F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – overdue payables / debiti scaduti – (2017-2018) – fifa.com – atto non ufficiale – Decision 21 September 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 21 September 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

John Bramhall (England), member

Johan van Gaalen (South Africa), member

Mohamed Al Saikhan (Saudi Arabia), member

Pavel Pivovarov (Russia), 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 6 August 2014, the Player of Country B, Player A (hereinafter: Claimant), and the Club of Country D, Club C (hereinafter: Respondent), signed an employment contract valid as from 2 August 2014 until 31 July 2016.

2. On 20 July 2015, the parties signed a “Mutual Termination Agreement” by means of which the employment contract was terminated by mutual consent (hereinafter: mutual termination agreement) and the Respondent undertook to pay the amount of EUR 790,854 to the Claimant in 9 monthly instalments of EUR 87,873 each, falling due as from 30 August 2015 until 30 April 2016.

3. On 20 January 2016, the parties signed an “Agreement” (hereinafter: agreement), which refers to the mutual termination agreement and in accordance with which the parties rescheduled the outstanding debt. In accordance with the agreement, the Respondent undertook to pay the amount of EUR 540,431 to the Claimant in 2 equal instalments of EUR 270,215.50 each, on 4 May 2016 and on 4 June 2016, respectively. According to the agreement, this sum is related to outstanding debts that should have been paid as from November 2015 until and including March 2016 as well as to “future payments” of April and May 2016.

4. The agreement further stipulates that in the event of non-payment of any instalment within the respective time limits, the Claimant shall put the Respondent in default in writing giving it 10 days to remedy the default. In addition, according to the agreement, in the event of non-payment of the first instalment, the second one falls due immediately and 5% interest p.a. shall accrue as from the “dates of the very first agreement”.

5. The agreement further sets forth that it “… is an integral part of the mutual termination agreement of the 20th of July 2015.”

6. By correspondence dated 16 June 2016, the Claimant put the Respondent in default of payment of the amount of EUR 540,431 plus 5% interest p.a. as from 6 August 2014 setting a 10 days’ time limit in order to remedy the default.

7. On 28 June 2016, 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 EUR 540,431 plus 5% interest p.a. as from the date of signature of the ”very first agreement”, i.e. 6 August 2014 according to the Claimant.

8. In reply to the claim, the Respondent informed FIFA that a new payment schedule had been agreed upon with the Claimant. The latter confirmed that the parties had verbally found an amicable settlement asking that the matter be suspended.

9. In January 2017, the Claimant informed FIFA that he only received a payment of 1,107,833.50 on 11 August 2016 as well as 100,000 on 6 December 2016 from the Respondent and he asked that the proceedings be resumed bearing in mind the partial payments made.

10. Consequently, the Claimant asked that the Respondent be ordered to pay the following amounts:

a. EUR 54,561.32 corresponding to 5% interest p.a. on the amount of EUR 540,431 as from 6 August 2014 until 11 August 2016;

b. EUR 5,290.67 corresponding to 5% interest p.a. on the amount of EUR 327,304.32 (EUR 272,743 allegedly unpaid + 54,561.32 interest under a. above) as from 11 August 2016 until 6 December 2016;

c. EUR 307,031.99 corresponding the allegedly outstanding amount + above interest;

d. 5% interest on the amount of EUR 307,031.99 as from 6 December 2016;

e. EUR 10,000 in legal fees and costs.

In addition, the Claimant asked that sanctions be imposed on the Respondent in accordance with art. 12bis and art. 17 of the FIFA Regulations on the Status and Transfer of Players.

11. The Respondent acknowledged that part of the amount due to the Claimant has remained unpaid, which, according to the Respondent, is due to its difficult financial situation.

12. However, the Respondent contested the interest amounts claimed by the Claimant, rejecting the Claimant’s position that interest was due as of 6 August 2014. The Respondent held that, instead, interest would fall due as of 30 December 2015, i.e. 30 days after the first unpaid instalment of the mutual termination agreement, as allegedly agreed upon between the parties in the mutual termination agreement.

13. The Respondent held that the “first agreement” is the mutual termination agreement. In this respect, the Respondent emphasised that when assessing the terms of a contract, the true and common intention of the parties must be ascertained without dwelling on any inexact expressions or designations they may have used either in error or by way of disguising the true nature of the agreement.

14. In this regard, the Respondent refers to the fact that according to the agreement it is an integral part of the mutual termination agreement and that the parties used the term “very first agreement” to distinguish it from the term “employment contract” as used in the mutual termination agreement.

15. The Respondent further emphasised that the employment contract was no longer in force as it had been previously terminated.

16. Taking into account the above, the Respondent presented the following calculation of the amount it considered to be outstanding:

a. Total amount due in accordance with the mutual termination agreement: EUR 790,854.

b. Rescheduled amount due under the agreement: EUR 540,431 minus first payment of EUR 270,215.50 and second payment of EUR 25,563 = EUR 244,652.50 outstanding without interest.

c. 5% interest p.a. as from 30 December 2015 until 11 August 2016 (224 days) on EUR 540,431: EUR 16,583.

d. 5% interest p.a. as from 11 August 2016 until 6 December 2016 (117 days) on EUR 270,215.50: EUR 4,330.

e. Total amount due as from 6 December 2016: EUR 244,652.50 + EUR 16,583 + EUR 4,330 = EUR 265,565.50

17. The Respondent asked that the claim be dismissed or, alternatively, that it be established that the Claimant is entitled to receive the amount of EUR 265,565.50.

18. In addition, the Respondent asked that no sanctions be imposed on it, since it acted in good faith and complied with approximately 75% of the initial settlement amount.

19. The Respondent also asked that the Claimant pay all legal and procedural costs.

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 28 June 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 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 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 28 June 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 acknowledged that, on 6 August 2014, the Claimant and the Respondent signed an employment contract valid until 31 July 2016, which was terminated by the parties by means of the mutual termination agreement on 20 July 2015, in accordance with which the Claimant was entitled to receive the amount of EUR 790,854 from the Respondent in 9 equal monthly instalments as from 30 August 2015 until 30 April 2016.

6. The DRC further took note that, on 20 January 2016, the Claimant and the Respondent signed an agreement, in accordance with which the parties rescheduled the Respondent’s outstanding debt based on the mutual termination agreement towards the Claimant. That is, according to this agreement, the Respondent undertook to pay the amount EUR 540,431 to the Claimant in 2 equal instalments of EUR 270,215.50 each, on 4 May 2016 and on 4 June 2016, respectively.

7. In addition, the parties agreed that in the event of non-payment of any instalment within the respective time limits, the Claimant shall put the Respondent in default in writing giving it 10 days to remedy the default. Furthermore, according to the agreement, in the event of non-payment of the first instalment, the second one falls due immediately and 5% interest p.a. shall accrue as from the “dates of the very first agreement”.

8. The Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent has overdue payables towards him in the amount of EUR 540,431 corresponding to the amount stipulated in the agreement dated 20 January 2016. In addition to the amount of EUR 540,431, the Claimant asked that he be awarded interest of 5% p.a. as of 6 August 2014.

9. In this context, the DRC took particular note of the fact that, on 16 June 2016, the Claimant put the Respondent in default of payment of the aforementioned amount, setting a 10 days’ time limit in order to remedy the default.

10. Consequently, bearing in mind the contractual clauses under numbers I./6. and I./7. last sentences above, 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).

11. Subsequently, the DRC took into account that during the course of the proceedings the Respondent had made 2 payments to the Claimant, as a result of which the Claimant reduced his claim to the principle amount of EUR 247,180 plus interest payments.

12. The Chamber noted that the Respondent, for its part, admitted that it had not fully respected the payment plan, but rejected the Claimant’s calculation of the amount and interest due to the Claimant.

13. Having said this, the DRC recalled that during the course of the proceedings the Respondent had remitted the amount of EUR 295,695 in 2 payments to the Claimant, whereas in accordance with the agreement the Claimant was entitled to receive EUR 540,431 from the Respondent. Consequently, the members of the DRC established that the Respondent failed to remit the amount of EUR 244,736 to the Claimant.

14. Subsequently, the DRC turned its attention to the Claimant’s claim relating to interest payments and agreed that the Claimant’s interpretation that interest would fall due as of the date of signature of the employment contract could not be followed. The agreement stipulates that interest would start running as of the “dates of the very first agreement”, which the members of the Chamber understood to be the dates originally set in the mutual termination agreement.

15. On account of the aforementioned considerations, bearing in mind the relevant due dates, the payments already remitted by the Respondent as well as the parties’ positions, the Chamber decided to award interest of 5% per annum as follows:

a. 5% p.a. on the amount of EUR 540,431 as from 1 December 2015 until 11 August 2016;

b. 5% p.a. on the amount of EUR 270,299 as from 11 August 2016 until 6 December 2016;

c. 5% p.a. on the amount of EUR 244,736 as from 6 December 2016 until the date of effective payment.

16. 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 amount of EUR 244,736 plus the aforementioned interest.

17. In continuation, the Chamber decided to reject the Claimant’s claim pertaining to legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

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

19. In this context, taking into account the preceding consideration, 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.

20. The DRC established that by virtue of art. 12bis par. 4 of the Regulations it has competence to impose sanctions on the Respondent. Bearing in mind that the Respondent duly replied to the claim of the Claimant and in the absence of the circumstance of repeated offence, the DRC decided to impose a warning on the Respondent in accordance with art. 12bis par. 4 lit. a) of the Regulations.

21. 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 overdue payables in the amount of EUR 244,736 within 30 days as from the date of notification of this decision.

3. The Respondent is ordered pay to the Claimant, within 30 days as from the date of notification of this decision, interest of 5% p.a. as follows:

a. 5% p.a. on the amount of EUR 540,431 as from 1 December 2015 until 11 August 2016;

b. 5% p.a. on the amount of EUR 270,299 as from 11 August 2016 until 6 December 2016;

c. 5% p.a. on the amount of EUR 244,736 as from 6 December 2016 until the date of effective payment.

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

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

6. 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 Dispute Resolution Chamber of every payment received.

7. A warning is imposed on the Respondent.

*****

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