FIFA - Decisión disputa Diguiny 22112023

REF. FPSD-12161

Decision of the Dispute Resolution Chamber passed on 22 November 2023 regarding an employment-related dispute concerning the player Nicolas Jean Pierre Diguiny BY: Frans de Weger (Netherlands), Chairperson Calum Beattie (Scotland), Member Johan van Gaalen (South Africa), Member

CLAIMANT:

Nicolas Jean Pierre Diguiny, France Represented by LOIZOS HADJIDEMETRIOU &

ASSOCIATES L.L.C.

RESPONDENT:

APOLLON LIMASSOL, Cyprus Represented by Dimitrios Nikolaidis pg. 2

REF. FPSD-12161

I. Facts of the case

1. On 1 July 2022, the French player, Nicolas Jean Pierre Diguiny (hereinafter: the player or the Claimant) and the Cypriot club, APOLLON LIMASSOL (hereinafter: the club or the Respondent) entered into an employment relationship that came to an end in September 2023 by mutual agreement.

2. For this purpose, on 13 September 2023, the parties concluded 2 different agreements: 1.) the termination agreement and 2.) the financial agreement – which contained the conditions under which the employment relationship that bound the parties would come to an end (hereinafter jointly referred to as: the agreements).

3. In particular, as per clause B of the termination agreement, the Respondent undertook to pay to the Claimant a termination fee of EUR 90,000 net, as follows: - EUR 11,250 by 1 October 2023; - EUR 11,250 by 1 November 2023; - EUR 11,250 by 1 December 2023; - EUR 11,250 by 1 January 2024; - EUR 11,250 by 1 February 2024; - EUR 11,250 by 1 March 2024;

• EUR 11,250 by 1 April 2024; - EUR 11,250 by 1 May 2024.

4. As per clause E of the termination agreement, the parties agreed that, should the Respondent fail to pay any of the aforementioned instalments by their due dates, the Respondent would enjoy a 7 days’ grace period to proceed with the relevant payment and, should the non-payment persist, the Claimant would be entitled to claim: A.) the residual value of the termination fee (acceleration clause); B.) a penalty fee of 20% of the residual value of the termination fee.

5. According to clause B of the financial agreement, the Respondent would pay to the Claimant – on top of the termination fee – a financial fee of EUR 128,385 net, as follows: - EUR 16,048.12 by 1 October 2023; - EUR 16,048.12 by 1 November 2023; - EUR 16,048.12 by 1 December 2023; - EUR 16,048.12 by 1 January 2024; - EUR 16,048.12 by 1 February 2024; - EUR 16,048.12 by 1 March 2024; - EUR 16,048.12 by 1 April 2024; - EUR 16,048.12 by 1 May 2024. pg. 3

REF. FPSD-12161

6. Under clause E of the financial agreement, the parties agreed on the same conditions agreed under clause E of the settlement agreement, i.e. on the acceleration of the payments of the financial fee and the obligation of the club to proceed with the payment of a penalty of 20% of the residual value of the financial fee in case of non-payment after a grace period of 7 days.

II. Proceedings before FIFA

a. Position of the Claimant

7. On 12 October 2023, the player lodged a claim against the club before FIFA, requesting to

be awarded outstanding remuneration and compensation for breach of contract in the total amount of EUR 262,062 net, plus 5% interest p.a. on the principal due, broken down by the Claimant as follows: - EUR 218,385 corresponding to the whole settlement fee (EUR 90,000 net) and the whole financial fee (EUR 128,385 net), plus 5% interest p.a. as from 2 October 2023 until the date of effective payment; - EUR 43,677 as penalty, corresponding to 20% of the principal due (218,3850.2 = 43,677).

8. In his claim, the player argued that despite having entered into the settlement agreement and the financial agreement, the club failed to respect it since the beginning, as the club did not even proceed with the payment of the first instalments thereof. In this context and while referring to clauses B and E of both agreement, the Claimant maintains being entitled to receive the full value of the settlement and financial fees, as well as the penalty contractually agreed.

b. Position of the Respondent

9. In its reply, the club argued – inter alia – the following: - That the player never put the club in default of payment, reason why the claim of the player does not meet the requirements of art. 12bis of the RSTP. - That it was the player the party that suggested the termination of the contract and that the club agreed to pay, as monetary compensation, “the majority of the amounts arising from his contract in relation to the 2023/24 season”; reason why the club argues that those cannot be considered as outstanding moneys, insofar as the player did not provide his services for the club in order to receive them. pg. 4

REF. FPSD-12161 - That the 7 days’ grace period to which clauses E of both agreements refer needed to be granted by the player via a default notice and the player failed to put the club in default

and grant said deadline and that the player lodged the present claim only 4 days after the relevant grace periods elapsed, which is not reasonable. - That the acceleration clauses inserted in the agreements are abusive, since the club only failed to pay the first instalments of both agreements. Consequently, the club argues that only the amount of EUR 27,298 (the sum of the first instalment under both agreements) is due and that the amount claimed by the player is not proportionate to the damages suffered, as it amounts to “800%” of the due amount. - In addition, the Respondent requested FIFA to also reject the player’s entitlement to receive the penalty of 20% of the fees due as per the agreements and, subsidiary, to only grant to the player an amount equal to 20% of EUR 27,298 (the sum of the first instalment under both agreements), which is the only amount that the Respondent considers due. In this sense, the Respondent argues that the penalty requested, i.e. EUR 43,677 equals “160%” of the amount actually due (EUR 27,298) and must be considered excessive and, hence, lowered, also considering that the Respondent was only in default of payment for 4 days before the present claim was lodged (counting with the grace period). - In this regard, while considering the acceleration of the residual value of both fees as a penalty, the Respondent referred to art. 163 of the Swiss Code of Obligations and requested said “penalty” and the penalty of 20% of the full value of the fees be reduced as considered excessive. - That the player found a new employment following the termination of the contract, reason why the player was not “dependent on the payment of the first instalment” of the agreements, which shall be considered. - That the club did not proceed with the payment of the first instalment of the agreements because the club underwent a difficult financial situation and that the club is a awaiting a payment that will enable the club to clear its financial dues.

III. Considerations of the Dispute Resolution Chamber

a. Competence and applicable legal framework

10. 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 12 October 2023 and submitted pg. 5

REF. FPSD-12161 for decision on 22 November 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.

11. 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 May 2023 edition), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employmentrelated dispute with an international dimension between a French player and a Cypriot club.

12. 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 12 October 2023, the May 2023 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

13. 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 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

14. 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

15. The foregoing having been established, the Chamber moved to the substance of the matter and firstly recalled the main facts and positions of the parties in the present proceedings: - The parties entered into the termination and financial agreements; pg. 6

REF. FPSD-12161 - The club did not proceed with the payment of the 1st instalment of either agreement; - No default notice was sent by the player to the club; - The Claimant is claiming the full amounts of the fees due as per the agreements, plus interest, as well as penalty fee; - The Respondent disputes the Claimant’s entitlement thereto as it considers that both, the acceleration clause and the penalty fee shall not be applicable as considered excessive penalties on the club, which was only in default of payment during 4 days before the player lodged the present claim, non-payment that was motivated by the club’s financial situation.

16. In this context, the Chamber entered into the substance of the matter at hand and tackled, one by one, the main legal points brought forward by the parties in their allegations:

A. Grace periods: In this respect, the DRC underscored that art. 18 para. 6 of the Regulations (first sentence)

states the following: “Contractual clauses granting the club additional time to pay to the professional amounts that have fallen due under the terms of the contract (so-called “grace periods”) shall not be recognised. In view of the above, the Chamber determined that the 7 days’ grace period to which clauses E of the agreements refer shall be considered null and void, meaning that the relevant instalments in which the termination and the financial fees were payable fell due on its individual due date and not 7 days thereafter.

B. Proportionality / Lawfulness of the acceleration clause: In this respect, the Chamber explained that acceleration clauses have been traditionally recognized by the Football Tribunal and by the Court of Arbitration for Sport (CAS) and are not considered as penalties stricto sensu, as such clauses do not entail the payment of additional amounts different to the principal amounts whose payment was agreed, but rather trigger the accelerated payment of the principal amount(s) due, which is a practice considered proportional if the parties agreed on its application, as occurs in the present case.

Hence, the Chamber concluded that the acceleration clause shall be considered proportional, lawful and applicable to the case at hand, as no requirements needed to be fulfilled for the acceleration of the residual value of the fees to be triggered, also considering that grace periods are not valid (see explanation supra). pg. 7

REF. FPSD-12161

C. Proportionality / Lawfulness of the penalty clause: In this respect, the DRC stated that penalty clauses need – according to the jurisprudence of the Football Tribunal – to satisfy a proportionality test that needs to be undertaken on a case by case basis. In principle, continued the Chamber, penalties based on a percentage of the principal amount due are considered proportional if the amount due as penalty does not exceed 50% of the principal amount due.

Considering that the abovementioned acceleration clause is considered as valid, the DRC noted that the principal amount due, in casu, amounts to the full value of both: the

termination fee and the financial fee. Thus, considering that the amount claimed by the player as penalty equals 20% of the principal amount due, the DRC concluded that the penalty requested (EUR 43,677 net) shall be considered proportional and it shall, consequently, be awarded.

D. Additional arguments of the Respondent: no default notice, no regulatory basis (12bis RSTP), short period elapsed before the claim was lodged, financial difficulties.

In this respect, the Chamber wished to highlight that parties must comply with their contractual obligations (pacta sunt servanda), which is a general principle of law that finds more than sufficient anchoring in the jurisprudence of the Football Tribunal. In addition – and considering the argument raised by the Respondent as to the non-applicability of art. 12bis of the Regulations – the DRC recalled that the requirements set out by art. 12bis para. 2 of the Regulations must be fulfilled in order for the Football Tribunal to consider that an outstanding payment is an “overdue payable” in the sense of said provision and be able to impose sporting sanction(s) on the debtor club. However, clarified the DRC, the absence of those requirements does not affect the degree of non-compliance of the debtor club if the amounts claimed are outstanding and the regulatory basis of said rationale is found in art. 12bis para. 1 of the Regulations, which states that: “Clubs are required to comply with their financial obligations towards players and other clubs as per the terms stipulated in the contracts signed with their professional players and in the transfer agreements”. Hence, the DRC determined that the claim of the Claimant does find a regulatory basis. Furthermore and taking into consideration that contractually agreed grace periods are not valid, the allegations of the Respondent that the first instalments of the termination and settlement fees were only due for 4 days before the present claim was lodged by the Claimant must be rejected, as those had been outstanding for 11 days. However, continued

the DRC, regardless of whether during 4 or 11 days, it is undisputed that the club failed to pay them by the agreed due date, which triggered the payment of the residual value of both fees, which, as already explained, shall be considered as a valid consequence of the Respondent’s non-payment. pg. 8

REF. FPSD-12161

As for the financial difficulties invoked by the Respondent (of which no evidence was presented), the DRC stated that such situation – albeit inconvenient – cannot discharge the Respondent from its financial liabilities vis a vis the Claimant, as the Respondent should have observed the necessary financial diligence before committing to make the payments hereby requested by the Claimant. Therefore, said argument is equally rejected, concluded the Chamber. ii. Consequences

17. Having stated the above, the members of the Chamber turned their attention to the question of the consequences of such unjustified breach of contract committed by the

Respondent.

18. In view of all of the above 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 amount of EUR 218,385 to the Claimant as outstanding remuneration, which corresponds to the whole settlement fee (EUR 90,000 net) and the whole financial fee (EUR 128,385 net).

19. 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 2 October 2023 until the date of effective payment.

20. Moreover, the Chamber decided that the Respondent is equally liable to pay to the Claimant a contractual penalty in the amount of EUR 43,677, which corresponds to 20% of the principal due. In this respect, the DRC wished to clarify that no default interest shall be awarded on the penalty fee awarded (ne bis in idem).

1. Compliance with monetary decisions

21. 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.

22. 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.

23. 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 pg. 9

REF. FPSD-12161 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.

24. 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.

25. 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

26. 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.

27. 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.

28. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties. pg. 10

REF. FPSD-12161

IV. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Nicolas Jean Pierre Diguiny, is accepted.

2. The Respondent, APOLLON LIMASSOL, must pay to the Claimant the following amount(s): - EUR 218,385 as outstanding remuneration, plus 5% interest per annum as from 2

October 2023 until the date of effective payment; - EUR 43,677 as contractual penalty.

3. Full payment (including all applicable interest) shall be made to the bank account indicated in the enclosed Bank Account Registration Form.

4. 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. pg. 11

REF. FPSD-12161

5. 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.

6. This decision is rendered without costs.

For the Football Tribunal: Emilio García Silvero

Chief Legal & Compliance Officer 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. 12