BFC Daugavpils v. FC Kairat, Fédération Internationale de Football Association (FIFA)

II. FACTUAL BACKGROUND

5. Below is a summary of the main relevant facts, as established on the basis of the Parties’ written submissions and the evidence examined in the course of the present appeals arbitration proceedings. This background is made for the sole purpose of providing a synopsis of the matter in dispute. Additional facts may be set out, where relevant, in connection with the legal analysis.

A. Background Facts

6. On 9 March 2020, the Single Judge of FIFA’s Players’ Status Committee (the “FIFA PSC”) rendered a decision, authorising the LFF to provisionally register R. (the “Player”) for Daugavpils.

7. On 10 March 2020, the Player was registered for Daugavpils with the LFF in FIFA’s Transfer Matching System (“TMS”).

8. On 11 March 2020, the Player and Daugavpils lodged a joint claim against Kairat with FIFA’s Dispute Resolution Chamber (the “FIFA DRC”), claiming that the Player terminated his employment contract with Kairat with just cause.

9. On 1 April 2020, the secretariat to the FIFA DRC (the “FIFA DRC Secretariat”) informed the Player and Daugavpils as follows:

“According to art. 22 of the Regulations on the Status and Transfer of Players [the “FIFA RSTP”], without prejudice to the right of any player to seek redress before a civil court for employment related disputes, FIFA, specifically the [FIFA DRC], is competent to hear employment-related disputes between a player and a club of an international dimension (cf. art. 24 par. 1 in conjunction with art. 22 lit. b of the [FIFA RSTP]; emphasis added).

Consequently, we have to inform you that for a dispute opposing a Kazakhstani player to a Kazakhstani club FIFA is not competent due to the lack of an international dimension.

Furthermore, we have noted that the Latvian club, [Daugavpils], has not specified its petition against [Kairat] in accordance with art. 9 par. 1 of the [FIFA Procedural Rules].

Nonetheless, in the context of this specific matter, we wish to highlight that [Daugavpils] does not appear to be an interested party in the sense of art. 22 lit. a of the [FIFA RSTP]” (emphasis in original).

B. Proceedings before the FIFA Dispute Resolution Chamber

10. On 25 May 2020, Kairat submitted a claim against Daugavpils with the FIFA Dispute Resolution Chamber (the “FIFA DRC”), claiming […] as outstanding training compensation.

11. On 29 May 2020, FIFA DRC secretariat (the “FIFA DRC Secretariat”), issued the following proposal (the “Proposal”) to Kairat and Daugavpils:

“[…] [I]n accordance with Article 13 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber, i.e. the Procedural Rules, and the FIFA Circular 1689, please find enclosed the proposal made by the FIFA secretariat in accordance with the above mentioned provision (Enclosure 1).

In sum, the proposed amount due by [Daugavpils] to [Kairat] is as follows:

[…] as training compensation, plus 5% interest p.a. as of the due date

In accordance with Article 13 of the Procedural Rules, it is informed that the parties have to either accept or reject the proposal within the 15 days following this notification via TMS, i.e. until 18 June 2020. In this regard, [Kairat] is limited only to accept or reject the proposal, excluding hereby any possibility to amend its original claim.

In case a proposal is accepted by all parties or the parties fail to provide an answer to the FIFA Player Status’ Department within stipulated deadline, the proposal will become binding.

In case of rejection by [Daugavpils], the latter will have five additional days, i.e. until 23 June 2020 to provide its position to the claim. Should [Daugavpils] wish to extend its deadline to file its position, it must request said extension before the expiration of the above mentioned date, in which case the deadline is automatically extended for ten (10) additional days, i.e. until 3 July 2020 in accordance with Article 16 par. 11 of the Procedural Rules.

Please also be informed that in case of rejection of the proposal by one of the parties, a formal decision on this matter will be taken by the Single Judge of the sub-committee of Dispute Resolution Chamber in due course.

Equally, we wish to point out that the relevant proposal will always be without prejudice to any formal decision which could be passed by the competent deciding body in the matter at a later stage in case the proposal is rejected by one of the parties” (emphasis in original).

12. On 16 June 2020, Kairat informed the FIFA DRC Secretariat that it accepted the Proposal by writing as follows:

“We refer to your letter dated 29th May 2020 regarding the above-referenced proposal. To this end, [Kairat] hereby accepts the proposal of the FIFA Administration”.

13. Daugavpils did not reply to the Proposal within the time limit granted.

14. On 25 June 2020, the FIFA Players’ Status Department informed Kairat and Daugavpils as follows (the “Appealed Decision”):

“We refer to the above-mentioned matter and in particular to the proposal made by the FIFA secretariat in accordance with Article 13 of the Procedural Rules.

As mentioned in our previous communication, in case a proposal is accepted by all parties or the parties fail to provide an answer to the FIFA Player Status’ Department within the stipulated deadline, the proposal will become binding.

Bearing the above in mind, we would like to inform the parties involved that the proposal has become binding. Consequently, [Daugavpils] has to pay to [Kairat], within 30 days as from the date of this notification, if not done yet, the amount of […], plus 5% interest p.a. as of 30 days of the due date of each instalment until the date of effective payment.

In the event that the aforementioned sum is not paid by [Daugavpils] within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

[Kairat] is directed to inform [Daugavpils] immediately and directly of the account number to which the remittance is to be made and to notify the FIFA Dispute Resolution Chamber of every payment received” (emphasis in original).

15. On 26 June 2020, Kairat sent a letter to Daugavpils with reference to the Appealed Decision, requesting payment of an amount of […].

16. According to Daugavpils, on 27 June 2020, Daugavpils’ TMS Manager, Mr Aleksandrs Isakovs, accessed TMS, allegedly for the first time since 10 March 2020 due to the COVID- 19 pandemic, and downloaded both the Proposal and the Appealed Decision simultaneously.

17. On 30 June 2020, Kairat filed a claim for breach of contract by the Player with the FIFA DRC, claiming compensation from the Player and Daugavpils.

18. On 3 July 2020, Daugavpils requested the grounds of the Appealed Decision.

19. On 6 July 2020, the FIFA DRC Secretariat informed Daugavpils as follows:

“[…] [W]e understand that you request the grounds of the alleged decision, allegedly communicated to the parties on 25 June 2020 in the dispute between the above-captioned parties.

In this regard, we must emphasize that in the matter at hand, no formal decision has been passed by the Dispute Resolution Chamber. In this respect, we refer to the proposal dated 29 May 2020, made by the FIFA

secretariat in accordance with article 13 of the Procedural Rules and the FIFA Circular 1689, which was not contested by any of the parties involved before the deadline of 18 June 2020.

As a result, on 2 June 2020, the FIFA Administration communicated that the proposal dated 29 May 2020 had become binding. In this respect, we also refer to the contents of article 13 of the Procedural Rules and the FIFA Circular 169, which amongst other stipulates that the parties have 15 days ‘to either accept or reject the proposal and provide the reasons which could justify the rejection’ and they can, within 15 days as from receipt of the proposal, request for a formal decision, however that ‘failure to do so will result in the proposal being regarded as accepted by and binding on all parties.’

Moreover, in our correspondence dated 29 May 2020, the parties were explicitly informed that ‘the parties fail to provide an answer to the FIFA Player Status’ Department within stipulated deadline, the proposal will become binding.’

In view of the above, we would like to emphasize that [Daugavpils] did not contest the [Proposal], before the deadline of 18 June 2020.

As a result, and considering all of the above, particularly that the proposal has become binding, we regret having to inform you that we are not in a position to provide you with the motivation of the decision, as no formal decision has been passed”.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

20. On 9 July 2020, Daugavpils lodged a Statement of Appeal with the Court of Arbitration for Sport (“CAS”), pursuant to Article R48 of the CAS Code of Sports-related Arbitration (edition 2020) (the “CAS Code”), challenging the Appealed Decision, naming Kairat as the sole respondent and requesting a sole arbitrator to be appointed. Daugavpils also applied for a suspension of the proceedings pending the outcome of the employment-related dispute between the Player and Kairat. Daugavpils lodged the following requests for relief:

“1. Set aside and annul the decision rendered by FIFA Players’ Status Department in the form of a letter in case Ref. No. TMS 6081 on 25 June 2020.

2. Order the Respondent to bear all costs incurred with the present procedure.

3. Order the Respondent to pay the Appellant a contribution towards its legal and other costs in an amount to be determined at the discretion of the Sole Arbitrator”.

21. On 16 July 2020, Daugavpils filed an amended Statement of Appeal with CAS, now also naming FIFA as respondent, lodging the following requests for relief:

“1. Order the Second Respondent (FIFA) to issue the grounds of the decision rendered by the Head of the Players’ Status on behalf of the FIFA Dispute Resolution Chamber in case Ref. No. TMS 6081 on 25 June 2020 (if the Sole Arbitrator deems it necessary).

2. Set aside and annul the decision rendered by the Head of the Players’ Status on behalf of the FIFA Dispute Resolution Chamber in case Ref. No. TMS 6081 on 25 June 2020.

3. Order the Respondents to bear all costs incurred with the present procedure.

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

22. On 17 and 20 July 2020 respectively, Kairat and FIFA objected to a suspension of the proceedings and requested that a Panel of three arbitrators be appointed.

23. On 20 July 2020, Daugavpils informed the CAS Court Office that Kairat had lodged another claim with the FIFA DRC against Daugavpils and the Player and that it intended to lodge a counterclaim and reiterated its request for a suspension of the proceedings.

24. On 22 July 2020, FIFA indicated that Daugavpils’ letter dated 20 July 2020 did not change its view with respect to the requested suspension.

25. On 23 July 2020, Daugavpils filed an unsolicited letter with the CAS Court Office, responding to FIFA’s letter dated 22 July 2020, following which the CAS Court Office requested the Parties to refrain from sending unsolicited letters and indicating that, unless the Panel would decide otherwise once appointed, Daugavpils’ letter was not admitted into the file.

26. On 24 July 2020, Daugavpils reiterated its request for a sole arbitrator to be appointed.

27. On the same date, 24 July 2020, Kairat reiterated its objection to a suspension of the proceedings.

28. On 4 August 2020, the CAS Court Office informed the Parties that the Deputy Division President had decided to submit this matter to a three-member Panel and that the Panel would decide on Daugavpils’ request for a suspension of the proceedings.

29. On 7 August 2020, Daugavpils nominated Mr Ulrich Haas, Professor of Law in Zurich, Switzerland, as arbitrator.

30. On 17 August 2020, Kairat and FIFA jointly nominated Mr Massimo Coccia, Professor and Attorney-at-Law in Rome, Italy, as arbitrator.

31. On 19 August 2020, Daugavpils filed an unsolicited letter with the CAS Court Office, referring to a letter dated 18 August 2020 from FIFA in an unrelated matter, where FIFA allegedly acted “exactly the opposite” as it did in the matter at hand, and on the basis of which Daugavpils reiterated its request for a suspension of the proceedings.

32. On 26 August 2020, Kairat objected to Daugavpils’ unsolicited letter dated 19 August 2020 and added that it was in any event irrelevant for the proceedings in the matter at hand. Kairat also reiterated its objection to a suspension of the proceedings.

33. On the same date, 26 August 2020, FIFA reiterated its objection to a suspension of the proceedings, adding that the matter referred to by Daugavpils in its letter dated 19 August 2020 had not become final and binding.

34. On 23 October 2020, the CAS Court Office informed the Parties on behalf of the Deputy President of the Appeals Arbitration Division, pursuant to Article R54 CAS Code, that the Panel was constituted as follows:

President: Mr Frans de Weger, Attorney-at-Law in Zeist, The Netherlands Arbitrators: Prof. Dr. Ulrich Haas, Law Professor in Zurich, Switzerland Prof. Massimo Coccia, Professor and Attorney-at-Law in Rome, Italy

35. On 28 October 2020, the CAS Court Office informed the Parties that the Panel had decided to reject Daugavpils’ request for a suspension of the proceedings.

36. On 10 November 2020, Daugavpils informed the CAS Court Office as follows:

“After thoroughly analyzing the case file in the above matter and the pertinent CAS jurisprudence (some of which was made available to the undersigned only recently), the Appellant deems that its request for production of the Appealed Decision’s grounds directed at FIFA is moot, as nothing prevents the Appellant from appealing to CAS despite FIFA’s unjustified denial to issue the Appealed Decision’s grounds (cf. CAS

Besides, the FIFA jurisdiction was not contested by the parties, the case at hand does not involve any disciplinary issues, and the subject matter of the dispute at stake is for training compensation (a “horizontal dispute”), for which FIFA has no standing to be sued if the Appellant is to drop the request for production of the Appealed Decision’s grounds. After all, the dispute itself is in substance between the clubs who are party

In light of the above, the Appellant, while reserving all rights and claims against FIFA, hereby withdraws (i) its request for relief directed at FIFA (Section VII point 1 of the rectified Statement of Appeal dated 16 July 2020) and (ii) its appeal directed at FIFA. Such withdrawal of the specific prayer and appeal against FIFA does not constitute and should not be interpreted as confession, acceptance, or acknowledgement of any of the allegations, claims, or requests made by FIFA.

For the sake of good order and clarity, the Appellant hereby maintains all of its other requests for relief against [Kairat]” (emphasis in original).

37. On 11 November 2020, the CAS Court Office, on behalf of the Panel, invited FIFA to provide its position on whether it agreed to be excluded as a party to this procedure.

38. On 13 November 2020, FIFA informed the CAS Court Office, inter alia, as follows:

“[…] Although FIFA understands that the Appellant is free to withdraw its appeal against any (or all) of the parties, FIFA is of the view that the consequences of such a withdrawal would nevertheless affect FIFA’s rights and should lead to the entire appeal’s dismissal by the Panel (without prejudice to FIFA’s objection to the admissibility of the appeal and to CAS jurisdiction, as described further below).

In this regard, FIFA firstly notes that the Appellant has withdrawn its appeal against FIFA while at the same time is ‘reserving all rights and claims against FIFA’. Although such reservation is difficult to understand and completely baseless, FIFA is of the view that this is a contradiction that shall be interpreted in any case against the Appellant.

Secondly, FIFA also notes that the Appellant has withdrawn all the requests for relief directed at FIFA but ‘maintains all of its other requests for relief against [Kairat]’. […]

As can be read from the Appellant’s requests for relief, aside from the (procedural and legal) costs, the primary relief sought was only directed against FIFA and not against [Kairat]. The Appellant’s sudden change by withdrawing the appeal against FIFA is even more relevant when taking into account that the FIFA letter of 25 June 2020 is not an appealable decision as the Appellant alleges. Under these circumstances, [Kairat] does not have any stake in the dispute and the Appellant cannot seek any relief against this club.

Therefore, by withdrawing the appeal against FIFA, the Panel must consider that the remedies are no longer sought by the Appellant, as there are no remaining substantive requests against [Kairat] to be resolved and, thus, the appeal must be considered as being dismissed and FIFA is deemed to have prevailed. Although FIFA is mindful that the Appellant may still amend its request for relief when filing its Appeal Brief, such amendment would in any case be moot in light of the withdrawal of substantive requests against FIFA and in the absence of an actual decision to appeal. This should therefore lead to the dismissal of the appeal on the merits (without prejudice to its inadmissibility).

If, for any reason the Panel considers that there are (even eventual) substantive requests against [Kairat] (quod non), FIFA believes that it should still be allowed to intervene in the proceedings, whether remaining a party or through the filing of an amicus curiae brief, which we hereby ask the Panel to grant if FIFA were to be excluded as a party due to the Appellant’s withdrawal of the appeal against it. In this respect, FIFA’s involvement in the proceedings (in either capacity) would be relevant insofar as the admissibility of the appeal is contested, as is the nature of the FIFA letter of 25 June 2020, which we submit is not (nor can it be considered) an appealable decision, in light of its mere informative nature.

In this regard, subject to the Panel’s decision on the Appellant’s withdrawal of the appeal against FIFA as well as on the subsidiary possibility of allowing FIFA to file an amicus curiae brief at a later stage, FIFA reserves all of its arguments on the admissibility of the appeal and CAS jurisdiction for the relevant stage of these proceedings.

Considering the foregoing position, FIFA asks the following from the Panel:

- Should FIFA remain a party, to bifurcate these proceedings and allow the parties to file submissions on the admissibility of the appeal and CAS jurisdiction, and render a preliminary award on these issues in accordance with Articles R39 and R55 CAS Code.

- Should FIFA be excluded from the proceedings due to the Appellant’s withdrawal of the appeal, to be granted the opportunity to file an amicus curiae brief after the Appellant and [Kairat] have exchanged written submissions in this matter”.

39. On 17 November 2020, following a request from Daugavpils to suspend the time limit to file its Appeal Brief pending the Panel’s decisions on (i) Daugavpils’ request for withdrawal of the appeal directed against FIFA; and (ii) FIFA’s request for bifurcation of the present proceedings, the CAS Court Office informed the Parties that such request was granted.

40. On 19 November 2020, Daugavpils informed the CAS Court Office that it agreed with a bifurcation of the proceedings. Daugavpils also reiterated the “withdrawal of its request for relief no. 1 directed solely at FIFA and the appeal against FIFA accordingly, while maintaining [Kairat] as the sole Respondent in this case […]” (emphasis in original).

41. On 20 November 2020, the CAS Court Office informed the Parties that the Panel had decided to grant the request for bifurcation of the proceedings, adding that “the Panel wishes that the Parties deal with every possible issue with the exception of the merits of the underlying horizontal dispute between [Daugavpils] and [Kairat], including the issues of CAS jurisdiction, admissibility of the appeal and ‘preclusion’, in order for the Panel to decide on all these issues in the preliminary award”.

42. On 30 November 2020, the Respondents filed their written submissions with respect to the bifurcated issues.

43. On 1 December 2020, Daugavpils filed three reasoned requests for production of documents with the CAS Court Office.

44. On 4 December 2020, the Respondents filed reasoned submissions, requesting that Daugavpils’ requests for production of documents dated 1 December 2020 be rejected. Kairat argued that Daugavpils’ repeated unsolicited requests, coupled with the constant alteration of its position, were not allowing the proceedings to move forward in a rational manner and were making it impossible for Kairat to defend itself in a coherent fashion. Kairat requested that Daugavpils’ conduct be taken into consideration by the Panel at the time of the allocation of costs.

45. On 5 December 2020, Daugavpils filed an unsolicited submission by means of which it responded to the Respondents’ submissions dated 4 December 2020.

46. On the same date, 5 December 2020, Daugavpils referred to six FIFA decisions that it considered relevant for determining the legal nature of the Appealed Decision and submitted two new requests for production of documents.

47. On 7 December 2020, with respect to Daugavpils’ requests for production of documents dated 1 December 2020, the CAS Court Office informed the Parties that the Panel had decided as follows:

“1) The Appellant’s request for production of documents is rejected. The reasons of this decision will be communicated in the final award.

2) The Panel considers that [the Appellant’s first correspondence dated 5 December 2020] is an unsolicited submission and therefore, it is not admitted into the file. The Appellant can further comment on it in the next submission that was directed by the Panel to the parties […].

3) The Parties are requested to refrain from sending any further unsolicited submission”.

48. On the same date, 7 December 2020, with respect to Daugavpils’ additional requests for production of documents dated 5 December 2020, the CAS Court Office informed the Parties as follows:

“On behalf of the Panel, the Appellant’s request for production of documents is rejected. The reasons of this decision will be communicated in the final award”.

49. On 11 December 2020, Daugavpils filed its written submission with respect to the bifurcated issues, reiterating that it had withdrawn its appeal against FIFA on 10 November 2020. Daugavpils maintained that the prerequisites of Article R41.4(1) CAS Code were not met and that FIFA could not be granted an intervening party’s status in these proceedings and that FIFA’s submission dated 30 November 2020 was therefore to be excluded from the case file and that also FIFA’s alternative request to submit an amicus curiae brief should be denied.

50. On 16 December 2020, the Parties were invited to inform the CAS Court Office whether they preferred a hearing to be held limited to every possible preliminary issue, including the issues of CAS jurisdiction, admissibility of the appeal and “preclusion”. On the same date, Daugavpils informed the CAS Court Office about its preference to issue a preliminary award based solely on the Parties’ written submissions, considering it reasonable from a financial and procedural point of view.

51. On 16 December 2020, Daugavpils filed an unsolicited submission, referring to the (then not yet entered into force) 1 January 2021 edition of the FIFA RSTP and the FIFA Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (the “FIFA Procedural Rules”) and FIFA Circular no. 1743, all published by FIFA on 14 December 2021, which it alleged were relevant and comprised exceptional circumstances under Article R56 CAS Code and should therefore be admitted on file. Daugavpils further indicated that the Panel could decide on the preliminary issues based on the Parties’ written submissions.

52. On 21 December 2020, FIFA did not object to the admissibility of the documents produced by Daugavpils on 16 December 2020, but requested the Panel for a second round of written submissions to address Daugavpils’ written submission dated 11 December 2020 and letter dated 16 December 2020. In this regard, FIFA informed the CAS Court Office that after this short second exchange of written submissions a hearing would not be necessary.

53. On the same date, 21 December 2020, Kairat informed the CAS Court Office that it did not consider it necessary for a hearing to be held, objected to the admissibility of the documents produced by Daugavpils on 16 December 2020 and indicated that further delays to the proceedings would be unwelcome.

54. On 5 January 2021, Daugavpils insisted on the Panel to decide on FIFA’s procedural status, arguing that since FIFA was not a party anymore, it was not entitled to request a second round of written submissions. Daugavpils in any event objected against FIFA’s request for a second

round of written submissions as FIFA already had the opportunity to address all issues and fully used such opportunity.

55. On 8 January 2021, Kairat informed the CAS Court Office that it left the decision on whether or not to allow for a second round of written submissions up to the Panel, emphasising that no Appeal Brief had been filed yet after almost six months into the proceedings and requesting for the proceedings to move as swiftly as possible.

56. On 11 January 2021, the CAS Court Office informed the Parties that the Panel had decided to invite the Respondents to comment on the new documents submitted by Daugavpils on 16 December 2020. The Parties were also informed that the Panel had decided to (i) reject Daugavpils’ request for the withdrawal of its appeal against FIFA; and (ii) admit into the case file FIFA’s submission of 30 November 2020, indicating that the reasons for such decisions would be communicated in the final award.

57. On 21 January 2021, both Respondents filed a written submission with respect to the new documents submitted by Daugavpils on 16 December 2020.

58. On 6 February 2021, Daugavpils filed its reply to the Respondents’ submissions dated 21 January 2021, objecting against the Respondents’ substantive comments in such submissions, arguing that they were only permitted by the Panel to comment on the admissibility of documents submitted by Daugavpils on 16 December 2020.

59. The Panel confirms that it carefully took into account in its decision all of the submissions, evidence and arguments presented by the Parties, even if they have not been specifically summarised or referred to in the present arbitral award.

IV. SUBMISSIONS OF THE PARTIES — A. Submissions on the bifurcated issues

60. Given that the Respondents raise an admissibility objection, the positions of the Respondents are set out first, before summarising Daugavpils’ position.

a. The Second Respondent

61. FIFA’s submission dated 30 November 2020 on the bifurcated issues may, in essence, be summarised as follows:

➢ The legal framework for proposals such as the Proposal is to be found in the FIFA Procedural Rules, specifically Article 13 thereof. In short, i) the FIFA administration can make written proposals to the parties in limited matters (including training compensation); ii) the parties can either accept or reject the proposal within 15 days; and iii) the failure to answer will be deemed as an acceptance to the proposal and the latter will have binding effects.

➢ Since Kairat accepted the Proposal and Daugavpils failed to provide an answer within the granted deadline, in accordance with Article 13 FIFA Procedural Rules, the Proposal was accepted by Daugavpils and became final and binding on it.

➢ Admitting Daugavpils’ appeal would contradict the very purpose of Article 13 FIFA Procedural Rules and would permit Daugavpils to “revive” an issue which was already settled by the Proposal which was accepted (either explicitly or tacitly) by the clubs.

➢ Article 13 FIFA Procedural Rules has the effect of settling a considerable number of training compensation and solidarity contribution disputes in a swift, efficient and pacific manner and had an immediate and impressive impact, i.e. over 70% of such disputes has been settled without an adjudication procedure. Allowing appeals against these proposals, especially when they have become final and binding, would render the system that FIFA implemented ineffective.

➢ Moreover, the system allows the relevant clubs to finally submit their dispute before the FIFA DRC and to obtain a decision from this body, if one of them does not want to accept the proposal. However, they must object the proposal within 15 days, otherwise, this right to object would preclude and the proposal would become final and binding.

➢ The present appeal is not only inadmissible (due to the preclusive effects of not having objected the Proposal in due time) but also goes against the principle of venire contra factum proprium. Daugavpils was estopped from appealing either the Appealed Decision or the Proposal (after 18 June 2020) because it led to the legitimate expectations that it had accepted the Proposal and that the dispute was already settled. Now, Daugavpils has changed its course of action to the detriment of Kairat and even FIFA and this aspect of the legal system.

➢ The Panel shall also find that Daugavpils is not acting in good faith by means of the present appeal. It shall be recalled that Daugavpils has challenged the Appealed Decision because it did not receive “grounds” of the Proposal and even initially requested the Panel to “order [FIFA] to issue the grounds of the decision [sic]”. Daugavpils did not contact FIFA within the time limit granted to either explicitly accept or object the Proposal or to even “request the grounds the decision”.

➢ Therefore, by submitting this appeal and alleging that there is an existing “horizontal” dispute with Kairat because the grounds of the “decision” were not communicated, it shall be concluded that Daugavpils did not respect the principle of good faith.

➢ The appeal is also inadmissible because the Appealed Decision cannot be considered to constitute a decision.

➢ The Appealed Decision does not contain any ruling; it did not resolve any issue in a final way and had a mere informative nature. Indeed, the Appealed Decision indicates that “we would like to INFORM the parties that the proposal became binding” (emphasis

added by FIFA). In contrast to the Appealed Decision, the Proposal did contain a (proposed) ruling, i.e. “the proposed amount due by [Daugavpils] to [Kairat] is […] as training compensation, plus 5% interest p.a. as of the due date” which would become binding if the parties accepted it or if they failed to reject it within the regulatory deadline.

➢ The Appealed Decision did not produce legal effects. Daugavpils may argue that the Appealed Decision intended to produce legal effects as it i) set a starting period to pay the amounts of the Proposal; and ii) warned that if the payment was not done in this period, the matter would be submitted to the FIFA Disciplinary Committee. Even when these mere procedural issues are mentioned in the Appealed Decision, they do not modify the informative character of the communication. In any event, Daugavpils is not appealing against the specific issues addressed in the Appealed Decision.

➢ The Appealed Decision does not have animus decidendi. Contrary to the Proposal, which indeed had the intention to solve the training compensation matter between Daugavpils and Kairat, the Appealed Decision was a mere communication with simple information which did not aim to solve any issue. The matter was decided in terms of the Proposal, since 18 June 2020. If Daugavpils wanted to challenge the Proposal, it should have done so within the 15-day deadline, failing which the Proposal became final and binding.

➢ The above points are corroborated by CAS jurisprudence, confirming that a mere letter which simply reminded about a past, final, binding and immutable Proposal, cannot be considered a decision in itself.

➢ The decisions of the FIFA Disciplinary Committee referred to by Daugavpils do not bind FIFA in any way vis-à-vis the legal consideration that is under scrutiny, especially because those decisions were rendered by the FIFA Disciplinary Committee, which is not bound by nor applies or interprets the FIFA Procedural Rules (these are only applicable to proceedings before the DRC and PSC). Moreover, the motivation of decisions from FIFA’s bodies are always made in consideration of the specific circumstances of each case. Therefore, it would be hard to follow how these decisions led to legitimate expectations for Daugavpils in terms of the present procedure. In any case, those decisions only confirmed the informative character of the FIFA communications and that the legal effects (if any) were limited to the imposition of a 30-day grace period, failing which the matter could be submitted to the FIFA Disciplinary Committee.

b. The First Respondent

62. Kairat’s submission dated 30 November 2020 on the bifurcated issues may, in essence, be summarised as follows:

➢ FIFA Circular no. 1689 stipulates, inter alia, that parties have 15 days “to either accept or reject the proposal and provide the reasons which could justify the rejection” and that they can,

within 15 days of receipt of the proposal, request a formal decision. However, “failure to do so will result in the proposal being regarded as accepted by and binding on all parties”.

➢ These principles are also enshrined in Article 13(1) FIFA Procedural Rules.

➢ With this regulatory framework in mind, it is highly questionable whether the Appealed Decision has the features of an appealable decision. FIFA, as the issuer of the letter, in its correspondence to CAS dated 13 November 2020, expressly stated that such letter does not constitute an appealable decision, being only of an informative nature.

➢ A final and binding decision in this matter was indeed issued by FIFA: however, the relevant decision is not the Appealed Decision sent by FIFA on 25 June 2020, but the Proposal dated 29 May 2020.

➢ The crucial feature is whether such document has a binding effect in respect of both the issuing authority and the party receiving it.

➢ The letter issued by the FIFA administration on 25 June 2020 does not contain any animus decidendi. On the contrary, it only informed the party that the Proposal issued on 29 May 2020 had become final and binding.

➢ As a result of Daugavpils failing to provide an answer to FIFA within 15 days of the notification, the Proposal became final and binding. Possibly due to a typographical error, the 15-day limit was set by FIFA at 18 June 2020 instead of 13 June 2020. In any event, as a result of the above it must be understood that on 18 June 2020, the Proposal sent by FIFA on 29 May 2020 changed its nature, from proposal to final and binding decision.

➢ Once Kairat confirmed that it agreed with the Proposal on 17 June 2020, there could be no doubt whatsoever for Daugavpils that the only way to avoid the Proposal becoming final and binding was to reject it and request a formal decision.

➢ As the Proposal became final and binding on 18 June 2020, any possible appeal with CAS had to be lodged by Daugavpils by 9 July 2020, against the Proposal dated 29 May 2020.

➢ Article 2(1) of Annexe 6 FIFA RSTP establishes an obligation for all TMS users to “check the Claims tab in TMS at regular intervals of at least every three days and pay particular attention to any petitions or requests for statements”, whereas Article 3(2) of Annexe 3 FIFA RSTP goes as far as requiring all TMS users to “check TMS at regular intervals on a daily basis and pay particular attention to any enquiries or requests for statements”.

➢ Only eight days after being informed that the Proposal had become final and binding did Daugavpils engage, in any form, by means of a request for the grounds of the decision from FIFA.

➢ Daugavpils’ conduct during the present proceedings, i.e. three requests for suspension of the proceedings and subsequent withdrawals of such requests, two requests for extension of its deadline to pay its share of the advance of costs, a request for suspension of the deadline to file its Appeal Brief, and its withdrawal of the appeal against FIFA, demonstrate a desire to use any procedural manoeuvre it is able to, in order to delay its obligations to make payment to Kairat.

c. The Appellant

63. Daugavpils’ submission dated 11 December 2020 on the bifurcated issues, in essence, may be summarised as follows:

➢ Proposals made in accordance with Article 13 FIFA Procedural Rules have to be sent by FIFA in accordance with one of the regulatory methods of communications mentioned in Article 9bis(1) FIFA Procedural Rules. A written proposal issued by the FIFA Players’ Status Department does not constitute a formal decision as it is not a FIFA judicial body. Also, there is no express regulatory right or obligation of the parties to – explicitly or implicitly – accept or reject a written proposal.

➢ The content of FIFA Circular no. 1689 provides for a “procedure governing proposals” materially different from the one under Article 13 in conjunction with Article 9bis FIFA Procedural Rules. The prerequisite whether the FIFA DRC has clear established jurisprudence on the subject matter is dropped, the prerequisite that “prima facie, all the regulatory requirements for being entitled to receive training compensation […] have been fulfilled” is added, it substitutes the parties’ regulatory right to request for a decision with a new obligation to either accept or reject the proposal, it introduces a new method of interaction via TMS, it replaces the notion of “receipt” with the concept of “notification”, and it imposes a duty on the parties to check the “Claims tab” in TMS at regular intervals of at least every three days.

➢ These amendments and expansions, and an impermissible hodgepodge of the rules made by the FIFA Deputy Secretary General, were not endorsed by the FIFA Council. FIFA Circulars are administrative measures hierarchically subordinated to the FIFA regulations. Although FIFA Circulars usefully and legitimately serve the purposes of implementing, detailing, and interpreting the FIFA regulations, they may not amend or expand them. If a provision contained in a FIFA Circular is incompatible with a provision contained in the FIFA regulations, the former should yield to the latter. Transposing this analysis to the present case, the obvious modifications, expansion, and hodgepodge of the relevant rules and procedures made by the FIFA Deputy Secretary General in FIFA Circular no. 1689, are insusceptible of being followed by the Panel.

➢ The Proposal was submitted to the parties via TMS, the regulatory deadline of 15 days set in Article 13 FIFA Procedural Rules was extended with 5 days (there are 20 days between 29 May and 18 June 2020), which is expressly prohibited by Article 16.9 FIFA

Procedural Rules, the potential automatic extension to reply until 3 July 2020 is not provided for in Article 13.1 FIFA Procedural Rules, FIFA Circular no. 1689 or Annex 6 FIFA RSTP and is manifestly illegal, the cover letter was signed but not the Proposal itself, and the Head of Players’ Status is not permitted to issue the Appealed Decision on behalf of the FIFA DRC upon concluding the “procedure governing proposals”.

➢ It is plain from the above analysis that FIFA followed neither the “procedure governing proposals” nor the “procedure governing claims”. The relevant procedures differ in their purposes, are regulated by distinct sets of procedural rules, provide for different regulatory time limits that cannot be merged, end with dissimilar types of legal acts, and are thus self-excluding, and, as such, cannot be set up simultaneously by FIFA.

➢ The only option for the FIFA Players’ Status Department to bifurcate the “procedure governing claims” and implement the “procedure governing proposals” is before notifying the claim for training compensation to the respondent.

➢ The FIFA Disciplinary Committee has already enforced six similar concluding letters as formal decisions under Article 15 FIFA Disciplinary Code. This makes Daugavpils believe that the Appealed Decision’s delivery on behalf of the FIFA DRC was not for merely informative purposes but to fill a gap in the rules and produce a decision “by a body, committee, or instance of FIFA” in the sense of Article 15 FIFA Disciplinary Code.

➢ As to the nature of the letter issued by FIFA on 25 June 2020, it is striking that when it suits it, FIFA takes the position that the relevant letter issued by or on behalf of a FIFA body “was a mere informative communication which lacks animus decidendi”. Luckily, FIFA generally fails to convince CAS. However, a FIFA letter suddenly becomes a final and binding decision when it serves FIFA’s interests.

➢ In general, according to well-established CAS jurisprudence, a communication is qualified as a decision if it contains a ruling either intending or capable of affecting the legal situation of the addressee, entailing the creation or suppression of a right by the authority in question. In the present case, the Appealed Decision constitutes a formal decision, regardless of its form and FIFA’s animus decidendi. It adversely affected Daugavpils’ legal situation, as it was ordered to pay a certain sum of money to Kairat, plus interest. It is noteworthy that the sentence regarding “purely informative nature” of a FIFA letter, which FIFA usually includes when a letter is intended to be informative, is missing in the present case.

➢ Moreover, the fact that the Appealed Decision is not motivated cannot affect being a decision.

➢ On these grounds, the first and main objection to the appeal’s admissibility should inevitably fail, being groundless and raised contrary to the legal principles of bona fide and venire contra factum proprium.

➢ As to the argument of estoppel, Kairat submits that the Proposal was “notified” to Daugavpils via TMS on 29 May 2020. That is irrelevant, for Daugavpils “received in its sphere of control” the Proposal only on 26 June 2020, when Kairat sent it a letter. As the Proposal was not submitted by email, as required by Article 9bis(1) FIFA Procedural Rules, Kairat cannot make a valid argument of Daugavpils’ non-access to TMS from 11 March through 26 June 2020.

➢ Further, Kairat submits that the Proposal is final and binding since 18 June 2020. That is legally flawed, since the Proposal had to be sent by email, with a time limit for a reply of “15 days from receipt” (emphasis added by Daugavpils), which requirement was not met by FIFA, and that it had to be “written”, i.e. “to bear the signature of the parties (including FIFA) to bind them”.

➢ Whatever the Appealed Decision’s legal nature, Kairat is free to try and enforce the Proposal immediately if it genuinely believes that it is a “final and binding decision”. However, Kairat has not dared to “test the water” already for six months. Daugavpils fails to see any practical or personal interest for Kairat in receiving an award that would render the Appealed Decision an “informative letter”.

➢ Conversely, considering Kairat’s noticeable procedural bad faith, it is precluded by the principle of nemo auditur propriam turpitudinem allegans from invoking an argument based on estoppel. In particular, Kairat reserved the filing of a claim for alleged breach of contract against the Player and Daugavpils for immediately after the FIFA DRC rendered a decision on the claim for training compensation in an obvious attempt to circumvent Article 2.2(i) Annex 4 FIFA RSTP and mislead the FIFA DRC. Notably, Kairat filed its claim for alleged breach of contract just 5 days after receiving the Appealed Decision. If the claim were filed before the Appealed Decision, FIFA would have put the proceedings regarding the claim for training compensation “on hold”.

➢ Furthermore, as the Appealed Decision is an appealable FIFA decision, the argument that Daugavpils did not challenge the Proposal is moot for obvious reasons.

➢ As to the arguments advanced by FIFA, the appeal has nothing to do with the “procedure governing proposals” under Article 13 FIFA Procedural Rules, which FIFA has never set up, at least not correctly, in the case at hand. That does not prevent Daugavpils from challenging the Appealed Decision, which was manifestly not issued on behalf of the FIFA DRC in the application of Article 13 FIFA Procedural Rules, contrary to what FIFA submits.

➢ All the analyses of the applicable rules and procedures above, and the fact that Daugavpils is not appealing against the Proposal, whether its right to object to the Proposal was precluded on 18 June 2020 is immaterial and should be left moot.

➢ Daugavpils fails to see how it could tacitly accept the Proposal when it had to be “written”, meaning that it had to bear the parties’ signatures. Moreover, the Proposal does not amount to a final FIFA decision that could have been appealed to CAS in

the meaning of Article 58(1) FIFA Statutes. If FIFA is so certain that the Proposal could have been appealed to CAS as a decision, why does the FIFA Disciplinary Committee enforce only the concluding letters and never the proposals in the form of unsigned Excel sheets?

➢ Finally, given the irrefutable fact that the Appealed Decision dated 25 June 2020 was issued after the Proposal dated 29 May 2020, the Proposal, even if deemed a formal decision (quod non), is obsolete.

➢ FIFA’s objection based on venire contra factum proprium is a remarkable manifestation of FIFA’s procedural bad faith and a poor attempt to mask its own turpitude, which behaviour is prohibited. Nothing in the behaviour of Kairat and FIFA allows them to legitimately rely on the Proposal to be binding on Daugavpils, effecting somehow the admissibility of the appeal. Conversely, FIFA’s reproachful behaviour deserves further attention.

➢ First, there is no evidence that the FIFA Players’ Status Department has assessed, even on a prima facie basis, whether the dispute raises complex legal or factual issues or whether there is clear and established FIFA DRC jurisprudence in favour of Kairat. In fact, the existence of the PSC Single Judge’s decision on the Player’s provisional registration dated 9 March 2020 should have prompted FIFA to verify whether the Player and/or Daugavpils had lodged a claim for breach of contract against Kairat, which they did on 11 March 2020. FIFA’s informative letter of 1 April 2020 did not end the proceedings instigated, which are still pending. Hence, the mandatory prerequisites for the FIFA Players’ Status Department to issue a written proposal under Article 13 FIFA Procedural Rules were not met.

B. Submissions with respect to the new documents submitted by Daugavpils on 16

December 2020

a. The First Respondent

64. Kairat’s submission on the new documents presented by Daugavpils on 16 December 2020, in essence, may be summarised as follows:

➢ The 2021 editions of the FIFA RSTP and the FIFA Procedural Rules are not applicable to the present proceedings and, even if they would apply, Daugavpils attempts to subvert the meaning of the amendments to try and support its meritless arguments.

➢ Although Article 13(3) FIFA Procedural Rules (2021 edition) provides that “the confirmation letter shall be considered a final and binding decision pursuant to the [FIFA RSTP]”, only the content of such letters would be appealable. The content of the relevant proposal (issued by FIFA prior to the confirmation letter) would not be appealable, given that the parties would have already accepted/not rejected the proposal and

therefore it would have become final and binding, as would be explained in the relevant confirmation letter.

➢ Therefore, the scope of such an appeal against a confirmation letter would be limited to the consequences of failing to pay the final and binding amount.

➢ However, the actual amount of compensation stated in the preceding proposal issued by the FIFA administration would be outside the scope of the appeal, given that the parties already had an opportunity to reject the proposal, but obviously did not do so if a subsequent confirmation letter is issued that confirms the final and binding nature of the proposal.

b. The Second Respondent (omitting the submissions that were considered by the Panel to be out of scope)

65. FIFA’s submission on the new documents presented by Daugavpils on 16 December 2020, in essence, may be summarised as follows:

➢ The documents submitted by Daugavpils are not applicable to the matter at hand.

➢ The “confirmation letter” referred to in the 2021 editions of the regulations is different from the Appealed Decision in the matter at hand. How can Daugavpils affirm that there was no regulatory basis to issue a “confirmation letter” but, at the same time, challenge the Appealed Decision and affirm that it is a decision? By admitting that there was no regulatory basis until 1 January 2021 to issue a “confirmation letter”, which is a final and binding decision, Daugavpils is admitting that the Appealed Decision is not a decision.

➢ The Appealed Decision was not intended to be a “confirmation letter”, inter alia, because a “confirmation letter” has a broader purpose and greater legal effects than the Appealed Decision. While the Appealed Decision and a “confirmation letter” both only inform/confirm that the proposed amounts became binding, the former does not provide for the disciplinary consequences of failing to pay within the granted grace period (leaving it up to the FIFA Disciplinary Committee to impose sanctions), whereas the latter does.

c. The Appellant

66. Daugavpils’ submission on the new documents presented by it on 16 December 2020, in essence, may be summarised as follows:

➢ Daugavpils never suggested, let alone claim, that the 2021 FIFA RSTP and FIFA Procedural Rules would be applicable to this case. Kairat claimed that the system is very clear and understandable. If this is true, why would FIFA amend its rules?

➢ The 2021 rules confirm that until that moment there was no regulatory basis for FIFA to overlap the relevant regulatory time limits under Article 13(1) FIFA Procedural Rules and Article 7(1) of Annex 6 FIFA RSTP. It now became clear that FIFA intended to issue the Appealed Decision as a “final and binding decision pursuant to the RSTP”, which renders the Appealed Decision an appealable decision and corroborates the position that there was no need for Daugavpils to appeal against the Proposal, which is not an enforceable decision.

➢ The concept of a “confirmation letter” was only introduced on 1 January 2021, yet FIFA applied this concept already in the present case without a legal basis.