FIFA's Powers to Sanction Clubs Upheld
On 5 January 2007, the Swiss Federal Court handed down a landmark decision upholding the right of FIFA, the world governing body of football, to impose sanctions for breaches of its disciplinary rules.
The case arose in the following circumstances. In October of 2005, the FIFA Disciplinary Committee imposed a fine of 25,000 Swiss Francs on a Spanish club in connection with a transfer dispute, as well as other sporting sanctions, the deduction of points and compulsory relegation to a lower division, if the Spanish club failed to pay a Brazilian club 373,226 for a player by a certain deadline. Prior to this, the Spanish club had ignored a decision rendered by the FIFA Players' Status Committee and then appealed against the disciplinary decision to the Court of Arbitration for Sport in Lausanne. This latter appeal also went against the Spanish club.
The Spanish club then appealed to the Swiss Federal Court in Lausanne. The club argued that, by threatening to deduct points or impose relegation, FIFA was, in effect, enforcing a financial claim. And, as such, this was a violation of the so-called public policy'('ordre public') principle, as FIFA was claiming to impose sanctions that were exclusively within the power of the State to award. In other words, FIFA, a private body, was acting like a Criminal Court. And, by implication, exceeding its powers and usurping the role of the State.
The Swiss Federal Court denied this legal challenge to the authority of FIFA. The Court held that, pursuant to the Swiss Association Law, to which FIFA--as an organisation established and operating under the Swiss Civil Code ('Code des Obligations')--is subject, any violation of a member's duties may result in the imposition of sanctions. The Court further held that, if a private association (such as FIFA) draws up rules and regulations to which its members are subject to achieve its objectives, it is lawful for FIFA, as a governing body of its sport, to impose sanctions that safeguard the members' duties. …