F.I.F.A. – Commissione per lo Status dei Calciatori (2015-2016) – controversie tra società – ———- F.I.F.A. – Players’ Status Committee (2015-2016) – 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 January 2016, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club, Club A, country B as Claimant against the club, Club C, 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 (2015-2016) – controversie tra società – ---------- F.I.F.A. - Players’ Status Committee (2015-2016) – 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 January 2016, by Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club, Club A, country B as Claimant against the club, Club C, country D as Respondent regarding a contractual dispute between the parties relating to the Player E I. Facts of the case 1. On 30 July 2014, the club from country B, Club A (hereafter: Club A), and the club from country D, Club C (hereafter: Club C), concluded a transfer agreement for the transfer of the player, Player E, from Club A to Club C. 2. In accordance with art. 3.2 of the transfer agreement, Club C would pay Club A the amount of EUR 4,500,000 “without any deduction” as follows: - EUR 2,000,000 “upon fulfilment of the condition precedent (…) receipt of the proper invoice by Club C.” - EUR 500,000 on 15 December 2014 - EUR 2,000,000 on 15 July 2015 3. Furthermore, art. 4.2. and 4.4. of the transfer agreement read as follows: Art. 4.2: “In case of default by Club C in the payment of the Transfer Fee, it shall be liable for the payment of a non-compensatory penalty corresponding to 15% (fifteen percent) of the due and unpaid amount to Club A, without prejudice of Club A claiming further losses and damages that can be evidenced.” Art. 4.4: “All the penalty fees shall be paid immediately upon the date of the relevant event and interest on such sum shall be applicable from due date until the date of effective payment, at a rate of 8% (eight per cent) per annum.” 4. On 9 September 2015, Club A lodged a claim in front of FIFA against Club C, requesting the following payments: - EUR 2,000,000 regarding the third instalment of the transfer fee; - EUR 300,000 as a penalty fee (15% of EUR 2,000,000); - 8% interest as from 16 July 2015. 5. In particular, Club A explained that on 20 July 2015 it had uploaded an invoice in the Transfer Matching System (TMS) requesting Club C to pay the third installment of the transfer fee. Nevertheless, Club C failed to make the relevant payment. 6. In its reply to the claim, Club C held that the claim of Club A should be rejected for the following reasons: - The legal representatives of Club A did not provide a power of attorney. - The last installment of the transfer agreement is “in dispute” and Club C has “the right to apply the doctrine of “Set-off” as a means to avoid the injustice that result if a debtor couldn’t pay the debt of the last installment of the fraudulent disputed transfer agreement before CAS, in this respect, it is unfair that the claimant could at the same time force his own debtor to pay his debt”. - In accordance with art. 102 of the Swiss Code of Obligations, “where an obligation is due, the obliger is in default as soon as he receives a formal reminder from the oblige.” In this respect, Club C asserts that Club A failed to put them in default and that it was not informed of the invoice uploaded into TMS. - In relation to the foregoing and in absence of a formal notice, the starting date of the interest should run as from the date of notification of the “FIFA decision on this matter”. - The penalty clause is clearly disproportionate and should be rejected or, alternatively, mitigated. In this respect, Club C alleged that Club A had “substantive contractual rights” in negotiating the agreement, whereas Club C’s rights had been “surprisingly limited”. Also, Club C deemed that the penalty fee is extravagant, inappropriate, non-enforceable and excessive. - Club A’s requests for ”penalties, additional interest and compensation for unjust enrichment” violate the principle of good faith and “fair dealing” since the player was part of a “disputed transfer tri-agreement or a direct party of the TPO owing 35% of the federative rights, the reason for he has stopped the employment contract on due influence and any claim for entitlement of the 3rd instalment at this stage is groundless and the penalty claim should therefore be dismissed for lack of grounds.” - Both Club A and the player have entered into various contracts with third parties, in violation of art. 18bis and 18ter of the Regulations, and the player eventually left Club C in February 2015 under influence of those third parties; “as the player is involved in the negotiations about the sum to be paid for him it is reasonable that he has to bear all of the consequences.” Club C finds it preposterous that it would have to pay EUR 4,500,000 for the services of the player, which they were not able to use. Such loss has to be taken into consideration as part of the “specificity of sport”. 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 (edition 2015) as well as to the fact that the present matter was submitted to FIFA on 9 September 2015, thus after 1 April 2015. Therefore, the Single Judge concluded that the 2015 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 2015 edition 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 9 September 2015. In view of the foregoing, the Single Judge concluded that the 2015 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 would in principle be competent to deal with the present matter since it concerned a dispute between clubs affiliated to two different associations. 4. As to the concerns raised by Club C in its letter dated 21 January 2016 with respect to the competence of the Single Judge to decide on the present dispute, the Single Judge held that, making use of his "competence competence", inherent to any deciding authority, he considers himself empowered to decide on the dispute at hand. 5. Furthermore, and as regards the club's concerns relating to his independence, the Single Judge pointed out that it is within the nature of a legal procedure that a decision taken by a first instance decision-making body, such as the Single Judge, may be overturned by another decision-making body in appeal, such as the Court of Arbitration for Sport. Equally, the mere fact that a legal representative of a party has taken part in the same Working Group meeting as the person adjudicating on a specific affair cannot legitimately be considered as a lack of independence on the side of the Single Judge. This in particular, if the Single Judge had no direct influence on the composition of the Working Group. The aforementioned concerns cannot lead to the conclusion that a legitimate doubt exists as to the independence and impartiality of the Single Judge. 6. 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 which he considered pertinent for the assessment of the matter at hand. 7. Having analysed all the arguments raised by the parties, the Single Judge started with addressing the argument invoked by Club C in relation to the issue of the lack of a power of attorney. In this respect, the Single Judge wished to outline that the present dispute is merely the continuation of a previous dispute between the same parties in relation to the same transfer agreement. Indeed, on 10 March 2015 a decision was passed in relation to the dispute between Club C and Club A regarding the first and second installment of the transfer compensation. As a result, the Single Judge did not see any reason not to entertain Club A’s current claim regarding the third installment of the transfer compensation, the legal representatives of Club A being the same as in the previous dispute. 8. The Single Judge further took note that Club C argued that Club A had not put them in default and that therefore no amount is due to Club A. The Single Judge does however not follow Club C’s argumentation and stresses that the transfer agreement at the basis of the present dispute does not contain a provision which would make the payment of the third installment conditional upon any notification. The Single Judge observes that the due date of the third installment of the transfer compensation is clearly set in the transfer agreement at 15 July 2015. As a result, the Single Judge is of the opinion that Club C was in default of its payment obligations as soon as it did not pay the third installment due on 15 July 2015 to Club A. In addition, the Single Judge considers that the principle of “set-off”, as invoked by Club C in its position, is not applicable to the matter at stake since Club C failed to prove that Club A has any debts towards Club C. 9. In connection with Club C’s argument that Club A violated the principle of good faith and “fair dealing” in relation to the “tri-agreement”, the Single Judge referred to art. 12 par. 3 of the Procedural Rules which stipulates that any party claiming a right on the basis of an alleged fact shall carry the burden of proof. At this stage, the Single Judge stressed that i) no evidence had been provided by Club C that would indicate that Club A had violated the principle of good faith, and ii) nothing indicated that Club C had not entered out of its own free will into the pertinent transfer agreement with Club A. 10. What is more, the Single Judge outlined that the apparent departure of the player in February 2015 is a matter between the player and Club C, failing to see any link with Club A in this respect. In other words, the Single Judge finds that the apparent departure of the player cannot be hold against Club A. 11. As a result, the Single Judge concluded that Club C did not provide any valid argument which would justify the non-payment of the third instalment of the agreed transfer compensation. For this reason, the Single Judge concluded that Club C had failed to respect the terms of the transfer agreement it had entered into with Club A on 30 July 2014. 12. Consequently, the Single Judge held that, in accordance with the basic legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, Club C has to fulfill its contractual obligations towards Club A. Therefore, the Single Judge decided that Club C has to pay Club A the amount of EUR 2,000,000 related to the third installment on the transfer fee. 13. Furthermore, and with regard to Club A’s request for interest, the Single Judge determined to award 8% interest on the outstanding amount as from 16 July 2015 on the amount of EUR 2,000,000. The Single Judge wished to outline that, contrary to Club C’s opinion, the interest does not start running from the date of notification of the decision, since the due date for the payment is clearly indicated in the transfer agreement and Club A’s claim specifies a request for interest as from the relevant due date. 14. Finally, the Single Judge addressed the remaining request of Club A, namely, its request for a penalty fee corresponding to 15% of the third installment of the transfer compensation. 15. In this context, the Single Judge observed that the penalty fee is stipulated in the transfer agreement and that, as mentioned previously, Club C delayed the payment of the third installment of the transfer fee without a legitimate reason. Equally, the Single Judge did not find the penalty fee of 15% excessive or disproportionate. As a result, the Single Judge determined to accept the penalty fee claimed by Club A. For the sake of completeness, the Single Judge also pointed out that Club C’s argument that Club A had “substantive contractual rights” in negotiating the agreement, whereas Club C’s rights had been “surprisingly limited”, has neither been proven nor substantiated to the extent why it would lead to the invalidity of the penalty clause. 16. As a consequence of the foregoing consideration, the Single Judge determined that Club C has to pay to Club A the amount of EUR 300,000 as a penalty fee corresponding to 15% of the third installment of the transfer compensation. 17. 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 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). 18. In respect of the above, and taking into account that Club A is the successful party in the present proceedings, the Single Judge concluded that Club C has to bear the full costs of the current proceedings before FIFA. 19. 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 2,300,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000. 20. In conclusion, taking into account the degree of success as well as the complexity of the case and the fact that Club C has been found liable for the violation of the transfer agreement for the second time, the Single Judge of the Players’ Status Committee determined the costs of the proceedings to the amount of CHF 25,000, which shall be borne by Club C. ***** III. Decision of the Single Judge of the Players’ Status Committee 1. The claim of the Claimant, Club A, is 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 2,000,000 plus 8% interest p.a. on said amount as from 16 July 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 300,000 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 abovementioned 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. The final costs of the proceedings, amounting to CHF 25,000, are to be paid by the Respondent within 30 days of notification of the present decision as follows: 6.1. The amount of CHF 20,000 has to be paid to FIFA to the following bank account with reference to case nr. XXXX: UBS Zurich Account number 366.677.01U (FIFA Players’ Status) Clearing number 230 IBAN: CH27 0023 0230 3666 7701U SWIFT: UBSWCHZH80A 6.2. The amount of CHF 5,000 has to be paid directly to the Claimant. 7. 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 6.2. 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: Markus Kattner Acting Secretary General Encl. CAS Directives