It has the makings of a career-defining moment for Stewart Regan.

The Scottish Football Association chief executive is caught between FIFA and the Court of Session, and the SFA Board faces a decision that has ramifications for the future of the Scottish game. It requires a strategic mind, as a well as a decisive one, and Regan has never fallen short on the latter quality.

Since taking up the post in July 2010, he has had to contend with a referees' strike, the dismissal of Hugh Dallas, the head of referee development, over an offensive email, and the complete – unanimously-approved – restructuring of the SFA's corporate governance structure. He has appointed Mark Wotte as the association's first performance director and streamlined the disciplinary procedures, including creating the position of compliance officer and establishing independent tribunals to hear cases. All of the modernising elements were welcomed and voted through my member clubs, but now Rangers have challenged a disciplinary decision in the civil court and there is a mess to tidy up.

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It is not all of Regan's making, and nor is the response his decision alone. It will be made by the SFA board, but as the chief executive he is the figure at the front and so bears the greatest weight of responsibility. This is the first significant challenge to the reforms he introduced, with the Court of Session judging that the SFA could not impose a 12-month registration embargo on Rangers for bringing the game into disrepute by not paying their taxes, and instead can only use one of four possible sanctions: a fine (which has already been handed down), expulsion from the Scottish Cup and suspension or termination of the club's SFA membership.

The SFA's original Independent Judicial Panel, on advice, believed that they had the discretionary powers to seek different punishments for bringing the game into disrepute – a view upheld by an appeal tribunal chaired by Lord Carloway – but the Court of Session judgement comes as a setback. Regan cannot ignore Lord Glennie's ruling, because the Court of Session has supervisory jurisdiction over the SFA, and he and the SFA board have two options open to them.

The first is to appeal Lord Glennie's judgement, and if they choose this course of action they have 21 days in which to lodge their challenge. The timescale is at the mercy of the inner house of the Court of Session, and so could be months, but given that Lord Carloway interpreted the penalties open to the SFA's Independent Judicial Panel differently from his colleague, Lord Glennie, there might be worth in seeking the appeal.

The second option is to accept the judgement and reconvene the Appellate Tribunal chaired by Lord Carloway, charging them with coming up with a different punishment for Rangers from the four available options. FIFA tend to agitate when civil courts intervene in the authority of national associations, but given the supervisory jurisdiction of the Court of Session, they are unlikely to take punitive action on the SFA. They have been posturing so far. The decision to appeal or not will be made by the SFA Board, led by Regan and they are currently taking legal advice on the matter. A point of principle is at stake, along with, potentially, the future of Rangers.

"In many ways, the law's an ass," said Stewart Gilmour, the St Mirren chairman, after yesterday's SPL meeting. "What is the court doing getting involved in football? That was up to [Rangers], but I still think it was wrong. The decision had been made. Are we going to take every single sending off to court? Is that we are going to end up with? The way they have handled that is not very good. Sport should stay within sport. Is it setting a dangerous precedent? Very much so."

When Regan introduced the new disciplinary procedures last July, he remarked that, "I don't think it will be plain sailing or seamless". There have been challenges along the way, often when Old Firm figures are involved, and despite all clubs signing up for the process, there has been little hesitation in criticising decisions they do not agree with. That is natural, but the choice facing the SFA is to stand by their own rules, and so appeal the Court of Session judgement, or revert back to the Appellate Tribunal, and so risk future decisions being challenged. There is no loophole to be closed when it is two Law Lords coming up with different interpretations of the same disciplinary powers.

Regan has improved the SFA, but there is more work to be done. This is a volatile drama, and a savvy chief executive would be opening lines of communication with FIFA to point out that the decision to take the case to the Court of Session was taken by the club's administrators – who admitted they did not know of the potential ramifications – while at the same time similar efforts could be made with representatives of Rangers to calm the situation down. It is understood that the club had offered to accept a season-long ban from the Scottish Cup before the 12-month registration embargo was imposed, and the original Independent Judicial Panel already ruled that expulsion or suspension of the club's membership was too harsh a penalty.

There is some room for manoeuvre, but the SFA have to maintain the credibility of their authority. They have been forced into a corner, but Regan and the board must act firmly and shrewdly.