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Saturday, 5 September 2009

Contract blues

There has been much harrumphing about Lens complaint against Chelsea's "poaching" of one of their junior players, and unsurprisingly the partisan chairman of UEFA has actively promoted the decision by FIFA to award the London club a fine of €780,000, training costs of €130,000 and banned the plyer for four months and banned the team from buying any more players until 2011.

Chelsea look a very strong team this year (I am not one of their fans by the way), but their most potent weapon is still their chequebook, so it is worth asking what went wrong. On closer examination perhaps not much. Chelsea will be appealling to the Council for Arbitration in Sport in Switserland, and if that fails they have the option of further appeals to the Swiss Supreme Court. As one distinguished lawyer once told me, the great advantage of an multi-tiered legal system of a ppeals is that the higher you go, the more likely you are to find a judge who knows what they are talking about.

At the moment, we are hearing newspaper talk about Chelsea talking to underrage players. The actual charge against Chelsea is that they induced the young player to breach his contract with Lens. The player had trained with Lens since the age of nine, and he signed a pre-contract agreement with the club when he was 14 and a half years old that stated he would sign professional terms with Lens at 17.

French employment law, quite rightly, does not permit minors under the age of 17 to sign employment contracts, so it is a reasonable presumption that any contract to sign a contract at 17 would be unenforceable. In normal circumstances, whenever a hack lawyer from a small provincial French town puts a piece of paper under the nose of an immigrant family in an HLM promising unimaginable riches, not only will they sign it, but they perobably won't question whether they have signed a binding contract.

The same probably applies to a football club manager who probably understands as much about contracts as he does about particle physics.

So who was working for Chelsea? It is reasoable to assume that a company that has invested so much in players has a decent legal team, and indeed they do in Bruce Buck, the chairman and the only other shareholder apart from Roman Abramovich (he has one share, Abramovich has 84 million). Mr. Buck is not your average hick lawyer, but the senior partner in the European practice of Skadden, Arps, Slate, Meagher & Flom LLP. If you have never heard of Skadden, Arps etc, then think of them as the Merrill Lynch Pearce Fenner & Smith, or the Klynveld Peat Marwick Goerdeler of the US legal system. Or rather, of the world legal system because they operate in 24 cities around the world.

To put it frankly, Skadden is the sort of firm that knows a thing or two about contracts, and to be blunt, a little more than UEFA, FIFA and any lawyer working for a French football club.

Chelsea's legal advice appears to have been that the pre-contract was unenforceable, that it is not possible to breach an unenforceable contract, and hence it is not possible to induce someone to breach that unenforceable contract.

My hunch is that once this dispute goes higher than sport governing bodies and reaches real world lawyers, this may well go Chelsea's way.

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