Civil Case (Tel Aviv) 4497-11-23 Hapoel Haifa Millennium Ltd. v. Saar Fadida

22.1.2025

The Applicant's application, "Hapoel Haifa Millennium Ltd" (hereinafter: "the Applicant" or "Hapoel Haifa" or the "Transferring Group"), which was filed by virtue of Regulation 54 of the Civil Procedure Regulations, 5779 - 2018 (hereinafter: "5741"), to order the cancellation of the judgment of the Supreme Court of the Football Association of September 3, 2023, all as detailed below.

Background

1. Saar Fadida (hereinafter: "Fadida" or "the Respondent") is a football player, born on January 4, 1997, who played for Maccabi Haifa from the 2006/2007 season until the end of the 2014/2015 season. From the 2015/2016 season, Fadida played for the Applicant, until the end of the 2021/2022 football season.  At the end of the season, Fadida moved to play for the "Hapoel Hadera Football Club" team (hereinafter: "the Respondent" or "Hapoel Hadera" or "the absorbing team").
2. In July 2022, the Applicant filed an application before the "Player Status Institute" of the Football Association (hereinafter: the "Institution") in which it requested that the Respondent and Hapoel Hadera pay compensation (hereinafter: the "Compensation") for Fadida's coaching and professional advancement, given the length of time he played for the Applicant and given the fact that he immediately moved to play for Hapoel Hadera without exhausting the "quarantine" period, all in accordance with the provisions of the Football Association's Registration Regulations in Section 12(b)(2)(5)(c) and D (hereinafter: The "Articles of Association" or the "Listing Regulations") in the framework thereof are set out as follows:

“)c) If the player is over 24 years old at the end of the last season of the agreement, he may move and register with any team he wishes, without the transferring team being entitled to any compensation for the transfer.

(d) Notwithstanding the provisions of subsection (c) above, if a player who is over 24 years old at the end of the last season of the agreement, and this is the first time that the player moves from a team in which he has played for most of his years, the transferring team will be entitled to receive compensation from the receiving team, or from the player himself, compensation for the promotion and coaching of the player, as will be agreed upon between the parties, and in the absence of agreement, as determined by the institution for the status of the player" (emphasis mine).

3. As stated, on July 20, 2022, the Applicant applied to the Institute for compensation for the Respondent's training and promotion (also known as "betterment fees") and on September 12, 2022, the Institute gave its decision on the application (hereinafter: the "First Decision"). In the framework of the first decision, the institution determined that "the transferring team is entitled to receive compensation for the coaching and promotion of the player while he was registered with its ranks for most of his years (about 6 years), minus the loan years" (see paragraph 19 of the first decision) and further determined that: "The player was registered in the ranks of the transfer team for about 6 seasons (minus the loan season), but in practice it is only 5 seasons, in light of the global coronavirus crisis...  Therefore, the compensation due to the transferring team for the coaching and promotion of the player will be determined accordingly" (see paragraph 25 of the first decision).  Ultimately, the institution determined that Fadida and Hapoel Hadera, jointly and severally, must pay the applicant the sum of ILS 250,000 as such compensation.
4. Fadida appealed this decision to the Supreme Court of the Football Association (hereinafter: the "Tribunal"), which issued its judgment on January 18, 2023 (hereinafter: "the First Judgment"). In paragraph 9.1 of the judgment, the court noted that: "In deciding this appeal, we have given our consideration, first and foremost, to the provisions of the bylaws, as well as to previous rulings of the Supreme Court, according to which in principle there is no right to appeal against the decisions of the Player Status Committee except in rare cases of deviation from authority and/or violation of the rules of natural justice." However, clause 9.2 states that: "At the same time, in the present case, the question arises in all its severity the very authority of the player's transfer committee to discuss the determination of compensation, where it is a matter of how the terms 'first transfer' and 'most of his years' as set forth in the regulations should be interpreted."
5. Since this was its conclusion, the Tribunal instructed the Mossad to examine and explain the Applicant's entitlement to receive the requested compensation, while determining in section 11 that the Institute's first decision was: "problematic" and "full of internal contradictions, and which was not explained at all - apart from the laconic determination in paragraph 19 of the decision - how and why he reached the conclusion that the appellant played "most of his years with Respondent 2".
6. On March 9, 2023, following the first judgment, the Institute issued its second decision (hereinafter: the "Second Decision"). In the framework of this decision, the institution determined in paragraphs 20-22 of its decision that the respondent "was registered in the ranks of Maccabi Haifa from the age of 12 years until the age of 18 years and five months - that is, for six years and five months.  He actually played for the team for 5 years and 5 months, minus the loan period to the transfer team.....  He played for Maccabi Haifa for 5 years.  The player was registered in the ranks of Hapoel Haifa from the age of 19 years and 8 months until the age of 25.5.  Years - we were for 5 years and 9 months.  He played for the team from the age of 18 years and 8 months, when he was loaned out for the 2015/2016 season.  Therefore, the player actually played for a team that has been going on for 6 years and 9 months...  In the business sector, he played for a team that has been going on for 7 years...  Hence, the player played for most of his years in the ranks of the transfer team and is entitled to betterment fees for him." Therefore, the Mossad again instructed Fadida and Hapoel Hadera to pay the compensation payments that were determined in the first decision.
7. On September 3, 2023, Fadida appealed the second decision again to the Tribunal, and on September 3, 2023, he gave his decision ordering the cancellation of the second decision (hereinafter: "the Second Judgment"). The Tribunal justified its ruling by saying that the Mossad's decision was fraught with "contradictions - both internal contradictions and contradictions in comparison to the first decision" (paragraph 10.2 of the second judgment).  The court again examined the question of entitlement to betterment fees and the question of where the respondent played "most of his years" and reached the conclusion that "the calculation of the period in which the appellant actually played for the Maccabi Haifa team and the calculation of the period in which the appellant actually played for respondent 2 is identical".  Therefore, the Tribunal ruled that the Applicant is not entitled to payment of compensation as claimed by her and in accordance with the provisions of Section 12(b)(2)(5)(c) and D of the Registration Regulations.
8. On November 1, 2023, the Applicant filed the application that is the subject of this proceeding, which is titled: "Written Request to Annul a Judgment of the Supreme Court of the Football Association". In the framework of the application, the Applicant petitioned to annul the second judgment, relying, according to her, on court rulings that require "judicial intervention in cases of deviation from authority made by internal tribunals of voluntary bodies" (paragraph 39 of the application).  The Applicant argued that the Tribunal had no authority at all to intervene in the decisions of the Mossad (neither for the first time nor for the second time), and that on the merits, there were also material errors in the Tribunal's decisions.
9. On February 1, 2024, Hapoel Hadera submitted its response to the request, requesting that it be rejected. According to her, this is a decision that was made in the framework of a proceeding that was conducted in an internal tribunal and as such - the scope of the courts' intervention in it is limited and is possible in rare and exceptional cases.  Hapoel Hadera also sought to postpone the method of calculating the number of years in which Fadida played for the Applicant - and claimed that the Applicant had incorrectly counted the years given the provisions of the Regulations, and that the Respondent had played for Maccabi Haifa for 10 years, and for 7 seasons in the Applicant's uniform - and therefore the rule regarding "most of his years" as aforesaid did not apply.
10. On February 16, 2023, Fadida submitted his response to the motion, which "folded" a motion to dismiss the motion in limine. According to Fadida, there was no reason to submit the application as an application under section 54 of the Civil Code; There was no room to file the application without the Football Association as a party to the application, and there was no room for filing it after a long time had passed since the first judgment was given (January 2023).  On the merits of the matter, Fadida argued that there was no room at all to intervene in the Tribunal's decision, since the aforementioned did not exceed its authority, when it duly examined the decisions of the Institute and found that they did indeed have flaws that violate the rules of natural justice and allow for intervention.
11. On July 1, 2024, a hearing was held in the presence of the parties (Fadida received an exemption from appearing). In the course of the hearing that took place, counsel for the parties was asked to clarify a number of facts and data relating to Fadida; the court tried to bring the parties to a procedural agreement whereby it would pass on the question in dispute (by calculating "most of his years"), while waiving questions of authority and others.  Since no agreements were reached, an order for summaries was issued, and once they were filed, I have no choice but to give my decision on the application before me, and first to review the arguments of the parties in more detail.

The Applicant's Arguments

12. The Applicant argued that the second judgment should be annulled, since the court exceeded its authority and was not authorized at all to annul the second decision of the institution, in accordance with the determination in section 14A(8) of the Registration Regulations, according to which "the decision of the adjudicators will bind the parties involved, will be final and cannot be appealed". The Applicant also referred to Section 1 of the Association's Rules of Procedure, which states that it is not authorized to hear decisions in respect of which there is no right of appeal.  The Applicant further added that the Tribunal exceeded its authority and violated the rules of natural justice when it seriously misinterpreted the facts and the law.  The Applicant argued that even the narrow façade in which the Tribunal unlawfully allowed itself the right to intervene did not apply in the present case, since there were no flaws in the Mossad's decision at all.
13. The Applicant added that the Institute duly examined its reasons at the time of its second decision, and that even in this decision there was no deviation from authority or violation of the rules of natural justice , and therefore there was no room for intervention, as the Tribunal did in the second judgment.
14. The Applicant argued that the Tribunal erred in passing the question of "most of his years" under the weight of its criticism, at a time when the Tribunal is not at all authorized to serve as the court of appeal against the Institute's decisions in these matters, all the more so when the result of the Tribunal's decision is liable to create chaos in the Football Association in the conduct of the football teams vis-à-vis players. The Applicant argued that the Tribunal's errors require judicial intervention even as it is an internal tribunal of a voluntary body, since its decision created an absurd and unacceptable result.  In the margins of her arguments, the Applicant further argued that if the judgment is upheld, teams will refrain from nurturing players and improving their professional ability, since they will be able to abandon them without compensation, while harming their property and without being deterred from doing so.
15. The Applicant argued that the Tribunal made a mistake that goes to the root of the matter, when it raised the reason relating to a "conditional arrangement" to invalidate the Institute's decision. According to the Applicant, the court refrained from considering the obligation of a player who refrains from reaching a financial arrangement - to enter quarantine and refrain from playing (in a manner that would have prevented Fadida from joining Hapoel Hadera over an entire season).
16. In her summary, the Applicant further argued that the Tribunal's interpretation that there is no appeal only to the amount of the amounts awarded as betterment fees is baseless and contradicts the provisions of section 14A(8) of the Registration Regulations. According to the Applicant, the role of the Player Status Institute is to decide a financial and commercial question that arises from the transfer of a player from one team to another (from the Football Association's website) and the Supreme Court has no jurisdiction to hear these decisions at all.  The Applicant added that the Institute acted lawfully in its second decision when it again examined its reasons and changed its decision, as required by the provisions of the first judgment.  The Applicant further added that by virtue of section 14A(6) of the Regulations, the Tribunal was prohibited from interfering in the second decision of the Institute, in light of the proprietary principle that arises from the sections of the Law and the Regulations that anchor the Applicant's economic rights in the player she nurtured and promoted.
17. According to the Applicant, the first judgment of the Tribunal referred the institution to clarify matters that require a "clerical error" and to "demand a detailed explanation on the question of entitlement to compensation", and therefore she did not appeal the first judgment, and in accordance with the ruling, she was required to exhaust the hearing within the framework of the Association's internal tribunal, and only after its second judgment was given did she turn to this court.

The Respondents' Arguments

18. The Respondent repudiated the Applicant's arguments and sought to dismiss them out of hand. According to him, as a rule, there is no room for this Court to intervene in the decisions of an internal legal tribunal, and such intervention is only possible in a limited manner and in exceptional cases of deviation from authority and violation of the rules of natural justice.  According to the respondent, the Supreme Court held a substantive and proper hearing prior to its judgment, and therefore, there was no flaw in its judgment.
19. As aforesaid, the Respondent raised threshold arguments, and argued, inter alia, that the application should not have been filed on the basis of Regulation 54 of the Civil Code, but that the Applicant should have opened a proceeding by filing a statement of claim, and this is the default for taking legal proceedings. It was also argued that the Applicant's failure to join the Football Association was deliberately done in view of the Association's support for the Respondent's interpretation that the Applicant was not entitled to compensation for the player's betterment at all .  The Respondent also added that the Applicant's application suffers from severe delay and that the Applicant's arguments regarding the deviation from authority should have been argued by the Applicant even when the proceeding was transferred to the Tribunal after the first decision of the Institution was rendered, and that the mere failure to take action against the annulment of the Institute's first decision speaks for itself and proves that the Applicant's arguments are based on shaky foundations.
20. On the merits of the decision, the respondent argued that the tribunal had lawfully intervened in the second decision of the institution, while in the second decision of the institution new and different reasons were raised from those made in the first decision; When the institution tried to validate its decision, which was revoked in the framework of the first judgment, by raising various and new reasons and by changing and contradicting the determinations it had made in the first decision; An arithmetic chronological examination of the Respondent's number of years was not conducted, all in contravention of the provisions of the Regulations and the instructions related thereto (such as the guidelines relating to the Corona year and the loan years).
21. According to the Respondent, the Institute acted in its second decision as it did in order to reach the first result - charging Fadida and the Respondent to pay the compensation fees. According to the respondent, these defects that occurred in the second decision are material defects that went to the root of the matter in dispute, and therefore the court lawfully intervened in the second decision of the institution and annulled it.
22. The Respondent added that in contrast to the decisions of the Institute, the Tribunal analyzed the relevant sections of the Regulations in a matter-of-fact manner and exhausted them while applying them to the case, and therefore reached the correct and obvious conclusion that the Applicant is not the team in which the Respondent played for most of his years. Therefore, and given the required intervention of the Football Court, the exceptional and extreme cases in which this Court has room to intervene in the decision of an internal tribunal - the Football Court have not occurred.
23. The Respondent added that the Applicant's arguments regarding the conditional arrangement should also be rejected when we are dealing with the determinations that the Applicant quoted from another judgment, to which the Applicant was not a party at all, and in any event, this was not the main reason or at all for the cancellation of the Institute's decision on the status of the player.
24. On the merits of the matter, the Respondent emphasized in his summaries that in any constellation or statutory interpretation was the Applicant entitled to betterment fees. According to him, he played for Maccabi Haifa for 9 years, starting on September 27, 2006, when he was 9 years old (or at least 6 years in the count, starting at the age of 12); then, in the 2015-2016 season, when he was 18.9 years old, he was loaned to the Applicant, and in the 2016-2017 season, he moved to play for the Applicant, until the end of the 2021-2022 season.  The Respondent added that the years in which he played for the Applicant were not consecutive, given that in the 2018-2019 season he was loaned for a full season to the ranks of Hapoel Rishon LeZion, and given that the Corona season should be deducted, in the end the Respondent played for the Applicant for only 5 seasons or at least, and if the Corona season was not deducted, 6 years.  According to the Respondent, when the Respondent left the Applicant when he was over the age of 24, and in view of the provisions of the Registration Regulations, the Applicant was not entitled to betterment fees at all, since most of his years the Respondent played for Maccabi Haifa.
25. The Respondent added that the Applicant raised contradictory claims as to the manner of calculating "most of his years" and did not make an equal decree in the calculations of the periods in which Fadida played for Maccabi Haifa and Hapoel Haifa. According to the respondent, there is no room to adopt the term "registered" but only the term "played"; The loan periods for both teams should be deducted; There is no place to recognize the claim of injury during the loan period to Hapoel Rishon LeZion; The corona period should be deducted as determined by the institution itself in its first decision.  The respondent further argued that if the same parameters are adopted for all periods, the result is that Fadida played for Maccabi Haifa for most of his years and not for Hapoel Haifa, and therefore the latter is not entitled to betterment fees.
26. In addition, and alternatively, the Respondent argued that the betterment period should be counted only from the age of 12 to the age of 21, as we learn from Appendix 16 to the Registration Regulations, "the table of transfers in the Registration Regulations", where the amounts calculated for the purposes of transfer relate only to betterment from the age of 12 to 21 and not thereafter. According to the respondent, this is also consistent with the FIFA Registration Regulations, which stipulate that the process of coaching a player is up to the age of 21.

Questions that need to be decided

27. Are there any truth to the threshold claims? In this case, is there room to intervene in the court's ruling?

Although the first question loses its importance, since I will relate to the matters on their merits, I will note that I cannot accept the Applicant's argument that the appropriate proceeding for our purposes is a proceeding under Section 54 of the Civil Procedure Regulations, in accordance with the precedent established in Other Municipality Applications 7486/21 Jerusalem Local Planning and Building Committee v.  Fatima Abbasi, published in Nevo, given on March 8, 2022, at paragraphs 11-17.  In other words, since the Regulations have limited the scope of the alternatives available for taking civil proceedings in the courts, taking action in accordance with section 54 of the Regulations will be possible only where it is expressly stipulated in the law.

28. In his matters, there is no positive provision in the Sports Law regarding the manner of appealing to the court for the purpose of annulling the decision of the tribunal or the institution (except, as claimed by the respondent: "Appeal regarding the transfer of an athlete" see paragraph 6 of his response) and therefore, the applicant should have taken the path of filing a claim to the court - which is the way to go in our case.
29. Moreover, I am of the opinion that the Applicant's argument that Regulation 4 of the Arbitration Procedures Regulations, 5729-1968 can apply in his case, should not be allowed, when this Regulation stipulates that only an application under the Arbitration Law, "for which no other procedure has been prescribed in these Regulations", will be submitted in writing in accordance with Regulation 54. A determination that the decision of the Football Court is equivalent in its status to an arbitrator's award is a far-reaching determination that is inconsistent with the provisions of the Arbitration Law.

Therefore, there was room to file an action and not an application by virtue of section 54 of the Civil Code, but I chose to examine the matters on their merits as well, as will be explained below.