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England and Wales High Court (Commercial Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Fleetwood Wanderers Ltd (t/a Fleetwood Town Football Club) v AFC Fylde Ltd  EWHC 3318 (Comm) (30 November 2018)
Cite as:  EWHC 3318 (Comm)
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BUSINESS AND PROPERTY COURTS IN MANCHESTER
CIRCUIT COMMERCIAL COURT
IN THE MATTER of a challenge to the Award of an arbitral tribunal under Rule K of the Football Association Rules
AND IN THE MATTER of the Arbitration Act 1996
B e f o r e :
|FLEETWOOD WANDERERS LIMITED|
|(t/a Fleetwood Town Football Club)||Claimant|
|AFC FYLDE LIMITED||Defendant|
Mr Martin Budworth (instructed by Harrison Drury) for the Defendant
Crown Copyright ©
(2) The Regulatory Framework
1.1 These regulations lay down global and binding rules concerning the status of players, their eligibility to participate in organised football, and their transfer between clubs belonging to different associations.
1.2 The transfer of players between clubs belonging to the same association is governed by specific regulations issued by the association concerned in accordance with article 1 paragraph 3 below, which must be approved by FIFA. Such regulations shall lay down rules for the settlement of disputes between clubs and players, in accordance with principles stipulated in these regulations. Such regulations should also provide for a system to reward clubs investing in the training and education of young players.
1.3 (a) The following provisions are binding at national level and must be included without modification in the association's regulations: articles 2-8, 10, 11, 12bis, 18bis, 18ter, 19 and 19bis.
(b) Each association shall include in its regulations appropriate means to protect contractual stability, paying respect to mandatory national law and collective bargaining agreements. In particular, the following principles must be considered:
-article 13: the principle that contracts must be respected;
-article 14: the principle that contracts may be terminated by either party without consequences where there is just cause;
-article 15: the principle that contracts may be terminated by professionals with sporting just cause;
-article 16: the principle that contracts cannot be terminated during the course of the season;
-article 17: paragraphs 1 and 2: the principle that in the event of termination of contract without just cause, compensation shall be payable and that such compensation may be stipulated in the contract;
-article 17: paragraphs 3-5: the principle that in the event of termination of contract without just cause, sporting sanctions shall be imposed on the party in breach.
13 Respect of contractA contract between a professional and a club may only be terminated upon expiry of the term of the contract or by mutual agreement.
14 Terminating a contract with just cause
A contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause.
15 Terminating a contract with sporting just cause
An established professional who has, in the course of a season, appeared in fewer than ten per cent of the official matches in which his club has been involved may terminate his contract prematurely on the ground of sporting just cause. Due consideration shall be given to the player's circumstances in the appraisal of such cases. The existence of sporting just cause shall be established on a case-by-case basis. In such a case, sporting sanctions shall not be imposed, though compensation may be payable. A professional may only terminate his contract on this basis in the 15 days following the last official match of the season of the club with which he is registered.
16 Restriction on terminating a contract during the season
A contract cannot be unilaterally terminated during the course of a season.
17 Consequences of terminating a contract without just cause
The following provisions apply if a contract is terminated without just cause.
17.1 In all cases, the party in breach shall pay compensation. Subject to the provisions of article 20 and Annexe 4 in relation to training compensation, and unless otherwise provided for in the contract, compensation for the breach shall be calculated with due consideration for the law of the country concerned, the specificity of the sport, and any other objective criteria. These criteria shall include, in particular, the remuneration and other benefits due to the player under the existing contract and/or the new contract, the time remaining on the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period.
17.2 Entitlement to compensation cannot be assigned to a third party. If a professional is required to pay compensation, the professional and his new club should be jointly and severally liable for its payment. The amount may be stipulated in the contract or agreed between the parties.
17.3 In addition to the obligation to pay compensation, sporting sanctions shall also be imposed on any player found to be in breach of contract during the protected period. This sanction shall be a four-month restriction on playing in official matches. In the case of aggravating circumstances, the restriction shall last six months. These sporting sanctions shall take effect immediately once the player has been notified of the relevant decision. The sporting sanctions shall remain suspended in the period between the last official match of the season and first official match of the net season, in both cases including national cups and international championships for clubs. This suspension of the sporting sanctions shall, however, not be applicable if the player is an established member of the representative team of the association he is eligible to represent, and the association concerned is participating in the final competition of an international tournament in the period between the last match and the first match of the next season. Unilateral breach without just cause or sporting just cause after the protected period shall not result in sporting sanctions. Disciplinary measures may, however, be imposed outside the protected period for failure to give notice of termination within 15 days of the last official match of the season (including national cups) of the club with which the player is registered. The protected period starts again when, while renewing the contract, the duration of the previous contract is extended.
17.4 In addition to the obligation to pay compensation, sporting sanctions shall be imposed on any club found to be in breach of contract or found to be inducing a breach of contract during the protected period. It shall be presumed, unless established to the contrary, that any club signing a professional who has terminated his contract without just cause has induced that professional to commit a breach. The club shall be banned from registering any new players, either nationally or internationally, for two entire and consecutive registration periods. The club shall be able to register new players, either nationally or internationally, only as of the next registration period following the complete serving of the relevant sporting sanction. In particular, it may not make use of the exception and the provisional measures stipulated in article 6 paragraph 1 of these regulations in order to register players at an earlier stage.
17.5 Any person subject to the FIFA Statutes and regulations who acts in a manner designed to induce a breach of contract between a professional and a club in order to facilitate the transfer of the player shall be sanctioned."
(3) The Award
(4) The Contentious Emails
"We are instructed by the Football Association ("the FA"). We write in relation to the High Court proceedings commenced by Fleetwood.
Our client has identified an email which, on 17 July 2017, was sent by Craig Moore to Paddy McCormack (Judicial Services Manager at The FA) and which appears to relate to the arbitration between Fylde and Fleetwood. Please find the exchange enclosed.
You will note that the issue raised by Mr Moore concerned whether The FA has adopted and incorporated into its Rules, the FIFA Regulations on the Status and Transfer of Players. The email did not refer to the arbitration to Fylde and Fleetwood. Mr McCormack responded on 21 July 2017, with Mr Moore sending a reply to Mr McCormack later that day".
I hope that you are well and enjoying some free time at the weekends now that you have finished your studies-until September!
Could I ask you to help me please? I am trying to ascertain whether The FA has adopted, and incorporated into its Rules, the FIFA Regulations on the Status and Transfer of Players. As you are no doubt aware, it is a key piece of FIFA's regulatory framework to maintain contractual stability. I am considering the RSTP generally, but Article 17 in particular which requires a player and his new club to pay compensation to the former club where the player has breached his contract 'without just cause'.
I cannot find any provision in The FA's Rules where FIFA's RSTP is expressly incorporated, or which resembles them. Section C deals in some detail with players' contracts, and registration requirements, but does not include anything that reflects Article 17. However, Rule A.1(b) of the FA's Rules requires all Clubs and Affiliated Associations to play and/or administer football in conformity with its Rules and also 'the statutes and regulations of FIFA which are in force from time to time'. In the absence of any conflicting provisions in the FA Rules, it is arguable that that provision incorporates FIFA statutes en masse. I have noted that the RSTP appear on The FA's website.
Is this something that you have ever had to consider in the context of a case? There are a number of CAS decisions involving international transfers. I have not been referred to any case under FA Rule E, or Rule K arbitration, where the application of FIFA's RSTP has been tested at international level between two clubs who are members of the same Association.
I would be grateful for your comments. I appreciate that you are always busy, although hopefully there is a lull before the storm at the moment.
"I apologise for troubling you, but I was wondering whether you had heard anything from the person in the office who you spoke to.
As I was carrying out some research a couple of days ago, I looked at the Irish FA's website and saw that they have expressly incorporated FIFA's RSTP into their domestic Rules via the Professional Game Player Regulations. You may or may or recall them! I have not been able to find equivalent in The FA's Rules, although Rules A, C and K all make reference to FIFA statutes (as if to suggest that they are adopted wholesale).
The first question that I have to resolve is whether the RSTP are incorporated into FA Rules. Subject to that, the second question is whether Article 17.2 of the RSTP, which imposes strict liability on a new club to pay compensation where a player terminates his contract with his former club without just cause, should 'trump' English law. Rule K provides that English law should apply to all substantive and procedural matters. It is something of a conundrum.
I do not expect an answer to either of these questions. I will have to resolve them myself. It is really some help with The FA's understanding of the position regarding the incorporation of FIFA's RSTP into FA Rules (and whether I am missing something), and whether Article 17 has ever been considered by a Regulatory Commission or a Rule K Tribunal.
"Good afternoon Craig,
I refer to your two recent emails in respect of the RSTP (original inquiry is at the first email of this thread and second email pasted below for ease).
Further to the aforementioned correspondence, my understanding is that pursuant to Art. 14.1(a) of the FIFA Statutes the Association is obliged to fully comply with the Statutes, regulations etc of FIFA bodies as a condition of membership of FIFA. You are correct that is what FA Rule a1(b) on page 89 covers All Clubs and Affiliated Association to also comply.
The Association does not usually get involved directly in disputes, such as training compensation and/or solidarity contribution. If such a case was before a FIFA Single Judge of the Players' Status Committee, the Association would be notified of such proceedings for information purposes only. However, this would always involve an international transfer.
With regards to disputes of two members of the same association, I've been informed that Danny Ings may have a domestic issue recently. FIFA would not have been involved for the reasoning below. In this millennium the only domestic case where FIFA have involved themselves was that of Marco Branco of Middlesbrough (link). Unfortunately, I haven't been able to obtain any such examples expressly involving 'without just cause' but am informed that's generally a FIFA term and would be considered simple breach of contract in this jurisdiction. A contract would then stipulate the usual remedies where disputes arise (PFCC below).
However, if such scenarios were to arise under this jurisdiction, and concerned professional clubs, it would involve the Association directly and would be a matter for the relevant leagues/clubs to deal with via the Professional Football Compensation Committee ("PFCC"). This is the agreed domestic dispute channel with regards to the collective bargaining agreement, which underpins employment relationships. If my be helpful to note the following information in respect of this committee:
- Premier League Handbook 2016-17 (https://www.premierleague.com/publications)
- Appendix 11 (commencing page 520). Regulations of the Professional Football Compensation Committee;
- You'll note in the PL Handbook there is reference of RSTP and such related terms from it as solidarity payments, training compensation etc
- Professional Football Compensation Committee-https://thepfa.com/thepfa/committees
- EFL Regs:http://origin-www.football-league.co.uk/regulations/20130704/appendix-4 2293633 2128219
I've been informed Art. 17.2 of RSTP would only come into scope where involving an international transfer. Therefore, with domestic only disputes English law should supersede other regulation.
I'm not sure if any of the above is going to assist but hopefully it is of some use.
"Good afternoon Paddy,
Thank you so much for all your trouble, that is very helpful. I had worked a route through to the conclusion that a Regulatory Commission would have power to consider a breach of a FIFA statute in disciplinary proceedings under FA Rule E and a Rule K arbitrator would have jurisdiction to consider the RSTP in a domestic dispute between two clubs wo are members of the same national association. That is what Article 1.2 and 1.3 of the RSTP envisage, provided that the member association has incorporated the Statute in full into its own rules and regulations (because of the application of Article 17 is discretionary at national level). Paragraph 1 of FA Rule A appears to incorporate all FIFA statutes into FA Rules on a wholesale basis, without qualification.
I will obviously have to reconsider all of that in the light of what you have told me.
Once again, thank you and have an enjoyable weekend.
(5) The Section 68(2)(a) challenge
"(a) act fairly and impartially as between the parties, giving each party a reasonable opportunity of putting his case and dealing with that of his opponent, and
(b) adopt procedures suitable to the circumstances of the particular case, avoiding un-necessary delay to expense, so as to provide a fair means for the resolution of the matters falling to be determined."
"The burden is squarely on the applicant, who invokes the exceptional remedy under section 68, to secure (if he can) findings of fact which establish the pre-condition of substantial injustice". If the result would most likely have been the same despite the irregularity there is no basis for overturning an award. However, in determining whether there has been substantial injustice, the court is not required to attempt to determine for itself exactly what result the arbitrator would have come to but for the alleged irregularity, as this process would in effect amount to a rehearing of the arbitration. Instead, if the court is satisfied that [had] the applicant…not been deprived of his opportunity to present his case properly, …he would have acted in the same way with or without the alleged irregularity, then the award will be upheld. By contrast, if it is realistically possible that the arbitrator could have reached the opposite conclusion had he acted properly in that the argument was better than hopeless, there is potentially substantial injustice. The accepted test now seems to be that there is substantial injustice if it can be shown that the irregularity in the procedure caused the arbitrators to reach a conclusion which, but for the irregularity, they might not have reached, as long as the alternative was reasonably arguable".
(6) The Section 67 and 68(2)(b) challenges