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 16 April 2019

Decision of the Single Judge

of the Players’ Status Committee

passed in Zurich, Switzerland, on 16 April 2019,

by

José Luis Andrade (Portugal)

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

I. Facts of the case

1. On 30 August 2017, the Club of Country B, Club A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), signed a transfer agreement for the definitive transfer of the player, Player E (hereinafter: the player), from the Claimant to the Respondent.

2. According to clause 4.1 of the transfer agreement, “[the Respondent] shall pay the total amount of EUR 200,000 to [the Claimant] […] within 20 days upon registration of the Player”.

3. In accordance with art. 4.6 of the transfer agreement (hereinafter: the penalty clause): “In case of [the Respondent] being in default of payment for more than ten (10) days, without prejudice to any other rights and remedies [the Claimant] may have, per case of default [the Respondent] shall pay to [the Claimant] on first demand a penalty of 15% of the outstanding amount”.

4. According to the information contained in the Transfer Matching System (TMS), the player was registered with the Respondent on 8 September 2017.

5. On 15 November 2017, the Claimant put the Respondent in default, granting the latter a deadline until 27 November 2017 to proceed with the payment of the total amount of EUR 232,792.90, consisting of:

a. EUR 200,000 corresponding to the transfer fee;

b. EUR 30,000 corresponding to the amount due as a result of the application of the penalty clause;

c. EUR 2,792.90 corresponding to “attorney fees”.

6. On 18 December 2017, the Claimant lodged a claim against the Respondent before FIFA, maintaining that, despite having put the Respondent in default of payment, the latter had not proceeded to pay the transfer fee for the transfer of the player. In this regard, the Claimant further explained that the transfer fee was “currently claimed by separate petition”. Therefore, the Claimant limited its request to the following amounts:

a. EUR 30,000 corresponding to the amount due as a result of the application of the penalty clause;

b. EUR 2,792.90 corresponding to “attorney fees”;

c. EUR 590.95 corresponding to “procedural costs”.

7. On 4 May 2018, the Respondent replied without contesting the substance of the claim, but only explaining that the parties were conducting negotiations in order to settle the present dispute on the condition that Respondent paid to the Claimant “the total amount of EUR 215,000. - in May 2018 for the overall financial obligations arising from the [transfer agreement] and the dispute(s) arising from it, including but not limited to fees, penalties, interest amounts and attorney fees”. In addition, the Respondent requested the FIFA administration “to suspend the ongoing procedure”.

8. In its rejoinder, the Claimant communicated to the FIFA administration that the negotiations for the settlement of the dispute “failed in Mid April” and that the Respondent is “deliberately attempting to delay the proceedings”. Moreover, the Claimant held that it remained undisputed that the claimed amounts were still outstanding and asked FIFA to continue with the proceedings.

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 whether he was competent to deal with the matter at hand. In this respect, he took note that the present matter was submitted to FIFA on 18 December 2017. Consequently, 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 (cf. art. 21 of the Procedural Rules).

2. Subsequently, the Single Judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that in accordance with art. 23 par. 1 and 4 in combination with art. 22 lit. f) of the Regulations on the Status and Transfer of Players (edition 2018), he was competent to deal with the present matter since it concerned a dispute between clubs affiliated to two different associations.

3. In continuation, 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 Regulations on the Status and Transfer of Players (edition 2018), and on the other hand, to the fact that the present claim was lodged with FIFA on 18 December 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 as to the substance.

4. His competence and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started his analysis by acknowledging the facts of the case and the arguments of the parties as well as the documents contained in the file. The Single Judge, however, 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 this respect and first of all, the Single Judge acknowledged that, on 30 August 2017, the Claimant and the Respondent signed an agreement over the transfer of the player from the Claimant to the Respondent.

6. In continuation, the Single Judge noted that, according to the transfer agreement, the Respondent undertook the obligation to pay a transfer fee of EUR 200,000 within 20 days upon the registration of the player. Furthermore, the Single Judge observed that the transfer agreement contained a clause providing that, in case the Respondent was in default of payment of the transfer fee for more than 10 days, the Claimant would be entitled to “a penalty of 15% of the outstanding amount”.

7. Subsequently, the Single Judge moved to analyse the claim and took notice, first and foremost, that – according to the information contained in the TMS – the player was registered with the Respondent on 8 September 2017. Consequently, the Single Judge observed that, pursuant to clause 4.1 of the transfer agreement, the transfer fee was payable within the following 20 days, i.e. by 28 September 2017 at the latest.

8. The foregoing having been established, the Single Judge took note that the Claimant maintained that, in light of (i) the day of the player’s registration, (ii) the fact that it had not received from the Respondent the transfer fee and (iii) the fact that it had put the latter in default on 15 November 2017, granting more than 10 days in order to remedy the default but to no avail, it was entitled to claim the penalty fee in the amount of 15% of the transfer fee, i.e. EUR 30,000.

9. Furthermore, the Single Judge acknowledged that the Claimant limited its request to the above-mentioned penalty fee and procedural expenses, since the transfer fee itself was allegedly the object of a separate claim.

10. In continuation, the Single Judge observed that, for its part, the Respondent did not contest the claim as to its substance but only informed the FIFA administration that the parties were conducting negotiations in order to amicably settle the dispute and, consequently, only asked that the related proceedings before FIFA be suspended.

11. In respect of the above, the Single Judge further noted that the Claimant communicated that the negotiations failed and, thus, asked FIFA to continue with the proceedings.

12. That said, the Single Judge underlined that it remained undisputed that the Respondent was in default of payment of the transfer fee to the Claimant for more than 10 days upon the expiry of the deadline of 20 days from the registration of the player with the Respondent.

13. Consequently, the Single Judge concluded that the conditions set by the transfer agreement to trigger the penalty clause had been met.

14. That said, the Single Judge focused his attention on the said penalty clause and deemed it appropriate to preliminary remark, on a general level, that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness. In this respect, the Single Judge highlighted that, in order to determine whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before him shall also be taken into consideration.

15. In the specific case at hand, the Single Judge deemed that the penalty fee of 15% of the total outstanding amount, which the parties contractually agreed upon in the context of the transfer agreement, is both proportionate and reasonable and, thus, valid and applicable.

16. Consequently, the Single Judge decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant the amount of EUR 30,000 in light of the Respondent’s failure to pay the transfer fee indicated in the transfer agreement in a timely manner.

17. In addition, as regards the claimed legal expenses, the Single Judge referred to art. 18 par. 4 of the Procedural Rules as well as to the longstanding and well-established jurisprudence of the Players’ Status Committee (PSC), in accordance with which no procedural compensation shall be awarded in proceedings in front of the PSC. Consequently, the Single Judge decided to reject the Claimant’s request relating to “attorney fees” and “procedural costs”.

18. The Single Judge concluded his deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

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 the proceedings before the Players’ Status Committee and 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 and are normally to be paid by the unsuccessful party.

20. In this respect, the Single Judge highlighted that the claim was partially accepted and that the Respondent was the party at fault. Therefore, the Single Judge decided that the Respondent has to bear the costs of the current proceedings in front of FIFA.

21. 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 lower than CHF 50,000, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to CHF 5,000.

22. In conclusion and in view of the fact that the case did not present particular complexities, the Single Judge determined the costs of the current proceedings to the amount of CHF 4,000.

23. Consequently, the Respondent has to pay the amount of CHF 4,000 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 total amount of EUR 30,000.

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

4. In the event that the aforementioned sum is not paid by the Respondent within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

5. The final costs of the proceedings in the amount of CHF 4,000 are to be paid by the Respondent, Club C, within 30 days as of the notification of the present decision as follows:

5.1 The amount of CHF 3,000 has to be paid directly to FIFA to the following bank account with reference to case no. XXX:

UBS Zurich

Account number 366.677.01U (FIFA Players’ Status)

Clearing number 230

IBAN: CH27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

5.2 The amount of CHF 1,000 has to be paid directly to the Claimant, Club A.

6. The Claimant, Club A, is directed to inform the Respondent, Club C, immediately and directly of the account number to which the remittances under points 2. and 5.2 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 art. 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 (CAS)

Avenue de Beaumont 2

CH-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