Who has jurisdiction over international football transfer disputes?
Published 02 September 2017 By: John Mehrzad
Recent sporting headlines have been dominated by the record levels of fees spent on football player transfers.
Behind the scenes, international disputes – involving parties from or based in different countries – related to transfers of players or the negotiation of player contracts have also increased enormously over the last few years.
Those disputes typically concern intermediaries – previously known as “player agents” – being cut-out of deals, not being paid under representation contracts, or deriving benefits from players or clubs to which they were not entitled.
In that context, this article will consider a key preliminary issue for any such international dispute – the question of jurisdiction. Specifically, it examines:
- The position to 1 April 2015;
- The current position;
- The potential jurisdictions;
- o Court of Arbitration for Sport
- o FA Rule K
- o National courts
The position to 1 April 2015
By way of background, when the “new” FIFA Regulations on Working with Intermediaries (the “FIFA Intermediaries Regs.”) came into force on 1 April 2015, clarity on where disputes in connection with agent/intermediary activity ceased in regulatory terms.
Up to that date, under the then FIFA Player’s Agents Regulations (the “FIFA Players’ Agents Regs.”) domestic disputes in connection with players’ agents’ activity were as a last resort to be referred to an independent, duly constituted and impartial court of arbitration, whilst taking into account the FIFA Statutes and the laws applicable in the territory of the association.
In the case of international disputes in connection with the activity of players’ agents, under the same FIFA Players’ Agents Regs, a request for arbitration proceedings was to be lodged with the FIFA Players’ Status Committee (the “FIFA PSC”).
In short, until 1 April 2015 disputes concerning domestic transfers would be determined by domestic sport-specific panels, whilst those of an international nature would be dealt with the FIFA PSC.
The current position
However, under the more recent FIFA Intermediaries Regs a dispute resolution forum is no longer provided for.
That lacuna has led to uncertainty as to the proper forum for disputes in connection with intermediaries’ activities; in summary, the negotiation of an employment contract between a player and a club or a transfer agreement between two clubs.
Obviously, parties to a representation contract can expressly choose the forum to resolve any dispute between them.
Be that as it may, many representation contracts are at best unclear as to the intended dispute resolution forum or still expressly refer to the FIFA PSC, which no longer exists to resolve international disputes in connection with intermediaries’ activities.
As a result, preliminary issues as to jurisdiction are frequently being raised in practice either before sports-specific arbitral panels or national courts.
The potential jurisdictions
By way of starting-off point, there are three potential dispute resolution jurisdictions for an international dispute involving intermediary activity:
- The Court of Arbitration for Sport (the “CAS”).
- Domestic sport-specific arbitration, which in England would be under Rule K of the FA Rules of the Association (“FA Rule K”).
- National courts.
The position as to the Court of Arbitration for Sport is relatively straight-forward.
First, the CAS will accept jurisdiction over an intermediary dispute where there is “an arbitration clause contained in the contract...or by reason of a later arbitration agreement” as provided for under R27 of CAS Code.
In other words, if the parties have agreed a clause to give it jurisdiction within the representation contract, or subsequently do so, the CAS will accept jurisdiction for such a dispute.
Secondly, CAS will also accept jurisdiction under R47 of its Code if the applicant can show that: (a) the appealed decision constituted a “decision” by FIFA; (b) FIFA’s Statutes provide for an appeal of such a decision to the CAS; and (c) all other remedies have been exhausted by the applicant.
As a result, in circumstances where the applicant has asked FIFA to make a decision but it has decided not to do so since it is no longer competent to do so (as will be the case nowadays); FIFA Statutes provide for an appeal to CAS (which they do); and there are no other remedies available to the applicant (which will not be the case unless provided for under the relevant representation contract), then the CAS will accept jurisdiction to determine the claim.
FA Rule K
The position as to the jurisdiction of Rule K is less clear-cut.
On point, Rule K1(a) provides:
“Subject to Rule K1(b), K1(c) and K1(d) below, any dispute or difference between any two or more Participants (which shall include for the purposes of this section of the Rules, The Association) including but not limited to a dispute arising out of or in connection with (including the existence of validity of):
(i) the Rules and regulations of The Association which are in force from time to time;
(ii) the rules and regulations of An Affiliated Association or Competition which are in force from time to time;
(iii) the statutes and regulations of FIFA and UEFA which are in force from time to time; or
(iv) the Laws of the Game
shall be referred to and finally resolved by arbitration under these Rules.”
However, such a literal approach may be too simplistic an approach to the question of jurisdiction of Rule K.
Since Rule K arbitration is seated in England and Wales, and save as expressly excluded, it is subject to the Arbitration Act 1998 (the “Act”). That is because the governing law of Rule K arbitration is English law (both procedural and substantive).
In other words, if there is no arbitration agreement between the parties – even if “Participants” as defined – it is arguable that the jurisdiction of Rule K does not apply to a dispute between those parties.
That may seem, at least at first blush, a surprising proposition when “any dispute” between “Participants” is expressed in terms under the FA Rules to be subject to Rule K.
Moreover, by extension, those “Participants” would the subject to some provisions of the FA Rules – such as in relation to misconduct under Rule E – but not in relation to Rule K. That would seem to create an anomalous position.
Nevertheless, as to whether the parties have reached an agreement for the purposes of the Act, the normal rules of contractual interpretation apply – albeit in more recent years English laws has adopted a more, “commercial common-sense” approach to that exercise.
Ultimately, where the parties refer in the representation contract to the FA Rules, it may be relatively easy to demonstrate that the parties intended Rule K to apply as it is incorporated into their agreement by reference.
Where a contract is silent as to the dispute resolution forum or the PSC is still mentioned, it may be very difficult to establish the intention of the parties was that Rule K should have jurisdiction.
Indeed, a clause that refers to the PSC can plainly not be fulfilled and, therefore, could be void by reason of impossibility or frustration.
If that is the case – and absent any agreement to refer the dispute to the CAS – the parties may then have to resolve their dispute in national courts, applying domestic and, as the case may be, trans-national laws, such as EU law, to establish forum conveniens (appropriate forum).
Player transfers and contract renegotiations are of an ever-increasing international nature. With derived international disputes also growing exponentially and the PSC no longer being the proper forum for such disputes, the most important first step for such a claim is to identify the proper jurisdiction for a potential claim by way of arbitration or otherwise.
For the reasons set out above, that may not be straight-forward. Furthermore, and for the same reasons, those defending such claims may well have good grounds to raise a preliminary issue as to jurisdiction in any event.
In the meantime, parties would be best advised to review the jurisdiction clauses in their representation contracts so that their intention as to their chosen forum for dispute resolution is clear be it to domestic sports-specific arbitration, such as under Rule K, to the CAS or national courts.
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- Tags: Court of Arbitration for Sport (CAS) | Dispute Resolution | Employment | FA Rules of the Association | FIFA | FIFA Player's Agents Regulations | FIFA Players Status Committee | FIFA Regulations on Working with Intermediaries | Football | The Football Association (The FA) | United Kingdom (UK)
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