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 20 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 20 February 2020,

in the following composition:

Clifford J. Hendel (USA/France), Deputy Chairman

Roy Vermeer (Netherlands), member

Daan De Jong (Netherlands), member

on the claim presented by the club,

Moreirense FC, Portugal,

represented by Mr Pedro Macieirinha

as Claimant

against the player,

Jhonatan Luiz Da Siqueira, Brazil,

represented by Mr Daniel Rey

as Respondent I

and against the club,

Vitória Sport Clube, Portugal,

represented by Mr Bernardo Lobo Xavier

as Respondent II

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 6 July 2017, the Brazilian player, Jhonatan Luiz Da Siqueira (hereinafter: the player or the Respondent) and the Portuguese club, Moreirense FC (hereinafter: Moreirense FC or the Claimant), signed an employment contract (hereinafter: the contract) valid as from 6 July 2017 until 30 June 2019.

2. According to the contract, the player was entitled to the following fixed remuneration:

(a) For season 2017/18: EUR 56,220;

(b) For season 2018/19: EUR 72,780;

(c) Signing-on fee of EUR 10,000 payable by 7 July 2017.

3. According to art. 10 of the contract, “All cases and situations not provided for in this contract shall be governed by the Collective Bargaining Agreement entered into between the National Union of Professional Football Players and the Portuguese Professional Football League, and the parties expressly state that the period provided for in Article 11 of that document applies to this contract.”

4. Art. 11 of the contract stipulates that “The Parties agree to submit any disputes between them to the arbitration committee established under Art. 55 of the Employment Contract for professional footballers.”

5. Pursuant to art. 12 of the contract, “The Club and Athlete agree that, by 31 May, 2019, the Club has the right to opt for renewal of the employment contract for another season, i.e. until 30 June, 2020, thus requiring the athlete to perform his duties as identified in clause 1, and the Club being required to pay the Player the following gross amounts, hereby established previously:”

- Season 2019/2020 EUR 99.120,00

6. In addition, according to art. 13 of the contract, “The Club and Player also agree that in the course of the respective sporting seasons, if there are national or foreign clubs or SADs, interested in the player’s sports rights, these Clubs and SAD’s will have to pay the amount of € 1,500,000.00 (...) to Moreirense Futebol Clube SAD, for the termination of the contract.”

7. On 28 February 2019, the Claimant sent a formal letter to the player indicating that it expressed “its intention to exercise its right to renew the contract until 30/06/2020, which it does through this letter”. The player received said letter on 4 March 2019 via recorded delivery.

8. On 7 March 2019, the player sent a correspondence to the Claimant in which he stated that he did not intend to renew his contract for the season 2019/2020 and made reference to Portuguese employment law according to which unilateral extension options are “not provided for”. As such, he declared that the Claimant’s extension for season 2019/2020 was “null and void”.

9. On 27 March 2019, the Claimant sent a letter to the Portuguese professional league in which it stated that it had exercised the player’s contract extension option, but the player had refused to sign the documents in order to extend his contract, and requested the league to “register the automatic renewal of the contract of the player (…) until 30/06/2020”. In this respect, the Claimant insisted that the player gave his consent to such clause when signing the contract, that the FIFA Regulations on the Status and Transfer of Players (hereinafter: the Regulations) do not prevent clubs from having unilateral extension options, and indicated that the extension foresaw improved financial conditions for the player, and does not “violate the principles of the player’s freedom of movement and personality rights, because the extension period is proportional to the main contract”.

10. On 15 April 2019, the Portuguese club Vitoria Sport Clube (hereinafter: Vitoria SC or Respondent II) informed the Claimant that, on 12 April 2019, it entered into an employment contract with the player valid as from 1 July 2019 until 30 June 2023, and according to which the player would earn a total remuneration of EUR 600,000 plus bonus. Vitoria SC further stated that according to Portuguese labour law, unilateral extension clauses are illegal. In addition, Vitoria SC referred to the Portuguese professional football league’s and Portuguese FA’s regulations according to which these bodies “are obligated [to] refuse the registration of the player by a new club if the player is in contract with another club” and explained that the fact that the player had been officially registered with it proved that the unilateral extension was indeed considered null and void by the Portuguese football regulators.

11. On 5 April 2019 the Claimant lodged a claim against the player, requesting the FIFA Dispute Resolution Chamber to rule that the claim is admissible, and that the contract it signed with the player on 6 July 2017 has been validly extended until 30 June 2020, and as such requested the following:

- The player should be banned for 4 months for having entered into another contract for season 2019/2020;

- The player should pay the Claimant EUR 1,500,000 as per clause 13 of the contract.

12. On 29 July 2019, the Claimant lodged a separate claim against Vitoria SC, the player’s new club, requesting the DRC:

- To impose sporting sanctions on Vitoria SC;

- To order Vitoria SC to pay compensation in the minimum amount of EUR 1,500,000 as per clause 13 of the employment contract concluded between the Claimant and the player on 6 July 2017.

13. In his reply to the claim, the player asserted that the option to extend the contract required the approval of both parties, and that the Claimant had unlawfully unilaterally extended the contract, seeking the equivalent of a transfer fee in a situation in which the player was free to negotiate a new contract with another club .

14. In its reply to the claim, Vitoria SC maintained that the claim should be declared inadmissible, based on art. 11 of the contract and art. 55 of the collective bargaining agreement concluded between the Union of Portuguese Professional Players and the Portuguese Professional Football League. Furthermore, as to the substance, it stated that unilateral extension clauses are not allowed by the Portuguese FA and the Portuguese Professional Football League and that the player’s registration with it as from 1 July 2019 evidenced that the Claimant’s argumentation is groundless and that its claim should be rejected.

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 5 April 2019 and decided on 20 February 2020. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter.

2. Subsequently, 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 January 2020), the Dispute Resolution Chamber is in principle competent to deal with the matter, which concerns an employment-related dispute with an international dimension between two Portuguese clubs and a Brazilian player.

3. The DRC noted that Vitoria SC, the player’s new club, contested the competence of FIFA’s deciding bodies, alleging that on the basis of art. 22 of the Regulations and on the lack of international dimension since both clubs are Portuguese “this Chamber is not competent to hear this dispute”.

4. The Chamber further noted that both the player and the Claimant agreed to submit the case to FIFA. In particular, the Chamber noted that the Claimant itself chose to submit its claim to FIFA and the player did not contest FIFA’s competence to deal with the present dispute.

5. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations, FIFA is competent to hear ”employment-related disputes between a club and a player of an international dimension; the aforementioned parties may, however, explicitly opt in writing for such disputes to be decided by an independent arbitration tribunal 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. The independent national arbitration tribunal must guarantee fair proceedings and respect the principle of equal representation of players and clubs;”

6. For the sake of completeness, the DRC pointed out that neither the Claimant nor the player had lodged an employment-related claim in front of “an independent arbitration tribunal that has been established at national level within the framework of the association and/or a collective bargaining agreement”.

7. Having said that, the Chamber further observed that although the Claimant and the Respondent II are both from Portugal and although there is an exclusive jurisdiction clause (clause 10.) in the contract signed between the Claimant and the Brazilian player, these two latter parties are not forbidden from submitting their claim to FIFA if they choose to do so and they in fact accepted FIFA’s competence by respectively lodging the claim at FIFA and replying to it as to the substance, without objecting to the competence. The Chamber pointed out that the Claimant and the player are the main parties to the contractual dispute and that Vitoria SC’s involvement is accessory to any possible breach committed by the player. Thus, Vitoria SC has no legal standing to challenge FIFA’s competence, especially considering that it is not a party to the contract at the basis of this dispute. In view of the foregoing, the Chamber established its competence to decide on the present dispute.

8. Having established that it is competent to decide on the merits of the present dispute on the basis of art. 22 lit. b) of the Regulations, the Chamber analysed which edition of the 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, and considering that the claim was lodged on 5 April 2019, the June 2018 edition of the aforementioned regulations is applicable to the matter at hand as to the substance.

9. 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.

10. First of all, the Chamber acknowledged that, on 6 July 2017, the player and Claimant had concluded an employment contract valid as from the date of signature until 30 June 2019. According to art. 12 of the contract the Claimant had the unilateral option to extend the player’s contract until 30 June 2020, by giving him notice of its intentions by 31 May 2019.

11. The Chamber further noted on the one hand that the Claimant deems the aforementioned extension option to be a valid and binding clause on the parties and to have properly exercised it on 28 February 2019. Thus, the Claimant deems that the employment contract was validly extended until 30 June 2020. Based on the foregoing, the Claimant understands that the player was still under contract with it when he signed a new employment contract with Vitoria SC on 12 April 2019, valid from 1 July 2019 to 30 June 2023. The Claimant thus considers that the player, induced by Vitoria SC, breached their employment contract without just cause.

12. The Chamber also noted that on the other hand the player deems the extension option to be invalid as per Portuguese law and thus on 7 March 2019 he rightfully rejected the renewal of the contract for one more season. Therefore, when his new contract with Vitoria SC entered into force on 1 July 2019, he was no longer contractually bound to the Claimant. The player requests that the Claimant’s claim is rejected.

13. Lastly, the Chamber noted that Vitoria SC, in its reply as to the substance of the case, also rejected the claim of the Claimant, alleging that unilateral extension clauses are not allowed by the Portuguese FA and the Portuguese Professional Football League and that the player’s registration with Vitoria SC as from 1 July 2019 proved that the Claimant’s argumentation is groundless and that its claim should be rejected.

14. In light of the foregoing, the DRC considered that the fundamental issue in the present dispute was to determine whether the contract was legally extended by the Claimant, based on art. 12 of the contract.

15. In this respect, the Chamber first analysed the wording of clause 12 of the employment contract, according to which “the Club has the right to opt for renewal of the employment contract for another season, i.e. until 30 June, 2020, thus requiring the athlete to perform his duties as identified in clause 1, and the Club being required to pay the Player the following gross amounts, hereby established previously: […]”

15. In this regard, the Chamber first noted that the aforementioned clause grants the club only the right to decide on whether the contract will be extended for one more season or not. The Chamber deemed that, in spite of the fact that such clause is included in an employment contract signed by both parties, which in principle conveys their agreement to its terms, this does not imply the automatic validity of all clauses therein included. In case a contractual clause in a valid employment contract is considered invalid, its content shall be individually disregarded. With regard to art. 12 of the contract specifically, the Chamber noted that such clause grants one party only in the contractual relationship the power to determine whether the contract shall be extended for one more season or not, regardless of the will of the other party.

16. At this point, the Chamber recalled that a clause which gives one party only the right to unilaterally cancel or lengthen the contract, without providing the counter-party the same rights, is a clause with disputable validity, due to the fact that it can be understood to deprive one of the parties to the contract of having any influence on its duration, while still being directly affected by it. Such options can be considered not based on reciprocity, since the right to decide upon the duration of a contract is left exclusively at the discretion of one party.

16. Furthermore, the Chamber focused its attention on the particular circumstances of the present case. In this respect, it noted that on 28 February 2019 the Claimant communicated to the player its intention to exercise the extension clause. This communication was received by the player on 4 March 2019, who on 7 March 2019 promptly and explicitly informed the Claimant that he did not intend to renew his contract for the season 2019/2020. In spite of the player’s clear refusal to extend the contract and sign the necessary documents, the Claimant sent a letter to the Portuguese Professional League on 27 March 2019, by means of which it requested the registration of the “automatic renewal of the contract of the player (…) until 30/06/2020”.

17. In view of the foregoing, the Chamber, by majority, deemed that in light of the terms of art. 12 of the contract stipulating unbalanced rights for the player and the Claimant with regard to the duration of the employment, and especially in light of the particular circumstances of the present case in which one of the parties explicitly expresses his refusal to extend the contract and the other party deliberately requests the League to disregard such refusal and carry on with the registration, o the extension is not only legally questionable but also concretely represents an act of deliberate disrespect of the player’s will, leading to a fundamental breach of confidence between the employer and the employee.

18. Against this background, the Chamber by majority, the Chairman exercising his casting vote, considered that in view of the particular combination of the contractual and the factual circumstances of the case at hand, the contract between the Claimant and the player cannot be considered as validly extended and it is thus no longer binding on the parties as from 1 July 2019.

19. As a result, the Chamber by majority decided that as from 30 June 2019 the player Jhonatan Luiz Da Siqueira was no longer contractually bound to Moreirense FC and therefore he was free to start executing the new employment contract with Vitoria SC on 1 July 2019.

20. The Chamber concluded its deliberations by establishing by majority that the claim of the Claimant is rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Moreirense, is admissible.

2. The claim of the Claimant is rejected.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the Dispute Resolution Chamber. 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 related to the appeal procedure:

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.

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

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Tel: +41 21 613 50 00

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e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer