The case revolves around a dispute between Danubio FC, FIFA, and FC Internazionale Milano (Inter) concerning the application of FIFA's solidarity mechanism in player transfers. Danubio, a Uruguayan club, sought a solidarity contribution of EUR 350,000 following the transfer of a player from Juventus to Inter, arguing that the mechanism should apply to domestic transfers within Italy. The FIFA Dispute Resolution Chamber (DRC) rejected Danubio's claim, stating that the solidarity mechanism under FIFA regulations only applies to international transfers, not domestic ones, and that national associations have the autonomy to establish their own systems for compensating clubs that train young players. Danubio appealed to the Court of Arbitration for Sport (CAS), challenging the interpretation of FIFA's rules and their compatibility with EC competition law.
The CAS panel, composed of arbitrators from the UK, Portugal, and Italy, addressed several key issues. It confirmed that disputes involving EC law, including competition law, are arbitrable under Swiss law and that FIFA, as a first-instance decision-making body, could not be named as a respondent unless it actively intervened in the case. The panel emphasized that Swiss law requires rules to be interpreted based on their wording and purpose, with historical context considered only if the rule is unclear. It upheld the DRC's decision, ruling that the solidarity mechanism does not apply to domestic transfers unless national federations implement similar regulations. The panel also concluded that FIFA's system, limited to international transfers, does not violate EC competition law, as it does not restrict competition or create market distortions. The absence of a domestic solidarity mechanism in Italy was deemed not to create an unfair advantage or distort competition.
The dispute originated from the transfer of a player trained by Danubio between the ages of 13 and 20. After his transfer from Juventus to Inter in 2004, Danubio sought compensation under FIFA's solidarity mechanism, which mandates payments to clubs that contributed to a player's training during international transfers. Both the DRC and CAS ruled that this mechanism does not extend to transfers within the same national association, as FIFA's regulations explicitly apply only to cross-border transfers. The CAS panel dismissed Danubio's argument that the lack of a domestic solidarity mechanism in Italy violated EC competition law, finding no evidence that the system restricted competition. The panel underscored the autonomy of national associations to design their own compensation systems, provided they align with broader regulatory frameworks. Ultimately, the CAS upheld the DRC's decision, rejecting Danubio's appeal and confirming that Inter was not obligated to pay the solidarity contribution for the domestic transfer.
The ruling reinforced the distinction between international and domestic transfers under FIFA's regulations and affirmed the compatibility of the solidarity mechanism with EC law. The CAS panel also addressed procedural and jurisdictional issues, including FIFA's role in the proceedings and the applicability of EC law. It determined that FIFA's regulations and Swiss law were primary, with EC law considered only where mandatory. The panel dismissed Danubio's claims under Articles 81 and 82 of the EC Treaty, noting that the solidarity mechanism's restriction to international transfers did not violate competition law. The decision highlighted the importance of adhering to the explicit wording of regulations and the limited role of judicial bodies in revising established rules. In conclusion, the CAS dismissed Danubio's appeal, upholding the FIFA DRC's decision and bringing the matter to a definitive close.