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

• Data decisione: 7 marzo 2019 • Stagione sportiva: 2018/2019

F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2018-2019) – fifa.com – atto non ufficiale – Decision 7 March 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 7 March 2019,

in the following composition:

Geoff Thompson (Country D), Chairman (did not take part in the deliberations)

Stijn Boeykens (Belgium), member

Tomislav Kasalo (Croatia), member

Daan de Jong (Netherlands), member

Elvis Chetty (Seychelles), 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 9 July 2009, the player of Country B, Player A (hereinafter: the player or Claimant) and the Club of Country F, Club E (hereinafter: Club E) concluded an employment contract valid for the period between 10 July 2009 and – after subsequent extensions – 30 June 2018.

2. Subsequently, on 15 July 2016, Club E concluded an agreement for the loan of the player (hereinafter: the loan agreement) to the Club of Country D, Club C (hereinafter: Club C or Respondent) valid for the period between 15 July 2016 and 30 June 2017.

3. Moreover, the loan agreement – which was also signed by the player – included the following stipulations:

‘5. TRANSFER ON PERMANENT TITLE

(a) [Club E] and Club C declare to have reached an agreement for the Player's registration on permanent basis with Club C, after the end of the registration on loan basis, agreeing a transfer fee of the gross amount of € 1.000,00 (one thousand euro) to be paid by Club C to [Club E], subject to the following condition: (i) The Player making 12 (twelve) appearances in official matches valid for official competitions attended by Club C during the sport season 2016/2017, subject to such appearances all being of at least 30 minutes; Thus, if the condition sub clause 5 lit. a), (i) will be satisfied, the Player will be registered on permanent basis by Club C and both clubs will upload the registration of the Player from on loan basis to permanent basis from 1st July 2017, without any possibility, for any reason whatsoever, for Club C and/or the Player, to refuse and/or to oppose the permanent registration with Club C […].

(e) The Player declares to have already reached an agreement for the continuation of labour relationship with Club C after the end of the loan period, effective only in case of registration on permanent basis with Club C. […]

7. ANY OTHER TERMS

[…]

(k) With the signature of the present agreement, the Player accepts all the terms and conditions of the present agreement, declaring, also for the issuing of the ITC, that he will not have any request or demand against [Club E] about the employment relationship until the signature of the present contract and he doesn't have the intention to claim, before any Court or Tribunal, against [Club E] for the employment relationship. […]. In case of fulfillment of the condition for the registration on permanent basis for Club C pursuant art. 5a), he acknowledges and accepts the terms of the clause and hereby declaring to allow Club C to register him on permanent basis;

(o) Any and all disputes will be handled by the competent FIFA Committee and in appeal by CAS in accordance with the rules of the Code of Sports - related Arbitration of the Court of Arbitration for Sport; the proceeding will be take place in English tongue; In case FIFA shall not have the power to hear and to decide any particular dispute arising out or in connection with this agreement, such dispute shall be handled directly by the Court of Arbitration for Sport, in accordance with the rules of the Code of Sports – related Arbitration of the Court of Arbitration for Sport; the proceeding will be settled in English – tongue’.

4. In this context, the player concluded an employment contract with Club C (hereinafter: the contract), valid as from 15 July 2016 until 30 June 2017, as well as two annexes to said contract (hereinafter: schedule 1 and schedule 2). Based on the contract, the player was entitled to a signing-on bonus of currency of Country D 83,400 (article 8.3.1 of the contract), due on 30 July 2016, as well as a ‘basic wage’ in the amount of currency of Country D 41,700 per week (article 8.1 of the contract), payable in ‘monthly instalments in arrear’ as from 15 July 2016 until 30 June 2017.

5. In addition, article 17 of the contract contains the following clause: ’17. Any dispute between the Club and the Player not provided for in clauses 9, 10, 11, 12 and Schedule 1 hereof shall be referred to arbitration in accordance with the League Rules, or (but only if mutually agreed by the Club and the Player) in accordance with the FA rules.’

6. Moreover, article 21 of the contract stipulates the following: ‘21. Jurisdiction and Law: This contract shall be governed and construed in accordance with law of Country D and the parties submit to the nonexclusive jurisdiction of the Courts of Country D.’

7. Furthermore, the contract contains the following stipulations:

‘Schedule II:

[…] 8.3.6 In the event Club C exercise the option for permanent transfer of the player, this contract will automatically extend for a further period of one year plus an option year on the same terms and including the following:

8.3.6.1 All of the appearance bonuses the player achieved in clause 8.3.1 will be added to his basic wage for the following season and the bonus clause for appearances once reached, will be cancelled thereafter. […]’

[…]

10. In the event of an unlawful breach by the Player of this Agreement the Player and the Club acknowledge and agree that the market value of the Player at the time of such unlawful breach, as determined by the Dispute Resolution Chamber of FIFA, shall be used (in addition to the existing criteria as set out at Article 17 of the December 2004 FIFA Regulations for the Status and Transfer of Players) (as amended) when calculating the compensation due and payable by the Player to the Club for the Player's unlawful breach of Agreement. The Player agrees and acknowledges that such market value represents the actual loss sustained by the Club and the true and fair cost to the Club of replacing the Player as at the time of his unlawful breach of this Agreement. For the avoidance of doubt the market value shall be assessed at the time of the unlawful breach not at the date this Agreement was entered into. Nothing in this Agreement shall infer or imply an acceptance by the Club of the Players ability to terminate this Agreement.’

8. On 4 May 2018, the player lodged a claim against Club C before FIFA, claiming compensation for breach of contract in the total amount of currency of Country D 4,362,232, plus 5% interest p.a. as from 30 June 2017 until the date of effective payment, specified as follows:

 currency of Country D 4,336,800, corresponding to 104 weekly salaries of currency of Country D 41,700 each, for the period between 1 July 2017 and 30 June 2019, which – according to article 8.3.6 of the contract – was to be considered the duration of the extended contract in case Club C would have exercised the option for the player’s permanent transfer;

 currency of Country D 166,800, corresponding to two signing-on bonuses of currency of Country D 83,400 each, which – according to article 8.3.6.1 of the contract – were included in his salary for the extended duration of the contract;

 minus mitigation in the amount of USD 183,595 (converted in approximately currency of Country D 141,368), as the player explained that he had signed a new contract with the club of Country B Club G, valid for the period between 15 January 2018 and 31 December 2019.

9. Furthermore, the player requested that sporting sanctions be imposed on Club C, as well as that Club C be ordered to pay legal and procedural costs.

10. First of all, the player argued that FIFA was competent to deal with the matter at hand, based on article 22 b) of the FIFA Regulations. In support of his allegation, the player referred to a decision rendered by the Dispute Resolution Chamber on 9 February 2017 (case Ref. Nr. 15-01603/pam), whereby FIFA deemed itself competent to deal with a claim from a player of Country H against an Club of Country D, as well as to clause 7.o) of the loan agreement (cf. supra point 3.).

11. Moreover, the player explained that he was aware of the contents of article 17 of the contract and maintained that it follows from this article that disputes arising out of the contract are dealt with by the Y League Board, however said deciding body allegedly does not meet the requirements of the FIFA Circular 1010, as it lacks a representative of the player’s union in its board.

12. Furthermore, the player explained that, in the season 2016/2017, he made the following appearances for Club C:

Date Competition Opponent Minutes

23 August 2016

XY League Cup

Club J

26 September 2016

Y League

Club K

1 October 2016

Y League

Club L

22 October 2016

Y League

Club M

19 November 2016

Y League

Club N

3 December 2016

Y League

Club O

10 December 2016

Y League

Club P

14 December 2016

Y League

Club Q

17 December 2016

Y League

Club R

26 December 2016

Y League

Club S

24 March 2017

XX League

Club T

8 April 2017

Y League

Club U

12 May 2017

Y League

Club P

13. According to the player, based on the abovementioned table, he collected 13 appearances of at least 30 minutes in official matches in official competitions for Club C, and, therefore, also based on the contents of the loan agreement (cf. supra point 3.) and the contract (cf. supra point 7.), he was ‘automatically entitled to a further one year contract plus an additional option year’.

14. However, the player explained that he never received a new contract from Club C and was ‘explicitly told to leave Club C’. Furthermore, the player recalled that, as ‘he was not permitted to return to Club E’, ‘he had to return to Country B without a club to play for’.

15. The player held that, on 20 November 2017, he put Club C in default, requesting to be allowed to return to Club C and to be provided with a new contract. However, according to the player, said request was left unanswered and, only on 4 December 2017, Club C replied that the contract had validly expired on 30 June 2017.

16. The player explained that it was undisputed that all the matches he played in the Y League (matches 2, 3, 4, 5, 6, 7, 8, 9, 10, 12 and 13) meet the requirements of article 5.a) of the loan agreement (cf. supra point 3.). Concerning matches 1 and 11, the player explained the following:

- the match played on 23 August 2016 for the XY League Cup against Club J meets the criteria of article 5.a) of the loan agreement, because (i) matches for the League are to be considered as official matches in official competitions as per the FIFA Regulations and (ii) he entered the field in the 94th minute (first half of extra time, which also had two minutes of extra stoppage time) and played until the end of the second extra time period (122nd minute, also the second half of extra time had two minutes of extra stoppage time), leading to a total of 11+2+15+2 = 30 minutes;

- the match played on 24 March 2017 for the XX League with the U-23 team of Club C against the U-23 team of Club T is an official match in an official competition as per the FIFA Regulations. According to the player, this is confirmed by FIFA in case XX-XXXXX/XXX, decided on 28 January 2015 by the Single Judge of the Players’ Status Committee and by the Court of Arbitration for Sport (XXX XXXX/X/XXXXPlayer X c. FIFA, rendered on 18 September 2015).

17. In conclusion, the player argued that Club C was obliged to provide him with a new contract, and that, if its intention was to limit the contents of article 5.a) of the loan agreement to certain competitions, for instance the Y League, it should have specified this more clearly in the loan agreement.

18. In its reply, Club C first of all pointed out that the player’s claim lacked a legal basis, as it was based on the loan agreement, to which he was not a party. Therefore, potential claims arising out of the loan agreement could only involve Club C and Club E. Furthermore, Club C contested the jurisdiction of the DRC to deal with the matter and explained that the player cannot make use of the contents of article 7.o) of the loan agreement, as he was not a party to said agreement.

19. In addition, Club C referred to the contents of article 17 of the contract (cf. supra point 5.) and argued that the matter at hand should be decided ‘in accordance with the League Rules’, or – alternatively – under rule K of ‘the FA Rules’. In this respect, Club C explained that, based on Rule T31 as well as Section X and W of the Y League Rules, the matter at hand should be referred to the ‘Arbitration Panel’ appointed under the Y League Rules (hereinafter also referred to as: NDRC of Country D), or alternatively under section K of ‘the FA Rules’.

20. With regard to the NDRC of Country D, Club C explained that its competence follows from a clear clause in the contract, as well as the fact that the said national deciding body meets the minimum procedural standards under FIFA Circular 1010, in respect of which it argued:

- Principle of parity: based on section X.9 until X.12 of the Y League Rules, the Arbitral Tribunal consists of 3 members, 1 of them chosen by each party, and the third member chosen by the 2 members earlier appointed;

- Right to an independent and impartial tribunal: based on section X.14 of the Y League Rules, all arbitrators have to sign a statement of impartiality;

- Principle of a fair hearing: based on section X.20 of the Y League Rules, the chairman can inter alia ’determine the directions of the case’;

- Right to a contentious proceeding: based on section X.20 of the Y League Rules, the parties can file statements, engage in discovery and disclose documents, as well as call up witnesses;

- Principle of equal treatment: based on section X of the Y League Rules, both parties are treated in the same way;

- Right to a fair proceeding: based on section X.38 of the Y League Rules, there is a right to appeal for all parties.

21. As to the substance, Club C explained that article 5.a) was only put in the loan agreement, and not in the contract, because of ‘the lack of influence of the player on his lining-up’ and because of the wish of Club E and Club C to make this condition only ‘enforceable between the clubs’.

22. In addition, Club C argued that the contract was duly terminated on 30 June 2017, as the player did not fulfill the criteria of article 5.a) of the loan agreement. In this respect, Club C pointed out that:

- the match played on 23 August 2016 for the XY LeagueCup against Club J does not meet the criteria of article 5.a) of the loan agreement, because the player only played for 26 minutes in said game, given that stoppage time added at the end of the first and second half of the extra time is not considered to be official playing time;

- the match played on 24 March 2017 for the XX League with the U-23 team of Club C against the U-23 team of Club T is not to be considered an official match. In this respect, Club C argued that, since the XX League does not have a promotion/relegation, its matches cannot be considered as official matches. Furthermore, Club C referred to article 15 of the FIFA Regulations (as well as the FIFA’s Disciplinary Code) and argued that the matches in the XX League are not to be considered official matches in the scope of this article. Moreover, according to Club C, the real intentions of Club E and Club C, while concluding the loan agreement, were that the player would play in Club C’s first team and that he would receive a salary corresponding to playing in top competitions. As such, the match played by the player in the XX League can only be seen as a match where he would recover his physical fitness after suffering an injury, and not as an official match as meant in the loan agreement. Finally, Club C maintained that the FIFA decision in the case Ref. Nr.XX-XXXXX/XXX and the award XXX XXXX/X/XXXX(Player X c. FIFA) only explained the concept of an official match in the scope of article 5 par. 3 of the FIFA Regulations (i.e. eligibility) and not in the scope of article 15 of the FIFA Regulations (i.e. breach of contract).

23. Subsequently, Club C recalled that the player, after 30 June 2017, never requested an extension of his contract with Club C and instead immediately returned to Country B, where he was training with the club of Country B Club G.

24. Club C further recalled that, only on 20 November 2017, the player reverted to it in order to request the extension of the contract. Club C explained that, after having denied said request on 4 December 2017, it had received, on 15 January 2018, a request from the player to be released, as he wanted to sign a contract with Club G. Club C held that, in reply to this last correspondence, it had sent an email on 16 January 2018, confirming that the player was a free agent.

25. Finally, Club C argued that the compensation claimed by the player had to be rejected, as ‘claiming a 2-year salary is groundless and excessive’, especially because, in July 2018, the player announced his retirement from professional football.

26. As a result, Club C concluded that the claim is inadmissible, and subsidiarily, should be rejected.

27. In his replica, the player, first of all, explained that he had standing to sue under the loan agreement, as Club E’s and Club C’s intention was to also involve him in the content of the loan agreement. In the player’s opinion, such circumstance is confirmed by the fact that, at art 7.k), the loan agreement required his signature for acceptance and, thus, not for informational purposes only. In addition, the player maintained that the loan agreement and the contract need to be considered together, as the two documents are closely connected.

28. Furthermore, the player insisted on the jurisdiction of the DRC to deal with the matter at hand, and reiterated that the ‘Y League Arbitration’ violates the FIFA Circular 1010. In particular, he explained that all the members of the Arbitration Panel are appointed by the Board, ‘whose sole purpose is to act in the interest of clubs who are the shareholders of the league’. Therefore, the player was of the opinion that the principle of parity is not met, as there are more club representatives than player representatives, and rejected Club C’s argumentation that the matter should be submitted to the NDRC of Country D. Further, the player explained that he did not agree to submit any disputes to arbitration as per Rule K of the FA Rules (cf. supra point 5.), as he and Club C did not mutually agree on this. What is more, according to the player, ‘the jurisdiction clause in the transfer agreement confirms that FIFA does have jurisdiction to hear this matter’ (cf. supra point 3.).

29. In addition, the player referred to article 10 of Schedule 2 of the contract (cf. supra point 7.), and explained that it follows from said clause that Club C ‘themselves intended to file a claim at FIFA’, as it was to be considered as reservation of its rights to claim ‘Matuzalem-style’ damages in case the player would breach the contract.

30. As to the substance of the matter, the player explained that his playing time met the criteria laid down in article 5.a) of the loan agreement. With regards to the match against Club J and the alleged ’30 minutes-condition’, the player argued that ‘the risk of drafting an obscure clause shall be borne by the drafting party only’, i.e. by Club E and/or Club C. In relation to the match played against Club T, the player reiterated his arguments and his reference to TAS 2015/A/3930, and asked the rejection of Club C’s argumentation. Furthermore, the player pointed out that the match against Club T was organized by the Y League and the FA, and not by FIFA, as a result of which Club C’s reference to FIFA’s Disciplinary Code cannot be upheld. Moreover, the player maintained that the true intention of the parties involved was to also consider matches in the XX League as official matches.

31. In reply to Club C’s allegations that he remained passive for a long period and eventually also retired from professional football, the player explained that, on 17 July and 2 August 2017, his by then legal representative sent letters to Club C and Club E, asking for the reintegration in either Club E’s or Club C’s team.

According to him, Club C ignored said letters, and Club E replied, on 16 August 2017, that he should have been registered by Club C and that it entered such instructions duly in the Transfer Matching System (TMS). Furthermore, according to the player, Club E argued that – in light of the loan agreement – there was no ‘working relationship’ between him and Club E as from 1 July 2017. According to the player, these circumstances explain why he could send official default letters to Club C for the first time only in November 2018.

32. In relation to article 5.a) of the loan agreement, the player explained that said clause is not to be considered a unilateral extension option, but rather a ‘condition precedent’. Additionally, the player explained that the clause cannot be considered as a potestative and, therefore, inapplicable clause.

33. In conclusion, the player requested the acceptance of all his claims.

34. In its duplica, Club C insisted that FIFA should not be competent to deal with the matter at hand, as the NDRC of Country D is the competent deciding body. In this respect, Club C explained that if parties ‘are not happy with an appointed arbitrator’, said arbitrator can be challenged based on Rule W.19.2 of the Y League Rules and a sole Arbitrator can also be appointed. Moreover, Club C considered that the NDRC of Country D is not competent for disputes regarding disciplinary decisions, but that it is competent for cases involving a breach of contract. What is more, Club C pointed out that it never claimed that the dispute should be dealt with under the FA Rules, and insisted the NDRC of Country D is the body competent to entertain the present claim. Finally, Club C explained that article 10 of schedule 2 of the contract cannot be seen as a choice for FIFA’s jurisdiction, as the said provision only covers the way of calculation of the compensation, payable by a player in case of an unjustified breach of the contract.

35. As to the substance, Club C reiterated its previous argumentation concerning the player’s standing to sue, and pointed out that it was never the intention of the parties to include him as a party in the loan agreement. Moreover, Club C stated that it was also unclear to the player which party had breached its obligations, as he sent default letters to both Club C and Club E (cf. supra point 31.).

36. Furthermore, Club C insisted that the contract and the loan agreement should be considered as separate documents, and additionally argued that the intention of the parties when signing the loan agreement ‘was absolutely clear: to verify on the pitch his physical and athletic conditions’.

37. Moreover, regarding the match played against Club J, Club C submitted the related official match report issued by the XY League, stating that the player only played 26 minutes. In relation to the match played against Club T, Club C reiterated its previous argumentation.

38. Additionally, Club C argued that, by trying to receive an offer from either Club C or Club E for signing a new contract and claiming compensation on the alleged residual value of ‘a non-existing contract’, the player acted in bad faith.

39. Finally, Club C considered that it acted in compliance with the contract it had signed with the player, as well as with the loan agreement, and concluded that, primarily, the claim is inadmissible and, subsidiarily, it should be rejected.

40. According to the information contained in the TMS, as well as the information made available by the player, on 15 January 2018, he and the club of Country B, Club G, concluded an employment contract, valid for the period between 15 January 2018 and 31 December 2019, according to which the player was entitled to receive a monthly salary of USD 9,000, or the total remuneration in the amount USD 207,580.

41. Furthermore, the player confirmed that, in July 2018, he retired from professional football, partially because of a leg injury.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred 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 4 May 2018. Consequently, the DRC concluded that the 2018 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 June 2018), the Dispute Resolution Chamber is, in principle, 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 an Club of Country D.

3. In this respect, the Chamber was eager to emphasize that, contrary to the information contained in FIFA’s letter dated 30 May 2018 by means of which the parties were informed of the composition of the Chamber, the Chairman, Mr Geoff Thompson, refrained from participating in the deliberations in the case at hand, due to the fact that he share the same nationality as the Respondent.

4. Moreover, the Chamber acknowledged that Club C contested the competence of FIFA’s deciding bodies. More specifically, the Chamber noted that Club C considered that, in accordance with clause 17 of the contract concluded between the parties, the dispute at hand should be decided ‘in accordance with the League Rules’ or, alternatively, under rule K of ‘the FA Rules’. The Chamber further noted that, in Club C’s opinion, the application of Rule T31 and Section X and W of the

Y League Rules would lead to the dispute being subject to the jurisdiction of the NDRC of Country D.

5. In relation to the above-mentioned arguments regarding the competence, the Chamber took note of the player’s allegations, according to which, inter alia, the NDRC of Country D violated the FIFA Circular 1010, as (i) it allegedly does not respect the principle of parity, having more club representatives than player representatives and (ii) all the members of the Arbitration Panel are allegedly appointed by the Board, ‘whose sole purpose is to act in the interest of clubs who are the shareholders of the league’. With regards to the player’s argument that in a previous decision rendered by the DRC on 9 February 2017 FIFA deemed itself competent to deal with a claim from a player of Country H against a Club of Country D, the members of the Chamber pointed out that, unlike in the present matter, in the case recalled by the player, both parties had tacitly accepted FIFA’s competence.

6. Consequently, the Chamber deemed that it should first of all examine its competence in relation to the contract at the basis of the employment relationship between the parties of the present dispute.

7. In this context, the members of the DRC observed, in relation to the competence, that the aforementioned contract included the following clauses:

“’17. Any dispute between the Club and the Player not provided for in clauses 9, 10, 11, 12 and Schedule 1 hereof shall be referred to arbitration in accordance with the League Rules, or (but only if mutually agreed by the Club and the Player) in accordance with the FA rules."

[…]

21. Jurisdiction and Law

This contract shall be governed and construed in accordance with law of Country D and

the parties submit to the non exclusive jurisdiction of the Courts of Country D.”

8. In relation to the above, the Chamber further noted that clauses 9, 10, 11 and 12 of the aforementioned contract refer, respectively, to “Disciplinary Procedure”, “Termination by the Club”, “Termination by the Player” and “Grievance Procedure”, whereas the Schedule 1 of the contract refers to “Disciplinary Procedures and Penalties”.

9. After having duly examined the content of the aforementioned clauses, the members of the DRC observed that, while clause 17 of the relevant contract seems to refer the matter to the national arbitration system established within The Football Association and/or the Y League, clause 21 of the same contract appears to be a jurisdiction clause in favour of the “non exclusive jurisdiction of the [ordinary] Courts of Country D”.

10. In this context, the Chamber noted, first of all, that the recourse to arbitration under the aforementioned clause 17 does not appear to be applicable to matters concerning the termination of the contract, since it clearly stipulates that “arbitration in accordance with the League Rules or […] in accordance with the FA rules” is applicable for matters “not provided for in clauses 9, 10, 11, 12 and Schedule 1”. In this respect, the Chamber noted that the player lodged his claim, asking compensation for Club C’s breach of contract, i.e. a matter which falls within the scope of application of clause 10, which deals with the “Termination by the Club”.

11. Besides, the Chamber noted that clauses 17 and 21 of the contract seem to stand in mutually exclusive and contradictory relationship. In this respect, the members of the Chamber unanimously understood that, on the basis of the contract, clause 17 appeared to be not applicable. However, clause 21 appeared to refer to a non-exclusive jurisdiction of the Courts of Country D.

12. Consequently, considering the absence of a clear and unequivocal jurisdiction clause and in compliance with its own well-established jurisprudence, the members of the Chamber agreed that the DRC is competent to entertain the claim at hand.

13. Subsequently, 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 Player (edition June 2018), and considering that the present claim was lodged on 4 May 2018, the 2018 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

14. Its competence and the applicable regulations having been established, the Chamber entered into the merits of the case and observed – first and foremost – that, according to Club C, the player lacked standing to sue, as his claim was based on the loan agreement concluded between Club E and Club C, to which he was not a party. The DRC noted that the player, on the contrary, substantially deemed that the loan agreement was a tripartite transaction and such allegation was confirmed by its art. 7 k), establishing, inter alia, that “with the signature of the present agreement, the Player accepts all the terms and conditions of the present agreement”. Therefore, according to the player, given that the intention of the parties was to involve him also as to the content of the loan agreement, he had standing to sue.

15. In respect of the above, the members of the DRC deemed it worth to preliminarily remark, on a general level, that standing to sue is attributed to a party which can validly invoke the rights brought forward with a claim on the basis of a legally protectable and tangible interest at stake in the matter concerned. In this respect, the members of the Chamber recalled, for illustrative purposes, that, in disciplinary proceedings, such an interest does not only exist when the party is the addressee of a measure, but also when it is a directly affected third party. The DRC recalled that those who – in principle – do not have standing to sue are the parties which are only indirectly affected by a measure or, obviously, not affected at all.

16. By the same token, the members of the Chamber pointed out that, in the case at hand, a tangible interest at stake could be recognised not necessarily only upon the parties to the loan agreement, i.e. Club E and Club C, but also upon a third party directly affected by any of the provisions contained therein.

17. In this context, the members of the DRC were eager to emphasise that, as it will be explained more in detail below, whether or not the extension clause envisaged in the loan agreement was triggered had a direct consequence upon the player’s contractual situation vis a vis Club C.

18. In light of the foregoing, the members of the DRC concluded that the player had indeed standing to sue. Moreover and although being confident of the exhaustiveness of the foregoing line of reasoning, the Chamber observed, for the sake of completeness, that – by virtue of art. 7 k) of the loan agreement – the player had been requested to explicitly accept its content with his signature, which he did.

19. The foregoing having been established, the Chamber moved to 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.

20. Shifting the focus on the contractual relationship between the parties of the present dispute, the members of the DRC noted that the player and Club C had concluded an employment contract, valid as from 15 July 2016 until 30 June 2017, with a specific conditional extension.

21. More in particular, the Chamber noted that clause 8.3.6 of the contract stipulated that “in the event Club C exercise the option for permanent transfer of the player, this contract will automatically extend for a further period of one year plus an option year on the same terms […]”.

22. In this regard, the DRC noted that the aforementioned clause refers to the option contained in the loan agreement. As such, it must be read in light of the content of the option under art. 5 a) of the loan agreement.

23. Within this framework, the Chamber noted that art. 5 of the said loan agreement stipulated the following:

“[Club E] and Club C declare to have reached an agreement for the Player's registration on permanent basis with Club C, after the end of the registration on loan basis, agreeing a transfer fee of the gross amount of € 1.000,00 (one thousand euro) to be paid by Club C to [Club E], subject to the following condition: (i) The Player making 12 (twelve) appearances in official matches valid for official competitions attended by Club C during the sport season 2016/2017, subject to such appearances all being of at least 30 minutes; Thus, if the condition sub clause 5 lit. a), (i) will be satisfied, the Player will be registered on permanent basis by Club C and both clubs will upload the registration of the Player from on loan basis to permanent basis from 1st July 2017, without any possibility, for any reason whatsoever, for Club C and/or the Player, to refuse and/or to oppose the permanent registration with Club C […].

24. In other words, the Chamber pointed out that the only condition set out in the loan agreement in order for it to be turned into a permanent transfer was that the player made 12 appearances in official matches valid for official competitions of Club C during the sporting season 2016/2017 and that each appearance be at least 30 minutes long.

25. In this respect, as briefly touched upon throughout the parties’ submissions, the members of the DRC wished to clarify the nature and validity of the said clause. The Chamber first of all preliminary remarked, in accordance with the longstanding jurisprudence on the point, that any discussion concerning the potestative nature of such extension option clauses is to be carried out on a case by case analysis. That said and after having duly considered the clause in question, the Chamber pointed out that it lacked one of the main prerequisites in order to be considered a unilateral extension option: a unilateral character.

26. In this regard, in fact, the members of the DRC emphasised that the extension of the contract was triggered by a purely statistic factor, i.e. a certain threshold in the number of the player’s appearances for Club C. In other words, the extension was not the sole prerogative of one of the parties to the employment contract. This seemed to be confirmed by the tenor of the last part of the clause, providing that, in case the 12 matches’ appearance requirement was met, the player and Club C did not have “any possibility, for any reason whatsoever […] to refuse and/or oppose the permanent registration with Club C”. As such, the Chamber deemed that the said clause was not potestative in nature and, therefore, valid and applicable.

27. The foregoing having been clarified, the DRC recalled that, by virtue of art. 8.3.6 of the contract, in case the loan turned into a permanent transfer, the player’s contract would be automatically extended for another year – with an option for a further one – as a consequence of which “all of the appearance bonuses the player achieved in clause 8.3.1 will be added to his basic wage for the following season and the bonus clause for appearances once reached, will be cancelled thereafter […]”.

28. That said, the members of the DRC observed that, according to the player, he had met the requirements enshrined in the abovementioned art. 5.a) of the loan agreement and that, therefore, based on art. 8.3.6 of the employment contract, his contractual relationship with Club C was extended until 30 June 2019. As a consequence, the player claimed he was entitled to currency of Country D

4,362,232, consisting of (i) currency of Country D 4,336,800, corresponding to 104 weekly salaries of currency of Country D 41,700 each and (ii) currency of Country D 166,800, corresponding to two signing-on bonuses of currency of Country D 83,400 each. The DRC further noted that, in his calculations, the player deducted the income he had received from the contract he had signed with Club G, in the amount of USD 183,595, which he converted into currency of Country D 141,368.

29. Equally, the Chamber took note that Club C, for its part, disputed the fulfilment of the requirements established by art. 5.a) of the loan agreement.

30. In light of the above, and considering the parties’ positions, the DRC observed that the issue underlying the present matter was to establish whether the loan agreement had turned into a definitive transfer due to the fact that its conditional extension had been triggered and, in the affirmative, to determine the consequences thereof.

31. More specifically, the members of the DRC underlined that the entire dispute, as to its substance, revolved around determining whether the player had made 12 appearances of at least 30 minutes in official matches in official competitions for Club C.

32. Moreover, having duly considered the parties’ submissions, the Chamber observed that, out of a total of 13, the matches contested were only the following two: the one played on 23 August 2016, against Club J and the one played on 24 March 2017 against Club T. More in particular, the members of the DRC took note that, with regards to the first match, it remained disputed whether the player accumulated 30 minutes of official playing time, whereas, with regards to the second, it was disputed whether it could be considered an official match.

33. That said, 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, the Chamber observed that the player had provided evidence of appearances with Club C in 13 matches, in 11 of which it remained undisputed that it was an official match where he played at least 30 minutes. Consequently, in order for the above-mentioned extension to be triggered, it sufficed that just one of the 2 contested matches met the requirements established by art. 5a of the loan agreement.

34. In light of the above, the members of the DRC moved to analyse the first of the two matches contested, i.e. the one played against Club J on 23 August 2016. In this respect, the Chamber noted that, while the player argued that he had reached the required threshold of 30 minutes, Club C maintained that he had only played 26 minutes, as the 4 minutes of stoppage time of the extra-time should not be counted as official playing time.

35. In this respect, the DRC noted that Club C submitted various official match reports of games played during the FIFA World Cup 2014, based on which, apparently, the stoppage time added to the extra time is not to be considered as ‘minutes played’. However, the members of the Chamber thought important to emphasise that, in light of the relevant clause, requiring that the player made “12 (twelve) appearances all being of at least 30 minutes”, there was no need to enter into the technicalities of establishing whether the stoppage time in the extra time of a match should be considered as time effectively played or not.

36. In this respect, the clause seemed to simply require that the player made 12 appearances of 30 minutes each in official matches. In other words, the generic way in which the clause was drafted, did not require, in the DRC’s opinion, to debate over the nature to be attributed to the time of a game which extends beyond the ordinary length of the extra-time. The members of the Chamber observed that, if the intention of the parties to the loan agreement was to exclude from the count of the minutes a specific part of a match, such as the extra-time or the stoppage time added to the extra-time, they should have explicitly drafted it in the relevant clause for the avoidance of any doubt. In the absence of any different indication in the relevant text, the members of the DRC concluded that the clause simply required that each of the 12 appearances lasted at least 30 minutes.

37. Consequently, and bearing in mind that it is uncontested that the player’s ‘appearance’ during the said match amounted to 30 minutes exactly, i.e. 13 minutes during the first extra-time (stoppage time included) and 17 minutes during the second extra-time (stoppage time included), the DRC concluded that the player had reached the required threshold for that game.

38. Having established that the game played against Club J of 23 August 2016 counted for the purposes of art. 5 a) of the loan agreement, the members of the Chamber decided that there was no need to assess whether the second contested game, i.e. the one against Club T, was to be considered an official match. Adding the one against Club J to the other 11 uncontested matches, in fact, the player had met the 12 matches’ condition established at art. 5 a) of the loan agreement in order for the loan to be turned into a definitive transfer.

39. Consequently, the DRC concluded that the player’s contract should have been automatically extended in accordance with its clause 8.3.6 and, thus, by failing to comply with such provision, Club C was in breach of its contractual obligations. Consequently, the player was entitled to compensation for breach of contract.

40. Subsequently, the Chamber focused its attention on the consequences of the breach of contract in question and, in this respect, it decided that, taking into consideration art. 17 par. 1 of the Regulations, the player is entitled to receive from Club C compensation for breach of contract on the basis of its clause 8.3.6. In this respect, the members of the DRC noted that the said clause provided for an automatic extension of one year only, whereas it only provided an option for a further one. Consequently, as it remains uncertain whether Club C would have exercised the option to extend it for a further year, the DRC concluded that the residual value of the contract consisted in the one-year extension.

41. In continuation, the Chamber outlined 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.

42. 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 members of the Chamber noted that no such clause was included in the contract concluded between the player and Club C.

43. As a consequence, the members of the Chamber determined that the amount of compensation payable by Club C to the player 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.

44. Bearing in mind the foregoing as well as the players’ claim, the Chamber proceeded with the calculation of the monies payable to him under the terms of the employment contract as from 1 July 2017 (i.e. the date as from which the loan would have turned into a permanent transfer according to the loan agreement) until 30 June 2018 (i.e. the end of the first following season, as previously explained). In this regard, the members of the Chamber observed, as detailed above, that under the contract, the Claimant would have earned the amount of currency of Country D 2,251,800, consisting of 52 weekly salaries of currency of Country D 41,700 each plus a signing-on bonus of currency of Country D 83,400.

45. 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 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 Claimant’s general obligation to mitigate his damages.

46. In this respect, the DRC subsequently noted that, on 15 January 2018, the player concluded an employment contract with the club of Country B, Club G, entitling him to a total amount of USD 207,580, equivalent to approximately currency of Country D 151,120.

47. As a result of the above, taking into account the value of the contract the player signed with Club G, the DRC came to the conclusion that the payable compensation shall amount to currency of Country D 2,100,680.

48. In conclusion, for all the above reasons, the Chamber decided to partially accept the player’s request and held that Club C must pay to him the amount of currency of Country D 2,100,680 as compensation for breach of contract.

49. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber, the Chamber decided that Club C must pay to the player interest of 5% p.a. on the compensation as of the date of the claim, i.e. 4 May 2018.

50. In addition, as regards the claimed legal expenses, the DRC referred to art. 18 par. 4 of the Procedural Rules as well as to its longstanding and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the DRC decided to reject the player’s request relating to the legal and procedural costs.

51. Finally, the Chamber concluded its deliberations by rejecting any further claim lodged by the player.

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 within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of currency of Country D 2,100,680, plus 5% interest p.a. as of 4 May 2018 until the date of effective payment.

4. In the event that the amount due to the Claimant plus interest in accordance with the above-mentioned number 3. is not paid by the Respondent 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 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 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 (CAS)

Avenue de Beaumont 2

CH-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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives