F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2020-2021) – fifa.com – atto non ufficiale – Decision 18 November 2020

Decision of the

DRC Judge

passed on 18 November 2020,

regarding an employment-related dispute concerning the player Armindo Rodrigues Mendes Furtado

COMPOSITION:

Pavel Pivovarov (Russia), DRC Judge

CLAIMANT:

ARMINDO RODRIGUES MENDES FURTADO, Portugal

Represented by Mr. Pedro Macieirinha

RESPONDENT:

SC DINAMO 1948, Romania

I. FACTS

1. On 30 January 2020, the Portuguese player Armindo Rodrigues Mendes Furtado (hereinafter: the player or Claimant) and the Romanian club SC Dinamo 1948 (hereinafter: the club or Respondent) concluded a termination agreement, whereby the latter undertook to pay to the former the amount of net EUR 32,750, as follows:

- EUR 24,750 on 30 January 2020;

- EUR 8,000 on 1 June 2020.

2. Clause 3 of the termination agreement states that: “In case of delay of payments of any of [the] above instalments the parties agree that the player is allowed to charge interest amounting to thirty Euro (30) per day”.

3. On 10 June 2020, the Claimant put the Respondent in default of payment of the amount of EUR 8,270, corresponding to the second instalment due as per the termination agreement, i.e. EUR 8,000, plus interest (already calculated by the Claimant in the amount of EUR 270 at that moment), granting the Respondent a 10 days’ deadline to remedy the default; however, to no avail.

4. In his request for relief, the player requested to be awarded outstanding remuneration in the amount of EUR 9,500, plus EUR 30 per day of delay as from the date on which the claim was lodged, i.e. 20 July 2020, until the date of effective payment, broken down by the player as follows:

- EUR 8,000 corresponding to the instalment payable on 1 June 2020;

- EUR 1,500 corresponding to the default penalty of EUR 30 per day, calculated by the Claimant himself as from 1 June 2020 until 20 July 2020, i.e. 50 days (30*50 = 1,500).

5. In his claim, the player explained that despite having put the Respondent in default of payment, the latter failed to comply with its financial obligations towards the Claimant.

6. Despite having been invited to do so, the Respondent failed to reply to the claim.

7. However, after the expiry of the deadline to reply, the club informed FIFA that it had paid the player the amount of Romanian Lei (RON) 38,714 on 28 August 2020, allegedly corresponding to EUR 8,000 (note: on file, bank statement in Romanian only).

8. Requested to comment on the alleged payment made by the club, the player while acknowledging having received the amount of EUR 8,000 on 28 August 2020, claimed that the penalty for late payment is still due and amounts to EUR 2,640 (EUR 30 x 88 days). Thus, the aforementioned amount plus interest is still claimed.

II. CONSIDERATIONS OF THE DRC JUDGE

1. First of all, the DRC Judge (hereinafter also referred to as judge) analysed whether he was competent to deal with the case at hand. Taking into account the wording of art. 21 of the June 2020 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 DRC Judge referred to art. 3 par. 1 of the Procedural Rules and emphasised 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, the DRC Judge is competent to deal with matters which concern employment-related disputes with an international dimension between players and clubs, such as the present one, which involves a Portuguese player and a Romanian club.

3. In continuation, the DRC Judge analysed which edition of the Regulations of the Status and Transfer of Players should be applicable to the present matter. In this respect, the DRC Judge confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the claim was lodged on 20 July 2020, the June 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

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 all 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. First and foremost, the DRC judge acknowledged that the parties had terminated their employment relation by mutual consent by entering into the termination agreement on 30 January 2020. In accordance with the termination agreement, the Respondent inter alia undertook to pay to the Claimant the amount of EUR 32,750 in two instalments, i.e. an amount of EUER 24m750 on 30 January 2020 and an amount of EUR 8,000 on 1 June 2020.

6. In continuation, the DRC judge noted that according to the Claimant, the Respondent paid the first instalment of EUR 24,750 on time, but however failed to remit the second instalment of EUR 8,000 on time, as said amount was only paid on 28 August 2020. Consequently, on the basis of clause 3 of the termination agreement, the Claimant is of the opinion that he is still entitled to a contractual penalty in the amount of EUR 2,640, corresponding to 88 days (the period between 1 June 2020 and 28 August 2020) multiplied with EUR 30, as well as EUR 30 for every day that the amount is not paid until the day of effective payment.

7. Furthermore, the DRC judge noted that the Respondent had been given the opportunity to reply to the amended claim submitted by the Claimant, but that the Respondent had failed to present its response in this respect (and only submitted outside the time limit a bank statement corresponding to the payment of the amount of EUR 8,000. In this way, so the DRC judge deemed, the Respondent renounced to its right of defence and, thus, accepted the allegations of the Claimant.

8. As a consequence of the preceding consideration, the DRC judge established that in accordance with art. 9 par. 3 of the Procedural Rules he shall take a decision upon the basis of the documents on file.

9. In view of the foregoing, the DRC judge deemed that the main issue in the matter at hand was the analysis of the penalty fee contained in clause 3 of the termination agreement, and therefore,, focussed his attention on said contractual clause.

10. In this respect, the DRC judge concluded that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness. In this respect, the DRC judge highlighted that in order to determine as to whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before it shall also be taken into consideration.

11. In the specific case at hand, the DRC judge deemed that the penalty fee of EUR 30 per day, which the parties contractually agreed upon in the context of terminating the employment relationship is in fact a hidden interest clause, that would amount to a yearly interest rate of 136% p.a.

12. In this respect, the DRC judge was of the clear opinion that such an interest rate and/or penalty clause is to be considered disproportionate, as it fairly exceeds to maximum interest rate of 1(% p.a. under Swiss law.

13. On account of all of the above, the DRC judge decided that the penalty fee as agreed upon between the parties in article 3 of the settlement agreement should be reduced to 18% interest p.a., to be applied on the amount of EUR 8,000, was fell due on 1 June 2020 but which was only paid on 28 August 2020.

14. Consequently, the DRC judge decided that in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant interest at the rate of 18% p.a. over the amount of EUR 8,000 as from 2 June 2020 until 28 August 2020, i.e. the date on which the second instalment of EUR 8,000 was paid to the Claimant.

15. The DRC judge concluded his deliberations in the present matter by rejecting any further request filed by the Claimant.

16. Furthermore, taking into account the consideration under number II./3. above, the DRC judge referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with his decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

17. In this regard, the DRC judge pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

18. Therefore, bearing in mind the above, the DRC judge decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

19. Finally, the DRC judge recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

III. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, Armindo Rodrigues Mendes Furtado, is partially accepted.

2. The Respondent, SC Dinamo 1948, has to pay to the Claimant, the following amount:

- interest of 18% p.a. over the amount of EUR 8,000 as from 2 June 2020 until 28 August 2020.

3. Any further claims of the Claimant are rejected.

4. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

5. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount due, plus interest as established above is not paid by the Respondent within 45 days, as from the notification by the Claimant of the relevant bank details to the Respondent, the following consequences shall arise:

 1.

The Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players).

2.

In the event that the payable amount as per in this decision is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, 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 Procedural Rules).

CONTACT INFORMATION:

Fédération Internationale de Football Association

FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland

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