FC Shakhtar Donetsk v. Fédération Internationale de Football Association (FIFA)

At a glance

Parties

FC Shakhtar Donetsk (Ukraine) v. Fédération Internationale de Football Association (FIFA)

Case no.

CAS 2022/A/9016

Forum and rules

Court of Arbitration for Sport, appeal procedure under the CAS Code (2021 edition); hearing in Lausanne

Treaty

None. The appeal was brought under Articles 56–57 of the FIFA Statutes

Tribunal

Prof. Luigi Fumagalli (President), Prof. Jan Paulsson, Prof. Ulrich Haas

Sector

Football; player transfers; sports governance

Outcome

Appeal dismissed and the 20 June 2022 decision of the Bureau of the FIFA Council confirmed (operative part 13 January 2023; reasoned award 3 May 2023).

Amount

Claimed: damages of EUR 40,288,177.80 net and EUR 100,000 towards legal costs. Awarded: nothing.

The dispute

After Russia invaded Ukraine on 24 February 2022, the Bureau of the FIFA Council added Annex 7 to the FIFA Regulations on the Status and Transfer of Players (RSTP) on 7 March 2022. Under it, international contracts between foreign players or coaches and clubs affiliated to the Ukraine Football Association (UAF) were automatically suspended until 30 June 2022. On 20 June 2022 the Bureau adopted Amended Temporary Rules. These allowed foreign players and coaches to suspend their contracts with UAF clubs unilaterally until 30 June 2023, unless a mutual agreement was reached by 30 June 2022. Shakhtar appealed this decision. It argued that the decision was ultra vires and contrary to Ukrainian employment law (the Martial Law No. 2136-IX) and to Swiss law, that it breached Article 101 TFEU, that it was discriminatory and disproportionate, and that it violated pacta sunt servanda, Shakhtar's economic freedom and the integrity of competitions. Shakhtar also claimed EUR 40,288,177.80 in damages under Article 41 of the Swiss Code of Obligations for transfer fees it said it lost. FIFA objected that CAS had no jurisdiction over the damages claim and defended the measures as a proportionate response to the war that fell within its regulatory autonomy.

Key holdings

1. Whether CAS could hear the damages claim is a question of admissibility, not jurisdiction. The claim is admissible: FIFA has no internal remedy for such a claim, the claim is inextricably linked to the appealed decision, and procedural efficiency favours deciding it in the appeal. The term "appeal" in Article R47 of the CAS Code is to be construed broadly. ¶¶ 75, 83–89
2. Shakhtar could challenge the Amended Temporary Rules even though it had not appealed the original Annex 7. The amendment extended the suspension period and so produced new effects for UAF clubs. ¶ 82
3. The dispute is governed by FIFA's regulations and, additionally, by Swiss law. Article 101 TFEU applies as a foreign mandatory rule under Article 19 of the Swiss Private International Law Act (PILA). Ukrainian law does not govern the validity of FIFA's regulations. ¶¶ 96–105
4. The Bureau validly adopted the decision by email under Article 38 of the FIFA Statutes because of the urgency. The Statutes did not require it to consult the Football Stakeholders Committee or the UAF. The decision was necessary and proportionate in pursuit of a legitimate aim: protecting the safety of foreign players and coaches and giving legal certainty. The 30 June 2023 end date, which coincides with the end of the season, was reasonable. The absence of compensation for Ukrainian clubs does not make the rules illegal. ¶¶ 131, 140–183
5. The decision was not ultra vires and did not breach Ukrainian or Swiss law. Shakhtar did not show a breach of Article 101 TFEU: applying the Meca-Medina test, the restrictions were inherent in FIFA's legitimate objectives and proportionate to them. The expert report did not assess the counterfactual in which players terminate their contracts for just cause. ¶¶ 219–245
6. Limiting the rules to Russian and Ukrainian clubs was justified and not discriminatory. There was no breach of pacta sunt servanda, of economic freedom or personality rights, or of the integrity of competitions. Abuse of Annex 7 by individual players, agents or acquiring clubs can be pursued case by case, for example under Article 2 of the Swiss Civil Code or as unjust enrichment under Articles 62 et seq. of the Swiss Code of Obligations. ¶¶ 160–165, 186, 249–282
7. No damages are due. FIFA committed no illegal act, so the Panel did not need to assess whether Shakhtar suffered loss or how much. ¶¶ 283–285

Procedural history

1. 7 March 2022The Bureau of the FIFA Council adopts Annex 7 to the FIFA RSTP (the Temporary Rules).
2. 20 June 2022The Bureau adopts the Amended Temporary Rules, extending the suspension right until 30 June 2023. FIFA notifies the decision on 22 June 2022 (Circular Letter No. 1800).
3. 11 July 2022Shakhtar files its Statement of Appeal with CAS.
4. 8 September 2022The Panel is constituted.
5. 11 November 2022The ICAS Challenge Commission rejects Shakhtar's challenge against Prof. Fumagalli as President of the Panel.
6. 22 December 2022Hybrid hearing at the CAS Court Office in Lausanne.
7. 13 January 2023Operative part of the award issued: the appeal is dismissed.
8. 3 May 2023Reasoned award issued.

Tribunal, counsel and experts

Decided by

• Luigi Fumagalli President, Panel — appointed by the institution (challenge by Shakhtar rejected by the ICAS Challenge Commission)
• Jan Paulsson Co-arbitrator, Panel — appointed by the claimant
• Ulrich Haas Co-arbitrator, Panel — appointed by the respondent

For the claimant

Josep Francesc Vandellos Alamilla · Saksham Samarth · Andriy Kharitonchuk

For the respondent

FIFA

Experts

Andrea Cattaneo (claimant)

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Keywords

• Shakhtar
• FIFA RSTP Annex 7
• war in Ukraine
• Temporary Rules
• suspension of employment contracts
• foreign players and coaches
• Bureau of the FIFA Council
• Article 101 TFEU
• Meca-Medina
• proportionality
• autonomy of associations
• pacta sunt servanda
• discrimination
• claim for damages in appeal
• admissibility
• Article R47 CAS Code
• exhaustion of internal remedies
• unjust enrichment

Summary generated with AI from the published documents — refer to the award for the authoritative text.