Udinese Calcio S.p.A v. Fédération Internationale de Football Association (FIFA), Santos FC

II. FACTUAL BACKGROUND — A. Facts of the case

4. Below is a summary of the relevant facts and allegations based on the Parties’ written submissions, pleadings and evidence adduced during these proceedings. Additional facts and allegations may be set out, where relevant, in connection with the legal discussion that follows. While the Panel has considered all the facts, allegations, legal arguments and evidence submitted by the Parties in the present proceedings, the Panel refers in its Award only to the submissions and evidence it considers necessary to explain its reasoning.

5. On 23 June 2003, in the season of his 14 th birthday, J. (the “Player”) was registered for Santos.

6. On 28 July 2006, the Player entered into a two-year professional employment contract with Santos, to expire on 27 July 2008.

7. On 29 July 2007, the Player, together with his mother (the Player was a minor at the time), entered into a new one-year contract with Santos, also to expire on 27 July 2008 (the “First Contract”).

8. Concurrently, on 29 July 2007, the Player was allegedly forced, against his will, to sign a further employment contract with Santos, which was to become effective on 28 July 2008 and to expire on 27 July 2011 (the “Second Contract”).

9. On 17 September 2007, the Player signed a pre-contract with Serie A club, Torino FC (“Torino”). Torino and the Player agreed to enter into a five-year employment contract from 31 March 2008.

10. In September 2007, the Player brought a claim before the 7 th Labour Court of Santos (the “Brazilian Court”) against Santos in relation to the First Contract. Santos also lodged a counterclaim against the Player.

11. On 21 November 2007, the Brazilian Court rendered a decision on the merits of both the Player’s claim against Santos and Santos’ counterclaim against the Player. The Brazilian Court dismissed both claims as having no legal basis.

12. At some stage in early 2008, the Player brought another claim before the Brazilian Court against Santos complaining about the Second Contract he had allegedly been forced to sign.

13. On 27 July 2008, the Player’s First Contract with Santos expired.

14. On 4 August 2008, the Brazilian Court granted the Player the “desired protective measure”, releasing him from the Second Contract signed between the Player and Santos to commence on 28 July 2008 and expire on 27 July 2011. The Brazilian Court also declared that the Player was free to “sign a contract with another employer”, but also highlighted that the Second Contract was “suspended, pending a final decision”.

15. On 13 May 2009, the Player signed a five-year employment contract with Udinese, to commence on 1 July 2009 and expire on 30 June 2014.

16. On 27 July 2009, the CBF issued the international transfer certificate (the “ITC”) for the Player to the FIGC.

17. On 28 July 2009, the Player was registered with Udinese.

18. On 1 January 2010, the Player and Santos settled all claims in the Brazilian Court arising out of their contractual dispute in relation to the Second Contract.

19. On 1 July 2010, the Player left Udinese and was transferred to the Italian Serie B club, Vincenza Calcio for EUR 400,000.

B. Proceedings before FIFA

20. On 21 December 2007, Santos filed a claim before FIFA against Torino and the Player requesting compensation for what Santos alleged was a premature breach of the Player’s

employment contract with Santos. This matter was assigned the FIFA reference “08- 00102/boa”.

21. During the investigation phase of the proceedings, it was found that the individual acting on behalf of Torino with regards to the Player’s contract with Torino was not authorised to do so by Torino. Further, Torino was not aware of the actions taken by this individual with respect to the Player. As such, any contract entered into by this individual purportedly on behalf of Torino could not be legally binding upon it.

22. On 5 November 2010, Santos wrote to FIFA requesting to drop its case against Torino and instead made the same claims against Udinese.

23. On 16 November 2010, FIFA wrote to Santos instructing them to amend their claim.

24. On 26 November 2010, Santos filed a new Statement of Claim before the FIFA Dispute Resolution Chamber (the “FIFA DRC”) requesting that the Player and Udinese be ordered to pay compensation for breach of contract without just cause and that Udinese be ordered to pay training compensation for the Player and to impose disciplinary sanctions against Udinese. This maintained the FIFA reference “08-00102/boa”.

25. On 30 November 2010, FIFA sent Santos’ correspondence to Udinese.

26. On 4 August 2011, FIFA wrote to Santos informing them of the requirements under Article 9(1) of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (the “FIFA Procedural Rules”) and in particular of the need to separate out the breach of contract claims from the training compensation claim. FIFA informed Santos that should it not receive the required documents by 18 August 2011, that it would assume that its intervention was no longer needed and close the file. FIFA used a new reference for this correspondence “mil 11–01743”.

27. On 18 August 2011, Santos wrote to FIFA asking for an exceptional extension, citing unforeseen circumstances with its ability to produce the required documents.

28. On 19 August 2011, FIFA wrote to Santos granting them an exceptional extension until 29 August 2011.

29. On 29 August 2011, Santos filed another new Statement of Claim before the FIFA DRC requesting that Udinese be ordered to pay training compensation in the amount of EUR 466,604.75 plus interest of 5% p.a. as from the day on which the payment was effectively due. As directed to by FIFA, Santos used the new FIFA reference “mil 11-01743” for this claim.

30. On 31 August 2011, FIFA wrote to Santos requesting that they make the relevant procedural payment in accordance with Article 9(1)(h) and Article 17 of the FIFA Procedural Rules within 10 days.

31. On 13 September 2011, Santos wrote to FIFA informing them that the relevant payment had been made.

32. Over the next three years, Santos wrote to FIFA at least twice a year requesting that FIFA “carry on with the present file and inform us about the next steps to be taken”.

33. On 20 August 2014, the FIFA DRC decided on the separate breach of contract dispute brought by Santos against Udinese and the Player. The FIFA DRC determined that it was not competent to hear the case and dismissed Santos’ claim. This decision used the FIFA reference “08- 00102/boa”.

34. On 30 October 2014, FIFA wrote to Udinese, through the FIGC, informing them of Santos’ training compensation claim against Udinese. FIFA invited Udinese to either proceed with the remittance of the alleged training compensation due to Santos, or respond to the claim made by Santos by 19 November 2014. This correspondence used the new FIFA reference “11- 01743/boa”.

35. On 19 November 2014, Udinese submitted its written response to FIFA.

36. On 28 April 2015, the decision relating to the breach of contract related dispute before the FIFA DRC was communicated to the Parties.

37. On 12 June 2015, FIFA wrote to Udinese, through the FIGC, acknowledging receipt of Udinese’s 19 November 2014 submission.

38. On 3 September 2015, the FIFA DRC rendered a decision (the “Appealed Decision”) as follows:

“1. The claim of the Claimant, Santos Futebol Clube, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Udinese Calcio, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 345,000 plus 5% interest p.a. as of 28 August 2009 until the date of effective payment.

4. In the event that the aforementioned sum plus interest is not paid within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee, for consideration and a formal decision.

5. Any further claim lodged by the Claimant is rejected.

6. The final amount of costs of the proceedings, amounting to CHF 20,000 are to be paid within 30 days as from the date of notification of the present decision as follows:

6.1. CHF 15,000 by the Respondent to FIFA to the following bank account (…).

6.2. CHF 5,000 by the Respondent to the Claimant (…).

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances under points 2. and 6.2. are to be made and to notify the Dispute Resolution Chamber of every payment received”.

39. On 14 January 2016, FIFA wrote to Santos and Udinese, through the FIGC, notifying them of the Appealed Decision.

III. PROCEEDINGS BEFORE THE CAS

40. On 3 February 2016, pursuant to Article R47 and Article R48 of the Code of Sports-related Arbitration (the “CAS Code”9, Udinese filed a Statement of Appeal against Santos and FIFA at the Court of Arbitration for Sport (the “CAS”). The Statement of Appeal contained the following requests for relief:

“1. To accept the present appeal against the challenged decision;

2. To set aside the challenged decision;

3. To establish that the Claim of the First Respondent regarding the training compensation for the player J. was time-barred;

4. In the event the request set out in point 3 above is not accepted, to establish that the Second Respondent decided ultra petita and/or extra petita;

5. To establish that the Appellant shall not pay any training compensation to the First Respondent;

6. In the event, the Panel should decide that the Appellant should pay training compensation to the First Respondent, to establish that:

i. the training period of the player J. with the First Respondent finished on 17 September 2007 and the training compensation shall only be awarded until this moment;

ii. the Appellant shall not pay any interests to the First Respondent for the period between the registration of the player J. for the Appellant and 30 October 2014;

7. To establish that the Appellant shall not pay any costs of the FIFA proceedings to the First Respondent;

8. To establish that the Appellant shall not pay any costs of the FIFA proceedings to the Second Respondent;

9. To condemn the Respondents to the payment in favour of the Appellant of the legal expenses incurred;

10. To establish that the costs of the present arbitral proceedings shall be borne by the Respondents”.

41. On 9 February 2016, Udinese wrote to the CAS Court Office requesting a five-day extension of the time limit to file its Appeal Brief.

42. On 10 February 2016, the CAS Court Office granted Udinese a five-day extension to file its Appeal Brief.

43. On 18 February 2016, pursuant to Article R51 of the CAS Code, Udinese filed its Appeal Brief with the CAS Court Office with the same requests for relief, save for the following modification:

“6. In the event, the Panel should decide that the Appellant should pay training compensation to the First Respondent, to establish that:

i. the training period of the Player with the First Respondent finished on 17 September 2007 and the training compensation shall only be awarded until this moment;

ii. the maximum amount due to the First Respondent as training compensation is EUR 255,000;

iii. the Appellant shall not pay any interests to the First Respondent;

iv. in the event the Appellant should be condemned to pay interests, then no interest shall be due to the First Respondent for the period between the registration of the Player for the Appellant on 27 July 2009 and 30 October 2014”.

44. On 23 February 2016, FIFA wrote to the CAS Court Office requesting that the time limit for filing its Answer be fixed after the payment of advance costs by Udinese.

45. On 24 February 2016, the CAS Court Office wrote to the Parties confirming that FIFA’s time limit for filing its Answer would be fixed upon Udinese’s payment of its share of the advance costs.

46. On 3 March 2016, Santos wrote to the CAS Court Office enquiring as to whether the extension of the time limit for filing an Answer applied to Santos as well as FIFA.

47. On 4 March 2016, the CAS Court Office wrote to the Parties informing them that the extension of the time limit for filing an Answer applied only to FIFA, as it was the only Party that filed the relevant request pursuant to Article R55 of the CAS Code. The CAS Court Office advised Santos that should it wish to benefit from a new time limit, it should file a request.

48. On 7 March 2016, the CAS Court Office wrote to the Parties informing them that Udinese had paid its share of advance costs.

49. On 8 March 2016, the CAS Court Office wrote to the Parties informing them that it had received a fax from Santos on 7 March 2016 (dated 4 March 2016) requesting that the time limit be modified and fixed after the payment of advance costs by Udinese. As the CAS Court Office had notified the Parties that Udinese had paid its share of advance costs prior to Santos filing its request, the original time limit would remain in place for Santos.

50. On 10 March 2016, FIFA requested another extension of the time limit to file its Answer until 8 April 2016.

51. On 10 March 2016, the CAS Court Office wrote to the Parties, inviting Udinese and Santos to state whether they agreed with FIFA’s request for another extension.

52. On 10 March 2016, Santos wrote to the CAS Court Office stating that it agreed with FIFA’s request for another extension.

53. On 14 March 2016, Udinese wrote to the CAS Court Office stating that it did not object to FIFA’s request for another extension.

54. On 15 March 2016, the CAS Court Office wrote to the Parties informing them that FIFA had been granted another extension, and the time limit to file its Answer would be on 8 April 2016.

55. On 16 March 2016, pursuant to Article R55 of the CAS Code, Santos filed its Answer containing the following requests for relief:

“1. The Appeal filed by Udinese Calcio S.p.A. is dismissed.

2. The decision issued by the FIFA Dispute Resolution Chamber on 3 September 2015 is confirmed.

3. Udinese Calcio S.p.A. shall bear all the costs of this arbitration.

4. Udinese Calcio S.p.A. shall compensate Santos Futebol Clube for the legal and other costs incurred in connection with this arbitration, in an amount to be decided at the discretion of the panel ”.

56. On 5 April 2016, in accordance with Article R54 of the CAS Code, and on behalf of the President of the CAS Appeals Arbitration Division, the CAS Court Office informed the Parties that the Panel appointed to this case was constituted as follows:

– President: Mr Mark A. Hovell, Solicitor, Manchester, England – Arbitrators: Mr Petros C. Mavroidis, Professor, Commugny, Switzerland Dr Markus Bösiger, Attorney-at-law, Zurich, Switzerland

57. On 8 April 2016, pursuant to Article R55 of the CAS Code, FIFA filed its Answer containing the following requests for relief:

“1.1. In conclusion of all of the above, we request that the CAS rejects the present appeal and confirms the decision passed by the Dispute Resolution Chamber on 3 September 2015 in its entirety.

1.2. Furthermore, we ask that the CAS orders the Appellant to bear all the costs incurred with the present procedure, and to cover all legal expenses of FIFA related to the proceedings at hand”.

58. On 18 April 2016, the CAS Court office wrote to the Parties informing them that the Panel had requested that FIFA send the FIFA DRC case file on this matter to the CAS Court Office.

59. On 3 May 2016, FIFA sent the FIFA DRC case file to the CAS Court Office.

60. On 18 May 2016, the CAS Court Office wrote to the Parties informing them of the Panel’s decision that a hearing would be held on this matter.

61. On 26 May 2016, the CAS Court Office wrote to the Parties informing them that the Panel had convened a hearing for this matter for 13 July 2016.

62. On 29 June 2016, the CAS Court Office sent the Order of Procedure to the Parties.

63. On 30 June 2016, the CAS Court Office informed the Parties that Santos had duly signed the Order of Procedure.

64. On 1 July 2016, the CAS Court Office informed the Parties that Udinese and FIFA had duly signed the Order of Procedure.

65. A hearing was held on 13 July 2016 at the CAS premises in Lausanne, Switzerland. The parties did not raise any objection as to the composition of the Panel. The Panel was assisted by Mr. Daniele Boccucci, CAS Counsel. The following persons attended the hearing: i. For Udinese: Mr Gianpaolo Monteneri and Ms. Anna Smirnova – external counsel; ii. For Santos: Messrs Cristiano Caús and Raphael Paço Barbieri – external counsel; and iii. For FIFA: Mr Antoine Bonnet – internal counsel.

66. There were no witnesses present at the hearing. The Panel heard from the Parties with regards to the admissibility of certain evidence (the translations of the decisions of the Brazilian Court) and new arguments from the Appellant regarding the payment of the FIFA DRC advance of costs by the First Respondent. The Panel determined to allow such arguments and evidence on the basis that the arguments could not have been made in its Appeal Brief, as they related solely to information gleaned recently from the FIFA file (which the Appellant had not seen before) and the Appellant had raised some questions regarding the payment of the advance of costs in its Appeal Brief (see par. 70 ff. below). Additionally, the translations were crucial for the Panel to fully understand some of the issues at stake.

67. The Parties were given the opportunity to present their cases, to make their submissions and arguments and to answer questions posed by the Panel. After the Parties’ final, closing submissions, the hearing was closed and the Panel reserved its detailed decision to this written Award.

68. Upon closing the hearing, the Parties expressly stated that they had no objections in relation to their respective rights to be heard and that they had been treated equally in these arbitration proceedings. The Panel has carefully taken into account in its subsequent deliberation all the evidence and the arguments presented by the Parties, both in their written submissions and at the hearing, even if they have not been summarised in the present Award.

IV. THE PARTIES’ SUBMISSIONS

69. The following summary of the Parties’ positions is illustrative only and does not necessarily comprise each and every contention put forward by the Parties. The Panel however, has carefully considered all the submissions made and evidence advanced by the Parties, even if no explicit reference is made in what immediately follows.

A. Udinese’s Submissions

70. In summary, Udinese submitted the following in support of its Appeal.

i. The advance of payments before the FIFA DRC was late and the case should have been dismissed

71. In order to be considered validly made, Santos’ claim must have accompanied the advance of costs made by it to FIFA, and if the payment was not made within the relevant timeframe, then the Panel should find that Santos’ claim was invalid and that the FIFA DRC erred in declaring the claim admissible. To this end, Udinese requested that Santos and FIFA produce evidence regarding the effective and correct payment of the advance of costs by Santos and the receipt of the payment by FIFA. The Panel had ordered that FIFA produce the FIFA DRC file to the Parties.

72. At the hearing, Udinese submitted that within the scope of its 2 nd and 5 th prayers for relief, as set out in its Appeal Brief (see above), the Panel should dismiss Santos’ claim as the payment was indeed made late.

73. It was only when it received the FIFA file, during the course of the procedure in hand before the CAS, that Udinese noted that it had not received copies of some of the direct correspondence between FIFA and Santos. In particular, it referred to the letter of 31 August 2011 that FIFA had sent to Santos, in which Santos was given 10 days to pay its advance of costs (in the sum of CHF 5,000) to FIFA, warning that “failure to pay the relevant advance within the previously mentioned time limit will result in the claim not being heard ”.

74. The FIFA file also revealed that the payment was received in FIFA’s bank account on 13 September 2011, i.e. 2 days late. In accordance with Article 17(5) of the FIFA Procedural Rules and the warning in this letter, FIFA should have closed the case and sent the late payment back:

“If a party fails to pay the advance of costs when submitting a claim or counter-claim, the FIFA administration shall allow the party concerned ten days to pay the relevant advance and advise that failure to do so will result in the claim or counter-claim not being heard”.

75. Udinese submitted at the hearing that Swiss law was not relevant to this issue, as the FIFA Statutes confirmed that Swiss law was only applicable to FIFA DRC disputes on a subsidiary basis, and here the FIFA Procedural Rules were clear, if payments were not made within the time limits, then the case should not be heard.

76. Much as the Panel has the ability to hear this dispute de novo, this does not cure all defects made during the process at first instance. The Panel could only put itself in the position of the FIFA DRC and apply the Procedural Rules. The payment was not made in time, so the case should have been dismissed.

ii. Santos’ claim for training compensation is time-barred

77. Santos made its first and only claim for training compensation allegedly due for the Player on 29 August 2011. This claim was made after the limitation periods for which a party can make a claim had expired, under both the FIFA Procedural Rules and the FIFA Regulations on the Status and Transfer of Players (the “FIFA RSTP”).

78. Article 25.5 of the FIFA RSTP states:

“The Players’ Status Committee, the Dispute Resolution Chamber, the single judge or the DRC judge (as the case may be) shall not hear any case subject to these regulations if more than two years have elapsed since the event giving rise to the dispute . Application of this time limit shall be examined ex officio in each individual case [emphasis added by Udinese]”.

79. As the event that gave rise to the dispute – namely, Udinese registering the Player on 27 July 2009 – occurred more than two years before Santos filed its claim for training compensation on 29 August 2011, the claim had expired and Santos was time-barred from bringing it. As a result, the FIFA DRC erred in deciding that Santos’ claim was admissible.

80. The submissions that Santos made on 5 November 2010 and 26 November 2010 (“the November Submissions”) were mere correspondence to FIFA and did not constitute a valid claim.

81. In support of this, Udinese referred to the 4 August 2011 letter sent by FIFA to Santos, in which FIFA stated:

“We acknowledge receipt of your correspondences dated 5 November 2010 as well as 26 November 2010, and have taken due note that you intend to lodge a complaint regarding training compensation in connection with the registration of the player J. with the club Udinese Calcio”.

82. Udinese highlighted the fact that FIFA referred to the November Submissions as mere “correspondences” rather than a “claim” or “petition”. Udinese also drew attention to the fact that FIFA stated that it recognised Santos’ mere intent to lodge a claim in the future, and “obviously, the intention to act somehow cannot be considered as if such action has already been performed ”.

83. Further, the November Submissions did not conform to the requirements of the FIFA Procedural Rules, and therefore could not be considered as valid petitions for the purpose of procedures regarding training compensation.

84. Udinese again referred to the 4 August 2011 letter sent by FIFA, which informed Santos that, under Article 9(1) of the FIFA Procedural Rules, certain criteria needed to be fulfilled in order

for a claim to be valid. FIFA set a deadline of 18 August 2011 for Santos to comply with such criteria and produce the required documents in a proper form. That FIFA set a deadline for Santos to comply with Article 9(1) of the FIFA Procedural Rules was clear evidence that the November Submissions did not conform to the requirements of the FIFA Procedural Rules, and therefore could not be considered as valid petitions.

85. As the 29 August 2011 submission was the first time Santos complied with the requirements of Article 9(1) of the FIFA Procedural Rules, this was the first and only submission that could be considered as a valid claim for training compensation. By 29 August 2011, however, the twoyear limitation period had already expired.

86. In the Appealed Decision, the FIFA DRC incorrectly determined that the “event giving rise to the dispute is non-payment of the training compensation allegedly due to [Santos] within thirty days having followed the player’s registration with the FIGC on 28 July 2009”. Udinese asserted that the event giving rise to the dispute was the Player’s registration, not the expiration of the thirty-day time limit to pay training compensation. Even Santos in its Answer agreed with Udinese here. In further support of this point, Udinese cited CAS 2013/A/3082, in which the Sole Arbitrator determined as follows:

“E. The time-limit for a claim for training compensation

77. (…) The Sole Arbitrator considers the event giving rise to the present dispute to be the Player’s registration with Appellant on 26 February 2010. (…)” [emphasis added by Udinese].

87. Udinese also cited a FIFA DRC decision passed on 6 November 2014 regarding training compensation in connection with the Player E, in which the FIFA DRC held that the event giving rise to the dispute for training compensation was the player’s registration with the relevant club having occurred.

88. Considering the Player was registered on 27 July 2009 and Santos made its first and only claim for training compensation on 29 August 2011, FIFA erred by not rejecting the case, as it was time-barred from doing so under the two-year limit.

89. Additionally, Santos referred to the following case in the November Submissions: “Santos Futebol Clube, Brazil / Player J., Brazil and Torino Football Club SpA, Italy – Ref. Nr. 08-00102/boa,” when in fact, that case number referred to an entirely different dispute between Santos, the Player and, originally, Torino (this dispute was subsequently amended to replace Torino with Udinese, and the FIFA DRC dismissed Santos’ claim).

90. As there were two separate disputes – one employment-related breach of contract claim, and one relating to training compensation – Udinese submitted that the separation of the two claims was essential. In the event that one and the same document contained claims on multiple disputes that it is customary for FIFA to advise on the obligation for a claimant to lodge two different claims pertaining to two different matters. As the November Submissions related to the employment-related dispute, they could not be considered to constitute claims in the present

training compensation case. Udinese submitted that “only from the moment [FIFA] had received two separate claims, it was in the position to consider the claim as being effectively submitted and the matter to be pending”.

91. Accordingly, for all the reasons above, Udinese stated that the FIFA DRC erred in asserting in the Appealed Decision that Santos’ claim was filed on 5 November 2010 and complemented on 29 August 2011. Only the 29 August 2011 document could be considered as a claim by Santos’ and the Appealed Decision should be set aside as the claim was made after the expiration of the two-year time limit.

iii. FIFA disregarded the principle of res judicata

92. By the time FIFA opened proceedings in the present case, the Brazilian Court had already rendered its decisions of 21 November 2007 and 26 August 2008. Under the principle of res judicata, a matter may not be re-litigated once it has been judged on the merits by a competent decision-making body.

93. The principle of res judicata is fundamental to Swiss public policy, and Udinese specifically referred to Article 59 of the Swiss Civil Procedure Code, which stated the procedural requirements that must be satisfied in order for a court to consider an action or application. Udinese particularly noted the following procedural requirements:

“– the case is not the subject of pending arbitration elsewhere;

– the case is not already the subject of a legally binding decision”.

94. In the present case, the Brazilian Court had already decided upon the same subject matter involving the same parties, and therefore, the requirements for the application of res judicata were met.

95. As the matter had already been decided upon by the Brazilian Court well before Santos submitted this matter to FIFA, FIFA was not entitled to hear the dispute. Furthermore, FIFA should have immediately rejected Santos’ petition in accordance with Article 9(2) of the FIFA Procedural Rules, which states that “Petitions with improper or inadmissible content will be rejected immediately”.

96. Udinese submitted that FIFA should have rejected Santos’ November Submissions under the principle of res judicata with respect to the employment-related dispute, as the matter had already been decided by the Brazilian Court. Had FIFA correctly rejected the November Submissions, then any subsequent request for training compensation based on the November Submissions would have been disregarded as well.

97. Santos’ claim before FIFA amounted to “forum shopping”, and therefore violated the principle of good faith.

iv. The FIFA DRC ruled ultra and/or extra petita

98. Udinese submitted that in rendering the Appealed Decision, the FIFA DRC ruled ultra and/or extra petita – that is, that the FIFA DRC granted more than what Santos requested in its prayers for relief and/or granted Santos a remedy that it did not request in its prayers for relief.

99. Udinese referred to the second of Santos’ November Submissions (the submission date d 26 November 2010), in which Santos made the following request relating to training compensation:

“(v) Consider that Training Compensation is due to Santos F.C. by the respective clubs which signed the player until now, all in line with Annex 4 of the FIFA RSTP (player’s passport to be provided in due course)”;

100. Santos failed to specify against whom the request was effectively addressed, and Udinese submitted that “the respective clubs which signed the player until now” was not a valid way to address a party. Udinese also submitted that only one club may be responsible for the payment of training compensation and not a set of clubs.

101. Santos also failed to specify the amount in dispute. Pursuant to Article 9(1)(g) of the FIFA Procedural Rules, petitions must contain the amount in dispute.

102. Even in its 29 August 2011 submission, Santos again failed to specify the amount in dispute. Santos requested the following:

“In the view of the above, we revert to Article 5 (4), annex 4 of FIFA RSTP, according to which, it falls within the purview of the Dispute Resolution Chamber to review disputes concerning the distribution of the Training Compensation, to respectfully request this governing body the implementation of its own statutes, determining therefore the immediate payment of the compensation claimed by the Brazilian Club Santos F.C., plus default interest payment of 5% p.a. from the day on which the payment was effectively due ”.

103. Santos never requested Udinese to be condemned to pay a specific amount, and rather simply requested that FIFA implement “its own statutes, determining the immediate payment of the compensation claimed”. The amount owed in training compensation cases are the result of a mathematic equation – years of training multiplied by the indicative amounts – and it is for Santos to do the equation and state an amount in dispute.

104. As Santos failed to state an amount in dispute, the FIFA DRC ruled ultra and/or extra petita when it awarded Santos an amount of training compensation when Santos never state d an amount in dispute.

105. In support of its argument, Udinese cited CAS 2010/A/2104, in which that panel held:

“The Panel notes here it cannot directly condemn the ACF to the payment of this amount to the extent that the appellants ask to find on the establishment of the right and not to find on the condemnation in its appeal brief” [emphasis added, and translation from the original French to English made by Udinese].

106. Additionally at the hearing, Udinese referred to Article 58(1) of the Swiss Civil Code which limits a judging body not to award more than it has been requested and that if a sum of money is requested, then the amount must be specified. Further, Udinese relied upon a decision of the Swiss Federal Tribunal that supported this, under reference5A_663/2011.

107. Accordingly, for all of the reasons above, Udinese requested that the Panel overturn the Appealed Decision.

v. Calculation of the training compensation

108. In the alternative, Udinese submitted that should the Panel decide that it should pay training compensation to Santos, the FIFA DRC erred when calculating training compensation and requested that the Panel modify the amount accordingly. The Player’s training period ended on 17 September 2007, rather than, as the FIFA DRC held, on 28 August 2008.

109. Santos recognised that the Player and Torino entered into an employment agreement on 17 September 2007, thereby prematurely ending the Player’s employment relationship with Santos. As a result, Santos could not have played any part in training the Player after 17 September 2007. Udinese submitted that “the basic principle and purpose of training compensation is to financially compensate those clubs that have effectively contributed to the development of a player through training and education. The training clubs should however only be compensated for the period they effectively trained young players”.

110. An additional argument was advanced at the hearing in relation to the 17 September date. As from that time, as the Player and Santos were in dispute, Santos would have stopped investing in (and training) the Player from that time.

111. Udinese referred to Article 3 Annex 4 of the FIFA RSTP and CAS jurisprudence in support of its argument that “the period to be considered when establishing training compensation owed is the time during which a player was effectively trained by a club” [emphasis added by Udinese].

112. Udinese provided its own calculation of training compensation, which showed that the amount owed, if any, is EUR 255,000.

vi. Reduction of interest

113. The FIFA DRC acted ultra and/or extra petita by establishing a specific date from which interest would begin accruing. In its prayers for relief, Santos failed to specify a date, and the FIFA DRC went beyond the scope of its remit in taking it upon itself to establish a date.

114. Udinese only received the relevant files on 30 October 2014, i.e. over three years after the first correspondence in this matter between Santos and FIFA. FIFA caused an unacceptable delay in this matter, and Udinese should not suffer financially because of this. At the hearing, Udinese claimed that the delays had caused it EUR 100,000 of damage.

115. Accordingly, for all of the reasons above, Udinese requested that, should the Panel award Santos training compensation, that no interest should be paid.

vii. Costs of the proceedings

116. Udinese submitted that the costs ordered by the FIFA DRC were disproportionate. It noted that the CAS Panel in CAS 2014/A/3620 determined to review the procedural costs as a result of the unreasonable delays caused by FIFA in that matter.

B. Santos’ Submissions

117. In summary, Santos submitted the following in support of its defence.

i. The advance of payments before the FIFA DRC was late and the case should have been dismissed

118. At the hearing, after listening to the submissions made by Udinese, Santos simply submitted that the 10 days expired on a Saturday, so the payment was made on the very next banking day i.e. 12 September 2011, which fully respected the time limit set by FIFA.

ii. Santos’ claim for training compensation is time-barred

119. Santos submitted that the Player was registered with Udinese on 28 July 2009, so it had until 29 July 2011 to bring its claim for training compensation. The FIFA DRC had correctly acknowledged that Santos’ initial claim had been brought on 5 November 2010 and was completed on 29 August 2011. As such, Santos had filed its claim 8 months before any deadline expired.

120. Santos noted that it took FIFA until 4 August 2011 to acknowledge the claim, but that delay does not “contaminate” its claim.

121. Article 9(1) of the FIFA Procedural Rules expressly envisaged that not all initial claims may be made exactly in accordance with the FIFA Procedural Rules. In the event that they were not, a claimant is given time to rectify this. This is what happened with Santos and it respected all time limits set by FIFA.

122. Santos’ claim was lodged in time, Udinese’s right of defence has not been jeopardised, so the Panel should dismiss its arguments that the claim is time barred.

iii. FIFA disregarded the principle of res judicata

123. The subjects, the requests, the applicable law, the matter, the jurisdiction and the parties were completely different in the Brazilian Courts from the matter before the Panel.

124. Udinese had also only provided the Panel with half of the truth with regards to the Brazilian Court rulings. These hearings concerned the employment-related disputes between Santos and the Player in relation to his First Contract and the Second Contract he signed. Neither had anything to do with Santos’ training compensation claim.

125. The Player’s first claim was dismissed by the Brazilian Court and he saw out the term of his First Contract with Santos. He was not able to claim that he ended the First Contract with just cause.

126. The second claim filed by the Player related to the Second Contract that he had signed wi th Santos. At that time he was induced by an agent to walk out on Santos and to join Torino. The decision from the Brazilian Court that he could leave was granted by a first instance judge and the dispute was eventually settled by agreement between the Player and Santos. This was simply a declaration that the Player did not want to work for Santos and the Brazilian Court would allow him to be free, but the case would then continue to look at the merits and to determine if one party was to blame and what consequences, such as compensation, should flow from that.

127. Santos noted that Udinese claimed that these decisions somehow demonstrated that Santos terminated the contract of the Player without just cause and so, pursuant to Article 2.2 of Annex 4 of the FIFA RSTP Santos would lose its right to training compensation and that the FIFA DRC could not dispute that, as the Brazilian Court had already decided this issue. For the reasons set out above, Santos disputed Udinese’s submissions. The res judicata arguments must be dismissed.

128. In summary, the Player had signed the Second Contract, but he pressured Santos to let him go to Italy. Santos relented. If he didn’t want to play for Santos, then he could go, but that did not affect the 5 years of training he had received from Santos.

iv. The FIFA DRC ruled ultra and/or extra petita

129. Udinese’s arguments here were that in the initial claim made by Santos, neither the amount of money claimed was set out, nor were the details of who would be responsible for the payment, so for the FIFA DRC to award monies from Udinese it went ultra and/or extra petita. However, as mentioned above, the FIFA Procedural Rules allowed claims to be amended or clarified, as happened in the case at hand.

130. In Santos’ submission of 29 August 2011, it clearly set out the amount of money it was seeking and a worksheet, along with the name of Udinese, from which it was claiming the training compensation.

131. The arguments of Udinese were “ultra formalistic”. The choice of verbs are not important, all that matters was that FIFA were aware of the claim and had been aware since 2010. Santos relied upon the CAS jurisprudence in CAS 2006/A/1177.

v. Calculation of the training compensation

132. Udinese attached a copy of the Player’s employment contract with Torino to give the Panel the impression that the Player started his employment with that club on 17 September 2007, and so he was no longer with Santos from that date. However, both the Player’s passport and the Brazilian Court documents demonstrated that the Player remained with Santos until the end of his initial contract, on 27 July 2008. In fact, he remained with Santos until 29 August 2008, awaiting the second decision from the Brazilian Court.

133. Santos further noted that before the FIFA DRC, Udinese claimed the amount of training compensation should be EUR 344,522.

134. In any event, Santos requested the Panel to follow the calculation and award of the FIFA DRC in this matter.

vi. Reduction of interest

135. Santos submitted that the Panel should uphold the Appealed Decision and award interest to Santos on the training compensation due. It cited CAS 2013/A/3082 as an example of where the CAS has awarded interest on late payments of training compensation, where sums had not been paid within 30 days of the registration the player, interest at 5% p.a. should from 31 days after the date of registration, pursuant to Article 104 of the Swiss Code of Obligations.

136. Santos noted that Udinese complained about the length of time the process before FIFA took, but the one that was affected by such a delay was Santos.

C. FIFA’s Submissions

137. In summary, FIFA submitted the following in support of its defence.

i. The advance of payments before the FIFA DRC was late and the case should have been dismissed

138. FIFA firstly questioned whether Udinese’s prayers for relief before the CAS were wide enough to allow the Panel to consider this new argument, raised only at the hearing, without the Panel falling foul of the extra and/or ultra petita arguments that Udinese had raised against the FIFA DRC.

139. In addition, FIFA answered the Panel’s questions regarding the practice of FIFA with regard to time limits set for the advance of costs. FIFA submitted that in 2011 the procedures might not have been as strict as perhaps now and that, whilst unable to speak for the case handler that dealt with the matter at that time, it might not have been surprised if she accepted a payment that might appear to be a day or so late, but was received on the first banking date after the time limit expired. To do otherwise might be “overly harsh or formalistic”.

ii. The admissibility of Santos’ claim for training compensation

140. FIFA referred to the FIFA DRC’s decision that Santos’ claim for training compensation was admissible and valid, and should therefore be confirmed by the Panel. FIFA addressed the issues relating to admissibility as follows:

a) The reported existence of an ultra/extra petita decision

141. FIFA submitted that its “reaction upon receipt of the First Respondent’s claim for training compensation fully matched the applicable rules and is deprived of any wrongdoing”.

142. FIFA referred to Article 9(2) of the FIFA Procedural Rules, which states the following:

“Petitions submitted by parties that do not satisfy the [requirements of par. 1] will be returned for redress along with a warning that the petition will not be dealt with in the event of non-compliance. Petitions with improper or admissible content will be rejected immediately” [emphasis added by FIFA].

143. FIFA was in full compliance with Article 9(2) of the FIFA Procedural Rules when it reverted to Santos asking it not to limit itself to change the name of the respondent club from Torino to Udinese, but to properly amend its statements of claims related to both the employment-related dispute and the training compensation claim.

144. FIFA noted that in Santos’ 5 November 2010 submission, Santos clearly claimed that Udinese has to pay training compensation to Santos in relation to the Player on the basis of Article 20 and Annex 4 of the FIFA RSTP.

145. Regarding Santos’ 26 November 2010 submission, FIFA submits that despite the formal irregularity – presenting its employment-related claim and training compensation claim in one and the same letter – Santos clearly claimed that training compensation was due from Udinese and explicitly inserted such specific claim in its final requests.

146. The FIFA DRC did not rule ultra and/or extra petita, as Santos clearly stated all of the claims for which the FIFA DRC ruled. Furthermore, FIFA argued that had the FIFA DRC “not followed up on the training compensation claim, it would have unjustifiably ignored a specific request of [Santos] for over formalistic reasons. Such stance would have to be qualified as a denial of justice ”.

147. Santos made out its claim to FIFA. It specified that it was claiming EUR 445,000; from the “new club” (which could only be Udinese); and requested the FIFA DRC to follow its Regulations.

b) The alleged prescription of Santos’ claim for training compensation

148. FIFA referred to Article 20, Article 25.5 and Annex 4 of the FIFA RSTP in support of its argument that the two-year time limit for the prescription of an action consisting of training compensation “only starts running as from the expiry of the 30 days the club registering the player was given to proactively proceed to the relevant payment(s)”.

149. It is undisputed that the Player was registered with Udinese on 28 July 2009, and the starting point of the calculation of the two-year statute of limitation was 28 August 2009.

150. Udinese’s restrictive approach that only a complete claim lodged within the two-year time limit may be deemed admissible appeared to conflict with Swiss Law. Article 135 of the Swiss Code of Obligations states the following:

“the prescription is interrupted: 1. (…); 2. when the creditor seeks the enforcement of his rights by initiating legal action, by lodging a claim or upholding a legal exception in front of a court or an arbitrator, by entering into insolvency proceedings or by initiating mediation”.

151. The submission of an incomplete claim interrupts the passage of time, and accordingly, each amended statement of claim Santos submitted consequently reinstated a new two-year time limit.

152. FIFA also referred to Article 63 of the Swiss Code of Civil Procedures in support of its argument that should a claim not meet the relevant procedural requirements, the claimant shall be given a one month deadline to amend the claim. Should the claim be correctly amended and completed, it will be considered submitted on the date of the first submission of the formerly irregular claim.

153. While the FIFA Procedural Rules do not allow the FIFA DRC to grant a 30-day deadline to a claimant to amend and complete its claim, Santos always complied with the time limits the FIFA DRC set for which to complete its claim. The time limits were always shorter than 30 days.

154. As the FIFA DRC found, Santos’ submission of 5 November 2010 interrupted the course of prescription and therefore Santos’ finalised claim, i.e. the 29 August 2011 submission and its payment of the relevant advance of costs, was seen to have been lodged on 5 November 2010. As the claim was seen to have been lodged on 5 November 2010, it was well within the twoyear time limit provided for under Article 25.5 of the FIFA RSTP.

c) The alleged existence of a res judicata situation

155. FIFA could not see that there is a res judicata situation flowing from the decisions of the Brazilian Court. Those deal with employment-related disputes between Santos and the Player. The issue at hand is to do with training compensation and is a dispute between Udinese and Santos. At the very least the equality of the parties is missing.

156. FIFA noted the link between whether Santos breached the Player’s contract without just cause and Article 2.2 of Annex 4 of the FIFA RSTP, as this could cause the loss of Santos’ ability to claim training compensation. However, the first decision of the Brazilian Court was that Santos’ disrespect of its contractual obligations were not sufficient to allow the Player to terminate his contract with just cause. Additionally, FIFA doubted that Udinese could have come to the conclusion from the second decision of the Brazilian Court that Santos had breached the Second Contract without just cause. If there was any doubt, Udinese could have asked the CBF.

157. Such decision failed to trigger the application of res judicata.

158. FIFA therefore requested the Panel to agree with the FIFA DRC in that Santos is entitled to a payment of training compensation from Udinese.

iii. Udinese’s arguments questioning the financial aspects of the Appealed Decision

159. FIFA noted that the Torino contract is of no relevance. The Player did not fulfil its terms and was never registered with Torino. Rather, the Player remained with Santos until 28 August 2008, having first joined Santos on 23 June 2003.

160. FIFA supported the calculation of training compensation made by the FIFA DRC, as set out in the Appealed Decision.

a) The calculation of interest payable

161. The calculation of interest payable by the FIFA DRC was fully justified.

162. FIFA rejected Udinese’s argument that the FIFA DRC ruled ultra petita in determining the rate of 5% p.a. and the date from which interest would begin accruing. It is clear that Santos, in its first claim, did request 5% p.a. from the day on which payment was effectively due. Following the FIFA RSTP, this is unambiguously the day after the 30 days after the registration of the Player by Udinese.

163. FIFA noted that Udinese alleged that Santos failed to show enough interest in its claim, so was responsible for the length of time that elapsed. However, Santos did regularly correspond with FIFA enquiring on the progress of its claim.

164. Finally, there was no provision at the FIFA DRC to suspend interest running on a claim, during the process at FIFA.

b) The costs of the proceedings

165. Following the Annex to the FIFA Procedural Rules, the maximum amount of procedural costs that the FIFA DRC could have levied were CHF 25,000, yet it ordered Udinese to pay CHF 20,000, CHF 5,000 of which were to reimburse Santos for the advance it had made.

166. This amount was legally justified, fair and reasonable.