CAS judgement: UEFA ban overturned, City exonerated (report out p603)

Just spotted the headline in todays Sunday Times sports section.
BAYERN WARNING TO CITY OVER FFP RULES.
It is by Jonathan Northcroft and he writes CAS threw out the CFCB ruling on the basis of process and lack of evidence.
 
M18CTID said:
If that last bit is true then UEFA are effectively finished. We would actually need proof of that though - you know, the kind of proof that UEFA never had against us, and not just innuendo.
Click to expand...

It is clear that it is not UEFA behind the campaign against City and others. Our detractors have now been clearly identified apart from the betting sector. Better to clean up FIFA, UEFA and PL and expose the protectionist and fixing interests and clubs behind it all. More mud will be slung and stick all round.

It is a war and City continue to look long term in their battles.
 
Prestwich_Blue said:
In preparation for a Bolt From The Blue podcast I'll be doing shortly, I've been going over the CAS judgement and hopefully you'll find this summary useful. I've listed the 10 points we based our appeal on then how CAS ruled on each one.

Our appeal
We appealed on ten specific grounds, as well on the general grounds of the admissibility/veracity of the hacked emails. The 10 specific grounds were:
  1. The core allegation (about Etihad & Etisalat sponsorships being disguised equity funding) is false.
  2. The hacked emails provide no proper factual basis for the AC's decision.
  3. The case against us is based on inference, whereas the AC declared it was "comfortably satisfied" that the documents were evidence of these arrangements.
  4. The evidence clearly demonstrates that Etihad & Etisalat met their sponsorship obligations in full, received valuable rights in respect of them, and none of them were funded by ADUG.
  5. The case is commercially irrational (i.e. why would we give Etiahd/Etisalat valuable commercial rights for a fraction of their value).
  6. The alleged breaches are in any event settled (via the 2014 agreement) and time barred.
  7. Accounting and the accrual accounting basis (This is about how we recorded these and whether our accounting was correct).
  8. The alleged non-cooperation by the club.
  9. The CFCB abused its obligation of due process.
  10. The proportionality of the sanction.
1. CAS clearly found in our favour on this one. There was some issue over the Etisalat sponsorships having been fronted by ADUG but it seems the AC agreed that their obligation to ADUG had eventually been satisfied. However the Etisalat payments in 2012 and 2013 were time barred by CAS so weren't material to this case.

2. CAS agreed on this. While they agreed the emails provided a basis for investigation by the CFCB they agreed there wasn't enough in them to prove, to their comfortable satisfactin, a demonstrable pattern of events. Just because they implied a course o action, there was nothing to show the action had been carried out. This basically bears out the poit I made all along that these emails were selective and shown out of context.

3. See (2) above basically.

4. CAS agreed on this, that there was clear evidence that the arrangements in scope had been met in full by the parties concerned and there was no evidence that they'd been funded by ADUG. UEFA's main issue was with the fact that Etihad made two distinct payments, one for £59.5m and the other for £8m. They'd jumped to a conclusion that ADUG must have provided the larger one but witnesses explained they came from two separate budgets, one being Etihad's marketing budget (the £8m) with the £59.5m coming from what was described as "central funds", which could have been from debt, the airline's ahareholder or other third parties. In any event, it didn't matter as CAS rules the weight of evidence showed that these were Etihad's funds.

5. CAS didn't agree with this but that was essentially irrelevant in view of (4), that Etihad & Etisalat paid the full amount and got what they paid for.

6. CAS didn't agree about the 2014 Settlement Agreement. It decided that the CFCB were justified in re-opening this as there was seemingly nothing in the 2014 agreement about it being a full & final settlement. If new information came to light that put a different slant on that agreement and the breaches it covered, then UEFA had the right to go back to it. It did agree on the time-barring but ruled that neither side had got the date for this cut-off right. What they did was interpret UEFA's rule about time-barring and work backwards, ruling that "prosecution" started when the decision was referred to the AC. As that was on May 15th 2019, then anything that occurred prior to May 16th 2014 (which is when the settlement agreement was signed) was time-barred. This therefore ruled out the accounts for the years 2012 and 2013, when the disputed payments from Etisalat were made, thereby rendering those, and earlier Etihad payments, as time-barred. But later Etihad payments were in scope.

however the CFCB employed what seemed to have been a very speculative argument that because FFP requires an aggregation of 3 years' figures, then if the 2014 accounts were in scope, the the 2013 and 2012 ones were as well, as they were all aprt of the same submission. CAS rejected this argument as nonsensical, as the prior year figures were simply a resubmission of when those were hte current year figures, which was the only time they could be considered as relevant.

7. Couldn't see anything in the judgement specific to this point but again it's irrelevant given that CAS found there was no issue with the Etihad sponsorship. It seems to be about a point I covered during the week that supposed that Etihad agreed a £55m a year sponsorship with us for 4 years. They might pay us £90m a year in the first 2 years then £20m for the last 2 years. But we'd still show it as £55m a year, assuming they got the same consideration over those 4 years regarding the advertising rights they got for that. In other words, the timing of the cashflow was very much secondary to the performance of the contract for accounting purposes.

8. This was quite interesting. Obviously CAS found for UEFA on this point but what it ultimately boiled down to was that when UEFA initially approached us, following the Der Spiegel articles and the opening of its investigation in March 2019, we refused to provide the evidence that we ultimately provided to CAS, plus we only sent Ferran Soriano to a hearing on April 19th 2019, rather than a list of witnesses he CFCB had asked for. The CAS judgement does mention, in a couple of places, that we did this on external legal advice. Presumably this was on the "fruit of the poisoned tree" principle, whereby we refused to acknowledge that the emails were genuine or that they gave the CFCB enough evidence to mount their investigation.

Eventually of course we provided all the evidence and witnesses, bar a run of emails that might have been linked to one of the hacked emails. UEFA had failed to push for these and agreed that they would not require them to be produced at CAS, as we claimed this was an incredibly wide response and it would take us too long to find all these. So I suspect that Ciy refused to co-operate on legal advice, citing the inadmissibility of the hacked emails as a source of evidence, plus (I suspect) they claimed Leterme was on a "fishing expedition" when asking for any and all emails associated with one of the leaked emails. I wouldn't be surprised if we appeal this, as CAS seem to be aaying that UEFA had grounds to investigate yet there wasn't enough in the emails to justify their conclusions. also the general legal issues around the admiisibility of the hacked emails and our refusal (on what we presumably were advised were sound legal grounds) to cooperate on the basis of those emails.

9. CAS rejected this, mainly on the grounds that the CAS process was(as Stefan said) 'de novo' and therefore effectively a fresh start.

10. As things turned out, CAS largely agreed, on the grounds that there was no issue with the sponsorship agreements, therefore we hadn't deceived UEFA or misreported our revenue. But they did see the failure ot cooperate as a serious breach of Article 56 and fined us accordingly, on the grounds that we could afford it and it needed to be a serious deterrent to future situations.

The admissibility of the hacked emails
CAS took a long look at this but eventually decided they were admissible. The Portuguese judge in charge of the Rui Pinto case had rules they shouldn't be used but CAS felt Swiss Law allowed their use in the public interest. They also advanced what, to me, seemed a rather strange justification that, anyway, they were already in the public domain and well publicised when UEFA picked them up. It also accepted that UEFA hadn't been involved in the theft of these therefore was an innocent party.

Now I'm no lawyer, but surely UEFA knew for certain that they were stolen? So the argument that they were in the "public domain" doesn't stand up in my view. If I unwittingly buy something that was stolen, it can be taken off me once it becomes apparent it's stolen, even though I acted in good faith. I'm entitled to my money back from the person who stole it but good luck with that in most cases. If however I buy stuff I know is stolen, then I'm plainly committing a criminal offence. So Der spiegel certainly knew they were in receipt of stolen goods and UEFA must have known they were using such stolen goods. Very strange.

Conclusions
Of the 10 grounds we appealed the AC's decision on, we lost on one major one (non-cooperation). We also lost on the arguments against admissibility of the emails and the time-barring/re-opening of the 2014 settlement agreement, but these rulings just led to CAS being able to examine the Etihad deal properly and finding it in order. The CFCB charged us with breaches of 7 separate FFP articles but only one, Article 56, stuck. And that one was not one that had been mooted as the start of the CFCB's investigation but only after it had started. So on every breach that the original investigation started from, we won.

It's also clear that this case isn't the death of FFP, as idiots like Ronay were proclaiming. It may even have been useful to UEFA in indicating where it needed to tighten things up, or clarify rules that were a bit too wide--ranging.

The other interesting thing in reading this is that we were obviosuly keen to get this resolved before the 2020/21 season but UEFA were equally, if not more keen to do this as well. If it was just a case of wanting to make sure their case stuck, they didn't have to do this. They could have waited, gsthered more evidence that we said would take too long to produce, and got what they wanted. Yet they were seemingly desperate to get this done as quickly as possible. To me, that suggests it was more important to some parties behind this to try to get us out of the CL as quickly as possible, losing the revenue from that which might have impacted us for years to come, than to actually prove their case beyond doubt (or allow us to prove our innocence). I ould be getting all paranoid but it seems they were more interested in landing a blow than anything else. and it failed miserably.
Click to expand...
Excellent summary for reference. I too hope we appeal the non compliance ruling as it seems the grounds to do this were very much justified. However I feel that the club are keen to move on and I believe had stated following the initial verdict that it was accepted in full?
 
Xhavenjoe said:
Just spotted the headline in todays Sunday Times sports section.
BAYERN WARNING TO CITY OVER FFP RULES.
It is by Jonathan Northcroft and he writes CAS threw out the CFCB ruling on the basis of process and lack of evidence.
Click to expand...

The full article is slightly more nuanced than the headline. Oliver Kahn, who is taking over as Bayern chief executive next year, is after 'fairer' FFP regulations so that the same teams don't win everything each year. Obviously both us and PSG get a name check but nothing specifically 'warning' us about anything.

How refreshing that Bayern seemingly want to voluntarily give up their Bundesliga monopoly :)
 
I haven’t, as yet, seen any reference to a statement about the CAS judgement from the City camp. Has there been one?
 
Prestwich_Blue said:
In preparation for a Bolt From The Blue podcast I'll be doing shortly, I've been going over the CAS judgement and hopefully you'll find this summary useful. I've listed the 10 points we based our appeal on then how CAS ruled on each one.

Our appeal
We appealed on ten specific grounds, as well on the general grounds of the admissibility/veracity of the hacked emails. The 10 specific grounds were:
  1. The core allegation (about Etihad & Etisalat sponsorships being disguised equity funding) is false.
  2. The hacked emails provide no proper factual basis for the AC's decision.
  3. The case against us is based on inference, whereas the AC declared it was "comfortably satisfied" that the documents were evidence of these arrangements.
  4. The evidence clearly demonstrates that Etihad & Etisalat met their sponsorship obligations in full, received valuable rights in respect of them, and none of them were funded by ADUG.
  5. The case is commercially irrational (i.e. why would we give Etiahd/Etisalat valuable commercial rights for a fraction of their value).
  6. The alleged breaches are in any event settled (via the 2014 agreement) and time barred.
  7. Accounting and the accrual accounting basis (This is about how we recorded these and whether our accounting was correct).
  8. The alleged non-cooperation by the club.
  9. The CFCB abused its obligation of due process.
  10. The proportionality of the sanction.
1. CAS clearly found in our favour on this one. There was some issue over the Etisalat sponsorships having been fronted by ADUG but it seems the AC agreed that their obligation to ADUG had eventually been satisfied. However the Etisalat payments in 2012 and 2013 were time barred by CAS so weren't material to this case.

2. CAS agreed on this. While they agreed the emails provided a basis for investigation by the CFCB they agreed there wasn't enough in them to prove, to their comfortable satisfactin, a demonstrable pattern of events. Just because they implied a course o action, there was nothing to show the action had been carried out. This basically bears out the poit I made all along that these emails were selective and shown out of context.

3. See (2) above basically.

4. CAS agreed on this, that there was clear evidence that the arrangements in scope had been met in full by the parties concerned and there was no evidence that they'd been funded by ADUG. UEFA's main issue was with the fact that Etihad made two distinct payments, one for £59.5m and the other for £8m. They'd jumped to a conclusion that ADUG must have provided the larger one but witnesses explained they came from two separate budgets, one being Etihad's marketing budget (the £8m) with the £59.5m coming from what was described as "central funds", which could have been from debt, the airline's ahareholder or other third parties. In any event, it didn't matter as CAS rules the weight of evidence showed that these were Etihad's funds.

5. CAS didn't agree with this but that was essentially irrelevant in view of (4), that Etihad & Etisalat paid the full amount and got what they paid for.

6. CAS didn't agree about the 2014 Settlement Agreement. It decided that the CFCB were justified in re-opening this as there was seemingly nothing in the 2014 agreement about it being a full & final settlement. If new information came to light that put a different slant on that agreement and the breaches it covered, then UEFA had the right to go back to it. It did agree on the time-barring but ruled that neither side had got the date for this cut-off right. What they did was interpret UEFA's rule about time-barring and work backwards, ruling that "prosecution" started when the decision was referred to the AC. As that was on May 15th 2019, then anything that occurred prior to May 16th 2014 (which is when the settlement agreement was signed) was time-barred. This therefore ruled out the accounts for the years 2012 and 2013, when the disputed payments from Etisalat were made, thereby rendering those, and earlier Etihad payments, as time-barred. But later Etihad payments were in scope.

however the CFCB employed what seemed to have been a very speculative argument that because FFP requires an aggregation of 3 years' figures, then if the 2014 accounts were in scope, the the 2013 and 2012 ones were as well, as they were all aprt of the same submission. CAS rejected this argument as nonsensical, as the prior year figures were simply a resubmission of when those were hte current year figures, which was the only time they could be considered as relevant.

7. Couldn't see anything in the judgement specific to this point but again it's irrelevant given that CAS found there was no issue with the Etihad sponsorship. It seems to be about a point I covered during the week that supposed that Etihad agreed a £55m a year sponsorship with us for 4 years. They might pay us £90m a year in the first 2 years then £20m for the last 2 years. But we'd still show it as £55m a year, assuming they got the same consideration over those 4 years regarding the advertising rights they got for that. In other words, the timing of the cashflow was very much secondary to the performance of the contract for accounting purposes.

8. This was quite interesting. Obviously CAS found for UEFA on this point but what it ultimately boiled down to was that when UEFA initially approached us, following the Der Spiegel articles and the opening of its investigation in March 2019, we refused to provide the evidence that we ultimately provided to CAS, plus we only sent Ferran Soriano to a hearing on April 19th 2019, rather than a list of witnesses he CFCB had asked for. The CAS judgement does mention, in a couple of places, that we did this on external legal advice. Presumably this was on the "fruit of the poisoned tree" principle, whereby we refused to acknowledge that the emails were genuine or that they gave the CFCB enough evidence to mount their investigation.

Eventually of course we provided all the evidence and witnesses, bar a run of emails that might have been linked to one of the hacked emails. UEFA had failed to push for these and agreed that they would not require them to be produced at CAS, as we claimed this was an incredibly wide response and it would take us too long to find all these. So I suspect that Ciy refused to co-operate on legal advice, citing the inadmissibility of the hacked emails as a source of evidence, plus (I suspect) they claimed Leterme was on a "fishing expedition" when asking for any and all emails associated with one of the leaked emails. I wouldn't be surprised if we appeal this, as CAS seem to be aaying that UEFA had grounds to investigate yet there wasn't enough in the emails to justify their conclusions. also the general legal issues around the admiisibility of the hacked emails and our refusal (on what we presumably were advised were sound legal grounds) to cooperate on the basis of those emails.

9. CAS rejected this, mainly on the grounds that the CAS process was(as Stefan said) 'de novo' and therefore effectively a fresh start.

10. As things turned out, CAS largely agreed, on the grounds that there was no issue with the sponsorship agreements, therefore we hadn't deceived UEFA or misreported our revenue. But they did see the failure ot cooperate as a serious breach of Article 56 and fined us accordingly, on the grounds that we could afford it and it needed to be a serious deterrent to future situations.

The admissibility of the hacked emails
CAS took a long look at this but eventually decided they were admissible. The Portuguese judge in charge of the Rui Pinto case had rules they shouldn't be used but CAS felt Swiss Law allowed their use in the public interest. They also advanced what, to me, seemed a rather strange justification that, anyway, they were already in the public domain and well publicised when UEFA picked them up. It also accepted that UEFA hadn't been involved in the theft of these therefore was an innocent party.

Now I'm no lawyer, but surely UEFA knew for certain that they were stolen? So the argument that they were in the "public domain" doesn't stand up in my view. If I unwittingly buy something that was stolen, it can be taken off me once it becomes apparent it's stolen, even though I acted in good faith. I'm entitled to my money back from the person who stole it but good luck with that in most cases. If however I buy stuff I know is stolen, then I'm plainly committing a criminal offence. So Der spiegel certainly knew they were in receipt of stolen goods and UEFA must have known they were using such stolen goods. Very strange.

Conclusions
Of the 10 grounds we appealed the AC's decision on, we lost on one major one (non-cooperation). We also lost on the arguments against admissibility of the emails and the time-barring/re-opening of the 2014 settlement agreement, but these rulings just led to CAS being able to examine the Etihad deal properly and finding it in order. The CFCB charged us with breaches of 7 separate FFP articles but only one, Article 56, stuck. And that one was not one that had been mooted as the start of the CFCB's investigation but only after it had started. So on every breach that the original investigation started from, we won.

It's also clear that this case isn't the death of FFP, as idiots like Ronay were proclaiming. It may even have been useful to UEFA in indicating where it needed to tighten things up, or clarify rules that were a bit too wide--ranging.

The other interesting thing in reading this is that we were obviosuly keen to get this resolved before the 2020/21 season but UEFA were equally, if not more keen to do this as well. If it was just a case of wanting to make sure their case stuck, they didn't have to do this. They could have waited, gsthered more evidence that we said would take too long to produce, and got what they wanted. Yet they were seemingly desperate to get this done as quickly as possible. To me, that suggests it was more important to some parties behind this to try to get us out of the CL as quickly as possible, losing the revenue from that which might have impacted us for years to come, than to actually prove their case beyond doubt (or allow us to prove our innocence). I ould be getting all paranoid but it seems they were more interested in landing a blow than anything else. and it failed miserably.
Click to expand...

Very good summary Colin, thank you.

As regards point 8, non co-operation, this is why the issue of the non-production of the scoping document was an issue. It's absence could be indicative of a "fishing exercise".

I can also see why UEFA banned us. From their perspective, whilst the evidence was flimsy, it was all they had and City were refusing to co-operate (quite rightly in principle if not in practice, in my opinion).

That being the case, the choice is give up, walk away and say "sorry folks, looks dodgy but there's nothing we can do" with the inevitable shit-storm that would bring down on UEFA and, collaterally, the club which is, ironically, the worst outcome for everyone.

So they had no option but to make a judgement on what they had, knowing that it would likely go to CAS. The non-co-operation charge, far from being a "red-herring" was a fail-safe in case we actually did have the irrefutable evidence we said we had. The CAS verdict effectively said, "you were wrong but drew the conclusion you did because City didn't co-operate".

The fine reflects the fact that CAS simply cannot endorse non-co-operation with a regulatory body. After all, it's hardly uncommon for a guilty party to claim to investigators that they have irrefutable evidence of their innocence but can't or won't produce it. A different court might decide that non-cooperation is justifiable in certain circumstances but I don't blame CAS for not setting the precedent. I'll be surprised if City appeal.
 
Xhavenjoe said:
Just spotted the headline in todays Sunday Times sports section.
BAYERN WARNING TO CITY OVER FFP RULES.
It is by Jonathan Northcroft and he writes CAS threw out the CFCB ruling on the basis of process and lack of evidence.
Click to expand...

Hmm. Fancy that. A bogus case thrown out due to lack of evidence. Who'd have thunk it. Oh well, City must be guilty anyway as there's no smoke without fire as the latest rag buzzphrase would have it.
 
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