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 17 April 2018

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 17 April 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 24 July 2014, the club of Country B, Club A (hereinafter: the Claimant) and the club of Country D, Club C (hereinafter: the Respondent) concluded a transfer agreement (hereinafter: the agreement) by means of which the Claimant would permanently transfer the Player E (hereinafter: the player) to the Respondent for a transfer fee in the amount of EUR 3,500,000, payable in 6 instalments as follows (cf. clause 3 of the agreement):

- EUR 500,000 due on 25 September 2014;

- EUR 1,000,000 due on 25 March 2015;

- EUR 500,000 due on 25 September 2015;

- EUR 500,000 due on 25 March 2016;

- EUR 500,000 due 25 September 2016;

- EUR 500,000 due on 25 March 2017.

2. According to clause 4 of the agreement, “[i]n case of delay of [the Respondent] in the payment of any amount due under clause 3 of this [agreement] for a period of over 10 (working) days from each of the due dates above, such amount shall be subject to interests on late payment at a rate of 0.2% (in words: zero point two percent) per day from and including the date such payment is due through and including the date upon which [the Respondent] has made bank wire transfer into the account designated by the [the Claimant]”.

3. Furthermore, article 7 of the agreement stated inter alia that, “[the Claimant] obliges to deliver to [the Respondent] the International Transfer Certificate of the Football Player until 30 July 2014 on a permanent basis”.

4. Finally, in accordance with clause 11 of the agreement, “[the Respondent] will be responsible for the payment of half of the solidarity contribution in relation to this transfer in accordance with FIFA Regulations to other clubs. [The Respondent] is, therefore, allowed to retain (pro rata) 2,5% from each once of the instalments set out in clause 3 above”.

5. On 26 April 2017, the Claimant lodged a claim against the Respondent in front of FIFA, alleging that the latter had breached the agreement and did not comply with its contractual duties.

6. In this respect, the Claimant alleged that the Respondent failed to pay the fifth and the sixth instalments of the transfer fee.

7. The Claimant further explained that on 28 February 2017, the Single Judge of the Players’ Status Committee passed a decision in the case Ref. no XXX by means of which the Claimant’s claim lodged against the Respondent on 24 November 2014 was partially accepted and according to which the Respondent had to pay to the Claimant, interest at a rate of 5% per year

- over the amount of EUR 487,500 as from 9 October 2014 until 3 March 2015;

- over the amount of EUR 487,500 as from 9 October 2015 until 24 November 2015; and

- the amount of EUR 487,500 as well as interest at a rate of 5% p.a. on the said amount as from 8 April 2016 until the date of effective payment.

8. Equally, the Claimant explained that, by means of two letters dated 26 September 2016 and 29 March 2017, it reminded the Respondent of the allegedly residual fifth and sixth outstanding instalments to be paid.

9. Consequently, the Claimant requested from the Respondent the amount of EUR 500,000 corresponding to the fifth instalment and the amount of EUR 500,000 corresponding to the sixth instalment of the transfer fee, plus “interests on late payment accordingly to the contract conditions until the dates of effective payments” as well as the reimbursement of the advance of costs and all proceeding costs to be borne by the latter.

10. In its reply to the claim lodged against it, the Respondent first acknowledged that the parties concluded the agreement, however, rejected all the allegations of the Claimant.

11. In this respect, the Respondent alleged that “it” “never entered into any employment contract with the Player nor registered the latter as one of its players before the Football Association of Country B and, obviously, never played any match (official or not) whatsoever. As such, [“the Respondent”] had no right whatsoever over the Player and, apparently, [“the Claimant"] was victim of a fraud. (…)

Indeed, the attempt of [the Claimant] to receive the referenced transfer fee from [the Respondent] without having any right whatsoever over the Player is an unjust enrichment”.

12. In continuation, the Respondent contested the rate of the default interest for late payment and claimed its entitlement to discount 2.5% from “the alleged overdue amount demanded by the Claimant in the ongoing dispute, as well as discount from the percentage regarding the fifth and the sixth instalments per se, based upon clause 13 of the Transfer Agreement” as solidarity contribution according to the agreement, thus the total amount of EUR 87,500. In this respect, the Respondent alleged that, “[it] mistakenly paid to the Claimant the first three instalments due as fee for the permanent transfer of the Player without having retained the aforementioned percentage due as solidarity contribution. Finally, it is imperative to clarify that the Claimant confirmed in its statement of claim that the Respondent has complied to date with the payment of the first 3 (three) instalments, that is to say, a total amount of EUR 2,000,000 without, however, having discounted the percentage due as solidarity contribution”.

13. In its replica, the Claimant maintained its previous arguments and further explained that, due to the continuous breaching of the transfer agreement from the part of the Respondent in terms of timely execution of payments, and based on the facts of new breaching, it had no other choice than to lodge a second claim against the latter in front of FIFA, disclosing new breaches of the transfer agreement from the part of the Respondent that had occurred after the date of submission of the first claim.

14. It its duplica, the Respondent reiterated its position and maintained all its previous arguments.

15. The Respondent further alleged that the two reminders dated 26 September 2016 and 29 March 2017 addressed to it by the Claimant failed to fulfil the conditions of article 12bis par. 2 and 3 of the Regulations on the Status and Transfer of Players. In this respect, the Respondent alleged that when the reminders were sent to it, the payment of the fifth and sixth instalments of the transfer fee which allegedly fell due on 25 September 2016 and 25 March 2017, were not delayed for more than 30 days.

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 26 April 2017, the Single Judge concluded that the 2017 edition of the Procedural Rules is applicable in the matter at hand (cf. art. 21 of the 2017 and 2018 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 26 April 2017 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 2016 and 2018 editions 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 2012 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 24 July 2014, the Respondent and the Claimant concluded an agreement in relation with the transfer of the player from the latter to the Respondent, by means of which they agreed on the payment of the total transfer fee in the amount of EUR 3,500,000 in 6 instalments as follows :

- EUR 500,000 due on 25 September 2014;

- EUR 1,000,000 due on 25 March 2015;

- EUR 500,000 due on 25 September 2015;

- EUR 500,000 due on 25 March 2016;

- EUR 500,000 due 25 September 2016;

- EUR 500,000 due on 25 March 2017.

6. In continuation, the Single Judge focussed his attention to the content of article 4 of the agreement which stipulated that, in case of delay by the Respondent in the payment of any amount due under clause 3 of the agreement “for a period of over 10 (working) days from each of the due dates, such amount shall be subject to interests on late payment at a rate of 0.2% per day from and including the date such payment is due through and including the date upon which [the Respondent] has made bank wire transfer into the account designated by [the Claimant]”.

7. On the one hand, the Single Judge noted that the Claimant maintained being entitled to receive from the Respondent the payment of the fifth and the sixth instalments of the transfer fee, which respectively fell due on 25 September 2016 and 25 March 2017. In view of the above, the Claimant requested from the Respondent the amount of EUR 500,000 corresponding to the fifth instalment and the amount of EUR 500,000 corresponding to the sixth instalment of the transfer fee in accordance with the agreement, plus “interests on late payment accordingly to the contract conditions until the dates of effective payments” as well as the reimbursement of the advance of costs and all proceeding costs to be borne by the latter.

8. Furthermore, the Single Judge took into account that on 28 February 2017, he already passed a decision in the case Ref. no XXX by means of which the Claimant’s claim lodged against the Respondent on 24 November 2014 was partially accepted and according to which the Respondent had to pay to the Claimant, interest at a rate of 5% per year

- over the amount of EUR 487,500 as from 9 October 2014 until 3 March 2015;

- over the amount of EUR 487,500 as from 9 October 2015 until 24 November 2015; and

the amount of EUR 487,500 corresponding to the fourth instalment of the transfer fee as well as interest at a rate of 5% p.a. on the said amount as from 8 April 2016 until the date of effective payment.

9. On the other hand, for the purpose of its defence, the Single Judge observed that, in its reply, the Respondent contested all the allegations of the Claimant. In this respect, the Single Judge understood that the Respondent alleged that the Claimant had never entered into an employment agreement with the player and never registered him at the Football Association of Country B and, consequently, the Respondent was victim of a fraud as the Claimant had no rights over the player. Furthermore, the Respondent challenged the Claimant’s entitlement to a contractual default interest of 0.2% per calendar day for late payment as being excessive and further claimed its entitlement to discount 2.5% from each instalment of the transfer fee as solidarity contribution according to the agreement, thus the total amount of EUR 87,500.

10. In addition, the Respondent was of the opinion that the two reminders dated 26 September 2016 and 29 March 2017 addressed to it by the Claimant failed to fulfil the conditions of article 12bis par. 2 and 3 of the Regulations on the Status and Transfer of Players. In this respect, the Respondent alleged that when the reminders were sent to it, the payment of the fifth and sixth instalments of the transfer fee which allegedly fell due on 25 September 2016 and 25 March 2017, were not delayed for more than 30 days.

11. Having duly examined the argumentation and documentation put forward by both parties and turning his attention to the Respondent’s argument that the Claimant had no rights over the player and was therefore not in a position to transfer him to the Respondent, the Single Judge observed that the Respondent solely relied on a statement of the club of Country B, Club F, in support of its position.

12. In addition, with reference to art. 6 par. 3 of Annexe 3 of the Regulations, the Single Judge took note that according to the transfer instruction in the Transfer Matching System, as well as the International Transfer Certificate issued by the Football Association of Country B, the player was indeed a former player of the Claimant.

13. Consequently, with reference to the principle of the burden of proof laid down in art. 12 par. 3 of the Procedural Rules, the Single Judge held that he was not convinced by the evidence produced by the Respondent and decided to reject its argument in this regard.

14. In continuation, the Single Judge referred to the Claimant’s request amounting to EUR 1,000,000 corresponding to the fifth and sixth instalments in accordance with the agreement, the Single Judge emphasised that, it was undisputed that such amount had not been paid by the Respondent. Equally, the Single Judge recalled the provision as set forth in article 11 of the agreement, which provided that the Respondent was entitled to retain 2.5% from each instalment of the transfer fee.

15. 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 above-mentioned provisions and the fact that the conditions for the payment of the fifth and sixth instalments of the transfer fee and the deduction of half of the solidarity contribution had in casu both been met, the Single Judge decided that the Respondent had breached its contractual obligations towards the Claimant once again and should, as a consequence, be liable to pay the outstanding amount of EUR 975,000.

16. In continuation and with regard to the Claimant’s request for interest at a rate of 0.2% per calendar day, corresponding to interest at a rate of 73% per year, 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 4 of the agreement 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 said amount and instalments as of the relevant due dates until the date of effective payment.

17. With these considerations in mind, the Single Judge referred to the content of article 4 of the transfer agreement which expressly provided for an interest rate in case of any delayed payment after a grace period of ten days. Recalling the considerations regarding excessive interest rate as outlined above, the Single Judge decided to grant interest at a rate of 5% per year on the delayed payments taking into account a grace period of 10 days.

18. 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. as follows:

- 5% p.a. over the amount of EUR 487,500 as from 8 October 2016 until the date of effective payment;

- 5% p.a. over the amount of EUR 487,500 as from 7 April 2017 until the date of effective payment.

19. In addition, with regard to the Claimant’s request related to the claimed legal costs, the Single Judge referred to art. 18 par. 4 of the Procedural Rules as well as to its longstanding and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Players’ Status Committee. Consequently, the Single Judge decided to reject the Claimant’s request relating to legal costs.

20. 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 975,000 as outstanding transfer fee as well as interest at a rate of 5% p.a. over the amounts respectively of EUR 487,500 as from 8 October 2016 until the date of effective payment and, EUR 487,500 as from 7 April 2017 until the date of effective payment and that any further claims lodged by the Claimant are rejected.

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 and 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 and are normally to be paid by the unsuccessful party.

22. In respect of the above, and taking into account that the Claimant’s claim was partially accepted, the Single Judge concluded that both the Claimant as well as the Respondent have to bear a part of the costs of the current proceedings before 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 over 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 the particularities of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000. Furthermore, and in line with his aforementioned considerations and taking into account the degree of success, the Single Judge decided that the amount of CHF 5,000 has to be paid by the Claimant and the amount of CHF 15,000 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 EUR 975,000 as outstanding transfer fee, plus interest as follows:

- 5% p.a. over the amount of EUR 487,500 as from 8 October 2016 until the date of effective payment;

- 5% p.a. over the amount of EUR 487,500 as from 7 April 2017 until the date of effective payment.

3. If the aforementioned sum, plus interest (point 2) 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 within 30 days as from the date of notification of this decision, as follows:

5.1 The amount of CHF 5,000 has to be paid by the Claimant, Club A, to FIFA. Given that the Claimant, Club A, has already paid the amount of CHF 5,000 as advance of costs at the start of the present proceedings, the latter is exempted to pay the cited amount.

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

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 point 2 above is to be made and to notify the Single Judge of 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).

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