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 8 May 2017

Decision of the

Single Judge

of the

Players’ Status Committee

passed in Zurich, Switzerland, on 8 May 2017,

by

Raymond Hack (South Africa)

Single Judge of the Players’ Status Committee,

on the claim presented by the club

Club X, from country X

as Claimant

against the club,

Club Y, from country Y

as Respondent

regarding a contractual dispute between the parties

relating to the player A

I. Facts of the case

1. On 11 July 2016, the country X club, Club X (hereinafter: the Claimant), and the country Y club, Club Y (hereinafter: the Respondent), concluded a transfer agreement on the transfer of the player, A (hereinafter: the player), from the Claimant to the Respondent.

2. Clause 2.1 of the transfer agreement stipulates that the Respondent has to pay to the Claimant a transfer fee amounting to EUR 4,500,000, as follows:

- EUR 1,000,000 on or before 31 July 2016;

- EUR 1,500,000 on or before 30 September 2016;

- EUR 1,500,000 on or before 31 December 2016;

- EUR 250,000 on or before 31 March 2017; and

- EUR 250,000 on or before 31 July 2017.

Furthermore, the above-mentioned parties agreed that “in case [the Respondent] fails to make a timely payment any instalment laid out above, [the Claimant] shall be entitled to demand either from [the Respondent] or from a bank/insurance company described in clause 6.2. below immediate payment of the defaulted instalment as well as of all left instalments” (hereinafter: the acceleration clause).

3. Clause 6.2 of the transfer agreement stipulates the following:

“The agreement shall be effective as of the date it is signed by both parties. Notwithstanding the above, the agreement immediately terminates as of 30 July 2016 and thus becomes ineffective, null and void, if [the Respondent] fails to provide [the Claimant] by 23:00 (country X time) on 29 July 2016 with one of the following documents:

6.2.1 an original of an irrevocable and unconditional bank guarantee that meets the following additional requirements: (i) it shall be issued in favour of [the Claimant] by a top-rated and reliable bank for the full amount of the transfer fee; (ii) it shall be subject to Uniform Rules for Demand Guarantees (758); (iii) its expiry date shall be not earlier than 10 August 2017; or

6.2.2 an original of an irrevocable and unconditional insurance warranty issued by a top-rated reliable insurance company for the full amount of the transfer fee, the expiry date of which shall be not earlier than 10 August 2017. This insurance warranty must be preliminarily approved by [the Claimant] (such approval is to be given at [the Claimant]’s sole discretion); or

6.2.3 an express and clear proof of irrevocable payment of the full transfer fee”.

4. On 12 December 2016, the Claimant lodged a claim before FIFA against the Respondent requesting the following:

- EUR 3,000,075, corresponding to the allegedly partially outstanding second instalment, as well as to the full third, fourth and fifth instalments of the transfer fee, plus 5% interest p.a. as of 15 November 2016 until the date of effective payment;

- EUR 1,092 corresponding to the interest at a rate of 5% p.a. for the late partial payment of the second instalment of the transfer fee;

- that the Respondent reimburses the amount of CHF 5,000 that the Claimant paid as advance of costs; and

- that the Respondent bear any and all additional costs of the proceedings that the Players’ Status Committee may deem appropriate to levy as a result of consideration of the case.

5. In particular, the Claimant acknowledged receipt of payment of the amounts of EUR 999,960 and of EUR 499,965, allegedly paid on 27 July 2016 and on 17 October 2016, respectively.

6. The Claimant held that, on 2 November 2016, it unsuccessfully requested the immediate payment of the defaulted interest as well as of all the remaining instalments in the total amount of EUR 3,000,075, in accordance with the acceleration clause agreed upon in the transfer agreement.

7. In its reply, the Respondent stated that it “actually though that contractually the terms of the transfer agreement provided for a guarantee in favour of [the Claimant]. Now that the claim has been brought to our attention, we respectfully request FIFA to allow us time to speak directly with [the Claimant] to resolve this issue. In fact, we are in contact with [the Claimant] and in our opinion the issue will be resolved shortly. (…) We are confident that a FIFA decision will not be required and it will be resolved between the two clubs”.

8. On 14 February 2017, the Claimant confirmed that the Respondent neither contacted it nor made any further payments until that date and, consequently insisted on a formal decision being passed in the present matter.

9. On 3 May 2017, after the investigation into the present matter had already been concluded, the Respondent provided a copy of an alleged bank transfer order in favour of the Claimant dated 31 March 2017 for the amount of EUR 1,000,849.23.

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 12 December 2016. 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 (edition 2016) and, on the other hand, to the fact that the claim was lodged before FIFA on 12 December 2016. In view of the foregoing, the Single Judge concluded that the 2016 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 concerns 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 first instalment of the transfer fee in full and that the second instalment had been paid partially and that, consequently, the second instalment remained partially outstanding. In addition, the Single Judge underscored that the Claimant, apart from payment of the remainder of the second instalment of the transfer fee, also requested the payment of all remaining instalments of the transfer fee on the basis of the acceleration clause in accordance with the transfer agreement. On this basis, the Claimant asked to be awarded, inter alia, the total amount of EUR 3,000,075.

6. In continuation, the Single Judge remarked that the Respondent, for its part, did not dispute the Claimant’s allegations or its claim that it is entitled to the aforementioned amount, but merely requested time to amicably settle the present dispute. Equally, the Single Judge noted that, on 3 May 2017, the Respondent submitted a copy of an alleged bank transfer order dated 31 March 2017 for the amount of EUR 1,000,849.23.

7. In this respect, the Single Judge noted that the Respondent provided said copy of an alleged bank transfer order after the notification of the closure of the investigation in the matter at hand. As a result, and in line with art. 9 par. 4 of the Procedural Rules as well as the Players’ Status Committee’s constant jurisprudence in this regard, the Single Judge decided not to take into account said document and concluded that he shall take a decision upon the basis of those documents on file that were provided prior to the closure of the investigation-phase in the present matter.

8. In light of the foregoing, the Single Judge concluded that it was undisputed that the Respondent failed to pay the full second instalment of the transfer fee in a timely manner, triggering the application of the acceleration clause as per clause 2.1 of the transfer agreement.

9. On account of the above and 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, the Single Judge decided that the Respondent has to fulfil its contractual obligations towards the Claimant and must pay the total amount of EUR 3,000,075 to the Claimant.

10. In continuation, the Single Judge addressed the Claimant’s request to be awarded 5% interest p.a. over the outstanding instalments of the transfer fee. In this respect, the Single Judge referred to the longstanding practice of the Players’ Status Committee and decided that the Respondent has to pay 5% interest p.a. on EUR 3,000,075 as of 15 November 2016 until the date of effective payment.

11. As regards the Claimant’s request to be awarded interest on the late partial payment of the second instalment of the transfer fee, the Single Judge took into account that such request had no contractual basis as well as the constant practice of the Players’ Status Committee in this context and decided to reject such claim.

12. Finally the Single Judge decided that the Claimant’s claim for “all additional costs” must be rejected due to the lack of a contractual or regulatory basis.

13. 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).

14. In respect of the above, and taking into account that the claim of the Claimant had nearly been fully accepted, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA.

15. 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 exceeds CHF 200,001. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

16. 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 Respondent.

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

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

2. The Respondent, Club Y, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 3,000,075, plus 5% interest p.a. as of 15 November 2016 until the date of effective payment.

3. If the aforementioned sum plus interest is not paid within the aforementioned deadline, 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 by the Respondent, within 30 days as from the date of notification of the present decision as follows:

5.1 The amount of CHF 15,000 has 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

5.2 The amount of CHF 5,000 has to be paid directly to the Claimant.

6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2. and 5.2. above are to be made and to notify the Players’ Status Committee of every payment received.

******

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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives