The case involves a dispute between Hapoel Beer-Sheva F.C. and Real Racing Club de Santander S.A.D. over training compensation for a player who trained with Hapoel from age 12 until his transfer to Santander. The appeal was brought before the Court of Arbitration for Sport (CAS) after FIFA's Dispute Resolution Chamber (DRC) awarded Hapoel €90,000, significantly less than the €570,000 they sought. The dispute centered on interpreting FIFA regulations and Circular Letters, particularly Circular Letter no. 826, which simplified the calculation of training compensation. While these circulars are not legally binding, they reflect FIFA's understanding and practice, aiding in regulatory interpretation.
The player, Y., had a contract with Hapoel until 2002 but negotiated with Santander before its expiration, leading to a breach claim. FIFA allowed the transfer but deferred compensation determination. Hapoel argued compensation should cover training costs from ages 12 to 21, calculated based on Spanish training costs (Santander's location), as per FIFA regulations. The panel noted FIFA's discretion to adjust compensation is limited to cases where the standard amount is "clearly disproportionate," a burden Hapoel failed to meet. The panel also rejected a joinder request due to lack of consent from involved parties.
The case highlighted complexities in training compensation disputes, particularly regarding calculation methods and jurisdictional frameworks. The Panel reviewed the case de novo, examining all facts and legal issues under FIFA regulations and Swiss law. Key issues included determining the applicable FIFA regulations, the correct period for calculating compensation, the applicable category for Hapoel, and the validity of Santander's counterclaim. The Panel concluded that Israel, where Hapoel is based, is not part of the EU/EEA, so compensation should be calculated based on Santander's location. The player's training was deemed completed by the end of the 1996-1997 season, and compensation was calculated for ages 12 to 17, categorized under Europe Category 4 for ages 12-14 and Category 3 for ages 15-17, totaling €90,000.
The Panel dismissed Hapoel's claim for additional compensation, as they provided no evidence the amount was disproportionate. Santander's counterclaim and request for a pre-emptive declaration were also dismissed, as the Panel could not affect third-party rights. The final ruling upheld the DRC's decision, ordering Santander to pay Hapoel €90,000 without interest, as no claim for interest was made. The appeal and counterclaim were dismissed, confirming the original decision. The case reaffirmed the importance of FIFA's regulatory framework and the limited scope for judicial intervention in training compensation disputes, emphasizing proportionality and transparency in such calculations.