FIFA - Decisión disputa Peixoto Principe 16082023

REF FPSD-10374

Decision of the Dispute Resolution Chamber passed on 16 August 2023 regarding an employment-related dispute concerning the player Leonardo Peixoto Principe BY: Roy VERMEER (The Netherlands)

CLAIMANT:

Leonardo Peixoto Principe, Portugal Represented by Parmars

RESPONDENT:

FC Krumovgrad, Bulgaria Represented by SILA International Lawyers Page 2

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I. Facts of the case

1. On 11 January 2023, the Dispute Resolution Chamber of the Football Tribunal passed a decision in case ref. FPSD-7604, regarding an employment-related dispute between the Portuguese player, Leonardo Peixoto Principe (hereinafter: the Claimant or the Player) and the Bulgarian club, FC Krumovgrad (hereinafter: the Respondent or the Club).

2. On 29 March 2023, the Claimant and the Respondent concluded a settlement agreement

(hereinafter: the settlement agreement)in connection with the abovementioned decision.

3. Clause 2.1 of the settlement agreement reads as follows: “The Club shall pay the Settlement Sum to the Player in full and final settlement of all Claims by the Player against the Club in five (5) installments as follows: (1) EUR 2,587 on or before April 7, 2023; (2) EUR 2,200 on or before May 9, 2023; (3) EUR 2,200 on or before June 9, 2023; (4) EUR 2,200 on or before July 7, 2023; and (5) EUR 2,200 on or before August 7, 2023”.

4. Clause 2.2 of the settlement agreement reads as follows: “The Settlement sum refers to the final amount the Player expects to receive. The Club shall entirely bear all sorts of relevant or applicable taxes, costs, charges, and withdrawals due

to the Bulgarian tax authorities or third parties {e.g., banks) connected with (the payment of) the Settlement Sum, whether recoverable or not by the Player”.

5. Clause 3 of the settlement agreement reads as follows: “3. Acceleration and indemnities 3.1 lf the Club delays any payment due under Clause 2.1 without the Player's prior written agreement, all claims arising from Clause 2.1 (i.e., the delayed installment and all remaining installments) shall automatically become due and payable immediately, without the need for a written notice thereof ("Accelerated Amount"). 3.2 ln that case, the Club shall also immediately pay the Player a cumulative penalty fee of fifty percent (50%) of the Accelerated Amount.”

6. On 5 April 2023, the Respondent paid to the Claimant the amount of EUR 2,587.

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7. On 14 June 2023, the Respondent was invited by FIFA general secretariat to provide its position to the present claim.

8. On 16 June 2023, the Respondent paid to the Claimant the amount of EUR 2,200.

9. Between April and June 2023, the Claimant and the administrative director of the Respondent, Mr. Osman, held the following discussions via the application WhatsApp, inter alia, regarding the payment of the first, second and third instalment (quoted

verbatim): “[…] Respondent: Leo Tomorrow we are sending the money for May and June sorry for late bro Claimant: Sorry bro, I was solving some problems this week Respondent 😊😊 Claimant: Congratulations for promotion to first league

Respondent: Thanks bro!

[The Respondent sent a PDF document] Respondent: Bro its send only for May for the moment Finansist told me that we have some struggles about the money I will tell you when we are sending for June and July also Claimant: ok bro Respondent: Did you receive for May?

Claimant: Yes Respondent: Bro we are late only for June Im receiving claims from FIFAA”

10. It is to be noted that the specific dates of the WhatsApp messages mentioned above were not translated into one of the official languages used in the FIFA proceedings (cf. art. 13, par 1 of the Procedural Rules Governing the Football Tribunal).

11. As per information contained in the FIFA Transfer Matching System (TMS), on 2 August 2022, the Respondent changed its name from “Levski 2005” to “FC Krumovgrad”.

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II. Proceedings before FIFA

12. On 28 May 2023, and amended on 13 June 2023, 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

13. In his claim, the Claimant requested the payment of EUR 8,800 corresponding to the 2nd, 3rd, 4th, and 5th instalments of the settlement agreement. The Claimant stated that the Respondent failed to pay the second instalment on the due date, hence, all the remaining instalments became due in accordance with the acceleration clause therein included.

14. The Claimant further requested EUR 4,400 as penalty in accordance with clause 3.2 of the settlement agreement.

15. Moreover, the Claimant requested FIFA “to rule that simple interest at the standard rate of 5%, or alternatively as to be determined by the panel, is applied to all and any amounts awarded”.

16. Finally, the Claimant requested that the Respondent be ordered to pay legal costs (GBP

5,000). b. Position of the Respondent

17. In its reply, the Respondent requested FIFA to dismiss the claim insofar as it is premature.

18. In accordance with the Respondent, the Claimant and Mr. Osman verbally agreed on the delay of the payments and this was further reflected in the WhatsApp conversations.

19. According to the Respondent, between April and June 2022, Mr. Osman: “always informed the Claimant about the Respondent’s precarious financial situation and sought his consent to the payment delays. The Claimant has always shown understanding and explicitly agreed with the payment delays, thus creating legitimate expectations in the Respondent that he has consented to the payment delays and will not file a lawsuit claiming outstanding amounts and penalties.

As a result the Claimant’s New Claim to is surprising, premature, contrary to good faith, and frustrates [the Respondent] legitimate expectations (venire contra factum proprium)” Page 5

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20. In view of the foregoing, the Respondent referred to art. 107 of the Swiss Code of Obligations (SCO) and argued that the claim is premature as the Claimant failed to warn it and set a new time limit for payment.

21. Additionally, the Respondent argued that the penalty “should fail” as the Football Tribunal does not proceed with claims that are only focussed on the payment of a penalty.

Alternatively, the Respondent argued that such penalty is excessive and should be adjusted and reduced to 5% per year according to the Football Tribunal’s jurisprudence.

22. It is to be noted that the Respondent provided with two bank statements which indicated the following payments to the Claimant: EUR 2,587 on 5 April 2023 and EUR 2,200 on 16

June 2023.

23. In view of the foregoing, the Respondent requested: - To dismiss the claim as it is premature and set a new time limit for subsequent performance. - Alternatively, the Claimant should be granted EUR 6,600 as outstanding amount and 5% interest per year as of 5 June 2023.

c. Additional comments of the Claimant

24. Inquired by the FIFA general secretariat upon the payment allegedly made by the Respondent, the Claimant acknowledged receipt of the payments of EUR 2,587 on 5 April

2023 and EUR 2,200 on 16 June 2023. However, the Claimant indicated the following (quoted verbatim): “For sake of reiteration, the payment in Exhibit A [EUR 2,587 related to the first instalment] was not in dispute, and was mentioned clearly in the opening of the claim on 28th May 2023 on the Legal Portal. The payment in Exhibit B [EUR 2,200 related to the second instalment] was due at the time of the claim, and was not received until mid-June 2023, having already been significantly delayed”

III. Considerations of the Dispute Resolution Chamber

a. Competence and applicable legal framework

25. First of all, the Single Judge of the Dispute Resolution Chamber (hereinafter also referred to as 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 28 May 2023 and submitted for decision on 16 August 2023. Taking into account the wording of art. 34 of the March 2023 edition of the Procedural Rules Governing the Football Tribunal

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(hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

26. 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 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 Portuguese player and a Bulgarian club.

27. 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 (May 2023 edition), and considering that the present claim was lodged on 28 May 2023, the May 2023 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

28. For sake of clarity, the Single Judge remarked that the Respondent also referred in its submissions to Swiss law, to support its position. In this respect, the Single Judge wished to recall that when deciding a dispute before the Dispute Resolution Chamber, FIFA’s regulations prevail over any national law that the parties might have chosen. In this regard, the Single Judge 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 Single Judge would have to apply the national law of a specific party on every dispute brought to it. By the same token, the Single Judge wished to point out that it is in the interest of football that the cases are based on uniform criteria rather than on provisions of national law that may vary considerable from country to country. Therefore, the Single Judge deemed that it is not appropriate to apply the principles of a particular national law but rather the Regulations, general principles of law and, where existing, the Football Tribunal’s wellestablished jurisprudence.

b. Burden of proof

29. 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 TMS. c. Merits of the dispute Page 7

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30. The competence and the applicable regulations having been established; the Single Judge entered into the merits of the dispute. In this respect, the Single Judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the Single Judge 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.

1. Main legal discussion and considerations

31. The foregoing having been established, the Single Judge moved to the substance of the matter, and took note of the fact that it pertains to a claim of a player against a club for overdue payables, in which the main dispute of the parties is to establish whether the acceleration and penalty clauses were triggered in accordance with the settlement agreement.

32. In this context, the Single Judge initially recalled the wording of clause 3 of the settlement agreement which stipulated that: “3.1. lf the Club delays any payment due under Clause 2.1 without the Player's prior written agreement, all claims arising from Clause 2.1 (i.e., the delayed installment and all remaining installments) shall automatically become due and payable immediately, without the need for a written notice thereof ("Accelerated Amount") 3.2 ln that case, the Club shall also immediately pay the Player a cumulative penalty fee of fifty percent (50%) of the Accelerated Amount”.” (Emphasis added).

33. Accordingly, the Single Judge noted that only one condition was to be met in order to trigger the acceleration and the penalty clauses, i.e., the Respondent failing to pay the respective amount on each due date. In continuation, the Single Judge noted that as per the evidence provided by the Respondent (i.e., the WhatsApp communications) regarding the payment of the second and third instalment, it could not be retrieved that the

Claimant accepted to postpone the dates of payment, as well as no written agreement has been provided by the Respondent.

34. In parallel, the Single Judge also highlighted that it remained undisputed between the parties that the Club paid the second instalment on 16 June 2023, therefore, more than one month late. Consequently, the Single Judge determined that the acceleration and penalty clauses had already been triggered by the default of the Club on 9 May 2023, hence should be enforced in line with the general legal principle of pacta sunt servanda.

Therefore, the Respondent should have paid the amount of EUR 8,800 on 10 May 2023. Page 8

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35. In view of the foregoing and considering that the Respondent paid the amount of EUR 2,200 during the current proceedings (on 16 June 2023), the Single Judge concluded that the Claimant shall be entitled to the balance of EUR 6,600 (i.e., EUR 8,800 less EUR 2,200).

36. In addition, taking into consideration the Player’s request, the constant practice of the Dispute Resolution Chamber in this regard and the principle of ne ultra petita, the Single Judge decided to award interest at the rate of 5% p.a. as from 28 May 2023.

37. Lastly, the Single Judge pointed out that the contractual penalty of EUR 4,400 shall also be awarded insofar as it is contractually based, reasonable and proportionate in line with the jurisprudence of the Football Tribunal. Notwithstanding, by recalling the principle of ne bis in idem, the Single Judge established that no interest should be applicable over the penalty. ii. Compliance with monetary decisions

38. 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.

39. 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.

40. 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.

41. 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.

42. 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.

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d. Costs

43. 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.

44. 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.

45. Lastly, the Single Judge 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, Leonardo Peixoto Principe, is partially accepted.

2. The Respondent, FC Krumovgrad, must pay to the Claimant the following amount: - EUR 6,600 as outstanding remuneration plus 5% interest p.a. as from 28 May 2023 until the date of effective payment; - EUR 4,400 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, 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.

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. This decision is rendered without costs.

For the Football Tribunal: Emilio García Silvero

Chief Legal & Compliance Officer Page 11

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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

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 Page 12