Al Ain FC/SC v. Club Atlético Lanus, Vitória S/A

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 appeal arbitration proceedings. This background is made for the sole purpose of providing a synopsis of the matter in dispute.

5. On 7 August 2009, Al Ain concluded a transfer agreement with Lanús (the “Transfer Agreement”) for the definitive transfer of the Player J. (the “Player”). Al Ain paid € 5,250,165 to Lanús as a transfer fee.

6. The Player was born in 1980.

7. According to the Player’s passport, the Player was registered with Vitória from 23 August 2001 until 28 May 2002.

III. PROCEEDINGS BEFORE THE FIFA DRC

8. On 21 July 2011, Vitória lodged a claim against Al Ain with the Dispute Resolution Chamber of FIFA (the “FIFA DRC”) requesting the payment of its share of the solidarity mechanism in connection with the Transfer Agreement, in particular, the amount of USD 50,000 corresponding to 0.5% of the total transfer compensation in the alleged amount of USD 10,000,000, plus interest.

9. Although having been invited to do so, Al Ain did not file its answer to the claim lodged by Vitória with the FIFA DRC.

10. On 28 August 2014, the FIFA DRC rendered a decision (the “Appealed Decision”), the operative part of which reads as follows:

“1. The claim of the Claimant, Esporte Clube Vitória, is partially accepted. 2. The Respondent, Al Ain FC, has to pay to the Claimant Esporte Clube Vitória, the amount of EUR 28,403 within 30 days as from the date of notification of this decision, plus 5% interest p.a. as of 21 July until the date of effective payment”.

11. On 7 July 2015, the grounds of the Appealed Decision were communicated to the parties, determining, inter alia, the following:

• The DRC took into account that according to the transfer agreement signed between the Argentinean club, Club Atlético Lanus and the Respondent, a compensation of EUR 5,250,165 was agreed upon between said clubs for the transfer of the player.

• Furthermore, the DRC noted that the Respondent has not replied to the claim of the Claimant, although having been invited to do so by FIFA. In this respect, the DRC deemed that, in this way, the Respondent renounced to its right of defence and accepted the allegations of the Claimant.

• The DRC recalled that the CBF had confirmed that the player, born on 17 July 1980, was registered with the Claimant as from 23 August 2001 until 28 May 2002.

• Furthermore, and considering that the player moved from Argentina to Brazil in August 2001, the Chamber confirmed that the season of the player’s 21st birthday lasted from 1 July 2001 until 31 December 2001, i.e. 6 months.

• On account of the above and in accordance with art. 1 of Annexe 5 of the Regulations, the DRC considered that the Claimant is, thus, entitled to receive solidarity contribution for the period as from 23 August 2001 until 28 May 2002, i.e. for 4 months of the season of the player’s 21 st birthday and for 5 months of the season of the player’s 22 nd birthday. In terms of the percentage of the 5% solidarity contribution, the DRC calculated that, on a pro rata basis, this corresponds to 10.62% of 5%.

• In view of all the above, the DRC decided to partially accept the claim of the Claimant and held that the Respondent is liable to pay the amount of EUR 28,403 to the Claimant as solidarity contribution in relation to the transfer of the player from Club Atlético Lanus to the Respondent.

• In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 28,403 as of the day on which the claim was lodged in front of FIFA, i.e. 21 July 2011, until the date of effective payment.

IV. PROCEEDINGS BEFORE THE COURT OF A RBITRATION FOR SPORT

12. On 26 July 2015, Al Ain filed its statement of appeal with the Court of Arbitration for Sport (“CAS”), pursuant to Articles R47 and R48 of the CAS Code of Sports-related Arbitration (the “CAS Code”) (Edition 2013), against Vitória and Lanús with respect to the Appealed Decision.

13. On 9 August 2015, the Appellant filed its appeal brief, pursuant to Article R51 of the CAS Code.

14. On 2 September 2015, the First Respondent filed its answer, pursuant to Article R55 of the CAS Code.

15. On 10 September 2015, after consulting the parties, the CAS Court Office informed the Parties that the Division President had decided to submit these arbitration proceedings to a Sole Arbitrator.

16. By letter dated 15 September 2015, the CAS Court Office informed the parties that the President of the Appeals Arbitration Division had appointed Mr João Nogueira da Rocha, attorney-at-law in Lisbon, Portugal, as a Sole Arbitrator.

17. On the same date, the Second Respondent filed its answer, pursuant to Article R55 of the CAS Code.

18. By letter dated 22 October 2015, the CAS Court Office informed the parties that the Sole Arbitrator, after consulting the parties, had decided to render an award on the sole basis of the parties’ written submissions, pursuant to Article R57 of the CAS Code.

19. On 9 November 2015, the CAS Court Office sent to the parties the Order of Procedure, which was duly signed by the Appellant and the Second Respondent. The First Respondent, in turn, did not sign the Order of Procedure despite having been invited to do so.

V. SUMMARY OF THE PARTIES’ POSITIONS

20. The Appellant submitted the following request for relief: a) Accept the present Appeal. b) Revoke the decision of FIFA’s Dispute Resolution Chamber. c) Decide that the second Respondent is solely liable to pay to the First Respondent the Solidarity Contribution. d) Decide that the Second Respondent solely or jointly with the First Respondent must bear all the costs of the present arbitration. e) Decide that the Second Respondent solely or jointly with the First Respondent to pay and reimburse to the Appellant the costs of the proceedings before the FIFA an amount CHF 5,000. f) Decide that the Respondents must compensate the legal costs of the Appellant incurred in the present proceeding in their full amount.

21. Al Ain FC’s position is summarized as follows: - Al Ain argues that Articles 2 and 4 of the Transfer Agreement state as follows: “Article 2: The First Party [The Appellant] commits itself to pay to the Second Party [The Second Respondent] a lump sum and all-inclusive amount equivalent to EUROS 5.250.165 (FIVE MILLIONS TWO HUNDRED FIFTY THOUSAND ONE HUNDRED SIXTY FIVE EUROS) against the definitive / permanent transfer of the Player to the First Party, to be paid as follows:

[...] Article 4: The amounts indicated in Article 2 hereinabove are the gross amounts that the Second Party shall receive due to this relevant transaction. Any and all amounts that might be charged regarding this transfer related to FIFA’s solidarity mechanism or any other amounts, which may become due to any third party, shall be borne exclusively by the Second Party who might not claim any reimbursement from the First Party in this regard”.

• Article 21 of the FIFA Regulations on the Status and Transfer of Pla yers (the “FIFA RSTP”) only provides that the percentage of 5% of any solidarity contribution is to be distributed to Players’ former clubs on the basis of FIFA solidarity mechanism. Although it appears logical that acquiring clubs should in general withhold such 5% from the amount paid to former clubs, FIFA RSTP do not prevent clubs to agree otherwise (i.e. to convene that a transfer fee could be paid without any deduction).

• The Appellant underlined that art. 19 of the Swiss Code of Obligations states a s follows: “Clauses that deviate from those prescribed by law are admissible only where the law does not prescribe mandatory forms or wording or where deviation from legally prescribed term would contravene public policy, morality or rights of personal privacy” (Appellant’s free translation).

• The Appellant considers that under this provision parties have the right to agree who will be responsible to distribute solidarity contributions to former clubs.

• The Appellant also argues that the Second Respondent had to know that it was its duty to pay Vitória 5% of the transfer fee as a solidarity contribution.

• The Appellant states that the FIFA DRC did not take into account the terms of the Transfer Agreement when it rendered the Appealed Decision.

22. In its answer, the First Respondent submitted the following request for relief: a) Dismiss all the allegations put forward by Al Ain in its appeal brief; b) Uphold in totum the decision rendered by the FIFA DRC on 28.08.2014; c) In case the Panel upholds the present appeal and considers that Lanús is the actual debtor of the proportion of solidarity contribution due to Vitória, maintain the procedural costs in the amount of CHF 2,000.00 (two thousand Swiss Francs) that Vitória was ordered to bear in accordance with the decision rendered by the FIFA DRC; and d) Order Al Ain to bear any and all CAS administrative and procedural costs, which have already been incurred or may eventually be incurred by Vitória.

23. The First Respondent’s position is summarized as follows:

• The main and only argument raised by the Appellant is that Lanús should be considered as the sole responsible for the payment of the solidarity contribution due to Vitória, pursuant to the terms of the Transfer Agreement.

• It is undisputed that Vitória has the right to receive its proportion of the solidarity mechanism, being only at stake whether Al Ain or Lanús is the club obliged to pay.

• In support of its position, the First Respondent refers to paragraphs 1 and 2 of article 2, Annex 5 of the FIFA RSTP, which reads as follows: “1. The new club shall pay the solidarity contribution to the training club(s) pursuant to the above provisions no later than thirty days after the player’s registration or, in case of contingent payments, 30 days after the date of such payments. 2. Is the responsibility of the new club to calculate the amount of the solidarity contribution and to distribute it in accordance with the player’s career history as provided in the player passport. The player shall, if necessary, assist the new club in discharging this obligation”.

• Al Ain contends that the FIFA RSTP “only provides that the proportion of 5% of any transfer fee is to be distributed”, fact which was previously rebutted by FIFA since the FIFA RSTP expressly establish that the distribution of the solidarity mechanism shall be made by the new club.

• Vitória’s right to receive a solidarity contribution is undisputed.

24. In its answer, the Second Respondent submitted the following request for relief: “a) I have to be: submitted in a timely manner due to the accompanying documentation, adequately answered by the transfer conferred and made the relevant allegations as set forth in Article R55 of your Code; b) It dictates the appeal filed by the appellant as dismissed and confirm in its entirety, the decision of the Dispute Resolution Chamber of FIFA, dated August 28, 2014. c) Sentence Al Ain FC to pay all costs and other accessories of the process, providing the certain conformity, it will be justice”.

25. The Second Respondent’s position is summarized as follows:

• In the proceedings before the FIFA DRC, Vitória filed a claim against Al Ain only.

• Despite being duly notified by the FIFA DRC, Al Ain did not exercise its right of defence.

• Lanús argues that as it had not been a party to the proceedings before the DRC, neither should it be summoned as a Respondent to these CAS proceedings.

• The Second Respondent also argues that it could not exercise its right of defence because it had not been named as a party to the appropriate procedural instance, this is, before the FIFA DRC.

• Al Ain had to pay Vitória the amount due as solidarity contribution and, then, it may ask Lanús to reimburse such amount.