F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2018-2019) – fifa.com – atto non ufficiale – Decision 31 January 2019

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 31 January 2019,

by

Roy Vermeer (Netherlands)

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 Player E.

I. Facts of the case

1. On 17 October 2016, the club of Country B Club A (hereinafter: the Claimant) concluded a transfer agreement (hereinafter: the agreement) with the club of Country D Club C (hereinafter: the Respondent) in relation to the transfer of the player Player E (hereinafter: the player) to the latter club, by means of which the Respondent undertook to pay to the Claimant, for 100% of the player’s federative rights and 40% of his economic rights, the sum of USD 1,800,000 as follows (hereinafter: the transfer fee): USD 600,000 on 25 January 2017, USD 600,000 on 25 January 2018 and USD 600,000 on 25 July 2018 (hereinafter: the third instalment).

2. As further specified in art. 3.3. of the agreement, in case of non-payment of the relevant amounts within the aforementioned deadlines, the Respondent had to pay to the Claimant, as penalty, 5% of the due amount, plus 6% interests p.a..

3. In accordance with art. 1.3. of the agreement, the Claimant kept 40% of the player’s economic rights and was to be informed by the Respondent, in writing, of any offer related to a potential subsequent transfer of the player within 3 days of having received the relevant offer (cf. art. 1.3.1. of the agreement). The Claimant had then 2 days to inform the Respondent of a possible similar or better offer for the player from another club.

4. In case the Respondent failed to comply with the prerequisites of art. 1.3.1. and the player would be transferred to a third club without the Claimant having had the possibility to make use of its right as per the above, an amount corresponding to 80% of the subsequent transfer would be due to the Claimant by the Respondent as penalty (cf. third paragraph of art. 1.3.1. of the agreement).

5. On 6 September 2018, the Claimant lodged a claim with FIFA against the Respondent and requested for the latter the following payments:

- USD 600,000, corresponding to the third instalment;

- 5% penalty over the claimed amount as penalty;

- 6% interests p.a.;

- USD 30,000 for the legal costs incurred;

- USD 1,200,000 as penalty for having breached art 1.3.1. of the agreement.

6. In this respect, the Claimant accused the Respondent of having failed to pay the third instalment.

7. Furthermore, the Claimant recalled that the Single Judge of the Players’ Status Committee (hereinafter: the Single Judge) had already taken a decision as to the obligation of the Respondent to pay the first two instalments due as per the agreement.

8. In addition, the Claimant accused the Respondent of having breached art. 1.3.1. of the agreement. In this respect, the Claimant added that USD 1,200,000 would correspond to 40% of the player’s economic rights.

9. In view of the above, the Claimant deemed being entitled to receive from the Respondent all amounts claimed.

10. In its response dated 13 December 2018, the Respondent rejected the claim of the Claimant in its entirety arguing that the latter had failed to provide it with a proper invoice requesting the payment of the third instalment. According to the Respondent, the invoice provided by the Claimant as evidence in its claim had not been addressed to any of its “official representatives”.

11. In addition and “assuming but not admitting, that the obligation to provide the invoice (..) is somehow not necessary” the Respondent contested the request of the Claimant related to the payment of “default interest, plus penalty, and a compensation for losses and damages” arguing that the latter had failed “to demonstrate the losses and damages”.

12. Equally, the Respondent considered that the Claimant’s “attempt (..) to claim also a percentage due as default interests (6% p.a.) together with a penalty (5%) is clearly disproportional and against the well-established jurisprudence published by the FIFA PSC”.

13. Finally, the Respondent contested the Claimant’s claim to be reimbursed of the sum of USD 30,000 for its legal expenses in accordance with “Art. 18, par. 4 of the FIFA Procedural Rules”.

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 6 September 2018, the Single Judge of the Players’ Status Committee concluded that the 2018 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 2016 and 2018 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 6 September 2018. In view of the foregoing, the Single Judge concluded that the June 2018 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 4 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 17 October 2016, the Claimant and the Respondent had concluded a transfer agreement which provided for the Claimant to receive from the Respondent USD 1,800,000 as transfer fee as follows: USD 600,000 on 25 January 2017, USD 600,000 on 25 January 2018 and USD 600,000 on 25 July 2018. Furthermore, the Single Judge remarked that, in accordance with art. 3.3. of the agreement in case of non-payment of the relevant amounts, the Respondent had to additionally pay to the Claimant, as penalty, 5% of the due amount, plus 6% interests p.a..

6. In addition, the Single Judge observed that, in accordance with the agreement, the Respondent had to inform the Claimant in writing, of any offer related to a potential subsequent transfer of the player within 3 days of having received the relevant offer (cf. art. 1.3.1. of the agreement) whereas the Claimant had then 2 days to reply. In the same context, the Single Judge also realized that, in case the Respondent failed to comply with the aforementioned prerequisites of art. 1.3.1. and the player would be transferred to a third club without the Claimant having had the possibility to make use of its relevant right, an amount corresponding to 80% of the subsequent transfer would be due to the Claimant by the Respondent as penalty.

7. 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 600,000, corresponding to the third instalment, and the application of the penalties included in art. 3.3. of the agreement.

8. Equally, the Single Judge observed that, for its part, the Respondent, although not denying that it had not yet proceeded with the payment of the relevant transfer fee, had rejected the claim of the Claimant arguing that the Respondent had so far failed to provide it with the correct invoice. The Single Judge also took note of the fact that the Respondent contested the applicability of the penalties included in art. 3.3. of the agreement for being excessive.

9. 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 1,800,000 in three equal instalments of USD 600,000 each to the Claimant as transfer fee and that the Respondent had not contested having failed to pay to the latter the third instalment which had become due on 25 July 2018.

10. Hence, considering the content of the transfer agreement 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 third instalment in the amount of USD 600,000 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 600,000.

11. 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 6% p.a. on the outstanding sum of USD 600,000 as well as a 5% penalty over the transfer fee, both in accordance with art. 3.3. of the transfer agreement.

12. In this respect, the Single Judge acknowledged the arguments of both parties with regard to the application of art. 3.3. of the agreement and, after analysing the provision in question, came to the conclusion that, in accordance with his well-established jurisprudence, an interest rate of 6% p.a. was not excessive and could not be considered disproportionate. Thus, it was to be applied on the outstanding transfer fee.

13. Equally, the Single Judge, referring once again to his well-established jurisprudence, pointed out that also an additional penalty equalling to 5% of the relevant outstanding sum was also not to be considered excessive nor disproportionate.

14. Hence, from the Single Judge’s point of view, the penalty clause included in art. 3.3. of the transfer agreement is also valid and binding between the parties and can in casu be applied.

15. In view of the aforementioned and considering the content of art. 3.3. of the transfer agreement, recalling once again the legal principle of pacta sunt servanda as well as taking into account that it had been established that the Respondent had failed to pay the third instalment due on 25 July 2018, the Single Judge decided that the Respondent, in order to fulfil its obligations established in the transfer agreement, has to pay to the Claimant an additional sum of USD 30,000 as penalty, corresponding to 5% of the outstanding amount of USD 600,000 as well as 6% interest p.a. over the sum of USD 600,000. In accordance with his well-established jurisprudence and taking into account the specific request of the Claimant, the Single Judge additionally decided that the mentioned interest of 6% p.a. over the due sum of USD 600,000 had to be paid as of the day after the relevant amount had become due, i.e. 6% p.a. over the amount of USD 600,000 as of 26 July 2018.

16. In continuation and with regard to the third part of the Claimant’s claim, i.e. his request relative to the payment of USD 1,200,000 as penalty for having breached art. 1.3.1. of the agreement, the Single Judge referred to the content of art. 12 par. 3 of the Procedural Rules and pointed out that in accordance with the provision in question, any party claiming a right on the basis of an alleged fact shall carry the respective burden of proof and pointed out that no evidence had been provided by the Claimant in support of the allegation that the Respondent would have breached the provision in question. As a result, the Single Judge came to the conclusion that this third part of the Claimant’s claim had to be rejected for lack of proof.

17. Finally and as to the request of the Claimant to be awarded USD 30,000 for the legal 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.

18. In conclusion, the Single Judge decided that the claim of the Claimant is partially accepted and that the Respondent has to pay to the Claimant the outstanding amount of USD 600,000, plus 6% interest p.a. from 26 July 2018 until the date of effective payment, as well as the sum of USD 30,000 as penalty.

19. Furthermore, taking into account the consideration under number II./2. above, the Single Judge referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

20. In this regard, the Single Judge established that, in virtue of the aforementioned provision, he has competence to impose a sanction on the Respondent. More in particular, the Single Judge pointed out that, against clubs, the sanction shall consist in a ban from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods.

21. Therefore, bearing in mind the above, the Single Judge decided that, in the event that the Respondent does not pay the amount due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

22. Finally, the Single Judge recalled that the above-mentioned sanction will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

23. 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).

24. In this respect, the Single Judge reiterated that the claim of the Claimant is only partially accepted and that the Respondent is the party at fault. Therefore, the Single Judge decided that the Claimant and the Respondent both have to bear the costs of the current proceedings in front of FIFA.

25. 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.

26. In conclusion, and considering that the particularity of the case at hand, the Single Judge determined the costs of the current proceedings to the amount of CHF 25,000.

27. Consequently, the Claimant has to pay the amount of CHF 5,000 and the Respondent 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, the amount of USD 600,000, plus 6% interest p.a. from 26 July 2018 until the date of effective payment.

3. The Respondent, Club C, has to pay to the Claimant, Club A, the amount of USD 30,000.

4. Any further claim lodged by the Claimant is rejected.

5. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts mentioned under points 2. and 3. above.

6. The Respondent shall provide evidence of payment of the due amounts in accordance with points 2. and 3. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amounts due, plus interest in accordance with points 2. and 3. above are not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

8. The ban mentioned in point 7. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

9. In the event that the aforementioned sums plus interest are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

10. The final costs of the proceedings in the amount of CHF 25,000 are to be paid by both parties, within 45 days as from the date of notification of the present decision, as follows:

10.1. The amount of CHF 5,000 has to be paid by the Claimant, Club A. Considering that the latter already paid an advance of costs in the amount of CHF 5,000 at the start of the present proceedings, the Claimant is exempted from paying the aforementioned costs of the proceedings.

10.2. The amount of CHF 20,000 has to be paid by the Respondent, Club C, to FIFA to the following bank account with reference to case nr. XX-XXXXX/XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

11. In the event that the aforementioned amount of costs 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.

*****

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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl. CAS Directives