THE FOOTBALL LEAGUE LIMITED

PROFESSIONAL CONDUCT COMMITTEE

DECISION (NO. 2) ON THE APPEAL OF MR MASSIMO CELLINO

Tim Kerr QC, Chairman

Greg Clarke
Richard Bowker CBE

Introduction
1.

This is the appeal of Mr Massimo Cellino against the written decision of the
Football League Limited (the League) dated 1 December 2014, that Mr
Cellino is disqualified from acting as a director of a League club. Mr Cellino is
entitled under the Leagues Regulations (the rules), Appendix 3, rule 6.1, to
appeal to the Professional Conduct Committee (the Committee). We have
been appointed to sit as the Committee for the purposes of determining this
appeal.

2.

This appeal was heard in London on 15 January 2015. We are grateful to the
parties representatives for their helpful and constructive contributions before,
during and after the hearing. The representatives assisted us with written and
oral submissions of high quality, which enabled the hearing to proceed
smoothly and comfortably finish within a single day, as scheduled.

3.

Mr Cellino was represented by Lord Macdonald of River Glaven QC and Mr

Aaron Watkins of counsel; Mr Adam Morallee, managing partner, and Mr Ben
Polak solicitor, of Brandsmiths, solicitors; and Mr Robert Brackup, partner, of
Chadwick Lawrence. The League was represented by Mr Jonathan Taylor,

partner, and Mr Jamie Herbert, solicitor, both of Bird & Bird, solicitors; Mr
Nick Craig, the Leagues Director of Legal Affairs; and Ms Ilaria Curti, from
the Rome office of DLA Piper, solicitors.
4.

This decision should be read together, where necessary, with the previously
issued written decision of the Committee (on that occasion the present chairman
sitting alone) sent to the parties on 5 April 2014 (the April 2014 decision).
Abbreviations and definitions in this decision are the same as in the April 2014
decision. In the interests of speed, efficiency and economy, we will not repeat
here factual and background matters set out in the April 2014 decision.

5.

On that occasion Mr Cellinos appeal against disqualification succeeded on the

basis that, although criminal proceedings against him in Sardinia had led to a
conviction, it was not a conviction for a an offence involving a Dishonest
Act under the rules, since there was insufficient information available from
which it could reasonably be concluded that his conduct in committing the
offence was dishonest. He was not, therefore, subject to a Disqualifying
Condition.

6.

The League obtained the written reasons given by the judge in Cagliari, Dr
Sandra Lepore, dated 28 July 2014. After considering written argument from
Mr Cellino, the League decided again on 27 November 2014 that the decision
in March 2014 was a conviction, and that in the light of the judges reasons,
the conviction was for an offence involving a Dishonest Act, i.e. any act
which would reasonably be considered to be dishonest (see the definitions in
Appendix 3, rule 1.1).

7.

The League accordingly decided that Mr Cellino was disqualified from holding
office or acting as a Relevant Person in respect of Leeds United FC or any
other Club until 18 March 2015 (pursuant to paragraph 2.1 of Appendix 3);
must resign forthwith as a director of Leeds United (paragraph 2.2(a) of
Appendix 3); must not otherwise act in a manner that would qualify him as a

Relevant Person (as defined in Appendix 3) until 18 March 2015; and must
take necessary consequential steps, within 28 days of the date of the decision.
8.

Mr Cellinos appeal is against that decision. The appeal is governed by English

law (rule 6.8 of Appendix 3 to the rules, incorporating rule 83.1). Mr Cellinos
grounds of appeal were that the Cagliari courts decision was not a
conviction; alternatively, that it was not a conviction for an offence
involving a Dishonest Act, i.e. any act which would reasonably be considered
to be dishonest; alternatively, that there are compelling reasons (see rule 6.2)
why Mr Cellino should not be disqualified from holding office or acting as a
director of Leeds United FC.

The Facts
9.

After the April 2014 decision was provided to the parties, Mr Cellino, through
corporate vehicles controlled by him and his family, acquired a controlling
interest in Leeds United Football Limited (the Club). Since then, Mr Cellino
has acted as President of the Club, which currently plays in the Championship.
The League and Mr Cellino were aware that Dr Lepores reasons were due to
be produced within 90 days of the date of her decision made on 18 March 2014,
i.e. by the middle of June 2014.

10.

In the event, her written reasons were dated 28 July 2014 but the League did
not at that stage have a copy of the document containing them. The judges
reasons were the subject of extensive written and oral submissions from the
parties, which we consider further below. The written reasons were available to
us in Italian and in English translation. They include the following salient
features.

11.

The prosecutor sought a conviction and a fine of 1.1655m in addition to

confiscation of the Nlie. The defence sought an acquittal on the ground that
the case could not be made out or on other legal grounds. The prosecution case
was founded on testimony from a tax enforcement officer, Antonio Pani, and on

documents. Mr Cellino gave evidence during the hearing on 12 December

2013. His evidence was to the following effect.
12.

He said he was authorised to use the vessel by its owner, Freetime Miami LLC
(Freetime), as manager of that company, in both US and international waters.
He had brought the vessel to Cagliari temporarily, for maintenance and repairs,
to make her fit state to cross the Atlantic to the USA. He sometimes used the
boat at weekends while she was being repaired, while awaiting the season
favourable for departure to the USA. He did not believe he had to pay the
relevant customs duties, as he believed he could rely on the total exemption in
cases of temporary admission to the territory of the EU for less than 18 months.

13.

The judge made the following findings. Freetime was established in about
August 2011, one month before the purchase of the Nlie. Mr Cellino was the
only shareholder and director. Freetime was set up for the sole purpose, as Mr
Cellino admitted, of acquiring the boat and undertook no other commercial
activity, nor did it have a registered office or permanent organisation. The
purchase of the vessel was not linked to any business activity of Freetime; there
was no evidence that Freetime ever undertook any business activity.

14.

The judge found that the vessel was acquired by Freetime in Croatia in
September 2011 and had never been used for business purposes. It was
exclusively for Mr Cellinos personal use. The judge referred to a written
authorisation to which, it is agreed, a mistaken date was attributed, the correct
date being 27 September 2011. It was to the effect that Freetime authorised
(among others) Mr Cellino to use the Nlie in international and Italian and other
European waters.

15.

The judge noted that it was not disputed that the vessel was based at Cagliari
from, at the latest, 1 January 2012, that being the date of a contract for a berth at
the port until 1 October 2012. It was not disputed that she was at Cagliari on 6
June 2012 and was intercepted and confiscated on the basis of alleged tax

evasion, in an estimated amount of 388,500. The judge did not accept Mr

Cellinos evidence that the Nlie was brought to Cagliari because of a need for
maintenance and repair work.
16.

She found that the circumstances of the boats acquisition and use led to the
conclusion, beyond any reasonable doubt, that the true or beneficial owner was
Mr Cellino. In a partly disputed English translation that was before us, the
written reasons include the following (with some Italian words inserted in
italics):
the real owner of the vessel is actually Massimo Cellino and the
company Freetime Miami, LLC is nothing other than a fictitious shell company
(schermo societario fittizio) established purposely to allow the defendant, as the
actual user of the asset, to introduce in the territory of E.U. a means of transport
under the temporary admission regime, in this way evading (eludendo) the
payment of the amount due as customs duties.
In light of the considerations above, therefore no doubt exists as to the existence
of an evading intention (intento elusivo) of the defendant, it being deemed that
the evasion of the V.A.T. on imports was the result of a deceptive
(macchiavellica) simulation (simulazione) executed by the defendant to disguise
a definitive admission as temporary admission.

17.

The judge concluded that Mr Cellino was guilty as charged and, taking account
of mitigating circumstances and his previous criminal record, imposed a fine of
600,000, ordered him to pay the legal costs of the proceedings and confirmed
that the vessel would remain confiscated as it had been the object of contraband
activity. The basis on which the judge convicted Mr Cellino was the subject of
rival arguments which we consider below. An appeal against her decision has
been brought, but we do not have evidence about the details of the appeal or the
grounds on which it was brought.

18.

Correspondence then ensued between the Leagues lawyers and Mr Cellinos

lawyers, and Mr Cellino himself. This was because the League understood
from press reports that the judges reasons were available to Mr Cellino, and
the League wanted to see them. The League took the view that Mr Cellino was
being obstructive by deliberately withholding the judges reasons to cause

delay. That issue may be the subject of disciplinary proceedings, but is not
relevant to the present appeal, and we express no view on the issue.
19.

In October 2014, the League successfully applied to the Cagliari Court of

Appeal (Corte dAppello di Cagliari) for an order that the judges written
reasons (sentenza or judgment) should be released to the League, in view of its
specific interest in the contents of the judgment for the purpose of exercising its
function of ascertaining the suitability of Mr Cellino to own and operate the
Club, which is one of the clubs in the League.

20.

The Board of the League then made its decision to disqualify Mr Cellino, as
explained above, on 27 November 2014, and confirmed it in writing on 1
December 2014. On 15 December 2014, Mr Cellino appealed against that
decision. As well as raising certain preliminary issues, he advanced as grounds
of appeal the contentions that, first, the Cagliari courts decision was not a
conviction under the Leagues rules; second, if it was, it was not for a
Dishonest Act; or alternatively, third, there are compelling reasons why the
conviction should not lead to disqualification.

The Proceedings
21.

In paragraphs 22 and 23 of the notice of appeal, Mr Cellino asserted his

entitlement under the rules to the Committee being composed of a chairman
and two directors of the League, rather than a chairman sitting alone, and
suggested that the chairman should recuse himself. This submission was then
developed in writing at the chairmans request, and was opposed by the League
in writing. By an email on 18 December 2014, the chairman declined to recuse
himself for reasons to be given in the Committees final decision.

22.

Mr Cellino submitted in writing, through Mr Tim Owen QC and Mr Watkins,

that the conviction issue was again a live one in the present appeal; that the
chairman had committed himself to the view that the Sardinian courts finding
was a conviction under the rules; and that accordingly there would be an

appearance of bias if the chairman were to sit on this occasion. He submitted

that a reasonable informed observer would consider the chairman disabled by
his previously reached decision on the conviction issue from bringing objective
consideration to bear on that issue.
23.

It was accepted in Mr Cellinos written submissions that this was not a matter
where the chairman had an interest, association or pressure extraneous to the
case; but he submitted that the chairmans decision on the conviction point in
the April 2014 decision could distort his objective judgment or, at any rate, a
reasonable informed observer might think so. It was also argued that the
chairman had predetermined the conviction issue or might be thought by a
reasonable informed observer to have done so.

24.

The League strongly resisted those propositions, submitting that the test for
apparent bias was not met in this case. The League argued that, assuming
(contrary to its stance) the conviction issue was not res judicata as between the
parties, the chairman would plainly be able to bring objective judgment to bear
on that issue; and that, while it was legitimate for the Committee to take
account of the chairmans views on the conviction issue as expressed in the
April 2014 decision, those views were a matter connected with the merits, and
did not constitute an interest, association, or pressure extraneous to the case.

25.

The chairmans prefers the Leagues submissions on the point and was not
persuaded that this was a case where there was any appearance of bias, applying
the well known test in Porter v. Magill [2002] 2 AC 357, HL, per Lord Hope at
paragraph 103 ( whether the fair-minded and informed observer, having
considered the facts, would conclude that there was a real possibility that the
tribunal was biased.). The chairman does not consider that is the position
here.

26.

It is true that, as observed by the learned editors of Russell on Arbitration, 23rd

edition, paragraph 4-117: [in] exceptional cases, the past or present positions

held or roles performed by the arbitrator outside of the particular case before
him can give rise to a real possibility of bias. In the same work, attention is
drawn at paragraph 4-124 to the point that [i]n certain circumstances, previous
expressed views of an arbitrator, which suggest a certain pre-disposition to a
particular course of action, outcome or in favour of a party, can constitute
grounds for removal.
27.

But the chairman does not think that the present case (bearing in mind the facts
of the cases cited in the footnotes in support of those propositions), comes near
one in which those propositions can properly be applied. There is no suggested
pre-disposition to favour the Leagues cause over Mr Cellinos; not
surprisingly, since the latter prevailed in the April 2014 decision. The
chairmans previously expressed decision on the conviction issue is the only
matter on which Mr Cellino relies.

28.

It seems to the chairman that the fair-minded and informed observer would
discount the possibility that he would fail to perform his obligation as a
decision maker to exercise dispassionate, independent and objective judgment
in an impartial manner when reconsidering the conviction issue, if it is not to be
treated as res judicata; including consideration of the possibility that the earlier
reasoning and conclusion were wrong, whether or not on the basis of fresh
points that might cast doubt on their validity.

29.

On 22 December 2014 following discussions conducted by email, directions

were given for the purpose of preparing for the hearing before us. Mr Cellino
agreed to the appointment of Messrs Clarke and Bowker to sit as members of
the Committee, expressly waiving (through Mr Watkins, during a telephone
hearing on 19 December 2014) any objection based on the fact that they had
taken part in the decision appealed against.

30.

During the discussions, the League offered a differently constituted panel

comprising the chairman sitting with officials of clubs from League 1 or

League 2; but Mr Cellino indicated his preference for Messrs Clarke and
Bowker, whose participation accords with the Leagues rules even though they
took part in the decision against which Mr Cellino appeals. At the hearing
before us on 15 January 2015, Lord Macdonald confirmed that Mr Cellino had
no objection to the composition of the Committee.
31.

Mr Cellino relied at the hearing on a letter from Avvocato Bruno Ghirardi, a

lawyer from Brescia specialising in sports law, who advises Serie A and Serie
B in Italy, and also has links with Leeds United FC. In his letter, Mr Ghirardi
gave a narrative account of certain amendments and proposed amendments to
the rules governing football and other sports, and expressed his legal opinion to
the effect that rules which conflicted with the presumption of innocence
guaranteed by article 27 of the Constitution of the Italian Republic would be
void and unenforceable.

32.

We also had a witness statement from Mr Andrew Umbers dated 19 December

2014. Mr Umbers is a specialist consultant who conducted due diligence
concerning Leeds United FC and Mr Cellino, from about March 2014 while the
proceedings leading to the April 2014 decision were underway. Mr Umbers
explained that he is now a director of the Club, and gave reasons why, in his
view, there is good reason to fear severe adverse consequences for the Club if
Mr Cellino is disqualified from owning and operating it, and even a real
likelihood of insolvency.

33.

Professor Maffei, instructed by Mr Cellino without any objection from the

League, provided an expert report dated 29 December 2014. He attached to it
his previous report, extensively discussed in the April 2014 decision, produced
for Mr Cellinos first appeal. He stood by the views expressed in that previous
report. In his report of 29 December 2014, he answered six questions put to
him by Mr Cellinos legal advisers. He was available to answer questions by
telephone, but in the event neither party wished to ask any questions of him.

34.

The first four questions he was asked, concerned the reasoning of Dr Lepore in
her judgment. The fifth question was about possible decriminalisation of the
tax offence of which Mr Cellino was found guilty. The sixth question was
whether the FIGC could impose disqualification on a director or manager of an
Italian football club on the basis of a finding of guilt by a first instance court
which is not yet final under Italian criminal law.

35.

In response to Mr Ghirardis letter, the League approached Mr Massimo

Coccia, an Italian CAS arbitrator and sports law specialist, who acts as external
counsel to CONI. Mr Coccia explained in an email dated 4 January 2015 that
he was not aware of any plan on the part of CONI to amend or repeal the
provision in its rules (article 11 of the Code of Conduct) which (among other
things) provides for provisional suspension from office, as a precautionary
measure (in via cautelere), of those convicted of certain crimes, for a maximum
of 18 months or (if sooner) until subsequent exoneration by a court.

36.

On 10 January 2015, Leeds City Council provided an emailed statement from

its chief executive in support of Leeds Uniteds ongoing discussions with the
Football League. The chief executive stated that the Council had been
working closely with Mr Cellino and had good working relations with the Club,
and that the city is starting to see a positive recovery and stability of the club is
key to its future success. In response, the League referred to a letter from the
Councils leader dated 3 February 2014, nearly a year previously, emphasising
the need to ensure any new owner was a fit and proper person.

37.

The parties produced eloquent written submissions of high quality two days
before the hearing, which we found very helpful. They developed their
arguments in detail. In Mr Cellinos skeleton argument, a further application
was also made. He asked the Committee, if we were to dismiss his appeal, to
deal with his Review Application under rule 6.3 of Appendix 3 to the rules.

10

38.

That rule provides (among other things) that a person whose appeal has been
rejected may make a Review Application, for an order that the period of a
disqualification should be reduced to less than the period during which the
applicant is subject to a Disqualifying Condition. The ground of Mr Cellinos
Review Application was that the length of the ban is disproportionate to the
nature of the Disqualifying Condition (see rule 6.4 c) to Appendix 3).

39.

We were invited, if we should dismiss the appeal, nevertheless to reduce the

length of the ban from 79 days (the period up to the date Mr Cellinos
conviction, if any, would become spent under the Rehabilitation of Offenders
Act 1974, as extended by agreement because of procedural delays), to nil, on
the ground that the length of the ban would be disproportionate to the nature of
the Disqualifying Condition.

40.

At the hearing itself, no oral evidence was called, but each side referred to its
written arguments and to the documentary evidence, and advanced its case in
succinct and articulate oral submissions. These were made by Mr Taylor, for
the League, and by Lord Macdonald, with contributions from Mr Watkins and
Mr Morallee, for Mr Cellino. The hearing lasted from 10.05am until about
3.45pm, with short breaks. It was tape recorded.

The Tribunals Conclusions, With Reasons

41.

The following matters were not contested and were uncontroversial, as they
were in April 2014:
(1)

that the Leagues rules apply to this case, including in particular the
Owners and Directors Test in Appendix 3; and that the burden is on
Mr Cellino under rule 6.2 of Appendix 3 to the Rules to satisfy us that
the appeal should succeed on one or more of the grounds there set out;

(2)

that the court in Cagliari which decided on 18 March 2014 that Mr

Cellino had committed an offence was a competent court having

11

jurisdiction outside England and Wales (within the definition of

Disqualifying Condition at e) ix), Appendix 3, rule 1.1);
(3)

that the Committees role in this appeal is not to consider whether it was
open to the League on the evidence before it to reach the conclusion it
reached, but to decide the issues on the evidence before the Committee,
including any evidence not before the League when it made its decision.

42.

The written and oral submissions of the parties made it clear that the issues we
have to decide, or may have to decide, are:
(1)

whether it is open to Mr Cellino to reopen the issue as to whether the

Cagliari courts decision was a conviction under the rules, or whether
he is estopped from so contending on the ground that the issue is res
judicata;

(2)

whether the decision of the Cagliari court on 18 March 2014 was a

conviction within e) ix) of the definition of Disqualifying Condition
in rule 1.1, Appendix 3 to the rules;

(3)

if so, whether it was a conviction for an offence involving a Dishonest

Act, within e) i) of the same definition, i.e. any act which would
reasonably be considered dishonest (ibid., rule 1.1);

(4)

if so, whether there are compelling reasons (see rule 6.2, Appendix 3)
why Mr Cellino should not (under rule 2.1 of Appendix 3) be
disqualified from holding office or acting as a Club Director at a Club;

(5)

if not, whether the Committee should accede to Mr Cellinos Review

Application made in his skeleton argument, and reduce the length of his
ban to nil, on the ground that the length of the ban is disproportionate to
the nature of the Disqualifying Condition.

12

The first issue: issue estoppel or res judicata

43.

The chairman confirmed (by email of 18 December 2014) when declining to

recuse himself, that he did not intend to prevent either party from arguing any
point relating to issue estoppel, i.e. whether any issue raised in the previous
appeal could or should be reopened or not reopened. It is common ground that
in the April 2014, the Committee decided in the Leagues favour that the
finding of guilt on 18 March 2014 was a conviction within the rules.

44.

Mr Taylor submitted that the issue had already been decided as between the
same parties and that decision was, in the normal way, binding so that it was
not open to Mr Cellino to reopen the issue and seek to argue it again, either in
the same way or differently, or relying on different evidence. He submitted that
Mr Cellino was attempting to mount a collateral attack on a binding award
(Russell on Arbitration, 23rd edition, paragraph 6-176) and that any decision we
might make on the issue would be outside the tribunals jurisdiction and void
(ibid. paragraph 6-019).

45.

Lord Macdonald submitted it would be wrong to apply the doctrine of issue

estoppel in this case, because this was an appeal against a fresh decision and Mr
Cellino could not be expected to have challenged the Committees previous
decision on the conviction issue, having won his appeal on another ground. In
an attempt to avoid application of the doctrine, he submitted that the present
proceedings were not arbitration proceedings but internal disciplinary
proceedings.

46.

This latter submission, also later developed by Mr Watkins, was founded on the
nature of the process provided for in an appeal against disqualification under
the rules. Mr Cellinos argument was that, while the presence on the
Committee of two League directors was perfectly proper, in accordance with
the rules and indeed approved and insisted on by Mr Cellino, the two directors
were not independent of the League and had taken part in the decision being

13

appealed. This had the consequence, Mr Cellino submitted, that the appeal was
not an arbitral process to which the Arbitration Act 1996 applied.
47.

The proceedings were, Lord Macdonald and Mr Watkins submitted, therefore

merely internal disciplinary proceedings, not arbitration proceedings;
accordingly, redress against the Committees present decision would be
available in arbitral proceedings under rule K of the rules of the Football
Association (FA); there was no warrant for applying the strict doctrine of
issue estoppel to an internal disciplinary process such as this appeal and to do
so would be unfair and inconsistent with the right to a fresh appeal.

48.

In his improvised response to those submissions (not all made in written

argument) Mr Taylor referred to the characteristics of arbitration proceedings
identified in Walkinshaw v. Deniz (transcript, 19 May 1999, Thomas J,
Commercial Court) and England and Wales Cricket Board v. Kaneria [2013]
EWCA 1074 (Comm), Cooke J. The present appeal proceedings, he said, bore
the character of an arbitration, and it did not matter whether any subsequent
challenge lay in the High Court, under section 68 of the Arbitration Act 1996,
or in a further arbitration under rule K of the FAs rules.

49.

At the chairmans invitation, the parties were invited to identify after the
hearing any further relevant authority on whether, if the present appellate
process are merely disciplinary and not arbitral in nature, the doctrine of issue
estoppel does or does not apply to such proceedings; or whether the question
was merely one of fairness in the conduct of a disciplinary process. We were
referred by Mr Taylor and Mr Herbert to R (Coke-Wallis) v Institute of
Chartered Accountants in England and Wales [2011] 2 AC 146, and Christou
v. Haringey Borough Council [2014] QB 131.

50.

We found it difficult to see any convincing answer to the Leagues plea of issue
estoppel. The two authorities just mentioned establish that the doctrine applies
to disciplinary proceedings brought by a body responsible for regulating

14

standards of conduct in a sport or profession, but does not normally apply

where the relationship between the parties to the disciplinary proceedings is
confined to that of employer and employee. It is therefore difficult to see any
basis for us to reopen the conviction issue even if the present proceedings are
not arbitration proceedings.
51.

On that latter point, we prefer to express no concluded view. The issue is not
straightforward and it was not possible to consider it fully during the course of
argument, because the point emerged during oral submissions and had not been
foreshadowed in written argument. The issue could impact on the manner of
any further challenge to our decision, and the forum for such a challenge. It is
better for the court or tribunal before which it takes place to decide, if it is
necessary to decide, whether these are arbitration proceedings or not.

52.

We accept that in domestic proceedings, as in court proceedings, the doctrine of

issue estoppel is not always applied where changed circumstances exist which
could not with reasonable diligence have been deployed on the first occasion
when the relevant issue was decided. An extreme example is that of a higher
court decision overruling the first decision, as in Arnold v. National
Westminster Bank plc [1991] 2 AC 93 (see per Lord Keith at 104-108, referred
to in the Coke-Wallis case by Lord Clarke at paragraph 47 of his speech).

53.

The only material in the present case which could not with reasonable diligence
have been deployed before the Committee sitting in March 2014 is an
amendment to the rules of the FIGC which was not made until 27 May 2014,
after the April 2014 decision. Mr Ghirardi says the effect of this amendment
was to cancel measures adopted under article 22-bis paragraph 3, a provision
repealed (abrogato) in 2012. It is doubtful whether that is a material change of
such significance that it justifies reopening the conviction issue.

54.

We incline to the view that the conviction issue cannot properly be reopened
and that Mr Cellinos submissions, taken together with the amendment to the

15

FIGC rules in May 2014, ought not to persuade us that fairness requires us to
allow it to reopened. But in case we are wrong in that view, we propose to
entertain the conviction issue and consider it afresh even though it has already
been decided in the Leagues favour between the same parties, in the previous
appeal.
55.

The convenient course, in our judgment, is to decide the conviction point again
in the light of the new material, on the assumption that Mr Cellino is entitled to
reopen it, contrary to the Leagues submissions. We appreciate that if we are
wrong in doing so, our decision on the conviction point will be otiose and void.
In that event, the Committees earlier decision on the conviction issue will
stand for the reasons set out in the April 2014 decision.

The second issue: was the Cagliari courts decision a conviction?

56.

Lord Macdonald submitted that the Committee was wrong in the April 2014
decision on this point and erred in deciding that the finding of guilt was not a
conviction under the Leagues rules. We were invited to review the earlier
arguments and to reconsider and recognise the force of the arguments advanced
by Mr Owen QC and Mr Watkins at the hearing on 31 March 2014, especially
arising from the Caldarelli case. Those arguments should lead us to the
contrary conclusion to that reached in the April 2014 decision.

57.

Further, Lord Macdonald submitted that even if it were right to interpret the
word conviction as understood in the legal culture prevailing in England, it is
of the essence of a conviction in England that it must entail a seamless
liability to immediate punishment. It is not enough that the process should
satisfy minimum standards of procedural fairness acceptable by English
standards of justice. It is also necessary, said Lord Macdonald, that the finding
of guilt must lead (normally, in the absence of a stay) to immediate certain
punishment, not possible future punishment.

16

58.

In relation to the new material not before the Committee on 31 March 2014,
Lord Macdonald submitted that Mr Ghirardis written evidence demonstrated
that, contrary to what was thought to be the position then, sports bodies
including the FIGC had amended or were in the process of amending their rules
so as to row back from the unconstitutional discretion to impose precautionary
suspension from office in the case of officials subject to a non-final judgment.

59.

Mr Taylor submitted that if, which he disputed, the issue could be reopened at
all, the arguments which prevailed in the April 2014 decision should prevail
again for the same reasons as then advanced by the League. He added that the
legal dictionary definition of conviction on which he had relied at the hearing
on 31 March 2014, did not include the element of liability to immediate
punishment, contrary to Lord Macdonalds submission.

60.

As to the evidence of Mr Ghirardi, Mr Taylor said that it did not contradict the
proposition advanced to the Committee in March 2014, that both the FIGC and
CONI had in their rules provision for precautionary suspension founded on a
non-final first instance finding of guilt. He pointed out that this proposition had
been accepted by Professor Maffei in his report for the hearing held on 31
March 2014, and that he had appended that same report to his report for this
appeal, without altering his view on this very point.

61.

As Mr Taylor pointed out, the rule on which he relies is not article 22-bis but
article 22-ter of the FIGC rules, which confers discretion on the President to
impose precautionary suspension founded on a non-final judgment, by crossreferring to article 11 of the CONI code of conduct, subject to a right of appeal
to an independent court. Mr Ghirardi had not even mentioned article 22-ter,
still less asserted that it had been repealed in 2012 along with article 22-bis,
paragraph 3.

62.

Finally, Mr Taylor submitted that the Committee determining the previous

appeal had not found Italian sports law rules persuasive and there was no good

17

reason to attribute more importance to them on this occasion. Even if the

present Committee were satisfied that precautionary suspension based on a nonfinal judgment is unconstitutional in Italy, and that any provision for it in sports
bodies rules there is void and unenforceable, that is not the position under the
Leagues rules, which are governed by English law.
63.

We turn to our reasoning and conclusions on this issue. First, we must

reconsider the arguments, the reasoning and the conclusion reached in the
previous appeal. Having carefully done so, we do not see any flaw in the
reasoning which invalidates the previously reached conclusion, in so far as
based on the arguments advanced in March 2014, which excluded the new
argument of Lord Macdonald that an English conviction must entail liability to
immediate punishment, and the points now made by Mr Ghirardi.

64.

We do not, with great respect, find Lord Macdonalds new argument

persuasive. A conviction in England consists of a finding of guilt by a court of
competent jurisdiction following due process. That is what also happens in
Italy in a first instance trial. In England, the punishment is then pronounced.
So it is in Italy. In both countries, ancillary matters are then dealt with; for
example, in this case, confiscation of the boat and legal costs.

65.

Even in Italy, a defendant must act to avoid punishment, by appealing. The

earliest time liability to punishment can become immediate is on expiry of the
appeal time limit. In England, unlike in Italy, Lord Macdonald is correct to say
that the punishment decided upon must then immediately be served, unless
stayed. Bail may be granted pending appeal, or sentence may be deferred, or
the punishment stayed. But the norm is that the punishment is served
immediately and any appeal takes place while it is being served.

66.

We bear in mind that the League rules refer to a conviction, not to conviction
and sentence. In the ordinary use of the English language, and in the English
legal culture, conviction and sentence are regarded as different things. The

18

sentence is not part of the conviction. It is a consequence of the conviction.

The issue of conviction is for the jury; the issue of sentence, for the judge.
They are so different from each other they are not even decided by the same
decision maker where the crime charged is serious.
67.

We consider that Lord Macdonalds added requirement of liability to

immediate punishment is really another way of expressing the argument
rejected in the first appeal, that the word conviction should be interpreted in
accordance with the norms of the country where the accused is charged and the
trial takes place. The conception of a conviction as something requiring
immediate liability to punishment has a distinctly Italian flavour to it.

68.

As for the fresh evidence from Mr Ghirardi, and the materials he produces, we
are of the view that they do not assist Mr Cellino. The new evidence is, in our
judgment, inconclusive and not supported by Professor Maffei who referred in
his first report to sport related sanctions as one of the consequences of a first
instance finding of guilt, as part of the reasoning supporting his conclusion that
the first instance finding of guilt is not a nullity.

69.

Mr Ghirardi, for his part, is willing to condemn the validity and enforceability
of rules which have that effect, yet without mentioning article 22-ter, neither
explicitly condemning it as invalid nor asserting that it has been amended. As
for the May 2014 amendment, the extracts from FIGC amending provisions
provided to us do not, on their face, clearly support his proposition that the
amendment was to cancel the effect of previously imposed measures.

70.

The documents produced would seem to indicate that it was in 2012 that this
amendment was made, and that the only amendment made in May 2014 was to
add a requirement, where disqualification is imposed by reason of a final
judgment, that the crime committed must have led to a sentence of at least one

19

years imprisonment.1 But we will assume, in Mr Cellinos favour, that Mr

Ghirardi is right and that the amendment in May 2014 did also cancel
previously imposed suspensions.
71.

Mr Ghirardis evidence, read together with the rules produced to the Committee
in the previous appeal, Professor Maffeis two reports and Mr Coccias email
professing ignorance of any plan to amend article 11 of the CONI Code of
Conduct, indicate at the most a debate in Italian sports law circles about the
propriety of precautionary suspension provisions based on a first instance
criminal judgment, the possibility that they might not survive a legal challenge,
and that they are being phased out to avoid such a challenge.

72.

We conclude that the new materials, if it is permissible to look at them and to

reconsider the conviction issue at all, do not alter the conclusion reached by the
Committee in the first appeal. If we have the power to determine the conviction
issue, we determine it now in the same manner as before: we decide that the
finding of guilt on 18 March 2014 was a conviction within the meaning of the
Leagues rules.

The third issue: was Mr Cellinos conviction for an offence involving a Dishonest Act?
73.

The parties agreed that we should approach this issue by considering the
judges written reasons and asking ourselves whether they lead us to conclude
that the offence of which Mr Cellino was convicted involved a Dishonest
Act, i.e. any act which would reasonably be considered to be dishonest.
Rightly, the parties agreed that we should disregard any views of our own about
the merits of the case, and that it is not for us to question the correctness of the
judges decision or reasoning.

See amendments of 7 March 2012 (bundle tab 17, pages 20-22, 35-36); cf. amendments of 27 May 2014
(bundle tab 17, pages 23-34; at pp. 24-25 the only bold text is a pene detentive superiori ad un anno
(punished with more than one years imprisonment); while the language of the Norma finale at page 25
appears to be as in the 2012 version, which appears to be pages 35-36.

20

74.

It is agreed that in reaching her conclusion, the judge considered and rejected
the defence contention that no tax was due in respect of the entry of the Nlie
into Italian waters because of the temporary admission exemption, based on
an EU regulation (EEC Reg. no. 2454/1993). It is further agreed that the judge
based her rejection of that contention on (among other things) the absence of
any employment contract between Mr Cellino and Freetime, the written
authorisation from Freetime not being an employment contract.

75.

What is not agreed is whether the judges remarks about the mens rea of Mr
Cellino formed a necessary part of her reasoning supporting her finding of guilt,
or whether, as Mr Cellino contended, those remarks were gratuitous dicta added
as a postscript after she had reached her conclusion. Mr Cellino submitted that
the judge adopted a strict liability approach and founded her decision on the
proposition that criminal liability for the offence is established simply by nonpayment of the tax due and the inapplicability of any exemption.

76.

We heard detailed submissions from the parties, but they can be summarised
quite briefly. Lord Macdonald emphasised the judges treatment of the tax
exemption issue, and her remark that, having rejected the applicability of any
exemption, criminal responsibility was established. In English translation, the
passage on which he relies, reads:
Given the above, having ascertained that Massimo Cellino could not benefit from
the regime of total exemption from the customs duties consequently to the socalled temporary admission, no doubt can thus exist on the criminal
responsibility (penale responsabilit) of the latter with regard to the offence he is
charged with . .

77.

Lord Macdonald said that passage showed that rejection of the defences
argument that Mr Cellino was exempt from paying the tax due was alone
sufficient to establish guilt in the mind of the judge, and that she therefore
convicted him without needing to rule on any issue of mens rea, or dolo. He
submitted that the passages which followed reflected moral condemnation, not
legal reasoning.

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78.

Mr Taylor, by contrast, submitted that Mr Cellinos interpretation of the

judgment was unrealistic. He pointed out that, while the reference to criminal
responsibility in the passage just quoted preceded the judges analysis of mens
rea, it did not indicate a strict liability approach, which would be contrary to the
position of both sides in the previous appeal, supported by Professor Maffei,
that some form of dolo was necessary to establish the offence.

79.

Furthermore, said Mr Taylor, the judge proceeded to analyse the factual

elements relevant to mens rea and had to do so in order to assess the defences
contention which she rejected, that Mr Cellino was not guilty because of
absence of mens rea. As the English translation of the judgment states in the
passage that follows on shortly after the passage previously cited:
Moreover, it cannot be legitimately argued that the mens rea [sic - mental
element] (lelemento psicologico) of the disputed offence does not exist, on the
basis of the good faith of the defendant, who, according to the defensive
allegation, did not pay the customs duties due because he was convinced he could
benefit from the suspensory fiscal regime consequent to the so-called temporary
admission and, therefore, in the absence of any elusive conduct (intento elusivo)
towards the Inland Revenue.

80.

Mr Taylor said that the judge gave detailed factual reasons for that conclusion,
which would have been unnecessary if the defence had not asserted an absence
of mens rea or dolo as a basis for seeking acquittal. This detailed factual
analysis, Mr Taylor submitted, was the necessary foundation for her conclusion
beyond any reasonable doubt that Mr Cellino had set up Freetime to disguise
his beneficial ownership of the boat, to disguise its definitive (or permanent;
definitiva) entry into Italian waters as temporary, and by this macchiavellica
simulazione to achieve non-payment of customs duties.

81.

Finally, Mr Taylor reminded us that the judge concluded her exposition of the
defendants guilt by observing that she found, as stated in translation all the
elements constituting the offence attributed to the defendant fully
integrated (ritenuti pienamente integrati tutti gli elementi costitutivi del reato

22

ascritto allimputato ). That passage, said Mr Taylor, could only sensibly be

understood to embrace the mental element of the offence as well as the actus
reus. Consequently, there was no sense in the assertion that the offence had
only one ingredient, the actus reus without any mental element.
82.

We come to our reasoning and conclusions on this issue. First, we accept that
the offence with which Mr Cellino was charged included the need for the
prosecution to prove some form of dolo, or mens rea, going beyond mere colpa
or blame. This was the position of both parties during the previous appeal. It is
supported by Professor Maffei, who considered that dolo eventuale would
suffice to establish the offence, a mental state that would not necessarily
correspond to the English concept of dishonesty.

83.

Secondly, it is plain that Mr Cellino did advance, as part of his defence, the
proposition that he could not be guilty of the offence charged not just because
he was in fact and in law entitled to benefit from the tax exemption, but also
because he lacked the necessary mens rea for the offence charged. It is clear
that his lawyer submitted to the judge that Mr Cellino had believed in good
faith (la buona fede) that he was entitled to benefit from the tax exemption;
and it is clear that Mr Cellino gave evidence to that effect.

84.

For present purposes, it is not of much importance whether the judge would
consider dolo eventuale a sufficient basis for a conviction, or whether she
would regard the higher standard of dolo diretto as essential to establish the
offence. The contest between these two reprehensible states of mind, central to
the Committees previous decision, is peripheral to this one. A belief formed in
good faith that he was entitled to the tax exemption would be unlikely to
correspond to dolo eventuale.

85.

This is because, as explained in the April 2014 decision, dolo eventuale would
entail an awareness of the risk that Mr Cellino was not entitled to the tax
exemption, and willingness to run that risk. Awareness of a risk and

23

willingness to run it is not easy to square with most peoples notion of good
faith. Not surprisingly, Mr Cellino did not run a defence of dolo eventuale; it
might well not have availed him, for reasons given in the April 2014 decision.
He denied that there was on his part any dolo at all.
86.

The judge begged to differ, as is plain from her written reasons. She found that
the mental element of the offence was made out. We do not accept that she
found no mental element was required. She did not define the mental element,
save to imply that an innocent belief in entitlement to the tax exemption formed
in good faith would support an acquittal. For present purposes, we do not need
any definition of the mental element of the offence.

87.

What matters is that we have the judges findings about what Mr Cellinos state
of mind was, which she deduced from her findings of fact. We have to decide
whether those findings of fact and her description of Mr Cellinos state of mind
based on them, is conduct which would reasonably be considered to be
dishonest. As previously noted, the test in the Leagues rules approximately
equates to the first, objective, limb of Lord Lane CJs test of dishonesty in R. v.
Ghosh [1982] QB 1053 (see paragraph 88 of the April 2014 decision).

88.

The judge used graphic language in her description of Mr Cellinos conduct and
state of mind. The meaning of that language was pored over in written
submissions, with the aid of dictionaries. We were referred to many definitions
and translations of the Italian words she used. Mr Cellinos linguistic
interpretation was that the words the judge used do not point to dishonest
conduct. The League disagreed.

89.

We agree with the League that the question for us does not engage Italian law,
and that we are not assisted, with great respect, by the commentary of Professor
Maffei on this aspect of the case. We would only need expert assistance on
Italian law if it were impossible to interpret the judges words without such
assistance. We do not think that is the case. We need to understand the

24

meaning of the judges words, but the relevant parts of her decision do not raise
points of Italian law.
90.

Macchiavellica simulazione is the judges vivid phrase describing the state of

mind she found, arising from her findings of fact. The English equivalent of
the Italian adjective macchiavellico, derived from the celebrated 15th century
Florentine courtier, is adequately rendered as Machiavellian. The adjective
has entered the English language sufficiently to merit a definition in the Oxford
English Dictionary, the online version of which defines it thus:
Of, relating to, or characteristic of Machiavelli, or of his principles or alleged
principles; practising, or characterized by, (esp. political) expediency;
unscrupulous, duplicitous; astute, cunning, scheming.

91.

In Italian usage, one of several sources we found useful was the online
dictionary at http://www.dizionario-italiano.it/, in which the adjective
macchiavellico is defined as astuto, subdolo, privo di scrupoli [unscrupulous] e
di lealt [disloyal]. Astuto is given several English meanings by Google
Translate; among them are astute, shrewd, cunning, crafty, wily, sly, canny and
artful. Subdolo is defined in the online dizionario as falso, ingannevole, i.e.
false and misleading.

92.

Simulazione is translated into English by all sources simply as simulation. In

the online dizionario, it is defined in Italian as atto, effetto del simulare;
finzione, i.e. the act, or effect, of simulating; or fiction. The Italian verb
simulare is defined in the dizionario as: manifestare sentimenti insinceri;
mostrare le cose diverse da come sono. In English, this means: to manifest
insincere feelings; to show things differently from how they are.

93.

The parties disagreed in their written arguments about whether the words
intento elusivo should be understood in English as denoting a legitimate intent
to avoid paying tax (elusione fiscale), or an intent to evade payment of tax
(evasione fiscale). Read in their context, it is plain that the bear they latter
meaning and not the former. If the judges comments about Mr Cellinos

25

mental state were superfluous moral condemnation not legal reasoning, this
would not matter. But we do not accept that interpretation of the judgment.
94.

It is true that the judges remark to the effect that Mr Cellinos criminal
responsibility is established precedes her account of mens rea. But we do not
accept that this leads to the conclusion that her account of mens rea was
unnecessary. On the contrary, the judges account of mens rea was necessary
to address the defences argument that an innocent belief formed in good faith
negates guilt, which would have succeeded if it had not failed on the facts.

95.

We can see no good reason why a judge such as Dr Lepore would indulge in
lengthy unnecessary and superfluous criticism, nor why the defence lawyer
would devote time and trouble to raising a defence of lack of mens rea which,
according to Mr Cellinos present argument, is not a defence in law at all. We
are clear in our minds that the judges attribution to Mr Cellino of a cunning
plan to evade payment of the tax due was integral to her conclusion that he was
guilty of the offence charged.

96.

In the light of the above, we consider that the judges findings of fact and her
description of Mr Cellinos state of mind based on them, is of conduct which
would reasonably be considered to be dishonest. We therefore conclude that
Mr Cellino has been convicted of an offence involving a Dishonest Act
within the meaning of the rules, and that he is accordingly subject to a
Disqualifying Condition.

The fourth issue: are there compelling reasons why this particular conviction should not
lead to disqualification?
97.

Lord Macdonald submitted that as the presumption of innocence in Italian law

outlasts a first instance conviction, this particular conviction (if it was one,
contrary to his primary case) was not one that entailed guilt in the legal system
in which it occurred; and that, moreover, it would not now lead to
disqualification or even precautionary suspension under the relevant amended

26

domestic rules governing football in Italy, for the reasons already advanced in
support of his (unsuccessful) submission that Mr Cellino had not been
convicted at all.
98.

In those circumstances, Lord Macdonald submitted, it was right and proper to

have regard to the likely consequences for the Club of Mr Cellinos
disqualification, even though normally the adverse consequences of a
disqualification would not amount to a compelling reason because they flow
naturally from the disqualification. He invited us to assess the potential or
likely adverse impact of disqualification on the Club in the light of the
consideration that disqualification would not ensue in Italy.

99.

Lord Macdonald relied on the evidence of Mr Umbers, while accepting that it

was necessarily speculative, as demonstrating a likelihood of severe adverse
consequences for the Club, to the point where there would be a significant risk
of insolvency. Towards the end of the hearing, and in a dialogue continued by
email after it ended, the parties debated the precise steps that would have to be
taken to comply with the Leagues decision of 27 November 2014, if the appeal
against it failed.

100.

This issue could in principle be relevant to the compelling reasons issue

because the more draconian the steps required to comply with the decision, the
more force there may be in the contention that compliance would have drastic
adverse consequences for the Club. Consequently, Mr Cellino argued that
under the rules, it would be necessary for Mr Cellinos family members as well
as Mr Cellino himself, to divest themselves of their stakes in the Club.

101.

For the League, Mr Taylor argued that there is no good reason for treating a
first instance conviction in Italy more favourably than one occurring in a
common law country such as Canada, where the conviction normally brings
with it an immediate obligation to serve the sentence consequent on the
conviction. As the Committee had observed in the April 2014 decision, those

27

convicted in Italy should not enjoy a windfall advantage over those convicted in
a common law country such as Canada.
102.

As for the potential damage to the Club if Mr Cellino were disqualified, Mr

Taylor emphasised that the length of the disqualification would be only 79 days
because of, among other reasons, the delay between the judges decision and
the availability of her reasons. He said that in the Leagues view, Mr Cellinos
family members would not necessarily have to divest themselves of their stakes
in the Club; there is a presumption that Mr Cellino would continue to exert
control over the Club through members of his family, but it could be rebutted.

103.

Mr Taylor suggested that Mr Umbers concerns were exaggerated, speculative

and unsupported by any external evidence or, tellingly, by any evidence from
Mr Cellino himself. He added that the League was willing to engage in
reasonable discussions about what steps would be necessary for the purposes of
compliance with the decision, if the appeal failed, and that it was for the League
and not the Committee to concern itself with that issue.

104.

We do not find persuasive the suggestion that a conviction in Italy should be

treated as qualitatively different from a conviction in a common law country.
We consider that a compelling reasons argument should focus on the particular
conviction (in the words of rule 6.2 b)). While that might include, at the
margin, some consideration of the legal system in which the conviction occurs,
the primary focus should be on the conduct of which the person is convicted.

105.

We were not persuaded that this was a case where the imminent demise of the
Club would be likely to follow any disqualification. Mr Cellino has shown a
strong desire to own and operate the Club and is plainly very attached to it. We
see no evidence of any wish on his part to walk away from the Club, which an
owner can always consider doing, whether or not disqualified. We appreciate
that disqualification would bring with it adverse consequences but the severity
of those consequences is a matter of speculation.

28

106.

We agree with the League that it is not for the Committee to decide what steps
would, or would not, constitute compliance with the Leagues decision in the
event that disqualification ensues. We do not propose to analyse the detailed
rules shown to us, dealing with the obligation of a disqualified person to divest
himself of control of a club, on what transactions would fulfil the obligation,
and dealing with the definition of Control in a case where family members
also have an interest in the relevant club.

107.

While we cannot see in the rules any rebuttable presumption which enables Mr
Cellino to defeat the proposition that his familys interests in the Club are to be
attributed to him, the issue is one of compliance and is therefore for the parties
and not this Committee to address. It is relevant that the League is prepared to
interpret the rules as including such a rebuttable presumption, and we accept Mr
Taylors point that the parties will need to engage in a constructive dialogue if
the disqualification is upheld.

108.

For those reasons, and in the light of the brevity of the disqualification which
will only last for 79 days, we do not find any compelling reasons why this
particular conviction should not lead to disqualification, and we reject the
contrary argument of Mr Cellino. It follows that the Leagues decision stands
and that we must dismiss Mr Cellinos appeal.

The fifth issue: Mr Cellinos Review Application

109.

Finally, in his skeleton argument, Lord Macdonald made a Review

Application under rule 6.3 of Appendix 3 to the Leagues rules, for an order
that, in the event that Mr Cellinos appeal should fail, the length of the
disqualification imposed upon should be reduced to nil. The application was
made on the ground that the length of the ban would be disproportionate to
the nature of the Disqualifying Condition, as provided for in rule 6.4 c), within
Appendix 3.

29

110.

The way the rules are drafted is such that, in a normal case, a Review
Application would be made to the Professional Conduct Committee during the
period of disqualification, rather than at the start of the period, and would be
intended to shorten the length of the disqualification rather than eliminate it
altogether which is the same practical result as obtained by winning an appeal.
Nonetheless, the League did not suggest that the application was defective, and
we agree that it can and should be addressed by us.

111.

Lord Macdonald confirmed at the hearing that he did not object to the presently
constituted Committee determining Mr Cellinos Review Application, and was
content with the Committees composition. The chairman raised this point
because the application is made in this case on the premise that the Committee,
with the same members sitting, must necessarily have rejected the appeal; and
the arguments supporting the Review Application are the same as the grounds
of the appeal (see paragraph 76 of Mr Cellinos skeleton argument).

112.

Mr Taylor submitted that rule 6.4c) of Appendix 3 is directed to the length of a

period of disqualification, and that it is not relevant when considering that issue
to have regard to the adverse consequences of the ban on the club concerned.
Mr Taylor also pointed to the brevity of what remains of the period of
disqualification, and the time that Mr Cellino has had to arrange his affairs so as
to minimise disruption to the Club during the period of disqualification.

113.

It seems to us that the consequences for the club concerned might, in principle,
be relevant to whether a ban is disproportionately long or not. We do not
accept that the two issues can, without artificiality, be decoupled from each
other. The more fundamental difficulty is that the Review Application travels
the same ground as the arguments on the appeal which we have already
rejected, and the remaining period of the ban, 79 days, is short when measured
against the conduct of which Mr Cellino was convicted. Consequently, we see
no good reason to accede to the Review Application.

30

The Tribunals Ruling

114.

Accordingly, for the reasons given above, we dismiss Mr Cellinos appeal and
we refuse his review application.

Tim Kerr QC, Chairman

Greg Clarke
Richard Bowker CBE
Dated: 19 January 2015

31