DECISIONI DI GIUSTIZIA SPORTIVA • F.I.F.A. - CAMERA DI RISOLUZIONE DELLE CONTROVERSIE - CONTROVERSIE DI LAVORO

• Data decisione: 31 agosto 2017 • Stagione sportiva: 2017/2018

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 31 August 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 31 August 2017,

in the following composition:

Geoff Thompson (England), Chairman

Theo van Seggelen (Netherlands), member

Wouter Lambrecht (Belgium), member

Todd Durbin (USA), member

Takaya Yamazaki (Japan), 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 30 June 2014, the Player of Country B, Player A (hereinafter: the Claimant) signed an employment contract with the Club of Country D, Club C (hereinafter also and collectively with its legal successor, Club C1: the Respondent – see point I.17 below) valid from 1 July 2014 until 30 June 2015.

2. The contract provides for the monthly payment of 23,000 to be paid on the 15th day of the following month. From 1 January 2015, the Claimant’s salary was to be increased to 28,000. The contract further provides for the payment of 28,000 for every twenty championship matches played, in which the Claimant has played in at least 20 minutes in each game.

3. The contract provides in its art VI par. 5 that “the Player is aware that in case of relegation or exclusion of the A-team from the competition, a major decrease of the Club’s incomes will follow. The Parties to the Contract agreed explicitly that the Club is allows for these cases to reduce the monthly remuneration unilaterally by as much as 50%”.

4. The contract provides in its art. X par. 1 lit. h) that “the validity and effectiveness of the Contract terminates for the following reasons (…) h) written notice of termination with an immediate effect in case of relegation to a lower football league competition”.

5. The contract provides in its art. X par. 9 b) that “in case of unilateral termination of this contract without a just cause by the Club, the Club undertakes to pay compensation to the Player amounting to 11,500 (in words: eleven thousand five hundred) for each full month remaining until the end of the fixed-term on which is the contract concluded (sic.)”.

6. In case of unilateral termination without just cause by the Claimant, the contract provides in its art. X par. 9 a) that the player has to pay 500,000 (approx. EUR 18,200) to the club, minus 5,000 for each month of the duration of the contractual relationship.

7. The contract provides in its art. XI par. 4 that “all disputes arising from this Contract or any other disputes between the Parties to the Contract will be settled by members of the Dispute Resolution Chamber in arbitration proceedings according to the relevant provisions of Football Association E Statutes; under conditions of the FIFA Regulations on the Status and Transfers of Players, the disputes can be resolved by the Dispute Resolution Chamber with the right to appeal to the Court of Arbitration for Sport”.

8. On 21 May 2015, the Claimant put the Respondent in default of outstanding remuneration amounting to 84,000, corresponding to the salaries of March 2015 and April 2015 as well as the “bonus for 20 matches”, i.e. 2x 28,000 for salaries and a further 28,000 for bonuses.

9. On 9 June 2015, the Claimant reiterated the default notice for the total amount of 84,000. In addition, with reference to art. X par. 1 lit. h) of the employment contract (cf. point 4 above), the Claimant indicated that since the Respondent was relegated, he formally terminated the employment contract with immediate effect.

10. On 16 June 2015, the Claimant lodged a claim against the Respondent before FIFA requesting to be paid a total of 140,000 as outstanding remuneration and compensation as follows plus 5% interest on the total amount from an unspecified date in addition to legal expenses:

a. 112,000 as outstanding remuneration:

i. 28,000 for the each of the months of March, April and May 2015;

ii. 28,000 for “20 match bonus”.

b. 28,000 as compensation for breach, amounting to the residual value of the contract, i.e. for June 2015

11. The Claimant claims that as the Respondent did not pay him the outstanding remuneration due to him, and in line with art. X par. 1 lit. h) of the employment contract, he had just cause to terminate said contract and is entitled to outstanding remuneration and compensation for breach.

12. In reply to the claim, the Respondent first argued that in light of the Claimant’s sporting nationality, the Dispute Resolution Chamber was not competent to hear the present matter. The Respondent claimed that the Claimant who has dual nationality of Country B and Country F, was registered with the Football Association of Country D (hereinafter: Football Association E) at the time the claim was lodged, and consequently, the present claim falls under the jurisdiction of the Football Association E. The Respondent further claimed that a jurisdiction clause was contained in the contract and that the Board of Arbitrators of Football Association E is competent in the first instance and the Arbitration Committee of the Football Association E is competent in the second instance. In addition, it claims that both bodies guarantee fair proceedings that meet all criteria of the essential principles contained in FIFA Circular Letter 1010 dated 20 December 2005.

13. As to the substance of the matter, the Respondent claims that in line with the employment contract, the Claimant was to make “maximum effort for reaching the best sport score possible of team of the Club”, and stated that on 3 June 2015 the Disciplinary Committee of the Respondent decided to impose a fine in the amount of 140,000 for repeated failure by the Claimant of his obligations. The Respondent stated that the player had not paid the fine by 9 July 2015 and the Respondent informed him that it had set off the fine against his monthly salaries, and consequently his claim for outstanding remuneration should be rejected.

14. Furthermore, the Respondent asserted that the Claimant’s claim for compensation of 28,000 should be rejected in line with art. VI par. 5 of the contract since the player’s remuneration should be reduced to 14,000 as the Respondent acknowledges having been relegated on 13 May 2015. It further stated that the relegation is not a breach in the sense of art. 17 of the Regulations on the Status and Transfer of Players.

15. In addition, the Respondent asserted that the compensation should be limited to 11,500 in line with art. X par. 9 of the employment contract (cf. point I.5 above).

16. The Claimant, for his part, noted that he is a Country F and Country B national performing in a Club of Country D and the dispute is therefore of an international dimension. He further states that the condition of equal representation is not met by any of the deciding bodies of the Football Association E. In this regard, the Claimant noted that the arbitrators are proposed by any of the parties to the dispute, nevertheless the Executive Committee has a right to exclude any arbitrator from the relevant list. In addition, the voting members of the Executive Committee are elected by the General Assembly of the Football Association E, which consists only of delegates of clubs and football associations. Therefore not players and there is no guarantee of equal representation. He added that the members of the Arbitration Committee of the Football Association E, which decides as a second instance, are also voted on by the General Assembly of the Football Association E, which consists of delegates from clubs and football associations. And therefore not players or player’s representatives and there is no guarantee of equal representation.

17. On 13 February 2017, the Football Association E informed FIFA that “Club C is not currently a member of the Football Association E and the Football Association E executive committee approved transfer of all rights and obligations, including debts, of the club to a new entity, i.e. Club C1, as a legal successor of the club. This new entity is currently member of the Football Association E and actively participates in the competitions organised under the auspices of the Football Association E.”

18. On 8 March 2017, the claim was sent to Club C for comment. Club C1 did not reply to the claim of the Claimant in spite of having been invited to do so.

19. The Claimant indicated that he had not signed any employment contract until 30 June 2015.

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 16 June 2015. Consequently, the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: the 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 2016) the Dispute Resolution Chamber would, in principle, be 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. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies, arguing that the judicial bodies of the Football Association E, namely the Board of Arbitrators of the Football Association E in the first instance and the Arbitration Committee of the Football Association E in the second instance, would be competent to deal with the present matter.

4. In this regard, the Chamber noted that the Claimant rejected such position and insisted that FIFA has jurisdiction to deal with the present matter.

5. While analysing whether it was competent to hear the present matter, the Chamber deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC is competent to settle an employment-related dispute between a club and a player of an international dimension, is that the jurisdiction of the relevant national arbitration tribunal or national court derives from a clear reference in the employment contract.

6. The Chamber, while analysing art. XI par. 4 of the contract, concluded that such clause is not clear and does not refer to the exclusive jurisdiction of a particular judicial body within the Football Association E; on the contrary, it even refers to the jurisdiction of the Dispute Resolution Chamber, in accordance with the Regulations on the Status and Transfer of Players. Hence, art. XI par. 4 of the contract clearly does not refer to a national dispute resolution chamber or any similar arbitration body in the sense of art. 22 lit. b) of the Regulations on the Status and Transfer of Players.

7. Furthermore, the Chamber was eager to emphasise that the mere fact that the Claimant was registered with the Football Association E does not trigger the competence of the judicial bodies of the said national federation. Indeed, in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the DRC remains competent so long as the player and the club have different nationalities, which is the case in the present matter.

8. Consequently, the Chamber established that the Respondents’ objection to the competence of FIFA to deal with the present matter has to be rejected and that the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

9. Subsequently, 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 referred, on the one hand, to art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2016) and, on the other hand, to the fact that the present claim was lodged on 16 June 2015. The Dispute Resolution Chamber concluded that the 2015 edition the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

10. 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.

11. First, the Chamber recalled that the parties were bound by a contract valid as from 1 July 2014 until 30 June 2015.

12. The Claimant proceeded to the termination of the contract on 9 June 2015, having previously put the Respondent in default on 21 May 2015 of payment of some allegedly outstanding remuneration amounting to 84,000, corresponding to the salaries of March 2015 and April 2015 as well as the “bonus for 20 matches”, i.e. 2x 28,000 for salaries, and a further 28,000 for bonuses. In the termination letter dated 9 June 2015, the Claimant also referred to art. X par. 1 lit. h) of the employment contract and indicated that since the Respondent was relegated, he was hereby formally terminating the employment contract with immediate effect.

13. The Respondent, for its part, rejected the Claimant’s claim, arguing that it did not owe the Claimant any outstanding remuneration since such amounts should be set off against a fine which was imposed on the Claimant by its Disciplinary Committee in the amount of 140,000.

15. In addition, the Respondent asserted that any compensation awarded should in any case be limited to 11,500 in line with art. X par. 9 of the employment contract.

16. With the aforementioned in mind, the Chamber first proceeded to analyse whether the Claimant had had just cause to terminate the employment contract and in the affirmative, what would be the consequences thereof.

17. In doing so, the Chamber determined that art. X par. 1 lit. h) of the contract upon which the Claimant relied to prematurely put an end to the employment relationship with the Respondent is valid, as it provides equal rights for both parties to terminate the contract in case the Respondent would be relegated. Since it remained uncontested that the Respondent was relegated in May 2015, the Chamber deemed that the Claimant had validly exercised his right to terminate the contract; in other words, the Claimant had had a just cause to terminate the contract on 9 June 2015 due to the Respondent’s relegation.

18. Having established that the Claimant had terminated the contract with the Respondent with just cause, the DRC proceeded to determine the consequences of said termination.

19. In this regard, the Chamber underlined that the Respondent had acknowledged that it had not paid the Claimant the claimed remuneration but argued that these amounts should be set off against a fine in the amount of 140,000 which was imposed on the Claimant by the Respondent’s Disciplinary Committee for failure to meet his contractual obligations.

20. In this context, the Chamber wished to point out that, as a general rule, the imposition of a fine, or any other available financial sanction in general, shall not be used by clubs as a means to set off outstanding financial obligations towards players.

21. Furthermore, the Chamber noted that the fine of 140,000 represented 5 monthly salaries and shall thus be viewed as highly disproportionate.

22. Finally, the Chamber underlined that in principle a fine sanctioning a player’s bad sporting performance cannot be seen as valid.

23. In view of the above, the Chamber decided that the Respondent had no valid reason to set off the player’s remuneration in view of the fine imposed on him and that the Respondent must pay the outstanding remuneration in accordance with the principle of pacta sunt servanda.

24. Therefore, the Claimant is owed outstanding remuneration pertaining to the months of March, April, May and 9 days of June 2015, i.e. all salaries due up until the date of termination of the contract, amounting to 94,200, plus 5% interest p.a. on said amount as from the date of the claim, i.e. 16 June 2015.

25. The Chamber decided, however, to reject the Claimant’s claim for alleged outstanding bonuses in the amount of 28,000 for 20 matches played due to a lack of evidence provided (cf. art. 12 par. 3 of the Procedural Rules).

26. In continuation, the Chamber addressed the Claimant’s claim for compensation for breach of contract. In this regard, the DRC found that, despite the contents of art. 17 par. 1 of the Regulations, which in principle entitles a player to receive compensation in case he terminated the contract with just cause, in the present matter the contract which was terminated contained a reciprocal clause according to which “the validity and effectiveness of the contract terminates (…) with written notice of termination (…) in case of relegation to a lower league competition”. Thus, and since the Respondent was indeed relegated in May 2015, the DRC determined that all effects of the contract are deemed to have ceased from the date of termination, i.e. 9 June 2015, and no compensation is owed to the Claimant.

27. Finally, the Dispute Resolution Chamber decided to reject the Claimant’s claim pertaining to legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

28. The Chamber concluded its deliberations by deciding that all further claims of the Claimant are rejected.

*****

III. Decision of the Dispute Resolution Chamber

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

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, has to pay to the Claimant within 30 days from the date of notification of this decision, outstanding remuneration in the amount of 94,200 plus 5% interest p.a. from 16 June 2015 until the date of effective payment.

4. In the event that the aforementioned sum plus interest is not paid within the stated time limit, 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 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

www.tas-cas.org

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives