DRC Overdue Payables
Texto da decisão
REF. FPSD-15030
Decision of the
Dispute Resolution Chamber
passed on 7 August 2024
regarding an employment-related dispute concerning the player Enock
Kwaten
BY:
Jorge GUITIERREZ (Costa Rica)
CLAIMANT:
Enock Kwaten, France
Represented by Anil Dinçer
RESPONDENT:
MKE Ankaragucu SK, Türkiye
pg. 2
REF. FPSD-15030
I. Facts of the case
1.
On 8 February 2023, the French player, Enock Kwaten (hereinafter: the Claimant), and the
Turkish club, MKE Ankaragucu (hereinafter: the Respondent) signed an employment
contract (hereinafter the Contract) valid as from 8 February 2023 until 31 May 2024.
2.
On 29 January 2024, the Claimant and the Respondent (hereinafter jointly referred to as
the Parties) signed a mutual termination agreement (hereinafter the Agreement)
3.
In accordance with the Agreement, the Respondent undertook to pay to the Claimant inter
alia the following amounts:
“The Club hereby accepts to pay to the Player EUR 110,000 as a compensation for the
termination of the employment relationship. A total amount of EUR 110,000 will be paid on the
following dates:
1. EUR 27,500 on 02.02.2024;
2. EUR 27,500 on 02.03.2024;
3. EUR 27,500 on 02.04.2024;
4. EUR 27,500 on 02.05.2024.’’
4.
In addition, according to the clause 6 of the Agreement, “If the Club fails to pay any of the
instalments on its due date, the Club will pay EUR 1,250 extra penalty for each week until the
effective payment date”.
5.
On 9 May 2024, the Claimant issued correspondence placing the Respondent in default for
the non-payment of EUR 27,500 net, representing the third instalment due on 2 April 2024,
and an additional EUR 27,500 net for the fourth instalment due on 2 May 2024.
Furthermore, the Claimant demanded the payment of EUR 11,250 as a contractual penalty,
broken down as follows: EUR 3,750 for the second instalment, EUR 6,250 for the third
instalment, and EUR 1,250 for the fourth instalment. The Claimant set a deadline of 10 days
for the Respondent to remedy the default.
6.
On 17 May 2024, the Claimant sent an email to the Respondent, stating that the third
instalment of EUR 27,500, due on 2 April 2024, and the fourth instalment of EUR 27,500,
due on 2 May 2024, had not yet been paid by the Club. Additionally, the Claimant requested
payment of the total overdue penalty of EUR 13,750, corresponding to the second, third,
and fourth instalments.
7.
On 24 May 2024, the Claimant sent a new letter to the Respondent alleging that the third
and fourth instalments remain overdue, and that the total overdue penalty is EUR 16,250
corresponding to the second, third and fourth instalments. Therefore, the total overdue
amount corresponds to EUR 71,250.
pg. 3
REF. FPSD-15030
8.
On 27 May 2024, the Claimant sent a payment request letter to the Respondent giving them
a 10-day deadline to comply with their financial obligation.
9.
In the above letter, the Claimant requested the total amount of EUR 71,250. Specifically:
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Third instalment of EUR 27,500 due on 2 April 2024;
Fourth instalment of EUR 27,500 due on 2 May 2024;
Penalty of EUR 3,750 for the second instalment;
Penalty of EUR 8,750 for the third instalment;
Penalty of EUR 3,750 for the fourth instalment.
10. On 3 June 2024, the Claimant sent an email to the Respondent stating that the third
instalment of EUR 27,500, due on 2 April 2024, and the fourth instalment of EUR 27,500,
due on 2 May 2024, have not yet been paid by the Respondent's Club. Additionally, the
Claimant noted that the penalty amounts of EUR 3,750 for the second instalment, EUR
10,000 for the third instalment, and EUR 5,000 for the fourth instalment remain overdue
and unpaid. As a result, the total outstanding penalty amounts to EUR 18,750, bringing the
overall overdue and unpaid amount to EUR 73,750. Finally, the Claimant requested the
payment of the above amounts.
11. On 9 June 2024, the Claimant sent one last email to the Respondent stating that the third
instalment of EUR 27,500, due on 2 April 2024, and the fourth instalment of EUR 27,500,
due on 2 May 2024, have not yet been paid by the Respondent's Club. Additionally, the
Claimant noted that the penalty amounts of EUR 3,750 for the second instalment, EUR
11,250 for the third instalment, and EUR 6,250 for the fourth instalment remain overdue
and unpaid. Consequently, the total outstanding penalty amounts to EUR 21,250. Finally,
the Claimant requested the payment of the overall overdue and unpaid amount of EUR
76,250.
12. Allegedly, the Club did not respond to any of the above-mentioned correspondences.
II. Proceedings before FIFA
13. On 25 June 2024, the Claimant filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a. Position of the Claimant
14. The claimant lodged a claim before FIFA requesting the condemnation of the Respondent
to pay the total overdue remuneration and 5% interest as from the due dates. Specifically,
the Claimant requested the following amounts:
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REF. FPSD-15030
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EUR 27,500 due on 2 April 2024;
EUR 27,500 due on 2 May 2024;
EUR 3,750 as penalty for the second instalment;
EUR 13,750 as penalty for the third instalment;
EUR 8,750 as penalty for the fourth instalment.
15. Finally, the Claimant requested the payment of the extra penalty of the amount of EUR
1,250 for the third and fourth instalment for each additional week until the date of effective
payment.
b. Position of the Respondent
16. In its reply, the Respondent acknowledged that the third and fourth instalments of the
Agreement remain outstanding.
17. However, the Respondent rejected the application of the penalty as stipulated in the clause
6 of the Agreement alleging that despite the agreement using the term 'penalty,' the EUR
1,250 added to the debt for each week of delayed payment actually represents a hidden
interest rate rather than a penalty.
18. Finally, the respondent further explained that a penalty fee of EUR 1,250 per week equates
to an additional payment of EUR 65,000 per year for each instalment, which corresponds
to an interest rate exceeding 200%. Consequently, the respondent rejects the player's
penalty requests, asserting that the player may only claim a maximum of 18% interest per
year.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
19. First of all, the Single Judge of the Dispute Resolution Chamber (hereinafter: the Single Judge)
analysed whether he was competent to deal with the case at hand. In this respect, he took
note that the present matter was presented to FIFA on 25 June 2024 and submitted for
decision on 7 August 2024. 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.
20. Furthermore, the Single Judge 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 (June 2024 edition), the Single Judge is
competent to deal with the matter at stake, which concerns an employment-related
dispute with an international dimension between a French player and a club.
pg. 5
REF. FPSD-15030
21. Subsequently, the Single Judge analysed which regulations should be applicable as to the
substance of the matter. In this respect, he confirmed that, in accordance with art. 26 par.
1 and 2 of the Regulations on the Status and Transfer of Players (June 2024 edition), and
considering that the present claim was lodged on 25 June 2024, the June 2024 edition of
said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the
substance.
b. Burden of proof
22. The Single Judge 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 Single Judge
stressed the wording of art. 13 par. 4 of the Procedural Rules, pursuant to which he 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
23. Having established the competence and the applicable regulations, the Single Judge
entered into the merits of the dispute. In this respect, he started by acknowledging all the
above-mentioned facts as well as the arguments and the documentation on file. However,
he emphasised that in the following considerations it will refer only to the facts, arguments
and documentary evidence, which he considered pertinent for assessing the matter at
hand.
i. Main legal discussion and considerations
24. The Single Judge then moved to the substance of the matter.
25. First of all, concerning the amounts claimed under the Agreement, the Single Judge noted
that these are not in dispute, as the Respondent has acknowledged that the third and
fourth instalments remain outstanding.
26. However, the Single Judge noted that the parties are in strong disagreement regarding the
application of clause 6 of the Agreement. Accordingly, the Single Judge's task was to assess
whether clause 6 of the Agreement is both proportionate and reasonable.
27. In this context, the Single Judge referred to the jurisprudence of the Dispute Resolution
Chamber (hereinafter: DRC), according to which the penalty clauses may be freely entered
into by contractual parties and may be considered acceptable, in the event that the
pertinent written clause meets certain criteria, such as proportionality and reasonableness.
pg. 6
REF. FPSD-15030
28. However, the Single Judge emphasised that for an amount added to the debt per day or
per week of delay in payment, the established DRC jurisprudence consistently considers
such obligations as hidden interest rates rather than penalties.
29. According to clause 6 of the Agreement “If the Club fails to pay any of the instalments on its
due date, the Club will pay EUR 1,250 extra penalty for each week until the effective payment
date.”
30. In the case at hand, the Single Judge noted that until the date of the submission of the case
(i.e. 23 July 2024), none of the instalments have been paid which means that the instalment
due on 2 April 2024 is due for 16 weeks and the instalment due on 2 May 2024 is due for
approximately 12 weeks. Consequently, the total fee for both instalments from their due
date until the day of the submission of this case would approximately be EUR 34,821 [(16
weeks x EUR 1,250) + (12 weeks x EUR 1,250)].
31. Therefore, the amount of the penalty represents more than 60% of the total outstanding
amount, i.e. (EUR 34,821/ EUR 55,000) x 100.
32. In other words, the fee of EUR 34,821 accumulated over the delay period represents an
annual hidden interest rate of approximately 230% that clearly does not fall within the
permissible interest of 18% established by the DRC jurisprudence and permitted by Swiss
Law.
33. Consequently, the Single Judge concluded that the hidden interest rate of the clause 6
should be considered disproportionate and unreasonable, and should be reduced to the
maximum interest allowed under Swiss Law, i.e. 18% p.a.
ii. Consequences
34. Having stated the above, the Single Judge observed that the outstanding remuneration
coupled with the specific requests for relief of the player, is equivalent to the third and
fourth instalment of the Agreement, amounting to EUR 55,000 (i.e. EUR 27,500x 2).
35. In addition, the Single Judge observed that the Respondent acknowledged that the above
amount remains outstanding.
36. As a consequence, and in accordance with the general legal principle of pacta sunt servanda,
the Chamber decided that the Respondent is liable to pay to the Claimant the amounts
which were outstanding under the Agreement, i.e. EUR 55,000 (EUR 27,500x 2).
37. Lastly, and taking into consideration the Single Judge’s conclusion regarding clause 6 of the
Agreement, as well as the provisions of the Swiss law in this regard, the Single Judge
decided to award the Claimant interest at the rate of 18% as follows:
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REF. FPSD-15030
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18% interest p.a. EUR 27,500 as from 3 April 2024 until the date of effective payment;
18% interest p.a. EUR 27,500 as from 3 May 2024 until the date of effective payment.
iii. Art. 12bis of the Regulations
38. Having established the above, the Single Judge 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.
39. To this end, the Single Judge confirmed that the Player put the Club in default of payment
of the amounts sought, which had fallen due for more than 30 days, and granted the Club
with 10 days to cure such breach of contract.
40. Accordingly, the Single Judge also 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 were met in the case at hand.
41. The Single Judge further established that by virtue of art. 12bis par. 4 of the Regulations it
has competence to impose sanctions on the club. On account of the above and bearing in
mind that this is the first offense by the Club within the last two years, the Single Judge
decided to impose a warning on the Club in accordance with art. 12bis par. 4 lit. a) of the
Regulations.
42. In this connection, the Single Judge highlighted 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.
iv. Compliance with monetary decisions
43. Finally, taking into account the applicable Regulations, the Single Judge 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.
44. In this regard, the Single Judge 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.
pg. 8
REF. FPSD-15030
45. Therefore, bearing in mind the above, the Single Judge 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.
46. 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.
47. The Single Judge 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
48. The Single Judge 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 Single Judge decided that no procedural costs were to be
imposed on the parties.
49. Likewise, and for the sake of completeness, the Single Judge recalled the contents of art.
25 par. 8 of the Procedural Rules and decided that no procedural compensation shall be
awarded in these proceedings.
50. Lastly, the Single Judge concluded its deliberations by rejecting any other requests for relief
made by any of the parties.
pg. 9
REF. FPSD-15030
IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Enock Kwaten, is partially accepted.
2.
The Respondent, MKE Ankaragucu SK, must pay to the Claimant the following amount(s):
- EUR 55,000 as outstanding remuneration plus interest as follows:
• 18% interest p.a. over the amount of EUR 27,500 as from 3 April 2024 until the date
of effective payment;
• 18% interest p.a. over the amount of EUR 27,500 as from 3 May 2024 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. 10
REF. FPSD-15030
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).
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pg. 11