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 27 September 2017

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 27 September 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, Player E

Player E

I. Facts of the case

1. According to the information contained in the Transfer Matching System (TMS), on 1 August 2012, the Player of Country F, Player E (hereinafter: the player), and the Club of Country B, Club A (hereinafter: the Claimant), signed an employment contract valid as from the date of signature until the end of the 2015 season.

2. On 8 August 2012, the Club of Country D, Club C (hereinafter: the Respondent) concluded a loan transfer agreement titled “Private Agreement” (hereinafter: the agreement) with “COMPANY G (Club A)” in order to temporarily transfer the player from the latter to the Respondent until “the end of the sporting season 2012/13”.

3. Moreover, the agreement stipulated that “COMPANY G (Club A)” should be identified therein as “Seller”.

4. The preface of the agreement stipulated that:

“ Whereas

a) Seller owns the full federative and financial rights of [the player]…;

b) [The Respondent] is interested in purchasing such federative and financial rights of the Player; subject to the following terms and conditions;

c) The Seller and [The Respondent] represent and warrant unconditionally that they are full entitled and authorised to sign and execute the terms of this Agreement;”.

5. According to art. 1 of the agreement, the parties agreed on the following:

“1. The Seller:

a) undertakes to temporarily transfer…the full federative and financial rights of the player for a consideration equal to the amount of Euro 350,000 to be paid by [the Respondent] to the Seller as follows:

(I) as to EUR 125,000 upon a valid International Transfer Certificate related to the Player has been delivered to the relevant authority…;

(II) as to EUR 175,000 until 31.01.2013;

(III) as to EUR 50,000 until 30.04.2013.

b) …”

6. Furthermore, art. 2 established that:

“All payments under this Agreement shall be made in EURO, by wire transfer to the current account in Seller’s name at Bank H, n. XXX, ABA XXX, Swift XXX; provided that the Seller has previously sent the relevant invoice to [the Respondent].”.

7. According to art. 4 of the agreement, “If any provision of this agreement shall be held to be illegal or unenforceable, in whole or in part the parties will agree in good faith an amendment to that provision to make it valid and legal reflecting as much as possible their original intent…”

8. Furthermore, art. 7 established that the agreement was subject to the following precedent conditions:

a) “ the player and [the Respondent] executes all the agreements necessary for the assignment to [the Respondent] of the full federative and financial rights of the Player, according to the FIFA and other national applicable regulations;

b) the player passes a satisfactory medical examination;

c) a valid International Transfer Certificate has been delivered to the relevant authority…”.

9. Art. 9 of the agreement stipulated the following:

“This Agreement shall be governed by and interpreted in accordance with the laws of Country D and the FIFA Regulations. Any and all disputes will be handled by the competent FIFA committee. In the event that FIFA shall not be competent to hear any particular dispute arising out of or in connection with this Agreement, such dispute shall be finally settled in accordance with the Rules of the Code of Sports related Arbitration of the Court of Arbitration for Sport. In the event that either FIFA and/or the Court of Arbitration for Sport shall have no jurisdiction to hear any dispute arising hereunder the parties shall submit to the jurisdiction of the courts of City J exclusively.”.

10. According to the information contained in the TMS, the player’s ITC was delivered by the Football Federation of Country B to the Football Federation of Country D on 14 August 2012. Moreover, the player was registered with the Respondent on 16 August 2012 and subsequently on 9 July 2013 with the Claimant as “Return from loan”.

11. On 15 November 2013, the Claimant lodged a claim before FIFA against the Respondent for having allegedly failed to respect the financial contractual obligations set in the agreement. In this regard, the Claimant requested the payment of EUR 350,000 plus interest as from the respective due dates until the date of effective payment. Moreover, the Claimant requested the payment of procedural costs and the “agreed penalties”.

12. In its claim, the Claimant held that after requesting the payment of the first instalment from the Respondent, on 29 October 2012, it received a reply from the latter on 9 November 2012, in which the Respondent argued that it was “currently reviewing the transfer contract dated 8 August 2012 and will get in touch with you as soon as possible”. Subsequently, the Claimant explained that it sent a second request for payment to the Respondent and that in answer thereto, the Respondent tried to delay the payment and kept eluding its obligations by arguing that it had doubts over the identification of its counterpart. The Claimant held that it sent another letter on 26 November 2012, by means of which it again requested the payment of the first instalment from the Respondent and stressed that “the misunderstanding quoted by you that was never mentioned neither at the moment we signed the contract nor at the time you insisted us with the petition of ITC via TMS”. The Claimant sustained that the Respondent did not reply to this letter.

13. The Claimant further argued that the Respondent’s aforementioned argument should not be considered valid as the Respondent had not raised any doubts as to the identification of its counterpart, neither at the time of conclusion of the agreement, nor at the time of uploading the corresponding documentation into the TMS. The Claimant further declared that this issue was not raised by the Respondent until the Claimant requested the payment in accordance with the agreement.

14. In its response to the claim, the Respondent rejected the Claimant’s position. In this respect, it first confirmed that on 8 August 2012 it concluded the agreement with the Company of Country B, Company G (hereinafter: Company G), “which claimed to hold the full federative rights and financial rights of the player”, regarding the loan transfer of the player for a loan fee of EUR 350,000, payable in 3 instalments. Subsequently, the Respondent sustained that the ensuing TMS activity was duly performed, however, by a different entity, i.e. by the Claimant.

15. The Respondent sustained that after the loan transfer was completed, it became apparent that Company G was “a commercial entity not affiliated to organized football” and that the involvement of the Claimant “was suspicious”, as the player had never played with it. The Respondent claimed that Company G and the Claimant are not the same entity. Moreover, the Respondent argued that the bank account details indicated in the agreement refer to an entity, Company G, which is not part of the agreement and “which is not affiliated to organized football”.

16. The Respondent further argued that the Claimant was not a party to the agreement and has “no entitlement in this respect”, since the agreement was concluded with Company G and the fact that the present claim is “allegedly made on behalf of [the Claimant] does not entitle [Company G] to access the football authorities”. In this regard, Club C maintained that Company G should “not recognised as a party pursuant to art. 6. Par 1 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber.”.

17. Furthermore, the Respondent explained that it had the impression that the Claimant was being used by Company G as a “bridge club” for the player’s transfer to Club C. In support of this allegation, the Respondent enclosed several news reports.

18. Moreover, the Respondent sustained that it considered that Company G had no legal entitlement to transfer the player to the Respondent, as according to it, Company G is a third party in accordance with art. 18bis of the Regulations on the Status and Transfer of Players, and therefore the agreement should be considered null and void, and that “any payment that [the Respondent] should make in respect of such illegitimate transfer agreement should be regarded by FIFA as being in violation of the applicable regulations”. The Respondent declared that it only became aware of these issues after it started its own investigation following the conclusion of the agreement.

19. Finally, the Respondent requested the following:

1) To declare that the claim is inadmissible as it was filed by a party not affiliated to organised football;

2) Alternatively, to declare that the Claimant has no grounds to claim against the Respondent;

3) Alternatively, to confirm that the transfer agreement at the basis of this dispute is in violation of the applicable regulations and therefore, null and void;

4) To refer the Claimant to the FIFA Disciplinary Committee for a violation of Annexe 3 of the FIFA Regulations;

5) That the Claimant should bear all the costs in relation to the ongoing proceedings.

20. In its replica, the Claimant repeated its initial position and request for relief. The Claimant held that contrary to what the Respondent has argued, the Claimant and Company G are in fact the same entity. In this regard, the Claimant argued that football clubs in a purely sporting sense do not have legal standing to be subject to rights and obligations, therefore, an artificial person is needed to administer and act on behalf of football clubs, which in the case at hand is Company G. In this context, the Claimant explained that it does not matter which denomination is used to refer to a sporting entity, as both the company name and its purely sporting denomination, refer to the same sporting entity. In support of its position, the Claimant cited three Court of Arbitration for Sport (hereinafter: CAS) decisions: CAS XXX, CAS XXX and CAS XXX.

21. Moreover, the Claimant held that the link between Company G and the Claimant can be readily seen in the agreement, since said document used the company name, Company G, and the sporting denomination, Club A, in parenthesis.

22. The Claimant insisted that the Respondent’s argument in respect to the Claimant and Company G not being the same entity cannot be sustained since the Respondent was allegedly aware of this situation when concluding the agreement. Moreover, and all the documentation in respect to the loan transfer instruction of the player was uploaded in TMS by the Claimant, which matched with what was uploaded by the Respondent.

23. The Claimant explained that in Country B, a sporting entity can use any business name and the said name can be the same one used to identify the sporting entity or a different name. In this respect, the Claimant cited examples in Country B Football, which according to it, are identical and support its position regarding clubs with different sporting names and legal names but being the same entity.

24. In this regard, the Claimant held that Company G is a company constituted in accordance with law 20.019, the only object of which is the participation in professional sporting activities. Furthermore, Company G is affiliated to the Football Association of Country B (Football Association K). Along this line, the Claimant further explained that in accordance with arts. 65 and 73 of the Regulations of the Football Association K, Company G must use the sporting denomination Club A.

25. Subsequently, the Claimant rejected the Respondent’s argument in regards to being a “bridge club”. In this respect, the Claimant held that the player played for it and the Respondent’s evidence “is not proof of anything”.

26. Furthermore, the Claimant held that the Respondent did not “want the agreement to be considered null and void”, as it did not lodge a claim against the Claimant in this respect and “it is just an excuse to avoid the payment”.

27. In its duplica, the Respondent repeated its position and insisted that Company G and the Claimant should be considered as two different and separate entities.

28. The Respondent stressed that “Company G cannot be a party to the current proceedings and use the FIFA dispute resolution system for its claims against [the Respondent]”, and therefore cannot have any role in the present dispute. Equally, the Respondent underlined that if Company G “deems to be entitled to any claim against [the Respondent], It would have to file its claim in front of the competent court, which is not the FIFA Players’ Status Committee.”.

29. Moreover, the Respondent sustained that the Claimant has no rights under the agreement, as the Claimant is not a party to the agreement and has failed to provide any proof in respect to its alleged entitlement to the loan transfer compensation under the terms of the agreement. The Respondent further held that the signatures on the last page of the agreement confirm that the agreement was only entered into by the Respondent and Company G, and not by the Claimant.

30. In support of its allegations, Club C made reference to FIFA’s PSC case XXX and CAS decision CAS XXX and argued that “The fact that both FIFA and CAS ruled that the Club of Country B is not entitled to claim money under the agreement between the Club of Country D and a company, and that the Club of Country B and the company are different legal entities, provide a self-explanatory and obvious answer to [the Claimant]’s claims.”.

31. Finally, the Respondent requested either “the FIFA administration to terminate these proceedings without delay” or the “FIFA Players’ Status Committee to render a decision:

1. Declaring that [the Claimant] has no grounds to claim against the Respondent and confirming that no transfer compensation is due by [the Respondent] to [the Claimant] under the [agreement];

2. …Declaring that the [agreement] at the basis of this dispute is in violation of the applicable FIFA regulations and is therefore null and void;

3. ….Referring Club A to FIFA Disciplinary Committee for a violation of Annexe 3 of FIFA Regulation on the Status and Transfer of Players;

4. …Ordering [Club A] to bear all costs relating to these proceedings.”.

32. By correspondence dated 22 August 2017, the Football Federation of Country B informed FIFA, in respect to the relation between Company G and the Claimant, that Company G is “the entity affiliated to our Association…using the sporting name of Club A” (free translation from Spanish. The quoted text reads as follows: “es la entidad afiliada a nuestra Asociación…utilizando el nombre deportivo de Club A”).

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 matter at hand. In this respect, he referred to art. 21 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (editions 2012, 2014, 2015 and 2017). Consequently, and since the present matter was submitted to FIFA on 15 November 2013, the Single Judge concluded that the 2012 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.

2. Furthermore, with regard to his competence, the Single Judge duly noted that Respondent had challenged the admissibility of the claim since, allegedly, it was filed by a party not affiliated to organised football. However, 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 2016 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, i.e. a dispute between a Club of Country B and a Club of Country D.

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 referred to art. 26 par. 1 and 2 of the 2012, 2014, 2015 and 2016 editions of the Regulations on the Status and Transfer of Players and again to the fact that the claim was lodged with FIFA on 15 November 2013. In view of the foregoing, the Single Judge concluded that the 2012 edition of the FIFA Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter as to the substance.

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 above-mentioned facts of the case 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 which he considered pertinent for the assessment of the matter at hand. In particular, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.

5. In this respect, and first of all, the Single Judge noted that on 8 August 2012 the Respondent concluded the agreement with “COMPANY G (Club A)” in order to temporarily transfer the player from the latter to the Respondent until “the end of the sporting season 2012/13”. In this regard, the Single Judge observed that pursuant to the wording of the agreement, the Respondent’s counterparty in the agreement i.e. “COMPANY G (Club A)” is addressed jointly as “Seller”.

6. Along this line, the Single Judge duly took note that according to the agreement the Respondent would pay to the “Seller” the amount of EUR 350,000 in three different instalments, i.e. EUR 125,000 “upon a valid International Transfer Certificate related to the Player has been delivered to the relevant authority”, EUR 175,000 by 31 January 2013 and EUR 50,000 by 30 April 2013.

7. In continuation, the Single Judge observed that the Claimant maintained the Respondent has not fulfilled its financial obligations towards it as per the agreement and therefore requested the payment of the amount of EUR 350,000.

8. Equally and in the same context, the Single Judge noted that the Respondent has rejected the claim of the Claimant, as it sustained that the Claimant has no grounds to claim the amounts due in connection with the agreement since the Claimant was allegedly not a party to the agreement. In this respect, the Respondent maintained that the agreement was concluded with Company G and not with the Claimant. Along this line, the Respondent argued that, only after the loan transfer of the player was completed, it became apparent that Company G and the Claimant are in fact two different and separate entities.

9. In continuation, the Single Judge duly observed that in its replica, the Claimant maintained that it and Company G are the same entity and that in consequence, it is entitled to receive the loan transfer fee under the agreement. In this context, the Claimant explained that in Country B Football, clubs can have different sporting and legal names but are in fact the same entity. Equally, it held that Company G is a company constituted in accordance with law 20.019, whose object is the participation in professional sporting activities and that is uses the sporting denomination “Club A”.

10. Furthermore, the Single Judge recalled that in its duplica, the Respondent, in order to support its allegation in respect of the Claimant and Company G being different and separate entities, made reference to FIFA’s PSC case XXX, as well as CAS award CAS XXX, where inter alia it was decided that the Club of Country B, Club L, was not entitled to claim money under an agreement between a Club of Country D and a company, Company M, and that said Club of Country B and company were in fact different entities.

11. At this point, the Single Judge wished to highlight that the reference made by the Respondent to the decision in FIFA’s PSC case XXX, as well as CAS award CAS XXX, cannot serve as the basis to conclude from the outset that the present case has to follow the same line of reasoning. Indeed, in a more recent award (TAS XXX), CAS inter alia held, on the contrary, that the company Company N was merely the representative of the Club of Country B, Club L, which has the obligation to act through said entity pursuant to Law of Country B. Therefore, CAS concluded that in the latter case, despite the fact that the payments were made to the company, the actual holder of the rights arising out of the transfer agreements was the club.

12. With this in mind, the Single Judge emphasized that the issue in respect to Clubs of Country B and Companies of Country B, and whether they are in fact one same entity or not, has to be addressed on a case by case basis.

13. Reverting to the matter at hand, the Single Judge deemed that the issue in the present dispute, considering the submissions of the parties, was to determine whether the Claimant was a party to the agreement and, in consequence, if it has rights under the same or not.

14. Along this line, the Single Judge reasoned that in order to determine if the Claimant was indeed a party to the agreement or not, he would need to analyse the content and wording of the agreement.

15. The Single Judge thus analysed the wording and content of the agreement and observed that the transfer agreement clearly stipulated that the Claimant and Company G are to be addressed jointly, specifically as “Seller” and therefore, concluded that the agreement itself does refer to both the club and company. Furthermore, the Single Judge duly took note that in accordance with the agreement, the payment of the loan fee should be made by the Respondent to the “Seller”, in other words, by the Respondent to the Claimant included.

16. Following this line of reasoning, as well as from a rational interpretation of the agreement, since a company cannot be considered to possess the federative rights of the player, the Single Judge concluded that the Claimant was indeed a party to the agreement at the basis of the dispute, and in consequence, it is entitled to receive the payment of the agreed loan transfer fee.

17. Furthermore, and in view of the above, the Single Judge considered that the rest of the Respondent’s arguments as to whether or not the Claimant and Company G are the same entity can be left open.

18. In continuation, the Single Judge concluded that the Claimant and the Respondent had agreed upon the essential aspects, namely the loan transfer of the player to the Respondent in return for the amount stipulated, as well as the fact that the latter agreement was duly signed by the parties.

19. With the aforementioned considerations in mind and 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, as well as considering that the Respondent had admitted not having paid the loan transfer fee to the Claimant, the Single Judge resolved that the Respondent must fulfil its obligations established in the agreement and consequently, pay to the Claimant the outstanding amount of EUR 350,000, plus interest at a rate of 5% p.a. as of the day following the relevant due dates until the date of effective payment, taking into account the longstanding practice of the Players’ Status Committee, as well as the Claimant’s request for relief.

20. Moreover, in respect of the Claimant’s request of payment in relation to, alleged, “agreed penalties”, the Single Judge decided to reject such request since the agreement does not contain a contractual stipulation in this regard.

21. In addition, with regard to the Claimant’s request related to the claimed legal costs, the Single Judge referred to art. 18 par. 4 of the Procedural Rules as well as to its longstanding and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Players’ Status Committee. Consequently, the Single Judge decided to reject the Claimant’s request relating to legal costs.

22. In view of all the above, the Single Judge decided to accept partially the Claimant’s claim against the Respondent, and held that the Respondent has to pay to the Claimant a total sum of EUR 350,000, plus 5% interest p.a. on the amount of EUR 125,000 from 14 August 2012, 5% interest p.a. on the amount of EUR 175,000 from 1 February 2013 and 5% interest p.a. on the amount of EUR 50,000 as from 1 April 2013 until the date of effective payment.

23. 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 and which states that the costs are to be borne in consideration of the parties’ degree of success in the proceedings.

24. Taking into account that the responsibility of the failure to comply with the payment of the loan transfer compensation can entirely be attributed to the Respondent and that the claim of the Claimant has been partially accepted, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings before FIFA. 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 is 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.

25. In conclusion, and considering the specificities of the present matter as well as that the Claimant is the successful party, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000 to 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 admissible.

2. The claim of the Claimant is partially accepted.

3. 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 350,000 as outstanding loan fee, plus interest as follows:

- 5% p.a. over the amount of EUR 125,000 as from 14 August 2012 until the date of effective payment;

- 5% p.a. over the amount of EUR 175,000 as from 1 February 2013 until the date of effective payment;

- 5% p.a. over the amount of EUR 50,000 as from 1 April 2013 until the date of effective payment.

4. If the aforementioned sum, plus interest (point 3.) is 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 are rejected.

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

6.1 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

6.2 The amount of CHF 5,000 has to be paid directly to the Claimant.

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 3. and 6.2 above are to be made and to notify the Single Judge of 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:

Omar Ongaro

Football Regulatory Director

Encl. CAS Directives