Fulham v Olympique Lyonnais: FIFA shows its teeth

There have been very few “football” disputes referred to CAS (Court of Arbitration for Sport) which, since FIFA Circular 827 was issued in November 2002, has been the tribunal of last instance for deciding all football related legal disputes. The first reported case to involve a contractual dispute between clubs is that of Fulham v Olympique Lyonnais (CAS 2003/0/486).

In this case, the Tribunal ruled on a dispute concerning the validity of a transfer contract pursuant to which the French player Steve Marlet had joined Fulham from Olympique Lyonnais in July 2001. CAS found in favour of Olympique Lyonnais and ordered that Fulham should pay the outstanding instalment owing on the transfer payment (approximately EURO 4.5 million) together with interest and costs. The decision was notified to the parties at the end of December 2003. Fulham subsequently failed to pay the outstanding amount and argued that the CAS decision did not prevent them from pursuing a parallel action in the English High Court which had been stayed pending the outcome of the FIFA dispute resolution process.

Not surprisingly, following Fulham’s refusal to comply with the decision of CAS, Olympique Lyonnais made written representations to FIFA via the FFF (the governing body of French football).

In what is a clear signal to National Associations and their member clubs, FIFA imposed a transfer ban on Fulham preventing the club from completing any international transfers until it had complied with the CAS decision. FIFA notified the English FA of the ban and they were prevented from issuing any international transfer certificates to Fulham.

This often threatened, but rarely imposed sanction had particular effect, coming as it did during the January 2004 transfer window and preceding the £12.82 million transfer of Louis Saha from Fulham to Manchester United. Saha’s replacement was Brian McBride, then playing for the N. American club Columbus Crew (MLS). The transfer of McBride could not take place with an international transfer ban in force and would have had to wait until the Summer if it had not been completed prior to the expiry of the January window.

The outstanding payment was made by Fulham very promptly indeed following receipt of the FIFA notification. Certainly, transfer bans, or worse still points deductions, are an extremely effective means of ensuring compliance.

FIFA envisages CAS playing an increasingly active role in football related disputes as part of FIFA’s wish that disputes are, wherever possible, resolved within the (dysfunctional) “football family”.  To this end, clubs should be aware that the threat of transfer bans and/or points deductions is a very real one in the event of non-compliance with a CAS decision.

Bulletins are for general guidance only. Legal advice should be sought before taking action in relation to specific matters. Where reference is made to Court decisions facts referred to are those reported as found by the Court. Please note that past bulletins included in the Archive have not been updated by any subsequent changes in statute or case law.