The Fédération Internationale de Football Association (FIFA) and the German Football Association (Deutscher Fußball-Bund e.V. – DFB) as well as affiliated associations must learn once again that they don’t operate in a legal vacuum. Orders, decrees and penalties require a legal basis. This is – in the case of SV Wilhemshaven – association law. The German Federal Court of Justice (Bundesgerichtshof – BGH) had looked for one but could not find anything with its judgement from 20 September 2016 – II ZR 25/15.

What happened?

Because the SV Wilhelmshaven e.V. declined to pay training compensation for the then 19-year-old Sergio Sagarzazu, the FIFA ordered the DFB to enforce the automatic relegation of the club. The claim for the training compensation, which had been filed by two Argentinian clubs and approved by the FIFA totaled 157,500 €.

In consequence, the DFB forwarded the relegation order to the club’s umbrella association Norddeutscher Fußballverband e.V., whose executive committee approved the relegation, forcing the club to leave their league, Regional League North. The appeal submitted by SV Wilhelmshaven e.V. at their association’s federal court was dismissed accordingly. Norddeutscher Fußballverband e.V. had previously tried to enforce the payment through deduction of points, as well as by ordering a fine, both without success.

The SV Wilhelmshaven e.V. then filed a law suit against the enforced relegation with Regional Court Bremen, but lost. Again, appealing at Higher Regional Court Bremen, the previous judgement was overruled and the decision by Norddeutscher Fußballverband e.V. to enforce the relegation was judged inadmissible. This view has now been supported by the BGH.

What is the legal background?

The judgement is situated within German association Law.

The BGH considers the decision of the Norddeutscher Fußballverband e.V., enforcing the relegation of the SV Wilhelmshaven e.V. to be a severe intrusion into the club’s membership at the association without there being an adequate basis for it.

Association law only allows for disciplinary measures if the statute of the association explicitly permits such measure. Per the BGH, such a statutory permission must be clearly stated, allowing the association’s members to be aware of possible legal disadvantages and hence enabling them to decide to accept them or to alter their behavior.

The statute of the Norddeutscher Fußballverband e.V does not provide any basis for disciplinary measures as a potential consequence of unpaid claims for training compensation. Whether or not the statutes of the umbrella associations DFB and FIFA contain such provisions is irrelevant, as SV Wilhelmshaven e.V. is only a member of Norddeutscher Fußballverband e.V and hence their statute is the only one that is legally binding for the club. The BGH points out that the statutes of umbrella associations are generally only binding for their direct member associations. They do not automatically extend to the members of a member association, e.g. the SV Wilhelmshaven e.V. as member of Norddeutscher Fußballverband e.V., simply because of its parent association’s membership in the umbrella association.

In consequence, the legitimacy of the relegation decision can only be checked for appropriateness against the statute of Norddeutscher Fußballverband e.V. As the latter also does not reference other provisions within the DFB or FIFA statutes, there are simply no legal grounds for the ruling.

Even the “Admission Agreement Regional League” concluded between the club and the DFB to participate in the regional league does not provide any grounds for sanctioning in the form of an enforced relegation as consequence of unpaid training compensation.

Whether through this admission agreement the club approved the FIFA rules regarding the Status and Transfer of Players, remains untouched by the new ruling, per the BGH. The trial at hand only discussed the lawfulness of the sanctions, i.e. the enforced relegation, not the legitimacy of the claims for training compensation themselves.

Eventually, the BGH does not see the mere participation of SV Wilhelmshaven e.V in the regional league as an automatic subjection to an enforced relegation decision due to unpaid training compensation claims. Such practical effectiveness is only exercised by the competition rules of the hosting association, as without these rules an orderly staging of competitions would not be possible. However, rules regarding training compensation cannot be considered competition rules in this sense.

Conclusion

Structures within the association are one thing, the generally applicable law is another. FIFA, DFB and Norddeutscher Fußballverband e.V. have just experienced this. DFB will now quickly instruct the affiliated regional associations, to ensure the effectiveness of appropriate sanctions and in general a feasibility of FIFA statutes. Whether because of the judgement the current County League team (7th League) can dream of a return to the Regional League North, remains an open question. The club has already announced to file the respective application for readmission to the league. The problem with this being only that the SV Wilhelmshaven e.V was not only relegated at the green table but also ended up on the 16th and last place during the season of 2013/14. The fact that the team also had to leave the league on sporting grounds presents a problem of causality. Nevertheless, it is obvious that the enforced relegation negatively influenced player morale. In any case, what still needs to be decided on are compensation claims of the club against the Norddeutscher Fußballverband e.V because of the enforced relegation.

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