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 13 October 2016

Decision of

the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 13 October 2016,

in the following composition:

Geoff Thompson (England), Chairman

Theo van Seggelen (Netherlands), member

Wouter Lambrecht (Belgium), member

on the matter between the club,

Club A, country B

as Claimant

and the player,

Player C, country D & country B

as Respondent 1

and the club,

Club E, country B

as Respondent 2

regarding an employment-related dispute arisen between the parties

I. Facts of the case

1. On 2 July 2012, the player, Player C (hereinafter: the Respondent 1), born on 12 October 1991, and the club from country B, Club A (hereinafter: the Claimant), signed an employment contract (hereinafter: the contract) valid as from the date of signature until 30 June 2017, according to which the Respondent 1 was entitled to a total net remuneration of EUR 595,000.

2. The aforementioned contract stated that the Respondent 1 has the country B nationality. Moreover, by means of an official confirmation dated 7 June 2016, the Football Federation of country B informed FIFA that the Respondent 1 was registered with the Claimant as a country B national.

3. According to the Claimant, the Respondent 1 possesses both country D and country B nationality. In this respect, the Claimant held that the Respondent 1 was born in country D and subsequently obtained country B nationality “through his parents origin”.

4. On 30 August 2015, the Respondent 1 and the Claimant signed a document titled “Termination of contract by Mutual Consent” (hereinafter: the termination agreement) by means of which the parties mutually agreed to terminate the contract and where it is established that the Claimant would pay to the Respondent 1, EUR 50,000, on 15 February 2015, as compensation for the early termination of the contract. Furthermore, the termination agreement mentions the Respondent 1’s registration within the Football Federation of country B.

5. Moreover, the termination agreement stipulated in its art. 5, inter alia, the following:

“[The Respondent 1], for the approval of [the Claimant] in the said termination undertakes not to be registered to Club E, Club F or Club G during the sporting season 2015/2016. In the event present clause is violated by [the Respondent 1], [the Respondent 1] expressly states and declares that he would pay to [the Claimant] the total net amount of EUR 350,000 within 15 days from his registration with one of the clubs expressly defined above and that such a club will also be equally liable towards [the Claimant] to pay such compensation”.

6. Furthermore, in accordance with art. 8 of the termination agreement “Any and all dispute arising from or related to the present contract will be submitted exclusively to FIFA dispute resolution bodies and resolved definitively in accordance with FIFA Regulations and the Swiss Law”.

7. On 29 January 2016, the Respondent 1 signed an employment contract with the club from country B, Club E (hereinafter: the Respondent 2) valid from the date of signature until 30 June 2016.

8. By means of its official confirmation dated 7 June 2016, the Football Federation of country B confirmed that the Respondent 1 was registered with the Respondent 2 as a country B national. Moreover, after being requested by FIFA to confirm on which exact date the player was registered with the Respondent 2, the Football Federation of country B stated that the Respondent 1 was registered with the Respondent 2, on 29 January 2016.

9. On 31 March 2016, the Claimant lodged a claim in front of FIFA against the Respondent 1 and the Respondent 2 requesting a payment in the amount of EUR 350,000, plus interest as of “15 days after the Player’s registration with [the Respondent 2]”. Moreover, the Claimant requested that “the Respondents should pay all legal costs and expenses”.

10. In its claim, the Claimant explained that it paid a total of EUR 861,000, for the transfer of the Respondent 1 from the club from country B, Club H (hereinafter: Club H) to it on 2 July 2012.

11. According to the Claimant, in accordance with the contract, the Respondent 1 was entitled to a gross remuneration of EUR 1,020,416.

12. Subsequently, the Claimant held that given the Respondent 1’s young age and his alleged need of further training, the Respondent 1 was loaned to several clubs as follows:

 To the country D club, Club I, from 6 July 2013 until 7 January 2014;

 To the club from country B, Club J, from 7 January 2014 until 30 June 2014;

 To the club from country B, Club K, from 1 September 2014 until 31 December 2014;

 To the French club, Club L, from 2 February 2015 until 30 June 2015.

13. The Claimant sustained that after the Respondent 1’s loan to Club L, the Respondent 1 informed it that he did not intend to stay any longer with the Claimant, and while some club from country B expressed their wish to acquire the Respondent 1 for a transfer fee, the Respondent 1 refused all offers, as according to the Claimant, the Respondent 1 did not want to stay in country B and declared explicitly that he wished to move abroad.

14. Afterwards, the Claimant maintained that after all possibilities for a transfer and efforts to persuade the Respondent 1 to remain in country B were exhausted, the services of the Respondent 1 and the Claimant signed the termination agreement on 30 August 2015, as the Claimant declared that “it did not wish to create any difficulties in [the Respondent 1]’s career”.

15. According to the Claimant, “[the Respondent 1] was so adamant that he was not going to use the possibility to signed as a fee player in country B,…., that even himself have offered the guarantee to include a clause not allowing him to be register in country B for a season,…”.

16. In this regard, the Claimant explained that it “did not wish to make impossible for [the Respondent 1] to play in country B but to secure only that he would not be registered for any of the top clubs of Championship of country B”.

17. In light of the above, the Claimant explained that it limited the number of club from country B to which the Respondent 1 could not be registered to only three, the Respondent 2, Club F and Club G, as according to the Claimant, these clubs did have the financial means to pay a transfer fee and would use the Respondent 1 immediately, a player for whom, according to the Claimant, it spent more than EUR 1,500,000, in developing.

18. The Claimant further explained that after it paid more than EUR 1,400,000 in transfer fee and salaries to the Respondent 1, it would not allow its main rivals to use the same player immediately after his release, especially taking into account that the Claimant did not wish to terminate the contract with the Respondent 1. In consequence, the Claimant sustained that for that scenario, a clause was included in the termination agreement which established that in the event that the Respondent 1 signed with one the above mentioned club from country B, the Respondent 1 and the club that “had assist him in violating” would pay a penalty fee of EUR 350,000 to the Claimant. In this regard, the Claimant argued that the amount was agreed with the Respondent 1’s legal representative.

19. Subsequently, the Claimant explained that it became aware that during the winter transfer window of 2016, the Respondent 1 was registered with the Respondent 2.

20. In this respect, the Claimant sustained that on 5 February 2016, it contacted the Respondent 1’s representative but received no reply to its communication despite its managing director allegedly contacting the agent of the Respondent 1 previously, who in turn allegedly clarified to the Claimant that “[the Respondent 2] was aware and they have promised to…take care of the situation”.

21. Moreover, the Claimant sustained that as no reply was received, it sent a communication to both the Respondent 1 and the Respondent 2 via the Football Federation of country B, by means of which the Claimant put the Respondent 1 and the Respondent 2 in default of payment of EUR 350,000, in accordance with the termination agreement.

22. Finally, the Claimant held that despite that the Respondent 1 is a country B national and the Respondent 2 is a club affiliated to the Football Federation of country B, FIFA is competent to hear the present claim due to the explicit and clear wording of the termination agreement. According to the Claimant, the parties have explicitly and exclusively agreed that the forum to resolve it is that of FIFA’s competent bodies. Moreover, the Claimant held that the dual nationality of the Respondent 1 grants the international dimension to the matter at hand.

23. The Respondent 1 rejected the Claimant’s claim. In this respect, the Respondent 1 explained that after remaining unemployed for half of the season after the signature of the termination agreement, he signed an employment contract with one of the clubs mentioned in the “non-compete clause” contained in the termination agreement. However, the Respondent 1 sustained that the Claimant is seeking to unlawfully claim the penalty fee of EUR 350,000 established in the mentioned termination agreement.

24. Furthermore, the Respondent 1 held that the claim should be dismissed, as the “non-compete clause” is not binding under Swiss Law, according to the Swiss Code of Obligations, which, according to the Respondent 1, is applicable to the termination agreement in accordance with its wording. In this regard, the Respondent 1 explained that such a clause can be accepted only if the employee had access to trade secrets and information about clientele and if the employer could suffer substantial damages in case the former employee would use such knowledge at a new employer. In this respect, the Respondent 1 held that in the matter at hand, none of these exceptional circumstances were fulfilled.

25. Moreover, the Respondent 1 held that the “non-compete clause” imposed upon him, violates the freedom of movement of workers, which is one of the fundamental pillars of European law.

26. The Respondent 1 also argued that the penalty fee of EUR 350,000 established in the termination agreement is excessive. In this respect, the Respondent 1 held that the amount is clearly disproportionate with respect to the interest of the parties, his annual salary, the lack of any damage incurred by the Claimant and that the Respondent 1 even complied with the “non-compete clause” for half a season. The Respondent 1 requested that if the “non-compete clause” is considered valid, the amount should be mitigated to the furthest extent possible.

27. Furthermore, the Respondent 1 held that after returning from the loan to Club L, he was proposed to transfer on loan to Club K or Club J, which he rejected as he did not want to be loaned again and waive part of his remuneration. The Respondent 1 denied having stated that he wanted to leave country B.

28. The Respondent 1 held that as he was unhappy with the situation, and as the Claimant did not want to pay his remuneration, the parties started the negotiation of the termination agreement. Moreover, the Respondent 1 stated that on 28 August 2015, his agent exchanged several emails regarding the potential termination agreement and where his agent pointed out that there were some outstanding amounts owed to the Respondent 1. In this regard, the Respondent 1 sustained that the fee of EUR 50,000 payable to him in accordance with the termination agreement corresponds to outstanding remuneration and not to compensation for the early termination of the contract.

29. Subsequently, the Respondent 1 explained that he and his agents were under great pressure to sign the termination agreement due to the transfer window closing on 31 August 2015. The Respondent 1 further explained that a first draft of the termination agreement did not contain the “non-compete clause”.

30. In this regard, the Respondent 1 declared that the Claimant took advantage of the alleged great pressure to finalize the termination agreement before the transfer window closed and introduced the “non-compete clause”, in the final draft of the agreement. The Respondent 1 then declared that he signed the final draft of the termination agreement, which included the “non-compete clause” on that same day, as he was still hoping to find a club. However, according to him, it was too late and he was unable to find a new club and in consequence, spent five months without remuneration.

31. The Respondent 1 then confirmed that, on 29 January 2016, he signed an employment contract with the Respondent 2.

32. Finally, the Respondent 1 requested that either the claim is dismissed or that the amount payable to the Claimant is reduced. Furthermore, the Respondent 1 requested that the Claimant pays his legal fees and the costs of the proceedings.

33. On its part, the Respondent 2 rejected the Claimant’s claim. In this respect, the Respondent 2 first argued that it does not have standing to be sued in the present matter, as there is no contractual or legally binding relationship between it and the Claimant. The Respondent 2 further argued that it was not part of the termination agreement signed between the Respondent 1 and the Claimant, which is the basis of the dispute, and therefore, the Claimant cannot base any claim against it.

34. Moreover, the Respondent 2 declared that it “has been convinced from the beginning that the non-compete/penalty clause in the Termination Agreement was invalid as it unreasonably restricted [the Respondent 1]’s freedom of occupation and the freedom of movement of workers”.

35. The Respondent 2 confirmed that it signed an employment contract with the Respondent 1, on 29 January 2016. However, the Claimant held that it did not assume any potential debt from the Respondent 1 by means of his registration with it, as there was no explicit mention of this.

36. Moreover, the Respondent 2 referred to the Respondent 1’s submission and declared that it fully supported and adopted Respondent 1’s arguments in the current matter.

37. Finally, the Respondent 2 requested that the claim is dismissed and that the Claimant pays its legal fees, as well as other expenses in connection with the current proceedings. The Respondent 2 further requested that the Claimant pays its own legal fees and the costs of the proceedings.

38. Despite being invited by the FIFA administration to provide comments on the reply of both the Respondent 1 and the Respondent 2, no further correspondence was received from the Claimant.

II. Considerations of the Dispute Resolution Chamber

1. First, 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 31 March 2016. Consequently, the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the 2015 edition of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 of the Procedural Rules and confirmed that, in general, 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, hereinafter: the Regulations) the Dispute Resolution Chamber is competent to deal with employment-related disputes with an international dimension between a player and a club.

3. In view of the above-mentioned provisions, the Chamber was eager to emphasise that, in principle, and without prejudice to the right of any player or club to seek redress before a civil court for employment-related disputes, it falls under its competence to deal with international employment-related disputes between players and clubs, unless an independent arbitration tribunal has been established at national level.

4. At this moment, the Chamber recalled that the Claimant, a club affiliated to the Football Federation of country B, held that despite that the Respondent 1 is a country B national and the Respondent 2 is a club affiliated to the Football Federation of country B, FIFA is competent to hear the present claim based on art. 8 of the termination agreement and its wording.

5. In this regard, the Chamber emphasized that the jurisdiction of FIFA derives from the Regulations and the FIFA Statutes, and not from private agreements between parties. In this respect, the DRC highlighted that, if the line of reasoning of the Claimant would be followed, then the DRC would be going against FIFA’s own Regulations and Statutes. The Chamber firmly stressed that the competence of FIFA is born from the Regulations.

6. The members of the Chamber then referred to the art. 1 of the Regulations on the Status and particularly to its par. 2 and par. 3, according to which some principles outlined in the Regulations are also binding at national level and each association is obliged to draw up its internal regulations. The associations are within the framework of their autonomy, free to adapt their internal rules to the necessity and the particularity of the country concerned. Therefore, the competence of FIFA is restricted to international transfers and disputes.

7. Furthermore, in the context of labour disputes, the Chamber underlined that, as a general rule, the international dimension is represented by the fact that the player concerned is not a national of the country of the association to which the relevant club is affiliated.

8. However, when both parties have the same nationality, the dispute shall be considered as national or internal, with the consequence that the rules and regulations of the association concerned shall be applied to the matter and the deciding bodies in accordance with the relevant provisions are to decide on the issue. If FIFA’s deciding body would deal with such internal matter, the internal competence of FIFA Members would be violated. These principles of delimitation between the competence of FIFA and the competence of the associations are primordial for the reciprocal recognition of the organisations and autonomy of FIFA and the member associations.

9. Having said this, the Chamber turned its attention to circumstances surrounding the double citizenship of a player. The Chamber observed that more and more players with two or more nationalities have appeared in the world of football and that FIFA and its deciding bodies are confronted with an augmented number of cases, which concern double citizenship. In this respect, the members of the Chamber emphasised that a player’s nationality is expressed by his passport(s) or identification documents, but that in the framework of plural citizenship a player could, under certain circumstances, possibly invoke a “sportive nationality”. The “sportive nationality” generally is linked to the concrete situation of the registration of a player with a club affiliated to the specific association domiciled in a country of which the player also is a national, in compliance with the rules of registration and eligibility for a club of the association concerned.

10. In such situations, both the club and the player may reap advantages of the “sportive nationality”. For example, the player being registered as a “local player” does not charge any quota of foreign players and would have no difficulty in obtaining a visa or work permit, if at all required. Furthermore, any possible restriction on the number of foreign persons in the country would not be applicable in such situation. Obviously, such circumstances are to the benefit of both the club and the player.

11. In this context, the Chamber recalled the crucial fact that the Respondent 1, who holds both the country B and the country D nationality, was registered with both the Claimant and the Respondent 2, two clubs affiliated to the Football Federation of country B, as a player from country B and not as a player from country D.

12. The members of the Chamber then turned to the Claimant’s argument in accordance with which on the basis of the Respondent 1’s country D nationality, the matter at stake should be dealt with by FIFA and not by the country B national deciding bodies.

13. In this respect, the Chamber analysed the employment contract and established that such contract was concluded by the parties making reference to the country B nationality of the Claimant, and the termination agreement makes a reference to the Respondent’s 1 registration. Moreover, the DRC noted that the Football Federation of country B confirmed that the Claimant was registered with both the Claimant and then the Respondent 2, two clubs affiliated to the Football Federation of country B, as a country B national.

14. On account of all of the above considerations, in particular of the fact that the Respondent 1 from country B/country D was registered as a player from country B with both the Claimant and the Respondent 2, two club from country B, the case of the Claimant in question comes under the jurisdiction of the football association in the country concerned (i.e. country B), as a result of which FIFA cannot intervene due to a lack of jurisdiction over the matter.

15. Consequently, the Dispute Resolution Chamber decided that the present claim is inadmissible.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Club A, is inadmissible.

*****

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