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

II. FACTUAL BACKGROUND — A. Background facts

1. Below is a summary of the relevant facts and allegations based on the Parties’ written submissions, pleadings and evidence adduced. Additional facts and allegations found in the Parties’ written submissions, pleadings and evidence will be discussed, where relevant, in connection with the legal discussion that follows. While the Sole Arbitrator has considered all the facts, allegations, legal arguments and evidence submitted by the Parties in the present proceedings, it refers in its Award only to the submissions and evidence it considers necessary to explain its reasoning.

B. The various decisions issued by FIFA

2. On 5 September 2011, the Dutch club NAC Breda accepted to transfer the Player M. to the Appellant for the sum of EUR 450,000. This amount was to be paid in several instalments.

3. Eventually and because the Appellant had not paid several instalments of M.’s transfer fee in accordance with the contractual obligations assumed, the club NAC Breda filed an application with FIFA to order the Appellant to pay in its favour the outstanding amounts, plus interests and penalty fees.

4. On 15 August 2012, the Single Judge of the FIFA Players’ Status Committee decided the following: “1. The claim of the Claimant, NAC Breda, is partially accepted. 2. The Respondent, Mersin Idman Yurdu, has to pay to the Claimant within 30 days as from the date of notification of this decision, the amount of EUR 300,000 plus default interest on said amount until the date of effective payment as follows: (…)

3. lf the aforementioned sum plus interest is not paid within the aforementioned deadline, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision. 4. Any further claim lodged by the Claimant is rejected.

5. The final amount of costs of the proceedings in the amount of CHF 20,000 are to be paid within 30 days as from the date of notification of the present decision as follows: 5.1. The amount of CHF 15,000 has to be paid by the Respondent to FIFA to the following bank account (…) 5.2. The amount of CHF 5,000 has to be paid by the Claimant to FIFA (…)”.

5. On 9 November 2012, the Appellant was notified of the operative part as well as of the reasons of the decision (the “Decision of 15 August 2012”).

6. On 29 November 2012, the Appellant lodged a statement of appeal with the Court of Arbitration for Sport (the “CAS”) to challenge the Decision of 15 August 2012.

7. The Appellant’s appeal brief was filed late and, therefore, was found to be inadmissible. As a result, the CAS held that the Appellant’s appeal “shall be deemed withdrawn in application of Article R51 of the [CAS Code of Sport-related Arbitration]” and issued a termination order on 8 February 2013.

8. On 28 May 2013, the Deputy Secretary to the FIFA Disciplinary Committee asked the TFF to forward the following letter to the Appellant: “Ref. no. 130410 obi (…) Club NAC Breda, Netherlands / Club Mersin Idman Yurdu, Turkey (…) We refer to the above-mentioned matter, as we have learnt that the club Mersin Idman Yurdu has not acted in accordance with the decision passed by the Single Judge of the Players’ Status Committee on 15 August 2012. This would appear to be a violation of article 64 of the FIFA Disciplinary Code (FDC), and as such, it will be the subject of an investigation by the FIFA Disciplinary Committee. We are therefore opening disciplinary proceedings against the club Mersin Idman Yurdu in respect of a violation of article 64 of the FDC. This case will be on the agenda for the next meeting of the FIFA Disciplinary Committee so that disciplinary sanctions (fine, deduction of points, relegation to a lower league) may be imposed on the club. With this in mind, we hereby urge the club Mersin Idman Yurdu to immediately pay to the club NAC Breda the outstanding amount of EUR 300,000, plus the 5% interest to be calculated in accordance with the decision of the Single Judge of the Players’ Status Committee dated 15 August 2012, as well as the proceedings costs of CHF 15,000 to FIFA, and to send us copies of the respective proof of payments. Should the club pay the outstanding amounts immediately and send us copies of the respective proof of payments, these disciplinary proceedings will be closed.

Should the club Mersin Idman Yurdu fail to submit a statement or pay the outstanding amounts, the FIFA Disciplinary Committee will decide the case using the file in its possession (cf. Art. 110 par. 4 FDC)”.

9. On 5 July 2013 and via the TFF, the Deputy Secretary to the FIFA Disciplinary Committee informed the Appellant that its case would be submitted to the FIFA Disciplinary Committee for evaluation on 24 July 2013. It took this opportunity to urge the Appellant one more time to pay the outstanding amount immediately, which would bring an end to the disciplinary proceedings.

10. The Appellant did not react upon the communication of the Deputy Secretary to the FIFA Disciplinary Committee.

11. In a decision dated 24 July 2013 (the “Appealed Decision”), the FIFA Disciplinary Committee insisted on the fact that it could not review or modify as to the substance the Decision of 15 August 2012, because it was final and had become enforceable. It held that its sole task was to analyse whether the Appellant complied with the decision (of 15 August 2012), which, it held, had not been the case. In particular, it considered that “In the matter at stake, the outstanding amounts equal to EUR 300,000 plus 5% of interest to be calculated in accordance with the decision passed by the Single Judge of the PSC to be paid to the creditor, and CHF 15,000 to be paid to FIFA. The combined application of art. 64 par. 1 a) and art. 15 par. 2 of the FDC entails that the fine shall range between CHF 300 and CHF 1,000,000. Non-payment of such amounts can cause a club financial difficulty. The debtor withheld the amount unlawfully from the creditor and FIFA. Even FIFA’s attempts to urge the debtor to fulfil its financial obligations failed to induce it to pay. In view of the circumstances and, in particular, by also taking into account the high outstanding amount due, the Committee decides to impose a fine amounting to CHF 20,000. This amount is line with the Committee’s well-established practice”.

12. As a result, the FIFA Disciplinary Committee decided the following: “(Decision 130410 PST TUR ZH) (…) 1. The club Mersin Idman Yurdu is pronounced guilty of failing to comply with a decision of a FIFA body in accordance with art. 64 of the FDC. 2. The club Mersin Idman Yurdu is ordered to pay a fine to the amount of CHF 20,000. The fine is to be paid within 60 days of notification of the decision. (…) 3. The club Mersin Idman Yurdu is granted a final period of grace of 30 days as from notification of the decision in which to settle its debt to the creditor and to FIFA. 4. If payment is not made by this deadline, the creditor may demand in writing from FIFA that six (6) points be deducted from the debtor’s first team in the domestic league championship. Once the creditor 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 Mersin Idman Yurdu still fails to pay the amounts due even after deduction of the points (…), the FIFA Disciplinary Committee will decide on a possible relegation of the debtor’s first team to the next lower division.

6. (…) 7. The costs of these proceedings amounting to CHF 2,000 are to be borne by the club Mersin Idman Yurdu (…)”.

13. On 3 October 2013, the Appellant was notified of the Appealed Decision.

III. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

14. On 22 October 2013, the Appellant filed its statement of appeal with the CAS and requested the present matter to be submitted to a sole arbitrator. It also applied for the stay of the Appealed Decision.

15. On 25 October 2013, the Respondent informed the CAS Court Office that it agreed to stay the execution of the Appealed Decision until CAS rendered a final decision. However, the Respondent requested the matter to be referred to a panel of three arbitrators in “view of the issue of principle which is at stake”.

16. On 25 October 2005, the CAS Court Office acknowledged receipt of the Respondent’s letter of the same day, and confirmed, on the behalf of the President of the CAS Appeals Arbitration Division, that the Appealed Decision was stayed. It also informed the Parties that the President of the CAS Appeals Arbitration Division or his Deputy would decide on the number of arbitrators to deal with the present matter in due time.

17. On 4 November 2013, the CAS Court Office acknowledged receipt of the Appellant’s appeal brief filed on 31 October 2013.

18. On 15 November 2013, the CAS Court Office informed the Parties that the President of the CAS Appeals Arbitration Division nominated Prof. Massimo Coccia to serve as Sole Arbitrator. In a letter dated 19 November 2013, the Appellant challenged Prof. Coccia’s nomination. Under these circumstances, the latter decided to decline his appointment as Sole Arbitrator in the present procedure. Eventually, Prof. Petros C. Mavroidis, Professor in Commugny, Switzerland, was appointed to replace Prof. Coccia.

19. On 25 November 2013 and in a timely manner, the Respondent filed its answer.

20. On 28 November 2013, the Parties were invited to inform the CAS Court Office on or before 5 December 2013 whether their preference was for a hearing to be held.

21. On 29 November 2013, the CAS Court Office informed the Parties that the Panel to hear the case had been constituted as follows: Prof. Petros C. Mavroidis, Sole Arbitrator.

22. On 3 December 2013, the Respondent confirmed its preference for the dispute to be decided solely on the Parties’ written submissions.

23. On 9 December 2013, the CAS Court Office invited the Respondent to take position with respect to the holding of a hearing on or before 12 December 2013. The Appellant did not respond to this request.

24. On 20 and 23 January 2014, FIFA and Club Mersin respectively sent to the CAS Court Office a duly signed copy of the Order of Procedure. None of the Parties made any comment as regards the content of the said document, which provides namely that “By the signature of the present Order, the parties confirm their agreement that the Sole Arbitrator may decide this matter based on the parties’ written submissions. The parties confirm that their right to be heard has been respected. Pursuant to Article R57 of the Code, the Sole Arbitrator considers himself to be sufficiently well informed to decide this matter without the need to hold a hearing”.

IV. SUBMISSIONS OF THE PARTIES

(i) The Appellant’s submissions

25. The Appellant submitted the following requests for relief: “(…) the CAS is respectfully requested: 1. We have received the decision of FIFA (disciplinary Committee) on October 03, 2013 by means of Fax and we are submitting the statement of appeal within the time limit of 21 days. 2. We request that execution of the decision of FIFA disciplinary Committee must be stayed until final verdict of the CAS. 3. To accept the present appeal against the challenged decision; 4. To set aside the challenged decision; 5. To establish that the Appellant does not have to pay the Respondent any amount. 6. To condemn the Respondent to the payment in the favour of the Appellant of the legal expenses incurred; 7. To establish that the costs of the arbitration procedure shall be borne by the Respondent”.

26. All of the Appellant’s submissions were developed in a single page brief, which can be reproduced hereafter: “Subject Appeal against the decision of FIFA dated on 03 October 2013. Explanations: As we have explained that FIFA’ decision is based on wrong assessment of the fact and we request from the Court of Arbitration for Sport the annulment of the decision given by FIFA October 03, 2013. However, the decision dated 03 October 2013 contain extremely hard and heavy provisions and puts our club under huge obligations. The agreement signed between two clubs is wrongly construed by FIFA decision dated 03 October 2013 and the decision is attempted to be implemented.

On the other hand, by the FIFA Disciplinary Committee on 29 August 2013 Octavian Bivolaru a signed article, the file is transmitted as a club be shut down due to financial obligations have been defined, according to which the file was closed in the club records processed the information written articles in this way are given where necessary. Moreover, the present agreement signed between our club and player M. had been terminated bilaterally by both parties. During termination with the player, our club had not made any income out of the player, but due to the fact that the club had met all needs of the player, our club had suffered 1,000,000 Euro damage. Also, we are put under obligation to pay the player’s transfer fee. We request that this situation is amended. Wishing that all these matters are considered, we request that the decision of FIFA dated 03 October 2013 is cancelled and that our club is acquitted. In conclusion: We kindly request that Annulment of the FIFA decision”.

27. In support of its submissions, the Appellant filed a letter dated 29 August 2013, signed by the Deputy Secretary to the FIFA Disciplinary Committee, with the following reference “no. 120269 obi (…) Club NAC Breda, Netherlands/Club Mersin Idman Yurdu, Turkey”. According to Club Mersin, this letter which reads “(…) the disciplinary proceedings (…) are closed, since all financial duties have been fulfilled” showed that the disciplinary proceedings initiated against it in relation to the Decision of 15 August 2012 were closed.

(ii) The Answer

28. The Respondent filed an answer, with the following requests for relief: “Requests: 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 Respondent related to the present procedure”.

29. The Respondent’s submissions, in essence, may be summarized as follows:

• The sanctions applied in accordance with Article 64 of the FIFA Disciplinary Code (the “FDC”) are necessary tools for FIFA to ensure that final and binding decisions reached by the CAS or other instances are enforced. A decision that cannot be enforced is of no use to the successful party.

• The FIFA Disciplinary Committee could not review or modify as to the substance the Decision of 15 August 2012, because it was final and had become enforceable. Its sole task was to analyse whether the Appellant had complied with the decision, i.e. whether the financial compensation that had to be paid in accordance with the Decision of 15 August 2012 had indeed been transferred by the debtor.

• In the present case, the Appellant has not proven that it had paid any amount awarded to the club NAC Breda in the Decision of 15 August 2012.

• The alleged agreement reached between the Appellant and M. is anyway irrelevant to the present proceeding as it refers to the substance of the dispute already decided by the Single Judge of the FIFA Player’s Status Committee. In this regard, it must further be observed that the Appellant’s allegations are not supported by evidence.

• Between 9 November 2012 (when the Decision of 15 August 2012 was disclosed) and 24 July 2013 (when the Appealed Decision was rendered), in spite of the two reminders sent by the Deputy Secretary to the FIFA Disciplinary Committee, respectively on 28 May and 5 July 2013, the Appellant failed to settle all or part of its debt.

• The letter dated 29 August 2013, signed by the Deputy Secretary to the FIFA Disciplinary Committee and filed by the Appellant in support of its appeal brief, refers to different disciplinary proceedings. The letter “has the reference number 120269, whereas the disciplinary proceedings in the present case (and the appealed decision of the Disciplinary Committee) have the reference number 130410. (…) More precisely, the disciplinary proceedings references under the number 120269 concerned the enforcement of a different decision taken at a different date by an instance of FIFA, in relation to another amount owed by the Appellant”, to quote the Respondent’s answer.

• In view of the circumstances, the conditions for a sanction to be imposed upon the Appellant pursuant to Article 64 FDC have been met.

• The sanction imposed upon the Appellant is proportional and consistent with the FIFA Disciplinary Committee’s well-established practice.