CAS rules that the Rangers de Talca precedent cannot be applied as a blanket rule to sporting succession cases

CAS rules that the Rangers de Talca precedent cannot be applied as a blanket rule to sporting succession cases
[1] The precedent in CAS 2011/A/2646 Club Rangers de Talca v. FIFA has become pivotal for the FIFA Disciplinary Committee (FIFA DC) decisions concerning sporting successor clubs under Article 15 of the 2019 FIFA Disciplinary Code (FDC) and Article 64 of the 2011/2017 FDC. The FIFA DC has often relied on Rangers de Talca to rule that the creditor did not show the required degree of diligence, just because he/it did not register his/its claim in the insolvency/bankruptcy/liquidation proceedings of the original debtor. CAS recently overruled that approach by saying that there is no blanket rule, and the assessment of the degree of diligence should be made based on the specific circumstances of each particular case. Further, CAS deemed that the value of the debtor’s liquidated assets plays a crucial role in assessing the creditor’s diligence.

Brief facts

The creditor club sought to enforce a FIFA Dispute Resolution Chamber (DRC) decision on training compensation before the FIFA DC against the potential successor club.

The FIFA DC determined that, based on the argument and evidence on file, the new club was the sporting successor of the original debtor and, as such, was liable for the debts incurred by the latter - particularly the one stemming from the DRC decision. Therefore, the sporting successor was found to have breached Article 64 of the 2017 FDC.

The new club did not raise the issue of the creditor’s diligence when claiming its debt during the original debtor’s liquidation proceedings in front of the FIFA DC club, and the latter did not consider this matter ex officio (as it did in other known cases).