We are proud to announce a successful representation of Nemanja Nikolic in the CAS arbitration 2019/A/6554, which followed the FIFA Dispute Resolution Chamber (the “DRC”) dispute between a football player Nemanja Nikolic (the “Player”) and an Israeli club Hapoel Tel Aviv (the “Club”). The case involved several legal issues, which were complex from both procedural and substantial point of view.
According to Israeli law, football clubs do not have legal capacity / subjectivity outside the realm of football and are therefore not registered in any registry except for the Israeli Football Association. Thus, the clubs are only ‘brand names’ owned by companies that possess ownership and managing rights over the clubs.
In January 2017, the liquidation procedure was initiated before the state court in Israel, due to the financial hardship of the company that was owning said rights over the Club. Soon afterwards, the legal counsel appointed by the liquidators of the Club’s owner unilaterally terminated the contract with the Player, deeming it an ‘onerous asset’. In February 2017, the state court in Jaffa rendered a decision whereby the Club was sold to new owners. It is noteworthy that the Club has been regularly competing in the Israeli football league since 1923.
In March 2018, the Player lodged a clam to the DRC, however, the Club did not take part in the proceedings. Instead, the legal counsel appointed by the previous owner of the Club, submitted and answer, objecting to the DRC jurisdiction and invoking (i) the clause which allowed the Club to unilaterally terminate the contract under certain terms and (ii) the insolvency as a just cause for termination under Israeli law and the FIFA RSTP. In May 2019, the DRC rendered a decision in favor of the Player, grounds of which were notified in October 2019 to both the Player the Club, as well as the aforementioned counsel, who appealed with CAS.
During the CAS arbitration, the Player requested appeal be rejected, since it was submitted by the third person and not the Club. One of the main points of the Player was related to the eventual enforcement of the CAS award – given that the players generally enforce the FIFA and CAS decisions through the sporting bodies (FIFA and national federations) and rarely through the state courts, the legal framework in which the Israeli clubs operate was irrelevant. Namely, should the Club fail to comply with the decision, the Player would ask FIFA to impose a sporting sanction on the Club, however, FIFA does not have a power to sanction the company that operates the Club. At the latest stage of the appeal process, the Club’s new owners issued a power of attorney to the same legal counsel, nevertheless, the CAS concluded that the current owner of the Club does not suddenly become a party to the proceedings by issuing a power of attorney.
The case also involved a very thorough and detailed debate on (i) applicable law; (ii) invalid unilateral termination clauses; (iii) whether the insolvency constitutes a just cause for termination of a footballer’s contract. However, provided that the appeal was rejected, these issues were not addressed by CAS.
It is noteworthy that, after the CAS award was communicated to the parties, FIFA relied on this award in another CAS arbitration, where eight appeal procedures, also initiated by the Club’s previous owners, were combined.
