F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2019-2020) – fifa.com – atto non ufficiale – Decision 27 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, 27 February 2020,

in the following composition:

Clifford Hendel (USA), Deputy Chairman

Roy Vermeer (The Netherlands), member

Stefano La Porta (Italy), member

On the matter between the player,

Valentin Lazar, Romania,

represented by Mr Josep F. Vandellos Alamilla

as Claimant

and the club,

Al-Sailiya, Qatar,

represented by MCA Sports Law LLP

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

Overview and contractual basis

1. On 20 July 2017, the player, Valentin Lazar (hereinafter: the player or the Claimant), and the club, Al Sailiya (hereinafter: the club or the Respondent), signed an employment contract (hereinafter: the contract) valid as from 1 July 2017 until 30 June 2022.

2. According to art. 1 of the Schedule of the contract, the “total value” of the contract was USD 2,000,000, with monthly salaries of USD 33,333 for each season, due “at the end of each Gregorian month”.

3. According to art. 8 of the Schedule of the employment contract, the player was entitled to a monthly housing allowance of USD 3,560 , a car and “2 return flight tickets in business class for the route Doha – Bucharest – Doha with 2 for his wife and 2 for his kid for a total value of USD 15,000 per each season”.

4. According to art. 14 par. 2 of the contract, “any dispute between the [Respondent] and the [Claimant] arisen in connection with the present contract shall be submitted to the exclusive jurisdiction of Qatar Sports Arbitration Tribunal (QSAT), if operational, which shall be settled in accordance with the QSAT procedural rules”.

5. According to the following paragraph of the same provision, “as a transitionary rule and as long as the QSAT is not yet operational, the QFA Dispute Resolution Chamber (DRC), if established, shall have the exclusive jurisdiction for any disputes related to this contract. Subsidiary and as long as the QFA DRC has not yet been established, FIFA shall hear employment-related disputes related to this contract in accordance with the relevant FIFA regulations governing this matter”.

6. According to art. 10 par. 4 of the employment contract, “if the [Respondent] terminates the contract without having just cause, the [Respondent] shall pay to the [Claimant] compensation equal to the total amount of two monthly salaries”.

7. According to the ensuing paragraph of the same provision, “if the [Claimant] terminates the contract without having just cause, the [Claimant] shall pay to the [Respondent] compensation equal to the total amount of 2,000,000 $”.

8. On 13 August 2018, the Respondent signed a loan agreement with the Qatari club Al Kharaitiyat SC, by means of which the Claimant was temporary transferred to the said club as from 1 August 2018 until 30 June 2019.

9. On 2 June 2019, the Respondent, referring to art. 10 of the employment contract and on “recommendation of the Technical Department”, unilaterally terminated the contract by a correspondence dated 29 May 2019 and with effect as of 30 June 2019.

10. On 4 June 2019, the Claimant replied that he considered the termination without just cause and asked the Respondent to remedy the breach with immediate effect.

11. According to the information on TMS, the Claimant subsequently signed an employment contract with the Turkish club, Umraniyespor, valid as from 16 July 2019 until 31 May 2020. Pursuant to said contract, for the season 2019/2020, the Claimant was entitled to an advance payment of EUR 30,000 and a monthly salary of EUR 13,000 (August 2019 until May 2020) and for the 2020/2021 season the Claimant was entitled to an advance payment of EUR 35,000 and a monthly salary of EUR 14,000 (August 2020 until May 2021). This contact was mutually terminated on 15 January 2020.

12. Furthermore, according to the information on TMS, the Claimant subsequently signed an employment contract with the Romanian club, Dinamo Bucaresti, valid as from 17 January 2020 until 30 June 2020, according to which the Clamant was entitled to receive, inter alia, a monthly remuneration of EUR 7,500.

Request from the Claimant

13. On 11 June 2019, the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent did not have just cause to terminate the contract on 20 May 2019 and requesting:

I. USD 1,373,148, as compensation for breach of contract, plus 5% interest p.a. as from 30 June 2019 until the date of effective payment;

II. Sporting sanctions to be imposed on the Respondent, namely a ban on registering new players for two registration periods.

Competence of FIFA and admissibility of the claim

14. The Claimant explained, first of all, that the jurisdiction clause contained in the employment contract (cf. points 4. and 5. above) is “rather vague” and does not contain a clear and explicit reference to a specific competent arbitration body and it does not expressly exclude the jurisdiction of FIFA.

15. The Respondent preliminary maintained that the FIFA DRC lacks jurisdiction to hear the present matter due to art. 14 par. 2 of the employment contract, which devolves such competence to the Qatar Sports Arbitration Tribunal (hereinafter: QSAT).

16. According to the Respondent, in fact, such contractual clause is clear enough in envisaging the exclusive jurisdiction of the QSAT.

17. With regard to the alleged lack of competence of the FIFA DRC, the Claimant pointed out that the QSAT was not operational at the moment the dispute between the parties arose. In this respect, the Claimant underlined that the Respondent conveniently omitted to mention that the jurisdiction clause was subject to the QSAT being operational (which happened only on 18 August 2019).

Positions of the parties

18. In his claim, the Claimant pointed out that the termination of 20 May 2019 was unlawful as it simply referred to “technical reasons” and to art. 10 of the employment contract, which, however, does not entitle the Respondent to freely terminate the employment contract.

19. Consequently, as the Respondent terminated the employment contract prematurely without just cause, the Claimant maintained he had to be compensated.

20. That said, the Claimant underlined that the contractual clause concerning compensation for breach of contract, i.e. art. 10 par. 4 (cf. point 6 above) cannot be applied as not reciprocal, considering that – for the same occurrence – it awards two monthly salary or USD 2,000,000 depending on which is the party that prematurely terminated the employment contract.

21. In view of the above, the Claimant requested compensation for breach of contract in the total amount of USD 1,373,148, consisting of:

 USD 1,199,988 as remaining value of the contract in terms of salaries owed (i.e. as from 1 July 2019 until 30 June 2022);

 USD 128,160 as total amount owed as monthly housing allowance as from 1 July 2019 until 30 June 2022;

 USD 45,000 as total amount owed for purchasing flight tickets.

22. Furthermore, the Claimant argued that, as the breach occurred during the protected period, sporting sanctions should be imposed on the Respondent.

23. In its reply, the Respondent recalled that, on 2 June 2019, a letter of termination of the employment contract was sent to the Claimant as a result of an “administrative oversight” and, therefore, on 15 July 2019, the Respondent asked the Claimant in writing to disregard such notice and consider the employment relationship still valid.

24. However, the Respondent explained that the Claimant filed his claim on 11 June 2019, i.e. “only seven days after his request for remedy” and signed an employment contract with a Turkish club on 12 July 2019.

25. In any case, the Respondent claimed that the compensation clause contained in the contract is valid and applicable as freely agreed by the parties upon signature and can be qualified as a “liquidated damages” clause under Swiss law. In this respect, the Respondent drew a parallel with the “Nilmar case” (CAS 2016/A/4826)

26. The Respondent also rejected the request of imposition of sporting sanctions.

27. Lastly, the Respondent pointed out that, in any case, any compensation awarded should be mitigated with the earnings that derive from the Claimant’s subsequent employment contract signed with the Turkish club, Umraniyespor.

28. In his replica, the Claimant entirely reiterated his position.

29. Concerning the alleged administrative oversight committed by the Respondent when terminating the contract, the Claimant underlined that he was offered to return only on 15 July 2019, i.e. when the Respondent had found out that he had signed a contract with Umraniyespor.

30. Concerning the compensation clause, the Claimant pointed out that even a cursory look at it suffices to understand that it cannot be construed as a buyout clause. However, in that remote possibility, he would be entitled to claim for further compensation since the damage he suffered as a result of the faulty conduct of the Respondent undoubtedly exceeds the amount of the liquidated damage.

31. Lastly, the Claimant rejected any parallel with the Nilmar case.

32. The Respondent reiterated its previous arguments in their entirety.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter: the DRC or the Chamber) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 11 June 2019 and decided on 27 February 2020. Consequently, the 2019 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 (January 2020 edition), the Dispute Resolution Chamber would, in principle, be competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Romanian player and a Qatari club.

3. However, the DRC acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of art. 14 par. 2 and 3 of the contract highlighting that the Qatar has an independent deciding body to deal with the matter, i.e. the QSAT.

4. On the other hand, the Chamber noted that the Claimant insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the Respondent.

5. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 lit b) of the Regulations on the Status and Transfer of Players, it is, in principle, competent to deal with employment-related disputes of an international dimension; the parties may, however, explicitly opt in writing for any disputes arisen between them to be decided by an independent arbitration tribunal guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs that has been established at national level within the framework of the association and/or a collective bargaining agreement. Any such arbitration clause must be included either directly in the contract or in a collective bargaining agreement applicable on the parties. With regard to the standards to be imposed on an independent arbitration tribunal existing at national level, the DRC referred to the FIFA Circular no. 1010 dated 20 December 2005. Equally, the members of the DRC 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 relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC is competent to settle an employment-related dispute between a club and a player of an international dimension, is that the jurisdiction of the relevant national arbitration tribunal or national court derives from a clear reference in the employment contract.

7. Therefore, while analysing whether it was competent to hear the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute contained a clear, specific and exclusive arbitration clause.

8. In this respect, the Chamber recalled that according to art. 14 par. 2 of the contract “any dispute between the [Respondent] and the [Claimant] arisen in connection with the present contract shall be submitted to the exclusive jurisdiction of Qatar Sports Arbitration Tribunal (QSAT), if operational, which shall be settled in accordance with the QSAT procedural rules”.

9. Moreover, the Chamber also recalled art 14 par. 3 of the contract which stipulates that “as a transitionary rule and as long as the QSAT is not yet operational, the QFA Dispute Resolution Chamber (DRC), if established, shall have the exclusive jurisdiction for any disputes related to this contract. Subsidiary and as long as the QFA DRC has not yet been established, FIFA shall hear employment-related disputes related to this contract in accordance with the relevant FIFA regulations governing this matter”.

10. In this respect, and regardless of the fact that the relevant employment contract contains a reference to dispute resolution at national level, the Chamber pointed out that the relevant article was drafted in a rather unclear manner in the sense that it referred to a tribunal that was not yet operational and stipulated that in case neither the QSAT nor the Qatari NDRC was operational or established, FIFA shall be competent to deal in employment-related disputes. In view of the foregoing, the Chamber held that the jurisdiction of the QSAT does not derive from a clear reference in the employment contract.

11. In view of all the above, the DRC established that the Respondent’s objection to the competence of FIFA to deal with the present matter has 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.

12. Subsequently, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, the Chamber confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (January 2020 edition), and considering that the claim was lodged on 11 June 2019, the June 2019 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

13. 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. In particular, the Chamber recalled that, in accordance with art. 6 par. 3 of Annex 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.

14. Having said this, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

15. First of all, the members of the Chamber acknowledged that, on 20 July 2017, the player and the club had concluded an employment contract valid as from 1 July 2017 until 30 June 2020, pursuant to which the club undertook to pay to the player the remuneration, as established in points I.2. and I.3. above.

16. Furthermore, the members of the DRC took note of the fact that, on 2 June 2019 the Respondent unilaterally terminated the contract with effect as of 30 June 2019 based on the “recommendation of the Technical Department”.

17. Moreover, the Chamber observed that the Claimant claimed that the club terminated the contract without just cause.

18. In continuation, the Chamber noted that the Respondent deemed that the termination letter was a result of an “administrative oversight” and that it informed the Claimant about this on 15 July 2019, however, by that time, the Claimant already filed his claim in front of FIFA and signed a new employment contract with a Turkish club.

19. Furthermore, the members of the DRC acknowledged the Respondent’s argument that the compensation clause contained in the contract, i.e. art. 10 of the contract, shall be considered as valid and applicable as it was freely agreed by the parties upon signature of the contract.

20. In light of the foregoing, the DRC considered that the underlying issue in this dispute, considering the parties’ position, was to determine as to whether the termination of the contract by the club, was made with or without just cause, and subsequently, to determine the consequences of such early termination by the club.

21. In this context, the Chamber observed that the Respondent did not contest having unilaterally terminated the contract without just cause, but simply claimed that the termination was a result of an “administrative oversight”. In this respect, the Chamber wanted to point out that it took the club more than a month to react to the Claimant’s letter dated 4 June 2019 and that by the time the Respondent finally replied, the Claimant already concluded a new employment contract with another club.

22. On account of the above, the members of the DRC came to the conclusion that, by means of its letter sent on 2 June 2019, the Respondent terminated the contract with the Claimant without just cause and that the Respondent is to be held liable for the early termination of the contract by the Respondent.

23. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract without just cause by the Respondent.

24. Having established that the Respondent is to be held liable for the early termination of the employment contract, the DRC focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC established that the Claimant is entitled to receive from the club compensation for breach of contract, in addition to any outstanding payments on the basis of the relevant employment contract.

25. In continuation, 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.

26. 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 members of the Chamber noted that, indeed, article 10 of the contract stipulated a compensation clause, which was drafted as follows:

“if the [Respondent] terminates the contract without having just cause, the [Respondent] shall pay to the [Claimant] compensation equal to the total amount of two monthly salaries”.

“if the [Claimant] terminates the contract without having just cause, the [Claimant] shall pay to the [Respondent] compensation equal to the total amount of 2,000,000

27. The members of the Chamber agreed that this clause is clearly drafted to the benefit of the Respondent, i.e. it contravenes the general principle of proportionality and the principle of equal treatment as it grants exorbitant rights to the Respondent in comparison to the rights granted to the Claimant. In this regard, it can be noted that said clause entitled the Claimant to less than 5% of what the Respondent would be entitled to in case of a termination without just cause. Consequently, and in view of the general principle of proportionality and of the principle of equal treatment, the members of the Chamber unanimously agreed that said clause cannot be taken into consideration in the determination of the amount of compensation.

28. 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 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 player under the terms of the employment contract as from its termination and concluded that the player would have been entitled to receive USD 1,328,148, corresponding to the monthly salary and housing allowance, as remuneration had the employment contract been executed until its regular expiry date, i.e. 30 June 2022. Consequently, the Chamber concluded that the amount of USD 1,328,148 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

29. In continuation, the Chamber assessed 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 able to reduce his loss of income. In this respect, the DRC deemed it necessary to refer to the first sentence of art. 17 par. 1 lit. ii) of the Regulations, according to which, in case the player signed a new contract by the time of the decision, the value of the new contract for the period corresponding to the time remaining on the prematurely terminated contract shall be deducted from the residual value of the contract that was terminated early (the ”Mitigated Compensation”).

30. In respect of the above, and according to the information available on TMS, the Claimant signed an employment contract with the Turkish club, Umraniyespor, valid as from 16 July 2019 until 31 May 2020. Pursuant to said contract, for the season 2019/2020, the Claimant was entitled to an advance payment of EUR 30,000 and a monthly salary of EUR 13,000 (August 2019 until May 2020) and for the 2020/2021 season the Claimant was entitled to an advance payment of EUR 35,000 and a monthly salary of EUR 14,000 (August 2020 until May 2021). This contact was mutually terminated on 15 January 2020. The Claimant subsequently signed an employment contract with the Romanian club, Dinamo Bucaresti, valid as from 17 January 2020 until 30 June 2020, according to which the Clamant was entitled to receive, inter alia, a monthly remuneration of EUR 7,500. On account of the above, the compensation shall be deducted, leading to a mitigated compensation in the amount of USD 980,148.

31. Consequently, on account of all the above-mentioned considerations, the Chamber decided that the club must pay the amount of USD 980,148 as compensation for breach of contract to the player, which is considered by the Chamber to be a fair and reasonable amount.

32. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the player interest at the rate of 5% p.a. as of the date of the claim, i.e. 30 June 2019, until the date of effective payment.

33. Moreover, taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had not fully substantiated his claim with pertinent documentary evidence in accordance with art. 12 par. 3 of the Procedural Rules. That is, there is no supporting documentation relating to the Claimant’s claim pertaining to costs of the flight tickets. Consequently, the DRC decided to reject this part of the Claimant’s claim.

34. Therefore, the DRC decided to partially accept the player’s claim and concluded its deliberations by rejecting any further claim of the Claimant.

35. Furthermore, taking into account the consideration under number II./12. 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.

36. In this regard, the Chamber pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban 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.

37. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, 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 Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

38. Finally, the Chamber recalled that the above-mentioned ban 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.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Valentin Lazar, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Al-Sailiya, has to pay to the Claimant compensation for breach of contract in the amount of USD 980,148, plus 5% interest p.a. as from 30 June 2019 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 plus interest 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 into one of the official FIFA languages (English, French, German, Spanish).

7. In the event that the amount due in accordance with point 3. above is not paid by the Respondent within 45 days as from the notification by the 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 amount is 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 amount is paid.

9. In the event that the amount due in accordance with point 3. above 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.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

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. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport (CAS)

Avenue de Beaumont 2, CH-1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer