RPC comments on CAS decision regarding Man City/UEFA

Man City have won away in Europe today, after the The Court of Arbitration for Sport (the “CAS”) overturned the ban on City participating in the Champions League, and found that City had not breached FFP rules by apparently disguising equity funding as sponsorship contributions.

The full reasons of the decision are to follow, but there are already some important points raised by the CAS’ press release this morning. 

1. No case to answer: Firstly, the CAS award emphasised that most of the alleged breaches of the FFP rules by City were either not established, or were time barred.  Put simply, UEFA’s Club Financial Control Body (the “CFCB”) failed to prove its case on the most substantive issues. What the CAS did find, was that City had not co-operated with the CFCB’s investigations, and had actually obstructed them. This warranted a EUR 10m fine (down from EUR 30m), but was not deemed serious enough to attract the Champions League ban.

1. Bad timing: Secondly, we are already discussing amongst sports law circles how the CFCB could have fallen short of the rules barring prosecution of alleged breaches of FFP rules.  Article 37 of the Procedural Rules Governing the CFCB quite clearly time bars any prosecution after 5 years. The CFCB’s investigations and adjudication (and the arguments before the CAS) were undertaken in private, and so the fact there were issues with limitation periods has come as a surprise. All eyes will be on the reasoned decision (due in the coming days) which should explain matters further. 

1. Are more funds required?: Thirdly, the press release made reference to the “limited investigative means” of the CFCB, which could explain why decisions were made to prosecute City for alleged breaches which were out of time.  The cornerstone of successful prosecutions is a well-run and organised investigation, but that can often be expensive to undertake. Without seeing ‘what went wrong’ it is difficult to know whether this passing reference will give rise to further changes on how FFP allegations are investigated and funded. However, it would be a false economy if it transpired that CFCB was underfunded or under-resourced in its investigatory function.  In particular, given the risk of expensive disputes and CAS hearings which could overturn the findings of an investigation or prosecution down the line. This decision comes off the back of AC Milan’s high profile success at the CAS a couple of years ago, again challenging the implementation and enforcement of the FFP rules by CFCB.

In terms of next steps, we all wait the decision, but City must be pleased that they have overturned the ban and reduced the fine. CAS decisions can be challenged at the Swiss Federal Tribunal – but it would not be an “appeal” in the ordinary sense of the term. It would have to be based upon grounds such as violating the right to a fair hearing, lack of jurisdiction, or incompatibility with public policy.  It seems unlikely at this stage, that UEFA would seek to lodge such an appeal, but they will almost certainly be considering the reasoned decision in some detail before finalising a decision on that front.