January 21st 2019, an Argentine footballer, Emiliano Sala who had just signed for Cardiff City was travelling from France to England, when the plane in which he was “disappeared”. Rescue searches were conducted for weeks which yielded no positive result, until his body was found in the wreckage of the plane on 9th February 2019.
In between that time, Nantes FC (the selling club) made a demand to Cardiff City FC (the buying club) for the payment of £5 Million, being the first installment of the whole transfer fee of £15 Million. The club also formally threatened that a legal action will be taken if Cardiff City FC further delays, or refuses to pay.
In light of the above, this article aims to give an appraisal of the likelihood of success or failure of the threatened legal action by Nantes.
At what stage was the football transfer?
In being able to give a proper appraisal, it is important to first ascertain the stage at which the transfer of Emiliano Sala was at the time of the tragic event.
Usually, when two clubs agree on the transfer of a player and a consideration value fixed, a transfer agreement is drawn up. The transfer agreement often includes a clause in which the buying club is given a couple of days to fulfill formalities required for such transfer, and that the transfer becomes binding upon the fulfillment of such formalities. Such formalities include: the successful matching and authorization of the transfer by the FIFA Transfer Matching System (TMS), the request and issuance of an International Transfer Certificate (ITC), a successful application for a work permit, etc. It is when the above have been concluded that the buying club usually announces the transfer and unveils the player.
In the case of Emiliano Sala, it is obvious that the transfer had already been concluded due to the fact that Cardiff City unveiled the player and the player was even scheduled to play for the club against Arsenal on 29th January 2019. Also, the player was reported to have resumed with Cardiff City, and only made a trip back to France to say final goodbyes to his former club.
An outright agreed payment or a contingency payment?
Having established that the transfer had already been completed as at the time of the tragic event, then it means that the financial obligations of Cardiff City contained in the transfer agreement had become binding.
However, a question that needs to be asked is: what is the exact details of the financial obligations of Cardiff City to Nantes? Is the fee being demanded, wholly an outright agreed payment that was merely scheduled into installments, or it is also made up of contingency payments that are due only upon the fulfillment of an event(s)?
This is important to consider because when a selling club and buying club agree on the consideration to be paid by the later, it may include one or more of the following: an outright payment to be fully paid upfront or scheduled into installments, add-ons based on the number of appearances the player makes, add-ons based on the performances of the player, add-ons based on the new club winning silverware, sell-on percentage clauses, etc.
I would like to state at this point that since I am not privy to the transfer agreement that was concluded between the two clubs, my opinion will be based on permutations. I shall be considering what would likely be the outcome of the case if the whole sum is an outright agreed payment, and if all or part of the sum are contingency payments.
a. Outright agreed payment
If I were to go by the common reports that it was a £15 million outright transfer fee which was merely scheduled into three installments for the convenience of Cardiff City, then it would mean that the payment of the installments was not hinged on the occurrence or non-occurrence of any (sporting) event. As such, I am of the strong view that if Nantes were to file a claim before the Players Status Committee (PSC) of FIFA, Cardiff City would be found obligated to pay Nantes each installment due, regardless of the fact that Emiliano Sala, unfortunately, lost his life in the plane crash.
Based on established jurisprudence of the FIFA PSC, it has been said that once a contract has been signed, all parties involved can rely in good faith on it being respected and enforced.
In this circumstance, Nantes had fully performed its side of the agreement by giving up the registration of its player, and thus, the obligation of Cardiff City to pay the agreed transfer fee in the sum of £15 million had already occurred. In fact, it must have been based on the conclusion of the transfer agreement with Nantes that an employment contract was concluded with the late player. I opine that it is merely the future mode of installment payment that leaves it in the form of a “mere debt”.
b. Contingency payments
If on the other hand, there were contingency fees included in the transfer agreement such as sell-on clauses or appearance/performance-related payments, I am of the view that such have practicably become terminated and payment unenforceable by Nantes, since the demise of the player would not even give a chance for such conditions to be met or not.
To further buttress this view, there have been circumstances that a player was alive during the whole period of his employment contract with his new club, and such contingencies which would have triggered payments failed to happen. This may also have been the case in this circumstance even if the player were alive throughout the period of his employment contract with Cardiff City. Thus, I do not think that Nantes can successfully make a claim based on the occurrence of an event that may or may not happen, and which has indeed not happened.
Hopefully, both Nantes and Cardiff City are able to resolve this dispute amicably, so as to avoid the unnecessary publicity and trauma that a legal action at the PSC may bring to the family of the deceased player and pilot.
(Rest in Peace, Emiliano Sala & David Ibbotson)
Written by: ‘Tosin Akinyemi, Esq.