THE ECJ’S DECISION IN DIARRA V. FIFA; SOME FIFA’S PLAYERS TRANSFER RULES ARE INCOMPATIBLE WITH EU LAWS

THE ECJ’S DECISION IN DIARRA V. FIFA; SOME OF FIFA’S PLAYER TRANSFER RULES ARE INCOMPATIBLE WITH EU LAWS. European Court of Justice, Fédération internationale de football association (FIFA) v BZ ("Diarra"), C‑650/22, 4 October 2024

1.0 BACKGROUND

Some FIFA rules that govern the way some football transfers work break the European Union’s laws, the European Court of Justice (ECJ) ruled, on October 4, 2024.
Former Chelsea and Arsenal Midfielder, Lassana Diarra challenged some FIFA’s rules after termination of his contract with Russian club Lokomotiv Moscow in 2014. FIFA refused to grant Diarra with an International Transfer Certificate for his proposed move to Belgian club Royal Charleroi in 2015.

He argued that the 2014 FIFA Regulations on the Status and Transfer of Players (RSTP) underlying the transfer and registration procedure, restricted his freedom of movement and contrary to EU competition law and therefore sued FIFA for damages.

2.0 ANALYSIS 

Diarra’s contract with Lokomotiv was terminated 3 years before its expiration because of a dispute between him and the club. In 2016 the Court of Arbitration for Sports (CAS) ruled that the former France international breached the contract and ordered him to 10.5M Euros to Lokomotiv and suspending him from professional football for 15 months.  Diarra sought a transfer to first division Belgian club Royal Charleroi, who then sought assurances that they will not be liable to pay any compensation to Lokomotiv. 

The deal collapsed because FIFA refused to grant an ITC basing on the rule that makes a club wishing to sign a player jointly liable for compensation to a player’s old club and at a risk of sporting sanctions, in cases where the players previous contract was terminated without a just cause. 

The RSTP has a section on “Maintenance of Contractual Stability between professionals and clubs” which lays down conditions for termination of a contract between a club and player. The rules under Articles 13 & 14 of the RSTP provide that a contract between a professional and a club may be terminated without compensation of sporting sanctions only;
(a)   Upon expiry of a term of contract 
(b)   By mutual agreement 
(c)   Where there is a just cause.

Article 17(1), in cases of early termination, provides that the party in breach shall be liable to pay compensation. Further, Article 17(2) specifically provides that if a professional is required to pay compensation, the professional, and his or her new club shall be jointly and liable for his payment.

Sporting sanctions are imposed on a player in addition to compensation if found in breach of a contract during the contract period. This is done to avoid the suggested new club from inducing the player to terminate its contract to be able to move to a new club. See Articles 17(3) and 17(4) of the RSTP.

3.0 HOLDING

The ECJ determined that FIFA should not use the ITC system to prevent players who have breached a contract from moving and working where they choose. In essence, the ECJ held that RSTP rules on transfer are inconsistent with the guarantee of freedom of movement under Article 45 of the TFEU. The ECJ further noted that the rules deprive the players from receiving firm and unconditional offers from clubs established in other member states. 

Written by;

Nasser SserunjogiSenior Partner
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