F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2017-2018) – fifa.com – atto non ufficiale – Decision 6 March 2018

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 6 March 2018,

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 arisen between the parties

and relating to the Player E.

Player E

I. Facts of the case

1. On 25 June 2016, the Club of Country B, Club A (hereinafter: the Claimant) concluded a transfer agreement (hereinafter: the transfer agreement) with the Club of Country D, Club C (hereinafter: the Respondent) in relation to the transfer of the Player E (hereinafter: the player) to the latter club, by means of which the Respondent had to pay to the Claimant, as transfer fee, the sum of USD 4,000,000 as follows: USD 1,000,000 “within 24h before the sending of the ITC of the player via TMS”; USD 1,000,000 on 1 November 2016 (hereinafter: the second instalment), USD 1,000,000 on 1 July 2017 (hereinafter: the third instalment) and USD 1,000,000 on 1 November 2017.

2. In accordance with art. 2.3. of the agreement (hereinafter: the penalty clause), “in the event the Club C fails to provide the payment of fee amount agreed above within the agreed a default interest will accrue on the full amount outstanding at the rate of 4% per month rate [hereinafter: the penalty fee] from the due date until the date of payment”.

3. On 1 September 2017, the Claimant lodged a claim with FIFA against the Respondent on the basis of the transfer agreement and requested from the latter club the payment of USD 1,000,000, plus 4% interest per month as of 1 July 2017 in accordance with the penalty clause, arguing that it had never received the third instalment due as per the transfer agreement.

4. Equally, the Claimant requested from the Respondent the payment of the costs incurred and asked FIFA to sanction the latter club.

5. In addition, the Claimant recalled that FIFA had already taken a decision with regard to the Respondent’s failure to pay the second instalment due as per the agreement.

6. In its response on 29 November 2017, the Respondent rejected the claim of the Claimant.

7. In this respect, the Respondent explained having failed to pay the claimed amount to the Claimant because the latter had not provided it with “the pertinent invoice”.

8. Furthermore, the Respondent deemed that “the interest rate set out in clause 2.3. (...) does not comply with the terms and conditions of the well-established jurisprudence established by FIFA” and pointed out that “the Single Judge of the Players’ Status Committee agreed with the aforementioned approach whether considering the first claim lodged by the Claimant regarding the second instalment [cf. point I.5 above] (..) ”

9. According to the Respondent, “a rate of 4% (..) per month due as default interest represents 48% (..) per year, which clearly violates any principle of proportionality and reasonability whatsoever”.

10. In view of the above, the Respondent requested FIFA to reject the claim of the Claimant as the latter had failed to “comply with its obligations” towards it “that is to say, to provide the necessary invoice” and therefore “the third instalment is not owed”.

11. Subsidiarily, “and only in the event the above is rejected”, the Respondent asked FIFA “to confirm that the default interest of 4% per month is excessive and as such, clearly violates general principle of laws (..)” and to “ratify (..) that the default interest of 4% per month (..) has no legal grounds whatsoever and, consequently, shall be set aside”.

12. Finally, the Respondent pointed out that no sanctions were to be applied against it.

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 Procedural Rules are applicable to the matter at hand. In view of the fact that the present matter was submitted to FIFA on 1 September 2017, the Single Judge of the Players’ Status Committee concluded that the 2017 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 present matter (cf. art. 21 of the Procedural Rules).

2. Furthermore, 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 referred, on the one hand, to art. 26 par. 1 and 2 of the 2015 and 2016 editions of the Regulations on the Status and Transfer of Players and, on the other hand, to the fact that the claim was lodged with FIFA on 1 September 2017. In view of the foregoing, the Single Judge concluded that the 2016 edition of the FIFA Regulations for the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the case at hand as to the substance.

3. Subsequently, 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 3 as well as art. 22 lit. f) of the Regulations 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 present matter, the Single Judge started by acknowledging the facts of the dispute, the arguments of the parties as well as the documentation contained in the file.

5. In doing so, the Single Judge noted that, on 25 June 2016, the Claimant and the Respondent had concluded a transfer agreement (hereinafter: the agreement) which provided for the Claimant to receive from the Respondent USD 4,000,000 as transfer fee as follows: USD 1,000,000 “within 24h before the sending of the ITC of the player via TMS”; USD 1,000,000 on 1 November 2016, USD 1,000,000 on 1 July 2017 (hereinafter: the third instalment) and USD 1,000,000 on 1 November 2017. Furthermore, the Single Judge remarked that, in accordance with art. 2.3. of the agreement “in the event the Club C fails to provide the payment of fee amount agreed above within the agreed a default interest will accrue on the full amount outstanding at the rate of 4% per month rate [hereinafter: the penalty fee] from the due date until the date of payment”.

6. In continuation, the Single Judge took note that, in its claim to FIFA, the Claimant had inter alia requested from the Respondent the payment of USD 1,000,000, corresponding to the third instalment as well as the application of the interest rate established in clause 2.3 of the agreement, arguing that the relevant amount was never received.

7. Equally, the Single Judge observed that, for its part, the Respondent had rejected the claim of the Claimant arguing that the latter had failed to provide it with an invoice for the sum in question and had contested the applicability of clause 2.3 of the agreement for establishing an excessive interest rate.

8. With the aforementioned considerations in mind, the Single Judge was eager to emphasize that the parties to the dispute had concluded a contract which clearly stipulated the obligation of the Respondent to pay the total amount of USD 4,000,000 to the Claimant as transfer fee in 4 equal installments and that the Respondent had acknowledged having failed to pay to the Claimant the third installment due.

9. Hence, considering all of the aforementioned as well as taking into account the legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith and bearing in mind that it is undisputed that the third instalment in the amount of USD 1,000,000 due as per the transfer agreement has not yet been paid by the Respondent to the Claimant, the Single Judge resolved that the Respondent, in order to fulfil its obligations established in the document in question has to pay to the Claimant the outstanding amount of USD 1,000,000.

10. Having established the above, the Single Judge went on to examine the second issue raised in the present matter by the Claimant, i.e. the Claimant’s request to be awarded interest in the amount of 4% per month in accordance with clause 2.3 of the agreement.

11. The Single Judge acknowledged the arguments of both parties in respect of the application of clause 2.3. of the agreement and, after analysing the relevant provision, concluded that an interest rate amounting to 4% per month corresponds to 48% per annum and is therefore to be considered as manifestly disproportionate and exorbitant in accordance with his well-established jurisprudence, and as such, cannot be enforced. In view of the foregoing, the Single Judge held that clause 2.3 of the transfer agreement concluded between the parties should be disregarded and that, as an alternative and in accordance with the practice of the Players’ Status Committee, the Respondent has to pay 5% default interest p.a. on the outstanding amount of USD 1,000,000 as of 2 July 2017.

12. In continuation and with regard to the last part of the Claimant’s claim, i.e. his request relative to the payment of the costs incurred, the Single Judge referred to art. 18 par. 4 of the Procedural Rules and stressed that no procedural compensation shall be awarded in proceedings of the Players’ Status Committee and the DRC. As a result, the Single Judge established that this last request of the Claimant has to be rejected for lack of legal basis.

13. In conclusion, the Single Judge decided that the claim of the Claimant is partially accepted and the Respondent has to pay to the Claimant the amount of USD 1,000,000, plus 5% interest p.a. on the said amount from 2 July 2017.

14. 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 the 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).

15. In this respect, the Single Judge reiterated that the claim of the Claimant is to a considerable extent accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Respondent has to bear the entire costs of the current proceedings in front of FIFA.

16. 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 above CHF 200,001, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

17. In conclusion, and considering that the case at hand was adjudicated by the Single Judge and not by the Players’ Status Committee in corpore and that a similar dispute between the parties had already been brought before FIFA by the Claimant due to the Respondent’s failure to comply with its contractual obligations, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000.

18. Consequently, the Respondent has to pay the amount of CHF 20,000 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 the present decision, the amount of USD 1,000,000 plus 5% interest p.a. on said amount as from 2 July 2017 until the date of effective payment.

3. If the aforementioned sum, plus interest as established above, 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 other claims lodged by the Claimant, Club A, are rejected.

5. The final costs of the proceedings in the amount of CHF 20,000 are to be paid by the Respondent, Club C, within 30 days as from the date of notification of the present decision, as follows:

5.1. The amount of CHF 15,000 has to be paid 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 5,000 has to be paid directly to the Claimant, Club A.

6. 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 5.2. 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 article 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

Marco Villiger

Chief Legal & Integrity Officer

Encl. CAS Directives