F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – players’ and match agents disputes / controversie agenti di calciatori – (2020-2021) – fifa.com – atto non ufficiale – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland, on 23 February 2021

Decision of the

Single Judge of the PSC

passed on 23 February 2021

regarding a contractual dispute concerning the player Andre Luis da Costa ALFREDO

BY:

Roy Vermeer (Netherlands), member

CLAIMANT:

Sport Club Corinthians Paulista, Brazil

Represented by Mr Sergio Engelberg

RESPONDENT:

Shanghai Shenhua FC, China

Represented by Mr Daniel Munoz

I. FACTS

1. On an unspecified date, the Brazilian club Sport Club Corinthians Paulista (hereinafter: Corinthians or Claimant) and the Brazilian player André Luis da Costa Alfredo (hereinafter: the player) concluded an employment contract, valid between 7 January 2019 and 31 December 2022.

2. On 17 January 2020, Corinthians and the South Korean club Daejeon Hanacitizen (hereinafter: Daejeon), concluded a loan agreement, based on which the player would be loaned (without the payment of any compensation) from Corinthians to Daejeon for the period between 17 January and 31 December 2020.

3. Article 3 of loan agreement provides for an option for Daejeon to obtain the player’s services on a definitive basis, in return for the payment of an amount of USD 3,000,000. The option ‘must be notified until 30 November 2020 and Corinthians cannot negotiate other club in K League until the end of November 2020’.

4. On 12 June 2020, Corinthians, the player and Daejeon signed a tripartite contract to formalize the definitive transfer of the player to Daejeon. In this respect, the player consented to the definitive transfer and Corinthians and Daejeon deviated from the original loan contract and agreed that Daejeon would pay an amount of USD 2,200,000, plus a 10% sell-on fee, in order to acquire the services of the player on a definitive basis.

5. On 20 July 2020, the Chinese club Shanghai Shenhua FC (hereinafter: Shanghai or Respondent) informed Corinthians that it wished to obtain the player’s services on a definitive basis for an amount of USD 3,000,000, to be paid no later than 20 August 2020 and providing Corinthians 48 hours to accept said proposal. Said proposal also explicitly stated that “After 48 hours, this proposal will no longer be valid (…)”.

6. On the same day, 20 July 2020, the company TwobeOne Entertainment (hereinafter: TwobeOne) sent a letter to Corinthians, providing it with an additional 48 hours to reply to the proposal of Shanghai “according to the request of Sport Club Corinthians Paulista” (i.e. in total 96 hours, until 24 July 2020). Also, TwobeOne provided a power of attorney, based on which it was granted the right to negotiate with Corinthians on the transfer of the player, on behalf of Shanghai.

7. On 23 July 2020, Daejeon and Corinthians concluded an agreement, on the basis of which Daejeon ‘waives its option right to buy the player on a definitive basis’. The agreement also stated that “all other clauses of the loan agreement remained unchanged”.

8. On 27 July 2020, Corinthians sent an email to TwobeOne with the following content:

“Dear Sir, I hope this e-mail finds you well. Concerning the Player Andre Luis da Costa Alfredo, please find enclosed the Proposal and the NDA signed by Corinthians. Further, as a proof of good faith, please see the amendment signed with Daejeon FC, which states that Daejeon FC has no option right to buy the Player until the end of the loan period.”

9. On 14 August 2020, TwobeOne requested the official bank details of Corinthians.

10. On 17 August 2020, Corinthians sent a draft of a transfer agreement to TwobeOne, along with an invoice for the payment of the transfer amount, however did not receive a reply from Shanghai.

11. On 23 August 2020, Corinthians sent an email to Shanghai with the following content: “Please, we need the information about the signature of the transfer agreement enclosed and the payment related to the transfer of Andre Luis da Costa Alfredo”

12. On 31 August 2020, Shanghai informed Corinthians that due to the COVID-19 pandemic, it could not formalise the transfer of the player in 2020, keeping the possibility open for a transfer in 2021.

13. On 1 September 2020, Corinthians provided Shanghai with a 10 days’ deadline to honour the concluded agreement, however to no avail.

14. On 17 September 2020, Shanghai sent a letter to Corinthians, in which it expressed its opinion that the offer was not accepted in 48 hours as well as that no transfer agreement had been signed between the parties.

15. On 29 October 2020, Corinthians lodged a claim before FIFA against Shanghai, requesting:

- the amount of USD 3,000,000, or alternatively USD 2,200,000 as compensation;

- the amount of BRL 2,640,000 as compensation for the salary of the player in the period between August 2020 and 31 December 2022, that is, the residual duration of the player’s contract with Corinthians, as well as legal and procedural costs.

16. In its claim, Corinthians claimed that it has a valid agreement with Shanghai and that the lack of a signature on the transfer agreement is irrelevant in this respect, as the proposal became legal, in force and binding.

17. In its reply, Shanghai argued that the claim of Corinthians should be rejected.

18. Shanghai confirmed that it indeed hired the services of TwobeOne to negotiate with Corinthians on the transfer of the player.

19. According to Shanghai, on 20 July 2020 it sent - via TwobeOne – an email to Corinthians, making a proposal for the transfer of the player, with a condition being that the proposal would be countersigned in 48 hours. In addition, on the same day, Shanghai sent an offer for the conditions of the potential new employment contract of the player with its club, to Corinthians, also with 48 hours deadline to counter-sign.

20. In addition, Shanghai argues that on 20 July 2020, it also provided a non-disclosure agreement to Corinthians, by means of which the parties agreed to not disclose the trade secrets of the negotiations being carried out.

21. According to Shanghai, on 22 July 2020, it had not received the counter-signed proposal from Corinthians, as a result of which it deemed that the proposal became invalid.

22. What is more, Shanghai explains that after the proposal had become invalid, Corinthians and TwobeOne still tried to close the deal regarding the transfer of the player. On 29 July 2020, Shanghai received the signed proposal – via TwobeOne - back from Corinthians, after it had allegedly agreed upon the terms on 27 July 2020.

23. On 3 August 2020, TwobeOne sent a draft transfer agreement to Shanghai, signed, by TwobeOne, which was ignored by Shanghai as the time limit to accept the proposal had passed. Furthermore, Shanghai explains that it never negotiated on the contents of the transfer agreement.

24. Further, Shanghai states that on 31 August 2020 it indeed confirmed that the transfer agreement could not be signed and that it would later on make a new proposal for the player.

25. Shanghai further explains that it was never aware that Corinthians and Daejeon, on 12 June 2020, had already signed a transfer agreement for the definitive transfer of the player.

26. Also, Shanghai pointed out that it was never aware of the extended deadline of 48 hours (up to the total of 96 hours) that was provided by TwobeOne to Corinthians on 20 July 2020. Further, Shanghai explained that it was not aware of the correspondence sent on 14 August 2020, by means of which TwobeOne requested the bank details of Corinthians.

27. In conclusion, Shanghai requests for the rejection of the claim of Corinthians, based on the following points:

- Corinthians did not have the federative rights for the player, ‘when the relationship with Shanghai Greenland Shenhua FC began’, as it concluded already a valid transfer agreement with Daejeon on 12 June 2020;

- The transfer agreement dated 12 June 2020 superseded the loan agreement dated 17 January 2020 and is therefore a valid and enforceable transfer agreement;

- Corinthians made no amendments in the transfer agreement dated 12 June 2020, as it only modified the contents of the loan agreement dated 17 January, by – on 23 July 2020 – confirming that Daejeon waived its right to have an option to buy the player on a definitive basis;

- Corinthians acted in bad faith and fraudulently misrepresented Shanghai, by negotiating with a third party (i.e. Shanghai) whereas it concluded already a binding agreement with Daejeon;

- The proposal was not accepted in 48 hours, nor in the extended deadline of 96 hours, which deadline extension is explicitly contested by Shanghai. In this respect, Shanghai explains that TwobeOne had no permission to go beyond the powers entrusted to it, and for instance grant a deadline extension;

- Corinthians and Shanghai never signed a definitive transfer agreement;

- Corinthians did not suffer any damages.

28. Finally, Shanghai points out that the alternative claims for the amount of USD 2,200,000, or the salaries to be paid to the player in the amount of BRL 2,640,000, should also be rejected. This because the player, Corinthians and Daejeon willingly waived the option for the player to be transferred to Daejeon and because it was Corinthians’ mistake that it did not accept the proposal in time.

II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PSC

1. First of all, the Single Judge of the PSC (hereinafter also referred to as Single Judge) analysed whether he was competent to deal with the case at hand. Taking into account the wording of art. 21 of the 2020 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the Single Judge of the PSC referred to art. 3 par. 1 of the Procedural Rules and emphasised that, in accordance with art. 23 par. 1 of the Regulations on the Status and Transfer of Players, in combination with art. 22 lit. f) of the Regulations on the Status and Transfer of Players, the Single Judge of the PSC is competent to deal with matters which concern a dispute between clubs affiliated to different associations.

3. In continuation, the Single Judge of the PSC analysed which edition of the Regulations on the Status and Transfer of Players should be applicable to the present matter. In this respect, the Single Judge of the PSC confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the claim was lodged on 29 October 2020, the October 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

4. With the above having been established, the Single Judge of the PSC entered into the substance of the matter. In doing so, he started to acknowledge the facts of the case as well as the documents contained in the file. However, the Single Judge of the PSC emphasized that in the following considerations he will refer only to facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. Entering into the substance of the matter, the Single Judge noted that the Claimant and Daejeon concluded a loan agreement for the transfer on loan basis of the player Andre Luis da Costa Alfredo from the Claimant to Daejeon, for the period between 17 January and 31 December 2020, without payment of any transfer compensation. What is more, in the loan agreement, the parties further agreed on an option for Daejeon to obtain the player’s services on a definitive basis for the amount of USD 3,000,000.

6. On 12 June 2020, the Claimant and Daejeon agreed upon the definitive transfer of the player to Daejeon, by deviating from the loan agreement and agreeing on the payment of an amount of USD 2,200,000, plus a 10% sell-on fee. This new agreement was also signed by the player, who agreed to the transfer and without whose consent the transfer could not take place.

7. In addition, the Single Judge noted that on 20 July 2020, the Respondent made an offer to the Claimant for the definitive transfer of the player to the Respondent, in return for the payment of an amount of USD 3,000,000, providing the Claimant a 48 hours’ deadline to accept said proposal. What is more, the intermediary company TwobeOne later extended said deadline until 96 hours, i.e. 24 July 2020.

8. It comes to reason for the Single Judge that, in view of the foregoing, the Claimant approached Daejeon and somehow seems to have persuaded Daejeon on 23 July 2020 to waive its option to buy the player on a definitive basis. The incentive for Daejeon to do so has remained unclear to the Single Judge. What is more, on 27 July 2020, the Claimant sent an email to the Respondent which included a signed version of the proposal and a signed version of the NDA. However, after several correspondences were exchanged between the Claimant and TwobeOne, on 31 August 2020, the Respondent informed the Claimant that due to the COVID-19 pandemic, ‘it could not formalise the transfer of the player in 2020’.

9. Subsequently, the Single Judge observed that, on 29 October 2020, the Claimant lodged a claim before FIFA against the Respondent and requested the payment of the amount of USD 3,000,000, or alternatively USD 2,200,000, as compensation for the non-closed transfer. In addition, the Claimant requested the amount of BRL 2,640,000 as compensation for the salary of the player in the period between August 2020 and 31 December 2022.

10. The Respondent, in its reply, argued that the claim of the Claimant has to be rejected, as Corinthians did not accept the Respondent’s proposal within 48 (or 96) hours, as well as that no definitive transfer agreement was concluded between the Claimant and the Respondent. Moreover, the Respondent argued that the Claimant did not demonstrate that it suffered any damages. Finally, the Respondent argued that it is of the opinion that the Claimant already concluded a valid transfer agreement for the definitive transfer of the player with Daejeon, reason why it allegedly was not in the position to negotiate on the definitive transfer of the player to the Respondent.

11. Having clarified the above, the Single Judge noted that the conflicting point arising from the present case concerns whether or not the Claimant validly agreed with the Respondent upon the definitive transfer of the player to the Respondent, in exchange for the payment of an amount of USD 3,000,000 and whether it is thus entitled to receive said amount from the Respondent.

12. In this respect, the Single Judge noted that indeed, before the Respondent made an offer to the Claimant for the definitive transfer of the player, the Claimant had already negotiated with Daejeon on the definitive transfer of the player and reached an agreement for a transfer fee of USD 2,200,000. However, the Single Judge noted that after the Respondent made its offer to the Claimant and was willing to pay a transfer compensation of USD 3,000,000, the Claimant all of a sudden had a substantial financial incentive to transfer the player to the Respondent, rather than to Daejeon. In this context, the Claimant somehow managed to persuade Daejeon to agree to terminate the agreement on the definitive transfer so the Claimant could accept the proposal of the Respondent.

13. As a result, the Single Judge focussed on the proposal made by the Respondent to the Claimant and noted that from the information on file, it appears that on 20 July 2020, the Respondent made an offer to the Claimant for the definitive transfer of the player. The Respondent offered to pay an amount of USD 3,000,000 for the definitive transfer of the player, providing the Claimant a 48 hours’ deadline to accept or reject said proposal. What is more, it appears that TwobeOne extended this 48 hours’ deadline to 96 hours upon the request of the Claimant, however, according to the Respondent, without its explicit permission. The signed version of the proposal was then sent on 27 July 2020 to TwobeOne.

14. In this regard, the Single Judge deemed it relevant to refer to the contents of art. 12 par. 3 of the Procedural Rules, according to which ‘any party claiming a right on the basis of an alleged fact shall carry the burden of proof’. Following the contents of said article, the Single Judge noted that from the information on file, it could not be established that the Claimant had effectively demonstrated that it had accepted the proposal of Shanghai no later than either 22 July (within 48 hours after the proposal was made) or 24 July 2020 (within 96 hours after the proposal was made). It follows from the emails submitted by the Claimant that only on 27 July 2020, the Claimant provided TwobeOne with the duly signed proposal.

15. However, the Single Judge emphasised that the proposal of the Respondent clearly stated that “After 48 hours, this proposal will no longer be valid (…)”. Whereas the Single Judge is willing to accept that the deadline was extended to 96 hours, the Single Judge is not willing to accept that when the Claimant sent the signed proposal to TwobeOne on 27 July 2020 – and thus after the expiry of the 96 hours – the parties had a validly binding agreement for the transfer of the player. Hence, the Single Judge considered that in accordance with the specific wording of the proposal, said proposal was no longer valid at the moment in time that the Claimant signed it and returned it to the Respondent.

16. In this respect, the Single Judge noted that after the Claimant’s email of 27 July 2020, which – for the sake of good order – did not indicate that a transfer had been finalised, neither the Claimant nor the Respondent seem to have sent any correspondence towards the other party confirming an agreement on the transfer, until the Claimant sent a draft of a transfer agreement to TwobeOne on 17 August 2020. Considering that silence and the fact that ultimately a transfer is concluded between two clubs and with the consent of the player, the Single Judge does not find that the Claimant could solely rely on the letter of TwobeOne dated 14 August 2020 that a transfer had in fact been agreed on and was finalised.

17. At this point, the Single Judge on the one hand felt sympathy for the arguments from the Claimant’s side that TwobeOne gave the impression that in the month of August, they still tried to finalize the definitive transfer of the player and that the Respondent’s ultimate argument not to transfer the player due to its financial situation was ill-founded. However, on the other hand, the Single Judge could not deny that there was no direct communication made between the Claimant and the Respondent regarding the finaliziation of the transfer of the player and no final transfer agreement was agreed or signed. Indeed, fact of the matter is that for the transfer of the player from the Claimant to the Respondent to proceed, the parties would still needed to

sign and agree upon a transfer agreement, as can also be derived from the fact that the Claimant sent a draft of a transfer agreement to TwobeOne. According to the Single Judge, that in itself indicated that the transfer had not been concluded yet and that no final agreement had been found. The Single Judge concurs with the Respondent that even if the official proposal would have been accepted on time, the parties would still have had to proceed to negotiate – and agree on - the exact terms and conditions of the transfer agreement in order to finalise the transfer the player as well as that the Respondent and the Player would have to conclude an employment contract.

18. Based on the foregoing circumstances, and after having balanced all the arguments of the parties, as well as the documentary evidence on file, the Single Judge was of the opinion that the Claimant had not effectively demonstrated that it had timely accepted the Respondent’s proposal, either by no later than 22 July or 24 July 2020, and that following 27 July 2020 no further agreement was entered into between the Claimant and the Respondent on the definitive transfer of the player. As a result, the Single Judge had to conclude that no agreement on the conditions of the definitive transfer of the player from the Claimant to the Respondent had been reached between the Claimant and the Respondent. This ties in with the fact that ultimately the player also remained a registered player for the Claimant.

19. Finally, the Single Judge concluded that it could not be established that the Claimant suffered any other damages in relation to the fact that the transfer of the player could not be finalized. The Claimant did not submit any corroborating documentary evidence in this respect, and the player even kept rendering his services for the Claimant, still being a registered player for the Claimant. The fact that the transfer with Daejeon did not go through was due to the desire of the Claimant to explore whether it could reach a better deal with the Respondent and the Single Judge considers that this behaviour inherently comes with a risk that the Claimant was, or should have been, aware of.

20. In the light of all of the above, the Single Judge decided that he must reject the claim put forward by the Claimant.

21. In continuation, the Single Judge of the PSC referred to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which in the proceedings before the Players’ Status Committee costs in the maximum amount of CHF 25,000 are levied. The costs are to be borne in consideration of the parties’ degree of success in the proceedings.

22. In this respect, the Single Judge of the PSC referred to the Covid-19 Football Regulatory Issues – FAQ, published on 11 June 2020 which establish that, given the current circumstances, for any claim lodged between 10 June 2020 and 31 December 2020 (both inclusive), there will be no requirement to pay an advance of costs and no procedural costs shall be ordered. Therefore, the Single Judge established that the present decision shall be rendered without costs.

III. DECISION OF THE SINGLE JUDGE OF THE PSC

1. The claim of the Claimant, Sport Club Corinthians Paulista, is rejected.

2. This decision is rendered without costs.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Procedural Rules).

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