Diarra Law: the court ruling that could revolutionize the football transfer market forever
Víctor García
October 4, 2024

The Court of Justice of the European Union (CJEU) on Friday ruled against FIFA rules in the case of former footballer Lassana Diarra, who played for clubs such as Real Madrid, PSG, Chelsea and Arsenal. “The (FIFA) rules at issue are liable to hinder the free movement of professional footballers who wish to pursue their activity by going to work for a new club. Thus, such rules mean that players and clubs wishing to sign them are exposed to significant legal risks, unpredictable and potentially very high economic risks and serious sporting risks which, taken together, may hinder the international transfer of such players”, the CJEU ruled. This ruling revolves around the operation of the transfer and transfer market, and has the potential to radically change the rules of world soccer, as the ruling affects FIFA’s existing regulations on player transfers.

“FIFA has taken note of today’s ruling by the Court of Justice of the European Union in relation to the case involving the player Lassana Diarra. FIFA is satisfied that the legality of the key principles of the transfer system has been reconfirmed in today’s ruling. The ruling only challenges two paragraphs of two articles of the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to examine. FIFA will analyze the decision in coordination with other interested parties before commenting further,” FIFA responded to the ruling.

The dispute began in the summer of 2014, when Diarra was playing for Lokomotiv Moscow and had a dispute with the Russian club due to a disagreement over his salary. Lokomotiv considered Diarra to be in breach of his contract and decided to terminate it and also sued him before the FIFA Dispute Resolution Committee, seeking compensation. FIFA ruled in favor of Lokomotiv and fined Diarra 10.5 million euros. Meanwhile, Diarra received a contract offer from Charleroi of Belgium, but the Belgian club demanded confirmation that it would not be liable for payments owed to Lokomotiv if they signed the player. FIFA did not provide these assurances as, according to their rules, an international transfer certificate is required, which was not granted due to the debt owed to Lokomotiv.

The case went through several instances until, in December 2015, Diarra filed a legal claim against FIFA and the Belgian league for loss of income. This triggered a protracted court process that eventually took the case to the CJEU. The Belgian appellate court requested the CJEU’s opinion, as the case involves two key principles of European Union law: the freedom of movement of individuals and the preservation of competition in internal markets.

The CJEU’s advocate general, Maciej Szpunar, had issued a legal opinion earlier this year, which will serve as a guide for the court. In his analysis, Szpunar pointed to three key questions: whether FIFA infringed Diarra’s free movement rights by denying him permission to join Charleroi, whether the obligation imposed on buying clubs to cover the costs of a player’s transfer affects their ability to negotiate, and whether FIFA’s rules are designed to generate these results. In all three cases, Szpunar argued that FIFA’s rules run counter to EU principles.

TOTAL FREEDOM FOR PLAYERS AND AGENTS?

The possible consequences of the ruling – which states that FIFA’s rules are contrary to European law – could lead to a major restructuring of the transfer market, which would give more power to players and their agents, allowing players to break contracts without penalties for new clubs. This would create uncertainty about transfer fees and contract negotiations.

This decision against FIFA could also have a major impact on the finances of many clubs, especially those that rely on the sale and purchase of players to stay afloat. Larger clubs could benefit, as they would be better able to attract players willing to break their contracts in search of better opportunities, while smaller clubs could lose control over their players’ movements.

This case has been compared to the Bosman Act of 1995, which allowed players to leave their clubs after the end of their contracts. However, this situation goes one step further, as it affects players in the middle of their contracts, allowing them to leave their clubs at any time.

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