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 21 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 21 February 2020,

in the following composition:

Clifford Hendel (USA), Deputy Chairman

Tomislav Kasalo (Croatia), member

Pavel Pivovarov (Russia), member

on the claim presented by the club,

Trabzonspor, Turkey

represented by Mr Juan de Dios Crespo Pérez

as Claimant / Counter-Respondent

against the player,

Esteban Alvarado Brown, Costa Rica

represented by Mr Alberto Ruiz Diaz-Obregon

as Respondent I / Counter-Claimant

and against the club,

LD Alajuelense, Costa Rica

as Respondent II

regarding an employment-related dispute between the parties

I. Facts of the case

1. The Claimant (hereinafter also referred to as Trabzonspor) and the first Respondent (hereinafter also referred to as the player) concluded a first employment contract on 6 August 2015 (hereinafter: the 2015 contract), valid until 31 May 2017, according to which the first Respondent was inter alia entitled to receive from the club the sum of EUR 550,000 during the 2015/2016 season and EUR 550,000 during the 2016/2017 season.

2. On 17 June 2017, the player the Trabzonspor signed a second employment contract (hereinafter: the 2017 contract), valid until 31 May 2019, according to which the first Respondent was inter alia entitled to receive from the club the sum of EUR 700,000 during the 2017/2018 season and the sum of EUR 700,000 during the 2018/2019 season, payable in 10 instalments of EUR 70,000 as from 31 August until 31 May of the following year. The first Respondent was also entitled to receive from the club the amount of EUR 50,000 as “living cost per season”.

3. As per clause VI a) of the 2017 contract “in case of non-payment of two consecutive salaries in full, the player should notify the club in writing. In this notification, the player shall give 30 (..) days to the club for payment. If the club does not pay the notified amount, then the player has the right to unilaterally terminate the contact.” Equally, clause VI b) of the contract establishes: “if the player fields in less than 10 official games in a season, he is entitled to terminate this contract by paying net 700.000 € (..) to the club as buy-out. The player might only use this right during the first month of first registration period and first week of second registration period and first week of second registration period declared by TFF for 2018-2019 football season.”

4. On 30 May 2018, Trabzonspor and the player concluded a settlement agreement in relation to overdue payables resulting from the 2015 contract, by means of which the Claimant undertook to pay to the first Respondent outstanding remuneration in the amount of EUR 420,000 as well as EUR 130,000 as “other payables”, as follows: EUR 210,000 on 30 May 2018; EUR 110,000 on 27 August 2018; EUR 110,000 on 27 September 2018 and EUR 120,000 on 30 October 2018.

5. By means of a correspondence dated 5 November 2018 (hereinafter: the default notice), the first Respondent requested from the Claimant the payment of the total amount of EUR 490,000, corresponding to EUR 230,000 due as per the settlement agreement as well as EUR 260,000 in accordance with the 2017 contract, within 30 days.

6. On 18 December 2018, the first Respondent terminated the 2017 contract alleging just cause. In the relevant document, the first Respondent accused the Claimant of having failed to pay him the sum of EUR 490,000 due although he had duly put the latter in default on 5 November 2018.

7. On 21 March 2019, Trabzonspor lodged a claim at FIFA against the player and his new club Alajuelense, claming that the player terminated the 2017 contract without just cause in order to avoid having to pay the sum of EUR 700,000 as buy out and so return to Costa Rica.

8. According to the Claimant, at the time the termination of contract had occurred, the amount of EUR 450,000, corresponding to EUR 120,000 under the settlement agreement and EUR 330,000 due as per the 2017 contract, had been outstanding. However, the Claimant alleged having been given an additional deadline by the first Respondent in order to pay the outstanding amounts. As further alleged by the Claimant, the first Respondent had agreed to receive the sums in question by no later than 24 December 2018, as evidence of which it presents an exchange of whatsapp messages dated 15 December 2018. Hence, the Claimant was of the opinion that the 2017 contract had been terminated “seven days in advance of the deadline that was renegotiated” and that the first Respondent had been prevented it from meeting “its financial obligations as agreed”.

9. The Claimant referred to clause VI b) of the 2017 contract and argued that because the first Respondent had only been fielded in 9 matches during the 2017/18 – 2018/2019 season the latter would have been entitled “to avail himself of the buy-out clause”.

10. From the Claimant’s, it had been “deprived” of the “ability of either negotiating a transfer or [of] having the buy-out exercised and receiving € 700,000”.

11. Hence and in accordance with Swiss Law, the Claimant deemed being entitled to claim from the first Respondent as well as from the second Respondent in line with art. 17 par. 2 of the RSTP compensation for the loss incurred in the amount of EUR 250,000, corresponding to the buyout sum of EUR 700,000 minus the amount of EUR 450,000 due to the first Respondent. The Claimant also requested the payment of CHF 15,000 as contribution towards the costs incurred.

12. On 23 July 2019, the first Respondent contested the claim of the Claimant and lodged a counterclaim against the latter requesting the payment of the outstanding amount of EUR 450,000 plus, 5% interests p.a.

13. The first Respondent pointed out that the Claimant had repeatedly failed to comply with the financial provisions included in both the 2015 and 2017 contracts and that the latter had only paid the first instalment due as per the settlement agreement on time. Equally, the first Respondent accused the Claimant of having failed to pay his salary of August, September and October 2018.

14. In continuation, the first Respondent pointed out that by the time the default notice had been sent to the Claimant, three monthly salaries under the 2017 contract had been outstanding and the Respondent had failed to partially comply with the settlement agreement.

15. As a result and because the Claimant had subsequently only proceeded with the payment of the sum of EUR 110,000 on 22 November 2018 payable under the settlement agreement, the first Respondent deemed having had just cause to terminate the 2017 contract on 18 December 2018 in line with its clause IV) a). The first Respondent added that, by that point, the Respondent had failed to pay him the following amounts: EUR 280,000, corresponding to his salary of August, September, October and November 2018; EUR 50,000, corresponding to the “living cost” due for the 2018-2019 season and EUR 120,000 out of the settlement agreement.

16. The first Respondent contested the allegation of the Claimant that he would have agreed on extending the deadline for the payment of the outstanding amount of EUR 450,000 until 24 December 2018. The first Respondent pointed out that, if at all, his agent, on 15 December 2018, after the expiry of the deadline included in the default notice, i.e. 9 December 2018, had inquired with the Claimant he could expect a payment.

17. In view of all the aforementioned, the first Respondent considered being entitled to claim from the Claimant, in addition to the outstanding amount of EUR 450,000, plus 5% interest p.a., the sum of EUR 420,000 as compensation in line with art. 17 RSTP for having breached the 2018 contract (i.e. 6 monthly salaries of EUR 70,000 each).

18. The second Respondent contested the claim of the Claimant arguing that the first Respondent had terminated the 2017 contract with just cause before it had hired him. The second Respondent added that, on 8 February 2019, FIFA had authorized the provisional registration of the player with the Federacción Costarricense de Futbol.

19. The second Respondent further pointed out that, on 5 March 2019, its contractual relationship with the first Respondent had been terminated by mutual agreement and that, during the validity of the relevant contract, the player had never been fielded in an official competition.

20. Finally, the second Respondent contested having been involved in the termination of the 2017 contract and alleged that it had only contacted the latter in January 2019.

21. In response to the counterclaim of the first Respondent, the Claimant mainly reiterated the content of its previous submission.

22. In particular, the Claimant argued once again that the first Respondent had terminated the 2017 contract without just cause. From the Claimant’s point of view, the first Respondent “through his lawyer (..) gave the impression that he will accept late payment as the date of the 24 December was offered to be valid”.

23. According to the employment contract concluded on 10 January 2019 between the first and the second Respondent, valid until the end of May 2019, the first Respondent was entitled to receive the total amount of USD 25,000.v

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 21 March 2019. 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 at hand (cf. article 21 par. 2 and 3 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 and par. 2 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2012), 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 Costa Rican player, a Costa Rican club and a Turkish club.

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, and considering that the present claim was lodged on 21 March 2019, the June 2018 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, the Chamber entered into the substance of the matter. The members of the Chamber started by acknowledging the facts of the case, 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 noted that while Trabzonspor deems that the 2017 contract was terminated without just cause by the player, induced by Alajuelense, the player deems to have had a just cause to terminate the 2017 contract on 18 December 2018 and to claim outstanding amounts and compensation for the breach of the latter by the club, as well as the payment of the amounts provided for in the settlement agreement.

6. The DRC highlighted that the central issue in the matter at stake would be, thus, to determine whether the Claimant had a just cause to terminate the contract on 18 December 2018.

7. In this context, the Chamber first noted that it is undisputed that when the termination of the contract occurred the total amount of EUR 450,000, corresponding to EUR 120,000 under the settlement agreement and EUR 330,000 due as per the 2017 contract, had been outstanding. This is even confirmed by Trabzonspor. In this respect, it remained undisputed that on 18 December 2018 at least the Respondent’s salaries of August, September, October and November 2018 from the 2017 contract had remained unpaid.

8. The Chamber also took due note of the argument of Trabzonspor, as per which the player had allegedly agreed on extending the deadline for the payment of the outstanding amounts, in accordance with whatsapp messages exchanged between the agent of the player and Trabzonspor.

9. In continuation, the DRC recalled that according to the legal principle of the burden of proof contained in art. 12 par. 3 of the Procedural Rules, any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

10. In view of the above, the DRC concluded that Trabzonspor failed to provide substantial evidence of such a new contractual agreement referring to new deadlines to pay the due remuneration to the player. The DRC considered that the whatsapp messages do not constitute a contractual novum with regard to the obligations of Trabzonspor to pay the player’s remuneration. Thus, this argument of Trabzonspor could not be upheld.

11. Furthermore, from the documentation on file the DRC could establish that on 5 November 2018 the player put Trabzonspor in default of payment of the aforementioned salaries inter alia. As a result of the above, and considering that more than 2 monthly salaries were outstanding and that de facto more than 15 days had elapsed between the default notice and the termination of the contract by the player, the latter had a just cause to terminate the 2017 contract on 18 December 2018, in accordance with art. 14bis of the Regulations. Thus, the player would be entitled to receive from Trabzonspor compensation for the unjust breach.

12. Before determining the amount of compensation due to the player, the Chamber decided to determine the amount of outstanding remuneration due to the player, as per the 2017 contract and the settlement agreement.

13. In this respect, the DRC established that on 18 December 2018, the total amount of EUR 450,000 had remained outstanding, corresponding to:

- EUR 120,000 for the last instalment of the settlement agreement;

- EUR 280,000 due as per the 2017 contract, i.e. 4 x EUR 70,000 (salaries from August 2018 until November 2018);

- EUR 50,000 as living costs.

14. Considering the player’s claim and the jurisprudence of the Chamber, the DRC decided to award on the aforementioned amounts interest of 5% p.a. as of the relevant due dates.

15. Having established the foregoing, the DRC focused its attention on the calculation of the compensation due to the player by Trabzonspor for the unjust breach of the contract.

16. In this respect, the Chamber first recapitulated that, in accordance with art. 17 par. 1 of the Regulations, 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 player 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.

17. In application of the relevant provision, the DRC held that it first of all had to clarify as to whether the pertinent employment contract contains a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the DRC established that no such compensation clause was included in the contract at the basis of the matter at stake. For the sake of completeness, the DRC clarified that clause VI b) of the contract (cf. point I.3 above) is not applicable to the present case as the contract was terminated based on outstanding remuneration and not insufficient fielding. The conformity of the aforementioned clause will not be further analysed.

18. As a consequence, the DRC 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.

19. Bearing in mind the foregoing as well as the counterclaim of the player, the DRC proceeded with the calculation of the monies payable to the player under the terms of the 2017 contract until 18 December 2018. In view of the foregoing, the DRC concluded that the remaining value of the contract is EUR 420,000, corresponding to 6 x EUR 70,000 (i.e. salaries from December 2018 until May 2019).

20. In continuation, the DRC verified as to 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. According to art. 17 par. 1 point ii) of the Regulations, such remuneration under a new employment contract shall be deducted from the residual value of the contract that was terminated early, in the calculation of the amount of compensation for breach of contract (“the mitigated compensation”).

21. In this respect, the DRC noted that indeed the player had concluded a new employment contract with Alajuelense for a total amount of USD 25,000 during the relevant period (EUR 22,500 approx.), leading to the amount of EUR 397,500 as a mitigated compensation.

22. Furthermore, the Chamber noted that the player would be entitled to receive additional compensation in light of art. 17 par. 1 ii. of the Regulations. The additional compensation amounts EUR 210,000 (3 x EUR 70,000).

23. Since the overall compensation exceeds the residual value of the prematurely terminated contract, the player would be entitled to receive EUR 420,000 as compensation for breach of contract, plus 5% interest p.a. as of the date of claim.

24. In light of the above, the DRC concluded its deliberations in the present matter by establishing that the claim of Trabzonspor is rejected and the counterclaim of the player is partially accepted.

25. Furthermore, the DRC 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.

26. In this regard, the DRC 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.

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

28. Finally, the DRC recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amount, in accordance with art. 24bis par. 3 of the Regulations.

***

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant / Counter-Respondent, Trabzonspor, is rejected.

2. The counter-claim of the Respondent I / Counter-Claimant, Esteban Alvarado Brown, is partially accepted.

3. The Claimant / Counter-Respondent has to pay to the Respondent I / Counter-Claimant outstanding remuneration in the amount of EUR 450,000 plus interest as follows:

a) 5% interest p.a. on the amount of EUR 120,000 from 31 October 2018 until the date of effective payment;

b) 5% interest p.a. on the amount of EUR 70,000 from 1 September 2018 until the date of effective payment;

c) 5% interest p.a. on the amount of EUR 70,000 from 3 October 2018 until the date of effective payment;

d) 5% interest p.a. on the amount of EUR 70,000 from 1 November 2018 until the date of effective payment;

e) 5% interest p.a. on the amount of EUR 70,000 from 1 December 2018 until the date of effective payment;

f) 5% interest p.a. on the amount of EUR 50,000 from 18 December 2018 until the date of effective payment.

4. The Claimant / Counter-Respondent has to pay the Respondent I / Counter-Claimant, compensation for breach of contract in the amount of EUR 420,000, plus 5% interests p.a. from 24 July 2019.

5. Any further claim lodged by the Respondent I / Counter-Claimant is rejected.

6. The Respondent I / Counter-Claimant is directed to inform the Claimant / Counter-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 Claimant / Counter-Respondent must pay the amounts plus interest mentioned under points 3. and 4. above.

7. The Claimant / Counter-Respondent shall provide evidence of payment of the due amounts plus interest in accordance with points 3. and 4. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

8. In the event that the amounts due, plus interest in accordance with points 3. and 4. above, are not paid by the Claimant / Counter-Respondent within 45 days as from the notification by the Respondent I / Counter-Claimant of the relevant bank details to the Claimant / Counter-Respondent, the Claimant / Counter-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).

9. The ban mentioned in point 8. above will be lifted immediately and prior to its complete serving, once the due amounts plus interest are paid.

10. In the event that the aforementioned sums, plus interest, are 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 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:

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 & Compliance Officer