Esteghlal Football Club v. Football Federation Islamic Republic of Iran (IRIFF), Iran Football League Organization, Persepolis Football Club

II. FACTUAL BACKGROUND

6. This appeal was filed by Esteghlal against the decision of the Appeal Committee of FFI passed on 28 August 2018 (the “Appealed Decision). By the Appealed Decision the Appeal Committee of FFI dismissed the appeal filed by Esteghlal against the decision issued by the Disciplinary Committee of FFI on 23 July 2018, by which it was decided that the match for the Iran Super Cup had been cancelled because of the refusal/unavailability of Esteghlal to participate and the match was awarded by forfeit in favour of Persepolis with a score of 3-0.

7. Below is a summary of the relevant facts and allegations based on the Parties’ written submissions, pleadings and evidence adduced at the hearing. Additional facts and allegations found in the Parties’ written submissions, pleadings and evidence may be set out, where relevant, in connection with the legal discussion that follows. While the Sole Arbitrator has considered all the facts, allegations, legal arguments and evidence submitted by the Parties in

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

the present proceedings, it refers in its award (the “Award”) only to the submissions and evidence it considers necessary to explain its reasoning.

8. The present dispute is related to the right of FFI to cancel the Super Cup match due to the refusal/unavailability of Esteghlal to play.

9. On 23 May 2018, the Second Respondent met with the head coaches of all the clubs participating in the various national competitions and got their opinion on the proposed new season calendar.

10. On 14 June 2018, the Second Respondent approached all clubs and provided them with the finalized version of the League calendar.

11. On 2 July 2018, the Second Respondent informed the Appellant and the Third Respondent that they would be the two clubs participating in the Super Cup match to take place on 20 July 2018.

12. On 3 July 2018, the Appellant requested that the First Respondent postpone the match for reasons related to the participation of some of its players in the World Cup and the corresponding advisable resting period as per the First Respondent’s instructions as well as the club’s taking part in the then ongoing Asian Cups.

13. On 10 July 2018, the Second Respondent rejected the Appellant’s request.

14. On 14 July 2018, the Second Respondent informed the Appellant that the date of the Super Cup was maintained and of the sanctions it would face should it not participate in the match.

15. On 15 July 2018, the Appellant reiterated its request for postponement.

16. On the same day, the Secretary General of the First Respondent issued an investigatory report in connection with that issue (the “Report”). Pursuant to the main findings of the Report, the Appellant rejected and insisted on changing the date of the Super Cup match.

17. On 17 July 2018, the Security Council of the Sports Commission of Tehran (the “Security Council”) met with representatives of all concerned parties in Tehran for the organization of the Super Cup match. At that meeting, a representative of the Appellant allegedly restated the reasons for the Appellant’s unavailability and its request for postponement but the same was rejected by the Security Council deeming itself the inappropriate venue for such request and directing the Appellant to the Second Respondent.

18. On 18 July 2018, the Second Respondent announced to the Appellant that the match would be cancelled automatically on 20 July 2018 and Persepolis would be considered as the winner with a score of 3-0, and referred the matter to the Disciplinary Committee of the First Respondent responsible for taking the appropriate decision.

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

A. The FFI Proceedings

19. On 19 July 2018, the First Respondent urged the Second Respondent to immediately forward the cancellation decision and transfer the matter to its Disciplinary Committee.

20. By letter dated19 July 2018, the Disciplinary Committee of the First Respondent invited the Appellant to submit its statement of defence within 48 hours of receipt of said invitation. The latter never submitted such a statement of defence as it allegedly only received said invitation on 23 July 2018 when the Disciplinary Committee rendered its decision.

21. By letter dated 21 July 2018, the Appellant independently wrote to the First Respondent confirming its previous position and demanding that the Disciplinary Committee conduct a fair investigation of the matter.

22. By letter dated 23 July 2018, the general manager of the Security Council declared to the attention of the Second Respondent that the representative for the Appellant confirmed that the Appellant would not be in Iran on the day of the Super Cup match.

23. On 23 July 2018, a disciplinary hearing was held in the present matter. Later that day, the Disciplinary Committee issued the following decision:

“[…] having authenticated negligence of Esteghlal Club of Tehran in not holding Super Cup Competition on Friday dated 20.07.2018 and with reference to Para. 1 to Art. 96 and Art. 61 of Disciplinary regulations, and Para. 1 to 10 and 14 of Articles of Association of Tehran Football Federation, and in compliance with Art. 93 of Disciplinary regulations, as no compensation is received by League Organization, League Organization declares competition result 3-0 in favor of Persepolis Club”.

24. The grounds of the Disciplinary Committee’s decision were the following:

- all clubs are obliged to observe the timetable;

- the Second Respondent explicitly insisted on holding the match on the previously agreed date and the mere disagreement with a postponement request should be read as an invitation to comply with the original calendar;

- the Appellant was not even in Iran on match date which illustrates that the latter did not believe in holding the competition on the scheduled date;

- at the meeting of the Security Council, a representative of the Appellant confirmed the latter’s refusal to participate in the match;

- the Appellant cannot force the Second Respondent into violating the FFI Regulations;

- in light of the Appellant’s behaviour, the Second Respondent could not have maintained the match which would have caused irreparable financial and non-financial damages.

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

25. On 14 August 2018, consistent with the applicable provisions of the FFI Regulations, the Appellant lodged an appeal against the decision of the Disciplinary Committee before the Appeal Committee of the First Respondent.

26. By letter dated 19 August 2018, the Appellant submitted its written statement.

27. On 20 August 2018, the Appellant informed the Appeal Committee that it would be relying on the testimony of two witnesses, that it duly identified, at the Appeal Committee hearing.

28. On 28 August 2018, after a hearing was held in the matter, the Appeal Committee issued the Appealed Decision which in its operative part reads as follows:

“[…] Estaghlal F.C. did not provide prima facie evidence to succeed in appealing against the rendered judgment of disciplinary council, enforcing 0-3 score in favor of Persepolis F.C. Therefore, by virtue of Article 61 and 106 of Disciplinary Council By-law, upon denying the appeal, the subject judgment is confirmed and approved regarding the case. In case of punishment mitigation, by virtue of Article 93 of the said by-law, as stated in Article 61 of the By-law, not only does the violating team loses the match, but also the team has to pay at least IRR 500,000,000/- as penalty, therefore, it was clarified that the decision is to mitigate the punishment and not entirely neglect it. By virtue of Article 61 and 106 of Disciplinary Council By-law, Estaghlal F.C. is convicted to pay IRR 500,000,000/- penalty, and this decision is final”.

29. The grounds of the Appealed Decision were as follows:

- it is clear that the Second Respondent did not accept the Appellant’s request for postponement;

- the Second Respondent provided sufficient reasons why it would not be able to delay the match and informed the Appellant of the consequences of not attending the match;

- the Appellant confirmed its absence at the Security Council meeting on 17 July 2018;

- the Appellant’s justifications as to its request for postponement did not convince either the Disciplinary Committee, or the Appeal Committee.

30. The Appealed Decision with grounds was notified to the Appellant on7 September 2018.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

31. On 25 September 2018, the Appellant filed a Statement of Appeal with the Court of Arbitration for Sport (the “CAS”) against the Respondents challenging the Appealed Decision, pursuant to Article R48 of the Code of Sports-related Arbitration (the “CAS Code”). By its Statement of Appeal, the Appellant requested that the case be decided by a sole arbitrator.

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

32. On 3 October 2019, the Respondents objected to the nomination of a sole arbitrator and requested instead that the dispute be submitted to a panel of three arbitrators.

33. On 18 October 2018, the CAS Court Office informed the Parties that the President of the CAS Appeals Arbitration Division had decided to submit the present case to a sole arbitrator.

34. On 19 October 2018, the Appellant filed its Appeal Brief in accordance with Article R51 of the CAS Code.

35. On 5 November 2018, the CAS Court Office, on behalf of the President of the CAS Appeals Arbitration Division and in accordance with Articles R33, R52, R53 and R54 of the CAS Code, informed the Parties that the Panel appointed to decide the case was constituted as follows:

Sole Arbitrator: Dr Ivaylo Dermendjiev, Attorney-at-law in Sofia, Bulgaria

36. In accordance with Article R55 of the CAS Code, the Third Respondent filed its Answer on 21 November 2018 while the First and the Second Respondent filed their Answers on 24 November 2018.

37. On 29 November 2018, the CAS Court Office invited the Parties to inform the CAS whether they preferred a hearing to be held or for the Sole Arbitrator to issue an award based solely on the Parties’ written submissions.

38. On 3 December 2018, the Third Respondent stated that it did contest holding a hearing session but would participate in such session if necessary.

39. On5 December 2018, the First and Second Respondents stated that they preferred a hearing to be held in the present matter.

40. On6 December 2018, the Appellant requested that the award be rendered solely on the basis of the Parties’ written submissions.

41. On 18 December 2018, the CAS Court Office informed the Parties that the Sole Arbitrator has decided to hold a hearing in this matter.

42. On 22 December 2018, the Appellant informed that it will seek leave to orally amend its request for relief at the hearing.

43. On 27 December 2018, the First and the Second Respondents objected to the Appellant’s request to be authorized to amend its relief.

44. On 18, 20 and 21 February 2018, the Parties signed the Order of Procedure.

45. In accordance with Article R57 of the CAS Code, a hearing was convened and held on 15 March 2018 in Lausanne, Switzerland. The Sole Arbitrator was assisted at the hearing by Mr Daniele Boccucci, Counsel to the CAS. The following persons attended the hearing:

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

A. For the Appellant:

Mr James Kitching, Counsel

Ms Susanah Ng, Counsel

Mr Amir Hossein Fathi, Managing Director

Mr Ali Ahmadi Khatir, Sporting Director

Mr Akbar Abbasi Maleki, former Chairman(by phone)

B. For the Respondents:

i. First Respondent

Mr Esmaeil Hassanzadeh, Head of Disciplinary Committee

Mr Amir Khosravi, General Secretary Legal Advisor

ii. Second Respondent

Mr Amir Hossein Fattahi, Competitions Officer

iii. Third Respondent

Mr Iraj Arab, President

Mr Mehdi Zaker, Legal Advisor

Mr Amirali Hosseini, Directior of International Affairs and relations

46. The Parties were given the opportunity to present their case, to make pleadings and arguments, to examine the witnesses and to answer questions posed by the Sole Arbitrator. Upon closing of the hearing, the Parties expressly stated that they had no objections in relation to their right to be heard. The Sole Arbitrator had carefully taken into account all the evidence and the arguments presented by the Parties, in their written submissions and at the hearing, even if they have not been summarised in the present Award.

IV. SUBMISSIONS OF THE PARTIES — A. The Appellant

47. As to the facts, the Appellant’s submissions, in essence, may be summarized as follows:

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

- The date of the Super Cup match was announced to the Appellant and the Third Respondent in May 2018. That being said, the Appellant underlines that the Super Cup match has a long history of not being played or being rescheduled;

- On 2 July 2018, the Second Respondent informed the Appellant and the Third Respondent that they would participate in the Super Cup match and confirmed its date;

- On 3 July 2018, the Appellant informed the First Respondent that the scheduled date of the match would cause the following problems: 1) high risk of some of the Appellant’s players’ being injured due to their simultaneous involvement in the 2018 FIFA World Cup (the “World Cup”); 2) the First Respondent’s instruction directed at clubs taking part in the World Cup to take a 14-day rest period before any future matches; 3) involvement of the Appellant’s players in the final match of the 2017 Iranian Cup which took place on 3 June 2018; 4) the impossibility for the Appellant’s team to complete its preparatory preseasonal camp because of the accumulated delays as per the previous points;

- On 10 July 2018, the Second Respondent rejected the postponement request because the match dates were known much in advance, the Super Cup match could only take place before the start of the 2018/2019 season and both the Appellant and the Third Respondent were in the same competing conditions. By the same correspondence, the Second Respondent cautioned the Appellant that its failure to participate would result in the imposition of sanctions;

- On 14 July 2018, the Appellant was invited to attend the meeting of the Security Council in view of the organization of the match;

- On the same day, by an unsolicited correspondence sent to the Appellant, the Second Respondent restated that disciplinary proceedings and potential monetary sanctions would follow the Appellant’s refusal to participate in the Super Cup match;

- On 15 July 2018, the Appellant reiterated its request for postponement;

- On 17 July 2018, the Security Council meeting was held. The representative of the Appellant who attended the meeting was not authorized to make decisions regarding the Appellant’s participation in the match;

- On 18 July 2018, the Second Respondent cancelled the match, awarded a 3-0 forfeit victory to the Third Respondent, and referred the matter to the Disciplinary Committee;

- While on 19 July 2018 the First Respondent issued an invitation to the Appellant to submit its statement of defence within 48 hours of receipt of said invitation, the Appellant did not receive the invitation until 23 July 2018, and after the Disciplinary Committee decision was announced publicly;

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

- On 21 July 2018, the Appellant independently wrote to the First Respondent regarding the cancellation of the match arguing that the Second Respondent misinterpreted the Appellant’s request for postponement which was never meant to be an act of withdrawal;

- On 23 July 2018, the Security Council issued a letter in support of the position that at the 17 July 2018 meeting, the representative for the Appellant advised on the Appellant’s absence on match day;

- The Disciplinary Committee of the First Respondent confirmed the cancelation decision and awarded the match by forfeit to the Third Respondent;

- The Appeal Committee confirmed the Disciplinary Committee’s decision and imposed additional monetary sanction upon the Appellant;

- Concerning the decision of the Appeal Committee, the Appellant claims that it was not given a meaningful opportunity to submit a written statement prior to the appeal hearing. At that hearing, the Appellant orally submitted that 1) the match was cancelled two days before the actual match date; 2) the 17 July 2018 meeting was for the limited purpose of deciding on security and logistical matters and that is why the Appellant’s representative at that meeting had no authority to take any decisions outside of that restricted scope; 3) at no point did the Appellant effectively withdraw from participation at the match; 4) both the Appellant and the Third Respondent were absent from the stadium on match day;

- On 8 September 2018, the First Respondent notified the Appealed Decision to the Appellant and stated in the media that it would award the trophy for the match to the Third Respondent.

48. With regard to the merits, the Appellant urged the Sole Arbitrator to hear the matter de novo and identified the following main issues:

- The Appeal Committee violated the Appellant’s procedural rights, and more specifically, its right to be heard and to meaningfully defend itself;

- The Appeal Committee erred in deciding that the Appellant withdrew from participating in the match. The Appeal Committee relied on irrelevant and incorrect factual allegations to cancel the match. Thus, it is irrelevant that the Appellant’s team was not in Iran on match day as the decision to cancel the match had been taken two days in advance of that date. Moreover, the Appellant’s players could have easily returned home had the match not being cancelled. Additionally, the very presence of the Appellant’s representative at the Security Council meeting was an obvious signal that the Appellant intended to participate in the match. At that same meeting, the representative of the Appellant did not communicate any wish or decision to withdraw from participation in the match. In claiming the latter, the First Respondent relied solely upon documents prepared by the Security Council, which had been clearly disproved by a witness statement of the Appellant’s representative. According to the applicable provisions of the FFI Regulations, the First

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

Respondent bears the burden of proving the club’s violation of said regulations. However, the latter failed to discharge its burden of proof and its claims of a withdrawal remained entirely unsubstantiated. Instead, the First Respondent erroneously and arbitrarily misconstrued the Appellant’s request for postponement;

- Anyhow, the Appeal Committee did not have the power to render the Appealed Decision, as pursuant to Article 61 of the FFI Regulations, the failure to organize the match is imputed to the club only if “such failure was due to an act or omission” of the club. Here, the match was obviously cancelled but through no fault of the Appellant. The latter could thus not be held liable for violation of Article 61 of the FFI Regulations;

- In any case, the Appeal Committee mistakenly increased the sanction imposed by the Disciplinary Committee adding to the forfeiture a large monetary fine.

49. In the Appeal Brief, the Appellant requested the following relief, which was later orally amended at the hearing:

“92.1. annul the Decision;

92.2. order the Match to be rescheduled and played on a date prior to 31 December 2018 [this request was amended at the hearing by requesting that the match be rescheduled at “a later date”];

92.3. (in the hypothetical scenario that the Appellant is found to have violated Article 61 of the Regulations) annul the Decision of the Appeal Committee and issue a new decision consistent with the DC Decision;

92.4. order the Respondents to bear all arbitration costs connected with this procedure; and

92.5. order the Respondents to pay the Appellant a contribution towards its legal and other costs, in the amount to be determined at the discretion of the Sole Arbitrator”.

B. The First Respondent and the Second Respondent

50. It must be noted that the First and the Second Respondents submitted a “joint answer” with the same requests for relief. Their position, which was aligned also for the pleadings at the hearing, will be consequently summarized together. As to the facts, the submissions of the First Respondent and the Second Respondent, in essence, may be summarized as follows:

- On 23 May 2018, the Second Respondent met with the head coached of all the clubs competing in the various national competitions and solicited their opinion with regard to the proposed new season calendar;

- The Second Respondent contacted the Appellant on various other occasions for the latter’s participation at the Super Cup;

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

- On 14 June 2018, the Second Respondent provided all clubs with the finalized league calendar;

- On 2 July 2018, the Second Respondent officially contacted the Appellant and the Third Respondent to invite them to attend a meeting in connection with the organization of the match;

- On 3 July 2018, the Appellant shared with the Second Respondent its opinion with regard to the date of the match;

- On 10 July 2018, the Second Respondent expressly and overtly manifested their refusal of the Appellant’s offer for postponement, confirmed the match date as the only possible date for the Super Cup, and reminded the Appellant of the consequences of its decision to withdraw from the match;

- On 14 July 2018, the Second Respondent, in good faith, sent yet another letter to the Appellant pointing out that its potential withdrawal would result in financial and nonfinancial damages for the League, triggering the latter to commence disciplinary and legal proceedings against the club;

- On 15 July 2018, the Appellant reiterated its request for postponement without taking into consideration the Second Respondent’s reasons for turning down its offer;

- On 17 July 2018, the fully authorized representative of the Appellant attended the Security Council meeting. All thirty-three attendees were unanimously convinced that the representative confirmed the Appellant’s withdrawal. However, the representative was advised to send its request by official letter to the Second Respondent;

- On 18 July 2018, the Second Respondent cancelled the match for the following reasons: 1) the Second Respondent had rejected the Appellant’s offer to postpone the match but the latter persisted in its position; 2) the Appellant’s representative present at the Security Council expressly stated that the Appellant was unavailable on match day; 3) on match day, the Appellant was at a training camp in Turkey and was absent from Iran and only planned to return on 22 or 23 July 2018; 4) the Appellant had planned to play a friendly match in Germany on 21 July 2018 and when that match got cancelled for visa issues it played another friendly match with a team from Turkmenistan on 20 July 2018; 5) a decision to maintain the match date would have caused hardship to the fan mass as well as a general confusion and chaos in the vicinity of the stadium;

- On 19 July 2018, the First Respondent requested that the Second Respondent having issued the decision to immediately refer the matter to the Disciplinary Committee so as to respect the Appellant’s right to be heard and to defend its case;

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

- As 20 July 2018 was a non working day in Iran, notification to the Appellant of the matter being referred to the Discipline Committee and the applicable deadlines to exercise its right to be heard, was sent to and received by the Appellant on 21 July 2018;

- The Second Respondent then referred the decision to the Disciplinary Committee of the First Respondent, which on 23 July 2018 issued a decision sanctioning the Appellant for its violation of the FFI Regulations by forfeiting the match in favour of the Third Respondent;

- Also on 23 July 2018, the General Manager of the Security Council addressed a letter to the Second Respondent whereby the former confirmed that the Appellant’s representative at the Security Council meeting on 17 July 2018 was fully authorized by the club to make binding decision and confirmed the team’s absence of Iran on match day;

- By letter dated 19 August 2018, the Appellant submitted a written statement before the Appeal Committee with regard to the cancellation and forfeit decision;

- On 20 August 2018, the Appellant informed the Appeal Committee that it would be relying on the testimony of two witnesses, that it duly identified, at the Appeal Committee hearing;

- On 28 August 2018, after a hearing was held in the matter, the Appeal Committee confirmed the cancellation of the match and issued the appropriate sanction as per the FFI Regulations.

51. With regard to the merits of the case, the First Respondent and the Second Respondent submitted the following justifications: 1) not only are the FFI and the League are independent sport governing bodies and have the discretion to organize competitions, but their decisions are fully in line with industry practices and the decisions taken by FIFA or the AFC under similar circumstances; 2) football public order has to be observed in organizing competitions and the current case cannot serve as precedent for other teams’ irrational requests; 3) the Super Cup had to be organized before the start of the new league season; 4) four independent bodies, that are the League, the Security Council, the Disciplinary Committee and the Appeal Committee share the same understanding as to the Appellant’s overall behaviour and the underlying decision to withdraw; 5) the Appellant’s training camp took place overseas and the it had organized a friendly game on match day which clearly illustrate its unwillingness to participate in the Super Cup.

52. In their Answer, the First Respondent and the Second Respondent requested the following relief:

“65.1. Dismiss request of the Appellant to annul a decision of the Iran Football Federation appeal committee dated 28 August 2018.

65.2. IRIFF and the League hereby reject all of the other requests raised by the appellant and ask for dismissing them”.

Esteghlal Iran Culture and Sport Private Joint Stock Company v. award of 7 October 2019

53. With regard to the arbitration and legal costs, the First Respondent and the Second Respondent declared they are “still insisting on not paying the arbitration costs and (…) that the Appellant has already incurred significant financial damages to the IRIFF and League due to the match cancellation and they should cover all of them upon providing receipts and documents”.

C. The Third Respondent

54. In its written submission, the Third Respondent stated its compliance with the rules and regulations of the FFI as well as with the league calendar. It further confirmed its availability to participate in the match on 20 July 2018 had the Appellant not withdrawn.

55. The Third Respondent argued that throughout the match preparation process, the Appellant exhibited ignorance regarding the Second Respondent’s warnings.

56. It stressed that clubs with over forty million fans such as Persepolis itself cannot afford to violate the FFI’s rules and regulations because of the high risk of irregularity and chaos that might ensue such behaviour.

57. The Third Respondent demanded to be compensated by the Appellant for the losses the former had suffered due to the match failure and requested the following relief:

“… confirmation of the decision, rendered by judiciary members of the Iranian Football Association, as well as the condemnation of Esteghlal Club to compensate for the damages that has (sic) been inflicted on us.

Considering the issue that Persepolis was not a party in any case raised at Iran Football Federation (Disciplinary Committee or Appeal Committee) and did not interfere or was not effective in any decisions therefore we respectfully request the arbitrator of the current case to dismiss appellant’s claim against Persepolis FC”.