The case involves a dispute between Mathare United FC (Kenya) and Al-Arabi SC (Qatar) over the transfer of a Kenyan football player, D., and the associated training compensation. The Court of Arbitration for Sport (CAS) panel, composed of Prof. Massimo Coccia, Mr. Dirk-Reiner Martens, and Mr. José Juan Pintó, issued an award on 12 April 2006. The central issues included the calculation of training compensation, the validity of the player's contract, and the burden of proof regarding disproportionate compensation. FIFA rules stipulate that for transfers outside the EU/EEA, training compensation should be based on the costs of the new club's country while considering the training club's category. Circular 769 clarifies that only years of effective training are considered, excluding previous periods. FIFA Circulars, though useful for interpreting regulations, cannot amend them and must yield to superior rules in case of conflict. Circular 826 allows for adjustments if the calculated compensation is "clearly disproportionate," with the burden of proof lying on the party challenging the amount.
The dispute arose when D., whose passport indicated a 1985 birthdate, transferred from Mathare United to Al-Arabi. Mathare United initially claimed D. was a minor but later asserted he was 19, based on school records showing a 1983 birthdate. They argued his 2002 contract was valid, while D. claimed he had never renewed it. The Kenyan Federation initially declared D. free to join any club but later correspondence revealed conflicting claims about his age and contract status. FIFA deferred the contractual validity issue to the Kenyan Federation but confirmed Mathare United's entitlement to training compensation since the transfer occurred before D. turned 23. Mathare United and MYSA (Mathare Youth Sports Association) sought a transfer fee or training compensation from Al-Arabi. D. disputed his association with Mathare United before 2002, claiming he played for other clubs. FIFA requested registration records from the Kenyan Federation, which were never provided, while Mathare United and MYSA cited the absence of registration requirements for individual players.
The FIFA Dispute Resolution Chamber (DRC) ruled that the validity of the player’s contract with Mathare United was an internal matter for the Kenyan Federation to decide. The DRC focused on calculating training compensation under FIFA regulations, determining the training period as 1995 to May 2003. This decision was based on the lack of evidence from the Kenyan Federation and the player’s failure to substantiate his claim of only one year with Mathare United. The DRC classified Mathare United as a category 4 club and set the training compensation at USD 2,000 per year for seven and a half years, totaling USD 15,000, to be paid by Al-Arabi SC within 30 days, with a 5% annual interest penalty for late payment. Mathare United appealed the DRC decision to the CAS, which confirmed its jurisdiction under FIFA statutes and the Code of Sports-related Arbitration, granting full authority to review the case de novo.
The CAS panel ruled that, for transfers outside the EU/EEA area, FIFA rules require the compensation to be based on the category of the training club and the costs of the new club's country. The panel rejected Al-Arabi's argument, affirming that Mathare United's category must be used. The panel determined that Mathare United trained the player for only one full year (2002) and thus compensation should be calculated for that single year. The panel disagreed with the DRC's classification of Mathare United in category 4, stating that as a first-division club in a country with professional football (Kenya), Mathare United should be classified in category 2. The compensation was calculated using the indicative amount for category 2 clubs in Asia, resulting in a sum of USD 40,000. The panel also addressed the possibility of adjusting this amount if it was "clearly disproportionate" to the case but found the evidence provided insufficient to prove clear disproportion.
The Panel ruled that Al-Arabi must pay Mathare United a total of USD 40,000 as training compensation. Since Al-Arabi had already paid USD 15,750 following the DRC Decision, the remaining amount due was USD 24,250, plus interest at 5% per annum from June 25, 2003,