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 26 June 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 26 June 2019,

in the following composition:

Geoff Thompson (England), Chairman

Eirik Monsen (Norway), member

Stéphane Burchkalter (France), member

Joseph Antoine Bell (Cameroon), member

Stefano La Porta (Italy), member

on the claim presented by the player,

Player A, Country B,

as Claimant

against the club,

Club C, Turkey

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 24 January 2017, the Country B player, 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 24 January 2017 until 31 May 2019.

2. In accordance with the contract, the Claimant was entitled, inter alia, to the following remuneration: a. EUR 375,000 for the season 2016/2017; b. EUR 750,000 for the season 2017/2018, payable in 10 monthly salaries of EUR 75,000 each as from August 2017; b. EUR 750,000 for the season 2018/2019.

3. According to art. 3.2 of the contract, “in case of nonpayment of three consecutive payments the [Claimant] can send a notice to the [Respondent] and give 7 days for the payment. If the [Respondent] still does not pay by the end of the given 7 days period the [Claimant] may unilaterally terminate the contract with just cause. Any termination without respecting this procedure will be deemed unjust and the [Respondent] will be entitled to compensation in accordance with FIFA RSTP art. 17”.

4. On an unspecified date, the Claimant, the Respondent and the Country E club, Club F (hereinafter: Club F) signed a loan agreement for the temporary transfer of the Claimant from the Respondent to Club F, valid as from 26 March 2018 until 31 May 2018.

5. In accordance with art. 2.b. of the loan agreement, the Respondent “will pay to the [Claimant] EUR 150,000 on 30 March 2018, EUR 75,000 on 15 April 2018, EUR 150,000 on 31 May 2018 during the loan period. If [the Respondent] would pay this amounts, the [Claimant] will have no remuneration from [the Respondent] for the period of 2017/2018 football season (i.e. until 31 May 2018)”.

6. In accordance with art. 2.c. of the loan agreement, “the [Claimant] and [the Respondent] herewith agree to suspend the employment contract dated 24 January 2017 for the time period of the temporary transfer of the [Claimant] from 26 March 2018 to 31 May 2018. Due to this suspension of the employment agreement, [the Respondent] has no obligations against the [Claimant] until 31 May 2018. Especially [the Respondent] is not obligated to pay to the [Claimant] any remuneration, car, apartment and flight tickets as this obligation has to be fulfilled by Club F from 26 March 2018 during the lending period in accordance with the employment agreement between Club F and the [Claimant]”.

7. Art. 3 of the loan agreement provides that “if the conditions set out in clauses 2 above shall not have all been deemed to have been satisfied with effect from 12:00 (CET) on 26 March 2018 then this agreement shall become null and void and of no effect and no party shall have any obligation to the other hereunder”.

8. On 2 May 2018, the Claimant put the Respondent in default of the payment of EUR 225,000 due under the loan agreement, consisting of EUR 150,000 due on 30 March 2018 and EUR 75,000 due on 15 April 2018, plus 5% interests “after due dates” and giving 10 days to the Respondent to remedy its default.

9. On 25 May 2018, the Claimant put the Respondent in default a second time for the same amounts, giving 7 days to remedy its default.

10. On 4 June 2018, the Claimant unilaterally terminated the contract, claiming that the Respondent did not pay the amounts requested in his two default letters. The Claimant further claimed the amount of EUR 150,000 which became due on 31 May 2018, for a total amount of EUR 375,000.

11. On 16 May 2018 and completed on 19 June 2018, the Claimant lodged a claim against the Respondent in front of FIFA for outstanding remuneration and compensation for breach of contract, requesting the total amount of EUR 1,125,000, consisting of:

a. EUR 375,000 as outstanding remuneration, corresponding to the salaries as from January to May 2018, plus 5% interest p.a. as from each due date “from end of January 2018 – May 2018”;

b. EUR 750,000 as compensation, corresponding to his “remaining remunerations of the contract”, plus 5% interest p.a. as from 4 June 2018;

12. With his claim, the Claimant further requested that sporting sanctions be imposed on the Respondent.

13. More in particular, the Claimant considered that the payments provided for at art. 2b of the loan agreement corresponded to the salaries provided for in the contract and which should have been paid to him by the Respondent. The Claimant considered that “if [the Respondent] does not pay according to the loan agreement to [him] obligations of the [Respondent] regarding to [his] monthly salaries shall continue according to the employment agreement”.

14. In reply to the claim, the Respondent contested that the amount due on 31 May 2018 and claimed by the Claimant corresponded to the salaries of April and May 2018, maintaining that, during the duration of the loan agreement, the contract was suspended.

15. The Respondent further argued that “the amount stipulated under the employment contract are not salaries”.

16. Moreover, the Respondent argued that, with his second default notice, the Claimant gave it 7 days to remedy the default notice, in violation of the applicable Regulations on the Status and Transfer of Players at the time said notice was sent, i.e. 7 June 2018, as art. 14bis of the June 2018 edition require a deadline of 15 days to be granted to the debtor. Therefore, according to the Respondent the player terminated the contract without just cause.

17. The Respondent also alleged that the Claimant’s remuneration under his new contract with the Country D club, Club G (cf. below points 21 and 24) had been lowered to diminish the eventual mitigation in case of compensation granted by the DRC. The Respondent argued that the agent’s fees are much higher than the salary of the Claimant under the new contract.

18. In his replica, the Claimant deemed that it remained uncontested that his salaries for January 2018, February 2018 and March 2018 for a total amount of EUR 225,000 had not been paid by Respondent.

19. The Claimant reiterated that, in accordance with the loan agreement, if the Respondent did not pay the amounts provided at art. 2, the “obligations of the club regarding the monthly salaries of the player [would be] valid and continue according to the employment agreement”. Consequently and since it was undisputed that the amounts of EUR 150,000 and EUR 75,000 respectively due on 31 March and 15 April 2018 had not been paid in accordance with the loan agreement, the Claimant maintained that the amounts provided by the contract were due to him.

20. Regarding the default notice of 25 May 2018 and the 7 days deadline given with it, the Claimant argued that he followed the conditions set out in art. 3.2 of the contract.

21. With his replica, the Claimant amended his claim, explaining that, due to a new contract he had signed with the Country D club, Club G, the compensation should amount to EUR 550,000, representing the difference between the residual value of the contract at the basis of the present dispute, i.e. EUR 750,000 and EUR 200,000 deriving from his new contract.

22. In its duplica, the Respondent argued that, since the loan agreement provided that the contract was suspended during the loan period until 31 May 2018, the contract could not apply regarding clause 3.2 on the condition for the termination of the Claimant. The Respondent reiterated in his second default notice, that the Claimant should have given a deadline of 15 days for the club to pay, following the June 2018 FIFA Regulation.

23. The Respondent argued once more that the Claimant tried to hide his remuneration with his new club by having part of his remuneration paid to his management team to limit the possible mitigation in case of compensation awarded to him by the FIFA DRC.

24. On 16 July 2018, the player signed an employment contract with the Country D club, Club G valid as from the date of signature until 31 May 2019, according to which he was entitled for the season 2018/2019 to the total amount of EUR 200,000 payable in 10 monthly instalments as from 31 August 2018. Moreover, after having amicably terminated said employment relationship, on 5 March 2019, the Claimant signed a contract with the Country E club, club H, valid as from the date of signature until 15 July 2019, pursuant to which, he was entitled to a signing-on fee of currency of Country E 700,000 and a monthly salary of 10,000.

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 matter at stake. In this respect, the DRC took note that the present matter was submitted to FIFA on 16 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 2018), the DRC is competent to deal with the matter at stake, which concerns an employment–related dispute with an international dimension between a Country B player and a Country D club.

3. Furthermore, the DRC analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, the DRC confirmed that, in accordance with art. 26 par. 1 and par. 2 of the said Regulations (edition 2018) and considering that the present claim was lodged in front of FIFA on 16 May 2018, the 2018 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the members of 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. In this respect, the DRC acknowledged that, on 24 January 2017, the Claimant and the Respondent concluded an employment contract valid as from 24 January 2017 until 31 May 2019, pursuant to which the Claimant was entitled to the total amount of EUR 375,000 for the first contractual year, the total amount of EUR 750,000 for the second and a monthly salary of EUR 750,000 for the third. More specifically, the DRC took note that, with regards to his financial entitlement for the season 2017/2018, the Claimant was entitled, inter alia, to 10 monthly salaries of EUR 75,000 each as from August 2017.

6. Moreover, the Chamber observed that, on an unspecified date, the Claimant, the Respondent and Club F signed a loan agreement for the temporary transfer of the Claimant from the Respondent to Club F, valid as from 26 March 2018 until 31 May 2018. The Chamber further took into account that, according to art. 2b of the said loan agreement, the Respondent undertook to pay the Claimant the total amount of EUR 375,000 in three separate instalments during the loan period. The DRC took note that the same provision specified that in case the Respondent paid the aforementioned amount “the [Claimant] will have no remuneration from [the Respondent] for the period of 2017/2018 football season (i.e. until 31 May 2018)”.

7. Furthermore, the members of the Chamber took note that the loan agreement clarified that “the [Claimant] and [the Respondent] herewith agree to suspend the employment contract dated 24 January 2017 for the time period of the temporary transfer of the [Claimant] from 26 March 2018 to 31 May 2018”.

8. In continuation, the members of the Chamber observed that, according to the Claimant, he had just cause to unilaterally terminate the employment contract on 4 June 2018, due to the fact that, following the signing of the loan agreement, the Respondent failed to fulfil its financial obligations for an amount equivalent to 5 monthly salaries.

9. In continuation, the members of the Chamber noted that the Respondent, for its part, contested that the amount due on 31 May 2018 in accordance with the loan agreement corresponded to the salaries of April and May 2018, maintaining that, during the duration of the loan agreement, the contract was suspended.

10. Moreover, the DRC took note that, according to the Respondent, the Claimant had terminated the contract without just cause since his second default notice was not compliant with art. 14 bis of the June 2018 edition of the Regulations, allegedly applicable to the matter at stake, which requires a deadline of 15 days to be granted to the debtor.

11. On account of the above, the Chamber highlighted that the underlying issue in this dispute was to determine whether the employment contract had been terminated by the Claimant with just cause and, subsequently, to determine the consequences thereof.

12. Prior to entering into the analysis concerning the amount of remuneration which had remained outstanding at the time of termination, however, the members of the DRC deemed it necessary to first assess the Respondent’s argument concerning the alleged incompatibility of the Claimant’s default notice with the applicable FIFA Regulations.

13. In this respect, the DRC took note that the claim was lodged on 16 May 2018, i.e. when the applicable Regulations were the January 2018 edition, which do not contain the art. 14bis, providing for the 15 days default notices. In any case, for the sake of completeness, the DRC pointed out that, by means of his default notices, the Claimant gave the Respondent 17 days in total to remedy its default. Consequently, the DRC dismissed the Respondent’s argumentation on the point.

14. The foregoing having been clarified, the members of the Chamber observed that it remained uncontested that the Claimant’s salary related to the months of January and February 2018 had remained unpaid and that none of the payments envisaged in the loan agreement had been performed by the Respondent to the Claimant.

15. Moreover, the members of the DRC recalled that, according to art. 2.b. of the loan agreement, the Respondent “will pay to the [Claimant] EUR 150,000 on 30 March 2018, EUR 75,000 on 15 April 2018, EUR 150,000 on 31 May 2018 during the loan period. If [the Respondent] would pay this amounts, the [Claimant] will have no remuneration from [the Respondent] for the period of 2017/2018 football season (i.e. until 31 May 2018)”.

16. In other words, the DRC pointed out that, pursuant to the loan agreement, the Respondent’s financial obligations deriving from the employment contract were suspended, provided that the Respondent paid the Claimant the amounts indicated in the loan agreement, which – not casually – corresponded to the salaries the latter would have been entitled to under the employment contract for the period between January and May 2018.

17. In light of the foregoing, the members of the DRC concluded that, at the time the Claimant terminated the employment contract, the total amount of EUR 375,000 was outstanding, corresponding to the his salaries as from January until May 2018. Therefore, the members of the Chamber considered that the Respondent had seriously neglected its contractual obligations towards the Claimant in a continuous and repeated manner, reason for which the latter had a just cause to terminate the contract on 4 June 2018, having previously put the Respondent in default of its financial obligations on 2 and 25 May 2018.

18. Consequently, the Chamber decided that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant.

19. In continuation, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant, the Chamber decided that the Respondent must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant EUR 375,000, pertaining to his salaries as from January until May 2018.

20. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the day following the day on which each instalment fell due in accordance with the employment contract until the date of effective payment.

21. In continuation and having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the Chamber decided that, taking into consideration art.17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to the aforementioned outstanding remuneration.

22. In this context, the Chamber outlined that in accordance with said provision 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.

23. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber observed that the matter at stake falls outside of the scope of the only clause contained in the employment contract concerning its unilateral premature termination.

24. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its termination and concluded that the Claimant would have been entitled to receive EUR 750,000 as remuneration had the employment contract been executed until its regular expiry date, i.e. 31 May 2019.

25. In continuation, the Chamber assessed whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been able to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract(s) 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.

26. In respect of the above, the Chamber recalled that the Claimant signed 2 consecutive employment contracts following the termination of the one at stake. More specifically, the Chamber recalled that, on 16 July 2018, the Claimant signed an employment contract with Club G valid as from the date of signature until 31 May 2019, according to which he was entitled for the season 2018/2019 to the total amount of EUR 200,000, which had been amicably terminated on 5 March 2019.

27. Moreover, the Chamber observed that, on 5 March 2019, the Claimant signed a contract with the Country E club, club H, valid as from the date of signature until 15 July 2019.

28. The Chamber recalled that, pursuant to this last contract, the Claimant was entitled to a signing-on fee of 700,000 and a monthly salary of 10,000.

29. Consequently, on account of all of the above-mentioned considerations, the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damage, the Chamber decided that the Respondent must pay the amount of EUR 541,180 to the Claimant as compensation for breach of contract.

30. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 16 May 2018, until the date of effective payment.

31. The Chamber 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 375,000 plus 5% interest p.a. until the date of effective payment as follows:

 5% p.a. as of 1 February 2018 on the amount of EUR 75,000;

 5% p.a. as of 1 March 2018 on the amount of EUR 75,000;

 5% p.a. as of 1 April 2018 on the amount of EUR 75,000;

 5% p.a. as of 1 May 2018 on the amount of EUR 75,000;

 5% p.a. as of 1 June 2018 on the amount of EUR 75,000.

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 EUR 541,180 plus 5% interest p.a. on said amount as from 16 May 2018 until the date of effective payment.

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, 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 remittances are 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

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives