Manchester City v UEFA Case Summary
Issue 1 – Did the Club Financial Control Body (CFCB) breach its obligations of due process and, if so, what were the consequences thereof?
- The decision by the Investigatory Chamber of the CFCB to refer the case to the Adjudicatory Chamber of the CFCB before concluding their investigation was premature and did not allow MCFC the opportunity to present its case.
- The CFCB breached duties of confidentiality and impartiality when leaks came out about the investigation and were published in the media.
- There were no procedural flaws, and even if there were, they were cured by the new review from CAS, and also the Adjudicatory Chamber.
- The fact that the case was referred to the Adjudicatory Chamber before concluding the investigation did not prejudice MCFC.
- The leaks did not impact the impartiality of the decision-making process. Agreed with UEFA that new review by CAS (and the Adjudicatory Chamber) has a curing effect because both parties must resubmit all evidence.
= CFCB did not breach its obligations of due process, and even if it did, any such breach is cured by the new review by both the Adjudicatory Chamber and CAS.
Issue 2 – Did the conclusion of the settlement agreement in 2014 and the release therefrom in 2017 bar UEFA from charging MCFC for the issues at stake in these proceedings?
- All the alleged breaches were subject to the settlement agreement between MCFC and UEFA in 2014 and therefore cannot be lawfully pursued. Release from the monitoring process (MCFC agreed to special Financial Fair Play (FFP) compliance measures) effectively immunises MCFC from issues during this period.
- No charges are being brought for breach of the settlement agreement. Disguising equity funding was not part of the settlement agreement and is a new separate issue. MCFC cannot be immune to these other possible breaches.
- The settlement agreement deals with MCFC’s compliance with a monitoring process set up by UEFA following previous breaches of FFP rules. UEFA is not claiming that MCFC breached this process. The specific charge here is disguised equity funding, which is distinct from the issues subject to the settlement agreement.
= UEFA was not barred from charging MCFC under these allegations because of the previous settlement agreement.
Issue 3 – Were the charges against MCFC time-barred and, if so, to what extent and what are the consequences thereof?
Article 37 CFCB Procedural Rules:
“Prosecution is barred after 5 years for all breaches of the UEFA Club Licensing and Financial Fair Play Regulations”
- “Prosecution” is the point of sanctioning, in this case, 14 February 2020. Therefore, any breach before 14 February 2015 is time-barred.
- “Prosecution” is the point of opening the investigation, in this case, 7 March 2019. Therefore, any breach before 7 March 2014 is time-barred, but March 2014 to February 2015 is fine.
- Neither MCFC nor UEFA’s definition of “prosecution” was right, it is not at the point of “sanctioning” or “investigation” as neither of these words are mentioned in the rules. “Prosecution” is the point of bringing charges, which was 15 May 2019, therefore breaches committed before 15 May 2014 cannot be prosecuted.
- MCFC cannot be prosecuted based on financial information submitted before 15 May 2014. The principle of legal certainty shall apply. The breach takes place when information is submitted for the first time, not when it is repeated or resubmitted in subsequent reporting periods.
= The alleged disguised equity payments from Sheikh Mansour or the Abu Dhabi United Group (ADUG) through Emirates Telecommunication Corporation (Etisalat) took place in 2012 and 2013 and therefore UEFA cannot prosecute for this.
Issue 4 – Were the leaked emails authentic and did they comprise admissible evidence?
- Refused throughout to confirm the authenticity of the documents. Said they should not be admissible because greater weight should be given to protecting MCFC’s personal rights.
- The ‘criminally obtained documents’ provide no factual basis. It was noted that the hacker is facing criminal prosecution in Portugal and the Portuguese Court suggested the stolen documents should not be used against any victims.
- Even if admissible, they do not provide ‘clear and direct’ evidence. They led UEFA to false conclusions (just because the email says it does not mean that is what happened).
- Under Swiss law, illegally obtained evidence is not automatically inadmissible, it depends on whether there is ‘overriding interest in finding the truth’. The public interest in establishing the truth outweighs MCFC’s interest in protecting confidential commercial information.
- They were not bound by the Portuguese Court because facts in this case are different.
- It is important that the leaked documents were in the public domain and not obtained illegally by UEFA. Publication in the media demonstrates the public interest, as does the European Parliament’s endorsement of FFP.
- Despite some alterations to the stolen emails (two emails merged into one), redacted disclosures of the original emails confirm the authenticity of the leaked documents.
= The leaked documents were authentic enough and determined to be admissible evidence.
Issue 5 – What was the applicable standard of proof?
“The parties agree that the standard of proof is that of comfortable satisfaction”
- The Adjudicatory Chamber failed to apply this standard when making their decision. There cannot have been comfortable satisfaction because the decision was inferred solely based on the leaked documents.
- Citing previous CAS decisions, the more serious the allegation, the more cogent the supporting evidence must be (Alexander Legkov v IOC). Adverse inferences cannot be drawn when available evidence could point to another conclusion (Mohamed Bin Hamman v FIFA).
- The leaked documents provide enough evidence.
- No obligation for UEFA to consider all evidence given by MCFC at face value. They must consider the weight of each piece of evidence differently.
- The principle that corruption, by nature, is concealed to leave no trail of wrongdoing (O v UEFA) is not just applicable to cases involving corruption, but to alleged dishonest concealment of equity funding too.
= The standard of proof is comfortable satisfaction, however, the more serious the allegations, the more cogent the evidence needs to be.
Issue 6 – Did MCFC disguise equity funding as sponsorship contributions?
- In explaining the reason for separate payments made by Etihad, MCFC said the £8 million was from Etihad’s marketing budget and £59 million was from Etihad’s central funds.
- Evidence from Mr Peace stated the ‘ADUG contribution’ mentioned in the leaked emails came from a misunderstanding within the club that ADUG was making funds available to Etihad for sponsorship purposes.
- Evidence from senior members at Etihad confirmed no money was received from Sheikh Mansour or ADUG in relation to the sponsorship agreement. All these payments to MCFC were made by Etihad, and the sponsorship agreement was a legitimate and properly negotiated deal entered into by both parties.
- Evidence from Sheikh Mansour stated he did not authorise, arrange or make any payments.
- Accounting information from Ernst & Young shows numerous payments (none of which exceed £250,000) totalling £21 million were made from ADUG to Etihad (nowhere near the £59 million claimed by UEFA).
- The leaked emails provide direct evidence of arrangements made between MCFC and ADUG.
- Transactions described in the leaked documents were reflected in other materials provided by MCFC. While the £8 million was from Etihad, the £59 million came from Sheikh Mansour or ADUG.
- The accounting evidence from Ernst & Young is unreliable as it was not an independent audit and they did not have full access to the books.
- MCFC’s behaviour shows it is hiding something. They have changed their story and explanations, for example, an explanation to CAS that Etisalat had internal regulations preventing it from making transfers to MCFC directly.
- Disagreed with UEFA that the leaked emails were direct evidence that the arrangements were made and implemented. It is on UEFA to prove these arrangements were executed, and the leaked emails were not sufficient to show MCFC provided incorrect financial information to UEFA.
- There must be some contemporaneous accounting or transactional evidence to support UEFA’s allegations. The witness and accounting evidence provided by MCFC contradicts the allegations.
- UEFA’s theory would mean that top accountancy firms such as Deloitte and Ernst & Young were also misled. It would mean the statements of several top executives from MCFC, ADUG and Etihad were false and therefore they would be subject to criminal sanctions.
- One email relied on by UEFA was sent 10 years ago, before FFP rules were even introduced and at that time there was nothing wrong with channelling equity funding through sponsors.
- The majority of the panel was not ‘comfortably satisfied’ that the arrangements discussed in the leaked emails were executed.
= Neither UEFA’s, nor MCFC’s theories could be comfortably established. However, given that UEFA have the burden of proof, and the evidence must be more cogent because the charges are very serious, the evidence relied on by UEFA was insufficient to conclude MCFC committed the violations.
Issue 7 – Did MCFC fail to cooperate with the CFCB’s investigation?
- MCFC had the right not to authenticate the leaked documents, and not authenticating does not mean they are not complying.
- Because MCFC considered the leaked documents inadmissible it was not ‘reasonable’ for UEFA to request this evidence.
- MCFC refused to answer questions, provide documents, arrange interviews and even instructed a witness not to answer specific questions.
- MCFC provided information ADUG knew to be false, they knew the payments made in 2012 and 2013 had not been funded by Etisalat.
- The refusal to comment on the authenticity of the leaked documents could be supported but was designed to obstruct the investigation.
- The CFCB had legitimate reasons to request this information and such requests were reasonable.
- Football clubs have a duty to cooperate, but the extent they need to provide information derived from third parties depends on the specific circumstances of the case.
- MCFC was very reluctant and at times uncooperative in providing CFCB with the information requested.
- It is possible that adverse inference can be made if a party fails to produce requested documents without a satisfactory explanation. However, UEFA failed to pursue the evidence that MCFC failed to provide, and as a result, at the point of the case reaching CAS, there were no outstanding evidentiary requests. Therefore, no adverse inference can be made by UEFA from MCFC’s non-compliance and no sanctions can be made against MCFC for not provided such evidence.
- MCFC cannot be sanctioned for refusal to authenticate the leaked documents as they had grounds to do so. However, they failed to provide all but one requested witness. They also failed to provide a complete run of the emails, failed to provide the original versions of the leaked documents, and failed to clarify who certain individuals referred to in the emails were.
- Although parties are allowed to submit new evidence to CAS, the fact that MCFC submitted evidence to CAS that had been previously requested by the CFCB “cannot be tolerated or endorsed” and defeats the purpose of an investigation. There was no legitimate reason for MCFC to do this.
- This is a severe breach and MCFC should be seriously reproached for obstructing the CFCB’s investigation.
= The charges concerning obstructing the investigation are not as serious as the charges of dishonest concealment of equity funding. Therefore, CAS did not consider any ban appropriate and reduced the original fine by 2/3, imposing a £10 million fine for obstructing the investigation. MCFC was also ordered to pay £100,000 towards UEFA’s costs, as CAS noted the case before CAS may have been avoided had MCFC provided the requested evidence earlier.