The case revolves around Cork City FC's appeal against FIFA's decision to deny an exception to Article 5, paragraph 3 of the FIFA Regulations for the Status and Transfer of Players, which would have allowed player Gareth Farrelly to play for Cork City despite having already played for two other clubs in the same season. The Court of Arbitration for Sport (CAS) upheld FIFA's decision, emphasizing the strict conditions under which exceptions to the rule can be granted. These conditions, established by FIFA's Players’ Status Committee, include overlapping football seasons between the clubs involved, compliance with transfer period rules, and adherence to employment contract duration rules. The CAS panel found that Farrelly's contract with Blackpool FC did not meet the minimum duration requirement under Article 18, paragraph 2 of the Regulations, which mandates contracts to last until the end of the season. This failure to comply with the contractual duration requirement was central to the denial of the exception.
Cork City FC argued that the decision unfairly restricted Farrelly's right to free movement and employment under Article 39 of the EC Treaty, contending that English law permitted contracts of the duration in question and that FIFA's rules should not override national law. The club also referenced FIFA Circular No. 867, which allows players to register with new clubs once transfer windows reopen, provided they have fulfilled previous contractual obligations. Additionally, Cork City highlighted the overlapping football seasons between the English FA and the Irish FAI, suggesting the decision prevented Farrelly from playing in a new competition under a different association.
FIFA defended its decision, stressing the importance of contractual stability in football, a principle embedded in its regulations and supported by agreements with the European Commission. FIFA argued that Article 5, paragraph 3 was designed to maintain this stability and was consistent with its circulars and established jurisprudence. The governing body maintained that exceptions to the rule must be narrowly construed and require strict compliance with all conditions, including contract duration and registration periods. Since Farrelly's contract did not meet the minimum duration requirement, FIFA asserted that the decision was justified.
The CAS panel acknowledged the tension between contractual freedom and regulatory stability but concluded that FIFA's regulations did not violate EC law. The panel referenced the Lehtonen case, where the European Court of Justice ruled that restrictions on player movement could be justified for non-economic, sporting reasons, provided they were limited in scope. The panel emphasized that FIFA's rules aimed to balance players' rights with the integrity of competitions and contractual stability. Ultimately, the panel dismissed Cork City's appeal, upholding FIFA's original decision.
Regarding costs, the CAS ruled that arbitration expenses would be shared equally by both parties, citing the lack of transparency in FIFA's jurisprudence on exceptions to Article 5, paragraph 3. The panel noted that FIFA's conditions for exceptions were not clearly communicated, leading to legitimate confusion for Cork City. Each party was ordered to cover its own legal fees and related expenses. The case underscores the importance of clarity in regulatory frameworks and the need for transparent communication between governing bodies and clubs to prevent unnecessary disputes. The ruling reaffirms the principle that contractual stability and competition integrity take precedence over individual player mobility unless all regulatory conditions are met.