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 24 February 2020

Decision of the

Single Judge of the sub

committee of the

Dispute Resolution Chamber (

passed on 24 February 2020,

by Johan van Gaalen (South Africa),

Single Judge of the sub-committee of the DRC,

on a matter between the club,

Royal Spanish Football Federation, Spain

on behalf of Padres Paules CF

as Claimant

against the club,

Beijing Guoan FC, China PR

as Respondent

regarding solidarity contribution in connection with the transfer

of the player Jonatan Viera Ramos

I. Facts of the case

1. The Royal Spanish Football Federation (hereinafter: the Spanish Football Federation or the Claimant) confirmed that the player, Jonatan Viera Ramos (hereinafter: the player), born on 21 October 1989, was registered with its formerly affiliated club, Padres Paules C.F. (hereinafter: Padres Paules CF) as from 18 September 2003 until 30 June 2004.

2. The Claimant confirmed that for the period during which the player was registered with its formerly affiliated club, the sporting season in Spain started on 1 July and finished on 30 June of the following year.

3. The Claimant informed FIFA that Padres Paules CF had been disaffiliated as from the 2011/2012 season, and provided an extract of a Resolution taken by the Interinsular Football Federation of Las Palmas, dated 31 May 2019, according to which Padres Paules CF was no longer affiliated and did not participate in organized football as from the 2011/2012 season.

4. According to the information contained in the Transfer Matching System (hereinafter: TMS), the player was registered with the Chinese club, Beijing Guoan FC (hereinafter: the Respondent), on 28 February 2018.

5. On 18 September 2019, and subsequently amended on 27 September 2019, the Claimant contacted FIFA on behalf of its disaffiliated club, Padres Paules CF, claiming its proportion of solidarity contribution in connection with the transfer of the player from the Spanish club, UD Las Palmas (hereinafter: UD Las Palmas) to the Respondent on 28 February 2018. In particular, the Claimant requested 3.75% of the 5% of the agreed transfer compensation plus 5% interest p.a. as from the due date.

6. According to the information contained in the TMS, UD Las Palmas and the Respondent had agreed upon transfer compensation amounting to EUR 11,000,000 net, payable on 9 March 2018.

7. As regards the transfer compensation, UD Las Palmas and the Respondent agreed that “the solidarity contributions owed to third parties […] shall be calculated and paid by [the Respondent] in surplus and exceeding the Transfer Fee”. In this context, the relevant parties stipulated that “[the Respondent] is solely and exclusively responsible for the calculation, payment and distribution of any solidarity contribution to any third party […]. The Parties explicitly agree that a deduction from the Transfer Fee […] is not permitted”.

8. In this respect, pursuant to clause 3.3 of the transfer agreement, it was further indicated that “the amount of the respective payment due from [the Respondent] to [UD Las Palmas] shall be increased to an amount which (after making any deductions and/or withholdings) leaves an amount equal to the payment which would have been due if no deduction and/or withholding had been required”.

9. On 12 November 2019, in accordance with article 13 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber and the FIFA Circular 1689, the FIFA Administration sent a proposal to the parties. According to the proposal made by the FIFA Secretariat, the proposed amount of EUR 22,752.63 (3.93% of the solidarity contribution) was due by the Respondent to the Claimant.

10. On 12 December 2019, the Respondent rejected FIFA’s proposal arguing that it had “already paid the abovementioned solidarity contribution to Padres Paule[s] F.C on April 13, 2018 with an amount of 27,500 euro”. In support of its statements, the Respondent provided the following documents:

a) The copy of a power of representation authorizing Metromedia Sport, S.L. (hereinafter: the representative) to act on behalf of Padres Paules;

b) The copy of an undated letter sent from the representative to the Respondent, requesting the payment of solidarity contribution in the amount of EUR 27,500;

c) The copy of an invoice allegedly sent from the representative to the Respondent on 4 April 2018;

d) An evidence of the payment allegedly made to the representative on 13 April 2018.

11. In view of all the above, on 13 January 2020, the Claimant was requested to confirm our services whether it had received the payment allegedly made in connection with the transfer of the player.

12. On 16 January 2020, the Claimant sustained that it had not received any payment from the Respondent.

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: the Single Judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note of the fact that the present matter was submitted to FIFA on 18 September 2019. 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 2020). 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 the Spanish Football Federation and a club of China.

3. Furthermore, and taking into consideration that the player was registered with the Respondent on 28 February 2018, 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 2020), the January 2018 version of the said Regulations (hereinafter: the Regulations) is applicable to the present matter as to the substance.

4. The competence of the Chamber 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 aforementioned facts as well as the arguments and the documentation submitted by the parties. The Single Judge, however, 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. 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 Regulations, any documentation or evidence generated or contained in the TMS.

5. Having established the above, the Single Judge started by acknowledging that the Claimant accepted FIFA’s proposal dated 12 November 2019. Therefore, the Single Judge considered that the Claimant had amended its claim and requested the amount of EUR 22,752.63, being 3.93% of 5% of the compensation paid for the transfer of the player, Jonatan Viera Ramos, from the Spanish club, UD Las Palmas, to the Respondent.

6. Furthermore, the Single Judge took note of the fact that the Claimant was claiming solidarity contribution for the period during which the player had been registered with its disaffiliated club, i.e. Padres Paules CF, as from 18 September 2003 until 30 June 2004.

7. On the one hand, considering that the club Padres Paules CF ceased to participate in organized football as from the 2011/2012 season, the Single Judge noted that the Claimant deemed to be entitled to the solidarity contribution arising from the aforementioned transfer of the player pursuant to art. 2 par. 3 of Annexe 5 of the Regulations.

8. In this regard, the Single Judge acknowledged that the Claimant confirmed that Padres Paules CF had been disaffiliated as from the 2011/2012 season, and in support of its allegations, submitted an extract of a Resolution taken by the Interinsular Football Federation of Las Palmas dated 31 May 2019, according to which Padres Paules CF had been disaffiliated.

9. On the other hand, the Single Judge observed that the Respondent contested the substance of the claim, as it deemed to have paid the entire solidarity contribution to Padres Paules CF.

10. With due consideration to the above, the Single Judge first of all turned his attention to the question as to whether or not the Claimant is entitled to receive solidarity contribution from the Respondent in connection with the international transfer of the player from UD Las Palmas to the Respondent.

11. In this context, the Single Judge recapitulated that art. 2 par. 3 of Annexe 5 of the Regulations stipulates that an association is entitled to receive the proportion of solidarity contribution, which in principle would be due to one of its affiliated clubs, if it can provide evidence that the club involved in the professional’s training and education has in the meantime ceased to participate in organised football and/or no longer exists due to, in particular, bankruptcy, liquidation, dissolution or loss of affiliation.

12. In view of the aforementioned, the Single Judge concluded that the Claimant had provided enough evidence that Padres Paules CF had been disaffiliated as from the 2011/2012 season.

13. Therefore, taking into account that the Claimant proved that Padres Paules CF was no longer affiliated and/or participating under the auspices of the Spanish Football Federation, the Single Judge concluded that the Claimant was, in principle, entitled to receive the proportion of solidarity contribution for the period of time the player was registered with its formerly affiliated club, i.e. Padres Paules CF.

14. Subsequently, as regard to the Respondent’s allegation that it has fulfilled all its obligations towards Padres Paules CF, the Single Judge firstly recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

15. According to this, the Single Judge noted that the Respondent substantiated its defence, as it presented evidence that it made a payment towards the Padres Paules CF’s alleged representative in the amount of EUR 27,500 on 13 April 2018.

16. Notwithstanding the above, even though the Respondent provided a copy of the power of representation authorizing the representative to act, allegedly, on behalf of Padres Paules CF, the Single Judge wished to emphasize that it was impossible to conclude with certainty who effectively benefitted from such payment, considering the fact that the club Padres Paules CF had been disaffiliated since the 2011/2012 season.

17. In this regard, the Single Judge was of the firm opinion that the Respondent should have performed due diligence in establishing in whose favor the payment of solidarity contribution was being made.

18. Furthermore, the Single Judge concluded that a payment made to an agency who allegedly represented a disaffiliated club, cannot be considered as the Respondent having complied with its obligation to pay solidarity contribution.

19. As a consequence of the aforementioned, the Single Judge determined that notwithstanding the payment made, the Respondent still had to comply with its obligations under art. 2 par. 3 of Annexe 5 of the Regulations, i.e. paying the relevant proportion of solidarity contribution to the Spanish Football Federation.

20. In continuation, and entering into the substance of the matter, the Single Judge started by acknowledging that the Claimant is requesting solidarity contribution based on an alleged transfer compensation of EUR 11,000,000 allegedly paid by the Respondent to UD Las Palmas in connection with the international transfer of the player.

21. At the same time, the Single Judge acknowledged that according to the relevant transfer agreement remitted to FIFA, the player was transferred on a permanent basis from UD Las Palmas to the Respondent for the net amount of EUR 11,000,000.

22. In this respect, the Single Judge moved to analysed whether the solidarity contribution should be calculated on the basis of the net transfer compensation stipulated in the transfer agreement or on the basis of a gross transfer compensation, whereby the solidarity contribution should be added on top of the net transfer compensation.

23. In view of the above, the Single Judge recalled the content of the transfer agreement concluded between the Respondent and UD Las Palmas, according to which the parties agreed that “the solidarity contributions owed to third parties […] shall be calculated and paid by [the Respondent] in surplus and exceeding the Transfer Fee”.

24. Furthermore, the Single Judge recalled that the aforementioned clubs agreed upon the following: “the amount of the respective payment due from [the Respondent] to [UD Las Palmas] shall be increased to an amount which (after making any deductions and/or withholdings) leaves an amount equal to the payment which would have been due if no deduction and/or withholding had been required”.

25. In this respect, the Single Judge observed that the transfer agreement clearly stipulated that the transfer compensation of EUR 11,000,000 is a “net” amount, as well as that the Respondent is exclusively responsible for the payment of solidarity contribution, and that “a deduction from the Transfer Fee […] is not permitted”.

26. According to the Single Judge, under these circumstances, the above-mentioned wording of the transfer agreement does not leave room for an interpretation that the solidarity contribution must be deducted from the transfer compensation stipulated in the transfer agreement. In this respect, the Single Judge pointed out that this was not disputed by the parties.

27. Having analysed the wording of the transfer agreement at stake, the Single Judge wished to underline that there is no legal obstacle which prevents the clubs from agreeing that the new club, apart from paying the transfer compensation, additionally bears the solidarity contribution. In this regard, the Single Judge reiterated that this is indeed what the parties to the transfer agreement clearly agreed upon. In this respect, the Single Judge wished to emphasize that, as a general rule, the relevant clause in the transfer agreement must make a clear reference to a net amount as well as to the solidarity contribution.

28. Furthermore, the Single Judge highlighted that CAS has established, in line with its jurisprudence, that an agreement on a net transfer compensation without deducting solidarity contribution does not contravene the spirit of the Regulations. Equally, CAS has established that a scenario in which the solidarity contribution is to be deducted from a gross transfer compensation does not harm the entitlement of the training club(s) since it would rather enhance the solidarity contribution.

29. Having said that, the Single Judge held that the agreement between UD Las Palmas and the Respondent is also covered by the wording of art. 1 of Annexe 5 of the Regulations which, as pointed out previously, provides that 5% of any transfer compensation shall be deducted from the total amount of the compensation and distributed by the new club. In this respect, the CAS held that the wording of the Regulations does not prohibit that the amount specified in a transfer agreement represents only 95% of the gross transfer value, as long as the solidarity contribution in the end is still deducted from the gross transfer value and distributed in conformity with the wording of art. 1 of Annexe 5 of the Regulations.

30. As a consequence of the aforementioned, the Single Judge concluded that the above-mentioned provisions in the transfer agreement between UD Las Palmas and the Respondent are valid, considering the clear reference to a net amount as well as the explicit reference to the solidarity contribution which may not be deducted from the transfer compensation stipulated in the transfer agreement. Therefore, the Single Judge held that the gross transfer compensation shall serve as the basis for the calculation of the solidarity contribution.

31. In the present matter, the Single Judge explained that the agreement on a net transfer compensation without deduction leads to the situation that the agreed transfer compensation of EUR 11,000,000 constitutes only 95% of the total amount of compensation for the transfer of the player, while the gross transfer compensation, i.e. 100% of the total amount of compensation, is EUR 11,578,947 (EUR 11,000,000 / 95 x 100 = EUR 11,578,947).

32. Having established the above, the Single Judge went on to determine which should be the relevant amount of the solidarity contribution to be paid by the Respondent to the Claimant.

33. To that end, the Single Judge referred again 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 the player was effectively trained by a specific club and taking into consideration the age of the player at the time he was being trained and educated by the club(s) concerned.

34. In this context, the Single Judge recalled that, according to the player passport issued by the Spanish Football Federation, the player, born on 21 October 1989, was registered with the Claimant as from 18 September 2003 until 30 June 2004, corresponding to 9 months and 12 days regarding the season of the player’s 14th birthday.

35. In view of the foregoing, the Single Judge established that the Claimant was entitled to 3.93% of 5% of the compensation paid by the Respondent to UD Las Palmas i.e. 3.93% of 5% of EUR 11,578,947.

36. In view of all the above, the Single Judge decided that the Respondent must pay to the Claimant the amount of EUR 22,752.63 plus default interest at a rate of 5% p.a. on the said amount as from 28 March 2018 until the date of effective payment.

37. Lastly, the Single Judge referred to 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. The relevant provision further states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings (cf. art. 18 par. 1 of the Procedural Rules).

38. In respect of the above, and taking into account that the claim of the Claimant has been partially accepted, the Single Judge concluded that Beijing Guoan FC has to bear the costs of the current proceedings in front of FIFA.

39. According to Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute.

40. The amount in dispute to be taken into consideration in the present proceedings amounts to EUR 22,752.63 relating to the claim of the Claimant. The Single Judge therefore concluded that the maximum amount of costs of the proceedings corresponds to CHF 5,000 (cf. table in Annexe A of the Procedural Rules).

41. As a result, considering the particularities of the present matter as well as the parties’ degree of success, the Single Judge determined the final amount of costs of the current proceedings in the amount of CHF 4,000.

42. In view of all of the above, the Single Judge concluded that the amount of CHF 4,000 has to be paid by the Respondent to cover the costs of the present proceedings.

*****

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

1. The claim of the Claimant, the Royal Spanish Football Federation, acting on behalf of Padres Paules CF, is accepted.

2. The Respondent, Beijing Guoan FC, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 22,752.63, plus 5% interest p.a. as from 28 March 2018 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 4,000 are to be paid by the Respondent, within 30 days of notification of the present decision, to FIFA to the following bank account with reference to case no. TMS 4793:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH 27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

*****

Note relating to the motivated decision (legal remedy):

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, 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 (CAS)

Avenue de Beaumont 2

CH-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 Officer