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, 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.

I. Facts of the case

1. On 24 July 2014, 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 (hereinafter: the agreement) according to which the Claimant would permanently transfer the Player E (hereinafter: the player) to the Respondent, upon payment of a transfer fee in the amount of EUR 3,500,000, payable in six instalments as follows:

- “EUR 500,000 due on 25 September 2014;

- EUR 1,000,000 due on 25 March 2015;

- EUR 500,000 due on 25 September 2015;

- EUR 500,000 due on 25 March 2016;

- EUR 500,000 due 25 September 2016;

- EUR 500,000 due on 25 March 2017”.

2. Article 4 of the agreement stated inter alia that, “[i]n case of delay of the “Club C” [i.e. the Respondent] in the payment of any amount due under clause 3 of this Contract [i.e. article 3 of the agreement] for a period of over 10 (working) days from each of the due dates above, such amount shall be subject to interests on late payment at a rate of 0.2% (in words: zero point two percent) per day from and including the date such payment is due through and including the date upon which “Club C” has made bank wire transfer into the account designated by the Club A [i.e. the Claimant]”.

3. Moreover, article 7 of the agreement inter alia stated that, “Club A [i.e. the Claimant] obliges to deliver to Club C [i.e. the Respondent] the International Transfer Certificate of the Football Player until 30 July 2014 on a permanent basis”.

4. Finally, in accordance with article 11 of the agreement, “Club C [i.e. the Respondent] will be responsible for the payment of half of the solidarity contribution in relation to this transfer in accordance with FIFA Regulations to other clubs. Club C is, therefore, allowed to retain (pro rata) 2,5% from each once of the instalments set out in clause 3 above [i.e. article 3 of the agreement]”.

5. On 24 November 2014 with amendments on 29 April 2016, the Claimant lodged a claim against the Respondent with FIFA, alleging that the latter had breached the agreement and did not comply with its contractual duties.

6. In this respect, the Claimant further alleged that the Respondent paid the first three instalments of the transfer fee with a delay respectively of 159 days regarding the first instalment of EUR 500,000 due by 25 September 2014 and paid on 3 March 2015, a delay of 7 days regarding the second instalment of EUR 1,000,000 due on 25 March 2015 and paid on 1 April 2015 and a delay of 60 days regarding the third instalment of EUR 500,000 due on 25 September 2015 and paid on 24 November 2015. Furthermore, the Claimant claimed that the Respondent failed to pay the fourth instalment in the amount of EUR 500,000.

7. The Claimant further explained that by means of two letters dated 14 October 2014 and 6 October 2015 as well as by an invoice dated 11 March 2015, it reminded the Respondent of the allegedly residual outstanding default interest.

8. Consequently, the Claimant requested from the Respondent the amount of EUR 233,000 corresponding to the default interest allegedly due for late payments related to the first instalment (EUR 159,000), the second instalment (EUR 14,000), the third instalment (EUR 60,000) and the amount of EUR 500,000 corresponding to the sum of the fourth instalment, plus interest at a rate of 0,2% per day on the said amount from the relevant due date until the date of effective payment according to clause 4 of the agreement, as well as the advance of costs and proceeding costs to be borne by the Respondent.

9. In its reply to the claim, the Respondent first acknowledged that it concluded an agreement with the Claimant and that it paid the first three instalments of the transfer fee.

10. In continuation, the Respondent contested the rate of the default interest for late payment and claimed its entitlement to discount 2.5% from the fourth instalment as solidarity contribution according to clause 11 of the agreement, thus the total amount of EUR 62,500.

11. In its replica, the Claimant mainly reiterated its initial claim and explained that the parties could not find an amicable solution in the present matter.

12. In its duplica, the Respondent reiterated its position and maintained its previous arguments.

II. Considerations of the Single Judge of the Players’ Status Committee

1. First of all, the Single Judge of the Players’ Status Committee (hereinafter also referred to as: the Single Judge) analysed which edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) were applicable to the matter at hand. In this respect, considering that the present matter was submitted to FIFA on 24 November 2014, the Single Judge concluded that the 2014 edition of the Procedural Rules is applicable in 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 (hereinafter: “the Regulations”) should be applicable as to the substance of the matter. In this respect, he confirmed that the present matter was submitted to FIFA on 24 November 2014 and, therefore, concluded that the 2014 edition of the Regulations is applicable in the matter at hand as to the substance (cf. art. 26 par. 1 and par. 2 of the Regulations).

3. With regard to his competence, 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 4 as well as art. 22 lit. f) of the 2014 edition of the Regulations on the Status and Transfer of Players he is competent to deal with the matter at stake, which concerns a dispute between two football 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 his analysis by acknowledging the facts of the case and the arguments of the parties as well as the documents contained in the file. However, the Single Judge emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence that he considered pertinent for the assessment of the matter at hand.

5. In doing so and to begin with, the Single Judge acknowledged that on 24 July 2014 the Claimant and the Respondent concluded an agreement in relation to the transfer of the player and that the Respondent paid the first three instalments of the transfer fee.

6. In continuation, the Single Judge focussed his attention to the content of article 4 of the agreement which stipulated that, in case of delay by the Respondent in the payment of any amount due under article 3 of the agreement “for a period of over 10 (working) days from each of the due dates, such amount shall be subject to interests on late payment at a rate of 0.2% per day from and including the date such payment is due through and including the date upon which “Club C” [i.e. the Respondent] has made bank wire transfer into the account designated by the Club A [i.e. the Claimant]”.

7. In this respect, the Claimant maintained that the Respondent paid the first three instalments of the transfer fee with a delay respectively of 159 days regarding the first instalment of EUR 500,000 due by 25 September 2014 and paid on 3 March 2015, a delay of 7 days regarding the second instalment of EUR 1,000,000 due on 25 March 2015 and paid on 1 April 2015 and a delay of 60 days regarding the third instalment of EUR 500,000 due on 25 September 2015 and paid on 24 November 2015 and that the latter failed to pay the fourth instalment. Therefore, the Claimant referred to article 4 of the agreement and requested from the Respondent the amount of EUR 500,000 corresponding to the fourth instalment of the transfer fee as well as default interest for late payments on the said instalments as of the relevant due dates until the date of effective payment.

8. Equally, the Single Judge observed that, in its reply, the Respondent confirmed having paid the first three instalments of the transfer fee, however, did not contest the delay in such payments as alleged by the Claimant. Furthermore, the Respondent challenged the Claimant’s entitlement to a contractual default interest of 0.2% per calendar day for late payment as being excessive and further claimed its entitlement to discount 2.5% from the instalments of the transfer fee as half of the solidarity contribution according to article 11 of the agreement.

9. Having duly examined the argumentation and documentation put forward by both parties and turning his attention to the Claimant’s request amounting to EUR 500,000 corresponding to the fourth instalment in accordance with the agreement, the Single Judge emphasised that, it was undisputed that such amount had not been paid by the Respondent. Equally, the Single Judge recalled the provision as set forth in article 11 of the agreement, which provided that the Claimant was entitled to retain 2.5% from each instalment of the transfer fee.

10. Bearing in mind the aforementioned and the basic legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith as well as bearing in mind the content of the above-mentioned provisions and the fact that the conditions for the payment of the fourth instalment of the transfer fee and the deduction of half of the solidarity contribution had in casu both been met, the Single Judge decided that the Respondent had breached its contractual obligations towards the Claimant and should, as a consequence, be liable to pay the outstanding amount of EUR 487,500.

11. In continuation and with regard to the Claimant’s request for interest at a rate of 0.2% per calendar day, corresponding to interest at a rate of 72% per year, the Single Judge highlighted that such contractual interest is to be considered as manifestly disproportionate and excessive, and as such, cannot be enforced. In view of the foregoing, the Single Judge held that the contractual rate of article 4 of the agreement should be disregarded and that, as an alternative, taking into account the longstanding practice of the Players’ Status Committee, the Single Judge concluded that the Respondent has to pay 5% default interest p.a. on the respective said amount and instalments as of the relevant due dates until the date of effective payment.

12. With these considerations in mind, the Single Judge focussed his attention to the Claimant’s request for interest at a rate of 0.2% per calendar day for the delayed payments corresponding to the three first instalments in accordance with the agreement. Accordingly, the Single Judge referred to the content of article 4 of such agreement which expressly provided for an interest rate in case of any delayed payment after a grace period of ten days. Recalling the considerations regarding excessive interest rate as outlined above, the Single Judge granted interest at a rate of 5% per year on the delayed payments taking into account a grace period of 10 days.

13. Consequently, the Single Judge ruled that the relevant request of the Claimant had to be rejected and, taking into account the constant practice of the Players’ Status Committee, decided to grant interest at a rate of 5% p.a. as follows :

- over the amount of EUR 487,500 (first instalment due by 25 September 2014) as from 9 October 2014 until 3 March 2015 (date of payment);

- over the amount of EUR 487,500 (third instalment due by 25 September 2015) as from 9 October 2015 until 24 November 2015 (date of payment);

- over the amount of EUR 487,500 (fourth instalment) as from 8 April 2016 until the date of effective payment.

14. In conclusion, 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 487,500, plus interest at a rate of 5% p.a. on the said amount as from 8 April 2016 until the date of effective payment, as well as interest at a rate of 5% p.a. over the amounts respectively of EUR 487,500 as from 9 October 2014 until 3 March 2015 and, EUR 487,500 as from 9 October 2015 until 24 November 2015 and that any further claims lodged by the Claimant are rejected.

15. 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 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 (cf. art. 18 par. 1 of the Procedural Rules).

16. In respect of the above, and taking into account that the Claimant’s claim was partially accepted, the Single Judge concluded that both the Claimant as well as the Respondent have to bear a part of the costs of the current proceedings before FIFA.

17. 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. Consequently and taking into account that the total amount at dispute in the present matter is over CHF 200,001, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

18. In conclusion, and considering that the specificities of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 17,000 to 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.

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, interest at a rate of 5% per year as follows:

- over the amount of EUR 487,500 as from 9 October 2014 until 3 March 2015;

- over the amount of EUR 487,500 as from 9 October 2015 until 24 November 2015.

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 total amount of EUR 487,500 as well interest at a rate of 5% per year on the said amount as from 8 April 2016 until the date of effective payment.

4. If the aforementioned sums, plus interest, are not paid within the stated time limit, 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 17,000 are to be paid within 30 days as from the date of notification of the present decision, as follows:

6.1 The amount of CHF 7,000 by the Claimant, Club A, to FIFA. Given that the Claimant, Club A, has already paid the amount of CHF 5,000 as advance of costs at the start of the present proceedings, the Claimant, Club A, shall pay an additional amount of CHF 2,000 as costs of proceedings.

6.2 The amount of CHF 10,000 by the Respondent, Club C, to FIFA.

6.3 The abovementioned amounts foreseen in points 6.1 and 6.2 have to be paid 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, immediately and directly 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.

*****

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