its Statutes and, thus, falls outside of the Panel’s scope of review.[25]

By observing that none of the parties challenged the Court’s jurisdiction, applying the FIFA regulations and additionally Swiss law pursuant to Article R58 of the CAS Code, and by dismissing the Respondent’s arguments pertaining to the admissibility and the Appellant’s active standing, the Panel addressed the legitimacy of FIFA’s non-recognition of the elections pursuant to Article 17 of the Statutes in the merits of the award.[26]

As per the legal grounds of the decision, the Panel stressed that: “The purpose of Article 17 is to grant FIFA the power to not recognize an election where the member association’s electoral process does not guarantee the complete independence of the election.[27] It went further saying: “...the Panel is of the view that the requirement of “complete independence” found in para. 2 must be understood in the light of para. 1 of Article 17, forbidding “influence from third parties”. Accordingly, an electoral process does not guarantee such complete independence where the election is not managed in a totally independent manner and, in particular, where it is influenced by third parties of any kind (e.g. government officials or bodies).[28]

Having established FIFA’s authority, the Panel subsequently assessed the relevant evidence submitted by the parties. After determining the relevant factual circumstances, the Panel noted that the intervention from the State Security Services (SSS) influenced the unfolding of the election and consequently of the General Assembly itself, constituting a manifest insufficiency of the independence of the election from the influence of third parties pursuant to Article 17 of the Statutes.[29] The appeal was thus duly dismissed on merits as well.

By dismissing the appeal, and in spite of recognizing the connection of the dispute with “a longstanding struggle occurring in Nigerian football between different personalities and factions fighting for leadership within the NFF”,[30] the Court, by setting a precedent to a certain extent, distanced itself from assessing the compliance of the interference with national law, hence virtually affirming FIFA’s discretion in the evaluation of the circumstances leading to its intervention, which appears to leave an eventual appeal by the Indonesian Football Federation with very slim chances of success. 


Quis custodiet ipsos custodes?[31]

When it comes to independence and third party influence issue, the Members are subject to instant scrutiny from FIFA and are swiftly held accountable, even when they hold no responsibility for a third party intervention, as may be seen in the above cited cases. The same cannot be said when the situation is reversed. FIFA is often not submitted to the same levels of accountability checks as those who are affected by its decisions.[32]

While in some instances FIFA’s prompt intervention appears well-grounded, since interference from a third party is manifestly ill-founded, as may be seen in the case of the Nigerian Football Federation (interventions from State Security Forces and unidentified armed individuals seem to go way beyond the borders of necessity, and can hence hardly be justified), other cases, namely the latest suspension of the PSSI, show that FIFA may have been slightly too quick when pulling the trigger. All the more so, given the circumstantial background of the case (e.g. pressing issues related inter alia to financial, tax and ownership issues of the clubs participating in national leagues which the PSSI, despite previous warnings, was unable or unwilling to cope with, and which in some extreme cases resulted in players losing their lives due to lack of medical care owed to arrears of health care contributions by the clubs), and the government’s intervention could arguably to a certain extent be seen as necessary.[33]

However, as seen above, under the existing rules FIFA is not inclined to look beyond the mere interference of third parties and verify whether such actions might be justified, thus possibly breaching the principle of proportionality which is recognized as a general principle by CAS.[34] Since such discretion seems to have been condoned by the latest CAS decision,[35] one may wonder whether there is actually any room for a more thorough and systematic factual assessment of the background of such interferences in the light of a possible justification, which inevitably raises questions of the eventual (over)restrictive nature of the relevant Statutes provisions themselves. Furthermore, the fact that any government intervention, regardless of the eventual acceptability and consideration of local specificities of each respective Member, is to be seen as a punishable infringement, puts the issue within the frame of the perpetual conundrum of the legitimate boundaries of the lex sportiva.

Since FIFA is virtually accountable to no-one from the hierarchical point of view, and given that governments, with the exception of the Swiss government, have no supervisory powers over it (some would argue that FIFA may itself be seen as a government),[36] the only plausible route for the assessment of the proportionality of the Statutes would seem to be through the legal accountability channel, using EU law, especially its provisions on competition and internal market.[37] In fact, given the precedents (e.g. Charleroi)[38] and the recent legal challenge of FIFA’s decision to ban Third-Party Ownership,[39] these rules appear to have become an increasingly important tool to hold the organization accountable, regardless of the latest developments regarding the prosecution of its officials.[40] A further analysis as to whether such a route remains available to potential appellants from outside of the European Union would, however, go beyond the scope of this paper. 


Conclusion

As presented throughout this brief overview, FIFA has seemingly developed a zero-tolerance policy for any governmental interference regarding the affairs of its Members, thus arguably safeguarding their independence. It has consistently availed itself of one of the most stringent corrective measures for alleged violations envisaged by its Statutes, suspending the non-compliant Members, hence often provoking strong emotional response within the pertinent countries.[41] Whereby such sanctions might be deemed necessary in certain cases, non-consideration of factual background and eventual justifications in others has led to accusations of double standards,[42] and raised questions of proportionality of the relevant Statutes provisions and the borders of the rules governing “purely sporting issues”.

The outcome of the deadlock in the latest case of PSSI remains to be seen, with the government’s intention to thoroughly reform the Indonesian football suggesting that a swift solution might not quite lie around the corner.[43] Given that compliance with the imposed conditions appears to be the route that will be taken in this case, and as long as provisions of the Statutes are not submitted to scrutiny of a competent judicial body, arguably in the form of the European Court of Justice, any future third party interferences shall most likely continue to be dealt with strictly by FIFA and the non-compliant Members will keep finding themselves “on the dark side of the moon”.[44]



[1] Pink Floyd, Eclipse (Dark Side of the Moon, EMI, 1973).

[2] Letter of FIFA to the Republic of Indonesia Minister of Youth and Sports, written in Zurich and sent on 10 April 2015.

[3] Decision of the FIFA Executive Committee: Suspension of the Indonesian Football Federation (PSSI), adopted in Zurich on 30 May 2015.

[4] Joined cases CAS 2014/A/3744 and CAS 2014/A/3766 Nigerian Football Federation v. FIFA, award of 18 May 2015.

[5] Decision of the FIFA Emergency Committee: Suspension of the Nigerian Football Federation (NFF), adopted in Zurich on 9 July 2014.

[6] Decision of the FIFA Emergency Committee: Suspension of the Cameroonian Football Association, adopted in Zurich on 4 July 2013 (FIFA Circular no. 1367, Zurich, 4 July 2013).

[7] Decision of the FIFA Emergency Committee: Suspension of the Football Federation of Belize, adopted in Zurich on 17 June 2011.

[8] Decision of the FIFA Emergency Committee: Suspension of the Kenya Football Federation, adopted in Zurich on 2 June 2004.

[9] Decision of the FIFA Emergency Committee: Suspension of the Islamic Republic of Iran Football Federation (IRIFF), adopted in Zurich on 23 November 2006.

[10] FIFA Decision of 30 May 2015, cited supra note 3.

[11] FIFA Decision of 9 July 2014, cited supra note 5.

[12] Letter of FIFA to Nigerian Football Federation (NFF), written in Zurich and sent on 29 August 2014.

[13] FIFA Decision of 2 June 2004, cited supra note 8.

[14] FIFA Decision of 17 June 2011, cited supra note 7.

[15] FIFA Decision of 23 November 2006, cited supra note 9.

[16] FIFA Statutes (Regulations Governing the Application of the Statutes, Standing Orders of the Congress), adopted in São Paulo on 11 June 2014.

[17] UEFA Statutes (Rules of Procedure of the UEFA, Congress Regulations governing the Implementation of the UEFA Statutes), adopted in Astana on 24 March 2014.

[18] FIFA Statutes, cited supra note 16, Art. 33.

[19] Ibid., Arts. 63, 65.

[20] Ibid., Art. 68.

[21] Nigerian Football Federation v. FIFA, cited supra note 4.

[22] Case CAS 2005/A/899 FC Aris Thessaloniki v. FIFA & New Panionios N.F.C., award of 15 July 2005, para. 12; Case CAS 2004/A/659 Galatasaray SK v. Fédération Internationale de Football Association (FIFA) & Club Regatas Vasco da Gama & F. J., award of 17 March 2005, paras. 23-25.

[23] Nigerian Football Federation v. FIFA, cited supra note 4, paras. 192,196.

[24] Ibid., para. 160.

[25] Ibid., para 160.

[26] Ibid., paras. 160-182.

[27] Ibid., para. 200.

[28] Ibid., para. 200.

[29] Ibid., paras. 203-211.

[30] Ibid., para. 213.

[31]Who guards the guardians?” (translation mine); Juvenal, Satires, (Book II, Satire VI, 1st and early 2nd centuries AD), lines 347–8.

[32] R. Pielke Jr., How can FIFA be held accountable? (Sport Management Review, Issue 16, 2013), pp. 258.

[33] FIFPro, Death of Mendieta must be the turning point for Indonesia, http://www.fifpro.org/en/news/death-of-mendieta-must-be-turning-point-for-indonesia (last visited 28 June 2015).

[34] See inter alia Cases CAS Arbitration CAS 2005/A/830 S. v. FINA, award of 15 July 2005, CAS 2009/A/2012 Doping Authority Netherlands v. N., award of 11 June 2010, CAS 2012/A/2740 Marcelo Carracedo v. Fédération Internationale de Football Association (FIFA), award of 18 April 2013.

[35] Nigerian Football Fedration v. FIFA, cited supra note 4.

[36]S. Bradley, FIFA reforms face resistance – and huge support (swissinfo.ch, 5 December 2012), http://www.swissinfo.ch/eng/football-scandals_fifa-reforms-face-resistance---and-huge-support/34067104 (last visited 28 June 2015).

[37] R. Pielke, cited supra note 32, pp. 259-262.

[38] Case A/05/03843, SA Sporting du Pays de Charleroi ao v FIFA, Tribunal de Commerce de Charleroi, 15 May 2006 (Case was referred to the European Court of Justice, but did not reach a judgment since the parties reached a settlement out of court),

[39] A. Duff, Portugal, Spain Said to Complain to EU on Soccer Finance Rules (BloombergBusiness, 4 February 2015), http://www.bloomberg.com/news/articles/2015-02-04/portugal-spain-said-to-complain-to-eu-on-soccer-finance-ban (last visited 28 June 2015).

[40] BBC News, Fifa corruption inquiries: Officials arrested in Zurich (bbc.com, 27 May 2015), http://www.bbc.com/news/world-europe-32895048 (last visited 28 June 2015).

[41] ESPN, Iranian Federation suspended by FIFA (espn.com, 23 November 2006), http://www.espnfc.com/story/393454/iranian-federation-suspended-by-fifa (last visited 28 June 2015).

[42] M. Zandi, Is FIFA's Decision in the Best Interest of Football (Association Internationale De La Presse Sportive),http://www.aipsmedia.com/index.php?cod=551&page=news&tp=n#.VZAhwRuqqko (last visited 28 June 2015).

[43] Reuters, Indonesia government takes responsibility for ban (uk.reuters.com, 31 May 2015), http://uk.reuters.com/article/2015/05/31/uk-soccer-fifa-indonesia-idUKKBN0OG03920150531 (last visited 28 June 2015).

[44] Pink Floyd, Brain Damage (Dark Side of the Moon, EMI, 1973).

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