FIFA will have to justify its player transfer system to Belgian courts

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Diarra case shakes up European football's transfer system

The Court of Justice of the European Union (CJEU) has issued a ruling that could change the landscape of international football transfers. The case stems from a dispute between the French footballer Lassana Diarra and the club Lokomotiv Moscow, but the implications of the ruling go far beyond this particular dispute. This ruling affects both the FIFA Regulations on the Status and Transfer of Players and the current Spanish regulations, putting the current transfer system and the responsibilities of clubs in check.

The origin of the case: Lassana Diarra

Lassana Diarra, known for his time at Chelsea, Real Madrid and PSG, was at the centre of this case when, following his departure from Russian club Anzhí Majachkalá, he signed for Lokomotiv Moscow in 2013. However, a year later, the Russian club decided to terminate his contract citing a breach of contract by the player. This led Lokomotiv to demand compensation, while Diarra claimed unpaid wages.

The problem was further complicated when Diarra tried to join Belgian club Charleroi, but FIFA transfer rules prevented him from doing so. According to these rules, the new club would be jointly and severally liable for any debts owed by the player to his previous club, something that frightened the Belgian club and frustrated the transfer. 

Faced with this situation, Diarra decided to take the case to court, suing FIFA and the Belgian federation for damages.

The intervention of the CJEU

The Belgian court hearing the case asked the CJEU for an interpretation as to whether FIFA's rules were contrary to EU law, in particular with regard to the free movement of persons and competition in the transfer market. In its ruling, the CJEU found that two articles of FIFA's regulations did violate European law, but left the door open for FIFA to justify its system before the Belgian courts.

The Court has recognised that, although these restrictions could be detrimental to the free movement of footballers, they could be justified if it is argued that they are necessary to guarantee the stability of the squads and the smooth running of sporting competitions. In other words, restrictions could be valid if they manage to maintain a certain balance in the teams and avoid chaos in the professional leagues.

What does this mean for the transfer system?

The CJEU ruling is not only limited to the Diarra case, but also calls into question the current FIFA transfer system, which has been the standard for years. One of the most contentious points is the joint and several liability imposed on the new club in the event of a contractual dispute between a player and his former team. According to the Court's Advocate General, Maciej Szpunar, this rule may discourage clubs from signing players for fear of financial consequences, thus restricting competition and the mobility of players.

However, the CJEU has clarified that, in situations where the new club has not actively participated in the breach of contract, it should not be held liable for the debt. In other words, if the player breaks up with his previous club without negotiating with another club, the new club should not be held liable for the dispute.

Impact on Spain and Decree 1006

This ruling also has direct implications in Spain, where Decree 1006 regulates the rights and duties of professional sportsmen. According to this decree, a player who unilaterally terminates his contract could see his new club become vicariously liable for the payment of debts owed to his former team. Now, with the CJEU ruling, this aspect could be reviewed if it is deemed to contravene European law.

Article 16 of Decree 1006 stipulates that if an athlete leaves a club through no fault of the latter, the team is entitled to compensation. If the player joins another club within one year, this new team could be obliged to assume part of the player's debts. With the recent ruling, such clauses could be called into question, as the European courts suggest that there must be clearer conditions for the new club to be held liable.

An uncertain future for transfers

What is clear is that this ruling marks a turning point in European football. If the Belgian court finally decides that FIFA's transfer system is not justified, we could be looking at a radical change that favours the big clubs to the detriment of the smaller ones. Teams with more spending power would have more leeway to sign players without fear of sanctions, which would widen the gap between the rich clubs and the smaller ones.

For now, everything is in the hands of the Belgian Court, which will have to decide whether the justifications presented by FIFA are sufficient to maintain the current transfer system. What is clear is that football, both in Spain and in Europe, is in the midst of a transformation process.