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Manchester City’s victorious appeal highlights the control’s many defeats, writes

Sergio Agüero of Manchester City holding the Premier League trophy last year,
Sergio Agüero of Manchester City holding the Premier League trophy last year,

Manchester City’s managers may have been tempted to emulate Premier League strikers by turning cartwheel celebrations after a ban imposed on the club from participating in European championships was lifted in the week. Sergio Agüero of Manchester City holding the Premier League trophy, However the highest brass at the Etihad Stadium and therefore the club’s legal team, Freshfields Bruckhaus Deringer, are keeping a lid on their relief that the Court of Arbitration for Sport (CAS) overturned the regulator’s earlier ruling that the club had breached Uefa’s financial fair play (FFP) regulations.

The city’s response involved little more than saying that it “wishes to thank the panel members for his or her diligence and the due process of law that they administered”. Wider reaction to the ruling from the court in Switzerland on Monday was also muted. As a London lawyer explains: “The financial fair play rules are a sensitive issue for our football club clients; they don’t wish to see us speaking publicly about them.” That approach is described as “pusillanimous nonsense” by another lawyer.

And indeed a couple of specialists are robust in their analysis of the case. “This week’s ruling has merely provoked even more severe doubts that Uefa is simply not up to the task both to regulate the financial conduct of European football clubs and properly enforce the regulations,” writes Mark Stephens, a partner at Howard Kennedy, during this week’s Brief, the weekly legal affairs email from the days.

There might be no better illustration of the importance of cash in modern professional football than this saga. Nine years ago Uefa introduced the financial fair play regulations in order that clubs could only spend what they earn. The aim was to stop them from going bust.

Clubs in European competition cannot lose quite £27 million over a three-year period. Uefa had originally sanctioned City, which is owned by Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, for allegedly providing misleading financial information and failing to cooperate with investigators at the regulator’s club financial control body. Although the court ruling in the week ditched the ban, it still fined the club €10 million (£9 million) for obstructing Uefa’s investigation.

Particularly damning for Uefa was that the court found that the fees against City fell outside the regulator’s own five-year limitation period, or were not established. In short, Uefa and its legal team look somewhat inept. Full details of the court’s ruling are expected today or tomorrow.

Nonetheless, Graham Shear, a partner at Bryan Cave Leighton Paisner, says that the ruling “looks sort of a big blow for Uefa’s credibility as a regulator”. Shear says that the statute of limitations within the disciplinary rules “is simple in its scope” which its exceptions, including for fraud, “appear to have been held by CAS to not apply in this case”.

More broadly, lawyers point to an odd approach by the regulator, where Uefa pursued a case over events that were imagined to have occurred during a period that seemed to be covered by an earlier settlement with the City. “Presumably, Uefa had detailed legal advice on both points before embarking on the disciplinary proceedings and the CAS appeal,” Shear says, “but the outcome cannot help but undermine its reputation for interpreting and enforcing its own regulations.

James Arnold, a lawyer with Cooke Young & Keidan, says that City’s appeal highlights “procedural weaknesses in enforcing disciplinary measures for FFP violations”. Arnold points out that club officials at City raised concerns about the process that resulted in the ban during a move that echoed the strategies of AC Milan and Paris Saint-Germain.

The Italian and French clubs appealed bans resulting from alleged breaches of the financial rules on the grounds of procedural failings instead of on the substantive charges. Stephens is obvious that in his view the financial fair play regulations are now “dead rules walking”.

He says that there is a general failure at Uefa and among some sports lawyers to appreciate how badly the principles are drafted”. However, not all specialists share this pessimism. Jamie Singer, a partner at Onside Law, says that the principle remains valuable and important”, although he concedes that “the belief that Uefa can actually monitor and enforce them has been dealt an enormous blow”.

Singer says that the regulator is relatively toothless therein it’s no power to force clubs to cooperate with its investigations. “If the City chose to not cooperate,” he says, “it made it very hard for Uefa to research and secure the evidence they needed to influence an independent court that the offenses had been committed.”

Singer agrees that the principles need to be reviewed to offer them much more teeth to force clubs to co-operate and disclose information. There need to be severe penalties for failing to try to do so. it’s no use having severe penalties for breaching rules if clubs can obstruct Uefa from ably presenting its case.

 

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