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 14 July 2020

Decision of the

Single Judge of the Players' Status Committee

passed via videoconference, on 14 July 2020,

regarding an employment-related dispute concerning the player Giuliano Victor de Paula

BY:

Castellar Guimaraes Neto (Brazil), Single Judge of the PSC

CLAIMANT:

FENERBAHCE SK, TURKEY

RESPONDENT:

AL NASSR, SAUDI ARABIA

Represented by Mr Daniel Muñoz Sirera

I. FACTS OF THE CASE

1. On 19 August 2018, the Turkish club, Fenerbahçe SK (hereinafter: the Claimant), and the Saudi club, Al Nassr (hereinafter: the Respondent), executed an agreement (hereinafter: the contract) over the transfer of the player Giuliano de Paula (hereinafter: the player) from the Claimant to the Respondent, for a transfer fee of EUR 10,500,000, to be paid as follows:

- EUR 5,000,000 on 6 September 2018;

- EUR 3,500,000 on 28 February 2019;

- EUR 2,000,000 on 1 October 2019.

2. In accordance with clause 2.2 (d) of the contract, in the event the Respondent failed to pay any of the instalments due after twenty days from the due dates had elapsed, and the Claimant had given the Respondent notice of such default, the Respondent was subject to a penalty of EUR 350,000.

3. By correspondence dated 5 November 2019, the Claimant put the Respondent in default of payment of the amount of EUR 2,350,000, requesting payment within 10 days.

4. On 26 November 2019, the Claimant lodged a claim against the Respondent in front of FIFA asking that the Respondent be ordered to pay to him amount of EUR 2,350,000, corresponding to the third instalment of the transfer fee, i.e. EUR 2,000,000 and the contractual penalty for late payment in the amount of EUR 350,000.

5. The Claimant further asks to be awarded both “default interest accrued from the due date of the instalment”, and costs and legal fees.

6. In reply to the claim, the Respondent, first of all, pointed out that the matter at hand cannot be considered as overdue payables in the sense of art. 12bis of the FIFA Regulations on the Status and Transfer of Players, due to the penalty claimed.

7. In any case, the Respondent acknowledged having failed to pay the third instalment. However, it pointed out that the penalty envisaged by clause 2.2 (d) of the contract is disproportionate.

8. In this regard, the Respondent highlighted that “a penalty clause that can be claimed several times and that, in case this case, represents more than 15% of the principal amount requested by the Claimant is excessive and thus shall be at least mitigated”.

9. In addition, the Respondent claimed that it “did not delay the payment of the third instalment on purpose. The other way around, the Respondent was subject to circumstance beyond its contract that caused the delay in payment”.

10. Finally, the Respondent deemed that no interest shall be applied over the third instalment, as this would result in being “punished twice for the same conduct”.

II. CONSIDERATIONS 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 26 November 2019. Taking into account the wording of art. 21 of the October 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 June 2020) he is competent to deal with the matter at stake, which concerns a contractual dispute between clubs affiliated to different associations, i.e. a Turkish club and a Saudi club.

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 June 2020), and considering that the present claim was lodged on 26 November 2019, the November 2019 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 19 August 2018, over the transfer of the player from the Claimant to the Respondent, for a transfer fee of EUR 10,500,000, payable in three instalments.

6. The Single Judge further took note of the fact that the parties agreed on a penalty of EUR 350,000 in case of late payments as per clause 2.3 (d) of the contract.

7. Moreover, the Single judge took noted that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent owed it the total amount of EUR 2,350,000, corresponding to the third instalment of the transfer fee, i.e. EUR 2,000,000 and the contractual penalty for late payment in the amount of EUR 350,000.

8. In this context, the Single Judge took particular note of the fact that, on 5 November 2019, the Claimant put the Respondent in default of payment of EUR 2,350,000, setting a 10 days’ time limit in order to remedy the default.

9. Subsequently, the Single Judge took into account that the Respondent, in reply to the claim, acknowledged that the third instalment of the transfer fee remained outstanding, held that the penalty was disproportionate and therefore shall be reduced. Moreover, the Respondent maintained that art. 12bis of the FIFA Regulations on the Status and Transfer of Players does not apply in the matter at hand.

10. Subsequently, the Single Judge turned his attention to the substance of the matter, and recapitulated that the parties agreed on a transfer fee of EUR 10,500,000, payable in three instalments. The third instalment of EUR 2,000,000 fell due on 1 October 2019.

11. On account of the above, taking into account the fact that the Respondent acknowledged that the third instalment remained outstanding, the Single Judge considered that the circumstances raised by the Respondent cannot be considered a valid reason for non-payment of the monies, 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.

12. To this extent, the Single Judge emphasized that the Respondent admitted having failed to pay the Claimant EUR 2,000,000 corresponding to the third instalment of the transfer fee.

13. Further, the Single Judge addressed the matter of the penalty the parties contractually agreed upon per clause 2.3 (d) of the contract.

14. 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.

15. In the specific case at hand, the Single Judge deemed that a penalty of EUR 350,000, corresponding to 17.5% of the total outstanding amount, which the parties contractually agreed upon, is both proportionate and reasonable in the case at hand.

16. On account of all of the above, the Chamber decided that the penalty is valid and applicable in the present matter.

17. Consequently, the Single Judge decided to reject the argumentation put forward by the Respondent in its defence.

18. On account of the aforementioned considerations, the Single Judge established that the Respondent failed to pay the Claimant the total amount of EUR 2,000,000, corresponding to the third instalment of the transfer fee. As such, the Single Judge decided that the Respondent has to pay the Claimant the contractual penalty of EUR 350,000.

19. 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 EUR 2,350,000.

20. Furthermore, as regards the claimed legal expenses, the Single Judge referred to art. 18 par. 4 of the Procedural Rules as well as to the long-standing and well-established jurisprudence of the Players’ Status Committee, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Players’ Status Committee. Consequently, the Single Judge decided to reject the Claimant’s request relating to legal expenses.

21. 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.

22. 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.

23. 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.

24. 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.

III. DECISION OF THE PLAYERS' STATUS COMMITTEE

1. The claim of the Claimant, Fenerbahce SK, is partially accepted.

2. The Respondent, Al Nassr, has to pay to the Claimant, the amount of EUR 2,350,000

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 to FIFA as follows: CHF 4,000 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 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:

Fédération Internationale de Football Association

FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland

www.fifa.com | legal.fifa.com | psdfifa@fifa.org | T: +41 (0)43 222 7777