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 29 August 2017

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 29 August 2017,

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 17 January 2015, the club of Country B, Club A (hereinafter: “the Clamant”), 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 the Claimant to the Respondent.

2. Clause 2.1 of the contract established that the Respondent should pay to the Claimant the total net amount of EUR 4,030,000 as follows:

 EUR 2,000,000 until 2 January 2015 and

 29 monthly and consecutive installments of EUR 70,000 each, being the first one due on 18 February 2015 and the last one on 18 July 2017.

3. Clause 2.4 of the contract established: “In case Club C delays the payment of any of the instalments, as established in clause 2.1, it shall be added to the amount(s) of the overdue installment(s) a fine of 5% over the amount of each defaulted installment”.

4. Clause 2.5 of the contract established: “In the case of a delay of over 3 (three) months in the payment of any installment or the delay in the payment of 3 installments, all future installments can be considered automatically enforceable, at the exclusive discretion of Club A, and, consequently, Club A shall be entitled to immediately collect all remaining debt”.

5. By email dated 5 November 2015, the Claimant allegedly put the Respondent in default of payment of four instalments (USD 280,000).

6. On 20 November 2015, the Claimant lodged a claim in front of FIFA against the Respondent requesting the payment of the following amounts:

 EUR 1,750,000 (cf. points 2 and 4 above) plus a 5% annual interest as from the date of claim and

 EUR 17,500 as 5% fine over the amount of EUR 350,000 (cf. point 3 above).

7. In particular, the Claimant alleged that the Respondent paid the first five installments (February, March, April, May and June 2015) for a total amount of EUR 350,000, but as from July 2015 it did not make any further payment in favor of the Claimant.

8. In view of the above, the Claimant deemed that based on clause 2.5 of the contract, the remaining outstanding amount, i.e. EUR 1,750,000 became due as well as the fine agreed in clause 2.4 of the contract.

9. In reply to the claim, the Respondent confirmed having made the following payments to the Claimant:

(1) EUR 70,000 on 4 August 2015 related to the instalment due in July 2015;

(2) EUR 70,000 on 19 August 2015 related to the instalment due in August 2015;

(3) EUR 70,000 on 24 November 2015 related to the instalment due in September 2015;

(4) EUR 70,000 on 4 February 2016 related to the instalment due in October 2015;

(5) EUR 70,000 on 3 March 2016 related to the instalment due in November 2015.

10. In particular, the Respondent argued that taking into account the aforementioned payments, the application of clause 2.5 of the contract requested by the Claimant is baseless and the FIFA Players´ Status Committee shall dismiss in full the anticipation of the upcoming instalments due as part of the transfer fee.

11. In its replica, the Claimant stated having received the payments indicated by the Respondent but contested the allocation presented by the latter of each of those bank transfers. In this regard, the Claimant enclosed a letter dated 26 July 2016 from its CEO listing all the payments received from the Respondent and their respective allocation, i.e.:

Amount paid

Date of payment

Related to the instalment due on:

EUR 70,000

23.03.2015

18 February 2015

EUR 70,000

13.05.2015

18 March 2015

EUR 70,000

19.06.2015

18 April 2015

EUR 70,000

04.08.2015

18 May 2015 (cf. point 9 (1) above)

EUR 70,000

20.08.2015

18 June 1015(cf. point 9 (2) above)

EUR 70,000

27.11.2015

18 July 2015(cf. point 9 (3) above)

EUR 70,000

05.02.2016

18 August 2015(cf. point 9 (4) above)

EUR 70,000

03.03.2016

18 September 2015(cf. point 9 (5) above)

EUR 420,000

29.03.2016

18 October 2016

18 November 2016

18 December 2015

18 January 2016

18 February 2016

18 March 2016

12. The Claimant added that none of the payments were concluded by the Respondent on time and in some cases, such as August and September 2015, the payments were made with six months of delay.

13. The Respondent presented its final position and, inter alia, stated “… assuming but not admitting, that the Respondent failed to pay the Claimant in the due dates, it is undisputed that the latter never complained about it and, therefore, accepted performance without any reservation whatsoever”.

14. On 11 July 2017, by means of an unsolicited letter stating that the Respondent did not make any other payment as of the month of March 2016, the Claimant amended its claim. Therefore, the Claimant alleged that the Respondent paid 14 out of the 29 instalments of EUR 70,000 each one (cf. clause 2.1 of the contract) and, as consequence, the total amount of EUR 1,050,000 related to the 15 instalments due from 18 April 2016 until 18 June 2017 are still pending of payment by the Respondent.

15. In this regard, the Claimant enclosed a letter from the Respondent dated 11 July 2017 recognizing to owe the sum of EUR 1,050,000 to them and offering a new payment plan, which the Claimant did not accept.

16. In sum, the Claimant requested the following amounts:

(1) EUR 1,050,000 as outstanding transfer amount;

(2) EUR 101,500 as fine of 5% over the 29 instalments (EUR 2,030,000) plus

(3) 5% annual interest according to Swiss law, calculated from the relevant due date of any of the instalments until the date of effective payment.

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 20 November 2015. 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 2017 edition of the Regulations on the Status and Transfer of Players, and considering that the present claim was lodged on 20 November 2015, 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 17 January 2015 the Claimant and the Respondent concluded the contract which established a transfer compensation amounting to EUR 4,030,000 payable in several instalments and, in addition, it contained a penalty amounting to 5% over the “amount of each defaulted instalment”.

6. At this stage, the Single Judge remarked that it remained undisputed that the Respondent paid to the Claimant the first instalment in accordance with the contract amounting to EUR 2,000,000.

7. Moreover, the Single Judge pointed out that, in accordance with clause 2.1 of the contract, the Respondent assumed the responsibility to pay to the Claimant the remaining transfer compensation amounting to EUR 2,030,000 in 29 equal and subsequent instalments amounting to EUR 70,000 each.

8. In this context, the Single Judge noticed that clause 2.1 of the contract referred to 29 instalments, the first one expiring on 18 February 2015 and the last one on 18 July 2017.

9. In this regard, the Single Judge acknowledged that according to the Claimant´s request, the Respondent paid 14 out of 29 instalments and that the last instalment paid by the latter was the one due on 18 March 2016. As such, the Single Judge noted that the Claimant alleged that the Respondent owe to it the amount of EUR 1,050,000 corresponding to 15 instalments due from 18 April 2016 until 18 June 2017.

10. At this stage, the Single Judge pointed out that it remained undisputed that the Respondent failed to pay to the Claimant the last 15 instalments for a total amount of EUR 1,050,000.

11. Moreover, the Single Judge recalled clause 2.5 of the contract, according to which, after late payment of three instalments, the rest of them would become automatically due. Taking into account the documentary evidence at disposal, the Single Judge concluded that on 19 April 2015 (i.e. day after the date of payment of the third instalment) said clause become applicable and consequently the rest of the instalments contractually agreed due.

12. Therefore, 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 EUR 1,050,000 in accordance with clause 2.1 of the contract.

13. In continuation, the Single Judge acknowledged that the Claimant requested a penalty amounting to 5% over the outstanding amount based on clause 2.4 of the contract and in addition a 5% annual interest over each of the outstanding instalments as from the relevant due date.

14. With regard to the claim for penalty the Single Judge took note that the Claimant requested the amount of EUR 101,500, i.e. 5% of EUR 2,030,000.

15. 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.

16. In this context, the Single Judge underlined that a 5% penalty over the amount of EUR 2,030,000 seems to be a reasonable amount to compensate late payments.

17. In view of the foregoing, the Single Judge was of the opinion that a 5% penalty is neither excessive nor disproportionate.

18. 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

19. In view of the above, the Single Judge decided to grant the aforementioned penalty of 5% over the amount of EUR 2,030,000 outstanding transfer compensation (cf. clause 2.4 of the contract) amounting to EUR 101,500.

20. Lastly, and pursuant to the consideration of point 15 above, the Single Judge rejected the Claimant´s request for 5% annual interest over the outstanding transfer compensation.

21. 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 EUR 1,050,000 as outstanding transfer compensation as well as a penalty amounting to EUR 101,500.

22. 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).

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. On that basis, the amount in dispute to be taken into consideration in the present proceedings is EUR 1,767,500. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

24. 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 15,000 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 EUR 1,050,000 as transfer compensation.

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 EUR 101,500 as fine.

4. If the aforementioned amounts are 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.

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

6. The final costs of the proceedings in the amount of CHF 15,000 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 10,000 has to be paid by the Respondent, directly to FIFA to the following bank account with reference to case 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