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 28 February 2017

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 28 February 2017,

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 23 July 2015, 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 agreement1) regarding the transfer of the player, Player E (hereinafter: the player), from the Claimant to the Respondent. The aforesaid transfer agreement stipulated, inter alia, that:

“Article 2 compensation fee

2.1 [The Respondent] will pay right now to [the Claimant] no Compensation fee.

2.2 Conditional compensation fee

In the case of a future transfer of the player to another club the parties will reduce the amount acquired by the amount of the transfer of €100,000 and so the calculated amount will be share between the parties in respect of 60% for [the Respondent] 40% for [the Claimant] but not more than €500.000.

[The Respondent] is obliged to transmit to [the Claimant] all necessary documents regarding the transfer agreement. In such case, payment will be made by [the Respondent] to [the Claimant] within 10 working days after signing the transfer agreement by an invoice.

2.3 Penalty fee

In case (any of) the payment(s) mentioned in this Agreement is (are) not paid before the above-mentioned dates, an interest rate of 2% per month will be applicable as from the date the amount(s) became due.

Article 3 Solidarity contribution

The mentioned amount(s) in article 2 of this Agreement is (are) exclusive the solidarity contribution as mentioned in the FIFA Regulations on the Status and Transfer of Players (hereinafter referred to as “FIFA Regulations”). According to article 1 of Annex 5 of the FIFA Regulations, 5% of any compensation paid to the former club should be taken by [the Respondent] and [the Respondent] will be fully responsible for the distribution and payment of the solidarity contribution to clubs that are entitled to solidarity contribution”.

2. According to the information provided by the Claimant, on 29 August 2016, the Respondent and the Club of Country F, Club G, concluded a transfer agreement (hereinafter: the agreement2) for the transfer of the player from the Respondent to Club G. The aforesaid transfer agreement stipulated, inter alia, that:

“Article 3 – Payment of transfer compensation

A) Transfer Fee

[Club G] agrees to pay to [the Respondent] by way of transfer compensation for the Player, a sum of €1,445,000 to be paid as follows:

- €1,000,000 after receipt of the International Transfer Certificate delivered by the Football Association of Country D to the Football Association of Country F;

- €200,000 on October 30, 2016 after correct invoice by [the Respondent];

- €145,000 on November 30, 2016 after correct invoice by [the Respondent];

- €100,000 on December 30, 2016 after correct invoice by [the Respondent]”.

3. On 10 November 2016, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract indicating that the Respondent had failed to pay the sell-on fee in the amount of EUR 500,000 as agreed upon in article 2.2 of the agreement1. In view of the foregoing, the Claimant requested the payment of EUR 500,000 plus 2% interest per month, as stipulated in article 2.3 of the agreement1, as of 12 October 2016.

4. In support of its claim, the Claimant explained that it calculated the outstanding amount by deducting EUR 100,000 from the transfer fee in the amount of EUR 1,445,000, as agreed between the Respondent and Club G in the agreement2, corresponding to EUR 1,345,000. Moreover, the Claimant stressed that before calculating 40% of EUR 1,345,000, it deducted 5% as solidarity contribution, although it was not agreed upon in the agreement1.

5. The Claimant further pointed out that the outstanding amount with the above mentioned deductions amounted to EUR 1,272,750, of which 40% corresponded to EUR 509,100. In this respect, the Claimant highlighted that, as stipulated in article 2.2 of the agreement1, “the parties will reduce the amount acquired by the amount of the transfer of €100,000 and so the calculated amount will be share between the parties in respect of 60% for [the Respondent] 40% for [the Claimant] but not more than €500.000”, it requested only the amount of EUR 500,000 from the Respondent.

6. In its reply, the Respondent first argued that it tried to solve the matter amicably without any success.

7. Moreover, the Respondent stressed that it sent a list to the Claimant with its calculation and deductions it had to make with respect to the transfer fee of EUR 1,445,000, in order to determine the correct amount from which the 40% should be calculated. In this respect, the Respondent provided a list of the following deductions of the transfer fee of EUR 1,445,000:

- EUR 100,000 as contractually agreed upon with the Claimant in article 2.2 of the agreement1;

- EUR 72,250 corresponding to 5% solidarity contribution;

- EUR 29,100 corresponding to a payment due to the Regional Football Association;

- EUR 21,825 corresponding to a payment due to the Football Federation of Country D;

- EUR 242,445 corresponding to a payment out of a contract with Company K;

- EUR 102,976 corresponding to a payment due to the player;

- EUR 71,155 corresponding to a payment due to the player;

- EUR 34,152 corresponding to a payment due to the manager.

8. In continuation, the Respondent argued that the amount after the above-mentioned deductions corresponds to EUR 692,447, of which 40% corresponds to EUR 276,978.80, which should be the correctly calculated amount due to the Claimant.

9. However, the Respondent pointed out that, due to its particular financial situation, it wanted to transfer the player already in an earlier occasion to Club J for a transfer fee of EUR 800,000. Due to a loan from the Company of Country D, Company K, the Respondent explained, that it could keep the player and transfer him at a later stage to Club G for a higher compensation.

10. Consequently, the Respondent pointed out that the transfer compensation, on the basis of which the 40% sell-on fee, stipulated in article 2.2 of the agreement1, should be calculated, should be EUR 800,000, as the Respondent would have been forced to transfer the player for this amount if it would not have received the loan from Company K. Therefore, according to the Respondent, the maximum amount payable to the Claimant should be EUR 218,000.

***

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) was applicable to the matter at hand. In this respect, considering that the present matter was submitted to FIFA on 10 November 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 2015 and 2017 editions 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 10 November 2016 and, therefore, concluded that the 2016 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 paras 1 and 2 of the Procedural Rules in connection with art. 23 paras 1 and 4 as well as art. 22 lit. f) of the 2016 edition 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 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. In particular, the Single Judge recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, 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).

5. In doing so and to begin with, the Single Judge acknowledged that on 23 July 2015, the Claimant and the Respondent concluded the agreement1 in relation to the transfer of the player, by means of which in case of a future transfer of the latter to another club, they “will reduce the amount acquired by the amount of the transfer of €100,000 and so the calculated amount will be share between the parties in respect of 60% for [the Respondent] 40% for [the Claimant] but not more than €500.000”, which payment should be made “by the Respondent to the Claimant within 10 working days after signing the transfer agreement by an invoice”.

6. In continuation, the Single Judge focussed his attention to the content of article 2.3 of the agreement1 which stipulated inter alia that, "[i]n case (any of) the payment(s) mentioned in this Agreement [i.e. the agreement1] is (are) not paid before the above-mentioned dates, an interest rate of 2% per month will be applicable as from the date the amount(s) became due”.

7. Subsequently, the Single Judge noted that on 29 August 2016 and according to the information provided by the Claimant as well as the information contained in the Transfer Matching System (TMS), the Respondent and Club G concluded the transfer agreement2 in relation with the transfer of the player from the Respondent to Club G, by means of which the Respondent was entitled to receive from Club G the amount of EUR 1,445,000 as transfer fee.

8. Having established the above, the Single Judge took note that the Claimant maintained that the Respondent failed to pay the sell-on fee in the amount of EUR 500,000 as contractually agreed upon by the parties in the agreement1 (article 2.2). In support of its claim, the Claimant further explained that after all deductions operated in accordance with article 2.2 of the agreement1, the outstanding amount remained EUR 1,272,740, of which 40% exceeded the amount of EUR 500,000. Consequently, the Claimant requested from the Respondent the amount of EUR 500,000, plus interest at a rate of 2% per month as from 12 October 2016 according to articles 2.2 and 2.3 of the agreement1.

9. Equally, the Single Judge observed that, in its reply, the Respondent challenged the Claimant’s entitlement to the amount of EUR 500,000, merely arguing that several payments allegedly made should be deducted from the transfer fee agreed upon with Club G and that the maximum amount due to the Claimant would be EUR 218,000.

10. At this stage, the Single Judge referred to the principle of the burden of proof explicitly stipulated in 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.

11. In doing so, the Single Judge thoroughly analyzed the documents on file and, in particular, the contents of the documentation submitted by the Respondent. In this regard, the Single Judge deemed that in casu the Respondent did not provide any conclusive evidence in order to establish that the alleged payments claimed by the Respondent should be deducted from the transfer fee paid to Club G.

12. As a result, considering the legal principle of burden of proof as well as the argumentation presented by the Respondent, the Single Judge decided to reject the Respondent’s allegations in full.

13. In continuation, turning his attention to the Claimant’s request amounting to EUR 500,000 corresponding to the contractually agreed sell-on fee establishing a maximum amount, the Single Judge observed that, as described above (point. II.8), the Claimant’s request appears to be in line with the calculation prescribed in article 2.2 of the agreement1.

14. In view of the foregoing, the Single Judge decided to accept the Claimant’s allegations and held that the Respondent is liable to pay the amount of EUR 500,000 as sell-on fee in accordance with article 2.2 of the agreement1.

15. In continuation and with regard to the Claimant’s request for interest at a rate of 2% per month, corresponding to a rate of 24% per annum, the Single Judge highlighted that such contractual interest is to be considered as manifestly disproportionate and excessive, and as such, cannot be enforced. In view of the foregoing, the Single Judge held that the contractual rate of article 2.3 of the agreement1 should be disregarded and that, as an alternative, taking into account the longstanding practice of the Players’ Status Committee, the Single Judge concluded that the Respondent has to pay 5% default interest p.a. on the respective amount as of the relevant due date until the date of effective payment.

16. 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 500,000, plus interest at a rate of 5% p.a. on the said amount as from 12 October 2016 until the date of effective payment and that any further claims lodged by the Claimant are rejected.

17. 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).

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

19. In conclusion, and considering the specificities of the present matter as well as that the Claimant is the successful party, the Single Judge determined the costs of the current proceedings to the amount of CHF 18,000 to 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, within 30 days as from the date of notification of the present decision, the amount of EUR 500,000 plus 5% interest p.a. on said amount as of 12 October 2016 until the date of effective payment.

3. In the event that the aforementioned amount, plus interest, is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. Any further claim lodged by the Claimant is rejected.

5. The final costs of the proceedings in the amount of CHF 18,000 are to be paid by the Respondent within 30 days as from the date of notification of the present decision as follows:

5.1. The amount of CHF 13,000 has to be paid 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

5.2. The amount of CHF 5,000 has to be paid directly to the Claimant.

6. The Claimant is directed to inform the Respondent directly and immediately of the account number to which the remittances are to be made in accordance with the above points 2. and 5.2. 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

For the Single Judge of the

Players’ Status Committee:

Omar Ongaro

Football Regulatory Director

Encl. CAS Directives