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 2 March 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 2 March 2017,

in the following composition:

Geoff Thompson (England), Chairman

Mario Gallavotti (Italy), member Pavel Pivovarov (Russia), member

Roy Vermeer (Netherlands), member Jon Newman (USA), 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 an unspecified date, the Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract), valid from 1 January 2016 until 30 June 2018.

2. Pursuant to art. 4 of the contract, the Claimant was entitled to receive the following remuneration:

 2015-16 season: USD 100,000 as follows:

- USD 50,000 upon the issuance of the International Transfer Certificate;

- USD 50,000 payable in five monthly instalments of USD 10,000 from 1 February 2016 until 30 June 2016;

 2016-17 season: USD 200,000 as follows:

- USD 50,000 on 1 September 2016;

- USD 150,000 payable in ten monthly instalments of USD 15,000 from 1 September 2016 until 30 June 2017;

 2017-18 season: USD 200,000 as follows:

- USD 50,000 on 1 September 2017;

- USD 150,000 payable in ten monthly instalments of USD 15,000 from 1 September 2017 until 30 June 2018.

3. On 23 September 2016, the Claimant requested the Respondent to pay him the amount of USD 65,000 as outstanding remuneration as well as to register him by no later than 27 September 2016.

4. On 11 October 2016, the Claimant sent a second correspondence to the Respondent, emphasising that “[he is] waiting from the [Respondent] some days ago to sign the pre-agreed termination contract proposal by both parties”. In this respect, the Claimant stressed that should the Respondent not react by 8.00 pm CET, he would lodge a claim with FIFA.

5. On 13 October 2016, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract requesting to be awarded the amount of USD 400,000, plus 5% interest as from 23 September 2016, as compensation for breach of contract as well as “any other remedy that the DRC think just and fair”.

6. In his claim, the Claimant explains that the Respondent did not pay him any amount for the 2016-17 season. In addition, the Claimant alleges that the Respondent did not register him at the Football Association of Country D, preventing him from taking part in any official games for the 2016-17 season.

7. In spite of having been invited to do so, the Respondent did not reply to the Claimant’s claim.

8. Upon request, the player informed FIFA that he did not enter into any new employment contract.

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 13 October 2016. Consequently, the 2016 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) are applicable to the matter at 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 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 of Country B and a Club of Country D.

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 13 October 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. 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 acknowledged that the parties had signed an employment contract, valid as of 1 January 2016 until 30 June 2018.

5. Furthermore, the Chamber observed that none of the parties formally terminated the employment contract. Nevertheless, the Chamber noted that by putting the Respondent in default on 23 September 2016 and, subsequently, lodging a claim in front of FIFA for breach of contract on 13 October 2016, the Claimant clearly and unambiguously expressed his intention to terminate the employment relationship. Therefore, the members of the Chamber deemed the contractual relationship was terminated on 13 October 2016, i.e. the date on which the claim was lodged.

6. Having established the foregoing, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the employment contract with just cause. In particular, the Claimant alleges that the Respondent did not pay him any amount for the 2016-17 season and failed to register him at the Football Association of Country D.

7. Subsequently, the DRC observed that the Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. Consequently, the Chamber deemed that the Respondent had renounced to its right of defence and, thus, had accepted the allegations of the Claimant.

8. As a consequence of the aforementioned consideration, the DRC held that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents on file, in other words, upon the statements and documents presented by the Claimant.

9. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute was to determine whether the contract had been terminated by the Claimant on 13 October 2016 with or without just cause.

10. On account of the aforementioned, and, in particular, taking into account that the Respondent did not reply and thus, did not contest the Claimant’s assertions, the DRC established that the Respondent, without any valid reason, failed to register the Claimant and to remit him, until 13 October 2016, the down payment due on 1 September 2016 as well as his salary for September 2016. Consequently, and considering that the Respondent had repeatedly and for a significant period of time been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 13 October 2016 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

11. Having established that the Respondent is to be held liable for the early termination of the employment contract, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

12. At this stage, the DRC made reference to its previous considerations and recalled that at the time of the termination, i.e. on 13 October 2016, the down payment due on 1 September 2016 as well as the salary for September 2016 were outstanding.

13. Consequently, in accordance with the principle of pacta sunt servanda, the DRC decided that the Respondent is liable to pay the Claimant the amount of USD 65,000 as outstanding remuneration.

14. In addition, and taking into consideration the Claimant’s claim, the DRC decided that the Respondent had to pay default interest at a rate of 5% as follows:

a. 5% p.a. as of 23 September 2016 on the amount of USD 50,000;

b. 5% p.a. as of 1 October 2016 on the amount of USD 15,000.

15. In continuation, the Chamber focused its attention on the calculation of the amount of compensation payable to the Claimant by the Respondent in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

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

17. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable.

18. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until 30 June 2018, taking into account that the Claimant’s remuneration until September 2016 is included in the calculation of the outstanding remuneration. Consequently, the Chamber concluded that the amount of USD 335,000, i.e. remuneration as from October 2016 until 30 June 2018, serves as the basis for the determination of the amount of compensation for breach of contract.

19. In continuation, the Chamber verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

20. The Chamber noted that it appears from the documentation on file that the Claimant did not sign any contract with a new club within the relevant period. Thus, the Claimant had apparently not been able to mitigate damages. In this context, the DRC declared that there is no remuneration to be taken into account in order to mitigate the amount of compensation for breach of contract.

21. In this respect and bearing in mind all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of USD 335,000 to the Claimant, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

22. In addition, taking into account the Claimant’s request as well as its longstanding and well-established jurisprudence, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 13 October 2016, until the date of effective payment.

23. Subsequently, the DRC analysed the Claimant’s request for “any other remedy that the DRC think just and fair”. In this regard, the Chamber deemed it appropriate to point out that the request for said “remedy” presented by the Claimant had no legal or regulatory basis and that no corroborating evidence had been submitted which would warrant any other “remedy” to be given to the Claimant.

24. In continuation, the Chamber focused its attention on the further consequences of the breach of contract in question and, in this respect, addressed the question of sporting sanctions in accordance with art. 17 par. 4 of the Regulations. The cited provision stipulates inter alia that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on a club found to be in breach of contract during the protected period.

25. Subsequently, the members of the Chamber referred to item 7 of the “Definitions” section of the Regulations, which stipulates, inter alia, that the protected period shall last “for three entire seasons or three years, whichever comes first, following the entry into force of a contract, where such contract is concluded prior to the 28th birthday of the professional, or two entire seasons or two years, whichever comes first, following the entry into force of a contract, where such contract is concluded after the 28th birthday of the professional”. In this respect, the Chamber took note that the breach of the employment contract by the Respondent had occurred on 13 October 2016, i.e. 10 months following the entry into force of the contract at the basis of the dispute. Therefore, the Chamber concluded that, irrespective of the Claimant’s age, such breach of contract by the Respondent had occurred within the protected period.

26. As a result, by virtue of art. 17 par. 4 of the Regulations and considering that the Claimant terminated the contract with the Respondent with just cause, the Chamber decided that the Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision. In this regard, the Chamber emphasised that apart from the Respondent having clearly acted in breach of the contract within the protected period in the present matter, the Respondent had also on several occasions in the recent past been held liable for the early termination of the employment contracts with the players Player E (case ref. nr. X; decided on 15 October 2015), Player F (case. ref. nr. Y; decided on 10 November 2015) and Player G (case. ref. nr. Z; decided on 30 September 2016).

27. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is 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 65,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 23 September 2016 on the amount of USD 50,000;

b. 5% p.a. as of 1 October 2016 on the amount of USD 15,000.

3. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract amounting to USD 335,000 plus 5% interest p.a. on said amount as from 5 October 2016 until the date of effective payment.

4. In the event that the amounts plus interest due to the Claimant in accordance with the above-mentioned points 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.

7. The Respondent shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision.

*****

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:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives