The case involves Kardemir Karabükspor Kulübü Dernegi (the Club) appealing against disciplinary sanctions imposed by UEFA for violating the UEFA Club Licensing and Financial Fair Play Regulations (CL&FFP Regulations). The Club had entered into a settlement agreement with UEFA in May 2015 after failing to meet the break-even requirement for the reporting periods ending in 2012, 2013, and 2014, resulting in a significant aggregate deficit. The agreement required the Club to cover the deficit with contributions from equity participants or related parties by a specified deadline, but the Club failed to comply. Consequently, UEFA's Club Financial Control Body (CFCB) Adjudicatory Chamber imposed sanctions, including exclusion from UEFA competitions for two seasons (2016/2017 and 2017/2018) and a fine.
The Club appealed to the Court of Arbitration for Sport (CAS), arguing that the sanctions were disproportionate and should be suspended due to force majeure, citing its relegation to a lower division as an unforeseen event that reduced revenues and hindered compliance. The Club also claimed structural difficulties in collecting financial contributions due to its status as an association and argued that it had settled debts with other clubs and players, which it believed should mitigate the sanctions. The CAS, led by Sole Arbitrator Lars Hilliger, rejected these arguments. It ruled that relegation did not constitute force majeure, as it was neither unforeseeable nor beyond the Club's control, and that the Club had ample time to address financial issues but failed to do so. The CAS also dismissed the claim that settling debts with other parties was relevant to the FFP breach.
Regarding proportionality, the CAS emphasized that its review of sanctions is limited to cases where the sanction is evidently and grossly disproportionate. It found no such disproportionality, noting that UEFA's discretionary choice of sanction was within acceptable bounds. The CAS also rejected the Club's argument of unequal treatment, stating that comparisons with other cases were insufficient without considering the specific circumstances of each. The CAS upheld UEFA's decision, reinforcing the principle that clubs must adhere to financial fair play regulations and that sanctions for non-compliance will be upheld unless clearly excessive or unjust.
The ruling underscores the strict enforcement of UEFA's financial fair play rules and the limited grounds for challenging disciplinary measures. It highlights the importance of financial discipline in football and the expectation for clubs to manage risks proactively, including the potential impact of relegation. The decision also reaffirms the binding nature of settlement agreements and the consequences of breaching them. Ultimately, the CAS dismissed the Club's appeal, confirming the original sanctions and reinforcing the need for clubs to comply with financial regulations to maintain competitive integrity in UEFA competitions.