International transfer of minors in football - key takeaways and procedural issues from Chelsea & The FA v. FIFA

Published 20 June 2019 By: Despina Mavromati, Jake Cohen

Background and FIFA Proceedings

On 22 February 2019, following a lengthy investigation, the FIFA Disciplinary Committee (FIFA DC) announced that it had sanctioned both Chelsea Football Club (“Chelsea”) and The Football Association (The FA) for breaches relating to the international transfer and registration of minor players.2

Specifically, the FIFA DC found that Chelsea had breached Article 19 of the FIFA RSTP in the case of twenty-nine minor players.

The FIFA DC also found that Chelsea had breached Article 18bis in two cases involving agreements concluded with minor players and further, that it had “committed several other infringements relating to registration requirements for players.”3

As a result, the FIFA DC banned Chelsea from registering new players for the next two registration periods, fined the club CHF 600,000, and mandated that the situations of the minors involved were regularised within 90 days. The ban does not apply to the women’s team or futsal team, however.

The FA was also sanctioned for breaching rules in connection with the registration of minor players. The FIFA DC imposed a fine of CHF 500,000 and mandated that The FA address the situation concerning the international transfer and first registration of minors in football within six months.

Chelsea immediately announced its intention to appeal the decision before the FIFA Appeals Committee (FIFA AC)4 and filed a request for provisional measures.

On 8 March, in a break from precedent established in the three most recent high-profile cases involving clubs being sanctioned for breaching Article 19, the FIFA AC denied5 Chelsea’s request for provisional measures.6

On 11 April, the appeal was heard before the FIFA AC and on 8 May, the FIFA AC confirmed the FIFA DC’s decision to sanction Chelsea with a registration ban and fine.

However, the FIFA AC did uphold one part of Chelsea’s appeal. Specifically, the FIFA AC

“believes that Chelsea’s wrongdoing consisted in not respecting the prohibition from internationally transferring or registering for the first time foreign minor players. In the committee´s opinion, imposing a ban on registering each and every minor would not be proportionate to the offence committed.”

“Consequently, the FIFA Appeal Committee decided that, as far as youth categories are concerned, the ban shall not cover the registration of minor players under the age of 16 who do not fall under the scope of art. 19 of the Regulations on the Status and Transfer of Players, which refers to international transfers and first registrations of foreign minor players.”7

While the FIFA AC confirmed much of the FIFA DC’s decision, the FIFA AC specifically excluded domestic youth players under the age of sixteen from Chelsea’s registration ban. So, regardless of the outcome of the club’s appeal at the CAS, Chelsea will still be permitted to register English youth players, subject to the Premier League Youth Development rules.

In a statement made on 8 May, Chelsea stated that it “notes that the FIFA Appeal Committee has decided to partially uphold the appeal lodged by Chelsea FC against the decision of the FIFA Disciplinary Committee. However, the Club is very disappointed that the transfer ban of two consecutive registration periods was not overturned.”

“Chelsea FC categorically refutes the findings of the FIFA Appeal Committee. It acted in accordance with the relevant regulations and will appeal the decision to the Court of Arbitration for Sport (CAS).”8

On 7 June, the CAS confirmed that Chelsea had filed a statement of appeal.9

Relevant FIFA regulations – a brief primer

In its 22 February announcement, the FIFA DC only mentioned two specific rules in relation to Chelsea’s sanctions – Article 18bis and Article 19 of the FIFA RSTP. While it is possible that the FIFA DC will have found that Chelsea breached other regulations – namely, Article 5 and Article 9 – these violations almost certainly would have stemmed from the Article 19 and Article 18bis violations and it is the two latter rules that the authors will focus on.

Article 19 of the FIFA RSTP states that as a general matter, international transfers are not permitted when the player is under the age of eighteen. However, there are three written exceptions contained in Article 19(2):

1. The player’s parents move to the country in which the new club is located for reasons not linked to football.

2. The transfer takes place within the territory of the European Union (EU) or European Economic Area (EEA) and the player is aged between 16 and 18. In this case, the new club must fulfil the following minimum obligations.

1. It shall provide the player with an adequate football education and/or training in line with the highest national standards.

2. It shall guarantee the player an academic and/or school and/or vocational education and/or training, in addition to his football education and/or training, which will allow the player to pursue a career other than football should he cease playing professional football.

3. It shall make all necessary arrangements to ensure that the player is looked after in the best possible way (optimum living standards with a host family or in club accommodation, appointment of a mentor at the club, etc.).

4. It shall, on registration of such a player, provide the relevant association with proof that it is complying with the aforementioned obligations.

3. The player lives no further than 50km from a national border and the club with which the player wishes to be registered in the neighbouring association is also within 50km of that border. The maximum distance between the player’s domicile and the club’s headquarters shall be 100km. In such cases, the player must continue to live at home and the two associations concerned must give their explicit consent.

An unwritten exception was borne out of what is colloquially known as the “Vada case” or “Vada II” – Girondins de Bordeaux v. FIFA10. The CAS ruling in the Vada case extended the EU/EEA provision contained in Article 19(2)(b) to apply to not only sixteen- and seventeen-year-old players being transferred between EU/EEA clubs, but also to sixteen- and seventeen-year olds with citizenship from an EU/EEA country who are transferred from a non-EU/EEA club to an EU/EEA club. This ruling has been adopted by FIFA in practice, if not in writing. The Vada decision has also been upheld and reaffirmed by other CAS panels, notably in Club Atlético Vélez Sarsfield v. The Football Association Ltd., Manchester City FC & FIFA11.

It is important to note that Article 19 also applies not only to transfers but also to “first registrations” – that is, situations in which a player who has never previously been registered for a club and wishes to register for a club in a country where the player is not a national.

Article 18bis states that “no club shall enter into a contract which enables the counter club/counter clubs, and vice versa, or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.” It also allows the FIFA DC to impose disciplinary measures on clubs that do not comply with this regulation.

Article 18bis deals with third-party influence on clubs and along with Article 18ter, stems from FIFA’s 2015 ban on third-party ownership and investment (TPO / TPI).

It is worth highlighting FIFA has since modified the RSTP, which was approved by the FIFA Council on 15 March 2019. While neither Article 19 nor Article 18bis have been changed, Article 18ter has been changed. The only violations which the FIFA DC specifically listed were Article 19 and Article 18bis, but it may be that FIFA may have alleged other violations as well.

However, this version of the RSTP did not come into force until 1 June 2019 and should not be applied in the case at hand. All procedural issues in this matter should be governed by the 2018 edition of the RSTP, as per Article 26 of the RSTP, whereby the decisive point in time is the starting of the FIFA proceedings.

The principle of precedent in Article 19 cases

While the FIFA AC is not bound to precedent (and nor for that matter is the FIFA DC or the CAS), some manner of jurisprudential consistency, especially on key procedural matters, is ideal in order to ensure that all of the relevant stakeholders are being treated fairly.

The CAS has, in fact, recognised the need for jurisprudential consistency, specifically as relates to cases involving Article 19. In John Kenneth Hilton v. FIFA, the CAS panel reaffirmed this, stating

“the Panel considers that Article 19 FIFA RSTP is a very important provision, which sets key principles designed to protect the interest of minor players. The Panel therefore agrees with the need to apply the rules on the protection of minors in a strict, rigorous and consistent manner.”12

The panel in the Barcelona case,13 appeared to agree with this notion, as did the panel in the Real Madrid case.14

Chelsea’s case – selected potential key issues

In this section, the authors highlight a few selected issues that may prove relevant to this case, and which is strictly based on their own experience with other Article 19 cases at the CAS and having been involved in international transfers whereby players have qualified for various exceptions under Article 19, rather than any direct or indirect knowledge of facts in this case that have not been made public.

“Organised football”

“Organised football” is defined in the FIFA RSTP as “association football organised under the auspices of FIFA, the confederations and the associations, or authorised by them.”15

For the purposes of this discussion it is also important to note the FIFA RSTP’s definition of “official matches,” which is “matches played within the framework of organised football, such as national league championships, national cups and international championships for clubs, but not including friendly and trial matches”.16

It is common for clubs to host trialists and invite them to train with the club, with a view towards further scouting the player and potentially offering the player a place in the academy, a scholarship agreement, or a professional contract.

Equally, it is also common to organise informal friendlies and trial matches with each other in order to gauge the relative talents and fit of the players currently on trial with their respective clubs. This is particularly common in England and among Premier League clubs.

These trials and informal matches and friendlies involving trialists have long been considered to be neither organised football nor official matches.

It has been reported17 that many of the players who are involved in the alleged Article 19 violations are players who Chelsea had on trial but did not register. Clubs are not required to register trialists, but FIFA has likely taken the position that the nature of the situation involving these trialists constituted “organised football,” and further that these trialists participated in “official matches.”

Article 5 of the FIFA RSTP states that

“A player must be registered at an association to play for a club as either a professional or an amateur in accordance with the provisions of article 2. Only registered players are eligible to participate in organised football. By the act of registering, a player agrees to abide by the statutes and regulations of FIFA, the confederations and the associations.”

When a player engages in organised football and and competes in official matches, that player would no longer be considered a trialist. FIFA will likely argue that at least some of the players involved were, in fact, engaging in organised football and competing and competitive matches, and therefore Chelsea was required to register them, but failed to do so.

Naturally, each player’s specific set of circumstances will have to be analysed on a case-by-case basis, but it is worth noting that FIFA has consistently raised the argument that certain trialists should be considered to have been participating in organised football and competing in competitive matches. In many cases, however, various CAS panels have dismissed FIFA’s arguments.

In Barcelona’s case, the Panel found that the club did not, in fact, breach Article 5.1 of the FIFA RSTP. The Panel held that the players should have been registered if any of the competitions they participated in were authorised by the RFEF. However, the Panel held that none of the competitions the Barcelona players participated in were authorised by the Spanish FA, and that any incompatibility between the RFEF’s regulations and FIFA’s regulations on this matter was not the responsibility of Barcelona.18

So long as the relevant Chelsea trialists involved did not compete in matches that were authorised by the FA, it is possible that Chelsea will cite this ruling in support of their argument that the trialists were not involved in organised football or competing in official matches.

Further, in any situations where former players and/or coaches participated in matches involving the players relating to this case, Chelsea could take the position that these matches did not constitute organised football and cite ARIS Football Club v. Márcio Amoroso dos Santos & FIFA in support of this19. In the latter case, the Panel found that a player that has terminated his football career and is no longer registered with a national association is no longer part of organised football.20

For example, if such a player (i.e. a retired player) was playing alongside one of the players involved in this matter, that would likely support Chelsea’s position that what was taking place was not organised football. It is worth noting that Chelsea regularly invites former players to participate in training sessions.

Furthermore, in the Real Madrid case, the Panel held that two players who were never registered with the club and which FIFA alleged participated in organised football, did not, in fact, participate in organised football.

In the case of the first player, he had participated in one trial and in two informal tournaments. He was ultimately not offered a contract after the club did not see a way that the player could qualify under one of the exceptions to Article 19.

In the case of the second player, he participated in one trial and in two informal tournaments. After the FIFA Subcommittee denied the club’s request to register the player, Real Madrid appealed the decision to the CAS without success, and so ultimately abandoned its efforts to register the player.

Should any of the players involved in Chelsea’s case have similar circumstances, i.e. where players have participated in extended trials and competed in friendly matches, the club will likely cite these examples where the CAS has already held that these activities did not constitute organised football.

Article 19(2)(a)

The exception contained in Article 19(2)(a) relates to when the player’s parents move to a country for reasons not linked to football. If Chelsea take the position that one or more of the players they signed qualified for this exception, the club will likely present evidence to support the position that the player’s parents moved to England for reasons [entirely – not the right word] unrelated to football.

In John Kenneth Hilton v. FIFA, the CAS panel found that

“in such cases were the panel is convinced that the move of the family was motivated by a mixture of several reasons, and where each one of the other proven reasons is legitimate per se, the application of the exception will be assessed and decided based on the weight of the “football factor” within the whole range of reasons and the overall circumstances of the matter, such as: what were the other reasons? Whether all the family moved? To what extent the specific location to which the family decided to move was chosen with due consideration of the football activity of the minor, etc.”

This is a more lenient test than the one issued by the CAS panel in A. v. Club Atlético de Madrid SAD & RFEF & FIFA, whereby the panel “considered that whenever the player’s parents took football into consideration, even if this was only part of the reasons for the move, then the exception is not applicable”21

In situations where Chelsea takes the position that a player qualified to be registered under this exception, the club will likely delineate the specific facts involved in each of the respective youth players’ move to England and argue for the CAS panel to adopt the more lenient test adopted by the panel in the Hilton case.

Procedural issues: Proceedings before the CAS

On 7 June, Chelsea filed a statement of appeal before the CAS.

In accordance with Article R67 of the CAS Code, the applicable rules should be the one in force at the time of the filing of the Statement of Appeal, in casu the 2019 Rules of the CAS Code.

Since 2010, under Article R37 of the CAS Code, a party appealing a final decision to the CAS may immediately request provisional measures, even before filing the official statement of appeal, provided that all internal legal remedies have been exhausted (i.e. the applicant can no longer appeal the decision within the federation’s internal instances) and the Court Office fee of CHF 1,000- has been paid with the CAS. Thereafter, the applicant has to file the statement of appeal within the applicable time limits set by Article R49 CAS Code: in case of appeal against a FIFA AC decision such time limit should be 21 days from the notification of the (full) decision. Otherwise any provisional measures granted by the CAS will be automatically annulled.

If the applicant files the request for provisional measures at an early stage of the proceedings, the CAS Panel will not have been formed and the order on provisional measures will have to be issued by the CAS Division President. If the CAS Division president denies such a request however, it is still an open question as to whether the claimant can request provisional measures again upon the formation of the Panel, which according to Article 183 of the Swiss Private International Law Act (PILA) should be the body having jurisdiction to hear the application for provisional measures.22 In any event, it is possible, during the course of the CAS proceedings, to file a new request for provisional measures on the basis of new elements.23

Under Article R37 of the CAS Code, a party appealing a final decision to the CAS may immediately request provisional measures, even before filing the official statement of appeal, provided that all internal legal remedies have been exhausted (i.e. the applicant can no longer appeal the decision within the federation’s internal instances) and the Court Office fee of CHF 1,000- has been paid with the CAS. Thereafter, the applicant has to file the statement of appeal within the applicable time limits set by Article R49 CAS Code, which in an appeal against a FIFA AC decision should be 21 days from the notification of the (full) decision.

What are the substantive conditions for granting provisional measures pending the CAS proceedings?

The CAS Panel will grant provisional measures if three substantial conditions are (cumulatively) met:24

1. the party seeking such relief risks to suffer irreparable harm if the relief is not granted,

2. there is a likelihood of success to the merits of the appeal and

3. the interests of the applicant outweigh those of the other party.25

In the first condition, it is necessary to consider whether the measure is useful to protect the applicant from irreparable harm. The risk of irreparable harm is generally the first condition to be examined and is strongly connected to the urgency of the request. There is a risk of irreparable harm if the final decision, even if it is favourable to the applicant, will not remedy the harm suffered and it can be of financial or / and moral nature. Since it is difficult to establish the actual damage and its degree, it suffices to establish the plausibility of the irreparable harm.26 In fooball-related disciplinary cases, a football club that would be deprived from its right to register new players until the end of the second period of registration was found to risk irreparable harm pursuant to the definition given by the SFT.27

According to the second condition, the appeal must have reasonable chances of success on the merits.28 The applicant must make at least a plausible case that the facts relied on by him and the rights that he tries to enforce exist and that the material conditions for a legal action are fulfilled. Since the appreciation of the case is not an easy task at a preliminary stage of the proceedings, the CAS will show lenience in this respect especially if the condition of irreparable harm seems to be met.29

The third condition requires that the interests of the applicant must not outweigh those of the opposite party if the interim relief is granted. According to CAS jurisprudence, the CAS will compare the risks incurred by the applicant in the event of immediate execution of the decision with the disadvantages for the other party from the non-immediate execution.30 In football-related cases, the interest of a sports federation to see its regulations applied and its decisions enforced is generally not as important as the interest of another party risking an irreparable harm through the immediate execution of the decision but, again, this should be examined on a case-by-case basis.31

Overall, in most cases, if the criterion of irreparable harm is not fulfilled, the Panel dismisses the application for provisional measures without examining the other criteria.32 In practice, however, the CAS has the freedom to assess the situation globally using the three criteria as a help rather than applying them strictly. When the other party does not raise any objection as to the request for a stay submitted by the applicant, the CAS will normally grant the interim measure.33

What is a “decision” appealable to the CAS?

Under Article R47 of the CAS Code, one of the jurisdictional conditions for the appeal to the CAS is the existence of a “decision” appealed against.34

In general, a decision should contain a ruling intending to affect the legal state of the addressee of the decision.35

Furthermore, such decision must have become “internally final”, i.e. final at the internal level of the relevant federation after exhausting all legal remedies available to it prior to the appeal. In Chelsea’s case, this matter became “internally final” when the club exhausted all legal remedies available at FIFA. Specifically, the matter became “internally final” once the FIFA AC issued its decision.

Of course, Chelsea’s case is ongoing and has been appealed to the CAS which has the full power to review the appealed decision under Article R57 CAS Code.36 In order to determine whether this condition has been met, the CAS Code refers to the applicable statutes or regulations of the body that issued the appealed decision.

Additionally, Article 58 of the FIFA Statutes (2018 Edition) provides that “Appeals against final decisions passed by FIFA’s legal bodies (…) shall be lodged with CAS within 21 days of receipt of the decision in question.”. The second paragraph stresses that “Recourse may only be made to CAS after all other internal channels have been exhausted,” which aligns with the definition used by the CAS in the CAS Code.

Is the FIFA AC’s denial to grant provisional measures a "final decision" appealable to the CAS?

In general, a decision to grant or deny provisional measures is, not, through a logical interpretation, considered a “final” decision which is appealable to the CAS.

This interpretation is reinforced by the fact that the orders on provisional measures rendered by the CAS specifically indicate that such orders do not constitute “final awards”37 and can therefore not be appealed against as such to the Swiss Federal Tribunal, which is the only venue a CAS award may be appealed (and only in very limited circumstances).38

In this context, and as a general rule, the decision of the tribunal of a federation (such as the FIFA AC), not to grant provisional measures should be construed, unless otherwise provided in the rules of such federation, as a mere “order” which does not decide on the merits, can be revoked or amended at any time and is therefore not a “final” decision appealable to the CAS.39

However, there are exceptionally cases where the decision not to grant provisional measures can indeed be equated to a “final” decision.

For example, the decision not to grant a request for provisional measures may be considered “final” when a denial of provisionally suspending the decision has an effect akin to a “final”, appealable decision decision for the claimant (who bears the burden to establish this before the CAS). This is also in line with a ruling of the Swiss Federal Tribunal in an appeal against a CAS Order to terminate the proceedings, where it was found that the name “Order” given by the CAS is not decisive and one has to look into the effect of the ruling instead.40

Specifically, in football disciplinary cases, and in accordance with Article 129 of the FIFA Disciplinary Code (2017 Edition), in cases of urgency and where the disciplinary decision cannot be taken early enough, the chairman of the judicial body “may take other provisional measures at his discretion, especially to ensure compliance with a sanction already in force (…).” Furthermore, under Article 130, the chairman delivers his decision immediately while, under Article 132, provisional measures may not be valid for longer than 30 days, subject to a one-time extension of up to 20 days.

The FIFA Disciplinary Code explicitly provides that an appeal against a decision regarding provisional measures can be lodged with the chairman of the Appeal Committee (Article 133.1 of the FIFA Disciplinary Code) and can only be admitted if “the facts stated in the contested decision are inaccurate or if the law has been violated”.

However, the FIFA Disciplinary Code is silent when it comes to a potential appeal against the decision regarding provisional measures rendered by the Chairman of the FIFA Appeal Committee.

In the authors’ view, the same conditions (i.e. the existence of a final “decision” after exhaustion of internal remedies under Article R47 of the CAS Code) should apply. Accordingly, the decision on provisional measures rendered by the FIFA judicial bodies should in principle not be admissible before the CAS for lack of exhaustion of legal remedies, with possible exceptions as mentioned above.

Can a decision without grounds be appealed to the CAS and request provisional measures before even filing the appeal brief?

Decision without grounds and appeal to the CAS

The CAS will accept an appeal against a decision after exhaustion of legal remedies, as described above. Article R47 of the CAS Code refers to the specific rules of the federation in question in order to determine whether the internal remedies have been exhausted.

As relates to FIFA, Article 115 of the FIFA Disciplinary Code indicates that the FIFA judicial bodies may decide not to communicate the grounds of a decision, but instead only its operative part, i.e. the outcome and any sanctions or remedies that have been issued.

Under Article 116 of the FIFA Disciplinary Code, in cases where the parties have only received the operative part of a decision, the parties cannot appeal against the operative part. However, the parties do have ten days to request the grounds, failing which the decision will become “final and binding.” It should be noted, however, that the term “final” in this case does not mean that the parties have exhausted the internal remedies and may appeal against the decision to the CAS, but rather that they missed the opportunity to contest the decision which will become enforceable.41

When a party does request the grounds of the decision within the ten-day time limit, Article 116 of the FIFA Disciplinary Code states that “if a party requests the grounds of a decision, the motivated decision will be communicated to the parties in full, written form”.

In such a case, the time limit to lodge an appeal only begins upon receipt of the grounds / motivated decision, and it is not possible to appeal the operative part of the FIFA decision only.

Article 115 of the FIFA Disciplinary Code is considered to be lex specialis compared to Article 67 of the FIFA Statutes. In any event, and as mentioned above, there can be exceptions whereby a party requested the grounds in writing but should wait a long time for their issuance (denial of justice).42

Conclusion

This matter raises key procedural questions with applicability in a range of international football disputes in addition to all disputes before the CAS in which a party is considering to request provisional measures. This is especially true in cases where a party has been sanctioned by a federation and wishes to make a request, as soon as possible, that the CAS stay that sanction pending the final outcome of the appeal.

While Chelsea’s dispute with FIFA is ongoing, it has already provided an excellent platform for which these complex procedural issues can be discussed and analysed in a practical manner. Depending on how it progresses, the authors may revisit this case for a follow-up article discussing the lessons learned and key procedural takeaways from this matter.

Interestingly, it is unclear as to whether Chelsea have filed a request for provisional measures in an attempt to have the CAS temporarily stay the registration ban while the appeals process is ongoing. The authors take the view that, in similar cases, the CAS would typically grant such a request after FIFA has had a chance to respond.

As such, there is no real legal barrier preventing Chelsea from registering new players this summer. The decision as to whether or not to file the request, therefore, could be a strategic or football decision. Chelsea could continue serving the ban while the appeals process is ongoing, which would enable the club to register new players at the start of the summer 2020 window should their appeal to the CAS not be successful. Of course, if Chelsea are ultimately successful at the CAS and do not request that the ban be stayed, the club run the risk of unnecessarily serving a registration ban.

If Chelsea requests that the registration ban be stayed while the appeals process is ongoing and its appeal is unsuccessful, the club would not be able to register new players until January 2021.

Additionally, the authors take the view that FIFA has been attempting to redefine the definition of both “trialists” and “organised football” through its filings in Article 19 cases before the CAS for a number of years. To date, the CAS has rejected FIFA’s attempts at moving the goalposts, and it will no doubt be very interesting to see this panel’s response, should FIFA raise this issue in this case.

Disclaimer: The present paper reflects only some personal views and general remarks drawn from the Chelsea case and should not be regarded as legal advice or bind the authors in any way. Neither author has any involvement in this particular matter.

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• Tags: Athlete Welfare | CAS Code | Chelsea | Court of Arbitration for Sport (CAS) | Employment | FIFA | FIFA Regulations on the Status and Transfer of Players (RSTP) | Football | Governance | Minors | Regulation | Swiss Private International Law Act (PILA) | The FA | United Kingdom (UK)

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Author

Despina Mavromati

Dr. Despina Mavromati, LL.M., is an attorney (Bar of Thessaloniki / Ordre des Avocats Vaudois) practicing in the field of international sports law and arbitration. She is the founder of a Lausanne-based practice (SportLegis Lausanne) and represents athletes, clubs, and sports federations in all aspects of arbitration, trials, and drafting policies.

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Jake Cohen

Jake is a Consultant Mills & Reeve and an attorney working on both sides of the pond.

He has worked in the sports team at Mills & Reeve, and also writes about legal, economic, and financial issues in European sport for the Wall Street Journal, ESPN, and other publications. He has been cited as an authority by media outlets all over the world.

At one time, he was a serviceable fly-half.

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