DECISIONI DI GIUSTIZIA SPORTIVA • F.I.F.A. - COMMISSIONE PER LO STATUS DEI CALCIATORI - CONTROVERSIE TRA SOCIETA'

• Data decisione: 10 novembre 2017 • Stagione sportiva: 2017/2018

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 10 November 2017

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 10 November 2017,

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 22 July 2013, the club of Country B, Club A (hereinafter: the Claimant), and the club of Country D, Club C (hereinafter: the Respondent), concluded a loan agreement for the temporary transfer of the player, Player E (hereinafter: the player), from the Claimant to the Respondent for a loan compensation of EUR 350,000, including an option for the permanent transfer of the player against payment of a transfer compensation of EUR 3,500,000, payable in several instalments as follows:

- EUR 200,000 on 30 September 2014;

- EUR 300,000 on 31 December 2014;

- EUR 300,000 on 31 March 2015;

- EUR 300,000 on 30 June 2015;

- EUR 300,000 on 30 September 2015;

- EUR 300,000 on 31 December 2015;

- EUR 300,000 on 31 March 2016;

- EUR 300,000 on 30 June 2016;

- EUR 300,000 on 30 September 2016;

- EUR 300,000 on 31 December 2016;

- EUR 300,000 on 31 March 2017;

- EUR 300,000 on 30 June 2017.

2. The aforesaid loan agreement also stipulated in its clause 1B, inter alia, that:

“[The Claimant] hereby agrees and acknowledges that it shall accept the sums payable to it under this Agreement in full and final settlement of any and all claims it may have now or at any time in future in respect of the Players registration with [the Respondent]. In any case in which [the Respondent] has exercised the Option and sells the Player’s rights and transfers the Player to another club on a permanent basis (“Future Transfer”) before it has completed the payment of the entire Purchase Consideration stipulated above. For the remaining amount to be paid by [the Respondent] of EUR 3.500.000,00, [the Respondent] will pay to [the Claimant] a percentage of the amount paid to [the Respondent] for the transfer which will be equal to the percentage still due to [the Claimant] of EUR 3.500.000,00 in that moment. In case the payments of a Future Transfer are later than the payments agreed between [the Claimant] and [the Respondent], [the Respondent] will make payments under the payment schedule defined in this Clause 1 of this Private Agreement.”

(hereinafter: clause 1B)

3. On 15 February 2017, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract indicating that the player had been transferred from the Respondent to the club of Country D, Club F, on 31 August 2016. The Claimant argued that the Respondent circumvented the sell-on clause (i.e. clause 1B) by transferring the player on loan to Club F, which would turn into a definitive transfer, taking effect as per the season 2017/2018, upon fulfilment of the condition of scoring one point in the professional League of Country D after 2 February 2017. In this respect, the Claimant explained that, due to the particular wording of clause 1B, it would only be triggered if a subsequent definitive transfer would occur until 30 June 2017.

4. According to the Claimant, the real intention of the Respondent and Club F was to transfer the player on a permanent basis already on 31 August 2016. The Claimant stated that the aforementioned condition of scoring one point after 2 February 2017 was not a real condition, since it was certain that Club F would achieve this. Therefore, the Claimant held that the Respondent and Club F only pretended that the player was first transferred on loan, which would not trigger the sell-on clause. Consequently, the Claimant argued that the sell-on clause was triggered on 31 August 2016, and therefore, based on the wording of the second sentence of clause 1B, requested 34,28% of the transfer compensation agreed upon between the Respondent and Club F (i.e. EUR 26,000,000), resulting in a total amount of EUR 8,912,800, of which EUR 5,484,800 was allegedly due at the moment of lodging the claim. In addition, the Claimant requested interest to be applied as follows:

- 5% p.a. on the amount of EUR 2,056,800 as from 1 September 2016;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 October 2016;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 January 2017.

5. In reply to the Claimant’s claim, the Respondent held that the Claimant would only be entitled to a fee if two conditions were fulfilled before 30 June 2017, regardless of whether clause 1B is interpreted as a sell-on or an acceleration clause: i) the player is permanently transferred to a third club, and ii) the amount due for such permanent transfer is actually paid to the Respondent. However, the Respondent argued that none of these conditions have been met. As to the first condition, the Respondent explained that the player was transferred on a temporary basis to Club F and that a potential permanent transfer to Club F would only take effect from the 2017/2018 season (i.e. from 1 July 2017) and is subject to the fulfilment of all necessary formalities set forth by the Football Federation of Country D regulations. As to the second condition, the Respondent argued that the transfer compensation for the definitive transfer of the player from the Respondent to Club F (i.e. EUR 20,000,000) will only be paid after 30 June 2017.

6. In continuation, the Respondent sustained that clause 1B should be literally interpreted as an acceleration clause, as its only effect would be that the outstanding amount owed to the Claimant by the Respondent would fall due earlier. In this respect, the Respondent referred to an email sent by the Claimant to the Respondent on 20 December 2016, and held that the Claimant interpreted the relevant clause as an acceleration clause by stating that “in case it will sell the Player’s rights before it has completed the payment of the entire purchase consideration to [the Claimant], then it will immediately transfer to [the Claimant] any amount that still due to the latter. Therefore, please be so kind and transfer to [the Claimant] account, as soon as possible, the entire remaining consideration which is due to [the Claimant]”.

7. In continuation, the Respondent pointed out that the construction used by the Respondent and Club F is a common construction in Country D and is specifically addressed by the Football Federation of Country D rules. Furthermore, with reference to law of Country D, the Respondent argued that the condition contained in clause 1B refers to an uncertain event which is fully legitimate.

8. Furthermore, the Respondent elaborated on the difference between a sell-on clause and an acceleration clause and argued that the following typical elements of a sell-on clause are missing in clause 1B: i) no fixed percentage is stipulated and no specific amount is mentioned to which said percentage would apply, and ii) the typical purpose of a sell-on clause is to remunerate a player’s former club if the player is subsequently transferred for a higher amount. As to i) above, the Respondent argued that if the player was transferred permanently to Club F immediately after his permanent transfer to the Respondent, the latter would have had to pay the Claimant 100% of the transfer amount received from Club F, which could not have been the intention of the parties. As to ii) above, the Respondent demonstrated that if the player was transferred permanently to Club F immediately after his permanent transfer to the Respondent and for a lower amount (e.g. EUR 3,000,000), the Claimant would then be entitled to a total amount of EUR 6,500,000 which would be “totally unreasonable” and “unlike any traditional sell-on clause in the football industry”.

9. In support of its statement that clause 1B is to be interpreted as an acceleration clause, the Respondent argued the following: 1) the first sentence of clause 1B demonstrates the intention of the parties that the Respondent would not have to pay any amount in addition to the EUR 3,500,000 transfer compensation, 2) the second sentence of clause 1B reveals that for the parties it was important to consider the moment in which the player’s future transfer would occur, which is crucial for an acceleration clause, 3) with reference to the last sentence of clause 1B, “should [the Respondent] receive money from a third club pursuant to a permanent transfer after 30th June 2017, the due date of the last payment of the transfer compensation under the contract of Club A, [the Respondent] would no longer benefit from a lengthy payment schedule, and would be obliged to pay [the Claimant] the remaining part of the transfer compensation at once”, 4) the parties agreed upon a long payment schedule for the transfer compensation of EUR 3,500,000 and, therefore, an acceleration clause is logical and reasonable.

10. Even if clause 1B was to be considered a sell-on clause, the Respondent held that the Claimant is not entitled to any sell-on fee, as the percentage cannot be applied to the loan compensation of EUR 6,000,000 agreed upon between the Respondent and Club F. Furthermore, since the payments for the permanent transfer of the player from the Respondent to Club F are due after 30 June 2017, no further payments are due to the Claimant. In the event the loan compensation is to be considered relevant in addition to the transfer compensation for the player’s permanent transfer, the Respondent referred to the wording “in that moment” in the second sentence of clause 1B and held that the percentage would constantly change following the payment schedule agreed upon between the Respondent and Club F.

11. In its replica dated 29 May 2017, the Claimant reiterated its arguments and insisted that clause 1B is a sell-on clause since it refers to a percentage as well as the Claimant’s participation in a future transfer of the player. Furthermore, the Claimant argued that it is irrelevant whether the Respondent actually receives payments from Club F, since the parties specifically provided for the sell-on fee to be paid in accordance with the payment schedule of the initial transfer fee of EUR 3,500,000, even in case the Respondent would receive payments from Club F later.

12. In addition, the Claimant sustained that the type of registration of the player with Club F (i.e. temporary or permanent) is irrelevant, as the permanent transfer of the player to Club F had been agreed upon with the Respondent already on 31 August 2016. Finally, the Claimant reiterated its calculation method and amended its claim requesting the amount of EUR 7,198,800 plus interest as follows:

- 5% p.a. on the amount of EUR 2,056,800 as from 1 September 2016;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 October 2016;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 January 2017;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 April 2017.

13. In its duplica, the Respondent reiterated its position and further stated that it had paid all amounts due in accordance with the transfer agreement concluded with the Claimant. Furthermore, the Respondent pointed out that the player was currently (i.e. 6 July 2017) still registered with it and therefore, a permanent transfer of the player to another club (i.e. Club F) had not yet occurred.

14. In addition, the Respondent referred to recent CAS jurisprudence in a similar case in which the CAS decided that the loan agreement with option could not be considered a permanent transfer agreement triggering a sell-on fee. In continuation, the Respondent argued that the rights deriving from the temporary transfer are not the same as the rights deriving from the possible future permanent transfer.

15. Finally, in the event that any sum is awarded to the Claimant, the Respondent argued that it should be reduced by EUR 1,200,000 since the Claimant did not deduct said amount related to the four remaining instalments of EUR 300,000 paid by the Respondent to the Claimant.

16. On 26 July 2017, before the closure of the investigation phase of the matter at hand, the Claimant provided unsolicited comments amending the requested amount to EUR 8,912,800 plus interest as follows:

- 5% p.a. on the amount of EUR 2,056,800 as from 1 September 2016;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 October 2016;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 January 2017;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 April 2017;

- 5% p.a. on the amount of EUR 1,714,000 as from 1 July 2017.

17. Upon request of FIFA, the Respondent replied to the aforementioned comments by stating that they should be disregarded by the Players’ Status Committee. In the event that the Claimant’s comments will be taken into account, the Respondent referred to its previous statements.

18. According to the English translation of the agreement between the Respondent and Club F dated 31 August 2016, provided by the Claimant together with the original in the language of Country D, the aforementioned clubs agreed, inter alia, upon the following:

“(…) temporary / annual (…) with option (…)

Total amount of the operation: EUR 6,000,000.00 (…)

Option right of the definitive purchase of the soccer Player E by [Club F] for EUR 20,000,000.00 (…)

[Club F] undertakes to convert the temporary contract assignment concerning the soccer Player E (…) into a definitive assignment when the following condition is met (…): As soon as Club F reaches one point in the championship of Professional League of Country D 2016/2017 after 2 February 2017. The compensation for the definitive assignment amounts to EUR 20,000,000.00 (…)

As a result of said obligation and upon fulfilment of the condition, the assignee is obliged to contribute to the assignor below amounts during the season following the one in which the temporary assignment (2017/2018) expires, pursuant to the maturity dates set out by the Council of Football Federation of Country D:

(…)

1st season 17/18 EUR 10,000,000 (…)

2nd season 18/19 EUR 10,000,000 (…)”

***

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 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber were applicable to the matter at hand. In this respect, he referred to art. 21 of the Procedural Rules as well as to the fact that the present matter was submitted to FIFA on 15 February 2017. Therefore, the Single Judge 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 matter at hand.

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 and, on the other hand, once again to the fact that the claim was lodged in front of FIFA on 15 February 2017. 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.

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

4. The competence of the Single Judge 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, 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.

5. In doing so and to begin with, the Single Judge noted that the parties had concluded a loan agreement for the temporary transfer of the player from the Claimant to the Respondent for a loan compensation of EUR 350,000, including an option for the permanent transfer of the player against payment of a transfer compensation of EUR 3,500,000, payable in several instalments as set out in point I.1. above.

6. In continuation, the Single Judge took note of clause 1B of the loan agreement, which stipulated that:

7. The Single Judge then reverted to the allegations of the Claimant as to the interpretation of clause 1B, which argued that said clause is a sell-on clause and that the Respondent had circumvented the sell-on clause by transferring the player on loan to Club F, which would turn into a definitive transfer upon fulfilment of a certain condition, whereas the actual intention of the Respondent and Club F was to transfer the player on a definitive basis already on 31 August 2016.

8. Furthermore, the Single Judge observed that the Respondent held that the Claimant would only be entitled to a fee if two conditions were fulfilled before 30 June 2017, regardless of whether clause 1B is interpreted as a sell-on or an acceleration clause: i) the player is permanently transferred to a third club, and ii) the amount due for such permanent transfer is actually paid to the Respondent. However, the Respondent argued that none of these conditions had been met. In continuation, the Single Judge took note of the Respondent’s argument that clause 1B should actually be interpreted as an acceleration clause.

9. On account of the above, the Single Judge considered that he had to determine whether the Claimant was entitled to receive any amount from the Respondent under clause 1B. In this respect, and regardless of whether clause 1B is to be interpreted as a sell-on clause or an acceleration clause, the Single Judge referred to the clear wording of clause 1B where it stipulates that “In any case in which [the Respondent] has exercised the Option and sells the Player’s rights and transfers the Player to another club on a permanent basis (“Future Transfer”) before it has completed the payment of the entire Purchase Consideration stipulated above”.

10. In this regard, the Single Judge considered that the obligation for the Respondent to pay any amount to the Claimant under clause 1B was subject to three conditions:

1. “…[the Respondent] has exercised the Option and”;

2. “sells the Player’s rights and transfers the Player to another club on a permanent basis (“Future Transfer”)”;

3. “before it has completed the payment of the entire Purchase Consideration stipulated above”.

11. As to the first condition, the Single Judge noted that it was undisputed between the parties that the Respondent had indeed exercised the option for the permanent transfer of the player from the Claimant to the Respondent.

12. With regard to the second condition, the Single Judge referred to the documentation on file, in particular the loan agreement concluded between the Respondent and Club F on 31 August 2016, according to which the player was transferred on a temporary basis from the Respondent to Club F until the end of the 2016/2017 season, i.e. 30 June 2017. In this respect, the Single Judge referred to art. 6 par. 3 of Annexe 3 of the Regulations, and pointed out that according to the information contained in the Transfer Matching System, the season 2016/2017 in Country D ran from 1 July 2016 until 30 June 2017.

13. In addition, the Single Judge held that it was undisputed between the parties that clause 1B could only be triggered if a permanent transfer of the player would occur until 30 June 2017 and that the potential permanent transfer of the player from the Respondent to Club F would only take effect as of the 2017/2018 season, i.e. at the earliest on 1 July 2017.

14. Moreover, the Single Judge took note of the documentation provided by the Respondent, from which it could be established that, at the start of the 2017/2018 season, the player was registered with the Respondent.

15. As to the third condition, the Single Judge understood that a permanent transfer of the player from the Respondent to a third club would have to occur before the due date of the final instalment of the transfer compensation for the definitive transfer of the player from the Claimant to the Respondent, i.e. 30 June 2017 (cf. point I.1. above).

16. In this respect, the Single Judge took note of the documentation provided by the Respondent and emphasized that it remained uncontested that the Respondent had indeed paid the last instalment of the transfer compensation for the definitive transfer of the player from the Claimant to the Respondent on 29 June 2017.

17. Therefore, and taking into account the aforementioned considerations, the Single Judge established that the player had not been transferred on a permanent basis from the Respondent to a third club before 30 June 2017, and concluded that the Respondent is under no obligation to pay any amount to the Respondent under clause 1B.

18. Consequently, the Single Judge decided to reject the claim of the Claimant.

19. 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).

20. In respect of the above, the Single Judge held that the amount to be taken into consideration in the present proceedings is EUR 8,912,800, related to the claim of the Claimant. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 25,000.

21. In conclusion, taking into account the particularities of the present matter, the Single Judge determined the costs of the current proceedings to the amount of CHF 15,000. Furthermore, and in line with his aforementioned considerations and taking into account that the Claimant’s claim is rejected, the Single Judge decided that the amount of CHF 15,000 has to be paid by the Claimant in its entirety.

*****

Decision of the Single Judge of the Players’ Status Committee

1. The claim of the Claimant, Club A, is rejected.

2. The final costs of the proceedings in the amount of CHF 15,000 are to be paid by the Claimant within 30 days as from the date of notification of the present decision, to FIFA. Given that the Claimant has already paid the amount of CHF 5,000 as advance of costs at the start of the present proceedings, the amount of CHF 10,000 is 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

*****

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

www.tas-cas.org

For the Single Judge of the

Players’ Status Committee:

Omar Ongaro

Football Regulatory Director

Encl. CAS Directives