Article 12bis of the FIFA RSTP celebrates its first birthday: an update

In February 2015 I wrote an article on several important amendments of the FIFA Regulations on the Status and Transfer of Players (RSTP) and the Procedural Rules, as published in the FIFA circular no. 1468 of 23 January 2015 (Dutch version? Click here). The biggest amendment was the addition of the new article 12bis to the FIFA RSTP as per 1 March 2015. The scope of the implementation of Article 12bis of the FIFA RSTP was to provide for a quick and helpful solution in situations concerning overdue payments.

It was understood that Article 12bis of the FIFA RSTP would give a party the possibility to request the FIFA for intervention in case of overdue payments. This is a good thing, because normally a player or coach would have to wait for 3 months of non-payment before being able to seriously request for FIFA’s intervention. Article12bis of the FIFA RSTP prescribes that, in the event of overdue payables, as from the 31^st day a reminder letter can be sent to summon the club to fulfil its payment obligations. Subsequently, on the 41^st day, after the club has be put in default, a petition on the basis of Article 12bis RSTP can be filed with FIFA. On the basis of the aforementioned petition FIFA has the power to impose the non-paying club with several sanctions.

Almost a year has passed since the implementation of this new rule. It is interesting to see how the rule has been adopted by FIFA, and if all expectations have been met.

When reviewing several recent decisions of the FIFA Dispute Resolution Chamber (DRC), it appears that the judges of the FIFA DRC apply the provision of Article 12bis RSTP ex ufficio. As per the coming into force of Article 12bis RSTP in March 2015 it seems that the FIFA DRC has definitively adopted the competence to impose the sanctions mentioned in said article.

In recent FIFA DRC decisions the DRC judge(s) duly took note of the fact that the delays in payment were of more than 30 days without a prima facie contractual basis. In most cases the DRC judge(s) consequently noted that the creditor had put the debtor in default in writing, and that a deadline of at least 10 days was granted in order for the debtor to comply with its financial obligation(s).

It also appears that the DRC judge(s) do make use of the possibility to impose direct financial sanctions on the debtor (club) in the event of serious overdue payables. A quick review of several FIFA DRC decisions shows that the financial sanctions may amount up to approximately 10-20% (with several exceptions in particular cases) of the compensation that has been assigned to the creditor (i.e. the player or coach).

One can only assume that the sanctions imposed in the FIFA jurisprudence will have a positive effect on the behaviour of certain clubs that are notorious for non complying with their payment obligations towards players/coaches. The financial sanctions are relatively high and if the clubs do not fulfil this obligation (towards FIFA), FIFA may impose even more serious sanctions such as transfer bans.

On the other hand it must be duly noted that the power to sanction clubs for the non-compliance with their payment obligations was always present with the FIFA Disciplinary Committee. If a club did not meet the obligations arising out of a FIFA DRC or PSC decision within the timeline mentioned, a player could revert to the Disciplinary Committee (see Article 64 of the FIFA Disciplinary Code). This however is a long and time-consuming extra procedure, so one can only hope that the current Article 12bis measures can speed this process up.

Finally, one last critical note must be made with regard to Article 12bis. Upon its implementation one year ago, it was expected that Article 12bis would provide players/coaches that had to deal with overdue payables with a quick solution to their problems. It was expected to be similar to summary proceedings, however it appears that it merely provides FIFA (and players/coaches) with an extra measure to pressure the non-paying clubs into fulfilling its payment obligations. This is a good thing, but unfortunately it does not provide for a quick resolution of the current problems.

So, have all expectations been met? Not completely, but the now 1-year old Article 12bis RSTP does provide new measures for players/coaches that have to deal with overdue payables. And that is always a good thing.

More information? Please contact me. This article has been written by Thomas Geukes Foppen (Sports lawyer at Brantjes Advocaten).