F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2016-2017) – fifa.com – atto non ufficiale – Decision 23 March 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 23 March 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Theo van Seggelen (Netherlands), member

Carlos González Puche (Colombia), member

Alejandro Marón (Argentina), member

Wouter Lambrecht (Belgium), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C, Country D

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

Facts relating to the preliminary issue of the competence of the DRC:

1. On 16 January 2015, the player of Country B, Player A (hereinafter: player or Claimant), and the club of Country D, Club C (hereinafter: club or Respondent), concluded an employment contract (hereinafter: contract) valid as from 16 January 2015 until 30 June 2018.

2. Clause O. of the contract reads as follows: “The parties agree not to submit any litigation to the courts of justice before exhausting all the means of the jurisdiction courts of the Football Federation of Country D, Professional Football League and FIFA”.

3. The club contested the competence of FIFA to deal with the claim lodged by the player in front of FIFA on 20 May 2015, arguing that the judicial bodies of the Football Federation of Country D, as well as of the Professional Football League of Country D, should be competent to deal with the matter at hand and that the player should have submitted his claim in front of one of these bodies.

4. Furthermore, the club asserts that said judicial bodies meet all the requirements set forth in art. 22 lit. b) of the Regulations on the Status and Transfer of Players (hereinafter: RSTP).

5. In this regard, the club held that the contract was signed in Country D and that law of Country D and regulations apply.

6. Moreover, the club submitted a decision taken by the National Dispute Resolution Chamber of the Football Federation of Country D, dated 2 September 2015, according to which “the petition” of the club, dated 18 August 2015, was accepted and the “cessation of the contractual relationship” between the parties was “ascertained” due to the player’s alleged absence for “more than 15 successive days”. Said decision indicates: “Although legally quoted, the player did not filed greeting”.

7. In respect of this decision, the club requested to dismiss the players’ claim due to res iudicata.

8. The player, for his part, insisted that FIFA’s Dispute Resolution Chamber is competent to deal with the present matter. In particular, the player held that the arbitration clause of the contract lacks “precision and clarity”, and refers to FIFA as deciding body as well.

Facts relating to the substance of the matter:

9. According to the contract, the club undertook to pay the player, inter alia, the following monthly salaries, due on the “9th of the next month”:

- EUR 5,000 between 16 January 2015 until 30 June 2015;

- EUR 6,000 between 1 July 2015 until 30 June 2016;

- EUR 7,000 between 1 July 2016 until 30 June 2017;

- EUR 8,000 between 1 July 2017 until 30 June 2018.

10. On 17 April 2015, the player sent a default notice to the club requesting payment of “three outstanding salaries” within 8 days. In said letter, the player warned the club that he would terminate his contract if the requested payment would not be remitted.

11. On 9 May 2015, the player terminated the contract due to the non-fulfilment by the club of its financial obligations, highlighting that he had not received any payment under the contract.

12. On 20 May 2015, the player lodged a claim in front of FIFA against the club for breach of contract without just cause and requested payment of EUR 280,000 as well as 5% interest p.a. if the amount would not be paid within 15 days of notification of the decision.

13. In his arguments, the player held that he fulfilled all of his contractual obligations and played 11 games for the club.

14. Furthermore, the player argued having terminated the contract with just cause since he did not receive any salary payments under the contract at stake.

15. In its reply, the club rejected the player’s claim and argued that the “conditions for the termination of the contract were not met”, “even if the club failed to pay the exact amount due to the player”, since the Regulations of the Football Federation of Country D and law of Country D apply. In this context, the club referred to the “Statute of the Football Federation of Country D”, according to which a player claiming outstanding remuneration must request that the “commission” issues a decision and in case the club does not comply with said decision, the “contractual relationships between club and player will stop”.

16. Furthermore, the club held that the player did not have just cause to terminate the contract according to the Regulations on the Status and Transfer of Players, since the termination notice itself is not sufficient to bring about the actual termination and he did not ask FIFA to “declare him free of contract” in the context of Annexe 3 of the Regulations on the Status and Transfer of Players dealing with the administrative procedure governing the transfer of professionals between associations.

17. Moreover, the club pointed out that it paid the following amounts to the player:

- 100,982 in the currency of Country D on 19 June 2015;

- 66,389 in the currency of Country D on 27 October 2015.

18. According to information contained in the Transfer Matching System (TMS), the player signed a new employment contract valid as from 13 August 2015 until 30 June 2018, with the club of Country E, Club F, entitling him to the following salaries:

- EUR 68,415.10 in total during each of the seasons 2015/2016 and 2016/2017;

- EUR 88,548 in total during the season 2017/2018.

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 matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 20 May 2015. Consequently, the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 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 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2016) the Dispute Resolution Chamber would, in principle, be competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player of Country B and a club of Country D.

3. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding body on the basis of clause O. of the employment contract invoking an alleged jurisdiction of the judicial bodies of the Football Federation of Country D and Professional Football League of Country D.

4. In particular, the Chamber duly noted that the Respondent had lodged a complaint against the Claimant in front of the DRC of the Football Federation of Country D on 18 August 2015 and that said body rendered a decision declaring the “cessation of the contractual relationship” on 2 September 2015.

5. What is more, following such decision of the DRC of the Football Federation of Country D, the Respondent requested to dismiss the Claimant’s claim since allegedly the principle of res iudicata would apply.

6. In turn, the DRC noted that the Claimant rejected such position and insisted that FIFA has competence to deal with the present matter.

7. Taking into account the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. In this regard, the members of the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

8. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC can settle an employment-related dispute between a club and a player of an international dimension, is that the competence of the relevant arbitration tribunal derives from a clear reference in the employment contract.

9. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute actually contained a clear and exclusive arbitration clause in favour of the judicial bodies of the Football Federation of Country D and Professional Football League of Country D.

10. Subsequently, the Chamber referred to clause O. of the employment contract, which stipulates “The parties agree not to submit any litigation to the courts of justice before exhausting all the means of the jurisdiction courts of the Football Federation of Country D, Professional Football League and FIFA”.

11. In view of the content of the aforementioned clause, the members of the DRC were of the opinion that clause O. of the employment contract does not make clear reference to one specific national dispute resolution chamber in the sense of art. 22 lit. b) of the aforementioned Regulations and even provides for the possibility of lodging a contractual dispute in front of FIFA. Therefore, the members of the Chamber deem that said clause can by no means be considered as a clear arbitration clause in favour either of the national deciding bodies, i.e. of the Football Federation of Country D or the Professional Football League of Country D, and, therefore, cannot be applicable. In this regard, the Chamber pointed out that this lack of clarity is also reflected in the Respondent’s argumentation since it refers to the alleged competence of the deciding bodies of both the Football Federation of Country D and Professional Football League of Country D, without further precision.

12. On account of the above, the Chamber established that the Respondent’s objection to the competence of FIFA to deal with the present matter has to be rejected and that the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to deal with the present matter as to the substance.

13. In connection with the above and in relation to the argument of the Respondent regarding the principle of res iudicata, the Chamber noted that the Claimant had already lodged his claim in front of FIFA on 20 May 2017, when the Respondent lodged its claim in front of the DRC of the Football Federation of Country D on 18 August 2015.

14. What is more, the Chamber determined that whenever a decision is passed by a national body that was not entitled to adjudicate on a specific matter for formal reasons, such decision does not have to be recognized by other competent bodies, in casu the DRC.

15. In this context, the DRC recalled that it already decided on a few occasions that the DRC of the Football Federation of Country D, which passed the decision at hand, is not constituted in accordance with the fundamental and explicit principle of equal representation of players and clubs, and as a consequence, did not fulfill the minimum procedural standards laid down in art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the FIFA Circular no. 1010 and the NDRC Regulations and, finally, that the Claimant contested its competence. Thus, the DRC unanimously decided that it could not recognise the said decision as well as its effects, since it was passed by a deciding body in lack of jurisdiction. Thus, based on the fact that the matter is not affected by the general legal principle of res iudicata, the DRC rejected the Respondent’s objection and declared itself competent to decide on the matter at hand between a player of Country B and a club of Country D in accordance with art. 22 lit. b) ab initio of the Regulations on the Status and Transfer of Players.

16. In continuation, 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 2016), and considering that the present claim was lodged on 20 May 2015, the 2015 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

17. 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.

18. In this respect, the Chamber recalled that, on 16 January 2015, the parties had signed an employment contract valid as from 16 January 2015 until 30 June 2018.

19. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent, maintaining that the latter shall be held liable for the early termination of the contract. In this regard, the DRC took note that the Claimant argued having had just cause to terminate the contract on 9 May 2015 and consequently, requested compensation in the amount of EUR 280,000 plus 5% interest p.a.

20. The DRC further noted that the Respondent, for its part, rejected the claim and argued that the player did not comply with law of Country D and regulations when terminating the contract on 9 May 2015.

21. Having said this, the DRC acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated by the Claimant with or without just cause and to decide on the consequences thereof.

22. With the above in mind, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

23. The members of the Chamber noted that the player had sent a default notice to the club on 17 April 2015 requesting payment of three monthly salaries. Said letter contained a warning that he would terminate his employment contract if said debt would not be settled within 8 days.

24. Subsequently, the DRC recalled that the Claimant terminated the contract on 9 May 2015, due to the club’s non fulfilment of its financial obligations.

25. In this respect, the Chamber wished to emphasize that, according to the Claimant, he had not received any payments under the contract until 9 May 2015. In this regard, the total amount of EUR 20,000, corresponding to his salaries as of January 2015 until April 2015, remained outstanding up to the player’s termination.

26. The Chamber then turned its attention to the arguments of the Respondent, which claimed that the termination was not in accordance with law of Country D and regulations. In this context, the DRC established that the contract does not contain a choice of law. Referring to the applicable regulations defined above, the Chamber had to reject said argument.

27. In this context and due to the fact that the Claimant’s allegations remained uncontested by the Respondent, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant remuneration totalling EUR 20,000 up to 9 May 2017, corresponding to four monthly salaries.

28. Consequently, and considering that the Respondent had thus repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 9 May 2015 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

29. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

30. Bearing in mind that at the moment of the contract termination EUR 20,000 remained outstanding, the Chamber analysed the documents provided by the Respondent, according to which two payments were remitted to the player after his termination.

31. In relation to the documentation provided by Respondent, the DRC referred to art. 9 par. 1 lit. e) of the Procedural Rules which stipulates that all documents of relevance to the dispute shall be submitted in the original version as well as translated into one of the official FIFA languages.

32. In this context, the DRC noted that, although having been asked to do so, the Respondent did not provide a translated version of the document dated 27 October 2015, according to which it allegedly paid 66,389 in the currency of Country D to the player. In view of the foregoing and taking into consideration art. 9 of the Procedural Rules, the Chamber decided that it could not take into account the relevant document which was not translated into an official FIFA language.

33. As to the documentary evidence presented in the English language, the DRC observed that a payment in the amount of 100,982 in the currency of Country D, corresponding to approx. EUR 22,500, was remitted to the Claimant on 19 June 2015. Taking into account said document, it appears that the outstanding remuneration, i.e. EUR 20,000, was indeed remitted to the player after his termination on 19 June 2015.

34. The Chamber concluded therefore that no remuneration remained outstanding.

35. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

36. 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.

37. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains 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 established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

38. 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

39. The members of the Chamber then turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

40. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Claimant until 30 June 2018, bearing in mind that he would have received in total EUR 262,000 as remuneration for the period as from 9 May 2015 until 30 June 2018. Consequently, the Chamber concluded that the amount of EUR 262,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

41. Furthermore, the Chamber recalled that out of the payment of 100,982 in the currency of Country D on 19 June 2015, corresponding to approx. EUR 22,500, the amount of EUR 2,500 was not related to outstanding remuneration and must be thus deducted as payment of the compensation.

42. 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.

43. In this respect, the Chamber recalled that the Claimant had found new employment with the club of Country E, Club F, as from 13 August 2015 until 30 June 2018. In accordance with the employment contract signed between the Claimant and Club F, the Claimant was entitled to a total salary of EUR 68,415.10 for each of the seasons 2015/2016 and 2016/2017, as well as to a total salary of EUR 88,548 for the season 2017/2018.

44. Consequently, on account of the above-mentioned considerations and the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damage, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 34,500 as compensation for breach of contract to the Claimant.

45. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 20 May 2015, until the date of effective payment.

46. The members of the Chamber concluded their deliberations by rejecting any further claim of the Claimant.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, has to pay to the Claimant within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 34,500 plus 5% interest p.a. as of 20 May 2015 until the date of effective payment.

4. In the event that the aforementioned amount and interest due to the Claimant are not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s 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 remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to article 58 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

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl: CAS directives