The 'Matuzalem-affaire': ending of the sporting justice?

• Author: Garraffa, Paolo

1. Introduction

   With its decision of last March 2012 (1) the Swiss Federal Supreme Court - First Civil Law Court, Judge Klett presiding - held unlawful a disciplinary sanction given by the FIFA Disciplinary Committee to the football player Francelino da Silva Matuzalem.

   The sanction threatened the player with a lifetime ban if he failed to pay a damage claim (in the case concerned: compensation for breach of contract) to his former club and employer.

   The judgment stated that an athlete could not be suspended for an indefinite period of time for a due compensation, as this situation represents 'a violation of (Swiss International) public policy' (2).

   It is not the first time that the Swiss Federal Supreme Court pronounces on sporting matters, neither is it the first time the Swiss Court has annulled a CAS award (3) (by grounding its decision on Swiss Public Policy (4)).

   But the concerned judgment is most likely going to be one of the most discussed and revolutionary in terms of its possible future impact.

2. The case

   Before examining the Swiss Federal Court's judgment, we need to briefly introduce the facts of the case.

   On June 26, 2004 the Brazilian player Francelino da Silva Matuzalem signed an employment contract with the Ukranian football club FC Shaktar Donetsk for a five year period (from July 1st 2004, until July 1st 2009).

   On July 2nd 2007, the player terminated his contract with his former club without notice, neither for just cause (5), nor for sporting just cause (6), and signed (on July 19, 2007) another employment contract with the Spanish club Real Zaragoza SAD (hereinafter: Real Zaragoza) for the next three seasons.

   In a letter dated July 16, 2007, Real Zaragoza undertook to hold the Appellant blameless for any possible damage claims as a consequence of the premature termination of the contract.

   After an unfortunate season - concluding with the demotion of the club into the second division of the Spanish Football League ('La Liga') - Real Zaragoza signed an agreement transfer with the club SS Lazio Spa (hereinafter: SS Lazio) by which the player was temporarily transferred to the Italian club for the season 2008/2009 (the agreement was signed on July 17, 2008, and accepted by the player on July 22) (7).

   Nobody expected this to be the beginning of a great long 'judicial saga'.

   With a decision of 2 November 2007, the FIFA Dispute Resolution Chamber (hereinafter: the DRC) awarded the club Shaktar Donetsk damages for compensation - as a consequence of the breach of the contract made by the player - in the amount of 6.8 million Euros (8).

   Following the appeal submitted by the parties, on May 19, 2009, the Court of Arbitration for Sport (CAS) partially annulled the decision of the DRC and ordered both the player and Real Zaragoza to pay 11,858.934 Euro as damages for compensation (with annual interest of 5% from July 5, 2007) (9). Afterwards, on July 14, 2010 the Deputy Secretary of the FIFA Disciplinary Committee informed the appellant (player) and Real Zaragoza that: a) disciplinary proceedings were initiated against them as they had not complied with the CAS award of May 2009; b) the corresponding sanctions - according to the Art. 64 of the FIFA Disciplinary Code (10) - would be imposed; c) the case would be decided during the next meeting of the Disciplinary Committee.

   As soon as the warning was issued, the Spanish club notified - on July 26, 2010 - the FIFA Disciplinary Committee that it was going through serious financial difficulties ('which could lead to insolvency and bankruptcy') and the player sent the same Committee a copy of his letter (dated August 19, 2010) in which he requested the payment of the amount due to FC Shaktar Donetsk by Real Zaragoza, as well as a copy of the letter (dated July 16, 2007) by which Real Zaragoza undertook to hold him harmless for any possible damage claims as a consequence of the premature termination of the contract.

   With a decision of August 31, 2010, the Disciplinary Committee found the player (appellant) and the club guilty of breaching their obligations (11) under the CAS award (rendered on May 19, 2009), and - on the basis of art. 64 of the FIFA Disciplinary Code - ordered the appellant to pay a fine of 30,000 CHF, and imposed a time limit of 90 days for paying the amount due, under penalty of a 'prohibition of any activity in connection with football without the necessity of any further decision by the Disciplinary Committee' (12).

   The player and Real Zaragoza appealed the decision of the FIFA Disciplinary Committee before the Court of Arbitration for Sport, but the CAS - with award rendered on June 29, 2011 - rejected the appeal claimed by the parties, and confirmed the decision of FIFA DC (also by rejecting any other submission filled by the parties).

   The only - and final - way for the player to solve his problems was to state an appeal before the Swiss Federal Supreme Court.

   Against all odds - this was revealed to be succesful.

   With its decision of last March 2012 the Swiss Federal Supreme Court (First Civil Law Court), by stating that 'the matter was capable of appeal' (13), upheld the appeal forwarded by the parties and - by holding unlawful the disciplinary sanction given by FIFA, which threatened a lifetime ban for the player - set aside the CAS award of June 29, 2011.

3. The Laws and Regulations concerned

   The main laws and regulations related to the concerned case can be split up into two categories: the FIFA Disciplinary Code (14) (hereinafter: FDC) on one side; and the Swiss Federal Code on Private International Law (15) (hereinafter: PILA) on the other side.

   As the problem was to check the compatibility of FIFA Regulations with the Swiss system of Private International Law (and in particular: against the Swiss International Public Policy) we need to recall them briefly.

   Bearing in mind that the FIFA Disciplinary Code applicable at the time was the 2009 Edition, the main regulations concerned are: 1) Art. 22 (Ban on taking part in any football related activity); 2) Art. 64, Section 8 (Failure to respect decisions).

   In particular, art. 22 of FDC states that: 'A person may be banned from taking part in any kind of football-related activity (administrative, sports or any other)'.

   Art. 64, Section 8, of FDC it states that: '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 in part, even though instructed to do so by any body, a committee or an instance of FIFA or CAS (financial decision), or anyone who fails to comply with another decision (non-financial decision) passed by a body, a committee or an instance of FIFA or CAS:

1. Will be fined at least of CHF 5,000 for failing to comply with a decision;

2. Will be granted a final deadline by the judicial bodies of FIFA in which to pay the amount due or to comply with the (non-financial) decision;

3. (for clubs only) will be warned and...