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 22 January 2020
Decision of the Single Judge
of the Players’ Status Committee
passed in Zurich, Switzerland, on 22 January 2020,
by
Roy Vermeer (Netherlands)
Single Judge of the Players’ Status Committee,
on the claim presented by the club
HNK Rijeka, Croatia, represented by Mr Danijel Beljan & Mr Gianpaolo Monteneri
as Claimant
against the club
Dalian Yifang FC, China PR
as Respondent
regarding a contractual dispute between the parties
relating to the player Mate Males
I. Facts of the case
1. On an unspecified date, the Croatian club HNK Rijeka HNK (hereinafter: the Claimant) concluded concluded a “Permanent Transfer Agreement” (hereinafter: the agreement) with the Chinese club Dalian Yifang FC (hereinafter: the Respondent) in relation to the transfer of the player Mate Males (hereinafter: the player) to the latter club by means of which the Respondent had to pay to the Claimant a transfer fee EUR 450,000, payable in 2 instalments:
a. EUR 200,000 “shall be paid to Rijeka within seven working days […] since the employment contract between Dalian Yifang and Mate Males is signed and the player Mate Males’s identity has been validated by Dalian Yifang and has passed the medical examination in hospital designated by Dalian Yifang”;
b. EUR 250,000, within seven working days, after the player “has completed the registration in Chinese Football Association”.
2. In addition, pursuant to art. 2 of the agreement, the parties agreed that “in the event Dalian Yifang does not comply with the payment of any instalment of the transfer fee mentioned above within ten (10) working days after a formal written notice by Rijeka after the deadline set forth in this clause above, Dalian Yifang […] pay as compensation for such contractual breach an amount equal to 5% of the amount in delay”.
3. On an unspecified date, the player signed an employment agreement with the Respondent.
4. On 27 February 2018, the Claimant sent an invoice to the Respondent for the transfer fee and requested the Respondent to proceed with the necessary steps in TMS in order to “register the player Mate Males in Chinese Football Association without any further delay”.
5. On 19 March 2018, the Claimant put the Respondent in default for the payment of EUR 450,000 corresponding to the transfer fee agreed in the agreement.
6. On 17 May 2018, the Claimant lodged a claim with FIFA against the Respondent and requested from the latter the payment of EUR 450,000 corresponding to the transfer fee and EUR 22,500 corresponding to the compensation as stipulated in art. 2 of the agreement.
7. In its claim, the Claimant argued that the player signed a valid employment agreement with the Respondent, “started practicing and passed winter preparations with Dalian Yifang” and the club “obtained working permit for the Player”, however, the Respondent never paid the agreed transfer fee, in fact, it never proceeded with the registration of the player. Therefore, the Claimant deemed that the Respondent “severely breached its contractual obligation taken over by Permanent Transfer Agreement”.
8. In this regard, the Claimant insisted that “the basic principle of law is to obey the agreements: ‘Pacta sunt servanda’”.
9. In its response, the Respondent rejected the claim of the Claimant.
10. In this respect, the Respondent first confirmed to have signed “the draft of ‘Permanent Transfer Agreement’ and referred to the conditions that needed to be met, in particular, the player passing his medical examination and the registration with the Chinese Football Association.
11. According to the Respondent, the player had several medical examinations, the doctors confirmed that the player suffered from “acute myocardial infarction”
12. In this regard, the club pointed out that “due to the failure of the medical test, and for concerns about the physical condition of the player, Dalian Yifang had to give up its plans to arrange for the player to participate in the matches in Season 2018. Therefore, eventually the information matching, ITC request and ITC release on the TMS system was not completed and the player was not even able to complete the registration with the Chinese Football Association.”
13. Furthermore, the Respondent deemed that working permits “shall be applied for by the employee (the player) himself, and Dalian Yifang only provides assistance services” and “when applying for the visa, Dalian Yifang did not know that the player had heart disease and the medical report failed”.
14. In addition, the Respondent acknowledged that “take the player to train to keep his state”, however, it stressed that “the purpose of the player to participate in the training was not the same as that of other professional players in Dalian Yifang, preparing for the official matches, or having the so-called ‘winter preparation’, but only based on the requirements of the player, out of goodwill of the club, to help the player maintain good physical condition”.
15. Moreover, the Respondent pointed out that “the player joined the Romanian CFR Cluj. Dalian Yifang has the reason to believe the player was transferred permanently from Rijeka to Romanian CFR Cluj by means of transfer”.
16. Furthermore, the Respondent “is of the opinion that since the results of the medical test can be used as a valid condition for the contract between clubs […], the validity of the payment subject to such condition is without any doubt.”
17. In this respect, the Respondent highlighted that “the player has never provided any evidence indicating that the results of the medical examination are untrue or invalid after the player learned the results of the examination.”
18. Consequently, the Respondent concluded that “the payment conditions in this case have not been fulfilled, and Dalian Yifang does not need to pay the transfer fee” and as there is no “breach of contract” the club deemed that “the penalty clause is not applicable”.
19. Finally, the Respondent pointed out that the mutual termination agreement between the Claimant and the player was signed on “February 26, 2018”, but the transfer agreement was signed on 25 January 2018.
20. In this respect, the Respondent argued that “the player undertook the medical examination in early February. After the medical report was issued, Dalian Yifang immediately sent a specified person to inform the player’s agent that the player’s physical examination was unqualified and he will not able to represent Dalian Yifang to participate in the official matches.”
II. Considerations of the Single Judge of the Players’ Status Committee
1. First of all, the Single Judge of the Players’ Status Committee (hereinafter: the Single Judge) analysed which Procedural Rules were applicable to the matter at hand. In this respect, he referred to 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) as well as to the fact that the present matter was submitted to FIFA on 17 May 2018 and decided on 22 January 2020. Therefore, the Single Judge concluded that the 2019 edition of the Procedural Rules is applicable to the matter at hand.
2. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players is 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 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 in front of FIFA on 17 May 2018. In view of the foregoing, the Single Judge concluded that the January 2018 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance.
3. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 1 and par. 2 of the Procedural Rules in connection with art. 23 par. 1 and par. 4 as well as art. 22 lit. f) of the Regulations, he was competent to deal with the present matter since it concerned a dispute between two clubs affiliated to two different associations.
4. The competence of the Single Judge and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties. The Single Judge emphasised, however, 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. First of all, the Single Judge acknowledged that it was undisputed between the parties that the transfer agreement was concluded relating to the transfer of the player from the Claimant to the Respondent and that according to said agreement the Respondent undertook to pay to the Claimant a transfer fee EUR 450,000, payable in 2 instalments:
a. EUR 200,000 “shall be paid to Rijeka within seven working days […] since the employment contract between Dalian Yifang and Mate Males is signed and the player Mate Males’s identity has been validated by Dalian Yifang and has passed the medical examination in hospital designated by Dalian Yifang”;
b. EUR 250,000, within seven working days, after the player “has completed the registration in Chinese Football Association”.
6. Equally, the Single Judge observed that pursuant to art. 2 of the agreement, the parties agreed that “in the event Dalian Yifang does not comply with the payment of any instalment of the transfer fee mentioned above within ten (10) working days after a formal written notice by Rijeka after the deadline set forth in this clause above, Dalian Yifang […] pay as compensation for such contractual breach an amount equal to 5% of the amount in delay”.
7. Likewise, the Single Judge acknowledged that it was undisputed between the parties that the player, after terminating his employment contract by mutual agreement with the Claimant on 25 February 2018, started his training with the Respondent.
8. Moreover, the Single Judge took note that, on 27 February 2018, the Claimant sent an invoice to the Respondent for the transfer fee and requested the Respondent to proceed with the necessary steps in TMS in order to “register the player Mate Males in Chinese Football Association without any further delay”.
9. Furthermore, the Single Judge noted that, on 19 March 2018, the Claimant put the Respondent in default for the payment of EUR 450,000 corresponding to the transfer fee agreed in the agreement.
10. Having established the above, the Single Judge further noted that the Claimant lodged a claim with FIFA against the Respondent and requested to be paid a total amount of EUR 472,500 by the latter, arguing that the player signed a valid employment agreement with the Respondent.
11. Furthermore, the Single Judge took note that, in its reply, the Respondent rejected the Claimant’s claim. The Respondent, apart from confirming to have signed the agreement, referred to the conditions that needed to be met, in particular, the player passing his medical examination and the registration with the Chinese Football Association, in order to consider the agreement valid.
12. At this point, the Single Judge acknowledged that the player on 11 October 2018 lodged a claim against the club maintaining that he had terminated the employment contract with just cause on 2 May 2018, since the club allegedly failed to pay the his remuneration.
13. With respect to the above, the Dispute Resolution Chamber, in its decision passed on 5 December 2019, was of the opinion that the Respondent had neglected its contractual obligations towards the player and that the claim of the player was partially accepted.
14. Taking into account the aforementioned decision, the Single Judge acknowledged that, despite not correctly fulfilling the formal requirements stated in the transfer agreement, the player and the Respondent had concluded a valid employment contract and consequently the player was effectively transferred to the Respondent.
15. On account of the above, the Single Judge held that it was beyond doubt that the Claimant and the Respondent had agreed upon the transfer of the player and had concluded a valid transfer agreement by means of which the player was transferred from the Claimant to the Respondent for the total amount of EUR 450,000. Consequently, the Single Judge held 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 Respondent has to fulfill its contractual obligations towards the Claimant. Therefore, and taking into account the claim of the Claimant, the Single Judge decided that the Respondent has to pay to the Claimant the outstanding amount of EUR 450,000 corresponding to the transfer fee as agreed upon in the pertinent transfer agreement.
16. 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 with the amount of EUR 22,500, corresponding to the penalty clause stipulated in art. 2 of the agreement. The Claimant based his request on the provision contained in the transfer agreement that reads as follows: “in the event Dalian Yifang does not comply with the payment of any instalment of the transfer fee mentioned above within ten (10) working days after a formal written notice by Rijeka after the deadline set forth in this clause above, Dalian Yifang […] pay as compensation for such contractual breach an amount equal to 5% of the amount in delay”.
17. In view of the above, the Single Judge emphasised that the Claimant and the Respondent mutually agreed on the terms upon the conclusion of the agreement, and that the Respondent freely accepted to commit itself to such contractual obligations. Furthermore, the DRC judge also noted that the penalty established in clause 2 of the contract is not excessive and can therefore be applied. Therefore, taking into consideration that the Respondent did not fulfill the conditions set out in the agreement and that the penalty clause provided for in that respect had been mutually agreed upon by the parties, the Single Judge concluded that the Respondent has to pay the Claimant a penalty for non-payment in the amount of EUR 22,500.
18. In view of all of the above, the Single Judge concluded that the total amount of EUR 427,500 was payable by the Respondent to the Claimant, corresponding to the amount agreed in the agreement.
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 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).
20. In respect of the above, and taking into account that the Claimant is the successful party in the present proceedings, as its claim is accepted, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before 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. On that basis, the Single Judge held that the amount to be taken into consideration in the present proceedings is EUR 472,500. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.
22. In conclusion and considering the specific circumstances of the case, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000, to be borne entirely by the Respondent.
II. Decision of the Single Judge of the Players’ Status Committee
1. The claim of the Claimant, HNK Rijeka, is accepted.
2. The Respondent, Dalian Yifang FC, has to pay to the Claimant within 30 days as from the date of notification of the present decision, the amount of EUR 472,500.
3. If the aforementioned sum is not paid within the aforementioned deadline, interest at the rate of 5% p.a. will fall due and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.
4. The final costs of the proceedings in the amount of CHF 20,000 are to be paid by the Respondent within 30 days as from the date of notification of the present decision, as follows:
4.1. The amount of CHF 4,991 has to be paid by the Respondent directly to the Claimant.
4.2. The amount of CHF 15,009 has to be paid by the Respondent to FIFA to the following bank account, with reference to case nr. 18-00985/gra:
UBS Zurich
Account number 366.677.01U (FIFA Players’ Status)
Clearing number 230
IBAN: CH27 0023 0230 3666 7701U
SWIFT: UBSWCHZH80A
5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2. and 4.1. above are to be made and to notify the Players’ Status Committee of every payment received.
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Note related to the publication:
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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
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Tel: +41 21 613 50 00
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e-mail: info@tas-cas.org
For the Single Judge of the
Players’ Status Committee:
Emilio García Silvero
Chief Legal & Compliance Officer