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 (England), Chairman

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 15 December 2017, the player of Country B, Player A (hereinafter: the player or Claimant) received from the club of Country D, Club C (hereinafter: the club or Respondent), an offer to sign:

- an employment contract (hereinafter: the contract), valid as from 14 December 2017 until 31 May 2019;

- a version of the standard contract prescribed by the Football Association of Country D (Football Association of Country D) (hereinafter: the standard contract);

- an agreement referred to as ‘Image rights contract of professional football player’ (hereinafter: the image rights agreement), valid for an undefined period;

- an addendum to the image rights agreement (hereinafter: the addendum).

2. Article 1.2 of the contract holds the following clause: ‘Both parties mutually agree that the player may be released by this contract after 31/05/2018 and until 30/06/2018, by means of a written notice from the club to the player. In such a case, the player will be entitled to EUR 1,000 gross as fair and reasonable compensation for the release of this contract without any right to claim any other damages or compensation whatsoever’.

3. Furthermore, according to article 1.4 of the contract, the player was entitled to receive:

- 5 monthly salaries of EUR 3,530 gross (or 5 monthly salaries of EUR 3,000 net) for the period between 14 December 2017 until 31 May 2018, payable in 5 equal instalments ‘beginning 31/01/2018’;

- 12 monthly salaries of EUR 3,475 gross (or 12 monthly salaries of EUR 3,000 net) for the period between 1 June 2018 until 31 May 2019, payable in 12 equal instalments ‘beginning 30/06/2018’.

4. According to article 2.3 of the contract: ‘In case of conflict, the terms of the Standard Contract shall take precedence over the terms of the present contract’.

5. Article 4 of the standard contract holds inter alia the following clauses: ‘4.1 For the purposes of promoting the public relations of the Club and/or (at the request of the Club) of any sponsors or commercial partners of the Club, the Player shall attend at and participate in such events as may reasonably be required by the Club including, but not limited to, appearances, interviews and photo shoots.

Provided that the Club shall give reasonable notice to the Player of the Club's requirements, the Player shall make himself available. No photograph of the Player taken pursuant to the provisions of this clause shall be used by the Club or any other person for commercial purposes […] 4.5 Nothing in this clause shall prevent the Club from entering into other arrangements with the Player, additional or supplemental hereto or in variance hereof, in relation to advertising, marketing and/or promotional services. All such agreements must be submitted to the Football Association of Country D’.

6. Moreover, article 9 of the standard contract stipulates: ‘9.1. The Club shall be entitled to terminate the Employment Agreement in writing to the Player if the Player: 9.1.1. Shall be guilty of Gross Misconduct, 9.1 2. Shall fail to heed any final written warning given under the provisions of Part 1 hereto, 9.1.3. Is convicted of any criminal offence where the punishment consists of a sentence of imprisonment of three months or more (which is not suspended). 9.1.4. As a result of physical inability of the Player or as a result of accident that happened other than in a game or during training, that subsists for over 90 days and as a result of which he cannot participate in training or games. 9.2. The Player shall be entitled to terminate the Employment Agreement in writing to the Club if the Club: 9.2.1. Shall be guilty of serious or persistent breach of the terms and conditions of this Contract, 9.2.2. Fails to pay any due payables or other benefits, allowances or bonuses due to the Player within 30 days since the date that the Club has been put in default in writing by the Player. 9.3. Both the Club and the Player have the right to unilaterally terminate with just cause the Player's Employment Agreement in case the Club's Team where the Player is engaged is relegated to a lower category. This right must be exercised within 30 days following the conclusion of the Championship and the termination notice must be effected in writing or else the termination shall be contrary to the terms of the present Contract, the Employment Agreement and the Rules of the Football Association of Country D’.

7. Article 13 of the standard contract provides: ‘Any employment dispute between the club and the player shall fall under the exclusive jurisdiction of the National Dispute Resolution Chamber of the Football Association of Country D and shall be resolved according to the applicable regulations of the Football Association of Country D.’

8. In addition, article 2 of the image rights agreement stipulates the following: ‘The player undertakes to take part in any advertising and commercial activity that may be requested of him by the Employer, in any form whatsoever for the consideration mentioned in Exhibit 1 below’.

9. Article 4 of the image rights agreement stipulates the following: ‘The Player accepts the dissemination, by the Employer, of images of any kind representing him alone or with the team and having been made by the Employer within the framework of the player’s professional activity’.

10. Article 5 of the image rights agreement holds the following clause: ‘This agreement shall terminate automatically […] 5.3. With the termination for any reason of the employment agreement dated 14/12/2017 between the player and the employer’.

11. Article 6 of the image rights agreement stipulates the following: ‘The consideration of services rendered herein the Employer will pay to the Player the sums, benefits and bonuses included in Exhibit 1 that is attached hereto. […]’.

12. According to the addendum to the image rights agreement, the player was entitled to receive the following amounts:

- EUR 60,000 net as ‘Image rights payment for the period between 15/12/2017 to 31/05/2018’, payable in 5 monthly instalments of EUR 12,000 each, due ‘at the end of each month beginning from 31/01/2018’;

- EUR 144,000 net as ‘Image rights payment for the period between 01/06/2018 to 31/05/2019’, payable in 12 monthly instalments of EUR 12,000 each, due ‘at the end of each month beginning from 30/06/2018’.

13. On 4 July 2018, the player lodged a claim against the club in front of FIFA, requesting compensation for breach of contract in total amount of EUR 250,916 gross, as follows:

Compensation for breach of the contract in the amount of EUR 40,700 gross, specified as follows:

- 12 monthly salaries of EUR 3,475 gross, corresponding to the payments due in the period between 8 June 2018 and 31 May 2019;

- minus the amount of EUR 1,000, as the amount the club already paid as compensation for breach of contract to the player on 22 June 2018;

- 5% interest p.a. on the amount of EUR 40,700 as from 8 June 2018.

Compensation for breach of the image rights agreement in the amount of EUR 210,216 gross, specified as follows:

- 12 monthly salaries of EUR 12,000, corresponding to the payments due in the period between 8 June 2018 and 31 May 2019, i.e. the net amount of EUR 144,000;

- as the image rights agreement does not set forth the tax applicable at the time of termination, the player deems that, based on the information provided by www.XXXXXX.com, the net amount of EUR 144,000 corresponds to a gross amount of EUR 210,216;

- 5% interest p.a. on the amount of EUR 210,216 gross as from 8 June 2018.

Furthermore, the player asked for sporting sanctions in line with article 17 par. 4 and article 24bis of the FIFA Regulations to be imposed on the club.

14. In his claim, the player states that on 15 December 2017, he agreed with the contents of the contract, the standard contract and the image right contract and signed these documents at the premises of the club. However, the club informed him that the documents needed to be registered at the Football Association of Country D and that for this reason, he could not get signed copies of the contract and the image rights agreement yet.

15. As a preliminary issue, the player argues that the FIFA DRC is competent to decide on the validity of the termination of both the contract and the image rights agreement. In this respect, the player explains that there is ‘a strong tendency among clubs of Country D […] to offer to their players and coaches to enter simultaneously into employment contracts and image rights agreements for whatsoever reason (most likely to minimize the tax impact)’. As to the documentation signed by the player, he explains that he considers the image rights agreement not as a de facto image rights agreement, but rather as a ‘separate contract accidental to the employment agreement’, inter alia because:

o the same parties (club and player) as the ones in the employment contract are involved;

o there is a direct reference to the employment contract and the image rights agreement is valid for the same period;

o the image rights agreement terminates automatically upon termination of the employment contract;

o the image rights agreement provides for remuneration, payable to the player in the same ‘modality’ as in the employment contract, i.e. 17 net monthly instalments during the validity of the documents;

o the standard contract already contains a clause regarding image rights, which makes – according to the player - the conclusion of a separate image rights agreement redundant, unless the club had other reasons to do so.

16. Further, the player explains that in the period between 15 December 2017 and 8 June 2018, despite suffering an injury, he played in 10 games for the club, and that he received all his remuneration as per the contract and the image rights agreement for said period.

17. Moreover, on 8 June 2018, the player received an e-mail from the club, containing the following wording: ‘We would like to inform you that this serves a written notice, as per our agreement dated 14/12/2017 and in particular term No. 1.2, by which we have mutually agreed that you may be released by this contract. Attached you may find the mutual termination agreement, which we kindly ask you to sign. Furthermore, please inform us how you wish to receive the amount of EUR 1,000, which you are entitled, as fair and reasonable compensation for the release. We would like to thank you for your cooperation and wish you all the best in your future career’.

18. According to the player, a draft version of a mutual termination agreement was attached to the e-mail dated 8 June 2018, which agreement he however refused to sign. Furthermore, the player is of the opinion that the e-mail dated 8 June 2018 is in fact a unilateral termination of both his contract and the image rights agreement and, via his legal representative, explicitly contested the validity of said termination(s).

19. Further, the player explains that the club, however, did not agree with this and reiterated, on 24 June 2018, that by means of its email dated 8 June 2018, both the contract and the image rights agreement were validly terminated. In addition, the club explained that on 22 June 2018, it paid an amount of EUR 1,000 to the player, as compensation for the termination of the contracts.

20. Regarding the validity of the termination, the player argues that article 1.2 of the contract is potestative and ‘clearly abusive, since it does not provide for reciprocal rights but only entails benefits towards the club’. Furthermore, the player deems that the clause cannot be considered as a buy-out clause. What is more, according to the player, article 1.2 of the contract and article 5.3 of the image rights agreement are not line with the FIFA Regulations and relevant CAS jurisprudence.

21. Further, the player argues that the clauses contained in article 1.2 of the contract and article 5.3 of the image rights agreement are in conflict with article 9 of the standard contract, and that based on article 2.3 of the contract, the standard contract should therefore prevail.

22. In conclusion, the player argues that the club, on 8 June 2018, had terminated the contract without just cause, as the clause provided for in article 1.2 of the contract and 5.3 of the image right agreement, cannot be upheld in the present matter.

23. Finally, the player explained that ‘the liquidated damages’ clause in article 1.2 cannot be upheld as valid clause for the calculation of the compensation, as it is unbalanced. Further, the player argues that the club is obliged to pay him compensation for breach of contract as requested, and explains that ‘as the remuneration set forth in the employment agreement was gross and the remuneration agreed in the image rights agreement was net, he should be compensated with the gross amount under both contracts’, as confirmed by CAS in previous awards.

24. In its reply dated 10 August 2018, first of all, the club contests FIFA’s competence to deal with the matter at hand, as the National Dispute Resolution Chamber of the Football Association of Country D (hereinafter: the NDRC of Country D) should be competent to deal with any employment related disputes arising out of the contract. Further, the club argues that NDRC of Country D complies with the minimum standards for fair proceedings.

25. In this respect, the club argues that the NDRC of Country D is an independent arbitration tribunal, established at national level, which respects the principle equal representation of players and clubs, and which has an independent chairman (who is chosen by the club representatives and player’s representatives). Furthermore, the club points out that the clause in article 13 of the contract is clear and unambiguous.

26. From the submitted documentation, it can be noted that inter alia the following articles are included in the NDRC Regulations:

- Article 22.1.1: ‘The Dispute Resolution Committee shall have the competence to adjudicate and/or resolve any financial and or other disputes which may arise […] A. between members clubs of Football Association of Country D and professional players regarding the employment and stability in their contractual relations’;

- Article 22.2: ‘The decisions of the DRC can be appealed before the Appeal Committee of the Dispute Resolution Chamber’;

- Article 22.4.1:’The Appeal Committee and the Dispute Resolution Committee (DRC) shall consist of five members and more specifically of the Chairman, Vice- Chairman and three members […].

- Article 22.4.3: ‘The two members of the Appeal Committee and DRC respectively will be elected from the Board of Directors of Football Association of Country D and two members of the Appeal Committee and DRC respectively will be elected by the Football Union of Country D. The election procedure must be approved by the Football Association of Country D. The four elected members of both the Appeal Committee and the DRC respectively will have to elect within 15 days, the Vice-Chairman of the Appeal Committee and DRC respectively. Accordingly the Vice-Chairman and all members will elect the Chairman of the Appeal Committee and the DRC respectively. If the votes are equal, the Vice-Chairman of the Committee will have the casting vote’.

- Article 22.4.4: ‘The members elected by the Football Union of Country D should be reported promptly to the Football Association of Country D for approval of their appointment from the Council of Football Association of Country D’.

- Article 22.4.5: ‘If the Football Union of Country D refuses or fails to elect any member to the DRC within the prescribed period the Council of the Football Association of Country D shall elect the member or members depending of the case’.

27. In addition, the club argues that the parties have the right to appeal decision of the NDRC of Country D before the Appeal Dispute Resolution Chambers, as well as that the Appeal Committee is composed in the same way as the NDRC of Country D; however obviously with other persons taking place in such committee.

28. What is more, the club argues that FIFA is not competent to consider the image rights agreement, since said document does not fall under the scope of art. 22 par. b of the FIFA Regulations. In this respect, the club argues that the image rights agreement concluded between the club and the player, does not contain any specific elements, leading to the conclusion that it is part of an actual employment contract.

29. In this respect, the club refers to article 2 and 4 of the image rights agreement and argues that said clauses justify the amount paid to the player under the image rights agreement. Furthermore, according to the club, based on article 4 of the standard contract, it is allowed to agree with the player upon further arrangements in relation to marketing, advertising and/or promotional services.

30. In case, the FIFA DRC would find itself competent, as to the substance of the matter, the club points out that the player had received signed copies of all documents agreed upon on 15 December 2017.

31. Furthermore, according to the club, the parties mutually agreed that the contract could be terminated in the period between 31 May 2018 and 30 June 2018, as article 1.2 of the contract was discussed and freely negotiated upon. Furthermore, the club argues that the clause in article 1.2 of the contract should – compared to the jurisprudence of CAS - be considered the same way as unilateral extension clauses and that it is to be considered as a mutually agreed way of terminating the contract.

32. In addition, according to the club, article 1.2 of the contract is not abusive, as the player was compensated when the contract was terminated, by means of the payment of EUR 1,000 made on 22 June 2018. Further, the club states that the clause in article 1.2 of the contract and article 9 of the standard contract can co-exist. Finally, according to the club, it follows implicitly from the clause in article 1.2 of the contract that also the player could have terminated the contract by means of the payment of an amount of EUR 1,000.

33. In conclusion, the club argues that it terminated the contract of the player by means of its email dated 8 June 2018 with just cause, as well as that it fully paid the contractually agreed compensation to the player, in line with compensation clause provided for in article 1.2 of the contract. For these reasons, the club asks for the rejection of all the player’s claims.

34. In his replica, the player first of all contests the club’s allegations that the NDRC of Country D is competent to deal with the employment related part of the current dispute. In this respect, the player argues that the image rights agreement was in fact part of the actual employment relationship between the parties, but that, for the purposes of FIFA jurisdiction, ‘the employment contract and the image rights agreement should be regarded as distinct contracts’. Further, the player argues that the image rights agreement did not contain a separate choice of forum clause, as a result of which it ‘cannot be subject to the dispute resolution clause contained’ in the standard contract.

35. With respect to the competence of the FIFA DRC on the contract and the standard contract, the player states that the NDRC of Country D does not pass the ‘stand-alone test’ and is therefore not to be considered independent, because it is subordinated to the Football Association of Country D, as well as, that if such body would cease to exist, also the NDRC of Country D would disappear.

36. Further, according to the player, the clause in article 13 of the standard contract was not a ‘free, lawful land unequivocal’ choice for the competence of the NDRC of Country D, but rather a ‘forced arbitration’, as it was prescribed by the standard contract of the Football Association of Country D. Moreover, according to the player, said clause cannot be applied, as he is no longer registered by the Football Association of Country D (there is no reference to registration in the competence part of the NDRC Regulations), since he is currently playing for the club of Country B Club E.

37. In addition, the player argues that the NDRC of Country D does not meet the minimum standards for fair proceedings, since there is no appropriate balance between player and club representatives, as one the four members initially chosen will be promoted to Vice-Chairman. This gives, according to the player, the club representatives an undue advantage. Further, according to the player, a significant advance of costs needs to be paid in order to start a proceeding before the NDRC of Country D.

38. What is more, according to the player, the club did not prove that the Chairman of the Country D NDRC is independent and chosen by consensus by the player and club representatives, as in case of no consensus ‘the casting vote […] is granted to the deputy chairman, who is a Football Association of Country D representative in the current formation of the Football Association of Country D NDRC’. Also, according to the player, article 22.4.3, 22.4.4. and 22.4.5 of the NDRC Regulations are not in compliance with the FIFA Circular No. 1010 and do not foresee an independent and fair process of election of the Chairman and the Vice-Chairman.

39. Further, the player refers to several decisions taken in the past by the FIFA’s DRC, where it decided that the Country D NDRC does not meet the minimum standards for fair proceedings. Moreover, according to the player, a minimum of three player representatives and three club representatives should have been appointed in order to meet the minimum standards for fair proceedings as laid down in FIFA Directives, whereas in fact, in the NDRC of Country D, only two player representatives and two club representatives are appointed.

40. For the abovementioned reasons, the player concludes that the NDRC of Country D has no competence in relation to the contract and the standard contract.

41. With respect to the image rights agreement, the player repeats his previous argumentation and states that it was clear that the image rights contract was meant to be related to the employment of the player by the club. The player also referred to the fact that his monthly remuneration as per the image rights agreement (EUR 12,000) was four times as high as the salary he was entitled to as per the contract (EUR 3,000), which is a clear indication that the image rights agreement was in fact part of the employment contract.

42. As to the substance of the matter at hand, the player argues that article 1.2 of the contract cannot be considered as a ‘pre-agreed termination clause’, as it meant to be a clause directly terminating the contract. Further, the player points out that he does not agree with the club’s argumentation that the clause phrased in article 1.2 of the contract should be dealt with in the same way as if it were a unilateral an extension clause.

43. Further, the player states that it follows from CAS and FIFA jurisprudence, as well as from decisions issued by the Swiss Federal Tribunal, that clauses like the clause in article 1.2 of the contract, are null and void. Also, the player points out that the club could terminate the contract with the player with immediate effect, without any ‘casual condition’, whereas the player could not terminate the contract in a similar way. What is more, the player explicitly contests that the clause could be interpreted as that he could also unilaterally terminate the contract based on said clause.

44. With regards to the compensation of EUR 1,000, the player received, he explicitly points out that he never agreed with the unilateral termination of the contract, in return for the receipt of EUR 1,000.

45. In conclusion, the player argues that the clause in article 1.2 of the contract, as well as article 5.3 of the image rights agreement, cannot be upheld and that the termination of the contract, made by the club, on 8 June 2018, was done without just cause. As a result, the player reiterates his initial claims and further points out that for the calculation of the compensation, the parameters laid down in article 17 of the FIFA Regulations should apply.

46. In its duplica, the club insisted on its arguments regarding the inadmissibility of the claim. In particular, according to the club, article 22.5 of the NDRC Regulations, clearly explains which persons can be elected as members of the Committee and that the president of the NDRC of Country D was elected with the consent of both the player and club representatives. In this respect, the club submitted a declaration dated 16 November 2018, submitted on behalf of the Football Association of Country D, in which it is confirmed that ‘both the Football Union of Country D and the Football Association of Country D had proposed the President of the Dispute Resolution Committee’.

47. As to the substance, the club rejects the argumentation of the player and submits that contents of the contract were freely negotiated between the parties. Further, the club states that in view of FIFA and CAS jurisprudence, buy out clauses are legally valid, and that the clause in article 1.2 of the contract has to be considered as a buy out clause or ‘pre agreed mutual termination clause’, compatible with article 13 of the FIFA Regulations.

48. What is more, the club argues that the clause in article 1.2 of the contract also qualifies as a liquidated damages clause and that therefore, the provisions of article 17 of the FIFA Regulations do not apply. Further, the club states that, since the parties validly inserted a buy-out clause in the contract and since the club terminated the contract in a valid way, no further (sporting) sanctions can be imposed on the club.

49. In conclusion, the club requests that the FIFA DRC declares itself not competent in the matter at hand, that it has no competence to examine and award compensation in relation to the image rights agreement, as well as that all the player’s claims are rejected.

50. Upon request of FIFA, the player stated that on 23 November 2018, he signed a new contract with the club of Country B Club E. According to said contract, valid as from 26 November 2018 until 31 May 2019, the player was entitled to receive a monthly salary of currency of Country B (currency of Country B) 2,600 (approximately EUR 1,330). For the period between 26 November 2018 and 31 May 2019, this corresponds to the total amount of currency of Country B 15,950 (approximately EUR 8,155).

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 July 2018. Consequently, the DRC concluded that the June 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 a club of Country D.

3. However, the Chamber acknowledged that the club contested the competence of FIFA’s deciding bodies on the basis of art. 13 of the employment contract highlighting that the Football Association of Country D (Football Association of Country D) has an independent deciding body to deal with the matter, i.e. the National Dispute Resolution Chamber of the Football Association of Country D.

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

5. Taking into account the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the 2010 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 FIFA Circular no. 1010 dated 20 December 2005. In this regard, the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

6. In continuation, the members of the Chamber wished to stress that the club was unable to prove that, in fact, the Football Association of Country D “National Dispute Resolution Chamber” meets the minimum procedural standards for independent arbitration tribunals as laid down in art. 22 lit. b) of the Regulations on the Status and Transfer of Players, in FIFA Circular no. 1010 as well as in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations.

7. In this respect, the DRC referred to the principle of equal representation of players and clubs and underlined that this principle was one of the very fundamental elements to be fulfilled, in order for a national dispute resolution chamber to be recognised as such. Indeed, this prerequisite is mentioned in the Regulations on the Status and Transfer of Players, in the Circular no. 1010 as well as in art. 3 par. 1 of the NDRC Regulations, which illustrates the aforementioned principle as follows: “The NDRC shall be composed of the following members, who shall serve a four-year renewable mandate: a) a chairman and a deputy chairman chosen by consensus by the player and club representatives (…); b) between three and ten player representatives who are elected or appointed either on proposal of the players’ associations affiliated to FIFPro, or, where no such associations exist, on the basis of a selection process agreed by FIFA and FIFPro; c) between three and ten club representatives (…).” In this respect, the FIFA Circular no. 1010 states the following: “The parties must have equal influence over the appointment of arbitrators. This means for example that every party shall have the right to appoint an arbitrator and the two appointed arbitrators appoint the chairman of the arbitration tribunal (…). Where arbitrators are to be selected from a predetermined list, every interest group that is represented must be able to exercise equal influence over the compilation of the arbitrator list.”

8. What is more, while analysing the documentation submitted by the parties in this respect, in particular, the members of the Chamber concurred that the “Regulations for the Registration and Transfer of Football Players and the DRC Procedural Regulations (2013)”, in accordance with its article 22.4.4, the two members which are elected by the Football Union of Country D, need to be approved by the Football Association of Country D, whereas such condition does not apply to the appointment of club representatives. What is more, based on article 22.4.5 of the Country D NDRC Regulations, in case Football Union of Country D refuses or fails to nominate a player representative, the Football Association of Country D has also potential influence on the selection process of player representatives, as opposed to club representatives.

9. Taking into account the foregoing articles of the Country D NDRC Regulations, the members of the Chamber were of the opinion that the Country D NDRC does not fully respect the principle of equal representation, as laid down in FIFA Circular no. 1010.

10. In view of all the above, the Chamber established that the club’s objection to the competence of FIFA to deal with the present matter has to be rejected and that the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

11. In continuation, with regard to the claimed payments in connection to the image rights contract apparently signed by the parties, the Chamber also had to verify whether, for formal reasons, it was competent to deal with this specific component or not. In fact, it remains that this part of the claim could possibly not be considered due to the Chamber lacking competence to deal with disputes related to image rights.

12. As a general rule, if there are separate agreements, the DRC tends to consider the agreement on image rights as such and does not have the competence to deal with it. However, such conclusion might be different if specific elements of the separate agreement suggest that it was in fact meant to be part of the actual employment relationship.

13. In casu, the members of the Chamber analysed the documentation on file, specifically the contract, the standard contract and the image rights agreement. In this respect, the members of the Chamber wished to highlight that the image rights contract contains elements, which led to believe that it was not in fact an image rights contract per se, but rather a separate agreement to the employment contract, i.e. directly linked to the services of the player, as a player. In particular, the image rights contract is signed by the same parties as the contract and came into force on the same day as the contract, i.e. from 14 December 2017 and was automatically terminated upon termination of the contract (cf. point I./10. above). What is more, the image rights agreement provides for monthly payments in an amount almost three times as high as the regular salary of the player as per the contract.

14. In view of the above, the members of the Chamber established that the image rights contract was in fact meant to be an integral part of the actual employment relationship, in the sense that it was directly linked to the services of the player as an employee of the club. Therefore, the Panel decided that such image rights contract was to be regarded as a supplementary agreement to the employment contract, meaning that the DRC was in a position to consider said image rights contract, when assessing the player’s claim.

15. Bearing all of the above in mind, the Chamber established that the club’s objection to the competence of FIFA to deal with the present matter had to be rejected and that the DRC 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.

16. 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 15 July 2018, the June 2018 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

17. 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.

18. First of all, the DRC acknowledged that, on 14 December 2017, the player and the club had concluded an employment contract valid as from 15 December 2017 until 31 May 2019. As to the financial terms of said employment contract, the Chamber took note that it had been agreed upon between the parties that the club would remunerate the player with a monthly salary of EUR 3,530 gross (or EUR 3,000 net) in the period between 15 December 2017 and 31 May 2018. Furthermore, in the period between 1 June 2018 and 31 May 2019, the player was entitled to a monthly salary of EUR 3,475 gross (or EUR 3,000 net).

19. Equally, the DRC acknowledged that, on the same date, the player and the club concluded the “image rights contract”, according to which the club was to pay the player a further monthly amount of EUR 12,000 in the period between 15 December 2017 and 31 May 2019.

20. The members of the Chamber then turned to the claim of the player, who maintained that until the month of June 2018, the club duly paid him all his dues, however that on 8 June 2018, the club unilaterally terminated the contract, based on article 1.2 of the contract.

21. In this context, the Chamber firstly focussed its attention on the said article 1.2 of the contract, which reads as follows: ‘Both parties mutually agree that the player may be released by this contract after 31/05/2018 and until 30/06/2018, by means of a written notice from the club to the player. In such a case, the player will be entitled to EUR 1,000 gross as fair and reasonable compensation for the release of this contract without any right to claim any other damages or compensation whatsoever’.

22. In this regard, the Chamber took into account that such clause appears to be unilateral and to the benefit of the club only, as the player would only be entitled to an amount of EUR 1,000, in case of the termination of his contract, whereas the club did not had to pay the player’s salary anymore. In the light of such potestative character of the pertinent contractual clause, especially entailing benefits towards the club, the members of the Chamber agreed that art. 1.2 of the contract is not acceptable. Along those lines, the members of the Chamber decided to disregard the club’s argumentation that the clause was freely agreed upon between the parties.

23. Based on the foregoing circumstances, the members of the Chamber came to the conclusion the said article 1.2 of the contract does not constitute a reason that can be validly invoked, nor a legal basis to unilaterally terminate the contract.

24. For all of these reasons, the Chamber decided to reject the club’s arguments and to establish that the club, on 8 June 2018, had unilaterally terminated the employment contract based on the aforementioned article 1.2 without just cause and is to held liable for the consequences of such termination.

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

26. The Chamber then reverted to the player’s claim, from which it clearly follows that at the day of the unilateral termination of the contract, 8 June 2018, there was no outstanding amounts to be paid by the club to the player, as the club had fulfilled all of its financial obligations towards the player until said date.

27. In continuation, the Chamber focussed its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the player 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 as to whether the pertinent employment contract contains a provision by which the parties had beforehand agreed upon an amount of compensation payable by either contractual party in the event of breach of contract. In this respect, the members of the Chamber referred to article 1.2 of the contract (cf. point II./21. above) and noted that said clause is to the benefit of the club only, i.e. it is not reciprocal as it does not grant the same rights to the player. Therefore, the members of the Chamber decided that said clause cannot be taken into consideration in the determination of the amount of compensation.

29. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club 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 the 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.

30. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 31 May 2019. In this respect, the Chamber took into account that the player claimed that in the 2018/2019 season, based on the contract, he was entitled to a monthly salary of EUR 3,000 net, which corresponds according to him to EUR 3,475 gross, therefore, to the total amount of EUR 41,800 gross as salary payments. Furthermore, the player argued that he was also entitled to 12 monthly payment of EUR 12,000 based on the termination agreement, therefore to the total amount of EUR 144,000 net, which corresponds according to the player EUR 210,216 gross. As a result of the foregoing, the player deems that he would be entitled to the amount of EUR 251,916 gross.

31. However, the members of the Chamber noted that the player was not able to provide documentation, proving to the Chamber’s satisfactory, that the amount of EUR 144,000 net indeed corresponded to EUR 210,216 gross. In this respect, the player only submitted a print screen of a calculation made on a website of Country D, which is not considered by the members as sufficient and convincing evidence that the player was entitled to the gross amount of EUR 210,216 and that he already had paid said alleged taxes to the respective tax authorities. Furthermore, it is clear from the contract that the monthly salary of EUR 3,475 gross as per the contract, corresponds to a monthly salary of EUR 3,000 net.

32. Based on the foregoing circumstances, the members of the Chamber decided that the residual value of the contract until 31 May 2019, corresponds to 12 monthly salaries of EUR 3,000 net, as well as 12 payments of an additional amount of EUR 12,000, based on the termination agreement, therefore, to the total amount of EUR 180,000 net. Taking into account hat the player confirmed to have received an amount of EUR 1,000 on 22 June 2018 (cf. points I./13. and I./19. above), the Chamber concluded that the amount of EUR 179,000 serves as the basis for the determination of the amount of compensation for breach of contract.

33. 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 player’s general obligation to mitigate his damages.

34. Indeed, on 23 November 2018, the player found employment with the club of Country B Club E. In accordance with the pertinent employment contract, which has been made available by the player, valid as from 26 November 2018 until 31 May 2019, the player was entitled to receive a monthly salary of currency of Country B (currency of Country B ) 2,600. For the period between 26 November 2018 until 31 May 2019, the player was therefore entitled to receive the total amount of currency of Country B 15,950, corresponding to approximately EUR 8,155. Consequently, the Chamber established that the value of the new employment contract concluded between the player and Club E, amounting to EUR 8,155, should be deducted from the compensation for breach of contract the player was entitled to.

35. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 170,845 to the player, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

36. Furthermore, in accordance with its established jurisprudence and taking into account the request of the player, the Chamber further decided that interest at the rate of 5% p.a. was to be applied over the amount of EUR 170,845 as from 4 July 2018, i.e. the date of the claim.

37. Furthermore, taking into account the consideration under number II./16. above, the Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

38. In this regard, the Chamber established that, in virtue of the aforementioned provision, it has competence to impose a sanction on the club. More in particular, the DRC pointed out that, against clubs, the sanction shall consist in a ban from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods.

39. Therefore, bearing in mind the above, the DRC decided that, in the event that the club does not pay the amount due to the player within 45 days as from the moment in which the player, following the notification of the present decision, communicates the relevant bank details to the club, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the club in accordance with art. 24bis par. 2 and 4 of the Regulations.

40. Finally, the Chamber recalled that the above-mentioned sanction will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

41. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the player 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, Club C, has to pay to the Claimant compensation for breach of contract in the amount of EUR 170,845, plus 5% interest p.a. as of 4 July 2018 until the date of effective payment.

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

5. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amount mentioned under point 3. above.

6. The Respondent shall provide evidence of payment of the due amount in accordance with point 3. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amount due plus interest in accordance with point 3. above is not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

8. The ban mentioned in point 7. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

9. In the event that the aforementioned sum plus interest is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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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

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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl. CAS Directives