Man City v UEFA: The full 93-page CAS judgment explained (2024)

Amid the various ups and downs for both Manchester City and UEFA detailed in the full written reasons for the Court of Arbitration for Sport’s (CAS) decision to quash a two-year Champions League ban, it is suggested we may never have had to go through this whole sorry episode had City submitted their evidence to UEFA in the first place.

Like so much else in this affair, quite what that means is open to debate.

On the one hand, it helps to highlight just how much the Premier League club failed to cooperate with the governing body’s investigation (leading to that huge £9 million fine). Yet, at the same time, it proves City did have the evidence all along — just as they promised.

City said they did not trust UEFA’s process, pointing to several leaks to the media as evidence of its alleged bias. CAS disagreed with City’s stance but it did not really matter who was right or wrong on this issue as the club provided their proof when and where it mattered most: the hearing rooms of sport’s highest court between June 8-10.

It was the legal equivalent of stumbling through the first five games of a Champions League group stage so you have to beat Barcelona away to qualify for the knockout rounds, only to wake up and thrash them 4-0.

City’s belated barrage of evidence was enough to clear them of the main charge they had disguised cash from their owner Sheikh Mansour as sponsorship income to circumvent UEFA’s financial fair play (FFP) rules. And it was also enough to raise big questions about UEFA’s decision to hit them with that record ban based on half a dozen hacked emails.

That said, CAS and even City agreed UEFA had grounds to make a case based on the material they had — in truth, UEFA had no choice but to open an investigation — but City ultimately filled in the missing blanks more plausibly than their opponent.

Here are some key facts about the case:

• The panel, by a two to one majority, found “there is no doubt” the club’s main sponsor Etihad “fully complied” with its agreed payments to City, its sponsorship was “fair value” and there is no evidence its payments actually came from City’s parent company Abu Dhabi United Group (ADUG).
• By the same majority decision, similar allegations relating to another of City’s Abu Dhabi-based sponsors, Etisalat, were not addressed because they occurred more than five years before UEFA charged the club and were therefore “time-barred”.
• UEFA, however, was well within its rights to charge City, as there was a “legitimate basis to prosecute” and the charges were “by no means frivolous”.
• Contrary to City’s arguments, the hacked emails were admissible, UEFA had not acted unfairly and the 2014 settlement between the two over a previous FFP case was irrelevant.
• A majority of the panel also found City were guilty of not cooperating with UEFA, as per the rules, and this breach “was severe” and must be “seriously reproached”.
• But, City came out winners on the most important issue: whether more than £200 million of Etihad’s sponsorship payments over three seasons really had come from Sheikh Mansour. Two of the three lawyers on the panel did not believe UEFA had proved its case.
• The emails, the panel found, could not be taken as proof that the “arrangements” apparently discussed in them were carried out or even could be carried out.
• And City had sworn statements and witnesses, including Etihad’s former president and chief executive, to say the alleged conspiracy to deceive UEFA did not happen and could not have happened.

So what are the main things we have learned?

If the CAS press release that announced City’s victory on July 13 can be considered a skeleton, then the award is the meat on the bones. With 93 pages of dense legal discourse, there is plenty to nibble on.

But the amount of detail does not change the two key points: 1) CAS decided UEFA’s allegation that City’s Abu Dhabi backers sneakily stuffed extra cash into the club coffers by disguising it as sponsorships was not proven. However, 2) City did not fully cooperate with the investigation.

“The majority of the panel finds that UEFA’s main charges — ie providing incorrect information to UEFA concerning having received disguised equity funding through Etisalat and Etihad — must be dismissed,” the award says.

The club, which turned up for the Lausanne hearing with nine lawyers compared to UEFA’s three, proposed 10 different arguments as to why the appealed sanctions, which included a £27 million fine, should be scrapped.

Like a scene from a Looney Tunes cartoon, City’s lawyers queued up to bash UEFA over the head with ever-larger implements. Their early blows missed, though, and, if the CAS ruling is a chronological account, City were two or three down after 20 minutes.

This would tally with The Athletic’s understanding that the City camp were worried after the first day of the hearing but then convinced of victory from day two onwards when their nine-man press started to click.

Once City landed one blow, another soon followed and UEFA’s case collapsed.

Many are still wondering one thing, however: how can you win the case but still be fined?

This was the question Tottenham Hotspur manager Jose Mourinho posed a day after the verdict was announced and it is one that will no doubt be the subject of sports law lectures for years to come.

The short answer is City won the war but lost a battle about non-cooperation.

Some will wonder if City did it on purpose because they had something to hide, while others will say it was a legitimate tactic against a case based on stolen material.More cynical observers may wonder if City waited until the last moment to bring out its big guns just to embarrass UEFA and settle the debate about the club’s Abu Dhabi-backed rise once and for all.

This debate, like so many others to do with City since Sheikh Mansour’s 2008 takeover, will run. But to explain why they were cleared of cheating but found guilty of not cooperating with an investigation to prove or disprove that cheating, we must set the scene more clearly.

Although June’s appeal hearing was between City and UEFA, the latter was defending the decision of its independent FFP watchdog, the Club Financial Control Body (CFCB), which is divided into an investigatory chamber (IC) and an adjudicatory chamber (AC).

As their names suggest, the IC, led by former Belgian prime minister Yves Leterme, investigates possible breaches of the FFP rules. The AC rules on any cases the IC refers upwards.

The IC opened its City investigation in March 2019, four months after the hacked emails were first published by the German magazine Der Spiegel, and formally charged the club two months later.

On February 14, the AC agreed with the IC’s “referral decision” that City had breached seven different articles of UEFA’s club licensing and FFP rules, including article 56, which states clubs that want to compete in UEFA’s competitions must cooperate with the CFCB. This cooperation includes providing it with “all necessary information and/or relevant documents” to demonstrate they are complying with the rules.

City, however, repeatedly failed to comply with requests from the IC and AC for unredacted copies of the six emails and one attachment at the heart of this case, as well as any emails immediately before or after — what the parties referred to as the “runs of emails” — and other supporting documents. The CFCB bodies also wanted to interview the men who sent and received the emails, as well as senior staff at the club, its parent company and main sponsors.

In its dealings with the IC and AC, City never deviated from the line the emails were “criminally obtained”and “partially published in redacted form, separated from any context or explanation”.

Their lawyers pointed out the emails were just a handful among more than five million stolen by Rui Pinto, a hacker who is the whistleblowing hero behind the Football Leaks operation to some and a crook to others.

So City told the IC and AC they were not going to confirm or deny if these hacked emails were authentic or not, disagreed with their take on what information was “relevant” and replied that the request to cross-examine eight current or former City employees was “unusual and aggressive”.

For the AC, this was enough to support the IC’s view that City were trying to “obstruct the investigation” and it could then infer, to its “comfortable satisfaction”, that the emails were legit and the conspiracy to deceive they outlined in them is what occurred.

But a month before the CAS hearing, in a move that will bolster the theory they were simply dilly-dallying in their own penalty area for a bit to draw UEFA in, City agreed to provide CAS with most of what the IC and AC had asked for. This included the chance to hear from the authors of those emails, as well as testimony from key figures in Abu Dhabi.

That was sufficient to avoid the existential threat of no Champions League football for two years and a huge asterisk being attached to all that the club has achieved under Sheikh Mansour but not quite enough get away unscathed.

“The majority of the panel finds that MCFC’s failure to cooperate with the CFCB’s investigation is a severe breach and that MCFC is to be seriously reproached for obstructing the CFCB’s investigations,” the ruling says.

CAS felt that while City were entitled to provide extra evidence at their appeal, the club should have shown UEFA’s process more respect. And it ruled City had specifically failed to cooperate in three ways: 1) by not making the club’s director Simon Pearce and their former head of finance Andrew Widdowson available for interview; 2) by failing to provide copies of the emails; 3) refusing to confirm the identity and role of an ADUG employee mentioned in one of those emails.

Pointing out it would “seriously risk turning the proceedings before the CFCB into a farce” if clubs were allowed to hold onto relevant evidence until a CAS hearing, the panel said “this cannot be tolerated or endorsed” and City’s actions should be “strongly condemned”.

It then waved away City’s protests about proportionality and the impact of COVID-19 on their finances and said the £9 millionfine would be a “sufficiently strong deterrent” to other clubs considering a similar tactic.

The irony is the panel almost ruefully noted that if the AC, which is staffed with legal minds of a similar calibre to the CAS panel, had seen and heard what it had been provided with, it may well have reached the same conclusions.

“The relevance of this is that MCFC may have avoided the appealed decision by already filing such evidence before the CFCB,” the award concludes.

“The appealed decision is therefore not per se wrong, but, at least to a certain extent, is a consequence of MCFC’s decision to produce the most relevant evidence at its disposal only in the present proceedings.”

And what was time-barred?

When the CAS verdict was released earlier this month, City fans leapt on the phrase “not established” concerning the allegations the club disguised Sheikh Mansour’s support as sponsorship income. Fans of City’s rivals, however, clung onto “or time-barred” as the real reason why this conspiracy could not be proven — ie some of the alleged offences happened too long ago to be considered now.

So, does the full decision settle this tug-of-war? Yes, no, maybe… erm, let’s look at the panel’s reasoning.

We must start with what was alleged in the emails, the charges the CFCB based on those emails and City’s responses. This was one of the most complicated and lengthy arguments in the hearing but we will try to put it in layman’s terms.

While the Der Spiegel articles — and the hundreds of follow-up pieces that scoop inspired — referenced all of City’s Emirati sponsors, the emails only suggested apparent wrongdoing concerning two sponsorship agreements: the club’s transformative shirt and stadium naming-rights deal with the airline Etihad, and their partnership with the Abu Dhabi-based telecoms company Etisalat.

The CFCB charged City with overstating their sponsorship income from the Etihad deal in the 2012-13, 2013-14 and 2015-16 seasons, and the Etisalat contract in 2012 and 2013. According to these charges, which were based on the plans City executives appeared to be discussing with each other in those emails, about 85 per cent of the income from these sponsorships really came from Sheikh Mansour, via the parent company ADUG or other related parties.

City, as mentioned, tried to swat these charges away with a couple of arguments based on how the CFCB handed the case, its “due process”, and the first settlement agreement reached with UEFA. This agreement is significant for many reasons — not least for souring relations between the club and governing body — but it is not as significant as City’s lawyers hoped it would be in this case.

In short, they hoped much of UEFA’s case at CAS could simply be swept away because they had already dealt with it, very begrudgingly, when the club agreed to a “bespoke” set of sanctions in 2014. City were then “released” from those in 2017 when the CFCB agreed they had complied with the terms of that agreement.

In response, UEFA argued the 2014 settlement was not a “blanket waiver” from any future charges, the new charges were based on new information and the charges were different anyway. CAS agreed.

But having won that row, and another key preliminary argument on the admissibility of the emails, UEFA got caught in possession in their own half and, before they knew it, the game was gone.

For all their confidence about the “unimpeachable” nature of the AC’s ruling, UEFA’s lawyers always knew they had a potential statute-of-limitations issue because of article 37 of the FFP rulebook: “Prosecution is barred after five years for all breaches”.

The CAS panel believes it is why the IC may have rushed to get its referral decision out on May 15, 2019, a day short of five years after the 2014 settlement with City was signed.

In the end, that date proved to be irrelevant, just as the legal sideshow did on the definition of “prosecution”. Just for the completists, this row was about whether the CFCB could take its investigation back to March 2014, five years before the IC opened its investigation into the Der Spiegel emails, or whether City were right in saying everything before February 2015 should be ignored, as that was more than five years before the AC sanctioned them.

CAS disagreed with both and set the clock at May 15, 2014, five years before the club was formally charged by the IC.

But UEFA was still hoping to use the way FFP works as a means to prosecute those alleged offences in 2012 and 2013. This, it felt, was possible because clubs have to meet the break-even requirement over three-year monitoring periods, which suggests City’s FFP filing in 2014-15 contained false information about the previous two seasons.

It was at this point that the panel — its president Rui Botica Santos, a Portuguese lawyer, Andrew de Lotbiniere McDougall, a Canadian lawyer based in France, and Ulrich Haas, a Swiss law professor — split for the first time. It would seldom be united again.

Two of them found that UEFA’s argument “artificially extended” the statute of limitation to “six or seven years without clear legal basis”. It is five years, they said, not five plus two, before noting “this conclusion has important practical implications for the scope of the charges at stake in these proceedings”. And with that, half of UEFA’s case disappeared.

As the Etisalat charges related to only 2012 and 2013, they were now off the table, with no need for CAS to even consider them. Even if they had, it seems unlikely UEFA would have been able to make their allegations stick. The first season of the Etihad charges was also now timed out.

What was “not established”?

To answer this, we must first address those emails, which City did provide to CAS — finally ending the debate about their authenticity — and, to be frank, they do not read any better for the club in a CAS report than they did on Der Spiegel’s pages.

As mentioned, there are six of them and they are printed, in their original formats, across seven pages of the decision.

1. August 2010, from Pearce (who is also City Football Group chairman Khaldoon Al Mubarak’s special advisor) to someone called Mohamed, whose last name and role are redacted. The email appears to set out a three-year deal with Aabar (a state-controlled investment fund in Abu Dhabi) that would see it pay just £3 million annually, with the remaining £12 million a year coming from “alternative sources provided by His Highness”.
2. September 2012 and its author has been redacted but it was to Pearce, City chief executive Ferran Soriano and at least one other redacted name. It sets out the club’s second-quarter cash requirement of £95 million, with the author saying the club has a “business need to be able to show” which money has come from its sponsors and which money has come from its owner. To do this, they ask if Pearce could make sure the money “is physically remitted to us by those businesses as opposed to a combined receipt of partner/equity funding all remitted in one lump”.
3. December 2012 and a similar request but this time from Widdowson, who now works for City’s MLS stablemate New York City FC, to Pearce. It refers to £27 million owed by Etihad and £15 million by Etisalat.
4. August 2013 and two emails, both partially redacted, between Pearce and City Football Group’s financial officer Jorge Chumillas. In the first, Chumillas asks Pearce to explain “the mechanism by which additional sponsorship flows through ADUG” so he can account for it properly. Pearce tells him it is money required for ADUG’s profit and loss account but “we can’t show the payment routes, so it’s partner funding and we should show the total and timing requirements for receipt but we should not include any more detail than that”.
5. December 2013, from Chumillas to Pearce laying out the payments and invoices between ADUG, the club and Etihad for the 2013-14 season. It refers to an £8 million “direct contribution” from Etihad and a £57 million “ADUG contribution to 13-14 sponsorship fee”.
6. Not dated but also from Chumillas to Pearce and Soriano. It sets out the payments and invoices between City, two other City Football Group teams and Etihad, and in it states the amounts for the 2014-15 and 2015-16 seasons are now £8 million “funded directly by Etihad and £59.5 million by ADUG”.

City’s lawyers refer to these emails as the “criminally obtained documents” throughout the entire process, while CAS simply calls them the “leaked emails”. The club failed in its attempt to have them declared inadmissible, as CAS agreed with UEFA that there was a clear public interest argument, their contents had already been widely published and UEFA could not be blamed for their theft.

But, as mentioned above, City’s legal strategy was a bit like Pep Guardiola’s approach: if Kevin De Bruyne, David Silva and Sergio Aguero don’t get you, I’ll throw Riyad Mahrez, Bernardo Silva and Gabriel Jesus at you.

So, unlike any of the CFCB proceedings, where only Soriano turned up for the AC hearing, City used six witnesses. These included Pearce, Widdowson, former Etihad boss James Hogan and Etisalat’s senior vice-president Mohammad Harib, and they also produced a written statement from Sheikh Mansour himself. Between them and City’s independent financial expert, Louis Dudney, the boss of the investigations department at AlixPartners, they stacked up a mass of counter-evidence.

Under oath, Pearce said “absolutely, categorically not” when asked if Sheikh Mansour’s money had been disguised as sponsorship income. He also said the “Highness” in the first email was not Sheikh Mansour, it was Sheikh Sultan Bin Tahnoon Al Nahyan, the chairman on the tourism authority at the time. Not that it mattered much, as the email was 10 years old, predating the implementation of FFP and, for good measure, time-barred.

A majority of the panel found Pearce credible and was also impressed with Hogan’s explanation that Etihad paid for £8 million of its City sponsorship from its marketing budget and the rest from “central funds”. He also said the airline had never received a penny from ADUG and was delighted with its partnership with City. Etisalat’s Harib said much the same.

Only a short section of Sheikh Mansour’s letter is quoted in the verdict but it was effective. It said he has not authorised ADUG to make any payments to City’s sponsors concerning their City deals, nor has he asked anyone else to do so nor done it himself.

Throw in Dudney’s “immaculate” accountancy report, in which he looked for rogue payments in the sponsors’ books, and the fact that Etihad and Etisalat have been audited over the years by big-brand accountants like Deloitte and Ernst & Young, and UEFA’s emails were starting to look thin.

As the CAS panel put it, the burden of proof was on UEFA and it had to demonstrate, to the panel’s comfortable satisfaction, that not only do the emails mean what they appear to mean but the actions they describe actually occurred.

The best UEFA could come up with to prove the second half of that equation was a document City provided which showed the Etihad money came in two chunks, with the larger amount arriving first. UEFA thought this was evidence of the Etihad/ADUG arrangement but Hogan and Pearce said otherwise.

“This is not accepted,” wrote CAS, adding “MCFC’s explanation is not incredible per se” — perhaps the only time City would be delighted to be described as such.

Ouch. So what could UEFA have done differently?

Even City’s lawyers accepted there was a prima facie (at face value) case for them to answer here, it is just that UEFA was in too much of a hurry to put it together. And time, or a lack of it, does seem to have played a part in UEFA’s decision-making throughout.

A month before the CAS hearing, the two parties exchanged a series of letters about evidence and witnesses they intended to bring to Lausanne, including a final request on May 8 from UEFA for the emails, the “runs of emails”, an unredacted version of a “payment ledger” from June 2012 and disclosure of the full identity of the “Dear Mohamed” in the first email.

A week later, City agreed to all but the second request and on the same day, UEFA accepted City’s response, saying it had “no desire to make the current procedure more complicated than necessary” and there was a “general, undisputed interest” that the present matter was resolved by July 10 to avoid any further uncertainty about next season’s Champions League.

But not holding its ground was a mistake. It weakened UEFA’s case at CAS, particularly on the issue of what inferences the panel could draw from City not cooperating more fully with the investigation. To put it another way, CAS told UEFA it could not expect it to agree that City was hiding something if UEFA did not demand the thing City are hiding.

“UEFA’s approach in this regard is understood, because it was faced with a dilemma between trying to obtain additional evidence and having an award issued before the start of the 2020-21 UEFA club competitions season,” CAS noted.

UEFA also allowed City to nominate two of the three judges making the decision at CAS. Normally both parties choose one each and the third is selected by the independent body which runs the court but UEFA bowed to City in their desire for a quick hearing. Remember, over-turning City’s Champions League ban was a majority decision, by two to one.

Asthe game got away from UEFA’s legal team in the second half, even their good moments came back to bite them.

Late on, when the two sides’ accountancy experts were giving their evidence, UEFA’s man, Noel Lindsay of Financial Investigations Limited, said he could not rule out that Sheikh Mansour’s money had not been funnelled through Etihad’s accounts because nobody has seen the “contemporaneous emails, relevant documents, board papers” and so on that would be needed to make such an assessment.

He added he could not say much about where the money had come from because “I feel, in essence, I’ve been shown the tip of the iceberg”.

This might have sounded good at the time but, as the judgment points out, “if Lindsay could not exclude any hypothesis, how should the panel conclude that UEFA’s hypothesis must be accepted and MCFC’s dismissed?”

The post-match debate at UEFA’s Nyon HQ has been raging for nearly three weeks now and it is understood there is frustration at the verdict but much of that is directed at themselves. They knew the five-year time bar could be a problem and so it proved.

Some in the building did not think it was an FFP case at all, and should perhaps have been treated as a disciplinary matter targeted at City’s executives.

They were outvoted, though, by those who felt UEFA had to defend FFP. Those rules were wobbling even before this case. While City’s win does not mean the death of financial fair play, it does mean this iteration of FFP needs an update.

In many ways, the COVID-related relaxation of FFP provides time and space for European football to think about what it wants its spending rules to achieve: greater financial sustainability or better competitive balance? Trying to do a bit of both has not been very successful.

So what happens now?

In as clear a sign as any that the debate — if not necessarily the legal proceedings — will probably drag on and on forever, Der Spiegel resurfaced on Thursday with new emails it claimed were part of the original 5.5 million documents, that had not been previously released and were not known to the CAS panel.

Just as in 2018, they published emails which certainly appear troubling for City, suggesting that the Etihad sponsorship deal was indeed only partly funded by the airline, and that some of the club’s witnesses had deliberately mislead the CAS panel under oath. So what could happen now?

Not a lot, quite possibly, because the whole thing would likely play out exactly the same way; City told Der Spiegel that they would not comment on a “cynical attempt” to “undermine and process an orderly and completed Cas procedure”, which is almost identical to their “organised and clear” defence two years ago.

And an article in the Manchester Evening News — which may be based on sources within the club — reports that these new emails have been taken out of context. Remember, the CAS panel found that the emails presented in the media in 2018 were often shorn of context, but did accept their veracity, not least because City provided the emails themselves.

Der Spiegel suggest that UEFA could have gone further in their arguments against City at CAS, though whether they have the stomach to essentially go through all this again appears very, very unlikely. As much as anything, City were able to satisfy the CAS panel that they had done no wrong, and both the club and UEFA would probably expect that to happen again if a potential round three (there have already been two CAS hearings, remember) were based merely on emails printed in the media.

Back to the verdict, now, and there are legal bills to be paid. As CAS did not fully exonerate City, it ruled both parties must pay their own costs and split the bill for the panel’s, plus City will also need to cough up the 100,000 Swiss francs (£84,000) the AC demanded for the CFCB’s costs in February.

But there may be a reckoning of a different sort if Guardiola and his team can see off Real Madrid in Manchester next week and qualify for the final rounds of this season’s Champions League. Their path to the final in Portugal could see them play Juventus in the quarter-finals and Bayern Munich in the semis, two of Europe’s aristocrats.

Juventus are owned by Andrea Agnelli, the boss of the European Club Association, the group of rich clubs that cooked up FFP with UEFA in the first place, while his predecessor Karl-Heinz Rummenigge is still Bayern’s chairman and told reporters last week City were cleared because UEFA “didn’t do a great job”.

There will be scores to settle in England, too, as the CAS award revealed it was a “nasty nine”, not a “hateful eight” ganging up on City. Nine Premier League clubs wrote to CAS in March to express their objection to City’s sanction being suspended while they appealed.

As it happened, both City and UEFA got on with it and City never needed a stay. They and all their fans now know, though, that Newcastle United joined Arsenal, Burnley, Chelsea, Leicester City, Liverpool, Manchester United, Tottenham and Wolverhampton Wanderers in signing the letter.

There are also a few legal loose ends to tie up.

Having failed with several preliminary attempts to have either the CFCB or CAS stop the case in its tracks, City filed a complaint in January with UEFA’s Control, Ethics and Disciplinary Body about the alleged leaking of information to several media outlets last year. In May 2019 Leterme “vehemently” rejected City’s claims, saying the allegations were “groundless in the merits and unacceptable in tone”.

That case is still pending and if City and UEFA are serious about burying the hatchet, and not just between each other’s shoulder blades, it might be an idea to quietly let it go.

The same could probably be said about any possible investigations into City’s conduct by the Football Association, which is responsible for giving clubs licences to play in Europe, or the Premier League, which has its own looser FFP rules. Given UEFA’s expensive defeat, it is hard to see what appetite there would be for either, or even what case there is to answer.

Once the dust settles, it might even seem that the outcome has suited both parties.UEFA can say it did everything in its power to bring City to heel, while the club can now claim UEFA’s investigation was flawed and insufficient.

The optics, and the politics, suit and discredit both City and UEFA, depending on which side of the argument you were on in the first place.

(Photo: Visionhaus)