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 a contractual dispute arisen between the parties

and relating to the player, Player E.

Player E, Country B

I. Facts of the case

1. On 17 October 2016, the club of Country B, Club A (hereinafter: the Claimant) concluded a transfer agreement (hereinafter: the transfer agreement) with the club of Country D, Club C (hereinafter: the Respondent) in relation to the transfer of the player, Player E (hereinafter: the player) to the latter club, by means of which the Respondent undertook to pay to the Claimant the sum of USD 1,800,000 as follows (hereinafter: the transfer fee): USD 600,000 on 25 January 2017, USD 600,000 on 25 January 2018 and USD 600,000 on 25 July 2018.

2. As further specified in art. 3.3. of the agreement, in case of non-payment of the relevant amounts within the aforementioned deadlines, the Respondent had to pay to the Claimant, as penalty, 5% of the due amount, plus 6% interests p.a..

3. In accordance with art. 1.3. of the agreement, the Claimant was to be informed by the Respondent, in writing, of any offer related to a potential subsequent transfer of the player within 3 days of having received the relevant offer (cf. art. 1.3.1. of the agreement). The Claimant had then 2 days to inform the Respondent of a possible similar or better offer for the player from another club.

4. In case the Respondent failed to comply with the prerequisites of art. 1.3.1. and the player would be transferred to a third club without the Claimant having had the possibility to make use of its right as per the above, an amount corresponding to 80% of the subsequent transfer would be due to the Claimant by the Respondent as penalty (cf. third paragraph of art. 1.3.1. of the agreement).

5. On 21 August 2017, the Claimant lodged a claim with FIFA against the Respondent and requested for the latter the following payments:

- USD 1,800,000, corresponding to the entire transfer fee;

- USD 120,000 as penalty in accordance with the third paragraph 1.3.1. of the agreement, corresponding to 80% of the transfer fee that the Respondent had allegedly received from the club of Country B, Club F for the subsequent transfer of the player, i.e. USD 150,000;

- USD 300,000 as compensation for the damages incurred for not having had the possibility to object to the transfer of the player to Club F in accordance with art. 1.3.1. of the agreement;

- 5% penalty over the amounts due as per art. 3.3. of the agreement;

- 6% interests p.a. in accordance with art. 3.3. as of 25 January 2017;

- USD 30,000 for the legal costs incurred.

6. According to the Claimant, since the Respondent had failed to pay the first instalment due as transfer fee for the player, i.e. the sum of USD 600,000 payable on 25 January 2017, and had also failed to comply with the rest of the requirements of the agreement, the remaining two instalments of USD 600,000 each had also become due.

7. In addition, the Claimant clarified that the player was transferred to Club F without its knowledge in a clear breach of art. 1.3.1..

8. In view of the above, the Claimant deemed being entitled to receive from the Respondent all amounts claimed.

9. In its response on 30 October 2017, the Respondent rejected the claim of the Claimant in its entirety.

10. In the alternative, the Respondent requested FIFA to order it “to pay the first instalment due as transfer fee (..) amounting USD 600,000 plus interest at a rate of 5% p.a. from 25 January 2017”.

11. In this respect, the Respondent contested the allegation that the entire transfer fee had fallen due as the agreement did not include an acceleration clause.

12. Furthermore, the Respondent alleged having sent to the Claimant an e-mail “to its official email” a week before the player was loaned to Club F and pointed out that no response was received by the Claimant in this regard. In this respect, the Respondent provided FIFA with an email dated 11 July 2017 addressed to “XXX@XXX” in which it gave the Claimant 2 days deadline to provide its position to an offer received for the player.

13. As a result, the Respondent deemed that the Claimant had given “a tacit consent” to the loan of the player to Club F.

14. In view of the above, the Respondent deemed that no additional amount was payable to the Claimant.

15. Additionally, the Respondent claimed the inapplicability of “a penalty and default interest of 6% p.a.” over the amount of USD 600,000 for being “excessive and as such” an “incontestable violation of the principle of proportionality as already established by the well-established jurisprudence issued by the decision-making bodies of FIFA”.

16. Finally, the Respondent contested the Claimant’s claim to be reimbursed of the sum of USD 30,000 for its legal expenses in accordance with “Art. 18, par. 4 of the FIFA Procedural Rules”.

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 Procedural Rules are applicable to the matter at hand. In view of the fact that the present matter was submitted to FIFA on 21 August 2017, the Single Judge of the Players’ Status Committee concluded that the 2017 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 present matter (cf. art. 21 of the Procedural Rules).

2. Furthermore, 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, 2016 and 2018 editions of the Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the claim was lodged with FIFA on 21 August 2017. In view of the foregoing, the Single Judge concluded that the 2016 edition of the FIFA Regulations for the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance.

3. Subsequently, 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 4 as well as art. 22 lit. f) of the Regulations 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 present matter, the Single Judge started by acknowledging the facts of the dispute, the arguments of the parties as well as the documentation contained in the file.

5. In doing so, the Single Judge noted that, on 17 October 2016, the Claimant and the Respondent had concluded a transfer agreement which provided for the Claimant to receive from the Respondent USD 1,800,000 as transfer fee as follows: USD 600,000 on 25 January 2017, USD 600,000 on 25 January 2018 and USD 600,000 on 25 July 2018. Furthermore, the Single Judge remarked that, in accordance with art. 3.3. of the agreement in case of non-payment of the relevant amounts, the Respondent had to additionally pay to the Claimant, as penalty, 5% of the due amount, plus 6% interests p.a..

6. In addition, the Single Judge observed that, in accordance with art. 1.3. of the agreement, the Respondent had to inform the Claimant in writing, of any offer related to a potential subsequent transfer of the player within 3 days of having received the relevant offer (cf. art. 1.3.1. of the agreement) whereas the Claimant had then 2 days to reply. In the same context, the Single Judge also realized that, in case the Respondent failed to comply with the aforementioned prerequisites of art. 1.3.1. and the player would be transferred to a third club without the Claimant having had the possibility to make use of its relevant right, an amount corresponding to 80% of the subsequent transfer would be due to the Claimant by the Respondent as penalty.

7. In continuation, the Single Judge took note that, in its claim to FIFA, the Claimant had inter alia requested from the Respondent the payment of the entire transfer fee due as per the transfer agreement, i.e. the amount of USD 1,800,000 as the entire transfer fee, USD 120,000 allegedly corresponding to 80% of the amount paid to the Respondent by Club F for the loan of the player, as per art. 1.3.1 of the agreement, as well as the application of the penalties included in art. 3.3. of the agreement.

8. Equally, the Single Judge observed that, for its part, the Respondent, although not denying that it had not yet proceeded with the payment of the relevant transfer fee, had rejected the claim of the Claimant arguing inter alia that the transfer agreement did not include an acceleration clause. The Single Judge also took note of the fact that the Respondent contested the applicability of the penalties included in art. 3.3. of the agreement for being excessive as well as an alleged breach of art. 1.3.1. of the agreement.

9. With the aforementioned considerations in mind, the Single Judge was eager to emphasize that the parties to the dispute had concluded a contract which clearly stipulated the obligation of the Respondent to pay the total amount of USD 1,800,000 to the Claimant as transfer fee and that the Respondent had not contested having so far failed to proceed with the payment of the amount in question.

10. Furthermore, the Single Judge also recalled that the transfer fee was to be paid in three equal instalments of USD 600,000 each on 25 January 2017, on 25 January 2018 and on 27 July 2018 respectively and that, so far until the date of the present decision, only the first two instalments payable on 25 January 2017 and on 25 January 2018 respectively, had become due. Similarly, the Single Judge pointed out that the transfer agreement did not include an acceleration clause, stipulating the immediate maturity of the entire transfer fee in case of non- or late payment of one or more instalments by the Respondent.

11. Hence, considering the content of the transfer agreement as well as taking into account the legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith and bearing in mind that it is undisputed that the first two instalments in the amount of USD 600,000 each due as per the transfer agreement have not yet been paid by the Respondent to the Claimant, the Single Judge resolved that the Respondent, in order to fulfil its obligations established in the document in question has to pay to the Claimant the outstanding amount of USD 1,200,000.

12. Having established the above, the Single Judge went on to examine the second issue raised in the present matter by the Claimant, i.e. the Claimant’s request to be awarded interest in the amount of 6% p.a. on the outstanding sum of USD 1,200,000 as well as a 5% penalty over the transfer fee, both in accordance with art. 3.3. of the transfer agreement.

13. In this respect, the Single Judge acknowledged the arguments of both parties with regard to the application of art. 3.3. of the agreement and, after analysing the provision in question, came to the conclusion that, in accordance with his well-established jurisprudence, an interest rate of 6% p.a. was not excessive and could not be considered disproportionate. Thus, it was to be applied on the outstanding transfer fee.

14. Equally, the Single Judge, referring once again to his well-established jurisprudence, pointed out that also an additional penalty equalling to 5% of the relevant outstanding sum was also not to be considered excessive nor disproportionate.

15. Hence, from the Single Judge’s point of view, the penalty clause included in art. 3.3. of the transfer agreement is also valid and binding between the parties and can in casu be applied.

16. In view of the aforementioned and considering the content of art. 3.3. of the transfer agreement, recalling once again the legal principle of pacta sunt servanda as well as taking into account that it had been established that the Respondent had failed to pay the first and second instalments due to date, the Single Judge decided that the Respondent, in order to fulfil its obligations established in the transfer agreement, has to pay to the Claimant an additional sum of USD 60,000 as penalty, corresponding to 5% of the outstanding amount of USD 1,200,000 as well as 6% interest p.a. over the sum of USD 1,200,000. In accordance with his well-established jurisprudence and taking into account the specific request of the Claimant, the Single Judge additionally decided that the mentioned interest of 6% p.a. over the due sum of USD 1,200,000 had to be paid as of the day after each instalment had become due, i.e. 6% p.a. over the amount of USD 600,000 as of 26 January 2017 and 6% p.a. over the amount of USD 600,000 as of 26 January 2018.

17. In continuation and with regard to the third part of the Claimant’s claim, i.e. his request relative to the payment of USD 120,000 as penalty in accordance with the third paragraph of art. 1.3.1. of the transfer agreement, allegedly corresponding to 80% of the loan fee allegedly received by the Respondent from Club F, the Single Judge recalled that in accordance with an email dated 11 July 2017 provided to FIFA by the Respondent, the latter had indeed informed the Claimant that an offer had been received from Club F for the loan of the player. In this context, the Single Judge pointed out that the email in question was dated prior to the loan of the player to Club F and that the Claimant had been given two days to reply as provided for in art. 1.3.1. of the transfer agreement. The Claimant, however, appears to have remained silent. As a result, the Single Judge came to the conclusion that the Respondent did not seem to have breached art. 1.3.1. of the agreement and that therefore, the third part of the Claimant’s claim had to be rejected.

18. After having decided over the aforementioned, the Single Judge turned its attention to the fourth request of the Claimant, i.e. the payment of the additional amount of USD 300,000 as compensation “for the damages incurred for not having had the possibility to object to the transfer of the player to Club F in accordance with art. 1.3.1. of the agreement”, and ruled that because no breach of art. 1.3.1. of the transfer agreement could be established, also this fourth part of the Claimant’s claim had to be rejected.

19. Finally and as to the request of the Claimant to be awarded USD 30,000 for the legal costs incurred, the Single Judge referred to art. 18 par. 4 of the Procedural Rules and stressed that no procedural compensation shall be awarded in proceedings of the Players’ Status Committee and the DRC. As a result, the Single Judge established that this last request of the Claimant has to be rejected for lack of legal basis.

20. In conclusion, the Single Judge decided that the claim of the Claimant is partially accepted and that the Respondent has to pay to the Claimant the outstanding amount of USD 1,200,000, plus 6% interest p.a. over the amount of USD 600,000 from 26 January 2017 until the date of effective payment and over the amount of USD 600,000 from 26 January 2018 until the date of effective payment, as well as the sum of USD 60,000 as penalty.

21. 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 the 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).

22. In this respect, the Single Judge reiterated that the claim of the Claimant is only partially accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Claimant and the Respondent both have to bear the costs of the current proceedings in front of FIFA.

23. 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 above CHF 200,001, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

24. In conclusion, and considering that the case at hand was adjudicated by the Single Judge and not by the Players’ Status Committee in corpore and that it did not pose any particular legal or factual difficulty, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000.

25. Consequently, the Claimant has to pay the amount of CHF 5,000 and the Respondent the amount of CHF 15,000 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 the present decision, the amount of USD 1,200,000 plus 6% interest p.a. as follows:

a) 6% p.a. over the amount of USD 600,000 from 26 January 2017 until the date of effective payment;

b) 6% p.a. over the amount of USD 600,000 from 26 January 2018 until the date of effective payment.

3. If the aforementioned sum, plus interest as established above, 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. The Respondent, Club C, has to pay to the Claimant, Club A, within 30 days as from the date of notification of the present decision, the amount of USD 60,000.

5. If the aforementioned sum, as established in point 4. above, is not paid within the aforementioned deadline, interest of 5% p.a. will fall due as of expiry of the stipulated time limit and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

6. Any other claims lodged by the Claimant, Club A, are rejected.

7. The final costs of the proceedings in the amount of CHF 20,000 are to be paid by both parties, within 30 days as from the date of notification of the present decision, as follows:

7.1. The amount of CHF 5,000 has to be paid by the Claimant, Club A. Considering that the latter already paid an advance of costs in the amount of CHF 4,980 at the start of the present proceedings, the Claimant, Club A, has to pay the remaining amount of CHF 20.

7.2. The amount of CHF 15,000 has to be paid by the Respondent, Club C.

7.3. Both amounts have to be paid 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

8. The Claimant, Club A, is directed to inform the Respondent, Club C, immediately and directly of the account number to which the remittances under points 2., and 4. 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 article 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

Player E, Country B

(Club A, Country B / Club C, Country D)

11

For the Single Judge of the

Players’ Status Committee

Omar Ongaro

Football Regulatory Director

Encl. CAS Directives