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 22 September 2020
Decision of the
Single Judge of the Players' Status Committee
passed on 22 September 2020,
regarding a dispute concerning the transfer of the player Paulo Cesar Díaz Huincales
Castellar Guimaraes Neto (Brazil), Single Judge of the PSC
Club Al Ahli, Saudi Arabia
CA River Plate, Argentina
Represented by Mr Javier Mayo Nader and Mr Leandro Adrián Bastida
I. FACTS OF THE CASE
1. On 31 July 2019, the Saudi Arabian club, Al Ahli (hereinafter: the Claimant) and the Argentinian club, CA River Plate (hereinafter: the Respondent) signed an agreement regarding the transfer of the player, Mr Paulo Cesar Díaz Huincales (hereinafter: the player), from the Claimant to the Respondent.
2. In accordance with clauses 1.1, 1.2 and 1.3 of the transfer agreement, the parties agreed, inter alia, on a transfer compensation amounting to USD 3,750,000, corresponding to 70% percent of the player’s economic rights, payable by the Respondent. In particular, the parties agreed on the following payment schedule:
3. On 4 May 2020, Al Ahli lodged a claim against CA River Plate before FIFA, requesting the outstanding transfer fee in the total amount of USD 1,100,000 –corresponding to the second instalment of the transfer fee, i.e. USD 1,000,000 due on 1 January 2020, and a penalty in the amount of USD 100,000; plus 5% interest p.a. on said amount as from 1 January 2020 until the date of effective payment.
4. In its claim, the Claimant explained that the Respondent failed to comply with its financial obligations resulting from the transfer agreement, insofar as the latter did not pay the second instalment of the transfer fee in the amount of USD 1,000,000.
5. In this context, the Claimant maintained that, on 5 January 2020, the Claimant sent an invoice to the Respondent regarding the payment of the second instalment of the transfer fee.
6. On 3 February 2020, by means of its letter dated 2 February 2020, the Claimant put the Respondent in default of payment in the amount of USD 1,000,000, plus a penalty of 10% thereof, granting the Respondent a 7 days’ deadline to remedy the default.
7. In its reply, the Respondent stated that in May 2020, the Government and the Banco Central de la Republica Argentina (BRCA) adopted a number of restrictive measures and exchange market controls.
8. The Respondent added that such measures have been deepened, with increasing and serious impact on the club with respect to the access and availability of foreign exchange or currency for making payments abroad.
9. In addition, the Argentine peso has been continuously devalued (USD 1.00 = $ 71.50).
10. The Respondent maintained that the amount committed in the contract has increased significantly in pesos, the internal economic factors have led to an extreme crisis on the verge of default, factors which led to developing complex regulations that hinder foreign trade operations, to which are to be added the consequences of the coronavirus pandemic.
11. To conclude, the Respondent requested to suspend the terms in of the present proceeding, in order to allow the parties to negotiate reasonable alternatives for the payment of the due amount to the Claimant.
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 4 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 August 2020) 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 August 2020), and considering that the present claim was lodged on 4 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 31 July 2019, regarding the 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 3,750,000 in three instalments.
6. The Single Judge further took note of the fact that the parties agreed on a penalty of 10% of the outstanding amount in case of late payments (as of 7 days) as per clause 1.4 of the transfer agreement.
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 total amount of USD 1,100,000, corresponding to the second instalment of the transfer fee, i.e. USD 1,000,000 and the contractual penalty for late payment in the amount of USD 100,000.
8. In this context, the Single Judge took particular note of the fact that, on 3 February 2020, the Claimant put the Respondent in default of payment of USD 1,100,000, setting a 7 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, did not dispute the outstanding amount, but requested to “suspend” the payment in order to renegotiate, since due to economic reasons and measures implemented in Argentina it was not able to remit the payment.
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 USD 3,750,000, payable in three instalments. The second instalment of USD 1,000,000 fell due on 1 January 2020.
11. On account of the above, taking into account the fact that the Respondent did not dispute that the second 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. Further, the Single Judge addressed the matter of the penalty the parties contractually agreed upon per clause 1.4 of the transfer agreement.
13. 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.
14. In the specific case at hand, the Single Judge deemed that a penalty of USD 100,000, corresponding to 10% of the outstanding amount, which the parties contractually agreed upon, is both proportionate and reasonable in the case at hand.
15. On account of all of the above, the Chamber decided that the penalty is valid and applicable in the present matter.
16. Consequently, the Single Judge decided to reject the argumentation put forward by the Respondent in its defence.
17. On account of the aforementioned considerations, the Single Judge established that the Respondent failed to pay the Claimant the total amount of USD 1,000,000, corresponding to the second instalment of the transfer fee. As such, the Single Judge decided that the Respondent has to pay the Claimant the contractual penalty of USD 100,000.
18. 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 1,100,000.
19. In addition, taking into consideration the Claimant’s claim, the Single Judge decided to award the Claimant interest at the rate of 5% p.a. on the amount of USD 1,000,000 as of the day following the day on which the second instalment fell due, i.e. 2 January 2020.
20. 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.
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.
25. Finally, in this respect, the Judge referred to the Covid-19 Football Regulatory Issues – FAQ, published on 11 June 2020 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 advance of costs amounts to CHF 5,000, the Single Judge established said amount as the payable procedural costs, from which CHF 1,000 shall be paid by the Claimant and CHF 4,000 by the Respondent, in view of the outcome of the matter.
III. DECISION OF THESINGLE JUDGE OF THE PLAYERS' STATUS COMMITTEE
1. The claim of the Claimant, Club Al Ahli, is partially accepted.
2. The Respondent, CA River Plate, has to pay to the Claimant, the following amounts:
- USD 1,000,000 plus 5% interest p.a. as from 2 January 2020 until the date of effective payment;
- USD 100,000 as penalty.
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 amounts.
5. The Respondent shall provide evidence of payment of the due amounts in accordance with this decision to firstname.lastname@example.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).
6. In the event that the amounts due, plus interest as established above 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:
The Respondent shall be banned 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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amounts are paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players). 2.
In the event that the payable amounts as per in this decision are 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 (cf. note relating to the payment of the procedural costs below) as follows:
The amount of CHF 1,000 is to be paid by the Claimant. Such amount is offset against the advance of costs paid by the Claimant and, where applicable, the Claimant shall receive a refund of CHF 4,000; 2.
The amount of CHF 4,000 is to be paid by the Respondent.
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).
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