F.I.F.A. – Commissione per lo Status dei Calciatori (2014-2015) – controversie tra società – ———- F.I.F.A. – Players’ Status Committee (2014-2015) – 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 22 April 2015, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club, Club A, from country B as Claimant against the club, Club C, from country D as Respondent regarding a contractual dispute between the parties relating to the Player E

F.I.F.A. - Commissione per lo Status dei Calciatori (2014-2015) – controversie tra società – ---------- F.I.F.A. - Players' Status Committee (2014-2015) – 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 22 April 2015, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club, Club A, from country B as Claimant against the club, Club C, from country D as Respondent regarding a contractual dispute between the parties relating to the Player E I. Facts of the case 1. On 12 June 2014, the Turkish club, Club A (hereafter: Club A or the Claimant), and the club from country D, Club C (hereafter: Club C or the Respondent), concluded a transfer agreement for the transfer of the player, Player E, from the Claimant to the Respondent. 2. In accordance with the transfer agreement, the Respondent would pay the Claimant the net amount of EUR 3,200,000 as follows: - EUR 2,000,000 upon signature of the contract; - EUR 1,200,000 on or before 31 December 2014. 3. Art. 2 par. 2 of the transfer agreement reads as follows: “Club C shall provide a bank guarantee from Bank V via National Commercial Bank as corresponding bank for the second instalment. The content of the bank guarantee shall be subject to approval of Club A. The bank guarantee shall be send to Club A until 01st of July 2014. If Club C does not provide a bank guarantee until 01st of July 2014 and does not pay the second instalment on 31st of December 2014 then a penalty payment in the amount of EUR 500,000 shall be paid by Club C to Club A; further, Club C agrees to pay an additional amount of EUR 50,000 per each period of 30 days delay, starting as of the 01/01/2015 until the second instalment is fully paid.” 4. Art. 2 par. 3 of the transfer agreement reads: “Payments to Club A are net [which means that the amounts referred above are the sums to be paid to Club A after all legal and/or – deductions including but not limited to solidarity contributions] and made via Bank transfer to the bank account of Club A which details are as follows: (…)” 5. On 7 January 2015, the Claimant lodged a complaint in front of FIFA against the Respondent requesting from the latter the payment of: - EUR 1,200,000 regarding the second instalment; - EUR 500,000 regarding the penalty fee; - EUR 50,000 per each period of 30 days of delay starting from 1 January 2015; - 5% interest as from the due date of the transfer fee, the penalty fee and the “monthly penalty”; - Legal costs. 6. In particular, the Claimant clarified that despite two reminders dated 8 and 30 December 2014, the Respondent did not proceed with the payment of the 2nd instalment. Instead, on 30 December 2014, it received a letter from the Respondent that it would deduct 5% solidarity and requested a new invoice. In a reply sent on the same day, the Claimant indicated that the transfer fee was a net amount and that no deduction was allowed. 7. On 31 December 2014, the Respondent insisted on receiving an invoice for the amount of EUR 1,040,000 and, after various further communications exchanged between the parties, the Claimant indicated that it believed that the Respondent was not planning on paying the relevant amount. 8. In reply to the claim, the Respondent stated that it had the right to deduct 5% of the solidarity contribution from the transfer fee, whilst indicating that it omitted to deduct the solidarity contribution from the first instalment of EUR 2,000,000. 9. Furthermore, the Respondent claimed that a penalty fee in the amount of EUR 500,000 regarding a payment of EUR 1,040,000 is inadmissible and should be disregarded, since it is disproportionate and excessive. 10. Equally, the Respondent stated that the double penalty of EUR 50,000 per 30 days of delay should be disregarded, as it is manifestly disproportionate and exorbitant. 11. Therefore, the Respondent suggested that it would be condemned to pay EUR 1,040,000 to the Claimant plus 5% interest as from 30 January 2015. II. Considerations of the Single Judge of the Players’ Status Committee 1. First of all, the Single Judge of the Players’ Status Committee (hereinafter: the Single Judge) analysed which edition of the Procedural Rules were applicable to the matter at hand. In this respect, he referred to art. 21 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber as well as to the fact that the present matter was submitted to FIFA on 7 January 2015. Therefore, the Single Judge concluded that the 2014 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is applicable to the matter at hand. 2. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players is 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 Regulations on the Status and Transfer of Players and, on the other hand, once again to the fact that the claim was lodged in front of FIFA on 7 January 2015. In view of the foregoing, the Single Judge concluded that the 2014 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance. 3. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 2 and par. 3 of the Procedural Rules in connection with art. 23 par. 1 and par. 3 as well as art. 22 lit. f) of the Regulations, he was competent to deal with the present matter since it concerned a dispute between clubs affiliated to two different associations. 4. The competence of the Single Judge 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. However, the Single Judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence that he considered pertinent for the assessment of the matter at hand. 5. First, the Single Judge took note that the Claimant maintained that it is entitled to receive EUR 1,200,000 from the Respondent, indicating that the latter had not yet paid the instalment of the transfer compensation that fell due on 31 December 2014. 6. Equally, the Single Judge noted that the Claimant deemed that in accordance with art. 2 par. 2 of the transfer agreement, it was entitled to a penalty fee corresponding to EUR 500,000 as well as an additional amount of EUR 50,000 per each period of 30 days of delay starting as from 1 January 2015. Finally, the Single Judge noted that the Claimant also requested 5% interest over all the amounts claimed as well as legal costs. 7. Moreover, the Single Judge observes that, in its reply, the Respondent did not dispute that a debt existed towards the Claimant, but that it held that it had the right to deduct 5% regarding solidarity contribution from the total amount of transfer compensation. 8. In addition, the Respondent holds that both the penalty fee in the amount of EUR 500,000 as well as the additional fee of EUR 50,000 per 30 days of delay cannot be granted as they are disproportionate and excessive. 9. In this context, the Single Judge notes from the Respondent’s reply dated 17 March 2015 that the only reason for the non-payment of the second instalment is its argument that it was allowed to deduct 5% regarding the solidarity contribution. 10. In this framework and for the sake of clarity, the Single Judge refers to art. 21 and art. 1 of Annexe 5 of the Regulations which clearly stipulates that “if a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and distributed by the new club as a solidarity contribution to the clubs involved in his training and education over the years. (…) “ (emphasis added). The Single Judge further recalls that the solidarity mechanism is a principle well-established in the Regulations, from which the parties signing a transfer or loan contract cannot derogate through the contents of a contract. Thus, as for the distribution of the solidarity contribution, the amount to be taken into account when calculating the solidarity contribution payments due to the club(s) involved in the player’s education and training is the amount actually agreed upon as the total compensation payable by the new club to the former club, i.e. the amount of EUR 3,200,000. Therefore, the Single Judge agrees with the Respondent that, in principle, the Claimant is only entitled to receive 95% of the transfer compensation. 11. However, the Single Judge finds that the Respondent is, in the present procedure, at fault due to the following two points: 1) It has remained unexplained by the Respondent why it did not proceed with the payment of 95% of the second instalment. The fact that a party is, in principle, entitled to deduct 5% regarding the solidarity contribution can by no means form a justification for the failure to pay the remaining 95% of the transfer fee. Therefore, the Single Judge is of the view that the Respondent failed to put forward any valid reason for the non-payment of 95% of the second instalment. 2) The Respondent did not provide any documentary evidence which confirmed that it had indeed distributed 5% of the transfer compensation it had agreed upon with the Claimant to the club(s) involved in the player’s training and education over the years. It is clearly not the purpose of the provisions regarding solidarity contribution that the new club, i.e. the Respondent, can simply retain 5% of the transfer compensation without distributing this 5% to the clubs involved in the training and education of the player. In other words, the Respondent cannot enrich itself by retaining 5% of the transfer compensation without distributing such percentage as solidarity contribution to the club(s) involved in the training and education of the player. 12. On account of the above two elements, the Single Judge concludes that the Respondent has to pay the amount of EUR 1,200,000 in full to the Claimant. 13. In continuation, the Single Judge addressed the remaining three requests of the Claimant, namely, its request for a penalty fee corresponding to EUR 500,000, its request for the payment of EUR 50,000 per 30 days of delay as well as its request for 5% interest on the outstanding amounts. 14. In this context, the Single Judge observes that the Respondent deemed that a penalty fee corresponding to EUR 500,000 is disproportionate and excessive. 15. The Single Judge however is of the opinion that the penalty fee is not excessive, disproportionate or grossly unfair. In reaching that conclusion, the Single Judge takes into account the amount of transfer compensation, the severity of the breach as well as the Respondent’s fault and intentional failure regarding the non-payment. The Single Judge deems that the behaviour of the Respondent not to pay, at the very least, 95% of the second instalment of the transfer fee should be considered as an intentional failure to comply with its financial obligations. In this respect, the Single Judge concludes from the Respondent’s reply that it is very well aware of the provisions regarding the solidarity mechanism. Equally, the Single Judge takes into account that, apart from not paying the relevant transfer instalment, the Respondent had also failed to provide the Claimant with the requested bank guarantee. Following this reasoning, as well as taking into account that the total transfer compensation amounts to EUR 3,200,000, the Single Judge does not find a penalty fee of EUR 500,000 excessive, disproportionate or grossly unfair. 16. As a consequence, the Single Judge determines that the Respondent has to pay to the Claimant the amount of EUR 500,000 as a penalty fee. 17. In relation to the Claimant’s request for the payment of EUR 50,000 per 30 days of delay as well as its request for 5% interest on the outstanding amounts, the Single Judge is of the opinion that it cannot grant the Claimant’s request for the amount of EUR 50,000 per 30 days of delay. Since the “penalty” of EUR 50,000 per 30 days of delay is to be applied “until the second installment is fully paid”, the Single Judge is of the view that said construction should rather be considered as default interest, which, in the present matter corresponds to an interest rate of approximately 50% per year. The Single Judge finds such an interest rate excessive and, in view of the fact that the Claimant also requested 5% interest on the outstanding amount, decides to award 5% interest p.a. on the amount of EUR 1,200,000 as from 1 January 2015 until the date of effective payment. In addition, the Single Judge rejects the Claimant’s request for a 5% interest rate on the penalty fee, as he finds that no interest is due over a late payment penalty. 18. As to the legal costs, the Single Judge decides to reject such request in accordance with art. 18 par. 4 of the Procedural Rules. 19. Lastly, the Single Judge refers to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which, in proceedings before the Players’ Status Committee including its Single Judge, costs in the maximum amount of CHF 25’000 are levied. The relevant provision further states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings (cf. art. 18 par. 1 of the Procedural Rules). 20. In respect of the above, and taking into account that the Claimant is the successful party in the present proceedings, the Single Judge concludes that the Respondent has to bear the full costs of the current proceedings before FIFA. 21. Furthermore and 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. On that basis, the Single Judge points out that the amount to be taken into consideration in the present proceedings is higher than CHF 200,000. Consequently, the Single Judge concludes that the maximum amount of costs of the proceedings corresponds to CHF 25,000. 22. In conclusion, taking into account the degree of success as well as the particularities of the present matter, the Single Judge of the Players’ Status Committee determines the costs of the proceedings to the amount of CHF 18,000, which shall be borne by the Respondent. ***** III. Decision of the Single Judge of the Players’ Status Committee 1. The claim of the Claimant, Club A, is partially accepted. 2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 1,200,000 plus 5% interest p.a. on said amount as from 1 January 2015 until the date of effective payment 3. In the event that the aforementioned sum plus interest is not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision. 4. The Respondent has to pay to the Claimant the amount of EUR 500,000 as a penalty fee, within 30 days as from the date of notification of this decision. 5. In the event that the amount due to the Claimant in accordance with the above-mentioned number 4. is not paid by the Respondent within the stated time limit, interest at the rate of 5% p.a. will apply as of the expiry of the stipulated time limit and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision. 6. Any further claim lodged by the Claimant is rejected. 7. The final costs of the proceedings in the amount of CHF 18,000 are to be paid by the Respondent within 30 days as from the date of notification of the present decision as follows: 7.1. The amount of CHF 13,000 has to be paid to FIFA to the following bank account with reference to case nr.: UBS Zurich Account number 366.677.01U (FIFA Players’ Status) Clearing number 230 IBAN: CH27 0023 0230 3666 7701U SWIFT: UBSWCHZH80A 7.2. The amount of CHF 5,000 has to be paid directly to the Claimant. 8. The Claimant is directed to inform the Respondent directly and immediately of the account number to which the remittances are to be made in accordance with the above points 2., 4. and 7.2. and to notify the Single Judge of the Players’ Status Committee of every payment received. ***** Note relating to the motivated decision (legal remedy): According to article 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