F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – overdue payables / debiti scaduti – (2018-2019) – fifa.com – atto non ufficiale – Decision 11 April 2019

Decision of the

Dispute Resolution Chamber

passed by way of circulars on 11 April 2019,

in the following composition:

Geoff Thompson (England), Chairman

Philippe Diallo (France), member

Jon Newman (USA), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C, Country D

as Respondent

regarding an employment-related dispute

between the parties in connection with overdue payables

I. Facts of the case

1. On 24 February 2018, the Claimant and the Respondent signed an employment contract valid as from 1 January 2018 until 31 December 2018, as well as a document referred to as ‘Supplementary Agreement on Salary and License Fee and Sign-on Fees’ (hereinafter: the supplementary agreement), valid for the same period.

2. In accordance with the supplementary agreement, the Respondent undertook to pay to the Claimant a sign-on fee of USD 1,500,000 ‘after-tax for 2018 season’, payable as follows: USD 1,000,000 ‘within 30 business days after the transfer’ and USD 500,000 ‘within 10 business days after the 20th round of the Football League of Country D’.

3. Furthermore, the Claimant explains that, since he signed the supplementary agreement on 24 February 2018, the amount of USD 1,000,000 fell due on 8 April 2018 and, since the 20th round of the Football League of Country D was ‘disputed on 24 August 2018’, that the amount of USD 500,000 fell due on 6 September 2018.

4. Since the Respondent failed to timely pay him the total amount of USD 1,500,0000, by correspondence dated 17 January and 7 February 2019, the Claimant put the Respondent in default of payment of the amount of USD 1,500,000, setting a 10 days’ time limit in order to remedy the default, however both times to no avail.

5. The Claimant lodged a claim against the Respondent in front of FIFA, asking that the Respondent be ordered to pay to him overdue payables in the amount of USD 1,500,000, plus 5% interest p.a. as of 8 April 2018 on the amount of USD 1,000,000 and 5% interest p.a. as of 6 September 2018 on the amount of USD 500,000.

6. In its reply, the Respondent argued that the delay in payment was due ‘exclusively to a cash-flow problem’, and that it even reached a verbal agreement with the Claimant on the postponement of the payment. Further, the Respondent argues that it always acted in good faith and that it does not ‘deserve the application of severe sanctions’, as it is ‘the first case of overdue payables’.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 22 February 2019. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; hereinafter; Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player of Country B and a club of Country D.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 22 February 2019, the 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and documentation on file. However, the DRC emphasised that in the following considerations, it will refer only to the facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

5. Having said this, the members of the Chamber acknowledged that, on 24 February 2018, the Claimant and the Respondent entered into a contract as well as a supplementary agreement, both valid as from 1 January until 31 December 2018.

6. The Chamber further acknowledged that pursuant to said contract and the supplementary agreement, the Respondent inter alia undertook to pay to the Claimant a sign-on fee of USD 1,500,000 as follows: USD 1,000,000 ‘within 30 business days after the transfer’ and USD 500,000 ‘within 10 business days after the 20th round of the Football League of Country D’.

7. Furthermore, the DRC took note that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent has overdue payables towards him in the amount of USD 1,500,000, which corresponds to the entire sign-on fee the Claimant was entitled to, as established in the contract.

8. In this context, the members of the DRC took particular note of the fact that, on 17 January and 5 February 2019, the Claimant put the Respondent in default of payment of the aforementioned amount, both times setting a time limit of 10 days in order to remedy the default.

9. Consequently, the DRC concluded that the Claimant had duly proceeded in accordance with art. 12bis par. 3 of the Regulations, which stipulates that the creditor (player or club) must have put the debtor club in default in writing and have granted a deadline of at least ten days for the debtor club to comply with its financial obligation(s).

10. Subsequently, the DRC took into account that the Respondent, for its part, held that the delay in payment was due to cash-flow problems and that it had reached a verbal agreement with the Claimant on the postponement of the payment. Further, the Respondent argues that it always acted in good faith and that, because it is its first case in overdue payables-matters it does not deserve severe sanctions.

11. In this regard, the DRC considered that the arguments raised by the Respondent cannot be considered a valid reason for non-payment of the monies claimed by the Claimant, in other words, the reasons brought forward by the Respondent in its defence do not exempt the Respondent from its obligation to fulfil its contractual obligations towards the Claimant.

12. Consequently, the DRC decided to reject the argumentation put forward by the Respondent in its defence.

13. Having said this, the DRC acknowledged that, in accordance with the contract signed by and between the parties, the Respondent was obliged to pay to the Claimant the total amount of USD 1,500,000, corresponding to a sign-on fee.

14. Taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had substantiated his claim pertaining to overdue payables with sufficient documentary evidence.

15. On account of the aforementioned considerations, the DRC established that the Respondent failed to remit the Claimant’s remuneration in the total amount of USD 1,500,000 in accordance with the contract concluded between the parties.

16. In addition, the DRC established that the Respondent had delayed a due payment for more than 30 days without a prima facie contractual basis.

17. Consequently, the DRC decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant overdue payables in the total amount of USD 1,500,000.

18. In addition, taking into account the Claimant’s request, which remained uncontested by the Respondent, as well as the constant practice of the Dispute Resolution Chamber, the DRC judge decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of USD 1,000,000 as from 8 April 2018 and 5% p.a. on the amount of USD 500,000 as from 6 September 2018.

19. In continuation, taking into account the consideration under number II./16. above, the DRC referred to art.12bis par. 2 of the Regulations which stipulates that any club found to have delayed a due payment for more than 30 days without a prima facie contractual basis may be sanctioned in accordance with art. 12bis par. 4 of the Regulations.

20. The DRC established that in virtue of art. 12bis par. 4 of the Regulations, it has competence to impose sanctions on the Respondent. Therefore, bearing in mind that the Respondent duly replied to the claim of the Claimant and in the absence of the circumstance of repeated offence, the DRC decided to impose a warning on the Respondent in accordance with art. 12bis par. 4 lit. a) of the Regulations.

21. In this respect, the DRC wished to highlight that a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty in accordance with art. 12bis par. 6 of the Regulations.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, overdue payables in the amount of USD 1,500,000, plus interest at the rate of 5% p.a. until the date of effective payment as follows:

a. 5% p.a. on the amount of USD 1,000,000 as from 8 April 2018;

b. 5% p.a. on the amount of USD 500,000 as from 6 September 2018.

3. In the event that the amount due to the Claimant is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the DRC judge of every payment received.

5. A warning is imposed on the Respondent.

*****

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 DRC judge:

Emilio García Silvero

Chief Legal Officer

Encl: CAS directives