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 7 June 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 7 June 2018,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), member

Jon Newman (United States of America), member

Wouter Lambrecht (Belgium), 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 22 July 2015, the player of Country B, Player A (hereinafter: the Claimant), and the club of Country D, Club C (hereinafter: the Respondent), signed an employment contract (hereinafter: the contract) valid as from its date of signature until 30 June 2017.

2. According to clause 4. of the contract, the Claimant was entitled, inter alia, to receive following amounts:

 150,192 in the currency of Country D for the period as from 22 July 2015 to 30 June 2016, payable in 12 equal monthly instalments in the amount of 12,516 in the currency of Country D due on the 10th day of each next month;

 178,236 in the currency of Country D for the period as from 1 July 2016 to 30 June 2017, payable in 12 equal monthly instalments in the amount of 14,853 in the currency of Country D, due on the 10th day of each next month.

3. Furthermore, clause 11.2 of the contract stipulates the following:

“The Parties unanimously declare that any disputes (…) shall be solved by competent bodies of Football Association of Country D, including by the Sports Dispute Resolution Chamber (…). Any disputes arising out of or in connection to this contract shall be settled by the Football Arbitration Court of the Football Association of Country D”.

4. Equally, clause 14.3 of the contract provides the following:

“(...) each party shall be entitled right to pronounce an opinion on the contract before the Commission for Players Statute or the FIFA Amicable Court”.

5. Moreover, clause 14.1 of the contract establishes the following:

“The Rules governing the Relations between a Sports Club and a Professional Player accepted by the Resolution of the Football Association of Country D dated 27 March 2015 (hereinafter: the Rules), i.e Minimum Requirements for Standard Contracts of the Players in the Professional Football Sector as amended are an integral part of this contract.”

6. Additionally, according to clause 2 of the contract, “[the Claimant] declares that [the Respondent] made the content of [the Rules] available to [the Claimant].”

7. Moreover, clause 3 of the contract provides the following: “If this contract does not provide otherwise, the rights and obligations of the parties are defined by [the Rules] (…)”.

8. Furthermore, clause 8.5 of the Rules provides the following:

”[The Respondent] is entitled to a unilateral declaration without fault of [the Claimant] (…) after transfer of [the Respondent] to a lower competition class due to sporting competition, provided that notice of termination of the Contract shall be made until 10 July, and [the Respondent] will not have towards [the Claimant] any arrears in the payment of contract remuneration and [the Respondent] shall pay to [the Claimant] a compensation in the amount of equivalent of one month individual remuneration(…).”.

9. By means of a letter dated 7 July 2016, which was titled “statement on termination of a contract”, (hereinafter: the termination notice) the Respondent unilaterally terminated the contract in writing. The termination notice reads as follows:

“Due to transfer of Club C to a lower competition class resulting from the sports competition, acting pursuant to art. 8 section 5 letter c) of the Resolution of 27 March 2015 of the Football Association of Country D on Minimum requirements for standard contracts of players in the sector of professional football, I hereby terminate the contract concluded on 22 July 2015 between Player A and Club C through no fault of the [the Claimant]. [The Respondent] hereby states that as of the day of this statement all financial liabilities resulting from aforementioned contract shall be paid, therefore [The Respondent] has no overdue liabilities towards [the Claimant]. [The Respondent] does also declare that of the day of this statement [the Claimant] shall be paid compensation in the amount constituting the equivalent of one month reward(…), i.e. in the amount of 14,853 in the currency of Country D.”

10. On an unspecified date, the Claimant sent a letter to the Respondent referring to the termination notice, disagreeing with it and stating that the Football Association of Country D had not delivered a confirmation about the early termination of his contract to him.

11. On 5 April 2017, the Claimant lodged a claim against the Respondent before FIFA regarding compensation for breach of contract due to the Respondent’s unilateral termination of the contract without just cause. In particular, the Claimant requested, after amending his claim, compensation for breach of contract in the total amount of 163,383 in the currency of Country D, amount corresponding to 11 monthly salaries of 14,853 in the currency of Country D, as from August 2016 until June 2017, plus 5% interest p.a. “within 5 days of the issue of this decision”. In addition, the Claimant requested to be reimbursed an unspecified amount related to procedural costs.

12. In his claim, the Claimant acknowledged having received the termination notice, which according to him refers to a “non-existent paragraph in the contract”. Furthermore, the Claimant explained that the Respondent allegedly excluded him from the “A team”, which in his view consists in itself a breach of contract.

13. In its reply, the Respondent contested FIFA’s competence to deal with the matter at stake, arguing that the matter should be referred to the competent bodies of the Football Association of Country D while referring to clause 11.2 of the contract.

14. In this respect, upon FIFA’s request to provide the pertinent documentation in relation to the independent arbitration tribunal in Country D, the Respondent stated that ”the competence of Dispute Resolution Chamber of Football Association of Country D is included in the contract of the Player (Article 11 Section 2) as well as in [the Rules]”.

15. As to the substance of the matter, the Respondent stated that it unilaterally terminated the contract on the basis of its relegation to a lower league, maintaining that it acted in accordance with clause 8.5 of the Rules, document which the Claimant allegedly was made aware of.

16. Along this line, the Respondent referred to the termination notice, which acknowledges compensation of one month salary, and which the Respondent claims having paid on 7 July 2016. In this regard, the Respondent provides proof of payment of 12,714 in the currency of Country D corresponding to “compensation for contract dissolution”.

17. Moreover, the Respondent states that the Claimant did not appeal the termination of the contract in front of the Dispute Resolution Chamber of the Football Association of Country D “7 days after it was notified to the player”, in accordance with the Rules.

18. Lastly, the club maintained that the Claimant was not part of the “A team”, but merely due to sporting reasons.

19. in his replica, the Claimant rejected the argumentation of the Respondent relating to the unilateral termination of the contract and maintained that the Respondent did not have a just cause to terminate the contract, as the contract does not refer to a “unilateral termination of the contract due to the [The Respondent]’s relegation into a lower league” and that he was allegedly the only player to receive such termination notice.

20. As to the issue of competence the Claimant declared that he “turned to FIFA on the grounds that he is a citizen of Country B who has a temporary stay outside Country D” and requested FIFA “to decide in accordance with his proposal”.

21. In its duplica the Respondent reiterated its position in respect to the competence and substance of the matter.

22. After being requested to do so by FIFA, the Claimant stated that he signed a contract with the club of Country E, Club F, valid as from 6 September 2016 until 31 January 2017, according to which he was entitled to receive a monthly salary of EUR 1,000.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 5 April 2017. Consequently, the 2017 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a club and a player that have an international dimension.

3. As a consequence, the DRC would, in principle, be competent to decide on the present litigation which involves a player of Country B and a club of Country D regarding an employment-related dispute.

4. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of clause 11.2 of the contract alleging that the competent body to deal with any dispute deriving from the relevant employment contract is the “Dispute Resolution Chamber of Football Association of Country D”.

5. On the other hand, the Chamber noted that the Claimant insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the Respondent.

6. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the 2018 edition 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. Equally, the members of the Chamber referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

7. 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 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.

8. 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 employment contract at the basis of the present dispute contained a clear jurisdiction clause.

9. In this respect, the Chamber recalled that clause 11 par. 2 of the employment contract stipulates that: “The Parties unanimously declare that any disputes (…) shall be solved by competent bodies of Football Association of Country D, including by the Sports Dispute Resolution Chamber (…). Any disputes arising out of or in connection to this contract shall be settled by the Football Arbitration Court of the Football Association of Country D”.

10. Furthermore, the Chamber recalled that art. 14 par. 3 of the employment contract stipulates that: “(...) each party shall be entitled right to pronounce an opinion on the contract before the Commission for Players Statute or the FIFA Amicable Court”.

11. Having examined the relevant provisions, the Chamber came to the unanimous conclusion that taking into account that the contract contains both clause 11 par. 2 and the provision contained in clause. 14 par. 3 of the contract, which makes a reference to FIFA’s jurisdiction, in consequence, the contract does not provide for an exclusive jurisdiction clause in favour “Dispute Resolution Chamber of Football Association of Country D”. What is more, the DRC duly observed that despite being invited to provide documentation in order to properly evaluate if the “Dispute Resolution Chamber of Football Association of Country D” complies with the standards of an independent arbitration tribunal guaranteeing equal representation and fair proceedings, the Respondent did not do so.

12. On account of all the above, the Chamber established that the Respondent’s objection towards 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.

13. In continuation, the Chamber analyzed 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 (editions 2016 and 2018) and, on the other hand, to the fact that the present claim was lodged on 5 April 2017. Therefore, the Dispute Resolution Chamber concluded that the 2016 edition of the Regulations on the Status and Transfer of Players (hereinafter: the 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, and entering into the substance of the matter, the Chamber continued 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.

15. First of all, the members of the Chamber acknowledged that, on 22 July 2015, the Claimant and the Respondent had concluded an employment contract valid as from 22 July 2015 until 30 June 2017.

16. The Chamber further observed that the Claimant lodged a claim in front of FIFA against the Respondent seeking payment of the total amount of 163,383 in the currency of Country D in respect to compensation for breach of contract, asserting that the Respondent had terminated the contract without just cause on 7 July 2016.

17. Along this line, the Chamber noted that the unilateral termination of the contract on 7 July 2016 had remained uncontested by the Respondent, however, according to the Respondent, it had just cause to terminate the contract on the basis of clause 8.5 of the Rules. Moreover, it was duly noted by the DRC that Respondent held that it had paid compensation for breach of contract to the Claimant in accordance with what is stipulated in the mentioned clause 8.5 of the Rules.

18. At this stage, the members of the Chamber considered important to highlight that said clause is only included in the so-called Rules, but not in the contract.

19. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute to determine whether the employment contract had been unilaterally terminated with or without just cause by the Respondent and to determine the financial consequences for the party that is to be held liable for the early termination of the pertinent employment contract.

20. Along this line, the Chamber turned its attention to clause 8.5 of the Rules, which was invoked by the Respondent as the basis of the unilateral termination.

21. In this respect, according clause 8.5 of the Rules, the Respondent may terminate the contract unilaterally, if “The [the Respondent] is entitled to a unilateral declaration without fault of [the Claimant] (…) after transfer of [the Respondent] to a lower competition class due to sporting competition, provided that notice of termination of the Contract shall be made until 10 July, and [the Respondent] will not have towards [the Claimant] any arrears in the payment of contract remuneration and [the Respondent] shall pay to [the Claimant] a compensation in the amount of equivalent of one month individual remuneration(…).”

22. In this respect, the Chamber were of the opinion that clause 8.5 of the Rules consists in a relegation clause and against such background, the members of the DRC unanimously concurred that a clause of such high importance had to be inserted in the contract itself. What is more, the members of the Chamber deemed that a mere referral to such clause is not sufficient. Furthermore, the Chamber examined the clause and noted that the clause did not fulfil the requirement of reciprocity, as it provides for a unilateral termination right to the benefit of the Respondent only. In particular, it appears that in case of relegation of the Respondent due to sporting merits, only the Respondent has the right to unilaterally terminate the contract and such right is not granted to the Claimant.

23. Therefore, the Chamber decided that the Respondent could not legitimately terminate the contractual relation with the Claimant by making use of clause 8.5 of the Rules and as a consequence, the members of the DRC arrived to the unanimous conclusion that the Respondent did not have just cause to terminate the contract on 7 July 2016.

24. On account of the above, the Chamber decided that the Respondent had no just cause to unilaterally terminate the contract between the Claimant and the Respondent on 7 July 2016 and that, consequently, the Respondent is to be held liable for the early termination of the employment contact without just cause.

25. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

26. In this regard, the Chamber took note that apparently the Claimant has received all of his dues in accordance with the contract.

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

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

29. Subsequently, and in order to evaluate the compensation to be paid by the Respondent, the members of the Chamber took into account the remuneration due to the Claimant in accordance with the employment contract as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber pointed out that the Claimant did not contest having already received 12,714 in the currency of Country D as compensation for breach of contract.

30. Consequently, the Chamber concluded that the remaining value of the contract as from its early termination by the Respondent until the regular expiry of the contract amounts to 178,236 in the currency of Country D, and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

31. In continuation, the Chamber remarked that following the early termination of the employment contract at the basis of the present dispute the Claimant had found new employment with the Club F, in accordance with which he would be remunerated with a monthly salary of EUR 1,000. Consequently, in accordance with the constant practice of the DRC and the general obligation of the Claimant to mitigate his damages, such remuneration under the new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract.

32. Hereto, the Chamber established that the player was able to mitigate his damages by EUR 5,000. Furthermore, the Chamber took into consideration for the calculation of the amount of compensation that the Claimant would be entitled to the amount that the Respondent had paid already for this concept, which was 12,714 in the currency of Country D. Having taken into consideration those amounts, the Chamber proceeded to calculate the amount of compensation due to the Claimant.

33. In view of all of the above, the Chamber decided that the Respondent must pay the amount of 143,765 in the currency of Country D to the Claimant as compensation for breach of contract without just case, which is considered by the Chamber to be a reasonable and justified amount as compensation.

34. As to the interest request by the Claimant, the Chamber was of the unanimous opinion that due to the unclear request of the Claimant in this regard, and in order to avoid a possible issue regarding the principle of ultra petita, to award standard punitive interest. That is, if the amount awarded is not paid within

30 days of notification of the decision, interest of 5% p.a. will start running over the awarded amount as from said date.

35. Moreover, the DRC decided to reject the Claimant’s claim pertaining to reimbursement of legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

36. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is 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 has to pay to the Claimant, compensation for breach of contract in the amount of 143,765 in the currency of Country D, within 30 days as from the date of notification of this decision.

4. In the event that the amount due to the Claimant in accordance with the above-mentioned number 3. is not paid by the Respondent within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and 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 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

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl: CAS directives