F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2016-2017) – fifa.com – atto non ufficiale – Decision 20 November 2014

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 20 November 2014,

by

Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the club,

A, country U

as Claimant

against the club,

B, country A

Represented by Mr xxxx

as Respondent

regarding a contractual dispute between the parties

I. Facts of the case

1. On 20 July 2013, the club from U, A (hereinafter: the Claimant), and the club from A, B (hereinafter: the Respondent), concluded a transfer agreement for the transfer of the player, C (hereinafter: the player), from the Claimant to the Respondent.

2. The aforesaid transfer agreement stipulated, inter alia, that:

“2.4 [The Respondent] will credit the account of [the Claimant] with the total amount of 1,915,000 Euros (one million, nine hundred and fifteen thousand Euros) on or before Monday 12th August 2013.

2.5 There is a penalty of 200,000 Euros (two hundred thousand Euros) if this total amount is received late.

2.6 There is a penalty of 200,000 Euros (two hundred thousand Euros) for each subsequent 7 (seven) day period that passes without the total amount not being received by [the Claimant].”

3. On 3 April 2014, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract indicating that the Respondent had paid the transfer compensation in the amount of EUR 1,915,000 on 16 September 2013, i.e. five weeks too late. In view of the foregoing, the Claimant requested the payment of a penalty fee in the amount of EUR 1,000,000.

4. On 29 September 2014, the Respondent replied to the claim and argued that the penalty fees claimed by the Claimant are abusive and, in line with the jurisprudence of the Players’ Status Committee, cannot be admitted.

5. Furthermore, the Respondent explained that it is currently undergoing bankruptcy proceedings and, consequently, payments to foreign countries are restricted by the xxxx and the tax authorities. The Respondent had instructed its bank on 9 August 2013 to pay the relevant amount to the Claimant, which was subsequently deducted from the Respondent’s bank account on 12 August 2013. However, the xxxxxxx had only authorized the international bank transfer on 10 September 2013. According to the Respondent, this is a situation of force majeure for which it cannot be held responsible.

6. Finally, the Respondent pointed out that the Claimant had only requested the payment of the penalty fee from the Respondent on 20 October 2013, i.e. one month after the Claimant had received the payment of the transfer fee.

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 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (editions 2012 and 2014) as well as to the fact that the present matter was submitted to FIFA on 3 April 2014, thus after 1 December 2012 but before 1 August 2014. Therefore, the Single Judge concluded that the 2012 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 2012 and 2014 editions 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 2014. 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 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 which he considered pertinent for the assessment of the matter at hand.

5. First of all, the Single Judge acknowledged that it was undisputed between the parties that the Claimant received the transfer compensation after the deadline stipulated in art. 2.4 of the transfer agreement, i.e. 12 August 2013.

6. Having established the above, the Single Judge took note that the Claimant maintained that it was entitled to receive a penalty fee in the amount of EUR 1,000,000 on the basis of art. 2.5 and 2.6 of the transfer agreement.

7. Equally, the Single Judge took note of the Respondent’s submission that the penalty fee claimed by the Claimant is abusive as well as that the delay in payment of the transfer compensation was caused by a situation of force majeure, as the Respondent’s international bank transfers are restricted by the xxxxx due to the bankruptcy proceedings that the Respondent is apparently undergoing.

8. Finally, the Single Judge took note of the Respondent’s argument that the Claimant had only requested the payment of the penalty fee one month after it had received the transfer compensation.

9. After having carefully examined the parties’ positions, taking into consideration all the aforementioned arguments, the Single Judge observed that the parties disputed the applicability of the penalty clauses as stipulated in art. 2.5 and 2.6 of the transfer agreement.

10. Having said that, the Single Judge started by recalling that it was undisputed between the parties that the Claimant had received the transfer compensation after the deadline stipulated in art. 2.4 of the transfer agreement, i.e. 12 August 2013.

11. Subsequently, the Single Judge turned his attention to the argument of force majeure brought forward by the Respondent. In this respect, the Single Judge was eager to point out that the Respondent was well aware of the bankruptcy proceedings that it was apparently undergoing, as well as of the consequences of such proceedings, i.e. the apparent restrictions on international bank transfers and the delay that such restrictions might cause. In this regard, the Single Judge held that the Respondent could have initiated the payment process earlier in order to avoid late payment.

12. In view of the foregoing, the Single Judge held that the Respondent had not submitted any valid argument for the late payment of the transfer compensation.

13. Having established the aforementioned, the Single Judge turned his attention to the penalty clauses laid down in art. 2.5 and 2.6 of the transfer agreement. In this respect, after a careful examination of the content of art. 2.5 of the transfer agreement, the Single Judge emphasized that the penalty fee amounting to EUR 200,000 for late payment in relation to an amount of EUR 1,915,000 is not to be considered excessive and, therefore, can be enforced.

14. In continuation, the Single Judge turned his attention to the content of art. 2.6 of the transfer agreement, which stipulated a penalty fee of EUR 200,000 for each subsequent 7 day period of delay in the payment of the transfer compensation. Since the “penalty” of EUR 200,000 is payable for each 7 days of delay until the payment is received, the Single Judge is of the view that said construction should rather be considered as default interest. In this respect, the Single Judge concluded that a “penalty fee” amounting to EUR 200,000 for each subsequent 7 day period of late payment is to be considered excessive. In view of the foregoing, the Single Judge concluded that the penalty fee/interest rate laid down in art. 2.6 cannot be enforced.

15. Furthermore, the Single Judge decided to reject the Claimant’s claim for “legal costs” in accordance with art. 18 par. 4 of the Procedural Rules, which stipulates that in proceedings of the Players’ Status Committee no procedural compensation shall be awarded.

16. In conclusion, the Single Judge decided to partially accept the Claimant’s claim, and established that the Respondent had to pay to the Claimant the total amount of EUR 200,000 and that any further claims of the Claimant are rejected.

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 the claim of the Claimant has been partially accepted, the Single Judge concluded that the procedural costs are to be divided between the Claimant and the Respondent in accordance with the relevant degree of success.

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 1,000,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

20. As a result, and taking into account the particularities of the present matter as well as the degree of success, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000. The Single Judge decided that thereof, the Claimant has to pay the amount of CHF 8,000 and that the Respondent has to pay the amount of CHF 12,000.

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III. Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, A, is partially accepted.

2. The Respondent, B, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 200,000.

3. If the aforementioned sum is not paid within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the stipulated time limit and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

4. Any further claim lodged by the Claimant is rejected.

5. The final costs of the proceedings in the amount of CHF 20,000 are to be paid within 30 days as from the date of notification of the present decision as follows:

5.1. The amount of CHF 12,000 has to be paid by the Respondent.

5.2. The amount of CHF 8,000 has to be paid by the Claimant. Given that the Claimant has already paid the amount of CHF 5,000 as advance of costs at the start of the present proceedings, the additional amount of CHF 3,000 has to be paid by the Claimant to FIFA.

5.3. The above-mentioned amounts have 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

6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance under point 2. above is to be made and to notify the Single Judge of the Players’ Status Committee of every payment received.

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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

For the Single Judge of the

Players’ Status Committee:

Markus Kattner

Deputy Secretary General

Encl. CAS Directives