F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – overdue payables / debiti scaduti – (2016-2017) – fifa.com – atto non ufficiale – Decision 19 May 2017

Decision of the

Dispute Resolution Chamber

passed by way of circulars on 19 May 2017,

in the following composition:

Geoff Thompson (England), Chairman

Philippe Diallo (France), member

Theo van Seggelen (Netherlands), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C, Country D

as Respondent

regarding an employment-related dispute

between the parties in connection with overdue payables

I. Facts of the case

1. On 1 October 2014, the player of Country B, Player A (hereinafter: the Claimant) and the club of Country D, Club C (hereinafter: the Respondent) signed an employment contract valid as from the date of signature until 30 September 2018.

2. On an unspecified date, the Respondent and the club of Country B, Club E, agreed upon the loan transfer of the Claimant from the Respondent to the Club E for the 2015/2016 season starting from 1 July 2015 until 30 June 2016.

3. On an unspecified date, the Claimant and the Respondent signed a document titled “Private Agreement” (hereinafter: the private agreement) by means of which the Claimant consented to the abovementioned loan transfer from the Respondent to the Club E and wherein the Claimant and the Respondent agreed that the Respondent shall pay to the Claimant USD 580,000 “as compensation for the different monthly salary that [the Claimant] will take on loan…for the period from 1 July 2015 until 30 June 2016”, payable in three instalments as follows: USD 180,000 due on 1 September 2015, USD 180,000 due on 1 January 2016, and USD 220,000 due on 1 May 2016.

4. On 28 July 2016, the Claimant and the Respondent signed a document titled “TERMINATION AGREEMENT” (hereinafter: the termination agreement), in which it is stated that the Respondent has not paid the second and third instalments of the private agreement.

5. In accordance with the termination agreement, the Respondent undertook to pay to the Claimant USD 1,500,000 “as compensation for the premature termination of the Employment contract”, payable in three instalments as follows:

1) USD 500,000 by no later than 20 August 2016;

2) USD 500,000 by no later than 1 December 2016;

3) USD 500,000 by no later than 1 April 2017.

6. Furthermore, the termination agreement established in its art. 5 the following: “In the event that [the Respondent] does not pay the first and the second instalments, [the Claimant] will have the right to collect the entire remaining amounts indicated in paragraph 2 [cf. point I./5. above] in one single payment”.

7. By correspondence dated 18 November 2016, the Claimant put the Respondent in default of payment of the first instalment of the termination agreement. Moreover, by correspondence dated 2 February 2017, the Claimant put the Respondent in default of payment of the first and second instalments setting a 10 days’ time limit in order to remedy the default.

8. By correspondence dated 10 March 2017, the Claimant put the Respondent in default of payment of USD 1,500,000 setting a 10 days’ time limit in order to remedy the default. In his default notice, the Claimant referred to the termination agreement and mentioned that since the first and second instalments have not been paid, he has the right to collect the remaining amounts in one single payment.

9. On 7 December 2016, subsequently completed on 27 March 2017, the Claimant lodged a claim against the Respondent in front of FIFA asking that the Respondent be ordered to pay to him overdue payables in the amount of USD 1,500,000 corresponding to the amount established in the termination agreement. In this regard, the Claimant held that as the first and second instalments of the termination agreement remained unpaid, in accordance with the acceleration clause established therein (cf. point I./6. above), the whole amount became due in one single payment, which is the one being requested.

10. The Claimant further asks to be awarded interest without further specification and that the Respondent be ordered to pay legal costs.

11. In spite of having been invited to do so, the Respondent has not replied to the claim.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter: Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 7 December 2016. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the 2015 and 2017 editions of the Procedural Rules).

2. Subsequently, the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in conjunction with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2016), it is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player of Country B and a club of Country D.

3. Furthermore, the DRC analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged 7 December 2016, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, the DRC started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. Having said this, the DRC first acknowledged the following facts:

 The Claimant and the Respondent signed an employment contract valid as from 1 October 2014 until 30 September 2018;

 The Respondent and the Club E agreed upon the loan transfer of the Claimant from the Respondent to the Club E for the period between 1 July 2015 until 30 June 2016;

 By means of the private agreement signed between the Claimant and the Respondent, the Claimant consented to be loaned to Club E, and it was agreed between the parties that the Respondent would pay the Claimant USD 580,000, amount payable in three instalments as follows: USD 180,000 due on 1 September 2015, USD 180,000 due on 1 January 2016, and USD 220,000 due on 1 May 2016.

6. Along these lines, the Chamber duly took note of the contents of the termination agreement concluded between the Claimant and the Respondent on 28 July 2016, which stipulated inter alia the following:

 The parties declared that the Respondent has not paid the second and third instalments mentioned above of the private agreement;

 The parties agreed that the Claimant is entitled to receive from the Respondent, “as compensation for the premature termination of the Employment contract”, USD 1,500,000 in three instalments of USD 500,000 each, payable by no later than 20 August 2016, 1 December 2016 and 1 April 2017, respectively.

7. Furthermore, the DRC duly took note of art. 5 of the termination agreement, in which it was established that in case the Respondent does not pay the first and the second instalments as stipulated in the termination agreement, the Claimant will have the right to collect the entire remaining amounts of the termination agreement in one single payment.

8. The Chamber observed that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent has overdue payables towards him in the total amount of USD 1,500,000, corresponding to the amount established in the termination agreement. Moreover, the Claimant held that the the first and second instalments of the termination agreement remained unpaid. It was duly noted that on 18 November 2016, the Claimant put the Respondent in default of payment of the first instalment of the termination agreement, while on 2 February 2017, the Claimant put the Respondent in default of payment of the first and second instalments.

9. In this respect, the DRC highlighted that bearing in mind the wording of art. 5 of the termination agreement, the parties agreed that if the first and second instalments of the termination agreement are not paid on the established dates, the full outstanding balance shall immediately become due.

10. In this context, the Chamber took particular note of the fact that, on 10 March 2017, the Claimant put the Respondent in default of payment of USD 1,500,000, corresponding to the full amount established in the termination agreement, after the first and second instalments of said agreement allegedly remained unpaid, setting a 10 days’ time limit in order to remedy the default.

11. Consequently, the DRC concluded that the Claimant had duly proceeded in accordance with art. 12bis par. 3 of the Regulations, which stipulates that the creditor (player or club) must have put the debtor club in default in writing and have granted a deadline of at least ten days for the debtor club to comply with its financial obligation(s).

12. Subsequently, the DRC took into account that the Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. In this way, the DRC considered that the Respondent renounced its right to defence and thus accepted the allegations of the Claimant.

13. Furthermore, as a consequence of the aforementioned consideration, the Chamber concurred that in accordance with art. 9 par. 3 of the Procedural Rules it shall take a decision upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

14. Having said this, the DRC acknowledged that, in accordance with the termination agreement provided by the Claimant and taking into account the above- mentioned circumstances, the Respondent was obliged to pay to the Claimant USD 1,500,000.

15. Taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had substantiated his claim pertaining to overdue payables with sufficient documentary evidence.

16. On account of the aforementioned considerations, the DRC established that the Respondent failed to remit the Claimant’s remuneration in the total amount of USD 1,500,000 corresponding to the amount established in the termination agreement.

17. In addition, the Chamber established that the Respondent had delayed a due payment for more than 30 days without a prima facie contractual basis.

18. Consequently, the DRC decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant overdue payables in the total amount of USD 1,500,000.

19. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber, the DRC decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of USD 1,500,000 as from 7 December 2016 until the date of effective payment.

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

21. Moreover, the Chamber decided that any further request filed by the Claimant is rejected.

22. In continuation, taking into account the consideration under number II./17. above, the DRC referred to art.12bis par. 2 of the Regulations which stipulates that any club found to have delayed a due payment for more than 30 days without a prima facie contractual basis may be sanctioned in accordance with art. 12bis par. 4 of the Regulations.

23. The DRC further established that by virtue of art. 12bis par. 4 of the Regulations it has competence to impose sanctions on the Respondent. On account of the above and bearing in mind that the Respondent did not reply to the claim, the DRC decided to impose a fine on the Respondent in accordance with art. 12bis par. 4 lit. c) of the Regulations. Furthermore, taking into consideration the amount due of USD 1,500,000, the DRC regarded a fine amounting to CHF 30,000 as appropriate and hence decided to impose said fine on the Respondent.

24. In this connection, the DRC wished to highlight that a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty in accordance with art. 12bis par. 6 of the Regulations.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, overdue payables in the amount of USD 1,500,000, plus interest at the rate of 5% p.a. as from 7 December 2016 until the date of effective payment.

3. In the event that the amount due to the Claimant, plus interest, is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. Any further request filed by the Claimant is rejected.

5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the DRC of every payment received.

6. The Respondent is ordered to pay a fine in the amount of CHF 30,000. The fine is to be paid within 30 days of notification of the present decision to FIFA to the following bank account with reference to case nr. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

*****

Note relating to the motivated decision (legal remedy):

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives