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 29 January 2020

Decision of the Dispute Resolution Chamber

passed in Zurich, Switzerland, on 29 January 2020,

in the following composition:

Geoff Thompson (England), Chairman

Daan de Jong (The Netherlands), member

Alexandra Gómez Bruinewoud (Uruguay), member

on the claim presented by the player,

Assani Lukimya, Germany

represented by Mr Joachim Rain

as Claimant

and the club,

Liaoning FC, China PR

represented by Mr Giandonato Marino and Mr Tomas Pereda

as Respondent

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 13 January 2016, the German player Assani Lukimya (hereinafter: the player or the Claimant) and the Chinese club Liaoning FC (hereinafter: the club or the Respondent) signed an employment agreement valid as from the date of signature until 31 December 2017.

2. On 14 April 2017, the employment agreement was extended for the period from 1 January 2018 until 31 December 2019 (hereinafter: the contract).

3. According to art. 10.1 of the contract, the player was entitled to a monthly remuneration of EUR 100,000, payable by the 15th day of the next month.

4. According to art. 11.6 of the contract, the player was entitled to six round-trip business class plane tickets from Germany to Shenyang, China, for himself, his wife and children.

5. Furthermore, according to art. 11.7 of the contract, the player was entitled to a monthly housing allowance of RMB 5,000.

6. According to art. 22 of the contract, “If [the club] arrears the payment of salary and bonus to [the player] for over 90 days or more days, [the player] has the right to ask to terminate the contract”.

7. Art. 18 of the contract stipulates the following: “if [the player] cancels or terminates the contract by himself for whatever described reason (including sporting just cause) without the permission of [the club], [the player] shall pay 2,000,000 USD as the penalty”.

8. According to the player, by 3 December 2018, the club failed to pay the monthly salaries of August, September and October 2018, as well as bonuses for winning two matches in the amount of RMB 176,000.

9. In this respect, the player explained that the club acknowledged its debt in writing on 2 October 2018 and committed to pay “at least two salaries before November 15, 2018 and the remaining debt until November 30, 2018”. However, according to the player, no further payments were made.

10. As a consequence, by means of a letter dated 3 December 2018 and sent to the club by email on 4 December 2018, the player put the club in default of payment of the total amounts of EUR 300,000 and RMB 176,000, granting the club a deadline to pay until 19 December 2018.

11. On 21 December 2018, considering that no further payments were made by the club, the player terminated the contract in writing, invoking just cause in view of the aforementioned outstanding amounts, and added the outstanding salary for the month of November 2018 which had fallen due in the meantime.

12. On 30 January 2019, the player lodged a claim in front of FIFA against the club for outstanding remuneration and compensation for breach of contract. In particular, the player requested the following amounts:

- EUR 1,246,499.70 and RMB 60,000 as compensation for breach of contract plus interest as from 12 January 2019, of which the amount in EUR is composed of 12 monthly salaries for the year 2019, as well as EUR 46,499.70 for the plane tickets; and the amount in RMB based on housing allowance for the year 2019;

- EUR 300,000 as additional compensation based on the “specificity of sport”.

13. Furthermore, the player explained that, on 11 January 2019, the player received all outstanding amounts until 31 December 2018. In this respect, the player argued that the payment of the outstanding salaries by the club does not cure the breach and, therefore, he insisted having terminated the contract with just cause.

14. After the player’s initial claim had been forwarded to the club on 18 February 2019 and no response had been received within the relevant deadline, the player reverted to FIFA on 2 April 2019, explaining that the parties had concluded a settlement agreement including a payment plan until August 2019. In this respect, the player requested FIFA to suspend the proceedings and explained that the parties agreed that he had the right to resume the proceedings in the event the club did not comply with the payment plan.

15. On 3 July 2019, the player explained that the club had failed to pay the first two instalments that fell due on 31 May 2019 and 30 June 2019 in accordance with the settlement agreement. Consequently, the player requested FIFA to resume the proceedings and reiterated his request for relief set out in his initial claim.

16. After having been invited to comment on the player’s submissions of 2 April 2019 and 3 July 2019, the club stated that it was facing financial difficulties, of which it had informed the player on 2 October 2018.

17. Furthermore, the club argued that the termination of the contract was not properly executed by the player. In this respect, firstly, the club argued that art. 14bis of the FIFA Regulations on the Status and Transfer of Players does not apply as an alternative provision was established in the contract. Secondly, the club referred to art. 22 of the contract and maintained that, at the moment that the player sent his default notice on 4 December 2018, not more than three monthly salaries were outstanding.

18. Moreover, the club requested that the DRC reduce the compensation due to the player. In this respect, the club pointed out that the player signed an employment contract with the German club, KFC Uerdingen 05 on 31 January 2019. Furthermore, the club argued that the player did not suffer any damage as a result of the termination of the contract, considering that the club paid him the outstanding amounts on 11 January 2019 and offered the player to return to the club for the remainder of 2019.

19. In continuation, the club argued that the amounts for flight tickets and housing claimed by the player shall not be part of the compensation for breach of contract. In this respect, the club argued that the housing allowance was only due to the player during his stay in Shenyang. As to the flight tickets, the club contested that each member of the player’s family was entitled to six round-trip tickets. The club maintained that no further flight tickets were due to the player, as it had already provided him with eight round-trip flight tickets, thereby exceeding its obligation in accordance with the contract.

20. Upon request of FIFA, the player provided a copy of the employment contract concluded with the German club, KFC Uerdingen 05, valid as from 30 January 2019 until 30 June 2020. According to the contract, the player is entitled to a monthly salary of EUR 15,000.

II. Considerations of the DRC

1. First, 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 30 January 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.

2. Subsequently, the DRC referred to art. 3 par. 2 and par. 3 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 January 2020) it is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a German player and a Chinese club.

3. Furthermore, the DRC 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 par. 2 of the Regulations on the Status and Transfer of Players (edition January 2020), and considering that the present claim was lodged on 30 January 2019, the October 2019 edition of said regulations (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 DRC entered into the substance of the matter. Subsequently, the DRC continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. However, the DRC 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. First of all, the DRC acknowledged that on 13 January 2020, the player and the club signed an employment agreement, valid as from the date of signature until 31 December 2017.

6. Furthermore, the DRC acknowledged that on 14 April 2017, the parties extended such employment agreement for the period from 1 January 2018 until 31 December 2019.

7. The DRC then reviewed the claim of the player, who maintains that he had just cause to terminate the contract on 21 December 2018, as the club failed to comply with its financial obligations. Consequently, the Claimant asked to be awarded, inter alia, payment of his outstanding remuneration as well as compensation for breach of contract.

8. The DRC then turned its attention to the arguments of the club and acknowledged that the latter did argued that the termination of the contract was not properly executed by the player. In this respect, the DRC took note that the club submitted that art. 14bis of the FIFA Regulations on the Status and Transfer of Players does not apply as an alternative provision was established in the contract. Moreover, the DRC noted that the club maintained that, at the moment that the player sent his default notice on 4 December 2018, not more than three monthly salaries were outstanding.

9. In view of the foregoing, the DRC deemed that the first issue to be solved is whether the player had just cause to terminate the contract on 21 December 2018. In so doing, the DRC proceeded with an analysis of the parties’ arguments as well as of the documentation on file, bearing in mind the wording of 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.

10. In continuation, taking into account the consideration under point II.3 above, the DRC referred to art. 14bis par. 1 of the Regulations, which, inter alia, stipulates that, in case a club unlawfully fails to pay a player at least two monthly salaries on their due dates, the player will be deemed to have had a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted it a deadline of at least 15 days to fully comply with its financial obligations.

11. Consequently, on account of the above, the DRC observed that when the player terminated the contract, the amount equivalent to four monthly salaries had fallen due and remained unpaid, despite the fact that the Claimant had put the Respondent in default. As such, the DRC concluded that, on 21 December 2019, the Claimant had a just cause to unilaterally terminate the employment contract.

12. As a result, the DRC decided that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant.

13. 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 Respondent compensation for breach of contract, in addition to any outstanding payments on the basis of the relevant employment contracts.

14. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the DRC held the Claimant would be entitled to the unpaid remuneration as established above at the moment when the contract was terminated by the Claimant. Nevertheless, the DRC noted that the Claimant recognizes to have received on 11 January 2019 all outstanding amounts until 31 December 2018. The DRC hence concluded that no unpaid remuneration is owed by the Respondent to the Claimant.

15. In continuation, the DRC focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the DRC firstly 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 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.

16. In application of the relevant provision, the DRC held that he first of all had to clarify as to whether the pertinent employment contracts 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 employment contract at the basis of the matter at stake.

17. As a consequence, the members of 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. The DRC recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the DRC emphasised beforehand that each request for compensation for contractual breach has to be assessed by the DRC on a case-by-case basis taking into account all specific circumstances of the respective matter.

18. The DRC then turned his attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the DRC to be essential. The DRC deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the DRC to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

19. Bearing in mind the foregoing, the DRC proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Claimant until its natural expiration. As such, the DRC observed that the player would be entitled to a remuneration of EUR 1,200,000 and RMB 60,000 for the period as from January 2019 until December 2019. Consequently, the DRC concluded that such amounts serve as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

20. To this extent, the DRC wished to highlight that the player was contractually entitled to 6 business-class plane tickets. However, the DRC took note of the fact that the club had provided him with 8 business-class plane tickets, therefore complying with the contract’s stipulations. Consequently, the DRC concluded that such request by the player had to be rejected and therefore not included in the calculation of compensation.

21. In continuation, the DRC verified as to 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 enabled to reduce his loss of income. According to art. 17 par. 1 lit. ii) of the Regulations as well as the constant practice of the DRC, such remuneration under a new employment contract 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.

22. In this respect, the DRC recalled that the Claimant had found new employment with the German club, KFC Uerdingen 05, as from 30 January 2019 until 30 June 2020, leading to total value for the period corresponding to the time remaining on the prematurely terminated contract of EUR 165,000, which shall be deducted from the above-mentioned residual value. As a result, the DRC established that the “Mitigated Compensation” amounts to EUR 1,035,000 and RMB 60,000.

23. Subsequently, the DRC turned its attention once more to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an “Additional Compensation” of three monthly salaries on top of the “Mitigated Compensation”, subject to the early termination of the contract being due to overdue payables. Furthermore, said provision established that the overall compensation may never exceed the rest value of the prematurely terminated contract.

24. Therefore, taking into consideration both the player’s monthly salary under the prematurely terminated contract, which the DRC deemed to be EUR 100,000, and the aforementioned provision of the Regulations that the overall compensation may never exceed the rest value of the prematurely terminated contract, the DRC decided to award the Claimant additional compensation in the amount of EUR 165,000.

25. Consequently, on account of the above-mentioned considerations, the DRC decided to partially accept the Claimant’s claim and held that the Respondent must pay the amount of EUR 1,200,000 and RMB 60,000 as compensation for breach of contract to the Claimant, which is considered by the DRC to be a fair and reasonable amount.

26. In addition, taking into account the player’s request and the DRC’s well-established jurisprudence, the DRC decided that the club must pay to the player interest of 5% p.a. on the amounts of EUR 1,200,000 and RMB 60,000 as of the date on which the claim was lodged, i.e. 30 January 2019, until the date of effective payment.

27. The DRC concluded its deliberations by rejecting any further claim of the Claimant.

28. Furthermore, taking into account the consideration under number II./3. above, 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.

29. 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.

30. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amount 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.

31. Finally, the DRC recalled that the above-mentioned sanction 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, Assani Lukimya, is partially accepted.

2. The Respondent, Liaoning FC, has to pay the Claimant compensation for breach of contract in the amount of EUR 1,200,000 and RMB 60,000, plus 5% interest p.a. as from 30 January 2019 until the date of effective payment.

3. Any further claim lodged by the Claimant is rejected.

4. 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 amounts mentioned under point III./2. above.

5. The Respondent shall provide evidence of payment of the due amounts in accordance with point III./2. 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).

6. In the event that the amounts due plus interest in accordance with point III./2. above are not paid by the Respondent within 45 days as from the notification by the Claimant 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 amounts are 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).

7. The ban mentioned in point III./6. above will be lifted immediately and prior to its complete serving, once the due amount is paid.

8. In the event that the aforementioned sums plus interest 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.

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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.

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