F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision 17 August 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 17 August 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Eirik Monsen (Norway), member

Pavel Pivovarov (Russia), 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 13 June 2014, the player of Country B, Player A (hereinafter: Claimant or player), and the club of Country D, Club C (hereinafter: Respondent or club), signed an employment contract valid as from its date of signature until 31 May 2016 (hereinafter: contract).

2. According to art. 4 par. 1 of the contract, the Respondent undertook to pay the Claimant the following remuneration:

a) For the sporting season 2014/2015: EUR 450,000 via an “advance payment” of EUR 150,000, payable on the signature date, and EUR 300,000 as salaries, payable in ten equal monthly instalments of EUR 30,000 each,“25th of each month shall the day.”

b) For the sporting season 2015/2016: EUR 500,000 via an “advance payment” of EUR 166,660 on 30 July 2015 and salaries totalling EUR 333,340 payable via ten equal monthly instalments of EUR 33,334 each,“25th of each month shall the day.”

3. Furthermore, art. 4 par. 2 of the contract reads that “salaries and other financial obligations of the club for more than 90 days in the event of non-fulfilment, player club in written form (e.g. warning, fax, etc.) to alert and will give you 30 days to pay. The club within 30 days upon receiving the written notice does fulfil their financial obligations, within the first 7 days following the player a contract of employment with justification shall be entitled to termination.”

4. On 17 November 2015, the Claimant put the Respondent in default in writing of payment of unspecified remuneration that had allegedly been due more than 90 days, requesting the club to pay within 30 days referring to art. 4 par. 2 of the contract.

5. On 15 December 2015, the Respondent replied to the Claimant’s default notice, referring inter alia to art. 4 par. 2 of the contract and stating that given the existence of a contractual period of 90 days and of a clause stipulating that the player’s “wage shall be paid until the 25th day of the month following month”, the Respondent considered that it had no outstanding debts towards the Claimant.

6. On 21 December 2015, the Claimant replied to the Respondent and asserted that according to the contract, it is stipulated that “The Club shall pay to the player in total EUR 333,340 in ten months. This amount shall be paid in 10 equal instalments on monthly basis i.e. EUR 33.334. 25thOf Each Month Shall The Day.” The Claimant specified that the Respondent fell “in delay on the 26th August 2015 and the 90 days delay has expired on 25th November 2015”. The Claimant concluded his letter by maintaining his default notice and suggested to negotiate a settlement agreement.

7. On 4 January 2016, the Claimant re-sent his letter of 21 December 2015 to the Respondent outlining that the Respondent had more than 90 days delay in payment and requested that the Respondent comply with its payment obligations within 48 hours.

8. In its reply dated 5 January 2016, the Respondent held having not received the Claimant’s letter of 21 December 2015. In addition, the Respondent maintained that it considered the Claimant’s claim groundless since, because of the two aforementioned contractual stipulations, there were no outstanding payments due to the Claimant. As a conclusion, the Respondent asked that the Claimant withdraw his notice and outlined that in case of unjustified termination of contract by the Claimant, the Respondent would lodge a claim against him.

9. On 7 January 2016, the Claimant sent a final default notice to the Respondent in which he, inter alia, asked the Respondent to comply with its obligations since, given his injury, he preferred to not start legal proceedings against the Respondent.

10. On 28 January 2016, the Claimant lodged a claim in front of FIFA against the Respondent for outstanding remuneration and compensation for breach of contract. In this respect, the Claimant requested that the Respondent be ordered to pay him EUR 200,004 corresponding to six outstanding monthly salaries and EUR 133,336 corresponding to his remuneration until the expiry of the contract.

11. In his statement of claim, the Claimant explained that the Respondent stopped paying his remuneration as from 25th August 2015 and that “altogether”, the Respondent accumulated “more than 180 days of delay”.

12. In particular, the Claimant held that although he followed the contractual terms by sending default notices to the Respondent, the latter repeatedly reacted by stating that it did not have any outstanding dues towards him and left his last default notice dated 7 January 2016 unanswered. However, according to the Claimant, the Respondent’s position is not justified.

13. In its reply, the Respondent rejected the claim and requested that the Claimant be ordered to bear all the costs related to the proceedings at hand as well as its legal expenses.

14. In this regard, the Respondent argued that, as it paid EUR 683,861 to the Claimant instead of EUR 706,660 between 13 June 2014 and 27 November 2015, the Claimant’s claim for EUR 333,340 is unjustified and he only has a credit of EUR 22,799 to receive from the Respondent.

15. In continuation, the Respondent considered that the claim is unsubstantiated and that accordingly, the Claimant failed to comply with the principle in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof. As an illustration of this argument, the Respondent stressed that in his default notice of 17 November 2015, the Claimant did not specify what his request was based upon or what the amount at stake was.

16. On the contrary, the Respondent stressed that, for its part, in its replies to the Claimant’s letters, it referred to the contractual period of 90 days, as a result of which the Claimant’s claims were unjustified.

17. In support of its position, the Respondent inter alia presented an in-house list of all the payments it declared having made to the Claimant between 13 June 2014 and 27 November 2015.

18. After the closure of the investigation in the present matter, the Claimant presented further, unsolicited, comments.

19. Following FIFA’s pertinent request, the Claimant indicated that he had not signed any other employment contract during the period of time between the date on which he lodged his claim in front of FIFA until the ordinary date of expiry of the contract.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the matter at stake. In this respect, it took note that the present matter was submitted to FIFA on 28 January 2016. Consequently, the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is 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 (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 edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, the Chamber 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 claim was lodged on 28 January 2016, the 2015 edition of the aforementioned 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, and entering into the substance of the matter, the Chamber started by acknowledging the above-mentioned facts as well as the documentation contained in the file. 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. In particular, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

5. Furthermore, in this context, the Chamber highlighted that, in accordance with art. 9 par. 4 of the Procedural Rules, the Claimant’s unsolicited submission received after the closure of the investigation into the present matter is not taken into consideration in the assessment of this matter.

6. Having said that, the Chamber recalled that the parties had signed an employment contract valid as of 13 June 2014 until 31 May 2016, in accordance with which the Claimant was entitled to receive, inter alia, for the 2015/2016 sporting season, EUR 500,000 via an advance payment of EUR 166,660 on 30 July 2015 and salaries totalling EUR 333,340 payable via ten equal monthly instalments of EUR 33,334 each.

7. In continuation, the Chamber took note that according to the Claimant, the Respondent is to be held liable for breach of contract by failing to remit his remuneration as of 25 August 2015 in spite of the Claimant having put the Respondent in default of payment on various occasions. The Chamber pointed out that the Claimant did not terminate the employment relationship in writing, but lodged a claim against the Respondent in front of FIFA on 28 January 2016 maintaining that the Respondent acted in breach of contract and requesting to be awarded outstanding remuneration relating to 6 monthly salaries in the amount of EUR 200,004 as well as the amount of EUR 133,336 as compensation for breach of contract.

8. The Respondent, for its part, rejected the claim stating that it was not in delay of payment of the Claimant’s remuneration invoking, inter alia, the 90 days’ period of time set out in art. 4 par. 2 of the contract. In addition, the Respondent argued that in light of the payments it had remitted to the Claimant between 13 June 2014 and 27 November 2015, it only owed the amount of EUR 22,799 to the Claimant.

9. In view of the above, the members of the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the contract had been terminated by one of the parties, and, in the affirmative, as to whether such termination was with or without just cause. The Chamber also underlined that, subsequently, it would be necessary to determine the consequences thereof.

10. In this context, bearing in mind the Respondent’s position, the Chamber deemed it fit to firstly establish the dates on which the Claimant’s monthly salary fell due. Indeed, from the exchange of correspondence between the Claimant and the Respondent it can be noted that according to the Respondent, salary payments fell due on the 25th day of the following month. The contract, however, establishes that salaries fell due “25th of each month shall the day.” The members of the Chamber agreed that in accordance with such contractual stipulation the Respondent undertook to pay the Claimant’s salary on the 25th day of each month and highlighted that there is no reference whatsoever to such payments falling due “the following month”. The members of the Chamber further took into account that the contract ran until 31 May 2016 and that the Claimant was entitled to receive for the 2015-16 season salaries totalling EUR 333,340 payable via ten equal monthly instalments of EUR 33,334. Consequently, the Chamber established that the first salary payment of EUR 33,334 fell due on 25 August 2015.

11. In continuation, the Chamber took into account that the Claimant had put the Respondent in default of payment on several occasions between 17 November 2015 and 7 January 2016, requesting the latter to comply with its financial obligations and arguing that it fell in delay of payment as of August 2015. The Chamber also took into account the relevant replies of the Respondent to the Claimant’s default notices in which it considered not having any outstanding debts towards the Claimant.

12. The members of the Chamber then focused their attention on the Respondent’s argument that its debt towards the Claimant amounts to EUR 22,799 only.

13. At this point, and in relation to the documentation provided by the parties, the members of the Chamber deemed appropriate to refer to the content of art. 12 par. 3 of the Procedural Rules, according to which “any party claiming a right on the basis on an alleged fact shall carry the burden of proof”. In this regard, the DRC underlined that, in the present case, the Respondent carried the burden of proof by bringing evidence of remuneration payments to the Claimant or to demonstrate that it had valid reasons not to make such payments in accordance with the contract.

14. In this context, the members of the Chamber first observed that it has remained uncontested that the Claimant was entitled to receive his monthly remuneration in accordance with the contract.

15. In continuation, the Chamber took into account that, in its defence, the Respondent presented an in-house accounting document, which includes remuneration allegedly remitted to the Claimant. In this respect, the Chamber noted that this document lists numerous payments, but that the purpose of payment is not specified for all of them. What is more, the document also refers to remuneration allegedly paid in connection with the previous season (i.e. 2014/2015). The Chamber further noted from this document that apparently no monthly salary was paid to the Claimant after the remittance of his salaries for the months of April and May 2015, which were both apparently paid together on 28 May 2015, and of the instalment of EUR 166,660, which was apparently paid on 21 August 2015. According to the document presented, two further payments of EUR 916 and EUR 2,022 were made to the Claimant on 17 September 2015 and 27 November 2015, respectively. Furthermore, the receipt presented by the Respondent for the amount of EUR 20,000 bearing the Claimant’s signature appears to bear the date of 13 June 2014 and was not further translated.

16. After careful study of the documents presented by the Respondent in its defence, the Chamber concluded that the documentation presented by the Respondent cannot be considered credible and convincing evidence that it effectively remitted the monthly salaries as from August 2015 to the Claimant.

17. On account of the above circumstances, the members of the Chamber established that, in spite of the Claimant’s various default notices addressed to the Respondent, a substantial part of the Claimant’s remuneration, i.e. salaries as from 25 August 2015, had fallen due and remained outstanding on the date when the Claimant lodged his claim against the Respondent in front of FIFA, i.e. 28 January 2016.

18. Consequently, the Chamber decided that the Respondent is to be held liable for breach of contract without just cause and, taking into consideration the Chamber’s constant practice in similar matters where there has been no written notice of termination, that the contract is to be considered terminated on the date of the Claimant’s claim for breach of contract in front of FIFA, i.e. 28 January 2016.

19. In light of the above, and in accordance with the legal principle of pacta sunt servanda, the DRC decided that the Respondent is liable to pay to the Claimant the remuneration which was outstanding under the contract as at the date of the termination; i.e. the total amount of EUR 200,004, corresponding to six monthly salaries as from August 2015 until January 2016.

20. Furthermore, having established that the Respondent is to be held liable for the termination of the contract without just cause, the Chamber decided that, in accordance with art. 17 par. 1 of the Regulations, the Respondent is liable to pay compensation for breach of contract to the Claimant.

21. Subsequently, 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.

22. 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.

23. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant in accordance with the employment contract for the remaining period of time until 31 May 2016 and concluded that the Claimant would, in fact, have received 4 monthly salaries totaling EUR 133,336 as remuneration had the contract been executed until its expiry date, which amount serves as the basis for the final determination of the amount of compensation for breach of contract.

24. In continuation, the Chamber assessed 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.

25. In this respect, the Chamber noted that the Claimant had not signed any employment contract during the relevant period of time, i.e. before 31 May 2016, and that according to the Transfer Matching System (TMS), he had signed an employment contract with a new club as of 6 July 2016.

26. As a consequence, and bearing in mind that the Claimant had not been able to mitigate damages, the Dispute Resolution Chamber concluded by deciding that the Respondent has to pay the amount of EUR 133,336 to the Claimant as compensation for breach of contract.

III. Decision of the Dispute Resolution Chamber

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

2. The Respondent, Club C, is ordered to pay to the Claimant outstanding remuneration in the amount of EUR 200,004, within 30 days as from the date of notification of this decision.

3. The Respondent is ordered to pay to the Claimant compensation for breach of contract in the amount of EUR 133,336, within 30 days as from the date of notification of this decision.

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, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limits and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. 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 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