Osmanlispor FK v. SD Huesca

II. INTRODUCTION

3. This appeal is brought by the Appellant against the Respondent, with respect to the decision rendered by the FIFA Players’ Status Committee (“FIFA PSC”) on 9 February 2021 (the “Appealed Decision”), regarding a dispute concerning the transfer of the player Serdar Gürler (the “Player”).

VI. JURISDICTION

27. Article R47 of the CAS Code provides as follows:

“An appeal against the decision of a federation, association or sports-related body may be filed with CAS if the statutes or regulations of the said body so provide or if the parties have concluded a specific arbitration agreement and if the Appellant has exhausted the legal remedies available to it prior to the appeal, in accordance with the statutes or regulations of that body”.

28. The jurisdiction of CAS derives from Article 58.1 of the FIFA Statutes, which reads:

“Appeals against final decisions passed by FIFA’s legal bodies and against decisions passed by confederations, member associations or leagues shall be lodged with CAS within 21 days of receipt of the decision in question”.

The Parties do not dispute the jurisdiction of the CAS and, moreover, confirmed it by signing the Order of Procedure. Furthermore, Article 5 of the Transfer Agreement provides that “(…). FIFA shall have exclusive jurisdiction of all disputes arising from this Agreement, its execution and its interpretation, with the right to appeal to the Court of Arbitration for sports (CAS) in Lausanne/Switzerland. The language of the arbitration shall be in English”.

29. In light of the foregoing, the Sole Arbitrator holds that the CAS has jurisdiction to hear the present dispute.

VII. ADMISSIBILITY

30. Article R49 of the CAS Code provides as follows:

“In the absence of a time limit set in the statutes or regulations of the federation, association or sports-related body concerned, or in a previous agreement, the time limit for appeal shall be twenty-one days from the receipt of the decision appealed against. The Division President shall not initiate a procedure if the statement of appeal is, on its face, late and shall so notify the person who filed the document. When a procedure is initiated, a party may request the Division President or the President of the Panel, if a Panel has been already constituted, to terminate it if the statement of appeal is late. The Division President or the President of the Panel renders her/his decision after considering any submission made by the other parties”.

31. Article 58 FIFA Statute provides a time limit of 21 days after notification to lodge an appeal against a decision adopted by one of FIFA’s legal bodies, such as the FIFA PSC.

32. The Appealed Decision was notified with grounds to the Appellant on 31 March 2021. The Appellant filed its Statement of Appeal on 21 April 2021, which is within the 21 days deadline allotted under the aforementioned provision.

33. Therefore, the appeal was timely submitted and is admissible.

VIII. APPLICABLE LAW

34. Article R58 of the CAS Code provides as follows:

“The Panel shall decide the dispute according to the applicable regulations and, subsidiarily, to the rules of law chosen by the parties or, in the absence of such a choice, according to the law of the country in which the federation, association or sports-related body which has issued the challenged decision is domiciled or according to the rules of law that the Panel deems appropriate. In the latter case, the Panel shall give reasons for its decision”.

35. Article 57.2 of the FIFA Statutes so provides:

“The provisions of the CAS Code of Sports-related Arbitration shall apply to the proceedings. CAS shall primarily apply the various regulations of FIFA and, additionally, Swiss law”.

36. In addition, the Sole Arbitrator notes that the Transfer Agreement also refers to FIFA regulations as applicable law.

37. Accordingly, the present dispute must be decided in accordance with the FIFA rules and regulations, such as in particular FIFA Regulations on the Status and Transfer of Players (the “FIFA RSTP”) as well as, subsidiarily, Swiss law.

IX. MERITS

38. The main issue in this arbitration, as raised by the Appellant, concerns the interpretation of the provision (the sell-on clause) contained in the Transfer Agreement. The Parties do not agree with the meaning of Article 1.1 para. 4 of the Transfer Agreement which provides that “In case the Player is transferred to a third club, HUESCA shall pay 20% (twenty percent) of the transfer fee that is received from the sale to OSMANLI within 7 (seven) days from the transfer date of the Player”. The Appellant is of the opinion that this provision applies to any transfer of the Player whereas the Respondent asserts that it should only apply to a definitive transfer.

39. The Sole Arbitrator remarks that the Transfer Agreement (and therefore the sell-on clause therein contained) has to be interpreted primarily on the basis of the FIFA rules and regulations, with Swiss law applying subsidiarily.

40. Since the FIFA Regulations do not provide any guidance as to how interpret contractual clauses and because Swiss law is subsidiary applicable, the Sole Arbitrator resorts to Article 18.1 of the Swiss Code of Obligations (“Swiss CO”), which determines the following:

“When assessing the form and terms of a contract, the true and common intention of the parties must be ascertained without dwelling on any inexact expressions or designations they may have used either in error or by way of disguising the true nature of the agreement”.

41. As a result, the interpretation of a contract in accordance with Article 18.1 Swiss CO aims at assessing the intention the parties had when they concluded the contract. In determining the intention of the parties it is necessary to look first to the words actually used or the conduct engaged in. However, the investigation is not to be limited to those words or the conduct even if they appear to give a clear answer to the question. In order to go beyond the apparent meaning of the words or the conduct by the parties, due consideration is to be given to all relevant circumstances of the case. This includes the negotiation, any subsequent conduct of the parties and usages.

42. As noted in CAS 2010/A/2098, the scope of a sell-on fee, which is a quite standard practice in the world of professional football, is to protect a club (the “old club”) transferring a player to another club (the “new club”) against an unexpected increase, after the transfer, in the market value of the player’s service. In other words, the new club agrees to share with the old club a portion of any profit made by the new club in connection with a player’s movement. In transfer contracts, for that reason, a sell-on clause is combined with the provision defining the transfer fee: overall, the parties divide the consideration to be paid by the new club in two components, i.e. a fixed amount, payable upon the transfer of the player to the new club and a variable, notional amount, payable to the old club in the event of a subsequent sale of the player from the new club to a third club.

43. It follows that often sell-on clauses are referring to permanent transfers as triggering element for a participation of the old club in the profit made by the new club after the player’s transfer to a third club. However, the parties of a transfer agreement are free to decide on a case by case basis on which terms a sell-on clause shall be triggered.

44. In the case at hand, the Appellant and the Respondent set in the Transfer Agreement a transfer fee (EUR 2,300,000) payable upon the permanent transfer of the Player to Huesca and the sell-on clause, providing that “In case the Player is transferred to a third club, HUESCA shall pay 20% (twenty percent) of the transfer fee that is received from the sale to OSMANLI (…)”.

45. The wording of this clause is clear in delimiting the scope of the sell-on fee. Article 1.1 of the Transfer Agreement, in fact, refers to the “sale” of the Player and not, in general, to the “transfer” of the same. The inclusion of the word “sale” within the sell-on clause can only lead to the conclusion that the real intention of the parties was to limit the application of such clause exclusively in the event of definitive transfer of the Player.

46. In fact, while the term “transfer” may include both a definitive and a temporary transfer, the word “sale” in the world of professional football can only refer to a definitive transfer.

47. The above is confirmed by CAS 2007/A/1219 which stated that “The Transfer Agreement does not specify whether the transfer triggering the right of the Appellant to a certain sum is only a final transfer or not. In view of the Sole Arbitrator, it is hardly imaginable that the mutual consent of the parties was to limit such right to a final transfer and to exclude any transfer which was structured as a loan but was de facto in many ways similar and equivalent to a final transfer (…)”.

48. In CAS 2007/A/1219 the sell-on clause contained in the transfer agreement provided that “In case that [the Player] will be transferred from Borussia to another club within his time as a professional player, Sekondi will receive 15% of the net transfer fee resulting from this transfer” (emphasis added).

49. The wording of the sell-on clause mentioned in CAS 2007/A/1219 is wide enough to cover every kind of transfer, definitive or temporary. This point marks a decisive distinction between such case and the case at stake where the triggering element is not in general terms a “transfer”, but specifically a “sale”.

50. Furthermore, in CAS 2007/A/1219 the Sole Arbitrator argued that the transfer of the player from the respondent to the third club was de facto a final transfer even if structured as a loan, since the player never returned to the Respondent. In the present case, it cannot be said that the loan agreement between the Respondent and Götzepe AS conceals a final transfer since the Player returned to Respondent after the loan period and, more generally, there are no evidence that would point to such a situation.

51. The Appellant also argues that the Respondent made some solidarity contribution payment over the amount of EUR 80,000 (i.e. the sum resulting from the application of the sell-on clause to the loan of the Player) in favour of two different clubs (Elazigspor and Kayseri Erciyesspor) and, therefore, implicitly interpreted the sell-on clause applicable also in the event of loan of the Player.

52. However, in the opinion of the Sole Arbitrator, these payments do not lead to the conclusion that Huesca interpreted Article 1.1 para. 4 of the Transfer Agreement applicable also in the event of loan of the Player, for the following reasons.

53. The obligation of payment of the solidarity contribution does not arise from the Transfer Agreement since it is provided for in Article 1 Annexe 5 FIFA RSTP which states that “If a professional moves during the course of a contract, 5% of any compensation paid within the scope of this transfer, not including training compensation paid to his former club, shall be deducted from the total amount of this compensation and distributed by the new club as a solidarity contribution to the club(s) involved in his training and education over the years (…)”. In fact, the parties to a transfer agreement are only entitled to agree whether the solidarity contribution shall be deducted from the total amount of the transfer fee in accordance with the above cited provisions of the FIFA RSTP or, as occurred in the Transfer Agreement, it shall be paid “on top” of the transfer fee.

54. On 7 October 2019, in a dispute between Elazigspor and the Respondent, the latter received a proposal from the FIFA Administration with regard to the distribution of the solidarity contribution in connection with the transfer of the Player from the Appellant to the Respondent. In said proposal the FIFA Administration invited Huesca to correspond to Elazigspor the solidarity contribution over the amount resulting from the application of the sell-on clause to the loan of the Player to Götzepe AS (i.e. EUR 80,000) and Huesca paid the amount requested.

55. However, since it is Huesca’s liability the payment of the solidarity contribution in accordance with Article 1, Annexe 5 FIFA RSTP above mentioned, such payment cannot lead to the conclusion that a definitive transfer took place given that the solidarity contribution should have been also paid in case of loans.

56. It is therefore not surprising that on 11 February 2020 Huesca made the payment of the solidarity contribution over the amount of EUR 80,000 also in favour of Kayseri Erciyesspor.

57. The correspondence between the Appellant and the Respondent confirms that these payments were made in compliance with the provision set forth under Article 1, Annexe 5 FIFA RSTP, and not by an extensive interpretation of the sell-on clause.

58. In particular, on 14 September 2020, when asked to correspond the amount resulting from the sell-on fee contained in the Transfer Agreement, the Respondent replied to the Appellant that “(…) the interpretation adopted by [the Appellant] of the contract and that gives rise to the claim that [the Appellant] now practice, is not correct. Specifically, clause 1.1 says: In case the Player is transferred to a third club, HUESCA shall pay 20% (twenty percent) of the transfer fee that is received from the sale to OSMNLI within 7 (seven) days from the transfer date of the Player. Except for the error of the person who addresses them, the temporary assignment or loan of [the Player] to GOZTEPE was not a sale, as stated in the clause for the payment of that 20%. Therefore, this part does not recognize the origin of the claim made. (…)”.

59. Lastly and for the sake of completeness, the Sole Arbitrator notes that the subsequent transfer of the Player to Antalyaspor was free of charge and, therefore, not relevant to the outcome of the case at stake.

60. The Sole Arbitrator taking in due consideration the wording of the Transfer Agreement and after careful review of all means of evidence produced by the Parties, is of the view that the real and common intention of the Parties was to limit the application of Article 1.1 para. 4 of the Transfer Agreement only in case of definitive transfer of the Player. If the Parties wished to extend the application of the sell-on clause also in the event of temporary transfer of the Player, they should have manifested it in a different way.

61. In light of the foregoing, the Sole Arbitrator concludes that the Appellant is not entitled to receive neither the amount of EUR 80,000 as outstanding sell-on fee nor the amount of EUR 12,000 as penalty.

Conclusions

62. Based on the foregoing the Sole Arbitrator finds that:

a. the Appellant’s Appeal shall be dismissed;

b. the Appealed Decision shall be confirmed.