Club de Futbol Atlante S.A. de C.V. v. Club Atlas F.C., Federacion Mexicana de Futbol (FMF)

II. LAW

1. Jurisdiction

49. The Panel finds that it has jurisdiction to adjudicate the present dispute.

50. According to Article R47 of the Code of Sports-related Arbitration (the “CAS Code”),

“An appeal against the decision of a federation, association or sports-related body may be filed with CAS if the statutes or regulations of the said body so provide or if the parties have concluded a specific arbitration agreement and if the Appellant has exhausted the legal remedies available to him prior to the appeal, in accordance with the statutes or regulations of that body”.

51. Article 86 of the FMF Statutes does provide for an appeal to CAS. The relevant parts of this Article read as follows (in the English translation provided by the Appellant): “The Member, in accordance with FIFA, is entitled to appeal before the CAS […] provided that all judicial instances within the FEDERATION have been exhausted. […]”.

52. In addition, all Parties have expressly confirmed in their written submissions that the CAS has

jurisdiction based on the above quoted provisions.

2. Law applicable to the merits

53. The law applicable to the merits of the Appeal consists of the FMF Statutes and Regulations and, subsidiarily, Mexican law.

54. Article R58 of the CAS Code provides that “The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

55. All Parties have expressly stated in their written submissions that the FMF Statutes and Regulations shall apply. It can be left open whether this amounts to a choice of the “applicable regulations” within the meaning of Article R58 of the CAS Code. Even if the Parties merely submitted their interpretation of what the “applicable regulations” are in the present case, the Panel agrees that the FMF Statutes and Regulations are indeed applicable. This follows from the fact that the appealed decision was taken by the FMF Committee on the basis of the FMF Statutes and Regulations. These applicable regulations also include the RANS and the Reglamento Interno de la Primera División Profesional (cf. Article 88 of the FMF Statutes on the basis of which the Liga MX can autonomously regulate its own affairs).

56. Whether or not the FIFA rules on multiple ownership apply is a question of whether they were incorporated by reference into the FMF Statutes and Regulations, and whether they needed to be applied by the FMF Executive Committee when deciding upon the Appellant’s action for annulment. These questions shall be dealt with below, when addressing the respective argument of the Appellant in the merits (see below paras. 80 et seqq.).

57. Regarding the national law that shall apply subsidiarily pursuant to Article R58 of the CAS Code, the Panel notes that the federation which issued the appealed decision is seated in Mexico, which is why Mexican law applies subsidiarily.

3. Merits

58. The Panel finds that the Decision was legal and that the Appeal must therefore be dismissed. As a preliminary matter, the Panel finds that the Liga MX Resolution did not concern a substitution of the Second Respondent’s Certification of Affiliation (see section 3.1 below). Given that before the FMF Executive Committee, the Appellant nonetheless expressly challenged (only) an alleged substitution of the Certificate of Affiliation, there are doubts as to whether the scope of the present Appeal would allow the Panel to annul the FMF Decision even if the challenges now brought by the Appellant were well-founded (see section 3.2 below). However, this can be left undecided eventually because, even applying a broad scope of review, the Panel finds that the FMF Decision does not violate any of the applicable rules

and regulations (see section 3.3 below).

3.1 Subject matter of the Liga MX Resolution

59. The outcome of these proceedings depends to a large extent on the subject matter of the Liga MX Resolution. In particular, if it in fact concerned (at least also) a substitution of Atlas’ Certificate of Affiliation, it is doubtful whether the vote was taken with the requisite number of votes. However, for the following reasons, the Panel holds that the Liga MX Resolution did not constitute a decision on Atlas’ Certificate of Affiliation.

60. The Panel finds the official minutes of the General Assembly of the Liga MX held on 2 December 2013 (the “Minutes”) to be the natural starting point for determining what was discussed and decided during that meeting. As outlined in para. 11 above, according to the Minutes, the only decision taken was whether or not Atlas should be granted an exemption from the Decálogo. During the discussion that preceded the vote, the President of the Liga MX even expressly stated (in response to an objection made by Atlas) that a substitution of Atlas’ Certificate of Affiliation was not the subject matter of the discussion.

61. The Appellant contends that the Minutes do not reflect what actually happened at the General Assembly of 2 December 2013. As a matter of course, the Panel acknowledges that minutes may be incorrect. However, in casu, all other participants of the meeting, notably also those clubs that voted against the Liga MX Resolution, confirmed the accuracy of the Minutes by unanimously approving them in the subsequent General Assembly of 12 May 2014 (see above para. 17). This happened despite the Appellant having requested a correction of the Minutes so as to reflect the alleged fact that the substitution of Atlas’ Certificate of Affiliation was approved. Hence, the Appellant effectively suggests that all other clubs have either knowingly confirmed the Minutes even though they were incorrect or have misconceived what had actually happened at the 2 December 2013 meeting.

62. The Panel would be prepared to accept this far-reaching allegation only on the basis of compelling evidence to that effect. In other words, the Panel finds reasonable to presume on the basis of the conduct of all other clubs that the Minutes are correct, and it is for the Appellant to bear the burden to establish otherwise. This presumption is further supported by subsequent events: Had the substitution of Atlas’ Certificate of Affiliation already been voted on at the General Assembly of 2 December 2013, as contended by the Appellant, it would be hard to understand why, on 12 May 2014, the General Assembly voted on and approved that very substitution.

63. In light of the presumption that the Minutes approved by all other Liga MX clubs are correct, the Panel finds that the Appellant has failed to establish that the Liga MX Resolution concerned the substitution of Atlas’ Certificate of Affiliation.

64. The Appellant’s allegation as to the subject matter of the 2 December 2013 meeting is backed solely by two witnesses that are the Appellant’s own officials. By contrast, the President of the Liga MX, Mr. de Maria, did not confirm the Appellant’s allegation when heard during the hearing. Likewise, the FMF Secretary General stated in a correspondence to the FMF

President dated 18 December 2013, that the 2 December 2013 General Assembly of the Liga MX had voted solely on an exemption from the Decálogo, as opposed to a substitution of Atlas’ Certificate of Affiliation.

65. Apart from Mr. Guzman, who was not available for testimony during the hearing (see para. 67 below), the Appellant did not call to be heard at the hearing any further witnesses even though there should have been witnesses available – the 2 December 2013 meeting was attended by quite a number of persons who should thus have been in a position to testify on whether or not the Minutes were accurate.

66. In summary, the witnesses called by the Appellant have given contradicting testimony, without there being any clear indication whose testimony is closer to the truth. Hence, the Appellant did not succeed in establishing by way of oral evidence that the Minutes did not reflect what actually happened at the General Assembly of the Liga MX.

67. As to Mr. Guzman, who is the President of Atlas, the Appellant requested the Panel to draw an adverse inference based on the fact that Mr. Guzman did not make himself available (by telephone) during the hearing. The Panel agrees with the Appellant that it was unfortunate that Mr. Guzman could not be heard as a witness. However, the Panel is not prepared to draw any adverse inference on that basis alone.

68. Firstly, Mr. Guzman was invited to make himself available on short notice and him being on air travel was, in principle, a plausible excuse (backed by the airplane ticket exhibited by the Second Respondent).

69. Secondly, and crucially, Article R44.2 of the CAS Code (which is applicable to the Appeal Arbitration Procedure by virtue of Article R57 of the CAS Code) expressly provides that “[e]ach party is responsible for the availability and costs of the witnesses and experts it has called”. While it is true that Mr. Guzman was in the First Respondent’s sphere of influence, the Panel finds that the Appellant could at least have been expected to take appropriate measures itself with a view to ensure that Mr. Guzman either be available during the hearing (e.g. by contacting him well in advance of the hearing) or at least provide a written witness statement. If the Appellant had sufficiently attempted but failed to obtain Mr. Guzman’s (oral or written) testimony, the Panel would have had possibly to consider an adverse inference. However, there is no indication that the Appellant took appropriate steps to discharge itself of its responsibility as provided for in Article R44.2 of the CAS Code. Against this background, the Panel is not prepared to draw any adverse inference from the fact that Mr. Guzman was not available during the hearing.

70. Hence, the Panel finds that the vote taken at the General Assembly of the Liga MX held on the 2 December 2013 concerned the Décalogo, and in particular an exception to it, as stated in the Minutes. Also, for the following reasons, the Panel holds that granting an exemption from the Decálogo does not necessarily imply a (tacit) resolution on the Certificate of Affiliation.

71. First, from a formal perspective, the Décalogo and the Certificate of Affiliation involve

different competences and procedures: On the one hand, the Decálogo was enacted and can therefore be amended by the Liga MX or its clubs. On the other hand, Certificates of Affiliation are regulated by the RANS, i.e. regulations enacted by the FMF. They are administered by the FMF Secretary General, with whom any requests for substitution of Certificates of Affiliation must be filed, and who decides whether the requirements are met.

72. Second, from a substantive perspective, an exemption from the Decálogo and a substitution of the Certificate of Affiliation are two different issues underlying different requirements and entailing different consequences. Subject to certain exceptions alluded to by the FMF during the hearing, there are 47 requirements that must be fulfilled for a Certificate of Affiliation to be substituted. The Decálogo is not relevant for any of them. Essentially, the exemption from the Decálogo granted to Atlas was – in business terms, not in legal terms – an authorization of the sale of Atlas by the other Liga MX clubs. At the hearing, the Liga MX Resolution has been referred to as an authorization of the sale even by the Appellant. However, a sale of a club (and thus the authorization thereof) does not in and of itself have any effect on the Certificate of Affiliation. The FMF’s representative stated at the hearing that a club could be sold – from the standpoint of the general legal system – without a substitution of the Certificate of Affiliation and without the FMF even knowing, because the old owner would continue to be the FMF’s contact as long as the Certificate of Affiliation was not substituted. Also, the FMF’s representative stated that there have been a number of cases in which the request for substitution of the Certificate of Affiliation was filed only quite some time after the sale. These statements made on behalf of the FMF were not disputed by the Appellant and they show that the sale of a club, and thus the authorization thereof, does not necessarily coincide with the substitution of the Certificate of Affiliation.

73. Consequently, the Panel finds that, in accordance with the Minutes, the General Assembly of the Liga MX of 2 December 2013 decided solely on an exception to the Decálogo. The subject matter of the Liga MX Resolution is therefore not a substitution of the Certificate of Affiliation, as argued by the Appellant.

3.2 Scope of the Appeal

74. As underscored by the Respondents, the Appellant’s request before the FMF Executive Committee was limited, at least based on its plain language, to the annulment of the substitution of Atlas’ Certificate of Affiliation. This leads to the question as to whether this Panel, too, must limit itself to the issue of the Certification of Affiliation when assessing the legality of the FMF Decision.

75. On the one hand, given that the Liga MX Resolution did not concern a substitution of Atlas’ Certificate of Affiliation, one could consider that the Appellant sought annulment of a nonexisting decision. If one were to take that position, the FMF Decision would have to be upheld even if the decision that was actually taken by the Liga MX, i.e. the exemption from the Decálogo, were illegal, because that decision was not appealed against before the FMF Executive Committee. While the de novo nature of the CAS Appeal Procedure allows a CAS Panel to take new facts into account, it does not free the Panel from the inherent constraint of any appeal procedure, which must remain within the scope of the first instance decision

(cf., e.g., CAS 2007/A/1433, para. 36; CAS 2006/A/1206, para. 25). By deciding upon a decision which was not the subject matter of the first instance, the CAS Panel itself might be deemed to effectively decide as a first instance, thus exceeding its mandate.

76. On the other hand, it might be overly formalistic to conclude that, by expressly challenging only a substitution of Atlas’ Certificate of Affiliation, the Appellant meant to limit the scope of its legal action before the FMF Executive Committee. An alternative interpretation of the Appellant’s request before the FMF Executive Committee would be that, by referring to the substitution of Atlas’ Certificate of Affiliation, it was merely describing (albeit incorrectly) the decision that it sought to challenge, namely the only vote taken at the General Assembly of the Liga MX of 2 December 2013. Indeed, this General Assembly was expressly referred to in the Appellant’s submission made to the FMF Executive Committee. If one were to take this view and thus considered that the Appellant had challenged the Liga MX Resolution before the FMF Executive Committee, albeit misstating its subject matter, the scope of review with respect to the first instance decision would not be limited to a substitution of Atlas’ Certificate of Affiliation. Rather, the Panel would also be in a position to annul the FMF Decision if its ruling on the actual subject matter, i.e. the exemption from the Decálogo granted in the Liga MX Resolution, violated applicable rules and regulations.

77. However, the Panel finds that this issue eventually can be left undecided. As will be demonstrated in the following section 3.3, even if the Panel were to take the latter, less formalistic approach, it would not find the FMF Decision to be in violation of the applicable rules and regulations.

3.3 Legality of the FMF Decision

78. The Appellant essentially relies on three arguments for its claim that the FMF Decision is illegal: It contends that the requisite majority of 80% under Article 32(24) of the RANS was not reached, that no substitution of the Certificate of Affiliation could be approved in the middle of the season, and that the FMF Decision violated rules on multiple ownership.

79. The first two arguments must fail as a consequence of the Panel’s finding that the Liga MX Resolution did not concern a substitution of Atlas’ Certificate of Affiliation, but rather an exemption from the Decálogo. The majority requirement under Article 32(24) of the RANS is applicable only to votes on a substitution of a Certificate of Affiliation, not to amendments to the Decálogo. Pursuant to Article 17 of the Reglamento Interno de la Primera División Profesional, the Décalogo could be amended by a simple majority of the Liga MX Clubs. This has been acknowledged also by the Appellant. Furthermore, the restrictions that the RANS foresees for a substitution of a Certificate of Affiliation in the middle of the season do not apply to an amendment of the Décalogo, which is an entirely different matter and follows a different procedure (see above paras. 72 et seq.).

80. As regards the Appellant’s third argument, i.e. multiple ownership regulations, the Panel does not agree that the FMF Decision is in violation of Article 18(2) of the FIFA Statutes (or the identical provision in the CONCACAF Statutes).

81. To begin with, the Panel finds that, contrary to the Appellant’s contention, the FIFA/CONCACAF regulations on multiple ownership do not apply to the case at hand. Article 88 of the FMF Statutes, which grants certain autonomy to the Liga MX, merely provides that decisions taken by the Liga MX shall not violate the FMF Statutes and Regulations. Hence, any FIFA/CONCACAF regulations can become relevant only to the extent that they are part of the FMF Statutes and Regulations. In that respect, the Appellant relies on several provisions which, according to the Appellant, require FMF to abide by the FIFA/CONCACAF regulations and to ensure that its own members comply with them (Article 11 of the FMF Statutes, Article 3 of the RANS, Article 13(1) of the FIFA Statutes). In addition, the Appellant refers to the gap-filling mechanism provided for in Article 49.17 of the FMF Statutes.

82. With respect to Article 11 of the FMF Statutes and Article 3 of the RANS, the Panel does not endorse the Appellant’s interpretation of those provisions. The reference to FIFA contained therein is made only for the purpose of defining the matters for which the FMF is the supreme authority in the Mexican territory. Neither provision imposes any obligation to comply with the FIFA Statutes and Regulations.

83. Also, it cannot be concluded from Article 13(1) of the FIFA Statutes that the FIFA (or CONCACAF) regulations on multiple ownership apply to the Liga MX Resolution and thus needed to be considered by the FMF Executive Committee. From the outset, the question whether or not FIFA provisions must be applied by a body of another legal entity cannot possibly be answered by a FIFA provision. Rather, the answer can only be given by the regulations governing that other legal entity. In addition, and in line with the concept of separate legal entities, Article 13(1) of the FIFA Statutes concerns solely the relationship between FIFA on the one side and its members on the other side. The legal relationship between the FMF and the Liga MX, which is the relevant one for determining which rules FMF needs to apply when assessing the legality of decisions of the Liga MX, is not addressed by Article 13(1) of the FIFA Statutes.

84. The only provision that might indeed incorporate certain FIFA provisions into the FMF Statutes and Regulations is Article 49.17 of the FMF Statutes. It stipulates that the FIFA regulations shall govern cases which are not provided for in the FMF Statutes and Regulations. In essence, as submitted also by the Appellant, this is a gap-filling mechanism. However, for the following reasons, the Panel finds that Article 13(1) of the FIFA Statutes, i.e. the FIFA provision on multiple ownership, is not amongst the provisions which are incorporated by reference into the FMF Statutes.

85. It is true that the FMF Statutes and Regulations do not directly regulate the issue of multiple ownership. However, in the Panel’s view, a gap to be filled under Article 49.17 of the FMF Statutes presupposes an inadvertent lack of regulations on a given issue. If, by contrast, the FMF consciously decided against regulating a particular issue at all, it would hardly make sense to incorporate any FIFA regulations on that issue. As regards multiple ownership, all parties acknowledged that multiple ownership has a long tradition in Mexico. To date, this has not led to any FIFA intervention, as confirmed implicitly by Mr. Jaberg of FIFA, who testified that there are no precedents at all in that field. Given this tradition of multiple ownership in

Mexico, and the fact that that FIFA does not seem to be concerned about it, it is hardly surprising that the FMF Statutes and Regulations do not follow the example of FIFA (and other sports governing bodies) to outlaw or at least restrict multiple ownership. Rather, it seems that this was a conscious decision reflecting the reality in Mexican football. In light of that situation, the Panel is not prepared to accept that Article 49.17 of the FMF Statutes is supposed to incorporate the FIFA regulations on multiple ownership.

86. In addition, the Liga MX has enacted the Decálogo, which is designed to put an end to multiple ownership (only) in the Liga MX. This enactment is based on the autonomy that is granted to the Liga MX under Article 88 of the FMF Statutes. Hence, the Decálogo is at least indirectly part of the FMF regulatory framework. To apply Article 13(1) of the FIFA Statutes to the issue of multiple ownership in the Liga MX would undermine the very essence of Article 88 of the FMF Statutes, according to which the Assembly of the Liga MX can regulate the affairs of the Liga MX autonomously.

87. Moreover, even if Article 13(1) of the FIFA Statutes were incorporated by reference in the FMF rules, as submitted by the Appellant, the Panel would not be prepared to find that the FMF Decision violates that provision. Article 18(2) of the FIFA Statutes reads as follows: “In any case, the member shall ensure that neither a natural nor a legal person (including holding companies and subsidiaries) exercises control over more than one club whenever the integrity of any match or competition could be jeopardised”.

88. The Panel observes that the FIFA rule on multiple ownership is not absolute but is based on a case-by-case assessment of the jeopardy caused to the integrity of football matches or competitions. Whether or not the integrity of a match or competition is jeopardised is a very intricate assessment which necessarily must be based on profound knowledge of the match or competition in question. For this reason, the Panel finds that the competent sporting bodies must have a certain degree of discretion in making that determination. In order to avoid becoming the decision-maker itself instead of merely reviewing the decision-maker’s decision (cf. CAS OG 96/005, para. 10; CAS 2010/A/2275, para. 4.28), the Panel deems it appropriate to allow a certain margin of discretion to the sporting bodies’ assessment as to whether or not the integrity of a competition was jeopardised. The Panel shall intervene only if such assessment is either based on materially incorrect or incomplete fact-finding on the part of the sporting body or if its decision is obviously inappropriate for other reasons (the Panel notes the similar approach in CAS jurisprudence to disciplinary sanctions, see ex multis CAS 2009/A/1817 & 1844, para. 174 with further references).

89. The FMF exercised its discretion when it rejected the Appellant’s appeal against the Liga MX Resolution, which was inter alia based on the argument that the Decálogo and FIFA regulations against multiple ownership were violated and that Atlas would gain an unfair advantage in the competition. On the basis of the submissions made by the Parties, the Panel is not convinced that the integrity of the Liga MX was indeed jeopardised, much less that the FMF exercised its discretion in an inappropriate manner. In particular, the Panel does not consider sufficient the mere fact that there is common ownership of Atlas and Monarcas. In principle, common ownership and, as often connected with it, common management may indeed give rise to

concerns (see CAS 98/200, paras. 31 et seq.). However, the Panel does not deem it appropriate to find that in and of itself the common ownership of Atlas and Monarcas jeopardised the integrity of the Liga MX, when at the same time neither FMF nor FIFA have seen any need to put an end to multiple ownership in Mexican professional football (the Decálogo being an initiative by the Liga MX and limited to that league). As regards the two transfers which the Appellant submits are suspect, the allegations made by the Appellant are not sufficiently substantiated. In particular, there is no indication of whether the counter-value for the players was inappropriate, i.e. whether it did not reflect what an unrelated third party would have had to invest in order to retain those players. Hence, given that the Respondents have disputed that those transfers did in any way adversely affect the integrity of the competition, the Panel is not prepared to accept the Appellant’s mere allegation that those transfers show that the integrity of the competition was compromised. Also, the Panel is not convinced by the Appellant’s contention that its relegation was (at least partly) due to the common ownership of Monarcas and the Second Respondent. First, the sale occurred relatively late in the season. Second, relegation is determined based on the clubs’ performances over a span of three years. Third, the difference in the standings between the Appellant on the one side and Monarcas and the Second Respondent on the other side does not suggest (absent any concrete evidence otherwise) that the Appellant would have avoided relegation if the Second Respondent had not been under common ownership with Monarcas.

90. For the above reasons, the Panel also is not satisfied that the Liga MX Resolution violated the principle of good faith or the FIFA Regulations on the Status and Transfer of Players. In any event, while any such violation (if it occurred) might prompt FIFA to intervene or might give rise to damage claims, if properly substantiated, it could not invalidate the FMF Decision.

91. The above conclusion, finally, makes it unnecessary for the Panel to consider the other requests submitted by the Parties. Accordingly, all other prayers for relief are rejected.