Questions

Irregularity of Solidarity or Solidarity in the Irregularity

The Case against the Applicability of the FIFA Solidarity Mechanism Only to

International Transfers

Irregularity of Solidarity or Solidarity in the Irregularity*

by Ian Blackshaw and Boris Kolev**

 

* This joint article is the result of the joint work of the authors as lawyers in a case aiming to prove a claim based on the FIFA solidarity mechanism in respect of a domestic transfer. They were engaged by the Bulgarian football club CSKA Sofia to investigate the possibilities for sustaining a claim for solidarity against Manchester United FC in connection with the transfer of the federative rights of the CSKA former player Dimitar Berbatov from Tottenham Hotspur FC to Manchester United FC in the fall of 2008. The amount of the transfer fee due to Tottenham Hotspur according to the information reported by the media was 30.75 million pounds. Despite the presence of a case law to the contrary, the authors consider that the non-applicability of the FIFA solidarity system to domestic transfers leads to quite unfair results. Namely, that the club who invested and trained a player capable of moving from one club to another for such significant amounts is deprived from receiving anything, simply because the English Football Association has not complied with the provisions of article 1.2. of the FIFA Regulations, even though the concrete provisions on solidarity in the Regulations do not make any distinction between international and domestic transfers. The club CSKA Sofia was ready to lead the battle aiming to overrule the current practice so the claim was lodged with the FIFA DRC. However, due to recent changes in the ownership and management of the club and also financial difficulties, CSKA Sofia was forced to withdraw its claim, thus missing the opportunity of becoming a flagman of the battle of the small clubs for real solidarity.

 

** Prof. Ian Blackshaw is an International Sports Lawyer and Academic and Honorary Fellow of the ASSER International Sports Law Centre. Boris Kolev is a Bulgarian Sports Lawyer, Managing Partner of Decaleges legal consultancy firm and researcher for Bulgaria of the ASSER International Sports Law Centre.

 

Introductory Remarks

 

The FIFA Commentary of the FIFA Regulations on the Status and Transfer of Players (the Regulations), which is based on the jurisprudence of the competent decision-making bodies of FIFA and the Court of Arbitration for Sport (CAS), interprets the provision of article 1 (3) of the Regulations to the effect that the solidarity mechanism does not apply in the case of a transfer between clubs belonging to one national association. Indeed, the most recent case law of the FIFA Dispute Resolution Chamber (DRC) and the CAS confirms the

applicability of the FIFA Solidarity Mechanism only to international transfers. This is so even in the cases where a member association of FIFA has failed to foresee a system to reward the clubs investing in the training and education of young players at national level as required by article 1.2 of the Regulations. If we see the Football Associations who have turned a blind eye to the one of the most important principles of today’s football and somehow missed to implement it in their domestic regulations one might be surprised to find the English and Italian associations on the list. At the same time, countries like Bulgaria, for instance, have duly incorporated

the FIFA provisions on solidarity in their respective internal rules.

 

The reason for the non-compliance of the biggest football countries in Europe is obvious. Only in the football leagues of such countries, there might be domestic transfers for significant amounts of money concerning players entirely trained and educated by foreign clubs. This means that even the 5% for solidarity could amount to a serious sum which will have to leave the country. And while this conduct may be understandable from the point of view of the English and Italian clubs what does it have to do with the idea of solidarity?

 

This is obviously one serious irregularity of the whole solidarity system as developed by FIFA which totally undermines it. And if there is any solidarity left, this is only the solidarity among the national associations of the biggest European football leagues to maintain this irregularity as long as possible. FIFA and the CAS have so far refused to remedy this injustice by insisting that the FIFA solidarity mechanism applies only regarding

international transfers, which, according to the respective decisions, follows from the alleged clear wording of the FIFA Regulations. We agree that the FIFA Regulations are clear; however, this article argues

that they are clear in saying just the opposite: the FIFA Solidarity Mechanism applies to all transfers either international or domestic.

 

Before moving to the essence of our analysis, we would like to mention some important preliminary points.

 

Some Preliminary Points

 

The Commentary and Notes are there for guidance purposes only and cannot affect the legal meaning and interpretation of the Regulations themselves. And, as the FIFA Commentary on the Regulations itself makes clear, the explanations in this Commentary are subject to changes or amendments of the relevant jurisprudence by the relevant bodies. Even the presence of CAS decisions should not make the matter completely settled because the principle of ‘stare decisis’ is not followed by the CAS; and even a similar case may be tried again with a different outcome, especially in view of new arguments such as theones advanced in this article.

 

The issue whether the solidarity mechanism shall apply to all transfers of players or only in cases of so-called international transfers may be answered correctly and thoroughly only after first examining the historical background to and the inherent reasoning and justification for the introduction of this mechanism. As Gerard McMeel, Professor of Law at Bristol University, United Kingdom, in his recent major work on The Construction of Contracts (Oxford University Press, UK, 2007) explains in respect of the interpretation of contracts, and,

by analogy rules and regulations, which he refers to as the ‘Objective Principle in Interpretation’, one has to take into account the objective framework of facts within which the measures came into existence. In

other words, the background to and purpose of the Regulations are key to a proper understanding and interpretation of them. Thus, as a starting point of our analysis, it is necessary to consider

the historical background to the introduction of the FIFA Transfer and Status of Players Regulations.

 

The Origin of the FIFA Transfer and Status of Players Regulations

 

The Regulations have their origin in the decision of the Executive Committee of FIFA passed at the FIFA Congress in Buenos Aires on 5 July 2001. A new feature of these Regulations was the introduction of new provisions on training and education compensation and the so -called solidarity mechanism, which was designed and intended to reward clubs that have been responsible for the training, education and formation of young players between the ages of 12 and 23 and also to restore the competitive balance between the smaller and the big clubs. This principle is regarded by FIFA as an important and fundamental one. It is clear that the solidarity between clubs is the main and fundamental principle, on which the Regulations are based. The solidarity mechanism is still regarded by FIFA as a fundamental and important principle of the Regulations. And indeed it is the raison d’être of the Regulations, because, without this mechanism, FIFA would not have been able to justify and to operate a transfer system of players, because of EU considerations arising out of the European Court of Justice decision in Bosman.

 

The EU background of the Regulations is very well explained by the very well known Professor dealing with international sports law, Stephen Weatherill, Jacques Delors Professor of EC law, at Oxford University, United Kingdom, in his Book ‘European Sports Law Collected Papers’ published by the T.M.C. ASSER Press in 2007

(hereinafterWeatherill”).

 

Bosman has prompted significant change in the practice of clubs in their dealings with players, and some of the potential wider implications argued for above (though by no means all of them) have also been instrumental in inducing the shaping of a revised system. In March 2001 it was announced that, after extended and sometimes acrimonious discussion, an agreement had been reached between the Commission and football’s governing bodies for the world, FIFA, and for Europe, UEFA. The Commission went so far as to announce that the deal of March 2001 had been “formalized” through an exchange of letters recorded in a Commission Press

Release between Mr. Mario Monti, the European Competition Commissioner, and the President of FIFA, Mr. Sepp Blatter.

 

….Eventually in June 2002 the Commission closed its investigation declaring “the end of the Commission’s involvement in disputes between players, clubs and football organizations”. …The key features of this system that the Commission is prepared to treat as compatible with EC competition law and the law of freedom of

movement provide (inter alia):

 

That in the case of players aged under 23, a system of training compensation should be in place to encourage and reward the training effort of clubs, in particular small clubs;

 

That there should be the creation of solidarity mechanism that would redistribute a significant proportion of income to clubs involved in the training and education of a player, including amateur clubs.

 

The second justification for regulation of the industry which the Court accepted as permissible in principle was the need to encourage the recruitment of young players. Advocate-General Lenz suggested that appropriate transfer rules might be acceptable if based genuinely on costs of training. But he felt it unnecessary to explore the matter more fully. He commented that any system would have to cover costs incurred in training by the selling club, which he thinks should only be the first club. This seems an irrational limitation, for it is not only the player’s first club that may spend money in improving a player’s capabilities.”

 

Weatherill’s conclusion was, in fact, reflected in the Regulations which established the solidarity mechanism aiming to reward not only the first club but any club, which has spent money in improving a player’s capabilities. The solidarity mechanism is a key feature of the transfer system introduced in 2001 and it was among those features according to which the Commission still regards this new system as compatible with the EC competition law and the law of freedom of movement of persons. That is why the adoption and introduction of the solidarity mechanism at national level must not depend only on the will and the discretion of the particular national associations but it is rather binding per se at national level.

 

The Structure of the Regulations – transfer rules as an international matter, training compensation and solidarity mechanism – separate treatment.

 

The Structure of the Regulations follows the outcome of the Bosman judgment and they are in line with the agreement reached between the European Commission and the World and European football governing bodies. The reason that the Regulations contain binding rules concerning the transfer between clubs belonging to different Associations is that Bosman was about a cross-border transfer and not about a national transfer. This is confirmed by Weatherill on page 106 of his Book: “The explicit terms of the judgment do not decide that a system of transfer fees within a single Member State falls foul of article 48….Bosman wished to move from Belgium to France and the explicit terms of the ruling deal only with cross-border matters in connection with article 48, so nothing in the explicit terms of the judgment declares a transfer between two clubs located within the same Member State incompatible with Community law. Several national associations responded to the judgment by asserting its inapplicability to domestic transfers and confirming the maintenance of a transfer regime within their own league. Such restrictions on contractual freedom seem to be subject to the supervision of national law alone. The European Court of Justice conceded in Bosman that Article 48 is inapplicable to situations wholly internal to a single Member State, citing well-established case law on the point. The Court seems reluctant to extend the scope of Community law to prohibit such “reverse discrimination” by a State against its own nationals…..As is clear from the second question in Bosman national associations may not respond by introducing limits on the number of EU nationals who may be imported in this way, so pressure will increase on national associations to remove the anomaly by agreeing to abandon fees altogether. Moreover, it is plain that the successful institution of a proper wealth distribution system in Europe, as discussed in Section 5.1.1. above, would involve a removal of the anomaly between domestic and cross-border transfers, as part of a wholesale reorganization of the game’s finances. To this extent, even though Bosman concerns only cross-border deals, it is likely to exert a wider impact on the football economy”.

 

The training compensation and the solidarity mechanism, however, are a totally different matter, and they were meant to encourage the recruitment of young people in line with the opinion of the Advocate- General Lenz in Bosman. The training compensation system and the solidarity mechanism are supposed to serve as an instrument for rewarding investments in training and compensation, which was also the purpose of the transfer system before Bosman according to its defenders. Unlike the transfer system in its form as existing before Bosman, however, the training compensation and the solidarity mechanism were viewed by the European Commission as compatible with EU law and that is why the European Commission regarded this new solidarity mechanism as a key feature of the new Regulations.

 

Therefore, it would be absolutely implausible to equate this new system to a part of the “transfer between clubs belonging to different situations” and thus to exclude its applicability at national level.

 

This approach was followed first in a decision of the FIFA Dispute Resolution Chamber (DRC) of 2003 related to the transfer within England of the Irish player Robbie Keane. The DRC admitted that this was a case of international transfer and thus applied the FIFA rules on solidarity. However, this approach was soon abandoned in a decision of 22 July 2004 regarding the solidarity contribution related to the transfer of the federative rights to the player C, which reads as follows:

 

“ ….The DRC referred to the contents of the Regulations and in particular, to their Preamble. Par. 1 of the Preamble establishes that the Regulations deal with the status and eligibility of players, as well as with the rules applicable whenever players move between clubs belonging to different associations. The deciding body lent emphasis to the wording of the last part of the aforementioned clause and concluded that, in fact, the Regulations are not applicable to transfers of the federative rights to a player between two clubs affiliated to the same association. Consequently, the members of the Chamber present at the meeting were of the unanimous opinion that the previous jurisprudence of the DRC needs reviewing and concluded that the principle regarding the solidarity mechanism contained in the Regulations is not applicable to national transfers, not even in cases where the club claiming the payment of the relevant contribution is affiliated to another association”.

 

This interpretation of article 1.1. of the FIFA Regulations made in the above cited decision of the DRC, with the greatest of respect, cannot be accepted. The Panel erroneously attributed the principle regarding the solidarity mechanism to the wording “transfer between clubs belonging to different associations”. The solidarity mechanism does not fall within the wording “transfer between clubs belonging to different associations” and was not meant to be included there by the legislator as already explained in the above analysis of the historical

roots of the rules on solidarity.

 

Article 1.1. lists specific matters, regarding which the Regulations established global and binding rules, and these matters are explicitly stated: (i) status of players, (ii) their eligibility to participate in Organized Football and (iii) their transfer between clubs belonging to different associations. But the Regulations also deal with other matters, including Maintenance of Contractual Stability, Training Compensation and Solidarity Mechanism. Therefore, FIFA cannot validly conclude that Article 1.1. is an all-embracing provision governing

all matters covered by the Regulations, including the Solidarity Mechanism and Contribution.

 

Then, article 1.3. indicates which provisions related to the matters stated in article 1.1. have to be included without modifications in the Associations Regulations and, further, it indicates the provisions, with respect to which the Associations will have certain discretion but still having the obligation to respect certain principles enumerated therein.

 

If we see the said articles and principles they concern exactly the provisions on the status of players, their eligibility to participate in Organized Football (registration of players) and “transfer between clubs belonging to a different association (maintenance of contractual stability between professionals and clubs and international transfers involving minors)”. The training compensation and solidarity mechanism are not included in article 1.3. simply because they do not fall within the wording “transfer between clubs belonging to different associations” and have nothing to do with the scope of article 1.1. Article 1.1. is absolutely inapplicable to the solidarity mechanism. The matters which remain outside the scope of articles 1.1. and 1.3. are (i) settlement of disputes (jurisdiction), (ii) training compensation and solidarity mechanism and (iii) release of players for association

teams. These matters are dealt with in article 1.2. and 1.4., accordingly.

 

Regarding the settlement of disputes, article 1.2. requires the national association to foresee rules for such settlement between clubs and players in accordance with the principles stipulated in these Regulations. Regarding the training compensation and the solidarity mechanism, this article requires the national associations to foresee a system to reward the clubs investing in the training and education of young players. Without any doubt, although not mentioned specifically for the solidarity mechanism, such a system referred to in article 1.2. must be based on the principles stipulated in the Regulations.

 

And these principles are the ones stated in article 21 and Annex 5. The 2001 version of the Regulations contained explicitly the word “principles” before the concrete wording of the provisions on the solidarity mechanism, and precisely this version was applicable at the time of the issuance of the above cited decision of the DRC. Although the word “principles” is omitted in the most recent 2008 edition, it is clear that the solidarity between clubs is the main and fundamental principle, on which the Regulations were based and their key feature.

 

Interpretation of article 21 and annex 5 - refer to any transfer

 

The provisions on the solidarity mechanism set out in article 21 and Annex 5 of the Regulations must be interpreted by applying a common sense approach in accordance with their normal, natural, and ordinary meaning; in other words, if it is stated “if a professional is transferred” this would mean - by all means - all kind of transfers, both national and international; there is no qualification to such a statement.

 

Article 21 of the Regulations 2008 reads as follows:

 

“If a professional is transferred before the expiry of his contract, any club that has contributed to his education and training shall receive a proportion of the compensation paid to his former club (solidarity contribution). The provisions concerning solidarity contributions are set out in Annexe 5 of these regulations.”

 

It is clearly stated that this principle is applicable in the case of any transfer of a player -international or national - before the expiry of his contract. There is nothing in this wording suggesting or implying that such a transfer must involve clubs belonging to different associations:

 

in other words, be limited only to international transfers. The panel in the above- mentioned decision, in fact, narrowed the scope of this principle by erroneously, as we demonstrated above, adding that the clubs involved in such transfer must belong to different associations. This conclusion of the DRC came as a result of the erroneous interpretation of article 1.1. of the Regulations under which the said article was deemed applicable to the FIFA solidarity mechanism, which is not true. It is a well settled canon of interpretation that a general provision

 

Art. 1.1., cannot override or derogate from a specific provision:

 

Art. 21 is a specific provision dealing with a separate and self-contained subject, namely, the solidarity mechanism and contribution.

 

This is known as the ‘generalia no specialibus derogant’ principle of legal interpretation.1

Annex 5 of the Regulations also says nothing that could be possibly construed in a sense that the transfer must be between clubs belonging to different associations. It reads as follows:

 

“If a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and distributed by the new club as a solidarity contribution to the club(s) involved in his training and education over the years. This solidarity contribution reflects the number of years (calculated pro rata if less than one year) he was registered with the relevant club(s) between the seasons of his 12th and 23rd birthdays, as follows:

 

- Season of 12th birthday: 5% (i.e. 0.25% of total compensation);

- Season of 13th birthday: 5% (i.e. 0.25% of total compensation);

- Season of 14th birthday: 5% (i.e. 0.25% of total compensation);

- Season of 15th birthday: 5% (i.e. 0.25% of total compensation);

- Season of 16th birthday: 10% (i.e. 0.5% of total compensation);

- Season of 17th birthday: 10% (i.e. 0.5% of total compensation);

- Season of 18th birthday: 10% (i.e. 0.5% of total compensation);

- Season of 19th birthday: 10% (i.e. 0.5% of total compensation);

- Season of 20th birthday: 10% (i.e. 0.5% of total compensation);

- Season of 21st birthday: 10% (i.e. 0.5% of total compensation);

- Season of 22nd birthday: 10% (i.e. 0.5% of total compensation);

- Season of 23rd birthday: 10% (i.e. 0.5% of total compensation).”

 

Again, it is obvious that the provision applies whenever a professional moves during the course of a contract.

 

Therefore, the single provision from the Preamble that is applicable to the solidarity mechanism is the last sentence of article 1.2, which states that national associations should foresee a system to reward the clubs investing in the training and education of young players. There is nothing in this provision excluding the binding effect of the provisions of the Regulations regarding the solidarity mechanism on the national associations. To admit that the national associations may derogate from the provisions in the Regulations regarding the solidarity mechanism by explicitly making it inapplicable in case of domestic transfers or by merely being silent on this issue would lead to absurd results: Reductio ad absurdum. If a distinction is made between national and international transfers so far as the payment of a solidarity contribution is concerned, other absurd results follow and the payment of a solidarity contribution can be easily circumvented where, for example, two national transfers are made at a high price, followed by an international one at an artificially low price, in which case only an insignificant solidarity contribution would be payable and would not reflect the true value of and investment of the player transferred. This can hardly be described as ‘solidarity’ in any sense or meaning of the term!

 

Furthermore, if a distinction is made between national transfers and international transfers with the result that the solidarity mechanism only operates in the case of international transfers, this could adversely influence the transfer fees demanded in the case of international transfers vis-à-vis national transfers. Such a scenario could infringe on the right to freedom of movement within the European Union and run counter to the ruling made in Bosman. This can also constitute anti-competitive conduct contrary to the EU Competition Rules.

 

In addition, if a distinction is made between national transfers, which do not qualify for a solidarity contribution and international transfers which do, this distinction itself can also have an anti-competitive effect contrary to national competition laws.

 

And lastly, but certainly not the least important, by applying the same flawed reasoning for distinction between national and international transfers, the national associations might be entitled to derogate from the provisions on the jurisdiction of the FIFA DRC and the Single Judge by relying on the second sentence of article 1.2, which allows the national association to set their own rules for the settlement of disputes between clubs and players. It is obvious that the national associations are not entitled to do so and they could only legislate on the matter of jurisdiction in cases which are not subject to the mandatory provisions on jurisdiction laid down in the Regulations.

 

Parallel between the solidarity mechanism and the dispute settlement mechanism

 

The parallel between the solidarity mechanism and the mechanism for settlement of disputes between clubs and players as provided for in the FIFA Regulations is, in our opinion, very useful and is worthy of further elaboration.

 

1. Both matters are not included in article 1.1, although they are undoubtedly present in the Regulations. This confirms the single correct conclusion that article 1.1 does not exhaust all matters which are included within the scope of the Regulations. This certainly means that there are also other matters in the Regulations which may be binding even if not stated expressly in article 1.1.

2. Both the solidarity and dispute resolution mechanisms are included in article 1.2 as matters which have to be mandatorily regulated by the internal regulations issued by the national associations, which are subject to approval by FIFA.

 

Both maters, therefore, are similarly treated in the Regulations. That is why it is very important to see what are the consequences which follow in the case of failure of the national associations to foresee rules for the settlement of disputes between clubs and players, because this will provide a valuable guideline about the necessary consequences that follow in the comparable case of failure of the national association to provide rules for rewarding clubs investing in the training and education of young players.

 

In all cases of failure of national associations to provide rules on settlement of disputes between clubs and players there will be no independent arbitration tribunal guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs established at national level and, therefore, all cases having an international dimension may be referred to FIFA, which is competent pursuant to article 22 of the FIFA Regulations. The case law of the DRC confirms that also “in the absence of a national sports arbitration tribunal […the DRC] is competent to deal with a dispute, even if written agreements signed between the parties involved in the dispute contain a clause by means of which the (exclusive) jurisdiction of another body is chosen.”2. Even if a national sports arbitration tribunal exists, the DRC could still declare it holds authority if it cannot be guaranteed that the tribunal is composed of members chosen in equal numbers by players and clubs with an independent chairman.3

 

It is obvious that the FIFA primary goal is to achieve a fair and effective dispute settlement mechanism within the family of football, and that is why it allows parties to such disputes to base their claims on the FIFA rules on jurisdiction, where such are absent at the national level or inadequate and inappropriate to guarantee the fair result of the proceedings. And, it is further submitted, that this is so regardless of the fact that the respective rules of the national association have been subject to approval by FIFA or actually approved by FIFA. Also, nobody could possibly construe the absence of the settlement of disputes between players and clubs from the scope of the Regulations in article 1.1 as meaning that the rules about dispute settlement under the Regulations are applicable only to cases of disputes concerning or arising out of transfers of players between clubs belonging to different associations. Such an interpretation of the Regulations is clearly unsustainable. In the case of solidarity between clubs, the major objective of FIFA, when interpreting its own rules, should be that all clubs, which have invested in the training and education of young players, should be rewarded in all cases of transfers of such players throughout their career wherever it may take them. Therefore, in the absence of any alternative solidarity mechanism operating at national level, similarly to the case of the absence of any dispute settlement mechanism at national level, the FIFA rules on solidarity must be applied also at the national level.

 

Moreover, the very wording of the rules on the solidarity mechanism in article 21 of the Regulations is quite broad and unqualified and, therefore, relates to all transfers and not only international ones.

 

Unlike the dispute settlement rules which specify that there should be international dimension in the dispute between a club and a player in order to be heard by the FIFA dispute resolution bodies, in the case of solidarity there are absolutely no limitations stated regarding the right of the clubs who contributed to the training and education of the player to receive solidarity contributions. This means that there are even much more solid grounds for FIFA to apply its rules on solidarity in the cases of domestic transfers, provided that national rules are absent or inadequate, than is the case for imposing its dispute resolutions system at national level.

 

Therefore, the articles on dispute settlement and solidarity as stated in the FIFA Regulations are the only ones in the Regulations that may determine their own scope. Article 22 defines the types of disputes that fall within the FIFA competence and provide certain limitations.

 

Article 21 also defines the scope of the rule regarding the solidarity mechanism and it clearly and undoubtedly according to its wording expressly states that it applies in all cases of transfers without imposing any qualifications or limitations.

 

Recommendations

 

The purpose of this article is to call upon FIFA, in the light of our arguments, to look again at and revise the current interpretation of its rules regarding the application of the solidarity mechanism at the national level. Because the current interpretation is not only legally unsustainable, but also causes significant injustice to the clubs, who have invested in the training and education of young players and are not rewarded although such players are moving during their career for significant amounts of money - both at the national and international levels. And the FIFA Regulations themselves permit the right and allow for the justification for FIFA to do so. article 1.2 provides merely an option for the national associations to choose another form of rewarding the clubs investing in training and education of young players. It would be absolutely illogical and unfair, therefore, to allow such national associations to avoid the application of any system for solidarity by merely failing to meet their obligation under the FIFA rules. These provisions cannot be derogated by the national associations and they could either restate them in the respective national associations’ regulations or provide additional elements to the solidarity mechanism as already regulated by the Regulations.

 

Article 21, which deals with the solidarity mechanism, is not enumerated in article 1.3. among the provisions that are binding at national level, because article 21 says quite clearly and explicitly that whenever a professional is transferred before the expiry of his contract, any club that has contributed to his education and training shall receive a proportion of the compensation paid to his former club (solidarity contribution). This clearly means that this provision covers the cases of both national and international transfers. Therefore, it is not legally necessary to make any specific provision on this subject.

 

Furthermore, article 1.3 does not indicate as binding at the national level also the provisions of the Regulations on jurisdiction and it would be absurd to accept that the latter provisions are not binding at the national level.

 

To deny the binding nature of the solidarity mechanism established under the Regulations at the national level would further undermine the nature and the essence of the principle of solidarity. The solidarity mechanism was designed, as previously mentioned, to fill in the gap between the rich and the poor clubs, which gap threatens the competitive balance and the ‘level playing field’ for football clubs worldwide. In other words, to ensure financial fair play between clubs.

 

Furthermore, the obligation for payment of solidarity contributions is not dependent on whether the player moves from one country to another: it always goes with the player when he moves either internationally or within one country. Conceptually, the investment is made in the player and also the principle/objective of the solidarity mechanism is to maintain a competitive balance between football clubs, and this applies nationally and internationally - the leagues are national and international - without any discrimination between them. In other words, the solidarity contribution attaches to and moves with the player from club to club - it is a kind of ‘financial baggage’ that the player carries with him and is not dependent on an artificial distinction between an international and a national transfer. It moves with the player wherever the player goes, as clearly and unequivocally stated in Article 21: “If a professional is transferred before the expiry of his contract….”. The only qualification in this Article is one of time; not of place! Finally, if the FIFA legislator had wanted to make it clear that the solidarity mechanism does not apply in the case of a transfer between clubs belonging to the same national associations he should have simply stated this explicitly in the Regulations and/or their annexes, which are an integral part thereof. However, he stated explicitly just the opposite - that the solidarity mechanism applies whenever a player moves in the course of his contract. At the same time, the so-stated rule is opposed on the ground of flawed reasoning and erroneous interpretation of other provisions of the Regulations. For instance, Article 21 of the Regulations could have expressly stated that a solidarity contribution is only payable in accordance with the provisions of Art1.1. Or could have stated that “Subject to and in the circumstances foreseen in article 1.1. and without prejudice to article 1.3., if a professional is transferred before the expiry of his contract, any club that has contributed to his education and training shall receive a proportion of the compensation paid to his former club (solidarity contribution)”.

 

No such qualifying phrase or provisions apply. It follows, therefore, that Art. 21 may not be interpreted restrictively. In other words, in a way that excludes national transfers from the solidarity contribution as the Respondent claims. In other words, under the ‘contra proferentem’ principle of interpretation, the provision is construed against the party seeking to include a restriction or a limitation in an otherwise clear and unqualified provision, on the basis that, if that meaning had been intended, the draftsman could have - and, indeed, should have - included such restriction or limitation.

 

It is also a basic principle of legal interpretation that different expressions denote different meanings. In Article 1.1, the expression “international transfer” is used and this expression recurs in other Articles. It is significant that Article 21 refers only to a “transfer”.

 

This indicates that the drafters of Article 21 had all transfers in mind and not only international transfers. This argument is supported by the general principle of interpretation that there is no redundancy in a legal text and that effect should be given to each and every word in the text. If “transfer” in Article 21 should be interpreted to refer to international transfers only, the word “international” in, for example, Articles 9 (International Transfer Certificate) and 19 (Protection of Minors) would serve absolutely no purpose whatsoever and, therefore, be redundant. This is not legally tenable from an interpretation point of view.4

 

 

Concluding Remarks

 

It is a great pity that, for the reasons already mentioned, CSKA Sofia were not able to proceed with their claim for a solidarity contribution in the FIFA DRC and even, if necessary, on appeal to the CAS itself, as, in the opinion of the authors of this article, the issues regarding the interpretation of the FIFA Regulations on the Status and Transfer of Players raised in this article would have been given a thorough airing and the previous erroneous - and, indeed, unfair - interpretation and application of the Regulations to international transfers only would have been corrected.

 

It is to be hoped, therefore, that - before too long - someone of the calibre of Maitre Jean Louis Dupont (of Bosman and other groundbreaking football cases’ fame) would take up the cudgels on behalf of another claimant football club for a solidarity contribution in relation to a national transfer of a leading player and thereby lay to rest this ‘received’ but entirely unjustified and unjust interpretation of the FIFA Regulations - once and for all!

 

Or is that too much to hope for?

 

 

1 For a recent judicial example of the application of this rule, see paragraph 23 of the judgment in the English Court of Appeal case of Golden Fleece Maritime Inc and Anor v ST Shipping and Anor [2008] 1 C.L.C. 861 (CA), 23 May 2008.

2 Case 86833 of 17.8.2006 3 Case 14288 of 15.1.2004

4 See also in support of this argument, the discussion of the rule that different words or expressions indicate different meanings and the rule that there are no superfluous words in a contract, and, by analogy, a legal regulation or, indeed, any legal text requiring interpretation, in Professor Steve Cornelius’s Book on Principles of the Interpretation of Contracts (LexisNexis, SA, 2nd ed, 2007) at pp 121 and 122 (cited with approval in the Provincial High Court in Johannesburg, South Africa, judgment in the case of Birkenruth Estates(Pty)Ltd v Unitrans Motors (Pty) Ltd [2005] 3 All SA 128 (W)).