EU court says FIFA can’t use private arbitration to dodge the law

AMSTERDAM (CN) — FIFA and other sports powerhouses can’t sidestep EU law by funneling disputes into private courts, as the European Court of Justice made clear on Friday. The ruling sends a sharp warning that legal shortcuts won’t fly in global football.

The case started with a bitter clash between FIFA and a small Belgian club, Royal Football Club Seraing. Back in 2015, the club signed a deal with Doyen Sports, a Malta-based investment firm. For €350,000 (about $404,000), Doyen would get a cut of future transfer fees for four of Seraing’s players.

These kinds of deals — where outside investors claim a slice of a player’s value — had long been part of the game, especially for clubs trying to stay afloat.

But in 2015, FIFA banned third-party ownership deals, arguing they put the fairness of the game at risk. Seraing’s timing didn’t help. The club signed an initial deal just before the new rules fully kicked in, and a second deal after, both of which ultimately led to them getting into trouble. FIFA hit the club with a hefty fine and barred them from signing new players for four transfer windows.

Seraing tried to fight back. But under FIFA’s rules, the only real place to appeal was the Court of Arbitration for Sport (CAS), a private tribunal in Switzerland that handles international sports disputes. In 2017, CAS ruled in FIFA’s favor, though it did shorten the transfer ban by one window. The arbitrators admitted that FIFA’s rules limited certain freedoms but said it was a fair tradeoff to protect the integrity of the sport.

Still, the club wasn’t ready to give up. It took the case to Switzerland’s highest court, arguing that the sanctions violated basic rights guaranteed under European law, like the freedom to do business and move across borders. But the Swiss court threw the case out, saying Seraing hadn’t clearly explained why the CAS ruling should be overturned. Arguments based on European and Swiss competition law weren’t enough without proper legal reasoning.

At the same time, the club filed a separate case in Belgium. It asked national courts to strike down FIFA’s rules and award damages. But again, Seraing ran into a wall. Belgian judges said the CAS ruling was final and binding not only for the club and FIFA but also for others, such as the national football association.

That raised a deeper legal problem. The rules that punished Seraing involved key rights under EU law. But because CAS is based outside the EU, the club had no way to raise those issues before a European court. And when it tried to challenge the outcome in Switzerland, the case was dismissed on procedural grounds.

Eventually, Belgium’s highest court stepped in and asked the EU’s top judges a critical question: Can national courts in Europe treat arbitration rulings from a non-EU country as legally binding, even when the people involved never got a shot at defending their rights under EU law?

The answer was no.

The EU court made one thing clear: Just because someone agrees to arbitration doesn’t mean they give up their right to challenge decisions that may break key European legal protections. That includes things like fair treatment, open competition and the chance to take your case to court when those rights are on the line.

“It cannot be accepted that, by having recourse to arbitration, individuals may discard the principles and provisions of primary or secondary EU law which are essential to the legal order,” the judges wrote.

They also pointed out that decisions made in these private tribunals don’t just affect sports. They can have a ripple effect on workers’ rights, market access and cross-border investments — all things the EU considers part of its legal bedrock. So national courts can’t simply stand by. They need to make sure people have some path to argue their case in court, even if the original ruling came from an arbitration panel outside the EU.

And while arbitration is often described as voluntary, the court wasn’t convinced that’s true in football. Under FIFA rules, clubs and players don’t get to choose where to take their disputes. They have to go to CAS, not national courts. And national football associations are told to make sure of it. So in reality, even if clubs sign on to arbitration, it’s not exactly a free choice. It’s the only option they have if they want to keep competing.

This setup creates a problem. Since CAS is in Switzerland, which isn’t part of the EU, it can’t refer questions to the EU court for clarification. And when Belgian judges treat CAS rulings as untouchable, that cuts off any chance for EU courts to weigh in, even on issues that directly affect the rights of people inside the bloc.

That, the court said, is unacceptable. “It must, in any event, remain possible for the individuals concerned by such awards to obtain a review by a court or tribunal.” In other words, people must have some way to ask a judge whether these arbitration decisions respect the core values and rules that make up the foundation of European law.

The ruling doesn’t overturn the CAS decision in RFC Seraing’s case, but it does push Belgian judges to take a second look. Before enforcing the outcome, they’ll need to consider whether the club had a real opportunity to raise its legal concerns, especially those rooted in EU law.

Antoine Duval, a senior researcher at the Asser Institute in The Hague and one of Europe’s leading experts on sports arbitration, said the decision signals a major shift in how CAS rulings are treated inside the EU.

“First, a possibility must exist for individuals to obtain effective judicial review as to whether the award is consistent with principles and provisions of EU public policy,” Duval wrote.

“Second, that review must be comprehensive — not a light-touch check, but a full assessment of whether the contested rules comply with EU competition law or free movement rights.”

Miguel Poiares Maduro, director of the School of Transnational Governance at the European University Institute and a former advocate general at the EU Court of Justice, sees even broader implications.

“It makes CAS irrelevant in most cases in the EU,” Maduro noted. “If sports want to continue using arbitration inside the Union, they will need a new body that is established by law, fully independent and capable of referring questions to the EU court. Otherwise, national courts will have to handle these cases directly.”

In short, the court left no room for doubt. Even powerful sports bodies don’t get special treatment. Arbitration can’t be used to shut people out of the legal protections they’re entitled to, no matter how global the sport or influential the federation.

FIFA and RFC Seraing did not respond to requests for comment.

Now, the case heads back to Belgian courts. It’s up to the judges there to decide if the CAS ruling should still stand and whether RFC Seraing got the fair shot it deserved.