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 15 July 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 July 2016,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Theo van Seggelen (Netherlands), member

Takuya Yamazaki (Japan), member

Mario Gallavotti (Italy), member

Mohamed Al Saikhan (Saudi Arabia), 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

arisen between the parties

I. Facts of the case

1. On 1 September 2014, the Player A from country B (hereinafter: the player or Claimant) and the Club C from country D (hereinafter: the club or Respondent) signed an employment contract, valid as from 1 September 2014 until 30 June 2015 (hereinafter: the contract).

2. According to the contract, the player was entitled to receive, inter alia, the total amount of EUR 120,000, payable in monthly instalments of EUR 12,000 net, due on the 9th day of the following month.

3. Furthermore, article O. of the contract provides for the following: ‘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, league of country D and FIFA’.

4. The player holds that the club did not pay him the monthly salaries for September, October and November 2014. After putting the club in default on 18 December 2014, he did not receive a reply from the club, nor did the club pay him the requested salaries.

5. On 24 December 2014, the player unilaterally terminated the contract with the club, due to the outstanding amounts.

6. On 9 January 2015, the player lodged a claim before FIFA against the club, claiming outstanding remuneration and compensation for breach of contract, requesting the total amount of EUR 120,000, as follows:

 EUR 36,000 as the outstanding remuneration for the months of September, October and November 2014;

 EUR 84,000 as compensation for breach of contract, corresponding to the remaining contractual value in the period between December 2014 and 30 June 2015.

Further, the player requested 5% interest on the afore-mentioned amounts ‘in accordance with Swiss law’, as well as the reimbursement of his legal costs by the club and sporting sanctions to be imposed on the club.

7. The player explains that the club was in ‘severe and repeated contractual non-compliance’ and that as a result thereof, on 24 December 2014, he unilaterally terminated the contract.

8. In its reply, the club states that FIFA’s DRC has no jurisdiction in the matter at hand, since country D’s law is applicable to the contract and that therefore, the player should have submitted his claim before the competent courts of law in country D.

9. As to the substance, the club holds that the player had the intention to terminate the contract, without giving the club the possibility to avoid this termination. In this respect, the club explains that the player gave the club a very short deadline (6 days) to pay the outstanding amounts and that finally, the player unilaterally terminated the contract ‘on Christmas Eve’.

10. In addition, the club holds that on 9 January 2015, it paid the player the amount of EUR 12,000, however that it suffered severe financial difficulties, because of ‘the enormous delays on the amounts to be received on television rights’. The club holds that it informed the player about these circumstances and asked ‘for the understanding and continuation of contract’.

11. As a result of the aforementioned circumstances, the club concludes that FIFA is not competent to deal with the matter at hand. Alternative, the club asks for the rejection of the claim of the player and for the reimbursement of the legal costs it made.

12. In his replica, the player reiterated that the club failed to comply with its contractual obligation to pay his salary on time and that therefore, he had a just cause to unilaterally terminate the contract. In this respect, the player further mentions that country D’s law offers the possibility to resign from a contract ‘with no notice’, if ‘the employer fails to fulfil its contractual obligations’.

13. Further, the player holds that FIFA is competent to deal with the matter at hand, since in article O. of the contract, it was agreed between the parties that FIFA had competence to deal with disputes arising out of the contract. In addition, the player holds that FIFA has to determine about ‘the choice of law’, as well as that the submitted payment receipts were illegible.

14. Despite being invited to do so, the club did not submit its duplica.

15. Upon request, the player informed FIFA that he remained unemployed until 30 June 2015 and further provided FIFA with a contract signed with the club from country B, Club E, valid as from 1 July 2015 until 30 June 2016.

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 9 January 2015. Consequently, the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2014; 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 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (editions 2014, 2015 and 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 from country B and a club from country D.

3. However, the Chamber acknowledged that the club contested the competence of FIFA’s deciding bodies on the basis of the alleged fact that country D’s law is applicable to the contract and that as a result thereof, the player should have submitted his claim before ‘the competent courts of law in country D’.

4. In this regard, the members of the Chamber noted that the player rejected such position and insisted that FIFA is competent to deal with the present matter highlighting, inter alia, that article O. of the contract provided inter alia for FIFA’s competence in case of disputes arising out of the contract.

5. Taking into account all 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 members of the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. Equally, the Chamber referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

6. 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 jurisdiction clause.

7. Having said this, the members of the Chamber turned their attention to art. O of the contract, which stipulates that ‘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, league of country D and FIFA’.

8. In view of the aforementioned clause, the members of the DRC were of the opinion that art. 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 and/or 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 club’s argumentation, since it refers to the alleged competence of the ‘competent courts of law in country D’, without further precision.

9. Having established that the first criterion for the recognition of the competence of a national decision-making body is not fulfilled in the present matter, the Chamber deemed unnecessary to examine any further points which would need to be assessed before concluding to the competence of a national deciding body.

10. Furthermore, with respect to the club’s argument that FIFA’s DRC has no jurisdiction in the matter at hand, since country D’s law should be applicable, the members of the DRC wished to point out that when deciding a dispute before the DRC, FIFA’s regulations prevail over any national law chosen by the parties. In this regard the Chamber emphasized that the main objective of the FIFA regulations is to create a standard set of rules to which all the actors within the football community are subject to and can rely on. This objective would not be achievable if the DRC would have to apply the national law of a specific party on every dispute brought to it. Therefore, the Chamber deems that it is not appropriate to primarily apply the principles of a particular national law to a dispute brought to its analysis but rather the RSTP, general principles of law and, where existing, the Chamber’s well-established jurisprudence.

11. In view of all the aforementioned circumstances, the Chamber established that the club’s objections to the competence of FIFA to deal with the present matter had to be rejected and that the DRC is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

12. Subsequently, 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 (editions 2014, 2015 and 2016), and considering that the present claim was lodged on 9 January 2015, the 2014 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

13. 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.

14. In this respect, the Chamber recalled that the parties had signed an employment contract valid as from 1 September 2014 until 30 June 2015, in accordance with which the player was entitled to receive, inter alia, a total guaranteed amount of EUR 120,000 for the 2014/2015 season (consisting of ten monthly instalments of EUR 12,000 each).

15. In continuation, the members of the Chamber took into account that, on 24 December 2014, after having put the club in default of 3 monthly salaries, the player notified the club of the termination of the contract on the basis of outstanding remuneration. The club, for its part, submits that the player terminated the contract on 24 December 2014 without just cause, by stating inter alia that the player did not give the club the possibility to avoid said termination. Further, the club invoked financial difficulties.

16. The DRC highlighted that the central issue in the matter at stake would be, thus, to determine as to whether the player had just cause to terminate the contract on 24 December 2014.

17. In this respect, the Chamber wished to emphasize that, according to the player, at the time of the termination of the contract on 24 December 2014, the total amount of EUR 36,000 had remained unpaid by the club, corresponding to the salaries for the months September, October and November 2014, which had fallen due at the 9th day of the next month.

18. The members of the Chamber then turned their attention to the arguments of the club and acknowledged that according to the latter, it suffered severe financial difficulties, as a result of a delay in the payment of television rights, as well as that on 9 January 2015, it had paid an amount of EUR 12,000 to the player. In this context, the Chamber noted that the club had submitted documentary evidence demonstrating that, in fact, on 9 January 2015, it had paid remuneration to the player in the amount of 53,858, which corresponds to approximately EUR 12,000.

19. In continuation, the DRC recalled that according to the legal principle of the burden of proof contained in art. 12 par. 3 of the Procedural Rules, any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

20. In this respect, the members of the Chamber acknowledged that the player did not explicitly contest that the club paid him the amount of EUR 12,000, corresponding to one monthly salary, and only referred to the alleged illegibility of the payment slip, provided by the club.

21. In this context, the Chamber concluded that - taking into account the documentation presented by the club in support of its allegation that on 9 January 2015, it paid the player the amount of 53,858 - the club had substantiated its allegation pertaining to this specific payment with sufficient documentary evidence. As a consequence, the Chamber decided that the club proved sufficient evidence that on 9 January 2015, it paid the player the amount of EUR 12,000. Notwithstanding the foregoing, the Chamber was eager to point out that this amount was only paid by the club after the contract had been terminated by the player.

22. In view of the above, and as a consequence of the aforementioned considerations and taking into account the documentation presented by the parties to the dispute, the Chamber established that, at the time of the termination of the contract by the player, three monthly salaries in the amount of EUR 12,000 each, corresponding to September, October and November 2014, had fallen due and remained outstanding. Despite the fact that on 9 January 2015, the club paid part of the outstanding amount, i.e. EUR 12,000 to the player, the Chamber concurred that the club, at the date of the termination of the contract by the player, i.e. 24 December 2014, had seriously neglected its financial contractual obligations towards the player, without having a legally valid reason.

23. On account of the above and taking into consideration the Chamber’s longstanding jurisprudence in this respect, the Chamber decided that the player had just cause to unilaterally terminate the contract on 24 December 2014 and that the club is to be held liable for the early termination of the contract with just cause by the player.

24. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amount which was outstanding under the contract at the moment of the termination and which still remains unpaid, i.e. EUR 24,000, corresponding to two monthly salaries of EUR 12,000 each.

25. In addition, taking into consideration the player’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 player interest at the rate of 5% p.a. on the outstanding amount of EUR 24,000 as of 9 January 2015, i.e. the date of claim, until the date of effective payment.

26. In continuation, having established that the club is to be held liable for the early termination of the employment contract with just cause by the player, the Chamber focused its attention on the consequences of such termination. In this regard, the members of the Chamber determined that the club was not only to pay the amount of EUR 24,000 as outstanding remuneration to the player, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.

27. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club 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 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.

28. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

29. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

30. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 30 June 2015. Consequently, the Chamber concluded that the amount of EUR 84,000 (i.e. remuneration as from December 2014 until June 2015) serves as the basis for the determination of the amount of compensation for breach of contract.

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. However, the Chamber noted that the player did not find new employment with another club during the relevant period of time and established that as a result thereof, no amounts shall be deducted from the amount of compensation for breach of contract as claimed by the player.

33. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 84,000 to the player, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

34. In addition, taking into account the player’s request as well as the constant practice of the Chamber, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of compensation as of the date the claim was lodged, i.e. 9 January 2015, until the date of effective payment.

35. Moreover, the Dispute Resolution Chamber decided to reject the player’s claim pertaining to legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

36. Furthermore, the members of the Chamber decided to reject any further claim lodged by the player.

*****

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 EUR 24,000, plus 5% interest p.a. on said amount as from 9 January 2015 until the date of effective payment.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 84,000, plus 5% interest p.a. on said amount as from 9 January 2015 until the date of effective payment.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

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

6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances are to be made and to notify the Dispute Resolution Chamber of every payment received.

*****

Note relating to the motivated decision (legal remedy):

According to art. 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