Decision of the Single Judge. of the Players Status Committee

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1 Decision of the Single Judge of the Players Status Committee passed in Zurich, Switzerland, on 28 August 2013, by Geoff Thompson (England) Single Judge of the Players Status Committee, on the claim presented by the club, Club Z, from country B as Claimant against the club, Club M, from country T as Respondent regarding a contractual dispute between the parties and relating to the player S

2 I. Facts of the case 1. On 23 June 2011, Club Z, from country B (hereinafter: the Claimant) and Club M, from country T (hereinafter: the Respondent), concluded a transfer agreement (hereinafter: the agreement) for the transfer of the player S (hereinafter: the player), from the Claimant to the Respondent. 2. The agreement provided a transfer compensation of EUR 425,000, payable as follows: 01 July 03 July ,000 EUR 25 August ,000 EUR 25 September ,000 EUR 25 October ,000 EUR 25 November ,000 EUR Payments shall be made by [the Respondent] to [the Claimant] on the maturity dates as agreed in accordance with the above payment statement. [The Respondent] agrees to pay 20% default interest starting from the day following the 15 th day of maturity date for each instalment unpaid on the maturity date. 3. On 6 February 2012, the Claimant lodged a claim at FIFA, requesting from the Respondent payment of the last four instalments provided for in the agreement and amounting to a total amount of EUR 375,000, plus 20% default interest on the amount of 75,000 EUR from 9 th September 2011, on the amount of 100,000 EUR from 10 th October 2011, on the amount of 100,000 EUR from 9 th November 2011, on the amount of 100,000 EUR from 10 th December 2011 until day of payment. Furthermore, the Claimant requested reimbursement of the costs of the proceedings, including 2,500 EUR on basis of filing of the claim. 4. In support of its claim, the Claimant stated that it only received the first instalment from the Respondent, the latter having failed to answer to the Claimant s correspondence by which it attempted to collect the outstanding payments from the Respondent. 5. In its reply, the Respondent indicated that it was having financial troubles due to the non-payment of broadcasting shares from the country T Football Federation in relation to a match-fixing scandal in country T. In this context, the Respondent allegedly asked for renegotiations of its debts towards the debtors concerned. 6. Moreover, the Respondent held that the default interest rate of 20% was excessive, representing an effort to unfair and unjust enrichment. In this regard, the Respondent referred to a decision passed by the Single Judge of the Players Status Committee in a different dispute of the Respondent in front of FIFA. 2/7

3 II. Considerations of the Single Judge of the Players Status Committee 1. First of all, the Single Judge of the Players Status Committee (hereinafter: the Single Judge) analysed which Procedural Rules are applicable to the matter at hand. In this respect, he referred to art. 21 par. 1 and 2 of the Rules Governing the Procedures of the Players Status Committee and the Dispute Resolution Chamber (edition 2008). The present matter was submitted to FIFA on 6 February 2012, thus after 1 July Therefore, the Single Judge concluded that the 2008 edition of the Procedural Rules (hereinafter: the Procedural Rules) is applicable to the matter at hand. 2. Subsequently, the Single Judge analysed which edition of the Regulations on the Status and Transfer of Players was 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 2010 and 2012 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 February In view of the foregoing, the Single Judge concluded that the 2010 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. 3. Furthermore, the Single Judge confirmed that, on the basis of art. 3 par. 1 and par. 2 of the Procedural Rules in connection with art. 23 par. 1 and par. 3 as well as art. 22 lit. f) of the Regulations, he was competent to deal with the present matter since it concerned a dispute between two clubs affiliated to two different associations. 4. The competence of the Single Judge and the applicable regulations having been established, and entering into the substance of the matter, the Single Judge started by acknowledging the above-mentioned facts as well as the arguments and the documentation submitted by the parties. 5. In this respect and first of all, the Single Judge established that it was undisputed between the parties that they concluded an agreement on 23 June 2011 regarding the transfer of the player from the Claimant to the Respondent. Furthermore, the Single Judge noted that the agreement stipulated a transfer compensation of EUR 425,000, thereof the amount of EUR 50,000 payable between 1 July 2011 and 3 July 2011, the amount of EUR 75,000 until 25 August 2011 and three instalments of EUR 100,000 each, payable until 25 September 2011, 25 October 2011 and 25 November 2011, respectively. 6. Moreover, the Single Judge took note that the transfer agreement contained a clause, stipulating a default interest of 20%, starting from the day following the 15 th day of maturity date for each instalment unpaid on the maturity date. 3/7

4 7. The Single Judge also acknowledged that the Respondent had only paid the first instalment of EUR 50,000 to the Claimant, as stated by the Claimant and uncontested by the Respondent. 8. In continuation, the Single Judge noted that the Claimant lodged a claim at FIFA, requesting from the Respondent payment of the last four instalments provided for in the agreement amounting to EUR 375,000, plus 20% default interest on the amount of 75,000 EUR from 9 September 2011, on the amount of 100,000 EUR from 10 October 2011, on the amount of 100,000 EUR from 9 November 2011, on the amount of 100,000 EUR from 10 December 2011 until the day of effective payment. Furthermore, the Single Judge took note that the Claimant requested reimbursement of its procedural costs in the amount of EUR 2,500 EUR. 9. At this stage, the Single Judge turned his attention to the arguments of the Respondent, which referred to alleged financial troubles, pointing to an outstanding payment of broadcasting shares that the Respondent was allegedly expecting from the Türkiye Futbol Federasyonu. In addition, the Single Judge acknowledged that the Respondent deemed the default interest rate of 20% to be excessive, representing an effort to unfair and unjust enrichment. 10. Bearing in mind the aforementioned, the Single Judge held that it remained beyond doubt that the Claimant and the Respondent had agreed upon the transfer of the player and had concluded a valid transfer agreement by means of which the player was transferred from the Claimant to the Respondent for a transfer compensation of EUR 425,000. Consequently, the Single Judge held that, in accordance with the basic legal principle of pacta sunt servanda, which in essence means that agreements must be respected by the parties in good faith, the Respondent has to fulfill its contractual obligations towards the Claimant. Therefore, taking into account the claim of the Claimant and recalling that the Respondent has paid the amount of EUR 50,000, representing the first installment of transfer compensation due, the Single Judge decided that the Respondent has to pay to the Claimant the outstanding amount of EUR 375,000 corresponding to the last four installments as agreed upon in the pertinent transfer agreement (cf. point I.2.). 11. Reverting to the Respondent, the Single Judge took the view that the Respondent s internal problems with the country T Football Federation and alleged outstanding payments with regard to broadcasting shares, could not allow the Respondent to deviate in any way from his contractual obligations regarding the payment of the transfer compensation in connection with the transfer of the player from the Claimant to the Respondent. 12. Having established the above, the Single Judge went on to examine a further aspect of the present claim, i.e. the Claimant s request to be awarded default interest on the 4/7

5 amount of 75,000 EUR from 9 September 2011, on the amount of 100,000 EUR from 10 October 2011, on the amount of 100,000 EUR from 9 November 2011, on the amount of 100,000 EUR from 10 December 2011 until the day of effective payment. 13. The Single Judge acknowledged the arguments of both parties in respect of the interest rate of 20% and, after analysing the relevant provision contained in the transfer agreement, concluded that, in accordance with the longstanding and well-established jurisprudence of the Players Status Committee, an interest rate of 20% for late payment is to be considered as manifestly disproportionate and exorbitant, and as such, cannot be enforced. In view of the foregoing, the Single Judge held that the default interest rate contained in the transfer agreement concluded between the parties should be disregarded and that, as an alternative and in accordance with the longstanding practice of the Players Status Committee, the Respondent has to pay 5% default interest on the respective outstanding installments as of their respective due dates. 14. Finally, the Single Judge looked into the Claimant s claim to receive procedural costs in the amount of EUR 2,500. In this regard, the Single Judge referred to art. 18 par. 4 of the Procedural Rules, according to which no procedural compensation shall be awarded in proceedings of the Players Status Committee. As a consequence of the above, the Single Judge decided that the Claimant s claim in this regard was to be rejected. 15. In conclusion, the Single Judge decided to partially accept the Claimant s claim, and established that the Respondent had to pay to the Claimant the total amount of EUR 375,000 plus 5% interest on the amount of EUR 75,000 as of 9 September 2011,on the amount of EUR 100,000 as of 10 October 2011, on the amount of EUR 100,000 as of 9 November 2011 and on the amount of EUR 100,000 as of 10 December 2011, each time until the date of effective payment. The Single Judge added that any further claims of the Claimant are rejected. 16. 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 proceedings before the Players Status Committee including its Single Judge, costs in the maximum amount of currency of country H are levied. The relevant provision further states that 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). 17. In this respect, the Single Judge reiterated that the claims of the Claimant are partially accepted. Therefore, the Single Judge concluded that the Respondent has to bear the costs of the current proceedings in front of FIFA. 18. 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. 5/7

6 19. On that basis, the Single Judge held that the amount to be taken into consideration in the present proceedings is EUR 377,500 related to the claim of the Claimant. Consequently, the Single Judge concluded that the maximum amount of costs of the proceedings corresponds to currency of country H 25,000 (cf. table in Annexe A.) 20. Considering that the case at hand did not pose particular factual difficulty and that it was adjudicated upon by the Single Judge and not the Players Status Committee in corpore, the Single Judge determined the costs of the current proceedings to the amount of currency of country H 12,000. Consequently, the Single Judge decided that the amount of currency of country H 12,000 has to be paid by the Respondent, thereof, bearing in mind that the Claimant had paid the mount of currency of country H 5,000 as advance of costs at the beginning of the present proceedings, the amount of currency of country H 5,000 directly to the Claimant and the amount of currency of country H 7,000 to FIFA. ***** III. Decision of the Single Judge of the Players Status Committee 1. The claim of the Claimant, Club Z, is partially accepted. 2. The Respondent, Club M, has to pay to the Claimant, Club Z, within 30 days as from the date of notification of this decision, the amount of EUR 375,000 plus interest at a rate of 5% p.a. until the date of effective payment as follows: - on the amount of EUR 75,000 as of 9 September 2011, - on the amount of EUR 100,000 as of 10 October 2011, - on the amount of EUR 100,000 as of 9 November 2011, - on the amount of EUR 100,000 as of 10 December If the aforementioned sum plus interest is not paid within the aforementioned deadline, the present matter shall be submitted, upon request, to FIFA s Disciplinary Committee, for consideration and a formal decision. 4. Any further claims lodged by the Claimant, Club Z, are rejected. 5. The final amount of costs of the proceedings in the amount of currency of country H 12,000 is to be paid by the Respondent, Club M, within 30 days as from the notification of the present decision as follows: 5.1 The amount of currency of country H 7,000 has to be paid to FIFA to the following bank account with reference to case nr. : 5.2 The amount of currency of country H 5,000 has to be paid directly to the Claimant, Club Z. 6/7

7 6. The Claimant, Club Z, is directed to inform the Respondent, Club M, immediately and directly of the account number to which the remittances are to be made and to notify the Single Judge of the Players Status Committee of every payment received. ***** Note relating to the motivated decision (legal remedy): According to art. 67 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: For the Single Judge of the Players Status Committee Court of Arbitration for Sport Avenue de Beaumont Lausanne Switzerland Tel: Fax: info@tas-cas.org Jérôme Valcke Secretary General Encl. CAS directives 7/7

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