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 30 June 2020

:Decision of the

Single Judge of the Players' Status Committee

passed via videoconference, on 30 June 2020,

regarding a contractual dispute concerning the player Bruno Miguel Borges Fernandes

BY:

Johan van Gaalen (South Africa), Single Judge of the PSC

CLAIMANT:

UC Sampdoria, Italy

Represented by Mr Gianpaolo Monteneri

RESPONDENT:

Sporting CP, Portugal

Represented by Mr José Miguel Albuquerque & Mr. José Carlos Oliveira

I. FACTS OF THE CASE

1. On 22 June 2017, the Italian club UC Sampdoria (hereinafter: Sampdoria or the Claimant) and the Portuguese club, Sporting Club Portugal (hereinafter: Sporting or the Respondent) (hereinafter jointly referred to as the parties) signed a transfer agreement for the permanent transfer of the player Bruno Miguel Borges Fernandes (hereinafter: the player), from the former to the latter, for a total amount of EUR 9,000,000.

2. Article 9 of the transfer agreement provided the following:

“In the event of a future definitive transfer of the PLAYER from SPORTING SAD to a third club, SAMPDORIA shall additionally have the right to receive 10% (ten percent) of the net added value received (by way of permanent transfer fee and/or bonuses, etc.) by SPORTING SAD from the buying club. It is understood that if after a loan, the third club will acquire the PLAYER on a permanent basis, the loan fee shall be added to the permanent transfer fee in order to calculate the future transfer fee due to SAMPDORIA. The added valued amount shall be determined by taking the gross amount effectively received by SPORTING SAD and deducting it of:

- any and all amounts paid or still due to SAMPDORIA pursuant to this Agreement;

- any and all amounts deducted / withholded concerning Solidarity Contribution pursuant to the FIFA or national Regulations arising from the present transfer or the transfer (temporarily or permanent) of the PLAYER from SPORTING SAD to a third club.

The above mentioned future transfer fee shall be paid pro rata by SPORTING SAD, by bank transfer, within 10 (ten) days of the payment dates agreed on the transfer agreement of the future transfer of the PLAYER to a third club. SPORTING SAD must provide SAMPDORIA with the transfer agreement concluded with the third club within 5 (five) days after the stipulation is entered into. In the event that SPORTING SAD fails to pay on time said conditional amounts or any part of them, SPORTING SAD shall be obliged to pay SAMPDORIA a contractual penalty of 10% (ten percent) per annum from the due amount until the day of the effective payment.”

3. Moreover, article 10 of the transfer agreement read as follows:

“For the sake of clarity, all the amounts defined in the preceding clauses 6,8 and 9 to be paid by SPORTING SAD to SAMPDORIA include all taxes, rates, charges, fees, Training Compensation and/or Solidarity Contribution due to any of the PLAYER’s former training clubs (other than SAMPDORIA) under the FIFA Regulations. Therefore, contracting parties agree that: i) SPORTING SAD shall be obliged to pay the Training Compensation and/or Solidarity Contribution due to any of the PLAYER’s former training clubs (other than SAMPDORIA); ii) shall not be entitled to deduct from the sums defined in the preceding clauses 6,8 and 9 the amount of Training Compensation and/or Solidarity Contribution due to the PLAYER’s former training clubs (other than SAPMDORIA)”.

4. Furthermore, according to the Claimant, on or around 29 January 2020, the player was transferred on a definitive basis from the Respondent to the English club, Manchester United (hereinafter: the third club) “against the payment by the latter of the transfer fee approximately amounting to EUR 55,000,000”.

5. In accordance with the information available in the Transfer Matching System (TMS), the player was registered with the third club on 31 January 2020 against the payment of EUR 55,000,000 payable as follows :

- EUR 13,750,000 within 14 days of the Registration Date;

- EUR 13,750,000 on 1 December 2020;

- EUR 13,750,000 on 1 September 2021;

- EUR 13,750,000 on 1 July 2022.

6. On 4 February 2020, the Claimant sent an email to the Respondent “whereby […] requested to be provided with a copy of the transfer agreement between the Respondent and Manchester United in order to assess the amount of the Sell-on Fee payable for the said transfer of the Player”.

7. On 13 February 2020, the Respondent replied to the Claimant’s email and sustained, inter alia, the following:

“Allow us to note that you seem to be basing your request on the understanding that Bruno Fernandes was transferred to Manchester United FC subsequently to his registration being acquired by Sporting CP pursuant to the transfer agreement entered into between our two clubs in June 2017. However this is not the case. As you may be aware, in June 2018 Bruno Fernandes decided to unilaterally terminate his employment contract with Sporting CP invoking just cause, thereby becoming a free agent. Consequently, from that date onwards Sporting no longer had any rights over the player’s registration which could be assigned to or shared with a third club. The fact that Sporting subsequently endeavored to sign the player (bearing new and significant financial costs – and waivers – to do so) does not change that”.

8. In this context, on 25 February 2020, the Claimant sent a further email maintaining that “[the Claimant’s] right to the sell-on fee which was agreed upon by the parties is valid and effective and the referred circumstances do not affect said right”. In addition, the Claimant also indicated that it was willing “to discuss an amicable settlement”. As such, the Claimant requested the Respondent to comply with the agreement urging to find a settlement of the matter by 2 March 2020.

9. Furthermore, on the other hand, with regard to the fact that the player had allegedly “decided to unilaterally terminate his employment contract with [the Respondent]”, the Claimant underlined that “it is not aware of the details regarding the termination of the contractual relationship between the Respondent and the Player, referred to in the Respondent’s email of 12 February 2020 and the subsequent apparent re-signing of the employment contract between the Respondent and the Player”. In this regard, the Claimant highlighted that “the Respondent never provided any information to the Claimant”. Additionally, the Claimant held that it “lately learned that in May 2018 certain players terminated their contracts with the Respondent following the physical attack on the training ground of the club from a group of around 50 ultra-fans of the Respondent”.

10. In continuation, given the absence of reaction from the Respondent in respect of the Claimant’s requests to provide a copy of the transfer agreement concluded with the third club and the payment of the sell-on fee, on 10 March 2020, the Claimant put the Respondent in default and requested the payment of EUR 1,150,000 plus the interest accrued within 10 days as from the receipt thereof, however to no avail.

11. On 3 April 2020, the Claimant lodged a claim in front of FIFA requesting the following;

i. To establish that the Respondent breached the Agreement signed on 22 June 2017 with the Claimant;

ii. To condemn the Respondent to the payment in favour of the Claimant of EUR 1,150,000 net plus interest at a rate of 5% p.a. as from the 11th day following the receipt of the first instalment of the transfer fee from Manchester United until the date of effective payment;

iii. To order the Respondent to pay to the Claimant the second, third and fourth instalments of the Sell-on Fee in accordance with the following payment schedule:

a. EUR 1,150,000 net by 11 December 2020 plus interest at a rate of 5% p.a. as from the due date until the date of effective payment;

b. EUR 1,150,000 net by 11 September 2021 plus interest at a rate of 5% p.a. as from the due date until the date of effective payment;

c. EUR 1,150,000 net by 11 July 2022 plus interest at a rate of 5% p.a. as from the due date until the date of effective payment;

iv. To establish that all amounts payable by the Respondent to the Claimant under point 2 and 3 above are net of solidarity contribution according to RSTP;

v. To condemn the Respondent to pay the Claimant the contractual penalty of 10% p.a. as from the 11th day following the receipt of the first instalment of the transfer fee from Manchester United until the date of effective payment;

vi. To sanction the Respondent in accordance with Art. 12bis par. 4 RSTP;

vii. To establish that the costs of the present procedure shall be borne by the Respondent.

12. In its reply to the claim, the Respondent explained that on 11 June 2018, the player unilaterally terminated the contract with the Respondent, that he filed a claim against it in front of the Portuguese Court of Arbitration on 28 June 2018 and, subsequently, that the Respondent and the player settled their disputes in an agreement on 10 July 2018. As such, on 10 July 2018, the Respondent and the player (as a free agent) signed a new employment contract by means of which the Respondent had to make “a big financial effort” and, finally, on 29 January 2020, the player was transferred to the third club for a transfer fee of EUR 53,887,900.

13. In this respect, the Respondent held that “following the unilateral termination of the employment agreement (…) the Player (…) became a free agent and the Respondent lost the Player’s federative rights it had acquired from the Claimant, which led to the definitive extinction of the sell-on fee set in clause nine of the Transfer Agreement”. As such, the Respondent held that as from 11 June 2018, the sell-on fee contained in the transfer agreement became legally impossible as the Respondent had no more rights over the player’s registration. In support of its arguments, the Respondent referred to CAS jurisprudence sustaining, inter alia, that “in the case of a unilateral termination by the player to which the club did not consent nor gave cause, the non-fulfilment of the condition cannot give rise to any sort of liability from the club towards the conditional oblige” (CAS 2012/A/3012 & CAS 2015/A/4204).

14. Moreover, the Respondent held that should it be responsible of any damages towards the Claimant due to intentional failure to safeguard the prospect of the fulfilment of the sell-on clause, the Claimant failed to demonstrate the amount of such hypothetical damages.

15. Furthermore, the Respondent argued that the sell-on fee did not come back in force once it signed a new employment contract with the player on 10 July 2018.

16. Finally, the Respondent reiterated its good faith in the present proceedings, it reminded that in its opinion, the sell-on clause consisted more in a profit-participation concept rather than a protection conception (“a gamble on a hypothetical gain based on the potential fulfilment of a condition”) and it further sustained that said clause consisted in a risk taken by the parties which ended in both losing such bet, i.e. “On one hand, the Respondent lost a player for whom it had paid the second biggest transfer fee of its history and had to reinvest a considerable amount to recover him. On the other hand, the Claimant lost the chance of obtaining and extra profit out of a sell-on fee that was extinguished by the unilateral termination of the employment contract by the Player”.

17. Consequently, the Respondent requested the following:

i. To dismiss the claim of the Claimant entirely;

ii. To order the Claimant to bear the procedural costs and to make a contribution to the Respondent’s legal costs in the minimum amount of CHF 20,000, and;

iii. In the alternative, should the Respondent be condemned to pay any amount to the Claimant, “the latter’s claims for interest and for the payment of the contractual penalty of 10% per annum, respectively made in 2. and 3, and in 5 of the relevant request for relief, should be rejected”.

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 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber is applicable to the matter at hand. In this respect, he referred to art. 21 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber as well as to the fact that the present matter was submitted to FIFA on 3 April 2020. Consequently, the Single Judge concluded that the 2019 edition of said Procedural Rules is applicable to the matter at hand (hereinafter: Procedural Rules).

2. Subsequently, 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 June 2020 edition of the Regulations on the Status and Transfer of Players, he is competent to deal with the matter at stake since it concerns a dispute between two clubs affiliated to different associations.

3. In continuation, 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 to art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (June 2020 edition) and to the fact that the present matter was submitted to FIFA on 3 April 2020. In view of the foregoing, the Single Judge concluded that the March 2020 edition of the Regulations on the Status and Transfer of Players (hereinafter: Regulations) is applicable in the matter at hand as to the substance.

4. His competence 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. However, the Single Judge emphasized 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. In particular, the Single Judge recalled that, in accordance with art. 6 par. 3 of Annex 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 FIFA Transfer Matching System (hereinafter: TMS).

5. First of all, the Single Judge acknowledged that it was undisputed between the parties that, on 22 June 2017, a transfer agreement was concluded relating to the transfer of the player from the Claimant to the Respondent and that said agreement contained a sell-on fee as set out under article 9 (point I./2. above), according to which the parties agreed, inter alia, upon the following: “In the event of a future definitive transfer of the PLAYER from SPORTING SAD to a third club, SAMPDORIA shall additionally have the right to receive 10% (ten percent) of the net added value received (…) by SPORTING SAD from the buying club.”

6. Furthermore, the Single Judge also took note that the aforementioned article also provided the following in case of non-compliance by the Respondent with the content of said article: “In the event that SPORTING SAD fails to pay on time said conditional amounts or any part of them, SPORTING SAD shall be obliged to pay SAMPDORIA a contractual penalty of 10% (ten percent) per annum from the due amount until the day of the effective payment”.

7. Having established the above, in accordance with art. 6 par. 3 of the Annexe 3 to the Regulations on the Status and Transfer of Players, the Single Judge further noted that, following a transfer agreement concluded between Sporting and Manchester United, the player was registered with the latter on 31 January 2020 against the payment of a transfer fee amounting to EUR 55,000,000 payable in four installments as set out in point I./5. above.

8. In continuation, the Single Judge observed that the Claimant lodged a claim in front of FIFA against the Respondent on 3 April 2020 requesting, inter alia, the payment of EUR 1,150,000 net plus interest at a rate of 5% p.a. as from the 11th day following the receipt of the first instalment of the transfer fee from Manchester United until the date of effective payment. In addition, the Single Judge also took note of the fact that the Claimant requested the payment of the second, third and fourth instalments of the sell-on fee, plus interest, as per the payment schedule as set out in its request for relief in point I./11. above.

9. Moreover, the Single Judge also recalled the Claimant’s request to be awarded the contractual penalty of 10% p.a. as from the 11th day following the receipt of the first instalment of the transfer fee from Manchester United until the date of effective payment.

10. Furthermore, the Single Judge took note that, in its reply to the claim, the Respondent first held that the right of the Claimant with regard to the sell-on fee was actually extinguished due to the early termination of the employment contract between the player and the Respondent.

11. In respect of the above, the Single Judge took note that, in the Respondent’s opinion, as from 11 June 2018, date of the abovementioned early termination of the employment contract binding the Respondent and the player, the sell-on fee contained in the transfer agreement concluded between the parties in the present dispute became legally impossible as the Respondent had no more rights over the player’s registration.

12. As such, the Single Judge observed that the Respondent underlined the fact that, despite a new employment contract with the player being signed on 10 July 2018, the sell-on fee concluded with the Claimant did not come back in force.

13. At this point and after having carefully examined the parties’ positions, taking into consideration all the aforementioned arguments, the Single Judge observed that the parties, in particular, disputed whether the scenario contained in article 9 of the transfer agreement occurred as contractually provided and, as such, if the sell-on fee was still due despite the early termination of the employment contract binding the Respondent and the player. As a consequence to the above, the Single Judge deemed that should the sell-on fee have been validly triggered and the subsequent payment become due, the applicable consequences such as the claimed penalty should then be examined at a later stage.

14. Consequently, the Single Judge firstly observed that the transfer agreement concluded between the parties provided in its article 9 a sell-on fee in favour of the Claimant which would have been triggered in case of subsequent transfer of the player.

15. Moreover, the Single Judge recalled that it was uncontested that the player had been definitively transferred from the Respondent to the third club at the end of January 2020.

16. Having established the above, the Single Judge deemed that the scenario provided in article 9 of the transfer agreement had effectively occurred despite the arguments raised by the Respondent according to which, inter alia, said right of the Claimant was extinguished due to the early termination of the employment contract between the player and the Respondent.

17. In this respect, the Single Judge observed that, on the one hand, the triggering of the sell-on fee was not conditioned to an event related to the employment relationship between the player and the Respondent and, on the other hand, the Claimant having not been part of said dispute and having not been involved in said events, it appeared that the Respondent’s arguments raised for not paying the sell-on fee could not be accepted.

18. Consequently, the Single Judge decided that the Claimant was entitled to the sell-on fee in accordance with the mechanism provided in article 9 of the transfer agreement. As such, the Single Judge deemed that the Claimant should receive the payment of EUR 1,150,000, corresponding to 10% of the first instalment (EUR 4,600,000 / 4 = EUR 1,150,000) due by the Respondent as per the transfer agreement and related to the transfer agreement concluded between the Respondent and the third club (EUR 55,000,000 – EUR 9,000,000 = EUR 46,000,000).

19. At this point, the Single Judge recalled the Claimant’s request to order the Respondent to pay in addition the second, third and fourth instalments of the sell-on fee, plus interest, as per the payment schedule as set out in its request for relief. However, the Single Judge observed that, according to the transfer agreement concluded between the Respondent and the third club, said instalments were due respectively on 1 December 2020, on 1 September 2021 and on 1 July 2022. As such, the Single Judge concluded that these installments had not matured yet and therefore, the sell-on fee due to the Claimant in respect of said instalments was not payable yet.

20. In continuation, the Single Judge turned its attention to the Claimant’s request for the payment of the contractual penalty of 10% p.a. as from the 11th day following the receipt of the first instalment of the transfer fee from Manchester United until the date of effective payment.

21. In this respect, the Single Judge recalled that article 9 of the transfer agreement provided, inter alia, the following: “In the event that SPORTING SAD fails to pay on time said conditional amounts or any part of them, SPORTING SAD shall be obliged to pay SAMPDORIA a contractual penalty of 10% (ten percent) per annum from the due amount until the day of the effective payment.”

22. As such, the Single Judge deemed that the claimed “penalty” should be considered as an interest of “10% p.a. from the due amount until the day of the effective payment” rather than a penalty stricto sensu. Therefore, considering that said interest had been contractually agreed between the parties and that, as per the jurisprudence of the Single Judge of the Players’ Status Committee, no double interest can be granted, the Single Judge decided that the interest quote of 10% p.a. should be applied on the amount of EUR 1,150,000 as of the due date.

23. In this respect, the Single Judge observed that, in accordance with the transfer agreement concluded between the Respondent and the third club, the due date for the payment was 14 February 2020, corresponding to the 14th day after registration, i.e. 31 January 2020. Consequently, the Single Judge concluded that by adding 10 days on top, in accordance with the content of article 9 of the transfer agreement, the due date for the payment of the sell-on fee was 24 February 2020.

24. Consequently, the Single Judge decided that the claim was partially accepted and, as such, in accordance with the general legal principle of pacta sunt servanda, the Respondent was liable to pay to the Claimant the amount of EUR 1,150,000, plus default interest of 10% p.a. as of 25 February 2020, i.e. one day after the due date for payment, in accordance with article 9 of the transfer agreement.

25. At this point, the Single Judge recalled the Claimant’s request for relief and, as such, it further noticed that the relevant case did not fall under the application of art. 12bis of the Regulations since the requirements of said provision were not met.

26. The Single Judge concluded its reasoning by deciding that any further claims of the Claimant are rejected.

27. In continuation, 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).

28. In respect of the above, and taking into account that the Claimant is the successful party in the present proceedings, the Single Judge concluded that the Respondent has to bear the full costs of the current proceedings before FIFA.

29. 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 1,150,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

30. In conclusion, taking into account the particularities of the present matter and considering and in view of the invalidity of the reasons advanced by the Respondent for not paying the awarded amount to the Claimant, the Single Judge determined the costs of the current proceedings to the amount of CHF 5,000. Furthermore, and in line with his aforementioned considerations and taking into account the degree of success, the Single Judge of the Players’ Status Committee decided that the amount of CHF 5,000 has to be paid by the Respondent.

31. Furthermore, taking into account the consideration under number II./3. above, the Single Judge referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

32. In this regard, the Single Judge pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

33. Therefore, bearing in mind the above, the Single Judge decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

34. Finally, the Single Judge recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

III. DECISION OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE

1. The claim of the Claimant, UC Sampdoria, is partially accepted.

2. The Respondent, Sporting CP, has to pay to the Claimant, EUR 1,150,000, plus 10% interest p.a. as from 25 February 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

4. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

5. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount due, plus interest as established above is not paid by the Respondent within 45 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:

 1.

The Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players). 2.

In the event that the payable amount as per in this decision is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

7. The final costs of the proceedings in the amount of CHF 5,000 are to be paid by the Respondent to FIFA.

For the Players' Status Committee:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Procedural Rules).

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