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 PSC

passed on 12 January 2021

regarding a contractual dispute concerning the player Filipe Martins Carriço

BY:

Stefano La Porta (Italy), Single Judge of the PSC

CLAIMANT:

Sevilla FC, Spain

RESPONDENT:

Wuhan Zall FC, China PR

I. Facts

1. On 18 February 2020, the Spanish club, Sevilla FC (hereinafter: the Claimant), and the Chinese club, Wuhan Zall FC (hereinafter: the Respondent), concluded an agreement over the transfer of the player, Filipe Martins Carriço, from the Claimant to the Respondent.

2. In accordance with clause 2 of the transfer agreement, the Respondent undertook to pay to the Claimant a transfer compensation of EUR 2,000,000, as follows:

- EUR 1,000,000 on 30 June 2020;

- EUR 1,000,000 on 31 December 2020

3. Moreover, clause 2 of the transfer agreement also stipulates the following:

“If [the Respondent] fail to pay the first instalment 1,000,000 € (ONE MILLION EURO), [the Respondent] shall immediately pay the first and the second instalment, i.e. if [the Respondent] overdue the first payment, [the Claimant] shall be entitled to request to [the Respondent] the immediate payment of 2,000,000 € (TWO MILLION EURO); and [the Respondent] shall immediately pay to [the Claimant] a penalty of a 5% of payment annual interest applicable on the overdue payable until the effective payment date. Additionally, as a consequence of the special situation of [the Respondent], in case [the Respondent] does not pay one of instalment, [the Respondent] should pay a penalization of 200,000 € (TWO HUNDRED THOUSAND EURO), i.e; If [the Respondent] fail to pay the first instalment, [the Claimant ] should request to [the Respondent] the immediate payment of 2,000,000 € (TWO MILLION EURO) of the transfer fee, the corresponding 5% of payment annual interest applicable on the overdue payable of both instalment until the effective payment date and 200,000 € (TWO HUNDRED THOUSNAD EURO) of penalization”.

4. On 30 June 2020, the Respondent sent a notice to the Claimant, requesting from the latter an extension of 30 days in order to proceed with the payment of the first instalment of the transfer compensation.

5. In reply thereto, on 7 July 2020, the Claimant granted the Respondent an extension until 15 July 2020 in order for the Respondent to make the payment of the first instalment of the transfer compensation.

6. In view of the lack of payment of the said instalment on the new due date, on 3 September 2020, the Claimant put the Respondent in default of payment in the amount of EUR 1,000,000, corresponding to the first instalment of the transfer compensation, granting the Respondent a 10-day deadline to remedy the default; however, to no avail.

7. On 16 September 2020, the Claimant lodged a claim against the Respondent before FIFA, requesting to be awarded the total amount of EUR 2,200,000, plus 5% interest p.a., broken down by the Claimant as follows:

- EUR 1,000,000 corresponding to the first instalment of the transfer compensation;

- EUR 1,000,000 corresponding to the second instalment of the transfer compensation;

- EUR 200,000 as penalty ex clause 2 of the transfer agreement.

8. Furthermore, the Claimant requested the Respondent be ordered to pay “the procedural costs” of the present proceedings.

9. In its claim, the Claimant maintained that, despite having concluded a valid transfer agreement and even having granted the Respondent an extension to comply with its financial obligations towards the Claimant, the Respondent failed to make the payment of the first instalment of the transfer agreement.

10. In addition, the Claimant held that, insofar the Respondent failed to pay the first instalment of the transfer compensation by 15 July 2020, the payment of the second instalment of the transfer compensation was also triggered as per the acceleration clause contained in clause 2 of the contract.

11. Moreover, the Claimant is requesting the amount of EUR 200,000 corresponding to the penalty due ex clause 2 of the transfer agreement, which fell due as a consequence of the Respondent´s default of payment of the first instalment of the transfer compensation.

12. Despite having been invited to do so, the Respondent failed to reply to the claim.

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) analyzed whether he was competent to deal with the case at hand. Taking into account the wording of art. 21 of the January 2021 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), as well as the date on which the claim was lodged, i.e. 16 September 2020, the June 2020 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. In continuation, the Single Judge of the PSC analyzed 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 16 September 2020, the August 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

4. The above having been established, the Single Judge of the PSC entered into the analysis of the substance of the matter. In doing so, he 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, he will only refer to the facts, arguments and documentary evidence that he considered pertinent for the assessment of the matter at hand.

5. In this respect, the Single Judge noted that, on 18 February 2020, the parties concluded an agreement for the permanent transfer of the player, Filipe Martins Carriço, from the Claimant to the Respondent, against payment of an amount of EUR 2,000,000, payable in 2 different instalments, as follows: EUR 1,000,000 on 30 June 2020 and EUR 1,000,000 on 31 December 2020.

6. Subsequently, the Single Judge observed that, on 30 June 2020, i.e. on the due date of the first instalment of the transfer compensation, the Respondent requested the Claimant to grant it a 30-day deadline extension to proceed with the payment of the first instalment, i.e. until 30 July 2020. The Single Judge further noted that the Claimant accepted to grant a deadline extension to the Respondent regarding the payment of the first instalment, but of 15 days and not of 30 days, as requested by the Respondent.

7. Moreover, the Single Judge observed that, on 3 September 2020 –in view of the lack of payment of the first instalment of the transfer compensation–, the Claimant put the Respondent in default of payment in the amount of EUR 1,000,000, granting the Respondent a 10-day deadline to remedy the default.

8. Subsequently –noted the Single Judge–, the Claimant lodged a claim against the club before FIFA, requesting to be awarded the first and second instalments of the transfer compensation, in the amount of EUR 2,000,000, as well as the contractual penalty of EUR 200,000, plus 5% interest p.a. as from the corresponding due dates.

9. In this context, the Single Judge observed that, despite having been invited to present its comments as to the claim lodged by the Claimant, the Respondent failed to present its position. Hence, the Single Judge stressed that the allegations of the Claimant, if sufficiently supported with the necessary documentary evidence, will be deemed as uncontested facts, ex. arts. 9.3 and 12.3 of the Procedural Rules.

10. The above being clarified, the Single Judge deemed it appropriate to refer to clause 2 of the transfer agreement, in accordance with which the parties agreed that, in case of default of payment of the first instalment of the transfer compensation, the Claimant would be entitled to immediately request from the Respondent the payment of both the first and second instalments of the transfer compensation. In this regard, the Single Judge wished to highlight that the said provision has the nature of an acceleration clause, whose validity has been broadly confirmed by the jurisprudence of the Players´ Status Committee.

11. In addition, the Single Judge observed that the referred clause 2 of the transfer agreement is not only an acceleration clause, but also a punitive clause, insofar –thereby– the parties also agreed that the Respondent would pay to the Claimant a penalty in the amount of EUR 200,000, should the Respondent fail to pay any of the 2 agreed instalments of the transfer compensation within their due dates. In this respect, the Single Judge wished to recall that, also in accordance with the jurisprudence of the Players´ Status Committee, economic penalties will in principle be awarded, should the entitlement to receive the said penalty find a contractual basis and should the amount of the penalty not be higher than 50% of the principal outstanding amount. In the present case, the Single Judge observed that clause 2 of the transfer agreement provides the necessary contractual basis and that the penalty agreed and requested by the Claimant amounts to EUR 200,000, which is below the limit of 50% of the principal amount due i.e. it is below EUR 1,000,000 (2,000,000/2 = 1,000,000). Thus, the Single Judge deemed that the contractually agreed penalty is to be considered reasonable and proportionate.

12. In this context, the Single Judge concluded that, since the amounts requested by the Claimant have a contractual basis and the Respondent has failed to challenge the allegations of the Claimant by failing to reply to the claim, the Respondent is to be considered liable for the non-payment of the amounts due.

13. In view of the above, the Single Judge determined that the Respondent shall pay to the Claimant outstanding remuneration in the amount of EUR 2,000,000 –corresponding to the first and second instalments of the transfer compensation in the amount of EUR 1,000,000 each– and EUR 200,000 –corresponding to the contractually agreed penalty– in accordance with the general principle of law: pacta sunt servanda.

14. In addition, taking into account the Claimant’s claim, as well as the longstanding jurisprudence of the Players´ Status Committee in this respect, the Single Judge decided to award the Claimant interest of 5% p.a. on the amount of EUR 2,000,000, as from 14 September 2020 until the date of effective payment. As to the dies a quo regarding the obligation to pay interest, the Single Judge wished to emphasize that, despite the parties firstly agreeing that the due date for the payment of the first instalment was 30 June 2020, the Claimant thereafter agreed to grant a deadline to the Respondent until 15 July 2020 to proceed with such payment and –what is more– by means of its correspondence of 3 September 2020, the Claimant granted the Respondent a deadline until 13 September 2020 to remedy the default. In view of the above-mentioned chain of events, the Single Judge deemed it reasonable to conclude that the default interest is to run as from the following day of the dies ad quem of the last deadline granted to the Respondent to comply with its financial obligations, i.e. as from 14 September 2020. In addition, the Single Judge explained that, as a consequence of the application of the acceleration clause, interest as from the said date shall be awarded not only in connection with the first instalment of the transfer agreement, but also in connection with the second.

15. Moreover, the Single Judge referred to the request for relief of the Claimant, whereby the latter requested to also be awarded default interest of 5% p.a. in connection with the requested penalty of EUR 200,000. In this respect, the Single Judge pointed out that, whereas default interest finds a jurisprudential anchoring regarding the outstanding remuneration due, no default interest can be awarded in relation to a penalty, insofar such practice is not permitted in accordance with the general principle of law: non bis in ídem, which provides that no legal action can be instituted twice for the same cause of action.

16. Hence –concluded the Single Judge– the Claimant shall be awarded outstanding remuneration in the amount of EUR 2,000,000, plus 5% interest p.a. as from 14 September 2020, until the date of effective payment; as well as a penalty in the amount of EUR 200,000.

17. Lastly, the Single Judge wished to stress that, despite the dispute at stake concerning outstanding remuneration, the present case does not fall within the scope of an overdue payables proceedings in the sense of art. 12bis of the Regulations. In this respect, the Single Judge referred to the default notice sent by the Claimant to the Respondent on 3 September 2020, i.e. the only default notice sent, and highlighted that –thereby– the Claimant only urged the Respondent to proceed with the payment of the first instalment of the transfer compensation, but not the second. Therefore, –concluded the Single Judge– since the Claimant, in the said default notice, did not request the full amounts that it later on requested in its statement of claim, art. 12bis cannot be applied to the present proceedings.

18. In continuation, the Single Judge of the PSC 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 relating to disputes regarding solidarity mechanism 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.

19. In this respect, the Single Judge of the PSC 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.

20. Furthermore, taking into account the previous considerations, the Single Judge of the PSC 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.

21. In this regard, the Single Judge of the PSC 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.

22. Therefore, bearing in mind the above, the Single Judge of the PSC decided that, in the event that the Respondent does not pay the interest 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.

23. In this respect, the Single Judge of the PSC recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amount, in accordance with art. 24bis par. 3 of the Regulations.

24. Finally, the Single Judge of the PSC ended his deliberations by stating that any further claim lodged by the Claimant is rejected and by determining that the claim of the Claimant is, therefore, partially accepted.

III. Decision of the Single Judge of the PSC

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

2. The Respondent, Wuhan Zall FC, has to pay to the Claimant the following amounts:

- EUR 2,000,000 as outstanding remuneration, plus 5% interest p.a. on the said amount as from 14 September 2020 until the date of effective payment;

- EUR 200,000 as penalty.

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 amounts.

4. The Respondent shall provide evidence of payment of the due amounts in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

5. In the event that the amounts due, plus the applicable interest, are 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.

6. This decision is rendered without costs.

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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