Gael Kakuta, Chelsea Football Club, the transfer embargo and the implications

Published 21 April 2009

By Jamie Horner, Ashfords LLP

On 4 September 2009, FIFA, the world governing body for football, announced that its Dispute Resolution Chamber had found Gael Kakuta guilty of breaching his contract with Lens Football Club.

In addition, FIFA also announced that it had held that Chelsea football club had been guilty of inducing Kakuta to breach his contract with Lens. As a consequence of FIFA’s decision, Kakuta was ordered to pay €780,000 (£682,000) to Lens for which Chelsea are jointly and severally liable. 

On 4 September 2009, FIFA, the world governing body for football, announced that its Dispute Resolution Chamber had found Gael Kakuta, a youth team footballer at Chelsea Football Club, guilty of breaching his contract with Lens Football Club. In addition, FIFA also announced that it had held that Chelsea football club had been guilty of inducing Kakuta to breach his contract with Lens. As a consequence of FIFA’s decision, Kakuta was ordered to pay €780,000 (£682,000) to Lens for which Chelsea are jointly and severally liable.

Kakuta has also been banned from playing in any official games for a period of 4 months. Chelsea have been ordered to pay €130,000 (£114,000) to Lens as “training compensation” and have been banned from registering any new players during the next two transfer windows (i.e. until January 2011). On receipt of FIFA’s judgment, Chelsea released a statement confirming their intention to “mount the strongest appeal possible” and that the sanctions imposed by FIFA are “totally disproportionate to the alleged offence. 

The Facts

In March 2007, Gael Kakuta, a 15 year old French winger at Lens Football club in France had been spotted by Chelsea’s scouts as a potential child prodigy.At the time, Lens issued a statement warning Chelsea (and any other club) that Kakuta was under contract with Lens until 2009, and that if any club were to contact Kakuta with a view to signing the player once the player turned 16, that club would be subject to FIFA disciplinary proceedings. However, despite the above, and a purported pre-contract agreement Kakuta had signed for Lens when he was 14 confirming that he would be contracted to Lens on his 16th birthday, Chelsea’s reported interest in Kakuta led to the player signing for Chelsea on his 16th birthday. 

Lens and Chelsea officials failed to reach an agreement over the player (Lens had asked Chelsea to pay a £4.3 million transfer fee whereas Chelsea were only prepared to pay £870,000 in compensation to Lens) and Lens subsequently lodged a complaint to FIFA.

Following the player’s perceived “transfer” to Chelsea as a purported “free agent”, Kakuta went on to play for Chelsea’s youth academy (where he was voted the academy’s player of the year in 2007/2008 and ended the season as the youth team’s top scorer). He also played twice for the reserve team before suffering a double fracture to his ankle in February 2008. 

The Ruling 

Article 17 paragraph 4 of FIFA’s Regulations on the Status and Transfer of Players states that: 

“It shall be presumed, unless established to the contrary, that any club signing a professional who has terminated his contract without just cause has induced that professional to commit a breach. The club shall be banned from registering any new players, either nationally or internationally, for two registration periods” . 

This Regulation therefore provides that if a player breaches his contract without just cause and then signs for another club, there is a presumption unless proven otherwise that that club has induced that breach of contract. 

Chelsea's Appeal 

The appeal route open to Chelsea is to the Court of Arbitration for Sport (“CAS”). CAS can review all of the evidence afresh and will determine the matter independently of FIFA . 

Other Clubs have recently found themselves in a similar position with mixed results: 

On hearing AS Roma's appeal of its FIFA transfer market ban in 2005, CAS reduced the penalty that had been imposed on the Italian club from two transfer windows to one. FIFA had banned AS Roma from participating in the transfer market for two windows following their signing of Philippe Mexes from Auxerre in 2005. 

However, in May 2009, CAS upheld FIFA's decision against Real Zaragoza in the case involving the Brazilian footballer Matuzalem who terminated his contract with Ukrainian side Shaktar Donetsk in order to move to the Spanish club. FIFA had ordered that Matuzalem was liable to pay Shaktar Donetsk €11,858,934 as compensation for the player’s unilateral breach of contract following his move to Zaragoza and also ordered that Zaragoza were jointly liable for the fine . 

Importantly, at the time of its decision FIFA announced that it: 

“…considers this decision to be very important, as it gives clear and strong support to the FIFA regulations and defends contractual stability in football. In particular, this decision, at its outset, once again underlines that article 17 of the FIFA regulations on the status and transfer of players does not give a free pass to unilaterally breach a contract. In fact the decision concerned confirms that any player in breach of contract must pay financial compensation to his former club” 

FIFA is clearly getting increasingly tough on players who breach their contract with their club without just cause and is also looking to make an example of the clubs that encourage players to do so. 

A decision from CAS is expected in or around November 2009, in relation to Swiss Club FC Sion's appeal against the ban that it received from FIFA in April 2009, after allegedly enticing Essam El Hadary to the club from Al Ahly . 

CAS have frozen the FIFA sanctions against FC Sion whilst it considers its verdict meaning that the Swiss club have been able to deal in the transfer market during the intervening period. 

CAS' decision in this case will surely give the best indication of the prospects of success of the inevitable Chelsea appeal. It is questionable however whether Chelsea's inevitable appeal will be successful. 

Implications for Gael Kakuta, Chelsea and the wider football community 

Whether or not CAS uphold FIFA's decision, FIFA’s ruling has already tarnished the reputation of both Chelsea and Kakuta . 

Whilst Chelsea may, of course, view the fine as a minor irritant (especially as it is roughly the same amount as the sum that they had offered to pay Lens prior to the signature of the player), the effect of the transfer ban, if it is upheld by CAS, could prove to be extremely damaging to the Club financially and also in terms of its reputation in world football . 

Chelsea are fortunate to already have a large and talented squad, however, should key first team members suffer long lasting or career damaging injuries, then given the scope of FIFA’s ban, the club would be unable to supplement its squad until 2011 and would have to rely on more junior and inexperienced squad members in the intervening period. This in turn would surely affect the clubs ability to challenge for silverware over the next two seasons which would no doubt cause problems in the boardroom, dressing room and in the stands . 

Furthermore, if CAS upholds the FIFA ruling then this could conceivably strengthen the negotiating position of Chelsea’s existing players who are due to negotiate a new contract with the club. Players such as Nicolas Anelka (who’s contract will soon be up for renewal) may be able to negotiate even more lucrative deals with the club as they will be aware that the club cannot enter the transfer market until 2011. 

As for Kakuta, whilst Chelsea will no doubt ensure that his fine is settled by the club, his reputation has been damaged by the decision. If he is not a success at Stamford Bridge, then other clubs may well think twice before signing him . 

Given the stance taken by FIFA in relation to player contracts, all football clubs must consider whether their activity in the transfer market could ultimately lead to FIFA imposing sanctions blocking the sale or acquisition of new players . 

It is interesting to note that French second division club Le Havre are rumoured to be seeking a FIFA ruling in relation to teenager Paul Pogba's transfer to Manchester United which is a case similar to that involving Lens and Chelsea. 

For more information, contact: Jamie Horner, Partner, Sports Team, +44 (0) 1392 333993.