F.I.F.A. – Camera di Risoluzione delle Controversie (2014-2015) – controversie di lavoro – ———- F.I.F.A. – Dispute Resolution Chamber (2014-2015) – labour disputes – official version by www.fifa.com – Decision of the Dispute Resolution Chamber passed in Zurich, Switzerland, on 30 July 2014, in the following composition: Thomas Grimm (Switzerland), Deputy Chairman Johan van Gaalen (South Africa), member Theodore Giannikos (Greece), member on the claim presented by the player, Player K, from country U as Claimant against the club, Club O, from country T as Respondent regarding an employment-related dispute arisen between the parties

F.I.F.A. - Camera di Risoluzione delle Controversie (2014-2015) - controversie di lavoro - ---------- F.I.F.A. - Dispute Resolution Chamber (2014-2015) - labour disputes – official version by www.fifa.com – Decision of the Dispute Resolution Chamber passed in Zurich, Switzerland, on 30 July 2014, in the following composition: Thomas Grimm (Switzerland), Deputy Chairman Johan van Gaalen (South Africa), member Theodore Giannikos (Greece), member on the claim presented by the player, Player K, from country U as Claimant against the club, Club O, from country T as Respondent regarding an employment-related dispute arisen between the parties I. Facts of the case 1. On 12 July 2013, Player K, from country U (hereinafter: the Claimant) and Club O, from country T (hereinafter: the Respondent) concluded an employment contract (hereinafter: the contract) which provides for a duration of two seasons as from the date of signature until 31 May 2015. The contract states that “if Club O does not get promoted to Super Lig at the end of 2013-2014, the players contract will be cancelled automatically”. Conversely, it also stipulates that “if Club O gets promoted Super League at the end of 2013-2014 season, the players contract will be renewed automatically for 1 year with a total salary of 475,000 USD net per year”. 2. According to said contract, the Claimant would receive the following net amounts: - For the season 2013-14: • USD 65,000 due on 22 July 2013; • USD 90,000 payable in ten equal monthly instalments, the first instalment due on 1 August 2013. - For the season 2014-15: • USD 175,000 due on 1 July 2014; • USD 300,000 payable in ten equal monthly instalments, the first instalment due on 1 August 2014. 3. According to article 3 of the contract, “in case the Club would not pay the signing fee of 65,000 USD on 22 July 2013, then the Player will be free to terminate this contract unilaterally without sending any warning and without being obliged to pay any kind of compensation. In the event of non-payment of the stated date, the Club shall be obliged to pay a penalty of 32,500 USD in addition to the monetary obligations stemming from this Contract.” 4. On 28 July 2013, the Claimant put the Respondent in default for the payment of the sign-on fee due on 22 July 2013. 5. On 31 July 2013, the Respondent wrote to the Claimant’s agent expressing its intention to discuss the termination of the contract. 6. On 1 August 2013, the Claimant replied stating that he would consider the mutual termination as soon as the payment of the sign-on fee would be made. 7. On 6 August 2013, with reference to the outstanding sign-on fee and salary due on 1 August 2013 as well as article 3 of the contract, the Claimant terminated the employment contract in writing. 8. On 7 August 2013, the Claimant filed a claim against the Respondent before FIFA requesting the payment of the amount of USD 712,500, broken down as follows: - USD 74,000 corresponding to the outstanding sign-on fee and one monthly salary (due on 1 August 2013); - USD 32,500 as penalty stipulated in article 3 of the contract; - USD 556,000 as compensation: • USD 81,000 for the rest of 2013-14 season (nine monthly salaries); • USD 475,000 for the 2014-15 season. 9. In its response, the Respondent stresses that “although the sides made a contract, Player K had not good condition to make such contract” and therefore that “the contract conditions was not occurred”. The Respondent alleges that this bad shape was the reason why they proposed on 31 July 2013 to terminate the employment contract mutually. 10. Besides, the Respondent states that, should the Dispute Resolution Chamber hold it liable for breach of contract, the salary for the 2014-15 season should not be taken into account since the extension to this second season was subject to the promotion to the country T Super Lig. 11. On 10 February 2014, the Claimant and the Club N, from country U signed an employment contract valid as from the date of signature until 10 February 2015, according to which the Claimant was entitled to a monthly salary of currency of country U 5,000,000 (USD 2,270). 12. At the end of the 2013-14 season, the Respondent failed to gain promotion to the country T Super Lig. II. Considerations of the Dispute Resolution Chamber 1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 7 August 2013. Consequently, the 2012 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) are applicable to the matter at stake (cf. art. 21 par. 2 and 3 of the 2012 edition of the Procedural Rules). 2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2012), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between an country U player and a country T club. 3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2012), and considering that the present claim was lodged on 7 August 2013, the 2012 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance. 4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand. 5. In this respect, the Chamber acknowledged that, on 12 July 2013, the parties had signed an employment contract which provides for a remuneration of USD 155,000 for the 2013-14 season and, as per the wording of the contract, “if Club O gets promoted Super League at the end of 2013-2014 season, the players contract will be renewed automatically for 1 year with a total salary of 475,000 USD net per year” and that “if Club O does not get promoted to Super Lig at the end of 2013-2014, the players contract will be cancelled automatically”. 6. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause on 6 August 2013, after previously having put the Respondent in default. In particular, the Claimant deemed to have had a just cause to terminate the contract since the Respondent allegedly failed to pay the Claimant’s remuneration, consisting of a sign-on fee of USD 65,000 as well as one monthly salary. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract. 7. The Chamber further took note that the Respondent did not contest not having paid the claimed amounts to the Claimant. However, the DRC noted that the Respondent argues that it did not do so because, after the signature of the contract, it realised that the Claimant was in bad shape. From the latter fact, the Respondent deduced that the conditions of the contract were not fulfilled and that therefore said contract was null and void. 8. In this context, the members of the Chamber referred to art. 18 par. 4 of the Regulations which stipulates that “the validity of a contract may not be made subject to a positive medical examination and/or the granting of a work permit”. 9. Thereto, the Chamber pointed out that the responsibility to conduct the necessary medical examinations prior to the signing of the employment contract is incumbent on the Respondent and that therefore, the argument of the Respondent had to be rejected. 10. In light of the above, the Dispute Resolution Chamber concluded that by failing to pay the Claimant the sign-on fee, which represents more than two thirds of the Claimant’s annual salary, as well as one monthly salary – despite being put in default – the Respondent breached the contract and therefore the Claimant had just cause to unilaterally terminate the contractual relationship. 11. Having established that the Respondent is to be held liable for the early termination of the employment contract, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract. 12. First of all, the Chamber reverted to the Claimant’s financial claim, which includes outstanding amounts of USD 74,000 corresponding to the sign-on fee and a monthly salary as well as USD 32,500 relating to the amount stipulated in article 3 of the contract. 13. In this regard, the DRC recalled that it is uncontested that the amount of USD 74,000 was outstanding at the time of the termination. As to amount stipulated in article 3 of the contract, the members of the Chamber observed that the parties contractually agreed that “in the event of non-payment of the stated date, the Club shall be obliged to pay a penalty of 32,500 USD in addition to the monetary obligations stemming from this Contract”. On this basis, the Chamber considered that the parties had agreed that the amount of USD 32,500 would have to be paid as a penalty by the Respondent in the event it would be in delay for the payment of the sign-on fee. Consequently, and in accordance with the principle pacta sunt servanda, the Dispute Resolution Chamber concluded that at the time of the termination, the Claimant was entitled to receive the penalty of USD 32,500, which had fallen due as of the Respondent’s failure to pay the sign-on fee. Accordingly, the Chamber held that the amount of USD 32,500 is to be considered as an outstanding amount. 14. In light of the foregoing, the Dispute Resolution Chamber decided that the Respondent is liable to pay the Claimant the amount of USD 106,500 as outstanding remuneration. 15. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period. 16. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber pointed out that clause 3 of the contract is not clear and does not set a fixed amount in case of termination of the contract without just cause by either of the parties. Accordingly, the DRC was of the opinion that the clause rather constitutes a penalty clause as previously outlined (cf. points II. 12 and II.13) than a compensation clause. 17. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. 18. Bearing in mind the foregoing as well as the claim of the Claimant, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until the end of the contractual relationship. 19. In order to do so, the DRC focused its attention on the above-mentioned stipulations related to the duration of the contract (cf. points I.1 and II.5). In this regard, the members of the Chamber emphasised that the conditions set for the contract to be renewed, i.e. the Respondent’s promotion to the country T Super Lig, are totally independent from the will of any of the parties. Consequently, and considering their lack of potestative nature, the Chamber held that the aforementioned stipulations had to be deemed valid. In light of the foregoing conclusion, the DRC pointed out that at the time of the termination of the contract, the Claimant and the Respondent were only bound by a contract until the end of the 2013-14 season as the following season depended on a further condition as stated above. On account thereof and the fact that the Respondent failed to gain promotion at the end of the 2013-14 season, the Dispute Resolution Chamber decided that only the remuneration provided for the 2013-14 season had to be taken into consideration and concluded that the amount of USD 81,000, i.e. nine monthly salaries amounting to USD 9,000 each, served as the basis for the determination of the amount of compensation for breach of contract. 20. In continuation, the Chamber verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages. 21. Indeed, on 10 February 2014, the Claimant concluded an employment contract with the Club N, from country U, valid as of the date of signature until 10 February 2015, according to which the Claimant is entitled to a monthly salary of currency of country U 5,000,000 (USD 2,270). Consequently, the Chamber established that the value of the new employment contract concluded between the Claimant and the new club for the period as from the date of termination of the contract until 31 May 2014 amounted to USD 9,080. 22. In accordance with the constant practice of the Dispute Resolution Chamber and the general obligation of the player to mitigate his damages, such remuneration under the new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract. 23. In view of all of the above, the DRC decided that the Respondent must pay the amount of USD 71,920 to the Claimant, which is considered by the DRC to be a reasonable and justified amount as compensation for breach of contract. 24. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim filed by the Respondent / Counter-Claimant is rejected. ***** III. Decision of the Dispute Resolution Chamber 1. The claim of the Claimant, Player K, is partially accepted. 2. The Respondent, Club O, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 106,500. 3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract amounting to USD 71,920. 4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision. 5. Any further claim lodged by the Claimant is rejected. 6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances are to be made and to notify the Dispute Resolution Chamber of every payment received. ***** Note relating to the motivated decision (legal remedy): According to art. 67 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following: Court of Arbitration for Sport Avenue de Beaumont 2 1012 Lausanne Switzerland Tel: +41 21 613 50 00 Fax: +41 21 613 50 01 e-mail: info@tas-cas.org www.tas-cas.org For the Dispute Resolution Chamber: Jérôme Valcke Secretary General Encl. CAS directives