F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2016-2017) – fifa.com – atto non ufficiale – Decision 28 February 2017

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 28 February 2017,

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

relating to the Player E.

Player E

I. Facts of the case

1. On 15 July 2015, the Club of Country B, Club A (hereinafter: “the Claimant”), and the Club of Country D, Club C (hereinafter: “the Respondent”) concluded a transfer contract (hereinafter: “the contract”) in connection with the transfer of the Player E (hereinafter: “the player”) from the Claimant to the Respondent.

2. Point 3 of the contract stated that the Respondent shall pay to the Claimant “the unconditional transfer compensation for the termination by Club A [i.e. the Claimant] of the employment contract with the Football Player [i.e. the player] in the amount of EUR 2,200,000” payable in two equal instalments of EUR 1,100,000 on 31 August 2015 and 31 July 2016, respectively.

3. Point 3.2 of the contract stated: “Parties agreed that if Club C [i.e. the Respondent] will make any payment delay on more than three business days in connection with this transfer, Club A [i.e. the Claimant] will be entitled to the fine amounting 0.5% from the delayed sum for each day of the delay”.

4. On 18 August 2015, the Claimant and the Respondent concluded an additional agreement (hereinafter: “the agreement”) by means of which in its point 1 both clubs amended point 3 of the contract as follows: “Club C [i.e. the Respondent] shall pay to Club A [i.e. the Claimant] the unconditional transfer compensation for the termination by Club A [i.e. the Claimant] of the employment contract with the Football Player [i.e. the player] in the amount of EUR 1,980,000 without any deductions” payable in two equal instalments of EUR 990,000 each on 31 August 2015 and 31 July 2016 respectively.

5. Point 2 of the agreement stated: “All other positions of the Transfer Contract [i.e. the contract] are staying unchanged”.

6. On 27 November 2015, the Claimant lodged a claim in front of FIFA against the Respondent requesting the payment of the total amount of EUR 1,390,950 corresponding to the first instalment in accordance with the agreement amounting to EUR 990,000, plus EUR 400,950 as penalty payment (cf. point 3.2 of the contract).

7. The Claimant stated having sent two reminders to the Respondent dated 25 September 2015 and 23 October 2015 without receiving any answer from the latter.

8. In its reply to the claim, the Respondent alleged having paid the 1st instalment in question on 1 March 2016. Therefore, the Respondent argued that the services of FIFA were no longer needed.

Player E

9. On 2 August 2016, the Claimant confirmed having received the amount of EUR 990,000 on 1 March 2016. Nonetheless, the Respondent argued that the amount of EUR 400,950 as fine (cf. point 3.2 of the contract) was still outstanding. Furthermore, the Claimant amended its claim and requested the payment of the 2nd instalment (cf. the agreement) which was due on 31 July 2016.

10. In this respect, the Respondent argued that the Claimant accepted the payment of the 1st instalment without claiming the relevant fine, i.e. without sending a default notice to the Respondent. Therefore, the Respondent deemed that the Claimant waived its right to receive any fine or default interest whatsoever.

11. Additionally, the Respondent was of the opinion that a penalty fee of “0,5% per day inter alia violates the well-established fundamental legal principle of proportionality and as such, it is clearly legally groundless” as well as the jurisprudence of the PSC.

12. With regard to the 2nd instalment requested by the Claimant, the Respondent alleged that this claim was null since the Claimant lodged the claim initially for the 1st instalment. Therefore, the Claimant should have lodged a new claim for the 2nd instalment in accordance with art. 9 par. 1 of the FIFA Procedural Rules. In addition, the Respondent alleged that the Claimant claimed the 2nd instalment on 2 August 2016 only 24 hours after it was due.

13. On 26 December 2016, after the investigation phase had already been closed, the Claimant submitted an additional unsolicited correspondence reiterating its claim and previous allegations.

II. Considerations of the Single Judge of the Player’s Status Committee

1. First of all, the Single Judge of the Player’s Status Committee (hereinafter: “the Single Judge”) analysed whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 27 November 2015. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: “the Procedural Rules”) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, the Single Judge concluded that in accordance with art. 26 par. 1 and par. 2 of the 2015 edition of the Regulations on the Status and Transfer of Players, and considering that the present claim was

Player E lodged on 27 November 2015, the 2015 edition of said regulations (hereinafter: ”the Regulations”) is applicable to the matter at hand as to the substance.

3. Furthermore, the Single Judge confirmed that, based on art. 3 par. 1 and 2 of the Procedural Rules in connection with art. 23 par. 1 and 4 as well as art. 22 lit. f) of the Regulations, he was competent to deal with the present matter since it concerns a dispute between clubs affiliated to two different associations.

4. The competence of the Single Judge 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 above-mentioned facts as well as the arguments and the documentation on file. However, the Single Judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.

5. In doing so and to begin with, the Single Judge noted that on 15 July 2015 the Claimant and the Respondent concluded the contract which established a transfer compensation amounting to EUR 2,200,000 payable in 2 instalments and, in addition, it contained a penalty amounting to 0.5% over the relevant outstanding amount for each day of delay.

6. Subsequently, the Single Judge acknowledged that on 18 August 2015 the Claimant and the Respondent concluded the agreement by means of which in its point 1, they agreed upon a new transfer compensation amounting to EUR 1,980,000 which would be payable by the Respondent to the Claimant in 2 instalments of EUR 990,000 each on 31 August 2015 and 31 July 2016 respectively.

7. Furthermore, the Single Judge pointed out that the point 2 of the agreement established that with the only exception of the transfer compensation which was amended in point 1 of the agreement, the Claimant and the Respondent agreed that the rest of the terms of the contract remained binding between them.

8. At this stage, the Single Judge recalled that it remained undisputed that the Respondent paid the first instalment in accordance with the agreement amounting to EUR 990,000 on 3 March 2016. However, the Claimant maintained being entitled to receive the amount of EUR 400,950 as penalty for the late payment of the relevant amount, allegedly corresponding to a daily interest rate of 0.5%.

9. In this respect, the Single Judge deemed appropriate to emphasise that an interest rate of approximately 180% per year was considered excessive in accordance with the longstanding practice of the Players’ Status Committee.

Player E

10. Notwithstanding the above, referring to point 3.2 of the contract and considering that an interest rate was contractually agreed between the parties, the Single Judge ruled that the Respondent had to pay to the Claimant late interest on the first instalment from its due date (i.e.1 September 2015) until the date of effective payment (i.e. 3 March 2016) at the default interest rate of 5% per year.

11. Turning his attention to the Claimant’s request for EUR 990.000 corresponding to the second instalment of the agreement, the Single Judge took note that the Respondent did not contest having failed to pay such amount.

12. Therefore, The Single Judge underlined that in accordance with the basic legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, the Claimant is entitled to receive from the Respondent to the amount of EUR 990,000 in accordance with the point 1 of the agreement.

13. In view of all the above-mentioned considerations, the Single Judge decided that the claim of the Claimant is partially accepted and that the Respondent has to pay to the Claimant the amount of EUR 990,000 as outstanding transfer compensation as well as interest at a rate of 5% per year over the amount of EUR 990,000 as from 1 September 2015 until 3 March 2016.

14. 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 proceedings before the Players’ Status Committee including its Single Judge, 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).

15. Furthermore and 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. On that basis, the amount in dispute to be taken into consideration in the present proceedings is EUR 1,390,950. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

16. In conclusion, the Single Judge determined, in view of the specificity of the case at hand, the costs of the current proceedings in the amount of CHF 15,000 which shall be borne by both parties.

III. Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, Club A, is partially accepted.

Player E

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 990,000.

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, interest at a rate of 5% per year on the amount of EUR 990,000 from 1 September 2015 until 3 March 2016.

4. If the aforementioned amounts are not paid within the aforementioned deadline, 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 15,000 are to be paid by both parties, 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 by the Claimant, Club A, directly to FIFA. Taking into account that the Claimant had already paid the amount of CHF 5,000 as advance of costs at the beginning of the present procedures is exempted to pay the cited amount as procedural costs.

6.2 The amount of CHF 10,000 has to be paid by the Respondent, Club C, to FIFA to the following bank account:

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. and 3. above are to be made and to notify the Players’ Status Committee of every payment received.

*****

Player E

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).

For the Single Judge of the

Players’ Status Committee

Omar Ongaro

Football Regulatory Director

Encl. CAS directives