European court ruling on Lassana Diarra v Fifa could lead to collapse of transfer system

The international transfer system, which facilitates the movement of hundreds of millions of dollars in player sales annually, has been in operation in its current form since 2001. It is supervised by the governing body of world football.

Diarra challenged it, however, when he successfully claimed in a Belgian court in 2017 that Fifa’s transfer rules had blocked him from moving to a new club after his contract was terminated by Lokomotiv Moscow.

Fifa’s regulations state that if a player breaches his contract, which is then terminated by the club, his new team is jointly liable with the player to pay compensation to his old one – which happened when Charleroi attempted to sign Diarra after his contract was ended by the Russian club in 2014.

Fifa refused to issue an International Transfer Certificate (ITC), effectively preventing Charleroi from registering Diarra with the Belgian federation.

In April 2015, Fifa’s Dispute Resolution Chamber (DRC) ordered Diarra to pay €10 million (S$14.3 million) to Lokomotiv Moscow.

Because the former Chelsea, Arsenal and Real Madrid midfielder was without a club, however, it ruled that any future employer would not be jointly liable to pay compensation and Diarra joined Olympique de Marseille.

The Court of Arbitration for Sport (CAS) rejected Diarra’s appeal against Fifa’s ruling but the player sued Fifa and the Royal Belgian Football Association in a Belgian court for damages and €6 million in loss of earnings since the clubs interested in signing him for the 2014-15 season had backed out because of the joint liability rule.

The Belgian court asked the CJEU for guidance, and the European Court’s decision could be devastating for Fifa, if it follows the recommendation of Advocate General Maciej Szpunar to the judges, saying they should side with the player.

“Some Fifa rules on transfer of players may prove to be contrary to EU law. These rules are of restrictive nature and may only be justified in specific circumstances,” he wrote in a non-binding opinion.

Diarra, who ended his career with Paris Saint-Germain in 2019, is represented by Jean-Louis Dupont, the same lawyer who took the case of Belgian Jean-Marc Bosman, which in 1995 cleared the way for players in the European Union to move to other clubs at the end of contracts without a transfer fee being paid.

Dupont said in 2024 that a judgment backing the footballer would be a milestone in modernising football governance in the bloc as it would allow players’ unions and clubs’ unions to regulate their employment practices.

“This will put an end to the degrading practice of commoditising players,” lawyers Dupont and Martin Hissel said in a joint statement in April.

It is still unclear how the ruling would impact countries beyond the EU, notably England’s Premier League, the biggest source of transfer funds in the world, but it is likely to result in a new Fifa ruling that would be used in all member countries.