F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – solidarity contribution / contributo di solidarietà – (2016-2017) – fifa.com – atto non ufficiale – Decision 26 May 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 26 May 2016,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Johan van Gaalen (South Africa), member

Eirik Monsen (Norway), member

Zola Percival Majavu (South Africa), member

Wouter Lambrecht (Belgium), member

on the claim presented by the club,

Club A, Country B

as Claimant

against the club,

Club C, Country D

as Respondent

regarding solidarity contribution in connection with the transfer

of the Player E

I. Facts of the case

1. According to the player passport issued by the Football Federation of Country B, the player, Player E, born on 28 October 1984, was registered with its affiliated club, Club A (hereafter: the Claimant), as from 19 October 1999 until 1 January 2004.

2. The Football Federation of Country B confirmed that for the period during which the player was registered with the Claimant, the sporting seasons ran from January until December of the same year.

3. On 28 October 2015, the Claimant lodged a claim in front of FIFA claiming its proportion of the solidarity contribution in connection with the transfer of the player from the Club of Country F, Club G, to the Club of Country D, Club C (hereafter: the Respondent). In particular, the Claimant requested 2.30% of the alleged total transfer compensation of EUR 13,000,000, corresponding to EUR 299,000, plus 5% interest as from the due date.

4. According to the information contained in the Transfer Matching System (TMS), the player was registered with the Respondent on 18 August 2015.

5. Equally, according to the information contained in TMS, Club G and the Respondent agreed upon the following: “[the Respondent] shall pay Club G as transfer compensation for the definitive transfer of the Player the net amount of EUR 5,430,000 […])”, payable in two instalments, EUR 2,715,000 “to be paid immediately after player’s medical passing and after signing the employment agreement between the Player and [the Respondent]” and EUR 2,715,000 to be paid until 31 May 2016.

6. Furthermore, the above-mentioned clubs agreed upon the following: “[the Respondent] is solely and exclusively responsible for paying any solidarity contribution which might arise pursuant to Article 21 of the FIFA Regulations on the Status and Transfer of Players. The parties explicitly agree that a deduction from the Transfer Fee is not permitted […]”.

7. In its reply, the Respondent provided a copy of the transfer agreement and stated that the transfer fee amounted to EUR 5,430,000, payable in two equal instalments of EUR 2,715,000, the second instalment being due on 31 May 2016.

8. Moreover, the Respondent requested official evidence which proves that the Claimant really participated in the training of the player and, in the event the Claimant proves its rights, the calculation shall be based on the above-mentioned amount, i.e. EUR 5,430,000.

9. To that, the Claimant stated that it based its calculation on information from the media since the Respondent initially did not provide a copy of the transfer agreement. In that regard, the Claimant referred to alleged jurisprudence of the DRC in which, due to the lack of collaboration from the Respondent, the amount to be paid as solidarity contribution was therefore determined on the basis of the information from the media.

10. Moreover, the Claimant explained that in the transfer agreement the amount for the transfer of the player was EUR 5,430,000. However, in clause 2, point 1 of the said agreement, it is stipulated that “Club G will receive that amount as a net amount”. Consequently, the Claimant held that Club G and the Respondent had in fact agreed upon a transfer compensation of EUR 5,701,500.

11. Furthermore, the Claimant stated that the well-established jurisprudence of FIFA and CAS has reasserted that the solidarity contribution is deducted from the gross amount payable by the new club to the former club. Therefore, the Claimant is entitled to 2.30% of the total transfer compensation paid by the Respondent, corresponding to EUR 131,134.50 plus 5% interest p.a. as of the due date.

12. In its final position, the Respondent argued that the calculation made by the Claimant is wrong. Furthermore, the Respondent asserted that the amount of the transfer is only EUR 5,430,000, payable in two instalments, as per the transfer agreement uploaded in the TMS. However, the transfer agreement does not refer to any increase of the solidarity contribution.

13. Finally, the Respondent reiterated its request regarding official evidence that the Claimant participated in the training of the player and, if so, the amount of solidarity contribution should be based on the transfer amount of EUR 5,430,000.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 28 October 2015. Consequently, the 2015 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 2015 edition of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. (d) of the Regulations on the Status and Transfer of Players (edition 2015), the Dispute Resolution Chamber is competent to deal with the matter at stake relating to a dispute regarding the solidarity mechanism between clubs belonging to different associations.

3. Furthermore, the Chamber 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, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2015), and considering that the player was registered with the Respondent on 18 August 2015, the 2015 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the Chamber entered into the substance of the matter. The members of the Chamber started by acknowledging the facts of the case as well as the 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. First of all, the DRC took note that the Claimant initially requested 2,30% of the alleged transfer compensation of EUR 13,000,000, corresponding to EUR 299,000, as solidarity contribution from the Respondent in relation with the transfer of the player from Club G to the Respondent.

6. Equally, the Chamber took note of the position of the Respondent, according to which the Claimant had not provided sufficient evidence to prove that it had actually contributed to the training of the player. Furthermore, in case the Claimant is able to prove its contribution to the training of the player, the Respondent held that the solidarity contribution shall be calculated based on the amount of the actual transfer compensation of EUR 5,430,000.

7. Furthermore, the DRC took note of the Claimant’s replica, in which it held that the Respondent and Club G had agreed upon a net transfer compensation of EUR 5,430,000, resulting in a gross transfer compensation of EUR 5,701,500. In this respect, the Claimant referred to the jurisprudence of the DRC and CAS in similar cases according to which the gross transfer compensation should serve as the basis for the calculation of the solidarity contribution. Consequently, the Claimant amended its claim and held that it is entitled to the amount of EUR 131,134.50.

8. Finally, the members of the Chamber took note of the Respondent’s duplica, in which it reiterated its position and added that it did not agree upon any increase of the solidarity contribution.

9. In view of the above, the Chamber first proceeded to analyse whether the Claimant had sufficiently proven its contribution to the training and education of the player. In this respect, the Chamber recalled that the Claimant had submitted a player passport issued by the Football Federation of Country B, according to which the player was undoubtedly registered with the Claimant as from 19 October 1999 until 1 January 2004.

10. In this respect, the members of the Chamber were eager to point out that, in accordance with the DRC’s constant practice and its well-established jurisprudence, an official player passport issued by the relevant association, containing the relevant details of the player, including his date of birth and all clubs with which the player was registered since the age of 12 until the date of his registration with the respondent club (cf. art. 7 of the Regulations on the Status and Transfer of Players), is deemed sufficient in order to establish a club’s contribution to the training and education of a player.

11. Consequently, the DRC held that it could be established on the basis of the aforementioned player passport issued by the Football Federation of Country B that the Claimant had indeed trained the player as from 19 October 1999 until 1 January 2004 and is, therefore, entitled to receive solidarity contribution from the Respondent.

12. At this point, the Chamber referred to art. 21 in combination with art. 1 of Annexe 5 of the Regulations which stipulate that, if a professional moves during the course of a contract, 5% of any compensation, not including training compensation paid to his former club, shall, in principle, be deducted from the total amount of this compensation and be distributed by the new club as a solidarity contribution to the club(s) involved in the training and education of the player between the seasons of his 12th and 23rd birthday.

13. Having established the aforementioned, the DRC deemed that the main issue in the present dispute, considering the submissions of the parties, was to determine whether the solidarity contribution should be calculated on the basis of the net transfer compensation stipulated in the transfer agreement or on the basis of a gross transfer compensation, whereby the solidarity contribution should be added on top of the net transfer compensation.

14. In view of the above, the DRC recalled the content of the transfer agreement concluded by the Respondent and Club G, according to which “[the Respondent] shall pay Club G as transfer compensation for the definitive transfer of the Player the net amount of EUR 5,430,000 […])”, payable in two instalments, EUR 2,715,000 “to be paid immediately after player’s medical passing and after signing the employment agreement between the Player and [the Respondent]” and EUR 2,715,000 to be paid until 31 May 2016.

15. Furthermore, the DRC recalled that the aforementioned clubs agreed upon the following: “[the Respondent] is solely and exclusively responsible for paying any solidarity contribution which might arise pursuant to Article 21 of the FIFA Regulations on the Status and Transfer of Players. The parties explicitly agree that a deduction from the Transfer Fee is not permitted […]”.

16. In this respect, the members of the Chamber observed that the transfer agreement clearly stipulated that the transfer compensation of EUR 5,430,000 is a “net” amount, as well as that the Respondent is exclusively responsible for the payment of solidarity contribution, and that “a deduction from the Transfer Fee is not permitted”.

17. According to the members of the Chamber, under these circumstances, the above-mentioned wording of the transfer agreement does not leave room for an interpretation that the solidarity contribution must be deducted from the transfer compensation stipulated in the transfer agreement. In this respect, the Chamber pointed out that this was not disputed by the parties.

18. Having analysed the wording of the transfer agreement at stake, the DRC wished to underline that there is no legal obstacle which prevents the clubs from agreeing that the new club, apart from paying the transfer compensation, additionally bears the solidarity contribution. In this regard, the DRC reiterated that this is indeed what the parties to the transfer agreement clearly agreed upon. In this respect, the Chamber wished to emphasize that, as a general rule, the relevant clause in the transfer agreement must make a clear reference to a net amount as well as to the solidarity contribution.

19. Furthermore, the DRC highlighted that CAS has established, in line with its jurisprudence, that an agreement on a net transfer compensation without deducting solidarity contribution does not contravene the spirit of the Regulations. Equally, CAS has established that a scenario in which the solidarity contribution is to be deducted from a gross transfer compensation does not harm the entitlement of the training club(s) since it would rather enhance the solidarity contribution.

20. Having said that, the Chamber held that the agreement between Club G and the Respondent is also covered by the wording of art. 1 of Annexe 5 of the Regulations which, as pointed out previously, provides that 5% of any transfer compensation shall be deducted from the total amount of the compensation and distributed by the new club. In this respect, the CAS held that the wording of the Regulations does not prohibit that the amount specified in a transfer agreement represents only 95% of the gross transfer value, as long as the solidarity contribution in the end is still deducted from the gross transfer value and distributed in conformity with the wording of art. 1 of Annexe 5 of the Regulations.

21. As a consequence of the aforementioned, the Chamber concluded that the above-mentioned provisions in the transfer agreement between Club G and the Respondent are valid, considering the clear reference to a net amount as well as the explicit reference to the solidarity contribution which may not be deducted from the transfer compensation stipulated in the transfer agreement. Therefore, the DRC held that the gross transfer compensation shall serve as the basis for the calculation of the solidarity contribution. In this respect, the members of the Chamber wished to emphasize that the Claimant had explicitly claimed solidarity contribution on the basis of the gross transfer compensation, albeit with a slightly different calculation.

22. In the present matter, the DRC explained that the agreement on a net transfer compensation without deduction leads to the situation that the agreed transfer compensation of EUR 5,430,000 constitutes only 95% of the total amount of compensation for the transfer of the player, while the gross transfer compensation, i.e. 100% of the total amount of compensation, is EUR 5,715,789.47 (EUR 5,430,000 / 95 x 100 = EUR 5,715,789.47).

23. Having established the above, the DRC went on to determine which should be the relevant amount of the solidarity contribution to be paid by the Respondent to the Claimant.

24. To that end, the DRC referred again to art. 1 of Annexe 5 of the Regulations which provides the figures for the distribution of the solidarity contribution, according to the period of time the player was effectively trained by a specific club and taking into consideration the age of the player at the time he was being trained and educated by the club(s) concerned.

25. In this respect, the members of the Chamber recalled that Club G and the Respondent agreed upon a net transfer compensation amounting to EUR 5,430,000, which would result in a gross transfer compensation of EUR 5,715,789.47. Furthermore, the members of the Chamber pointed out that the transfer compensation was payable in two equal instalments of EUR 2,715,000 net, resulting in two gross instalments of EUR 2,857,894.73. Furthermore, the DRC emphasized that only the solidarity contribution based on the first instalment of the transfer compensation was outstanding at the moment that the decision was taken.

26. In continuation, the DRC recalled that, according to the player passport issued by the Football Federation of Country B, the player, born on 28 October 1984, was registered with the Claimant as from 19 October 1999 until 1 January 2004, corresponding to 2 months and 4 full years regarding the seasons of the player’s 15th to 19th birthdays.

27. In view of the foregoing, the DRC established that the Claimant was entitled to 40,83% of 5% of EUR 2,857,894.73, i.e. EUR 58,343.92.

28. In view of all the above, taking into account the claim of the Claimant, the DRC decided that the Respondent must pay to the Claimant the amount of EUR 58,343.92 plus default interest at a rate of 5% p.a. on the said amount as of 15 September 2015 until the date of effective payment.

29. Lastly, the DRC referred to art. 18 par. 1 of the Procedural Rules, according to which, in proceedings before the DRC relating to disputes regarding training compensation and the solidarity mechanism, costs in the maximum amount of CHF 25,000 are levied. It is further stipulated that the costs are to be borne in consideration of the parties’ degree of success in the proceedings and, in accordance with Annexe A of the Procedural Rules, the costs of the proceedings are to be levied on the basis of the amount in dispute.

30. In respect of the above, the DRC held that the amount to be taken into consideration in the present proceedings is EUR 131,134.50 related to the claim of the Claimant. Consequently, the DRC concluded that the maximum amount of costs of the proceedings corresponds to CHF 15,000 (cf. table in Annexe A of the Procedural Rules).

31. As a result, considering the particularities of the present matter as well as the parties’ degree of success, the DRC determined the final costs of the current proceedings to the amount of CHF 12,000, of which the amount of CHF 6,000 shall be borne by the Claimant and the amount of CHF 6,000 shall be borne by the Respondent.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Club A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 58,343.92 plus 5% interest p.a. on said amount as from 15 September 2015 until the date of effective payment.

3. In the event that the aforementioned sum plus interest is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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

5. 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 Dispute Resolution Chamber of every payment received.

6. The final costs of the proceedings in the amount of CHF 12,000 are to be paid within 30 days of notification of the present decision, as follows:

6.1. The amount of CHF 6,000 has to be paid by the Respondent.

6.2. The amount of CHF 6,000 has to be paid by the Claimant. 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 additional amount of CHF 1,000 has to be paid by the Claimant to FIFA.

6.3. The above-mentioned amounts have to be paid 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: CH 27 0023 0230 3666 7701U

SWIFT: UBSWCHZH80A

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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

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 Dispute Resolution Chamber:

Marco Villiger

Deputy Secretary General

Enclosed: CAS directives