F.I.F.A. – Players’ Status Committee / Commissione per lo Status dei Calciatori – club vs club disputes / controversie tra società – (2020-2021) – fifa.com – atto non ufficiale – Decision 23 March 2021

Decision of the

Single Judge of the Players’ Status Committee

passed on 23 March 2021

regarding a dispute concerning the transfer of the player Anderson de Oliveira da Silva

BY:

Vitus Derungs (Switzerland), Single Judge of the PSC

CLAIMANT:

Londrina Esporte Clube, Brazil

Represented by Eduardo de Vargas Neto

RESPONDENT:

Portimonense Sporting Clube, Portugal

Represented by Joao Lobao

I. FACTS OF THE CASE

1. On 27 August 2019, the Brazilian club Londrina Esporte Clube (hereinafter: Claimant), and the Portuguese club, Portimonense Sporting Clube (hereinafter: Respondent) signed a “Private Instrument of Assignment of Federative and Economic Rights of Professional Soccer Athlete and Other Covenants” (hereinafter: the Contract) according to which the player Anderson de Oliveira da Silva (hereinafter: the Player) was transferred from the Claimant to the Respondent.

2. In accordance with the Contract, the Respondent undertook to pay to the Claimant a transfer fee of EUR 500,000 payable in three instalments.

3. The Contract includes inter alia the following clauses (quoted verbatim):

“2.4 In the event of delay in the payment of the instalments provided for in clause 2.1, a 10% (ten percent) fine will be charged on the total instalment amount and interest of 2% (two percent) per month, limited to 15 (fifteen) days from delay, counting from the due date”.

“2.5 After the period of fifteen (15) days of default in the payment of any instalment has elapsed, the due instalments will mature early, as well as the incidence in the total amount of fine twenty percent (20%), interest of two percent (2%) per month, until the effective payment, becoming the present instrument enforceable by means of the specific guardianship”.

“5.1. Failure to comply with any of the obligations provided for in this instrument, regardless of the time it occurs, except for cases that already have a specific penalty, will imply the non-compensatory fine for each non-compliance, equivalent to R$ 500,000.00 to the missing party. (Five hundred thousand reais) in favour of the party affected by the default, plus interest of 0.5% per day of delay / default”.

4. On 30 January 2020, the third and final instalment amounting EUR 150,000 became payable and was not paid by the Respondent.

5. On 9 March 2020, the Claimant sent a default notice to the Respondent requesting payment of the outstanding amount within 10 days, to no avail.

6. On 23 March 2020, the Respondent paid the amount of EUR 15,000 to the Claimant.

7. On 24 April 2020, the Respondent paid the amount of EUR 14,975 to the Claimant.

8. On 20 May 2020, the Respondent paid the amount of EUR 50,000 to the Claimant.

9. On 15 June 2020, the Respondent paid the amount of EUR 36,670.83 to the Claimant.

10. On 24 August 2020, the Claimant sent a written notice to the Respondent putting it in default requesting the amount, including outstanding amounts, interest and penalties, of EUR 128,961.83 and granting a deadline of 48 hours to comply.

11. On 1 September 2020, the Respondent made a payment of EUR 15,000 to the Claimant.

II. PROCEEDINGS BEFORE FIFA

12. On 21 September 2021, the Claimant filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a. The claim of the Claimant

13. According to the Claimant, the Respondent was liable to pay to the Claimant the amount of EUR 202,879.

14. As per the Claimant’s submissions, the requested amount is calculated in the following manner:

a. The outstanding amount of EUR 33,354.17 plus a fine of 20% (twenty per cent) and interest of 2% per month from September 2020, totalling the debt of EUR 46,428.76, minus the partial payment (i.e. from 1 September 2020) results in EUR 31,428.76.

b. Including the application of a contractual penalty of Brazilian Real (“BRL”) 500,000 plus a fine of 0.5% per day of delay until the effective payment (i.e. in accordance with Clause 5.1. of the Contract).

c. Since 30 January 2020, 230 days have elapsed, with the coefficient of 230 x 0.5% to be applied, totalling 115% to be increased to the value of the fine of clause 5.1, it should still be added 230 x (0.5) to the calculation, reaching the value of BRL 575.000 to be added to the agreed contractual penalty of BRL 500,000, making a total of BRL 1,075,000.

d. This amount if converted into Euros at the proposed exchange rate, it is equivalent to EUR 171,451.

e. EUR 31,428 + EUR 171,451 = EUR 202,879.

b. Position of the Respondent

15. On 2 December 2020, the Respondent filed its response and a counterclaim.

16. The Respondent requested to:

a. “recognize that LONDRINA has no right to claim any penalty

b. recognize that LONDRINA did not perform any of the mandatory notice letters to trigger the penalty presented in clause 2.4 and 2.5 of the Transfer Agreement; -

c. recognize that PORTIMONENSE shall deduct from the transfer fee the amount regarding Solidarity Mechanism;

d. recognize that LONDRINA has no ground to request the payment of the amount allegedly in debt.”

17. Additionally, the Respondent filed a counterclaim claiming that the Claimant shall compensate the Respondent in and amount no less than BRL 500.000,00

18. Firstly, the Respondent refers to the fact that allegedly; the Claimant is controlled by a company. The Respondent further refers to national legislation against money laundering and requests the production of document authorising the mentioned company to manage the Claimant.

19. Secondly, the Respondent states that on a total of EUR 150,000 regarding the third instalment, the Claimant has already received no less than EUR 131,645.83 and therefore the Respondent would be - if due- in delay of the maximum amount of EUR 18,354.17.

20. It is further argued that “in a clear and unpleasant demonstration of bad faith, collect from PORTIMONENSE and outrageous compensation for the unreasonable amount in debt”.

21. Furthermore, the Respondent states that the penalties expressed on clauses 2.4 and 2.5. and 5.1 are not compatible because at it is stated in art. 5.1, it should apply “except cases that already have a specific penalty”.

22. The Respondent submits that the Claimant forgets to deduct the 5% amount due regarding Solidarity Mechanism, and therefore, the total amount to be transferred to the Claimant would be no more than EUR 475,000

23. The Respondent states to had paid a total of EUR 481,645.83, therefore, nothing is due.

24. Moreover, the Respondent submits that the formal notice sent to the Respondent cannot be considered to put in default the Respondent because:

a. “it requests a payment that “is not due has the Claimant did not deduct the amounts referring to Solidarity Mechanism”;

b. adds on an unjustified way the penalty amount without first sent a first default notice to trigger the penalty and

c. request the payment to a bank account that is different from the one presented in the transfer agreement”.

25. Finally, in relation to the counterclaim, the Respondent states that the behaviour of the Claimant clearly entitles the Respondent to request the payment of the fine presented on the Clause 5 of the Contract.

c. Answer to the counterclaim

26. The Claimant/ Counter-Respondent filed a response to the counterclaim stating that it should be disregarded due to be “without any endorsement of truth or logic”.

III. CONSIDERATIONS OF THE SINGLE JUDGE OF THE PLAYERS’ STATUS COMMITTEE

a. Competence and applicable legal framework

27. 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 case at hand. In this respect, he took note that the present matter was presented to FIFA on 21 September 2020 and submitted for decision on 23 March 2021. Taking into account the wording of art. 21 of the January 2021 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

28. Subsequently, the Single Judge referred to art. 3 par. 1 of the Procedural Rules and observed that in accordance with art. 23 par. 1 in combination with art. 22 lit. f) of the Regulations on the Status and Transfer of Players (edition February 2021), the Single Judge is competent to deal with the matter at stake, which concerns a dispute between Brazilian and a Portuguese club.

29. Subsequently, the Single Judge analysed which regulations should be applicable as to the substance of the matter. In this respect, he confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Player (edition February 2021), and considering that the present claim was lodged on 21 September 2020, the August 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

30. The Single Judge recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. Likewise, the Single Judge stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which he may consider evidence not filed by the parties.

31. In this respect, the Single Judge also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.

c. Merits of the dispute

32. The competence of the Single Judge and the applicable regulations having been established, the Single Judge entered into the merits of the dispute. In this respect, the Single Judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on 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.

i. Main legal discussion and considerations

33. The foregoing having been established, the Single Judge moved to the substance of the matter, and took note of the fact that the dispute between the parties was based on determining which amount of the transfer fee remained outstanding and determining the applicability of the contractual penalties set forth in the Contract.

34. Firstly, the Single Judge analysed the evidence on file, and determined that in accordance with the pertinent clauses under the Contract, on 31 January 2020 the amount of EUR 150,000 became outstanding by the Respondent.

35. Furthermore, the Single Judge noted that it is undisputed that the Respondent had proceeded with partial payments between March and September 2020. Thus, the Single Judge concurred with the Respondent in determining that the amount outstanding from the agreed transfer fee at the time of the decision was EUR 18,354.

36. Once the above had been established, the Single Judge turned to the matter of the contractual penalties contained in the clauses 2.4, 2.5 and 5.1 of the Contract. The Single Judge could observe that in clause 2.4 of the agreement, there are two penalties (i.e. 10% fine and 2% interest per month) agreed between the parties for the delay in payment.

37. Furthermore, the Single Judge could observe that the 2% monthly interest stated, would equal to 24% annual interest, which based on FIFA and CAS jurisprudence, is found to be disproportionate and excessive. Hence, the Single Judge confirmed that this amount of interest cannot be awarded. Based on the aforementioned consideration, the Single Judge determined that the maximum amount of interest which may be awarded is 18% annual interest.

38. Therefore, the Single Judge decided that the aforementioned interest shall be applied on the outstanding amount in consideration with the partial payments made by the Respondent on 23 March 2020, 23 April 2020, 20 May 2020, 15 June 2020, and 1 September 2020.

39. Subsequently, the Single Judge proceeded with the analysis of Clause 2.5 of the agreement, and the arguments of the parties in this regard. Accordingly, the Single Judge confirmed that that the parties agreed on a specific penalty of 20% on the outstanding amount to be applied in the event of a default in payments. More in specific, the Single Judge confirmed as per clause 2.5 that such penalty of 20% would apply in case of default payment for more than 15 days, the circumstances of which are indeed the ones in the case at hand.

40. The Single Judge found this percentage reasonable and proportionate. Hence, based on the principle of pacta sunt servanda, decided that this contractual penalty shall also be granted. Hence, the Single Judge confirmed that the Respondent had to pay to the Respondent 20% of the initially outstanding amount of EUR 150,000 (i.e. EUR 30,000).

41. The Single Judge however wished to point out that no interest on such penalty fee shall be awarded, as this would correspond to a double sanction (ne bis in idem).

42. Lastly, the Single Judge turned to the analysis of Clause 5.1 of the Contract and the argumentation of the Claimant. In this point, the Single Judge was convinced by the Respondent’s arguments and determined that the additional penalty established in clause 5.1 of the Contract is not applicable since the clause as it is expressly stated in the same provision that it would apply “except for cases that already have a specific penalty”.

43. Thus, based on the previous considerations regarding clauses 2.4 and 2.5 of the Contract, the Single Judge confirmed that Clause 5.1 is not applicable in the case at hand, as other specific penalties are applied.

44. In continuation, the Single Judge took note of the argumentation of the Respondent in regard to the deduction of 5% of the outstanding amounts as solidarity contribution. To this end, he confirmed that the Respondent filed no evidence of having paid such solidarity contribution to the clubs entitled to such amount. Consequently, the Single Judge decided that the Respondent failed to meet its burden of proof in line with art. 12 par. 3 of the Procedural Rules and as such its argumentation had to be rejected.

45. Finally, the Single Judge had to rule on the counterclaim filed by the Respondent/Counter-Claimant. In this regard, the Single Judge, bearing in mind his considerations regarding the Claimant’s claim, deemed that the counterclaim had to be rejected due to lack of any contractual basis.

46. As a way of conclusion and for the sake of completeness, the Single Judge confirmed that art. 12bis of the Regulations does not apply in the case at hand, as the strict requirements specified in the provision have not been met.

ii. Compliance with monetary decisions

47. Finally, taking into account the applicable Regulations, 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.

48. In this regard, the Single Judge highlighted that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban 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.

49. Therefore, bearing in mind the above, the Single Judge decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, communicates the relevant bank details to the Respondent, provided that the decision is final and binding, 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.

50. The Single Judge recalled that the above-mentioned bans 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.

51. Lastly, the Single Judge concluded his deliberations by rejecting any other requests for relief made by any of the parties.

iii. Costs

52. Lastly, the Single Judge referred to article 18 par. a lit. 1) of the Procedural Rules, according to which no costs shall be levied by the parties for claims or counter-claims lodged between 10 June 2020 and 31 December 2020 (both inclusive). Accordingly, the Single Judge decided that no procedural costs were to be imposed on the parties.

53. Likewise, and for the sake of completeness, the Single Judge recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.

IV. DECISION OF THE SINGLE JUDGE OF THE PLAYERS’ STATUS COMMITTEE

1. The claim of the Claimant / Counter-Respondent, Londrina Esporte Clube, is partially accepted.

2. The Respondent / Counter-Claimant, Portimonense Sporting Clube, has to pay to the Claimant / Counter-Respondent the following amounts:

a. EUR 18,354 as outstanding transfer fee;

b. Interest of 18% p.a. on the amount of EUR 150,000 as from 31 January 2020 until 23 March 2020;

c. Interest of 18% p.a. on the amount of EUR 135,000 as from 24 March 2020 until 23 April 2020:

d. Interest of 18% p.a. on the amount of EUR 120,025 as from 24 April 2020 until 20 May 2020;

e. Interest of 18% p.a. on the amount of EUR 70,025 as from 21 May 2020 until 15 June 2020;

f. Interest of 18% p.a. on the amount of EUR 33,354 as from 16 June 2020 until 1 September 2020;

g. Interest of 18% p.a. on the amount of EUR 18,354 as from 2 September 2020 until the date of effective payment.

h. EUR 30,000 as contractual penalty.

3. Any further claims of the Claimant / Counter-Respondent are rejected.

4. The Claimant / Counter-Respondent is directed to immediately and directly inform the Respondent / Counter-Claimant of the relevant bank account to which the Respondent / Counter-Claimant must pay the due amount.

5. The Respondent / Counter-Claimant shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amounts due, plus interest as established above is not paid by the Respondent / Counter-Claimant within 45 days, as from the notification by the Claimant / Counter-Respondent of the relevant bank details to the Respondent / Counter-Claimant, the following consequences shall arise:

1.

The Respondent / Counter-Claimant shall be banned 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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid. (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

2.

In the event that the payable amount as per in this decision is 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 the FIFA Disciplinary Committee.

7. The counterclaim of the Respondent / Counter-Claimant is rejected.

8. This decision is rendered without costs.

For the Players’ Status Committee:

Emilio García Silvero

Chief Legal & Compliance Officer

NOTE RELATED TO THE APPEAL PROCEDURE:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Procedural Rules).

CONTACT INFORMATION:

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