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 11 April 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 11 April 2019,

in the following composition:

Geoff Thompson (England), Chairman

Alexandra Gómez (Uruguay), member

Stefano Sartori (Italy), member

Daan de Jong (The Netherlands), member

Muzammil bin Mohamed (Singapore), 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 11 January 2017, the player of Country B, player A (hereinafter: the Claimant), and the Country D club, club C (hereinafter: the Respondent) concluded an employment contract (hereinafter: the contract) valid as from 11 January 2017 until 11 January 2018.

2. According to art. 7 of the contract, the Respondent undertook to pay to the Claimant, inter alia, the following remuneration:

- EUR 3,000 as monthly remuneration, payable “by the 20th day of the month for the previous month, with statutory default interest charged from the day of arrears until the day of payment in the event of arrears”;

- EUR 3,000 as a signing-on fee, payable in two instalments: in February 2017 and March 2017, respectively.

3. On 18 July 2017, the Claimant put the Respondent in default of payment of the total amount of EUR 9,000, corresponding to the outstanding salaries of May 2017 and June 2017, as well as the signing-on fee, granting the Respondent a 7 days’ deadline to comply with its financial obligations.

4. On 3 August 2017, the Claimant put the Respondent in default of payment of the total amount of EUR 9,502 corresponding to the outstanding salaries of January 2017, May 2017 (partially), June 2017 and the signing-on fee, granting the Respondent, a 7 days’ deadline to proceed with the payment of the said amount.

5. On 7 August 2017, the Claimant lodged a claim against the Respondent before FIFA requesting outstanding remuneration in the total amount of EUR 10,064; amount broken down by the Claimant as follows:

- EUR 3,000 corresponding to the monthly instalment of January 2017;

- EUR 3,000 corresponding to the monthly instalment of February 2017;

- EUR 1,064 corresponding to the partial monthly instalment of May 2017;

- EUR 3,000 corresponding to the monthly instalment of June 2017.

6. Moreover, the Claimant requested FIFA to “establish the unilateral termination of the contract by the [Claimant] for the reason of just cause, for not being paid by the [Respondent] for more than 90 days”.

7. In its reply, the Respondent argued that, since 1 February 2017, it is immersed in a procedure of compulsory settlement before the District Court in Country D. Furthermore, the Respondent admitted not having paid the claimed amounts and held that the monthly instalment of January 2017 must be paid according to the dynamics of the compulsory settlement procedure. In this context, the Respondent broke down the amounts that it considered due to the Claimant, as follows:

- EUR 135 corresponding to the monthly instalment of January 2017 (settlement conditions allegedly indicate that amounts corresponding to periods that fall prior to the start of settlement proceeding will be reduced to 4,50% of its quantity and would be payable within 3 years as of the effective date of the settlement proceeding);

- EUR 3.000 corresponding to the monthly instalment of February 2017;

- EUR 1.064 corresponding to the partial monthly instalment of May 2017;

- EUR 3.000 corresponding to the monthly instalment of June 2017.

8. Additionally, the Respondent held that, as a consequence of being immersed in the procedure of compulsory settlement, it did not get the license to perform in the Country D Premiere League during the season 2017/2018. Therefore, the Respondent allegedly concluded verbal mutual termination agreements with all the players, by which the Respondent allegedly “terminated the contracts with all players since the team [that played] in the Premier league no longer existed”.

9. Furthermore, the Respondent maintained that the Claimant did not fulfil his contractual obligations, since he allegedly stopped “training and performing” once the club no longer competed.

10. Additionally, the Respondent stressed that, although “the contract itself does not determine which law is to be used”, the applicable law to the present dispute shall be Country D law, as the Respondent’s registered office is located in Country D and the contractual obligations were to be performed in Country D. In this regard, the Respondent held that, in accordance with art. 329 of the “Obligation Code”, if the fulfilment of the contract becomes impossible “due to circumstance for which the debtor holds no responsibility, the obligation revoke”. In this regard, the Respondent held that “due to unexpected termination of the sponsorship agreement of the main sponsor […] the fulfilment of obligations became impossible without the debtor’s fault”.

11. In his replica, the Claimant stressed that, as the Respondent acknowledged its debts towards him, he accepted the inclusion of the outstanding instalment of January 2017 into the dynamics of the compulsory settlement proceeding. Therefore, the Claimant asked FIFA, inter alia, to: “condemn the [Respondent] to pay the following amounts:

a) 3,000 Euro net – salary for February 2017;

b) 1,064 Euro net – rest of salary for May 2017;

c) 3,000 Euro net – salary for June 2017”.

12. Moreover, the Claimant explicitly rejected the argumentation of the Respondent regarding him not fulfilling his contractual obligations as he “was present at the [Respondent] for training sessions, matches and other activities organized by the [Respondent] from the beginning of the year 2017 until the end of the competition season […] in June 2017”.

13. In its duplica, the Respondent maintained its previous arguments and stated that as the Respondent was not granted with the referred license, circumstance for which the Respondent “holds no responsibility”, activities such as “holding training sessions and matches” have become impossible for the Respondent to fulfil; therefore “payment obligations no longer existed”.

14. By means of its correspondences dated 4 September 2017 and 17 January 2019, the Football Association of Country D confirmed to the FIFA Administration that the Respondent has remained affiliated to the Football Association of Country D and is currently participating in organized football within the competitions of the said association.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter: the DRC or the Chamber) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 7 August 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) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition June 2018), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player of Country B and a Country D club.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, the Chamber confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition June 2018), and considering that the claim was lodged on 7 August 2017, the 2016 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. Having said this, the Chamber proceeded with an analysis of the circumstances surroundings 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.

6. First of all, the members of the Chamber acknowledged that, on 11 January 2017, the Claimant and the Respondent had concluded an employment contract valid as from the date of its signature until 11 January 2018, pursuant to which the Respondent undertook, inter alia, to pay to the Claimant a monthly salary of EUR 3,000, payable “by the 20th day of the month for the previous month […]”.

7. The Chamber further acknowledged that, according to the Claimant and to his amended claim, the Respondent had failed to pay his remuneration in the total amount of EUR 7,064, corresponding to the monthly salaries of February 2017 and June 2017, in the amount of EUR 3,000 each, as well as to the partial monthly salary of May 2017 amounting to EUR 1,064. The DRC also noted that the Claimant put the Respondent in default on 18 July 2017 and 3 August 2017, respectively.

8. In continuation, the DRC noted, first and foremost, that the Respondent acknowledged being in debt towards the Claimant of the amount of EUR 7,064 and maintained that, since 1 February 2017, it is immersed in a procedure of compulsory settlement before the District Court in Country D, and that, in view of the fact that i) the Respondent’s office is located in Country D and ii) the contractual obligations were to be performed in Country D, Country D law is applicable and prevails over any other law.

9. In this context, the members of the DRC first wished to stress that when deciding a dispute before the DRC, FIFA’s regulations prevail over any national law chosen by the parties. In this regard, the Chamber emphasized that the main objective of the different FIFA Regulations is to create a standard set of rules to which all the actors within the football community are subject to and can rely on. This objective would not be achievable if the DRC would have to apply the national law of a specific party on every dispute brought to it. Therefore, the Chamber deemed that it is not appropriate to apply the principles of a particular national law to a dispute brought before it but rather the Regulations on the Status and Transfer of Players, general principles of law and, where existing, the Chamber’s well-established jurisprudence.

10. In continuation, the Chamber noted that the Respondent affirmed that, as a consequence of being immersed in the procedure of compulsory settlement, it did not get the license to perform in the Country D Premiere League during the season 2017-2018 and that said circumstances allegedly led it to conclude “verbal mutual termination agreements with all the players”, because, pursuant to Country D law, if contractual obligations become impossible to fulfil, obligations revoke.

11. With respect to the request put forward by the Respondent to reject the claim of the Claimant due to its “procedure of compulsory settlement”, the Chamber stressed that in accordance with the jurisprudence of both the DRC and the Court of Arbitration for Sport, bankruptcy/insolvency procedures do not affect procedures in front of the DRC. In fact, the Chamber wished to outline that it is only requested to address the recognition of the Claimant’s claim and not the execution of a possible debt. What is more, the members of the Chamber noted that according to the correspondence dated 4 September 2017 and 17 January 2019 of the Football Association of Country D, the Respondent remains affiliated to the Football Association of Country D and is currently participating in organized football within the competitions of the said association.

12. On account of the above, the Chamber was of the unanimous opinion that the Respondent cannot use its situation of insolvency, for which the Claimant holds no liability, as an exemption to avoid complying with its financial obligations towards the Claimant. Consequently, the Chamber decided that the argumentation of the Respondent cannot be followed on this point.

13. Furthermore, the Chamber also observed that the Respondent affirmed that the Claimant did not fulfil his contractual obligations, since the Claimant allegedly stopped “training and performing” once the Respondent no longer competed.

14. In this context, and in relation to the documentation and explanations provided by the Respondent, the Chamber recalled the basic principle of the burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. At this point, the Chamber deemed it appropriate to clarify that, in the present case, the Respondent bore the burden of proving either the payment of the Claimant’s salaries or that it had a valid reason for not having done so.

15. That being said, and concerning the Respondent’s allegations that it allegedly concluded a mutual termination with the player and that the Claimant allegedly stopped “training and participating” once the club no longer competed in the Country D Premiere League, the Chamber observed that the Respondent had not provided any evidence in support of its argumentation. Consequently, the Chamber decided to reject the Respondent’s argument in this connection.

16. Furthermore, the DRC noted that the Respondent alleged having had some financial difficulties in order to justify its non-payment of the Claimant’s outstanding salaries. In particular, the DRC noted that the Respondent alleged that “due to unexpected termination of the sponsorship agreement of the main sponsor […] the fulfilment of obligations became impossible without the debtor’s fault”.

17. However, the Chamber wished to stress that, in line with its well-established jurisprudence, a club’s financial difficulties cannot be considered a valid justification for non-compliance with its essential contractual obligation deriving from the signature of an employment contract, that is, to pay a player’s remuneration in full and in a timely manner. Consequently, the Chamber also decided that this argumentation of the Respondent cannot be followed on this point.

18. Having said that, the Chamber highlighted that it remained uncontested that the Respondent had not fulfilled its financial obligations set forth in the employment contract signed between the parties and that it failed to pay to the Claimant the amount of EUR 7,064 in accordance with said contract.

19. In light of all the foregoing considerations, the DRC concluded that, in accordance with the general legal principle of “pacta sunt servanda”, the Respondent is liable to pay the total amount of EUR 7,064 to the Claimant.

20. Therefore, the DRC decided to partially accept the Claimant’s claim and concluded its deliberations in the present matter by rejecting any further claim of the Claimant.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. 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 EUR 7,064.

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

4. In the event that the aforementioned sum 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 FIFA’s Disciplinary Committee for consideration and a formal decision.

5. 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.

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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

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives