The Citizens stood accused by Velez Sarsfield of "flouting transfer rules" in the signing of attacking midfielder Benjamin Garre.
Federation Internationale de Football Association cleared City of any wrongdoing but the Argentine club took their case to the Court of Arbitration for Sport.
He was 16 at the time, but Argentine officials accused City of tapping him up when he was still 15, and pointed to Federation Internationale de Football Association rules which say no player can leave their home country until they are 18, unless the player's parents move countries for "non-footballing reasons".
As reported by the Telegraph, the club will not face a two-window transfer embargo after CAS found nothing wrong with the club's activities that year, but Velez will now have the right to appeal the decision.More news: Unseasonal warmth in London for the Commonwealth Heads Meeting
But there is serious concern that CAS will rule in favour of Velez Sarsfield, the Argentine club who claim City acted unethically by contacting Garre when he was 15 and then committed a breach of transfer rules by signing the winger only days after his 16th birthday.
City chairman Khaldoon Al-Mubarak was anxious the club would be handed a 24-month ban from making new signings. The Premier League club have argued that they acted within the rules, but Velez took the complaint to CAS and a verdict is expected within the next seven days.
Velez, however, claim that Federation Internationale de Football Association rules only allow players under 18 to move between clubs in Europe and do not include South America.
Liverpool, Manchester United and co. will all be desperately hoping that City are curtailed in their attempts to continue to buy success.