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 28 July 2020

Decision of the

Single Judge of the Players’ Status Committee

passed on 28 July 2020,

regarding a dispute concerning the transfer of the player Mahmoud Abdel Razak Hassan Fadlallah

BY:

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

CLAIMANT:

SPORTING CLUBE DE PORTUGAL, PORTUGAL

Represented by Mr José Carlos Oliveira

RESPONDENT:

ZAMALEK SPORTING CLUB, EGYPT

I. FACTS OF THE CASE

1. On 26 August 2015, the Claimant and the Respondent signed a transfer agreement over the transfer of the player Mahmoud Abdel Razek Hassan Fadlallah (hereinafter: “the player”) from the Claimant to the Respondent.

2. According to art. 2.1 of the transfer agreement, the Respondent agreed to pay to the Claimant USD 650,000 in 3 instalments as follows:

a. USD 250,000 upon signature of the transfer agreement;

b. USD 200,000 on 1 January 2016;

c. USD 200,000 on 1 June 2016.

3. According to art. 2.2. of the transfer agreement, “in the event the second instalment is paid after 15.01.2016, [the Respondent] pays to [the Claimant] USD 200,000 as penalty”.

4. According to art. 2.3. of the transfer agreement, “in the event the third instalment is paid after 15.06.2016, [the Respondent] pays to [the Claimant] USD 200,000 as penalty”.

5. According to art. 2.4. of the transfer agreement, “in the event there is a late payment in any of the instalments, the remaining instalments shall become automatically due plus interest rate of 10% per annum”.

6. By means of a correspondence dated 30 December 2015, the Claimant informed the Respondent that, as it had paid only USD 140,000, all the instalments had become immediately due as from 19 August 2015 along with interest at a rate of 10% p.a. and thus it put the Respondent in default of the payment of USD 528,723.29.

7. On 16 February 2016, the Claimant addressed the Respondent in writing again, putting it in default of the payment of USD 710,015 plus 10% interest p.a. over USD 510,015 as from 19 August 2015 and over USD 200,000 as from 15 January 2016.

8. On 19 July 2016, the Claimant addressed the Respondent in writing once more, putting it in default of the payment of USD 910,015 plus 10% interest p.a. over USD 510,015 as from 19 August 2015, over USD 200,000 as from 15 January 2016 and over further USD 200,000 as from 15 June 2016.

9. On 16 March 2017, the Claimant lodged a claim against the Respondent, requesting to be awarded the total amount of USD 910,015, plus 10% interest p.a. as follows:

i. over the amount of USD 510,015 as from 19 August 2015;

ii. over the amount of USD 200,000 as from 15 January 2016;

iii. over the amount of USD 200,000 as from 15 June 2016.

10. The Claimant pointed out that, after the signing of the transfer agreement, the Respondent paid only USD 139,985. Consequently, according to the Claimant, the penalties envisaged at arts. 2.2. and 2.3. of the transfer agreement had been triggered, as well as the interest rate of 10% p.a. provided for at art. 2.4. of the transfer agreement.

11. The Respondent, for its part, maintained that – due to force majeure and, in particular, to the 2016 Egyptian economic crisis – it had failed to perform the payments timely. However, it claimed it was willing to pay the outstanding principal amount of USD 510,015.

12. With regards to the penalties, the Respondent claimed that they are disproportionate and should be disregarded.

13. Furthermore, the Respondent asked that an interest at a rate of 5% p.a. should apply on the outstanding principal amount only.

14. In its replica, the Claimant entirely reiterated its position.

15. With regard to alleged difficulties deriving from the political situation in Egypt, the Claimant pointed out that the events recalled by the Respondent dates back to October 2016 whereas the payment should have been performed between August 2015 and June 2016.

16. Concerning the penalties, the Claimant explained that they had been “freely negotiated and agreed upon”.

17. In its duplica, the Respondent mostly reiterated the position provided in its reply.

18. Furthermore, the Respondent deemed that no penalty fee shall be due as there is no contractual basis. In this regard, the Respondent argued that as the Respondent failed to pay the entire first instalment, the acceleration clause was triggered and all instalments became due and therefore, “the payment plan contractually agreed upon between the parties is no longer valid”.

19. In the event, that a penalty fee shall be due, the Respondent argued that such high penalty is “clearly disproportionate” and would need to be reduced.

II. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PLAYERS´ STATUS COMMITTEE

1. First of all, the Single Judge of the Players’ Status Committee (hereinafter: the Single Judge) analysed which Procedural Rules were applicable to the matter at hand. In this respect, he referred to the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) as well as to the fact that the present matter was submitted to FIFA on 16 March 2017 and decided on 28 July 2020. Therefore, the Single Judge concluded that the June 2020 edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players is applicable as to the substance of the matter. In this respect, he referred, on the one hand, to art. 26 par. 1 and 2 of the June 2020 edition of the Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the claim was lodged in front of FIFA on 16 March 2017. In view of the foregoing, the Single Judge concluded that the 2016 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance.

3. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 1 and par. 2 of the Procedural Rules in connection with art. 23 par. 1 and par. 4 as well as art. 22 lit. f) of the Regulations, he was competent to deal with the present matter since it concerned a dispute between two clubs affiliated to two different associations.

4. The competence of the Single Judge 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. The Single Judge emphasised, however, 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. First of all, the Single Judge acknowledged that it was undisputed between the parties that the transfer agreement was concluded relating to the transfer of the player from the Claimant to the Respondent and that according to said agreement the Respondent undertook to pay to the Claimant a transfer fee amounting to USD 650,000 in three instalments.

6. Likewise, the Single Judge took note that the Respondent acknowledged to owe the amount of USD 510,015 to the Claimant.

7. Equally, the Single Judge observed that pursuant to art. 2.4 of the transfer agreement, the parties agreed that “in the event there is a late payment in any of the instalments, the remaining instalments shall become automatically due plus interest rate of 10% per annum”.

8. The Single Judge held that it was uncontested that the Respondent failed to pay the first instalment in full on time, i.e. on the day of signature of the transfer agreement and therefore the acceleration clause established in art. 2.4 of the transfer agreement became applicable.

9. Therefore, as a first conclusion, the Single Judge underlined that in accordance with the basic legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, the Claimant is entitled to receive from the Respondent the amount of USD 510,015, relating to the outstanding transfer fee pursuant to the transfer agreement in accordance with its arts. 2.1 and 2.4.

10. In continuation, the Single Judge acknowledged that the Claimant requested an annual interest of 10% over the outstanding amount based on clause 2.4 of the transfer agreement.

11. In this respect, the Single Judge underlined that according to the long-standing practice of the Players´ Status Committee an annual rate of 10% of interest seems to be a reasonable amount to compensate late payments.

12. In view of the aforementioned, the Single Judge concluded that the Respondent has overdue payables towards the Claimant amounting to USD 510,015 plus an annual interest at a rate of 10% applicable from the due date, i.e. 27 August 2015 (day after the signature of the transfer agreement) until the date of effective payment.

13. Having established the above, the Single Judge further noted that the Claimant requested an amount of USD 400,000 as penalty based on arts. 2.2 and 2.3 of the transfer agreement.

14. Furthermore, the Single Judge took note that, in its reply, the Respondent held that the requested penalty is disproportionate.

15. In this regard, the Single Judge underlined that in accordance with the terms of art. 2.4 of the transfer agreement all the instalments agreed by the parties became due on 27 August 2015, as the Respondent failed to pay the full amount of the first instalment on time.

16. Therefore, the Single Judge concluded that the penalties established in arts. 2.2 and 2.3 of the transfer agreement were not applicable to the matter at stake and as a consequence, the relevant request of the Claimant should be rejected.

17. In conclusion, the Single Judge decided to partially accept the claim of the Claimant and determined that the Respondent is liable to pay to the Claimant an amount of USD 510,015 plus a 10% interest p.a. as from 27 August 2015 until the day of the effective payment.

18. The Single Judge concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

19. 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 proceedings before the Players’ Status Committee including its Single Judge, costs in the maximum amount of CHF 25’000 are levied.

The relevant provision further states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings (cf. art. 18 par. 1 of the Procedural Rules).

20. Moreover, the Single Judge referred to art. 18 par. 1 ii. of the Procedural Rules according to which “For any claim or counter-claim lodged prior to 10 June 2020 which has yet to be decided at the time of this temporary amendment, the maximum amount of procedural costs levied shall be equivalent to any advance of costs paid”.

21. In respect of the above, and taking into account that the claim of the Claimant had been partially accepted, the Single Judge concluded that both the Claimant as well as the Respondent had to bear a part of the costs of the current proceedings before FIFA.

22. Furthermore and according to art. 18 par.1 ii. of the Procedural Rules, the costs of the current proceedings shall be equivalent until the maximum amount paid by the Claimant as advance of costs. On that basis, the Single Judge held that the amount paid by the Claimant as advance of costs in the present proceedings is CHF 5,000. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings correspond to CHF 5,000.

23. In light of all the above, the Single Judge decided that the amount of CHF 1,000 has to be paid by the Claimant and the amount of CHF 2,000 has to be borne by the Respondent.

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

1. The claim of the Claimant, Sporting Clube de Portugal, is partially accepted.

2. The Respondent, Zamalek Sporting Club, has to pay to the Claimant, the following amount:

- USD 510,015, plus 10% interest p.a. as from 27 August 2015 until the date of effective payment.

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 30 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:

In the event that the payable amount as per in this decision is not paid within the granted deadline , 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 3,000 are to be paid to FIFA as follows: CHF 2,000 by the Respondent and CHF 1,000 by the Claimant (cf. note relating to the payment of the procedural costs below).

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 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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