DRC Overdue Payables
Texto da decisão
REF. FPSD-9720
Decision of the
Dispute Resolution Chamber
passed on 22 June 2023
regarding an employment-related dispute concerning
the player Jordy Caicedo Medina
COMPOSITION:
Omar ONGARO (Italy), Deputy Chairperson
Andre DOS SANTOS MEGALE (Brazil), member
Stefano SARTORI (Italy), member
CLAIMANT:
Jordy Josue Caicedo Medina, Ecuador
Represented by Ariel Reck and Julian Mafud
RESPONDENT:
Esporte Clube Vitória, Brazil
pg. 2
REF. FPSD-9720
I. Facts of the case
1.
The parties to the dispute are the player Jordy Josue Caicedo Medina from Ecuador
(hereinafter: Claimant or player) and the club Esporte Clube Vitoria from Brazil (hereinafter:
club, Vitoria or Respondent).
2.
Following a dispute between the parties connected to a previous employment relationship
existing between them, on 19 July 2021 the FIFA Dispute Resolution Chamber (DRC) issued
a decision (hereinafter: the Decision) whereby inter alia the Respondent was ordered to pay
to the Claimant the following:
-
USD 102,495.15 as outstanding remuneration plus 5% interest p.a. as from 15
January 2021 until the date of effective payment; and
-
USD 630,000 as compensation for breach of contract without just cause plus 5%
interest p.a. as from 3 March 2021 until the date of effective payment.
3.
The Decision was appealed to the Court of Arbitration for Sport (CAS) by the Respondent.
4.
On 28 August 2021, the parties entered into a settlement agreement (hereinafter: the
settlement agreement). Contextually, the appeal filed with CAS was withdrawn.
5.
According to the settlement agreement, the Respondent undertook to pay the Claimant
USD 300,000 in 20 equal instalments of USD 15,000 each, the first one due on 30 October
2021 and the remainder every 30th day of the immediate subsequent second month.
6.
The amounts agreed under the settlement agreement are net and were payable to a bank
account to be indicated by the player within the next 10 days.
7.
Clause 3 of the settlement agreement reads as follows:
“THIRD. Vitoria and the Player hereby agree that the total or partial default in timely
payment of 2 (two) instalments, and the subsequent failure to pay the full overdue
amount within a 10 (ten) day notice provided by the Player to Vitoria via email, will
result in the immediate cancelation of the deadlines of the remaining instalments, and
consequently the full remaining debt owed by Vitoria will immediately become due
and enforceable by the Player. In addition to the immediate payment in full of the
remaining instalments, Vitoria will have the obligation to pay a penalty of the total net
amount of USD 300,000.00 (three hundred thousand United States Dollars 00/100) as
a consequence of its failure to pay the overdue amounts under the terms and
conditions hereby agreed. A 10% interest rate per annum will be applied on the
accumulated overdue debt and to the pending instalments at the moment of the
breach of this settlement agreement, but no interest rate will be applied over the
pg. 3
REF. FPSD-9720
penalty amount. This penalty constitutes an essential condition for the Player to enter
into the present settlement agreement.
The Parties hereby accept and recognize that the conditions established in this clause,
including the cancelation of the deadlines of the remaining instalments and the
penalty due in case of default, are fair and equitable, as the Player, by agreeing to
enter into this settlement agreement with Vitoria, is renouncing to approximately 60%
of the amount granted in his favor in the FIFA Decision and to the accrued interest,
and is granting Vitoria a 20-instalment long-term payment period regarding the
compensation herein agreed.”
8.
Clause 4 of the settlement agreement reads as follows:
“FOURTH. The Parties expressly recognize that the amounts agreed as compensation
in this settlement agreement substitute and cancel the amounts established as
compensation for the Player in the FIFA Decision. Therefore, the amounts agreed to in
this agreement are not subject to mitigation for any reason.”
9.
On 6 February 2023, the player put the club in default of the instalments 5 to 8 of the
settlement agreement, amounting to USD 60,000. He contextually informed the club of the
following bank account, and requested payment to be made thereto (freely translated to
English):
“Intermediary or correspondent bank: Deutsche Bank AG
Intermediary bank SWIFT: DEUTGB2LXXX
Place: London, England
Beneficiary bank: Banca Afirme S.A.
Beneficiary bank SWIFT: AFIRMXMTXXX
Final beneficiary (Afirme client): JORDY JOSUE CAIDEDO
062580115510030450”
MEDINA,
Key
10. On 16 February 2023, the parties signed an addendum to the settlement agreement
(hereinafter: the Addendum), by means of which they:
-
confirmed that the Respondent had failed to pay the instalments 5 to 8 of the
settlement agreement;
-
agreed to reach a new agreement and increment the debt by USD 24,000, together
with USD 12,000 as legal costs incurred by the player; and
-
amended the settlement agreement as follows:
pg. 4
REF. FPSD-9720
o
Quota no. 9 of the settlement agreement due by 28 February 2023 would
amount to USD 45,000, comprising of the original amount of USD 15,000 plus
the missed payments of quotas 5 and 6;
o
Quotas no. 10 and 11 of the settlement agreement due by 28 April 2023 and
28 June 2023 respectively would amount to USD 30,000 each, comprising of
the original amount of USD 15,000 plus the missed payments of quotas 7 and
8;
o
Quotas no. 12, 13, 14, 15, 16 and 17 of the settlement agreement respectively
would amount to USD 19,000 each, comprising of the original amount of USD
15,000 plus additional USD 4,000;
o
The Respondent additionally undertook to pay USD 12,000 in 2 quotas of USD
6,000 each respectively on 28 March 2023 and 28 April 2023;
o
The other payments under the settlement agreement would remain
unchanged; and
o
All other clauses of the settlement agreement would remain unchanged as
long as not modified by the Addendum.
11. Clause 3 of the Addendum reads as follows (freely translated to English):
“The Parties agree that in the event of a breach of any of the terms of this contract
(including the sum fixed for legal fees) and any of the terms of the Settlement
Agreement, the player may consider the agreement as fallen into default and demand
payment of the full sum fixed in the decision ’Ref. Number FPSD 1926’ which amounts
to the net sum of USD 732,495.15 (US dollars seventy two thousand and thirty two
thousand and four hundred and ninety five and fifteen cents) plus interest at 5% per
annum, as set out in the Settlement Agreement”.
12. On 2 March 2023, the Claimant put the Respondent in default and requested payment of
USD 45,000 under the Addendum and the settlement agreement within 15 days.
II. Proceedings before FIFA
13. On 22 March 2023, the Claimant filed the claim at hand before FIFA. A brief summary of
the position of the parties is detailed in continuation.
a. Claim of the Claimant
pg. 5
REF. FPSD-9720
14. The Claimant lodged a claim against the Respondent in front of FIFA and requested
outstanding remuneration of (a) USD 732,495 net, with reference to the Decision; and (b)
USD 12,000 per the Addendum, together with (c) interest of 5% over said amounts as from
17 March 2023.
15. In his claim, the player argued that the club failed to comply with the settlement agreement
and the Addendum, triggering clause 3 of the latter.
b. Position of the Respondent
16. On 4 April 2023, the FIFA general secretariat invited the Respondent to file its position on
the claim of the Claimant by 24 April 2023.
17. On 24 April 2023, the Respondent filed its position on the substance of the claim, which
included a petition “to uphold the counterclaim of the Respondent to reduce the penalty clause
(…)” as well as deadline extension “to translate documents”.
On 25 April 2023, the FIFA general secretariat granted a deadline extension to the
Respondent until 2 May 2023. Contextually, it also invited the Respondent to (a) confirm
whether it had lodged a counterclaim; and (b) in the affirmative, to complete said
counterclaim in line with art. 18 of the Procedural Rules Governing the Football Tribunal,
as follows:
-
A detailed breakdown of the amount in dispute, indicating individually: (i) each of its
components, (ii) their currency, (iii) their contractual basis and (iv) which period of
time (day/month/year) they correspond to;
-
The details of a bank account registered in the name of the counterclaimant on a
signed copy of the Bank Account Registration Form (available on fifa.com/legal); and
-
A clarification on the request for relief.
18. The Respondent was further warned that failing to complete the counterclaim would result
it being withdrawn.
19. On 2 May 2023, the Respondent requested a new deadline extension to “for a proper
analysis of your submission and an accurate response to its terms, as well as the completion of
the translation of the documents”.
20. On 3 May 2023, the FIFA general secretariat granted a second and exceptional deadline
extension to the Respondent until 5 May 2023. On such occasion, the Respondent was
advised that no further extensions would be granted.
pg. 6
REF. FPSD-9720
21. On 5 May 2023, the Respondent confirmed its counterclaim against the Claimant, however
without filing the mandatory documentation as requested by the FIFA general secretariat.
22. On 8 May 2023, the FIFA general secretariat wrote to the parties and confirmed that since
the counterclaim was not completed, it was deemed withdrawn in line with art. 21 par. 2
of the Procedural Rules Governing the Football Tribunal. In the same occasion, the parties
were informed of the closure of the submission phase of the proceeding.
23. On 10 May 2023, the Claimant filed additional unsolicited correspondence.
24. The position of the Respondent can be summarized as follows:
-
The Respondent is facing a serious economic crisis and was relegated to the 3rd
division of national championship;
-
The agreement between the parties should be interpreted in accordance with
Brazilian Law;
-
In accordance with the principle of objective good faith, the Addendum cannot affect
the settlement agreement in that the default should be considered if exceeding 60
days and not with immediate effect. In this respect, the Respondent highlighted the
final wording of clause 3 of the Addendum, which reads “as set out in the Settlement
Agreement”; and
-
The Respondent paid, albeit late, the quotas due on 28 February 2023 and 31 March
2023. In support of this, the Respondent filed two swift transfer receipts, as follows,
both paid to JP Morgan Chase Bank, and without a reference for the receiver: (a)
dated 24 March 2023 for USD 31,048.89; and (b) dated 18 April 2023 for USD 20,000.
c. Additional comments of the Claimant
25. The FIFA general secretariat invited the player to comment on the following:
o Which bank account was informed to the Respondent, if any, in line with clause 3 of
the settlement agreement signed by and between the parties on 28 August 2021;
o To which bank account the amounts detailed for instalments 1, 2, 3 and 4 as agreed
under the same settlement agreement were paid to;
o Whether the Claimant has received the payments alleged by the Respondent with
reference to file “20230424_22244352_5. ECV - Jordy pagos 2023_flh-005.pdf” available
in the FIFA Legal Portal.
26. In turn, the player provided the following explanations, supported by evidence:
pg. 7
REF. FPSD-9720
-
The player never received the amounts alleged by the club. In particular, he
explained that the payments under the settlement agreement had been made to his
account in Bulgaria, and provided his bank statements in this regard;
-
The payments alleged by the club were not made to the bank account indicated in
the Back Account Registration Form, which is the same one indicated on the player’s
notice of 6 February 2023; and
-
The player’s bank account is with Banco Afirme S/A, while the payments argued by
the Respondent were made to JP Morgan Chase NY.
pg. 8
REF. FPSD-9720
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
27. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or
DRC) analysed whether it was competent to deal with the case at hand. In this respect, it
took note that the present matter was presented to FIFA on 4 April 2023 and submitted for
decision on 22 June 2023. Taking into account the wording of art. 34 of the March 2023
edition of the Procedural Rules Governing the Football Tribunal (hereinafter: the Procedural
Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at
hand.
28. Subsequently, the members of the Chamber referred to art. 2 par. 1 of the Procedural Rules
and observed that in accordance with art. 23 par. 1 in combination with art. 22 par. 1 lit. b)
of the Regulations on the Status and Transfer of Players (May 2023 edition), 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 from
Ecuador and a club from Brazil.
29. Subsequently, 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 2 of the Regulations on the Status and Transfer of Players (May 2023 edition), and
considering that the present claim was lodged on 22 March 2023, the October 2022 edition
of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to
the substance.
30. For sake of clarity, the Chamber remarked that the Respondent also referred in its
response that Brazilian law is to be applicable as to the substance. In this respect, the
Chamber wished to recall that when deciding a dispute before the DRC, FIFA’s regulations
prevail over any national law chosen by the parties. In this regard, the Chamber
emphasised that the main objective of the FIFA regulations is to create a standard set of
rules to which all the actors within the football community are subject to and can rely on.
This objective would not be achievable if the DRC would have to apply the national law of
a specific party on every dispute brought to it. Therefore, the Chamber deemed that it is
not appropriate to apply the principles of a particular national law to the termination of the
contract but rather the Regulations, general principles of law and, where existing, the
Chamber’s well-established jurisprudence.
b. Burden of proof
31. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 13
par. 5 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 Chamber stressed
pg. 9
REF. FPSD-9720
the wording of art. 13 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the parties, including without limitation the evidence generated by or
within the Transfer Matching System (TMS).
c. Merits of the dispute
32. Its competence and the applicable regulations having been established, the Chamber
entered into the merits of the dispute. In this respect, the Chamber started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the Chamber 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.
i. Main legal discussion and considerations
33. The foregoing having been established, the Chamber moved to the substance of the
matter, and took note that it pertains to a claim of a player against a club for outstanding
remuneration.
34. According to the player, the club failed to comply with the settlement agreement and
Addendum, triggering clause 3 of the latter. The Respondent for its part states that the
Addendum cannot affect the settlement agreement in respect of the acceleration clause
since the default should be of at least 60 days.
35. Against this background, the DRC determined that in the case at hand the Respondent bore
the burden of proving that it indeed complied with the financial terms of the contract(s)
concluded between the parties. Nonetheless, the Chamber considered that the evidence
provided by the Respondent does not prove to the comfortable satisfaction degree that it
indeed paid of the amounts claimed as outstanding by the Claimant.
36. In particular, the Chamber found that the evidence filed by the club is insufficient to
demonstrate the payment either to the bank account of the player in Bulgaria or the one
listed in the notice of 6 February 2023, as well as it could not corroborate that such bank
account belongs to the player. Furthermore, the Chamber recalled its longstanding
jurisprudence according to which financial difficulties are not a valid justification for nonpayment of contractually amounts agreed amounts. The DRC even more comforted with
this conclusion by considering that the debt sub judice had already been (i) addressed by
the Chamber in a previous dispute; (ii) settled during CAS proceedings and via the
settlement agreement; and (iii) renegotiated via the Addendum.
37. As a consequence, and in accordance with the general legal principle of pacta sunt servanda,
the Chamber decided that the club failed to honour its obligations under the Addendum,
triggering thus its clause 3 and in principle entitling the Claimant to USD 732,495.15 as
stated therein.
pg. 10
REF. FPSD-9720
38. In this respect, the Chamber wished to outline that the Addendum represents a novatio of
the settlement agreement and thus the legal fees, which had been requested by the
Claimant, cannot be awarded, in that the Addendum established new amounts due by the
Respondent to the Claimant.
39. By the same token, the Chamber wished to remark that the Claimant does not dispute that
the amount of USD 60,000 has been paid by the Respondent. As a result, it would amount
to unjust enrichment, in the Chamber’s view, that this amount was awarded again to the
player. Consequently, from the amount originally agreed in the settlement agreement, as
amended by the Addendum, the Chamber decided to deduct USD 60,000, leaving a residual
due amount of USD 672,495.15 to be paid by the Respondent to the Claimant.
40. In conclusion, the Chamber decided that the Respondent should be liable to pay to the
Claimant the final amount of USD 672,495.15. In addition, taking into consideration the
player’s request as well as its constant practice in this regard, the DRC decided to award
the Claimant interest at the rate of 5% p.a. on the outstanding amounts as from 17 March
2023 until the date of effective payment.
ii. Article 12bis of the Regulations
41. In continuation, the Chamber 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.
42. To this end, the Chamber confirmed that the player put the club in default of payment of
USD 45,000, which had fallen due more than 30 days before, and granted the club a 10-day
deadline to cure such breach of contract. Accordingly, the Chamber confirmed that the club
had delayed a due payment without a prima facie contractual basis. It followed that the
criteria enshrined in art. 12bis of the Regulations was met in the case at hand.
43. The Chamber further established that by virtue of art. 12bis par. 4 of the Regulations it is
competent to impose sanctions on the club. Because of the above and bearing in mind that
this is the first offense by the club within the last two years, the Chamber decided to impose
a warning on the club in accordance with art. 12bis par. 4 lit. a) f the Regulations.
44. In this connection, the Chamber highlighted that a repeated offence will be considered as
an aggravating circumstance and lead to a more severe penalty in accordance with art.
12bis par. 6 of the Regulations.
iii. Compliance with monetary decisions
pg. 11
REF. FPSD-9720
45. Finally, taking into account the applicable Regulations, the Chamber referred to art. 24 par.
1 and 2 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.
46. In this regard, the DRC 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. The overall
maximum duration of the registration ban shall be of up to three entire and consecutive
registration periods.
47. Therefore, bearing in mind the above, the DRC decided that the Respondent must pay the
full amount due (including all applicable interest) to the Claimant within 45 days of
notification of the decision, failing which, at the request of the Claimant, a ban from
registering any new players, either nationally or internationally, for the maximum duration
of three entire and consecutive registration periods shall become immediately effective on
the Respondent in accordance with art. 24 par. 2, 4, and 7 of the Regulations.
48. The Respondent shall make full payment (including all applicable interest) to the bank
account provided by the Claimant in the Bank Account Registration Form, which is attached
to the present decision.
49. The DRC recalled that the above-mentioned ban will be lifted immediately and prior to its
complete serving upon payment of the due amounts, in accordance with art. 24 par. 8 of
the Regulations.
d. Costs
50. The Chamber referred to art. 25 par. 1 of the Procedural Rules, according to which
“Procedures are free of charge where at least one of the parties is a player, coach, football agent,
or match agent”. Accordingly, the Chamber decided that no procedural costs were to be
imposed on the parties.
51. Likewise, and for the sake of completeness, the Chamber recalled the contents of art. 25
par. 8 of the Procedural Rules and decided that no procedural compensation shall be
awarded in these proceedings.
52. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the parties.
pg. 12
REF. FPSD-9720
IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Jordy Josue Caicedo Medina, is partially accepted.
2.
The Respondent, Esporte Clube Vitória, must pay to the Claimant USD 672,495.15 as
outstanding remuneration plus 5% interest p.a. as from 18 March 2023 until the date of
effective payment.
3.
Any further claims of the Claimant are rejected.
4.
A warning is imposed on the Respondent.
5.
Full payment (including all applicable interest) shall be made to the bank account indicated
in the enclosed Bank Account Registration Form.
6.
Pursuant to art. 24 of the Regulations on the Status and Transfer of Players, if full payment
(including all applicable interest) is not made within 45 days of notification of this decision,
the following consequences shall apply:
1. The Respondent shall be banned from registering any new players, either nationally or
internationally, up until the due amount is paid. The maximum duration of the ban shall
be of up to three entire and consecutive registration periods.
2. The present matter shall be submitted, upon request, to the FIFA Disciplinary Committee
in the event that full payment (including all applicable interest) is still not made by the
end of the three entire and consecutive registration periods.
7.
The consequences shall only be enforced at the request of the Claimant in accordance
with art. 24 par. 7 and 8 and art. 25 of the Regulations on the Status and Transfer of Players.
8.
This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
pg. 13
REF. FPSD-9720
NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 57 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 17 of the Procedural Rules Governing the Football
Tribunal).
CONTACT INFORMATION
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FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | [email protected] | T: +41 (0)43 222 7777
pg. 14