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 6 December 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 6 December 2018,

in the following composition:

Geoff Thompson (England), Chairman

Eirik Monsen (Norway), Member

Jérôme Perlemuter (France), 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 arisen between the parties

I. Facts of the case

Facts relating to the preliminary issue concerning the competence of the DRC

1. On 16 January 2017, the Player of Country B, Player A (hereinafter: Claimant), and the Club of Country D, Club C (hereinafter: Respondent), signed an employment contract valid as from 15 January 2017 until 30 June 2017.

2. On an unspecified date, the Claimant and the Respondent signed a settlement agreement (hereinafter: agreement), which refers to the employment contract as already having expired on 30 June 2017.

3. Art. 8 of the agreement provides that:

“8.1 This SETTLEMENT AGREEMENT shall be governed by and interpreted in accordance with its provisions, as well as the FIFA Regulations, and the laws of Country D.

8.2 Any dispute arising from or related to this SETTLEMENT AGREEMENT will be submitted to the Court of Arbitration for Sport (TAS-CAS). “

4. Art. 9.1 of the agreement stipulates that “If any provision of this SETTLEMENT AGREEMENT shall be held by any competent body (including, without limitation, FIFA, the Court of Arbitration for Sport (TAS-CAS) and/or any court of competent jurisdiction to be illegal, invalid or enforceable, the remaining provisions shall remain in full force and effect.” “…”.

5. On 9 March 2018, the Claimant lodged a claim against the Respondent before FIFA on the basis of the agreement.

6. The Respondent rejected the competence of FIFA to deal with the present matter. In particular, based on art. 8 of the agreement the Respondent argued that the only competent body to decide upon a dispute between the parties on the basis of the settlement agreement is the Court of Arbitration for Sport (CAS).

7. The Claimant insisted that FIFA is competent to deal with the matter at hand arguing that despite the CAS jurisdiction clause, nothing prevents him from lodging a claim against the Respondent in front of the FIFA Dispute Resolution Chamber.

8. In this regard, the Claimant referred to art. 22 lit. b of the FIFA Regulations on the Status and Transfer of Players (hereinafter: RSTP). According to the Claimant, the criteria of the international dimension and the employment-related dispute are fulfilled.

9. However, the Claimant underlined that the exception to FIFA’s competence is not applicable in this matter, since CAS has not been established at national level or within the framework of a national football association and/or a collective bargaining agreement and does not respect the principle of equal representation between players and clubs.

10. In this respect, the Claimant presented a CAS award (XXX) in which CAS considered that “Since CAS is not such national arbitration tribunal, the Panel finds that the precondition for this exception (i.e. art 22 lit. b of RSTP) is not applicable and that the FIFA DRC, based on the FIFA Regulations, rightly accepted the jurisdiction.”

As to the substance of the matter:

11. According to art. 3 of the agreement, the Claimant was entitled to receive, “as full, complete and final settlement under the [employment contract]”, the total amount of EUR 330,000 payable in four instalments as follows:

- EUR 50,000 on 7 September 2017;

- EUR 60,000 on 17 September 2017;

- EUR 110,000 on 15 October 2017;

- EUR 110,000 on 15 November 2017.

12. Art. 3 of the agreement includes a note, which establishes that “In the event the [Respondent] fails to pay any of the instalments herein agreed within the agreed due dates, the overdue instalment shall be immediately considered payable and the [Respondent] shall immediately accomplish with the payment of the total remuneration of the due instalment only in such occasion (for example if the second instalment is not paid on the 17th of September 2017 then a penalty of 6,000 EUR will be applied and a monthly interest of 1% from the 60,000 which is equal to six hundred EUR only till the date of the second instalment payment is done). In such case, a fine of 10% plus interest will accrue on the full amount outstanding at the rate of 12% annual rate from the due date until the date of payment.” i.e. 10% penalty and a monthly interest of 1% from the date of payment till the date of the actual instalment payment with a maximum of 12% annually.”

13. On 16 December 2017, the Claimant sent a default notice to the Respondent asking it to proceed with the payment of second, third and fourth instalments set out in the agreement.

14. In his claim, the Claimant requested to be awarded:

- EUR 110,000 corresponding to the third instalment of the agreement, plus interest of 1% per month as of 16 October 2017 until the date of effective payment;

- EUR 110,000 corresponding to the fourth instalment of the agreement, plus interest of 1% per month as of 16 November 2017 until the date of effective payment;

- EUR 22,000 as penalty, plus interest of 5% p.a. “as from the date in which a decision is rendered regarding the matter at hand.”

The Claimant further asked that sporting sanctions be imposed on the Respondent.

15. The Claimant acknowledged having received the first instalment of EUR 50,000 of the agreement in a timely manner and that a few days after having sent the default notice, the Respondent proceeded with the payment of the second instalment of EUR 60,000.

16. As to the substance, the Respondent pointed out that it could not execute the payment of the third and fourth instalments due to “a deteriorated financial situation.”

17. In addition, the Respondent held that it does not owe the amount requested by the Claimant in relation with the penalty clause, considering that the application of the penalty plus the high interest rate of 12% per year established in the agreement will result in an overcompensation for the Claimant, which according to the Respondent is against Swiss law.

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 9 March 2018. Consequently, the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is applicable to the matter at hand (cf. article 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and highlighted that in accordance with art. 24 par. 1 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018; hereinafter: Regulations), the Dispute Resolution Chamber has competence to adjudicate employment-related disputes between a club and a player that have an international dimension.

3. As a consequence, the Dispute Resolution Chamber would, in principle, be competent to decide on the present employment-related dispute between a Player of Country B and a Club of Country D.

4. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s Dispute Resolution Chamber to deal with the present case, stating that disputes related to the agreement should be only referred to the Court of Arbitration for Sport (CAS) in accordance with article 8.2 of the agreement.

5. The Chamber equally noted that the Claimant rejected such position and alleged that FIFA had jurisdiction to deal with the present matter, referring to art. 22 lit. b of the Regulations and considering that the criteria of the international dimension and the employment-related dispute are fulfilled.

6. In addition, the DRC noted that the Claimant underlined that the Court of Arbitration for Sport does not fall under the exception of art. 22 lit. b of the Regulations, arguing that it has not been established at national level or within the framework of a national football association and/or a collective bargaining agreement and that it would not respect the principle of equal representation between players and clubs.

7. Having said that, first and foremost, the members of the DRC established that the claim of the Claimant for allegedly outstanding remuneration is solely based on the agreement, which was apparently signed after the date of expiry of the employment contract.

8. At this stage, the members of the DRC recalled the content of the aforementioned art. 8.2 of the agreement, which provides that “Any dispute arising from or related to this SETTLEMENT AGREEMENT will be submitted to the Court of Arbitration for Sport (TAS-CAS).”

9. In this respect, the Chamber first outlined that said clause unambiguously identifies the Court of Arbitration for Sport as exclusively competent to deal with disputes arising out of the agreement. Furthermore, the DRC was eager to point out that the relevant clause was freely included in the agreement and resulted from the common will of the parties.

10. As regards art. 9 par. 1 of the agreement, which indicates other deciding bodies, the members of the Chamber highlighted that such clause cannot be considered to be related to the parties’ choice of jurisdiction, but rather seems to serve the purpose of a general severability/illegality clause.

11. Having stated the foregoing, the members of the Chamber highlighted that the choice of forum is a fundamental right of the parties to a contract which, as a matter of principle, needs to be respected. In this context, the members of the DRC referred to the first sentence of art. 22 of the Regulations, which establishes that “Without prejudice to the right of any player or club to seek redress before a civil court for employment related disputes, …”. The Chamber underlined that a player and a club thus have the right to refer a labour dispute to a court other than FIFA. The only limit to the parties’ above-mentioned freedom is that the chosen forum respects fundamental principles of due process, which an ordinary court is presumed to do.

12. Along those lines, the Chamber wished to emphasize that it is undisputed that CAS guarantees the respect of the fundamental procedural rights of the parties, i.e. the principle of parity when constituting the tribunal, the right to an independent and impartial tribunal, the principle of a fair hearing, the right to contentious proceedings and the principle of equal treatment.

13. In fact, the members of the DRC were eager to point out that the Swiss Federal Tribunal has recognised CAS as a true arbitral tribunal, the decisions of which have the same effect as those of an ordinary court judgement.

14. With those considerations in mind, the DRC took into account that, as stated above, according to the first sentence of art. 22 of the Regulations, as a general rule, any player or a club can seek redress before a civil court for employment-related disputes and, in this respect, determined to follow the criteria established by the Swiss Federal Tribunal according to which CAS is considered to have the same level of independence and impartiality as an ordinary court and that an arbitral award of the former produces the exact same legal effects as a judgement of the latter. In other words, the DRC came to the conclusion that the main objective of the first sentence of art. 22 is to give the parties the liberty to choose a forum other than FIFA to resolve their employment-related disputes, the only limit being, as established above, the respect of fundamental principles of procedural law, which the CAS undoubtedly fulfils.

15. Having established all of the above, the members of the DRC concluded that there is no reason not to respect the choice of forum explicitly made by the parties in the agreement and therefore that the Respondent’s objection to the competence of FIFA to deal with the present matter is to be upheld. As a result, the DRC decided that it is not competent, on the basis of art. 8.2 of the agreement, to consider the present matter as to the substance.

16. In light of the above, the DRC decided that the claim of the Claimant is inadmissible.

III. Decision of the Dispute Resolution Chamber

The claim of the Claimant, Player A, is inadmissible.

*****

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 Officer

Encl. CAS directives