The court of justice of the European Union (CJEU) has said that Fifa rules governing the transfer system are against EU law.
In a verdict that could have huge implications on club football and player movement, the court ruled the transfer rules of world football’s governing body go against European Union laws, citing free movement principles.
“The rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club,” said the Luxembourg-based Court of Justice of the European Union (CJEU).
Fifa’s Regulations on the Status and Transfer of Players (RSTP) say a player who terminates a contract before its term “without just cause” is liable to pay compensation to the club. A new club will then become jointly liable for the payment of compensation.
In perhaps the biggest landmark ruling since the Bosman rule in the mid-nineties, the new ruling means players should now be able to join new clubs after a contract termination without being liable to pay compensation.
#FIFPRO‘s statement on the judgement of the European Court of Justice in the case of Lassana Diarra vs FIFA. pic.twitter.com/jfQoXrLNXx
— FIFPRO (@FIFPRO) October 4, 2024
What started the court ruling?
The ruling comes amid a high-profile case involving former Chelsea, Arsenal and Portsmouth midfielder Lassana Diarra, who was told to pay Lokomotiv Moscow €10.5m after a dispute with the Russian side. In 2014, Lokomotiv terminated the player’s contract due to a dispute over his salary, claiming a breach of contract on the player’s side.
The court ruled in favour of the club. Diarra was then offered a contract at Chaleroi, though the Belgian side wanted confirmation that they would not become responsible for money owed to Lokomotiv Moscow. Fifa failed to provide guarantees, insisting an international transfer certificate must be granted by the league a player is leaving. Diarra then filed a lawsuit against the governing body claiming a €6m loss of earnings.
What has the court ruled?
Extract from the Judgment of the Court in Case C-650/22 | FIFA
“First, the rules in question are such as to impede the free movement of professional footballers wishing to develop their activity by going to work for a new club, established in the territory of another Member State of the European Union.
“Those rules impose considerable legal risks, unforeseeable and potentially very high financial risks as well as major sporting risks on those players and clubs wishing to employ them which, taken together, are such as to impede international transfers of those players.
“Although restrictions on the free movement of professional players may be justified by overriding reasons in the public interest consisting in ensuring the regularity of interclub football competitions, by maintaining a certain degree of stability in the player rosters of professional football clubs, in the present case the rules in question nevertheless seem, subject to verification by the Cour d’appel de Mons (Court of Appeal, Mons, Belgium) in a number of respects, to go beyond what is necessary to pursue that objective.
“Secondly as regards competition law, the Court holds that the rules at issue have as their object the restriction, and even prevention, of cross-border competition which could be pursued by all clubs established in the European Union, by unilaterally recruiting players under contract with another club or players about whom it is alleged that the employment contract was terminated without just cause.
“In that regard, the Court recalls that the possibility of competing by recruiting trained players plays an essential role in the professional football sector and that rules which place a general restriction on that form of competition, by immutably fixing the distribution of workers between the employers and in cloistering the markets, are similar to a no-poach agreement.”
