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 11 October 2016

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 11 October 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 E.

I. Facts of the case

1. On 8 March 2010, the Club of Country B Club A (hereinafter: the Claimant) and the Club of Country D Club C (hereinafter: the Respondent) concluded an agreement (hereinafter: the agreement) for the transfer of the Player F (hereinafter: the player) from the Claimant to the Respondent, upon payment of a transfer fee in the amount of EUR 4,000,000 and the transfer of the player to be effected on or before 11 March 2010.

2. Clause 2.1 of the agreement stated inter alia that, the player’s transfer depended “on the execution of a professional football player employment agreement” between the player and the Respondent.

3. Moreover, in accordance with article 4 of the agreement, the latter “may be terminated by any of the Parties solely in case of default by the other Party in connection with any of the obligations assumed herein and only if such default persists after 15 days (fifteen) days counted from the notification of the default by the innocent Party.

4.2 Any Party has the right to unilaterally terminate this Transfer Agreement [i.e. the agreement] without just cause. In this case such Party shall be liable for the payment of a compensatory penalty fee in amount of 400,000.00 Euros (four hundred thousand Euros) to the innocent Party.

4.3 Rejection to make payment of the transfer Fee and rejection to transfer the player shall be deemed as unilateral termination of this Transfer Agreement without just cause.

4.4 Should Club A [i.e the Claimant] not issue the ITC before 11PM City G time on 11 March 2010 (as it is stipulated in Section 3.3 above), Club A will be liable for the payment of a compensatory penalty fee in amount of 400,000.00 Euros (four hundred thousand Euros) to Club C [i.e. the Respondent].

4.5 All the penalty fees shall be paid within 30 days from the date of the relevant event and interest on such sum shall be applicable from due date until the date of effective payment, at a rate of 10% (ten percent) per annum”.

4. On the same day, the Claimant and the Respondent signed an amendment to the agreement (hereinafter: the amendment) according to which, in addition to the amount of EUR 4,000,000, “Club C [i.e. the Respondent] undertakes to pay to Club A [i.e. the Claimant] 20% (twenty percent) of any amount received in the future from any third party (whether a club or an investor) for the permanent transfer of the Player to any third football club (the 20% share of Club A is hereinafter referred to as “Further Transfer Fee”). Such Further Transfer Fee is to be paid to Club A within 15 (fifteen) days from receipt of the amount, owed by such third party. In case of contingent payments, Club A shall be entitled to receive its 20% (twenty percent) share, within 05 (five) days from each payment by the third-party”.

5. Equally, clause 2.4 of the amendment stipulated that if the Respondent and the player, at any time, decided upon the prolongation or extension of the employment contract or to the termination and subsequent execution of a new employment contract, the Claimant should have the right to transfer its 20% further transfer fee to the Respondent, which should be obliged to acquire it for the amount of EUR 1,500,000.00.

6. On 9 March 2016, the Claimant lodged a claim in front of FIFA requesting from the Respondent the payment of EUR 1,500,000, plus interest at a rate of 10% p.a. as from the date on which the prolongation/ extension/ execution of a new contract with the player took place until the date of the effective payment.

7. In support of its claim, the Claimant alleged that the Respondent breached the agreement and the amendment without just cause. In this regard, the latter explained that it “attempted in the past year to obtain confirmation from the Respondent on whether it had prolonged, extended or executed a new employment agreement with the Player, but was not able to obtain a conclusive response”. Furthermore, the Claimant claimed that “the Respondent and the player executed the original employment agreement on 10 March 2010 and, since the employment agreement shall be limited to a period of 05 (five) years (art 18, paragraph 2 of FIFA Regulations), it is safe to assume that on 09 March 2015 – or before, the Respondent and the player either prolonged, extended or executed a new employment agreement, since the Player is still under registration/contract with the Respondent”.

8. In its reply to the claim, the Respondent first acknowledged that it concluded an agreement with the Claimant and two employment contracts with the player, however, rejected all the allegations made by the Claimant. In this regard, the Respondent contested the validity of the amendment arguing that it contained a signature of the ex-president of the Respondent.

9. In continuation, the Respondent claimed that it concluded with the player a first employment contract, valid as of 11 March 2010 until 30 June 2014, and a second one on 15 July 2014 valid until 30 June 2017 and, therefore, alleged that during the two weeks period in between the two aforementioned contracts, the player was a free agent without any registration period.

10. In its replica, the Claimant mainly reiterated its initial claim.

11. In its duplica, the Respondent reiterated its position and maintained its previous arguments.

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 which edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) were applicable to the matter at hand. In this respect, considering that the present matter was submitted to FIFA on 9 March 2016, the Single Judge concluded that the 2015 edition of the Procedural Rules is applicable in 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 (hereinafter: “the Regulations”) should be applicable as to the substance of the matter. In this respect, he confirmed that the present matter was submitted to FIFA on 9 March 2016 and, therefore, concluded that the 2015 edition of the Regulations is applicable in the matter at hand as to the substance (cf. art. 26 par. 1 and par. 2 of the Regulations).

3. With regard to his competence, 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 2015 edition of the Regulations on the Status and Transfer of Players he is competent to deal with the matter at stake, which concerns a dispute between two football 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 his analysis by acknowledging the facts of the case and the arguments of the parties 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 that he considered pertinent for the assessment of the matter at hand.

5. In doing so and to begin with, the Single Judge acknowledged that, on 8 March 2010, the Claimant and the Respondent concluded an agreement in relation to the definitive transfer of the player upon payment of a transfer fee and under the terms of which its effectiveness was conditioned to the execution of a professional football player employment contract between the player and the Respondent.

6. In continuation, the Single Judge also acknowledged that the parties concluded an amendment which, inter alia, provided that the Claimant was entitled to receive from the Respondent the amount of EUR 1,500,000, if the latter and the player, at any time decided upon the prolongation or extension of the employment contract or to the termination and subsequent execution of a new employment contract (cf. clause 2.4 of the amendment).

7. In this respect, the Claimant maintained that, since the first employment contract between the player and the Respondent has expired and the player is nonetheless still registered and playing for the Respondent, such employment contract must have been extended or a new contract must have been executed. Therefore, the Claimant referred to clause 2.4 of the amendment and requested an amount of EUR 1,500,000 from the Respondent.

8. Equally, the Single Judge observed that, in its reply, on one hand, the Respondent acknowledged having concluded two employment contracts with the player, a first one valid as of 11 March 2010 until 30 June 2014, and a second one, as of 15 July 2014 until 30 June 2017. On the other hand, The Respondent disputed the Claimant’s entitlement to amount at stake, arguing that during the two weeks period in between the two aforementioned contracts, the player was a free agent without registration period.

9. Having duly examined the argumentation and documentation put forward by both parties, the Single Judge emphasised that it remained undisputed that the player and the Respondent concluded two employment contracts, the first of which ended on 30 June 2014 and the second of which started on 15 July 2014. Hence, the respective execution of the contracts was only separated by a period of 15 days.

10. Turning his attention to clause 2.4 of the amendment, the Single Judge was eager to emphasise that, taking into account the circumstances of the termination and subsequent execution of the second employment contract, such clause was applicable in the matter at hand. For the sake of good order, the Single Judge deemed appropriate to state that, in view of the short period between the two employment contracts, the execution of the second employment contract may also qualify as an extension in accordance with clause 2.4 of the amendment.

11. Having said that, the Single Judge concluded that, in accordance with the pertinent and concrete character of such provision and, considering the termination of the first employment contract concluded with the player on 30 June 2014 and the subsequent execution of the second employment contract as of 15 July 2014, the Respondent had breached its contractual obligations towards the Claimant and should, as a consequence, be liable to pay the outstanding amount of EUR 1,500,000 in accordance with clause 2.4 of the amendment.

12. Bearing in mind the aforementioned and the basic legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith as well as bearing in mind the content of the amendment and the fact that the conditions for the payment of the amount of EUR 1,500,000 had in casu been met, the Single Judge decided that the Respondent must pay the Claimant the outstanding amount of EUR 1,500,000 according to clause 2.4 of the amendment.

13. In continuation, the Single Judge further observed that the Claimant claimed an interest at a rate of 10% p.a. on the amount in dispute from the date on which the prolongation/extension/execution of a new contract with the player took place until the date of effective payment. In this respect, the Single Judge referred to the content of clause 4.5 of the agreement and highlighted that an interest rate of 10% p.a. is solely applicable in connection with penalty fees and cannot be applied in the present dispute.

14. Consequently, the Single Judge ruled that the relevant request of the Claimant had to be rejected and, taking into account the constant practice of the Players’ Status Committee, decided to grant interest at a rate of 5% p.a. over the outstanding amount of EUR 1,500,000 as from 16 July 2014 until the date of effective payment.

15. In conclusion, the Single Judge decided that the claim of the Claimant is partially accepted and held that the Respondent has to pay to the Claimant the amount of EUR 1,500,000, plus interest at a rate of 5% p.a. on the said amount as from 16 July 2014 until the date of effective payment and that any further claims lodged by the Claimant are rejected.

16. 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 the proceedings before the Players’ Status Committee, including its Single Judge, costs in the maximum amount of CHF 25,000 are levied. 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).

17. In respect of the above, the Single Judge reiterated that the claim of the Claimant is partially accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Respondent has to bear the entire costs of the current proceedings in front of FIFA.

18. 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. Consequently and taking into account that the total amount at dispute in the present matter is EUR 1,500,000, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

19. In conclusion, and considering that the specificities of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000.

20. Consequently, the Respondent has to pay the amount of CHF 20,000 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 partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, Club A, within 30 days as from the date of notification of this decision, the total amount of EUR 1,500,000 as well as 5% interest per year on the said amount from 16 July 2014 until the date of effective payment.

3. If the aforementioned sum, plus interest, is not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

4. Any further claims lodged by the Claimant, Club A, are rejected.

5. The final costs of the proceedings in the amount of CHF 20,000 are to be paid by the Respondent, Club C, 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:

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, Club A.

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

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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