EPP review process: negligence cannot be remedied in the appeal before CAS

EPP review process: negligence cannot be remedied in the appeal before CAS

CAS 2023/A/9682 is an award with important considerations and conclusions regarding the FIFA Clearing House Regulation and the EPP Review Process, under the new system for the distribution of training rewards.

The case concerns the non-submission of waivers by the new club when requested by FIFA. The issues examined by the Sole Arbitrator were:

  1. whether the new Club was prevented from uploading the waivers due to force majeure;
  2. whether the FIFA General Secretariat shall be compelled to consider the waivers in the context of the Appeal proceedings and whether the new club can remedy its omission to upload them.

In this briefing, we focus on the analysis of CAS on the second issue.

Interpretation of the FIFA Clearing House Regulation: Deadlines are mandatory for clubs

To respond to the second issue, the Sole Arbitrator proceeded with the interpretation of the FCHR provisions, primarily emphasising that the literal interpretation of the provisions of the FCHR “leaves many questions unanswered”. For this reason, the Sole Arbitrator proceeded with a systematic and teleological interpretation of the said provisions. He underlined that the objectives of the FCHR (centrallisation, processing and automation of training-reward payments), require a rigorous approach towards the compliance of the FCHR. It is underlined that the system relies on effective cooperation between all stakeholders within the given deadlines.

With these in mind, the Sole Arbitrator found that the deadline outlined art. 9.2 FCHR, stating that “the EPP review process shall last ten (10) days” and that “the FIFA general secretariat may, at its discretion, exceptionally extend its duration” is mandatory “at the very least” for clubs and Member Associations (MAs) that have been negligent and, in a faulty manner have allowed the specified time limits to expire before exercising their rights and/or obligations. Therefore, it was decided that the negligent parties shall not be able to exercise their rights when the 10-day time limit has passed. A different interpretation could generate uncertainty about the reliability of the final EPP (and the corresponding allocation statement) and could open the door for negligent clubs to cause harm and take dilatory action to the detriment of training clubs.

Negligence in the EPP review process cannot be remedied through an appeal

Taking into consideration the above, the Sole Arbitrator found that the interpretation of the FCHR cannot reasonably lead to the establishment of an appeal mechanism which would allow a negligent club to rectify its failure to comply with the regulatory obligations and cooperation which form the basis of the EPP review process.”

Interestingly, the Sole Arbitrator clarified that, on the basis of the wording of the FCHR, he cannot confirm that he would reach the same conclusion if the new club had not been negligent, had requested an extension of the regulatory deadline for reasonable reasons, had been unable to obtain in a timely manner the waivers for reasons beyond its control, expressly objected to measures taken by the FIFA general secretariat during the EPP Review Process and/or had done its utmost to meet the imposed deadlines but had been unsuccessful.” 

Takeaways from CAS 2023/A/9682

This award is one of the first (if not the first) regarding the EPP review process and generally the new mechanism for the distribution and payment of training rewards. It provides us with important conclusions and indications regarding the implementation of the FIFA Clearing House Regulation and the necessity for the Club to follow the required process with utmost diligence.

As stated in the award, deadlines set by the FCHR are mandatory. Indeed, the teleological interpretation of the FCHR leaves no room for manoeuvre for clubs and MAs that show a negligent or uncooperative attitude. Nevertheless, the Sole Arbitrator set significant asterisks to the strict implementation of certain provisions. It was emphasised that, had the Club not been negligent but rather had shown a certain level of interest in reviewing the relevant EPP, the determination of the Arbitrator may have been different.

From the above considerations and outcome, we can draw the conclusion that clubs shall be diligent in checking EPPs that concern them, and they shall proceed with communications with FIFA in case they need additional time to find and submit certain documents or to complete the necessary actions with other clubs and associations.

For those interested in an elaborate read of the award, paragraphs 84 and 85 contain a clear and rigorous criticism of the wording of certain FCHR provisions, due to lack of clarity and consistency.