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 9 April 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 April 2020,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (the Netherlands), member

Daan de Jong (the Netherlands), member

on the claim presented by the player,

Player A, Country B,

as Claimant / Counter-Respondent I

against the club,

Club C, Country D,

as Respondent / Counter-Claimant

with the club,

Club E, Country F,

as Counter-Respondent II

with the club,

Club G, Country B

as Counter-Respondent III

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 16 July 2017, the Club of Country B, Club H, and the Club of Country D, Club C (hereinafter: Club C) agreed on the transfer of the services of the Player of Country B, Player A (hereinafter: player) from the former to the latter upon payment of a transfer fee of USD 3,300,000. On the same day, the player and Club C executed an employment agreement valid from the same date until 31 May 2020 (hereinafter: the employment agreement).

2. According to Part B item 3 of the employment agreement, the player and Club C agreed upon a “weekly basic wage” of 30,000. Additionally, according to Part B item 8 of the employment agreement, the player and Club C agreed upon “2 return flight tickets for the player and his family to Country B per season”.

3. According to clause 27 of Schedule 3 of the employment agreement, the player and Club C agreed upon the following: “In the event that a Player commits an act of misconduct, breach of contract or duty or brings the Club or any Associated Company into disrepute, whether during or outwith the Employment and except where the Club shall terminate the Employment, the Club shall have the right to suspend the player on basic wage only, for a defined period not exceeding a maximum of 4 weeks or impose a fine, calculated by reference to the player’s weekly wage (…)”.

4. According to clause 10.2 of Schedule 2 of the employment agreement, the player and Club C agreed upon the following: “The parties to this Agreement submit to the non-exclusive jurisdiction of the Courts of Country D”.

5. According to clause 5 of Schedule 3 of the employment agreement, the player and Club C agreed upon the following: “The Player shall observe and be subject to the articles of association, protocols, procedures, rules, decisions and regulations of the Football Association of Country D, the Articles, Rules, Regulations and decisions of The Football League of Country D and the Charter and Regulations, Rules etc. of UEFA and of FIFA, the rules, regulations and the like of any other organisation of which these bodies or the Club may be a member and any competition in which the Club may from time to time take part, and the player submits to the jurisdiction and to the decision making authority of the Football Association of Country D, The Football League of Country D, UEFA and of FIFA, and the player undertakes to forthwith execute any participation agreement or other document that may be required to be executed in order for him to play for the Club in any such competition. In the case of any conflict between this Agreement and such articles of association, protocols, procedures, rules, decisions regulations, Articles, Rules, Regulations and Charters then, save in the case where this Agreement confers additional rights, benefits or remedies on the Club, such articles of association, protocols, procedures, rules, decisions, regulations, Articles, Rules, Regulations and Charters shall take precedence”.

6. According to clause 13 (i) of Schedule 3 of the employment agreement, the player and Club C agreed upon the following: “Subject to any exclusive jurisdiction of FIFA, if any dispute or difference, including one relating to damages for breach of contract, not otherwise expressly provided for in this Agreement, shall arise between the Club and the player the Club, and the player hereby agree that such dispute or difference shall be submitted for determination by the Board or if the Board so decides, a Commission, in the case of a Player who plays for a Club in membership of The Football League of Country D who shall, upon application made by either party, consider and adjudicate upon such dispute or difference as an arbiter”.

7. On 3 January 2018, Club C and the Club of Country B, Club J (hereinafter: Club J) agreed on a free loan transfer of the player from the former to the latter until 3 January 2019 (hereinafter: the Loan Agreement). Subsequently, the player and Club J executed a temporary labour contract.

8. On 11 May 2018, Club J sent a notice to the player terminating their labour contract on the basis, inter alia, that “the [player] has been recently involved in public scandals related to his abusive consumption of alcohol in public places and/or in the workplace” and directing him to immediately report to Club C. On the same date, Club J sent a notice to Club C terminating the Loan Agreement “due to, among other things, the scandals on which the player was involved during the month of April, 2018 involving the player’s alcohol abuse”.

9. On 15 May 2018, Club C replied to the notice sent by Club J and, inter alia, (i) objected to the termination of the Loan Agreement and (ii) requested information about the player’s alleged events regarding alcohol abuse, and what assistance had been provided to him by Club J, if any.

10. On 29 May 2018, the Club of Country B, Club K (hereinafter: Club K) presented an offer to the player to hire his professional services.

11. On 6 June 2018, the player, Club C, and Club J executed a Deed of Variation, by means of which the Loan Agreement was amended in order to allow Club J to sub-loan the player’s services. On the same date, the player, Club C, Club J, and Club K executed a sub-loan agreement (hereinafter: the Sub-Loan) by means of which the player’s services were temporarily transferred from Club J to Club K until 3 January 2019. Subsequently, an employment contract was executed between Club K and the player.

12. On 31 October 2018, Club K and the player executed a “Convenio de Terminación Deportiva Laboral” and allegedly ended their employment relationship by mutual consent.

13. On 13 November 2018, Club J sent an e-mail to Club C reporting, inter alia, that it had been made aware via media of Country B that the player allegedly “had relapsed into his conducts of alcohol abuse”.

14. On 20 November 2018, Club K sent Club J two letters with the same content informing, inter alia, that the player had engaged into rehabilitation services since his arrival at Club K, namely “Alcoholicos Anónimos”, and that Club K had given him full support. Notwithstanding, Club K reported that the player had had four episodes of alcohol abuse since 2 July 2018, the last of which on 3 November 2018, when the player presented himself for a training session “in an inconvenient condition”, occasion in which he was tested with an alcoholmeter by Club K’s medical staff.

15. On 22 November 2018, Club J send a letter to Club C, forwarding to said club one of the aforementioned letters it had received from Club K.

16. On 6 December 2018, Club C sent a letter to the player’s agent, Mr Agent L (hereinafter: the Agent), demanding “full details” regarding the player’s status and whether he had quit his rehabilitation process. On the same date, Club C sent a letter in response to Club J’s correspondence of 22 November 2018, requesting information about the player’s condition, including his rehabilitation process, media and medical reports, and further information on why Club J and Club K had respectively intended to terminate the Loan Agreement and the Sub-loan with Club C.

17. On the same date, the Agent replied to Club C informing that both Club J and Club K had helped the player with his treatment and that the player had on a voluntary basis “entered into a private clinic to finish his treatment which he did and report with Club K for the Tournament M”. The Agent further explained that the player had been training, playing matches and fulfilling his contracts with either Club K, Club J, or Club C. Finally, the Agent reported that the player had been released by Club K since that club had not made it to playoffs, and that he was waiting for instructions by Club C given that “the loan (Club J, Club K) has ended and the players [sic] contract is active with Club C from January 2019”.

18. On 7 December 2018, Club C sent a response to the Agent claiming inconsistencies in his report, and requesting further information on the player’s status, including alcohol tests results, counselling/rehabilitation, training schedule, and recent alcohol consumption.

19. On 14 December 2018, an unscheduled meeting was held at Club C’ facilities between the player, two members of his staff - the Agent and Mr Agent N - and two representatives of Club C, Mr Agent O and Mr Agent P. On the same date, the Agent sent a letter to Club C in response to Club C’ letter of 7 December 2018, stating, inter alia, that the player had not undergone any alcohol tests and that he had consumed alcohol in one occasion with his family during his vacations.

20. On 17 December 2018, Club C sent an e-mail to the aforementioned player’s representatives requesting clarification of his vacation period. On the same day, the player’s representatives replied stating that Club K had let the player go from 9 November 2018.

21. On the same date, Club C sent letters to both Club K and Club J requesting further information on the player’s undertakings during his time which each club, inter alia, reports on the incidents of alcohol abuse, medical tests conducted, treatment and rehabilitation, medical reports, playing history, and general state of body and mind.

22. On 18 December 2018, Club C sent a lengthy letter to the player’s representative, Mr Agent N, reporting Club C’ position on the player’s doings in Country B, and laying the grounds for a termination of the employment agreement based on alleged gross misconduct by the player. In particular, Club C affirmed that the player had breached the duties outlined in clauses 3.1.1, 3.1.2, 3.1.5, and 3.1.5 of the employment agreement. Notwithstanding, Club C awarded the player with 2 days to present his “side of the story before any decision is taken”.

23. On 19 December 2018, the player responded to the letter sent by Club C, rebutting Club C’ allegations and stating that he was “committed to Club C”, and “prepared to undergo any medical or physical tests however many times you consider it necessary”. The player ended the letter by stating that the hoped Club C could “consider this letter as [his] formal commitment to this institution and take into account [his] version of events”.

24. On 31 December 2018, Club K responded to Club C’ letter of 17 December 2018 and stated, inter alia, that the contract between the player and Club K had been terminated because of the player’s alleged alcohol abuse. Club K also provided further details on its letter of 20 November 2018.

25. On 7 January 2019, Club C sent a letter to the player terminating the employment agreement. On the same date, Club C sent a “Confidential and Without Prejudice” letter referencing the termination letter of the same date, and offering the player a tentative settlement agreement, the terms of which would be still discussed by the parties. Such offer was valid until 11 January 2019.

26. On 12 March 2019, the player filed a claim before FIFA against Club C, as detailed below.

27. On 15 March 2019, the player and the Club of Country F, Club E (hereinafter: Club E) signed an employment contract valid from the same date until 30 June 2020, according to which the player was, inter alia, entitled to the following:

– total salaries for the season 2018/2019 of 9,000;

– a scholarship for the season 2018/2019 in the total amount of 4,000;

– total salaries for the season 2019/2020 of 27,000;

– a scholarship for the season 2019/2020 in the total amount of 12,000.

28. As stated by Club E, it also paid the player a total of 6,600 for housing allowances and 3,260 as costs associated with the use of a car by the player. As stated by the player, such employment contract was allegedly terminated on 18 May 2019.

29. On 22 December 2019, the player and the Club of Country B, Club G (hereinafter: Club G) signed an employment contract valid from 1 January 2020 until 31 May 2020, i.e. for the Tournament Q. Under such contract, the player was entitled to, inter alia, a remuneration of 2,500,000 for the contract period.

30. On 7 January 2020, Club E and Club G executed a transfer agreement by means of which they agreed on the transfer of the services of the player from the former to the latter upon, inter alia, a payment of a transfer fee of EUR 10,000.

31. On 21 January 2020, the player and Club E signed a joint declaration stating that their employment contract had been terminated based on the aforementioned transfer agreement, i.e. the one executed with Club G on 7 January 2020.

32. According to the information available in the Transfer Matching System (TMS), the player was permanently registered with Club G on 30 January 2020. TMS further shows that the relevant transfer instruction (reference number 270159) was entered by Club G, and matched by Club E, as if the player had been engaged “out of contract” and “free of payment”.

33. The player filed the claim at hand before FIFA, asking to be awarded compensation for breach of contract of 2,190,000, plus 5% interest p.a. as from 8 January 2019 until the date of effective payment. Said amount is calculated considering the player’s weekly wages of 30,000, multiplied by 73, i.e. the remaining weeks until the end of the employment agreement.

34. Furthermore, the player asked that sporting sanctions be imposed on Club C in accordance with article 17.4 of the FIFA Regulations on the Status and Transfer of Players “due to the breach of the Employment Agreement during the protected period”. Finally, the player requested that Club C bears all the costs and expenses of the proceedings.

35. The player submits that the dispute is of an international dimension and therefore subject to the competence of FIFA under art. 22 b) of the FIFA Regulations on the Status and Transfer of Players. The player further notes that the employment agreement does not foresee a “clear, explicit and exclusive” reference to a national dispute resolution body to hear disputes between the parties.

36. Further, the player, whilst having admitted that “some personal decisions did not have a positive impact on his personal life”, claims that Club C terminated the employment agreement without just cause, as detailed below.

37. Firstly, the player claimed that Club C was not entitled to terminate the employment agreement as it was suspended during the term of the Loan Agreement. He went on to state that Club C cannot base said termination on the alleged facts that took place while the employment agreement was not in force.

38. Secondly, the player is of the opinion that he regularly fulfilled his obligations under the Loan Agreement and the Sub-Loan, since he played 25 official matches during the year of 2018. He further claims that his dismissal by Club J was without just cause, and that Club C stayed on his side as per the letter it sent to Club J on 15 May 2018. The player also stated that Club K’s interest in his services is further evidence of his professional commitment and abiding by his contractual obligations. He finally notes that he was dismissed by Club K on 24 November 2018 at the end of that club’s season as it did not qualify for the Playoffs in Country B.

39. Thirdly, the player claims that Club C was never interested in his situation, given that a Representative of Club C never travelled to Country B to assess what was happening, something that Club C could have done under the rights conferred to it by clause 2.5 of the Loan Agreement. The player went on to state that it was only in the end of 2018, i.e. in the proximity of his return to Country D, that Club C took action to effectively assess his situation. In the player’s view, this was due to the complaints made by the Club C head coach, Mr Coach R, who publicly voiced an opinion that the player’s salaries were too high and prevented Club C from hiring reinforcements.

40. Fourthly, the player submitted that Club C never provided him with evidence of the alleged misbehaviours, therefore violating his rights, especially concerning his right to be heard. The player submitted that a termination of contract should always be an ultima ratio, and that Club C could have used more lenient measures such as the grievance proceeding foreseen in the employment agreement. The player further stated that only material breaches allow a termination with just cause and that no material breaches were committed by the player, as the employment agreement was suspended.

41. Lastly, the player stated that under the principle of pacta sund servanda, the employment should be fulfilled and that Club C did not meet its burden of proof under the FIFA Regulations on the Status and Transfer of Players to constitute just cause.

42. Club C, for its part, disputes the competence of FIFA and submits that as per clause 13 (i) of Schedule 3 of the employment agreement, disputes should be submitted to the dispute resolution body of the Football League of Country D, i.e. the Sub-Committees of the Board (hereinafter: NDRC of Country D). Club C further claims that the NDRC of Country D complies with the standards set out in FIFA Circular no. 1010 and therefore is “as independent arbitration tribunal guaranteeing fair proceedings at national level”.

43. Club C also claims it has no standing to be sued as the claim was directed against “The Club C Football Club” and not “The Club C Football Club Limited”. Club C is of the position that the latter is “a different legal entity”, and that “the present claim is drafted against the wrong legal entity”.

44. Club C further submits that the “confidential and without prejudice correspondence” sent to the player “was not to be disclosed in these or any other proceedings”. Club C requested that such material and any references to it are “removed from the Claim”, re-filed by the player and “that FIFA destroys all copies of the file” that contain such material. Club C claims that the inclusion of such document in the file sets a “dangerous precedent” as it would deter a party from engaging in potential good-faith settlements.

45. Club C claims that the player has committed several material breaches of the employment agreement, therefore entitling Club C to terminate it. To this extent, Club C if of the position that the player lied to it, turned up drunk to training sessions, was seeing buying alcohol after training, and missed club commitments, as well as admitted publicly that the had alcohol dependency problems. To Club C, these breaches are as severe as the use of cocaine, for instance.

46. Club C further submitted that clauses 3.1.5 and 7.1 et seq. of Schedule 2 of the employment agreement allowed it to terminate it as it did.

47. Club C claimed that whilst the main obligations contained in the employment agreement were transferred to Club J or Club K, “the player was always bound by his duties of fidelity and care to his principal employer”. Club C also stated that, in any event, the termination took place when the employment agreement was no longer suspended and, further, it stated that even if it was not, Club C would still be entitled to terminate it for a gross misconduct by the player. Club C exemplified such situation of gross misconduct with the player being, for instance, arrested while on loan.

48. Club C rebutted the player’s allegations that it wanted to dispose of him due to his high wages, claiming that the comments made were those of the journalist and not of Mr Coach R, who had limited himself, with regards to the player, to state that “[Club C] will have to make a decision on [the player’s] future but, at the moment, I think it would be a very long shot for him here”.

49. Club C filed its defence requesting the player’s claim to be deemed inadmissible or, alternatively, fully rejected, or in a further alternative, that should it be accepted, that the amount of compensation is reasonably reduced.

50. Additionally, Club C counterclaimed against the player, Club E and Club G, demanding it be awarded compensation of “at least” 4,000,000 plus 5% interest p.a. as from 8 January 2020 until the date of effective payment. It bases such amount in clauses 3 and 4 of Schedule 6 of the employment agreement, as follows:

– 1,453,000 corresponding to the unamortised transfer fees paid by Club C to acquire the player’s registration;

– 2,190,000 corresponding to the residual value of the employment agreement;

– the value of the player’s employment contract with his new club (if any);

– the player’s age, ability, field position, on-field performances, club appearance record and international appearance record;

– any substantiated interest shown by other clubs in acquiring the services of the player.

51. Alternatively, Club C calculated compensation in the same amount based on art. 17 of the FIFA Regulations on the Status and Transfer of Players, using the same criteria, arriving at an amount of a minimum of 4,000,000.

52. Furthermore, Club C asked that sporting sanctions be imposed on the player in accordance with article 17.3 of the FIFA Regulations on the Status and Transfer of Players, and that Club E and Club G be considered jointly liable. Finally, Club C requested that the player bears all the costs and expenses of the proceedings, if any.

53. As to Club G, Club C, in its amendment to the counterclaim, submitted that given the salary difference between Club E and Club G, the latter “arguably has benefited or profited from the [player’s] breach of contract” and “might be the club that should be held jointly and severally liable for any damages”.

54. The player, in his defence, rebutted Club C’ allegation that it did not have standing to be sued, as the information contained in Club C’ TMS, webpage and previous communications with the player, including the termination letter, all made reference to “The Club C Football Club” and not “The Club C Football Club Limited”. The player further reiterated his position that FIFA is competent to deal with the dispute, and claimed that the NDRC of Country D does not meet the requirements established by FIFA Circular 1010.

55. In addition, the player submitted that Club C did not present any evidence that the alleged alcohol abuse by the player had damaged his career, and he further submitted that no medical or physical tests were ever conducted by Club C in neither Country B nor elsewhere to assess his condition. The player was also of the position that he regularly fulfilled his contractual obligations towards Club J and Club K. To this extent, the player claimed that the letter sent by Club K to Club C on 31 December 2018 is in sheer contradiction with the termination agreement executed between Club K and the player on 31 October 2018.

56. The player further claimed that Club C deliberately ignored the “press reports” on the player’s alleged misbehaviour, and only used them as basis for the termination of the employment agreement more than six months after such reports arose. The player also submitted that Club C (i) withheld information from him which prevented him from fully presenting his position, which, nonetheless, was that he was at Club C’s disposal and (ii) never gave him a warning.

57. Finally, the player reiterated his position that the employment agreement was suspended both contractually and de facto, and that the Club C did not have just cause to terminate the employment agreement.

58. The player requested FIFA to reject the Club C’ counterclaim. Alternatively, the player requested FIFA to rule that (i) clauses 3 and 4 of Schedule 6 the employment agreement are null and void as they are not reciprocal and unbalanced in favour of Club C, and (ii) to drastically reduce the amount of compensation due. Finally, the player requested that no sporting sanctions be imposed on him.

59. On 26 January 2020, Club E spontaneously informed FIFA that it had been indirectly made aware of the counterclaim, which allegedly had been directed by FIFA to a homonymous club.

As such, it requested to be awarded an opportunity to file its position on the counterclaim, which was granted.

60. Accordingly, Club E properly filed its submissions. While affirming FIFA’s competence as per art. 22 lit.) of the FIFA Regulations on the Status and Transfer of Players, it contested the admissibility of the counterclaim on twofold.

61. Firstly, Club E argued that the claim was not directed by FIFA to the right club. Secondly, Club E claimed it has no standing to be sued as the counterclaim was directed by Club C against “Club E, Country F”, whilst it should have been addressed to “Club E1, TMS Identification ClubE1”. Club E deems the counterclaim was “drafted against the wrong legal entity”.

62. As to the substance, Club E argued that it did not compromise the principle of contractual stability, and therefore the joint liability set forth in Article 17 of the FIFA Regulations on the Status and Transfer of Players should be excluded from the dispute. Club E went further to state that “it was undeniably Club C’s unilateral decision to terminate the employment relationship with the player” and that it did not have any “involvement whatsoever on this termination”.

63. Club E requested that the counterclaim be deemed inadmissible or, alternatively, dismissed entirely. In a further alternative, Club E requested that it be not found jointly and severally liable. In a final alternative, Club E requested that in case compensation is awarded to Club C, it be reduced “taking into account all mitigating circumstances”.

64. Club G, for its part, did not reply to the counterclaim, nor filed any submissions.

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 12 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.

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 (edition March 2020), the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a club and a player that have an international dimension.

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

4. However, the Chamber acknowledged that Club C contested the competence of FIFA’s deciding bodies on the basis of clause 13 (i) of Schedule 3 of the employment agreement, alleging that the competent body to deal with any dispute deriving from said contract is the NDRC of Country D.

5. Contrariwise, the Chamber noted that the player insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against Club C, and that he deemed that the NDRC of Country D did not meet the criteria set out in FIFA Circular no. 1010. Additionally, the DRC noted that Club E also submitted that the FIFA DRC is competent to adjudicate on the matter at hand.

6. Consequently, the Chamber deemed that it should first of all examine its competence in relation to the contract at the basis of the employment relationship between the parties of the present dispute.

7. In this context, the members of the DRC observed, in relation to the competence, that the aforementioned employment agreement included the following clauses:

- “The parties to this Agreement submit to the non-exclusive jurisdiction of the Courts of Country D” (clause 10.2 of Schedule 2);

- “The Player shall observe and be subject to the articles of association, protocols, procedures, rules, decisions and regulations of the Football Association of Country D, the Articles, Rules, Regulations and decisions of The Football League of Country D and the Charter and Regulations, Rules etc. of UEFA and of FIFA, the rules, regulations and the like of any other organisation of which these bodies or the Club may be a member and any competition in which the Club may from time to time take part, and the player submits to the jurisdiction and to the decision making authority of the Football Association of Country D, The Football League of Country D, UEFA and of FIFA, and the player undertakes to forthwith execute any participation agreement or other document that may be required to be executed in order for him to play for the Club in any such competition. In the case of any conflict between this Agreement and such articles of association, protocols, procedures, rules, decisions regulations, Articles, Rules, Regulations and Charters then, save in the case where this Agreement confers additional rights, benefits or remedies on the Club, such articles of association, protocols, procedures, rules, decisions, regulations, Articles, Rules, Regulations and Charters shall take precedence” (clause 5 of Schedule 3);

- “Subject to any exclusive jurisdiction of FIFA, if any dispute or difference, including one relating to damages for breach of contract, not otherwise expressly provided for in this Agreement, shall arise between the Club and the player the Club, and the player hereby agree that such dispute or difference shall be submitted for determination by the Board or if the Board so decides, a Commission, in the case of a Player who plays for a Club in membership of The Football League of Country D who shall, upon application made by either party, consider and adjudicate upon such dispute or difference as an arbiter” (clause 13 (i) of Schedule 3).

8. Having examined the contents of the aforementioned clauses, the member of the Chamber concluded that the jurisdiction articles established by the parties in the employment agreement are not entirely clear. In this respect, the Chamber found that while it seems that they were envisioned to favour a dispute resolution system within the relevant national association, their wording does not reflect that goal.

9. In particular, the DRC observed that the cited clauses revert either to the jurisdiction and decision making authority of FIFA (which can only be the FIFA DRC) and/or to the FIFA Regulations (clause 5, Schedule 3, and clause 13, Schedule 3). What is more, the DRC emphasized that clause 13 (i), Schedule 3, is not an exclusive jurisdiction clause, a conclusion confirmed by the wording of clause 10.2 of Schedule 2, which refers to the non-exclusive jurisdiction of the Courts of Country D.

10. Consequently, the DRC concluded that the employment agreement did not exclude the jurisdiction of the FIFA DRC and even referred to the decision-making authority of FIFA. This is, in the Chamber’s view, further confirmed by Club C’s termination letter, by means of which referenced seeking the judicial bodies of FIFA to impose sporting sanctions on the player. While it is true that the player and Club C could have sought relief from the NDRC of Country D, which would have jurisdiction under clause 13 (i) schedule 3 of the employment agreement, it is also true that no disposition of such contract neither prevents nor impedes FIFA from entertaining the claim.

11. In light of the foregoing, the members of the DRC unanimously decided that the employment agreement does not contain a clear, specific, exclusive, and unequivocal jurisdiction clause in favour of the NDRC of Country D. For the sake of good order, based on the documentation provided, it could also not be concluded that the NDRC of Country D complied with FIFA Circular 1010. Consequently, and in compliance with its own well-established jurisprudence, the members of the Chamber agreed that the DRC is competent to entertain the claim at hand.

12. Subsequently, 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 Player (edition March 2020), and considering that the present claim was lodged on 12 March 2019, the June 2018 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

13. Its competence and the applicable regulations having been established, the Chamber entered into the merits of the case and observed – first and foremost – that, according to Club C and Club E, they respectively lack standing to be sued vis-à-vis the claim and the counterclaim.

14. In this regard, the members of the Chamber firstly observed that Club C deems the claim to have been directed against the “wrong legal entity”, i.e. “The Club C Football Club”, which is a “different legal entity” from “The Club C Football Club Limited”. Secondly, the DRC took into account that Club E deemed, following the same line of reasoning as Club C, that the counterclaim had been filed against “the wrong legal entity”. Lastly, the members of the Chamber noted that Club E submitted it had not been properly summoned to the proceedings by the FIFA Administration.

15. In respect of the above, the members of the DRC deemed it worth to preliminarily remark, on general level, that standing to be sued is attributed to a party in which it can be validly placed the legal consequences deriving from the rights brought forward with a claim on the basis of a legally protectable and tangible interest at stake in the matter concerned. Secondly, the DRC recalled that, when assessing disputes presented before it, it can consider evidence not presented by the parties, in line with article 12 par. 4 of the Procedural Rules.

16. In this regard, the Chamber turned its attention to the letter issued by the Football Association of Country D according to which, in response to a request by FIFA on the matter of the relationship, if any, between “The Club C Football Club” and “The Club C Football Club Limited”, it stated as follows: “So far as the Football Association of Country D is concerned, we are not required to make a distinction between the obligations and liabilities that are imposed on The Club C Football Club Limited and The Club C Football Club. Both entities are treated as being subject to all of our and FIFA’s rules and regulations (for instance in relation to player registration matters) regardless of which entity is specifically referenced. This is a special factor of FIFA and the Football Association of Country D’s relationship with its members and football clubs, underpinned by our Articles of Association (our formal constitution)”.

17. In addition, the Chamber observed that according to the information available in TMS, Club C is registered with such system as “Club C Football Club”, having as TMS Manager, inter alia, Mr Agent P – whom, as noted by the members of the Chamber, participated as a representative of Club C in the meeting held with the player on 14 December 2019.

18. Bearing in mind the foregoing, the Chamber concluded that irrespective of the corporate structure that Club C may adopt interna corporis, it is affiliated to the Football Association of Country D and thus meets the definition of a “club” enshrined in article 6 par. 1 of the Procedural Rules, i.e. a club playing association football. The DRC found that the aforementioned letter by the Football Association of Country D confirmed such conclusion.

19. Likewise, the DRC observed that, in order to determine the outcome of the proceedings at hand, it does not need to enter into the matter of the company structure of Club C, as it is irrelevant whether it has a parent company/controller under the same or a different name, given that the services of the player and the dispute at hand concern, undoubtedly, Club C Football Club, against which the claim was directed, and whom the legal consequences of the employment agreement inevitably give respect to.

20. Consequently, the members of the DRC unanimously concluded that Club C had indeed standing to be sued.

21. Subsequently, the DRC turned its focus on the issue of standing be sued raised by Club E, according to which the counterclaim was (i) not directed to the right club by FIFA, and (ii) directed at the “wrong legal entity” by Club C.

22. In this regard, the DRC observed that FIFA’s correspondence was indeed, at first, addressed to a homonymous club in Country F. However, Club E spontaneously reached out to FIFA and requested it be informed about the counterclaim. With this information in mind, FIFA redirected its correspondence to Club E, who was then provided with copies of all documents on file and awarded the chance to file its position, which it comprehensively did. Therefore, the Chamber concluded that any procedural flaw that could arise regarding the summoning of Club E to the proceeding was promptly corrected, hence having no detrimental effect in Club E’s standing, right to due process and/or right to be heard.

23. Moving on to the issue of the legal identity of Club E, the DRC confirmed the same reasoning outlined above regarding Club C, and underlined, once more, that it does not need to examine the corporate structure of Club E as it is, undoubtedly, a club within the meaning of article 6 par. 1 of the Procedural Rules, i.e. a club playing association football, and undisputedly the club with which the player was registered after the termination of the employment agreement.

24. More in particular, the DRC emphasized that Club E spontaneously requested to be awarded the possibility of filing its position once it became aware of the counterclaim, which demonstrates it accepted to have “passive” standing, or standing to be sued, in the current proceedings.

25. Consequently, the members of the DRC unanimously concluded that Club E had indeed standing to be sued, and that the counterclaim should be deemed admissible.

26. The foregoing having been established, the Chamber moved to 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.

27. First of all, the members of the Chamber acknowledged that, on 16 July 2017, the player and Club C had concluded the employment agreement valid as from the same date until 31 May 2020.

28. The Chamber further observed that the player’s services were loaned by Club C to Club J from 3 January 2018 until 3 January 2019, and later sub-loaned by Club J to Club K, with the player’s and Club C’ acquiescence, from 6 June 2018 until 3 January 2019.

29. The Chamber, in continuation, took into account that the player seemed to be involved in a number of incidents, regarding his behaviour and alcohol consumption, during his time with Club J and Club K, and noted that these were of particular relevance to the parties involved between May and June of 2018, and November and December of the same year. Within the former period the labour contract between the player and Club J was terminated; Club J tentatively terminated the Loan Agreement – which was immediately rejected by Club C, as per its letter of 15 May 2018; and the execution of both the Sub-Loan and a new labour contract between the player and Club K took place. Within the second period, the employment contract between the player and Club K was terminated, and the parties exhaustively exchanged a series of written correspondences.

30. Lastly, the Chamber observed that Club C unilaterally terminated the employment agreement on 7 January 2019, and sent a “Confidential and Without Prejudice” letter to the player on the same date.

31. The Chamber further observed that the player lodged a claim in front of FIFA against Club C seeking payment of the total amount of 2,190,000, asserting that Club C had terminated the employment agreement without just cause. Likewise, the Chamber took note that Club C counterclaimed against the player, Club E, and Club G, seeking compensation for breach of contract in the amount of “at least” 4,000,000.

32. In this context, the Chamber acknowledged that it had to examine whether the reasons put forward by the Club C could justify the termination of the employment agreement in the present matter, i.e. whether Club C had just cause to terminate the employment agreement, and the consequences thereof.

33. From the outset, with regards to the “Confidential and Without Prejudice” letter sent by Club C, the DRC highlighted that it welcomes any good faith attempt to amicably solve a quarrel between a player and a club, and noted that negotiations of such nature are a commonplace in the world of football. In this sense, the Chamber wished to stress that the wording of such letter and the customary practice of law in various countries may lead to different interpretations of its contents, but that in any event the DRC did not take it as detrimental to Club C’ stance in these proceedings.

34. In continuation, the Chamber outlined that, in principle, the loan of a professional suspends the original employment relation between a player and his/her parent club. This is due to the fact that, unless a contractual stipulation to the contrary has been agreed by the parties and subject to a case-by-case analysis, during a loan neither the player renders services to the parent club, nor the club remunerates the player.

35. Bearing in mind the foregoing, the Chamber proceeded to examine the contents of the Loan Agreement and the Sub-Loan, and observed that clause 7 of the Loan Agreement expressly established that Club J was responsible for paying the player’s salaries for the term of the loan.

Equally, the DRC took note that the Third Clause of the Sub-Loan foresaw the payment of the player’s remuneration as an obligation of Club K. Finally, the DRC acknowledged that the player was not rendering services to Club C while the Loan Agreement and the Sub-Loan were in force, and further took into account that Club C expressly manifested to the player that the Loan Agreement was valid until 3 January 2019, as per its letter of 18 December 2018.

36. Consequently, the majority of the members of the Chamber concluded that the player’s undertakings in Country B could not be considered by Club C for the matter of terminating the employment agreement. By the same token, the DRC observed that no wrongdoing by the player is reported between 3 January 2019, i.e. the date when the Loan Agreement and the Sub-Loan expired, and 7 January 2019, i.e. the date of termination of the employment agreement. Moreover and although being confident of the exhaustiveness of the foregoing line of reasoning, the majority of the members of the Chamber, for the sake of completeness, also considered that the player’s deeds in Country B cannot be compared or considered as grievous as, for instance, the violation of criminal law leading to the player’s incarceration.

37. In continuation, the Chamber was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to ensure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

38. The DRC observed that Club C, albeit having actively required information from the player, Club K, and Club J, relied solely on the information given by these third parties to terminate the employment agreement. In this regard, the DRC, following the principle that a termination should always be an ultima ratio measure, concluded that Club C fell short of concluding a fully comprehensive investigation: for instance, there is no medical evidence on file, and no exam of any kind was conducted by Club C, in spite of the fact that the player availed himself to do so.

39. The majority of the members of the DRC found this to of particular importance especially due to the fact that the player seemingly presented Club C with inconsistent information, as claimed by Club C: hence, the DRC concluded, the more need, on Club C’ side, to obtain additional, reliable information on its own.

40. In short, the majority of the members of the Chamber deemed that Club C’s termination of the employment agreement was premature; the player had not resumed his employment with Club C yet, and the alleged breaches in Country B – apart from not being proven – had in any case not reached a level for Club C to conclude that it could not reasonably be expected to continue the employment relationship.

41. In light of the foregoing, the majority of the members of the Chamber decided that Club C did not have just cause to terminate the employment agreement, and must therefore compensate the player for breach of contract.

42. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber 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 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.

43. In application of the relevant provision, the Chamber 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 Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

44. 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 other parameters set out in art. 17 par. 1 of the Regulations. The Chamber 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.

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

46. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment agreement as from its date of termination without just cause by Club C, i.e. 7 January 2019, until 31 May 2020, and concluded that the player would have received in total 2,190,000 as remuneration had the employment agreement been executed until its expiry date. Consequently, the Chamber concluded that the amount of 2,190,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

47. In continuation, the Chamber 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 enabled to reduce his loss of income. According to the constant practice of the DRC, and article 17 par.1 lit. ii) of the Regulations, 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.

48. The Chamber recalled that the player signed an employment contract with the Counter-Respondent II, valid from 15 March 2019 until 30 June 2020, in accordance with which he was to receive, inter alia, as follows:

– total salaries for the season 2018/2019 of 9,000;

– a scholarship for the season 2018/2019 in the total amount of 4,000;

– total salaries for the season 2019/2020 of 27,000;

– a scholarship for the season 2019/2020 in the total amount of 12,000.

49. The Chamber also recalled that Club E claimed it paid the player a housing allowance in the amount of 6,600, and costs related to a car in the amount of 3,260.

50. In this regard, the Chamber took note of the fact that the player claimed that the labour contract signed with Club E was terminated on 18 May 2019. However, the Chamber noted that a transfer agreement was executed between Club E and Club G on 7 January 2020, by means of which they agreed on the transfer of the services of the player from the former to the latter upon, inter alia, a payment of a transfer fee of EUR 10,000.

51. In addition, the Chamber observed that on 21 January 2020, the player and Club E signed a joint declaration stating that their employment contract had been terminated based on the aforementioned transfer agreement.

52. What is more, the Chamber observed that according to the information available in TMS, the player was permanently registered with Club G on 30 January 2020. TMS further shows that the relevant transfer instruction (reference number 270159) was entered by Club G, and matched by Club E, as if the player had been engaged “out of contract” and “free of payment”.

53. In this respect, the DRC observed that the transfer agreement between Club E and Club G was not filed together with the aforementioned transfer instruction, which also does not seem to reflect the reality of events. As such, the Chamber was eager to outline that such conduct could constitute a breach of the Regulations, particularly article 1 par. 1 and art. 3 para. 1 of Annexe 3.

54. In light of the above, the DRC considered the player was engaged with Club E from 15 March 2019 until 31 December 2019, i.e. up until his transfer to Club G. Therefore, the DRC decided that the mitigation of the player’s damage should consider the whole period that he was available to render services for Club E.

55. As such, the DRC concluded that player’s earnings at Club E, composed of salaries and benefits he was entitled to receive, amounted to 32,740, which corresponds approximately to 6,562.

56. Further, the Chamber observed that the player signed an employment contract with the Counter-Respondent III, valid from 1 January 2020 until 31 May 2020, in accordance with which the player was to receive, inter alia, a fixed remuneration of 2,500,000, which corresponds approximately to 100,396.

57. Hence, the DRC concluded that the player mitigated his damage in the amount of 106,958.

58. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand as well as the player’s general obligation to mitigate his damage, the Chamber decided to partially accept the player’s claim and that Club C must pay the amount of 2,083,042 as compensation for breach of contract in the case at hand.

59. In addition, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that Club C must pay to the Claimant/Counter-Respondent I interest of 5% p.a. on the amount of compensation as of the date of claim, i.e. 12 March 2019, until the date of effective payment.

60. Finally, 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.

61. 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.

62. Therefore, bearing in mind the above, the DRC decided that, in the event that Club C does not pay the amounts 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 Club C, 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 Club C in accordance with art. 24bis par. 2 and 4 of the Regulations.

63. The DRC 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.

64. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant/Counter-Respondent I, Player A, is admissible.

2. The counterclaim of the Respondent/Counter-Claimant, Club C, is admissible.

3. The claim of the Claimant/Counter-Respondent I is partially accepted.

4. The counterclaim of the Respondent/Counter-Claimant is rejected.

5. The Respondent/Counter-Claimant has to pay the Claimant/Counter-Respondent I 2,083,042, plus 5% interest p.a. on said amount as from 12 March 2019 until the date of effective payment.

6. Any other requests for relief from the parties are rejected.

7. The Claimant/Counter-Respondent I is directed to inform the Respondent/Counter-Claimant, 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 mentioned under point III./5. above.

8. The Respondent/Counter-Claimant shall provide evidence of payment of the due amount in accordance with point III./5. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated into one of the official FIFA languages (English, French, German, Spanish).

9. In the event that the amount plus interest due in accordance with point III./5. above is not paid by the Respondent/Counter-Claimant within 45 days as from the notification by the Claimant/Counter-Respondent I of the relevant bank details to the Respondent/Counter-Claimant, the Respondent/Counter-Claimant 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).

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

11. In the event that the aforementioned sum 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.

*****

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 the Code of sports-related arbitration. 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