The case involves a dispute between FC Karpaty (Ukraine) and FC Zestafoni (Georgia) over training compensation for a player who transferred from Zestafoni to Karpaty. The Court of Arbitration for Sport (CAS) ruled on several key issues, clarifying that a party must have a direct stake in the dispute to be sued. The case centered on training compensation, which aims to reimburse clubs for developing young players (ages 12–21) and maintain competitive balance in football. The "new club" obligated to pay compensation is the one effectively benefiting from the player’s training, not just the club to which the player is formally transferred. This determination depends on factual circumstances, such as the player’s stay duration, match participation, and league status.
The player in question was registered with Zestafoni from 2005 to 2012 and played increasingly for the first team from 2007 onward, also representing Georgia’s youth and senior national teams. Zestafoni demanded EUR 360,000 in training compensation, while Karpaty disputed the amount, claiming the player’s training ended earlier and offering a counter-proposal. The player later signed with FC Lviv, a Ukrainian club, and was loaned to Karpaty. Zestafoni escalated the matter to FIFA’s Dispute Resolution Chamber (DRC), which ruled in October 2013, ordering Karpaty to pay EUR 295,000. Karpaty appealed to CAS, arguing it lacked standing and that FC Lviv should be liable.
The CAS Sole Arbitrator found inconsistencies in Karpaty’s claims, noting the player’s rapid move from FC Lviv to Karpaty and the low fees involved, suggesting an attempt to circumvent regulations. The arbitrator concluded Karpaty was the benefiting club and thus liable for compensation. The arbitrator also determined the player’s training was completed by the start of the 2008/2009 season, reducing the compensation period to 36 months (August 2005 to August 2008). Based on Karpaty’s UEFA Category II status, the compensation was calculated at EUR 180,000 (EUR 5,000 per month).
The CAS partially upheld Karpaty’s appeal, amending the DRC’s decision and ordering Karpaty to pay Zestafoni EUR 180,000, with 5% annual interest starting 30 days after the award notification. The ruling emphasized the importance of adhering to FIFA’s training compensation rules and ensuring fairness in player development and transfers. It also highlighted the scrutiny applied to unusual transfer patterns to prevent abuse of the system. The decision reaffirmed that clubs benefiting from a player’s training must compensate the training club, upholding the principles of competitive balance and youth development in football.