On 6th June 2019, the Court of Arbitration for Sport (CAS) registered an Appeal filed by Manchester City Football Club (MCFC). The Appeal was against the decision taken by the Investigatory Chamber (IC) of the UEFA Club Financial Control Body (CFCB) to refer the pending case against MCFC to the Adjudicatory Chamber (AC) of the CFCB. The adjudication of this Appeal will involve a crucial issue of admissibility i.e. whether this decision of the IC to refer the case to the AC constitutes an appealable decision. In this article, I hope to shed some light on the regulatory framework and previous jurisprudence surrounding this interesting legal issue.
The investigation into MCFC’s potential violation of the UEFA Financial Fair Play Regulations (FFP) arose from the articles published in November 2018 by German publication Der Spiegel as part of its Football Leaks series. UEFA launched the formal investigation on 7thMarch 2019 and on 16thMay 2019, the Chief Investigator of the CFCB completed the investigation and referred the case to the CFCB AC for adjudication. It is this “decision” of the CFCB IC that MCFC has challenged before CAS.
The CFCB is governed by the Procedural Rules Governing the UEFA Club Financial Control Body, Edn. 2015 (“Procedural Rules 2015”) which defines its scope as:
“The present rules govern: the jurisdiction of the CFCB (Article 3); b) the organisation of the CFCB (Articles 4 to 11); c) the decision-making process of the CFCB (Articles 12 to 41)” (Art. 2 of the CFCB Procedural Rules 2015)
It is important to note that “decision” is not one of the terms that is covered within Art. 1 of the CFCB Procedural Rules 2015 wherein only four terms are defined. Section III of the Procedural Rules 2015 titled “Decision-making process of the CFCB” deals with the conclusion of the investigation in Art. 14. It states that
“At the end of the investigation, the CFCB chief investigator, after having consulted with the other members of the investigatory chamber, may decide to: a) dismiss the case; or b) conclude, with the consent of the defendant, a settlement agreement; or c) apply, with the consent of the defendant, disciplinary measures limited to a warning, a reprimand or a fine up to a maximum amount of €100,000; or d) refer the case to the adjudicatory chamber.”
The present case falls within sub-section “d” of said provision and is the only type of decision that is not covered within Art. 16 which provides for review of the decision of the CFCB Chief Investigator by the AC.
Art. 17 of the Procedural Rules 2015 mandates that the decision of the Chief Investigator to refer the case to the AC has to contain certain details. It is within this Article that we first encounter the term “final decision” in the Rules. From the context, it is clear that the reference is with respect to the decision taken by the AC based on the information provided by the Chief Investigator. Art. 27 titled “Final Decision” states explicitly that
“The adjudicatory chamber may take the following final decisions…”.
Hence, it is evident that the term “final decision” has been used within the Procedural Rules 2015 to refer to a decision made by the AC under Art. 27 after due consideration. Read alongside Art. 34, this would indicate that the right to appeal to CAS exists only for a final decision of the AC of the CFCB. Further, it might be relevant to note that Art. 62 of the UEFA Statutes deal with the provisions for appeal against “Any decision taken by a UEFA organ”. However, Art. 62 (4) of the UEFA Statutes states that an appeal can be brought before CAS only after UEFA’s internal procedures and remedies have been exhausted.
The issue of appealability of a decision has come up before the CAS on various occasions. CAS Panels have, over the years, laid down the characteristic features of a “decision” – its form is not relevant (CAS 2005/A/899 & 2007/A/1251), it must contain a ruling affecting the legal situation of the concerned party and it must be a unilateral act intended to produce legal effects (CAS 2004/A/659). To come to these conclusions, CAS Panels have previously referred to the definition of the term “decision” in Swiss Law:
“The decision is an act of individual sovereignty addressed to an individual, by which a relation of concrete administrative law, forming or stating a legal situation, is resolved in an obligatory and constraining manner. The effects must be directly binding both with respect to the authority as to the party who receives the decision.”(ATF 101 Ia 73).
The principle that emerges from these cases is that for a decision of any authority to be considered an appealable decision, the legal effect of it on the party concerned needs to be examined.
For the purposes of the case under discussion, the most relevant CAS case is AC Milan v. UEFA (CAS 2018/A/5808) which involved a similar legal issue. AC Milan were investigated by the IC of the CFCB much like MCFC and were referred to the AC of the CFCB without being offered the option of a settlement agreement. However, AC Milan did not appeal this decision of the IC and instead contested the case before the AC which resulted in sanctions being imposed on them through a final decision of the AC. This final decision was then appealed before CAS, challenging not only the sanctions imposed by the AC but also the decision of the IC to not offer a settlement agreement and to refer the case to the AC.
Before CAS, AC Milan argued that the referral decision of the IC is not separately appealable under the Procedural Rules 2015. However, this argument was based on the fact that the operative part of the referral decision only deals with the referral of the case to the CFCB Adjudicatory Chamber and not the non-offering of a settlement agreement. AC Milan then argued that only the operative part of the decision of a sports authority can be appealed to CAS and accordingly, the non-offering of a settlement agreement could not be appealed in this case. UEFA responded by stating that AC Milan should have filed an appeal against the referral decision within ten days as provided in the rules and since they did not, it was time barred. It is important to note that UEFA did not argue that an appeal was not permissible against a referral decision.
The Panel remarked that there was no dispute between the parties as to whether the final decision was appealable and it was only to be determined whether the Panel can review the preliminary question of not offering a settlement agreement. The Panel stated that if the referral decision was separately appealable, then the Panel could not review the issue as AC Milan did not file an appeal against it within the prescribed time. Though the rules of the sports authority (i.e. UEFA) is the first source to determine the appealability of the decision, the Panel also stated that the decision must be appealable if it affects the legal position of the addressee. Through an analysis of the relevant provisions of the Procedural Rules 2015, the Panel concluded that the regulations do not provide for an appeal for the referral decision. It further concluded that the legal position/rights of AC Milan were not affected by the decision to not offer a settlement agreement. The Panel held that whether the sanctioning by the CFCB was to be through a settlement agreement or an AC decision is a question of form and hence, the IC referral decision would have no effect on AC Milan’s legal rights. The following portion of the Award sheds more light on the reasoning adopted by the Panel:
“99. Finally, the Panel notes that the decision of the CFCB Investigatory Chamber not to conclude a settlement agreement with AC Milan does not impact on the latter’s rights and, therefore, cannot be qualified as a “final decision of the CFCB” within the meaning of Article 34(1) of the Procedural Rules, i.e. a decision subject to appeal. AC Milan’s legal position is not affected by the form, in which UEFA regulates a specific matter, i.e. whether the CFCB issues a unilateral act (in the form of a disciplinary sanction) or whether it chooses to deal with a matter by entering into a settlement agreement. The legal position of a licensee is not affected by such formalities, but only by the substantive contents of the respective legal instrument chosen by UEFA. The Panel notes that the contents of a decision of the CFCB Adjudicatory Chamber within the meaning of Article 29 of the Procedural Rules covers any possible contents (such as a fine (suspended on conditions pursuant to Article 30 of the Procedural Rules), withholding prize money, limiting clubs from registering new players, limiting the number of players that could be registered for participation in UEFA Competitions, limiting the aggregate cost of employee benefit expenses and the like) that could be incorporated into a settlement agreement (entered into between the CFCB Chief Investigator and a license holder). Thus, by refusing to execute a settlement agreement and opting for a disciplinary measure instead, the possible contents of the decision of the CFCB Adjudicatory Chamber is in no way predetermined or less proportionate from the outset. This is all the more true considering that also the execution and the contents of a settlement agreement by the CFCB Chief Investigator can be reviewed (and amended) by the CFCB Adjudicatory Chamber (Article 16(1)-(3) of the Procedural Rules).”
Though this decision prima facie appears to jeopardize the admissibility of MCFC’s appeal, there is still some room for interpretation considering the nuances of the legal issues involved.
Is MCFC’s CAS Appeal admissible?
Though the AC Milan decision seems to have dealt with the same issue as is involved in MCFC’s Appeal (CAS 2018/A/5808), I believe that there are some clear distinctions between the two. The primary difference between the cases is that AC Milan filed the appeal after a final decision was passed by the AC and MCFC have instead chosen to appeal the referral decision. Secondly, AC Milan argued before CAS that the IC referral decision is not appealable, which might not be the stance that MCFC take in its appeal. However, it does seem that the conclusions of the AC Milan case will adversely affect MCFC’s appeal to the extent that they will have to demonstrate how the IC referral decision impacts their legal rights/position.
Another preliminary issue that MCFC will have to address will be Art. 64 (2) of the UEFA Statutes which prevents parties from filing appeals until internal remedies are exhausted. It is likely that UEFA will use this provision to argue that until the AC passes any final decision, there is no right to appeal. However, this would be contrary to the stance taken by them in the AC Milan case where their arguments suggested that an IC referral decision could be appealed before CAS. Another relevant provision in this regard is Art. 3 of the Procedural Rules 2015 which refers to a scenario where there is a disagreement within the organisation on which internal body will have jurisdiction. It also states that in such a scenario, the Chairman of the Appeals Body will decide at his discretion. It further goes on to state that:
“Such decisions on jurisdiction may only be appealed against with the final decision of the body to which the case was assigned.”
This portion of the provision could be used as to supplement the argument that no appeal to CAS is envisaged under the Procedural Rules 2015 until the final decision by the AC.
There does seem to be some scope to argue that there is indeed a provision for an appeal against the IC referral decision under the UEFA rules and regulations as Art. 62 (1) of the UEFA Statutes states that “any decision taken by a UEFA organ” may be challenged before CAS. However, the better strategy for MCFC might be to emphasize on the impact of the IC referral decision on its legal position. In the AC Milan case, the question was whether non-offering of a settlement agreement impacted their rights but in this case it could be much more than that. MCFC had released a strongly worded statement indicating that the Chief Investigator Yves Leterme had not followed due process during the investigation. MCFC said that the referral decision
“contains mistakes, misinterpretations and confusions fundamentally borne out of a basic lack of due process and there remain significant unresolved matters raised by Manchester City FC as part of what the Club has found to be a wholly unsatisfactory, curtailed, and hostile process.” (Source)
It is likely that this breach of due process will be the way MCFC attempts to prove the effect of the referral decision on its legal position. In my opinion, whether the Appeal will be held to be admissible will depend on this issue of effect on the legal position. In any case, it will be interesting to see the arguments that MCFC will put forth regarding the admissibility of this Appeal and the award in this case will have a significant impact on future cases involving such decisions by the UEFA CFCB.