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

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.

I. Facts of the case

1. On 13 January 2015, 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 2,200,000 as follows: USD 200,000 “within 24 hours following the registration of the New Player Contract before Football Federation of Country D”; USD 200,000 on 17 March 2015; USD 200,000 on 17 April 2015; USD 200,000 on 17 May 2015; USD 200,000 on 17 June 2015; USD 100,000 on 17 August 2015; USD 100,000 on 17 September 2015; USD 100,000 on 17 October 2015; USD 100,000 on 17 November 2015; USD 100,000 on 17 December 2015; USD 100,000 on 17 January 2016; USD 100,000 on 17 February 2016; USD 100,000 on 17 March 2016; USD 100,000 on 17 April 2016; USD 100,000 on 17 May 2016; USD 100,000 on 17 June 2016 and USD 100,000 on 17 July 2016.

2. According to art. 12.1. of the transfer agreement the Respondent was “authorized to discount from the transfer fee (..) 5% due as solidarity contribution (..).”

3. On 5 May 2016, the parties signed a document entitled “Debt recognition agreement” (hereinafter: the agreement) by means of which the Respondent acknowledged having failed “to fulfil its payment obligations under the contract transfer” and undertook to pay to the Claimant the outstanding sum of USD 1,600,000 as follows: USD 300,000 on 11 May 2016; USD 200,000 on 2 June 2016; USD 125,000 on 2 July 2016; USD 125,000 on 2 August 2016; USD 125,000 on 2 September 2016; USD 125,000 on 2 October 2016; USD 125,000 on 2 November 2016; USD 125,000 on 2 December 2016; USD 125,000 on 2 January 2017; USD 125,000 on 2 February 2017 and USD 100,000 on 2 March 2017.

4. As further established in the agreement, if the Respondent failed to comply with “any of the payment on the dates indicated, is obliged to pay the amount of an additional $ 100,000.00 (..) [hereinafter: the penalty fee] three days after the breaching of this agreement” (hereinafter: the penalty clause).

5. Equally, the agreement specified that in case the Respondent “do[es] not pay any of the amounts set out in this agreement (..) Club A[i.e. the Claimant] will be empowered to file a claim at FIFA demanding all the appropriate sanctions and the recovery of all the amounts due and owed to Club A according to the Transfer agreement, including the payment mentioned above of $ 100,000 (..) since the new payment plan agreed by the parties will have no legal effect.”

6. On 2 March 2017, the Claimant lodged a claim with FIFA against the Respondent and requested from the latter club the payment of the outstanding amount of USD 1,145,000 corresponding to the overdue instalments and to the penalty fee of USD 100,000 (cf. note in point 9 below). In addition, the Claimant requested the payment of 5% interest p.a. on the claimed amounts and the reimbursement of all costs incurred in accordance with the matter at stake.

7. Finally, the Claimant requested FIFA to impose sanctions on the Respondent in accordance with art. 12bis of the FIFA Regulations on the Status and Transfer of Players.

8. In this respect, the Claimant accused the Respondent of having so far only proceeded to the payment of the total amount of USD 1,045,000 as follows: USD 190,000 on 26 February 2015; USD 190,000 on 18 March 2015; USD 190,000 on 8 May 2015; USD 285,000 on 16 May 2016 and USD 190,000 on 14 July 2016.

9. In view of the above and considering that the total amount of USD 2,200,000 should have been paid in addition to the USD 100,000 due as penalty fee, the Claimant deems to be entitled to claim the amount of “USD 1,145,000” from Club C.

10. In its response on 13 April 2017, the Respondent rejected the claim of the Claimant pointing out that, in accordance with art. 12.1. of the transfer agreement (cf. point I.2 above), it was entitled to “discount 5% of the total amount due as transfer fee for the Player (..)”, corresponding to the solidarity contribution due for the player.

11. As a result, the Respondent deemed that “in practical terms, (..) the Claimant is only entitled to receive USD 992,750 due as transfer fee”.

12. In addition, the Respondent contested the applicability of the penalty clause arguing that it was excessive in accordance with both FIFA’s and CAS’s jurisprudence.

13. Finally, the Respondent deemed that any interest, if at all, should only run as “from the date in which the FIFA Players’ Status Committee renders a decision”.

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 2 March 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 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 2 March 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 13 January 2015, the Claimant and the Respondent had concluded a transfer agreement which provided for the Claimant to receive from the Respondent the total sum of USD 2,200,000 as detailed in point I.1 above. Furthermore, the Single Judge remarked that, in accordance with art. 12.1. of the transfer agreement the Respondent was “authorized to discount from the transfer fee (..) 5% due as solidarity contribution (..).”

6. Equally, the Single Judge took note of the fact that, on 5 May 2016, the parties had signed a further agreement by means of which the Respondent had acknowledged having failed “to fulfil its payment obligations under the contract transfer” and had undertaken to pay to the Claimant the outstanding sum of USD 1,600,000 in instalments, as detailed in point I.3 above. Similarly, the Single Judge also observed that, as further established in the agreement, if the Respondent failed to comply with “any of the payment on the dates indicated, is obliged to pay the amount of an additional $ 100,000.00 (..) three days after the breaching of this agreement” and that, in case the Respondent failed to pay “any of the amounts set out in this agreement (..) Club A [i.e. the Claimant] will be empowered to file a claim at FIFA demanding all the appropriate sanctions and the recovery of all the amounts due and owed to Club A according to the Transfer agreement, including the payment mentioned above of $ 100,000 (..) since the new payment plan agreed by the parties will have no legal effect.”

7. In continuation, the Single Judge remarked that, in its claim to FIFA, the Claimant had inter alia requested from the Respondent the payment of a total of USD 1,145,000, corresponding to overdue instalments in the total amount of USD 1,045,000, plus the penalty fee in the amount of USD 100,000, arguing that the Respondent had failed to comply with the “Debt recognition agreement”, triggering the consequences foreseen in such agreement (cf. points I.4 and I.5 above).

8. Equally, the Single Judge observed that, for its part, the Respondent had rejected the claim of the Claimant arguing that 5% of the total amount due to the Claimant had to be deducted from the main amount in accordance with art. 12.1. of the transfer agreement. The Single Judge further noticed that the Respondent also contested the applicability of the penalty clause for being excessive.

9. With the aforementioned considerations in mind and to begin with, the Single Judge referred to art. 21 and art. 1 of Annexe 5 of the Regulations, and pointed out that the relevant provision stipulates that “if a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and distributed by the new club as a solidarity contribution to the club(s) involved in his training and education over the years “. Furthermore, the Single Judge recalled that, in accordance with art. 12.1 of the transfer agreement, the Respondent could deduct from the transfer fee 5% due as solidarity contribution.

10. In view of the aforementioned and as a preliminary remark, the Single Judge found it worthwhile to mention that, from his point of view and contrary to the allegations made by the Respondent in this regard, the provision included in art. 12.1 of the transfer agreement must be understood in connection with art. 21 and art. 1 of Annexe 5 of the Regulations and was not to be interpreted as a general authorization for the Respondent to deduct 5% of the transfer fee, i.e. the relevant deduction could only be made if the sum in question was to be actually distributed to the clubs that had been involved in the training of the player over the years as per art. 21 and art. 1 of Annexe 5 of the Regulations. Equally and in the same context, the Single Judge emphasized that no evidence had been provided by the Respondent in support of the assertion that it would have indeed distributed 5% of the transfer fee to the clubs involved in the training and education of the player over the years.

11. Considering the aforementioned, the Single Judge referred to art. 12 par. 3 of the Procedural Rules and stressed that any party deriving a right from an alleged fact shall carry the burden of proof. Consequently, taking into account the wording of art. 12.1 of the transfer agreement as well as the fact that the Respondent had not been able to prove that it had effectively paid 5% of the transfer fee as solidarity contribution in accordance with art. 21 and art. 1 of Annexe 5 of the Regulations, the Single Judge concluded that the Respondent could not deduct 5% of the transfer fee from the amount payable to the Claimant.

12. After having established the aforementioned, the Single Judge continued deliberating in the matter at hand by emphasizing that, following the non-fulfillment by the Respondent of its financial obligations under the transfer agreement, the parties to the dispute had undisputedly concluded a settlement agreement which inter alia established the renewed validity of the transfer agreement in case of non-compliance with the settlement agreement. In the same context, the Single Judge added that the Respondent had undisputedly failed to comply with most of its financial obligations under the settlement agreement.

13. 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, bearing in mind that it is undisputed that the Respondent had failed to comply with its obligations towards the Claimant and considering the content of both the transfer agreement and of the agreement as well as the specific request made by the Claimant, the Single Judge resolved that the Respondent, in order to fulfil its obligations as per the transfer agreement has to pay to the Claimant the outstanding amount of USD 1,045,000.

14. Equally and with regard to the Claimant’s request for interest, the Single Judge, in accordance with his well-established jurisprudence, decided that the Respondent has to pay to the Claimant 5% interest p.a. on the amount of USD 1,045,000 as from 2 March 2017, i.e. the date of the Claimant’s claim, until the date of effective payment.

15. In continuation and with regard to the second part of the Claimant’s claim, i.e. his request related to the payment of the sum of USD 100,000 as penalty fee, the Single Judge recalled that, in accordance with the agreement, the Respondent had to pay to the Claimant the additional sum of USD 100,000 in case he omitted to pay any of the instalments indicated in the relevant document and that such amount remained due even in case of a renewed validity of the transfer agreement following the non-compliance by the Respondent of its obligations under the agreement. Furthermore and considering the Respondent’s allegation that the penalty clause could not be applied as it was excessive, the Single Judge referring to his well-established jurisprudence, pointed out that the penalty clause was not to be deemed excessive, when compared to the total amount of the transfer agreement, and was therefore legal and binding between the parties.

16. As a result, in view of the aforementioned as well as taking into account once again the legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, bearing in mind that it is undisputed that the Respondent had failed to comply with its obligations as per the agreement and considering the content of penalty clause as well as the specific request of the tlaimant, the Single Judge resolved that the Respondent has to pay to the Claimant the sum of USD 100,000, corresponding to the penalty fee.

17. Subsequently and as to the Claimant’s request related to the payment of interests on the amount of USD 100,000, the Single Judge referred to his well-established jurisprudence in this context and stressed that no interest are generally granted on a penalty fee. Therefore, the Single Judge established that such request of the Claimant for interest had to be rejected.

18. Having established the aforementioned, the Single Judge turned his attention to the third part of the Claimant’s claim i.e. its request relative to the payment of the costs incurred in connection with the present proceedings and referred to art. 18 par. 4 of the Procedural Rules in accordance with which 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 third request of the Claimant has to be rejected for lack of legal basis.

19. 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 1,045,000, plus 5% interest p.a. on said amount as from 2 March 2017, as well as the amount of USD 100,000.

20. 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).

21. In this respect, the Single Judge reiterated that the claim of the Claimant is partially accepted to a considerable extent 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.

22. 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.

23. In conclusion, and considering that the case at hand was adjudicated by the Single Judge and not by the Players’ Status Committee in corpore, the Single Judge determined the costs of the current proceedings to the amount of CHF 20,000.

24. 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 1,045,000 plus 5% interest p.a. on said amount as from 2 March 2017 until the date of effective payment.

3. Furthermore, 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 100,000.

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

6. 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:

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, Club A.

7. The Claimant, Club A, is directed to inform the Respondent, Club C, immediately and directly of the account number to which the remittance under points 2., 3. 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

Omar Ongaro

Football Regulatory Director

Encl. CAS Directives