DRC Overdue Payables
Texto da decisão
REF FPSD-2790
Decision of the
Dispute Resolution Chamber
passed on 12 August 2021
regarding an employment-related dispute concerning the player Ola Williams Kamara
COMPOSITION:
Geoff Thompson (England), Chairman
Tomislav Kasalo (Croatia), member
MD Abu Nayeem Shohag (Bangladesh), member
CLAIMANT:
Ola Williams Kamara, Norway
Represented by Mr Luis Eduardo Torres Septién Warren and Mr José
María Zayas Prado
RESPONDENT:
Shenzhen FC, China PR
Represented by Mr Giandonato Marino and Mr Tomas Pereda
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I.
FACTS OF THE CASE
1.
On 26 January 2019, the Norwegian player, Ola Williams Kamara (hereinafter: the Claimant
or Player) and the Chinese club, Shenzhen FC (hereinafter: the Respondent or Club)
concluded an employment contract valid as of 26 February 2019 until 31 December 2020
(hereinafter: the Contract).
2.
On 2 August 2019, the parties decided to mutually terminating the contract (hereinafter:
the Settlement Agreement).
3.
According to the settlement agreement, the Respondent undertook to pay to the Claimant
a total amount of EUR 5,100,000 in four instalments, payable as follows:
-
EUR 1,800,000 net, on or before 30 August 2019;
EUR 1,800,000 net, on or before 30 September 2019;
EUR 1,000,000 net, on or before 30 April 2020;
EUR 500,000 net, on or before 30 April 2021.
4.
Clause 2 of the settlement agreement established that “This agreement is conditioned to
the Player entering into an employment contract with the team in the membership of Major
League Soccer, L.L.C. within 7 August 2019 (…)”.
5.
Pursuant to clause 4 of the settlement agreement, “The Parties acknowledge and confirm
that the payment of the Settlement Amount shall apply a grace period of ten (10) days,
which shall start counting from the following day after the Club receives notice of default
from Player. In case of failure to pay within such deadline, the Club shall pay an additional
penalty of 10% on a monthly basis for such part of payment.”
6.
On 7 August 2019, the player concluded an employment agreement with DC United.
7.
On 2 May 2021, the Claimant put the Respondent in default for the payment of the fourth
instalment amounting to EUR 500,000 net, granting a 10 days’ deadline to the Respondent,
however to no avail.
8.
On 1 June 2021, “the Claimant provided the Respondent with yet another 10-day payment
request as per Article 12 Bis of the RSTP, whereby, Mr. Kamara once again formally
requested Shenzhen FC to comply with its essential payment obligation regarding the
Fourth Instalment which should have been paid on or before April 30th, 2021 (…)”
II.
PROCEEDINGS BEFORE FIFA
9.
On 11 June 2021, the Claimant filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
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REF FPSD-2790
a.
10.
The claim of the Claimant
On 11 June 2021, the Claimant lodged a claim against the Respondent, claiming, inter alia,
the following:
“The Respondent has once again, that is for the third time, breached the Settlement
Agreement, specifically its Provision 3, by failing to comply with the timely and
complete payment of the Fourth Instalment in the amount of FIVE HUNDRED
THOUSAND EUROS (EUR 500,000), net, since April 30th, 2021;
The Claimant formally requested the payment of said Third Instalment by means of
the First Formal Payment Request and yet again by means of the 12 Bis Formal
Payment Request granting Shenzhen FC a deadline of ten (10) days to immediately
proceed with the overdue instalment;
Consequently, and bearing in mind that the amount claimed has been overdue for
more than thirty (30) days, Shenzhen FC has overdue payables towards Mr. Kamara
in the sense of Article 12bis of the FIFA Regulations and, therefore, the
corresponding sanctions must be imposed;
In accordance with Provision 4 of the Settlement Agreement, additional penalties
equivalent to SIXTY-EIGHT THOUSAND THREE HUNDRED EUROS AND
THIRTYTHREE CENTS (EUR 68,333.33), net, shall be added to the Fourth Instalment
amounting to EUR 500,000 (FIVE HUNDRED THOUSAND EUROS), net, in
accordance with the Settlement Agreement. Thus, as of the date hereof, Shenzhen
FC owes and, consequently, is bound to pay Mr. Kamara the total amount of FIVE
HUNDRED AND SIXTY-EIGHT THOUSAND THREE HUNDRED AND THIRTY-THREE
EUROS AND THIRTY-THREE CENTS (EUR568,333.33), net.”
11.
In his claim, the Claimant explained that it received complete payment of the first three
instalments amounting to a total of EUR 4,600,000 net and that the Respondent failed to
comply with the payment of the fourth and last instalment amounting to EUR 500,000 net,
which should have been carried out on or before 30 April 2021 as per clause 3 of the
settlement agreement.
12.
What is more, the Claimant explained that since that fourth instalment amounting to EUR
500,000 net has been due since 30 April 2021, “Shenzhen FC would, in principle, be
obliged to pay the Player ten percent (10%) monthly over said principal amount
(…).Therefore, since the month of May and eleven (11) days of June have elapsed, then,
Shenzhen FC owes Mr. Kamara the amount of (…)” EUR 68,333.33 net as additional
penalties.
b.
Position of the Respondent
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13.
In its reply, the Respondent first “acknowledges that it has failed to comply with the
payment of the fourth instalment of the Settlement Agreement. However, the Respondent
would like to explain in this regard that the penalty requested by the Claimant in its Claim
shall not be awarded by the FIFA DRC, as it is excessive and grossly disproportionate (…).”
14.
What is more, the Respondent stated that: “a penalty of 10% monthly adds up to a total
amount of 120% p.a. Without any further considerations on such amount, we shall recall
the long-standing jurisprudence of the FIFA judicial bodies, whereas it has been confirmed
in several occasions that penalty clauses exceeding the amount of 18% p.a. shall be
considered as abusive and, therefore, they shall be utterly disregarded.”
15.
The request for relief of the Respondent were as follows:
-
“Dismiss all claims from the Claimant regarding the Decision and/or fourth
instalment;
Determine that the penalty set out in clause 4 of the Settlement Agreement is
excessive and grossly disproportionate and that it shall be disregarded;
As an alternative
-
Determine that the penalty set out at clause 4 of the Settlement Agreement is
excessive and thus shall be reduced to a maximum 5% p.a. as default interest rate
or to the amount that the FIFA DRC shall deem appropriate but never higher than
18% p.a.;
In any case
-
No sanctions shall be imposed to the Club as per Article 12bis.4 of the FIFA RSTP
or the Club should be imposed the lowest sanction possible (i.e. a warning);
To the extent that any costs of these proceedings are to be paid by the Parties, ruling that
such costs shall be paid by the Claimant.”
III.
CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
a.
16.
Competence and applicable legal framework
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 11 June 2021 and submitted
for decision on 12 August 2021. Taking into account the wording of art. 21 of the 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.
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17.
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules
and observed that in accordance with art. 24 par. 1 in combination with art. 22 lit. a) and
b) of the Regulations on the Status and Transfer of Players (edition February 2021), 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 Norwegian
player and a Chinese club.
18.
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 Player (edition February 2021), and
considering that the present claim was lodged on 11 June 2021, the February 2021 edition
of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to
the substance.
b.
Burden of proof
19.
The Chamber 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 DRC stressed the
wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the parties.
20.
In this respect, the Chamber 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.
21.
Merits of the dispute
The competence of the DRC and the applicable regulations having been established, the
DRC entered into the merits of the dispute. In this respect, the DRC started by
acknowledging all the above-mentioned facts as well as the arguments and 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.
i. Main legal discussion and considerations
22.
The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that on 2 August 2019 the parties signed the settlement
agreement, in accordance with which the Claimant was entitled to receive from the
Respondent a total amount of EUR 5,100,000, in four instalments, respectively due between
30 August 2019 and 30 April 2021.
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23.
In this context, the Chamber acknowledged that the Claimant lodged a claim against the
Respondent in front of FIFA, maintaining that the Respondent failed to pay to the him the
fourth instalment amounting to EUR 500,000 on the due date, i.e. 30 April 2021, as per
the settlement agreement, as well as the amount of EUR 68,333.33 in accordance with
clause 4 of the settlement agreement.
24.
Subsequently, the DRC took into account that the Respondent, for its part, confirmed to
have not paid the fourth instalment due on 30 April 2021 to the Claimant, however, it
contested the Claimant’s request of EUR 68,333.33 as per clause 4 of the settlement
agreement, deeming it is excessive and disproportionate, given that it results in an interest
rate of 120% p.a. on the unpaid amount of EUR 500,000.
25.
The Chamber, taking into account the position of the parties, established that the
Respondent failed to remit to the Claimant the amount of EUR 500,000 corresponding
to the last instalment under the settlement agreement.
26.
In addition, the DRC established that the Respondent had delayed a due payment for more
than 30 days without a prima facie contractual basis.
27.
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 the amount of EUR
500,000.
28.
Subsequently, the DRC focussed his attention on the penalty clause contained in clause 4
of the settlement agreement, which established that: “The Parties acknowledge and
confirm that the payment of the Settlement Amount shall apply a grace period of ten (10)
days, which shall start counting from the following day after the Club receives notice of
default from Player. In case of failure to pay within such deadline, the Club shall pay an
additional penalty of 10% on a monthly basis for such part of payment.”
29.
The DRC pointed out that said clause appears to be a hidden interest clause corresponding
to a yearly interest rate of 120%. The DRC concluded that such interest clause was explicitly
and contractually agreed upon between the parties and is therefore not per se inapplicable.
30.
In line with the jurisprudence of the Dispute Resolution Chamber and the Players’ Status
Committee, as well as CAS jurisprudence and in accordance with Swiss Law, the DRC had
no other option but to conclude that a yearly interest of 120% was disproportionate, and
decided to reduce it to a rate of 18% p.a., a rate that shall be applicable as of 1 May 2021
on the amount of EUR 500,000.
ii. Art. 12bis of the Regulations
31.
In continuation, taking into account the applicable Regulations, the DRC referred to
art.12bis par. 2 of the Regulations which stipulates that any club found to have delayed a
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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.
32.
In this context, the DRC took particular note of the fact that, on 2 May and 1 June 2021,
the Claimant put the Respondent in default of payment of the aforementioned amount,
setting a time limit of 10 days in order to remedy the default.
33.
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).
34.
The DRC established that by virtue of art. 12bis par. 4 of the Regulations she has
competence to impose sanctions on the Respondent. Therefore, 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.
35.
In this respect, the DRC wished to highlight 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
36.
Finally, taking into account the applicable Regulations, the Chamber 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.
37.
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.
38.
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. 24bis par. 2, 4, and 7 of the Regulations.
39.
The Respondent shall make full payment (including all applicable interest) to the bank
account provided by the Claimant in the Bank Registration Form, which is attached to the
present decision.
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40.
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. 24bis par. 8
of the Regulations.
d.
Costs
41.
The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC
proceedings relating to disputes between clubs and players in relation to the maintenance
of contractual stability as well as international employment related disputes between a club
and a player are free of charge”. Accordingly, the Chamber decided that no procedural
costs were to be imposed on the parties.
42.
Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18
par. 4 of the Procedural Rules, and decided that no procedural compensation shall be
awarded in these proceedings.
43.
Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the parties.
IV.
DECISION OF THE DISPUTE RESOLUTION CHAMBER
1.
The claim of the Claimant, Ola Williams Kamara, is partially accepted.
2.
The Respondent, Shenzhen FC, has to pay to the Claimant, the following amount:
- EUR 500,000 as outstanding remuneration plus 18% interest p.a. as from 1 May 2021 until
the date of effective payment.
3.
A warning is imposed on the Respondent.
4.
Any further claims of the Claimant are rejected.
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 article 24 bis of the Regulations on the Status and Transfer of Players if full payment
(including all applicable interest) is not paid 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 the ban shall be of
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 paid by the end of
the of the three entire and consecutive registration periods.
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7. The consequences shall only be enforced at the request of the Claimant in accordance with
article 24 bis paragraphs 7 and 8 and article 24ter of the Regulations on the Status and Transfer
of Players.
8. This decision is rendered without costs.
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
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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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FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
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