The case involves a complex legal dispute between FC Shakhtar Donetsk, FIFA, and Real Zaragoza S.A.D., revolving around the enforcement of disciplinary measures following Real Zaragoza's failure to pay compensation owed to Shakhtar Donetsk. The conflict began in 2007 when player Matuzalem Francelino da Silva unilaterally terminated his contract with Shakhtar Donetsk and signed with Real Zaragoza. Shakhtar filed a claim with FIFA's Dispute Resolution Chamber (DRC), which ruled in 2007 that the player and Real Zaragoza were jointly liable to pay Shakhtar €6.8 million plus interest. The case escalated to the Court of Arbitration for Sport (CAS), which in 2009 increased the compensation to approximately €11.86 million, maintaining the joint liability. The Swiss Federal Supreme Court upheld this decision in 2010.
When the payment was not made, FIFA's Disciplinary Committee initiated proceedings against the player and Real Zaragoza for non-compliance under Article 64 of the FIFA Disciplinary Code. In August 2010, FIFA found them guilty and ordered payment, threatening a six-point deduction from Real Zaragoza's league standings if the debt remained unpaid. However, Real Zaragoza entered insolvency proceedings in Spain, leading FIFA to close the disciplinary case against the club in 2011 while maintaining proceedings against the player. Shakhtar Donetsk appealed this decision to CAS, arguing that FIFA should not have closed the case against Real Zaragoza.
The CAS panel addressed several legal issues, including the interplay between national insolvency laws and FIFA regulations. It ruled that insolvency proceedings are governed by national law unless they conflict with FIFA's rules. The panel also clarified that FIFA's decision to close the case was a final, appealable act under Swiss law. While FIFA argued that Article 107(b) of its Disciplinary Code allowed it to close proceedings in cases of insolvency, the panel found that the provision granted discretion rather than an obligation. The panel emphasized that FIFA should have suspended, not closed, the proceedings, as the Zaragoza Commercial Court's order preventing sanctions was temporary.
The CAS panel ultimately overturned FIFA's decision to permanently close the proceedings, ruling that they should have been suspended until Real Zaragoza's insolvency concluded. This would allow FIFA to enforce the six-point deduction or other sanctions once the insolvency proceedings ended. The panel dismissed Shakhtar Donetsk's request for immediate enforcement, acknowledging the legal constraints imposed by Spanish insolvency law. The case highlights the tension between international sports governance and national legal systems, particularly in financial disputes involving insolvent clubs. It underscores the importance of balancing disciplinary enforcement with respect for national legal processes, ensuring fairness while maintaining the integrity of sports regulations. The decision reaffirms that temporary legal obstacles do not justify the permanent closure of disciplinary proceedings, preserving the possibility of future enforcement.