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 given15 (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. After having lodged a first claim on 17 May 2016 (Ref. nr. XXX), the Claimant lodged a second claim in front of FIFA against the Respondent on 12 August 2016. In particular, the Claimant explains that the Respondent proceeded to the payment of the seventh instalment on 11 August 2016, i.e. 42 days after its due date, and therefore claims the amount of EUR 13,883.84 as interest in accordance with the termination agreement. In addition, the Claimant requests FIFA to order the Respondent to bear the procedural costs and reimburse his legal fees.

7. 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 details were missing. In this regard, the Respondent alleges that it requested such information to the Claimant; however to no avail.

8. In continuation, the Respondent asserts that on 13 July 2016, i.e. within the grace period granted to pay the seventh instalment, the Claimant closed his account in Country D. Consequently, the Respondent explains that it had to find an alternative and eventually after several exchange of correspondence with the bank in Country D, the latter accepted to transfer the money to the bank account provided by the Claimant when closing his account in Country D.

9. In his replica, the Claimant emphasises that the Respondent undertook to pay all the instalments to the bank account stipulated in the termination agreement. In this regard, the Claimant points out that the Respondent eventually managed to pay the seventh instalment to this account in spite of having not received the requested information, which demonstrates the Respondent’s bad faith.

10. In its duplica, the Respondent reiterates that the delay was exclusively due to the Claimant’s bad faith. Furthermore, the Respondent points out that the bank transfer could eventually be made because the Claimant’s bank in Country D found out that when closing his account in Country D, the Claimant transferred money to his account in Country E and was therefore able to complete the missing information.

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 12 August 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 12 August 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 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. 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.

6. 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”.

7. In continuation, the members of the Chamber noted that on 11 August 2016, the Respondent proceeded to the payment of the instalment due on 30 June 2016.

8. Having said this, the DRC observed that the Claimant requests the amount of EUR 13,883.84 allegedly corresponding to the default interest of 5% per month related to the late payment of the instalment due on 30 June 2016.

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

10. At this stage, the Chamber focused on the Respondent’s argument that the interests are not due since the delay was imputable to the Claimant’s fault. In doing so, the DRC pointed out that the Respondent stressed that it eventually managed to make the payment thanks to the information collected by the bank when the Claimant closed his account in Country D. In this respect, the Chamber deemed it crucial to point out that the Respondent itself acknowledged that such closure was performed within the grace period. Considering the above, the Chamber came to the conclusion that the Respondent could have obtained the alleged missing information and therefore made the payment within the 15-day grace period. In this regard, the members of the Chamber were eager to highlight that grace periods, such as the one granted to the Respondent, are generally used in order to solve this type of unexpected issues. As a consequence, the members of the Chamber unanimously concluded that since the late payment resulted exclusively from its lack of diligence, the Respondent must be deemed in default of payment.

11. Having established the above, the Chamber went on to determine as of when the Respondent should have been deemed in default. In this respect, and considering the Claimant’s stand in his first claim (cf. case Ref. nr. XXX), the Chamber decided that the day following the expiry date of the grace period must be deemed as the effective due date.

12. 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 and in accordance with its longstanding practice, the Respondent has to pay 5% p.a. default interest.

13. On account of all the above, the Chamber decided that the Respondent is liable to pay to the Claimant an interest for late payment of 5% per annum on the amount of EUR 206,000 as from 16 July 2016 until 11 August 2016.

14. 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.

15. 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, an interest of 5% per annum on the amount of EUR 206,000 as from 16 July 2016 until 11 August 2016.

3. In the event that the abovementioned 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 claim lodged 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 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