CROATIA Trends and Developments Contributed by: Lovro Badžim, Badžim Law Practice
In this respect, Croatian law and CAS jurisprudence are not fundamentally incompatible. Both recognise that insolvency proceedings carry legal consequences that cannot be ignored without compelling justifica - tion. The real tension arises when sporting bodies seek to apply succession concepts developed for non-bankruptcy scenarios to cases involving full judi - cial insolvency. Public policy and the limits of sporting autonomy The concept of public policy serves as the ultimate boundary between private regulation and mandatory law. In Croatia, public policy encompasses constitu - tional principles, statutory imperatives, and the foun - dational values of the legal system, including legal certainty and equality of creditors. If sporting succession were applied in a manner that effectively nullifies the outcome of bankruptcy pro - ceedings, it could be perceived as undermining these values. This is particularly true if liabilities are reas - signed without a clear legal basis or in disregard of creditor hierarchy. To date, Croatian courts have not been required to rule directly on this issue. Most disputes remain confined to football arbitration, where enforcement relies on sporting sanctions rather than judicial mechanisms. Nonetheless, as financial distress among football clubs increases, the likelihood of a direct confronta - tion between sporting decisions and national public policy grows. Systemic risk and regulatory spillover effects Beyond doctrinal consistency, the interaction between sporting succession and Croatian insolvency law raises broader systemic concerns. If sporting bodies routinely impose successor liability following formal bankruptcy, this may distort the incentives of both debtors and creditors. Clubs may be discouraged from using lawful insolvency mechanisms if financial liabilities are perceived as inescapable, while credi - tors may strategically bypass insolvency proceedings in the expectation that claims can later be enforced through sporting channels.
From a regulatory perspective, this creates a form of spillover effect whereby private sporting rules indi - rectly reshape the practical consequences of man - datory national law. While such effects may be toler - ated within the closed system of sport, they become problematic when they undermine the predictability of insolvency outcomes relied upon by courts, inves - tors, and public authorities. As sports arbitration bod - ies increasingly refine the contours of sporting suc - cession, the pressure on domestic legal systems to accommodate these regulatory outcomes is likely to grow. For Croatia, preserving a clear boundary between insolvency finality and sporting regulation is therefore not only a matter of doctrinal coherence, but also of institutional balance between private autonomy and mandatory law. An open question for the Croatian market For now, sporting succession continues to operate within Croatian football largely unchallenged. Arbitra - tion bodies apply FIFA and CAS standards, and clubs comply in order to avoid regulatory sanctions. Whether this model can withstand scrutiny outside the sporting system remains uncertain. Should a case reach state courts through enforcement or annulment proceedings, Croatian insolvency principles would inevitably come to the forefront. Until such guidance emerges, stakeholders must navigate a dual system in which sporting identity can carry regulatory consequences that do not always align neatly with national insolvency law. For clubs and investors, this makes sporting succession not merely a legal curiosity, but a material commercial risk.
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