FIFA - Decisión disputa Caicedo Medina 22062023 (1)

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 Contextually, the appeal filed with CAS was withdrawn.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 MEDINA, Key

062580115510030450”

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

Quota no. 9 of the settlement agreement due by 28 February 2023 would o amount to USD 45,000, comprising of the original amount of USD 15,000 plus the missed payments of quotas 5 and 6; Quotas no. 10 and 11 of the settlement agreement due by 28 April 2023 and o 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; Quotas no. 12, 13, 14, 15, 16 and 17 of the settlement agreement respectively o would amount to USD 19,000 each, comprising of the original amount of USD 15,000 plus additional USD 4,000; The Respondent additionally undertook to pay USD 12,000 in 2 quotas of USD o 6,000 each respectively on 28 March 2023 and 28 April 2023; The other payments under the settlement agreement would remain o unchanged; and All other clauses of the settlement agreement would remain unchanged as o 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:

Which bank account was informed to the Respondent, if any, in line with clause 3 of o the settlement agreement signed by and between the parties on 28 August 2021; To which bank account the amounts detailed for instalments 1, 2, 3 and 4 as agreed o under the same settlement agreement were paid to; Whether the Claimant has received the payments alleged by the Respondent with o 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.

1. 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

Fédération Internationale de Football Association FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland www.fifa.com | legal.fifa.com | psdfifa@fifa.org | T: +41 (0)43 222 7777 pg. 14