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 between the parties

I. Facts of the case

1. On 5 June 2014, the player of Country B, Player A (hereinafter: player or Claimant), and the club of Country D, Club C (hereinafter: club or Respondent), concluded the “Services Agreement” (hereinafter: agreement) valid as from 1 July 2014 until 30 June 2016.

2. According said agreement, the club undertook to pay the player a monthly salary in the amount of 2,200 in the currency of Country D. The contract further details that said amount “shall be paid to the bank card of the [player] within 14 days from the date of the calculation for the last month of the contract, the payment will be given to the [player] on the last day of each calendar month of the contract”.

3. Art. 7 par. 2 of the agreement establishes that: “Each party shall have the right to terminate this agreement with a termination period of preservation for 1 month”.

4. Art. 9 of the agreement reads as follows: “All issues that can not be settled by this agreement shall be settled in accordance with the provisions of law of Country D, in particular, in accordance with the provisions of the Civil Code”.

5. On 4 July 2014, the parties concluded an employment contract (hereinafter: contract) valid as from 4 July 2014 until 30 June 2016.

6. According to the contract, the club undertook to pay the player a monthly remuneration in the amount of 12,800 in the currency of Country D (approx. EUR 3,100), payable by the 10th day of the following month.

7. Art. 3 par. 2 of the contract establishes that: “As part of its features, the Club provides the following:

[…]

c. Medical care, adequate sanitation, provision of appropriate medical equipment”.

8. Art. 12 of the contract reads as follows: “The contract may be revoked (canceled) by the Club and / or the player in accordance with the conditions specified in Regulation No. II / 12 of the Board of the Football Federation of Country D, dated May 19, 2002.”

9. Art. 13 par. 1 of the contract establishes that: “In matters that can not be regulated by this Contract, it is necessary to apply to the relevant provisions of the current legislation, the provisions of Football Federation of Country D, in the first place”.

10. Art. 13.3 of the contract stipulates: “In the event of any dispute by relating to the terms and conditions of this Contract, the parties apply to the Arbitration Court of the Football Federation for the consideration”.

11. Furthermore, according to art. 13.5 of the contract, “The decisions II / 11 and II / 12 of the Board of the Football Federation of Country D are an integral part of this contract. In signing this contract the Player and the Club confirm that they have read all the above provisions and liabilities, and are ready for their proper compliance”.

12. According to the resolution no. II./12 of the Management Board of the Football Association of Country D, “any dispute concerning the validity, the existence or the termination of the Contract are settled by the Sports-related Dispute Resolution Chamber. Disputes concerning property rights and non-property-rights, which could be subject of an amicable settlement resulting from the Contract, are submitted by the parties to the Court of Arbitration for Sport dealing with football related issues”.

13. On 19 June 2015, the club terminated the contract due to the player’s injury. In particular, the club referred to Art. 13 par. 1 of the contract and to a “Resolution of the Management Board of the Football Association of Country D”.

14. Also on 19 June 2015, the player sent a reply via email to the club stating that it cannot terminate the contract due to an injury. In said email, the player requested the club to either revoke its termination or to pay the player compensation in the amount of the residual value of the contract.

15. On 22 June 2015, the club sent a second termination notice, dated 15 June 2015, terminating the agreement referring to Art. 7 par. 2 of the agreement and alleging that “the notice period starts with the day you receive this statement”, to which the player replied on the same day reiterating the objections raised in his letter of 19 June 2015.

16. On 3 July 2015, the player sent a reminder to the club, giving it a time-limit until 6 July 2015 to revoke its termination or to pay the player compensation in the amount of the residual value of the contract.

17. On 9 July 2015, the club replied to the player’s correspondence refusing to revoke its termination.

18. On 9 July 2015, the player lodged a claim in front of FIFA against the club for breach of contract without just cause and requested payment of the following monies:

- 6,600 in the currency of Country D corresponding to the salaries of April, May and June 2015 as per the agreement plus 5% interest p.a. as of the 15th day of the following month;

- 25,600 in the currency of Country D corresponding to the salaries of April and May 2015 as per the contract plus 5% interest p.a. as of the 11th day of the following month;

- EUR 4,227 as medical costs;

- 26,400 in the currency of Country D as compensation for breach of the agreement plus 5% interest p.a. as of 23 July 2015;

- 166,400 in the currency of Country D as compensation for breach of contract plus 5% interest p.a. as of 29 June 2015.

Furthermore, the player requested to impose sporting sanctions on the club.

19. In his arguments, the player held that the club terminated the contract without just cause, since an injury does not constitute a valid reason to terminate a contract. In this regard, the player pointed out that that the club’s application of the “Resolution of the Management Board of the Football Association of Country D” was “wrong” and “erroneous”, since art. 13. par. 1 of the contract does refer to regulations and not to “resolutions” even more considering that said resolution was adopted on 27 March 2015, i.e. after the date of the relevant employment contract.

20. Moreover, the player argued that he picked up the relevant injury in November 2013 but continued playing for the club until summer 2014, when the club offered him the new contract.

21. The player further argued that the agreement needs to be considered as part of the employment relationship and not as an image rights contract, since it contains elements directly linked to services of the player, such as the similar duration compared to the contract, the wording “monthly salary” and “wages”. Moreover, the player pointed out that the agreement contains all the essentialia negotii of an employment contract.

22. Furthermore, he argued that the club did not have just cause to terminate the agreement, since the invoked “one-month-notice” is “highly arbitrary” and that said article goes against FIFA regulations and the principle of contractual stability.

23. Taking into account the above, the player claimed that the salaries of April to June 2015 as per the agreement, i.e. 6,600 in the currency of Country D, and the salaries from April and May 2015 as per contract, i.e. 25,600 in the currency of Country D, remained outstanding.

24. Based on the contract, the player also claimed reimbursement of medical costs in the amount of EUR 4,227.

25. The club, for its part, rejected the claim of the player. First, the club contested FIFA’s competence in the matter at hand. In this regard, the club argued that the agreement and the contract are different contracts, independent from each other and subject to different jurisdictions.

26. In this context, the club argues that according to art. 9 of the agreement, the Civil Courts of Country D have exclusive jurisdiction regarding disputes arising therefrom.

27. Furthermore, the club referred to art. 13.3 and 13.5 of the contract in connection with resolution II. 12 of the Management Board of the Football Association of Country D, and held that the Sport Dispute Resolution Chamber and the Football Arbitration Court of the Football Association of Country D are competent to deal with the dispute regarding the contract. According to the club, said deciding bodies both constitute “an independent national arbitration tribunal”.

28. As to the substance, the club held that the two contracts concluded were “separate and totally independent from each other” and that “none of these contracts was an employment contract”.

29. The club sustained having terminated the agreement in accordance with its article 7 par. 2.

30. Furthermore, the club argued having terminated the contract with just cause, in accordance with art. 8 par. 5 of the resolution no. III./54 of the Management Board of the Football Association of Country D, dated 27 March 2015, which reads as follows: “The club is entitled to a unilateral declaration about termination of the Contract without fault of the Player through a statement submitted to the Player in writing under pain of nullity, only in the following cases:

[…]

b. The player due to an injury or illness that has been identified by a medical certificate, did not appear in the official matches played by the Club in the championship and cup competitions for more than a total of 180 days in a calendar year or in the Competition season, provided that notice of termination of the Contract shall be submitted accordingly until 10 January or 10 July”.

31. In this regard, art. 15 par. 1 of the resolution no. III./54 of the Management Board of the Football Association of Country D states: “Resolution No. II/12 of the Management Board of the Football Association of Country D of 19 May 2002 – The rules governing the relationship between the sports club and professional player becomes null and void.”

32. Moreover, the club held that it is not bound to reimburse the player’s medical expenses, since the contract only obliged it to provide medical care for the player.

33. In addition, the club asserted that “all receivables were covered”.

34. Upon FIFA’s request to comment only to the competence issue, the player insisted that FIFA’s Dispute Resolution Chamber is competent to deal with the present matter. In particular, the player held that the agreement does not contain an arbitration clause at all and that the arbitration clause contained in the contract is not “explicit” in favor of Dispute Resolution Chamber of the Football Association of Country D.

35. Finally, the player informed FIFA that he remained unemployed as of 19 June 2015 and 30 June 2016.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 9 July 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 and 2 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 body on the basis of art. 9 of the agreement invoking an alleged exclusive jurisdiction of the Civil Courts of Country D as well as on the basis of art. 13.3 and art. 13.5 of the contract invoking an alleged competence of the Sport Dispute Resolution Chamber and the Football Arbitration Court of the Football Association of Country D.

4. In turn, the DRC noted that the Claimant rejected such position and insisted that FIFA has competence to deal with the present matter.

5. Taking into account the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. In this regard, the members of the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

6. In relation to the above, the Chamber also 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 can settle an employment-related dispute between a club and a player of an international dimension, is that the competence of the relevant arbitration tribunal derives from a clear reference in the employment contract.

7. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the agreement and/or the contract at the basis of the present dispute actually contained a clear and exclusive arbitration clause in favour of the Civil Courts of Country D, the Sport Dispute Resolution Chamber or the Football Arbitration Court of the Football Association of Country D.

8. Subsequently, the Chamber referred to art. 9 of the agreement, which stipulates “All issues that can not be settled by this agreement shall be settled in accordance with the provisions of law of Country D, in particular, in accordance with the provisions of the Civil Code”.

9. Analysing its content, the Chamber deemed it of utmost importance to highlight that the art. 9 of the agreement does not consist in a choice of jurisdiction, but rather a choice of applicable law which does not concern procedural matters. The members of the Chamber therefore concluded that the agreement does not contain any arbitration or jurisdiction clause. Hence, art. 9 of the agreement clearly does not refer to Civil Courts of Country D or other national deciding bodies, as argued by the Respondent.

10. Furthermore, the DRC referred to art. 13.3 of the contract, which reads as follows: “In the event of any dispute by relating to the terms and conditions of this Contract, the parties apply to the Arbitration Court of the Football Federation for the consideration”. Furthermore, according to art. 13.5 of the contract, “The decisions II / 11 and II / 12 of the Board of the Football Federation of Country D are an integral part of this contract. In signing this contract the Player and the Club confirm that they have read all the above provisions and liabilities, and are ready for their proper compliance”. Said resolution no. II./12 of the Management Board of the Football Association of Country D states that “any dispute concerning the validity, the existence or the termination of the Contract are settled by the Sports-related Dispute Resolution Chamber. Disputes concerning property rights and non-property-rights, which could be subject of an amicable settlement resulting from the Contract, are submitted by the parties to the Court of Arbitration for Sport dealing with football related issues”.

11. In view of the content of the aforementioned clauses, the members of the DRC were of the opinion that art. 13.3 and 13.5 of the employment contract make references to different national deciding bodies in the sense of art. 22 lit. b) of the aforementioned Regulations. Therefore, the members of the Chamber deem that said clauses can by no means be considered as a clear arbitration clause in favour either of the national deciding bodies, i.e. of the Sport Dispute Resolution Chamber or the Football Arbitration Court of the Football Association of Country D, and, therefore, cannot be applicable. In this regard, the Chamber pointed out that this lack of clarity is also reflected in the Respondent’s argumentation since it refers to the alleged competence of the deciding bodies of both the Sport Dispute Resolution Chamber or the Football Arbitration Court of the Football Association of Country D, without further precision.

12. On account of the above, the Chamber established that the Respondent’s 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 deal with the present matter as to the substance.

13. In continuation, 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 2016), and considering that the present claim was lodged on 9 July 2015, the 2015 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

14. 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.

15. In this respect, the Chamber recalled that the employment relationship between the parties was governed by two contracts, the agreement signed on 5 June 2014 and the contract concluded on 4 July 2014, both valid until 30 June 2016.

16. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent, maintaining that the latter shall be held liable for the early termination of the contracts. In this regard, the DRC took note, that the Claimant argued that the Respondent did not have just cause to terminate the contract and consequently, requested payment of his outstanding dues as well as compensation for breach of contract.

17. The DRC further noted that the Respondent, for its part, rejected the claim and argued having had the right to terminate the contract due to an injury, since the resolution no. III. 54 of the Management Board of the Football Association of Country D provides such option and since the agreement was terminated in accordance with its content.

18. Having said this, the DRC acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated by the Respondent with or without just cause and to decide on the consequences thereof.

19. With the above in mind, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, bearing in mind 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.

20. The members of the Chamber noted that the club sent two separate termination notices, one referring to the contract dated 19 June 2015, and one relating to the agreement on 22 June 2015. After having examined the content of the agreement and the contract, the DRC considered that the agreement is an integral part of the contract and as such the DRC established that the employment relationship was de facto terminated on 19 June 2015 with the first termination notice delivered to the Claimant.

21. Subsequently, the DRC recalled that the Respondent terminated the employment relationship on 19 June 2015, due to the player’s injury referring to the resolution no. III.54. of the Management Board of the Football Association of Country D and its art. 8 par. 5, which apparently provides the possibility to terminate a contract due to injury.

22. First and foremost, the Chamber noted that said resolution came into force 27 March 2015 and was therefore not in force at the time the parties signed the agreement and the contract, which is why it cannot be taken into account.

23. However, the DRC deemed it necessary to stress that the content of art. 8 par. 5 of the resolution no. III.54. of the Management Board of the Football Association of Country D is in direct conflict with the FIFA regulations and the long-standing jurisprudence of this Chamber, according to which an injury or the health condition of a player can be no valid reason to cease the payment of a player’s remuneration and even less so to terminate an employment contract.

24. On account of the above, the members of the Chamber unanimously reached the conclusion that the Respondent terminated the contract and the agreement on 19 June 2015 without just cause.

25. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

26. Bearing in mind that the Respondent failed to submit any evidence in support of its argument that “all receivables were covered”, the Chamber concluded that at the moment of the termination of the employment relationship, the amounts of 4,400 in the currency of Country D, corresponding to the salaries of April and May 2015, resulting of the agreement as well 25,600 in the currency of Country D, corresponding to the salaries of April and May 2015 as per the agreement, remained outstanding.

27. Consequently, on account of the above and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amount of 30,000 in the currency of Country D with regard to the remuneration due to him relating to April and May 2015.

28. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of 30,000 in the currency of Country D as of the respective due dates, until the date of effective payment.

29. Subsequently, the DRC stressed that the player’s claim for reimbursement of the medical costs must be rejected, due to the lack of contractual basis.

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

31. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

32. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

33. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

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

35. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination without just cause by the Respondent until 30 June 2016, bearing in mind that he would have received in total 195,000 in the currency of Country D as remuneration for the period as from 19 June 2015 until 30 June 2016 resulting from the contract and the agreement. Consequently, the Chamber concluded that the amount of 195,000 in the currency of Country D serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

36. In continuation, the Chamber verified as to whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages. In this regard, the members of the Chamber noted that the Claimant had not signed any new employment contract within the period of time between the termination of the contract and its original date of expiry and, thus, had not been able to mitigate damages.

37. Consequently, on account of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of 195,000 in the currency of Country D as compensation for breach of contract to the Claimant.

38. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 9 July 2015, until the date of effective payment.

39. The members of the Chamber concluded their deliberations by rejecting any further claim of the Claimant.

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 as from the date of notification of this decision, outstanding remuneration in the amount of 30,000 in the currency of Country D plus 5% interest p.a. until the date of effective payment as follows:

- 5% p.a. as of 1 May 2015 on the amount of 2,200 in the currency of Country D;

- 5% p.a. as of 11 May 2015 on the amount of 12,800 in the currency of Country D;

- 5% p.a. as of 1 June 2015 on the amount of 2,200 in the currency of Country D;

- 5% p.a. as of 11 June 2015 on the amount of 12,800 in the currency of Country D.

4. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of 195,000 in the currency of Country D plus 5% interest p.a. as of 9 July 2015 until the date of effective payment.

5. In the event that the aforementioned amounts plus interest are not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

6. Any further claim lodged by the Claimant is rejected.

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance are 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

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl: CAS directives