TAS-CAS – Tribunale Arbitrale dello Sport – Corte arbitrale dello Sport (2005-2006)———-Tribunal Arbitral du Sport – Court of Arbitration for Sport (2005-2006) – official version by www.tas-cas.org Arbitration CAS 2005/A/835 PSV N.V. Eindhoven v. Fédération Internationale de Football Association (FIFA) & Federação Portuguesa de Futebol (FPF) & CAS 2005/A/942 PSV N.V. Eindhoven v. Leandro do Bomfim & Fédération Internationale de Football Association (FIFA), award of 3 February 2006

TAS-CAS - Tribunale Arbitrale dello Sport - Corte arbitrale dello Sport (2005-2006)----------Tribunal Arbitral du Sport - Court of Arbitration for Sport (2005-2006) - official version by www.tas-cas.org Arbitration CAS 2005/A/835 PSV N.V. Eindhoven v. Fédération Internationale de Football Association (FIFA) & Federação Portuguesa de Futebol (FPF) & CAS 2005/A/942 PSV N.V. Eindhoven v. Leandro do Bomfim & Fédération Internationale de Football Association (FIFA), award of 3 February 2006 Panel: Prof. Luigi Fumagalli (Italy), President; Mr Manfred Nan (The Netherlands); Mr José Miguel Nobre Ferreira (Portugal) Football Registration of a player with his new club Participation of a third party to the arbitration proceedings Designation of a party as respondent Power of the FIFA Single Judge to act as a body competent to pass resolutions Alleged procedural defects in decisions rendered at first level Legal force of FIFA Circulars Conflict between international and national (domestic) rules Validity of an injunction to remain with his employer as a sanction for the breach of an employment contract 1. According to the provisions of the Code of Sports-related Arbitration, a third party can participate as a party to the arbitration proceedings already pending among other subjects in two situations, joinder or intervention, but subject to a common condition: that it is bound by the same arbitration agreement binding the original parties to the dispute or that it agrees in writing to such participation. If a party, however de facto interested in the outcome of this arbitration, was not a party in the FIFA proceedings leading to the appealed decisions, and is therefore not directly bound by them, it cannot be compelled, failing its consent, to participate in the appeals arbitration concerning those decisions. In the same way, if that party does not voluntarily submit to the jurisdiction of CAS, it cannot be bound by the award to be rendered on the appeals against decisions formed without its participation and not binding it. 2. In the CAS system, for a statement of appeal against a given respondent to be admissible, it is necessary not only that it names that respondent, but also that it contains an actual claim against the subject indicated as respondent; the simple indication of a respondent does not mean per se that arbitration can proceed against that respondent, unless a specific claim is brought against it. 3. The FIFA Statutes provide that “Each committee may, if necessary, set up a bureau and/or sub-committee to settle urgent matters”. In other words, any committee in the FIFA system, including the PSC, has the power to exercise, in case of urgency, its powers through a body of smaller composition, and even through a single component (the Single Judge), created within its members. In addition, no provision in the FIFA system imposes, under penalty of nullity, the communication of the appointment of the Single Judge to which the matter had been referred for consideration or of the components of any panel entrusted with the adjudication on a dispute. Also, no specific provision, or general principle, disqualifies a component of the PSC from passing a decision on the basis of his skills: the appointment of a person to be a member of the PSC - and then to act as single judge - is in itself sufficient guarantee of the ability and skills of that person to concur in the decisions of the internal body of FIFA, and cannot be challenged under this perspective. 4. In accordance with the consistent and long standing CAS jurisprudence, a due process argument, even assuming it to be valid, cannot stand alone. Indeed, should the procedure at the first instance be unsatisfactory, the deficiency may be cured as long as there is a possibility of full appeal to the CAS. 5. FIFA Circulars are administrative measures which are - as sources of law within the FIFA legal system - hierarchically subordinate to the FIFA Players’ Regulations. Accordingly, although FIFA Circulars usefully and legitimately serve the purposes of implementing, detailing and interpreting the FIFA Players’ Regulations, they may not amend them. Therefore, if a provision contained in a FIFA Circular is incompatible with a provision contained in the FIFA Players’ Regulations, the former should yield to the latter (lex superior derogat inferiori). 6. Pursuant to para. 2 of the Preamble to the FIFA Players’ Regulations 1997 “the principles outlined in under Art. … 36 … of these regulations are also binding at national level”. As a result, domestic provisions inconsistent with Art. 36 limiting the duration of the employment contracts signed by players minor of age cannot be invoked “at national level” to seek and obtain a remedy expressly prohibited by the FIFA rules. In the same way, it cannot be maintained that the regulations of a National Federation impose a duty on FIFA and another National Federation, which are obviously not subject to such rules. 7. An employee who breaches an employment contract by wrongful and premature withdrawal from it may be liable in damages or even be imposed a sanction (Art. 23 of the FIFA Players’ Regulations 2001), but not to an injunction to remain with his employer. This is the position under Swiss law (Article 337(d) of the Swiss Civil Code) and under the CAS jurisprudence. On 21 July 2001 Leandro do Bomfim, a Brazilian professional football player born on 8 January 1984 (the “Player”) signed an employment contract (the “Contract of 2001”) with the Dutch football club PSV N.V. Eindhoven (the “Appellant” or “PSV”) for a period of four and half years, starting on 1 January 2002 and ending on 30 June 2006. The Contract of 2001 contained also the unilateral option for PSV to extend it for an additional year, until 30 June 2007. On 23 December 2004 the Player contacted FIFA stating his opinion that the Contract of 2001 was “void”, because “it breaches various FIFA Regulations, [and] is not in a format recognized by the Dutch FA”, and that he had “grounds for avoiding” it “on the basis of sporting just cause”. On 17 January 2005 the Player sent a letter to PSV substantially declaring that the Contract of 2001 had to be considered as terminated as of 1 January 2005. Such claim was rejected by PSV by letter dated 18 January 2005. By letter dated 20 January 2005 the Player confirmed to FIFA his position, “seeking an urgent declaration from FIFA … allowing him to move to a new club of his choice or a declaration that he is a free agent”. The Player based this request on the alleged breach of Article 36 of the Regulations for the Status and Transfer of Players (the “FIFA Players’ Regulations”), 1997 Edition (the “FIFA Players’ Regulations 1997”), or the corresponding provision of the 2001 Edition of those Regulations (the “FIFA Players’ Regulations 2001”) maintaining that at the time of the signature of the Contract of 2001 he was still minor of age, and therefore he could not sign a contract, such as the Contract of 2001, for a period exceeding 3 years. By letter to FIFA dated 28 January 2005 PSV replied to the letter of the Player dated 20 January 2005, challenging the statements therein contained and submitting (i) that FIFA had no jurisdiction on the subject matter of the dispute, (ii) that the Player had confirmed the validity of the Contract of 2001, by signing a declaration to that effect on 29 March 2002 (the “Declaration of 2002”), when he was no longer minor of age, (iii) that Article 36 of the FIFA Players’ Regulations 1997 was not binding at national level, and (iv) that the Player had failed to substantiate his claim for termination for just cause of the Contract of 2001. On 25 January 2005 the Player signed an employment contract with the Portuguese football club FC Porto, Futebol, SAD (“Porto”). On 31 January 2005 the Federação Portuguesa de Futebol (“FPF”) requested the Dutch Football Federation (“KNVB”) to issue the International Registration Transfer Certificate of the Player. On the same day the KNVB informed the FPF that it was “not able to issue the international transfer certificate”, because “PSV has informed us that the player … is still under contract with PSV”. By letter dated 11 February 2002 the FPF formally referred the matter to FIFA, transmitting a letter of 10 February 2005, whereby Porto requested the issuance of a provisional certificate so to allow the Player to play for his new club. In support of its request Porto confirmed that the Contract of 2001 had already expired, because the Player, at the time he had entered into it, could not sign a contract for a period exceeding 3 years, that the Declaration of 2002 could not be construed as a confirmation of the Contract of 2001, and therefore that there were no reasons supporting the denial by the KNVB of the International Registration Transfer Certificate of the Player. On 18 February 2005 PSV replied to the submissions to FIFA, denying the allegation that the Contract of 2001 would be null and void. In support of its position PSV outlined that the Player had failed to submit his claim to the competent Dutch authorities in accordance with the applicable Dutch regulations, and that he had confirmed his unconditional will to respect the Contract of 2001 by signing, when he was no longer minor of age, the Declaration of 2002. PSV therefore concluded that the Contract of 2001 “is and remains in full force and effect” and that “the Player cannot be treated as a free- agent”. By letter dated 21 February 2005 the KNVB informed FIFA that it considered the request of the Player “as patently unjustified”, because the Contract of 2001 was consistent with the applicable Dutch regulations, it had not been challenged before the competent Dutch authorities and because it had been confirmed by the Player with the Declaration of 2002. On 24 February 2005 the Single Judge of the FIFA Players’ Status Committee (the “Single Judge”) issued the following decision (the “Decision of the Single Judge”): “The Portuguese Football Federation is authorised to provisionally register the Brazilian player, Leandro do Bomfim, with its affiliated club FC Porto with immediate effect”. The Single Judge, in fact, held that the duration of the Contract of 2001 had to be limited to 3 years, i.e. until January 2005, and in support of such conclusion offered the following reasons: “4. … the Single Judge started by acknowledging that Mr. Leandro do Bomfim signed an employment contract with PSV Eindhoven, whilst he was still a minor of age. 5. Moreover, the Single Judge took note that the player’s contract with the aforementioned Dutch club, has a duration of 4 and a half years. 6. In this regard, the Single Judge underlined the content of Art. 35 of the FIFA Regulations for the Status and Transfer of Players, which corresponds to Art. 36 of the former version of the Regulations, according to which, «a player who has not reached his eighteenth birthday may sign a contract as non-amateur only for a period not exceeding three years» and furthermore, that «Any clause referring to a longer period shall not be recognized by FIFA or a national sports tribunal». 7. Furthermore, the Single Judge was of the opinion that, in fact, the letter signed by Mr. Leandro do Bomfim in March 2002, demonstrates the player’s intention to comply with his employment contract with PSV Eindhoven, however, within the circumstances that existed at the time of the contract’s signature. 8. Therefore, and since the player was only authorized to sign an employment contract with the maximum duration of 3 years at the time of the contract’s signature, such letter only confirmed that the player agreed to be linked to the Dutch club for such period and not for 4 years and a half. Any intention of the parties to reach another consequence, in particular, the extension of the duration of the contract, would have needed an explicit new agreement”. On 4 March 2005, PSV filed a statement of appeal with the CAS, pursuant to the Code of Sportsrelated Arbitration (the “Code”), to challenge the Decision of the Single Judge. On 6 April 2005 FIFA informed the parties that the dispute between the Player and PSV, having “a labour nature”, had been referred for adjudication to the FIFA Dispute Resolution Chamber (the “DRC”), inviting the parties to file their final statements. On 13 April 2005, FIFA informed the CAS that it “will renounce to present an answer to the appeal lodged by PSV … and simply refer to the motivation and the decision passed by the Single Judge” of the PSC. At the same time, however, FIFA stressed that the Decision of the Single Judge “constituted a provisional measure, only authorizing the Federação Portuguesa de Futebol to provisionally register the player Leandro do Bomfim for its affiliated club FC Porto, pending the outcome of a final decision to be taken by the Dispute Resolution Chamber, over the substance of the matter, i.e. regarding the contractual dispute between Mr Leandro do Bomfim and PSV N.V. Moreover, and with respect to the proceeding still pending at FIFA, we would like to inform you that we have granted a deadline until today to the parties, in order for them to provide our services with their final statements in the matter, which will probably allow our services to submit the relevant labour dispute to be submitted to the Dispute Resolution Chamber, at its next meeting, on 13 May 2005, for consideration and decision”. On the same 13 April 2005 PSV filed its submissions, challenging the procedure before the DRC, stating inter alia that no specific claim had been filed by the Player with the DRC or forwarded to PSV, and, in any case, that the DRC had no jurisdiction to hear the case, this jurisdiction being vested in the relevant sport arbitration body at the KNVB, before which proceedings were already pending. On the same day the Player filed his submissions before the DRC, confirming the jurisdiction of the DRC, as well as the inconsistency of the Contract of 2001 with the FIFA Players’ Regulations under several perspectives, and therefore requesting that the Decision of the Single Judge “be upheld and the provisional authorization … confirmed with a declaration that … PSV has no further contractual relationship” with the Player. On 13 May 2005 the DRC issued its decision (the “Decision of the DRC”) acknowledging that the Contract of 2001 had been signed before the entry into force of the FIFA Players Regulation 2001, and was therefore subject to the FIFA Players Regulation 1997, pursuant to which contractual disputes between clubs and players had to be dealt with by the FIFA Players’ Status Committee (the “PSC”). As a result, the Decision of the DRC reads as follows: “1. The Dispute Resolution Chamber is not competent to decide upon the present matter. 2. The present matter will be submitted to the FIFA Players’ Status Committee, for consideration and decision”. On 23 May 2005 PSV filed its submissions to the PSC, with observations as to the admissibility of the claim of the Player, the jurisdiction of the PSC, the impartiality of the PSC, the procedural duties and obligations of the PSC, the acceptance by FIFA of the KNVB regulations, and the effects of Article 36 of the FIFA Players’ Regulations 1997 in the Dutch national context, and with a reply to the submissions of the Player dated 13 April 2005. On the same 23 May 2005 the KNVB provided FIFA with its position on the matter. In this regard, the KNVB asserted that the Contract of 2001 was concluded in accordance with Dutch Law. In addition, the KNVB drew the attention of FIFA to the fact that, when the Player requested the KNVB to be registered with it, he had acknowledged and agreed that the KNVB regulations, such as the Arbitration Regulations, would apply. Finally, the KNVB raised the question whether the Decision of the DRC was correct, since according to the FIFA Circular No. 769 of 24 August 2001 (p. 19 and 20), “in any event, disputes arising in connection with contracts governed by the earlier version of these regulations will be settled according to the procedural provisions of the present Regulations”, this meaning, according to the KNVB, that the DRC was competent pursuant to the FIFA Players’ Regulations 2001 to deal with the dispute concerning a contract (the Contract of 2001) subject to the FIFA Players’ Regulations 1997. On 27 May 2005 FIFA informed the parties that the dispute would be considered at the following meeting of the PSC and that a request of the Player for an extension of the deadline for the submission of statements of defence had been denied. On 29 May 2005 the Bureau of the PSC issued the following decision (the “Decision of the PSC”): “1. The claim of Mr Leandro do Bomfim is accepted. 2. The contractual relationship between the Claimant Mr Leandro do Bomfim and the Respondent PSV Eindhoven is considered as terminated since 1 January 2005. 3. The provisional registration of Mr Leandro do Bomfim with the Portuguese club FC Porto is hereby confirmed on a definitive basis”. In support of its decision, the PSC preliminarily outlined that also the procedural provisions of the FIFA Players’ Regulations 1997 were applicable to the Contract of 2001, signed before the entry into force of the FIFA Players’ Regulations 2001. As a result, the PSC had jurisdiction to hear the dispute between the Player and PSV on the basis of Article 19 of the FIFA Players’ Regulations 1997. The PSC then considered some preliminary observations of PSV, as follows: - as to the point that the matter should not be heard due to prescription, because more than two years had elapsed between the signature of the Contract of 2001 and the claim of the Player to FIFA, the PSC emphasized that the facts leading to the dispute arose at the moment when the Player decided to consider the contractual relation as terminated, i.e. in January 2005, and not at the time the Contract of 2001 was signed; - as to the point that the principle of procedural fairness had been breached in the proceedings before the PSC, put forward by PSV that maintained that it had not been given the opportunity to reply to the Player’s final statements, the PSC noted that no breach had been committed because “the player did not submit any final remarks”. The PSC then considered the substance of the dispute, and started by acknowledging that, on 21 July 2001, the Player signed an employment contract with PSV, starting on 1 January 2002 and ending on 30 June 2006. The PSC also remarked that the Player had unilaterally terminated his relation with PSV on 17 January 2005, claiming that the content of the Contract of 2001, and in particular, its duration, contravened the FIFA Players’ Regulations 1997, particularly due to the fact that at the time of the signature of the Contract of 2001, he was still minor of age and was therefore prevented by the FIFA from signing a contract for period a longer than 3 years. At the same time the PSC took note of the PSV submission that by means of the Declaration of 2002 the Player, already at the age of 18, unconditionally affirmed his will to play for PSV in accordance with the terms of the Contract of 2001, confirming its validity until 30 June 2006 and excluding the possibility to invoke the application of Article 36 of the Players’ Regulations 1997. The PSC then “after having thoroughly analyzed the content of the aforementioned letter” noted: “… in particular that the relevant wording does not refer to the terms of the contract. In fact, by means of said letter the player affirmed that he would unconditionally respect the labour and image rights agreement he had signed with PSV Eindhoven on 21 July 2001, in order to be authorized to leave for Brazil for a certain period (until 1 May 2002), without being paid and covering all his medical expenses. … the player clearly demonstrated his intention to comply with his relevant employment contract with PSV Eindhoven and, in particular, to resume duty with the club once he had recovered from his injury in Brazil. However, … contrary to the opinion of the Dutch club, by means of the relevant letter the player did not confirm his will to play for PSV Eindhoven in accordance with the terms of their employment contract signed on 21 July 2001. … the content of the aforementioned letter demonstrates the player’s intention to comply with his employment contract, but within the circumstances that existed at the time of its signature. As a consequence, and in view of the fact that, at the time of the relevant contract’s signature, according to the applicable regulations, Mr Leandro do Bomfim was only authorized to sign an employment contract with the maximum duration of 3 years, the letter of the player dated 29 March 2002 can only be regarded as the player’s agreement to be linked to PSV Eindhoven for such a period and not for 4 and a half years, which corresponds to the period actually stipulated in the contract. Furthermore, … the aforementioned letter cannot and does not constitute neither a renewal of contract nor an addendum to the relevant employment contract and, as a consequence, it could not have served as an instrument to validate any contractual vices nor to implement any changes to the contractual terms previously agreed. In fact, … any intention of the parties in order to change the validity of the contract’s duration, would have needed an explicit new agreement in order to became valid”. In light of all the above, the PSC reached the conclusion that the duration of the Contract of 2001 had to be limited to 3 years and consequently had ended on 1 January 2005. Therefore, the PSC decided to accept the claim filed by the Player, i.e. to declare as terminated his working relationship with PSV as of 1 January 2005 and to confirm his provisional registration for Porto. The Decision of the PSC was notified to the parties on 22 July 2005. On 4 August 2005, PSV filed a statement of appeal, dated 1 August 2005, with the CAS, pursuant to the Code, to challenge the Decision of the PSC. By letter dated 9 August 2005 to the parties, the CAS Court Office, while acknowledging the receipt of the appeal brief filed by PSV against the Decision of the PSC, stressed that the case submitted to CAS in the new proceedings (CAS 2005/A/942) was practically identical to that submitted to CAS in the proceedings already pending under reference CAS 2005/A/835, and invited the parties to express their position as to a possible joinder of the two cases and their referral to the same Panel. On 8 September 2005, FIFA filed its answer to the appeal brought by PSV against the Decision of the PSC. On 17 October 2005, the Player filed its answer to the appeal brought by PSV against the Decision of the PSC. By letter of 28 October 2005 the CAS Court Office informed Porto that the Respondents had applied to Porto’s participation in the arbitration. Porto was granted a time limit of 20 days to express its views regarding its joinder to the proceedings and to lodge its answer. On 11 November 2005, Porto filed its answer to the appeal brought by PSV against the Decision of the PSC. On 17 November 2005, the CAS Court Office informed the parties, inter alia, that the Panel had decided to proceed as follows: “1. Standing of FIFA: as the Appellant insists on FIFA’s participation and appears to have taken proper claims against FIFA, the Panel’s decision on the standing of FIFA shall be addressed as a preliminary issue within the final award. Until then, FIFA will be considered as a party to these arbitration proceedings. As a consequence, the Panel has decided to grant FIFA a deadline of 20 days from the receipt of the present fax letter to file its answer on the merits of this case, in accordance with Art. R55 of the Code of Sports-related arbitration. 2. Joinder of the cases: in view of the fact that the two captioned matters have exactly the same object and in order to keep the costs as low as possible, the Panel has decided that these two matters will be dealt with together. This will be confirmed in the order of procedure that the parties will receive shortly …”. On 9 December 2005 FIFA filed its submissions following the CAS letter dated 17 November 2005. By letters of various dates the parties agreed that an award be issued without a hearing. The present award is therefore rendered after consideration of the written documents on file. LAW Jurisdiction 1. CAS has jurisdiction to decide the present dispute, concerning appeals against decisions issued by a federation (FIFA), pursuant to Article R47 of the Code, which so provides: “An appeal against the decision of a federation, association or sports-related body may be filed with the CAS insofar as the statutes or regulations of the said body so provide or as the parties have concluded a specific arbitration agreement and insofar as the Appellant has exhausted the legal remedies available to him prior to the appeal, in accordance with the statutes or regulations of the said sports-related body”. 2. The jurisdiction of CAS is based in casu on Article 59 ff. of the FIFA Statutes. Appeal Proceedings 3. As these proceedings involve appeals against decisions issued, in a dispute relating to the registration of a player with a club, by a federation (FIFA), whose statutes provide for an appeal to the CAS, they are considered and treated as appeal arbitration proceedings, in a non disciplinary case, in the meaning and for the purpose of the Code. Admissibility 4. The Player’s statements of appeal were filed within the deadline set down in the FIFA Statutes, in the Decision of the Single Judge and in the Decision of the PSC. The appeals comply with the requirements of Article R48 of the Code. Accordingly, the appeals are admissible. Applicable Law 5. According to Article R58 of the Code, the Panel is required to decide the dispute “according to the applicable regulations and 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 application of which the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”. 6. Pursuant to Article 59 para. 2 of the FIFA Statutes “CAS applies the various regulations of FIFA or, if applicable, of the Confederations, Members, Leagues and clubs and, additionally, Swiss Law”. 7. In this case, therefore, for the evaluation of the Decision of the Single Judge and of the Decision of the PSC, FIFA rules and regulations have to be applied primarily, with Swiss law applying subsidiarily. 8. More precisely, the Panel finds that the parties did not express their agreement to subject the Contract of 2001 to the application of the FIFA Players’ Regulations 2001, and therefore that the Contract of 2001, executed by the Player with the Appellant on 21 July 2001, is governed, as to its substance, by the FIFA Players’ Regulations 1997. In fact, pursuant to Article 46 of the FIFA Players’ Regulations 2001, “contracts between players and clubs concluded before 1 September 2001 will continue to be governed by the previous version of these regulations, which came into force on 1 October 1997 [FIFA Players’ Regulations 1997], unless the clubs and the players expressly agree to subject their agreement signed after 5 July 2001 to these regulations [FIFA Players’ Regulations 2001]”. 9. At the same time, the Panel remarks that it is disputed among the parties whether also the procedural aspects of the FIFA Players’ Regulations 1997 - and chiefly the dispute adjudication system therein provided - apply in the present dispute. This point will be considered below (para. 30-34). Scope of Panel’s Review 10. Pursuant to Article R57 of the Code “The Panel shall have full power to review the facts and the law. It may issue a new decision which replaces the decision challenged or annul the decision and refer the case back to the previous instance. […]”. The Dispute between the Parties A. Preliminary Issue: the Position of Porto 11. The first question that the Panel has to consider concerns the position of Porto in these arbitration proceedings, i.e. whether Porto has to be treated as a party, bound by this award, or not. On one side, in fact, FIFA and the Player expressed the position that Porto should be joined, or be given the opportunity to intervene, in the arbitration; on the other side, Porto, while filing its answer upon transmission of the file of the proceedings, did not accept the joinder, declared that the outcome of the dispute in any case would not affect its position, and therefore asked that it “should not be considered a party in this dispute”. 12. The provisions of the Code that are relevant on the point (being applicable also to the appeals arbitration proceedings pursuant to Article R54) are the following: Article R41.2 [“Joinder”]: “If a Respondent intends to cause a third party to participate in the arbitration, it shall mention it in its answer, together with the reasons therefore, and file an additional copy of its answer. The Court Office shall communicate this copy to the person whose participation is requested and set such person a time limit to state its position on its participation and to submit a response pursuant to Article R39. It shall also set a time limit for the Claimant to express its position on the participation of the third party”. Article R41.3 [“Intervention”]: “If a third party intends to participate as a party in the arbitration, it shall file with the CAS an application to this effect, together with the reasons therefore within the time limit set for the Respondent’s answer to the request for arbitration. To the extent applicable, such application shall have the same contents as a request for arbitration. The Court Office shall communicate a copy of this application to the parties and set a time limit for them to express their position on the participation of the third party and to file, to the extent applicable, an answer pursuant to Article R39”. Article R41.4 [“Joint Provisions on Joinder and Intervention”]: “A third party may only participate in the arbitration if it is bound by the arbitration agreement or if itself and the other parties agree in writing. […]”. 13. According to the abovementioned provisions, a third party can participate as a party to the arbitration proceedings already pending among other subjects in two situations, joinder or intervention, but subject to a common condition: that it is bound by the same arbitration agreement binding the original parties to the dispute or that it agrees in writing to such participation. In the present dispute the Panel finds that this common condition is not satisfied. Indeed, pursuant to Art. 59 and 60 of the FIFA Statutes, CAS jurisdiction derives from the issuance by FIFA of a decision and is therefore limited to the scope of such decision and to the parties concerned by the same. Porto, in fact, however de facto interested in the outcome of this arbitration, concerning the authorization for the Player to be registered with it, was not a party in the FIFA proceedings leading to the Decision of the Single Judge and to the Decision of the PSC, and is therefore not directly bound by them. As a result, it cannot be compelled, failing its consent, to participate in the appeals arbitration concerning those decisions; in the same way, Porto, if it does not voluntarily submit to the jurisdiction of CAS, cannot be bound by the award to be rendered on the appeals against decisions formed without its participation and not binding it. 14. In the light of the foregoing the Panel concludes that Porto is not to be treated as a party in these arbitration proceedings. B. Preliminary Issue: The Position of FIFA 15. The second preliminary issue that the Panel has to examine is whether FIFA has to be considered a party in these arbitration proceedings. FIFA, in fact, denies it, by claiming that the Appellant, while challenging the Decision of the Single Judge and the Decision of the PSC, has failed to submit a concrete claim against FIFA, and by stressing that FIFA has been involved in the dispute between the Player and PSV only as a competent instance for its adjudication. On the other hand, PSV has insisted for the participation of FIFA in this arbitration, by specifying a list of criticisms directly brought against FIFA, with respect to the adoption both of the Decision of the Single Judge and of the Decision of the PSC. 16. In this respect the Panel notes that, pursuant to Article R48 of the Code, the statement of appeal has to contain, in addition to the indication of the respondent, “the appellant’s request for relief” and that the appeal shall be deemed withdrawn if the requirements specified in the same provisions are not fulfilled within the deadline granted by the CAS Court Office. In other words, as correctly remarked by FIFA, in the CAS system for a statement of appeal against a given respondent to be admissible it is necessary not only that it names that respondent, but also that it contains an actual claim against the subject indicated as respondent; the simple indication of a respondent does not mean per se that arbitration can proceed against that respondent, unless a specific claim is brought against it. 17. The Panel, in this framework, finds that not only has the Appellant indicated FIFA as a respondent in both the appeals against the Decision of the Single Judge and against the Decision of the PSC, but also that it has actually indicated specific claims against FIFA. Indeed FIFA, in the matter to which this arbitration refers, has not acted, through its PSC, as a first tier adjudicative body in a dispute between PSV and the Player; FIFA has issued a decision, authorizing, first provisionally, then finally, the registration of the Player with the new club of his choice, in the exercise of its “administrative” responsibilities pursuant to Article 7 of the FIFA Players’ Regulations 1997. The exercise of such function goes well beyond the mere adjudication on the contractual claims of the parties. And the Appellant criticizes the exercise of that power. 18. In the light of the foregoing, therefore, the Panel concludes that FIFA is to be treated as a respondent in these arbitration proceedings. C. The Merits 19. PSV is challenging, in these joined arbitration proceedings, two decisions rendered by FIFA, authorizing the Player to register for the club of his choice (Porto): first, the Single Judge granted a provisional authorization; then, the PSC confirmed the provisional registration “on a definitive basis”. In both the Decision of the Single Judge and the Decision of the PSC the granting of the authorization has been based on the assertion that the Contract of 2001 is to be considered as terminated since 1 January 2005. Against those decisions PSV is putting forward criticisms relating to the procedural and to the substantive aspects thereof. In other words, the Appellant challenges the appealed decisions for procedural defects and for reasons concerning the substantive assertion on which they are based. 20. The Decision of the Single Judge is challenged for procedural reasons under several points of view. The Panel however finds that the Appellant’s submissions in this respect cannot be sustained for the reasons hereafter specified. 21. Under a first perspective, in the Appellant’s opinion the Decision of the Single Judge has to be set aside because no provision in the FIFA system provides for the Single Judge as a body competent to pass resolutions. Contrary to this submission, the Panel notes that Article 34.6 of the FIFA Statutes provides that “Each committee may, if necessary, set up a bureau and/or sub-committee to settle urgent matters”. In other words, any committee in the FIFA system, including the PSC (Article 34.1(m) of the FIFA Statutes), has the power to exercise, in case of urgency, its powers through a body of smaller composition, created within its members. As a result, the PSC was allowed to hear through a single component (the Single Judge) the urgent matter of the provisional registration of the Player upon the request of the FPF. 22. Under a second perspective, the Appellant requests the Panel to cancel the Decision of the Single Judge because the appointment of such Single Judge has not been properly adopted and notified, and resulted in an improper designation of a person lacking the required acquaintance with Dutch laws, which were relevant for the adjudication of the case. Contrary to such submission, the Panel remarks that no provision in the FIFA system imposes, under penalty of nullity, the communication of the appointment of the Single Judge to which the matter had been referred for consideration or of the components of any panel entrusted with the adjudication on a dispute. In addition, the Panel underscores that no specific provision, or general principle, disqualifies a component of the PSC from passing a decision on the basis of his skills: the appointment of a person to be a member of the PSC - and then to act as single judge - is in itself sufficient guarantee of the ability and skills of that person to concur in the decisions of the internal body of FIFA, and cannot be challenged under this perspective, and chiefly so by way of mere speculation, unsupported by any kind of evidence. 23. As a further procedural reason for the annulment of the Decision of the Single Judge the Appellant claims that its fundamental rights have been disregarded before the Single Judge, because it has not been awarded with a fair hearing. More specifically, in the Appellant’s opinion, the Single Judge breached his duty to act fairly and impartially, by not giving PSV the possibility to be heard on the submissions of FPF and Porto. Contrary to such submission, the Panel underlines that the Appellant’s right to a fair hearing has been fully respected in the proceedings leading to the Decision of the Single Judge and that its fundamental rights have not been infringed: - the Decision of the Single Judge was rendered on the basis of the several submissions made by the parties to FIFA, including the letters dated 18 February 2005 by the Appellant and dated 21 February 2005 by the KNVB, filed in reply to the request made by FIFA on 16 February 2005 to provide an answer to the application of the FPF on behalf of Porto dated 11 February 2005; - the content of the Appellant’s submissions with respect to the application of the FPF on behalf of Porto were mentioned and considered by the Single Judge; and - in any case, PSV had the opportunity, of which it made use, to dispute the submissions made by the FPF and Porto, before the Decision of the Single Judge, in the proceedings following it, in front of the DRC and the PSC, where the confirmation of the “provisional” registration of the Player was discussed. 24. Finally, the Decision of the Single Judge is challenged by the Appellant because of alleged failures in the motivation offered by the Single Judge on several points: i.e., on the effects of the Declaration of 2002 (points 7 and 8 of the Decision of the Single Judge), on the reasons submitted by the KNVB to FIFA by letter dated 21 February 2005, and on the non-existence of valid reasons for the refusal by the KNVB of the issuance of the International Registration Transfer Certificate of the Player. Contrary to such submission, the Panel underscores: - that points 7 and 8 of the Decision of the Single Judge are far from being “incomprehensible … not supported by evidence, nor … based upon the substance of exchange of communication” between the parties. In such points, in fact, the Single Judge clearly stated the reasons why, in his opinion, the Declaration of 2002 could not be held as to have the effect of extending the duration of the Contract of 2001; - that the Decision of the Single Judge clearly confirmed the competence of FIFA to adjudicate, in application of the FIFA rules, on the issue disputed among the parties, and therefore rejected the submission of the KNVB that the Contract of 2001 had to be examined on the basis of the Dutch regulations by the Dutch competent bodies; and - that, by the statements that the Contract of 2001 had to be limited to 3 years and that the FPF was authorized to provisionally register the Player for Porto, the Decision of the Single Judge ruled on the non-existence of valid reasons for the refusal by the KNVB of the issuance of the International Registration Transfer Certificate of the Player. 25. Procedural reasons are also invoked by the Appellant in support of its request that the Decision of the PSC be cancelled by the Panel. The Panel finds that the Appellant’s submissions also in this respect cannot be upheld. 26. Under a first perspective, in the Appellant’s opinion, the Decision of the PSC has to be cancelled because the PSC failed to consider the submission of PSV that the Player had not filed a complaint in accordance with Article 6 of the Procedural Rules for the Players’ Status Committee (the “PSC Procedural Rules”) and to pay the administrative costs provided by Article 7 of the same Procedural Rules: the PSC should have decided that the referral of the case to it was not admissible. Contrary to such submission, the Panel notes: - that Article 6 of the PSC Procedural Rules, clearly addressed to individuals directly applying to the PSC for a remedy, does not seem to be applicable to the “administrative” referral of a case by the DRC to the PSC, as it happened in the case here considered, following the Decision of the DRC; -. that, by passing its Decision, the PSC clearly assumed, even without explicitly considering the submission of PSV, that the infringement, if any, of Article 6 of the PSC Procedural Rules would not affect the possibility for the PSC to adjudicate on the substance of the dispute, which was clearly identified and considered; - that, notwithstanding the alleged infringement of Article 6 of the PSC Procedural Rules, the Appellant had full opportunity to state its position as to the substance of the dispute referred to the PSC; - that, as explained by FIFA in its submissions in this arbitration, no payment for administrative costs was due with respect to the dispute submitted to the PSC, concerning the registration of a player, since no financial claim had been heard; - that the failure by a party to pay the administrative costs indicated in Article 7 of the PSC Procedural Rules seems to give only FIFA - being the creditor of such payment, that has the possibility to exonerate an applicant therefrom - the right not to hear the claimant’s application, and cannot therefore be invoked as a ground for inadmissibility by a different subject; and finally - that in any event, in accordance with the consistent and long standing CAS jurisprudence, the Appellant’s due process argument, even assuming it to have been valid, could not have stood alone. Indeed should the procedure at the first instance be unsatisfactory, the deficiency may be cured as long as there is a possibility of full appeal to the CAS (see CAS Award CAS 94/129, published in the Digest of the CAS Awards 1986-1998, pp. 187 ff., sp. p. 203) 27. Under a second perspective, the Appellant denies that the PSC was the competent body to hear the dispute concerning the Contract of 2001. In the Appellant’s opinion, in fact, on one hand, that dispute should have been, as it was, heard at national level, pursuant to the KNVB Statutes and the KNVB Arbitration Regulations, and not by a FIFA body; on the other hand, according to the Appellant, if heard at the FIFA level, the dispute concerning the Contract of 2001 should have been considered by the DRC, and not by the PSC, as indicated by the “transitional arrangements” contained in Article 8 of the FIFA Circular No. 769. 28. Contrary to such submission, the Panel confirms that FIFA had the power to hear through its PSC the question submitted by the FPF, i.e. whether the Player - previously registered for PSV with the KNVB - could be registered for Porto with the FPF. 29. In the Panel’s opinion, indeed, FIFA was certainly competent to decide on the registration of the Player moving from a national federation, the KNVB, to another national federation, the FPF. Paragraph 1 of the Preamble to both the FIFA Players’ Regulations 1997 and the FIFA Players’ Regulations 2001, in fact, provide in similar terms that “the regulations deal with the status and eligibility of players”, “whenever players move between clubs belonging to different national associations” (FIFA Players’ Regulations 2001), or “whenever they effect a transfer from one national association to another” (Players’ Regulations 1997). In other words, the FIFA Players’ Regulations apply to international transfers of players, and provide for the competence of FIFA to adjudicate on the issues regarding the transfer of the registration of players from a national association to another. In the Panel’s opinion, therefore, no provisions or decisions of a national association, which are certainly not binding on FIFA or on a foreign national association, can be invoked to exclude such competence. 30. A question, then, arises as to whether the competence of FIFA to hear such kind of disputes remains with the PSC, in accordance with the FIFA Players’ Regulations 1997, or with the DRC, pursuant to the FIFA Players’ Regulations 2001. 31. In this respect the Panel notes, on one side, that pursuant to Article 46 of the FIFA Players’ Regulations 2001, issues regarding “contracts between players and clubs concluded before 1 September 2001” continue to be governed by the FIFA Players’ Regulations 1997, and therefore that the Contract of 2001 is subject, at least as to its substance, to the FIFA Players’ Regulations 1997; and, on the other side, that the FIFA Circular No. 769 of 24 August 2001 provided that “in any event, disputes arising in connection with contracts governed by the earlier version of these regulations will be settled according to the procedural provisions” of the FIFA Players’ Regulations 2001. 32. In order to settle this apparent contradiction, the Panel remarks that the FIFA Players’ Regulations 1997 were adopted by the FIFA Executive Committee pursuant to Article 57 of the FIFA Statutes then in force, whereas the FIFA Circular No. 769 was issued by the FIFA General Secretariat. According to the FIFA Statutes currently in force, the General Secretariat is the “administrative body” (Article 21) and “shall carry out all the administrative work of FIFA under the direction of the General Secretary” (Article 64), who shall be “responsible for: […] (a) implementing decisions passed by the Congress and Executive Committee …” (Article 65.3). 33. In the light of the above provisions of the FIFA Statutes, the Panel confirms, also on the basis of CAS precedents (CAS 2003/O/506, §§ 51-52), that the FIFA Circulars are administrative measures which are - as sources of law within the FIFA legal system - hierarchically subordinate to the FIFA Players’ Regulations. Accordingly, although FIFA Circulars usefully and legitimately serve the purposes of implementing, detailing and interpreting the FIFA Players’ Regulations, they may not amend them. Therefore, if a provision contained in a FIFA Circular is incompatible with a provision contained in the FIFA Players’ Regulations, the former should yield to the latter (lex superior derogat inferiori). 34. As a result, the Panel concludes that both the DRC, by a decision which was not challenged, and the PSC were correct in holding that the procedures set forth by the FIFA Players’ Regulations 1997 applied to the FIFA proceedings, and therefore that the PSC was the competent body to decide on the registration of the Player for Porto. The fact that a direct appeal to CAS is mentioned in the Decision of the PSC does not contradict such application, since the competence of CAS is directly provided in the FIFA Statues since 1 January 2004 by rules immediately applicable. 35. Under a different procedural perspective the Appellant argues that the Decision of the PSC is not valid because the “PSC may not rule twice” on the same issue. In this respect the Panel notes that the Decision of the Single Judge and the Decision of the PSC had clearly different nature and purpose: the Decision of the Single Judge concerned the “provisional” registration of the Player with Porto, in the same way as an interim decision provides on an urgent application for a provisional measure, while the Decision of the PSC “finally” confirmed the registration of the Player with Porto, in the same way as a decision on the merits of a dispute confirms the interim relief urgently granted. The Appellant’s argument cannot therefore be accepted. 36. An additional point made by the Appellant concerns an alleged failure of the PSC “to abide its duty of procedural fairness”, because PSV, in its opinion, was not given the opportunity to answer to the final submission of the Player and learnt that no final submission of the Player had been filed only after the Decision of the PSC had been adopted. In this respect the Panel notes that, contrary to what it claims, the Appellant was given full opportunity to be heard in the proceedings before the PSC. Indeed, its submissions, dated 23 May 2005, and those of the KNVB, of same date, were the last received by the PSC before entering the Decision of the PSC on 29 May 2005 and after that a request by the Player, that had not filed specific submissions to the PSC but only submissions to the DRC on 13 April 2005, to have an extension of the deadline for the filing of a statement, had been denied by FIFA on 27 May 2005 (see para. 24-26 above). As a result, the PSC did not breach any duty of fairness. 37. The final procedural argument raised by the Appellant against the Decision of the PSC concerns an assumed impossibility for the PSC to confirm, on a definitive basis, the registration of the Player with Porto, because Porto was not a party to the proceedings before the PSC. The Panel does not agree with such assumption, and emphasizes that the issue before the PSC concerned the transfer of a player from a national federation to another, i.e. the registration of a player with a club of a new national association. The confirmation of the registration of the Player for Porto is therefore a natural consequence of the decision on the transfer of the Player. 38. The Decision of the Single Judge and the Decision of the PSC are then challenged under substantive points of view, concerning the application of Article 36 of the FIFA Players’ Regulations 1997 limiting to duration of the employment contracts signed by players minor of age, i.e. of the rule whose application lead the Single Judge and the PSC to the conclusion that the Contract of 2001 had to be considered as having expired on 1 January 2005, and therefore that the Player was free to register for a club of his choice. According to the Appellant, the provisions of the FIFA Players’ Regulations limiting to 3 years the employment contracts signed by players minor of age: - “are legally invalid in the Dutch context”, because Dutch legislation and the applicable collective bargaining agreement for non-amateur players allow a longer duration, and because the KNVB did not incorporate these FIFA provisions in its regulations, and “FIFA accepted KNVB regulations” by failing to react against KNVB for the alleged breach of FIFA rules concerning the duration of contracts signed by players minor of age; - could not be invoked by the Player and Porto, since they are addressed only to national associations and not to clubs and players; - did not apply to the relation between the Player and PSV, because the Player was registered with the KNVB to become a player eligible to play for PSV only on 19 January 2002, when he had already reached the age of 18 years; - the Player’s right to invoke Article 36 of the FIFA Players’ Regulations 1997 “has been forfeited” because it was not exercised for 3 and a half years, and the Player “acted against good faith to invoke this Article so late and mid-season and without timely prior notice”. 39. The Panel finds that the submissions of the Appellant with respect to the abovementioned substantive issues cannot be sustained. In the Panel’s view, Article 36 of the FIFA Players’ Regulations 1997 could be and was correctly applied by the FIFA bodies with respect to the Contract of 2001, and it could be invoked, as it was, by the Player so to obtain a decision from FIFA allowing him to register for a new club. 40. Article 36 of the FIFA Players’ Regulations 1997 so provides: “Any player who has not reached his eighteenth birthday may sign a contract as non-amateur only for a period not exceeding three years. Any clause referring to a longer duration shall be null and void”. 41. The Panel notes that pursuant to paragraph 2 of the Preamble to the FIFA Players’ Regulations 1997 “the principles outlined in under Art. … 36 … of these regulations are also binding at national level”. As a result, the rule set forth in Article 36 can be invoked “at national level” in the relation between clubs and players: national associations cannot depart from such rule; and domestic provisions inconsistent with the principles expressed by the mentioned Article 36 of the FIFA Players’ Regulations 1997 cannot be invoked “at national level” to seek and obtain a remedy, enforcing a contract having a duration of more than 3 years, expressly prohibited by the FIFA rules. In the same way, it cannot be maintained that the regulations of the KNVB, invoked by the Appellant as allowing the players minor of age to enter into contracts for a term longer than that allowed by Article 36 of the FIFA Players’ Regulations 1997, impose a duty - not to register the Player with Porto - on FIFA and the FPF, which are obviously not subject to such rules. 42. In addition, the Panel observes that it cannot be retained that FIFA had accepted the KNVB provisions inconsistent with Article 36 of the FIFA Players’ Regulations 1997, and is therefore bound by them. First, because FIFA could not accept such provisions, in the light of principle expressed in Section 2 of the Preamble to the FIFA Players’ Regulations 1997. Second, because the failure by FIFA to react against statutes or regulations of its member associations does not necessarily mean that FIFA has accepted those internal provisions as being in compliance with its own Statutes and Regulations. 43. In the light of the foregoing, therefore, in the Panel’s view, the Player could invoke Article 36 of the FIFA Players’ Regulations 1997 so to obtain a decision from FIFA allowing him to register for a new club not belonging to the KNVB. And correctly the PSC considered that the claim of the Player was not time barred pursuant to Article 3 of the PSC Procedural Rules, which provides that “the FIFA Players’ Status Committee does not hear any dispute if more than two years have elapsed since the facts leading to the dispute arose”. The facts leading to the dispute occurred when the Appellant denied the Player’s request to consider the Contract of 2001 as terminated upon expiration of the three year term indicated in Article 36: only in that moment could the Player exercise his right to seek the registration for a club of his choice. In addition, the Player does not seem to have acted in bad faith vis-à-vis the Appellant. On one side, the Appellant does not offer any evidence of that bad faith. On the other side, the documents on file clearly show that the Player made known his position to PSV before turning to FIFA. 44. Finally, the Panel confirms that Article 36 of the FIFA Players’ Regulations 1997, as invoked by the Player, was correctly applied by the FIFA bodies. In fact: - the Contract of 2001 provided for a duration of four and a half years, from 1 January 2002 to 30 June 2006; - the Player, born on 8 January 2004, was still minor of age at the time of signature, on 21 July 2001, of the Contract of 2001. - Therefore all the conditions set down in Article 36 are met: on 21 July 2001 the Player could sign only a contract for the maximum period of three years; the provisions in the Contract of 2001 contrary to such rule cannot be invoked against the Player. 45. In this framework, the fact that the registration of the Player with the KNVB was made only on 19 January 2002, when he had reached the age of 18 years, is irrelevant. At the moment in which the Player contractually expressed his consent to be bound to play for PSV, he was minor of age. And Article 36 of the FIFA Players’ Regulations 1997 makes a clear and reasonable reference to the time of signature as the moment relevant to determine the age of the player. 46. In the same way, the Panel fully agrees with the PSC as to the interpretation of the Declaration of 2002, and confirms that it cannot be construed as having the meaning of a confirmation by the Player, no longer minor of age, of the duration of the Contract of 2001. In fact, by means of said declaration the Player stated that he would unconditionally respect the labour and image rights agreement he had signed with PSV Eindhoven on 21 July 2001, in order to be authorized to leave for Brazil for a certain period, without being paid and covering all his medical expenses: the Contract of 2001 was left unchanged, so that the parties thereto had all the rights, duties and claims with respect to the same contract, as they had before. Also after the signature of the Declaration of 2002 the Player was therefore entitled to seek a remedy under Article 36 of the FIFA Players’ Regulations 1997. 47. The above confirms that on 1 January 2005, upon expiration of the maximum term provided by Article 36 of the FIFA Players Rules 2001, the Player, moving from a national association to another, was entitled to obtain from FIFA a decision allowing him to register for a club of his choice. At the same time, the Panel observes that the Appellant’s application consists, as to its substance, in the request that that the Player not be allowed to leave the Dutch club in order to play for another club of his choice. Contrary to such submission, the Panel underscores that in principle a person should not be compelled to remain in the employment of a particular employer. An employee who breaches an employment contract by wrongful and premature withdrawal from it may be liable in damages or even be imposed a sanction (Article 23 of the FIFA Players’ Regulations 2001), but not to an injunction to remain with his employer. This is the position under Swiss law (Article 337(d) of the Swiss Civil Code) and under the CAS jurisprudence (CAS 2004/A/678, Order on Provisional Measures issued by the Panel hearing that case on 17 August 2004; CAS 2004/A/691, Order on Provisional Measures delivered by the Deputy President of the CAS Appeals Arbitration Division on 17 August 2004). In addition, the Appellant has not demonstrated that Dutch law or any other law applicable to the Contract of 2001 and/or to the merits of the dispute submitted to FIFA and object of decisions issued by its bodies would prohibit the Player to be transferred from the Dutch club to a foreign club. 48. It follows that FIFA was actually entitled to authorize the registration of the Player for Porto even assuming a breach of contract by the Player and considering the Contract of 2001 as still binding on the Player at the time of his signature of the new contract with Porto. Should this be the case, the Player - and possibly Porto - could be subject to disciplinary sanctions and to the obligation to compensate the PSV. But the registration of the Player would remain unaffected. As a result, the submissions of the Appellant contrary to such conclusion cannot be maintained. 49. In the light of the foregoing, the Panel holds that the appeals brought by PSV have to be dismissed and that the Decision of the Single Judge and the Decision of the PSC are to be confirmed. The Court of Arbitration for Sport rules that: 1. The request for participation of F.C. Porto to these arbitral proceedings filed by FIFA and by Mr Leandro do Bonfim is denied. 2. The appeals filed by PSV NV against the decision issued on 24 February 2005 by the Single Judge of the FIFA Players’ Status Committee (CAS 2005/A/835) and against the decision issued on 29 May 2005 by the Bureau of the FIFA Players’ Status Committee (CAS 2005/A/942) are dismissed. (…).