EU court judgment in Lassana Diarra’s case sparks transfer uncertainty

The Court of Justice of the European Union ruled on Friday that certain international football regulations concerning player transfers are in violation of EU law, in a landmark decision that could disrupt the existing transfer system.

The court was called upon to resolve a long-standing dispute between former French footballer Lassana Diarra, who played for clubs including Chelsea and Real Madrid, and FIFA over the consequences of players unilaterally terminating their contracts.

In a highly anticipated verdict, the judges determined that current FIFA rules, by restricting a footballer’s ability to seek new employment, impede the EU’s principles of free movement and competition between clubs.

“The court holds that all of these rules are contrary to EU law,” the ruling stated.
This decision could have significant implications for the transfer market, potentially enabling players to leave their clubs without the risk of being legally bound thereafter.

Diarra’s Belgian lawyer, Jean-Louis Dupont, who referred to the case as “the Bosman 2.0 affair,” hailed the ruling as “a total victory.”

Dupont was also involved in the landmark 1995 case of Jean-Marc Bosman, which allowed players to move to another club at the end of their contracts without a transfer fee and abolished quotas on foreign players at clubs.
In response to Friday’s decision, FIFA stated that it would “analyse the judgment in coordination with other stakeholders before making further comments.”

“FIFA is satisfied that the legality of key principles of the transfer system has been re-confirmed in today’s ruling. The ruling only questions two paragraphs of two articles in the FIFA Regulations on the Status and Transfer of Players, which the national court is now invited to consider,” it said.

However, global players’ union FIFPRO described the judgment as “a major ruling.”

“The entire economic logic behind the transfer market has been undermined today,” FIFPRO lawyer Pieter Paepe told AFP.

– Financial and legal risks –
The Diarra saga dates back 10 years. In August 2014, Russian club Lokomotiv Moscow terminated the midfielder’s contract, citing breaches by the player, and sought €20 million in compensation. Diarra, now 39, refused and instead demanded compensation from Lokomotiv.

FIFA eventually ordered Diarra to pay €10 million to his former club, a decision upheld by the Court of Arbitration for Sport. He also received a backdated 15-month suspension.
According to FIFA regulations, if a player unilaterally terminates their contract “without just cause,” they must pay compensation, which includes their salary and benefits until the contract’s end. Additionally, a purchasing club could be held jointly liable for any compensation and may face a ban on signing new players.

National football associations are also required to withhold a transfer certificate while a dispute is ongoing, which deterred clubs from signing Diarra after he left Lokomotiv.
Diarra’s legal team argued that these regulations violated the EU’s free movement of workers and were contrary to the principle of free competition within the 27-nation bloc.

Diarra sought €6 million in damages from FIFA, claiming he had been prevented from playing for most of the 2014-2015 season.

Belgian club Charleroi withdrew their contract offer to Diarra, fearing potential legal and financial consequences. After several legal proceedings, a Belgian court referred the matter to the CJEU for its opinion.

On Friday, the CJEU concluded that the rules hinder the free movement of players by “imposing considerable legal risks, unforeseeable and potentially very high financial risks, as well as major sporting risks on players and clubs wishing to employ them.”

While some restrictions could be justified to ensure a degree of stability in club rosters, the rules in question went beyond “what is necessary to pursue that objective,” the court said.

The ruling has thrown the football transfer market into uncertainty.
Smaller clubs, which often rely on trading players for financial sustainability, could face challenges. These clubs typically recruit young talent at low cost to sell them at a higher price later. Clubs are currently under no obligation to release players before the end of their contracts, a key negotiation tool that they may lose as a result of this ruling.

AFP