F.I.F.A. – Commissione per lo Status dei Calciatori (2011-2012) – controversie tra società – ———- F.I.F.A. – Players’ Status Committee (2011-2012) – club vs. club disputes – official version by www.fifa.com – Decision of the Single Judge of the Players´ Status Committee passed in Zurich, Switzerland, on 26 March 2012, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club, Club N, from country A as “Claimant” against the club Club O, from country B as “Respondent” regarding a contractual dispute between the parties and relating to the player C

F.I.F.A. - Commissione per lo Status dei Calciatori (2011-2012) – controversie tra società – ---------- F.I.F.A. - Players' Status Committee (2011-2012) – club vs. club disputes – official version by www.fifa.com – Decision of the Single Judge of the Players´ Status Committee passed in Zurich, Switzerland, on 26 March 2012, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club, Club N, from country A as “Claimant” against the club Club O, from country B as “Respondent” regarding a contractual dispute between the parties and relating to the player C I. Facts of the case 1. On 17 December 2004, Club N (hereinafter: “the Claimant”), Club O (hereinafter: “the Respondent”) and the player C (hereinafter: “the player”) concluded an agreement (hereinafter: “the agreement”) concerning the transfer of the player from the Claimant to the Respondent for the amount of USD 16,000,000 to be paid to the Claimant by the Respondent or by someone else appointed by the latter. 2. The agreement also contained a sell on clause (hereinafter: “the sell on clause”; cf. art. 7 of the agreement) in accordance with which, in case of a subsequent transfer of the player from the Respondent to a third club or to a sport organisation for an amount higher than USD 35,000,000, the Respondent would have to pay the Claimant 20% of the difference between the sum of USD 35,000,000 and the amount that it had actually received from the third club or sport organisation (hereinafter: “the sell on fee”). Furthermore, it was specified in the same article that in case the player would be transferred by the Respondent for an amount lower than USD 35,000,000, the Claimant would not be entitled to receive any compensation from the Respondent. 3. Moreover, art. 8 of the agreement stipulated that the Respondent had to inform the Claimant in writing about the terms and conditions of a subsequent transfer of the player before finalising the transaction and pay the Claimant within 10 days as of the end of the negotiations. 4. On 13 January 2005, the player and the Respondent concluded an employment contract (hereinafter: “the employment contract”) valid from 13 January 2005 until 13 January 2007. 5. On 28 August 2006, the Respondent, the player and the company M (hereinafter: “M”), as “intervening consenting party”, signed a document entitled “Instrument of settlement and termination of employment agreement” (hereinafter: “the termination agreement”) by means of which the employment contract between the Respondent and the player was terminated. 6. On 25 October 2007, the Claimant lodged a claim in front of FIFA against the Respondent alleging that the latter had breached the agreement and requesting the payment of USD 4,000,000 as compensation. 7. In this respect, the Claimant argued that the Respondent, in order to avoid paying the sell on fee, had terminated its contractual relationship with the player and transferred his “rights” to M for free. Furthermore, the Claimant alleged that the Respondent, in breach of art. 8 of the agreement, had failed to inform it of its intention to terminate the employment contract with the player and had never mentioned the fact that it wanted to transfer the “rights” of the latter to M. 8. In addition, the Claimant explained that, after having concluded the termination agreement, the player had signed an employment contract with the Club P, from country C (hereinafter: “Club P”) as a free agent. 9. As proof of its allegations, the Claimant inter alia provided FIFA with an unsigned printout of a decision (hereinafter: “the decision”) that had allegedly been taken by the League of country C on 27 April 2007 against Club P, imposing a penalty of currency of country C 5,500,000 and in which it was mentioned that the “rights” of the player had been transferred to M by means of a contract dated 7 February 2006. 10. On account of the above, the Claimant was of the opinion that the Respondent had breached the agreement and had prevented it from receiving the sell on fee stipulated in the agreement. In this context, the Claimant estimated the value of the player to USD 55,000,000 and calculated that the Respondent should therefore pay compensation in the amount of USD 4,000,000, i.e. 20% of {55,000,000 - 35,000,000}. 11. In its response to the claim, the Respondent rejected the Claimant’s allegations and deemed that the claim of the Claimant had been lodged in bad faith. Furthermore, the Respondent requested FIFA to impose “disciplinary sanctions” on the Claimant “in compliance with the FIFA Disciplinary Code” for having “clearly violated the FIFA Rules Governing the Procedures of the Players’ Status Committee.” 12. With regard to the facts of the case, the Respondent explained that it had concluded a “Joint Venture Agreement” (hereinafter: “the Joint Venture”) with M in November 2004 and that the latter had been responsible for managing its Professional Football Department. In this connection, the Respondent stressed that, at the time of the conclusion of the Joint Venture, art. 18bis of the FIFA Regulations on the Status and Transfer of Player was not in force. Furthermore, the Respondent mentioned that its contractual relationship with M was terminated on 24 July 2007. 13. In continuation, the Respondent argued that it had been M’s decision to terminate the contractual relationship with the player and stressed that it had never received any compensation in this connection. Additionally, the Respondent denied having transferred the “rights” of the player neither to M nor to any other third party. 14. Moreover, the Respondent pointed out that, in accordance with art. 8 of the agreement, it had been obliged to contact the Claimant only “if there was a transfer of the player to another club” while, in the present case, no transfer had taken place and the player had signed with Club P as a free agent. Besides, the Respondent alleged that it had not received any compensation in connection with the player’s transfer to Club P. 15. In addition, the Respondent mentioned that the negotiations of the agreement had been carried out by M and that “a company pertaining to the M Group” had paid the transfer fee to the Claimant. Consequently, the Respondent deemed that the Claimant knew of M’s involvement. 16. On account of all the aforementioned, the Respondent was of the opinion that it had not breached the agreement and that, therefore, it should not pay any compensation to the Claimant. 17. Likewise, the Respondent also rejected the Claimant’s estimation of the player’s value and stressed that even if it had transferred the latter, the transfer fee paid by any third club would not have exceeded the amount of USD 35,000,000. As to that, the Respondent especially pointed out that, in its calculation, the Claimant had not taken into account the duration of the employment contract. 18. Finally, the Respondent mentioned that by signing the agreement, the Claimant “knew that the possibility of transferring the player in an amount higher than USD 35,000,000 […] was very low” and that “this risk was clear when both clubs [i.e. Club O and Club N] signed the Agreement.” 19. In its subsequent submission to FIFA, the Claimant reiterated the content of its first statement. 20. In addition, the Claimant requested FIFA to commence disciplinary proceedings against the Respondent for having allegedly breached art. 17 par. 1 and 2 of the FIFA Regulations on the Status and Transfer of Players. 21. Furthermore, the Claimant provided FIFA with a report (hereinafter: “the report”) written by an company from country A, apparently linked to the company X, in which the transfer value of the player had been estimated between USD 44,000,000 and USD 52,000,000, i.e. to USD 48,000,000, and with a document entitled “informe sobre el valor mediatico del fútbol”, dated June 2008 and issued by the University of country C, in which the transfer of the player was valued at EUR 30,000,000. 22. Moreover, the Claimant informed FIFA that the employment contract concluded between the Respondent and the player included a penalty clause in accordance with which, in case of a premature termination, the Respondent would receive USD 100,000,000. In addition, the Claimant provided FIFA with an excerpt from the website of the Club Q, from country P which stated that it offered an option price of currency of country P 25,500,000. Besides, the Claimant alleged that Club O had paid to M a transfer amount of USD 65,000,000. 23. In continuation, the Claimant maintained that since the termination agreement had been concluded on 28 August 2006 and the player had signed an employment contract with Club P on 30 August 2006 it was clear that the Respondent and M had acted in bad faith with the purpose of not having to pay the sell on fee. 24. Besides, the Claimant alleged that, by not disclosing that it was in fact M who disposed of the employment contract, the Respondent had hid essential information during the negotiations that had finally led to the conclusion of the agreement and stressed that arts. 7 and 8 of the agreement had been concluded on the understanding that it was the Respondent who controlled a potential future transfer of the player. As a result, the Claimant was of the opinion that the Respondent had violated its contractual obligations and that its behaviour had to be considered as culpa in contrahendo. Hence, from the Claimant’s point of view, the Respondent had to compensate it for the unrealised gain that the Claimant could have received. 25. In its successive statements, the Respondent mainly reiterated the content of its previous submission. 26. In addition, the Respondent contested the player’s value estimated in the report and argued that according to the jurisprudence of the Dispute Resolution Chamber (DRC) and CAS “the allegation of ‘lost profit’ by the CLAIMANT” could not be taken into account. 27. Furthermore and with regard to the penalty clause included in the employment contract of the player, the Respondent explained that the legislation of country B considered “the time remaining of the existing contract as crucial aspect to calculate the penalty” and “for each year of contract concluded there must be a reduction of the penalty agreed in the contract”. 28. In continuation, the Respondent reiterated that the Claimant was aware of its contractual relationship with M and added that even various media from country A as well as FIFA had released such information. As to that, the Respondent added that the Claimant, being aware of M’s involvement when concluding the agreement, had “assumed any risks derived from such contractual relation”. Moreover, the Respondent denied having acted with “culpa in contrahendo” or in bad faith. 29. In its last statement to FIFA, the Claimant reiterated its previous allegations. However, at the same time, the Claimant admitted having known of M’s relationship with the Respondent. Nevertheless, the Claimant stressed that it had not been aware of M’s control over the Respondent’s contractual relationships, otherwise it would not have accepted certain clauses included in the agreement. 30. In its final statement, the Respondent adhered to its previous position. 31. On 3 February 2012, and in the context of a claim for solidarity contribution lodged by the Claimant against Club P in connection with the move of the player to the latter club, the Football Association (country C) informed FIFA that “[…] we have no record of any payments being made by Club P to any other party in relation to the transfer of Player C […]”. II. Considerations of the Single Judge of the Players’ Status Committee 1. First of all, the Single Judge of the Players’ Status Committee (hereafter also referred to as: “the Single Judge”) analysed whether he was competent to deal with the matter at hand. In this respect, the Single Judge confirmed that, on the basis of art. 3 par. 1 of the 2008 edition of the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber in connection with art. 23 par. 1 and 3 as well as art. 22 f) of the 2010 edition of the Regulations on the Status and Transfer of Players, he was competent to deal with the present matter since it concerned a dispute between two clubs affiliated to different associations. 2. Furthermore, the Single Judge analysed which Procedural Rules are applicable to the matter at hand. In this respect, he referred to art. 21 par. 2 and 3 of the 2008 edition of the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber. Consequently, and since the present matter was submitted to FIFA on 25 October 2007, the Single Judge concluded that the 2005 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereafter: “the Procedural Rules”) is applicable to the matter at hand (cf. art. 18 par. 1 and 2 of the Procedural Rules). 3. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, he referred, on the one hand, to art. 26 par. 1 and 2 of the 2010, 2009 and 2008 editions of the Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the present claim was lodged in front of FIFA on 25 October 2007. In view of the foregoing, the Single Judge concluded that the 2005 edition of the FIFA Regulations for the Status and Transfer of Players (hereafter: “the Regulations”) is applicable to the case at hand as to the substance. 4. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties during the course of the present proceedings. 5. In doing so, and first of all, the Single Judge noted that the parties to the dispute had concluded a transfer agreement on 17 December 2004 in order to transfer the player to the Respondent for an amount of USD 16,000,000 as transfer compensation. 6. In addition, the Single Judge took note that the parties had agreed in art. 7 of the agreement that in case the player would be subsequently transferred from the Respondent to another club for an amount higher than USD 35,000,000, the Respondent would have to pay to the Claimant an amount representing 20% of the difference between the sum of USD 35,000,000 and the amount that the Respondent would receive from any third club or sport organisation. The Single Judge also acknowledged that art. 8 of the agreement established that the Respondent had to inform the Claimant in writing about the terms and conditions of a subsequent transfer of the player before finalising the relevant transfer. 7. Furthermore, the Single Judge acknowledged that on 13 January 2005, a two-year employment contract was concluded between the player and the Respondent and on 28 August 2006, the Respondent, the player and M concluded a termination agreement which terminated the employment relationship between the player and the Respondent. 8. In continuation, the Single Judge pointed out that following the player’s registration with the Club P in August 2006, the Claimant had lodged a complaint in front of FIFA on 25 October 2007, alleging that the Respondent had breached the cited arts. 7 and art. 8 of the agreement and claimed from the latter an amount of USD 4,000,000 as compensation, plus the imposition of disciplinary sanctions on the Respondent. In this respect, the Single Judge noted that the Claimant had argued that the Respondent, in order to avoid paying the sell on fee provided for in art. 7 of the agreement had deliberately transferred the “rights” of the player to M so that the player could sign an employment contract with Club P as a free agent. 9. Furthermore, the Single Judge acknowledged that the Respondent had categorically rejected the present claim alleging in essence that it had never transferred the “rights” of the player to M or any other third party and that the player had joined Club P as a free agent. 10. Based on the above-mentioned considerations and taking into account the documentation available on file, the Single Judge held that the main question to be addressed in the present claim was whether the Respondent had breached the agreement and, in particular, whether the latter had failed to comply with any of its obligations deriving from arts. 7 and art. 8 of the agreement it had concluded with the Claimant. 11. In this respect and first of all, the Single Judge underlined that art. 7 of the agreement stipulated that a sell on fee was due in case the Respondent would transfer the player to another club for a particular amount (i.e. for an amount higher than USD 35,000,000). 12. At this stage, the Single Judge referred to the letter dated 3 February 2012 it had received from the Football Association from country C in relation to a claim for solidarity contribution that the Claimant had lodged against Club P in connection with the player and noted that the latter association had confirmed that it had no “record of any payments being made by Club P to any other party in relation to the transfer of the player”. 13. Besides, the Single Judge underlined that the Claimant had not provided any convincing documentary evidence in support of its allegation that the Respondent had received compensation from Club P for the transfer of the player. 14. In this context, the Single Judge recalled that according to the legal principle of the burden of proof, any party claiming a right on the basis of an alleged fact shall carry the burden of proof (cf. art. 12 par. 3 of the Procedural Rules). 15. In view of the above, the Single Judge concluded that the art. 7 of the agreement was not breached by the Respondent since it could not be established that a transfer compensation was paid by Club P to the Respondent in order to acquire the services of the player. 16. In continuation, the Single Judge focussed his attention on the content of art. 8 of the agreement which provided that the Respondent had to inform the Claimant in writing about the terms and conditions of a subsequent transfer of the player before the relevant transaction was completed. In view of this and while reiterating that the Claimant had not been able to prove that the Respondent had received a compensation in the sense of art. 7 of the agreement, the Single Judge was eager to underline that art. 8 of the agreement did not mention that the Respondent would have to compensate the Claimant in any way should the Respondent failed to inform the Claimant as stipulated. 17. In other words, the Single Judge held that the provision in question did not grant the Claimant the right to object to or reject a possible subsequent transfer of the player. According to the Single Judge, art. 8 of the agreement appears to have only been agreed between the parties in order for the Claimant to be kept informed about the player´s career. 18. In view of all the above-mentioned considerations, the Single Judge decided to reject the Claimant´s claim for compensation for breach of the agreement. 19. Finally and for the sake of completeness, the Single Judge also decided to reject the request of both parties for disciplinary sanctions for lack of legal basis. 20. Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 15 par. 1 of the Procedural Rules, according to which in the proceedings before the Players’ Status Committee (including its Single Judge) costs in the maximum amount of currency of country D 25,000 are levied. The costs are to be borne in consideration of the parties’ degree of success in the proceedings and are normally to be paid by the unsuccessful party. 21. In respect of the above, the Single Judge reiterated that the Claimant’s claim is rejected. Therefore, the Single Judge concluded that the Claimant has to bear the costs of the current proceedings before FIFA. 22. According to Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute. The amount in dispute to be taken into consideration in the present proceedings is of USD 4,000,000. Therefore, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to currency of country D 25,000. 23. In view of the amount of submissions that had to be analysed as well as considering that a number of factual and legal complexities had to be addressed, the Single Judge determined the costs of the current proceedings to the amount of currency of country D 12,000. 24. Consequently, and in line with the aforementioned, the Single Judge decided that the Claimant must pay the amount of currency of country D 12,000 in order to cover the costs of the present proceedings. III. Decision of the Single Judge of the Players´ Status Committee 1. The claim of the Claimant, Club N, is rejected. 2. The costs of the proceedings in the amount of currency of country D 12,000 are to be paid by the Claimant, Club N, within 30 days as from the date of notification of the present decision to the following bank account with reference to case nr. XX-XXXX: Note relating to the motivated decision (legal remedy): According to art. 67 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following: Court of Arbitration for Sport Avenue de Beaumont 2 1012 Lausanne Switzerland Tel: +41 21 613 50 00 / Fax: +41 21 613 50 01 e-mail: info@tas-cas.org www.tas-cas.org For the Single Judge of the Players´ Status Committee: Jérôme Valcke Secretary General Encl. CAS Directives