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 12 January 2021
Decision of the
Single Judge of the Players' Status Committee
passed on 12 January 2021,
regarding a dispute concerning the transfer of the player C
BY:
Stefano La Porta (Italy), Single Judge of the PSC
CLAIMANT:
A, Country A
Represented by Mr.
RESPONDENT:
B, Country B
I. FACTS OF THE CASE
1. On 10 September 2018, the club, A (hereinafter: the Claimant or A) and the B Club (hereinafter: the Respondent or B) signed an agreement regarding the loan transfer of the player (hereinafter: transfer agreement), Mr C (hereinafter: the player), from the Claimant to the Respondent, for the period between 11 September 2018 and 30 June 2019.
2. In accordance with clause 2 of the loan agreement, the Respondent undertook to pay a transfer compensation amounting to USD 200,000, payable by 21 September 2018.
3. Furthermore, clause 2.2 of the loan agreement states: “In case of failure to pay any payment in this agreement and after sending a notice to comply with the payment within ten days, A club shall be entitled to receive an amount equivalent to 10% monthly of such payment in addition to the full due amount”.
4. In addition, clause 8.1 of the loan agreement reads as follows: “The parties agree that in case that the player does not participate in more than 50% of the official matches of B, B shall pay an amount of USD 200,000 (two hundred thousand USD) to A to be paid within 10 days from the last official match of B in 2018/2019 season”.
5. On 21 May 2020, A lodged a claim against B before FIFA, requesting payment of the total amount of USD 400,000 plus a penalty corresponding to 10% per month, as follows.
- USD 200,000 corresponding to the transfer fee payable as per clause 2 of the loan agreement, plus a penalty of 10% per month on said amount as from 21 September 2018 until the date of effective payment as per clause 2.2. of the loan agreement;
- USD 200,000 corresponding to the penalty payable by virtue of clause 8.1 of the loan
agreement, plus a penalty of 10% per month on said amount as from 10 May 2020 until the date of effective payment as per clause 2.2. of the loan agreement.
6. Subsidiary, the Claimant requested to be awarded default interest of 18% p.a. on the amount of USD 400,000 as from the due dates (i.e. 18 October 2018 and 10 May 2020) until the date of effective payment, should the Claimant not be awarded the amounts requested as penalties.
7. In its claim, the Claimant explained that the Respondent failed to comply with its financial obligations, insofar the latter did not pay: 1.) the transfer fee in the amount of USD 200,000; 2.) the amount of USD 200,000 which fell due, as per clause 8.1 of the loan agreement.
8. In connection with those amounts, the Claimant maintained that during the season 2018/2019, the player only participated in 13 out of the 36 official matches of the Respondent, i.e. in only
36% of the official matches where he could have participated. Hence, the Claimant held that
the condition set in clause 8.1 was fulfilled and the Claimant is entitled to receive from the
Respondent the amount of USD 200,000.
9. In this context, the Claimant stated that, on 29 April 2020, it had put the Respondent in default of payment in the amount of USD 760,000, corresponding to the transfer compensation, the penalty as per clause 8.1 of the loan agreement and the penalties as per clause 2.2 of the loan agreement, granting the Respondent a 10 days’ deadline to remedy the default.
10. In reply to the claim of the Claim, the Respondent held that the penalty of 10% per month is disproportionate and goes beyond 120% of the transfer fee, and that therefore, the penalty should be disregarded.
11. According to the Respondent, the loan agreement was for a period of 1 year but effectively the player stayed with the Respondent only 3 months as of 12 September 2018 until 5 January 2019, allegedly as per request of the Claimant.
12. As to the penalty due in case the player would not be playing more than 50% of the matches, the Respondent held that during the time frame the player was in the club, he could have participated in 15 matches and actually played in 13.
13. In its replica, the Claimant reiterated its position and insisted that the early termination of the
player’s loan has no influence on the obligation of the Respondent to pay the loan fee.
14. Furthermore, the Claimant argued that according to the wording of art. 8.1 of the transfer agreement refers to the whole season and not just the part in which the player was with the club and that it therefore is entitled to such additional amount.
15. Furthermore, the Claimant pointed out that parties are free to agree on contractual penalties and that an interest rate of 10% per month was concluded.
16. In its duplica, the Respondent reiterated its position and insisted that the loan was terminated
early due to Claimant, which subsequently profited from the player’s services again.
17. In this regard, due to the short period of the effective loan, it rejected the claim.
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 21 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 January 2021) 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 January 2021), and considering that the present claim was lodged on 21 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 acknowledged that the Claimant and the Respondent signed a transfer agreement on 10 September 2018 regarding the loan 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 200,000 as a loan fee payable until 21 September 2018.
6. The Single Judge further took note of the fact that the parties agreed in clause 8.1. of the transfer agreement that the Claimant would be entitled to an amount of USD 200,000, if the player “does not participate in more than 50% of the official matches”.
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 200,000, corresponding to the loan fee and USD 200,000, in accordance with clause 8.1. of the transfer agreement as well as 10% interest per month or alternatively 18% interest p.a..
8. Subsequently, the Single Judge took into account that the Respondent, in reply to the claim, did not dispute the amount due as loan fee, but argued that the 10% interest per month are disproportionate and shall therefore be disregarded. Further, the Respondent held that the player’s loan was terminated early and that therefore not all the matches until the end of the season should be taken into account.
9. In this context, the Single Judge examined the claim regarding the outstanding loan fee and, it noted that such fee fell due on 21 September 2018 and the Respondent undisputedly failed to remit such amount. In this regard, the Single Judge was eager to emphasise that the early termination of the loan has no influence on such amount and he therefore decided that the Respondent has to pay the Claimant USD 200,000 in line with the legal principle of pacta sunt servanda.
10. In continuation, the Single Judge turned his attention to the contractually agree interest rate of
10% per month, which in itself possibly constitutes a penalty since it corresponds to a yearly interest rate of 120%.
11. In this regard, the Single Judge outlined that such interest clause was explicitly and contractually agreed upon between the parties apart from the penalty fee and is therefore not per se inapplicable. But in line with the Chamber’s jurisprudence, as well as CAS jurisprudence and in accordance with Swiss Law, the Single Judge had no other option but to conclude that the interest of 10% per month was disproportionate, and decided to reduce it to a rate of 18% p.a., a rate that shall be applicable as of the default notice as agreed upon in the transfer agreement.
12. Further, the Single Judge addressed the matter of the penalty the parties contractually agreed upon per clause 8.1. of the transfer agreement. In this regard, the Single Judge pointed out that the wording of said clause is clear and the fact that the loan was terminated early would not influence the fact that the player did not play 50% of the matches of the season. Therefore, the Single Judge, concluded that clause 8.1. of the transfer agreement was triggered and that the Respondent has to pay the contractual penalty of USD 200,000.
13. Therefore, the Single Judge decided to reject the argumentation put forward by the Respondent in defence of said part of the claim.
14. 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
400,000.
15. 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.
16. Moreover, the Single Judge decided that any further request filed by the Claimant is rejected.
17. 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.
18. 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.
19. 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.
20. 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.
21. Finally, , the Single Judge of the PSC referred to the Covid-19 Football Regulatory Issues – FAQ, published on 11 June 2020 which establish 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 amount of CHF 5,000 was paid at the beginning of the proceedings by the Claimant, the Single Judge decided that the procedural costs of CHF 5,000 have to be borne by the Respondent, in view of the outcome of the case.
Emilio García Silvero
III. DECISION OF THE SINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE
1. The claim of the Claimant, A, is partially accepted.
2. The Respondent, B, has to pay to the Claimant, the following amount:
- USD 200,000 as outstanding loan fee plus 18% interest p.a. as from 29 April 2020 until the date of effective payment.
- USD 200,000 as penalty fee.
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 (cf. note relating to the payment of the procedural costs below).
For the Players' Status Committee:
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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