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2015 Football Contractual litigations Partially Upheld English Appeal Procedure

Arbitrators

President: Mark Hovell

Decision Information

Decision Date: May 9, 2016

Case Summary

The case involves a dispute between Al-Gharafa SC, a Qatari football club, and Nicolas Fedor, a professional football player, regarding the non-payment of a settlement amount agreed upon after the termination of their employment contract. The Court of Arbitration for Sport (CAS) ruled on the matter, emphasizing the hierarchy of FIFA regulations and the responsibilities of the debtor in fulfilling contractual obligations. The employment agreement between Al-Gharafa SC and Nicolas Fedor was terminated by mutual consent on January 29, 2015, leading to a settlement agreement requiring the club to pay Fedor EUR 750,000 within three days. The payment was to be made to a specified Swiss bank account. However, the club's bank, Qatar National Bank (QNB), refused the transfer, citing potential violations of Qatar's anti-money laundering laws. The bank raised concerns about the large sum being sent to a Swiss account, discrepancies in the account holder's name, and the absence of supporting tax documents. Despite these issues, the club failed to notify Fedor or seek his assistance in resolving the matter.

Fedor sent multiple default notices to the club, which went unanswered. He subsequently filed a claim with FIFA's Dispute Resolution Chamber (DRC). The CAS panel upheld FIFA's decision, ruling that FIFA circulars cannot override the clear provisions of FIFA's Regulations on the Status and Transfer of Players (RSTP). The panel emphasized that it is the debtor's responsibility to ensure compliance with payment obligations, including taking all necessary steps to resolve banking issues. The club's failure to communicate with Fedor or address the payment delays demonstrated a lack of good faith. Consequently, the club was ordered to pay the outstanding amount, along with default interest, as stipulated in the settlement agreement. The ruling reinforced the principle that contractual obligations must be honored, and debtors cannot evade responsibility by citing external factors like banking restrictions without making reasonable efforts to resolve them.

The club appealed the FIFA DRC decision to CAS, arguing procedural violations, including the incorrect application of the RSTP version and unequal treatment during the FIFA proceedings. The club claimed it was not informed about the composition of the FIFA DRC panel, depriving it of the right to challenge panel members. The club also argued that the principle of clausula rebus sic stantibus (changed circumstances) should override pacta sunt servanda (agreements must be kept), claiming it could not fulfill the settlement agreement due to external factors. The Player and FIFA rejected these claims, stating no such circumstances existed and the club failed to prove it made reasonable attempts to comply. The CAS panel found no merit in the club's procedural objections and upheld FIFA's decision, concluding that the club had no valid reason for non-payment.

The Panel confirmed that the EUR 750,000 was due and payable by the club to the player, rejecting the club's claim of impossibility due to QAML laws. The Panel emphasized that the club had not demonstrated sufficient effort to resolve the payment obstacles and could have sought the player's cooperation to facilitate the transfer. The Panel ruled that the club must pay the outstanding amount plus 5% annual interest from the original due date, 2 February 2015, and overturned a FIFA-imposed warning against the club, as the relevant regulation was not in force at the time. The decision underscores the debtor's responsibility to exhaust all efforts to meet payment obligations as agreed. The case highlights the importance of contractual obligations, procedural fairness, and the interpretation of legal principles in football-related disputes.

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