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 March 2021
Decision of the
Single Judge of the Players' Status Committee
passed on 23 March 2021
regarding a dispute concerning the transfer of the player Fábio Gonçalves de Abreu
Vitus Derungs (Switzerland), Single Judge of the PSC
Moreirense FC, Portugal
Represented by Mr Pedro Macieirinha
Albatin Saudi FC, Saudi Arabia
Represented by Mr Abdelrahman Hashish
I. FACTS OF THE CASE
1. On 8 October 2020, the Portuguese club, Moreirense FC (hereinafter: the Claimant) and the Saudi club, Albatin Saudi FC (hereinafter: the Respondent) concluded a transfer agreement (hereinafter: the agreement) for the definitive transfer of the player Fábio Gonçalves de Abreu (hereinafter: the player) from the Claimant to the Respondent.
2. Pursuant to clause 3 of the agreement, the Respondent undertook to pay to the Claimant EUR 2,550,000 net in four instalments, as follows:
- EUR 750,000 on 8 October 2020;
- EUR 750,000 on 31 January 2021;
- EUR 525,000 on 30 July 2021;
- EUR 525,000 on 31 December 2021.
3. Clause 3 of the agreement further provided that: “In the event that any of the aforementioned instalments aren’t paid within one month starting from their due dates, the First Party [the Respondent] shall be obliged to pay 15% of the value of the delayed instalment(s) as a penalty for not fulfilling the payment.”
4. On 25 October 2020, the parties signed a document named “Declaration of Trust”, by means of which the parties agreed upon the following:
“Declaration of the First Party [the Respondent]:
a. The First party, hereby, declares that it will pay to the Second Party the first instalment amounting to EUR 750,000, as indicated in the Permanent Transfer Agreement between the Parties, on Tuesday 3 November 2020 on the latest. The payment shall be made before the given deadline upon receipt of found from the Public Authority on the 1st of November 2020.
b. In the event that the First Party have not fulfilled the payment as mentioned above, it shall be obliged to pay to the Second Party the Aforementioned sum plus the 20% penalty therefore total of EUR 900,000, that will be due immediately.
Declaration of the Second Party [the Claimant]:
a. The Second Party, hereby, declares that it accepts, in good will, the Declaration (i.e. commitment) made by the First Party.
b. The Second Party will proceed with the finalization of the TMS procedures for the ITC of the Player on 25 October 2020 which is the last date of transfer window in Saudi.”
5. The Claimant maintained that it fulfilled its obligation as per the Declaration of Trust, “namely, the finalization of the TMS procedures.”
6. On 11 November 2020, the Claimant sent a default notice to the Respondent by means of which it requested the amount of EUR 750,000 “plus 20% penalty, therefore total of EUR 900,000, plus 5% interest since the present date until effective payment, in the time limit of 10 days.”, however to no avail.
7. On 27 November 2020, the Claimant filed the claim at hand, sustaining that the Respondent failed to pay the due amounts as per the agreement and the Declaration of Trust and added that “this situation is causing to the Claimant serious damages.” and requested, inter alia, the following relief:
“a) to condemn the Respondent Club to pay to the Claimant Club the amount of € 900,000, plus 5% interests since the date of the missing payment until full payment, under penalty of imposition of sporting and disciplinary sanctions to the Respondent Club if the above obligation is not observed. (…)”
8. In its reply to the claim, the Respondent maintained that it ”was not able to field the Player because of the non-receipt of his ITC which was mandatory for his participation, the Respondent hence approached the Claimant requesting the ITC to be electronically sent as soon as possible and clarified that it has been suffering damages arising out of the Player's ineligibility to participate unless the TMS procedures get finalized (i.e. The Respondent missed the services of the Player in its first two fixtures 18/10/2020 and 23/10/2020 against Al-Ahli and Al-Faisali)”
9. The Respondent also that the Claimant did not accept to finalize the ITC procedures unless the parties sign a declaration stating that the first instalment of the transfer fee shall be paid as soon as possible.
10. With regard to the above, the Respondent explained that the parties “reached a satisfactory point of intersection (i.e. to put a deadline as requested by the Claimant but also to make it conditional upon the Respondent's receipt of its financial dues from the Ministry as requested by the Respondent)”.
11. Moreover, the Respondent held that it contacted the Ministry on several occasions chasing its financial reward to satisfy its financial obligation towards the Claimant.
12. The Respondent added that the Claimant unofficially contacted the Respondent subsequent to its default letter dated 11 November 2020 and that it clearly expressed its interest to settle its financial dues in due course.
13. Regarding the Claimant’s request of a penalty as per the Declaration of Trust, the Respondent stated that the payment of the delayed instalment is connected and conditioned with the receipt of the fund from the Public Authority and since the condition was not satisfied, the penalty cannot be applied.
14. Furthermore, the Respondent held that according to the wording of the Declaration of Trust, the instalment shall be deemed delayed only if the Respondent could collect its financial reward from the Ministry. Consequently, “the Declaration shall have no force and we shall refer only to the permanent transfer agreement dated 08 October 2020.”
15. In addition, the Respondent argued that its impossibility to pay the Claimant had been caused by a state of force majeure, namely, the Ministry’s failure to pay the reward to the Respondent and added that it “does not request an exemption from paying the instalment, but rather a mere exemption from paying any penalty.”
16. Lastly, the Respondent stated that, “alternatively, in the unlikely event that the Honourable FIFA DRC finds that this force majeure cannot exempt the Respondent from paying the penalty clause, then we submit that the penalty clause of 15% shall be deemed as excessive and shall be reduced.“
17. The requests for relief of the Respondent were as follows:
“To establish that the Declaration's penalty is unenforceable for the reason of the non-occurrence of the condition stipulated therein;
To establish that the Claimant (Moreirense Club) is entitled to the amount of the installment in question amounting to EUR 750,000 without applying any penalty based on our submitted and evidenced force majeure;
Alternatively, should any penalty be imposed, it shall be reduced, as being excessive, to 5% only.”
II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PLAYERS’ STATUS COMMITTEE
a. Competence and applicable legal framework
18. First of all, the Single Judge of the Players’ Status Committee (hereinafter also referred to as the Single Judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the present matter was presented to FIFA on 27 November 2020 and submitted for decision on 23 March 2021. Taking into account the wording of art. 21 of the January 2021 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.
19. Subsequently, the Single Judge referred to art. 3 par. 1 of the Procedural Rules and observed that in accordance with art. 23 par. 1 in combination with art. 22 lit. f) of the Regulations on the Status and Transfer of Players (edition February 2021), he is competent to deal with the matter at stake, which concerns a dispute with an international dimension between two clubs belonging to different associations, i.e. a Portuguese club and a Saudi club.
20. Subsequently, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that, in accordance with art. 26 par.
1 and 2 of the Regulations on the Status and Transfer of Player (edition February 2021), and considering that the present claim was lodged on 27 November 2021, the October 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.
b. Burden of proof
21. The Single Judge recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. Likewise, he stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which he may consider evidence not filed by the parties.
22. In this respect, the Single Judge also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.
c. Merits of the dispute
23. 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. However, the Single Judge emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.
i. Main legal discussion and considerations
24. Having stated this, the Single Judge acknowledged that the Claimant and the Respondent signed the Declaration of Trust, in accordance with which the Respondent agreed to pay the Claimant “the first instalment amounting to EUR 750,000, as indicated in the Permanent Transfer Agreement between the Parties, on Tuesday 3 November 2020 on the latest. The payment shall be made before the given deadline upon receipt of found from the Public Authority on the 1st of November 2020.”
25. The Single Judge further acknowledged that according to the Declaration of trust “In the event that the First Party [the Respondent] have not fulfilled the payment as mentioned above, it shall be obliged to pay to the Second Party [the Claimant] the Aforementioned sum plus the 20% penalty therefore total of EUR 900,000, that will be due immediately.”
26. The Single Judge also acknowledged that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent did not pay the amount stipulated in the Declaration of Trust amounting to EUR 750,000 and that, as consequence, it is also entitled to receive a penalty of EUR 150,000 (20% of EUR 750,000), as agreed between the parties.
27. Subsequently, the Single Judge took into account that the Respondent, for its part and in reply to being informed about the claim of the Claimant, contested the Claimant’s arguments and stated that the payment of the instalment of EUR 750,000, as per the Declaration of Trust, was linked and conditioned to the receipt of the fund from the Public Authority and since the condition was not satisfied, the penalty shall not be paid.
28. After having carefully analysed the wording of the Declaration of Trust, the Single Judge considered that the circumstances raised by the Respondent cannot be considered a valid reason for non-payment of the monies claimed by the Claimant, given that the payment was not “conditioned to the receipt of the fund from the Public Authority” as affirmed by the Respondent but rather “upon receipt of found from the Public Authority on the 1st of November 2020.”, in other words, the reasons brought forward by the Respondent in its defence do not exempt the Respondent from its obligation to fulfil its contractual obligations towards the Claimant.
29. What is more, the Single Judge observed that in accordance with the Declaration of Trust, in the event that the Respondent failed to pay the agreed amount of EUR 750,000 on 1 November 2020, it has then to pay “the Aforementioned sum plus the 20% penalty therefore total of EUR 900,000, that will be due immediately.” Consequently, the Single Judge decided to reject the argumentation put forward by the Respondent in its defence.
30. On account of the aforementioned considerations, the Single Judge established that the Respondent failed to remit to the Claimant EUR 750,000 as per the Declaration of Trust and therefore, the amount of USD 750,000 has fallen due by 4 November 2020.
31. Subsequently, the Single Judge addressed the matter of the penalty the parties contractually agreed upon in the Declaration of Trust.
32. After due deliberation, the Single Judge concluded that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness. In this respect, the Single Judge highlighted that in order to determine as to whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before it shall also be taken into consideration.
33. In the specific case at hand, the Single Judge deemed that a penalty of EUR 150,000, corresponding to 20% of the total outstanding amount, which the parties contractually agreed upon, is both proportionate and reasonable in the case at hand.
34. On account of all of the above, the Single Judge decided that the penalty is valid and applicable in the present matter. Consequently, the Single Judge decided to reject the argumentation put forward by the Respondent in its defence.
35. Consequently, the Single Judge decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant the total amount of EUR 750,000 as outstanding remuneration and EUR 150,000 as a penalty fee.
36. In addition, taking into consideration the Claimant’s claim, the Single Judge decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 750,000 as of 4 November 2020, day after the due date of the amount, i.e. 3 November 2020, until the date of effective payment.
37. Furthermore, in accordance with the long-standing jurisprudence of the Dispute Resolution Chamber and the Players’ Status Committee, no interest is granted for the contractual penalty.
ii. Compliance with monetary decisions
38. Taking into account the applicable Regulations, the Single Judge referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.
39. In this regard, the Single Judge pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.
40. Therefore, bearing in mind the above, the Single Judge decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.
41. Finally, the Single Judge recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.
42. The Single Judge referred to article 18 par. 1 lit. i) of the Procedural Rules, according to which “For any claim or counterclaim lodged between 10 June 2020 and 31 December 2020 (both inclusive), no procedural costs shall be levied”. Accordingly, the Single Judge decided that no procedural costs were to be imposed on the parties since the claim was lodged on 27 November 2020.
43. Likewise and for the sake of completeness, the Single Judge recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.
III. DECISION OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE
1. The claim of the Claimant, Moreirense FC, is partially accepted.
2. The Respondent, Albatin Saudi FC, has to pay to the Claimant, the following amount:
- EUR 750,000 as outstanding amount plus 5% interest p.a. as from 4 November 2020 until the date of effective payment;
- EUR 150,000 as penalty.
3. Any further claims of the Claimant are rejected.
4. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amounts.
5. The Respondent shall provide evidence of payment of the due amounts in accordance with this decision to email@example.com, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).
6. In the event that the amounts due, plus interest as established above are not paid by the Respondent within 45 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:
The Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amounts are paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players). 2.
In the event that the payable amounts as per in this decision are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.
7. This decision is rendered without costs.
For the Players' Status Committee:
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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