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 Yeferson Julio Soteldo Martinez

BY:

Geoff Thompson (England), Single Judge of the PSC

CLAIMANT / COUNTER-RESPONDENT:

HUACHIPATO SADP, Chile

Represented by Carlezzo Advogados

RESPONDENT / COUNTER-CLAIMANT:

SANTOS FC, Brazil

Represented by CCLA Advogados

I. FACTS OF THE CASE

1. On 9 January 2019, the Chilean club, Huachipato SADP (hereinafter: the Claimant/Counter-Respondent or Huachipato) and the Brazilian club, Santos FC (hereinafter: the Respondent/Counter-Claimant or Santos) signed an agreement regarding the permanent transfer of the player, Yeferson Julio Soteldo Martinez (hereinafter: the player), from the former to the latter, whereby the Claimant transferred to the Respondent 50% of the player’s economic rights and 100% of the player’s federative rights.

2. Clause 2 of the transfer agreement provided that, for the acquisition of 50% of the player’s economic rights, the Respondent undertook to pay to the Claimant the amount of USD 3,000,000, as follows: USD 1,000,000 on 30 June 2019; USD 1,000,000 on 28 February 2020; USD 1,000,000 on 31 July 2020.

3. In addition, clause 3 of the transfer agreement states that: “[…] in case of a future transfer of the player from Santos to a third club, either definitive or temporary, national or international, Huachipato is entitled to receive, as sell-on fee, 50% of the net total transfer fee to be paid by the third club to Santos. The deduction shall be limited to an intermediary fee up to 10% and the mandatory contribution of FAAP and FENAPAF”.

4. In this regard, clause 3.5 of the transfer agreement states that: […] SANTOS commits to inform HUACHIPATO about any formal written proposal received from third clubs that might be related to a future transfer, definitive or temporary, or any kind of operation related with the PLAYER and, in case a future transfer is settled, SANTOS also commits to provide HUACHIPATO with a copy of all the relevant documents concerning the future transfer. In case this obligations is not respected, which means that SANTOS has not disclosed information that it was obliged to, for each lack of disclosure a fine of USD 30.000,00 (thirty thousand dollars) will be paid to HUACHIPATO”.

5. Moreover, clause 3.7 of the transfer agreement read as follows: “Every time SANTOS receives a proposal from a third club regarding a future transfer of the PLAYER in an amount equal or higher than USD 12.000.000 (twelve million American Dollars) and refuses such proposal, HUACHIPATO will be entitled, at its own discretion, to demand from SANTOS the acquisition of its participation in the PLAYER's economic rights for the amount equal to 50% of the gross amount proposed by the third club. So, if SANTOS receives a proposal in the above-mentioned conditions and HUACHIPATO does not exercise its above-mentioned right, it would not prevent HUACHIPATO from exercising it in any other future opportunity in which SANTOS receives a proposal in such conditions. In the event that HUACHIPATO exercises such option, demanding SANTOS to buy its 50% share, and the event that SANTOS paid all transfer installments set by the clause 2.1 in the dates agreed, HUACHIPATO will accept that SANTOS pays the amount due to HUACHIPATO in accordance in the remaining time of the PLAYER'S contract. It means that if, for example, at the time of the execution of the clause the PLAYER and SANTOS have more 20 months of contract to be performed, the amount to be paid to HUACHIPATO for its 50% share with will be divided in 20 and will be paid within in 20 months, in monthly and consecutive installments due on the day 10. Any delay in the payment of the installments bigger than 30n days will be fined in 20%. In the case that, taking the 20-months as example, the PLAYER is transferred in definite terms by SANTOS to another club, SANTOS will to pay the entire debt that is still pending to be paid to HUACHIPATO within 30 days after receiving from the buying club the price of the transfer fee.”

6. Clause 3.9 of the transfer agreement provides that: “In case SANTOS disrespects the clause 3.7 by not paying the 50% participation of HUACHIPATO in due time, SANTOS shall pay a fine of 20% over the total amount due to HUACHIPATO’s, in accordance with the 50% participation in the transfer fee. In addition to the above-mentioned fine, if SANTOS delays any payment due to HUACHIPATO for more than 30 (thirty) days, an interest of 1% (one percent) per month over the total amount overdue will be applied until the date of the effective payment, in order to compensate HUACHIPATO for the damages suffered”.

7. Clause 4.1 of the contract reads as follows: “4.1 The PARTIES agree to treat the terms of this Agreement as confidential and undertake not to disclose their content to any third party (other than their respective professional advisors), including the media, without the consent of the others. The only disclosures that the PARTIES shall make are those required by law or by any fiscal, jurisdictional or regulatory or football authorities.”

8. On 15 May 2020, Huachipato lodged a claim against Santos, requesting the amount of USD 7,320,000, plus 1% interest per month on the amount of USD 7,200,000, as of 13 March 2020 (30 days after the letter sent by Huachipato to Santos on 11 February 2020 requesting the payment), broken down by Huachipato as follows:

- USD 120,000 corresponding to the fine for the 4 offers received by the Respondent for the acquisition of the player’s economic rights as per clause 3.5 of the transfer agreement;

- USD 6,000,000 corresponding to the amount payable as per clause 3 of the transfer agreement (50% of USD 12,000,000), plus 1% interest per month as from 13 March 2020 (i.e 30 days after the letter sent on 11 February 2020);

- USD 1,200,000 corresponding to the fine stipulated in clause 3.9 of the transfer agreement (20% of 6,000,000 equals to 1,200,000).

9. In its claim, the Huachipato explained that, allegedly on 31 January 2020, the Brazilian club, Club Atlético Mineiro (hereinafter: CAM), sent an e-mail to Santos, containing an offer for the acquisition 100% of the Player’s economic rights, amounting to USD 12,000,000. According to Huachipato, the offer was allegedly valid for 5 days and, should Santos not present any kind of reply to CAM, the offer would be understood as tacitly refused by Santos. Such offer also read that “Considering that Santos FC holds the right to receive an amount equivalent to 50% (fifty percent) of the transaction amount, the payment of the amount corresponding to the percentage to which Santos FC is entitled will take place in 5 (five) business days after signing the respective transfer contract. The remaining amount due for the transfer to the other holders of the player's economic rights will be the subject of direct negotiations with the third party”.

10. In this context, Huachipato further explained that, since Santos did not present any reply, CAM decided to present a second offer on 10 February 2020, whereby CAM offered, once again, the amount of USD 12.000.000 for the acquisition of 100% of the Player’s economic rights. In its offer, CAM emphasized the need of a reply from Santos, either accepting or denying the offer.

11. Huachipato argued that, after becoming aware of the two official proposals made by CAM to Santos, it sent a letter to Santos on 11 February 2020 informing about the decision to exercise its right, as provided for in clause 3.7. of the transfer agreement.

12. In this context, Huachipato explained that, by means of its letter dated 13 February 2020, Santos informed Huachipato that it had not received any offer from CAM, reason why Huachipato was not entitled to claim the purchase of its 50% share of the player’s economic rights. Furthermore, Huachipato explained that, along said letter, Santos enclosed a letter allegedly written by the player and dated 12 February 2020, whereby the player expressed his intention to stay with Santos and that the latter had improved his financial conditions.

13. Huachipato further held that, in addition to the offer sent by CAM, Santos also received two other offers from third clubs (FC Internazionale and Atlanta United), where said clubs expressed their interest in signing the player and offered a transfer compensation higher than USD 12,000,000. In this regard, Huachipato held that Santos never informed it about said offers.

14. Santos filed a defence and counterclaim against Huachipato and requested:

“FIRST - To set aside in fully the statement of claim filed by the Claimant;

SECOND – To confirm the counter-claim herein filed by the Respondent;

THIRD - To order the Claimant to pay to the Respondent USD 30,000 (thirty thousand dollars) due as compensation for breaching Clause 4 of the Transfer Agreement, plus default interest at rate of 5% annually as from 14 February 2020 until the date of effective payment; and

FOURTH - To confirm that the whether there is the necessity to pay any procedural in relation to the ongoing dispute the Claimant shall afford it in full, exempting the Respondent of any obligation whatsoever.”

15. Santos confirmed that on 31 January 2020 and 10 February 2020 it received two offers from CAM, both with the same content, and argued that in such offer CAM “clarified that although the offer amounted USD 12,000,000 (twelve million dollars), it would pay only USD 6,000,000 (six million dollars) to the Respondent and afterwards CAM would directly negotiate the terms and conditions of a deal in relation to its percentage due as sell-on clause with the Claimant”. Consequently, Santos deemed that “it was not exactly clear from the offer whether the total amount of the transfer would indeed be USD 12,000,000 or if the offer would be USD 6,000,000 plus any amount eventually agreed with the Claimant”.

16. In continuation, Santos explained that after having informed the player of the offer, he decided to decline it, and that consequently it informed Huachipato on 13 February 2020 that it “had never refused any offer whatsoever from CAM”. In this respect, Santos argued that “the Player was the one who had refused the mentioned offer and as such, there was nothing left for it to do, considering the consent of the latter was not a mere detail but a compulsory element for the conclusion of said transfer”. Santos, while referring to said letter, also highlighted that Huachipato had breached the contract’s duty of confidentiality.

17. As to the substance of the matter, Santos argued that the offer by CAM was non-binding due to the fact that clause 3.7 of the agreement mandated two conditions, namely (a) and offer equal or higher than USD 12 million, and (b) that it refused such offer. In this respect, Santos argued that the offer by CAM, due to its wording, “did not refer to a payment of USD 12,000,000 (twelve million dollars) but USD 6,000,000 (six million dollars) plus a separate negotiation with the Claimant in respect of its share of the transfer fee. Therefore, one cannot conclude or affirm that the offer was of USD 12,000,000 (twelve million dollars)”.

18. Santos further argued that the player’s consent to the offer and transfer was mandatory under the provisions of the RSTP and Brazilian Law, and therefore was of the position that it never refused such offer. Santos, in addition, adduced that “it is undisputed that the exercise of its most important triggering element never occurred. Clause 3.7 of the Transfer Agreement is very clear, the Claimant is entitled to demand the payment of the percentage established in its sell-on clause if and only when the Respondent refuses an offer addressed by a third club for the transfer of the Player”.

19. Santos also argued in its defense that the Claimant “created a whole scenario to invoke its right to receive compensation. In other words, the Claimant liaised with CAM prior to any offer being addressed to the Respondent, the Claimant was always one step ahead of the Respondent in this matter and was the intellectual architect behind CAM’s offer. The greatest proof to that is the content of the offer itself, by which CAM, while confirming it had contact with the Claimant, informed that it would negotiate the Claimant´s share of the transfer fee directly with the Claimant”. Santos believed this to constitute an abuse of right and a “simulation”.

20. With regards to the alleged breach of clause 3.5 of the agreement, Santos argued that Huachipato failed to discharge its burden of proof that it had received offers from FC Internazionale and Atlanta United. More in particular, Santos submitted that due to “simulation” orchestrated between CAM and the Claimant, the latter was already aware of the offers made by CAM and therefore the purpose of clause 3.5 of the contract had been fulfilled, therefore no breach has taken place.

21. Lastly, Santos counterclaimed against Huachipato on the grounds that it had colluded with CAM and therefore made the latter aware of the contents of the transfer agreement. Accordingly, Santos deemed that the claimant breached clause 4.1 of the agreement and request a compensation of USD 30,000, making a parallel of this amount with that inserted on clause 3.5 in accordance with the “principle of reciprocity”.

22. Huachipato rejected the counterclaim and reiterated its position. It adduced that it never violated the confidentiality of the contract, and argued that the Santos has not produced any evidence in this respect.

23. Further, Huachipato argued that “The terms of contract were already known by the press and the football market“ and filed press reports in support of this position. It also argued that the former coach of the player, then coaching CAM, was interested in hiring the player’s services, which in Huachipato’s opinion “would be fully plausible and understandable that the transfer details, for example, could be passed by the player to Mr. Rafael Dudamel, so that his new club (CAM) could try to sign him”.

24. In continuation, the Claimant argued that “The truth is that CAM probably became aware of the transfer details through the most likely possibilities, which are (i) the news from the Brazilian press since the player was transferred to Santos; and/or (ii) the several declarations of the Respondent´s president to the press confirming the transfer details; and/or (iii) information passed on by the player himself to the former coach of the Venezuelan National Team (which was the head coach of CAM at the moment the proposals were presented); and/or (iv) information passed on by the player´s intermediary, considering the player was interested in a move to CAM, as duly demonstrated in the initial claim.”

25. The claimant also argued that no penalty is established in the contract with regards to the confidentiality. It furthermore argued that the “Respondent’s line of defence is based on an unfounded counterclaim”, which moreover was drafted in procedural bad faith.

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 15 May 2020. Taking into account the wording of art. 21 of the November 2019 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 15 May 2020, the March 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 proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

6. Subsequently, the Single Judge acknowledged that Huachipato and Santos signed a transfer agreement on 9 January 2019, regarding the transfer of the player from Huachipato to Santos. According to clause 3.5 of the transfer agreement and in light of the sell-on clause agreed upon, Santos had, inter alia, the obligation to inform Huachipato about “formal written proposals” and to “provide Huachipato with a copy of all the relevant documents concerning the future transfer”.

7. Moreover, the Single judge took notice of Huachipato’s claim lodged against Santos in front of FIFA, maintaining that Santos failed to inform it about four different offers received and claiming the corresponding “fine” of USD 120,000, as well as USD 6,000,000 in accordance with clause 3 of the transfer agreement and USD 1,200,000 in accordance with clause 3.9 of the agreement.

8. Subsequently, the Single Judge took into account that Santos, in reply to the claim, rejected the claim and lodged a counterclaim against Huachipato as it allegedly breached clause 4.1 of the transfer agreement.

9. The Single Judge duly noted that Huachipato denied having breached clause 4.1, rejected the counterclaim and reiterated its position.

10. Subsequently, the Single Judge turned his attention to the substance of the matter, and recapitulated that the dispute revolves around the four offers supposedly made to Santos, as well as their disclosure to Huachipato. The Single Judge therefore started analysing each of the offers, while having in mind art. 12 par. 3 of the Procedural Rules in order to determine if Santos has breached its duty under clause 3.5 of the contract:

a) Offer by FC Internazionale: The news report filed by Huachipato constitutes of a report by a journalist that Santos’ president would have been in contact with FC internazionale. There is no proof of a written offer by such club on file. It therefore cannot be established that a written offer was received by Santos from FC Internazionale. Therefore, the Single Judge concluded that no contractual breach has taken place in relation to this alleged offer.

b) Offer by Atlanta United: The news report filed by Huachipato constitutes of a report by a journalist with a quote from Santos’ president that the club received an offer from a club from the United States. There is no proof of a written offer by such club on file. Therefore, it cannot be established that a written offer was received by Santos from Atlanta United. Therefore, the Single Judge concluded that no contractual breach has taken place in relation to this alleged offer.

c) Offers by CAM: There are two written offers made by CAM to Santos. The parties do not dispute this fact and the contents of the offers. Under the contract, Santos undertook to provide Huachipato with a copy of all the relevant documents concerning the future transfer. From the documentation on file, the Single Judge concluded that the offers were never sent by Santos to Huachipato. Therefore, the Single Judge established that Santos breached its contractual duty defined in clause 3.5 of the transfer agreement, to inform Huachipato. However, the offer made on 10 February 2020 by CAM is identical to the first one, and CAM stated clearly in its email to Santos that it was reiterating its first offer. Therefore, the Single Judge considered them as one offer only, which triggered the penalty fee in the amount of USD 30,000 penalty fee.

11. Having established the above, the Single Judge turned then to the contents of the offers from CAM in order to verify if Santos breached clause 3.7 and, consequently, clause 3.9. The transfer agreement mandated that in case Santos received an offer “equal or higher” than USD 12 million and refused it, then Huachipato could exercise its option to sell its 50% share.

12. The wording of the offer may seem dubious at first, but is in fact clear. While it reads USD 12,000,000, it also states that “Considering that Santos FC holds the right to receive an amount equivalent to 50% (fifty percent) of the transaction amount, the payment of the amount corresponding to the percentage to which Santos FC is entitled will take place in 5 (five) business days after signing the respective transfer contract”. In other words, CAM was only willing to pay Santos USD 6,000,000, and not USD 12,000,000. What is more, the offer also stated that “the remaining amount due for the transfer to the other holders of the player's economic rights will be the subject of direct negotiations with the third party”, which clearly makes it uncertain what, and if, CAM and “the other holders of the player's economic rights”, i.e. Huachipato, would come to terms regarding such negotiation.

13. On account of the above, the Single Judge concluded that the offer made by CAM was not of USD 12,000,000 but in fact USD 6,000,000 only, which is the amount it was willing to pay Santos in accordance with the unequivocal wording of the offer.

14. Consequently, the Single Judge established, in absence of an offer equal or higher than USD 12 million, the option inserted in clause 3.7 was not triggered. The Single Judge further pointed out that it became irrelevant to examine the matter of the refusal of the offer by Santos. Therefore, the Single Judge rejected Huachipato’s claim for USD 6,000,000 in accordance with clause 3.7 of the transfer agreement.

15. Subsequently, the Single Judge turned his attention to the counterclaim of Santos and observed that no evidence was presented by Santos in order to maintain the allegations that Huachipato violated the confidentiality of the transfer agreement. Consequently, the Single Judge rejected said part of the claim.

16. Consequently, the Single Judge decided to partially accept Huachipato’s claim and that, in accordance with clause 3.5 of the transfer agreement, Santos is liable to pay to Huachipato the total amount of USD 30,000.

17. 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.

18. The Single Judge rejected any further claim lodged by Huachipato as well as the counterclaim lodged by Santos.

19. 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.

20. 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.

21. Therefore, bearing in mind the above, the Single Judge decided that, in the event that the Santos does not pay the amounts due to Huachipato within 45 days as from the moment in which Huachipato, following the notification of the present decision, communicates the relevant bank details to Santos, 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 Santos in accordance with art. 24bis par. 2 and 4 of the Regulations.

22. 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.

23. Finally, in this respect, the Judge referred to the Covid-19 Football Regulatory Issues – FAQ, published on 11 June 2020 that, given the current circumstances, for any claim lodged prior to 10 June 2020 which has yet to be decided, the maximum amount of the procedural costs shall be equivalent to any advance of costs paid. Thus, considering that the advance of costs amounts to CHF 5,000, the Single Judge established said amount as the payable procedural costs, from which CHF 2,000 shall be paid by Huachipato and CHF 3,000 by Santos, in view of the outcome of the matter.

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

1. The claim of the Claimant/Counter-Respondent, HUACHIPATO SADP, is partially accepted.

2. The counterclaim of the Respondent/Counter-Claimant, SANTOS FC, is rejected.

3. The Respondent/Counter-Claimant has to pay to the Claimant/Counter-Respondent USD 30,000 as penalty fee.

4. Any further claims of the Claimant/Counter-Respondent are rejected.

5. The Claimant/Counter-Respondent 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/Counter-Claimant 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/Counter-Claimant within 45 days, as from the notification by the Claimant/Counter-Respondent of the relevant bank details to the Respondent/Counter-Claimant, the following consequences shall arise:

 1.

The Respondent/Counter-Claimant 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.

8. The final costs of the proceedings in the amount of CHF 5,000 are to be paid by the parties to FIFA (cf. note relating to the payment of the procedural costs below) as follows:

 1.

CHF 2,000 by the Claimant/Counter-Respondent. Such amount is offset against the advance of costs paid by the Claimant/Counter-Respondent. 2.

CHF 3,000 by the Respondent/Counter-Claimant.

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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