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2011 Football Transfer Upheld English Appeal Procedure

Parties & Representatives

Appellant Representative: Ersin Hamarat
Respondent: Manchester City FC

Arbitrators

President: Lars Hilliger

Decision Information

Decision Date: August 24, 2012

Case Summary

The case involves a legal dispute between the Bulgarian Football Union (BFU) and Manchester City FC over the payment of a solidarity contribution related to the transfer of a Bulgarian player from Atlético Madrid to Manchester City in 2007. The solidarity contribution, a fee paid to clubs involved in training a player, was contested because Manchester City allegedly paid the first installment to the player's former training club, PFC Botev-1921-Vratsa JSC, instead of the BFU. The BFU argued that the training club had lost its membership status in 2003 and was no longer entitled to receive the payment, asserting that the contribution should have been paid directly to the BFU. The FIFA Dispute Resolution Chamber initially rejected the BFU's claim, prompting the BFU to appeal to the Court of Arbitration for Sport (CAS). The CAS panel, consisting of a sole arbitrator, examined whether Manchester City had fulfilled its obligation correctly under FIFA regulations, which stipulate that if a training club no longer exists, the solidarity contribution should be paid to the national association. The arbitrator found that Manchester City failed to provide sufficient evidence that the training club was still active at the time of payment and did not adequately justify its decision to pay the training club instead of the BFU. The arbitrator ruled that Manchester City had assumed the risk of paying the wrong creditor and thus remained liable for the payment to the BFU. The CAS award overturned the FIFA decision, holding that the BFU was entitled to the unpaid solidarity contribution. The case underscores the importance of verifying the legitimacy of creditors before making solidarity payments and reaffirms that national associations become the rightful creditors when training clubs cease to exist. The disputed amount for the first installment was €52,500, with the BFU also claiming default interest at 5% per annum from August 31, 2007. Manchester City argued that it had paid the training club in good faith in September 2007, but the arbitrator found no conclusive evidence that the payment was made to the correct entity. The arbitrator noted that the payment might have been deposited into a private account belonging to the former president of the training club, further undermining Manchester City's claim. The CAS ultimately ruled in favor of the BFU, ordering Manchester City to pay the solidarity contribution plus interest and dismissing all other claims. The decision highlights the procedural aspects of CAS arbitration, including jurisdiction, applicable law, and the consequences of a party's failure to respond, while reinforcing the principle that parties must actively prove their claims with credible evidence in arbitration proceedings. The outcome serves as a precedent for similar disputes involving solidarity contributions in football transfers, emphasizing the need for due diligence in verifying creditor legitimacy.

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