F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – solidarity contribution / contributo di solidarietà – (2019-2020) – fifa.com – atto non ufficiale – Decision 29 November 2019

Decision of the

Single Judge of the sub-committee of the Dispute Resolution Chamber (DRC)

passed on 29 November 2019,

by Johan van Gaalen (South Africa),

Single Judge of the sub-committee of the DRC,

on the claim presented by the club,

SER Caxias do Sul, Brazil

as Claimant

against the club,

FC PAOK Thessaloniki, Greece

as Respondent

regarding solidarity contribution in connection with the transfer

of the player Pedro Henrique Konzen Medina

I. Facts of the case

1. According to the player passport issued by the Confederação Brasileira de Futebol, the player, Mr Pedro Henrique Konzen Medina (hereinafter: the player), born on 16 June 1990, was registered with the club SER Caxias do Sul (hereinafter: the Claimant) as from 1 April 2010 until 24 January 2012.

2. The football seasons in Brazil during the period of time the player was registered with the Claimant started in January and ended in December of the same calendar year.

3. According to the information contained in the Transfer Matching System (TMS), the French club, Stade Rennais FC, and the Greek club, FC PAOK Thessaloniki (hereinafter: the Respondent), agreed upon a transfer compensation amounting to EUR 1,608,750, payable in three instalments as follows:

(i) EUR 804,375 “upon signing the contract and no later than on 10 February 2017”;

(ii) EUR 402,188 “no later than on 27 July 2017”;

(iii) EUR 402,187 “no later than on 27 January 2018”.

4. Furthermore, the above-mentioned clubs agreed upon conditional payments as follows:

(i) EUR 50,000 “each time that the PAOK FC qualifies for the EUROPA LEAGUE group stage provided the player is still under contract with the PAOK FC on the date of the sport qualification”;

(ii) EUR 100,000 “each time that the PAOK FC qualifies for the CHAMPIONS LEAGUE group stage provided the player is still under contract with the PAOK FC on the date of the sport qualification”.

5. In addition, the above-mentioned clubs agreed that “STADE RENNAIS shall receive – without limits as to time pursuant to this clause – in a share of 20% to be calculated on net sums receivable by PAOK FC in relation to the departure of the Player from PAOK FC, this share arising from receipt by PAOK FC of all types of financial compensation relating to the Player.”

6. Equally, according to the TMS, the player was registered with the Respondent on 31 January 2017.

7. On 29 May 2017, the Claimant lodged a claim in front of FIFA, requesting its proportion of the solidarity contribution in connection with the transfer of the player from Stade Rennais FC to the Respondent. In particular, the Claimant requested 18.1918% of the 5% of the transfer compensation, plus 5% interest p.a. “as from the date in which the payments should have been done”.

8. In its reply dated 27 July 2017, the Respondent argued that it made the payment to the Claimant in the amount EUR 7,701.50, of which EUR 1,541.32 were “paid on behalf of the Claimant” to the Greek taxes authorities.

9. With regard to the two remaining instalments as agreed upon in the transfer fee, the Respondent commented that those were not due yet.

10. In its replica dated 28 August 2017, the Claimant acknowledged the receipt of the partial payment of EUR 6,116.26, however, it argued that the Respondent is not entitled to perform any tax deduction on the amount to be paid as solidarity contribution.

11. In view of the above, the Claimant requested “the remaining value of the first instalment of the solidarity contribution […] with the relevant interest as from the date when the payment should have been done”.

12. Furthermore, the Claimant requested the solidarity contribution based on the alleged PAOK FC’s qualification for the Europa League group stage “with the relevant interest as from the date when the payment should have been done”.

13. At last, the Claimant requested the solidarity contribution regarding the second instalment of the transfer fee “with the relevant interest as from the date when the payment should have been done”.

14. In its duplica dated 9 November 2017, the Respondent argued that it made the payment to the Claimant of EUR 7,701.50; an amount which was paid without any kind of deduction after having been provided with required documents from the Claimant.

15. With regard to the conditional payments, the Respondent considered that the condition set forth in the transfer agreement was not met, i.e. the club was eliminated before reaching the Europa League group stage 2017/2018.

16. On 25 October 2019, a proposal in accordance with Article 13 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber was sent out by the FIFA Administration.

17. The proposed sum due by the Respondent amounted EUR 15,401.66, i.e. 18.19% of the due solidarity contribution. In this regard, the FIFA Administration have taken due note that a partial payment of EUR 6,116.26 has already been made by the Respondent, receipt of which has been confirmed by the Claimant in TMS.

18. On 9 November 2019, the Respondent rejected the proposal made by the FIFA Administration, since it considered that after having paid the amounts of EUR 7,701.50 [minus EUR 1,541.32 as taxes deductions] and EUR 7,701.59, the present dispute is settled.

19. On 11 November 2019, the Claimant also rejected the proposal made by the Administration of FIFA, considering said proposal does not reflect the conditional payments and the sell-on fee amounts.

20. In its correspondence dated 20 November 2019, the Claimant acknowledged to have received the solidarity contribution related to the second and third instalment. With regard to the first instalment, the Claimant argued that it was paid only partially.

The Claimant reiterated his request for the outstanding payment as well as solidarity contribution based on sell-on fee amounts.

II. Considerations of the Single Judge of the sub-committee of the DRC

1. First of all, the Single Judge of the sub-committee of the DRC (hereinafter also referred to as: Single Judge) analysed whether he was competent to deal with the case at hand. 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 referred to art. 3 of the Procedural Rules, which states that the Dispute Resolution Chamber shall examine its jurisdiction in light of arts 22 to 24 of the Regulations on the Status and Transfer of Players (edition October 2019). In accordance with art. 3 of Annexe 6 in conjunction with art. 24 par. 3 and art. 22 lit. d) of the Regulations on the Status and Transfer of Players, the Single Judge is competent to decide on the present dispute relating to solidarity mechanism between clubs belonging to different associations handled through TMS.

3. Furthermore, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, the Single Judge confirmed that in accordance with art. 26 par. 1 and par. 2 of said Regulations (editions June 2016, January 2018, June 2018, June 2019 and October 2019) and considering that the player was registered with the Respondent on 31 January 2017, the 2016 edition of the Regulations on the Status and Transfer of Players (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 submitted by the parties. 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. In particular, the Single Judge recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

5. The Single Judge started by acknowledging that the Claimant is requesting the payment of 18.1918% of the 5% of the transfer compensation, plus 5% interest p.a. as of the due dates, from the Respondent as solidarity contribution in connection with the international transfer of the professional player, Pedro Henrique Kozen Medina, from Stade Rennais FC.

6. Moreover, the Single Judge duly noted that, according to the relevant transfer agreement dated 27 January 2017, the player was transferred from Stade Rennais FC to the Respondent for the amount of EUR 1,608,750, payable in three instalments as follows:

- EUR 804,375 “upon signing the contract and no later than on 10 February 2017”;

- EUR 402,188 “no later than on 27 July 2017”;

- EUR 402,187 “no later than on 27 January 2018”.

7. Furthermore, the Single Judge noted that above-mentioned clubs agreed upon conditional payments of EUR 50,000 “each time that the PAOK FC qualifies for the EUROPA LEAGUE group stage provided the player is still under contract with the PAOK FC on the date of the sport qualification”

8. In continuation, the Single Judge observed that at the relevant transfer agreement stipulated that “STADE RENNAIS shall receive – without limits as to time pursuant to this clause – in a share of 20% to be calculated on net sums receivable by PAOK FC in relation to the departure of the Player from PAOK FC, this share arising from receipt by PAOK FC of all types of financial compensation relating to the Player.”

9. The Single Judge observed that through the proceedings, the Claimant acknowledged having received (i) partial payment of the solidarity contribution based on the first instalment; (ii) full payment of the solidarity contribution based on the second instalment; (iii) full payment of the solidarity contribution based on the third instalment.

10. In this respect, the Single Judge noted that the Claimant requested the outstanding amount from the first instalment as well as the solidarity contribution based on the alleged PAOK FC’s qualification for the Europa League group stage.

11. Equally, the Single Judge took note that the Respondent, for its part, considered that after having paid the amounts of EUR 7,701.50 – minus EUR 1,541.32 as taxes deductions “paid on behalf of the Claimant” to the Greek taxes authorities – and EUR 7,701.59, the present dispute is settled.

12. With regard to the conditional payments, the Single Judge acknowledged Respondent’s argument that the condition set forth in the transfer agreement was not met, i.e. the club was eliminated before reaching the Europa League group stage 2017/2018.

13. In view of all the above, the Single Judge first of all wished to stress that FIFA’s deciding bodies are in principle not competent to deal with tax relate disputes, as the fall outside the scope of the Regulations and Procedural Rules.

14. Furthermore, the Single Judge emphasised that, as established in art. 21 in combination with Annexe 5 of the Regulations, if a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and to be distributed by the new club as solidarity contribution to the club(s) involved in the training and education of the player in proportion to the number of years the player has been registered with the relevant clubs between the sporting seasons of his 12th and 23rd birthday.

15. Consequently, the Single Judge decided to reject the Respondent’s argument that EUR 1,541.32 was deducted for tax purposes and confirmed that said difference remained due.

16. With regard to the conditional payment, the Single Judge analysed the relevant evidence on file and concluded that the Respondent, indeed, did not qualify to the group stage of the Europa League. Recalling the wording of the pertinent clause, the Single Judge concluded that the condition set forth in the transfer agreement was not met and that therefore, the conditional payment shall not be taken into account.

17. Before commencing with the relevant calculation for the matter at hand, the Single Judge noted that the Claimant, after rejecting the proposal of the FIFA Administration, amended its claim, additionally requesting the payment of solidarity contribution based on the sell-on fee.

18. In this regard, the Single Judge pointed out on the correspondence sent out by the FIFA Administration, together with the said proposal:

“[…] the Claimant is limited only to accept or reject the proposal, excluding hereby any possibility to amend its original claim.”

19. On account of the above, the Single Judge decided to not take into account the amendment of the claim made by the Claimant after the rejection of the proposal of the FIFA Administration.

20. Having said that, the Single Judge started with the relevant calculation of the solidarity contribution.

21. First of all, the Single Judge recalled that, according to the player passport issued by the Confederação Brasileira de Futebol, the Claimant was involved in the training and education of the player.

22. On account of the above, the Single Judge decided that, in accordance with art. 21 in combination with Annexe 5 of the Regulations, the Respondent must pay the relevant proportion of the solidarity contribution to the Claimant.

23. Having established the above, the Single Judge referred to art. 1 of Annexe 5 of the Regulations, which provides the figures for the distribution of the solidarity contribution, according to the period of time during which the player was registered with the relevant club.

24. In this respect, the Single Judge recalled that, according to the player passport issued by the Confederação Brasileira de Futebol, the player, born on 16 June 1990, was registered with the Claimant as from 1 April 2010 until 24 January 2012.

25. On account of the above and in accordance with art. 1 of Annexe 5 of the Regulations, the Single Judge considered that the Claimant is, thus, entitled to receive solidarity contribution for the period as from 1 April 2010 until 24 January 2012, i.e. during 275 days of the season of the player’s 20th birthday, during 365 days of the season of the player’s 21st birthday, during 24 days of the season of the player’s 22nd birthday. In terms of the percentage of the 5% solidarity contribution, the Single Judge calculated that, on a pro rata basis, this corresponds to 18.19% of the 5% of the total transfer compensation.

26. Therefore, the Single Judge concluded that the Claimant is entitled to receive EUR 15,401.66, plus 5% interest p.a. as of the due dates, as solidarity contribution in relation to the transfer of the player from Stade Rennais FC to the Respondent.

27. As a result, considering that the Claimant acknowledged the payment of EUR 13,861.77, the Single Judge concluded that such amount shall be deducted from the above-mentioned solidarity contribution.

28. On account of the above, in accordance with art. 21 in combination with Annexe 5 of the Regulations, the Single Judge decided that the Respondent is liable to pay to the Claimant the amount of EUR 1,540, plus 5% interest p.a. as of the respective due date, as solidarity contribution for the player, Pedro Henrique Kozen Medina.

29. Lastly, the Single Judge referred to art. 25 par. 2 of the Regulations in combination with art. 18 par. 1 of the Procedural Rules, according to which, in proceedings before the DRC relating to disputes regarding training compensation and the solidarity mechanism, costs in the maximum amount of CHF 25,000 are levied. It is further stipulated that the costs are to be borne in consideration of the parties’ degree of success in the proceedings and, in accordance with Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute.

30. In respect of the above, the Single Judge held that the amount to be taken into consideration in the present proceedings is EUR 1,540, related to the claim of the Claimant. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 5,000 (cf. table in Annexe A of the Procedural Rules).

31. As a result, considering the degree of success, the Single Judge determined the final costs of the current proceedings to the amount of CHF 3,000, which shall be paid by the Respondent to FIFA.

III. Decision of the Single Judge of the sub-committee of the DRC

1. The claim of the Claimant, SER Caxias do Sul, is accepted.

2. The Respondent, FC PAOK Thessaloniki, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 1,540, plus 5% interest p.a. as of 30 days of the due date of each instalment until the date of effective payment.

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

4. 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 Single Judge of the sub-committee of the DRC of every payment received.

5. The final costs of the proceedings in the amount of CHF 3,000 are to be paid by the Respondent to FIFA to the following bank account with reference to case no. TMS 1563:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH 27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

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Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, 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 Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note related to the appeal procedure:

According to art. 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. 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.

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 Single Judge of the

sub-committee of the DRC

Emilio García Silvero

Chief Legal & Compliance Officer