DRC Overdue Payables
Texto da decisão
REF FPSD-6516
Decision of the
Dispute Resolution Chamber
passed on 14 September 2022
regarding an employment-related dispute concerning the player Michael
Pereira
BY:
Gonzalo de Medinilla (Spain)
CLAIMANT:
Michael Pereira, France
Represented by Mr Carlos Andrés Aliaga Téllez
RESPONDENT:
FC CFR 1907 Cluj, Romania
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I. Facts of the case
1.
On 26 June 2019, the French player, Michael Pereira (hereinafter: the Claimant), and the
Romanian club, FC CFR 1907 Cluj (hereinafter: the Respondent) signed an employment
contract valid as from the date of signature until 30 June 2021.
2.
On 3 June 2021, the Claimant and the Respondent (hereinafter jointly: the Parties) signed
a termination agreement (hereinafter: the Agreement), by virtue of which the
aforementioned contractual relationship was mutually terminated.
3.
In accordance with the Agreement, the Respondent undertook to pay the Claimant a total
settlement fee of EUR 137,000 divided into the following instalments:
a) EUR 47,000, by no later than 1 August 2021;
b) EUR 45,000, by no later than 20 September 2021;
c) EUR 45,000, by no later than 25 October 2021.
4.
Moreover, in accordance with the Agreement, the Parties agreed as follows:
“[The Claimant] declares that he no longer has any financial or other claim to [the Respondent]
for the past, present or future, with except of the amounts set forth in this [Agreement], in the
total net amount of EUR 137,000 and he declares that he understood the entire content of this
present [Agreement].”
5.
Additionally, the following was agreed upon in the Agreement signed by the Parties:
“This amount is irrevocably due and will be paid in due time. If the club does not comply with
the payment terms established in any of letters a), b), or c) of this addendum, and will
delay any of the established payments by more than 24 hours after the established payment
term, then the club will be obliged to pay a penalty of EUR 500 / each day of delay.”
6.
By correspondence dated 26 September 2021, the Claimant put the Respondent in
default of payment of EUR 7,500, in application of the contractual penalty clause, based
on the fact that the first instalment of EUR 47,000 had fallen due on 1 August 2021, but
was only paid on 17 August 2021. In this respect, no deadline was granted to the
Respondent to comply with the request.
7.
By correspondence dated 2 December 2021, the Claimant put the Respondent in default
of payment of EUR 75,000, in application of the contractual penalty clause, based
on the fact that that the first instalment of EUR 47,000 had been paid 15 days after the
stipulated deadline, and the third instalment of EUR 45,000, due on 25 October 2021, had
remained unpaid at the time of said default notice. In this respect, a deadline of 48 hours
was granted to the Respondent to comply with the request.
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8.
By correspondence dated 4 May 2022, the Claimant put the Respondent in default
of payment of EUR 86,000, in application of the contractual penalty clause, based
on the fact that that the first instalment of EUR 47,000 had been paid 15 days after the
stipulated deadline, and the third instalment of EUR 45,000, due on 25 October 2021, was
only paid on 31 March 2022. In this respect, a deadline of 10 days was granted to the
Respondent to comply with the request.
9.
By correspondence dated 2 June 2022, the Claimant once again put the Respondent
in default of payment of EUR 86,000, granting a 10-day deadline for the Respondent to
comply with the request.
II. Proceedings before FIFA
10. On 25 June 2022, 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
11. According to the Claimant, the Respondent was liable to pay a total amount of EUR 86,000,
in application of the penalty clause contained in the Agreement which stipulated that, for
every day of delay regarding the contractually stipulated instalments, a penalty of
EUR 500 became due.
12. In this respect, the Claimant asserted that the first instalment of EUR 47,000 had fallen
due on 1 August 2021, but was only paid on 17 August 2021. Therefore, allegedly being
15 days late, a “penalty” of EUR 7,500 had accrued over the delayed period.
13. Moreover, the Claimant argued that the third instalment of EUR 45,000 had fallen due on
25 October 2021, but was only paid on 31 March 2022. Therefore, being 157 days late, a
“penalty” of EUR 78,500 had accrued over the delayed period.
14. The Claimant outlined that, in line with the principle of pacta sunt servanda, the
purported penalty clause above should apply and the claimed amount of EUR 86,000
should be paid by the Respondent.
15. Furthermore, the Claimant requested interest on the claimed amount of 5% p.a. as from
4 May 2022 until the date of effective payment.
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b. Position of the Respondent
16. In its reply, the Respondent primarily argued that the claim for EUR 86,000 should be
dismissed, as the Agreement contained a provision which outlined that the Claimant
declares that he has no further financial claims with the exception of the sum of
EUR 137,000 set out in the Agreement. The Respondent, therefore, asserted that
the Claimant waived his right to claim any amounts beyond those set out in the
Agreement, including the amounts in dispute in the present matter.
17. Subsidiarily, the Respondent argued that the penalty should be considered as a hidden
interest rate, as opposed to a penalty clause, and that in line with the jurisprudence of
FIFA’s deciding bodies, should be reduced to 18% p.a. for the respective time periods in
which interest would have applied. In this context, the Respondent argued that EUR 500
per day would correspond to an interest rate of more than 118% p.a..
18. Lastly, the Respondent requested that no interest shall be applicable on any amounts
awarded, based on the principle of ne bis in idem.
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 also referred
to as Single Judge or SJ) analysed whether it 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 2022 and submitted for decision on 14 September 2022. Taking into account the
wording of art. 34 of the June 2022 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. Subsequently, 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 lit. b) of the
Regulations on the Status and Transfer of Players (July 2022 edition), he 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 Romanian club.
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 (July 2022 edition),
and considering that the present claim was lodged on 25 June 2022, the June 2022 edition
of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to
the substance.
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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. His competence and the applicable regulations having been established, 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,
the Single Judge also emphasised that in the following considerations he will refer only to
the facts, arguments and documentary evidence, which he considered pertinent for the
assessment of the matter at hand.
i. Main legal discussion and considerations
24. The foregoing having been established, the Single Judge moved to the substance of the
matter, and took note of the fact that the Parties concluded a settlement agreement (the
Agreement), in accordance with which the Respondent undertook to pay the Claimant the
total net amount of EUR 137,000 in two instalments, as outlined below:
a) EUR 47,000 by no later than 1 August 2021;
b) EUR 45,000 by no later than 20 September 2021;
c) EUR 45,000 by no later than 25 October 2021.
25. The Single Judge noted that the Claimant requested to be awarded the amount of
EUR 86,000 on the basis of the penalty clause contained in the Agreement, arguing that
the Respondent had not paid the first and third instalments on time and that, in total, a
delay of 172 days had accumulated with regards to the payment of these instalments.
26. In this respect, the Single Judge turned his attention to the penalty clause contained in
the Agreement, which stipulated as follows:
“This amount is irrevocably due and will be paid in due time. If the club does not comply with
the payment terms established in any of letters a), b), or c) of this addendum, and will
delay any of the established payments by more than 24 hours after the established payment
term, then the club will be obliged to pay a penalty of EUR 500 / each day of delay.”
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27. The Single Judge took note of the Respondents’ argumentation that the Claimant’s
request should be rejected because, in accordance with the Contract, it was agreed upon
by the Parties that the Claimant shall have no further financial claims towards the
Respondent, with the exception of the amount of EUR 137,000 as set out under the
Agreement.
28. In this respect, the Single Judge established that said provision did not prevent the
Claimant from requesting any amounts arising out of the Agreement as a result of the
Respondent’s non-compliance thereunder, as is alleged in the present case. Thus, the
Single Judge rejected said argumentation and continued to assess the matter.
29. The Single Judge subsequently analysed the penalty clause contained in the Agreement,
which stipulated that the Respondent shall pay the Claimant a daily penalty of EUR 500
for delay of payment of any amount stipulated thereunder.
30. In this respect, the Single Judge acknowledged the arguments of both Parties in respect
of said provision and referred to its constant jurisprudence, in accordance with which
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. In this respect, the Single Judge further highlighted
that whenever the payment of a penalty is triggered in connection with a default of
payment that persist in time (i.e. it is not only paid once but increases along with the nonpayment over time), the DRC jurisprudence tends to consider those obligations as hidden
interest rates rather than penalties. Thus, if so considered, the said penalty would amount
to a rate higher than the maximum interest rate permitted under Swiss Law and under
the DRC jurisprudence, i.e. a default interest of 18% p.a..
31. The Single Judge observed that the Respondent was 16 days late with regards to effecting
payment of the first instalment of EUR 47,000 under the Agreement, as well as 156 days
late with regards to paying the third instalment under the Agreement, in the amount of
EUR 45,000. Taking into account the stipulated penalty for the relevant period of 172 days,
this would amount to EUR 86,000 (172 x EUR 500).
32. Consequently, the Single Judge established that the penalty fee of EUR 86,000 for a delay
of 172 days is, in fact, a hidden interest rate, which on a yearly basis would correspond to
an interest rate of 118% p.a.. Said percentage is to be considered clearly disproportionate
and excessive, in line with the longstanding jurisprudence of the Single Judge.
33. In view of the foregoing, the Single Judge considered that the interest rate provided for in
the Agreement was disproportionate and unreasonable, and should be reduced to the
maximum interest allowed under Swiss Law, i.e., 18% p.a..
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ii. Consequences
34. Having stated the above, the Single Judge established that the Claimant is entitled to
payment of an interest rate of 18% p.a. on the instalments of EUR 47,000 and EUR 45,000
respectively, as from the day following the respective due dates until the date of effective
payment.
35. In this respect, the Single Judge established that the period(s) in which the
aforementioned interest rates shall apply were as follows:
-
On the amount of EUR 47,000, 18% p.a. as from 2 August 2021 until
17 August 2021 = EUR 347.55
-
On the amount of EUR 45,000, 18% p.a. as from 26 October 2021 until
31 March 2022 = EUR 3,461.90
36. Thus, the Single Judge awarded the Claimant a total amount of EUR 3,809.55, in
accordance with the Agreement.
37. Furthermore, the Single Judge noted that the Claimant requested interest of 5% p.a. as
from 4 May 2022 until the date of effective payment. In this respect, the Single Judge
referred to the general legal principle of ne bis in idem and established that, as the amount
awarded already represented hidden interest, the application of a second interest rate
thereon would result in a double penalty. Therefore, the Single Judge concluded that no
additional interest shall be awarded to the Claimant.
iii. Art. 12bis of the Regulations
38. In continuation, 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 basis may be sanctioned in accordance with
art. 12bis par. 4 of the Regulations.
39. To this end, the Single Judge confirmed that the Claimant put the Respondent in default
of payment of the amounts sought on several occasions, and that the amounts had been
overdue for more than 30 days. Moreover, the Single Judge confirmed that the Claimant
granted the Respondent a 10-day deadline to cure such breach.
40. Accordingly, it was established that the Respondent 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.
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41. The Single Judge further established that, by virtue of art. 12bis, par. 4 of the Regulations,
he had competence to impose sanctions on the Respondent. On account of the above
and bearing in mind that this was the first offence committed by the Respondent within
the last two years, the Single Judge decided to impose a warning on the Respondent in
accordance with art. 12bis pr. 4 lit. b) of the Regulations.
iv. Compliance with monetary decisions
42. 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 his decision, former 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.
43. 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.
44. 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.
45. 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.
46. 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
47. 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, he decided that no procedural costs were to be
imposed on the Parties.
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48. 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.
49. Lastly, the Single Judge concluded his deliberations by rejecting any other requests for
relief made by any of the Parties.
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IV. Decision of the Dispute Resolution Chamber
▪
1.
The claim of the Claimant, Michael Pereira, is partially accepted.
2.
The Respondent, FC CFR 1907 Cluj, has to pay to the Claimant EUR 3,809.55 as an
outstanding amount.
3.
Any further claims of the Claimant are rejected.
4.
A warning shall be 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 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 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 article 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
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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).
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