CAS 2015/A/4162 Liga Deportiva Alajuelense v. Fédération Internationale de Football Association (FIFA), Award of 3 February 2016

Article 64 FDC provides for a specific mechanism for the “self-enforcement” of FIFA decisions and CAS awards rendered in appeal proceedings against the non-complying debtor. However, Article 107(b) FDC provides that the competent FIFA body may close the disciplinary proceedings in case the debtor is declared bankrupt. The question is whether the latter provision also applies in a case when reorganization proceedings are commenced against the debtor (in casu a football club). In the present case, the CAS Panel upheld the FIFA’s decision to close the disciplinary proceedings launched against an insolvent Spanish club for non-payment of a training compensation. In substance, based on a “balance of interests” test (and in line with CAS jurisprudence), the CAS Panel held that the claim concerned had arisen prior to the commencement of the reorganization proceedings and, consequently, there was no reason to treat preferably the creditor claiming for the payment of the training compensation in comparison with the other ordinary creditors of the Spanish club. In our view, the approach taken by the CAS Panel is questionable as Article 64 FDC is not primarily aimed at enforcing monetary claims but rather at providing for associative sanctions against (indirect) members who do not comply with a FIFA decision or a CAS award rendered in appeal proceedings. In other words, the CAS Panel has put too much emphasis on the particularities of Spanish insolvency law when applying the above-mentioned balance of interests test. In our view, it should have rather taken into account the very purpose of Article 64 FDC which, similar to the UEFA Club Licensing and Financial Fair Play Regulations, aims at maintaining a level playing field between football clubs, in particular by sanctioning clubs which fail to comply with their financial obligations. In the present case, the debtor benefited (for a second time) from reorganization proceedings and, as a result, could continue to compete with the player at issue and, eventually, transfer him for a substantial transfer fee without paying the full amount of the training compensation. In our view, the non-compliant club may have been sanctioned in such circumstances notwithstanding the fact that it was subject to reorganization proceedings. A sanction may be imposed provided that it is proportional and does not jeopardize the club’s rescuing (i.e. existence) through reorganization proceedings.