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

Geoff Thompson (England)

Single Judge of the Players’ Status Committee,

on the claim presented by the club,

Club A, from country B

as Claimant

against the club,

Club C, from country D

as Respondent

regarding a contractual dispute between the

parties relating to the Player E

I. Facts of the case

1. On 16 January 2016, the Club of country B, Club A (hereinafter: the Claimant), and the Club of country D, Club C (hereinafter: the Respondent), concluded a transfer agreement for the transfer of the Player E (hereinafter: the player), from the Claimant to the Respondent.

2. Clause 3.1 of the transfer agreement stipulates that the Respondent has to pay to the Claimant a transfer fee amounting to EUR 5,000,000, payable as follows:

- EUR 2,000,000 on the day of receipt by the Football Federation of country D the International Transfer Certificate (ITC) of the player;

- EUR 1,500,000 on 15 September 2016; and

- EUR 1,500,000 on 15 September 2017.

3. Clause 3.3 of the transfer agreement stipulates the following:

“Variable Amount

In addition to the fixed amount under article 3.1 above, [the Respondent] agrees and shall pay to [the Claimant] the net amount of EUR 1,000,000 (net of any local taxes and VAT), if [the Respondent] participates in the Champions League and, the player has been registered on 60% of Liga match sheets during the season immediately prior to the season in which [the Respondent] participates in the Champions League (1) (2).

In addition to the fixed amount under art. 3.1 above, [the Respondent] agrees and shall pay to [the Claimant] the net amount of EUR 500,000 (net of any local taxes and VAT), if [the Respondent] participates in the Europa League and, the player has been registered on 60% of Liga match sheets during the season immediately prior to the season in which [the Respondent] participates in the Europa League (1) (2).

In addition to the fixed amount under art. 3.1 above, [the Respondent] agrees and shall pay to [the Claimant] the net amount of EUR 500,000 (net of any local taxes and VAT), if [the Respondent] team sporting final ranking in Liga is between first and eighth place included (and this regardless whether the team is subject to an administrative derating), and the player has been registered on 60% of Liga match sheets during this same season (1) (2).

(1) This clause is applicable during the following seasons: 2015/2016, 2016/2017, 2017/2018, 2018/2019 and 2019/2020. For season 2015/2016 the matches considered for counting the 60% are the Liga matches for which the player was qualified to play with [the Respondent].

(2) The amounts above are cumulative.

It is expressly specified that the global variable amount which can be paid by [the Respondent] to [the Claimant] under this clause 3.3 cannot exceed more than 2.500.000 €.

If due, the amounts above should be paid by [the Respondent] to [the claimant] on seven working days after having been fulfilled the condition. [The Claimant] must provide [the Respondent] with the relevant invoice to allow for payment to be made accordingly”.

4. Clause “3.4” of the transfer agreement reads as follows:

“Penalties

(…)

In case of disrespect of the above obligations mentioned in article 3.3 and in article 3.4, no matter it could have been caused by any justifiable fact, fact of right or case of force majeure, [the Respondent] will pay penalties to [the Claimant] consisting in both legal penalties defined below and a lump sum of 10% of the total due variable amount after more than 7 calendar days of payment delay.

Legal penalties should be calculated using a 5% rate and should accrued on a daily basis from the due date until the actual date of payment of the full due amount”.

5. On 3 October 2016, the Claimant lodged a claim before FIFA against the Respondent requesting the following amounts:

- EUR 500,000, corresponding to the allegedly outstanding variable transfer fee in connection with the qualification of the Respondent to the Europa League and the registration of the player in more than 60% of the match sheets upon his transfer to the Respondent;

- EUR 500,000, corresponding to the allegedly outstanding variable transfer fee in connection with the final rank of the Respondent in the national league and the registration of the player in more than 60% of the match sheets upon his transfer to the Respondent;

- EUR 100,000 as penalty for the late payment, representing 10% of the total variable transfer fee that remain allegedly outstanding; and

- EUR 25,000 per day of delay in the payment as per clause “3.4” of the transfer agreement.

6. In particular, the Claimant held that the Respondent qualified for the 2016/2017 Europa League, ended the 2015/2016 football season in 6th place of the national league and that the player appeared in 12 out of 18 match sheets, i.e. 66.66%, for which the player could participate upon his transfer to the Respondent, which was the relevant period according to clause 3.3 of the transfer agreement (cf. point I.3. above). In this respect, the Claimant submitted a copy of the respective invoices it addressed to the Respondent for the payment of the variable transfer fees dated 19 May 2016 and 31 May 2016 respectively, as well as a copy of the notice of default dated 13 June 2016, this is, after the contractual deadline to pay had expired.

7. In this respect, the Claimant provided an exchange of emails with the Respondent dated 20 May 2016, according to which, the latter rejected that the variable transfer fees be due as the player did not play in 60% of the matches. Equally, the Claimant stated that the Respondent rejected the payment of the variable transfer fee on the basis that the player only played for more than 45 minutes in 5 matches.

8. In this context, the Claimant asserted that the wording of the contract does not condition the payment of the variable transfer fees to the effective participation of the player in a match or to a minimum time on the pitch. As a result, the Claimant stated that the Respondent is in breach of the transfer agreement.

9. In its reply, the Respondent rejected the Claimant’s claim by arguing that the latter was claiming on bad faith, twisting the wording of the transfer agreement and distorting the intention of the parties, a variable transfer fee.

10. In particular, the Respondent provided a copy of the minutes of the matches it played between 16 January 2016 and 14 May 2016, i.e. the period of time the player was allegedly eligible to play for the Respondent during the season 2015/2016, and stated that the player was called up in 12 out of 19 matches, that he only played in 10 of these matches and for 529 minutes out of 1,710, this is, 63.15% and 52.63% of the matches respectively, and 30.90% of the minutes. Consequently, the Respondent was of the opinion that, since the player took part in less than 60% of the Respondent’s matches, no variable transfer fee is payable to the Claimant.

11. In this respect, the Respondent asserted that the main discrepancy is the parties’ interpretation of clause 3.3 of the transfer agreement. In this respect, the Respondent, contrary to the Claimant’s opinion, deemed that the parties conditioned the variable transfer fees to the participation of the player in the results the Respondent would achieve.

12. In this regard, the Respondent provided a copy of the exchange of emails for the alleged negotiations of the player’s transfer to the Respondent dated between 6 and 16 January 2016, according to which the parties reached an agreement on the fixed transfer fee in the amount of EUR 5,000,000 (cf. point I.2 above) and discussed the payment of EUR 2,500,000 as bonus. In particular, according to the aforementioned exchange of emails, the Claimant insisted in the payment of EUR 2,500,000 either without any condition or conditioned to the registration of the player in 75% of the match sheets, whereas the Respondent insisted that the payment of the bonus should be conditioned to the participation of the player in its results.

13. In particular, the Respondent provided a copy of its email dated 14 January 2016, by means of which it proposed to pay to the Claimant a variable transfer fee of up to EUR 2,500,000, depending on the Respondent’s qualification to the Champions League, the Europa League and its final rank in the national league championship, provided that the player plays in 75% of the matches with the Respondent for at least 45 minutes. In this respect, the Respondent provided a copy of the Claimant’s reply, according to which it would accept to transfer the player against the payment of a cumulative variable transfer fee depending on the Respondent’s qualification to the Champions League, the Europa League and its final rank in championship Leage, provided that the player appears in 75% of the match sheets, up to a maximum of EUR 2,500,000, which would immediately fall due in the event the player was transferred before the end of the season 2019/2020 (hereinafter: the acceleration clause), which the Respondent rejected on the basis that it “cannot reward that it does not play”.

14. Equally, the Respondent provided a copy of the Claimant’s email dated 15 January 2016, in accordance with which the latter stated that it “maintain our position on the bonuses which is a fundamental point because as you know since the beginning we shall have bonuses to be paid to the Club F (2.5M) in spite of the departure of Player E”. In its reply, the Respondent proposed “to reduce the participation of Player E in the bonus in order that these are effective to 60%”, to which the Claimant replied that “following our exchanges, we accept to do make a lot of efforts (after having done yet other efforts): we accept that the variable bonus (article 3.3) are conditioned to the participation/registration of the player with [the Respondent]. In counterpart, it is normal to add an incentive of 20% in case of departure of the player considering as we said all the variable amounts we had to pay to Club F. You will find attached the transfer agreement with these new elements”.

15. In light of the foregoing, the Respondent stated that the real intention of the parties when concluding the transfer agreement was to condition the payment of the amounts under clause 3.3 of the transfer agreement to the participation of the player in a minimum of 60% of the matches and that, in exchange, the Claimant included a sell-on clause for the potential subsequent transfer of the player as well as the penalties stipulated in clause “3.4” of the transfer agreement (cf. point I.4. above).

16. Moreover, the Respondent provided a copy of the employment contract it concluded with the player, according to which he would be entitled to receive bonuses from the Respondent upon having played a minimum number of matches for it. In this respect, the Respondent held that the player agreed upon the same bonus payment scheme with the Claimant and that the payment of bonuses conditioned to the player’s participation in a minimum of matches is similar to the one agreed upon in the transfer agreement concluded between the Claimant and the Respondent. Equally, the Respondent argued that it would only make sense that both the transfer agreement and the employment contract conditioned the payment of the bonuses to the participation of the player in the matches as, otherwise, the player would have requested the same conditions.

17. In addition, the Respondent provided a declaration of the player, the Respondent’s General Director G, and the Respondent’s former Sports Director H, according to which the variable transfer fee was conditioned to the effective participation of the player in the Respondent’s matches. The player further declared that he was aware that the Claimant and the Respondent agreed upon “variable transfer fees conditioned to me playing official matches with [the Respondent]. At no point in the negotiations or in the conversations I had with the management of [the Claimant] did I receive information of a different assumption. I was always told that the variables depended on me playing official games like the bonuses that [the Claimant] paid me for the games I played with it. For that reason, the leaders of [the Claimant] wished me a lot of luck and asked me to work hard to play many games so that [the Claimant] would receive the variable transfer fee”.

18. In this respect, the Respondent stressed that, from the declaration of the player, it can be noted that the Claimant is fully aware that the variable transfer fee is not due.

19. As to the ratio behind clause 3.3 of the transfer agreement, the Respondent argued that its nature is precisely to reward the effective participation and intervention of the player in the sporting results of the new club and that this is the reason why the bonuses are conditional to the productivity or fulfilment of the sporting results of the new club. In the present matter, the Respondent was of the opinion that the main condition was the sporting objective, this is, that it qualifies for the Champions League, Europa League or finishes the season in the top 8 clubs of the championship of the national league, and the accessory condition, that the player effectively contributes to the achievement of the objectives by participating in the matches.

20. In this respect, the Respondent further pointed out that any other interpretation would lead to the situation in which the variable amount is due whereas the player could have been sitting in the bench, without playing at all. Equally, the Respondent stressed that such interpretation would be contrary to art. 18bis of the FIFA Regulations on the Status and Transfer of Players.

21. Furthermore, the Respondent referred to art. 18 of the Swiss Code of Obligations, the jurisprudence of the Court of Arbitration for Sport (CAS) and the Swiss Federal Tribunal (SFT), and held that the contents of a contract are determined by its subjective interpretation, this is, for the true and reciprocal intention of the parties by mistake or in order to conceal the true nature of the contract. In this respect, the Respondent argued that when the mutually agreed real intention of the parties cannot be established, the contract must be interpreted in accordance with the meaning each of the parties to the contract could and should reasonably have understood from the counterpart’s expression of will under the concrete circumstances surrounding the conclusion of the contract.

22. In light of the foregoing, the Respondent asserted that in the present matter the true will of the parties was to subject the payment of the variable transfer fee to the effective participation of the player in the achievement of the Respondent’s sporting results.

23. In addition, the Respondent assessed that, in accordance with the general principle of in dubio contra stipulatorem and in line with the CAS jurisprudence, unclear declarations or wordings in a contract will be interpreted against the party that drafted the contract. In this respect, the Respondent pointed out that the Claimant drafted the transfer agreement (cf. point I.14. above) and that, as a result, the latter cannot benefit from its unclear wording.

24. Equally, the Respondent argued that, in accordance with the general principle of venire contra factum proprium, when the conduct of one party has led to the legitimate expectations of a second party, the first party cannot change its course of action to the detriment of the second party. In this regard, the Respondent referred to the Claimant’s email (cf. point I.14. above), according to which, it accepted that clause 3.3 of the transfer agreement be conditional to the effective participation of the player and included a sell-on clause in the transfer agreement in exchange, and concluded that the Claimant’s claim is contradicting said email.

25. Furthermore, the Respondent stated that the sole intention of the Claimant with the present claim is to get rich at the expense of the Respondent by abusively exercising its right to claim on the basis of an arbitrary and twisted interpretation of a clause.

26. Lastly, the Respondent insisted that it has fulfilled all its contractual obligations for the transfer of the player and that no variable transfer fee fell due for the season 2015/2016.

*****

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 which Procedural Rules are applicable to the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 3 October 2016, thus after 1 April 2015. Therefore, the Single Judge concluded that 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 Single Judge analysed which edition of the Regulations on the Status and Transfer of Players is applicable as to the substance of the matter. In this respect, he referred, on the one hand, to art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2016) and, on the other hand, to the fact that the claim was lodged before FIFA on 3 October 2016, thus after 1 June 2016. In view of the foregoing, the Single Judge concluded that the 2016 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance.

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

4. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, he emphasized 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 observed that the Claimant indicated that the Respondent had only paid the transfer fee and that, consequently, the variable transfer compensation in the amount of EUR 500,000 for the Respondent’s qualification to the 2016/2017 Europa League (hereinafter: UEL) linked to the registration of the player in more than 60% of the match sheets, as well as the variable transfer compensation in the amount of EUR 500,000 for its final ranking in the national league, also linked to the appearance of the player in more than 60% of the match sheets were both still outstanding. In addition, the Single Judge noted that the Claimant also requested 10% of the variable transfer fee as penalty for the late payment, amounting to EUR 100,000, and EUR 25,000 as per clause “3.4” of the transfer agreement.

6. Furthermore, the Single Judge underscored that the Claimant considered to be entitled to the aforementioned amounts on the basis of the wording of the transfer agreement concluded between the Claimant and the Respondent.

7. In continuation, the Single Judge remarked that, on the other hand, the Respondent deemed that the wording of the contract was unclear and insisted that the real intention of the parties was to link the payment of the variable transfer fees to the Respondent’s results when the player had effectively contributed to the achievement of said results.

8. Having established this, the Single Judge went into the interpretation of the transfer agreement and, in particular, of the clauses 3.3 and “3.4”of said transfer agreement. In this regard, the Single Judge referred to the wording of the transfer agreement and was eager to emphasise that it clearly and unmistakably established that two conditions needed to be met in order to trigger the payment of the variable transfer compensation: i) that the Respondent would achieve the mentioned sporting results in the seasons of 2015/2016, 2016/2017, 2017/2018, 2018/2019 and 2019/2020, and ii) that the player had been registered in 60% of the national league match sheets during the season immediately prior to the season in which the Respondent participates in the Champions League or the Europa League (UEL), or in the season in which it is ranked between the first and the eighth positions of the national championship (hereinafter: the national league), as the case may be.

9. In continuation, the Single Judge stressed that it remained undisputed that the Respondent would participate in the 2016/2017 UEL and that it terminated the season in the sixth rank of the national league.

10. Subsequently, and in relation to the argument of the Respondent that the transfer agreement was unclear and that, as a result, one had to look at the intention of the parties when drafting the agreement, the Single Judge underscored that the wording of the relevant clause was, in itself, clear. The Single Judge indeed observed that one of the conditions for the additional payments of EUR 500,000 was that “the player has been registered on 60% of the national league match sheets” with the Respondent.

11. In this respect, the Single Judge underscored that it was undisputed that the player was registered in the match sheets in 12 out of 19 possible games in the 2015/2016 football season in which the Respondent ranked sixth in the national league and qualified to the next season’s UEL.

12. Consequently, the Single Judge decided that the parties agreed to set the appearance of the player in the match sheets with the Respondent as one of the two triggering elements for the payment of the variable compensation.

13. On account of the above and 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 Single Judge held that the Respondent has to fulfill its contractual obligations towards the Claimant in the amount of EUR 500,000 as the variable amount for the Respondent’s participation in the UEL and the player having been registered in 60% of the national league match sheets during the immediate previous season, as well as the amount of EUR 500,000 as the variable amount for the Respondent’s final rank in the national league and the player having been registered in 60% of the national league match sheets during the relevant season.

14. Having established the above, the Single Judge went on to examine the Claimant’s request to be awarded EUR 100,000 as penalty for the late payment, representing 10% of the total variable transfer fee.

15. In this respect, the Single Judge referred to clause “3.4” of the transfer agreement as well as to the fact that, according to clause 3.3 of such transfer agreement, the variable amounts should have been paid within seven working days after the condition have been fulfilled. Consequently, and bearing in mind that, to date, the amounts remain outstanding, the Single Judge concluded that the Respondent has to pay to the Claimant a lump sum of EUR 100,000.

16. Turning his attention to the Claimant’s request of being awarded EUR 25,000 per day of delay in the payment as legal penalties based on clause “3.4”, the Single Judge stressed that said provision stipulates an interest for late payment of 5% per day as of the due date, which equals to an interest of 18.25% p.a. Consequently, the Single Judge concluded that such interest is to be considered as manifestly disproportionate and excessive and that, as such, it cannot be enforced. In view of the foregoing, the Single Judge decided that, in accordance with the longstanding practice of the Players’ Status Committee, the Respondent has to pay 5% default interest p.a. on the respective variable amounts of the transfer fee.

17. In conclusion, the Single Judge decided to partially accept the claim of the Claimant and determined that the Respondent is liable to pay to the Claimant the total amount of EUR 1,100,000, plus 5% interest p.a. on EUR 1,000,000 as of 8 July 2016 until the date of effective payment.

18. Lastly, 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).

19. In respect of the above, and taking into account that the claim of the Claimant had been partially accepted, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA.

20. 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 Single Judge held that the amount to be taken into consideration in the present proceedings exceeds CHF 200,001. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

21. In conclusion, and considering the specific circumstances of the case, the Single Judge determined the costs of the current proceedings to the amount of CHF 22,000, which shall be borne by the Respondent.

****

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, within 30 days as from the date of notification of this decision, the amount of EUR 1,100,000, plus interest as follows:

- 5% p.a. over the amount of EUR 1,000,000 as of 8 July 2016 until the date of effective payment.

3. If the aforementioned sum plus interest is 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.

4. Any further claim lodged by the Claimant is rejected.

5. The final amount of costs of the proceedings in the amount of CHF 22,000 are to be paid by the Respondent, within 30 days of notification of the present decision as follows:

5.1 The amount of CHF 17,006 to FIFA to the following bank account with reference to case nr: xxx.

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

5.2 The amount of CHF 4,994 to the Claimant.

6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2. and 5.2 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. 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 Single Judge of the

Players’ Status Committee:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives