By Jonathan Copping, Lawyer, Stone King, London, UK
The legal dispute between Cardiff City and French club, Nantes, was heard before a FIFA tribunal in September in relation to the payment of the transfer fee by Cardiff to Nantes.
Back in January, Cardiff City purchased Argentinian striker, Emiliano Sala from Nantes. Tragically, two days later, Sala was killed in a plane crash in the English Channel, after he had gone back to Nantes to say goodbye to his former teammates. Cardiff had refused to pay Nantes the transfer fee, claiming that because it had not resolved all points in the contractual relationship with Sala, the transfer had not been concluded and, therefore, no payment was due for the transfer fee.
On 25 September 2019, the Bureau of the Player’s Status Committee of FIFA ruled that Cardiff City must pay Nantes the transfer fee relating to the sale of Emiliano Sala. The transfer fee was EUR 17,000,000.00 to be paid in the following three instalments:
(1) EUR 6,000,000.00 within 5 days of Sala registering with Cardiff City;
(2) EUR 6,000,000.00 on 1 January 2020; and
(3) EUR 5,000,000.00 on 1 January 2021.
Following the conclusion of the transfer agreement between Cardiff and Nantes, on 21 January 2019, at 10:00 local time in Wales, the Football Association of Wales (FAW) requested the Fédération Française de Football (FFF) to deliver the international transfer certificate (ITC) for the player. On the same day, at 17.17 local time in France, the FFF delivered the ITC for the player and, subsequently, the FAW registered the player with Cardiff in the International Transfer Matching System (TMS). In particular, the FAW entered the registration date in the TMS and confirmed receipt of the ITC on 21 January 2019, at 17.30 local time in Wales. At the point the FAW acknowledged receipt of the ITC, an international transfer is complete according to the FIFA Regulations.
The transfer agreement contained the following clause, referred to as a “condition precedent” to the validity of the agreement:
“2.1.1. the player completing successfully medical examination with Cardiff City FC;
2.1.2. FC Nantes and the Player agreeing all the terms of a mutual termination of FC Nantes contract of employment with the Player;
2.1.3. the mutual termination of FC Nantes contract of employment with the Player is registered by the LFP;
2.1.4. the LFP and the FAW have confirmed to Cardiff City FC and FC Nantes that the Player has been registered as a Cardiff City FC player and that the Player’s International Transfer Certificate has been released”.
There was no dispute between Cardiff and Nantes that 2.1.1 had been fulfilled. Cardiff alleged that 2.1.2 had not been complied with because two conditions precedent included the termination agreement signed between the player and Nantes had not been fulfilled, namely the definitive transfer of the player to Cardiff and the issuance of the player’s ITC to the FA.
As such, Cardiff claimed that the employment relationship between the player and Nantes was not validly terminated and, consequently, clause 2.1.2 of the transfer agreement was not fulfilled, the agreement was to be considered as invalid and the transfer fee was not due.
FIFA dismissed Cardiff’s argument and ruled that by the very act of signing a termination agreement Nantes and the player had agreed on all the terms enshrined therein.
FIFA ruled that Nantes had presented a stamped copy of the termination agreement on 19 January 2019, containing the indication “Ratified on 21/01/2019”. As such, clause 2.1.3 had been fulfilled.
Turning to the issue of the final condition precedent at 2.1.4, Cardiff argued that because the employment contract could not be registered with the Premier League, the condition had not been fulfilled. FIFA ruled that the registration of the employment contract with the Premier League was an internal matter between Cardiff and the Premier League over which Nantes had no influence and that the steps in relation to the ITC had been completed.
As a result of the condition precedent being fully complied with, FIFA ruled that the initial EUR 6,000,000 payment is owed to Nantes. In relation to the subsequent payments, FIFA noted that the payments are not yet payable and, therefore, it was not in a position to make a ruling on them.
After the ruling, Cardiff confirmed that it would be appealing to the Court of Arbitration for Sport (CAS).
It is likely that CAS will hear the case at some point in 2020.
Jonathan Copping may be contacted by e-mail at ‘JonathanCopping@stoneking.co.uk’