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

• Data decisione: 14 settembre 2018 • 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 14 September 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 14 September 2018,

in the following composition:

Geoff Thomson (England), Chairman

Jerome Perlemuter (France), member

Elvis Chetty (Seychelles), member

Stefano Sartori (Italy), member

Takuya Yamazaki (Japan), 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 an unspecified date, the Player of Country B, Player A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract), valid for the seasons 2015/2016 and 2016/2017 in Country D.

2. On 23 June 2016, the Claimant lodged a claim against the club before FIFA regarding outstanding remuneration and compensation for breach of contract, requesting the total amount of EUR 268,000.

3. On 16 August 2017, the Claimant and the Respondent signed a document titled “Settlement agreement” (hereinafter: the settlement agreement).

4. The settlement agreement stipulated, inter alia, the following:

“1 The [Respondent] shall make the following payments to the [Claimant] :

- EUR 150,000 by no later than 30 September 2017. […]

3. Upon receipt of the full payment, the [Claimant] shall withdraw his claim against the [Respondent] in front of the FIFA Dispute Resolution Chamber by means of a letter […].

5. In case the payment as per clause 1 is not made in due time, the [Claimant] shall have the right to immediately request that the proceedings in front of the FIFA Dispute Resolution Chamber continue, in case of any delay in payment, it is agreed between the parties that an irrevocable and unconditional penalty of EUR 100,000 must be paid by the [Respondent] to the [Claimant], in addition to any amount awarded by FIFA DRC.

6. With the consummation and full implementation of this Agreement, the parties declare themselves fully settled as regards any mutual claims, rights or obligations under any existing and/or previous contractual relationship between the parties.”

5. On 29 September 2017, the Respondent paid the Claimant, the amount of EUR 100,000 and on 2 October 2017, the Respondent paid the Claimant, the amount of EUR 50,000.

6. On 29 November 2017, the Claimant lodged a claim against the Respondent in front of FIFA requesting the amount of EUR 118,000. The amount claimed was broken down as follows:

 EUR 100,000 in application of the penalty clause of the settlement agreement;

 EUR 18,000 as unpaid balance from the claim lodged on 23 June 2016. In this regard, the Claimant explained that this amount corresponds to the amount claimed in his claim of 23 June 2016 i.e. EUR 268,000, minus mitigation of EUR 100,000 corresponding to his remuneration with his new club for the overlapping period and minus the EUR 150,000 paid in regards to the settlement agreement.

7. In his claim, the Claimant argued that even though the totality of the amounts provided by the settlement agreement had been paid, according to him, the payment was late, and, in consequence, the penalty clause became applicable.

8. In its reply, the Respondent argued that the deadline for the payment of the amount in the settlement agreement was on 30 September 2017, which was a Saturday, which explains, that the last part of the payment was made on the following business day i.,e. Monday, 2 October 2017, and that as such, there is no delay.

9. In his replica, the Claimant rejected the Respondent’s argumentation, and sustained that the settlement agreement was signed in August 2017, giving enough time to the Respondent to pay before the deadline. The Claimant also argued that he was claiming not the just the amount provided in the agreement, but also the unpaid balance from his original claim.

10. Notwithstanding, the Claimant amended his claim, reducing his request for relief as he estimated that the penalty clause would be lowered “at 25% of the settlement amount, i.e. 37,500 EUR”. In consequence, the Claimant requested the payment of the total amount of EUR 55,500, corresponding to EUR 18,000 from the original claim and EUR 37,500 from the lowered penalty clause, in order to avoid further proceedings.

11. In its duplica the Respondent held that the penalty clause is excessive, as the Claimant requested EUR 100,000 for an alleged one day-delay. The Respondent further held that the Claimant did not suffer any loss.

12. The Claimant informed FIFA that on 15 June 2016, he signed an employment contract with the Club of Country D, Club E, valid as from 9 June 2016 until 31 May 2019, with an annual salary of EUR 100,000 for the 2016/2017 season, corresponding to the overlapping period.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 29 November 2017. Consequently, the 2017 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) are applicable to the matter at hand (cf. article 21 of the 2017 and 2018 editions of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018), the Dispute Resolution Chamber 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 Club of Country D.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions 2016 and 2018), and considering that the present claim was lodged on 29 November 2017, the 2016 edition of said regulations (hereinafter: 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, and entering into the substance of the matter, the Chamber started by acknowledging the above-mentioned facts as well as the documentation contained in the file. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Chamber first acknowledged that the Claimant and the Respondent signed an employment contract valid for the season 205/2016 and 2016/2017.

6. In addition, the Chamber observed that on 23 June 2016, the Claimant had previously lodged a claim against the Respondent in front of FIFA claiming outstanding remuneration and compensation for breach of contract in the total amount of EUR 268,000.

7. In this regard, the DRC took note that the Claimant and the Respondent signed a settlement agreement on 16 August 2017, in accordance with which the Claimant was entitled to EUR 150,000 payable “by no later than 30 September 2017”. The Chamber further acknowledged that the settlement agreement provided the following: “3. Upon receipt of the full payment, the [Claimant] shall withdraw his claim against the [Respondent] in front of the FIFA Dispute Resolution Chamber by means of a letter […].

8. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent claiming that the penalty clause of the settlement agreement became applicable, since according to him, the payment of the amount provided by the settlement agreement was done late. Consequently, the Claimant asks to be awarded his outstanding dues from the first claim lodged in front of FIFA on 23 June 2016 in the amount of EUR 18,000 corresponding to EUR 268,000, minus mitigation of EUR 100,000 corresponding to his remuneration with his new club for the overlapping period and minus the EUR 150,000 paid in regards to the settlement agreement. The Claimant further requested the payment of the penalty clause in the amount of EUR 100,000, which he later amended to EUR 37,500 as he considered that the DRC might see fit to lower the penalty clause to an amount corresponding to 25% of the original penalty amount of the settlement.

9. The members of the DRC then observed that the Respondent held that there was no delay since the deadline for the payment provided by the settlement agreement was on 30 September 2017, which was a Saturday, and according to the Respondent, the last part of the payment was made on the next working day, i.e. on Monday 2 October 2017. The DRC noted that the Respondent further argued that the amount provided in the penalty clause was in any case excessive and that the Claimant suffered no loss since he received the total amount provided by the settlement agreement.

10. In view of the dissenting viewpoint of the parties with respect to the applicability of the penalty clause contained in the settlement agreement, the Chamber, to start with, focussed its attention on said contractual clause.

11. In this regard, the DRC was of the opinion that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness.

12. In this respect, the Chamber first decided to analyse the applicability of such clause, as the Respondent deemed that the penalty clause could not be applied since according to it, the payment of the amount provided in the settlement agreement had not been late.

13. In this context, the DRC recalled that following the settlement agreement, the payment due under it had to be made “by no later than 30 September 2017”.The DRC also observed that the total amount of EUR 150,000 had been paid in two instalments of EUR 100,000 on 29 September 2017 and of EUR 50,000 on 2 October 2017.

14. The DRC further recalled the argumentation of the Respondent, according to which the second payment had been made after the deadline provided by the settlement agreement since that deadline was set on a non-working day. However, the Chamber was of the view that the deadline provided by the settlement agreement had been freely agreed upon by the parties and therefore the Respondent was fully aware of it. Moreover, the DRC took note that the Respondent had paid the first part of the EUR 150,000 on 29 September 2017, before the end of the deadline, and with this in mind, the DRC considered that the Respondent had been in a position to perform the entirety of the payment before the end of the provided deadline.

15. In light of the above, the Chamber was of the unanimous opinion that the full payment of the amount provided by the settlement agreement had not been done within the deadline provided therein, activating the penalty clause of said agreement.

16. Having said that, the DRC decided to analyse the penalty clause in itself to determine whether it could be applied as such.

17. In this regard, the Chamber highlighted that in order to determine as to whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before it shall also be taken into consideration.

18. In the specific case at hand, the members of the Chamber deemed that the penalty clause of 100,000 in case of the late payment of the total amount of EUR 150,000 represented 67% of the total amount to be paid under the settlement agreement, and as such would have been disproportionate. However, the Chamber taking into account the amended claim of the Claimant in which he lowered his request pertaining to the penalty clause to EUR 37,500, deemed that this new amount, representing 25% of the amount to be paid under the settlement agreement was both proportionate and reasonable in the case at hand.

19. Consequently, the Dispute Resolution Chamber concluded that in accordance with the general principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant the amount of EUR 37,500 corresponding to the lowered amount of the penalty clause, in light of the Respondent’s failure to pay the full amount provided by the settlement agreement in a timely manner.

20. Furthermore, the DRC recalled that in application of art. 5 of the settlement agreement, the Claimant requested the balance of the original claim, which he calculated as EUR 18,000. In this regard, the DRC observed that the first part of the penalty clause stated the following : “In case the payment as per clause 1 is not made in due time, the player shall have the right to immediately request that the proceedings in front of the FIFA Dispute Resolution Chamber continue […]”. Taking into consideration the request of the Claimant to be awarded EUR 18,000 which corresponded, according to him, to the amount he would have received had the first claim be decided by the DRC, minus the amount received under the settlement agreement.

21. Taking into consideration all the documentation provided, and the fact that the Respondent did not contest this claimed amount, the DRC was of the opinion that the Claimant was entitled to the balance of the amounts due to him under the original claim.

22. Consequently, the DRC decided that the Respondent is liable to pay to the Claimant EUR 18,000 as outstanding remuneration.

Decision of the Dispute Resolution Chamber

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

2. The Respondent, Club C, has to pay to the Claimant the amount of EUR 18,000 as outstanding remuneration, within 30 days as from the date of notification of this decision.

3. The Respondent has to pay to the Claimant the amount of EUR 37,500 as penalty, within 30 days as from the date of notification of this decision.

4. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, 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.

*****

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

www.tas-caFor the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl.: CAS directives