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 18 February 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 18 February 2016,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Mario Gallavotti (Italy), member

Mohamed Al Saikhan (Saudi Arabia), member

Johan van Gaalen (South Africa), member

Eirik Monsen (Norway), member

on the claim presented by the player,

Player X, from country X

as Claimant

against the club,

Club Z, from country Z

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 1 July 2013, the player X, from country X (hereinafter: player or Claimant), and the Club Z, from country Z (hereinafter: club or Respondent), signed an employment contract (hereinafter: contract), as from 1 July 2013 until the “end of the contract 31/05/2015”.

2. According to the contract, the club undertook to pay the player during the 2014/2015 season, inter alia, an amount of EUR 495,000 in ten monthly instalments of EUR 49,500, starting in August 2014.

3. Furthermore, the club undertook to pay the player a total amount of EUR 715,000 during the 2015/2016 season, as follows:

- EUR 165,000 as “pre-payment” on 10 July 2015;

- EUR 550,000 in ten monthly instalments of EUR 55,000, starting in August 2015.

4. The contract further defines that “A budget of 15,000€ will be given to the football player to compensate house, car and plane ticket costs and should the player exceed the budget, he will pay for the remaining costs himself.”

5. On 22 June 2015, the player sent a default notice to the club, requesting payment of the amount of EUR 163,500, corresponding to outstanding salaries of March until May 2015 plus the “allowance for the apartment”. In said letter, the player warned the club that he would terminate the contract if the debt would not be settled by 29 June 2015.

6. On 9 July 2015, the player sent a letter to the club terminating his contract due to the allegedly outstanding payment of EUR 163,500.

7. On 10 July 2015, the player signed an employment contract with the club A, from country Z valid as of 11 July 2015 until 31 May 2017, including the following remuneration during the 2015/2016 season:

- EUR 295,000 as advance payment in July 2015;

- EUR 200,000 as salary, payable in ten monthly instalments of EUR 20,000 between August 2015 and May 2016.

8. On 9 September 2015, the player lodged a claim in front of FIFA maintaining that the club is to be held liable for the early termination of the contract and he requested to be awarded EUR 163,500 as outstanding remuneration and EUR 250,000 as compensation for breach of contract, plus 5% interest.

9. According to the player, the contract was valid for the “2013/2014, 2014/2015 AND 2015/2016 seasons.”

10. In his statement of claim, the player further held that the club did not pay the salaries of March to May 2015 (3 x EUR 49,500) nor the housing allowance of EUR 15,000 and that he, therefore, terminated the contract on 9 July 2015.

11. Moreover, the player claimed compensation in the amount of EUR 250,000. According to the player, in accordance with the contract he was entitled to EUR 715,000 during the 2015/2016 season. From this amount, the player deducted EUR 495,000 corresponding to the salaries earned during the 2015/2016 season with Club A and he added EUR 30,000 “from the bonuses term”.

12. Despite being invited to do so, the club has not replied to the player’s claim.

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 September 2015. 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 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 2015) 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 country X player and a country Z club.

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 2015), and considering that the present claim was lodged on 9 September 2015, the 2015 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. In this respect, the members of the Chamber acknowledged that, on 1 July 2013, the Claimant and the Respondent had concluded an employment contract valid as from 1 July 2013 until the “end of the contract 31/05/2015”. The Chamber further noted that the contract contains detailed salary arrangements for the 2015/2016 season.

6. The Claimant lodged a claim against the Respondent maintaining that the contract was valid as from 1 July 2013 until the end of the 2015/2016 season. He further held that he terminated the contract with just cause on 9 July 2015, after previously having put the club in default, since the Respondent allegedly had failed to pay the Claimant’s remuneration. In this respect, the Claimant submits that at the time he terminated the employment contract three monthly salaries and the housing allowance remained outstanding. Consequently, the Claimant asks to be awarded his outstanding receivables as well as payment of compensation for breach of the employment contract.

7. Subsequently, the DRC noted that the Respondent failed to present its response to the claim of the Claimant, in spite of having been invited to do so. By not submitting its position to the claim, the Chamber was of the opinion that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

8. Furthermore, as a consequence of the aforementioned consideration, the DRC concurred that in accordance with art. 9 par. 3 of the Procedural Rules, it shall take a decision upon the basis of the documentation on file.

9. Having said this, first and foremost, the Chamber took note of the Claimant’s allegation that the contract was valid as from 1 July 2013 until the end of the 2015/2016 season. In this regard, the Chamber recalled that, on the one hand, the contract defines the “end of the contract 31/05/2015”, whereas, on the other hand, the contract includes detailed salary arrangements for the 2015/2016 season. Consequently, the contract includes ambiguous clauses with respect to its duration.

10. However, in light of the lack of reply of the Respondent to the Claimant’s claim (cf. point II./7. and II./8. above) and since the contract undisputedly contains salary arrangements for the 2015/2016 season, the DRC decided to consider that the validity of the contract runs until 31 May 2016.

11. In continuation, the DRC acknowledged that, in accordance with the contract, the Respondent was obliged to pay to the Claimant the amount of EUR 495,000 during the 2014/2015 season in ten monthly instalments starting in August 2014, plus a housing allowance of EUR 15,000.

12. In this respect, the Chamber took into consideration that according to the Claimant, the Respondent had failed to pay his remuneration in the total amount of EUR 163,500, corresponding to the salaries of March until May 2015 in the amount of EUR 49,500 per month as well as the housing allowance of EUR 15,000.

13. On account of the aforementioned, in particular in view of the considerations under points II./7. and II./8. above, the Chamber established that the Respondent, without any valid reason, failed to remit to the Claimant the total amount of EUR 163,500. Consequently, and considering that the Respondent had thus 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 9 July 2015 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.

14. Consequently, on account of the above 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 amount of EUR 163,500 in connection with the remuneration due to the Claimant in accordance with the employment contract until its early termination.

15. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 163,500 as of 9 September 2015.

16. Having established the above, the Chamber turned its attention to the consequences of the termination of the employment contract by the Claimant with just cause on 9 July 2015.

17. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

18. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract 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.

19. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent 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 included in the employment contract at the basis of the matter at stake.

20. 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

21. The members of the Chamber then turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

22. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Respondent, i.e. 9 July 2015, until the original date of expiry, i.e. 31 May 2016, and concluded that the Claimant would have received remuneration in the total amount of EUR 715,000 had the contract been executed until its ordinary expiry date. Consequently, the Chamber concluded that the amount of EUR 715,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

23. 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.

24. In this respect, the Chamber recalled that the Claimant had found new employment with Club A, as from 10 July 2015 until 31 May 2017. In accordance with the employment contract signed between the Claimant and Club A, the Claimant was entitled to a remuneration of EUR 495,000 for the period between 10 July 2015 and 31 May 2016 and thus mitigated his damages accordingly.

25. Consequently, on account of the above and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of EUR 220,000 as compensation for breach of contract to the Claimant.

26. In addition, taking into account the Claimant’s request as well as the Chamber’s constant practice, 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. 9 September 2015, until the date of effective payment.

27. The members of the Chamber concluded their deliberations on the present matter by rejecting any further claim of the Claimant.

III. Decision of the Dispute Resolution Chamber

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

2. The Respondent, Club Z, 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 163,500 plus 5% interest p.a. as from 9 September 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 220,000 plus 5% interest p.a. as from 9 September 2015 until the date of effective payment.

4. In the event that the aforementioned sums are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to FIFA’s 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 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 67 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:

Markus Kattner

Acting Secretary General

Encl: CAS directives