Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Revisiting FIFA’s Training Compensation and Solidarity Mechanism - Part. 5: Rethinking Redistribution in Football - By Rhys Lenarduzzi

Editor’s note: Rhys Lenarduzzi recently completed a Bachelor of Law (LL.B) and Bachelor of Philosophy (B.Phil.) at the University of Notre Dame, Sydney, Australia. As a former professional athlete, then international sports agent and consultant, Rhys is interested in international sports law, policy and ethics. He is currently undertaking an internship at the T.M.C. Asser Institute with a focus on Transnational Sports Law.

 

As one may have gathered from the series thus far, the question that comes out of this endeavour for me, is whether redistribution in football would be better divorced from the transfer system?

In my introductory blog I point towards historical, cultural, and of course the legal explanations as to why redistribution was established, and why it might be held onto despite obvious flaws. In my second blog, I point out how the training compensation and solidarity mechanisms work in practice through an African case study, as well as the hindrance caused and the Eurocentricity of the regulations. The key take-away from my third blog on the non-application of training compensation in women’s football might be that training compensation should apply to both men’s and women’s football, or neither. The sweeping generalisation that men’s and women’s football are different as justification for the non-application to the women’s game is not palatable, given inter alia the difference between the richest and poorest clubs in men’s football. Nor is it palatable that the training compensation mechanism is justified in men’s football to incentivise training, yet not in women’s football.

In the fourth blog of this series, I raise concerns that the establishment of the Clearing House prolongs the arrival of a preferable alternative system. The feature of this final blog is to consider alternatives to the current systems. This endeavour is manifestly two-fold; firstly, are there alternatives? Secondly, are they better? 

 

1. Is training compensation necessary to incentivise training?

It might be the case that this question does not receive adequate attention. Though we are told there exists a need to incentivise training and the system as it stands is justified by this notion, is that truly what the redistributive mechanisms in the current form achieve? Furthermore, for all the flaws in reasoning and hindrance created by the mechanisms, is it really worth it?

During my time as an agent, I have personally never heard from a director or executive of a football club, the words or sentiment that, time - effort - money placed towards their youth football programs is done so solely, predominantly, or at all in anticipation of training compensation or solidarity payments.  Nor have I ever come across the sentiment from within any club, that a club would not care for or abandon its youth programs without the ‘dangling carrot’ of potential compensation. FIFA now refer to the redistributive mechanisms as ‘training rewards’, though one may reasonably struggle to connect these training rewards with a true definition of incentive. It appears more likely to be the case that any desire or expectation to be rewarded or compensated is an after the fact conclusion, when a player progresses professionally and a training club concludes that they are part of the reason for that players’ success. In a macro sense, given how infrequent it is for a training club to develop a professional, this seems to add weight to an argument that compensation does not create the purported incentive, or at least that clubs do not rely on the prospect.  It is because of this that I tend to lean towards the view that the incentivisation to train youth as a justification for redistributive measures may not have aged well. In any event, it would be interesting to test that intuition derived from experience, through a proper social scientific survey of clubs. Systems with such far-reaching implications should be grounded in a proper study of the socio-economic drivers of the training of football players.

On the other hand, the possibility of attracting large and exciting transfer fees is often spoken about within club walls.  For these ‘selling clubs’ with a clear intention to invest in youth and capitalise later in the form of transfer fees, such fees may be seen as compensation of sorts, but more likely as a remuneration for a deliberate though hardly risk-free investment. Moreover, these clubs do not simply abandon their first team and focus on youth and potential transfers exclusively. First team squads are also the beneficiary of strong youth systems and commonly the main reason a club invests in youth. Additionally, clubs can have a strong connection to their communities and see a combined duty and benefit of having strong youth programs. Clubs not only play a role in sustaining the social fabric of the communities to which they are situated, but benefit commercially through the many ways in which fans add value.

If it is true that compensation does not amount to incentivisation, then it is difficult to conclude that it is necessary. However, even if training compensation and the solidarity mechanism are not deemed necessary, a strong case can still be made for redistribution so long as the gap between wealthy and poor clubs remains or grows, and entire continents continue to be nurseries and the source of the muscle drain.

 

2. Imagining Alternative Redistributive Mechanisms

Proposing an alternative to the existing FIFA systems of redistribution is a difficult task. I have raised the concern of the Eurocentricity of the current regulations, and in proposing something else, one must be mindful that these are global regulations. If one suggests a form of taxation or tariff to redistribute, awareness of the myriad cultural differences on taxation and the multiplicity of enforcement contexts might be important. Also, whilst I have raised the question on whether compensation ought to be divorced from the transfer system, reasons for redistributing at all should be axiomatically better than not having a system of redistribution.

Intent and what is to be achieved needs to be clear. Is the ideal system of redistribution in place to reward ‘something’ or should redistribution be directed more deliberately and where it is needed, acting as welfare of a kind? I have already suggested that compensation does not incentivise clubs, though conversely, might clubs be disincentivised to grow if they only remain the beneficiaries of redistribution insofar as they stay sufficiently small and poor, whatever that threshold might be? Or could a system still incentivise growth, with clubs the beneficiaries of an amount that would not be enough to sustain themselves in full, yet enough to help them to continue to grow and commercialise? Whether greater commercialisation is a desirable change is another worthwhile question.

Despite the difficulties in suggesting an alternative, one can hope that a system of redistribution can be non-discriminative, does not create the hindrance effect to the current extent or encourage risky circumvention of the regulations (see blog 2 for detail), and is able to attain its legitimate aims. I would submit that the current systems do not tick these boxes. In this section, I provide some food for thought regarding potential alternatives, though I must caveat that I am not an economist and have not yet settled on an alternative myself.

 

a)     Coubertobin Tax

I will begin this section by introducing Andreff’s Coubertobin tax, in the interest of highlighting that others have thought about alternative systems of redistribution and have perhaps proposed alternatives that are arguably better than the current systems. Whilst I hope to present the Coubertobin tax adequately, one will need to read Andreff for the full picture.  Though valuable food for thought, I do not endorse the Coubertobin tax per se, as it has its flaws and remains connected to the transfer system, albeit to a lesser extent.

Inspired by a mix of the economic thought of James Tobin and Pierre de Coubertin, the idea of a Coubertobin tax “is to levy a tax at a 1 % rate on all transfer fees and initial wages agreed on in each labour contract signed by athletes and players from developing countries with foreign partners.”[1]

The objectives are as follows:

  1. slightly covering the education and training cost, for his/her home developing country, of any athlete or player transferred abroad;
  2. providing a stronger disincentive to transfer an athlete or a player from a developing country, the younger he/she is when the transfer takes place;
  3. thus, slowing down the muscle drain from developing countries and toward professional player markets in developed countries; and
  4. accruing revenues to a fund for sports development in the home developing country from the tax levied on every athlete or player transfer abroad.[2]

There is little wonder why Andreff desires to redistribute to developing countries. He has done extensive work on the correlation between economic prosperity and sporting success. This list is by no means exhaustive, but for instance, he writes extensively on the muscle drain, where athletes from developing nations move for financial and developmental reasons, which creates a myriad of follow-on issues to the home-country. He identifies the toll poverty takes on a developing country’s domestic leagues and competitions due to the muscle drain and the inability to train professionals to a world class standard. He notes that some athletes defect to other nations early and qualify for the adopted country’s national team. Per Andreff and in summary “the overall context of sport underdevelopment does not provide a strong incentive for talented players to stay in their home country even if a professional championship does exist there.”[3]

Andreff’s proposal is not set in stone and an admirable element to his work on the matter is the consistent offering of caveats that suggest, with more study and/or work, a certain piece of the Coubertobin system may benefit from amendment. Andreff describes his system as “a solution (not a panacea) which is likely to alleviate, along with some of the financial problems of developing countries, the aforementioned problem of the muscle drain.”[4] Most relevant is perhaps the idea that, the younger the player is in question regarding a transfer, the higher the tax (see suggested formulae).[5] This he submits, may put a brake on the muscle drain at such early ages, or result in greater amounts of money moved to developing nations if a club wishes to recruit a player at a significantly young age.

Andreff acknowledges hindrances, though takes a macro view that encompasses protecting minors, as well as strengthening local leagues in developing countries given the talent will remain for longer periods. One can envisage an additional positive result, in having young athletes finish non-football education having stayed at home until a later date.

Though this is my interpretation, I suspect Andreff finds it an easy task to identify the beneficiaries or winners of these transactions and therefore those parties should be the ones who pay the Coubertobin tax, on “the bill for the transfer fee and the first year wage”.[6]

Andreff raises the concern of “bargaining and corruption surrounding the tax collection in developing countries”,[7] though offers a plausible solution. “[T]he collection of the Coubertobin tax should be monitored and supervised by an international organization, either an existing one (UNDP or the World Bank) or an ad hoc one to be created.”[8] This is plausible as it is not so different to the way FIFA intends to outsource the operation of the Clearing House to a suitable and reputable organisation that would be subject to audit (see blog 4).

Andreff admits the tax “would meet with both hindrance and resistance”,[9] it would “not be easy to implement and enforce insofar as it has to be accepted on a worldwide basis”,[10] the system would contain administrative costs that would need sorting and ironing out, and there would need to be a method for disputes and perhaps fines for non-compliance.  Even so, the Coubertobin tax provides much food for thought as it is proposed for all professional sport and not just football. It attempts to address the muscle drain and the taxes proposed may prove less a hindrance than the current FIFA systems.

 

b)    Abolishment and Free Market Economics

If this was day one of football, there might be a strong argument for a free market approach, with emphasis on club management to make sure intelligent decisions are made to sustain clubs, with wealth the responsibility of the clubs themselves. However, we are not at the beginning of football.  Certain clubs in certain regions are the victims of much more than mismanagement, adding weight to an argument for a need to redistribute equitably.

As it stands, an equitable system or one where redistribution is directed to where it is most needed, is not in place and has not been proposed. Could it be the case, at least in the interim, that the free market is the best and fairest? The current systems appear at least somewhat a case of over-regulation with side effects that were not, or could not have been anticipated, like the hindrance effect and the pressures on vulnerable clubs to waive compensation to name just a couple.  It then seems defensible to abolish systems that do not work in the interim, than to hang on to those flawed systems until a better proposal is put forth. Instead, all efforts could be placed into study and research to remedy the obvious flaws.

Conversely, the free market in modern football would not appear to improve the situation for the kind of club I have identified frequently throughout this series, and although it may eliminate the hindrance effect, destination clubs would have their pick of players and poor clubs would undoubtedly lose all talent. Furthermore, if a system of redistribution was to be created that clearly improved football and the free-market approach had been adopted in the interim, a valid consideration might be the difficulty the relevant bodies would have in re-introducing a system of redistribution, having gone back to the free market for a period.  It is for these reasons that I can not endorse such an approach, however sympathetic I am to abolishment and the idea of alleviating hindrance and promoting free movement.

 

c)     FIFA Funded Solidarity: A New Model

As he addressed the Confederation of African Football’s (CAF) 42nd ordinary general assembly, FIFA President Gianni Infantino said, “I believe in Africa. I count on Africa, and you can count on me to help you to bring Africa to the top.” However admirable and applaudable are the purported goals of FIFA for Africa, and the sentiment warm, one cannot help but wonder if this African project, relevant to this blog series, could not be expedited by a substantial FIFA based investment. Infantino went on to say, “I want to see at least 50 national teams and 50 clubs from all over the world that can compete for the title of world champions with realistic chances of winning. And why shouldn’t Africa be at the top, with the incredible talent that we see shining every week, mainly in Europe’s top clubs? I am convinced it’s only a matter of commitment, work and engagement by all of us together.”

To answer the President’s question, one cannot see African clubs on top in a global sense, so long as all the best African players play, as the President said, in Europe. Further, we will continue to be less likely to see an African national team win a World Cup, whilst some of the best African players play for other nations to which they moved when they were younger, and whilst African federations are unable to organise like European federations, given they do not have the same resources.  I could of course go on, but one likely gathers my point. 

So, could FIFA make an investment sufficient to prop up Africa as it supposedly desires? Perhaps. How about an amount equal to the frequently referred gap between what is owed and paid when it comes to the redistributive mechanisms of FIFA? Could FIFA at least cover that gap? If one considers the annual financial reports, certainly, and probably further and in a more specific and deliberate fashion. Surely direct, targeted investment is preferable to leaving redistribution to the whim of a club’s good fortune to have registered a player that would go on to be a professional. That is, of course, if that player’s club did not have to waive training compensation to render a transfer possible.

The FIFA Forward Development Programme is described by FIFA as “global football development and the way we share the success of the FIFA World Cup”. It is an encouraging and frankly exciting initiative, and again one must applaud the efforts. Under the Infantino administration, FIFA has pledged more funding in this way than ever before. “On 13 June 2018, the FIFA Congress decided to increase investment in the FIFA Forward Development Programme still further for the next cycle of 2019-2022 with a 20% increase in the annual entitlement for each of the 211 member associations and six confederations.”

Anyone can go to the webpage for the FIFA Forward Programme, roll their cursor over the interactive map and see that FIFA are investing money in places of need. Disappointingly, not overly specific information is provided regarding the exact use of funding, though there are encouraging articles that unpack some of the investments and initiatives and these efforts should be commended (the FIFA Foundation Community Programme is another example of some of the encouraging work being done).  One element that is interesting and appealing within these funding programs, is the toying with an application process to be granted some form of investment. This perhaps shows an increased awareness that money ought to be distributed specifically and deliberately, to address a genuine need. Though not a trial per se, this kind of process could be used as one and may turn out to be preferable to clubs in need, who would for instance prefer to bypass the national association if that relationship is not so sturdy.   

At first glance, the almost even allocation of investment per member association found in Circular no. 1659 - FIFA Forward Development Programme – regulations (FIFA Forward 2.0) may seem equitable, though taking into account that some of the wealthier associations may be the beneficiaries of the systemic exploitation and drain that has featured in this blog series, might render the near even distribution questionable. Whilst “an additional amount of up to USD 1,000,000 is available for member associations with an annual revenue of USD 4 million or less”, one might reasonably wonder if that amount of extra funding to smaller and/or poorer associations is sufficient to affect real change.

Whilst I hope I have made clear that FIFA’s efforts ought to be commended, the overarching theme of this section is to consider if more could be done and if so, might those extra efforts to distribute funds be preferable and able to replace the current systems of redistribution connected to the transfer system. I do not find impressive the self-congratulatory theme of the statement from Alejandro Domínguez, Chairman of the FIFA Finance Committee, of being hundreds of millions of dollars under budget in the 2019 annual report, as well as possessing “sufficient liquidity”. FIFA, a not-for-profit organisation, was delighted to report that “at the 2019 year-end, total assets had increased to USD 4,504 million (four billion, five hundred and four million), chiefly made up of cash and financial assets (82%). Reserves also remained at a very satisfactory level at USD 2,586 million (two billion, five hundred and eighty-six million), clearly above the amount budgeted.”[11]

Proposing FIFA fund more redistribution is not a risk free, nor a concern free proposition, but it does appear the idea could be taken more seriously by the relevant stakeholders. FIFA’s predominate money maker is the FIFA World Cup, which is in a sense, a way of using the produce of the richest clubs in the world, which have in turn benefitted from some of the poorest clubs nursing the players until they are of age. FIFA, filling the frequently mentioned gap from the profits of the World Cup makes as much sense as any proposal. Is this not simply a case of, if more can be done then more should be done? Going off FIFA’s reports, it has the resources.

Within this potential alternative, where FIFA are responsible for raising and redistributing funding that would otherwise supposedly come from the current redistribution systems, is a change to the modality of redistribution. From what is currently intimately connected to training and transfers, this alternative provides for the much-needed decoupling, not only based on the philosophical flaws, but additionally due to the preferable practical implications that divorcing redistribution, training and the transfer market could achieve. In terms of a body or mechanism to implement an alternative like this, how might a Clearing House kind of project unfold, that adopts a specific and deliberate ethos to distributing FIFA funds? To expand, following a substantial process of planning and allocation of adequate resources, the creation of a specific arm dedicated to researching and identifying those areas of football most in need, as well as receiving and vetting applications for funding. Might that or a similar solution be achievable? It could be in-house or outsourced the same way the Clearing House is intended to be, geared to make suggestions, provide expert economic advice and proposals, reporting its findings back to FIFA for an extra layer of approval. Food for thought in any case.

 

3. Concluding Remarks

There is a core of wealth in football that has benefitted from, been propped up by, and drained the periphery. It is important to ensure the strength and survival of football outside this core of wealth and to actively make sure value is added to the periphery. Football needs to promote this notion and in doing so ask the question, where will the big clubs turn for talent and youth if those reservoirs which they drain are emptied and unable to continue to produce talent? 

If one is convinced that it is not necessary to incentivise training, that the current regulations have significant negative effects, that any system of redistribution should be non-discriminative, provide minimal hindrance to free movement and pursue deliberate legitimate aims, then one is in favour of overhaul. Further then, surely there is an obligation to address what can be in the immediate sense. Namely, to either default to the free market, until a convincing system of redistribution is created, or perhaps preferably, for FIFA to take the reins and fund redistribution to the periphery of football to a greater extent.


[1] Wladimir Andreff (2001). The correlation between economic underdevelopment and sport. European Sport Management Quarterly, 1, p.274.

[2] Wladimir Andreff, “A Coubertobin Tax Against Muscle Drain”, 4th Play the Game Conference: Governance in Sport: The Good, the Bad & the Ugly, Copenhagen, 6-10 November (2005) p.10.

[3] Ibid, p.5.

[4] Ibid, p.9.

[5] Ibid, p.11.

[6] Ibid, p.12.

[7] Ibid.

[8] Ibid.

[9] Ibid.

[10] Ibid.

[11] FIFA Annual Report 2019 p.124.

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Asser International Sports Law Blog | Stepping Outside the New York Convention - Practical Lessons on the Indirect Enforcement of CAS-Awards in Football Matters - By Etienne Gard

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Stepping Outside the New York Convention - Practical Lessons on the Indirect Enforcement of CAS-Awards in Football Matters - By Etienne Gard

Editor’s Note: Etienne Gard graduated from the University of Zurich and from King's College London. He currently manages a project in the field of digitalization with Bratschi Ltd., a major Swiss law firm where he did his traineeship with a focus in international commercial arbitration.

1. Prelude

On the 10th of June, 1958, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, widely known as the “New York Convention”, was signed in New York by 10 countries.[1] This rather shy figure progressively grew over the decades to now reach 157 signatory countries, turning the New York Convention into the global recognition and enforcement instrument it is today. As V.V. Veeder’s puts it, “One English law lord is said to have said, extra judicially, that the New York Convention is both the Best Thing since sliced bread and also whatever was the Best Thing before sliced bread replaced it as the Best Thing.”[2]

However, among the overall appraisal regarding the New York Convention, some criticisms have been expressed. For instance, some states use their public policy rather as a pretext not to enforce an award than an actual ground for refusal.[3]  A further issue is the recurring bias in favor of local companies.[4] Additionally, recognition and enforcement procedures in application of the New York Convention take place in front of State authorities, for the most part in front of courts of law, according to national proceeding rules. This usually leads to the retaining of a local law firm, the translation of several documents, written submissions and one, if not several hearings. Hence, the efficiency of the New York Convention as a recognition and enforcement mechanism comes to the expense of both money and time of both parties of the arbitral procedure.

In contrast with the field of commercial arbitration, where the New York Convention is often considered the only viable option in order to enforce an award, international football organizations, together with the Court of Arbitration for Sport (“CAS”), offer an effective enforcement alternative. This article aims at outlining the main features of the indirect enforcement of CAS awards in football matters in light of a recent case.

2.  Facts of the Case

The dispute at hand involved a football club affiliated with the United Arab Emirates Football Association (“UAEFA”) and a player’s agent. The club at hand owed a commission to the agent following the completion of a player’s transfer. The agent ultimately won the case before the CAS and the latter awarded him monetary compensation against the football club.

Shortly thereafter, means of enforcement against the club were sought.

It is widely recognized that the awards rendered by the CAS do qualify as awards under the New York Convention and may thus be subject to the classic enforcement provided therein.[5]

Whilst this is to be welcomed because it offers alternatives to the prevailing party seeking recognition and enforcement of the arbitral award, the following will show that another route exists, which may prove just as effective whilst saving both time and money.

Indeed, though the United Arab Emirates did ratify the New York Convention, the general critics mentioned above also applied in the case at hand. This meant that going down the route of direct enforcement against the UAE-based football club would have had several drawbacks. First, the translation workload in order to comply with the local procedural rules was significant. Second, since the recognition procedure was due to take place in front of national courts, a local law firm would have had to be retained. Finally, there was no clear timeline as to when exactly the due compensation would effectively be paid.

3. The Indirect Enforcement

Luckily, the world of football organizations provides for an alternative path, which proved to be highly effective at hand. Indeed, as a result of the deep-rooted integration of CAS and of its decisions in effectively all organizational layers of national and international football, the New York Convention is not the only global enforcement mechanism available to a prevailing party in that field. Although it requires to take steps outside that Convention and, as a result, of the entire ‘state-supported’ enforcement system, the indirect enforcement described below nonetheless proves to be a viable alternative for parties involved in football-related arbitration.

3.1 The Statutory Basis of Indirect Enforcement

It all starts with art. 15 para. 1 let. f of the FIFA Statutes which stipulates that the statutes of the member associations shall ensure that, inter alia, all relevant stakeholders must agree to recognize the jurisdiction and authority of CAS.[6] Art. 23 para. 1 let. f provides for a similar obligation with regard to the confederations’ statutes.[7]

Pursuant to art. 61 para. 1 of the Statutes of the Asian Football Confederation (“AFC”), to which the UAEFA is a member, the AFC recognizes the CAS to resolve disputes between, inter alia, clubs and intermediaries.[8] Further, according to art. 62 para. 1 of said Statutes, the member associations, among which the UAEFA, shall agree to recognize CAS as an independent judicial authority and to ensure that their members and clubs comply with the decisions passed by CAS. Any violation of these provisions will trigger a sanction on the breaching party, according to art. 62 para. 3 of the AFC Statutes.

Finally, art. 19 para. 4 of the UAEFA Statutes provides that each club, upon application for affiliation, shall provide a declaration whereas it undertakes to accept and implement the decisions rendered by the CAS.[9]

In light of the above, the rules of football organizations put in place a terraced indirect enforcement mechanism regarding CAS awards, whereas each club undertakes to comply with such awards vis-à-vis its home association, each such association being in turn similarly obligated vis-à-vis FIFA and its own Confederation. The latter finally has the duty to ensure that its affiliated associations recognize the authority of CAS, thereby closing the loop.

The broad sanction mechanism at every stage leaves considerable discretionary powers to the competent bodies in order to appropriately pressure the breaching stakeholder, on whichever link in the chain the latter may be, into complying with CAS decisions.

3.2 The Indirect Enforcement Procedure

The FIFA Statutes do not provide for any particular body directly tasked with the enforcement of CAS awards against FIFA’s affiliates and their stakeholders. Nor is there any particular procedure enshrined in the FIFA Statues as to how the indirect enforcement of CAS awards shall take place. In particular, art. 64 FIFA Disciplinary Code only applies to CAS decisions in appeal arbitration proceedings regarding the decisions of FIFA and not to CAS decisions rendered in an ordinary arbitration procedure.[10]

However, art. 45 of the FIFA Statutes does provide that the Member Associations Committee shall deal with relations between FIFA and its member associations as well as the member associations’ compliance with the FIFA Statutes. The same is true at the level of the AFC, whereas art. 54 of its Statutes provide that the Associations Committee shall be responsible for relations between the AFC and its Member Associations as well as Member Association’s compliance with FIFA and AFC Statutes and Regulations.

In other words, both at FIFA and AFC level, a standing committee is responsible for ensuring that the Members comply with the applicable statutes and thus, inter alia, with awards rendered by CAS.

Based on the above, we concluded that in order for the competent FIFA and AFC standing committees to examine the case of a club not complying with a CAS award, they needed to be first convinced that (i) a final and binding CAS award had been rendered against a club affiliated with a member association and that (ii) such club refused to comply with said award. Second, the above-mentioned committees would need to be shown that the national football association has been notified of such occurrence and been asked to take appropriate actions against the club according to its own statutes.

From this point in time onwards, the FIFA and AFC standing committees will have been notified that a member’s association has been asked to remedy a matter of non-compliance of an affiliated club with a CAS award and thus such association is now under a statutory obligation to ensure compliance from the club, as described above, or else may itself be found to have breached the FIFA and/or AFC Statutes and sanctioned accordingly.

4. Epilogue and Conclusion

Shifting the focus back to the case that prompted the idea of this blog, once the route leading to indirect enforcement was mapped, we proceeded with gathering the evidence needed, i.e. that the CAS award was final and binding upon the football club.

Section 193 of the Swiss Private International Law Act – which applies to international CAS proceedings – enables the parties to request an enforceability certificate from the competent state court regarding an award rendered by an international arbitral tribunal with its seat in Switzerland. This document certifies that the award in question is final and that no appeal can be filed against it. In the case of the CAS, the state court competent for the issuance of an enforceability certificate is the Tribunal cantonal, in Lausanne.

Once this certificate was obtained, we filed it together with a copy of the award to the competent national association, the UAEFA, urging the latter in writing to request from the club that it complied with the CAS award, or else the club would be sanctioned. Both the competent standing committees of the FIFA and of the AFC received a copy of that letter.

From this moment onwards, the machinery of the indirect enforcement mechanism was switched on and we knew that leverage existed at every level, up until FIFA, to ensure that each stakeholder, be it the UAEFA or the AFC, pressures its affiliated bodies, and, ultimately, the club, into complying with the CAS award.

In the case at hand, this method proved to be successful. Indeed, as a result of the aforementioned steps, the AFC promptly contacted the UAEFA, requesting this matter to be solved and the football agent received the awarded compensation from the club within a few weeks after the UAEFA, the AFC and the FIFA were notified as described above.

This case shows how operating outside the New York Convention can prove both cost- and time-effective. When used properly, the indirect sanction mechanism put in place by football organizations proves to be a proper alternative to classic enforcement proceedings and shall in any event be considered as a viable option under similar circumstances.


[1] Flannery/Merkin, Arbitration Act 1996, 5th Ed., Oxon, 2014, p. 356.

[2] V.V. Veeder, Is There a Need to Revise the New York Convention - Key note speech, in: ‘The Review of International Arbitration Awards – IAI Forum’, International Arbitration Institute, 2008, p. 183 et sqq., p. 186.

[3] V.V. Veeder, p. 191.

[4] Gaillard, ‘The Urgency of Not Revising the New York Convention’, in: The New York Convention at 50, 2008, p. 689 et seqq., p. 690.

[5] Nafziger/Ross, Handbook on International Sports Law, Edward Elgar 2011, p. 40; Rubno-Sammartano, International Arbitration Law and Practice, 3rd Ed., JurisNet, 2014, p.1709; Nolon, Arbitration and the Olympic Athlete, in: McCann, ‘The Oxford Handbook of American Sports Law’, OUP 2017, p. 444.

[6]Art. 15 para. 1 let. f of the FIFA statutes reads as follows: “Member associations’ statutes must comply with the principles of good governance, and shall in particular contain, at a minimum, provisions relating to the following matters: […] all relevant stakeholders must agree to recognise the jurisdiction and authority of CAS and give priority to arbitration as a means of dispute resolution […].

[7] Art. 23 para. 1 let. f of the FIFA statutes reads as follows: “The confederations’ statutes must comply with the principles of good

governance, and shall in particular contain, at a minimum, provisions relating to the following matters

[8] Art. 61 para 1 of the Asian Football Confederation Statutes reads as follows: “The AFC recognises the independent Court of Arbitration for Sport (CAS) with headquarters in Lausanne (Switzerland) to resolve disputes between the AFC and the other Confederations, Member Associations, Leagues, Clubs, Players, Officials, Intermediaries and licensed match agents.”

[9] Art 19 para 4 of the UAEFA Statutes reads as follows (tentative translation): “Each applicant should provide the following documents: […] A declaration that it will to accept and implement the resolutions and decisions issued by the Court of Arbitration for sport in Lausanne (CAS).”

[10] Art. 64  para 1 of the FIFA Disciplinary Code  reads as follows (emphasis added): “Anyone who fails to pay another person (such as a player, a coach or a club) or FIFA a sum of money in full or part, even though instructed to do so by a body, a committee or an instance of FIFA or a subsequent CAS appeal decision (financial decision), or anyone who fails to comply with another decision (nonfinancial decision) passed by a body, a committee or an instance of FIFA, or by CAS (subsequent appeal decision): […].”

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