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 23 September 2014, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club Club M, from country R as Claimant against the club Club N, from country P as Respondent regarding a contractual dispute between the parties relating to the player C

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 23 September 2014, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club Club M, from country R as Claimant against the club Club N, from country P as Respondent regarding a contractual dispute between the parties relating to the player C I. Facts of the case 1. On 30 August 2012, Club M, from country R (hereinafter: the Claimant) and Club N, from country P (hereinafter: the Respondent), concluded an agreement (hereinafter: the agreement) for the loan of the player C (hereinafter: the player), from the Claimant to the Respondent. 2. The agreement stipulated the following: “3.1 For the loan of the player [the Respondent] shall pay to [the Claimant] the Loan Fee in net amount of €157,000 (…) which shall be paid to [the Claimant] without any retention, in 4 (four) equal installments no later than 30 September 2012, 31 December 2012, 28 February 2013 and 31 May 2013 respectively. 3.2 In case of untimely payment [the Respondent] is obliged to pay the penalty for every day of delayed payment at a rate of 20% of amount of the Loan Fee per annum.” 3. On 3 April 2013, the Claimant lodged a claim at FIFA and, after amending its claim, requested from the Respondent the payment of outstanding transfer compensation in the amount of EUR 78,540, plus an amount of EUR 16,527.77 with reference to clause 3.2. of the contract. 4. In support of its claim, the Claimant stated that after receiving the amount of EUR 39,230 each for the first two installments of the loan compensation on 24 October 2012 and 12 March 2013 respectively, i.e. after the due dates stipulated in the agreement, the Respondent failed to comply with its further contractual obligations. Furthermore, the Claimant stressed that instead of the due amount of EUR 39,250 for each of the first two instalments, the Respondent only transferred the amount of EUR 39,230 to its bank account, despite the fact that according to the agreement all amounts had to be paid net. Moreover, the Claimant stated that the third and fourth instalments of loan compensation of EUR 39,250 each are still outstanding. 5. Regarding its claim for an additional 16,527.77, the Claimant stressed that the first and second instalment were only paid after the respective due dates. Therefore, a default interest at a rate of 20% p.a. should apply as follows: Amount of debt Due date of payment Date of payment Delay (days) Penalty EUR EUR 39,250 30 September 2012 24 October 2012 24 2,064.66 EUR 39,270 31 December 2012 12 March 2013 71 6,107.95 EUR 39,290 28 February 2013 - 92 7,914.52 EUR 39,250 31 May 2013 - 11 946.30 EUR 78,540 Total penalties: 16,987.77 Total claim: 95,527.77 6. In its reply, the Respondent disagreed with the Claimant’s calculation of default interest, stressing that the first instalment was paid on 19 October 2012 and the second instalment was paid on 8 March 2013. In this regard, the Respondent provided bank statements indicating two payments in the amount of EUR 39,250 each. Moreover, the Respondent stressed that the first and second instalments were paid in full, i.e. that no amounts were withheld as alleged by the Claimant. 7. Moreover, the Respondent stated that the player did not participate in any football activities with the club during the period from 11 March 2013 until 3 May 2013, following a suspension of the player by the club due to a violent confrontation between the player and a teammate. Therefore, during the aforementioned period of time, the player was unable to carry out his professional activity. Consequently, the Respondent argued that since the player was “not able to, culpably, perform its activity, the loan transfer agreement cannot be fully completed.” Therefore, the primary goal of the agreement, i.e. to temporarily allow the player to perform his activity on behalf of the new club, could not be achieved anymore and the loan compensation has to be reduced in accordance. 8. Based on the above, the Respondent stated that the agreement provided for a loan compensation in the amount of EUR 157,000 for a loan period of ten months, equalling EUR 523 per day. Since the player was suspended for a total of 54 days, the amount of EUR 28.242 (EUR 523 x 54 days) has to be deducted from the loan compensation. 9. As to the Claimant’s request for default interest of 20% p.a., the Respondent held that such a penalty clause should only compensate the creditor for the delay in payment and “not serve to place him in a profitable situation.” Therefore, in line with the jurisprudence of the PSC, the latter should determine that the interest rate of 20% is considered excessive and unlawful. 10. In its replica, the Claimant provided bank statements which indicate that it received the first and second instalments on 24 October 2012 and 12 March 2013 respectively in the amount of EUR 39,230 each. Moreover, the Claimant pointed to the bank statement provided by the Respondent, from which it can be seen that the Respondent ordered its bank to split the costs for the respective transactions, which is why the full net amount was eventually not transferred to the Claimant’s account. 11. Furthermore, the Claimant argued that the player’s incorrect behaviour had occurred during the course of his employment contract with the Respondent and, in this context, made reference to a decision of the Dispute Resolution Chamber (DRC decision no. 5101020 passed on 28 May 2010) in which it is stated that “a transfer agreement and an employment contract are two independent contracts which do not have the same object.” Therefore, the Claimant should not be held responsible for what happens in the contractual relationship between the Respondent and the player. 12. Finally, regarding its request for default interest at a rate of 20% p.a., the Claimant referred to the legal principle of pacta sunt servanda, stressing that a penalty clause, in order to maintain its sanctioning nature, has to be higher than what a creditor could normally claim as compensation for non-performance, without being automatically deemed excessive. Moreover, according to art. 163 par. 3 of the Swiss Code of Obligations, a judge, in order to respect the principle of proportionality, can reduce contractual penalties if they are excessive and thereby harm the ordre public. 13. The Respondent did not provide FIFA with its final position pertaining to the replica of the Claimant. 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 Procedural Rules were applicable to the matter at hand. In this respect, he referred to art. 21 par. 2 and 3 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2014; hereinafter: the Procedural Rules) as well as to the fact that the present matter was submitted to FIFA on 3 April 2013, thus after 1 December 2012. Therefore, the Single Judge concluded that the 2012 edition of the 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 was 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 2014 edition of the Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the claim was lodged in front of FIFA on 3 April 2013. In view of the foregoing, the Single Judge concluded that the 2012 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. 1 and par. 2 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 two clubs affiliated to 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. 5. In this respect and first of all, the Single Judge noted that it was undisputed between the Claimant and the Respondent, that, on 30 August 2012, an agreement had been concluded, pertaining to the loan of the player from the Claimant to the Respondent for a loan fee of EUR 157,000 which was supposed to be paid net “without any retention”. Furthermore, the Single Judge noted that the agreement stipulated that “in case of untimely payment [the Respondent] is obliged to pay the penalty for every day of delayed payment at a rate of 20% of amount of the Loan Fee per annum.” 6. Moreover, the Single Judge took note that the Claimant lodged a claim before FIFA, requesting the payment of outstanding loan compensation in the amount of EUR 78,540 plus an amount of EUR 16,527.77 due to the delayed payment and with reference to clause 3.2. of the contract. 7. In continuation, and as to the arguments put forward by the Claimant regarding the outstanding loan compensation, the Single Judge acknowledged that the Claimant argued that after receiving the amount of EUR 39,230 each for the first two installments of the loan compensation on 24 October 2012 and 12 March 2013 respectively, i.e. after the due dates stipulated in the agreement, the Respondent allegedly failed to comply with its further contractual obligations. In this context, the Single Judge further noted that the Claimant stressed that instead of the due amount of EUR 39,250 for each of the first two instalments, the Respondent allegedly only transferred the amount of EUR 39,230 to the Claimant’s bank account, despite the fact that according to the agreement all amounts had to be paid net. Moreover, the Singe Judge took note of the Claimant’s allegation that the third and fourth instalments of loan compensation of EUR 39,250 each are still outstanding. 8. Furthermore, the Single Judge took note of the arguments put forward by the Respondent with regard to the loan compensation. In this regard, the Single Judge took notice that the Respondent generally acknowledges that certain amounts are still outstanding. However, the Single Judge also noted that according to the Respondent, the payable amount needs to be reduced by the amount of EUR 28,242, due to the fact that the player was suspended by the Respondent following an alleged “violent confrontation” with a teammate, which is why the player was allegedly not able to provide his services as stipulated in the employment contract between it and the player. Therefore, as noted by the Single Judge, the Respondent argues that the primary goal of the loan agreement, i.e. to temporarily allow the player to play for the Respondent during the duration of the loan agreement, could not be fulfilled. In addition, the Single Judge noted the Respondent’s objection to the claim that the first two instalments had not been paid in full as well as the fact that it submitted bank statements in an attempt to corroborate such an argument. 9. On account of the above, the Single Judge considered that he first had to determine if the Respondent has to pay the full amount of loan compensation as provided for in the relevant loan agreement, as claimed by the Claimant, or if the relevant amount has to be reduced as indicated by the Respondent. 10. In this context, the Single Judge emphasised that the loan agreement was concluded between the Claimant and the Respondent only and provided for the provisions and respective obligations between the two clubs in relation to the loan of the player concerned. At the same time, the Respondent concluded an employment contract with the player, which provides for the respective obligations of either party relating to their employment relationship. In this regard, the Single Judge outlined that the obligation of payment of the loan fee as stipulated in the loan agreement is independent from any obligation that the player might have towards the Respondent on the basis of the employment contract. Having stated the above, the Single Judge concluded that regardless of whether the Respondent was entitled to sanction the player for his alleged wrongdoings, such violations of the employment contract cannot dispense the Respondent from fulfilling its obligations towards the Claimant. As a consequence, the Single Judge rejected the arguments of the Respondent in this regard and decided that the Claimant was entitled to the full amount of loan compensation as stipulated in the loan agreement. 11. At this stage, the Single Judge examined which amounts had actually been paid by the Respondent to the Claimant. In this respect, the Single Judge recalled that in accordance with art. 12 par. 3 of the Procedural Rules, the burden of proof in relation to the payments regarding the loan compensation lied on the Respondent. The Single Judge started by acknowledging that it was undisputed between the parties that the third and fourth instalments had not been paid by the Respondent. Then, the Single Judge took due note of the parties’ respective argumentation relating to the payment of the first and second instalments. In this latter respect, the Single Judge observed that the Respondent had failed to prove that the full amounts of EUR 39,250 had been remitted to the Claimant for the first two instalments. In fact, after examination of the documentation on file, the Single Judge was able to conclude that the amount of EUR 39,230 had been remitted to the Claimant instead of EUR 39,250 for each of the first two instalments. 12. In continuation, the Single Judge went on to examine the second issue raised in the present matter by the Claimant, i.e. the Claimant’s request to be awarded an amount of EUR 16,987, basing its request on the provision contained in the transfer agreement that reads as follows: “In case of untimely payment [the Respondent] is obliged to pay the penalty for every day of delayed payment at a rate of 20% of amount of the Loan Fee per annum.”” 13. The Single Judge acknowledged the arguments of both parties in respect of clause 3.2. of the contract and, after analysing the relevant provision contained in the transfer agreement, concluded that interest of 20% for late payment is to be considered as manifestly disproportionate and exorbitant, and as such, cannot be enforced. In view of the foregoing, the Single Judge held that the relevant clause contained in the transfer agreement concluded between the parties should be disregarded and that, as an alternative and in accordance with the longstanding practice of the Players’ Status Committee, the Respondent has to pay 5% default interest on the respective outstanding installments. 14. In conclusion, the Single Judge decided to partially accept the claim of the Claimant and determined that the Respondent is liable to pay to the Claimant the total amount of EUR 78,450 plus default interest on said amount until the date of effective payment as follows: 5% p.a. over the amount of EUR 39,290 as from 3 April 2013; 5% p.a. over the amount of EUR 39,250 as from 1 June 2013. 15. Lastly, the Single Judge referred 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 currency of country H 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). 16. In respect of the above, and taking into account that the claim of the Claimant had been partially accepted, the Single Judge concluded that both the Claimant as well as the Respondent had to bear a part of the costs of the current proceedings before FIFA. 17. 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 held that the amount to be taken into consideration in the present proceedings is EUR 95,527. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to currency of country H 15,000. 18. In conclusion, and considering that the case at hand did pose some particular factual difficulties, the Single Judge determined the costs of the current proceedings to the amount of currency of country H 10,000. Moreover, in line with his aforementioned considerations and taking into account the degree of success, the Single Judge of the Players’ Status Committee decided that the amount of currency of country H 3,000 has to be paid by the Claimant and the amount of currency of country H 7,000 by the Respondent 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 M, is partially accepted. 2. The Respondent, Club N, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 78,540. 3. Within the same deadline, the Respondent has to pay the Claimant interest as follows: 3.1. 5% p.a. over the amount of EUR 39,290 as from 3 April 2013 until the date of effective payment; 3.2. 5% p.a. over the amount of EUR 39,250 as from 1 June 2013 until the date of effective payment. 4. If the aforementioned sum plus interest is not paid within the aforementioned deadline, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision. 5. Any further claims lodged by the Claimant are rejected. 6. The final amount of costs of the proceedings in the amount of currency of country H 10,000 are to be paid within 30 days as from the date of notification of the present decision as follows: 6.1. The amount of currency of country H 3,000 by the Claimant to FIFA. Given that the Claimant has already paid the amount of currency of country H 5,000 to FIFA as advance of costs at the beginning of the present proceedings, no additional costs have to be paid by the Claimant. 6.2. The amount of currency of country H 2,000 by the Respondent directly to the Claimant. 6.3. The amount of currency of country H 5,000 by the Respondent to FIFA to the following bank account with reference to case nr.: 7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2., 3. and 6.2. above are to be made 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