Lawinsport - On 23 January 2015, FIFA issued Circular Letter no.1468 (Circular), implementing some additions and amendments to the Regulations on the Status and Transfer of Players (RSTP) and the Rules Governing the Procedures of the Players' Status Committee (PSC) and the Dispute Resolution Chamber (DRC).
The most important addition was Article 12bis (“Overdue payables”) to the RSTP. The article aimed to establish an efficient and effective mechanism for resolving overdue payables – i.e. “their financial obligations towards players and other clubs as per the terms stipulated in the contracts signed with their professional players and in the transfer agreements”.
This article afforded the PSC and DRC more power over clubs which have overdue payables, including (importantly) the power to ban them from registering any new player national or international players for one or two entire and consecutive registration periods.
The effects of the new Article 12bis have recently had interesting implications for two Iranian football clubs: Esteghlal FC and Traktor Sazi FC. This article reviews the Esteghlal FC case and looks briefly at the Traktor Sazi FC case. Specifically, it looks at:
- Facts of the Esteghlal FC case
- The start of the legal procedure: pre-action proceedings
- Proceedings in the FIFA DRC
- Failure to comply with the Order: Article 12bis in action
- The Traktor Sazi FC case and author’s comment
The FIFA Circular urged all member associations to ensure that their affiliated clubs were immediately made aware of its contents, including the new Article 12bis. However, Iranian football clubs claim that the Iranian Football Federation failed to alert them to the Circular or inform them of the new Article.
Esteghlal FC is an Iranian professional football club based in Tehran that plays in the Persian Gulf Pro League. On 27 February 2016, Esteghlal signed an employment contract with Adil Chihi, a German-Moroccan player, that ran from 27 February 2016 until the end of the Iranian Persian Gulf Pro League.
According to the contract, Chihi was entitled to receive a total of $97,000 USD. However, if he participated in less than 50% of the official matches, $10,000 USD could be deducted from the total remuneration. This provision was invoked and accordingly he was entitled to receive a total of $87,000 USD.
In practice, Chihi received $40,000 USD just after getting his international transfer certificate (ITC), but Esteghlal FC failed to pay him the remaining $47,000 USD on time.
THE START OF THE LEGAL PROCEDURE: PRE-ACTION PROCEEDINGS
In cases like this, players are required under Article 12bis paragraph 3 to “put the debtor club in default in writing and have granted a deadline of at least ten days for the debtor club to comply with its financial obligation(s).”
Chihi put Esteghlal FC on notice for default of payment, and set the club a time limit that expired on 17 July 2016 to remedy the default (i.e. pay him the balance of $47,000 USD).
Unfortunately, Chihi received no response. Consequently, he lodged a claim against the club with the DRC, requesting that they pay the “overdue payables”.
PROCEEDINGS IN THE FIFA DRC
FIFA DRC accepted the player’s claim and the club was ordered to pay the player $47,000 within 30 days from the date of notification.
The DRC then considered Article 12bis Paragraph 2, and noted that the club could be sanctioned under the terms of Paragraph 4 if they failed to comply with the order. Paragraph 4 states that the DRC judge may impose the following sanctions on a club:
- a warning;
- a reprimand;
- a fine;
- a ban from registering any new players, either nationally or internationally, for one or two entire and consecutive registration periods.
(For note, Paragraph 5 states that: The sanctions provided for in paragraph 4 above may be applied cumulatively).
In addition, the DRC also considered Article 12bis Paragraph 6, which states that “a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty.”
The DRC noted that the Esteghlal FC had failed to comply with its financial obligations toward players on various occasions in the recent past. In these circumstances, they ruled that if the club failed to comply with the order, they would face being banned from registering any new player, either nationally or internationally, for the entire of the next registration period (i.e. transfer window).
FAILURE TO COMPLY WITH THE ORDER: ARTICLE 12BIS IN ACTION
The 30-days came to pass, and Chihi did not receive any response from the club. Consequently, Esteghlal were barred from registering any players during the next transfer window.
This was a real blow for the club, as they went on to sign contracts with two of the best players in Asia during this window: Andranik Teymourian, captain of the Iran national football team; and Server Djaparov, who had won the Asian Footballer of the Year award twice in 2008 and 2011. When the club tried to register these players in the TMS system, they found that they were unable to do so because of the decision.
Esteghlal FC representatives said that they had not been informed of the FIFA DRC decision and that the Iranian Football Federation had failed to communicate the effects of the decision to them, so they were unaware that they would be unable to register new players. However, in response, the Iranian Football Federation published its correspondence letter to the club informing them of the decision and consequently it was established that the club itself had acted carelessly in response to this decision. The author understands that the Club knew of the decision, but believed in error that even if they missed the 30-day payment window, any bar of registering new players would be immediately lifted once payment had been made.
Following this, the club attempted to convince FIFA that the reason for their late payment was because of UN sanctions in Iran, which have caused banks problems transferring money internationally. This may have been considered a valid contractual defence (and have been an effective reason for the club to delay implementation of the DRC decision); but the point is that they brought it up after passing the timeframe for appealing it to CAS, so in the circumstances the decision was final.
THE TRAKTOR SAZI FC CASE AND COMMENT
Soon after this situation came to light, the media revealed that another Iranian football club, Traktor Sazi FC, had received the same decision on basis of the new Article 12bis.
After these decisions, criticism was directed towards the legal departments of the clubs and the Iranian Football Federation for failing to effectively communicate the FIFA DRC decisions.
In response to these cases, the Iranian Football Federation has decided to establish a national player status committee and to use a national TMS system to observe the status of football players in Iran and their eligibility to play. While this won’t help teams in relation to overdue payables to players, it will, more importantly, help the Iranian Football Federation to have better monitoring on players and their eligibility to play.
Clearly, the impact of FIFA Article 12bis is far reaching and cannot be overlooked. It should however be noted that only serial offenders are sanctioned with transfer bans, and that before that a range of lesser sanctions are applicable.
Authored by: Amir Arsalan Eskandari
Comments powered by CComment