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 23 January 2018

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 23 January 2018,

by

Mr 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.

Player E

I. Facts of the case

1. On 11 January 2016, the club of Country B, Club A (hereinafter: “the Claimant”), and the club of Country D, Club C (hereinafter: “the Respondent”) concluded a transfer contract (hereinafter: “the contract”) in connection with the definitive transfer of the Player E (hereinafter: “the player”) from Club A to Club C.

2. Clause 2.1 and 2.3 of the contract established that the Respondent should pay to the Claimant the total net amount of USD 1,050,000 as follows:

 USD 550,000 no later than 31 January 2016;

 USD 250,000 no later than 30 March 2016 and

 USD 250,000 no later than 30 June 2016.

3. Clause 2.4.1 of the contract established: “In the event Club C fails to make the payments in the due dates herein agreed, a fine of ten percent (10%) will apply”.

4. On 30 September 2016, the Claimant lodged a claim in front of FIFA against the Respondent requesting the payment of the following amounts:

 USD 250,000 (cf. points 2 above) and a penalty of 10% (cf. point 3. above) plus a 5% annual interest as from the due date and

 USD 250,000 (cf. points 2 above) and a penalty of 10% (cf. point 3. above) plus a 5% annual interest as from the due date.

5. In particular, the Claimant alleged that the Respondent paid only the first installment for an amount of USD 550,000. However, it failed to pay the second and third instalment contractually agreed in spite of having sent some reminders.

6. In reply to the claim, the Respondent alleged that the claimed default interest is not clear since the Claimant did not specify if the referenced percentage shall accrue daily, monthly or on yearly basis. The Respondent added that the payment of any default interest shall never accrue before the date of the relevant decision.

7. Moreover, the Respondent argued that “a penalty of 10% calculated over any eventual outstanding amount, together with any interest whatsoever the rate claimed is unfair and clear disproportionate in accordance to the well-established jurisprudence issued by the decision-making bodies of FIFA”.

8. Finally, the Respondent alleged that the Claimant´s claim for penalty and default interest lack legal basis.

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

1. First of all, the Single Judge of the Player’s Status Committee (hereinafter: “the Single Judge”) analysed whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 30 September 2016. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: “the Procedural Rules”) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, the Single Judge concluded that in accordance with art. 26 par. 1 and par. 2 of the 2018 edition of the Regulations on the Status and Transfer of Players, and considering that the present claim was lodged on 30 September 2016, the 2016 edition of said regulations (hereinafter: ”the Regulations”) is applicable to the matter at hand as to the substance.

3. Furthermore, the Single Judge confirmed that, based on 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 Regulations, he was competent to deal with the present matter since it concerns a dispute between clubs affiliated to two different associations.

4. The competence of the Single Judge and the applicable regulations having been established, the Single Judge entered into the substance of the matter. In this respect, the Single Judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on 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 on 11 January 2016 the Claimant and the Respondent concluded the contract which established a transfer compensation amounting to USD 1,050,000 payable in 3 instalments. In continuation, the Single Judge took note of clause 2.4.1. of the contract which provides that “In the event Club C fails to make the payments in the due dates herein agreed, a fine of ten percent (10%) will apply”.

6. At this stage, the Single Judge recalled that it remained undisputed that the Respondent paid only the first instalment in accordance with the contract amounting to USD 550,000, and that hence the second and third instalments due on 30 March 2016 and 30 June 2016 remain outstanding to date.

7. Therefore, as a first conclusion, the Single Judge underlined that 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 Claimant is entitled to receive from the Respondent the amount of USD 500,000, relating to the second and third instalments pursuant to the contract in accordance with its clause 2.3.

8. In continuation, the Single Judge acknowledged that the Claimant requested a penalty amounting to 10% over the outstanding amount based on clause 2.4.1 of the contract and in addition a 5% annual interest as from the relevant due dates.

9. In this respect, the Single Judge was keen to emphasise that according to the long standing and well-established jurisprudence of the Players´ Status Committee in similar cases, a compensation or penalty for late payment cannot be requested together with default interest as both requests are punitive in nature and aim at compensating the creditor for late payment.

10. In this context, the Single Judge focused his attention on the penalty requested by the Claimant and remarked that said penalty was contractually agreed by the parties, i.e. clause 2.4.1 of the contract.

11. In addition, the Single Judge underlined that a 10% penalty over the outstanding transfer fee seems to be a reasonable amount to compensate late payments. Indeed, contrary to the position of the Respondent, the Single Judge was of the opinion that a 10% penalty is neither excessive nor disproportionate.

12. Therefore, the Single Judge recalled, once again, the legal principle of pacta sunt servanda according to which the Respondent must honoured the obligations voluntarily assumed in the contract towards the Claimant

13. In view of the above, the Single Judge decided to grant the aforementioned penalty of 10% over the second and third instalments agreed in clause 2.4.1 of the contract, i.e. USD 50,000.

14. In view of all the above-mentioned considerations, the Single Judge decided that the claim of the Claimant is partially accepted and that the Respondent has to pay to the Claimant the amount of USD 500,000 as outstanding transfer compensation as well as a penalty amounting to USD 50,000.

15. Lastly, and pursuant to the consideration of point 10 above, the Single judge rejected the Claimant´s request for interest.

16. Finally, 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).

17. 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 amount in dispute to be taken into consideration in the present proceedings is USD 550,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

18. In conclusion, the Single Judge determined, in view of the specificity of the case at hand, the costs of the current proceedings in 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 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 amount of USD 500,000 as outstanding transfer fee.

3. 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 amount of USD 50,000 as penalty fee.

4. If the aforementioned amounts are not paid within the aforementioned deadline, an interest rate of 5% per year will apply as of the expiry of the fixed time limit and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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

6. 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:

6.1 The amount of CHF 5,000 has to be paid to the Claimant, Club A.

6.2 The amount of CHF 15,000 has to be paid by the Respondent, directly to FIFA to the following bank account with reference to case nr. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

7. The Claimant, Club A, is directed to inform the Respondent, Club C, directly and immediately of the account number to which the remittances under points 2., 3. and 6.1 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).

For the Single Judge of the

Players’ Status Committee

Omar Ongaro

Football Regulatory Director

Encl. CAS directives