F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2019-2020) – fifa.com – atto non ufficiale – Decision 28 February 2020
Decision of the Single Judge
of the Players’ Status Committee
passed in Zurich, Switzerland, on 28 February 2020,
by
José Luis Andrade (Portugal)
Single Judge of the Players’ Status Committee,
on the claim presented by the club
Atlético Velez Sarsfield, Argentina,
as “Claimant”
against the club
Atlético Mineiro, Brazil,
represented by Mr Breno Costa Ramos Tannuri,
as “Respondent”
regarding a contractual dispute arisen between the parties
related to the player Lucas David Pratto
I. Facts of the case
1. On 22 December 2014, the Claimant and the Respondent signed a transfer agreement over the transfer of the player Lucas David Pratto (hereinafter: the player) from the Claimant to the Respondent.
2. According to art. 3.2. of the transfer agreement, in case of future transfer of the player to a third club for an amount above EUR 3,200,000, the Claimant would be entitled to a ‘capital gain’ (“plusvalía”) of 20% of the transfer fee. The provision further specified that the Claimant would not be entitled to anything, should the transfer occur for an amount equal to or below EUR 3,200,000. Moreover, according to the same provision, in case the Claimant effectively earns the said capital gain for an amount equal to or above EUR 200,000, the Claimant shall remit EUR 200,000 to the Respondent.
3. Art. 4.1 of the transfer agreement stipulates that in the event of delay of up to 90 (ninety) days in the payment of any of said instalments, interest of 3% (three percent) per month pro rata die, on the amount due and not paid on the date initially foreseen, will also be due to the Claimant by the Respondent. In case of delay of more than 90 days in the payment of any of the mentioned instalments, the Respondent will charge the Claimant interest of 5% (five percent) per month, pro rata die, on the amount due and not paid on the date initially foreseen, as well as all the other following instalments will be due in advance.
4. On 9 February 2017, the player was transferred from the Respondent to the Brazilian club, São Paulo Futebol Clube (hereinafter: São Paulo). According to this transfer agreement, São Paulo committed itself to pay the Respondent EUR 6,200,000 for the player. Said amount was payable as follows:
a. EUR 3,200,000 on 15 February 2017;
b. EUR 1,500,000 on 15 April 2017;
c. EUR 1,500,000 on 15 July 2017.
5. By means of a correspondence dated 19 April 2017, the Claimant put the Respondent in default of the payment of EUR 300,000 and informed it that further EUR 100,000 would be due on 15 July 2017.
6. On 8 January 2018, São Paulo and the Argentinean club River Plate signed a transfer agreement over the transfer of the player from São Paulo to River Plate for an amount of EUR 11,500,000.
7. On 11 January 2018, São Paulo and the Respondent signed a second transfer agreement. According to this document, the Respondent was entitled to receive from the Claimant the additional amount of EUR 2,435,000.
8. On 18 October 2017, the Claimant lodged a claim against the Respondent, requesting to be awarded the amount of EUR 400,000 plus interests at a rate of 3% per month in case of late payment within 90 days and 5% per month in case of late payment longer than 90 days as well as sanctions to be imposed on the Respondent.
9. The Claimant pointed out that, notwithstanding the sell-on fee included in the transfer agreement, the Respondent had not proceeded to the payment of 20% of the transfer fee it had received from São Paulo in relation to the subsequent transfer of the player occurred in February 2017.
10. More specifically, the Claimant explained that, in accordance with art. 3.2. of the transfer agreement, nothing was due in relation to the first instalment of 15 February 2017, whereas with regards to the following two instalments, the sell-on fee would operate as follows:
20% of EUR 1,500,000 is equal to EUR 300,000. Consequently, deducting EUR 200,000 as indicated in the relevant provision, the Claimant was entitled to EUR 100,000;
20% of EUR 1,500,000 in full. Therefore, the Claimant was entitled to EUR 300,000 in relation to this instalment.
11. The Respondent, for its part, claimed that it only received the first instalment from São Paulo but not the second and the third.
12. Moreover, according to the Respondent the Claimant’s request for interest had no legal basis as art. 4.1 of the transfer agreement applies to the remittance of the transfer fee of the original transfer of the player from the Claimant to the Respondent. In any case, the Respondent pointed out that the said interest rate would be disproportional, respectively amounting to 36% p.a. (3% per month) and 108% p.a. (9% per month).
13. Consequently, the Respondent asked that the claim be dismissed in full.
14. In its replica, the Claimant added that, on 11 January 2018, a second transfer agreement concerning the player had been concluded between the Respondent and São Paulo for an amount of EUR 2,435,000.
15. The Claimant further recalled that, in relation to the above, had started to exchange correspondence with the Respondent’s in house lawyer, Mr. Ottoni.
16. Consequently, the Claimant amended the original claim, requesting the payment of EUR 887,000 as sell-on fee.
17. In its duplica, the Respondent reiterated that it only received the first instalment from São Paulo but not the second and the third. In this respect, the Respondent argued that the second and third instalments were paid directly to the Brazilian club Gremio.
18. Furthermore, the Respondent explained that it signed the “supplementary agreement” with São Paulo (cf. point 7 above). However, the Respondent clarified that the Claimant was only entitled to receive 20% over the amount “eventually received by the Respondent from a third club for the transfer of the player, which exceed EUR 3,200,000”. According to the Respondent, any financial benefits it is entitled to receive “in case of a new transfer of the player to a new third club are not contemplated in the referenced plusvalia” of clause 3.2 of the transfer agreement.
19. In view of the above, the Respondent requested the rejection of the claim and the Claimant to bear all the “administrative and procedural fees”.
20. Alternatively, the Respondent argued that the Claimant is only entitled to receive EUR 104,540 but that the interests are “excessive” and “no legal grounds and shall be set aside”.
21. In this respect, the Claimant argued that it only received EUR 522,700, i.e. 20% of EUR 522,700 = EUR 104,540, but provided no evidence thereof.
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. Bearing in mind the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) and considering that the present matter was submitted to FIFA on 18 October 2017 and decided on 28 February 2020, the Single Judge concluded that the 2019 edition of the Procedural Rules is applicable to the present matter.
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 Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the claim was lodged with FIFA on 18 October 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 22 December 2014, the Claimant and the Respondent signed a transfer agreement for the transfer of the player Lucas David Pratto. Furthermore, the Single Judge remarked that, in accordance with art. 3.2. of the agreement a sell-on fee of 20% of any future transfer for an amount higher than EUR 3,200,000 was due to the Claimant, minus EUR 200,000, and that in accordance with art. 4.1. of the agreement an interest rate of 3% respectively 5% per month would apply in case of late payment.
6. Subsequently, the Single judge noted that on 9 February 2017 the player was further transferred from the Respondent to the Brazilian club, São Paulo, for an amount of EUR 6,200,000 payable in instalments.
7. The Single Judge further noted that on 11 January 2018 São Paulo and the Respondent signed a supplementary transfer agreement, according to which the Respondent was entitled to receive from the Claimant the additional amount of EUR 2,435,000.
8. In continuation, the Single Judge took note that, in its claim to FIFA and its further amendment, the Claimant had requested from the Respondent the payment of EUR 887,000 as sell-on fee, plus interest at a rate of 3% per month in case of late payment within 90 days and 5% per month in case of late payment longer than 90 days, as well as sanctions.
9. 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 it only received the first instalment of the transfer fee from São Paulo, that the interest rate cannot apply since it is excessive and that the supplementary agreement signed with São Paulo should not be taken into account for the calculation of the sell-on fee. Thus, the Claimant should only be entitled to receive EUR 104,540.
10. 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 to the Claimant a sell-on fee of 20% of any future transfer over EUR 3,200,000, to be applied on the plus value of such transfer. Moreover, the agreement further stipulated that, in case the Claimant is in fact entitled to the sell-on fee, it shall remit EUR 200,000 back to the Respondent.
11. Bearing in mind the wording of the aforementioned clauses, the Single Judge noted that the sell-on clause over the plus value of a future transfer of the player had indeed been triggered, as on 9 February 2017 the player was effectively transferred from the Respondent to São Paulo for an amount higher than EUR 3,200,000, namely EUR 6,200,000. The Single Judge also noted that an additional amount of EUR 2,435,000 was agreed later on between São Paulo and the Respondent, upon which the sell-on fee should also be applied.
12. The Single Judge then established that 20% shall apply on the total amount of EUR 5,435,000, which consists of EUR 6,200,000 (for the first agreement between the Respondent and São Paulo), plus EUR 2,435,000 (for the second agreement between the Respondent and São Paulo), minus EUR 3,200,000 (the amount over which the plus value should be calculated as per art. 4.1 of the agreement between the Claimant and the Respondent). This amounts to 1,087,000. Furthermore, as per art. 4.1. of the agreement, in case the Claimant effectively earns the said capital gain for an amount equal to or above EUR 200,000, the Claimant shall remit EUR 200,000 to the Respondent. Thus, the final amount due by the Respondent to the Claimant is EUR 887,000. This is in line with the calculations provided by the Claimant, which should therefore be accepted.
13. The Respondent’s interpretation of the agreement as well as its argument that it did not receive all amounts due from São Paulo, cannot be sustained, as they are not in line with the wording of the contractual terms agreed upon with the Claimant.
14. 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 no amounts due as per art. 4.1. of the agreement have 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 EUR 887,000.
15. Having established the above, the Single Judge went on to examine the second issue raised in the present matter, i.e. the Claimant’s request to be awarded interest in the amount of 3% per month in case of late payment within 90 days and 5% per month in case of late payment longer than 90 days.
16. In this respect, the Single Judge acknowledged the arguments of both parties with regard to the application of art. 4.1. 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 3% or 5% per month amounts to 36% respectively 60% per year and is therefore to be considered as excessive and disproportionate.
17. Thus, in line with his well-established jurisprudence and with Swiss law, the Single Judge decided to reduce such interest to a maximum of 18% per annum over the due instalments, as follows:
a. 18% p.a. as of 16 July 2017 on the amount of EUR 100,000;
b. 18% p.a. as of 16 October 2017 on the amount of EUR 300,000;
c. 18% p.a. as of 12 April 2018 on the amount of EUR 487,000.
18. In conclusion, the Single Judge decided that any further claim of the Claimant is rejected.
19. 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).
20. In this respect, the Single Judge reiterated that the claim of the Claimant is almost entirely accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Respondent shall bear the costs of the current proceedings in front of FIFA.
21. 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.
22. In conclusion, the Single Judge determined the costs of the current proceedings to the amount of CHF 25,000, to be paid by the Respondent 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, Atlético Velez Sarsfield, is partially accepted.
2. The Respondent, Atletico Mineiro, has to pay to the Claimant, within 30 days as from the date of notification of the present decision, the amount of EUR 887,000, plus interest until the date of effective payment as follows:
a. 18% p.a. as of 16 July 2017 on the amount of EUR 100,000;
b. 18% p.a. as of 16 October 2017 on the amount of EUR 300,000;
c. 18% p.a. as of 12 April 2018 on the amount of EUR 487,000.
3. In the event that the aforementioned sums plus interest are not paid by the Respondent within the stated time limits, 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 costs of the proceedings in the amount of CHF 25,000 are to be paid by the Respondent, as follows:
5.1. The amount of CHF 5,000 has to be paid directly to the Claimant.
5.2. The amount of CHF 20,000 has to be paid to FIFA to the following bank account with reference to case nr. 17-01860/akl:
UBS Zurich
Account number 366.677.01U (FIFA Players’ Status)
Clearing number 230
IBAN: CH27 0023 0230 3666 7701U
SWIFT: UBSWCHZH80A
The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 3. And 4. above are to be made and to notify the Players’ Status Committee of every payment received.
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Note related to the appeal procedure:
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. 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.
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:
Emilio García Silvero
Chief Legal & Compliance Officer