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 January 2020

Decision of the

Dispute Resolution Chamber (DRC) judge

passed in Zurich, Switzerland, on 21 January 2020,

by Omar Ongaro (Italy), DRC judge

on the claim presented by the player,

Mr Mohamed El Hadi Boulaouidat, Algeria

represented by Mr Ali Abbes and Mr Moahmed Rokbani

as Claimant

against the club,

Al Hilal Khartoum, Sudan

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 21 July 2019, the Algerian player, Mohamad El Hadi Boulaouidat, (hereinafter: the Claimant), and the Sudanese club, Al Hilal Khartoum, (hereinafter: the Respondent) concluded an employment contract valid as from 21 July 2019 until 20 July 2020 (hereinafter: the contract).

2. According to the schedule I annexed to the contract, the Claimant was entitled to receive a total amount of USD 140,000 payable as follows:

i. USD 56,000 as signing on fee payable at the signature of the contract;

ii. USD 7,000 as monthly salary, for 10 months payable at the end of each month;

iii. USD 17,000 payable on 20 January 2020;

iv. USD 23,000 payable at the end of the contract on 20 July 2020

3. Moreover, in accordance with Schedule I, the Claimant was further entitled to a house and a “car/transportation”.

4. Pursuant to article 10 par. 4 of the contract, the Respondent undertook to pay the Claimant USD 10,000 in the event it would have terminated the contract without just cause.

5. According to article 10 par. 5 of the contract, in the event that the Claimant would have terminated the contract without just cause, the latter should have paid USD 100,000 to the Respondent.

6. Furthermore, in accordance with article 10 par. 6 of the contract, “The Parties expressly agree that the compensation amounts stipulated under the provisions of paragraphs 4 and 5 of this Article 10 above are fair and respect the principles of parity and reciprocity of the Parties in light of the overall circumstances related to the Contract’s conclusion and execution.”

7. On 6 October 2019, the Respondent unilaterally terminated the contract arguing that it was a decision of the coach of the team, and that the termination was effective as of 1 October 2019. The Respondent further held that the outstanding amounts would be paid to the Claimant in the presence of his agent.

8. On 17 October 2019, the Respondent sent a letter to the Claimant by means of which it requested him to provide his Algerian bank details in order to enable the Respondent to transfer the outstanding amounts due to the Claimant in accordance with the provisions of the contract.

9. On 6 November 2019, the Claimant lodged a claim against the Respondent in front of FIFA for outstanding remuneration and for breach of contract, claiming a total amount of USD 70,000, no interest was requested, broken down as follows:

• USD 7,000 as outstanding remuneration, corresponding to the salary of September 2019;

• USD 63,000 as compensation for breach of contract, corresponding to the residual value of the contract.

10. In its reply to the claim of the Claimant, the Respondent argued that after having unilaterally terminated the Claimant’s contract, it invited the latter to remain in Sudan in order to allow the Respondent to proceed with the payment of the outstanding amount due to the Claimant, but according to it he refused and left the country, and asked the club to deal with his agent.

11. Moreover, the Respondent affirmed that Sudan was under sanctions and that no money could be transferred from the country, for such reason, it asked the Claimant “to provide the financial department with his account details in order to transfer to him his money from abroad”.

12. Furthermore, the Respondent held to have contacted the Claimant’s agent and to have succeeded in issuing an entry visa to Sudan for him. According to the Respondent, the agent refused to travel to Sudan.

13. Finally, the Respondent acknowledged a debt of USD 19,100 towards the Claimant, “The financial entitlements of the player are as follows: 10000 USD (ten thousand dollars) for the termination of the contract. 7000 USD seven thousand dollars. The salary of September. 2100 USD a ten day Salary. The total amount to be paid to the player is 19100 nineteen thousands and hundred dollars. Please be assured of our readiness to transfer the amount to the player from any neighbouring country because of the aforesaid sanctions as soon as he provide the club with his bank account details”.

II. Considerations of the DRC judge

1. First of all, the DRC judge analysed whether it was competent to deal with the matter at stake. In this respect, the DRC judge took note that the present matter was submitted to FIFA on 6 November 2019 and decided on 21 January 2020. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the DRC judge referred to art. 3 par. 1 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 and 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the DRC judge is competent to deal with the matter at stake, which concerns an employment–related dispute with an international dimension between an Algerian player and a Sudanese club.

3. Furthermore, the DRC judge analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, the DRC judge confirmed that, in accordance with art. 26 par. 1 and par. 2 of the said Regulations and considering that the present claim was lodged in front of FIFA on 6 November 2019, the October 2019 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC judge and the applicable regulations having been established, the DRC judge entered into the substance of the matter. In this respect, the DRC judge started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the DRC judge 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 DRC judge acknowledged that, on 21 July 2019, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 20 July 2020, pursuant to which the Respondent undertook to pay to the Claimant a total amount of USD 140,000 as well as a house and a “car/transportation”.

6. Moreover, the DRC judge acknowledged that, pursuant to article 10 par. 4 of the contract, the Respondent undertook to pay the Claimant USD 10,000 in the event it would have terminated the contract without just cause.

7. Furthermore, the DRC judge took note that, according to art. 10 par. 5 of the contract, in the event that the Claimant would have terminated the contract without just cause, the latter should have paid USD 100,000 to the Respondent.

8. In addition, the DRC judge noted that in accordance with art. 10 par. 6 of the contract, “The Parties expressly agree that the compensation amounts stipulated under the provisions of paragraphs 4 and 5 of this Article 10 above are fair and respect the principles of parity and reciprocity of the Parties in light of the overall circumstances related to the Contract’s conclusion and execution.”

9. Moreover, the DRC judge took that on 6 October 2019, the Respondent unilaterally terminated the contract arguing that it was a decision of the coach of the team, and that the termination was effective as of 1 October 2019.

10. Having recalled the above, the DRC judge observed that, the Claimant, in his claim, requested outstanding remuneration in the amount of USD 7,000 and compensation for breach of contract in the amount of USD 63,000, and that no interest was requested.

11. The DRC judge further took note that the Respondent, for its part, maintained that after having unilaterally terminated the Claimant’s contract, it invited the latter to remain in Sudan in order to be able to proceed with the payment of the outstanding amount due to the Claimant, but according to it the Claimant refused and asked the club to deal with his agent.

12. The DRC judge further noted that the Respondent acknowledged a debt of USD 19,100.

13. In this context, the DRC judge established that the main issued he would have to examine in the present case was whether the reasons put forward by the Respondent could justify the termination of the contract with effect as from 1 October 2019.

14. In this respect, the DRC judge 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.

15. In view of the above, the DRC judge first of all observed that the Respondent merely claimed that the premature termination of the employment contract had been a decision of the coach. This allegation alone can by no means be considered as a just cause for termination. For the sake of completeness, the DRC judge also referred to his longstanding jurisprudence, according to which low performance is not considered a just cause for the termination of an employment contract, due to the unilateral and arbitrary character of such assessment.

16. On account of the above, the DRC judge decided that the Respondent had no just cause to unilaterally terminate the employment contract on 1 October 2019.

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

18. First of all, the DRC judge concurred that the Respondent must fulfil its obligations as per employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”.

19. In this respect, the DRC judge highlighted that the Claimant’s salary of September 2019 in the amount of USD 7,000 remained outstanding, as acknowledged by the Respondent, and must therefore be paid by the latter.

20. Having established the above, the DRC judge turned his attention to the consequences of the unilateral termination of the employment contract by the Respondent without just cause on 1 October 2019.

21. The DRC judge 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 other 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.

22. In application of the relevant provision, the DRC judge held that it first of all had to clarify as to whether the contract at the basis of the present dispute contain 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.

23. In this respect, the DRC judge referred to the wording of clause 10 of the contract, par. 4, 5 and 6, as quoted in the previous section. Briefly, the DRC judged noted that the contract stipulated that in case of an unjustified termination by the club the latter would pay the player compensation in the amount of USD 10,000; in case of an unjustified termination by the player the latter would pay the club compensation in the amount of USD 100,000. Bearing in mind the aforementioned, the DRC judge referred to his well-established jurisprudence and concluded that he could not accept said article as a valid compensation clause, as it is not balanced to the repartition of rights between the parties.

24. As a consequence, the DRC judge 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 judge 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 judge emphasised beforehand that each request for compensation for contractual breach has to be assessed by the DRC judge on a case-by-case basis taking into account all specific circumstances of the respective matter.

25. In order to estimate the amount of compensation due to the Claimant in the present case, the DRC judge first turned his attention to the remuneration and other benefits due to the Claimant under the existing contract, which criterion was considered to be essential. The DRC judge deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows him to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

26. In this respect, the DRC judge noted that the contract was to run until 20 July 2020, had it not been prematurely terminated by the club on 1 October 2019. Thus, the DRC judge established that the residual amount of the contract, from 1 October 2019 to 20 July 2020 was USD 63,000 corresponding to 9 monthly salaries, plus an amount of USD 17,000 payable on 20 January 2020 and USD 23,000 payable at the end of the contract on 20 July 2020. The DRC judge however noted that the Claimant limited his request for compensation to the amount of USD 63,000.

27. In continuation, the DRC judge 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 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.

28. The DRC judge noted that the Claimant had remained unemployed during the relevant period of time.

29. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC judge decided to accept the Claimant’s claim and that the Respondent must pay the amount of EUR 63,000 to the Claimant, which was considered reasonable and proportionate as compensation for breach of contract in the case at hand.

30. The DRC judge concluded its deliberations in the present matter by accepting the claim of the Claimant.

31. Furthermore, taking into account the consideration under number II./3. above, the DRC judge 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.

32. In this regard, the DRC judge 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.

33. Therefore, bearing in mind the above, the DRC judge decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

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

III. Decision of the DRC judge

1. The claim of the Claimant, Mr Mohamed El Hadi Boulaouidat, is accepted.

2. The Respondent, Al Hilal Khartoum, has to pay outstanding remuneration to the Claimant in the amount of USD 7,000.

3. Furthermore, the Respondent has to pay compensation for breach of contract to the Claimant in the amount of USD 63,000.

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 points 2 & 3.

5. The Respondent shall provide evidence of payment of the due amounts in accordance with points 2 & 3 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 in accordance with point 2 & 3 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 6 above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

8. In the event that the aforementioned sums 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.

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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 related to the appeal procedure:

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

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

Court of Arbitration for Sport

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 DRC judge:

Emilio García Silvero

Chief Legal & Compliance Officer