FIFA - Decisiones estatuto del jugador - 032367 23032023

Decision of the Players’ Status Chamber passed on 31 March 2023 regarding a dispute concerning the transfer of the Player C

COMPOSITION:

Javier Vijande Penas (Argentina), Chairperson Tomas Gonzales Cueto (Spain), member Luis Kanonnikoff (Paraguay), member

CLAIMANT:

Club A, Country A

RESPONDENT: Club B, Country B Represented by pg. 2

I. Facts of the case

1. On 31 August 2021, Club A (hereinafter: Claimant) and Club B (hereinafter: Respondent) concluded an agreement (hereinafter: transfer agreement) regarding the transfer on loan of the Player C from the Claimant to the Respondent, namely as of 31 August 2021 until 30 June 2022.

2. According to the transfer agreement, the Respondent undertook to pay the Claimant a fixed amount of CURRENCY B 1,000,000 (hereinafter: Transfer Fee), minus the relevant deductions regarding the solidarity contribution, in two instalments as follows: - CURRENCY B 500,000 (Five Hundred Thousand CURRENCY B) payable on 30 September 2021; - CURRENCY B 500,000 (Five Hundred Thousand CURRENCY B) payable on 7 February 2022.

3. Pursuant to clause 2.3 of the Transfer Agreement: “The payment of the Temporary Transfer Compensation Fee and the Contingent Temporary Transfer Compensation Fee shall be made in Euro at the exchange rate of the European Central Bank on the date of payment to the following bank account:

(xxx)

4. It stood undisputed between the parties that clubs affiliated to Football Association B

(hereinafter: Football Association B) - such as the Respondent -, are bound to adhere to Football Association B Rules including Rule xxx of Football Association B Rules 2021/22 (in force both on the date of the transfer agreement and the relevant payment date) which establishes that all payments to clubs belonging to other national associations in respect of transfer fees, solidarity

and training compensation are required to be made via Football Association B Clearing House. By the same token, it stood equally undisputed that Bank B (hereinafter: Bank B) is the operative bank for the payment realized via Football Association B Clearing House.

5. The parties dispute however the effect of the rules in the performance of their obligations under the transfer agreement.

6. On 30 September 2021, the Respondent paid the first instalment of the Transfer Fee via Football

Association B Clearing House.

7. On 22 October 2021, the Claimant received the relevant sum.

8. On 7 February 2022, the Respondent paid the second instalment of the Transfer Fee

(hereinafter: the Disputed Payment) to Football Association B Clearing House in accordance with the relevant domestic regulations, minus CURRENCY B 19,171.23 as solidarity contribution.

9. On 24 February 2022, the Country A launched an armed invasion in Country D and war broke out between these countries. pg. 3

10. On 28 February 2022, the COUNTRY B government expanded the relevant sanctions regime against certain individuals and entities following the cited war. In particular, the bank of the Claimant, Bank A (hereinafter: Bank A), was included in the consolidated list of financial targets in the COUNTRY B.

11. On 3 March 2022, The Football Association B Clearing House transferred the Disputed Payment back to the Respondent justifying such payback in virtue of the new COUNTRY B sanctions regime.

12. On 4 March 2022, the Respondent (a) notified the Claimant that due to the sanctions imposed on Country A banks, the Disputed Payment had been blocked by Bank B and had been returned to the Respondent; and (b) informed the Claimant that it would hold the monies until it had been advised that it was able to remit it successfully to the Claimant.

13. On the same date, the Claimant informed the Respondent that it was working on opening a new account with an international bank and that it would inform the Respondent of the new bank details in due course.

14. On 13 April 2022, Mr. Sanctioned Person A (hereinafter: the Sanctioned Person), who was reportedly owner of xxx% shares in the Claimant, was added to the COUNTRY B sanctions list.

15. On 20 April 2022, the Claimant contacted the Respondent to inform the latter that it had opened a new bank account with Bank E, which was based in Country E, and provided the Respondent with an additional agreement to sign which set out the details of this new bank account

(hereinafter: the Additional Agreement).

16. Contextually, the Respondent contacted Football Association B to query whether it would be able to make onward payment via The Football Association B’s Clearing House to a Country A club (whose primary bank had been sanctioned) to an alternative, non-sanctioned, bank account. The Football Association B reverted to the Respondent to confirm that due to the crisis in Country D and the subsequent sanctions imposed on Country A businesses and individuals, Bank B had temporarily suspended service for all foreign exchange payments requiring Country A currency, including the prohibition of making payments to certain Country A banks via the international SWIFT payment system. Contextually, The Football Association B confirmed to the Respondent that therefore it was unable to make onward payment to any correspondent bank account of which the beneficiary bank account is a Country A bank account.

17. On 21 April 2022, the Respondent sent the Additional Agreement to the Football Association B notifying it that the Claimant had requested the Respondent to make the payment of the Disputed Payment to a bank account based in Country E. It was noted that the Country E bank was listed as the “Correspondent Bank” whilst the “Beneficiary Bank” was based in Country A.

Accordingly, the Respondent requested the Football Association B to confirm with its bank and

legal team what the position would be in respect of onward payment of the monies from the Football Association B’s Clearing House to the Country E bank account. pg. 4

18. On 4 May 2022, the Football Association B informed the Respondent that the Bank B bank had confirmed that it would not accept payments to any account whereby the ultimate beneficiary of the payment is a Country A bank, as this would result in a circumvention of the sanctions regime.

19. Following an exchange of correspondence between the parties, on 30 May 2022, the Respondent confirmed to the Claimant that Bank B remained unable to make any such transfer due to the COUNTRY B sanctions regime, irrespective of whether the bank account was held in another country and that even UEFA guidelines would corroborate the supervening condition of force majeure.

20. In this context the Respondent referred to the “Extraordinary measures in respect of club licensing processes for participating in the 2022/23 UEFA club competitions” which provide, inter alia, that “fulfilment off financial criteria by license applicants involving financial transactions with clubs from the relevant UEFA member associations (COUNTRY D, Country A, Country G) with an impact on overdue payables criteria ... could be impeded or rendered impossible within the regulatory deadline of 31 March 2022”.

21. On 22 June 2022, the Claimant issued a formal notice to the Respondent, putting the latter in default of the Disputed Payment and accusing it to have failed to comply with its financial obligations “without any valid reason”.

22. On 28 June 2022, the Respondent contacted the Football Association B and requested confirmation of the Football Association B’s position on managing an escrow account into which the Respondent would pay the sums owed to the Claimant.

23. On the same date, the Football Association B confirmed that it had “no intention of managing an escrow account in relation to payments due to clubs in sanctioned countries”. Contextually, the Respondent also received an email from Bank B which highlighted the involvement of the

Sanctioned Person in the ownership of the Claimant.

24. On 2 September 2022, Bank B issued a letter for the purposes of these proceedings and at the request of the Respondent, whereby it confirmed that it operates the bank accounts for both

(i) the Claimant and (ii) the Football Association B Clearing House. In this context, Bank B additionally clarified that: “1. The onward payment of the [Disputed Payment] was not made from the Football Association B Clearing House to [the Claimant] prior to the introduction of increased sanctions by the COUNTRY B government against Country A entities/individuals in late February 2022 following the Country A invasion of Country D.

2. Following the introduction of such increased sanctions by the COUNTRY B government,

[Bank B] temporarily suspended facilitating foreign exchange payments to Currency A pg. 5 registered bank accounts such as the account notified by [the Respondent] to [Bank B] for onward payment of the [Disputed Payment]. As such, onward payment of the [Disputed Payment] was not able to be made and it was therefore transferred back to [the Respondent].

3. We were subsequently notified by [the Respondent] that they had received a request from [the Claimant] to make the [Disputed Payment] to a ‘correspondent’ bank account in Country E. The ‘beneficiary bank’ for such ‘correspondent’ bank account, however, was a Country A currency account based in Country A. We therefore notified [the Respondent] that we would not facilitate payment to such account given one of the ultimate beneficial owners of the intended beneficiary is sanctioned by the COUNTRY B Government.

4. In line with the current sanctions’ regime, we do not engage in transactions involving entities in which a sanctioned party (including Country G designated entities) has an interest in 10% or more of the shareholding of such entity. From research conducted by our sanctions team, we understand that a currently sanctioned individual may hold in

excess of 10% of the shareholding of [the Claimant] which currently prevents us facilitating the [Disputed Payment] or indeed any payment to/for the benefit of [the Claimant] (whether via Football Association B Clearing House or [the Respondent’s] bank account).”

25. On 5 September 2022, the Football Association B confirmed the Respondent that, pursuant to the Bank B Sanctions Policy, Country A was currently a narrowly restricted country, hence it was not possible to make payments towards an entity more than 10% owned by a party subject to sanctions by the EU, US or XX, such as the Claimant, whose relevant shareholder, the Sanctioned Person, owns more than xx% of the shares. Furthermore, Bank B confirmed that also the banks of Country A and Bank A were subject to sanctions designation by XX. pg. 6

II. Proceedings before FIFA

26. On 27 July 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

27. According to the Claimant, the Respondent has overdue payables in the amount of CURRENCY B 500,000 and shall pay said sum to the Claimant in Euro at the exchange rate of the European Central Bank on the date of payment.

28. In this context, the Claimant argued that the Respondent would have no prima facie basis for the delay of the payment.

29. In particular, the Claimant highlighted that in fact, the due date for the payment of the second instalment of the Transfer Fee had expired even before the circumstances adopted by the Claimant arose, namely 21 days before the COUNTRY B sanctions regime had been applied to Bank A (i.e., on 7 February 2022).

30. Furthermore, the Claimant argued that the Respondent cannot transfer its contractual liability to the Football Federation B nor to the Bank B as these entities simply acted as its auxiliaries in

the case at stake, hence the Respondent shall be held responsible for the payment nevertheless.

31. Lastly, the Claimant declared that on 18 July 2022 XXX was able to make a payment in favor of the Claimant through the account opened by the latter in April - and already notified to the Respondent -, at Bank E. In the Claimant’s view, this would prove that it was not impossible for other clubs to make payments to the Claimant, namely as the COUNTRY B government did not prohibit every transfer abroad but only those directed at the entities and individuals indicated under the list of sanctions.

32. In addition to what above, the Claimant demanded that the Respondent pay also interest on the outstanding amount running as from 8 February 2022.

b. Position of the Respondent

33. In its reply, the Respondent acknowledged the existence of the debt contested by the Claimant, as well as the quantum.

34. Nevertheless, the Respondent argued that the payment of the Disputed Payment had been made on time to the Football Association B Clearing House whereas its actual performance was impeded by Football Association B due to the establishment of the COUNTRY B sanctions regime, which in the Respondent’s view would represent a situation of force majeure. pg. 7

35. In this respect, the Respondent referred to its breach as due to the concurrence of an event

(the war) or an impediment (the COUNTRY B sanctions regime) that is not only beyond its control (and that it cannot avoid to overcome) but also that could not have been reasonably expected or taken into account when he assumed the relevant obligation that has been breached, hence this would exactly correspond to the definition of force majeure.

36. In particular, the Respondent disputed the existence of alternatives to the mere acceptance of what imposed by a higher authority, namely the COUNTRY B government and the Football Association B, stating that trying to circumvent their regulations would make the Claimant face severe sanctions at a domestic level.

37. In this context, the Respondent also objected to the applicability of art. 12 bis of the Regulations on the Status and Transfer of Players (RSTP), arguing that the situation of force majeure supervened on 28 February 2022 would represent a prima facie basis for the delay of the payment before the 30th day from the relevant due date (i.e., 7 February 2022).

38. Furthermore, the Respondent argued that because of the inclusion of the Sanctioned Person in the COUNTRY B’s sanctions list, it still subsists a prohibition on making funds and economic resources available to or for the benefit of the Claimant, either directly or indirectly.

39. In light of the above, the Respondent reiterated that its bank, Bank B, was and is still unable to

(and therefore the Respondent was and is currently unable to) make payment of the Disputed Payment, irrespective of whether the latter opens another bank account in a separate country to try and circumvent the sanctions or whether football clubs based in other jurisdictions (such as XX) have made payment to such correspondent bank accounts (as the Claimant set out).

40. In conclusion, the Respondent objected also to the imposition of interests and sporting sanctions, namely because the payment has allegedly occurred in due time as per clause 2.3 of

the Transfer Agreement.

41. In this context, the Respondent argued that both the first instalment and the second one were paid on the respective due dates by the Respondent, and in the first case the Claimant did not contest the fact that the monies arrived to the latter only 3 weeks later, hence now it cannot contest the fact that the Respondent paid the second instalment on 7 February 2022 and demand interest on it.

42. The requests for relief of the Respondent, accordingly, were the following: “Payment of the [Disputed Payment] should be suspended until the sanctions imposed on Country A entities and individuals (including [the Claimant’s] bank and one of [the Claimant’s] significant

shareholders) have been lifted. In the alternative, the PSC shall order that [the Respondent] is to make payment of the [Disputed Payment] into a designated escrow account created by FIFA, until [the Respondent] is able to make payment of the [Disputed Payment] to [the Claimant].” pg. 8 c. Rejoinder of the Claimant

43. In its rejoinder, the Claimant argued that the Respondent based its defense on the erroneous assumption that the Football Association B regulations and COUNTRY B legislation should be applicable to this case, namely as the restrictions allegedly stipulated by the Football Association B regulations (i.e., obligation to make payments via the Football Association B Clearing House) and COUNTRY B legislation (i.e., imposition of the sanctions regime by COUNTRY B legislation which prohibits payments being made to the Claimant) caused the Respondent’s failure to pay the Disputed Payment to the Claimant and constitute an excuse for breach of the Transfer Agreement.

44. In this respect, the Claimant remarked that when entering into an international transfer agreement with a foreign club, the law applicable to said agreement must be the one approved and agreed between both parties.

45. Accordingly, in the Claimant’s view, the sole applicable law to the case at stake should be the FIFA Regulations and the Swiss law.

46. As a consequence of the above, the Claimant stated that the Respondent cannot invoke external legal provisions to avoid complying with its contractual obligations.

47. Furthermore, the Claimant argued that the Respondent’s payment to the Football Association B does not constitute per se a form of compliance releasing the Respondent from its financial liabilities, namely as the Football Association B is simply a third party acting as an intermediary and not even under the jurisdiction of FIFA.

48. Beside the above, the Claimant also objected to the Respondent’s position according to which the start of the war in Country D would constitute a cause of force majeure to justify the noncompliance of the Transfer Agreement.

49. In particular, according to the Claimant, the Respondent did not provide legal norms that allegedly impose an “absolute ban” on COUNTRY B entities and individuals making payment to sanctioned entities and entities that are connected to sanctioned individuals.

50. Moreover, the Claimant argued that even if there are some restrictions on payments to some Country A entities, the Respondent did not prove that such restrictions apply to payments to the Claimant. In this context, the Claimant rebutted the Respondent’s statements according to which “COUNTRY B legislation prohibits making payment 1) to sanctioned entities (i.e. [the Claimant’s] bank)” and 2) “entities such as [the Claimant] that are connected to sanctioned individuals (i.e. by way of its beneficial ownership)”.

51. In this respect, the Claimant declared that its bank is not under any sanctions, nor the same club is connected to any sanctioned individuals. In particular, the Claimant specified that Bank A was excluded from SWIFT system, it opened a European bank account in Bank E and the pg. 9 relevant new bank details were provided to the Respondent, whereas the Respondent did not provide any evidence that it is prohibited to make payment to such bank account.

52. Secondly, the Claimant objected also to the Respondent’s statement that the Sanctioned Person would be a “significant shareholder”. In this regard, the Claimant argued that (i) “SHAREHOLDER A is the only shareholder of [the Claimant], whereas none of the shareholders of SHAREHOLDER A owns ten or more percent of shares of SHAREHOLDER A, hence none of SHAREHOLDER A shareholders is able to determine the financial and operating policies of [the Claimant] or exercise direct or indirect control over the club”, and, moreover, that (ii) “in xxx [the Sanctioned Person] resigned as a member of the Board of Directors of SHAREHOLDER A and as President of SHAREHOLDER A.

Accordingly, neither he is a controlling shareholder of SHAREHOLDER A”.

53. In conclusion, the Claimant held his original request for relief and stated that even if COUNTRY B legislation stipulates restrictions on payments to Country A entities, the Respondent failed to prove that such restrictions apply to payments to the Claimant.

d. Final comments of the Respondent

54. In its final submission, the Respondent argued that the COUNTRY B domestic provisions cannot be disregarded neither by FIFA, namely as the same FIFA Procedural Rules specify that the “in their application and adjudication of law, the chambers shall apply the FIFA Statutes and FIFA regulations, whilst taking into account all relevant arrangements, laws, and/or collective bargaining agreements that exist at national level”.

55. In the case at stake, the Respondent reiterated that under the specific circumstances there is an objective impediment for the same Respondent to comply with its financial obligations which derives from the imposition of the COUNTRY B Sanctions Regime which in turn arose as a direct consequence of the war in Country D.

56. In In particular, according to the Respondent, that impediment has the following traits:

(a) it was clearly and entirely beyond the control of the Respondent; (b) it occurred beyond the Respondent’ sphere of the activity; (c) it was unforeseeable at the time the Transfer Agreement was entered into by the parties; (d) it could not (and cannot) be resisted, avoided, or overcome by the Respondent; and (e) was not (and is not) attributable to the Respondent.

57. Accordingly, the Respondent insisted on being unable to comply due to a situation of force majeure which cannot render the Respondent liable.

58. In particular, the Respondent remarked that it is obliged to follow COUNTRY B and Football Association B regulations and that the compliance process imposes the intervention of the Football Association B, whereas the made realized by the Respondent on 7 February 2022 to pg. 10

Football Association B Clearing House clearly shows its willing to uphold its financial obligations

and its good faith.

59. Furthermore, the Respondent stated that “Breaches of financial sanctions imposed by the Sanctions Regime are deemed a serious criminal offence under COUNTRY B law, carrying a maximum sentence on indictment of 7 years’ imprisonment and, on summary conviction, a maximum of 12 months’ imprisonment in Country B. In addition, the xxx has the power to impose monetary penalties for breaches of financial sanctions under powers bestowed upon it in the xxx Act 2017. The maximum value of a monetary penalty may range from 50% of the total breach up to CURRENCY B 1,000,000

(One Million CURRENCY B), whichever is greater in value.5 For example, if the payment which breached the Sanctions Regime was for the sum of CURRENCY B5,000,000 (Five Million CURRENCY B), the maximum value of the monetary penalty would be CURRENCY B2,500,000 (Two Million Five Hundred Thousand CURRENCY B). In the present case, given that the Second Instalment is the sum of CURRENCY B500,000 (Five Hundred Thousand CURRENCY B) a fine of CURRENCY B1,000,000 (One Million CURRENCY B) would be imposed on [the Respondent] in the event that it breached the Sanctions Regime by making payment to [the Claimant] and/or its bank”.

60. In this respect, the Respondent insisted on the fact that pursuant to the Consolidated List of person/entities subject to the Sanctions Regime, the Sanctioned Person still appears as President and CEO of Shareholder A, which owns 100% of the Claimant’s shares, hence any payment addressed to it, regardless of the bank account would be seen as a circumvention of the aforementioned national provisions and the Respondent would be harshly sanctioned.

61. Finally, the Respondent remarked that in the case at stake it is possible to extract the concept of force majeure from the jurisprudence of Swiss Federal Tribunal and CAS, namely as this implies an objective (rather than a personal) impediment, which:

• “arises from an event or impediment beyond the control of the “obliged party”; • could not have reasonably been foreseen by the party when it agreed to assume the relevant contractual obligation; • arise from extraordinary and unforeseeable events that occur beyond the sphere of the activity of the person concerned that impose themselves on that person in an irresistible manner; and • renders the performance of the relevant obligation impossible.”

62. Accordingly, the Respondent submitted that, based on the aforementioned established CAS jurisprudence, the Sanctions Regime that has been imposed by the COUNTRY B Government as a result of the Country A invasion in Country D is precisely the type of situation which is to be deemed a force majeure event given that it commenced on 24 February 2022, approximately 6 months after the Transfer Agreement was entered into. pg. 11

63. In this respect, the Respondent remarked that when it agreed the terms of the payment of the Disputed Payment, the Respondent could not have reasonably foreseen that Country A would invade Country D and that sanctions would be imposed by the COUNTRY B government, such that the Respondent would be unable to make payment to the Claimant, otherwise the mentioned agreement would have not been signed.

64. Based on the above, and pursuant to the Swiss Code of Obligations (art. 119 and 1051) the Respondent argued that the performance claimed by the Claimant has become impossible, hence the relevant obligation shall be deemed as extinguished.

65. In conclusion, the Respondent reiterated its previous requests for relief.

III. Considerations of the Players’ Status Chamber

a. Competence and applicable legal framework

66. First of all, the Players’ Status Chamber (hereinafter also referred to as Chamber or PSC) 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 27 July 2022 and submitted for decision on

31 March 2023. Taking into account the wording of art. 34 of the October 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.

67. 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. 2 in combination with art. 22 lit. f) of the RSTP October 2022 edition, the PSC is competent to deal with the matter at stake, which concerns a contractual dispute between clubs belonging to different associations.

68. 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 RSTP (October 2022 edition), and considering that the present claim was lodged on 27

July 2022, the July 2022 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

69. In doing so, the Chamber recalled the longstanding jurisprudence of the Football Tribunal and clarified in application of art. 3 of the Procedural Rules, it shall apply the FIFA Statutes and FIFA regulations, whilst taking into account all relevant arrangements, laws, and/or collective bargaining agreements that exist at national level, as well as the specificity of sport. As such, the PSC clarified that it must take into account the laws that may exist at national level, but not necessarily apply it. pg. 12

70. In this context, the PSC wished to recall that, while adjudicating in a given dispute, the longstanding jurisprudence of the Football Tribunal indicates that the FIFA regulations prevail over another national law (even if chosen by the parties). In line with this reasoning, the Chamber emphasized that the objective of the Regulations on the Status and Transfer of

Players, and the FIFA regulations in general, is to create a standard regulatory framework to which all actors within the football community are subject to and can trust. This approach has been also confirmed in multiple occasion by the Court of Arbitration for Sport. b. Burden of proof

71. 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

72. 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

73. The foregoing having been established, the Chamber moved to the substance of the matter, and took note of the fact that the parties strongly dispute the payment of certain financial obligations by the Respondent as per the contract, namely the Disputed Payment of CURRENCY

B 500,000.

74. In this context, the Chamber acknowledged that its task was to determine, based on the evidence presented by the parties, whether the claimed amounts had in fact remained unpaid by the Respondent and, if so, whether the latter had a valid justification for not having complied with its financial obligations.

75. The Chamber first observed that in the case at hand the Respondent did not contest the existence of the debt claimed as outstanding, but rather argued its incapability of proceeding with the relevant payment due to causes of force majeure. In particular, the Chamber took note

of the arguments presented by the Respondent with regard to legal impediments alleged as ascribable to the sa