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 dispute concerning the transfer of the player William Gabriel Mendieta
Pintos
BY:
Geoff Thompson (England), Single Judge of the PSC
CLAIMANT:
SE Palmeiras, Brazil
Represented by CSMV Advogados
RESPONDENT:
Club Olimpia, Paraguay
I. FACTS OF THE CASE
1. On 4 January 2017, the Brazilian club, SE Palmeiras (hereinafter: the Claimant) and the Paraguyan
club, Olimpia (hereinafter: the Respondent) concluded an agreement (hereinafter: transfer
agreement) regarding the permanent transfer of the player William Gabriel Mendieta Pintos
(hereinafter: player) from the Claimant to the Respondent.
2. According to the transfer agreement, the Respondent undertook to pay the Claimant a transfer
fee of USD 750,000, payable as follows:
- USD 200,000 on 30 January 2018;
- USD 200,000 on 30 July 2018;
- USD 200,000 on 30 December 2018;
- USD 150,000 on 30 July 2019.
3. Furthermore, the transfer agreement contained the following clauses:
4. Moreover, clause 3.2.4 of the transfer agreement reads as follows: “The parties agreed that if
there is a default or delay with the payment mentioned in the hypothesis under the terms of
clause 3.2. above, for more than ten (10) days will imply a fine in the amount of ten percent (ten
percent) in favour of PALMEIRAS plus one percent (1.0%) for each month of delay, from the first
day of delay until the effective date of payment”.
5. According to information contained in the Transfer Matching System (TMS), on 6 January 2020,
the Respondent concluded an agreement with the Mexican club, FC Juárez, regarding the
permanent transfer of the player to the Mexican club, involving a transfer fee of USD 600,000.
6. On 13 August 2019, the Claimant put the Respondent in default of the payment of the fourth
instalment of the transfer agreement, i.e. USD 150,000.
7. On 13 August 2019, the Respondent requested an extension to pay the outstanding amounts
until 30 September 2019, to which the Claimant agreed.
8. On 26 September 2019, the Respondent made a payment of USD 75,000 to the Claimant.
9. On 27 September 2019, the Respondent requested another extension of 45 days to pay its
outstanding dues, to which the Claimant agreed.
10. On 2 December 2019, the Claimant sent a default notice to the Respondent, requesting payment
of USD 75,000 as part of the fourth instalment of the transfer agreement, USD 350,000 resulting
from clause 3.3. of the transfer agreement, plus a fine of 10% for late payments as well as
interest.
11. On 11 December 2019, the Respondent sent a settlement proposal to the Claimant, which was
rejected.
12. On 15 January 2020, the Claimant sent a default notice to the Respondent, requesting payment
of the following monies within 10 days:
- USD 75,000 resulting from art. 2.2. (iv) of the transfer agreement, plus 5% interest p.a. as
of 11 November 2019;
- USD 350,000 resulting from art. 3.3 of the transfer agreement, plus 1% monthly interest as
from 13 December 2019;
- A fine of 10% of the outstanding amounts.
13. On 11 June 2020, the Claimant lodged a claim against the Respondent in front of FIFA,
requesting payment of the following monies:
- USD 75,000 resulting from art. 2.2. (iv) of the transfer agreement, plus 5% interest p.a. as
of 30 July 2019;
- USD 350,000 resulting from art. 3.3 of the transfer agreement, plus 1% monthly interest as
from 12 December 2019 or alternatively as from the date of the player’s transfer to Mexico;
- A fine of 10% of the outstanding amounts.
Additionally, the Claimant requested to order the Respondent to bear the Claimant’s legal fees.
14. In its claim, the Claimant held that USD 75,000 as part of the fourth instalment of the transfer
agreement remained outstanding.
15. Furthermore, the Claimant argued being entitled to USD 350,000 either resulting from clause
3.3. or 3.2.1. of the transfer agreement.
16. Moreover, the Claimant referred to art. 3.2.4. of the transfer agreement, which defines a penalty
in case of late payment as well as 1% interest per month. In this context, the Claimant argued
that such penalty as well as the interest is applicable as of the dates the respective payments fell
due.
17. In its reply to the claim, the Respondent stated that on 29 December 2019 it concluded a transfer
agreement with FC Juárez for the player William Mendieta. The former undertook to pay to the
latter a fixed amount of USD 600,000. Therefore, in accordance with art. 3.2.1 of the transfer
agreement, the 50% of the transfer fee to which the Claimant is entitled to is lower than USD
350,000.
18. The Respondent added that due to the COVID-19 pandemic, on 22 June 2020, it offered to the
Claimant the payment of USD 75,000 plus USD 350,000 accrued by 1% monthly interest on the
amount due as from 13 December 2019 as well as to pay a fine of 10% over the mentioned
amounts (75,000 and 350,000), in accordance with clauses 2.2 (iv) and 3.3 of the transfer
agreement, in instalments of USD 50,000 per month.
19. Moreover, the Respondent maintained that the COVID-19 pandemic has to be considered as a
force majeure cause, which “force” the Respondent to suspend, for the moment, the payment
towards the Claimant “without any kind of liability”.
20. The Respondent further stated “Paraguay was declared in emergency situation past 16 March
2020. Later on, it was approved the Law 6524 (Annex 2), passed on 26 of March, and it was
ordered the closure of all the non-essential activities, including those financial activities not linked
to essential services.”
21. The Respondent held that it has no incomes at this moment, therefore it cannot pay the agreed
amount for the transfer of the player William Mendieta “due to a force majeure”.
22. Regarding the 1% interest rate per month requested by the Claimant, the Respondent held that
such rate is contrary to the DRC and PSC established jurisprudence and considered that it should
be lowered to a rate of 5% per year with regard to the second half of the fourth instalment, i.e.
USD 75,000. Moreover, the due interest shall be calculated as from 12 November 2019,
corresponding to the 105th day after the accepted postponement, and the “stipulation
according the article 3.2.1. of the transfer agreement, must be calculated since January 09,
2020“.
23. To conclude, the Respondent stated the following: “For those reasons, we consider that the Club
Olimpia complied with the agreement terms when it had the chance to do it. Nowadays, it is no
possible to afford in the same way that before the pandemic. Therefore, we ask respectfully to
PSC of FIFA, to make the decision considering the times of crisis that we are passing, and in
consequence, establish a calendar of payment in 24 monthly installments that Club Olimpia can
meet, and on the other hand establish a fair interest rate according the jurisprudence in the
football industry”.
II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE
1. First of all, the Single Judge of the Players’ Status Committee (hereinafter: 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 11 June 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.
2. Subsequently, the Single Judge referred to art. 3 paras 2 and 3 of the Procedural Rules and
confirmed that in accordance with art. 23 paras 1 and 4 in conjunction with art. 22 lit. f of the
Regulations on the Status and Transfer of Players (edition October 2020) he is competent to deal
with the matter at stake, which concerns a contractual dispute between clubs affiliated to
different associations.
3. Furthermore, the Single Judge analysed which regulations should be applicable as to the
substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and
par. 2 of the Regulations on the Status and Transfer of Players (edition October 2020), and
considering that the present claim was lodged on 11 June 2020, the June 2020 edition of said
regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.
4. The competence of the Single Judge and the applicable regulations having been established, the
Single Judge entered into the substance of the matter. In this respect, the Single Judge started
by acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the Single Judge emphasised 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. Having said this, the Single Judge acknowledged that the Claimant and the Respondent signed
a transfer agreement on 4 January 2017 regarding the transfer of the player from the Claimant
to the Respondent, according to which the Respondent undertook to pay the Claimant the total
amount of USD 750,000 in four instalments.
6. The Single Judge further took note of the fact that the parties agreed in clause 3.2.1 of the
transfer agreement that the Claimant would be entitled to an amount of USD 350,000, or 50%
of the sell-on amount (if higher), in case the player is transferred to a third club. Furthermore,
the parties agreed on a penalty of 10% of the outstanding amount in case of late payments as
per clause 3.2.4. of the transfer agreement.
7. Moreover, the Single judge took notice of the Claimant’s claim lodged against the Respondent
in front of FIFA, maintaining that the Respondent owed it the amounts of USD 75,000,
corresponding to half of the fourth instalment of the transfer agreement, USD 350,000, in
accordance with clauses 3.2. of the transfer agreement as well as USD 35,000 resulting from
clause 3.2.4 of the transfer agreement.
8. Moreover, the Single Judge duly noted that the Respondent, on 6 January 2020, transferred the
player to the Mexican club FC Juárez, including a transfer fee of USD 600,000, which triggered
clause 3.2.4. of the transfer agreement.
9. In this context, the Single Judge took particular note of the fact that, on 15 January 2020, the
Claimant put the Respondent in default of payment of USD 75,000, USD 350,000 and 10% of
the outstanding amounts, setting a 10 days’ time limit in order to remedy the default.
10. Subsequently, the Single Judge took into account that the Respondent, in reply to the claim, did
not dispute the outstanding amount, but argued that due to the Covid19 pandemic it could not
make the due payments to the Claimant.
11. Having said that, the Chamber wished to refer to the fact that, in light of the worldwide COVID-
19 outbreak, FIFA issued a set of guidelines, the COVID-19 Guidelines, which aim at providing
appropriate guidance and recommendations to member associations and their stakeholders, to
both mitigate the consequences of disruptions caused by COVID-19 and ensure that any
response is harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an
additional document, referred to as FIFA COVID-19 FAQ, which provides clarification about the
most relevant questions in connection with the regulatory consequences of the COVID-19
outbreak and identifies solutions for new regulatory matters.
12. For this dispute. it is important to note that based on the COVID-19 Guidelines, as well as the
FIFA FIFA COVID-19 FAQ, the COVID-19 outbreak is not a force majeure situation in any specific
country or territory. What is more, the COVID-19 Guidelines do not exempt an employer from
paying its contractual obligations.
13. In this context, the Single Judge considered that the arguments 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.
14. In addition, the Single Judge established that the Respondent had delayed a due payment for
more than 30 days without a prima facie contractual basis.
15. Further, the Single Judge addressed the matter of the penalty the parties contractually agreed
upon per clause 3.2.4 of the transfer agreement.
16. After due deliberation, the Single Judge concluded 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. In this respect,
the Single Judge highlighted that in order to determine as to whether a penalty clause is to be
considered acceptable, the specific circumstances of the relevant case brought before it shall
also be taken into consideration.
17. In the specific case at hand, the Single Judge deemed that a penalty of 10% of the outstanding
amount, which the parties contractually agreed upon, is both proportionate and reasonable in
the case at hand.
18. On account of all of the above, the Chamber decided that the penalty is valid and applicable in
the present matter.
19. Consequently, the Single Judge decided to reject the argumentation put forward by the
Respondent in its defence.
20. On account of the aforementioned considerations, the Single Judge established that the
Respondent failed to pay the Claimant the total amounts of USD 75,000 corresponding to half
of the fourth instalment of the transfer fee as well as the USD 350,000 in accordance with
clauses 3.2.1 of the transfer agreement. As such, the Single Judge decided that the Respondent
has to pay the Claimant the contractual penalty of USD 35,000.
21. 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
460,000.
22. In addition, taking into consideration the Claimant’s claim, the Single Judge decided to award
the Claimant interest at the rate of 5% p.a. on the amount of USD 75,000 as of 13 November
2019 as well as 12% p.a. on the amount of USD 350,000 as of 17 January 2020.
23. In accordance with the long-standing jurisprudence of the Dispute Resolution Chamber and the
Players’ Status Committee, no interest is granted for the contractual penalty.
24. Moreover, the Single Judge decided that any further request filed by the Claimant is rejected.
25. In continuation, taking into account the consideration under number II./14. above, the Single
Judge referred to art.12bis par. 2 of the Regulations which stipulates that any club found to
have delayed a due payment for more than 30 days without a prima facie contractual basis may
be sanctioned in accordance with art. 12bis par. 4 of the Regulations.
26. The Single Judge established that by virtue of art. 12bis par. 4 of the Regulations he has
competence to impose sanctions on the Respondent. Bearing in mind that the Respondent duly
replied to the claim of the Claimant and in the absence of the circumstance of repeated offence,
the Single Judge decided to impose a warning on the Respondent in accordance with art. 12bis
par. 4 lit. a) of the Regulations.
27. In this connection, the Single Judge wished to highlight that a repeated offence will be
considered as an aggravating circumstance and lead to more severe penalty in accordance with
art. 12bis par. 6 of the Regulations.
28. What is more, 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.
29. 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.
30. 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.
31. Moreover, 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.
32. Finally, the Single Judge referred to the Covid-19 Football Regulatory Issues – FAQ, published on
11 June 2020 which establish that, for any claim lodged between 10 June 2020 and 31
December 2020 (both inclusive), there will be no requirement to pay an advance of costs and
no procedural costs shall be ordered.
III. DECISION OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE
1. The claim of the Claimant, SE Palmeiras, is partially accepted.
2. The Respondent, Club Olimpia, has to pay to the Claimant, the following amounts:
- USD 75,000 plus 5% interest p.a. as from 13 November 2019 until the date of effective
payment;
- USD 350,000 plus 12% interest p.a. as from 17 January 2020 until the date of effective
payment;
- USD 35,000.
3. Any further claims of the Claimant are rejected.
4. A warning is imposed on the Respondent.
5. 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.
6. 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).
7. 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 amounts are 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 amounts are paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players).
2. In the event that the payable amounts as per in this decision are 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 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).
CONTACT INFORMATION:
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FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
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