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 6 October 2020

Decision of the

Single Judge of the Players' Status Committee

Passed on 6 October 2020,

regarding a contractual dispute concerning the player Christian Alberto Cueva Bravo

BY:

Geoff Thompson (England), Single Judge of the PSC

CLAIMANT:

FC KRASNODAR, Russia

RESPONDENT:

SANTOS FC, Brazil

Represented by CCLA Advogados

I. FACTS OF THE CASE

1. On 7 February 2019, the Russian clu, FC Krasnodar (hereinafter: the Claimant) and the Brazilian club, Santos FC (hereinafter: the Respondent) concluded an agreement (hereinafter: contract) for the loan transfer of the player Christian Alberto Cueva Bravo (hereinafter: the player), between 7 February 2019 until 30 January 2020 (hereinafter: the loan period).

2. Pursuant to clause 3 of the contract, the Respondent undertook to acquire the player’s services on a permanent basis upon expiry of the loan period, against the payment to the Claimant of USD 7,000,000 in three equal instalments of USD 2,333,333 each, payable respectively on 31 March 2020, 31 March 2021, and 31 March 2022. Such amounts were agreed inter alia “free from any taxes or fiscal charges arising out of the transfer”.

3. Clause 3.5 of the contract inter alia established that as follows: “if during [the loan period] [the Respondent] will have the intention to sell [the player’s] registration (on loan or permanent) to a third club it should notify [the Claimant] about that”.

4. Clause 9.3 of the contract established a penalty fee of 5% in case of default of payment by the Respondent in favour of the Claimant “plus interest at 5% per annum”.

5. On 17 September 2019, the Respondent sent a notification to the Claimant stating that it wants to return the player to the Claimant after the loan period and permanently transfer the player as foreseen in the contract. The Claimant refused to accept said proposal.

6. On 27 March 2020, the Respondent informed the Claimant that the player unilaterally terminated his contract with the Respondent and joined the Mexican club, Pachuca. In this regard, the Respondent requested to temporary suspend the payments due to the Claimant. The Claimant refused to accept said proposal.

7. On 1 April 2020, the Claimant sent a default notice to Respondent requesting payment of the first instalment, i.e. USD 2,333,333, due on 31 March 2020, within 10 days.

8. In this framework, the Claimant lodged a claim against the Respondent, requesting the payments agreed upon in the contract as well as the penalty fee of 5%. The requests for relief of the Claimant were as follows:

a. USD 2,333,333 as “outstanding payables”;

b. USD 116,667 as “penalty fee on the amount of” USD 2,333,333;

c. 5% per year on the amount of USD 2,333,333 as from 6 April 2020 until the date of effective payment;

d. That the Respondent is ordered to bear all costs incurred with the proceeding.

9. In its reply, the Respondent rejected the claim and deemed that the Claimant’s bad faith has caused severe financial damage to the Respondent.

10. The Respondent explained that after having signed the player, the player “fell out of favour with the Head Coach” and therefore, the Respondent was considering options to transfer the player on loan or permanently to a third club.

11. According to the Respondent, on 31 August 2019, it received “a lucrative offer for the transfer of the Player on loan” from the Saudi Arabian club Al Ahli for a fee “amounting to USD 1,000,000”.

12. The Respondent explained that it contacted the Claimant and asked for “consent from the Claimant to proceed with the transfer for the Player to Ahli on a loan”, however, according to the Respondent, the Claimant “blatantly refused to accept such sub-loan without any rationale whatsoever”.

13. Furthermore, the Respondent explained that on 5 September 2019, it received another offer from the Mexican club América for a loan fee in the amount of EUR 300,000. In this regard, America alternatively offered to transfer the player on a permanent basis and that it would “undertake any pending payment obligation payable by the Respondent towards the Claimant”.

14. According to the Respondent, the Claimant “deliberately refused to provide its assent such transfer without any justification whatsoever”.

15. Consequently, the Respondent argued that it “missed two remarkable opportunities regarding the transfer of the Player […] due to the appalling conduct of the Claimant who unreasonably withheld its consent”.

16. The Respondent stated that on 27 January 2020, the player terminated the contract and joined the Mexican club, Pachuca.

17. In continuation, the Respondent wished to point out that it was always the intention of the parties to conclude a permanent transfer agreement, but due to “institutional reasons faced by the Respondent” it was not possible.

18. Moreover, the Respondent argued that clause 3.5 was “vague and ambiguous” and that it failed “to clarify the proceedings if there was a transfer ot the Player to a third club on loan basis”.

19. In this context, the Respondent claimed that the contract was drafted by the Claimant and therefore the principle of “in dubio contract stipulatorem” shall be applied.

20. In addition, the Respondent wished to point out once more, that the Claimant’s behaviour caused the Respondent a significant damage and argued that “on one hand, the Claimant raises that the Respondent has to pay the compensation for supposedly having breached the Transfer Agreement but, on the other hand, simply ignores the fact that it unreasonably withheld consent resulting in losses to all the parties involved.”

21. Consequently, the Respondent requested that “it is clear that the Respondent indeed suffered losses and damages, which are attributable to the Claimant and, thereafter, the members of the FIFA PSC must reduce the compensation payable to the Respondent”.

22. In addition to the already mentioned offers from the Saudi Arabian and Mexican club, the Respondent wished to point out that the Claimant owed the Brazilian club, Sao Paulo FC, a sell on fee of 10% for the transfer of the player. In this context, the Respondent explained that in connection with a transfer between the Respondent and Sao Paulo FC, the clubs agreed to “assign” the 10% sell-on fee to the Respondent, with the aim “of the latter to discount or set-off the 10% which would have eventually be payable by the Respondent to the Claimant”. In other words, “instead the Claimant pay the Sell-on Fee previously due to [´Sao Paulo FC], the Claimant just had to discount 10% of each instalment of the Transfer Agreement from Santos, without any prejudice at all to the Claimant.” In this respect, the Respondent deemed that the Claimant did not accept it “without any good reason to do so”.

23. For this reason, the Respondent stressed that “yet again suffered a loss, which was attributable to the Claimaant”.

24. In regards to the penalty fee and interest claimed, the Respondent referred to the principle of ne bis in idem and deemed that a penalty of 5% and interest of 5% p.a. is excessive and “and incontestable violation of the principle of proportionality”.

25. In conclusion, the Respondent requested the following:

“i. To set aside in fully the statement of claim filed by the Claimant;

ii. To confirm that the Respondent is only liable to pay to the Claimant an amount of USD 633.333 (six hundred thirty three thousand three hundred thirty three dollars):

iii. To confirm that the Respondent is only liable to pay to the Claimant default interest at a rate 1101 higher than 5% (five percent) annually as from the issuance any decision rendered by the FIFA PSC: and

iv. To confirm that the Claimant and the Respondent shall jointly and proportionally afford the payment of costs to FIFA regarding the case at hand.”

II. CONSIDERATIONS OF THE PLAYERS’ STATUS COMMITTEE

A. Competence and applicable legal framework

26. First of all, the Single Judge of the Players’ Status Committee (hereinafter: the Single Judge) analysed whether he was competent to deal with the present matter. In this respect, he took note that the present matter was submitted to FIFA on 14 April 2020. 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.

27. Subsequently, the Single Judge referred to art. 3 of the Procedural Rules and confirmed that in accordance with art. 23 par. 1 and 3 in combination with art. 22 lit. f) of the October 2020 edition of the Regulations on the Status and Transfer of Players, he is competent to deal with the matter at sake which concerns an employment-related dispute of an international dimension between a Russian club and a Brazilian club.

28. 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 confirmed that in accordance to art. 26 par. 1 and 2 of the October 2020 edition of the Regulations on the Status and Transfer of Players and considering that the present claim was lodged with FIFA on 14 April 2020, the March 2020 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the present matter as to the substance.

B. Burden of proof

29. The Single Judge recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. Likewise, he stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which he may consider evidence not filed by the parties.

30. In this respect, the Single Judge also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.

C. Merits of the dispute

31. 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 Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

32. Having said this, the Single Judge turned to the argumentation of the Respondent, and considered that the circumstances raised by the Respondent cannot be considered a valid reason for non-payment of the monies claimed by the Claimant, in other words, the reasons brought forward by the Respondent in its defence do not exempt the Respondent from its obligation to fulfil its contractual obligations towards the Claimant.

33. In this respect, the Single Judge emphasized that the Claimant rejected the sub-loan of the player to the Saudi Arabian club due to the lack of time in order to be able to evaluate all risks of the transaction, as per the Exhibit 1 of the reply. What is more, the Single Judge noted that after receiving the second offer from the Mexican club, the Claimant informed the Respondent that it should proceed in TMS to make the transfer “from loan to permanent”, cf. Exhibit 3 of the reply. In this regard, the Single Judge highlighted that the Claimant informed the Respondent via tet message that if the loan would be made permanent it would then agree to the originally agreed payment schedule, cf. Exhibit 5 of the reply.

34. Moreover, the Single Judge underlined that the Claimant did not have any role in the dispute concerning the unilateral termination of the employment relationship between the player and the Respondent.

35. Lastly, the Single Judged emphasized that the Claimant did not breach any contractual obligations and acted within its rights.

36. Consequently, the Single Judge decided to reject the argumentation put forward by the Respondent in its defence.

37. On account of the aforementioned considerations, the Single Judge established that the Respondent failed to remit to the Claimant USD 2,333,333, corresponding to the first instalment of the transfer fee.

38. 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 2,333,333.

39. In continuation, the Single Judge turned to the matter of the contractual penalty, and concluded that such amount was freely negotiated by the parties and is fair and proportional not only in respect of the amounts due but also concerning the jurisprudence of the Players’ Status Committee. Consequently, the Single Judge decided to award the amount of USD 166,666.65 as contractual penalty.

40. In addition, taking into account the Claimant’s request as well as the constant practice of the Players’ Status Committee, the Single Judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on each of the relevant payment(s) as of the day following the day on which the relevant payment(s) fell due, until the date of effective payment.

41. What is more, taking into account the applicable Regulations, 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.

42. 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.

43. 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.

44. 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.

D. Costs

45. 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 and 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 and are normally to be paid by the unsuccessful party.

46. In this respect, the Single Judge reiterated that the Claimant’s claim is partially accepted and that the arguments raised by the Respondent were fully rejected. Therefore, the Single Judge decided that the Respondent shall bear the entirety of costs of the current proceedings in front of FIFA.

47. The Single Judge further observed 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 the maximum amount of procedural costs levied for any claim lodged prior to 10 June 2020, which was yet to be decided at the time of such temporary amendment, shall be equivalent to any advance of costs paid.

48. Accordingly, the Single Judge observed that the Claimant paid the amount of CHF 5,000 as advance of costs, and therefore decided that the maximum amount of costs of the proceedings corresponds to CHF 5,000.

49. Consequently, the Single Judge determined that the Respondent shall pay the amount of CHF 5,000 in order to cover the costs of the present proceedings.

50. Subsequently, the Single Judge reverted to art. 17 par. 5 in combination with art. 18 of the Procedural Rules, and observed that the advance of costs paid by a party shall be duly considered in the decision regarding costs. Therefore, given that the Respondent is responsible to pay the entirety of the procedural costs, the Single Judge decided that the amount paid by the Claimant as advance of costs shall be reimbursed to the latter by FIFA.

51. For the sake of completeness, the Single Judge referred to art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation was to be awarded in these proceedings.

III. DECISION OF THE PLAYERS' STATUS COMMITTEE

1. The claim of the Claimant, FC Krasnodar, is partially accepted.

2. The Respondent, Santos FC, has to pay to the Claimant, the following amount:

- USD 2,333,333 net as outstanding remuneration plus 5% interest p.a. as from 6 April 2020 until the date of effective payment;

- USD 116,666.65 as penalty.

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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