DRC Overdue Payables
Texto da decisão
REF FPSD-4576
Decision of the
Dispute Resolution Chamber
passed on 24 February 2022
regarding an employment-related dispute concerning the player Elvis Saric
COMPOSITION:
HENDEL Clifford J. (USA), Deputy Chairperson
DE MEDINILLA Gonzalo (Spain), member
GUTIERREZ Jorge (Costa Rica), member
CLAIMANT:
Elvis Saric, Croatia
Represented by Hrvoje Raić, Ivan Ostojić & Bruno Skelin
RESPONDENT:
Al Ahli, Saudi Arabia
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REF FPSD-4576
I.
Facts of the case
1.
On 16 July 2019, the Croatian player Elvis Saric (hereinafter: the Claimant) and the Saudi club
Al Ahli (hereinafter: the Respondent) concluded an Employment contract, valid from until 30
June 2022 (hereinafter: the Contract).
2.
On 8 August 2021, the Claimant and the Respondent signed a Mutual Termination
Agreement (hereinafter: the Settlement).
3.
Clause 2 of the Settlement reads as follows:
“In consideration of an early termination of the employment contract, the Club undertakes
to pay to the player an overall sum of net EUR 2,500,000 as outstanding remuneration and
as compensation for the early termination of the Employment Contract (hereinafter:
Settlement Sum) which shall be paid by the Club to the Player in instalments as follows:
EUR 500,000 net on 09 August 2021,
EUR 650,000 net on 01 November 2021
EUR 400,000 net on 01 March 2022
EUR 400,000 net on 01 June 2022
EUR 400,000 net on 01 September 2022
EUR 150,000 net on 01 December 2022.
2) The Club shall also pay to the Player, on top and above agreed net sums, all taxes and
contributions, and other surcharges, if any”.
4.
Clause 3 of the Settlement reads as follows:
“In the event that the Club fails to pay to the Player any of the instalments of the Settlement
Sum stipulated in the clause 2 herein timely, then all remaining instalments of the Settlement
Sum shall immediately fall due, and in such case, the Club shall also pay to the Player, on top
and above the full Settlement Sum, lump sum penalty for delay in payment in the amount of
net EUR 500,000, meaning that in such case the Club shall pay to the Player net total of EUR
3.000.000”.
5.
On 9 August 2021, the Respondent paid to the Claimant the first Instalment of net EUR
500,000.
6.
On 3 December 2021, the Claimant, through his representative, sent a default notice to the
Respondent requesting the payment of the net total of EUR 2,500,000 and granting 10 days
to comply, to no avail.
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II. Proceedings before FIFA
7.
On 16 December 2021, 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
8.
According to the Claimant, “the Respondent had failed to pay to the Claimant the 2nd
Instalment of net EUR 650,000.00 which matured on 1 November 2021 and therefore,
according to the terms of the Settlement, all remaining instalments stipulated in the Clause 2
par. 1), had fallen due on 1 November 2021” and the Clause 3 of the Settlement had been
triggered.
9.
The Claimant argues that the Respondent refused to respect the financial terms of the
Settlement, which the parties had voluntarily entered into. The Claimant reiterates that the
Settlement clearly defined the terms of the payment of the debt of the Respondent which
were not respected by the Respondent.
10. The Claimant requests for relief were the following:
a. to condemn the Respondent to pay in favor of the Claimant overdue payables of net EUR
2,500,000, which matured on 1/11/2021, within 45 days as from the date of notification
of the decision in the matter of the reference to the Respondent; and
b. to condemn the Respondent to pay in favor of the Claimant, in addition to the net sum
stipulated in the point I. of this article of Prayers of relief, all relevant taxes and
contributions, if any, on top of above specified net amount, all within 45 days as from the
date of notification of the decision in the matter of the reference to the Respondent; and
c. to condemn the Respondent to pay in favor of the Claimant default interest of 5% per
year on the aforementioned net amount starting from the respective date of maturity until
the effective date of the payment, within 45 days as from the date of notification of the
decision in the matter of the reference to the Respondent; and
d. to impose sporting sanctions against the Respondent, all in the light of FIFA RSTP.
b. Position of the Respondent
11. The Respondent replied to the claim on the following terms.
12. The Respondent put forward a proposal of a new payment schedule to the Claimant.
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13. The Respondent further states that it is still in a “very critical financial situation characterized
by a total absence of incoming amounts because of the persistence of the effects of COVID19 Pandemic”.
14. The Respondent consider that the claim does not fulfil the requirements under article 12bis
and therefore, “the Claimant is not entitled to demand the application of Article 12 unless all
payments are due, while only the second instalment is due”.
15. Regarding the penalty of EUR 500,000, the Respondent finds that “such penalty is clearly
excessive and disproportionate as per Swiss Law and the well-established Jurisprudence of
the Player’s Status Committee”.
16. Accordingly, the Respondent “demand a rejection of the penalty of EUR 500,000 due to its
injustice, unreasonable, disproportionate and excessive and we ask Football Tribunal to reject
such penalty Under the powers vested in him by Swiss Law.”
17. The Respondent’s request for relief were the following:
“1. Accept the proposal of the respondent to settle the outstanding amount due to the
claimant.
2. Dismiss the request of the penalty of EUR 500,000 and consider that is clearly excessive,
unreasonable, and disproportionate and should be rejected.
3. adopt that this claim should not be treat under the article 12 bis of the FIFA Regulations
on the Status and Transfer of player and consider that the Claim do not fulfil the requirements
under article 12bis of the FIFA Regulations on the Status and Transfer of Players”.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
18. 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 16 December 2021 and submitted for
decision on 24 February 2022. Taking into account the wording of art. 34 of the October
2021 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.
19. 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 lit. b) of the
Regulations on the Status and Transfer of Players (August 2021 edition), the Dispute
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Resolution Chamber is competent to deal with the matter at stake, which concerns an
employment-related dispute with an international dimension between a Croatian player and
a Saudi club.
20. 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 (August 2021 edition) and
considering that the present claim was lodged on 16 December 2021, the August 2021
edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand
as to the substance.
b. Burden of proof
21. 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.
c. Merits of the dispute
22. 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
23. The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that the Respondent had not contested owing the amounts claimed.
Although it has contested the applicability of the contractual penalty contained in the
Settlement.
24. In this context, the Chamber acknowledged that it its task was to determine if the Claimant
is entitled to the amounts claimed.
25. Firstly, the Chamber took due note of the Respondent’s argumentation regarding the effects
of the COVID-19 pandemic. However, the Chamber observed that the club had not provided
any valid justification for the non-payment of the amounts that were outstanding.
Furthermore, the Chamber observed that the Claimant had put the club in default and
granted it a 10-day deadline to comply with its financial obligations, however to no avail.
Thus, a substantial amount of the Claimant’s entitlements had undisputedly remained
outstanding without a prima facie contractual basis, which constitutes a breach of the
Settlement.
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26. Having established the above, the Chamber turned to the matter of the contents of art. 3 of
the Settlement. In this regard, the Chamber observed that the parties in use of their
contractual freedom had voluntarily agreed to include the said provision which had two-fold
nature.
27. On the one hand, it contained an “acceleration clause” according to which in the event of
default all remaining amounts were immediately due. On the other hand, it contained a
contractual penalty.
28. The Chamber observed that since the Respondent failed to pay the relevant instalment due
on 1 November 2021, the acceleration clause was triggered and therefore all subsequent
instalments became automatically due on the said date.
29. Furthermore, the DRC noted that considering the particular circumstances of the case, the
penalty agreed (i.e. EUR 500,000) constituted an amount equal to the 20% of the overall
amount due to the Claimant by the Respondent. Hence, the Chamber was convinced that
the said penalty was to be deemed reasonable and proportionate considering the
circumstances of the case.
30. 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 due under the Settlement at the moment of the termination, i.e. EUR 2,000,000 and
the contractual penalty of EUR 500,000.
31. In addition, taking into consideration the Claimant’s request as well as the constant practice
of the Chamber in this regard, the latter decided to award the Claimant interest at the rate
of 5% p.a. on the outstanding amounts as from 1 November 2021 until the date of effective
payment
ii. Consequences under art. 12bis
32. 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.
33. To this end, the Chamber confirmed that on 3 December 2021 the Claimant put the
Respondent in default of payment of the amounts sought, which had fallen due more than
30 days before, and granted the club a 10-day deadline to cure such breach of contract.
34. 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.
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35. The Chamber further established that by virtue of art. 12bis par. 4 of the Regulations it has
competence to impose sanctions on the Respondent. On account of the above and bearing
in mind that this is the 8th offense by the Respondent within the last two years, the Chamber
decided to impose a fine in the amount of USD 105,000 on the Respondent in accordance
with art. 12bis par. 4 lit. c) of the Regulations.
36. 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
37. 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.
38. 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.
39. 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.
40. 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.
41. 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
42. 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
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agent, or match agent”. Accordingly, the Chamber decided that no procedural costs were to
be imposed on the parties.
43. 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.
44. Lastly, the DRC concluded its 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, Elvis Saric, is accepted.
2.
The Respondent, Al Ahli, has to pay to the Claimant, the following amount(s):
- EUR 2,000,000 as outstanding amount plus 5% interest p.a. as from 1 November 2021 until
the date of effective payment;
- EUR 500,000 as contractual penalty.
3.
Any further claims of the Claimant are rejected.
4.
Full payment (including all applicable interest) shall be made to the bank account indicated in
the enclosed Bank Account Registration Form.
5.
Pursuant to art. 24 of the Regulations on the Status and Transfer of Players (August 2021
edition), if full payment (including all applicable interest) is not made within 45 days of
notification of this decision, the following consequences shall apply:
1.
2.
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.
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.
6.
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.
7.
A fine in the amount of USD 105,000 is imposed on the Respondent to be paid to FIFA (cf.
note relating to the payment of the procedural costs below)
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).
CONTACT INFORMATION
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