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 8 March 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 8 March 2018,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Stefano Sartori (Italy), member

Pavel Pivovarov (Russia), member

Muzammil bin Mohamed (Singapore), member

on the matter between the club,

Club A, Country B

as First Claimant / Respondent II

and the player,

Player C, Country D

as Second Claimant / Respondent I

and the club,

Club E, Country D

as Respondent III

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 8 September 2012, the player of Country D, Player C (hereinafter: the player or Second Claimant / Respondent I) and the club of Country D, Club E (hereinafter: Club E or Respondent III) concluded a contract, valid between 8 September 2012 and 8 September 2017, according to which the player was entitled to receive a monthly salary of 40,000 in the currency of Country D (approximately USD 19,691 on 8 September 2012).

2. On 22 May 2015, the player, Club E and the club of Country D, Club F, agreed upon a transfer on loan basis of the player in the period between 21 May and 30 November 2015.

3. On 17 September 2015, the club of Country B, Club A (hereinafter: Club A or First Claimant / Respondent II), via a player’s agent, Player’s agent G, made an offer to Club E for a transfer of the player on loan basis to its club. The next day, 18 September 2015, Club E made the necessary arrangements in order to conclude the loan transfer of the player to Club A, claiming that the transfer window in the Country B would close on 21 September 2015.

4. In this respect, the loan agreement between the player, Club E and Club F was terminated and on 19 September 2015, Club E sent a draft version of a loan agreement to Club A.

5. On 20 September 2015, Club E, Club A and the player signed a loan transfer agreement (hereinafter: the loan agreement), based on which the player was loaned from Club E to Club A in the period between 21 September 2015 and 30 June 2016, ‘free of charge’.

6. In article 7.1 of the loan agreement, the following is stipulated: ‘Notices between the parties relating to this Agreement must be in writing and must be delivered personally or sent by prepaid first-class post, prepaid air mail post or facsimile transmission to the address set out opposite the parties above or to the fax number as set out below, unless alternative details have been notified by a party for the purpose of this clause: […] Club A: Fax number: XXX ’.

7. Article 13.1 of the loan agreement inter alia holds the following: ‘All the parties to this agreement shall keep confidential all the information contained in this agreement and/or any information which it receives in relation to any other party (the ‘Confidential Information’) and shall not use it or disclose it except for the purposes of exercising or performing its rights and obligations under this agreement […]’.

8. On 21 September 2015, the player and Club A concluded an employment contract (hereinafter: the contract), valid between 21 September 2015 and 30 June 2016.

9. According to article 3 of the contract, the player was entitled to receive the following amounts:

 a signing fee of USD 100,000, due upon signature of the contract;

 a payment of USD 100,000, due on 20 January 2016;

 9 monthly payments of USD 44,444, due at the end of each month, in the period between 31 October 2015 and 30 June 2016.

10. Furthermore, the contract stipulates that the player is entitled to an amount of 100,000 in the currency of Country B (corresponding to approximately USD 27,220 on 21 September 2015) as housing allowance, ‘or the provision of suitable accommodation’, as well as a car and ‘family air tickets for his wife and one member of his family’, ‘once years (round trip) (economic class) of the Country B to Country D’.

11. In addition, article 7 par. 2 of the contract stipulates the following: ‘In case of the breach of the contract by the first party [Club A] except for a serious violation of the second party [the player], the second party will receive the full payment and advantages stipulated in article 3 until the end of the contract’.

12. Article 13 of the employment contract holds the following clause: ‘This contract shall be deemed valid on signature by the two parties and after the player registered with the Football Association of Country B to this the two parties and witnesses have signed on the day and date specified above’.

13. Also on 21 September 2015, Club A sent an e-mail to Club E, indicating that it ‘cancelled the TMS procedure because the player did not arrive to Country B on 21/09/2015 which was mentioned in the contract so we could not have time to finish our procedures with Football Association of Country B’.

14. On 22 September 2015, Club A sent a letter to Club E by means of which it informed Club E that ‘our triple loan agreement is terminated because of the essential violation by the player for not coming in the agreed date for registration which was agreed in loan agreement’. Further, in said letter, Club A explained that the player did not join its club ‘till this moment 22/09/2015’ and that the last day to register players in the Country B was ‘in 21/09/ 2015 and the federation offices officially close at 05:00 o’clock’. Also, Club A argued that ‘entering the player to Country B is obligatory term to register in Football Association of Country B and it was impossible to complete the registration for reason beard by the player and his club, Club E, where Club A has no responsibility for this violation’.

15. Moreover, on 23 September and 1 October 2015, Club E requested Club A to comply with its contractual obligations as per the loan agreement. On 1 October 2015, Club A replied to Club E, explaining that Club E’ letters were sent to the wrong fax number and referring to the fact that the player did not show up on the agreed date.

16. On 24 September 2015, the player sent a letter to Club A, requesting it to fulfil the necessary procedures for the ‘employment agreement fulfilment’. On 28 September 2015, Club A requested a deadline of 48 hours to answer to the player’s letter, however never did so. As a result, on 1 October 2015, the player sent a letter to Club A, explaining that he deemed both the loan agreement and the contract terminated by Club A’s ‘unilateral and unmotivated initiative due to the player’s and Club E’ unequivocal contractual breach’.

17. On 15 October 2015, Club A lodged a claim against both the player and Club E in front of FIFA, requesting the following:

 ‘the establishment of the annulment of the loan contract’, concluded between Club A, Club E and the player;

 ‘the establishment of the annulment of the bilateral work agreement’, concluded between Club A and the player;

 to hold both the player and Club E responsible for the payment of USD 2,200,000 as compensation for the ‘moral and material damages’, arising from the player’s non-execution of the contract;

 to hold both the player and Club E responsible for the payment of USD 500,000 as compensation for ‘violation of the breach of confidentiality and privacy obligations’;

 to hold both the player and Club E responsible for the payment of USD 5,000 as ‘value of fees and expenses’.

18. In its claim, Club A explains that during the negotiations regarding the transfer on loan basis of the player from Club E to Club A, the most important condition ‘of the nominated player was to be able to arrive Country B before the expiry of the registration and transfers deadline’. After the parties had concluded a final version of the loan agreement and the contract, Club A holds to have instructed Player’s agent G that the player had to come to ‘Country B without waiting for signing the contract’, because of the importance of arrival before the expiry of the registration period. According to Club A, Player’s agent G confirmed that the player was ready ‘to arrive before the expiry of the registration period and that he will comply with the terms and conditions of the contract, especially, the start date of 21/09/2015’.

19. In addition, ‘due to the importance of early arrival to Country B’, Player’s agent G was entitled to finalize the flight booking procedure ‘on the basis that the air tickets value will be reimbursed to Player’s agent G as soon as the player arrives’. According to Club A, Player’s agent G booked a flight for the player.

20. Moreover, Club A explains that on 20 September 2015, it obtained the entry visa for the player and that afterwards, the player and Club E, via Player’s agent G, confirmed that the player would arrive on Sunday 20 September 2015 in the Country B. However, Club A states that the player delayed his arrival a couple of times ‘for reasons that were not understood, last one was losing the player for his passport’ and that on 21 September 2015, the player was still in Country D.

21. Furthermore, Club A explains that Club E delayed the signing of the final version of the contract and the loan agreement, and that only on 21 September 2015, it received the signed version of the loan agreement. After having uploaded said document in the TMS on 21 September 2015, Club A explains that it found out that Club E made a mistake in the TMS by ‘not mentioning the amount of transfer allowance or contract value’.

22. Club A further argues that, despite the delay in the arrival of the player in the Country B and the fact that it could not finish the procedure in the TMS, it ‘exerted all-out efforts to register the player, […], such as finalizing the registration procedures and requesting to allow delaying the stamp document of entry to Country B […]’. However, Club A points out that the Registration Division of the Football Association of Country B rejected the registration of the player, ‘due to not attaching the afore-mentioned document’ (i.e. the stamp document of entry in the Country B). As a result of the foregoing, Club A states that there was ‘no chance left for the player to participate in the next period’.

23. What is more, Club A argues that, due to the fact that the player did not arrive in the Country B on 21 September 2015 and was still in Country D on 22 September 2015, the loan agreement signed between the parties was violated. Consequently, Club A deemed the loan agreement to be null and void and confirmed this in a letter sent to Club E. What is more, Club A explains that the work visa it requested for the player is still valid.

24. In addition, Club A explains that the foregoing circumstances caused serious damages to its club, as it was not able to replace its injured player and/or to sign a new player, as well as that it lost an important game against Club H and further lost ‘its ability to compete’ with other clubs in the Country B.

25. Finally, Club A explains that on 30 September and 1 October 2015, both Club E and the player breached the confidentiality clauses included in article 13 of the contract, by sending correspondence to an ‘unreliable fax number’, i.e. the number YYY. This number did not correspond to the number specified in article 7.1 of the loan agreement, namely, XXX.

26. In conclusion, Club A argues that, because the player did not arrive on 21 September 2015, the start date of the contract, ‘all contractual obligations between the parties of the player loan agreement became legally valueless’.

27. On 2 February 2016, Club E answered to the claim of Club A, by arguing that after the parties signed the transfer agreement and the contract, Club A bought flight tickets for the player, in order for him to be able to travel to the Country B. Furthermore, Club E explains that it was ‘unexpectedly informed’ that ‘Club A had failed to enter significant information in the TMS’, as well as that ‘the Player’s ITC had been cancelled by Club A’.

28. After having requested Club A to comply with its contractual obligations, Club E holds that Club A only provided ‘absolutely unfounded answers’ and stated that it was the player’s fault that he failed to enter the territory of the Country B on 21 September 2015. Moreover, Club E explicitly denies Club A’s allegations that Club E incorrectly entered information in the TMS.

29. In addition, Club E argues that neither the loan agreement, nor the contract, contain any clauses obliging the player to enter the territory of the Country B by no later than 21 September 2015. What is more, Club E argues that there is no proof on file that Player’s agent G guaranteed that the player would arrive in the Country B on 21 September 2015.

30. Furthermore, Club E explains that Club A should be aware of any procedures and obligations to register players in the Country B, and that it cannot uphold the alleged circumstance that the player could not be registered in time against Club E and the player.

31. With regard to the confidentiality clauses in article 13 of the loan agreement, Club E argues that it did not breach said clauses, as on 21 January 2016, ‘the last fax sent by Club E was on 12 June 2015, months before the exchange of correspondence between Club E and Club A’. In addition, Club E explains that the website of Club A also shows the fax number YYY and that as such, Club A ‘itself indicated such number for communication’.

32. Moreover, Club E explains that Club A failed to provide evidence of the ‘moral and material damages’ in the amount of USD 2,200,000 it allegedly suffered. In addition, Club E states that Club A did not lose the game against Club H, but that said game ended in a score of 1-1.

33. According to Club E, Club A further failed to provide evidence of the alleged obligation of the player to arrive in the Country B on 22 September 2015, the alleged confirmation of Club E that the player would arrive on 21 September 2015, the calculations able to confirm the compensation amount requested and the alleged fees and expenses incurred. As a result, Club E asks for the rejection of Club A’s claim, as well as to impose procedural costs on Club A, to oblige Club A to reimburse legal costs of Club E and to impose a penalty for procedural bad faith on Club A.

34. On 3 February 2016, the player replied to the claim of Club A, first of all pointing out that after the signing of the loan agreement on 20 September 2015, ‘the relevant authorities’ issued a visa, as well as that ‘plane tickets for the player were issued’.

35. Further, the player explains that, on an unspecified date, he was ready to travel to the Country B, but that upon arriving at the airport, he was ‘surprised with the news that Club A had cancelled the TMS proceedings and also unilaterally terminated the employment agreement and transfer agreement, by means of a notification’.

36. Furthermore, the player argues that Club A terminated the contract on the very same day as it was signed, as well as that there is no contractual provision that required the player to arrive in the Country B on 21 September 2015. Therefore, according to the player, he could not have breached his contractual obligations by not arriving in the Country B on 21 September 2015. Moreover, the player explains that he ‘does not need to be physically present in order for the data to be entered in the TMS’, as this was Club A’s responsibility.

37. Furthermore, the player argues that Club A did not submit evidence, proving that Player’s agent G guaranteed that the player would arrive in the Country B on 21 September 2015.

38. In addition, the player explains that he also suffered sports related damage, as after the unilateral termination of the contract by Club A, he could not be registered with Club F or Club E anymore, as the registration period in Country D had closed on 15 September 2015.

39. Moreover, the player concludes that the loan agreement and the contract effectively came into force, and that it was Club A which decided to terminate them, by sending its correspondence dated 21 and 22 September 2015.

40. With regard to the confidentiality clauses in article 13 of the loan agreement, the player argues that he did not breach said clauses, as the website of Club A also shows the fax number YYY and that as such, Club A ‘itself indicated such number for communication’.

41. Moreover, the player explains that Club A failed to provide evidence of the ‘moral and material damages’ in the amount of USD 2,200,000 it allegedly suffered. In addition, the player states that Club A did not lose the game against Club H, but that said game ended in a score of 1-1.

42. According to the player, Club A further failed to provide evidence of the alleged obligation of the player to arrive in the Country B on 22 September 2015, the alleged confirmation of Club E that the player would arrive on 21 September 2015, the calculations able to confirm the compensation amount requested and the alleged fees and expenses incurred. As a result, the player asks for the rejection of Club A’s claim, as well as to impose procedural costs on Club A, to oblige Club A to reimburse his legal costs and to impose a penalty for procedural bad faith on Club A.

43. On 15 December 2015, the player lodged a separate claim against Club A, claiming compensation for breach of contract in the total amount of USD 1,125,063 to be paid by Club A, specified as follows:

 USD 898,397 as residual value of the contract in the period between 21 September 2015 and 30 June 2016, consisting of:

- USD 600,000 as salary payments, due between 31 October 2015 and 30 June 2016;

- USD 245,070 as total amount of the housing allowance, consisting of 9 monthly payments of 100,000 in the currency of country B (approximately USD 27,220 on 21 September 2015);

 USD 19,000 as ‘average values of a car rental in the Country B’;

 USD 34,327 as ‘average values of a round trip flight tickets for 3 people from the Country B to Country D’;

 USD 226,666 as ‘compensation for career damages’, corresponding to the contractual value for the period of 102 days between 21 September 2015 and 31 December 2015, based on an average monthly salary of USD 66,666.66.

Furthermore, the player requested 5% interest p.a. on the total amount of USD 1,125,063 as from 21 September 2015, as well as that sporting sanctions are imposed on Club A. In addition, the player asks Club A to be condemned to pay procedural costs.

44. In his claim, the player explains that after the parties signed the transfer agreement and the contract, he bought plane tickets and was ready to travel to the Country B to perform his duties with Club A. However, when arriving on the airport, he was ‘surprised with the news that Club A had cancelled the TMS proceedings and also unilaterally terminated the employment agreement and transfer agreement, by means of a notification’.

45. What is more, the player explains that by sending its letter dated 22 September 2015, Club A terminated the loan agreement and ‘consequently, the employment agreement was also terminated’.

46. Furthermore, the player argues that Club A ‘never informed him that being physically present at the Country B was a legal requirement for the registration of the athlete with the Football Association of Country B’. Moreover, the player states that ‘it is very clear from the employment agreement, in article 9, that the term of the validity was from September 21st 2015 to June 30th 2016, independently of any registration with the Football Association of Country B’. In addition, the player argues that neither the loan agreement, nor the contract, contain any clauses obliging the player to enter the territory of the Country B by no later than 21 September 2015.

47. According to the player, on 24 September 2015, the player put Club A in default and asked it to take the necessary measures in order to make it possible for the player ‘to engage the activities of a professional football player with Club A’s squad’. Moreover, the player states that on 1 October 2015, Club A replied to his default letter, holding that the player should provide valid reasons ‘for not showing in the agreed date’ and that it is ‘still keeping its rights in asking for compensation for all the moral and material damages’.

48. Based on the foregoing circumstances, the player deems that ‘because of Club A’s unilateral and unmotivated initiative […]’, Club A had terminated both the loan agreement and the contract without just cause.

49. Finally, the player explains that he also suffered sports related damage, as after the unilateral termination of the contract by Club A, he could not be registered with Club F or Club E anymore, as the registration period in Country D closed on 15 September 2015.

50. In its reply to the player’s claim, Club A explained that it acquired the services of a player’s agent, Player’s agent G, in order to find a new striker.

51. After Player’s agent G introduced the player to Club A, an offer was made to Club E and Club A informed Player’s agent G that the player should be in the Country B by no later than 20 September 2015. According to Club A, it was informed by Player’s agent G that the player had acknowledged this information and stated that he was fully aware of the short time frame.

52. Club A further points out that after negotiations with Club E, on 20 September 2015, both the loan agreement and the contract were signed by Club A, as it ‘was pushing very hard to make it happen’. In relation to the contract, Club A points out that after signing said document, it sent the contract via Player’s agent G to the player, as the player ‘has confirmed that he would arrive before Monday 21st of September to execute his obligations as a professional football player’. Club A explains that for this reason, the starting date of the contract was 21 September 2015.

53. Furthermore, Club A explains that it arranged a visa for the player in order to be able to travel to the Country B, however that on 20 September 2015, it noted that the player kept on delaying his arrival. In addition, Club A argues that it put an obligation on the player to arrive by no later than 21 September 2015, 5:00 pm, as the ‘Football Association of Country B Regulations requires attaching the entry stamp of the player’s passport to the Country B to finalize the registration’. Club A further indicates that this ‘was clearly understood by the intermediary who passed it to Club E and to the player’.

54. As the player did not arrive in the Country B on 21 September 2015, Club A holds that ‘the loan agreement will not be completed and the player will not be able to play with Club A’. As a result, Club A holds to have had no other choice than to terminate the loan agreement with just cause. Moreover, Club A explains that the loan agreement did not come to the point to be effective due to the player’s absence, and that consequently ‘the employment agreement between Club A and the player was not effective as well’.

55. Regarding the amounts claimed by the player, Club A argues that the case should be considered as a non-execution case. Moreover, Club A argues that it cannot be held responsible for the (financial) consequences of any contracts the player signed with Club E and Club F.

56. What is more, Club A explains that on 4 January 2016, the player signed a contract with the club of Country D, Club L, on a loan basis. Therefore, according to Club A, the amounts claimed by the player as career damages are groundless.

57. In conclusion, Club A asks for the rejection of the player’s claim, and to oblige him to pay procedural costs as well as Club A’s legal expenses. Furthermore, Club A requests that sporting sanctions be imposed on the player.

58. In his replica, the player reiterated his initial claims and further explains that the fact that he was not present in the Country B on 21 September 2015, cannot be considered as a valid reason to terminate the loan agreement, as there was no contractual provision obliging him to be physically present in the Country B.

59. Moreover, the player points out that Player’s agent G is not Club E’ agent and that Club E was not aware of any communications between Club A and Player’s agent G. What is more, the player explains that Player’s agent G ‘may be considered’ as Club A’s agent.

60. In addition, the player states that the Football Association of Country B Regulations allegedly not allowing a club to register a player if he is not present in the Country B ‘does not make a transfer agreement invalid and neither an employment agreement’.

61. Moreover, the player explains that the amounts claimed as salaries and benefits, in the total amount of USD 898,397, can be granted to him, based on article 7 par. 2 of the contract. Also, the player argues that his claims related to career damages and specificity of the sport can be upheld, as he ‘was developing quite well and, out of the sudden, he could no longer play official matches because of the early termination of the employment agreement’. The player more precisely points out that for 102 days, the period between 21 September 2015 and 31 December 2015, he could not play any official matches.

62. In its duplica, Club A reiterated its previous arguments, and further explained that it always acted in good faith. In this respect, Club A points out that it issued a visa for the player, and that it allowed him to book the flight tickets from Country D to the Country B. Moreover, by signing both the loan agreement and the contract, Club A holds to have done its utmost efforts to finalize the transfer, despite the player’s physical absence.

63. Furthermore, Club A explains that, because the contract started on 21 September 2015, the player should have understood that he needed to be physically on the territory of the Country B by that date. According to Club A, it is otherwise ‘not understandable how can the Athlete start executing his contractual obligations’.

64. Further, Club A explains that if the player would have arrived on time ‘as per the terms of the contract’, he would not have had to bear the consequences of not being registered in line with the Football Association of Country B Regulations. Moreover, Club A states that both the player and Club E were aware of Player’s agent G’ role in concluding the transfer.

65. In addition, Club A reiterates that the loan agreement never became effective, as well as that the contract was never executed by the player.

66. In conclusion, Club A requests for the rejection of all the player’s financial and disciplinary claims, as the ‘agreement was terminated for just cause due to external factors Club A could not control’. In this respect, Club A also points out that the player could not prove that his market value decreased as of September 2015, and in any case that from January 2016, he continued his career by playing for the club of Country D, Club L.

67. In conclusion, Club A explains that it suffered severe damages due to the fact that the player could not be registered with its club. Therefore, it requests for the rejection of all the player’s claims.

68. After being requested to do so, the player informed FIFA that on 21 September 2015, he returned to Club E, where he ‘trained separated from his work colleagues’. In the period between 21 September 2015 and 5 January 2016, he was entitled to receive a monthly salary of 40,000 in the currency of Country D or – according to the player - USD 10,250.89.

69. Moreover, on 6 January 2016, the player holds to have signed a contract with the club of Country D, Club L, according to which he was entitled to a monthly salary of 60,000 in the currency of Country D or – according to the player - USD 14,887.23. As a result, in the period between 21 September 2015 and 30 June 2016, the player received a total amount of approximately 493,200 in the currency of Country D or approximately USD 122,700.

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 by Club Ato FIFA on 15 October 2015, and that the player submitted his claim to FIFA on 15 December 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 2018) 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 club of Country B and a player of Country D, with the involvement of 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 2018), and considering that the present claim was lodged by Club A on 15 October 2015 and by the player on 15 December 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 doing so, the members of the Chamber started by acknowledging that Club A, Club E and the player signed a loan transfer agreement, based on which the player was loaned from Club E to Club A in the period between 21 September 2015 and 30 June 2016.

6. Furthermore, the members of the Chamber noted that Club A and the player had also signed an employment contract on 21 September 2015, valid as from 21 September 2015 until 30 June 2016, in accordance with which Club A would pay the player a sign-on fee of USD 100,000, another payment of USD 100,000 due on 20 January 2016, as well as 9 monthly payments of USD 44,444. Furthermore, the player was entitled to an amount of 100,000 in the currency of Country B as housing allowances.

7. In continuation, the Chamber noted that on 15 October 2015, Club A lodged a claim against both the player and Club E, maintaining that the player and Club E breached – respectively, induced the breach of – the loan agreement and the employment contract, as on the starting date of the loan period, i.e. 21 September 2015, the player had not arrived on the territory of the Country B, in order to start rendering his services under the employment contract. Further, Club A held that since the player did not timely arrive in the Country B, it terminated the loan agreement with just cause and that as a result, as from 22 September 2015, also the employment contract signed between the parties ‘was not effective’. Based on the foregoing, Club A claims that it is entitled to compensation for breach of contract to be paid by the player and/or Club E.

8. Moreover, the members of the Chamber took due note of the separate claim of the player, as well as the argumentation contained therein, by means of which the player explained that the breach of the contract occurred due to the fault of Club A, since on 21 September 2015, Club A cancelled the TMS registration procedure and terminated the loan agreement, as well as on 22 September 2015, Club A unilaterally terminated the employment contract. The player points out that the reason for termination brought forward by Club A, i.e. the alleged fact that the player did not arrive on the supposedly agreed date (21 September 2015) in the Country B, does not constitute a just cause to terminate the employment contract. As a result, the player deems that Club A terminated – both the loan agreement and – the employment contract with just cause and requests to be awarded compensation for breach of contract.

9. With the aforementioned considerations in mind, in particular, the opposite position of the parties, the Chamber deemed that the underlying issue in this employment-related dispute was to determine whether the employment contract had been unilaterally terminated on 22 September 2015 with or without just cause by Club A, and subsequently, to determine the consequences of said early termination of the employment relationship by Club A.

10. Entering into the substance of the matter at hand, the Chamber first pointed out that it remained uncontested that Club A and the player had concluded an employment agreement on 21 September 2015, valid as from 21 September 2015 until 30 June 2016 and that, as per its article 13, said contract was valid upon signature of the parties and upon registration of the player by the Football Association of Country B.

11. Thereafter, the members of the Chamber analysed the claim of Club A, as well as its reply to the claim of the player, in which it alleged that due to the fact that the player did not arrive on 21 September 2015 on the territory of the Country B, he did not receive the entry stamp in his passport, which is according to Club A a prerequisite for properly registering the player with the Football Association of Country B. Club A further holds that the player was aware of his obligation to arrive on time in the Country B and that, due to his own fault, he could not be properly registered.

12. The player, on the other hand, stated that Club A did not prove that both the player and Club E were aware of the alleged requirement to arrive on 21 September 2015 in order to be registered at the Football Association of Country B. What is more, the player states that the employment contract does not hold a clause, stipulating that he needed to arrive on the territory of the Country B by no later than 21 September 2015. Such arguments are also brought forward by Club E, which also indicated that Club A should be the party aware of any procedures and obligations for the valid registration of players in the Country B, and that it should bear the (legal) consequences of an eventual non-compliance with them, if the player cannot be properly registered.

13. At this point, the members deemed it vital to refer to the contents of art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof. Based on the aforementioned legal principle, the members of the Chamber noted that Club A was not able to provide documentary evidence, proving that the player, his agent or Club E were duly informed that the player needed to be physically present on the territory of the Country B on 21 September 2015 in order to be registered with Club A.

14. What is more, after analysing both the employment contract as well as the loan agreement, the Chamber established that none of these documents held a clause, stipulating that the player needed to be present on the territory of the Country B by no later than 21 September 2015. As such, according to the members of the Chamber, the circumstance that the player did not arrive in the Country B on said date could not be upheld against him or against Club E, as it was not a contractual obligation of any of these parties.

15. In addition, irrespective of the fact of whether there was a contractual clause obliging the player to timely arrive in the Country B in order to be properly registered, the Chamber considered relevant to recall its longstanding jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of (administrative) formalities, such as, but not limited to, the registration procedure in connection with the international transfer of a player, which is the sole responsibility of a club.

16. As regards the matter at stake, Club A asserted that in order to properly register the player at the Football Association of Country B, the player had the obligation to obtain an entry stamp on his passport dated 21 September 2015 – the final date of the registration window in the Country B –, at the latest. Bearing in mind the general rule that the registration of a player and/or a contract at a national federation and/or in the TMS, does not constitute a condition for the validity of a contract, the Chamber further wished to point out that Club A would actually have been in the position to prevent the occurrence of the non-registration, had it only made clear arrangements with the player, his agent and/or Club E about the date of arrival of the player, considering the short period of time between the negotiations, the signature of the contract and the closure of the registration window. For these reasons, and whilst emphasizing once more that it is the responsibility of the engaging club to properly register a player’s contract with its national association, as well as taking into account that Club A and the player had already signed a contract, the members of the Chamber decided to reject Club A’s arguments in this regard.

17. Subsequently, the Chamber finally wished to emphasize that only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria which do not reasonably permit to expect the continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to ensure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

18. In view of the above, the Chamber observed that Club A already cancelled the TMS instructions on 21 September 2015, and that on 22 September 2015, both the loan agreement and the contract were terminated, as the player would only arrive on 22 September 2015 in the Country B. Equally, the Chamber observed that there was no evidence submitted by Club A that the player was indeed supposed to arrive in the Country B on 21 September 2015 and, even if such evidence had been presented, the Chamber deems that a delay of only one day could not legitimately be considered as a breach severe enough to justify the termination of the contract. Thus, the Chamber concluded that Club A had no just cause to cancel the relevant TMS instructions on 21 September 2015 and to announce to the player on 22 September 2015 that it would not carry on with the execution of the employment contract duly concluded with him on 21 September 2015.

19. On account of the above, the Chamber established that Club A, in particular by not carrying out the relevant steps for the registration procedure of the employment contract, which were in its responsibility, and for the player’s transfer in TMS, refused to accept the player’s services without any valid reason.

20. In light of the aforementioned, the DRC came to the unanimous conclusion that, considering the contents of the employment contract and the fact that Club A is responsible for any administrative formalities regarding inter alia the registration of the player, Club A’s conduct of 22 September 2015 constituted, in the Chamber’s view, a breach of contract without just cause and, thus Club A has to be held responsible for the consequences of such.

21. Having established that Club A 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 to reject Club A’s claim against the player and Club E and established that the player is entitled to receive from Club A an amount of money as compensation for breach of contract, in addition to any outstanding payments – if any – on the basis of the relevant employment contract.

22. Along those lines, the Chamber firstly referred to the fact that, at the time of the unilateral termination of the contract, the parties had not yet started executing the contract and the player never had the chance to render his services to Club A.

23. Consequently, the Chamber decided that on the date of the termination of the employment contract – or rather of the communication of its non-execution –, there was no outstanding remuneration payable to the player and that such contract was in fact never executed, and that due to the unjustified failure of Club A to obtain his registration at the Football Association of Country B.

24. 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 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.

25. 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 noted that the clause in article 7 par. 2 of the contract, which stipulates the consequences of a unilateral termination of the contract by Club A, i.e. that the player is entitled to receive the full value of the contract, in case of a breach of the contract by Club A.

26. The members of the Chamber analysed the content of the aforementioned clause and deemed that the circumstances therein described do not exactly match the ones of the present case, as in fact, the contract was not terminated during its course, but rather it never started being executed by any of the parties, due to the fault of Club A. For such very specific situation, the Chamber deemed that the clause in article 7 par. 2 of the contract – which is also not reciprocal – cannot be applied in the present case to determine the amount of compensation due by Club A to the player for the non-execution of a validly concluded employment contract.

27. Thus, the Chamber deemed it appropriate to calculate the amount of compensation payable by Club A to the player in application with its well-established jurisprudence regarding the non-execution of employment contracts as well as in line with 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.

28. 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 2016. Consequently the Chamber concluded that, in line with the player’s request, the amount of EUR USD 627,216 (i.e. the 9 monthly salary payments in the amount of USD 44,444 each, the sign-on fee of USD 100,000, the additional payment of USD 100,000, as well as the housing allowances in the amount of 100,000 in the currency of Country B (approximately USD 27,220), serves as the basis for the determination of the amount of compensation for breach of contract. At this point, the Chamber deemed it appropriate to explain that the contract stipulates that a housing allowance of 100,000 in the currency of Country B is in fact due to the player, but it does not specify that this should be a regularly repeated payment. In view of the foregoing, and considering that such amount corresponds to approximately USD 27,220, the Chamber considered it unlikely – and in any case nowhere contractually established – that such payment would be due on a monthly basis, but rather that is constituted a single payment to be made to the player for housing costs.

29. 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 able 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.

30. In this context, the Chamber noted that the player had returned to Club E, his previous club, where he earned in the period between 21 September 2015 and 5 January 2016 an amount of approximately USD 35,478. Furthermore, on 6 January 2016, the player signed a new employment contract with the club of Country D, Club L, valid as from 6 January 2016 until 30 June, by means of which he would receive the total amount of approximately USD 86,920. In conclusion, the Chamber deemed that the player was able to mitigate his damages with the total amount of USD 122,398 in the relevant period.

31. At this point, the Chamber established that the player had allegedly suffered damages in the total amount of USD 504,818, that is, the difference between the remaining value of the contract with Club A in the amount of USD 627,216, minus the amount of USD 122,398, which corresponds to the value of contracts with Club E and Club L.

32. What is more, the Chamber considered important to point out that, although the employment contract was fully valid and enforceable, the execution of the contract had never started. In this respect, the members of the Chamber deemed that such circumstance should be taken into consideration in the calculation of the amount of compensation for breach of contract, and decided – in accordance with its well-established jurisprudence in cases of non-execution of a contract - to reduce the aforementioned amount of USD 504,818 to one-third of it, i.e. to USD 168,272.

33. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that Club A must pay the amount of USD 168,272 to the player as compensation for breach of contract without just cause.

34. Further, with regard to the player's request for interest, the Chamber decided that the player – in line with the Chamber’s longstanding and well-established jurisprudence - is entitled to receive interest at the rate of 5% p.a. on the amount of USD 168,272 as from 15 December 2015, the date on which the player lodged his claim against Club A.

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

36. The Chamber concluded its deliberations in the present matter by rejecting the claim lodged by Club A, as it has been established that Club A had no just cause to terminate the employment contract on 22 September 2015.

III. Decision of the Dispute Resolution Chamber

1. The claim of the First Claimant / Respondent II, Club A, is rejected.

2. The claim of the Second Claimant / Respondent I, Player C, is partially accepted.

3. The First Claimant / Respondent II has to pay to the Second Claimant / Respondent I, within 30 days as from the date of notification of this decision, the amount of USD 168,272, plus 5% interest p.a. on said amount as from 15 December 2015 until the date of effective payment.

4. In the event that the amount due to the Second Claimant / Respondent I in accordance with the above-mentioned number 3. is not paid by the First Claimant / Respondent II within the stated time limit, 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 Second Claimant / Respondent I is rejected.

6. The Second Claimant / Respondent I is directed to inform the First Claimant / Respondent II 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