Mersin Idman Yurdu Club v. Fédération Internationale de Football Association (FIFA), Milan Stepanov

II. FACTUAL BACKGROUND

4. Below is a summary of the main relevant facts, as established on the basis of the parties’ written submissions and the evidence examined in the course of the present appeals arbitration proceedings. This background information is given for the sole purpose of providing a synopsis

of the matter in dispute. Additional facts may be set out, where relevant, in connection with the legal analysis.

A. Proceedings before the FIFA Dispute Resolution Chamber

5. On 23 July 2015, the FIFA Dispute Resolution Chamber (the “FIFA DRC”) issued a decision (the “FIFA DRC Decision”) in a contractual dispute between the Player and the Club, with the following operative part:

“1. The claim of the [Player] is partially accepted. 2. The counterclaim of the [Club] is rejected. 3. The [Club] has to pay to the [Player], within 30 days as from the date of notification of this decision, outstanding remuneration in the amounts of EUR 270,000 and Serbian Dinar (RSD) 78,577 plus 5% interest p.a. until the date of effective payment […]. 4. The [Club] has to pay to the [Player], within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 650,000 plus 5% interest p.a. as from 15 August 2013 until the date of effective payment. 5. In the event that the amounts due to the [Player] are not paid by the [Club] within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision. […]”.

6. On 26 October 2015, upon the Club’s request, the grounds of the FIFA DRC Decision were communicated to the parties.

7. On 13 November 2015, the Club lodged an appeal against the FIFA DRC Decision with the Court of Arbitration for Sport (“CAS”). A procedure was thus opened by the CAS Court Office under the reference CAS 2015/A/4281 Mersin Idman Yurdu Spor Kulübü v. Milan Stepanov.

8. On 19 February 2016, CAS rendered a Termination Order in the procedure CAS 2015/A/4281 Mersin Idman Yurdu Spor Kulübü v. Milan Stepanov because the Club failed to pay the advance of costs.

9. On 15 March 2016, the Player informed the FIFA DRC that, further to the issuance of the Termination Order by CAS, the FIFA DRC Decision became final and binding, but that he had not received any payment from the Club notwithstanding that he had provided the Club with his bank details. The Player requested FIFA to open disciplinary proceedings and impose disciplinary sanctions on the Club.

10. On 22 April 2016, FIFA urged the Club to immediately pay the relevant amount to the Player and to provide FIFA with a copy of the payment receipt by 2 May 2016 at the latest, failing which the entire file would be forwarded to the FIFA Disciplinary Committee (the “FIFA DC”).

11. On 4 May 2016, the Player informed the FIFA DRC that the Club had not paid the relevant amount within the final deadline and requested the matter to be forwarded to the FIFA DC.

12. On 12 May 2016, FIFA informed the Player and the Club that the entire file would be forwarded to the FIFA DC for consideration and a formal decision.

B. Proceedings before the FIFA Disciplinary Committee

13. On 19 December 2016, the secretariat to the FIFA DC opened disciplinary proceedings against the Club because it had allegedly failed to comply with the FIFA DRC Decision, thereby violating Article 64 FIFA Disciplinary Code. The Club was informed that, if it would pay the outstanding amount immediately and send FIFA copies of proof of payment, the disciplinary proceedings would be closed.

14. On 6 February 2017, the secretariat to the FIFA DC informed the Club that the case would be submitted to the FIFA DC for evaluation on 15 March 2017. The Club was also informed that, should it pay the outstanding amounts by 3 March 2017, the proceedings would be closed.

15. The Club did not respond to the letters of the secretariat to the FIFA DC.

16. On 15 March 2017, the FIFA DC issued its decision (the “Appealed Decision), notified to the parties on 20 March 2017, with the following operative part:

“1. The [Club] is pronounced guilty of failing to comply with the [FIFA DRC Decision] and is, therefore, in violation of art. 64 of the FIFA Disciplinary Code. 2. The [Club] is ordered to pay a fine to the amount of CHF 30,000. The fine is to be paid within 60 days of notification of the present decision. […]. 3. The [Club] is granted a final period of grace of 60 days as from notification of the present decision in which to settle its debt to the [Player]. 4. If payment is not made by this deadline, the [Player] may demand in writing from the secretariat to the FIFA Disciplinary Committee that six (6) points be deducted from the debtor’s first team in the domestic league championship. Once the [Player] has filed this request, the points will be deducted automatically without a further formal decision having to be taken by the FIFA Disciplinary Committee. The order to implement the points deduction will be issued on the association concerned by the secretariat to the FIFA Disciplinary Committee. 5. If the [Club] still fails to pay the amount due even after deduction of the points in accordance with point 4 above, the FIFA Disciplinary Committee will decide on a possible relegation of the [Club’s] first team to the next lower division. 6. As a member of FIFA, the [TFF] is reminded of its duty to implement this decision and, if so requested, provide FIFA with proof that the points have been deducted. If the [TFF] does not comply with this decision despite being ordered to do so, the FIFA Disciplinary Committee will d ecide on appropriate sanctions on the member. This can lead to expulsion from all FIFA competitions.

7. The costs of these proceedings amounting to CHF 3,000 are to be borne by the [Club] and shall be paid according to the modalities stipulated under point 2 above. 8. The [Player] is directed to notify the secretariat to the FIFA Disciplinary Committee of every payment received”.

17. On 27 March 2017, the Club requested the grounds of the Appealed Decision.

18. On 18 July 2017, the grounds of the Appealed Decision were communicated to the parties, which provided, inter alia, as follows:

– “According to art. 53 par. 2 of the FIFA Statutes, the Disciplinary Committee […] may pronounce the sanctions described in the Statutes and the FIFA Disciplinary Code […] on member associations, clubs, officials, players, intermediaries and licensed match agents. – Anyone who fails to pay another person (such as a player, a coach or a club) or FIFA a sum of money in full or part, even though instructed to do so by a body, a committee or an instance of FIFA or a subsequent CAS appeal decision (art. 64 par. 1 of the FDC [i.e. the FIFA Disciplinary Code]): a) Will be fined for failing to comply with a decision; b) Will be granted a final deadline by the judicial bodies of FIFA in which to pay the amount due; c) If it is a club, it will be warned and notified that, in the case of default or failure to comply with a decision within the period stipulated, points will be deducted or demotion to a lower division ordered. A transfer ban may also be pronounced. If the club disregards the final time limit, the relevant association shall be requested to implement the sanctions threatened (art. 64 par. 2 of the FDC).

– The Committee emphasises that equal to the competence of any enforcement authority, it cannot review or modify as to the substance a previous decision, which is final and binding and, thus, has become enforceable. – In the case at stake, the Committee notes that the grounds of the [FIFA DRC Decision] had been duly communicated on 26 October 2015 to the [Club]. Moreover, even though an appeal was lodged against such decision before CAS, the latter rendered a termination order on 19 February 2016. Therefore, the decision became final and binding. – In view of what has been explained under paragraph II./3. above, the Committee is not allowed to analyse the case decided by the Dispute Resolution Chamber as to the substance, in other words, to check the correctness of the amounts ordered to be paid, but has as a sole task to analyse if the [Club] complied with the final and binding decision rendered by the Dispute Resolution Chamber. – As the [Club] did not comply with the [FIFA DRC Decision] and is consequently withholding money from the [Player], it is considered guilty under the terms of art. 64 of the FDC. – The fine to be imposed under the above-referenced art. 64 par. 1 a) of the FDC in combination with art. 15 par. 2 of the FDC shall range between CHF 300 and CHF 1,000,000. The [Club] withheld the amount unlawfully from the [Player]. Even FIFA’s attempts to urge the [Club] to fulfil its

financial obligations failed to induce it to pay the total amount due. In view of all the circumstances pertaining to the present case and by taking into account the outstanding amounts due, the Committee regards a fine amounting to CHF 30,000 as appropriate. This amount complies with the Committee’s established practice. – In application of art. 64 par. 1 b) of the FDC, the Committee considers a final deadline of 60 days as appropriate for the amounts due to be paid to the [Player]. – In accordance with art. 64 par. 1 c) of the FDC, the [Club] will be warned and notified that, in the case of default within the period stipulated, points will be deducted or demotion to a lower division be ordered. A deduction of points will occur if the [Player] informs the secretariat to the FIFA Disciplinary Committee of the non-payment within the stipulated deadline and demands in writing that points be deducted from the [Club’s] first team in the national league. Once the [Player] has filed this request, the points will be deducted automatically without a further formal decision having to be taken by the Committee. The order to implement the deduction of points will be issued on the association concerned by the secretariat to the FIFA Disciplinary Committee. – With regard to the amount of points to be deducted, art. 64 par. 3 of the FDC is applicable, whereby the number of points deducted must be proportionate to the amount owed. In the light of the fo regoing criteria, regarding the amount of the fine to be imposed and in keeping with the Committee’s wellestablished practice, a deduction of six (6) points is considered appropriate. – The Committee decides based on art. 105 par. 1 of the FDC that the costs and expenses of these proceedings amounting to CHF 3,000 shall be borne by the debtor”.

III. PROCEEDINGS BEFORE THE COURT OF A RBITRATION FOR SPORT

19. On 8 August 2017, the Club lodged a Statement of Appeal against the Appealed Decision, pursuant to Article R48 of the CAS Code of Sports-related Arbitration (edition 2017) (the “CAS Code”), naming both the Player and FIFA as respondents. In this submission, the Club nominated Mr Stuart C. McInnes, Solicitor in London, United Kingdom, as arbitrator. The Club also applied for a stay of execution of the Appealed Decision.

20. On 18 August 2017, the Player and FIFA jointly nominated Mr Edward Canty, Solicitor in Manchester, United Kingdom. Further, the Player and FIFA informed the CAS Court Office that the Appellant’s request for a stay is moot and the Player requested that the Club be ordered to make a security deposit.

21. On 18 August 2017, the Club filed its Appeal Brief, pursuant to Article R51 of the CAS Code, requesting “CAS to take the Statement of Appeal as Appeal Brief”. The Club challenged the Appealed Decision, submitting the following requests for relief:

“1- A stay of execution for the decision of the FIFA Disciplinary Committee until the final verdict of CAS. 2- Annulment of the decision given by the FIFA Disciplinary Committee.

3- An establishment that the costs of the arbitration procedure and legal expenses shall be borne by the Respondents”.

22. On 23 August 2017, FIFA informed the CAS Court Office that it leaves it to the CAS to decide whether the Club should be ordered to make a security deposit as requested by the Player. The Club failed to submit its position on this issue.

23. On 30 August 2017, the CAS Court Office provided the parties with a copy of a decision rendered by CAS in an unrelated matter where the question of the stay of the execution of a monetary award was decided upon, according to which a decision of a financial nature issued by a private Swiss association is not enforceable while under appeal. The Club was invited to state whether it maintained or withdrew its application for a stay.

24. On 7 September 2017, the Club informed the CAS Court Office that it maintained its request for a stay of execution of the Appealed Decision.

25. On 29 September 2017, the President of the CAS Appeals Arbitration Division issued an Order on the Request for the Stay, by which both the Appellant’s request for a stay and the Player’s request that the Club be ordered to make a security deposit were dismissed.

26. On 9 October 2017, the Player filed its Answer, pursuant to Article R55 of the CAS Code, submitting the following requests for relief

“1. The Appellant’s appeal dated 4 (statement of appeal) and 18 August 2017 (appeal brief) shall be rejected in its entirety; 2. The Appellant shall bear all the costs of the present arbitration procedure and he shall bear as well all legal expenses of the First Respondent (plus 8% value-added tax) related to the present arbitration procedure”.

27. On 12 October 2017, FIFA filed its Answer, pursuant to Article R55 of the CAS Code, submitting the following requests for relief:

“1. To reject the Appellant’s appeal in its entirety. 2. To confirm the decision hereby appealed against. 3. To order the Appellant to bear all costs incurred with the present procedure and to cover all legal expenses of the Second Respondent related to the present procedure”.

28. On 13 and 17 October 2017 respectively, upon being invited to express their position, the Player, FIFA and the Club informed the CAS Court Office that they did not consider a hearing necessary, requesting for an award to be rendered on the sole basis of the parties’ written submissions.

29. On 18 October 2017, pursuant to Article R54 of the CAS Code and on behalf of the President of the CAS Appeals Arbitration Division, the parties were informed that the arbitral tribunal appointed to decide the present matter was constituted by:

– Mr Manfred Nan, Attorney-at-Law in Arnhem, the Netherlands, as President; – Mr Stuart C McInnes, Solicitor in London, United Kingdom; and – Mr Edward Canty, Solicitor in Manchester, United Kingdom, as arbitrators.

30. On 9 November 2017, the CAS Court Office informed the parties that the Panel considered itself sufficiently well-informed to decide the case based on the parties’ written submissions, without the need to hold a hearing.

31. On 14, 15 and 20 November 2017 respectively, the Player, the Club and FIFA returned duly signed copies of the Order of Procedure to the CAS Court Office. By signing the Order of Procedure, the parties, inter alia, confirmed that no hearing would be held, but that their right to be heard had nonetheless been respected.

32. The Panel confirms that it fully reviewed and took into account in its discussion and subsequent deliberations all of the submissions, evidence, and arguments presented by the parties, even if they have not been specifically summarised or referred to in the present award.

IV. SUBMISSIONS OF THE PARTIES

33. The Club’s submissions read as follows in full:

– “The Appellant was not given enough opportunity to defend itself in front of FIFA DC, – The decision of FIFA DC was not completely in line with the provisions and well -established jurisprudence, – The fine of 30.000 CHF imposed upon the Appellant is excessive”.

34. The Player’s submissions, in essence, may be summarised as follows:

– The Club did not substantiate its appeal in violation of Article R51 of the CAS Code; – The Club was granted enough opportunity to defend itself in front of the FIFA DC, but the Club did not use it; – Finally, the fine imposed on the Club by the FIFA DC is “entirely appropriate”, adding that the Appealed Decision is “completely in line with the provisions and well-established jurisprudence”.

35. FIFA’s submissions, in essence, may be summarised as follows:

– The spirit of Article 64 of the FIFA Disciplinary Code is to enforce decisions that had been rendered by a body, a committee or an instance of FIFA or CAS in a subsequent appeal decision, which are final and binding. This article provides FIFA with a legal tool ensuring to a certain extent that decisions passed by the relevant authority within FIFA (or CAS following an appeal) are respected and that the rights of players or clubs be guarded. Proceedings under this provision are to be considered not as enforcement, but

rather as the imposition of a sanction for breach of the association’s regulations and under the terms of association law. The FIFA DC, in line with the competence of any “enforcement authority”, cannot review or modify the substance of a previous decision. – If the FIFA DC is not provided with proof that the payment has been discharged or that a payment plan was agreed upon, it will render a decision imposing a fine on the debtor for failing to comply with a final and binding decision, and will grant the debtor a final period of grace in which to settle its debt to the creditor and/or FIFA. – In the present case it is clear and uncontested that the Club made no payment – not even a partial amount – to the Player in spite of several reminders being sent by the FIFA Players’ Status and Governance Department on 22 April 2016 and 12 May 2016, and the secretariat to the FIFA DC on 6 February 2017, to which the Club failed to respond. The Club thereby not only blatantly disrespected a final and binding decision of the FIFA DRC, but although it had ample opportunity to defend itself, decided not to participate in any way in the disciplinary proceedings. – FIFA maintains that the Club did not in fact challenge the application of Article 64 FIFA Disciplinary Code, but only limits itself to challenge in a couple of sentences the sanction imposed on it. – As to the proportionality of the fine, FIFA maintains that CAS shall only amend a disciplinary decision of a FIFA judicial body in cases in which it finds that the relevant body exceeded the margin of discretion accorded to it by the principle of association autonomy, i.e. only in cases in which the FIFA judicial body concerned must be held to have acted arbitrarily. This is not the case if the Panel merely disagrees with a specific sanction, but only if the sanction concerned is to be considered as evidently and grossly disproportionate to the offence. – FIFA submits that the FIFA DC is refrained from imposing a fine lower than CHF 300 and higher than CHF 1,000,000 and admitted that imposing financial sanctions above a certain limit would be counterproductive. It is not the intention of FIFA or the logic behind Article 64 FIFA Disciplinary Code to impose sanctions that create additional financial difficulties to the debtor that might compromise the payment of the

outstanding amount due to another football stakeholder subject to enforcement. – In this regard, FIFA considers a fine in the amount of CHF 30,000 to be appropriate and proportionate in the light of the debt of EUR 270,000 and RSD 78,577 plus 5% interest p.a. to be calculated in accordance with the FIFA DRC decision, and EUR 650,000 plus 5% interest p.a. as from 15 August 2013 until the date of effective payment. A meagre fine would contradict the principle of repression and prevention and would fail to encourage the prompt fulfilment of obligations. In fact, FIFA purports that a fine of CHF 30,000 is actually on the lower end of the scale, underlining that the Club has failed to prove that this fine would be excessive. – FIFA highlights that the fine imposed on the Club is in compliance with the principle of proportionality and in line with the FIFA DC’s long-standing practice. In this respect, FIFA referred to five other (non-exhaustive) decisions in cases where similar outstanding amounts were due and in which a fine in the amount of CHF 30, 000 was

imposed and six points were threatened to be deducted. The sporting sanction will only be imposed if the Club persists in its failure to comply with the FIFA DRC Decision. – Finally, FIFA maintains that the Club engaged in dilatory conduct in the pre sent proceedings as well as in several other proceedings held before CAS. FIFA indicates that it believes that the Club used the proceedings before the judicial bodies of FIFA and before CAS with the sole intention to postpone for as long as possible payment of the amounts due to the relevant creditor, which is corroborated by the fact that its appeals were dismissed after the Club had presented an inconsistent and hasty Appeal Brief or were considered withdrawn, as the Club failed to comply with one or more of the necessary procedural requirements. FIFA refers to seven other CAS proceedings in this respect. FIFA also finds that in the present case, the Club filed an extremely short and inconsistent submission, which reflects the complete lack of respect towards the Player, FIFA and CAS. FIFA requests that the Panel take this reproachable behaviour of the Club into account.