The English Football League (“EFL”) has settled a dispute with Cardiff City Football Club (“Cardiff”) as to the regulatory consequences of Cardiff’s failure to pay the first instalment of Emiliano Sala’s £15 million transfer fee to FC Nantes on time. The independent Disciplinary Commission approved an agreed position reducing a fee restriction on Cardiff’s ability to pay fees on football transfers and loans from 3 transfer windows to 2 (including the January 2023 transfer window).
Underlying facts
Emiliano Sala died tragically in a plane crash on 21 January 2019 as he flew from France to Cardiff to join his new team. Cardiff and FC Nantes engaged in litigation as to whether the first instalment of the transfer fee was properly owed. Ultimately, following an appeal to the Court of Arbitration for Sport and to the Swiss Federal Tribunal, it was held that Cardiff was required to pay.
When the sum became payable in November 2022, Cardiff failed to pay within 30 days as it was required to do under Regulation 52.6 of the EFL Regulations. As a result, the EFL imposed an automatic fee restriction on Cardiff: it was unable to pay a fee to sign a player for 3 transfer windows.
The litigation
Cardiff started arbitral proceedings against the EFL challenging the fee restriction and made an application for an urgent interim award on 12 January 2023 (ahead of the January transfer window closing). It then withdrew that application but proceeded to challenge the legality of Regulation 52.6 on the basis, amongst other things, that it had disproportionate effect.
In May 2023 Cardiff and the EFL settled the arbitral proceedings on the basis that Cardiff would be subject retrospectively to the new Regulation 52.6 proposed to Clubs at the AGM on 8 June 2023. Upon the new Regulation 52.6 being passed by Clubs, Cardiff appealed against the 3 window fee restriction to the Disciplinary Commission.
A copy of the Disciplinary Commission Award is available here.
Ruth Kennedy acted for the EFL throughout the arbitral proceedings and the appeal under the new rule (led by Tom de la Mare KC of Blackstone Chambers and at the interim relief stage Paul Harris KC of Monckton Chambers).
