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 27 July 2016

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 27 July 2016,

by

Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the club

Club A, country B,

as “Claimant”

against the club

Club C, country D

as “Respondent”

regarding a contractual dispute between the parties relating to the player

Player E

I. Facts of the case

1. On 14 July 2014, the club from country B, Club A (hereinafter: the Claimant), and the club from country D, Club C (hereinafter: the Respondent), signed a transfer agreement for the definitive transfer of the player from country F, Player E (hereinafter: the player).

2. According to the said transfer agreement, the Respondent had to pay to the Claimant the net amount of EUR 5,500,000 in five equal instalments of EUR 1,100,000, payable on the date of signature, on 10 December 2014, on 10 June 2015, 10 December 2015 and 10 March 2016, respectively.

3. Art. 2.5 of the transfer agreement stated that the Respondent “shall submit bank guarantee for the payments [in point 2. above] to [the Claimant], on the date of execution hereof. The bank guarantee shall be (i) from a first-class worldwide recognized bank (ii) irrevocable, (iii) transferrable; and (iv) irreversible.

In case Club C fails to present a bank guarantee as provided above, [the Respondent] shall be subject to the fine established in clause 6.1 herein, additionally to the payment of all Transfer Fee in advance, and [the Claimant] will be released of making the transfer of the player until those obligations are properly fulfilled.”

4. Art. 6 of the transfer agreement provided that “The breach of the other obligations provided for herein for which no specific fine has been established shall subject the defaulting party to the payment of a fine, for each breach, in the amount equivalent to one million Euro (€ 1,000,000.00) in favour of the party damaged by the default, accrued by interest of 1% per month”.

5. Pursuant to art. 8 of the transfer agreement, “The effectiveness of this agreement is subject to [the player] and [the Respondent] entering into a valid employment contract.

If the transfer of [the player] does not take place because of the fact that the aforementioned condition is not fulfilled, this agreement shall be null and void; in such case the Parties shall have no claim for damages or any form of compensation against each other”.

6. On 21 March 2016, the Claimant lodged a complaint before FIFA against the Respondent, explaining that the latter had not complied with the transfer agreement signed by the parties on 14 July 2014.

7. In particular, the Claimant alleged having been informed by the Respondent, by means of a letter allegedly received on 22 July 2014, that “[the Respondent’s] negotiation been stopped with player because we not agreed with the player contract conditions, also the media announcement of [the Claimant] of deal prices in newspapers from country B and official websites against our club strategy and affect our club name”. In continuation, the Claimant argued that it requested further explanations, by means of an e-mail sent to the Respondent on the same date, however the Respondent allegedly did not provide any further reason for the termination of the transfer agreement.

8. In this context, the player apparently returned to country B and the Claimant explained that it had to pay his salary from 22 July 2014 until 17 August 2015. In this respect, the Claimant provided the player’s salary payment slips, amounting to 3,808,725.91, equivalent to the amount of EUR 1,144,622.18.

9. Subsequently, the Claimant claimed having sent a letter to the Respondent on 5 and 14 December 2014 referring to the alleged unilateral termination of the transfer agreement by the latter and requested the payment of the amount of EUR 1,000,000 as penalty foreseen in art. 6 of the transfer agreement. According to the Claimant, the Respondent did not reply to any of its aforementioned letters.

10. In view of the foregoing circumstances, the Claimant argued that the Respondent did not pay any of the instalments of the transfer compensation of EUR 5,500,000, the bank guarantee in accordance with art. 2.5 of the transfer agreement, nor the penalty of EUR 1,000,000 in case of breach of the aforementioned obligations.

11. Consequently, the Claimant requested from the Respondent the amount of EUR 5,500,000 corresponding to the unpaid transfer compensation, plus interest.

Furthermore, the Claimant requested from the Respondent the amount of EUR 3,000,000 corresponding to the penalty foreseen in art. 6 of the transfer agreement for the default of payment of the transfer compensation, the failure to provide a bank guarantee and the unilateral termination of the transfer agreement, plus interest.

In addition, the Claimant requested the reimbursement of the amount of EUR 1,144,622.18 as compensation for the damages incurred, corresponding to the player’s salaries and benefits paid to the player when he returned to country B from 22 July 2014 until 17 August 2015, plus interest.

The Claimant further requested an additional 1% interest per month from 14 July 2014, as per art. 6 of the transfer agreement; or alternatively 5% interest p.a. as from the date of default.

Finally, the Claimant requested the imposition of sporting sanctions on the Respondent and that all procedural costs be covered by the Respondent.

12. In its statement of defence, the Respondent acknowledged the signing of the transfer agreement, which was followed by the player and his agent travelling to country D on 17 July 2014 in order to negotiate the employment contract with the Respondent. In this respect, the Respondent provided a copy of the e-ticket dated 17 July 2014 as well as a copy of the visa to enter country D.

13. Thereafter, the Respondent argued that on 18 July 2014, a meeting was scheduled with the player and its directors in order to discuss the terms of the employment contract, however, no agreement was concluded between the parties, because the player did allegedly not accept the terms and conditions offered by the Respondent. In absence of an agreement, the player returned to country B on 22 July 2014, which is confirmed by a statement dated 30 April 2016 from the General Secretary of the Respondent.

14. In this context, the Respondent confirmed having informed the Claimant on 22 July 2014 that no agreement had been concluded with the player, that the latter did not undertake any medical examination and that the transfer agreement was therefore to be considered null and void. In this regard, the Respondent referred to art. 8 of the transfer agreement and concluded that the Claimant was not entitled to any of the amount referred to in the transfer agreement.

15. As to the penalty mentioned in art. 6 of the transfer agreement, the Respondent emphasised that the amount of EUR 1,000,000 for each breach was “disproportional and exorbitant” since it represented 55% of the value of the entire transfer agreement.

16. With regard to the request for compensation of EUR 1,144,622.18, corresponding to the salaries and benefits paid to the player when he returned to the Claimant, Club C underlined that the player continued to play for the Claimant the end of his employment contract and, therefore, the Respondent deemed that such request should be dismissed.

17. In his replica, the Claimant insisted on the fact that all necessary actions for the transfer of the player had been met, inter alia, the presentation to the press of the player as the new midfielder of the club. In this respect, the Claimant provided press articles dated 18 July 2014 confirming the presentation of the player by the Respondent to the media.

18. In addition, the Claimant pointed out that the Respondent omitted to evoke that a document including all employment conditions between the player and the Respondent was signed by the parties as soon as the player arrived in country D. In this regard, the Claimant provided a copy of a document named “Contract Offer to Player Born on 19/10/1983” (hereinafter: the contract offer), by means of which the Respondent stated that “after a successful medical test, we would like to offer below contract conditions.

1- Three (3) years profession contract, Euro 4 Million a year.

2- Good games Bonus for winning match, and Bonus for success in the league or cup according to club policy.

3- Furnished Apartment.

4- Tow way Airline ticket for the player and his family (ones per season)

5- Suitable car.

6- Health insurance.

(…)”.

The document was apparently also signed by the player who specified in handwriting that “[he] accept the conditions in this letter, just is pending the payments terms conditions”.

19. In this regard, the Claimant considered that compliance with the condition of “effectiveness” contained in art. 8 of the transfer agreement had been fulfilled, since the terms of an employment relationship between the player and the Respondent were formalised. The Claimant especially emphasised its opinion that, regardless of the name of the agreement or of whether or not it was an acceptance of proposal, it was allegedly a fact that both the Respondent and the player expressed their agreement upon the essential elements of a private employment relationship by means of a written document.

20. As to the Respondent’s allegation pertaining to the non-submission of the player to the medical examination, the Claimant rejected such allegation and referred to the contract offer, in which the Respondent allegedly confirmed that the player successfully passed the medical tests. In addition, the Claimant underlined that such condition had not been stipulated in the transfer agreement or be deemed an essential condition for entering into the employment contract so that the same be valid and effective. Therefore, the Claimant deemed that such argument shall not be considered by the Players’ Status Committee.

21. In view of the aforementioned, and since the Claimant considered that the transfer agreement was valid and was not complied with by the Respondent, the Claimant deemed that it was entitled to the aforementioned claimed amounts and rejected all of the Respondent’s allegations pertaining to these amounts.

22. In its duplica, the Respondent explained that the contract offer cannot be considered as an employment agreement between the Respondent and the player, but constituted an “introductory offer” that the Respondent presented to the player in light of a possible agreement. The Respondent further stated that the contract offer did not contain an execution date nor any indication as to the date the player was expected to start his contractual relationship with the Respondent; that it did not make any reference to the duties and responsibilities of the player; that the acceptance of the player was conditional upon a further agreement to be reached on the payments terms and such agreement never occurred; and that in any event, the Respondent had apparently never been notified of the player’s acceptance of its offer. Equally, the Respondent alleged having never received the contract offer including the signed acceptance of the player and claimed having only seen aforementioned documents during the present proceedings. Therefore, the Respondent regarded such document as not being sufficient to establish an employment contract.

23. With regard to the medical examination, the Respondent mentioned that it was meant to be a condition precedent to the validity of the relevant offer.

24. As per the presentation to the media of the player as the “new midfielder of [the Respondent]” as alleged by the Claimant, the Respondent refuted the foregoing and pointed out that the documents submitted by the Claimant only reported “the welcome that was given to the Player when he arrived at Club C”.

25. On account of the above, the Respondent rejected the Claimant’s claim in its entirety and urged the latter to bear the costs of the present proceedings.

II. Considerations of the Single Judge of the Players’ Status Committee

1. 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 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 (edition 2015). Consequently, and since the present matter was submitted to FIFA on 21 March 2016, thus after the aforementioned rules entered into force (1 April 2015), 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) was applicable to the matter at hand.

2. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be 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 2015 and 2016 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 21 March 2016. In view of the foregoing, the Single Judge concluded that the 2015 edition of the FIFA Regulations for the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter as to the substance.

3. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 1 of the Procedural Rules in connection with art. 23 par. 1 and 3 as well as art. 22 lit. f) of the Regulations on the Status and Transfer of Players, he was competent to deal with the present matter since it concerned a dispute between two clubs affiliated to different associations.

4. His competence and the applicable regulations having been established, and entering into the substance of the present matter, the Single Judge started by acknowledging the above-mentioned facts of the case as well as the documents contained in the file. 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. In doing so and to begin with, the Single Judge noted that the parties had signed a transfer agreement on 14 July 2014 for the permanent transfer of the player from the Claimant to the Respondent, in exchange of the payment by the Respondent to the Claimant of the amount of EUR 5,500,000 payable in five equal instalments of EUR 1,100,000, respectively due on 14 July 2014, on 10 December 2014, on 10 June 2015, on 10 December 2015, and on 10 March 2016.

6. In continuation, the Single Judge noted that the Claimant lodged a claim against the Respondent in front of FIFA, requesting the unpaid transfer compensation amounting to EUR 5,500,000. The Single Judge observed that the Respondent, for its part, alleged that considering the absence of an employment contract concluded between it and the player, the transfer agreement signed with the Claimant should thus be considered as null and void according to art. 8 of the transfer agreement and, consequently, no amount shall be awarded to the Claimant based on the aforementioned.

7. On account of the above, the Single Judge turned his attention to art. 8 of the transfer agreement, according to which “The effectiveness of this agreement is subject to [the player] and [the Respondent] entering into a valid employment contract. If the transfer of [the player] does not take place because of the fact that the aforementioned condition is not fulfilled, this agreement shall be null and void; in such case the Parties shall have no claim for damages or any form of compensation against each other”

8. In this respect, the Single Judge deemed that, by means of the relevant article, the parties intended to establish a concrete and pertinent validity clause in the agreement. In other words, the conclusion of a valid employment contract between the player and the Respondent was, as explicitly agreed by the parties, a precondition for the validity of the agreement. Having said that, the Single Judge highlighted that, as a preliminary issue in the present matter, it has to be determined whether a legally binding employment contract had been concluded between the player and the Respondent subsequently to the signing of the transfer agreement by the Claimant and the Respondent.

9. At this stage, the Single Judge deemed it relevant to recall that in order for an employment contract to be considered as valid and binding it should contain the essentialia negotii of an employment contract, such as the parties to the contract and their role, the duration of the employment relationship, the remuneration. Moreover, the Single Judge pointed out that such essentialia negotii have to be accepted by all relevant parties concluding a contract. The Single Judge further referred to 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.

10. In this context, the Single Judge turned his attention to the contract offer, which was provided by the Claimant in its submission (cf. point I.18 above) and signed by both the Respondent and the player, in which the latter expressly accepted the conditions contained in the offer, however, mentioned that “is pending the payments terms conditions”. Furthermore, the Single Judge pointed out that such offer was subject to “a successful medical test”. Therefore, considering that such offer had been made provided that the player successfully passed his medical test and bearing in mind that no other document was presented by the Claimant in this respect, the Single Judge concluded that the contract offer presented by the Claimant lacked the essential elements to be considered as a valid employment contract and it cannot be convincingly concluded that such offer was accepted by the player. On account of the above, the Single Judge decided that the contract offer presented by the Claimant cannot be qualified as a valid and binding employment contract.

11. In view of the foregoing, and in accordance with art. 8 of the transfer agreement, the Single Judge came to the conclusion that the transfer agreement signed by the Claimant and the Respondent was null and void, in the absence of any legally binding employment contract subsequently concluded between the player and the Respondent. Therefore, the Single Judge decided that the Claimant was not entitled to any amount based on the said transfer agreement.

12. With regard to the Claimant’s request for damages corresponding to the reimbursement of the player’s salaries paid by the Claimant when he returned to country B, the Single Judge rejected such request in accordance with art. 18 par. 4 of the Procedural Rules and the Single Judge’s respective longstanding jurisprudence in this regard, as well as in the absence of any evidence substantiating such damages.

13. All the above led the Single Judge to conclude that the complaint of the Claimant had to be rejected.

14. Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations on the Status and Transfers of Players in combination with art. 18 par. 1 of the Procedural Rules, according to which in the proceedings before the Players’ Status Committee and the 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.

15. In this respect, the Single Judge reiterated that the claim of the Claimant was rejected. Therefore, the Single Judge concluded that the Claimant had to bear the costs of the current proceedings in front of FIFA. Furthermore, and according to Annexe A of the Procedural Rules, the costs of the proceedings were to be levied on the basis of the amount in dispute. Since, the amount in dispute to be taken into consideration in the present proceedings was over CHF 200,000, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

16. In conclusion and in view of the circumstances of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000.

17. Consequently, the Single Judge decided that the amount of CHF 20,000 has to be paid by the Claimant in order to cover the costs of the present proceedings.

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, Club A, to FIFA. Considering that the Claimant, Club A, already paid the amount of CHF 5,000 as advance of costs at the start of the present proceedings, the latter has to pay the remaining amount of CHF 15,000 within 30 days as from the date of notification of the present decision to the following bank account with reference to case nr. xxxxxxxxxx:

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