The case involves an appeal by Cruzeiro Esporte Club against sanctions imposed by FIFA's Disciplinary Committee for failing to comply with a prior Court of Arbitration for Sport (CAS) award. The CAS had ordered Cruzeiro to pay compensation to Club Atlético Morelia for a player transfer, including USD 1,045,000 plus interest, a USD 100,000 penalty fee, and procedural costs. Despite the ruling, Cruzeiro did not make the required payments, prompting FIFA to initiate disciplinary proceedings under Article 64 of the FIFA Disciplinary Code (FDC). The FIFA Disciplinary Committee found Cruzeiro guilty of non-compliance and imposed a CHF 30,000 fine, along with a warning that further failure to pay could result in a transfer ban or point deductions.
Key legal issues addressed included the applicability of EU law, the principle of nulla poena sine lege (no penalty without law), and the predictability of sanctions under FIFA's disciplinary framework. The Sole Arbitrator ruled that EU law was irrelevant since neither party was based in the EU, and there was no connection to EU competition law. The principle of nulla poena sine lege was upheld, with the arbitrator noting that disciplinary provisions need not specify exact sanctions for every violation, as long as the rules clearly define the infringement and allow for proportionate penalties. Article 64 FDC was deemed sufficiently clear, enabling clubs to foresee consequences like fines, payment deadlines, and potential transfer bans.
Cruzeiro argued that the sanctions were disproportionate and lacked transparency, requesting a reduced fine and alternative measures like point deductions instead of a transfer ban. FIFA defended its decision, asserting that the sanctions were consistent with established practices and necessary to enforce financial discipline. The Sole Arbitrator emphasized FIFA's discretion in disciplinary matters, recognizing the need for sanctions to be tailored to individual cases, considering factors like the severity of the offense and the club's behavior. The degressive approach to fines—aimed at encouraging compliance without causing undue financial harm—was deemed reasonable. The transfer ban was justified as a necessary measure to uphold the integrity of football competitions, ensuring clubs cannot gain unfair advantages by avoiding payment obligations.
The Sole Arbitrator upheld the FIFA Disciplinary Committee's decision, confirming the fine and transfer ban while dismissing Cruzeiro's appeal. The ruling reinforced the importance of compliance with financial obligations in football and the balance between disciplinary discretion and legal predictability. The case underscores the consequences of failing to meet financial commitments in international football, highlighting FIFA's role in maintaining fair competition and protecting the sport's integrity. The decision serves as a reminder that financial difficulties, such as economic crises or currency fluctuations, do not absolve clubs of their contractual responsibilities. Ultimately, the sanctions were found to be lawful, proportionate, and in line with FIFA's regulatory framework.