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 22 November 2016

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 22 November 2016,

by

Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the club,

Club A, from country B,

as Claimant

against the club,

Club X, from country Y

as Respondent

Player L

regarding a contractual dispute between the

parties relating to the player L

I. Facts of the case

1. On 20 June 2011, the Club A, from country B (hereinafter: Claimant), and the Club X, from country Y (hereinafter: Respondent), signed a transfer agreement for the transfer of the player L (hereinafter: the player L) from the Claimant to the Respondent for a transfer compensation of EUR 1,500,000.

2. Article 1.3 of the transfer agreement reads as follows:

“The Parties have also agreed that in case of the qualification of [the Respondent] to the group stage of the UEFA Champions League in the seasons of 2012/13, 2013/14, 2014/15, 2015/16, [the Respondent] shall be obliged to pay to [the Claimant] an additional conditional transfer compensation in the amount and subject to the conditions stipulated in the art. 3 of the present Contract”.

3. Article 3 of the transfer agreement reads as follows:

“In addition to the above mentioned fixed transfer compensation, the Parties have agreed that [the Respondent] shall pay an additional conditional transfer compensation in amount of 500,000 (five hundred thousand) Euros, subject to the conditions that due to the results of performance in the Football Championship of country Y [the Respondent] qualifies to the group stage of the UEFA Champions League in the seasons of 2012/13, 2013/14, 2014/15, 2015/16 (per each such qualification), and the Player still has valid employment contract with [the Respondent] on the end of the season in which [the Respondent] obtains the qualification to participate in the UEFA Champions League for the next season”.

4. On 16 March 2016, the Claimant lodged a claim against the Respondent requesting the following:

- the amount of EUR 500,000 as the conditional transfer compensation, plus 5% interest p.a. as of 10 July 2015 (i.e. the date in which the Claimant put the Respondent in default, cf. point 12 below), - the amount of EUR 10,000 as compensation for the damages and interest for the “abusive resistance” to the payment of the aforementioned conditional transfer compensation, plus an interest of 5% p.a. as from 16 March 2016 (i.e. the date of the claim),

- the amount of EUR 5,000 as the “irrecoverable” costs incurred in order to enforce the transfer agreement, plus 5% interest p.a. as of the date of notification of the decision, and

- that sporting sanctions be imposed on the Respondent.

5. In this regard, the Claimant stated that, pursuant to art. 1.3 and art. 3 of the transfer agreement, the Respondent is obliged to pay a conditional transfer compensation amounting to EUR 500,000 to the Claimant every time the Respondent qualifies for the UEFA Champions League (hereinafter: UCL) during the seasons 2012/2013, 2013/2014, 2014/2015 and 2015/2016 if the player still has a valid employment contract with said club.

6. In this context, the Claimant asserted that the Respondent qualified for the UCL in the season 2015/2016 and that, as a result, the Claimant requested on 10 July 2015 and on 11 September 2015 respectively the payment of the conditional transfer compensation. In this respect, the Claimant provided a copy of the Respondent’s reply dated 2 October 2015, according to which, the latter rejected that the conditional transfer fee fell due as the player was on loan to Club H at the end of the season 2014/2015 (i.e. when the Respondent qualified for the group stage of the UCL 2015/2016) and, consequently, he had a valid employment contract with Club H, whereas his employment contract with the Respondent was suspended.

7. Furthermore, the Claimant assessed that the Respondent qualified for the UCL for the season 2015/2016 while the player, although being on loan with Club H as of 2 March 2015 until 30 June 2015 and thereafter with Club M as from 9 July 2015, had an employment contract with the Respondent.

8. In particular, the Claimant argued that it was never the intention of the parties to the transfer agreement to link the payment of the conditional transfer fee with the effective presence of the player at the Respondent on the last day of the season and, in this respect, provided a copy of the Respondent’s correspondence dated 10 and 14 June 2011 respectively, according to which the conditional transfer fee would be due in the event the employment contract between the player and the Respondent is in force “as of the date of such conditional payments”. Consequently, the Claimant concluded that the parties did not agree in the transfer agreement upon the non-payment of the conditional transfer fee in the event the employment contract would be suspended due to a loan of the player.

9. Furthermore, the Claimant asserted that, on 1 July 2015, after his loan, the player went back to the Respondent without concluding a new employment agreement, therefore, in the Claimant’s opinion, his employment contract was valid and in force.

10. Moreover, the Claimant stated that it was clear from the transfer agreement that the intention of the parties was to compensate it with a supplementary amount in the event the Respondent would qualify for the UCL as it was a way to i) offset the loss of value of the player that prevailed in his transfer with a conditional payment in the event his new club would qualify for the UCL, and ii) consider additional means that the Respondent would obtain as a result of its qualification. As a result, the Claimant deemed that it was irrelevant whether the player was at the Respondent on 30 June 2015 since the intention of the clauses 1.3 and 3 of the transfer agreement was to preserve the Claimant’s interest by being the progress of the Respondent in the UCL while the player had a valid contract with the country Y club the triggering elements of the payment of the conditional transfer fee.

11. In light of the foregoing, the Claimant underlined that it was neither the intention of the parties nor the wording of the transfer agreement to condition the payment of the conditional transfer fee to the effective presence of the player at the Respondent on 30 June 2015. In this respect, the Claimant further pointed out that the player, before leaving on loan, took part in 16 out of 26 matches of the country Y Championship in the season, which qualified the Respondent for the UCL 2015/2016. As a result, the Claimant was of the opinion that the player had significantly contributed to the Respondent’s qualification and that, consequently, the conditional transfer fee was due.

12. In addition, the Claimant also held that in spite of all its attempts to solve the matter amicably, the Respondent refused to pay the conditional transfer fee on the basis of, in the Claimant’s opinion, a wrong interpretation of the relevant clauses of the transfer agreement. As a result of the Respondent’s alleged bad faith, the Claimant requested to be compensated for the damages and as interest for “abusive resistance” with the amount of EUR 10,000.

13. Equally, the Claimant referred to art. 12bis of the Regulations on the Status and Transfer of Players and, in this respect, held that it provided the Respondent with an invoice on 13 August 2015 and that it put said club in default on 11 September 2015, granting a 10-days deadline to pay. Since the Respondent failed to pay within the granted deadline, the Claimant requested that sporting sanctions be imposed on the Respondent.

14. Lastly, the Claimant stated that, in order to uphold the contractual commitments, it had some expenses and requested that the Respondent be ordered to pay the amount of EUR 5,000 as the “irrecoverable” costs.

15. On 22 July 2016, the Respondent stated that it had never received the claim. However, on 25 July 2016, the Football Federation of country Y provided evidence of having forwarded the claim to the Respondent on 20 May 2016. In this respect, the Respondent held that “we have rechecked this fact and found out that this communication indeed took place and (…) found out that this situation occurred as a result of negligence of one of our IT employees”.

16. On 19 August 2016, the Respondent provided its reply to the Claimant’s claim, this is, after the deadline granted to reply, i.e. 9 June 2016, had expired.

*****

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 are applicable to the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 16 March 2016, 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: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

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 Regulations on the Status and Transfer of Players (editions 2015 and 2016) and, on the other hand, to the fact that the claim was lodged before FIFA on 16 March 2016. 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 2 of the Procedural Rules in connection with art. 23 par. 1 and 3 as well as art. 22 lit. f) of the Regulations, he was competent to deal with the present claim since it concerned a dispute between two clubs affiliated to two different associations.

4. 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, he emphasized 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. In doing so and to begin with, the Single Judge observed that the Claimant indicated that the Respondent had only paid the transfer fee and that, consequently, the Respondent still owed the conditional transfer compensation in the amount of EUR 500,000, plus the relevant interest. In addition, the Single Judge noted that the Claimant also requested EUR 10,000, plus 5% interest p.a. as from 16 March 2016, as compensation for “abusive resistance”, EUR 5,000, plus 5% interest p.a. as of the date of notification of the decision, as “irrecoverable” costs and that sporting sanctions be imposed on the Respondent.

6. Furthermore, the Single Judge underscored that the Claimant deemed that the intention of the parties was to reward the former club of the player, i.e. the Claimant, who helped to reach the group stage of the UCL.

7. In continuation, the Single Judge remarked that the Respondent, in spite of having been provided by the Football Federation of country Y with a copy of the claim in a timely manner (cf. point I.15. above), had, for its part, failed to present its response to the claim of the Claimant within the relevant time limit set by FIFA, i.e. 9 June 2016. In fact, the reply of the Respondent was only received on 19 August 2016. As a result, bearing in mind the constant jurisprudence of the Players’ Status Committee in this regard and in application of art. 9 par. 3 of the Procedural Rules, the Single Judge decided not to take into account the reply of the Respondent and established that, in accordance with the aforementioned provision, it shall take a decision on the basis of the documents on file that were provided prior to the deadline set by FIFA expired, in casu, on the statements and documents presented by the Claimant.

8. Having established this, the Single Judge referred to the wording of the transfer agreement and highlighted that two conditions needed to be met in order to trigger the payment of the conditional transfer compensation, i.e. that the Respondent would qualify to the group stage of the UEFA Champions League (UCL) in the seasons of 2012/13, 2013/14, 2014/15, 2015/16, due to its performance in the Football Championship of country Y and that the player had a valid employment contract with the Respondent at the end of the season in which the Respondent obtains the qualification to participate in the UCL for the next season.

9. In continuation, the Single Judge stressed that it was undisputed that the Respondent qualified for the UCL in the season 2015/2016 and that the player was on loan with Club H as from 2 March 2015 until 30 June 2015.

10. Subsequently, and in relation to the argument of the Claimant that one had to look at the intention of the parties when drafting the agreement, the Single Judge underscored that the wording of the relevant clause was, in itself, clear. The Single Judge indeed observed that one of the conditions for the additional payment of EUR 500,000 was that “the player still has valid employment contract” with the Respondent at the end of the season in which it qualified to participate in the UCL.

11. In this context, the Single Judge acknowledged that the centre of the present dispute was the question whether or not the player had a valid employment contract with the Respondent at the end of the season in which it obtained the qualification.

12. Having said this, the Single Judge wished to emphasise that it seemed that the intention of the parties was to link the presence of the player with the Respondent to the latter’s qualification in the UCL. In particular, the Single Judge noted that, from the wording of the contract and, in particular, from the link between the presence of the player with the Respondent at the end of the season in which it obtained the qualification for the UCL and the payment of the conditional transfer compensation, it appears that the parties’ will was to restrict the circumstances in which the conditional transfer compensation would fall due.

13. The Single Judge is comforted in his decision by the wording of art. 1.3 of the transfer agreement, which stipulated that an additional amount was due if the Respondent would qualify for the group stage of the UCL, provided that the conditions in art. 3 are met. Thus, art. 1.3. specified the two conditions which had to be met in order for the additional amount to be paid to the Claimant by the Respondent.

14. Consequently, the Single Judge decided that the parties agreed to set the presence of the player with the Respondent at the end of the season in which it would qualify to the UCL as one of the two triggering elements for the payment of the additional amount of compensation.

15. With this established, the Single Judge recalled that during loans, players are temporarily transferred to another club and that the effects of the employment contract with his club of origin are temporarily suspended.

16. In light of the foregoing, the Single Judge concluded that, since the employment contract of the player with the Respondent was temporarily suspended at the time the Respondent qualified for the UCL, not all the conditions stipulated in articles 1.3 and 3 of the transfer agreement had been met.

17. On account of the above, the Single Judge decided to reject the Claimant’s claim pertaining to the additional payment of EUR 500,000 plus the relevant interest.

18. Finally, the Single Judge did not find it necessary to decide on neither the Claimant’s request for EUR 10,000 and EUR 5,000 as compensation for “abusive resistance” and “irrecoverable” costs respectively, nor on the request to impose sporting sanctions on the Respondent as the Respondent has not breached the transfer agreement concluded by the parties.

19. 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).

20. In respect of the above, and taking into account that the claim of the Claimant had been rejected, the Single Judge concluded that the Claimant has to bear the costs of the current proceedings before FIFA.

21. 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 515,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

22. In conclusion, and considering the specific circumstances of the case, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000, which shall be borne by the Claimant.

****

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

1. The claim of the Claimant, Club A, is rejected.

2. The final costs of the proceedings in the amount of CHF 20,000 are to be paid by the Claimant to FIFA. Given that the latter has already paid the amount of CHF 5,000 as advance of costs at the start of the present proceedings, the amount of CHF 15,000 has to be paid by the Claimant within 30 days of notification of the present decision, 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

******

Note relating to the motivated decision (legal remedy):

According to art. 58 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:

Marco Villiger

Deputy Secretary General

Encl. CAS directives