F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2020-2021) – fifa.com – atto non ufficiale – Decision 9 March 2021

Decision of the

Single Judge of the PSC

passed on, 9 March 2021

regarding a dispute concerning the transfer of the player Nicholas Llanos

BY:

José Luis Andrade (Portugal)

CLAIMANT:

HNK Hajduk, Croatia

Represented by Mr Hrvoje Raić and Mr Ivan Ostojić

RESPONDENT:

America de Cali, Colombia

Represented by Mr Alejandro Zorrilla Pujana

I. FACTS

1. On 29 April 2017, the Croatian club, HNK Hajduk Plc (hereinafter: ‘the Claimant’) and the Colombian club, America de Cali (hereinafter: ‘the Respondent’) concluded a transfer agreement (hereinafter: ‘the agreement’) in respect of the permanent transfer of the player Nicholas Llanos (hereinafter: ‘the player ’).

2. Pursuant to art. 2.2 of the agreement, the parties agreed that the Claimant would be entitled to receive 8% of the transfer compensation fee paid by a third club to the Respondent upon the next permanent transfer of the player.

3. Moreover, art 2.3 of the agreement stipulated that the minimum amount payable to the Claimant in respect of the future transfer of the player could not be lower than USD 80,000.

4. According to art 2.4 of the agreement, the Respondent will be obliged to pay to the Claimant the minimum amount of USD 80,000, exclusive of VAT, by no later than 8 July 2020, if the agreement between the club [Respondent] and player is terminated prior to 30 June 2020, for any reason whatsoever, except for termination thereof relating to the future transfer of the player as provided for in art. 2.2. or 2.3. of the agreement, additionally the aforesaid amount will also be payable to the Claimant if no transfer at all take place to a third party.

5. Furthermore, art. 2.11 of the agreement established a lump sum penalty of USD 30,000 payable by the Respondent to the Claimant in the event of any delayed due payments to the Claimant arising out of the agreement.

6. On 4 August 2017, the player and the Respondent mutually agreed to the early termination of the employment contract concluded between the parties.

7. According to the Claimant, the said termination of the employment contract between the player and the Respondent triggered the provisions of art. 2.4 of the agreement.

8. Consequently, on 29 June 2019, the Claimant sent a letter to the Respondent requesting the amount of USD 80,000 as transfer compensation fee by granting it a deadline to comply with payment of the aforesaid amount by 8 July 2020.

9. On 29 June 2020, the Claimant sent another letter to the Respondent, reiterating its request in relation to the transfer compensation fee and reminding the Respondent of the penalty provisions of art. 2.11 of the agreement.

10. On 17 July 2020, the Claimant sent a default notice to the Respondent requesting the payment of the following due amounts:

a) USD 80,000 (VAT exclusive) as transfer compensation fee, and

b) USD 30,000 (VAT exclusive) as penalty for delay in payment

11. On 11 September 2020, the Claimant issued a second default notice to the Respondent, granting it a 10 days’ deadline to comply with payment of the amount of USD 110,000, however to no avail.

12. On 12 October 2020, the Claimant lodged a claim before FIFA requesting the following relief:

a) payment by the Respondent of the total amount of USD 110,000, plus 5% interest p.a. as from the respective due dates;

b) to impose sanctions on the Respondent in accordance with art.12bis; and

c) payment by the Respondent of the procedural cost and legal expenses of the Claimant

13. In its reply to the claim, the Respondent argued that the Claimant failed to send all the alleged correspondence to the correct email address of the Respondent, hence making it impossible for the Respondent to reply, as the club never received the said correspondence.

14. Furthermore, the Respondent stipulated that the claim should be considered time-barred, as the event, giving rise to the dispute (early termination of the employment contract between the player and Respondent) occurred on 4 August 2017, i.e. more than 2 years before the present claim was lodged.

15. In conclusion, the Respondent objected the validity of art. 2.4 of the agreement, in light of the fact that it violates the principle of art. 18bis of the FIFA Regulations.

II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PSC

1. First of all, the Single Judge of the PSC (hereinafter also referred to as the Single Judge) analysed whether he was competent to deal with the case at hand. Taking into account the wording of art. 21 of the June 2020 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the Single Judge of the PSC referred to art. 3 par. 1 of the Procedural Rules and emphasized that, in accordance with art. 24 par. 1 in combination with art. 22 lit. f) of the Regulations on the Status and Transfer of Players, the Single Judge of the PSC is competent to deal with disputes between clubs belonging to different associations.

3. Notwithstanding the above, the Single Judge of the PSC noted that the Respondent had argued that the claim of the Claimant should be considered time-barred, as the event giving rise to the dispute, was the early termination of the employment contract between the player and the Respondent which occurred on 4 August 2017, i.e. more than 2 years before the present claim was lodged.

4. In view of the above, the Single Judge firstly had to determine which is the event giving rise to the present dispute. In this regard, the Single Judge referred to art. 25 par. 5 of the Regulations, according to which, inter alia, the Single Judge shall not hear any case subject to the said Regulations if more than two years have elapsed since the event giving rise to the dispute. The present claim was lodged on 12 October 2020 and the basis of the Claimant’s claim being art. 2.4 of the transfer agreement stipulates that the transfer compensation as claimed were due on or before 8 July 2020, accordingly the Single Judge held that the aforesaid date should be considered “the event giving rise to the dispute”, the Single Judge had to reject the argument of the Respondent and confirmed that the present petition was lodged within the said two years’ time period. The matter is, thus, not time-barred by the statute of limitations in accordance with art. 25 par. 5 of the Regulations.

5. In continuation, the Single Judge of the PSC analysed which edition of the Regulations of the Status and Transfer of Players should be applicable to the present matter. In this respect, the Single Judge of the PSC confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the claim was lodged on 12 October 2020, the October 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

6. With the above having been established, the Single Judge of the PSC entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents contained in the file. However, the Single Judge of the PSC emphasized that in the following considerations it will refer only to facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

7. In this respect, the Single Judge noted that, on 29 April 2017, the parties concluded an agreement in respect of the permanent transfer of the player, from the Claimant to the Respondent, and accordingly in terms of art. 2.2 of the agreement agreed that the Claimant would be entitled to receive 8% of the transfer compensation fee paid by a third club to the Respondent upon the next permanent transfer of the player and that in accordance with art 2.3 of the contract, that the minimum amount payable to the Claimant in respect of the future transfer of the player could not be lower than USD 80,000.

8. Moreover, the Single Judge observed that art 2.4 of the contract, indicated that the Respondent will be obliged to pay to the Claimant the minimum amount of USD 80,000 exclusive of VAT by no later than 8 July 2020, if the agreement between the club [Respondent] and player is terminated prior to 30 June 2020, for any reason whatsoever, except for termination thereof relating to the future transfer of the player as provided for in art. 2.2. or 2.3. of the contract, additionally the aforesaid amount will also be payable to the Claimant if no transfer at all take place to a third party.

9. Furthermore, the Single Judge acknowledged that art. 2.11 of the contract established a lump sum penalty of USD 30,000 payable by the Respondent to the Claimant in the event of any delayed due payments to the Claimant arising out of the contract.

10. Subsequently, the Single Judge observed that the Claimant lodged a claim before FIFA against the Respondent, maintaining that the termination of the employment contract between the player and the Respondent triggered the provisions of art. 2.4 of the transfer agreement.

11. Furthermore, the Single Judge noted that the Respondent did not contest the allegations of the Claimant as to the substance, but indicated the Claimant failed to send the alleged correspondence to the correct email address of the Respondent, as well as that art. 2.4 of the transfer agreement should be considered a breach of art. 18bis of the FIFA regulations.

12. In addition, the Single Judge observed that, the Respondent in its reply argued that art.2.4. of the transfer agreement violated the provisions of art.18bis of the Regulations. In this regard, the Single Judge referred to art.18bis of the Regulations, which, inter alia, stipulates the following:

“No club shall enter into a contract which enables the counter club/counter clubs, and vice versa, or any third party to acquire the ability to influence in employment and transfer-related matters its independence, its policies or the performance of its teams.”

13. Accordingly, the Single Judge held that it is important to note that the said article is not concerned with the issue of the validity and/or the binding nature of the contractual provisions of an agreement, hence a breach or a said violation of art. 18bis of the Regulations would not per se mean that a contract or a contractual clause stipulated therein is not enforceable. The Single Judge therefore concluded that this argument of the Respondent cannot be upheld and the Respondent is not exempted from fulfilling its contractual obligations.

14. The Single Judge concluded that, as the termination of the employment contract between the player and the Respondent had undisputedly occurred, subsequently triggering the provisions of art. 2.4 of the transfer agreement, the Respondent accordingly had an obligation to comply with the terms of the transfer agreement. As a result, the Single Judge concluded that the Claimant was entitled to the transfer compensation in the amount of USD 80,000 as contractually laid down in the agreement.

15. Furthermore, the Single Judge addressed the matter of the penalty the parties contractually agreed upon in clause 2.11 of the transfer agreement in the amount of USD 30,000 and indicated that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness.

16. In the specific case at hand, the Single Judge deemed that a penalty of EUR 30,000, which the parties contractually agreed upon, is both proportionate and reasonable in the case at hand, and accordingly decided that the penalty is valid and applicable in the present matter.

17. Consequently, the Single Judge decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant the total amount of USD 110,000, plus 5% interest p.a. on the amount of USD 80,000 as from 9 July 2020 until the date of effective payment.

18. Furthermore, 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.

19. 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.

20. 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.

21. 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

22. Lastly, the Single Judge referred to the temporary amendments outlined in art. 18 par. 2 lit. ii) of the Procedural Rules, which entered in force in 10 June 2020, according to which no procedural costs shall be levied for any claim lodged between 10 June 2020 and 31 December 2020 (both inclusive), and determined given that the claim at hand was lodged on 3 July 2020, the decision shall be rendered free of costs.

III. DECISION OF THE SINGLE JUDGE OF THE PSC

1. The claim of the Claimant, HNK Hajduk, is accepted.

2. The Respondent, America de Cali, has to pay to the Claimant, the amount of USD 110,000, corresponding to:

- USD 80,000 as transfer compensation plus 5% of interest p.a. from 9 July 2020 until date of effective payment; and

- USD 30,000 as penalty, no interest on the penalty shall be awarded.

3. 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.

4. Any further claims of the Claimant are rejected.

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.

For the Single Judge of the PSC:

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).

CONTACT INFORMATION:

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