The case involves a dispute between Club Hannover 96 and FC Varteks over compensation for the training and development of a player, P. The player had a contract with FC Varteks until July 1999 but chose not to renew it, instead entering into an agreement with F.C. Internazionale Milano (Inter) and a German company, Finigra GmbH. This arrangement allowed Inter to train and loan the player to other clubs. Despite FC Varteks' demand for compensation, Inter did not pay, and the player later signed an employment contract with Club Hannover 96 in October 1999. Club Hannover 96 claimed the player was loaned by Inter and thus any compensation claims should be directed to Inter, while FC Varteks objected and sought payment, escalating the matter to FIFA.
FIFA's Player’s Status Committee ruled in April 2002 that the transfer violated FIFA regulations because it involved a private company (Finigra) rather than direct dealings between football clubs. The committee found Inter had no official role in the transfer since the player was never registered with them. Instead, the direct employment contract between Club Hannover 96 and the player, along with the issuance of an international transfer certificate, meant Club Hannover 96 was liable for compensation under Article 14.1 of the 1997 FIFA Transfer Regulations. The committee also censured Club Hannover 96 for violating FIFA rules on player agents and transfer principles.
Club Hannover 96 appealed, arguing Inter's role was significant and presenting agreements to support their claim. The Court of Arbitration for Sport (CAS) upheld FIFA's decision, emphasizing that FIFA's transfer system requires official registration with a national association for a valid transfer. Since the player was directly registered with Club Hannover 96, they were responsible for compensating FC Varteks. The CAS panel found no conclusive evidence that Inter had ever registered or formally loaned the player, as no signed loan agreement was provided. The transfer was deemed to have occurred directly between the Croatian and German football associations, with Club Hannover 96 signing the employment contract and requesting the international transfer certificate.
The CAS ruling confirmed FIFA's original decision, dismissing Club Hannover 96's appeal and obliging them to pay compensation to FC Varteks. The parties were instructed to negotiate the compensation amount within 30 days, failing which the matter could be referred back to FIFA. The case underscores the importance of adhering to FIFA's regulatory framework in player transfers and the consequences of circumventing official procedures. The decision highlights the necessity of formal registration and compliance with FIFA regulations to ensure valid and legally binding player transfers.