F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2016-2017) – fifa.com – atto non ufficiale – Decision 2 March 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 2 March 2017,

in the following composition:

Geoff Thompson (England), Chairman

Mario Gallavotti (Italy), member Pavel Pivovarov (Russia), member

Roy Vermeer (Netherlands), member Jon Newman (USA), 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 arisen between the parties

I. Facts of the case

1. On 10 July 2015, the Player of Country B, Player A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract), valid as of 1 July 2015 until 30 June 2016.

2. Pursuant to the contract, the Claimant was entitled to a total salary of EUR 3,500,000.

3. On 31 January 2016, the Claimant and the Respondent concluded a termination agreement (hereinafter: the termination agreement) in accordance with which the Respondent undertook to make the following payments:

- EUR 259,091 on 1 February 2016;

- EUR 259,091 on 4 February 2016;

- EUR 206,000 on 28 February 2016;

- EUR 206,000 on 31 March 2016;

- EUR 206,000 on 30 April 2016;

- EUR 206,000 on 31 May 2016;

- EUR 206,000 on 30 June 2016.

4. In this regard, the termination agreement specifies the following:

“The Parties determined the payment terms and amounts based on the faith on the timely payments in full and the [Claimant] waives a part of his salary until the end of the Professional Contract in the amount of 265.455,00-Euro, accepting to be paid in the amount of 1.548.182,00-Euro instead of 1.813.637,00-Euro. Considering this belief on the payments to be paid on timely manner and aforementioned waiver of the [Claimant], the Parties agree on a contractual default interest of 5% per month for the delayed payments. This interest shall apply for each instalment that [the Respondent] is on default of the payments fully and/or partially. Parties also agree that [the Respondent] shall be given 15 (fifteen) days tolerance period for the relevant payment following the date of payment. This tolerance period shall start automatically after the dates without the need of any notice, notification and/or court verdict”.

5. Art. 2.3 of the termination agreement further states that “[t]he payments shall be made to the bank account of the [Claimant] as follows:

‘Beneficiary: [the Claimant]

Bank: ING Bank

Acc No: XXX

IBAN: XXX

Swift: XXX

6. On 17 May 2016, and amended on 27 June 2016, the Claimant lodged a claim in front of FIFA against the Respondent, claiming the following amounts:

- EUR 1,725.68, plus 5% interest per month from 16 April 2016, as outstanding part of the fourth instalment;

- EUR 18,123.73 as interest as from 31 March 2016 until 25 May 2016 related to the late partial payment of the fourth instalment;

- EUR 8,127.12 as interest as from 30 April 2016 until 25 May 2016related to the late payment of the fifth instalment.

In addition, the Claimant requests FIFA to order the Respondent to bear the procedural costs and reimburse his legal fees.

7. In his submission, the Claimant explains that in spite of having his default notices allegedly sent on 20 April 2016 and 10 May 2016, the Respondent failed to pay the instalments due on 31 March 2016 and 30 April 2016 on time. In this regard, the Claimant stresses that on 25 May 2016 only, the Respondent paid partially the fourth instalment and the fifth instalment.

8. In its reply to the claim, the Respondent explains that in spite of the bank details stipulated in the termination agreement, the Claimant accepted to be paid the first three instalments to his bank account in Country D. As to the fourth instalment, the Respondent argues that it gave the instruction to its bank to make the payment to the bank account referred in the termination agreement, but the latter bank was unable to proceed to the transfer since the bank details were incomplete, in particular the beneficiary’s address and contact number were missing. As a consequence, the Respondent alleges that it requested such information to the Claimant; however to no avail. In this respect, the Respondent insists that it has never received the default notices allegedly sent by the Claimant. In view of above, the Respondent asserts that it paid the claimed instalments, i.e. the fourth and the fifth instalment, to the Claimant’s bank account in Country D, submitting two receipts in the amount of EUR 204,273.14 and EUR 206,000 respectively in support of its assertion. In this respect, the Respondent maintains that, by e-mail on 29 May 2016 and fax on 9 June 2016, it informed the Claimant’s representative of such payments, while reiterating its request regarding the missing information in order to proceed to the payments of the last two instalments.

9. After the expiry of the deadline granted to him to do so, the Claimant submitted its replica.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 17 May 2016. Consequently, the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2016), the Dispute Resolution Chamber 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 an Club of Country D.

3. Furthermore, the Chamber 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 on 17 May 2016, the 2015 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties. 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. In this respect, the DRC observed that the Claimant, in spite of having been invited to do so, had failed to present its replica within the relevant time limit set by FIFA, i.e. 23 June 2016. In fact, the replica of the Claimant was only received on 24 June 2016. As a result, bearing in mind the Chamber’s constant jurisprudence in this regard and in application of art. 9 par. 3 of the Procedural Rules, the Chamber decided not to take into account the replica of the Claimant.

6. Having stated the above, the members of the Chamber acknowledged that the Claimant and the Respondent signed an employment contract initially valid as from 1 July 2015 until 30 June 2016. Furthermore, the Chamber observed that on

31 January 2016, the parties concluded a termination agreement, which constitutes the document at the heart of the dispute. In particular, the Chamber acknowledged that in accordance with the termination agreement, the Respondent undertook to make the following payments to the Claimant’s bank account referred in point I.5:

- EUR 259,091 on 1 February 2016;

- EUR 259,091 on 4 February 2016;

- EUR 206,000 on 28 February 2016;

- EUR 206,000 on 31 March 2016;

- EUR 206,000 on 30 April 2016;

- EUR 206,000 on 31 May 2016;

- EUR 206,000 on 30 June 2016.

7. In this regard, the members of the Chamber observed that the termination agreement specifies, inter alia, the following:

“[T]he Parties agree on a contractual default interest of 5% per month for the delayed payments. This interest shall apply for each instalment that [the Respondent] is on default of the payments fully and/or partially. Parties also agree that [the Respondent] shall be given 15 (fifteen) days tolerance period for the relevant payment following the date of payment. This tolerance period shall start automatically after the dates without the need of any notice, notification and/or court verdict”.

8. In continuation, the members of the Chamber noted that on 25 May 2016, the Respondent made two payments of EUR 204,273.14 and EUR 206,000 corresponding to the instalments due on 31 March 2016 and 30 April 2016 respectively.

9. Having said this, the DRC observed that the Claimant requests the amount of EUR 1,725.68 as outstanding part of the instalment due on 31 March 2016 plus 5% interest per month as from 16 April 2016 until the date of effective payment. Equally, the Chamber took note that the Claimant claims the amount of EUR 18,123.73 as well as the amount of EUR 8,127.12 allegedly corresponding to the default interest of 5% per month related to the late payment of the instalments due on 31 March 2016 and on 30 April 2016 respectively.

10. Subsequently, the Chamber took into account that the Respondent, for its part, asserts that it cannot be considered having been in default since the delays in payment were due to the Claimant’s failure to provide it with his complete bank details.

11. At this stage, and insofar as it remained undisputed, the Chamber established that by virtue of the legal principles of pacta sunt servanda and of non ultra petita, the Respondent is liable to pay the Claimant the amount of EUR 1,725.68 corresponding to the outstanding part of the instalment due on 31 March 2016.

12. In continuation, the Chamber focused on the Respondent’s argument that the interests are not due since the delays were imputable to the Claimant’s fault. In doing so, the Chamber first pointed out that the parties decided to explicitly mention in the termination agreement the bank details that they considered necessary in order for the remittances to be properly made. The Chamber further outlined that insofar as the obligation to make the payments lies on the Respondent, the latter had the duty to proactively inform itself in case it had realised that certain information was missing. In this regard, the members of the Chamber highlighted that grace periods, such as the one granted to the Respondent, are generally used in order to solve this type of unexpected issues.

13. Along those lines, and after recalling the content of art. 12 par. 3 of the Procedural Rules according to which any party claiming a right on the basis of an alleged fact shall carry the burden of proof, the Chamber observed that the Respondent alleges that it requested the missing information to the Claimant; however without presenting any evidence in support of its assertion. As a consequence, the members of the Chamber unanimously concluded that the Respondent did not have any valid reason in order not to pay the relevant amount on time and must therefore be held liable for the late payments.

14. Having established the above, the Chamber went on to determine as of when the Respondent should have been deemed in default. In this respect, the Chamber noted that when claiming the default interest on his outstanding remuneration, the Claimant does it as of the 16th day following the date set out in the termination agreement, thereby, in the Chamber’s view, acknowledging that the Respondent could only be considered in default once the 15-day grace period had elapsed. As a consequence, the Chamber decided that the day following the expiry date of the grace period must be deemed as the effective due date.

15. The Chamber then turned its attention to the consequences of the default of payment. In this regard, after carefully analysing the above-mentioned provision contained in the termination agreement, the members of the DRC were of the unanimous opinion that in accordance with the jurisprudence of this Chamber, a penalty interest of 5% per month, or 60% per year, is to be considered as manifestly disproportionate, and as such, cannot be enforced. In view of the foregoing, the Chamber held that the penalty clause contained in the termination agreement concluded between the parties should be disregarded and that in accordance with its longstanding practice, the Respondent has to pay 5% p.a. default interest.

16. On account of all the above, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 1,725.68 plus 5% interest per annum on said amount as from 16 April 2016 until the date of effective payment.

17. In addition, the Chamber decided that the Respondent is liable to pay to the Claimant interests for late payment as follows:

- 5% per annum on the amount of EUR 204,274.32 as from 16 April 2016 until 25 May 2016;

- 5% per annum on the amount of EUR 206,000 as from 16 May 2016 until 25 May 2016.

18. Subsequently, the Dispute Resolution 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.

19. The Chamber concluded its deliberations in the present matter by rejecting any further request filed by the Claimant.

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, the amount of EUR 1,725.68 plus 5% interest per annum on said amount as from 16 April 2016 until the date of effective payment.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, interests as follows:

- 5% per annum on the amount of EUR 204,274.32 as from 16 April 2016 until 25 May 2016;

- 5% per annum on the amount of EUR 206,000 as from 16 May 2016 until 25 May 2016.

4. In the event that the abovementioned amounts and interests 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 claim lodged 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.

*****

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

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