F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2017-2018) – fifa.com – atto non ufficiale – Decision 5 June 2018

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 5 June 2018,

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 the reimbursement of the solidarity contribution in connection

with the transfer of the player, Player E

I. Facts of the case

1. On 7 July 2015, the player, Player E, born on 17 November 1986 (hereinafter: the player), and the Club of Country D, “Club C AS”, concluded an employment contract for the period between 7 July 2015 and 31 May 2018.

2. Clause 7 par. 1 of the said employment contract reads as follows:

“The parties mutually agree and expressly accept in advance that, if at the end of the Football Season in Country D 2015-2016 (i.e. 30 June 2016 at the latest), the Club should receive a written offer from another club interested to register the Player for an amount of EUR 8,500,000.00/- (Eight Million Five Hundred Thousand Euro Only), then the Club shall be obliged to immediately notify in written the Player and permit him as well as his intermediaries/representatives, if any, to enter into negotiations with such other club, should the Player wish to do so. In the event that the Player should then agree with the aforesaid other club for his transfer to the same club, the Club shall be obliged to do all the necessary actions to complete the Player’s transfer accordingly at the first available date thereafter and it will be entitled to receive only the amount of 8,500,000.00/- (Eight Million Five Hundred Thousand Euro Only)” (hereinafter: the buy- out clause).

3. According to the information contained in the Transfer Matching System (TMS), the player was engaged against payment from the Club of Country D, Club C (hereinafter: the Respondent), by the Club of Country B, Club A (hereinafter: the Claimant), with which he was registered on 26 July 2016.

4. On 12 May 2017, the Claimant lodged a claim against the Respondent, requesting the reimbursement of the solidarity contribution in connection with the transfer of the player from the Respondent to the Claimant in the amount of EUR 402,010.52, plus 5% interest p.a. on “EUR 155,847.50” as from 30 March 2017, on EUR 127,035.52 as from 30 March 2017, and on EUR 119,127.50 as from 31 March 2017, and that the Respondent cover the costs of the proceedings as well as legal fees in the amount of EUR 10,000.

5. In this respect, the Claimant submitted a copy of the following documents :

- its correspondence dated 27 June 2016 addressed to the Respondent whereby the Claimant informed the Respondent of its intention to execute the buy-out clause contained in the employment contract signed by and between the Respondent and the player by paying the Respondent the amount of EUR 8,500,000,

- its bank transfer order, dated 5 July 2016, of the amount of EUR 8,500,000 to “Club C AS”,

- a copy of “Club C AS”’s email dated 12 July 2016, which allegedly contained an invoice dated 8 July 2016 (hereinafter: the first invoice) containing the letterhead of “Club C AS” as well as the Respondent’s logo, whereby the Respondent referred to the “transfer payment”, respectively, to the “transfer fee”, and

- a new copy of said invoice dated 8 July 2016 where “transfer fee” was struck-out and replaced by “buy-out clause article 7” (hereinafter: the second invoice).

6. In this regard, the Claimant argued that, after having received the first invoice, the Respondent requested to modify it and that the Respondent was ready to block the transfer if the Claimant did not agree. The Claimant submitted a copy of its lawyer’s email dated 21 July 2016, according to which the Claimant could not “accept the modification of [the first invoice]” and “for the sake of having the transfer done and the TMS matches, we do accept to modify the concept to be introduced into the FIFA TMS System so you could get the ITC urgently. However, this modification does not change the contract with the player and its wording, as well as it does not change the invoice too”.

7. Moreover, the Claimant stated that it received the following requests in connection with the distribution of the solidarity contribution in relation to the transfer of the player from the Respondent to the Claimant:

Club Date request Registration dates according to player passport issued by the Football Federation of Country K Percentage claimed

Club F

11 July 2016

As from 20 November 1998 until 31 July 1999

28.03%

As from 6 October 1999 until 31 July 2000

As from 26 October 2000 until 30 June 2001

As from 22 August 2001 until 30 June 2002

As from 18 September 2002 until 30 June 2003

Club G

27 October 2016

As from 4 November 2003 until 30 June 2004

36.67%

As from 30 November 2004 until 30 June 2005

As from 1 August 2005 until 4 July 2007

As from 22 August 2014 until 30 June 2015

8. Similarly, the Claimant submitted a copy of the player passport issued by The Football Association of Country H, according to which the player had been registered with its affiliated club, Club J, as from 3 July 2007 until 21 August 2014 as well as from 6 July 2015 until 21 July 2015.

9. The Claimant referred to jurisprudence of FIFA and the Court of Arbitration for Sport (CAS), according to which the new club shall distribute the relevant portions of the solidarity contribution to clubs entitled to it, whereas the former club shall immediately reimburse said amounts to the new club, and held that, as it failed to deduct the solidarity contribution, it invited the above-mentioned Clubs of Country K to directly contact the Respondent, which allegedly had refused to comply with said jurisprudence.

10. In this regard, the Claimant argued that, since Club F and Club G had lodged a claim before FIFA, it paid the solidarity contribution to said Clubs of Country K as well as to Club J in the total amount of EUR 402,010.52. In particular, the Claimant submitted a copy of the following documents:

- bank receipt of a pending payment to Club G in the amount of EUR 156,847.50 dated 30 March 2017,

- bank receipt of a pending payment to Club F in the amount of EUR 119,127.50 dated 31 March 2017, and

- bank transfer order in the amount of EUR 127,035.52 to Club J dated 30 March 2017.

11. Lastly, the Claimant referred to jurisprudence of CAS, according to which the present situation allegedly constitutes a transfer of the player, as the club that entered into the employment contract with him consented to the transfer in advance, and held that in accordance with art. 21 and art. 1 of Annexe 5 of the Regulations on the Status and Transfer of Players, solidarity contribution shall be deducted from the transfer fee.

12. In reply to the claim lodged against it, the Respondent rejected the jurisdiction of the Players’ Status Committee (PSC) by stating that it is not affiliated to the Football Federation L and that, therefore, the present matter does not fall within the scope of “art. 22 e)” of the Regulations on the Status and Transfer of Players. In particular, the Respondent stated that it is a multi-sports club and a shareholder of “Club C AS”, which is an entity that operates the Respondent’s professional football club and is affiliated to the Football Federation L and to the League M In this respect, the Respondent submitted the following documents:

- a copy of a CAS award, according to which, “Club C (hereinafter, “Club C”) is a sports club (…) whose purpose is, inter alia, to administer Professional Football Club of Country D, Club C AS, a joint-stock company of which Club C owns 63% of the stock. Club C AS is a member of the Football Federation of Country D (hereinafter, “Football Federation L”), which is in turn affiliated to (…) the Fédération International de Football Association (hereinafter, “FIFA”). Unlike Club C AS, Club C is not a member of the Football Federation L” and “stock-companies, limited liabilities companies and other legal entities have their own separate identity and existence under Swiss law (Article 53 of the Swiss Civil Code). Thus, they must be distinguished, in fact and in law, from their shareholders and other affiliated persons”,

- a screenshot of the Football Federation L’s official website, according to which “Club C AS” apparently is a club registered with the Football Federation L,

- a copy of the alleged registration certificate issued by the Football Federation L in Language of Country D only, and

- a copy of the alleged attendance list of the general assembly of “Club C AS” in Language of Country D only, according to which the Respondent allegedly was present in said general assembly.

13. Furthermore, the Respondent referred to jurisprudence of CAS, according to which a party has standing to be sued if it has some stake in the dispute because something is sought against it, and stated that it has no standing to be sued, as it was not a party to the employment contract, it was not involved in the transaction giving rise to the present claim nor did it receive any payments in connection with the buy-out clause.

14. In this context, the Respondent held that it was “Club C AS” and not the Respondent who was a party to the employment contract with the player. Likewise, the Respondent argued that it was “Club C AS” who was involved in the exchange of correspondence with the Claimant and that, as a result, the Claimant paid the amount pertaining to the buy-out clause to “Club C AS”.

15. Equally, the Respondent referred to Swiss law and stated that, as a shareholder, it cannot be held liable for any of the alleged debts of “Club C AS”. In this respect, the Respondent pointed out that the Claimant failed to meet the burden of proof to demonstrate that the Respondent could be held liable for claims against “Club C AS”.

16. As to the Claimant’s request to be reimbursed the amount it asserted having distributed as solidarity contribution, the Respondent argued that, in the absence of a contract between the parties to the dispute, the Players’ Status Committee needs to ascertain their real and common intent regarding the buy-out clause, and that from its interpretation, it can be noted that only the payment of EUR 8,500,000 would trigger the buy-out of the player, this is, said amount is net.

17. In this respect, the Respondent further pointed out that the Claimant paid the full amount of EUR 8,500,000 before the invoice was issued without any reservation whatsoever, confirming, in the Respondent’s opinion, that said amount was payable without any deductions including solidarity contribution. The Respondent stressed that, considering the Claimant’s experience in international transfers, it could not envisage that the Claimant triggered the buy-out clause omitting the deduction of EUR 425,000, i.e. 5% of EUR 8,500,000, which would result in the receipt by the Respondent of EUR 8,075,000 instead of the full amount of the buy-out clause. In this regard, the Respondent put emphasis to the wording of the buy-out clause, which states that “... it will be entitled to receive only the amount of EUR 8,500,000 ...” in its last sentence.

18. Equally, the Respondent submitted an exchange of emails between the Respondent and the Claimant dated 21 July 2016, according to which the Respondent requested the Claimant to modify the information it introduced in the TMS which referred to a transfer fee of EUR 8,500,000 instead of the buy-out clause, to which the Claimant replied that it inserted said information following the wording of the Respondent’s first invoice. The Respondent stated that, as a result, it issued the second invoice in order to reflect the agreement of the parties in this respect and that, in doing so, it demonstrated its intent to receive the total amount as agreed upon in clause 7 of the employment contract.

19. Likewise, the Respondent held that “Club C AS” insisted on amending the invoice and that the Claimant’s understanding that “Club C AS” was ready to block the whole transfer in TMS should have made it clear to the Claimant that “Club C AS” would not accept a lower buy-out clause.

20. In addition, the Respondent referred to CAS jurisprudence, according to which the wording of art. 1 of Annexe 5 of the Regulations does not preclude an agreement to pay solidarity contribution in addition to the transfer fee, and argued that, should the Players’ Status Committee consider that the transaction at hand is a “transfer” in the sense of art. 21 and art. 1 of Annexe 5 of the Regulations, the parties are free to decide whether solidarity contribution will be deducted from the transfer fee or if it will be paid on top of the transfer fee.

21. Furthermore, the Respondent pointed out that the Claimant cannot claim that it was not aware of the solidarity mechanism, which was introduced in 2003, or of the relevant CAS jurisprudence and submitted a copy of the Claimant’s email dated 7 November 2016, which reads as follows: “Any and all of the parties involved in the matter at stake agree on the consistent application of the FIFA RSTP and its long-standing practice, with the sole exception of your most esteemed club. (…) As per the above, it remains obvious that the move of the player (…) from your club to [the Claimant] shall be considered as a transfer “in the sense of article 21 and article 1 Annex 5 of the FIFA RSTP”. In light of the foregoing, the Respondent argued that the Claimant paid the full amount of EUR 8,500,000 either because it agreed to a net payment of the buy-out fee or because it tried to deceive the Respondent by requesting the reimbursement of the solidarity contribution at a later stage, a situation that, in the Respondent’s opinion, is excluded in accordance with Swiss law.

22. Alternatively, the Respondent argued that the Claimant’s conduct clearly conveyed the message that it agreed to pay EUR 8,500,000 net and, therefore, it is now estopped from requesting the reimbursement of any amount paid in connection with the buy-out clause on the basis of the doctrine of venire contra factum proprium.

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 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber is 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 (edition 2018) as well as to the fact that the present matter was submitted to FIFA on 12 May 2017. Consequently, the Single Judge concluded that the 2017 edition of said Procedural Rules is applicable to the matter at hand (hereinafter: the Procedural Rules).

2. With regard to his competence, the Single Judge remarked that the Respondent rejected the competence of the Players’ Status Committee on the basis that the Respondent allegedly is not affiliated to the Football Federation L, since it is a multi-sports club and a shareholder of “Club C AS”, the latter allegedly being the club affiliated to the Football Federation L. Therefore, according to the Respondent, the present matter does not fall within the scope of “art. 22 e)” of the Regulations on the Status and Transfer of Players.

3. At this stage, the Single Judge recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations on the Status and Transfer of Players, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

4. In this respect, the Single Judge referred to art. 3 of the Annexe 3 of the Regulations, according to which the users of TMS are, inter alia, clubs, which are responsible for entering and confirming transfer instructions in TMS. Similarly, the Single Judge underlined that, according to the information contained in the TMS, the player was registered with the Respondent, i.e. Club C, on the basis of the employment contract mentioned under number I./1. above and engaged against payment from the Respondent by the Claimant. What is more, “Club C AS” does not appear in the TMS as a club. In this context, bearing in mind that the player, prior to his registration with the Claimant, was registered with the Respondent, Club C, the Single Judge also referred to art. 8.1.1. of Annexe 3 of the Regulations, which stipulates that “Any professional player who is registered with a club that is affiliated to one association may only be registered with a club affiliated to a different association after an ITC has been delivered ...” (emphasis added).

5. In this context, referring to art. 12 par. 3 of the Procedural Rules, the Single Judge emphasised that the burden of proof to corroborate its allegation that the Respondent was not affiliated to the Football Federation L on the basis that “Club C AS” is the club affiliated to said Federation lies on the Respondent. In this regard, the Single Judge took into account that in order to corroborate its assertion, the Respondent had presented some documentation only in Language of Country D as well as an award issued by CAS. In consideration of the stated principle, the Single Judge stressed that he could not take into account documents which are not provided in an official FIFA language in accordance with art. 9 par. 1 of the Procedural Rules. Furthermore, the Single Judge deemed that the CAS award referred to by the Respondent does not outweigh the aforementioned facts available in the TMS, from which it can be concluded that Club C is affiliated to the Football Federation L, whereas “Club C AS” is not. Therefore, the Single Judge concluded that the Respondent had not presented sufficient evidence demonstrating that Club C is not affiliated to the Football Federation L.

6. For all the above reasons, the Single Judge decided that the Respondent’s argumentation that it was not affiliated to the Football Federation L had to be rejected.

7. Consequently, the Single Judge concluded that the Claimant’s claim against the Respondent indeed involves two clubs affiliated to two different associations. In light of the foregoing, 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 4 as well as art. 22 lit. f) of the 2018 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.

8. 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 to art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition 2018) and to the fact that the present matter was submitted to FIFA on 12 May 2017. 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 in the matter at hand as to the substance.

9. His competence and the applicable regulations having been established and entering into the substance of the matter, the Single Judge continued 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.

10. In continuation, the Single Judge turned his attention to the argument brought up by the Respondent, according to which it has no standing to be sued, alleging that the Respondent, Club C, was not a party to the relevant employment contract, was not involved in the transaction giving rise to the present claim, and did not receive any payments in connection with the aforementioned buy-out clause.

11. In this regard, the Single Judge recalled his findings under number II./4. above and concluded that in the event that Club C and “Club C AS” are to be considered different legal entities, which allegation was not corroborated with sufficient evidence, they would only be different legal forms of the same football club.

12. Consequently, the Single Judge rejected the Respondent’s aforementioned argument, and confirmed that the Respondent has legal standing in the current procedure.

13. Having established the above, the Single Judge acknowledged that, on 7 July 2015, the player and “Club C AS” concluded an employment contract for the period between 7 July 2015 and 31 May 2018, which contained a buy-out clause in the amount of EUR 8,500,000. Equally, the Single Judge noted that the Claimant made use of said buy-out clause in order to acquire the player’s services, as a result of which the player was transferred to and registered with the Claimant on 26 July 2016.

14. In this context, the Single Judge noted that the Claimant asserted that it omitted to deduct the solidarity contribution in relation with the transfer of the player when it paid the amount of EUR 8,500,000 to the Respondent.

15. In continuation, the Single Judge observed that the Claimant provided evidence of having distributed the total amount of EUR 402,010.52 to Club F, Club G and Club J as solidarity contribution in relation with the transfer of the player and according to art. 21 and Annexe 5 of the Regulations and that it asked that the Respondent be ordered to reimburse said amount.

16. Similarly, the Single Judge noted that, for its part, the Respondent alleged that clause 7 par. 1 of the employment contract being a buy-out clause, the amount of EUR 8,500,000 contained therein is a net amount, as only the payment of EUR 8,500,000 would trigger the transfer of the player from the Respondent to the Claimant.

17. In this regard, the Single Judge referred to art. 21 of the Regulations in combination with art. 1 of Annexe 5 of the Regulations which stipulate that, if a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and be distributed by the new club as a solidarity contribution to the club(s) involved in the training and education of the player in proportion of the number of years the player has been registered with the relevant club(s) between the seasons of his 12th and 23rd birthday.

18. Moreover, the Single Judge referred to the jurisprudence of the Dispute Resolution Chamber in accordance with which the solidarity mechanism as provided for in art. 21 and Annexe 5 of the Regulations is applicable to compensation paid by the new club on the basis of a buy-out clause contained in the employment contract of a player with his former club, as in the matter at hand.

19. Furthermore, the Single Judge highlighted that it remained undisputed that the Claimant has paid 100% of the amount of the buy-out clause to the Respondent, i.e. EUR 8,500,000.

20. At this stage, the Single Judge turned his attention to the wording of clause 7 par. 1 of the above-mentioned employment contract, which reads as follows: “The parties mutually agree and expressly accept in advance that, if at the end of the Football Season in Country D 2015-2016 (i.e. 30 June 2016 at the latest), the Club should receive a written offer from another club interested to register the Player for an amount of EUR 8,500,000.00/- (Eight Million Five Hundred Thousand Euro Only), then the Club shall be obliged to immediately notify in written the Player and permit him as well as his intermediaries/representatives, if any, to enter into negotiations with such other club, should the Player wish to do so. In the event that the Player should then agree with the aforesaid other club for his transfer to the same club, the Club shall be obliged to do all the necessary actions to complete the Player’s transfer accordingly at the first available date thereafter and it will be entitled to receive only the amount of 8,500,000.00/- (Eight Million Five Hundred Thousand Euro Only)”. In this respect, the Single Judge underscored that the Respondent and the player agreed upon the early termination of the player’s employment relationship in the event that another club offers the Respondent the amount of EUR 8,500,000 for the services of the player and the player reaches an agreement with the relevant other club.

21. Likewise, the Single Judge referred to jurisprudence of the Dispute Resolution Chamber (DRC) and the Court of Arbitration for Sport (CAS) submitted by the parties, pursuant to which the wording of the Regulations does not prohibit that the amount specified in a transfer agreement represents only 95% of the gross transfer value, as long as the solidarity contribution in the end is still deducted from the gross transfer value and distributed in conformity with the wording of art. 1 of Annexe 5 of the Regulations. The Single Judge considered that the same applies, by analogy, to the amount specified in a buy-out clause.

22. Having said that, the Single Judge agreed with the argumentation put forward by the Respondent in that only the payment of EUR 8,500,000 would trigger the buy-out of the player, i.e. the payment of EUR 8,500,000 minus the 5% of solidarity contribution would not result in the early termination of the player’s employment contract.

23. On account of the above, the Single Judge concluded that the amount of EUR 8,500,000 is indeed to be considered a net amount, which thus represents the 95% of the total compensation paid by the Claimant in connection with the transfer of the player from the Respondent to the Claimant. In light of the foregoing, the Single Judge decided that the aforementioned consideration could lead to no other conclusion than that, in line with art. 21 of the Regulations in combination with art. 1 of Annexe 5 of the Regulations, the Claimant shall bear the financial obligations pertaining to the solidarity contribution.

24. In view of all the above, the Single Judge decided to reject the Claimant’s claim for the reimbursement of the solidarity contribution in connection with the transfer of the player from the Respondent to the Claimant.

25. Moreover, the Single Judge decided to reject the Claimant’s claim pertaining to legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the PSC’s respective longstanding jurisprudence in this regard.

26. 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. It is further stipulated that the costs are to be borne in consideration of the parties’ degree of success in the proceedings and, in accordance with Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute.

27. In respect of the above, the Single Judge held that the amount to be taken into consideration in the present proceedings is EUR 402,010.52 related to the claim of the Claimant. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000 (cf. table in Annexe A of the Procedural Rules).

28. As a result, considering the particularities of the present matter as well as the parties’ degree of success, the Single Judge determined the final 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 admissible.

2. The claim of the Claimant is rejected.

3. The final amount of 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 no. XXX:

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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives