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 30 June 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 30 June 2017,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (Netherlands), member

Zola Majavu (South Africa), member

on the claim presented by the player,

Player A, from country A,

as Claimant

against the club,

Club B, from country B,

as Respondent

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 11 August 2014, the Player A, from country A (hereinafter: the Claimant or the player), and the Club B, from country B (hereinafter: the Respondent or Club B), signed a “Contract of employment of professional football player” (hereinafter: the employment contract) valid for three seasons, as from the day following the date of signature until 30 June 2017.

2. According to art. III.1 of the employment contract, the Claimant was entitled to a net monthly salary of EUR 14,286, to be paid by the 15th day of the month following the month for which the remuneration is due.

3. Pursuant to art. X.5, X.6 and X.7 of the employment contract, for each season, the Claimant was entitled to “two net bonuses” per season amounting to EUR 50,000 each. Such bonuses were respectively payable on 31 August and 28 February of the relevant season, “provided that the player has not been transferred (against payment of transfer compensation to the club or as a free player) to a third football club until the said dates”.

4. Furthermore, according to the employment contract, the Claimant was entitled to the following:

- “an apartment/house (…) with monthly rent price up to 500” (art. X.2);

- two flight tickets “country B-country A-country B” for each season (art. X.3);

- “a car at club’s expense (…) at a monthly rent price up to 700. In any event, when the club is in the process of preparation for the coming season or in the regulated timeout in accordance with Regulations of the Football Federation of country B the provisions of the preceding sentence shall not apply and the player shall return the car for the duration of the said period” (art. X.4).

5. On 15 July 2015, the Claimant and the Respondent signed a “Termination Agreement” by means of which they terminated the employment contract with immediate effect. On the same date, the Respondent and the Club C, from country C (hereinafter: Club C), entered into an “Agreement for the transfer of professional football player” (hereinafter: the transfer contract), which was also signed by the Claimant.

6. According to art. I.2 of the transfer contract, “the transfer of the full competitive and transfer rights (i.e. economic and federative rights) of the player is concluded with the explicit consent of the player, who hereby declares that he acknowledges and accepts all the terms and conditions set forth in this agreement”.

7. Pursuant to art. II.1 of the transfer contract, the Respondent and Club C agreed on a transfer fee amounting to “the net amount of USD 50,000”.

8. Furthermore, art. IV of the transfer contract provides as follows:

“IV. BUY-BACK

IV.1 [Club B] has the irrevocable obligation to purchase back from [Club C] the full competitive and transfer rights (economic and federative rights) of the Player for a fixed transfer fee in the amount of EUR 1,000 (one thousand Euro) net (“Buy-Back Fee”). As a result of the exercise of the buy-back obligation by [Club B], the Player shall be transferred from [Club C] to [Club B] effective as of 01 July 2016 and [Club C] shall terminate the employment agreement concluded with the Player.

IV.2 [Club B] must irrevocably exercise the buy-back option by transferring the Buy-Back Fee to [Club C] onto the bank account specified herein until 30 June 2016 and [Club C] must issue an invoice for the amount of the Buy-Back Fee paid. The parties agree that the Buy-Back is irrevocable and that [Club C] must receive the Buy-Back Fee for the purchase of the full competitive and transfer rights of the Player before 30 June 2016. If necessary for the purposes of the registration of the transfer of the player with the Football Federation of country B only, the Parties may sign an additional agreement for the transfer of the Player from [Club C] to [Club B], which shall include the same terms as stipulated under the provisions of this Article IV.2. The buy-back obligation subject to the provisions of this Article IV.2 must be exercised by [Club B] by transferring the Buy-Back Fee under Art. IV.I to the bank account of [Club C], which will be communicated later.

IV.3 Once the obligation of the buy-back is exercised by [Club B] pursuant to the provisions of this Section IV, [Club C] transfers the full competitive and transfer rights of the Player (economic and federative rights) to [Club B] effective as of 01 July 2016. Furthermore, by signing the present agreement the Player and the CLUB explicitly agree and oblige to enter into an employment contract with [Club B] for one football season 2016/2017 in the form required by the Football Federation of country B under the terms and conditions as provided for in the Contract of Employment of Professional Football Player between the Player and [Club B] dated 11 August 2014. In case of failure of the Player to enter into an employment contract with [Club B] as provided for in the preceding sentence, the Player shall be obliged to pay [Club B] liquidated damages amounting to USD 400,000.

[…] IV.5 The parties undertake and confirm that until 30 June 2016, [Club C] and the Player shall not initiate nor engage in discussions or negotiations or enter into any agreement with any party relating, directly or indirectly, to the sale or other form of disposal of the transfer and/or competitive rights of the Player or any other transaction which may circumvent the rights and obligations of [Club B] to exercise and effectuate the right of buy-back. Otherwise, [Club B] shall be entitled to liquidated damages in the amount of USD 400,000 from the defaulting party”.

9. At the beginning of January 2016, the Claimant terminated the employment contract with Club C and, on 9 January 2016, he wrote an SMS message to the Club B’s President, informing him that he had not been receiving his salary for the last four months. In particular he affirmed that “now I am without team without money so I think the best solution now for both of us is to let me free if I find something because no team will accept me in this situation or give money for Club B..it will be a lost for both of us if I stay home without playing and in June I come back to Club B”.

10. On 12 May 2016, the Claimant sent an e-mail to the Respondent, referring to art. IV.3 of the transfer contract, requesting to be informed of the date of the team’s gathering and to be provided with visa, flight tickets for country B and copy of the employment contract for season 2016/2017.

11. On the same date, Club B’s President replied to the Claimant as follows: “your contract with Club C was not done till the end and terminated from your side, so the contract and all terms in it are not in force anymore (…) The clause is not valid at all”.

12. On the same date, the Claimant wrote a letter to the Respondent arguing that clause IV.3 of the contract was fully valid and reiterating his requests.

13. On 19 May 2016, the Respondent sent a letter to the Claimant, by means of which it averred that it “understand from the public domain” that the player was no longer under contract with Club C and that he had concluded an employment contract with the Club D, from country D (hereinafter: Club D), whose terms were allegedly unknown to the Respondent. Furthermore, the Respondent affirmed that it was not in breach of art. IV.3 of the transfer contract and “the condition precedent under art. IV.3 of the Agreement (“once the obligation of the buy-back is exercised…”) to enter into an employment contract with the player effective as of 01 July 2016 was also compromised by actions of Player A himself”. On account of the above, the Respondent rejected the requests of the Claimant.

14. On 23 May 2016, the Claimant informed the Respondent that, due the divergent opinion between him and the club on the matter, he would submit a claim for breach of contract before FIFA (note: document on file).

15. On 26 July 2016, the Claimant lodged a claim against the Respondent before FIFA for breach of contract, requesting the payment of the following amounts for the period from 1 July 2016 until 30 June 2017:

a) EUR 271,432 plus interest of 5% p.a. as from 1 July 2016 as compensation for breach of contract, corresponding to:

- EUR 171,432 as salaries;

- EUR 100,000 for bonuses;

b) EUR 796,84 for two flight tickets;

c) 8,400 for car allowance;

d) 6,000 for rent allowance;

e) Sporting sanctions to be imposed on the Respondent.

16. In his claim, the Claimant affirmed first that art. IV.3 of the transfer contract constituted a binding employment contract between him and Club B as, through said article, he and the Respondent committed “to enter into an employment agreement since 1 July 2016 in the same terms and conditions of the employment contract signed on 11 August 2014”. In particular, the Claimant emphasised that art. IV.3 of the transfer contract contained the essentialia negotii of the employment contract which the parties allegedly committed to sign for season 2016/2017.

17. Secondly, the Claimant averred that the transfer contract was a simulation of the real intention of the parties, which was to loan the player to Club C and not to transfer him on a definitive basis. In particular, the Claimant argued that the aim of the transfer contract was to “circumvent the limit of foreign player (quota limit) existing at a national level” and such circumstance was allegedly corroborated by:

- the express acknowledgement by the Club B’s President in the SMS messages exchanged with the player, whereby the President wrote: “loan is not an option because I need the place for non-european player and if it loan, the place is still occupied. That’s why we need transfer”;

- the low amount of the buy-back fee i.e. EUR 1,000 set out in art. IV.1 of the transfer contract compared to the transfer fee i.e. EUR 50,000 and the severe consequences for the Claimant in case he refused to sign the new employment contract with the Respondent, i.e. payment of USD 400,000.

18. In view of the above, the Claimant was of the opinion that the aim of the Respondent was to secure him until 30 June 2017 and argued that “the obligation to conclude the employment contract in July 2016 is fully independent from the obligation to execute compulsory buy-back clause which was solely intended to cover the risk of the Club C, from country C offering the Player a possible extension of the contract”.

19. Furthermore, the Claimant affirmed that he and the Respondent considered themselves bound by the transfer contract to each other also after he terminated his employment contract with Club C, as he requested the Club B’s President to be released and the latter allegedly refused such request.

20. In this respect, the Claimant argued that the Respondent refused to enter into the new employment contract with him for season 2016/2017 and, as a consequence thereof, breached art. IV.3 of the transfer contract and frustrated “the legitimate expectations of the player”.

21. Lastly, the Claimant asserted that “the employment contract originally had to last until 30 June 2017, but was unilaterally terminated by the [club] without just cause on 21 July 2016 by refusing to conclude the employment contract”. As a consequence of such alleged termination, the Claimant requested the compensation set out above and the imposition of sporting sanctions.

22. The Respondent replied rejecting the Claimant’s arguments and asserting that the parties bound by the terms of the transfer contract were exclusively Club C and Club B. In particular, the Respondent alleged that the Claimant, pursuant to art. I.2 of the transfer contract, signed the transfer contract only to consent with the terms and conditions of his transfer. Moreover, the Respondent emphasized that art. III of the transfer contract, which sets the “parties’ rights and obligations”, stipulates rights and obligation for Club B and Club C, but not for the player.

23. Moreover, the Respondent argued that the transfer contract did not stipulate a contractual obligation for Club B to offer a future employment contract to the player. In particular, referring to the wording of art. IV.3 of the transfer contract, the Respondent emphasised that, on 15 July 2015, the player’s agent and the Club B’s lawyer exchanged via e-mail a last draft of the transfer contract where the latter, allegedly without reason, made “a typographical error in clause IV.3 by inserting the words ‘and the CLUB’”. This argument, according to the Respondent, is confirmed by the fact that none of the parties is defined in the transfer contract as “the CLUB” and, thus, the words “and the CLUB” are an “error and should be deleted”. As further proof that Club B had no obligation to offer a new employment contract, the Respondent highlighted that the last sentence of art. IV.3 of the transfer contract does provide a penalty for the Claimant in case he refuses to sign the new employment contract, but it does not contain a reciprocal sanction in case Club B does not offer the player the new employment contract.

24. Furthermore, the Respondent added that the aim of art. IV.3 of the transfer contract was not to bind Club B to offer the player a new employment contract for season 2016/2017 but, rather, to leave Club B the discretion to decide whether or not to do it “subject to the performance of the buy-back clause”. In this regard, the Respondent emphasised that, in the last draft of the transfer contract, the player’s agent agreed on this argument, as he added the following comment on art. IV: “We accept to state that the buy back shall ne [sic] obligation of Club B, not a right nor an option. However, we do not anticipate to conclude employment contract at this stage, but when the obligation of buy-back is fulfilled. The contract will be under the same terms and conditions and will be for season 2016/2017”.

25. On account of the above, the Respondent argued that art. IV.3 of the transfer contract “does not constitute a final and binding employment contract between the Parties, as there was no reciprocal commitment from the part of [Club B] to bindingly and unconditionally enter later into an employment contract with [the player]”.

26. In continuation, the Respondent rejected the Claimant’s argument that the real intention of the parties was not to transfer the player definitively to Club C, but rather to loan him in order to circumvent the foreign player quota allegedly existing in the Football Federation of country B regulations. In this respect, first, the Respondent stressed that the Claimant did not provide any evidence that such quota actually exists. Moreover, the Respondent added that:

- the SMS messages exchanged between the player and Club B’s President, submitted by the Claimant, are “completely taken out of their contest and purpose”;

- the low amount of the buy-back fee was agreed with Club C in order to protect the Respondent’s interest to a way out of its buy-back obligation;

- the amount of the penalty fee (USD 400,000) to be paid by the Claimant was set in order to protect the Respondent’s interest and, in particular, to recover its investment in the player, should he refuse to conclude the new employment contract.

27. Furthermore, the Respondent argued that the conclusion of the new employment contract under art. IV.3 of the transfer contract depended on two conditions:

- the execution of the buy-back obligation by the Respondent;

- the actual interest of the Respondent in offering the player a new employment contract as of 1 July 2016.

In addition, the Respondent argued that the above was also confirmed by the content of the e-mails exchanged on 15 July 2015.

28. As to the Claimant’s argument according to which Club B terminated the employment contract without just cause, the Respondent reiterated that it had no obligation to offer the player a new employment contract and the player “did not really intend to sign one with [Club B]”. More in detail, the Respondent argued that the Claimant was aware that the Club B’s offer of the new employment contract depended on the exercise of the buy-back clause by the Respondent but, as he terminated his contract with Club C, it could not exercise such clause. Consequently, the Respondent concluded that its buy-back obligation was “extinguished with the termination of the employment relationship between the [player] and [Club C]”.

29. Furthermore, the Respondent alleged that, thereafter, on 11 February 2016, the player’s lawyer sent via e-mail a draft of a settlement agreement. Therefore, the Respondent asserted that the Claimant acted contra factum proprium by requesting to sign the new employment contract in May 2016, allegedly in view of creating “artificial grounds for a claim for compensation” against the Respondent.

30. In continuation, the Respondent affirmed that, as further proof of his lack of interest in a new employment contract with Club B, the player had initially signed an employment contract with the Club D and, eventually, with the country E club, Club E. In particular, the Respondent alleged that the player concluded the employment contract with Club E on 29 June 2016 and, consequently, he terminated the “alleged pre-contract” with Club B without just cause, as he prevented this latter from offering him the new employment contract within the deadline of 1 July 2016.

31. In view of the aforementioned termination by the Claimant, the Respondent argued that, in accordance with the principle exceptio non adimpleti contractus, the player could not request from Club B the fulfilment of its alleged obligation to offer him the new employment contract, as he himself was already in breach of the transfer contract. In this regard, the Respondent added that the player signed the employment contract with Club E without the consent of Club B and, consequently, he breached art. IV.5 of the transfer contract.

32. As to the Claimant’s request of compensation for breach of contract, the Respondent further argued that, in any event, the Claimant was not entitled to such compensation as “there is no provision in the Regulations entitling a party to compensation for the non-conclusion of a “future employment contract”” or, alternatively, said compensation should be reduced by at least 50%.

33. With regard to the Claimant’s request of the relevant flight tickets, car allowance and rent allowance, the Respondent stressed that said request should be dismissed as such allowances were directly linked to the performance of the employment contract, which never started. Moreover, the Respondent emphasised that said allowances were not a salary but rather benefits in kind and they were intended to cover actual and real expenses which, in this case, did not occur.

34. In his replica, the Claimant rejected the Respondent’s arguments and stated that neither he was represented by any agent, nor he was informed of any negotiation pending between said agent on his behalf and Club B. Therefore, the Claimant argued that the exchange of e-mails submitted by the Respondent was irrelevant and “even if these e-mails were true, they only show that negotiations took place”. In this regard, the Claimant affirmed that he did not recognise the drafts of the transfer contract submitted by the Respondent which, consequently, could not be opposed to him.

35. As to the alleged “typographical error” in the drafting of the transfer contract, the Claimant deemed that it was not an error, but rather the expression of the commitment of Club B to enter into a new employment contract with the player “at the end of the simulated loan with [Club C]”.

36. Furthermore, the Claimant affirmed that he never had any relationship with the lawyer who, according to the Respondent, allegedly sent on his behalf a draft of settlement agreement to Respondent. In particular, the Claimant stated that said settlement agreement was unknown to him.

37. The Claimant also insisted that the transfer contract was a simulation and that the real intention was to conclude a loan agreement. In this regard, the Claimant reiterated that the purpose of such agreement was to circumvent the foreign player quota allegedly existing in the Football Federation of country B regulations and submitted part of said regulations, according to which: “Conditions for participation in state championships and tournaments: (…) d) in teams of League One in every football match of the championship and the Cup of country B are eligible to 5 (five) filed players from countries outside the European Union, in the minutes of the football match can enrol and participate it simultaneously to 3 (three) of them”.

38. Furthermore, the Claimant argued that, according to the transfer contract, the Respondent could not choose whether to buy-back the player depending on his performances. In particular, the Claimant stressed that the buy-back by Club B was a “pure obligation”.

39. In continuation, the Claimant rejected the Respondent’s argument according to which the conclusion of the new employment contract depended on two conditions. In this regard, the Claimant argued that, according to art. IV.3 of the transfer contract, the Respondent had the obligation to offer the Claimant the new employment contract and such obligation was autonomous and independent.

40. Moreover, the Claimant reiterated that the Respondent terminated “the agreement” with him without just cause by refusing “to formalize” the new employment contract in accordance with the terms of the transfer contract. In particular, the Claimant pointed out that the aforementioned termination occurred through the Respondent’s letter on 19 May 2016.

41. As to the contract with the Club E, the Claimant emphasized that said contract had been signed on 7 July 2016, i.e. after the expiry of the deadline for the conclusion of new employment contract with Club B, and not on 29 June 2016 as alleged by the Respondent. Thus, the Claimant argued that he did not breach art. IV.5 of the transfer contract and that the exceptio non adimpleti contractus raised by the Respondent was inadmissible.

42. In continuation, the Claimant emphasised that the employment contract with Club D”never entered into force” and, anyway, it was supposed to expire on 30 May 2016. As a consequence thereof, the Claimant argued that said employment contract could not affect the conclusion of the new employment contract with the Respondent within 1 July 2016.

43. In its duplica, the Respondent reiterated its previous arguments, in particular reaffirming that art. IV.3 of the transfer contract did not contain a final and binding agreement, but it was rather a “pre-contract”. In particular, the Respondent argued that the new employment contract depended on the fulfilment of the buy-back obligation and on the signature of “a future employment contract in the form required by the Football Federation of country B”.

44. Furthermore, the Respondent argued that, regardless whether the player was represented by an agent, he anyway ratified the transfer contract as negotiated by the alleged agent by signing it. In addition, according to the Respondent, the correspondence exchanged between the agent and the Club B’s lawyer showed that the Claimant’s intention was to set the buy-back as an obligation of Club B conditional to the signature of his future employment contract.

45. As to the regulations of the Football Federation of country B submitted by the Claimant, the Respondent stressed that said regulations referred to season 2016/2017 and, thus, were not in force when the player was transferred to Club C. Moreover, the Respondent added that the aforementioned regulations did not prove that the player “would have charged a foreign player quota, if he would have been lent to [Club C]”.

46. In continuation, the Respondent explained that the termination of the contract with Club C by the player did not permit the Respondent to exercise the buy-back clause and, as consequence thereof, Club B was not obliged to enter into the new employment contract with the player.

47. Furthermore, the Respondent argued that it assumed in good faith that the lawyer who sent the draft of settlement agreement was representing the player. In this regard, the Respondent submitted a copy of the exchange of correspondence between said lawyer and the player where they discussed, with the alleged agent in copy, the terms of the power attorney.

48. Finally, the Respondent argued that, with its letter dated 19 May 2016, it did not definitively refuse to sign a new employment contract using the standard form of the Football Federation of country B but, rather, it only considered the player’s request in this regard as “premature”. In particular, the Respondent stressed that it had no obligation to enter into a new employment contract with the player in May 2016. Conversely, the Respondent emphasised that the Claimant, on 1 July 2016, did not request Club B to sign the new employment contract with the form of the Football Federation of country B, showing that he was not intentioned to conclude such contract.

49. The Claimant provided copy of the contract with Club E, which was valid as from 7 July 2016 until 30 June 2017. According to such contract, the player was entitled to a total salary of EUR 109,189.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as: the 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 26 July 2016. 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, par. 2 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 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2016), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from country A and a club from country B.

3. 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 26 July 2016, the 2016 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. First, the Chamber noted that the parties entered into an employment contract valid as from 12 August 2014 until 30 June 2017, which entitled the player to a monthly salary of EUR 14,286, plus “two net bonuses” of EUR 50,000 payable on 31 August and 28 February of each season respectively. Furthermore, the club committed to provide the player with “an apartment/house (…) with monthly rent price up to 500”, with two flight tickets “country B-country A-country B” for each season and with “a car at club’s expense (…) at a monthly rent price up to 700”.

6. Moreover, the DRC took note that, on 15 July 2015, the Claimant and the Respondent signed a transfer contract according to which, on the one hand, the player was transferred to the Club C against payment of a transfer fee of USD 50,000 to the Respondent. On the other hand, the same transfer contract stipulated the Respondent’s “irrevocable obligation to purchase back” the player against the payment of the buy-back fee, in the amount of USD 1,000, before 30 June 2016.

7. Equally, the members of the Chamber duly noted that the second paragraph of art. IV.3 of the transfer contract stipulated that “furthermore, the Player and the CLUB explicitly agree and oblige to enter into an employment contract with [Club B] for one football season 2016/2017 in the form required by the Football Federation of country B under the terms and conditions as provided for in the Contract of Employment of Professional Football Player between the Player and [Club B] dated 11 August 2014”. Furthermore, it was provided the Claimant’s obligation of payment of USD 400,000 in case of failure “to enter into an employment contract with [Club B]”.

8. In continuation, the DRC acknowledged that it was undisputed that the Claimant terminated his employment contract with Club C in January 2016 and neither the Respondent exercised the obligation to “buy-back” the player, nor a new employment contract pursuant to art. IV.3 of the transfer contract was executed between the Claimant and the Respondent.

9. On account of the above, the members of the Chamber took note that the Claimant alleged that the Respondent breached art. IV.3 of the transfer contract. In particular, the Claimant argued that said clause constituted a valid and binding employment contract, as it contained the essentialia negotii of an employment contract already signed by the parties and provided an autonomous and independent obligation on the Claimant and the Respondent to conclude a new employment contract with the Claimant for season 2016/2017.

10. Moreover, the Claimant alleged that the transfer contract constituted the simulation of a loan agreement, as the real intention of the parties allegedly was to circumvent the rules of the Football Federation of country B on foreign player quota for season 2015/2016.

11. Equally, the members of the Chamber took note of the position of the Respondent, which, conversely, alleged that the Claimant was not a party of the transfer contract and that art. IV.3 did not stipulate an obligation for the Respondent to offer him a new employment contract.

12. The Chamber further noted that the Respondent argued that the transfer contract provided a permanent transfer of the player to Club C and that the conclusion of a new employment contract for season 2016/2017 depended on the execution of the buy-back obligation, its intention to offer the Claimant a new contract and the signature of the form required by the Football Federation of country B.

13. Furthermore, the Respondent argued that the Claimant’s termination of the employment contract with Club C extinguished its obligation to buy-back the player.

14. In view of the aforementioned considerations, the members of the Chamber highlighted that the first issue to be analysed, considering the diverging position of the parties, was to determine whether the transfer contract signed on 15 July 2015 stipulated the Respondent’s autonomous and independent obligation to offer the Claimant a new employment contract for season 2016/2017, containing the same terms and conditions of the employment contract dated 11 August 2014.

15. In this respect, the members of the Chamber turned their attention to the transfer contract and concurred that art. IV.3, second paragraph, provided an obligation on both parties to conclude a new employment contract valid for season 2016/2017, the content of which had been already determined, i.e. the terms and conditions set out in the employment contract signed by the same parties on 11 August 2014. In particular, the Chamber considered that the reference to “the CLUB” contained in the aforementioned clause could be logically construed only as a reference to the Respondent. What is more, being the transfer contract signed also by the Claimant, the members of the Chamber considered that the Claimant and the Respondent concluded a valid and binding agreement to sign a new employment contract within the framework of art. IV of the transfer contract.

16. Moreover, the members of the Chamber were of the unanimous opinion that the obligation under art. IV.3, second paragraph of the transfer contract, was not subject to the exercise of the buy-back obligation by Club B, to the extent that such obligation, pursuant to the first paragraph of art. IV.3, was set as a condition only of the transfer of “the full competitive and transfer rights of the Player” from Club C to Club B and not of the execution of an employment contract. Indeed, according to the relevant clause, the parties obliged themselves to conclude a new employment contract “by signing the present agreement”, without any further conditions.

17. Along those lines, the members of the Chamber considered that the construction of the transfer contract was aimed to let Club B to acquire the services of the player as of July 2016. In this regard, the transfer contract contained two different obligations for the player and Club C respectively which, in the Chamber’s view, were completely independent from each other. Indeed Club C was obliged to transfer the “full competitive and transfer rights” and the player to sign an employment contract with Club B.

18. In continuation, as to whether the execution of the form required by the Football Federation of country B could be considered as a condition for the validity of the new employment contract, the Chamber considered relevant to recall its jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of (administrative) formalities, such as, but not limited to, the registration procedure in connection with the international transfer of a player and the use of particular forms provided by the concerned association.

19. Consequently, in view of the aforementioned considerations, the members of the Chamber concluded that the parties committed to enter into a new employment contract and that such obligation was not subject to any condition.

20. Subsequently, the members of the Chamber emphasised that the second issue to be addressed was to determine if, by means of the transfer contract, the parties actually started a new labour relationship.

21. Having stated the aforementioned, the Chamber wished to highlight that, in accordance with its long-established jurisprudence, in order for an employment contract to be considered as valid and binding, apart from the signature of both the employer and the employee, it should contain the essentialia negotii of an employment contract, such as the parties to the contract, their role, the duration of the employment relationship and the remuneration.

22. With the above in mind, the Chamber emphasised that the transfer contract clearly provides that the new employment contract would have the exact same terms and conditions as the original employment contact. In particular, it is noteworthy that the original employment contract concluded between the parties provided to be valid until 30 June 2017.

23. Having stated the above, the members of the Chamber recalled that the transfer contract on the one hand stipulated the irrevocable obligation of the Respondent to exercise the buy-back of the player within 30 June 2016 and, on the other hand, to conclude the new employment contract with the Claimant for season 2016/2017.

24. In view of the above-mentioned considerations, the members of the Chamber came to the conclusion that the real intention of the parties by signing the transfer contract was to suspend the employment relationship between the player and Club B during the period of his permanence with Club C, i.e. season 2015/2016, and to restart it for season 2016/2017. The Chamber felt comforted with its conclusion considering the low amount of the buy-back fee compared to the transfer fee and of the severe consequences provided only on the Claimant in case of his failure to conclude a new employment contract with the Respondent for season 2016/2017.

25. Having established the above, the Chamber recalled that is was undisputed by the Respondent that the latter, despite the Claimant’s request, refused to comply with the obligation set out under art. IV.3, second paragraph, of the transfer contract. What is more, the members of the Chamber emphasised that the player remained out of contract since the moment of the termination of the employment contract with Club C until 30 June 2016 and, as a consequence thereof, the Respondent was not prevented from entering into the new employment contract with the Claimant as per art. IV.3, during this period. In this respect, it remained undisputed by the Respondent the allegation of the Claimant that his contract with Club D never entered into force.

26. In view of the above, and taking into consideration the Respondent’s refusal to comply with the aforementioned obligation, the members of the Chamber concurred on the fact that the Respondent terminated the employment relationship with the Claimant, without just cause on 19 May 2016, i.e. at the time the Respondent unequivocally informed the Claimant that it would not continue with the labour relationship.

27. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber focused its attention on the consequences of such termination. In this regard, in accordance with art. 17 par. 1 of the Regulations, the Respondent is liable to pay compensation for breach of contract to the Claimant.

28. Along those lines, the Chamber pointed out that 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 player 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.

29. In application of the relevant provision, the Chamber held therefore that it first of all had to clarify as to whether the 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 agreed between the parties within the context of their labour relationship at the basis of the matter at stake.

30. 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. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment relationship until 30 June 2017 and concluded that the player would have received a total remuneration of EUR 271,432, equal to the monthly salaries for twelve months plus the “two net bonuses” under art. X.7 of the employment contract, had the contract been executed until its expiry date.

31. In continuation, the Chamber verified as to whether the player 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.

32. Indeed, the player found employment with the country E club, Club E, with which he signed a contract valid from 7 July 2016 until 30 June 2017, providing a total salary of EUR 109,189.

33. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the club must pay the player the amount of EUR 162,234 which is to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.

34. In addition, and with regard to the player's request for interest, the Chamber decided that the player is entitled to 5% interest p.a. on said amount as of the date on which the claim was lodged, i.e. 26 July 2016, until the date of effective payment.

35. As regards the Claimant’s claim relating to the payment of flight tickets, car and rent allowance relating to the 2016/2017 season, the members of the Chamber stressed that, in the absence of a clear monetary value in the contractual condition relating to flight tickets, car and rent allowance and of any documentary evidence in this connection (cf. art. 12 par. 3 of the Procedural Rules), the Chamber had to reject the Claimant’s claim relating to said fringe benefit(s).

36. 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 partially accepted.

2. The Respondent, Club B, 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 162,234 plus 5% interest p.a. as from 26 July 2016 until the date of effective payment.

3. In the event that the aforementioned amount plus interest is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. Any further claim lodged by the Claimant is rejected.

5. 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