German football club SV Wilhelmshaven (SVW) won a case before the German Federal Court (BGH) today concerning the lawfulness of a penalty based on FIFA.

Due to the non-payment of training compensations for an international transfer of a player, the FIFA Disciplinary Committee had decided on the enforced relegation of the SVW. After the CAS had affirmed this penalty, the North German Football Association (NFV) had implemented the relegation. While further complaints remained unsuccessful, the SVW won before the Higher Regional Court in Bremen (OLG), which considered the enforced relegation to be unlawful. Today, the BGH confirmed the OLG’s judgement.

The court found that disciplinary measures in case of non-payment of training compensations could only be imposed, if the association’s statue contained explicit regulations in this regard. As the regulations of associations only apply to their members, only the NFV statue would be decisive in this matter, since the SVW is a member of the NFV, but not of the DFB or FIFA. However, the BGH found the NFV statue did not contain any such regulations. Moreover, the NFV statue did not include a reference, which sufficiently stated a submission of the SVW to the FIFA rulings regarding disciplinary measures in said cases. The relegation was therefore not the execution of a decision made by the DFB or FIFA, but a disciplinary measure imposed by the NFV with no legal grounds.

However, the compatibility of FIFA regulations concerning training compensations with the TFEU remains uncertain. While the OLG had declared them generally incompatible with Art. 45 TFEU, since the amount of the compensation is not based on the actual costs incurred, the BGH didn’t decide on that matter in its ruling. The question of the admissibility of the training lump sum under German law therefore remains unresolved, until it is submitted to an appropriate proceeding.

This ruling could have a major impact on German sports associations in general, as they might have to review the submission of its members to international sporting rules and regulate them more clearly. Members of associations will have to be able to identify possible legal disadvantages and adjust their conduct accordingly. Even though the ruling is mainly based on formal flaws of the NFV statue, it has enormous consequences on the world of sports. It appears that proceedings before civil courts are of increasing importance, even if the sport’s jurisdiction – like in this case the CAS – has already decided on a matter.