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 September 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 30 September 2016,

in the following composition:

Geoff Thompson (England), Chairman

Theo van Seggelen (Netherlands), member

Jon Newman (USA), member

Mario Gallavotti (Italy), member

Taku Nomiya (Japan), member

on the matter between the player,

Player A, country B,

as Claimant

and the club,

Club C, country D,

as Respondent

and the club,

Club E, country B

as intervening party

regarding an employment-related dispute arisen between the parties

I. Facts of the case

1. On 15 August 2013, the Club C from country D (hereinafter: the Respondent), the club from country B, Club E (hereinafter: Club E) and the Player A from country B (hereinafter: the Claimant), concluded an agreement for the loan of the Claimant from Club E to the Respondent until 30 June 2014.

2. On the same date, the Respondent and the Claimant concluded an employment contract (hereinafter: the contract), valid as of the date of signature until 30 June 2014.

3. According to clause 19 of the contract, the Claimant was entitled to the following remuneration:

“The [Respondent] to pay a sum of (200,000 USD), a provided contract and pay as follows:

1. An amount of ($50,000) upon signing the contract.

2. An amount of (USD$ 150,000) to be divided by 4 months as monthly salaries, It will be (37,500 USD) per month.

3. In the case of the [Respondent] desire to complete the contract till 30/6/2014 the [Respondent] will pay to the [Claimant] an amount of (500,000 USD) will be paid as follows:

- An amount of (50,000 USD) on 15 January 2014;

- An amount of (450,000 USD) will be divided as monthly salary for the period of the contract”.

Clause 19 of the contract further specifies that the salary is due at the end of each month.

4. The contract also stipulates that the Respondent must provide the Claimant with housing and transporting allowance as well as three round-trip business class tickets for him, his wife and his daughter, for the route “country B – city F – country B”.

5. Furthermore, clause 15 of the contract provides that “if a decision issued by the federation, FIFA, or if a final decision passed by the disciplinary committee of the anti-doping committee, or competent identities in the country preventing the [Claimant] from practicing sport activities, the [Respondent] has the right to terminate the contract and preserve its rights (…)”.

6. Pursuant to clause 23 of the contract, “if the [Claimant] decides to break this contract before the end of its term then the [Claimant] has to pay to the [Respondent] an amount of (USD 500,000)”.

7. In addition, clause 26 of the contract stipulates that “should there be any dispute between the parties regarding the present agreement, the parties will attempt to settle such dispute in an amicable manner within 15 days of the notification of the dispute”.

8. Moreover, clause 27 states that “all correspondences and notifications related to this contract shall be addressed to both parties’ addresses as shown in this contract, unless otherwise notified by either party in writing of any change in the address”.

9. At the end of December 2013, the Claimant was given authorisation to return to country B for Christmas until 29 December 2013; however, he returned until 4 January 2014.

10. By means of a correspondence dated 21 March 2014, the Respondent informed FIFA that it had complied with its financial obligations towards the Claimant. In this regard, the Respondent outlines the reductions of the “total value of the contract” that were imposed on the Claimant on 30 December 2013 (30%), 31 January 2014 (30%), 4 February 2014 (60%), 6 February 2014 (10%) and 11 February 2014 (20%) due to his repeated absences and requested “the lifting of the Federation Internationale Football Association (FIFA) to agree to discount the amounts described in our discourse that of the total contract of the [Claimant] as compensation for what caused the [Respondent] of negative consequences as a result of non-participation as a professional player by the internal regulations and guidance to comply with the terms of the contract signed with him”.

11. On 16 April 2014, the Anti-Doping Disciplinary Panel of country D sanctioned the Claimant with a period of ineligibility of four years for an anti-doping rule violation.

12. On 27 April 2014, the Respondent sent a second correspondence to FIFA by means of which it informed the latter that on 25 March 2014, the Claimant failed to attend a doping control and was therefore sanctioned with a period of ineligibility of four years and requested FIFA, in addition to the request made on 21 March 2014, to cancel the contract.

13. On 28 April 2014, 2 May 2014 and 5 May 2014, the Claimant put the Respondent in default of payment of his outstanding remuneration allegedly amounting to USD 350,000. In addition, the Claimant requested to be informed about the anti-doping procedure initiated against him.

14. On 14 May 2014, the Claimant notified, in writing, the termination of the contract to the Respondent.

15. In response to the Respondent’s correspondence sent to FIFA, as above-mentioned, on 21 March and 27 April 2014, the Claimant lodged a claim against the Respondent, on 7 July 2014, for breach of contract, requesting the following:

 USD 350,000, plus 5% interest as of the due date of each payment, as outstanding remuneration corresponding to the salaries for January, February, March and April 2014;

 USD 150,000, plus 5% interest as of the due date of each payment, as compensation corresponding to the residual value of the contract;

 the reimbursement of the legal and procedural costs;

 sporting sanctions to be imposed on the Respondent.

16. In his claim, the Claimant first of all acknowledges having returned late from his Christmas holidays but considers that the principle of inadimplenti non est adimplendum entitled him to do it, considering that at that time almost three monthly salaries were outstanding. In any case, the Claimant holds that this absence was tacitly excused by the Respondent.

17. In continuation, the Claimant sustains that he was never notified of the decisions to impose fines on him. In this respect, the Claimant asserts that the Respondent should have notified them at his address, which was known by the Respondent since the latter was responsible for his accommodation, in accordance with clause 27 of the contract. In particular, the Claimant points out that he has never given an authorisation to receive documents on his behalf to Mr G, i.e. person to whom the sanctions dated 6 and 11 February 2014 were notified. In addition, the Claimant explains that at the end of February 2014, the Respondent invited him to sign a document by means of which it recognised owing him an amount of USD 554,000 and proposed a new payment plan. According to the Claimant, this amount corresponds exactly to his outstanding remuneration and therefore evidences that the Respondent has not applied any financial sanction on him. Furthermore, the Claimant maintains that the alleged absences were actually due to his side-lining from the Respondent’s activities.

18. In addition, the Claimant alleges that the Respondent stopped paying for his accommodation and he was therefore obliged to live at his own expenses.

19. As to the doping sanction, the Claimant asserts that since it was taken in violation of his right to be heard and was never properly notified, it should be deemed contrary to Swiss law and therefore null and void.

20. In its reply to the his claim, the Respondent insisted on two more absences of the Claimant, on 23 March 2014 and 30 March 2014, that were sanctioned with a reduction of the value of the contract by 10% and 20% respectively.

21. The Respondent further asserts that the sanction to reduce the total value of the contract by 30% made on 30 December 2013 clearly evidences that the Claimant’s late return after Christmas was not excused. In this respect, the Respondent acknowledges some slight delays in the payment of the salaries for November and December 2013 but stresses that according to the DRC and CAS jurisprudence, slight delays in payment do not constitute a valid reason for the Claimant to refuse to fulfil his own contractual obligations without a prior default notice.

22. In addition, the Respondent alleges that all salaries up to January 2014 were paid by the beginning of February 2014 and that the salaries as of January 2014 cannot be deemed outstanding since they were not due considering the sanctions imposed on the Claimant.

23. The Respondent further highlights that the Claimant did not submit any evidence that he had to live at his own expenses.

24. Moreover, the Respondent contests the authenticity of the addendum. In this respect, the Respondent outlines that the Claimant did not sign it and questions why it would have offered to pay USD 554,000 to the Claimant in February 2014 while no amount was outstanding for the year 2013 and it only owed USD 500,000 for the year 2014. The Respondent further stresses that the reasoning becomes even more inconsistent if the sanctions imposed on the Claimant are taken into consideration.

25. In continuation, the Respondent sustains that the Claimant’s address was not mentioned in the contract and it was therefore obliged to notify to the Claimant’s agent, Mr G, who was duly authorised to act on behalf of the Claimant. In this respect, the Respondent provided two documents allegedly evidencing the aforementioned power of representation: the first one, bearing the signatures of Mr H, presented as the “impresario from country B of [the Claimant]” and of Mr G, authorises the latter to represent the Claimant before the Respondent. The second one, bearing the signatures of Mr I and Mr J, authorises Mr G to “negotiate a proposal and contract for the [Claimant]” and expires “at the end of the transmission season of professional football players in the country D for the year 2013/2014 not more”. In particular, the Respondent stresses that the anti-doping decision was properly notified to Mr G.

26. Following on the anti-doping issue, the Respondent insists on its goodwill, stating that this mere fact would have entitled it to terminate the contract and claim compensation in accordance with clause 15 of the contract, but that, instead of doing so, “the [Respondent] decided to address to FIFA for the approval of the [Respondent]’s right to terminate employment contract with the [Claimant]”.

27. In light of the above, the Respondent requests FIFA to reject the Claimant’s claim and to be reimbursed with the legal costs incurred.

28. In his replica, the Claimant first of all stresses that the delays in payment were much more significant than as alleged by the Respondent. In particular, the Claimant puts forward that his salary for September 2013 was paid in December 2013 and his salary for November 2013 was paid in two instalments made on 28 January and 11 February 2014. As a comparison, the Claimant outlines that the Respondent treated each of his alleged absences, even of one single day, as a very serious breach of contract, sanctioned with enormous and disproportionate amounts, up to USD 210,000.

29. In continuation, the Claimant explains that he did not sign the addendum because when the latter was proposed to him, he was not aware of the fines and therefore signing such an agreement which provided for a new payment plan would have worsened his situation.

30. The Claimant further contests the validity of the fines. In this regard, the Claimant reiterates his arguments as to the lack of notification. In this respect, the Claimant adds that the Respondent did not submit any conclusive evidence that the persons to whom the fines were allegedly notified were duly authorised to represent the Claimant. The Claimant then highlights that they were imposed without prior attempt of amicable settlement and therefore in violation of clause 26 of the contract. Finally, the Claimant asserts that they are disproportionate since they amount to 180% of the value of his contract.

31. Subsequently, the Claimant highlights the incoherence of the salary payment made on 11 February 2014 (cf. point I.28 above). Indeed, according to the Claimant, it makes no sense to make a payment to the Claimant while the Respondent had, at that time, already imposed on him a fine corresponding to 150% of the total value of his contract and should have been therefore entitled to receive money from him.

32. In addition, the Claimant reiterates that the anti-doping procedure was carried out in violation of his right to be heard and cannot be therefore deemed as a just cause to terminate the contract. The Claimant also points out that the Respondent’s first submission was addressed to FIFA on 21 March 2014, i.e. before the alleged anti-doping control took place, and that the Respondent invoked the alleged anti-doping decision as a just cause to terminate the contract even though all the internal remedies were not exhausted.

33. Finally the Claimant reiterates his requests for relief but specifies that, should the DRC hold that the contract was terminated in April 2014 due to the anti-doping decision, he requests to be awarded all salaries matured until the date of termination, plus 5% interest as of their respective due dates.

34. In its final comments, the Respondent reiterates its previous argumentation.

35. Having been invited to submit its comments, Club E explained that the Claimant was no longer a member of its club.

36. Upon request, the Claimant informed FIFA that he had not entered into any new employment contract after the termination of the contract with the Respondent. According to the information uploaded into the Transfer Matching System (TMS), the Claimant was re-registered with Club E on 19 August 2014 based on the employment contract concluded with the latter club on 25 June 2010 and which was valid as of the date of signature until 24 June 2015. In accordance with said contract, the Claimant was entitled to the following remuneration:

 First year:

- 30,000 (approx. USD 17,000) as sign-on fee;

- 40,000 (approx. USD 22,000) as monthly salary;

 Second year: 45,000 (approx. USD 25,000) as monthly salary;

 Third year: 50,000 (approx. USD 28,000) as monthly salary;

 Fourth year: 55,000 (approx. USD 31,000) as monthly salary;

 Fifth year: 60,000 (approx. USD 34,000) as monthly salary.

37. On 24 March 2016, the Court of Arbitration for Sport confirmed the worldwide extension of the ban imposed on the Claimant.

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 21 March 2014. Consequently, the 2012 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. article 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 conjunction 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 B, a club from country D and a club from country B.

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 2016) and considering that the present claim was lodged on 21 March 2014, 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. The members of the Chamber started by acknowledging the facts of the case, as well as the documentation contained in the file. However, the Chamber emphasised that in the following considerations it will refer only to facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand. In this respect, the Chamber recalled that the Claimant and the Respondent signed an employment contract valid as from 15 August 2013 until 30 June 2014.

5. In continuation, the DRC observed that on 16 April 2014, the Anti-Doping Disciplinary Panel of country D sanctioned the Claimant with a period of ineligibility of four years, sanction that was extended worldwide by FIFA and confirmed by the Court of Arbitration for Sport (CAS) on 24 March 2016. Furthermore, the members of the Chamber took note that, on 14 May 2014 and after putting the Respondent in default on several occasions, the Claimant notified the Respondent of the termination of the contract.

6. At this stage, the Chamber deemed it crucial to emphasise that in spite of the fact that the contractual relationship was officially terminated on 14 May 2014, the Claimant was de facto unable to render his services to the Respondent as of 16 April 2014, i.e. the date of the sanction. As a consequence, the members of the Chamber came to the conclusion that the Respondent only had the obligation to pay the Claimant’s salary until that date.

7. Subsequently, the Chamber took note of the Claimant’s arguments which considers that he had just cause to terminate the contract on 14 May 2014 since the Respondent had failed to pay his remuneration since January 2014.

8. Having established the above, the Chamber deemed that the underlying issue in this dispute was to determine whether the employment contract had been unilaterally terminated with or without just cause by the Claimant.

9. In this respect, the Chamber pointed out that the Respondent asserts having paid all the amounts actually due to the Claimant. In particular, the DRC took note that Respondent emphasises that the Claimant’s remuneration was reduced by means of several fines imposed on him due to his misbehaviour.

10. In this context, the Chamber referred to the content of art. 12 par. 3 of the Procedural Rules and held that with the exception of a few days in December 2013 – January 2014, the Respondent did not submit any evidence proving that the Claimant had actually been absent without authorisation. In any case, the DRC stressed that should the facts reproached to the Claimant have been proven, quod non, a cumulated fine equivalent to 180% of the Claimant’s annual remuneration is clearly totally disproportionate.

11. Furthermore, and irrespective of the foregoing consideration, the Chamber wished to point out that the imposition of a fine, or any other available financial sanction in general, shall not be used by clubs as a means to set off outstanding financial obligations towards players. Consequently, the Chamber decided to reject the Respondent’s argument in this connection.

12. In view of the above, the Chamber concluded that the Respondent has not provided evidence to substantiate its defence and that, therefore, it could be established that the Respondent had failed to pay to the Claimant his remuneration as from January 2014 until 16 April 2014, equivalent to EUR 315,000.

13. Having taken into consideration the previous considerations, the Chamber considered that the Respondent had seriously neglected its contractual obligations towards the Claimant in a continuous and constant manner, i.e. the Respondent had failed to remunerate the Claimant for a substantial period of time. Therefore, the Chamber considered that the Respondent was found to be in breach of the employment contract and that the breach was of such seriousness that, in line with the Chamber’s long-standing and well-established jurisprudence, the Claimant had a just cause to unilaterally terminate the contractual relationship with the Respondent on 14 May 2014, having previously put the Respondent in default of payment of the outstanding amounts.

14. On account of the above, the Chamber established that that the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

15. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent is liable to pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination, i.e. EUR 315,000.

16. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the members of the Chamber decided to award the Claimant interest at the rate of 5% p.a. until the date of effective payment as follows:

- 5% p.a. as of 16 January 2014 on the amount of USD 50,000;

- 5% p.a. as of 1 February 2014 on the amount of USD 75,000;

- 5% p.a. as of 1 March 2014 on the amount of USD 75,000;

- 5% p.a. as of 1 April 2014 on the amount of USD 75,000;

- 5% p.a. as of 1 May 2014 on the amount of USD 40,000.

17. In continuation, having established that the Respondent is to be held liable for the termination of the contract with just cause by the Claimant, the Chamber decided that, in accordance with art. 17 par. 1 of the Regulations, the Respondent would, in principle, be liable to pay compensation to the Claimant.

18. In this respect, the members of the Chamber deemed it important to recall that on 16 April 2014, the Anti-Doping Disciplinary Panel of country D sanctioned the Claimant with a period of ineligibility of four years due to a violation of the anti-doping regulations of country D, sanction that was later extended worldwide by FIFA and confirmed by CAS.

19. In continuation, the Chamber was eager to emphasise the content of art. 15 of the contract which provides that “if a decision issued by the federation, FIFA, or if a final decision passed by the disciplinary committee of the anti-doping committee, or competent identities in the country preventing the player from practicing sport activities, the [Respondent] has the right to terminate the contract and preserve its rights (…)”.

20. In light of the considerations mentioned above, the Chamber came to the conclusion that when the Claimant terminated the contract with the Respondent on 14 May 2014, he was also in breach of the contract, in particular in breach of art. 15 of the latter. As a consequence, the Chamber concluded that due to the Claimant’s own fault, i.e. the breach of art. 15 of the contract, he could not be entitled to receive compensation in the case at hand. The Chamber highlighted that this is in line with existing jurisprudence of the Chamber.

21. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, 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 315,000 plus 5% interest p.a. until the date of effective payment as follows:

- 5% p.a. as of 16 January 2014 on the amount of USD 50,000;

- 5% p.a. as of 1 February 2014 on the amount of USD 75,000;

- 5% p.a. as of 1 March 2014 on the amount of USD 75,000;

- 5% p.a. as of 1 April 2014 on the amount of USD 75,000;

- 5% p.a. as of 1 May 2014 on the amount of USD 40,000.

3. In the event that the amount foreseen in point 2. plus interest is not paid within the stated time limit by the Respondent, the 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 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. 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:

Marco Villiger

Deputy Secretary General

Encl.: CAS directives