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

Anderson Hernanes De Carvalho Viana Lima

BY:

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

CLAIMANT:

Hebei China Fortune FC, China

RESPONDENT:

Sao Paulo FC, Brazil

I. FACTS

1. On 1 January 2019, the Claimant and the Respondent signed a transfer agreement regarding the transfer of the player Anderson Hernanes De Carvalho Viana Lima from the Claimant to the Respondent.

2. In accordance with the transfer agreement, the Respondent undertook to pay to the Claimant inter alia EUR 3,000,000, as follows:

a. EUR 1,000,000 by 4 January 2019;

b. EUR 1,000,000 by 5 August 2019;

c. EUR 1,000,000 by 5 January 2020.

3. The transfer agreement further stipulated that if the Respondent delays “on pay any of these instalments above mentioned for more than 5 days, will be subjected to a 20% penalty, notwithstanding the obligation on paying the relevant amount”.

4. By a decision of the Single Judge of the PSC dated 3 December 2019, the Respondent was sentenced to pay to the Claimant EUR 1,000,000, plus 5% interest, corresponding to the second instalment, as well as EUR 200,000 corresponding to the penalty fee contractually agreed upon by the parties. A warning was also imposed on the Respondent pursuant to art. 12bis.

5. On 6 January 2020, the Claimant sent an invoice to the Respondent for the payment of the third instalment due on 5 January 2020.

6. On 6 February 2020, the Claimant granted the Respondent 12 days to make the payment of EUR 1,200,000, corresponding to the third instalment and the penalty fee.

7. On 11 February 2020, the Respondent suggested an amicable solution between the parties, including a payment to a Portuguese club, partner of the Respondent.

8. On 14 February 2020, the Claimant rejected the Respondent’s proposal. On the same day, the Respondent took note of the decision of the Single Judge PSC and informed the Claimant that it would pay within 45 days. Moreover, the Respondent reiterated its proposal.

9. On 20 February 2020, the Claimant accepted the proposal of the Respondent, under strict conditions. However, the Respondent did not reply.

10. On 2 March 2020, the Claimant informed the Respondent that should the payment not be made by the end of the week, the Claimant would submit the case to FIFA.

11. On 4 March 2020, the Respondent suggested to pay the amount as set out in the decision of the Single Judge PSC by 23 March 2020 and the third instalment by no later than 21 March 2020.

12. On the same day, the Claimant asked the Respondent to pay by 6 March 2020 the amount of EUR 1,229,315.07, corresponding to the second instalment, plus 5% interest and the penalty fee as set out in the decision of the Single Judge PSC. Moreover, the Claimant also took note of the Respondent’s offer to pay the third instalment by 21 March 2020 and refused said proposal. Nonetheless, the Claimant granted the Respondent a deadline until 9 March 2020 to make the payment of the third instalment.

13. Still on the same day, the Respondent suggested to pay the amount set out in the decision on 23 March 2020 (45 days after the notification of the grounds) and the third instalment immediately. The Respondent informed the Claimant that due to cash flow issues, the Respondent would not be able to pay both amounts at the same time.

14. On 9 March 2020, the Claimant lodged a claim before FIFA against the Respondent, and requested the payment of the total outstanding amount of EUR 1,000,000 “with legal interest at 5% per annum plus 20% delaying payment contractual penalty EUR 200,000 within 30 days from the date of such order”.

15. The Claimant held that it made a number of attempts to contact the Respondent in order to obtain the payments. However, according to said party, the Respondent never paid the amounts due, in clear violation of the contract.

16. In its reply, the Respondent did not dispute that it owed the Claimant the amount of EUR 1,000,000, corresponding to the third instalment. However, according to the Respondent, the club always acted in good faith and tried to find an amicable solution.

17. In this regard, the Respondent deemed that it made several proposals on a new payment plan as it faces serious financial problems, which were all rejected by the Claimant.

18. In fact, the Respondent claimed that the Claimant acted in bad faith, as, according to the Respondent, the Claimant is in default with several payments to other clubs and players.

19. In addition, the Respondent deemed that the penalty clause should be considered “void” as it is abusive.

20. In this context, the Respondent deemed that the parties never negotiated about this clause, but that it was simply requested by the Claimant and the Respondent was “forced” to accept it.

21. Finally, the Respondent argued that a penalty in the amount of 20% shall be considered as abusive and excessive.

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

1. First of all, the Single Judge of the PSC (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 9 March 2020. Taking into account 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), the aforementioned 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 emphasised 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 analysed 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 9 March 2020, the January 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

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

5. Thereafter, the Single Judge noted that, on 1 January 2019, the Claimant and the Respondent signed a transfer agreement regarding the transfer of the player Anderson Hernanes de Carvalho Viana Lima from the Claimant to the Respondent. The Single Judge noted in particular that, in accordance with said agreement, the Respondent undertook to pay to the Claimant inter alia EUR 3,000,000, as follows:

b. EUR 1,000,000 by 4 January 2019;

c. EUR 1,000,000 by 5 August 2019;

d. EUR 1,000,000 by 5 January 2020.

6. Subsequently, the Single Judge observed that the Claimant lodged a claim before FIFA against the Respondent, and requested the payment of the total outstanding amount of EUR 1,000,000 “with legal interest at 5% per annum plus 20% delaying payment contractual penalty EUR 200,000 within 30 days from the date of such order”.

7. In view of the above, the Single Judge considered that the present matter contains two fundamental legal issues, (1) whether the claimant is entitled to the claimed outstanding amount and (2) whether the aforementioned penalty fee (cf. point II. 6 above) is applicable.

8. In relation to (1), the Single Judge took note of the Respondent’s position, Respondent did not dispute, that it owed the Claimant the amount of EUR 1,000,000, corresponding to the third instalment and that it always and tried to find an amicable solution.

9. In view of the above, the Single Judge noted that, regardless of any other consideration, it appears to be clear in the matter at stake that, under any circumstance, the claimed amount of EUR 1,000,000 remained outstanding, despite being contractually agreed.

10. As a result, and in application of the principle of pacta sunt servanda the Single Judge established that the Respondent has to pay to the Claimant the aforementioned amount of EUR 1,000,000.

11. Subsequently, the Single Judge went on to analyze the applicability of the penalty fee of 20% over said amount, as requested by the Claimant.

12. In this respect, the Single Judge noted that the contract stipulated that “on pay any of these instalments above mentioned for more than 5 days, will be subjected to a 20% penalty, notwithstanding the obligation on paying the relevant amount”

13. In regard to the rate of said penalty, i.e. 20%, the Single Judge understood that it cannot be considered as excessive or disproportionate as it is in line with the longstanding jurisprudence of the PSC.

14. Moreover, in relation to said clause, the Single Judge understood that, in any case, it could only note that it was mutually and freely agreed between the parties as a part of the transfer.

15. As a result, and in strict application of the principle of pacta sunt servanda, the Single Judge established that the Respondent has to pay to the Claimant the aforementioned penalty of 20% over the principal amount, i.e. EUR 200,000.

16. In addition, and taking into account the Claimant’s request as well as the jurisprudence in this respect, the Single Judge decided to award 5% interest p.a. over the principal amount.

17. 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.

18. 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.

19. Therefore, bearing in mind the above, the Single Judge of the PSC 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. Finally, 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 amounts, in accordance with art. 24bis par. 3 of the Regulations.

21. 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 Dispute Resolution Chamber 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.

22. 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, 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, the Single Judge decided to impose the payment of CHF 5,000 by the Respondent.

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

1. The claim of the Claimant, Hebei China Fortune FC, is accepted.

2. The Respondent, Sao Paulo FC, has to pay to the Claimant, the following amount:

- EUR 1,200,000 plus 5% interest p.a. on the amount of EUR 1,000,000 as from 6 January 2020 until the date of effective payment.

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 amount.

4. 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).

5. 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.

6. 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:

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

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