F.I.F.A. – Commissione per lo Status dei Calciatori (2014-2015) – controversie tra società – ———- F.I.F.A. – Players’ Status Committee (2014-2015) – club vs. club disputes – official version by www.fifa.com – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland, on 26 March 2015, by Mr Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club Club A, country B as “Claimant” against the club Club C, country D as “Respondent” regarding a contractual dispute between the parties and relating to the Player E. I.

F.I.F.A. - Commissione per lo Status dei Calciatori (2014-2015) – controversie tra società – ---------- F.I.F.A. - Players’ Status Committee (2014-2015) – club vs. club disputes – official version by www.fifa.com – Decision of the Single Judge of the Players’ Status Committee passed in Zurich, Switzerland, on 26 March 2015, by Mr Geoff Thompson (England) Single Judge of the Players’ Status Committee, on the claim presented by the club Club A, country B as “Claimant” against the club Club C, country D as “Respondent” regarding a contractual dispute between the parties and relating to the Player E. I. Facts of the case 1. On 26 July 2010, the Club A from country B (hereinafter: “the Claimant”) and the Club C from country D (hereinafter: “the Respondent”) signed a transfer contract (hereinafter: “the contract”), in connection with the transfer of the Player E from country B (hereinafter: “the player”) from the Claimant to the Respondent. 2. Clause 2 of the contract stated that the Respondent would pay to the Claimant a net transfer compensation amounting to EUR 4,000,000, as follows: (1) EUR 2,000,000 upon signature of the relevant contract; (2) EUR 1,250,000 until 15 November 2010; (3) EUR 750,000 until 30 August 2011. 3. Clause 2 par. 2 of the contract stipulated that the aforementioned total amount (i.e. EUR 4,000,000) represented 100% of the transfer compensation of the player, being included in this amount training compensation and solidarity mechanism established by FIFA. 4. Clause 2 par. 4 of the contract established that in case of delay in paying any of the agreed instalments the entire remaining transfer amount will become due at that moment and a contractual penalty equivalent to 20% over the outstanding transfer amount will imply. 5. Clause 7 of the contract stated that the non-execution of rights or powers established in this contract, the rules and regulations of FIFA and (national) law, as well as, the tolerance of any breaches by the other party, will not result in the renunciation by the relevant party to any of its contractual, legal, or regulatory rights, on the modification or novation of the contract, which the party may, at any time, exercise. 6. On 10 August 2012, the Claimant lodged a complaint with FIFA against the Respondent requesting the payment of the outstanding amount of EUR 568,438.36 plus costs, as follows: (1)EUR 200,000 as outstanding transfer fee (part of the third instalment, cf. clause 2 of the contract); (2)EUR 400,000 as penalty (cf. clause 2 par. 4 of the contract); (3)less the amount of EUR 31,561.64 apparently paid by the Respondent to the player?s training club, Club F, as solidarity contribution within the frame of a FIFA Dispute Resolution Chamber (DRC)?s case. 7. In particular, the Claimant alleged that the first instalment agreed upon in the contract was correctly paid by the Respondent, however the second instalment was paid with delay, only in December 2010. 8. With regard to the third instalment, the Claimant stated that the Respondent paid only the partial sum of EUR 550,000 and thus an amount of EUR 200,000 was still outstanding. The Claimant alleged that the Respondent informed them that the remaining amount of the third instalment was retained to pay solidarity contribution to the player?s training clubs. However, the Claimant argued to have rejected the Respondent?s position and deemed that the relevant retention based on clause 2 par. 2 of the contract was illegal. The Claimant further stated that, according to the player?s passport issued by the Football Association of country B, the training clubs of the player between the age of 12 and 23 were Club F and the Claimant and the rest of the training years showed the mention “no records found”. Therefore, the Claimant was of the opinion that the Respondent did not have the right to retain the amount of EUR 200,000 as solidarity contribution. 9. Moreover, the Claimant stated that, due to the delay in paying the second and part of the third instalments as well as the lack of complete payment of the third instalment, a penalty fee of EUR 400,000 should also be paid by the Respondent in accordance with clause 2 par. 4 of the contract. 10. The Respondent presented its position in relation to the Claimant?s complaint and stated that the FIFA Players? Status Committee (PSC) is not competent to deal with matters regarding solidarity contribution or training compensation (cf. art. 22 et seq. of the FIFA Regulations on the Status and Transfer of Players [hereinafter: “the Regulations”]). Hence, the Respondent requested that discussions related to the deduction of 5% of the total amount due as compensation made in the last instalment shall be ex officio dismissed by the PSC due to its lack of jurisdiction. 11. Moreover, the Respondent rejected the Claimant?s claim of EUR 400,000 as penalty for the alleged late payment of the second and third instalments. In this respect, the Respondent stated that both instalments were duly paid on 20 December 2010 and 1 September 2011, respectively. Therefore, the Respondent deemed that it was uncontested that the second instalment was fulfilled within 35 days from the due date and the third instalment within 2 days from the due date only. Therefore, the Respondent alleged that, in accordance with the well-established jurisprudence of the FIFA deciding bodies, payments made only few days later after the relevant due dates may not be considered a proper infringement to the terms and conditions set out in a contract. 12. Furthermore, the Respondent alleged that the Claimant waived its right to enforce the penalty clause by tacitly accepting the late payment of the second and third instalments without taking any legal or proper action in due time. In this respect, the Respondent invoked CAS?s well established jurisprudence (CAS 2006/A/1180; 2005/A/893 and 2006/A/1100) and art. 44 par. 1 of the Swiss Code of Obligations (SCO). 13. The Claimant presented its reaction and rejected the Respondent?s allegations in its entirety. With regard to the Respondent?s objection to the PSC jurisdiction to enter in this matter, The Claimant stated that this matter was not a solidarity contribution?s case but more a dispute regarding the non-fulfilment of the contract and its clauses freely agreed upon by both clubs. The Claimant further added that, at the time of the negotiation of the contract, the Respondent was fully aware that the unique retention that it could occasionally make was 0,7890% of the total transfer amount as solidarity contribution in favour of one training club of the player, i.e. Club F, apart from the Claimant. The Claimant added that Club F did not receive any amount from the Respondent until it lodged the relevant claim at FIFA which was eventually decided by the DRC on 28 June 2013. 14. Moreover, the Claimant stated that the Respondent had breached blatantly clause 2 par. 2 of the contract and added that if the former club of the player was also one of his training clubs, like in the case at hand, the new club, i.e. the Respondent, should not deduct the solidarity mechanism due to this club. 15. With regard to the requested penalty fee, the Claimant stated that it was uncontested by the Respondent that the second and third instalments were paid late by the latter. Moreover, the Claimant deemed that the Respondent acted with bad faith and violated the legal principal of pacta sunt servanda. In addition, the Claimant stated that the cases invoked by the Respondent as well as art. 44 of the SCO are not applicable to this matter. 16. Furthermore, the Claimant alleged that it did not tacitly accept the behaviour of the Respondent. In this respect, the Claimant explained that, on 18 November 2010 (i.e. 3 days after the due date of the second instalment), it requested in writing information about the relevant payment and warned the Respondent about the content of clause 2 par. 4 of the contract. On 21 December 2010, same date in which it received the late payment of the second instalment, the Claimant requested in writing the Respondent the fulfilment of the penalty. Therefore and even if the Claimant would not have notified the Respondent, it would not mean that it waived its rights (cf. clause 7 of the contract). 17. The Respondent presented its final position, reiterating its previous arguments and alleging that the main point under discussion was whether it was (or not) entitled to deduct a proportion from the amount due as transfer compensation in order to allow the distribution of the solidarity contribution between the clubs which trained the player. In this respect, the Respondent stressed that clause 2 par. 2 of the contract clearly established that the clubs agreed that EUR 4,000,000 represented 100% of the amount due as compensation for the transfer of the player and that, in accordance with art. 21 Annexe 5 of the Regulations the Respondent, it was liable to deduct the solidarity contribution claimed by the clubs which trained the player. 18. Furthermore, the Respondent stated that, in the improbable case that the PSC would detain jurisdiction to enter into the present matter, it is important to clarify that the Claimant would only be entitled to an amount of solidarity contribution of 1,5% of the total transfer amount, i.e. EUR 60,000, in accordance with the information contained in the player?s passport issued by the Football Association of country B, and not the sum of EUR 168,438.36 as requested by the Claimant. The amount of EUR 168,438.36 is the result of EUR 200,000 (outstanding part of the third instalment) – EUR 31,561.64 (solidarity paid to Club F). 19. With regard to the requested penalty fee, the Respondent reiterated its previous allegations and added that the delay to fulfil the payment of the instalments after only few days from the due dates may not be considered as a breach which would justify the imposition of EUR 400,000 as penalty fee which is abusive and clearly disproportional. The Respondent also alleged that the Claimant did not address any warning regarding the late payment of the third instalment. 20. Finally, the Respondent added that the Claimant did not suffer any significant damage which would justify the requested penalty fee and that it is unquestionable that the principle of proportionality plus the circumstances of the case per se play an important role to establish if a penalty is excessive or not. II. Considerations of the Single Judge of the Players? Status Committee 1. First of all, the Single Judge of the Players? Status Committee (hereinafter: “the Single Judge”) analysed whether he was competent to deal with the case in hand. In this respect, he took note that the present matter was submitted to FIFA on 10 August 2012. Consequently, the Single Judge concluded that the 2008 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution (hereinafter: “the Procedural Rules”) is applicable to the matter in hand (cf. art. 21 of the Procedural Rules). 2. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 1 of the Procedural Rules in connection with art. 23 par. 1 and 3 as well as art. 22 f) of the 2015 edition of the Regulations on the Status and Transfer of Players, he would be, in principle, competent to deal with the present matter since it concerns a dispute between two clubs affiliated to different associations. 3. Subsequently, 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, he recalled that the present matter was submitted to FIFA on 10 August 2012. Therefore, the Single Judge held that the 2012 edition of the Regulations on the Status and Transfer of Players (hereinafter: “the Regulations”) is applicable to the matter at stake as to the substance (art. 26 par. 1 and 2 of the Regulations). 4. At this stage, the Single Judge acknowledged that the Respondent contested his competence to deal with the present dispute alleging that the said deciding-making body did not have jurisdiction to deal with matters regarding solidarity contribution in accordance with the art. 22 of the Regulations. 5. In this respect, the Single Judge was keen to emphasise that the request of the Claimant was in connection to the execution of a transfer contract concluded on 26 July 2010 between the parties and not in relation to a claim of solidarity contribution. 6. On account of the above, the Single Judge rejected the Respondent?s objection and confirmed that he was competent on the basis of art. 22 lit. f) of the Regulations to consider the present matter as to the substance. 7. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge of the Players’ Status Committee started his analysis by acknowledging the facts of the case and the arguments of the parties as well as the documentation contained in the file. 8. In doing so and first of all, the Single Judge observed that the parties signed a contract for the definitive transfer of the player from the Claimant to the Respondent for a total amount of EUR 4,000,000 (cf. clause 2 of the contract), to be paid in three different instalments of EUR 2,000,000 upon signature of the contract; EUR 1,250,000 until 15 November 2010 and EUR 750,000 until 30 August 2011. 9. Moreover, the Single Judge noted that it remained undisputed by the parties concerned that the second instalment was paid late and that part of the third instalment was still outstanding. 10. In this respect, the Single Judge remarked that the Claimant had requested from the Respondent the amount of EUR 168,438.36 as remaining sum of the third instalment stipulated in the contract, the amount of EUR 31,561.64 representing the proportion of solidarity contribution the Respondent had to pay to the potential training clubs, in casu Club F, in accordance with the clause 2 par. 2 of the contract having been deducted. 11. In view of the above and in accordance with the legal principle of pacta sunt servanda which in essence means that agreement must be respected by the parties in good faith, the Single Judge concluded that the Claimant is entitled to receive from the Respondent the amount of EUR 168,438.36 (i.e. EUR 200,000 – EUR 31,561.64) as outstanding transfer compensation (cf. clause 2 of the contract). 12. Having said this, the Single Judge turned his attention to the Claimant?s request regarding the payment of a penalty in the amount of EUR 400,000 for late payment based on clause 2 par. 4 of the contract. 13. In this regard, the Single Judge started analysing the content of clause 2 par. 4 of the contract and, first of all, outlined that the wording of such contractual clause was clear and precise and established the applicability of a penalty of 20% over the outstanding transfer amount in case of any delay of any of the instalments agreed upon in the contract. 14. Moreover, the Single Judge also remarked that said clause 2 par. 4 of the contract provided that in case of delay in paying any of the agreed instalments agreed upon in the contract, the entire remaining transfer amount would become due at that moment. 15. Bearing in mind the aforementioned, the Single Judge recalled that the parties concerned had not contested that the Respondent paid the second instalment with a delay of 35 days and that part of the third instalment was paid by the Respondent on 1 September 2011, i.e. two days after the relevant due date. 16. Therefore, the Single Judge concluded that, based on clause 2 par. 4 of the contract, the third instalment became also due at the moment in which the Respondent was late in paying the second instalment, i.e. on 16 November 2010. 17. In view of the foregoing, the Single Judge acknowledged that on 16 November 2010 the total transfer amount of EUR 1,968,438.36, i.e. both the second and third instalments for a total sum of EUR 2,000,000, less the solidarity contribution of EUR 31,561.64 that the Respondent had to pay to the training Club F, became outstanding. 18. Therefore, in view of the circumstances of the present matter, the Single Judge considered that a penalty clause of 20% over the outstanding amount as stipulated in clause 2 par. 4 of the contract is appropriate and reasonable. 19. Bearing in mind the aforementioned, the Single Judge calculated the relevant sum and concluded that the Respondent owed to the Claimant an amount of EUR 393,687.67, i.e. 20% of EUR 1,968,438.36, as penalty in accordance with clause 2 par. 4 of the contract. 20. In view of all the above, the Single Judge decided that the claim of the Claimant is partially accepted and held that the Respondent has to pay to the Claimant the amount of EUR 168,438.36 as outstanding transfer compensation as well as the amount of EUR 393,687.67 as penalty based on the contract. 21. Finally, 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 the proceedings before the Players? Status Committee, including its Single Judge, costs in the maximum amount of CHF 25,000 are levied. The costs are to be borne in consideration of the parties? degree of success in the proceedings and are normally to be paid by the unsuccessful party. 22. In this regard, the Single Judge reiterated that the Claimant’s claim is partially accepted and that the Respondent is the party at fault. Therefore, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA. 23. 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. The amount in dispute to be taken into consideration in the present proceedings is over than CHF 200,001. Therefore, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000. 24. In view of the specific circumstances of the present matter, the Single Judge determined the costs of the current proceeding to the amount of CHF 18,000. 25. Consequently, and in line with the aforementioned, the Single Judge decided that the Respondent must pay the amount of CHF 18,000 in order to cover the costs of the present proceedings. III. Decision of the Single Judge of the Players? Status Committee 1. The claim of the Claimant, Club A, is partially accepted. 2. The Respondent, Club C, has to pay to the Claimant, Club A, within 30 days as from the date of notification of this decision, the amount of EUR 168,438.36 as outstanding transfer compensation. 3. The Respondent, Club C, has to pay to the Claimant, Club A, within 30 days as from the date of notification of this decision, the amount of EUR 393,687.67 as penalty. 4. If the aforementioned amounts are not paid within the aforementioned deadline, an interest rate of 5% per year will apply as of the expiry of the fixed time limit and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision. 5. Any further claims lodged by the Claimant, Club A, are rejected. 6. The final costs of the proceedings in the amount of CHF 18,000 are to be paid by the Respondent, Club C, within 30 days as from the date of notification of the present decision, as follows: 6.1 The amount of CHF 5,000 has to be paid directly to the Claimant, Club A. 6.2 The amount of CHF 13,000 has to be paid to FIFA to the following bank account with reference to case nr. XXXX: UBS Zurich Account number 366.677.01U (FIFA Players’ Status) Clearing number 230 IBAN: CH27 0023 0230 3666 7701U SWIFT: UBSWCHZH80A 7. The Claimant, Club A, is directed to inform the Respondent, Club C, directly and immediately of the account number to which the remittances under points 2., 3. and 6.1 above are to be made and to notify the Players’ Status Committee of every payment received. ***** Note relating to the motivated decision (legal remedy): According to art. 67 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 www.tas-cas.org For the Single Judge of the Players’ Status Committee Markus Kattner Acting Secretary General Encl. CAS Directives