The case involves S.C. Football Club Rapid S.A. appealing against the Romanian Football Federation (RFF) and the Romanian Professional Football League (RPFL) for denying its license to participate in the Liga 1 national championship for the 2014/2015 season. The club, undergoing insolvency proceedings since December 2012, argued it met the criteria under the National Club Licensing Regulations, particularly demonstrating financial stability and the ability to continue as a going concern. Despite performing well in the Romanian League II and earning promotion, the club faced financial challenges, including unpaid damages to former players as ruled by FIFA. The Club Licensing Commission (CLC) refused the license, citing non-compliance with Articles 46, 47, and 49 of the Regulations, due to overdue payables and insufficient proof of financial stability. The CLC noted the club failed to verify transfer-related debts and had unresolved payments to former players under FIFA decisions. The club’s financial auditor also expressed doubts about its ability to continue operations without adhering to its reorganization plan.
The case was brought before the Court of Arbitration for Sport (CAS), where a sole arbitrator reviewed the decision. The arbitrator emphasized that insolvency does not automatically disqualify a club from obtaining a license if it meets regulatory criteria, but the club must prove financial stability during the licensing period. The club’s reorganization plan, approved by a syndic judge, provided prima facie evidence of its viability, but the burden of proof remained on the club to demonstrate compliance with financial obligations. The CAS upheld the RFF’s decision, concluding the club had not sufficiently proven its financial stability or resolved overdue payables, justifying the license refusal. The case highlights the importance of financial accountability in club licensing, particularly for clubs in insolvency, and reaffirms the need for clear evidence of financial viability to meet regulatory standards.
The club argued its approved reorganization plan eliminated bankruptcy risks and provided a structured payment schedule, fulfilling financial viability criteria. It also claimed the refusal violated the principle of equal treatment, as other clubs in similar situations had been granted licenses. The RFF maintained that insolvency proceedings do not guarantee a license and stressed the need for proof of financial stability throughout the season. The RPFL supported the club’s inclusion, citing its historical significance and potential financial benefits for Romanian football. The CAS arbitrator ultimately ruled in favor of the club, finding its reorganization plan credible and sufficient to demonstrate financial stability. The RFF was ordered to issue the license, allowing the club to participate in the 2014/2015 Liga 1 championship. The decision underscores the role of credible financial reorganization plans in licensing and the need for licensing bodies to base decisions on substantive evidence.