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 18 June 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 18 June 2020,

regarding an employment-related dispute concerning the player Ronielson da Silva Barbosa

COMPOSITION:

Geoff Thompson (England), Chairman Muzammil Mohamed (Singapore), member Stefano Sartori (Italy), member

CLAIMANT:

ALBIREX NIIGATA, Japan

Represented by Mr. Breno Costa Ramos Tannuri

RESPONDENT 1:

RONIELSON DA SILVA BARBOSA, Brazil

Represented by Mr. Sergio Ribeiro

RESPONDENT 2: CLUB ATHLETICO PARANAENSE, Brazil

Represented by Mr. Marcos Motta & Mr Stefano Malvestio

INTERVENING PARTY: CRUZEIRO EC, Brazil

I. FACTS OF THE CASE

1) On 9 April 2015, the Brazilian player Ronielson da Silva Barbosa (hereinafter: the Respondent 1 or the player) and the Brazilian club Cruzeiro (hereinafter: Cruzeiro) signed an employment contract valid as from 9 April 2015 until 8 April 2018, extended on 4 January 2017 until 5 January 2020.

2) On 10 December 2016, the Japanese club Albirex Niigata (hereinafter: the Claimant or Albirex) and the player signed a “pre-contract” by means of which Albirex committed itself to sign an employment contract with the player valid as from 2 February 2017 until 1 January 2020, for the following remuneration:

a) For the 2017 season: USD 300,000 (net annual value);

b) For the 2018 season: USD 350,000 (net annual value);

c) For the 2019 season: USD 450,000 (net annual value).

3) On 9 January 2017, Albirex, Cruzeiro and the player entered into a “term of agreement” regarding the transfer of the player to Albirex. In the term of agreement, the Claimant stipulated that it was “deeply interested in retaining the Player’s services for three sporting seasons, but due to regulatory issues is unable to immediately offer a three-year contract to the Player”, and as such the parties agreed that ”due to regulatory restraints, the Player shall be initially loaned by Cruzeiro to [Albirex] for season 2017, from 02 February 2017 to 01 January 2018”. This is consistent with the loan instruction of the player to the Albirex in TMS.

4) The term of agreement also stipulates that “The player is seduced by the opportunity to play in Japan and has expressly requested his transfer to Albirex, in the terms presented by the Japanese club”.

5) The agreement further stipulated a transfer fee of USD 1,200,000 payable on 31 January 2017 and explicitly states that even though the latter amount is payable in the context of the player’s loan for one season it also covers the player’s loan for seasons 2018 and 2019 and no further amounts should be due in this regard. The term of agreement also stipulated a sell-on clause of 20% in favour of Cruzeiro.

6) The second clause of the term of agreement stipulates that “The parties shall execute a proper document for the temporary transfer of the player to Albirex for the 2017 season, as well as for the ensuing 2018 and 2019 seasons (which shall end on 01 January 2020). For the 2017 season, the parties shall enter on this date into a temporary transfer agreement”.

7) The sole paragraph to the aforementioned article also established that “Although the parties shall execute several documents to perform subsequent temporary transfers of the player to Albirex, from a commercial / business stand point, the parties hereby agree and acknowledge that upon the payment of the transfer fee provided in third clause below, Albirex shall be treated and considered as the holder of the permanent registration rights of the player; i.e. Albirex shall have the last instance on a future transfer of the player during the three-season period (2017-2019)”.

8) Clause 4 of the term of agreement establishes in addition that “Albirex shall be the sole responsible for the payment of the player’s wages during the three-season period from 2017 to 01 January 2020”.

9) Clause 5 of the term of agreement stipulates that “The player hereby confirms his interest and personal request to be loaned to Albirex for the three-season period and further declares to waive any salaries or payments that would be due by Cruzeiro between 02 February 2017 and 01 January 2020”.

10) Finally, clause 8 of the term of agreement establishes that “Should Cruzeiro or the player fail to execute the necessary documents to allow the player to be registered with Albirex for the 2017, 2018 or 2019 season, the party in breach shall be liable for the payment of a penalty in the amount of USD 1,000,000.00 (one million American dollars) to Albirex”.

11) Also on 9 January 2017, Albirex, Cruzeiro and the player signed a “temporary transfer agreement”, stipulating the loan of the player from Cruzeiro to Albirex, from 2 February 2017 to 1 January 2018, for a fee of USD 1,200,000 payable by no later than 31 January 2017.

12) Clause 6 of the temporary transfer agreement stipulated that “Albirex commits to return the player to Cruzeiro at the term of the loan and the player commits to return to Cruzeiro and fully comply with his employment contract, which is hereby suspended for the term of this temporary agreement”.

13) As per clause 8 of the temporary transfer agreement, “Any party giving cause to the non-fulfilment of the clauses and conditions established herein shall be liable for the payment of a penalty in the amount of USD 500,000 (five hundred thousand American dollars) to the innocent party which has been affected by such non-fulfilment”.

14) On 16 January 2017, Albirex and the player signed an employment contract valid as from 2 February 2017 until 1 January 2020, with the same terms as the “pre-contract”, namely:

a) For the 2017 season: USD 300,000 (net annual value);

b) For the 2018 season: USD 350,000 (net annual value);

c) For the 2019 season: USD 450,000 (net annual value);

d) 4 business class tickets per season for the player and his wife from São Paulo <> Narita.

15) Clause 7 of the contract (“termination fine”) established that “1. The termination fine is USD 10,000,000.00 (ten million American dollars)”.

16) Finally, clause 15 of the contract (“Disputes”) stipulated that “Disputes regarding the content of the contract shall be settled by Japan Football Association (JPA). The parties renounce any other general or special jurisdiction that may correspond”.

17) On 30 November 2017, the player sent a letter to Albirex, requesting it to “present within 12 hours, as from the receipt of this notification, the Image Contract whereby my image was assigned or marketed, for video games and/or electronic games for third parties”, “the life insurance executed” and “your position about the illegalities of the ‘Temporary Transfer Agreement’ and the ‘Term of Agreement’, especially as regards the regulatory impediments that prevented [Albirex] from hiring me for three subsequent seasons, that is, the seasons of 2017, 2018 and 2019. However, I was compelled to sign an employment contract for 3 years, for the period from 02/02/2017 until 01/01/2020”.

18) On 2 December 2017, the player sent another letter to Albirex, in which he states that in spite of not having received a reply to his previous letter, he received from the club the “Schedule of Activities of the start of the Year of 2018, with the dates of return to Japan, presentation in the Club, training, Pre-season and the date of the First Match of the 2nd Division of the Japanese Championship”. In addition, he warns Albirex that “pursuant to the ‘Temporary Transfer Agreement’ that deals with ‘Temporary Transfer’ executed on 09/01/17, with [Albirex], in the First Clause, it was established that the loan, starting on 02/02/17, ends on 01/01/18. In addition, Clause Six of this agreement establishes that Albirex Niigata must return me to Cruzeiro Esporte Clube to fulfil the remainder of the employment contract”. Furthermore, he claims that “in the ‘Term of Agreement’, executed on 09/01/17, in item 2, it is clear that due to "regulatory issues", Albirex Niigata could not sign a three-year contract with me. Therefore, in Clause Two, it is made evident that for me to play for Albirex Niigata in the 2018 season, another document should be executed, in order to legalize the loan”. Finally, the player claims that at the end of the loan agreement he would resume his contract with Cruzeiro and “only sign the loan instrument for Albirex for the 2018 season, after your statement and correction of the illegalities of the already mentioned contracts”.

19) On 19 December 2017, a letter with similar contents was also sent by the player to Cruzeiro.

20) On 3 January 2018, the player wrote again to Albirex, reinforcing that “it is clear that by ‘regulatory issues’, Albirex Niigata could not sign a three-year contract with me. Therefore, in Clause Two, it is made evident that for me to play for Albirex Niigata in the 2018 season, another document should be executed. […] That fact, if we do not reach an amicable settlement, will be brought to the knowledge of the Federal Revenue of Japan for it to investigate possible tax evasion, a fact that will greatly harm Albirex and its representatives. Therefore, with the end of the loan agreement for Albirex Niigata, I will present myself at Cruzeiro Esporte Clube and I will only sign the loan instrument for Albirex for the 2018 season, after your statement and correction of the illegalities of the already mentioned contracts”.

21) At the end of season 2017, the player returned to Brazil, and Albirex and Cruzeiro agreed on his permanent transfer to Albirex by entering a “loan to permanent” transfer instruction in TMS. Instead of a transfer agreement, Albirex uploaded a letter counter-signed by Cruzeiro in which they agreed to switch the loan to permanent since Albirex ”has no longer any problem whatsoever which would prevent the permanent transfer of the player”.

22) On 13 January 2018, Albirex informed Cruzeiro about the fact that the player while in Brazil appeared to have been negotiating with other Brazilian clubs.

23) Also on 13 January 2018, Cruzeiro acknowledged receipt of the player’s letter of 19 December 2017 and informed him that “in opposite to what is mentioned in your notification, we believe, based on the principles of the most crystalline good faith, for the validity and absolute regularity of its transfer to ALBIREX NIIGATA, as you must fully comply with the contract with the club ALBIREX NIIGATA, in the manner in which it was established, under the penalties provided in said agreement”.

24) On 17 January 2018, Albirex contacted the player warning him of his contractual obligations, while pointing out that he was late to return to the club and that his tickets had been re-scheduled for the 22 January 2018.

25) Between 17 January 2018 and 8 February 2018, several pieces of correspondence were exchanged between the legal representatives of Albirex and of the player, related to his return to Japan. In particular, on 8 February 2018, the player’s lawyer sent Albirex’s lawyer an email in which it was stated that “We understand that Albirex does not wish to make any further changes, just as the player does not want any further setbacks in the relationship between the parties. However, we note that the new ticket departs from Belém, instead of Rio de Janeiro, where the player is currently at and as requested in our e-mail of 02/02/2018. We therefore kindly ask that the corresponding change be made. In addition, as reported several times, we emphasize that the player's stay in Brazil was, at first, according to the instructions from his main employer, Cruzeiro Esporte Clube, which had the intention of negotiating with the Botafogo de Futebol e Regatas, and, secondly, because of the negotiations between Albirex and the aforementioned Rio de Janeiro club. Since the player has acted in good faith and with transparency, there is no reason to apply sanctions”.

26) On 10 February 2018, Cruzeiro advised the player to return to Japan.

27) The player returned to Albirex on 10 February 2018. After his return to Japan, the player asked to be excused from joining a training camp in another city, which the club authorised. The player was supposed to rejoin the team once they were back in Niigata, but failed to do so, returning again to Brazil on 22 February 2018.

28) On 13 March 2018, the player notified Cruzeiro of his intention to resume the employment contract with it, since the loan with Albirex had ended.

29) On 23 March 2018, Albirex sent the player a notification requesting inter alia his return to Japan, as they were still interested in his services, to which he replied on 28 March 2018 stating inter alia that no new agreement for the extension of his loan or a definitive transfer to Albirex had been concluded, thus he did not have a valid contract with the latter club anymore. Furthermore, he claims that he never signed any document authorising the conversion of his loan into a permanent transfer.

30) On 30 March 2018, Cruzeiro and the player signed a termination agreement, by means of which both parties confirmed not to have any pending claims against each other.

31) On 16 April 2018, Albirex sent a letter to the CBF, warning it about the fact that apparently several Brazilian clubs were willing to sign him, but that he was still under contract with Albirex and the club had been for the past weeks trying to convince the player to return to Japan. Thus, Albirex asked for the assistance of the CBF to stop such negotiations.

32) On 18 April 2018, the player sent a letter to Albirex pointing out that neither had he been aware nor had he agreed to the extension of his employment with the club, on a permanent basis. On the same day, the player lodged a claim at FIFA requesting the cancellation of his employment contract with Albirex, again stating he had not agreed to an extension. No further claim than that for declaration of termination was made and the case with Ref. 18-00801 was closed after the player was informed of the content of Art. 14 and of of Annex 3 art. 8.2 of the Regulations on 3 May 2018.

33) On 20 July 2018, another Brazilian club (hereinafter: the Respondent 2, Clube Athlético Paranaense, or CAP) forwarded an email to Albirex, in which it states to have been informed by the player that he was a free agent and asking Albirex to provide it with a “TPO-letter”.

34) On 22 July 2018, Albirex replied to CAP that the player had a valid employment contract with it.

35) On 26 July 2018, the player and CAP entered into an employment contract valid as from 16 July 2018 until 15 July 2021, for a monthly salary of Brazilian Reais (BRL) 120,000 (approx. USD 31,145 in July 2018).

36) On 9 August 2018, CAP requested the ITC of the player, which was refused by Albirex. On 30 August 2018, the Single Judge of the Players’ Status Committee authorised without prejudice the provisional registration of the player with CAP.

II. PROCEEDINGS BEFORE FIFA

A. Claim of Albirex

37) Based on the aforementioned facts, on 29 March 2019, Albirex lodged a claim against the player and CAP for breach of contract and inducement to breach respectively, claiming compensation as stipulated in the compensation clause in the contract, i.e. USD 10,000,000.

38) Albirex claims to have signed a valid employment contract with the player, following the conclusion of the “pre-contract”, the “term of agreement” and the “temporary transfer agreement”, which clearly laid out the contractual framework of the player’s engagement with Albirex, in particular the duration of their contractual relationship, supposed to last from 2 February 2017 to 1 January 2020.

39) Albirex claims that, after a successful first season without any particular issues, the player breached their employment contract without just cause, by leaving the club at the end of the season 2017 to Brazil and not returning until 11 February 2018, upon request of Albirex and advice of Cruzeiro, only to leave again on 22 February 2018 and sign a new employment contract with [CAP] on 26 July 2018, while having a valid employment contract with Albirex. Albirex claims the player and CAP acted in manifest bad faith, as the player had explicitly agreed to the terms of the employment contract and CAP, warned by Albirex about the latter, decided nonetheless to carry on with the registration of the player.

40) Thus, Albirex requests the DRC:

“FIRST – To uphold in full the present claim;

SECOND – To confirm that the Player, induced by CAP, terminated the Employment Contract unilaterally and without just cause during the so-called “Protected Period”;

THIRD – To order the Player to pay to the Claimant USD 10,000,000 (ten million dollars) due as compensation, plus default interest at rate of 5% (five percent) - per annum - as from 20 July 2018 until the effective date of payment;

FOURTH – To confirm the jointly and severally liability of CAP in the payment to the Claimant of the aforementioned compensation amounting USD 10,000,000 (ten million dollars), plus default interest at rate of 5% (five percent) - per annum - as from 20 July 2018 until the effective date of payment; and

FIFTH – To impose sporting sanctions on the Player, notably, a six month sanction on playing any official matches;

SIXTH – to impose sporting sanctions on CAP, notably, its ban from registering any new players (professional or amateurs) either nationally or internationally, for two entire and consecutive registration periods; and

SEVENTH – to submit (without any prejudice that the Claimant has to start disciplinary procedures before the judicial bodies of CBF) the file of the present case to the FIFA Disciplinary Committee together with a request for the commencement of disciplinary proceedings against The Agent.

EIGHTH – to open the necessary proceedings, by notifying the Player and CAP without delay via CBF or through the data set out in the FIFA Transfer Matching System (cf. Art. 6, par. 3 of the FIFA Procedural Rules).”

B. Reply of the Player

41) In his reply, the player rejected the claim of Albirex and claimed that he did not have a valid employment contract with the club. In this respect, he claims that his employment contract with Cruzeiro was only valid until 8 April 2018. He further claims that the agreement signed with Albirex provided for his loan for one season only, with the explicit obligation to return to Cruzeiro after the end of it. For the player, in spite of the fact that the employment contract established that it should be valid for 3 seasons it is obvious that it was only valid for the same period of time covered by the loan agreement.

42) He also claims that at the end of 2017 Cruzeiro began to negotiate his transfer to Botafogo and that the clubs even signed a permanent transfer agreement on 28 December 2017. In this respect, the player provided a copy of an “agreement for the exchange of economic and federative rights” of 2 players, one of them being the Respondent 1, between Cruzeiro and Botafogo, containing the signatures of the 2 clubs and of one of the 2 players, but not that of the player. Nonetheless, on 13 January 2018, 2 days after the press announced his transfer to Botafogo, the player was allegedly summoned to come to Cruzeiro and was told that he had a valid contract with Albirex; thus, as per the principle of good faith, the negotiations with Botafogo are to be disregarded and he should return to Japan. The player claims that after his return to Japan, Albirex started to “show clear signs of negligence and disrespect towards [him]”, in particular refusing his request for medical assistance, which allegedly lead to hospitalisation.

43) As no new agreement had been concluded between Cruzeiro and Albirex for the extension of his loan, the player again returned to Brazil, in order to present himself to Cruzeiro, in accordance with clause 6 of the “temporary transfer agreement”. However, due to the entire confusion created by Cruzeiro, regarding the loan to Albirex and the cancelled transfer to Botafogo, on 30 March 2018, the player and Cruzeiro signed a termination agreement, and the player was allegedly free to negotiate his services with other clubs.

44) In this context, the player claims to have been surprised to learn that he had a valid employment contract with Albirex, the loan having been extended without his knowledge or consent, via a letter uploaded in TMS, signed between Cruzeiro and Albirex. The player claims that the employment contact signed on 16 January 2017 was only valid until 1 January 2018, i.e. the end date of the loan. Any further duration would be invalid as per art. 20 par. 2 of the Swiss code of obligations (CO), since these terms would be impossible. The invalidity of the employment contract was also the reason why such document was allegedly never registered with the Japanese Football Association (JFA). Thus, he had no contractual relationship with Albirex and since his contract with Cruzeiro was also terminated on 30 March 2018, when he signed the new employment contract with CAP on 26 July 2018 he was a free agent. The player also points out that according to TMS his definitive transfer to Albirex should be valid as from 2 January 2018 to 1 January 2020, however this would not be possible, since he only terminated his employment contract with Cruzeiro on 30 March 2018, and two employment contracts would have been simultaneously valid for 3 months. The player equally deems that the Claimant erroneously excluded Cruzeiro from its claim, since the latter was the only party to cause all the contractual confusion for the player. The player also pointed out that between January and July 2018 Albirex did not pay him any remuneration.

45) Finally, the player claims that the compensation requested by the Claimant, i.e. USD 10,000,000 as in clause 7 of the contract, cannot be considered separately from clause 8 of the temporary transfer agreement, which stipulated that any breach of the agreement by any of the parties would trigger the obligation to pay a penalty of USD 500,000. Thus, in case any penalty should be imposed on the player, it should be the one stipulated in clause 8 of the temporary transfer agreement. In the alternative, the player also refers to clause 8 of the term of agreement, which stipulates a penalty of USD 1,000,000. In any case, the player claims that if any party should be condemned to pay anything to Albirex, this should be Cruzeiro. The player also claims that no sanction should be imposed on him, as the contract with Albirex was extended without his knowledge and consent.

46) In conclusion, “the Player refutes all the facts alleged by the Claimant and comes before this respectful Chamber to request:

a. The dismissal of all and every request presented by the Claimant to facts alleged, being the present case judge as unfounded;

b. The voidance of the Employment Contract registered by the Claimant along the JFA as well of the Agreement signed by the Claimant and Cruzeiro to revert the Player’s contract from loan to definitive;

c. The conversion of the Player’s ITC from provisional to permanent;

d. In the remote event this Chamber understand that the Employment Contract registered by the Claimant is valid, subsidiarily is requested that Cruzeiro be invited to be part of the present Claim, being considered the sole responsible for any breach and, consequently, for the payment of any eventual compensation due to the Claimant or, alternatively, jointly responsible for these

payments, which might be stipulated taking in consideration the Eight Clause of the Temporary Transfer Agreement or, alternatively, the Eight Clause of the Term of Agreement.

e. Finally, it is requested the dismissal of the Claimant’s request for the application of any kind of sporting sanctions to the Player as well for the beginning of any disciplinary proceedings against the Player’s Agent”.

C. Reply of CAP

47) In its reply to the claim, CAP first contests the competence of FIFA to deal with the present dispute based on clause 15 of the employment contract, alleging that the parties had agreed upon the exclusive jurisdiction of the Japanese FA to deal with employment-related disputed between them.

48) As to the substance, CAP claims that the contracts concluded between the Albirex and Cruzeiro are a clear act of simulation, as the parties themselves acknowledge that they were not allowed to conclude a transfer agreement for the player due to regulatory constraints. CAP claims that a possible reason for this set of contracts was paying less taxes in Japan and this would constitute the crime of tax fraud. Furthermore, CAP claims that Albirex and Cruzeiro breached art.18bis of the RSTP (by having influenced and granted the ability to influence transfer and employment-related matters), art. 3 par. 1 of Annexe 3 of the RSTP (by not having used TMS in good faith) as well as art. 9.1. par. 2 of Annexe 3 of the RSTP (for having entered untrue data in TMS and having used the system for illegitimate purposes). CAP also claims the employment contract should be considered invalid as per art. 20 par. 1 of the Swiss CO. Albirex and Cruzeiro never entered into a new loan agreement for the player for the 2018 and 2019 seasons, and the player’s transfer was converted from a temporary to a definitive one without his knowledge and consent. In view of all of these regulatory and legal infringements, the employment contract concluded between the player and Albirex is invalid, and thus there is no possibility that it could have been breached.

49) CAP focuses on clause 2 of the term of agreement and clause 1 of the temporary transfer agreement, which combined meant to the player that he was only bound to Albirex until 1 January 2018. For this reason, the player contacted Cruzeiro in November 2017, December 2017 and January 2018, informing that he would return to Cruzeiro if the irregularities of his employment contract and the transfer agreement would not be solved. The registration system of the CBF also stated that his loan with Albirex would finish on 1 January 2018 and the fact that Cruzeiro started negotiating the player with Botafogo also implies that the club deemed that the player’s employment relationship with Albirex was finished. CAP also claims that between January and July 2018 Albirex did not pay the player any remuneration.

50) In the very unlikely case that the player is condemned to pay any compensation to Albirex, CAP should not be jointly and severally liable, since Cruzeiro is the new club of the player.

51) In light of the foregoing, CAP requests FIFA to:

a) Reject the claim for lack of jurisdiction since the Employment Contract provides for the jurisdiction of the bodies of the Japan Football Association (JPA);

b) Reject the claim in the merits;

c) Immediately forward the present file to the FIFA Disciplinary Committee for the imposition of the appropriate sanctions against Albirex and Cruzeiro for breaches of (i) art. 3 par. 1 of Annexe 3 of the FIFA RSTP; (ii) art. 9.1 par. 2 of Annexe 3 of the FIFA RSTP; (iii) art. 18-bis of the FIFA RSTP.

d) Consider Cruzeiro as the new club of the Player for the purposes of art. 17 of the FIFA RSTP;

f) Alternatively, reduce the amount of compensation eventually assigned to Albirex taking in consideration the specificities of the present case”.

D. Replica of Albirex

52) In its replica, Albirec first insisted on the competence of FIFA to deal with the present dispute, as per art. 22 b) of the RSTP.

53) As to the substance, Albirex rejects the argumentation of the player and CAP. In particular, it claims that no irregularities hindered the club from signing a valid employment contract with the player for 3 years, as it managed to solve any pending issues between the signature of the pre-contract and of the contract. The contract as per Albirex is perfectly valid as it contains all the essentialia negotii, in particular the knowledge and the consent of the player. Furthermore, Albirex pointed out that the validity of an employment contract is independent of that of a transfer agreement. Albirex also insists on the fact that CAP is the new club of the player, since it was the first club with which the player was registered after breaching his valid employment contract with Albirex. Albirex also rejects that the contract should be considered as invalid as per art. 20 par. 1 of the Swiss CO, as its terms are not impossible, unlawful or immoral. As to the suspension of the payment of the player’s salaries, Albirex claims it was entitled to do so, as the player only returned to Japan on 10 February 2018, staying only a few weeks until he again left to Brazil.

54) Considering that the breach by the player and the inducement by CAP occurred during the protected period, both parties should be subject to sporting sanctions. Finally, Albirex points out that neither the player nor CAP can request the imposition of any sporting sanctions on it or on Cruzeiro as they have no legitimate sporting of financial interest in it and thus have no standing to sue. Albirex further claims that it never had any issues with TMS or with the tax authorities in Japan. As to the amount of compensation, the club insists on the application of the compensation clause in the contract, i.e. USD 10,000,000, as it is reciprocal and proportionate, considering the remuneration of the player with CAP, the comfortable financial situation of the latter club, the market value of the player as well as all expenses Albirex incurred into in order to replace the player. Albirex indicates that if the amount of compensation is calculated taking into account the usual factors considered by the Chamber, it would be higher than USD 10,000,000 (i.e. the compensation clause), broken down as follows:

55) In the alternative, the Claimant deems to be entitled at least to the following amount of compensation:

56) “In view of all the facts above, as well as the considerations provided by the present Replica, the Claimant herein re-ratify the submissions previously filed in front of the FIFA DRC with its statement of claim. In this regard, the Claimant herein forwards to the attention of the FIFA DRC the following requests for relief:

FIRST – To uphold in full the present claim;

SECOND – To confirm that the Player, induced by CAP, terminated the

Employment Contract unilaterally and without just cause during the socalled

“Protected Period”;

THIRD – To order the Player to pay to the Claimant USD 10,000,000 (ten million dollars) due as compensation, plus default interest at rate of 5% (five percent) - per annum - as from 27 July 2018 until the effective date of payment;

FOURTH – To confirm the jointly and severally liability of CAP in the payment to the Claimant of the aforementioned compensation amounting USD 10,000,000 (ten million dollars), plus default interest at rate of 5% (five percent) - per annum - as from 27 July 2018 until the effective date of payment; and

FIFTH – To impose sporting sanctions on the Player, notably, a six-month sanction on playing any official matches;

SIXTH – to impose sporting sanctions on CAP, notably, its ban from registering any new players (professional or amateurs) either nationally or internationally, for two entire and consecutive registration periods; and

SEVENTH – to submit (without any prejudice that the Claimant has to start disciplinary procedures before the judicial bodies of CBF) the file of the present case to the FIFA Disciplinary Committee together with a request for the commencement of disciplinary proceedings against The Agent.

Alternatively and only in the event the above is not accepted:

EIGHTH – To confirm that the Player, induced by CAP, terminated the Employment Contract unilaterally and without just cause during the socalled “Protected Period”;

NINTH – To order the Player to pay to the Claimant USD 3,825,000 (three million eight hundred twenty five thousand dollars) due as compensation, plus default interest at rate of 5% (five percent) - per annum - as from 27 July 2018 until the effective date of payment;

TENTH – To confirm the jointly and severally liability of CAP in the payment to the Claimant of the aforementioned compensation amounting USD 3,825,000 (three million eight hundred twenty five thousand dollars), plus default interest at rate of 5% (five percent) - per annum - as from 27 July 2018 until the effective date of payment; and

ELEVENTH – To impose sporting sanctions on the Player, notably, a six month sanction on playing any official matches;

TWELFTH – to impose sporting sanctions on CAP, notably, its ban from registering any new players (professional or amateurs) either nationally or internationally, for two entire and consecutive registration periods; and

THIRTEENTH – to submit (without any prejudice that the Claimant has to start disciplinary procedures before the judicial bodies of CBF) the file of the present case to the FIFA Disciplinary Committee together with a request for the commencement of disciplinary proceedings against The Agent”.

E. Duplica of player

57) In his duplica, the player insisted on his arguments brought up in the reply, in particular in relation to the invalidity of the employment contract, its accessory nature to the loan agreements, the non-applicability of the compensation clause or any sporting sanction, and that Cruzeiro should be invited to be part of the present proceedings.

F. Duplica of CAP

58) In its duplica, CAP also insisted on its previous argumentation, in particular on the fraudulent setup of contracts concluded by the Claimant, the invalidity of the employment contract any further than 1 January 2018, the regulatory and the legal violations of Albirex, that Cruzeiro should be considered as the player’s new club and that any amount of compensation requested by Albirex is excessive and should not exceed USD 1,000,000 as stipulated in the term of agreement and which corresponds approximately to the player’s value in the market.

G. Position of Cruzeiro EC

59) Cruzeiro was also invited by FIFA to provide its position on the dispute, as possible new club of the player, to which it replied mostly confirming the argumentation of Albirex, and rejecting that of the player and CAP.

60) Cruzeiro first points out that on 9 January 2017 Cruzeiro, Albirex and the player entered into the “master agreement” (i.e. the Term of Agreement) and subsequently on the same day, the parties entered into the “temporary transfer agreement”. Cruzeiro claims that “there was never any doubt that Albirex intended to transfer the Player on permanent basis. In accordance with such understanding, the terms of the transfer and the intention of permanent transfer is explicitly stated in both the Term of Agreement and the First Loan Agreement”.

61) Furthermore, Cruzeiro indicated that the player signed an employment contract with Albirex valid as from 2 February 2017 until 1 January 2020, and therefore explicitly acknowledged and consented to his employment relationship with Albirex for the mentioned period of time. Thus, the player’s arguments in the sense that he was not aware of or had not consented to being contractually bound to Albirex until 1 January 2020 cannot be sustained.

62) As to the negotiations started with Botafogo in early 2018, Cruzeiro claims that they were due to a lack of thorough knowledge of its new board of directors – elected at the end of 2017 – about the contracts previously concluded by the club. In this respect, Cruzeiro provided an extract from its website about the election of a new board. Cruzeiro claims that as soon as the new board became aware of the contractual situation of the player it interrupted any negotiations and instructed the player to return to Albirex, with whom he had a valid employment contract. In particular, Cruzeiro emphasised that their in-house lawyer “addressed an official email to the agent / intermediary of the Player, also marking the Player and the then managers and directors of Botafogo and Cruzeiro specifically instructing them, based upon the principles of utmost good faith to return to Japan and fulfil his contractual obligations towards Albirex. The said email also stated that a copy of the present correspondence would be forwarded to the attention of Albirex”.

63) Cruzeiro further claims that after the player allegedly agreed to return to Japan, it proceeded with converting the transfer from loan to permanent in TMS, on 11 February 2018, in accordance with the term of agreement and the employment contract the player had signed with Albirex. “Considering that Cruzeiro had already been paid the compensation previously agreed with Albirex, there was no reason for the both clubs to not fulfil with the necessary pre-requisites established in the FIFA TMS in order to convert the loan into a permanent transfer”. Therefore, Cruzeiro rejects the accusations of having made unlawful use of TMS.

64) Cruzeiro also rejects having ever induced the breach of the player’s contract with Albirex. On the contrary, it points out that it advised the player to comply with his contract with Albirex and “had no sort of benefit or profit from the chaotic scenario resulting from the actions of the Player and [CAP]. Indeed, Cruzeiro lost money the possibility to earn 20% due of any future amount eventually received in case of a subsequent transfer of the Player to a third club, and thereby Cruzeiro never received anything in that regard”.

65) In addition, Cruzeiro claims that it should not be considered as the new club of the player, but CAP. Cruzeiro alleges that only CAP benefited from the player’s breach of the Albirex contract, as it did not pay a transfer fee to the latter club and signed a player “who turned out to be a crucial player for the team during the 2018 season and saved [CAP] from relegation to the second division of the Brazilian National Championship. In the season of 2019, the Player is also of great important in the titles of Copa do Brazil and Copa Sudamericana. Furthermore and one year and a half after having induced the Player to breach the Albirex Employment Contract, [CAP] allegedly transferred the player to the Brazilian club S.E. Palmeiras for EUR 6,000,000”.

66) Based on the foregoing, Cruzeiro deems that it should not be held jointly and severally liable to pay any amount of compensation to Albirex.

F. Contractual situation of the player

67) On 26 July 2018, the player and CAP entered into an employment contract valid as from 16 July 2018 until 15 July 2021, for a monthly salary of Brazilian Reais (BRL) 120,000 (approx. USD 31,145 in July 2018).

III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

A. Competence

68) The Dispute Resolution Chamber (hereinafter also referred to as 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 29 March 2019 and decided on 18 June 2020. Consequently, the June 2020 edition of the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

69) Subsequently, the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the Dispute Resolution Chamber is in principle competent to deal with employment-related disputes with an international dimension between a player and several clubs.

B. Admissibility

70) Notwithstanding the above, the Chamber acknowledged that CAP contested the competence of FIFA arguing that pursuant to clause 15 of the contract the Japan Football Association (JFA) was the competent instance to enter the substance of the matter.

71) The Chamber then turned its attention to said clause 15 of the contract, according to which “Disputes regarding the content of the contract shall be settled by Japan Football Association (JPA). The parties renounce any other general or special jurisdiction that may correspond”.

72) In this context, the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is competent to deal with ”employment-related disputes between a club and a player of an international dimension; the aforementioned parties may, however, explicitly opt in writing for such disputes to be decided by an independent arbitration tribunal that has been established at national level within the framework of the association and/or a collective bargaining agreement. Any such arbitration clause must be included either directly in the contract or in a collective bargaining agreement applicable on the parties. The independent national arbitration tribunal must guarantee fair proceedings and respect the principle of equal representation of players and clubs”.

73) With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005 and to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

74) In this respect, the Chamber noted that in spite of the fact that clause 15 of the contract clearly indicated that any dispute between the player and Albirex should be submitted to the JFA, CAP did not submit any evidence related to the composition and functioning of the specific deciding body of the JFA which would be competent to hear the present dispute and therefore the Chamber could not analyse whether such deciding body in fact complies with the pre-requisites of the FIFA Circular no. 1010 and the FIFA NDRC Regulations.

75) Thus, the Chamber deemed that CAP had failed to prove that one specific deciding body of the JFA was indeed an independent arbitration tribunal guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs. Therefore, FIFA is competent to deal with the substance of the present dispute.

76) Notwithstanding the aforementioned conclusion, the Chamber deemed it important to point out that the only party to object to the competence of FIFA’s deciding bodies was CAP, as both the player and Albirex agreed to bring the dispute to FIFA and to renounce to the application of the jurisdiction clause agreed upon between them in the employment contract. In particular, the Chamber noted that Albirex itself chose to submit its claim to the DRC and the player did not contest FIFA’s competence to deal with the present dispute, having replied only to its substance.

77) Although being confident of the exhaustiveness of the foregoing conclusion that the DRC is competent to enter the merit of the case at hand, the Chamber, for the sake of completeness also clarified that even if the employment contract at the basis of the dispute contains a clear and exclusive jurisdiction clause, as per art. 22 lit. b) of the Regulations the parties to such contract are not forbidden to submitting their claim to FIFA if they choose to do. The Chamber pointed out that the Claimant and the player are the main parties to the contractual dispute and that CAP’s involvement is accessory to any possible breach committed by the player. Thus, CAP has no legal standing to challenge FIFA’s competence, considering that it is not a party to the contract at the basis of this dispute and that the parties to such contract agreed to bring their dispute to FIFA.

78) In view of the foregoing, the Chamber established that it is competent to consider the present matter as to the substance, on the basis of art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players and that the claim is admissible.

C. Applicable legal framework

79) The Chamber analysed which edition of the regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the present claim was lodged on 29 March 2019, the June 2018 edition of said regulations is applicable to the matter at hand as to the substance.

80) The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. The Chamber 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 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.

D. Burden of proof

81) The Chamber recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

E. Merits of the dispute

I. Main legal discussion

82) The fundamental disagreement between the parties, at the basis of the present dispute, is in fact the validity of the employment contract signed between the player and Albirex during seasons 2018 and 2019.

83) On the one hand, Albirex claims that the employment contract concluded with the player is valid for several reasons. First, it contains all the essentialia negotii, as it is signed by both parties, clearly stipulates the player’s duties, the remuneration to be paid in exchange for his services and the duration of the employment, namely from 2 February 2017 until 1 January 2020.

84) Albirex also claims that the terms of the employment contract are in line with the ones foreseen and guaranteed by the club in the “pre contract” concluded between the parties, as well as with the “term of agreement”, which clarifies from the beginning of their contractual relationship that ”due to regulatory restraints, the Player shall be initially loaned by Cruzeiro to [Albirex] for season 2017, from 02 February 2017 to 01 January 2018” and stipulates a transfer fee of USD 1,200,000 payable on 31 January 2017, covering also the player’s loan for seasons 2018 and 2019.

85) Furthermore, Albirex claims that Cruzeiro and itself duly proceeded in TMS, first entering the loan instruction and later on its conversion into a permanent transfer. Finally, Albirex points out that the validity of an employment contract in any case is not dependent on the validity or existence of a transfer agreement.

86) The aforementioned arguments of Albirex are fully endorsed by Cruzeiro.

87) On the other hand, the Chamber noted that the player and CAP (hereinafter also referred to as the Respondents) deem that the employment contract concluded between the player and Albirex was not valid beyond the end of season 2017, for the several reasons. First, the player and CAP emphasise that it was clear for the parties from the beginning that, due to certain regulatory constraints, the player would first be loaned for one season and, as per clause 2 of the “Term of agreement”, the parties would have to further conclude “a proper document” for the player’s loan for seasons 2018 and 2019 and the player should return to Cruzeiro after the end of first season. The Respondents deem that such “proper document” was never concluded as the clubs simply uploaded a document in TMS converting the loan into a permanent transfer, allegedly without the player’s knowledge or consent.

88) In addition, the Respondents argue that the employment contract signed between the player and Albirex was based on impossible conditions, since its duration exceeded that of the loan agreement. Thus, the employment contract was not valid for seasons 2018 and 2019, and neither the player breached nor CAP induced the breach of said contract.

89) In view of the diverging positions of the Claimant (and Cruzeiro) and the Respondents, the Chamber deemed that it first would have to address the issue of the validity of the employment contract beyond 2017 and subsequently that of its unilateral termination by the player, assessing whether he had or not a just cause to do so.

II. Considerations

90) In this context, the Chamber first wished to highlight that in order for an employment contract to be considered as valid and binding, apart from the signature of both the employer and the employee, it should contain all the essentialia negotii, such as the parties to the contract, their role, the duration of the employment relationship, the remuneration. After careful study of the employment contract between the player and Albirex, the Chamber concluded that all such essential elements are in principle included in it and their formal presence is not precisely what it being contested by the Respondents.

91) The Chamber noted that the Respondents, while acknowledging the player’s signature of the employment contract, deem that it does not reflect the player’s genuine consent, as the latter was allegedly flawed by the contradictory wording of the pre-contract, the term of agreement, and the temporary transfer agreement, as well as by Albirex’s and Cruzeiro’s acts in TMS and the actual sequel of events occurred as from the end of the 2017.

92) Furthermore, the Respondents deem that the employment contract was not valid beyond the end of the season 2017 as Cruzeiro and Albirex never entered into a proper permanent transfer agreement, which was a formal pre-requisite stipulated in the term of agreement. Therefore, it was legally impossible for the employment contract to be valid beyond the duration of the loan, i.e. after 1 January 2018.

93) In view of the aforementioned allegations of the Respondents, the Chamber deemed it appropriate to recall a few specific provisions of the legal documents at the basis of the dispute in order to properly assess whether their joint interpretation could in fact have flawed the player’s consent when signing the employment contract with Albirex for 3 seasons. In this respect, the Chamber highlighted the following relevant excerpts:

Pre-contract between the player and Albirex (10 December 2016):

“By this contract, the parties […] have agreed on a pre-contract of employment according to conditions in this contract:

Art. 1 Term:

The contract of employment between the club and the player will be valid for the following period:

From February 2, 2017 to January 1, 2020.

Art. 2 Salary:

The Club shall pas as salary compensation the following amount, as described below:

 Compensation for the 2017 season: USD 300,000 (net annual value);

 Compensation for the 2018 season: USD 350,000 (net annual value);

 Compensation for the 2019 season: USD 450,000 (net annual value).

[…]

Article 6. Agreement Fine of Pre-Contract

The breach of this agreement by the Player, except in case the latter does not pass in the medical examinations and in case Cruzeiro E.C. does not agree with his release as set out in clause 5, will result in the payment of a penalty of USD 1,000,000 NET (one million American Dollars).”

Term of agreement between Albirex, Cruzeiro and the player (9 January 2017):

“Whereas:

[…]

2. Albirex is deeply interested in retaining the Player’s services for three sporting seasons, but due to regulatory issues is unable to immediately offer a three-year contract to the Player;

3. The player is seduced by the opportunity to play in Japan and has expressly requested his transfer to Albirex, in the terms presented by the Japanese club”

[…]

First clause: Albirex is interested in retaining the Player’s services or the seasons 2017, 2018 and 2019. Due to regulatory restraints, the Player shall be initially loaned by Cruzeiro to [Albirex] for season 2017, from 02 February 2017 to 01 January 2018”.

Second clause: The parties shall execute a proper document for the temporary transfer of the player to Albirex for the 2017 season, as well as for the ensuing 2018 and 2019 seasons (which shall end on 01 January 2020). For the 2017 season, the parties shall enter on this date into a temporary transfer agreement.

Sole paragraph: Although the parties shall execute several documents to perform subsequent temporary transfers of the player to Albirex, from a commercial / business stand point, the parties hereby agree and acknowledge that upon the payment of the transfer fee provided in third clause below, Albirex shall be treated and considered as the holder of the permanent registration rights of the player; i.e. Albirex shall have the last instance on a future transfer of the player during the three-season period (2017-2019).

Third clause: For the temporary transfer of the player (for the three-season period 2017-2019), Albirex shall pay to Cruzeiro a net transfer fee in the amount of USD 1,200,000 (one million and two hundred thousand American dollars) on or before 31 January 2017.

[…]

Second paragraph: This same transfer fee will also be explicit in the temporary transfer agreement to be entered on this date, but is payable only once and shall cover the temporary transfers for the 2018 and 2019 seasons as well, without any further payment to Albirex.

Fourth clause: Albirex shall be the sole responsible for the payment of the player’s wages during the three-season period from 2017 to 01 January 2020.

Fifth clause: The player hereby confirms his interest and personal request to be loaned to Albirex for the three-season period and further declares to waive any salaries or payments that would be due by Cruzeiro between 02 February 2017 and 01 January 2020.

[…]

Eighth clause: Should Cruzeiro or the Player fail to execute the necessary documents to allow tht player to be registered with Albirex from the 2017, 2018 or 2019 season, the party in breach shall be liable for the payment of a penalty in the amount of USD 1,000,000 (one million American dollars) to Albirex”.

Temporary transfer agreement between Albirex, Cruzeiro and the player (9 January 2017)

“First clause: The parties agree for the temporary transfer of the player (“loan”) from Cruzeiro to Albirex from 02 February 2017 until 01 January 2018.

[…]

Sixth clause: Albirex commits to return the player to Cruzeiro at the term of the loan and the player commits to return to Cruzeiro and fully comply with his employment contract, which is hereby suspended for the term of this temporary transfer”.

Employment contract between the player and Albirex (16 January 2017):

“2. Term:

This contract will begin on 02/02/2017 and end on 01/01/2020.

4. The Club’s obligations:

[…]

9. The club will provide to the player and his wife, business class air tickets from São Paulo – Narita – São Paulo, as described:

4 tickets - 2017

4 tickets - 2018

4 tickets - 2019

5. Salary:

1. The club will pay salary as described below:

2017 – USD 300,000 – net annual value

2018 – USD 350,000 – net annual value

2019 – USD 450,000 – net annual value”

94) Having carefully analysed the provisions of the aforementioned contracts, the Chamber was of the opinion that the parties made it clear and repeatedly reinforced their intention to sign the player for a period of 3 years, for seasons 2017, 2018 and 2019. The aforementioned duration of the employment is stated in all aforementioned contracts, except for the temporary transfer agreement, which was however signed by the parties – including the player – on the same date as the term of agreement, which in turn clearly stipulated that the player and Albirex would enter a 3-year employment relationship, initially on loan and subsequently on a permanent basis.

95) The fact that the temporary transfer agreement was valid from 2 February 2017 until 1 January 2018 and stipulated that the player should resume his employment with Cruzeiro as from the expiry of the loan, if considered in the context of all legal documents concluded by the parties by no means contradicts or invalidates their previous agreement on the player’s employment with Albirex for 3 years. In fact, 7 days after signing the temporary transfer agreement, the player confirmed said understanding by signing the employment contract valid from 2 February 2017 until 1 January 2020, which clearly stipulated his remuneration and relevant benefits for each one of the 3 seasons.

96) Furthermore, the Chamber also noted that the pre-contract and the term of agreement also stipulate the financial consequences for the non-compliance with their terms, reflecting the parties’ explicit commitment and deliberate extraordinary “incentive” to ensure the compliance with their terms.

97) In view of the foregoing, the Chamber deemed that the duration of the player’s labour engagement with Albirex for 3 years was clearly stipulated in the pre-contract, in the term of agreement and in the employment contract, which are all drafted in explicit terms with regard to the duration of the player’s employment with Albirex. The Chamber understands that the temporary transfer agreement was concluded in the framework of the arrangements between Albirex and Cruzeiro for an initial loan – in view of the immediate impossibility of concluding a permanent transfer agreement – and its subsequent conversion into a permanent agreement. The provision determining the player’s return to Cruzeiro after the expiry of the loan, in itself and considered in the context of all agreements conclude between the parties, does not alone justify the fundamental doubt alleged by the player regarding the duration of his employment with Albirex. Thus, no uncertainty about the duration of the player’s engagement with Albirex could arise from the aforementioned contractual framework for any of the parties in good faith.

98) As to the Respondent’s argument that Cruzeiro and Albirex did not comply with the formal pre-requisite of concluding a “proper transfer agreement” for the player after the end of the loan, performing an alleged simulation in TMS, and leading to the impossibility of the employment contract beyond the 2017 season, the Chamber considered that such argument could not be sustained in the context of all clear and explicit contractual agreements reached by all parties related to his employment with Albirex.

99) In this respect, the Chamber understood that even if no new transfer agreement was concluded by the 3 relevant parties, the formalities in TMS required for the conversion of the loan to a permanent transfer were duly fulfilled and none of the clubs’ actions can be reproached. The player’s consent to his 3-year employment with Albirex was clearly given by the latter through the pre-contract, the term of agreement and the employment contract.

100) The Chamber also referred to the player’s argument that he had been “compelled” to sign an employment contract for the duration of 3 seasons. Referring to art. 12 par. 3 of the Procedural Rules, the Chamber observed that no evidence whatsoever that the player had been forced against his will to sign an employment contract for 3 years was provided by any of the Respondents. Thus, such argument cannot be sustained.

101) Still referring to principle of burden of proof, the Chamber also rejected CAP’s argument that Albirex and Cruzeiro would have setup a “Fraudulent Structure […] to pursue illegitimate purposes (such as a tax fraud), […] using the FIFA TMS to realize such illegal schemes” and violating art. 3. par. 1, art. 9.1 par. 3 of Annexe 3 and art. 18-bis of the RSTP. The proceedings in TMS were correctly followed by Albirex and Cruzeiro and no substantial evidence of any kind of third-party influence or fraud was provided by CAP.

102) Finally, and for the sake of completeness, the Chamber deemed it important to remind the parties of its well-established jurisprudence according to which a party that signs a document of legal bearing does so at its own risk and must therefore bear the legal consequences deriving thereof. Also, the Chamber referred to its longstanding jurispdrudence, which establishes that the validity of an employment contract is independent of the validity or even the existence of a transfer agreement.

103) In view of the foregoing, the Chamber concluded that the parties had a valid employment contract, from 2 February 2017 to 1 January 2020, and that such contract had been agreed between the player and Albirex in full awareness of its content, which reasonably and in good faith cannot be denied.

104) Having established the foregoing, the Chamber went on to analyse whether the player had had a just cause to terminate his valid employment contract with Albirex on 26 July 2018, when he signed a new employment contract with CAP. For the sake of clarity, the Chamber explained that in the absence of a formal termination document, given the factual circumstances of the case, the date of the signature of the new employment contract with CAP was to be considered as the date on which the player de facto terminated his employment relationship with Albirex.

105) In this context, the Chamber deemed it important to analyse the facts occurred after the expiry of the loan agreement and in particular the content of the correspondence exchanged between the parties, between 30 November 2017 and 30 March 2018 (cf. points 17 to 30 above).

106) In this respect, the Chamber noted that even though the player contacted Albirex and Cruzeiro by means of his letters of 30 November 2017, 2 December 2017, 19 December 2017 and 3 January 2018, mentioning inter alia “the illegalities of the ‘Temporary Transfer Agreement’ and the ‘Term of Agreement’, especially as regards the regulatory impediments that prevented [Albirex] from hiring me for three subsequent seasons, that is, the seasons of 2017, 2018 and 2019” and conveying an alleged uncertainty about the duration of his employment with Albirex, a clear answer was provided by Cruzeiro on 13 January 2018 and by Albirex on 17 January 2018, both emphasising his obligation to return to Japan and resume his employment contract with Albirex. After a several messages exchanged between 17 January 2018 and 8 February 2018, the player agreed to resume his contract and even requested that his plane tickets would depart from Rio de Janeiro and not Belém, as organized by the club.

107) For the sake of completeness, the Chamber also noted the player’s argument according to which his doubt about the validity of the contract stemmed from the negotiations for his transfer between Cruzeiro and Botafogo and that an “agreement for the exchange of economic and federative rights” of 2 players, including Respondent 1, had indeed been concluded (even though the player’s signature is missing). Even though Cruzeiro does not deny such allegations, it claims that they were the temporary result of the unawareness of the club’s new board about the player’s employment situation. Thus, on 13 January 2018 Cruzeiro summoned the player to its offices and informed him that in view of the fact that he had a valid employment with Albirex, the negotiations with Botafogo are to be disregarded in good faith and the player should return to Japan. After that, the player agreed to fly back to Japan and resume his employment with Albirex, closing – apparently – the issue of the validity of his employment contract with said club.

108) The player effectively returned to Japan on 10 February 2018, resuming the execution of the employment contract with Albirex, however only to leave again to Brazil on 22 February 2018. By means of his letter of 13 March 2018 to Cruzeiro, the player again insisted on resuming his employment contract with the latter club, since the loan with Albirex had ended. After receiving another notification from Albirex on 23 March 2018, requesting his return to Japan, he still insisted that he did not have a valid employment contract with Albirex, as no new agreement for the extension of his loan or for his definitive transfer to said club had been concluded.

109) On 30 March 2018, Cruzeiro and the player signed a termination agreement, by means of which both parties confirmed not to have any pending claims against each other.

110) In view of the foregoing, the Chamber was of the opinion that the player was not able to justify why he again started questioning the validity of the employment contract, when he had already agreed to resume it – via the letter of his legal representative of 8 February 2018 (cf point 25. above) – and de facto resumed the execution of said employment contract with Albirex, by returning to Japan on 10 February 2018.

111) The player alleges that after his return Albirex started to “show clear signs of negligence and disrespect towards [him]”, in particular refusing his request for medical assistance, which allegedly lead to hospitalisation. In this regard, the Chamber noted that the player failed to provide substantial evidence of such allegations and of having ever put the club in default for such alleged breaches of the employment contract. In fact, 12 days after having arrived in Japan and having been undisputedly excused from a training camp as per his own request, the player returned to Brazil, alleging again the invalidity of the contract.

112) At this point, the Chamber deemed it relevant to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract without prior warning. 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 assure 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 always only be an ultima ratio.

113) In view of the above, the Chamber was of the opinion that the player, by failing to provide any substantial evidence of the alleged breaches of Albirex after his return, by not serving the latter any default notice allowing it to remedy the default and by returning to Brazil 12 days after his arrival in Japan after having agreed to resume the contract, was not able to demonstrate that the continuation of the employment relationship was in fact rendered impossible by Albirex.

114) In addition, the Chamber noted the player’s argument that Albirex never paid his remuneration for the 2018 season. In this respect, the Chamber pointed out that, during the entire season 2018, the player was only 12 days in Japan, for some of which he had been excused to join a training camp as per his own request. In this respect, the Chamber emphasized that a party who is not in compliance with its contractual obligations is not in a position to demand from the counterparty the due compliance with the contract, before first remedying their own default. Thus, the Chamber deemed that this argument of the player also did not justify his departure and the subsequent termination of the employment contract, on 26 July 2018.

115) With regard to the signature of the new employment contract with CAP on 26 July 2018, the Chamber made reference to the wording of art. 18 par. 5 of the Regulations, according to which “If a professional enters into more than one contract covering the same period, the provisions set forth in Chapter IV shall apply”. In this context, the Chamber pointed out that when the player signed the employment contract with CAP on 26 July 2018, his contract with Albirex was still valid, leading to a clear violation of the aforementioned art. 18 par. 5 of the Regulations.

116) In view of all the foregoing, the Chamber concluded that the player did not have a just cause to terminate the contract on 26 July 2018 and should therefore bear the financial and sporting consequences of his unjustified breach of the valid employment contract concluded with Albirex for seasons 2017, 2018 and 2019.

117) In continuation, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that Albirex is entitled to receive from the player an amount of money as compensation for breach of contract.

118) Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to Albirex by the player in the case at stake. In doing so, 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, with due consideration for the law of the country concerned, the specificity of sport, and any other objective criteria. These criteria shall include, 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, the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period.

119) In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained 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 referred to clause 7 of the contract (“termination fine”), which stipulated that “The termination fine is USD 10,000,000.00 (ten million American dollars)”.

120) In spite of the general and succinct terms of the aforementioned clause, the Chamber understood that, in principle, such clause appears to apply to both the player and the club, in case any of them unilaterally terminates the contract without just cause. Even though the clause appears to comply with the pre-requisite of reciprocity, the Chamber noted that it provides for an amount substantially higher than the player’s annual remuneration – varying from USD 300,000 to USD 450,000 – and than the amount paid by Albirex for the services of the player for a period of 3 years – USD 1,200,000. In this respect, the Chamber concluded that such compensation clause was not applicable in the present matter as it does not comply with the pre-requisite of proportionality.

121) As a consequence, the Chamber determined that the amount of compensation payable in the case at stake 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. In this regard, the Chamber stated beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

122) In order to estimate the amount of compensation due to the Claimant in the present case, the Chamber first turned its attention to the financial terms of the former contract with Albirex and the new contract with CAP, the value of which constitutes an essential criterion in the calculation of the amount of compensation in accordance with art. 17 par. 1 of the Regulations. The Chamber deemed it important to emphasise that the relevant compensation should be calculated based on the average fixed remuneration, i.e. excluding any conditional or performance related payment, agreed by the player with his former club and his new club, as well as considering the period of time remaining on the contract signed between the player and the former club.

123) Bearing in mind the foregoing, the Chamber proceeded with the calculation of the fixed remuneration payable to the player under the terms of both the employment contract signed with Albirex and the one signed with CAP, for the period of 17 months that was remaining since the unilateral termination of the contract by the player until its expiry, i.e. from 26 July 2018 until 1 January 2020.

124) In this regard, the Chamber noted that, as per the employment contract signed with Albirex, the player was entitled to his remuneration for 5 remaining months of season 2018 (USD 350,000 / 12 x 5 = USD 145,833) as well as to the entire remuneration for season 2019 (USD 450,000), amounting in total to USD 595,833.

125) In continuation, the Chamber equally took note of the player’s remuneration under the terms of his employment contract with his new club, CAP, for the same period of time (17 months) which corresponds to USD 529,465 (17 x USD 31,145).

126) Taking into account the above, the Chamber concluded that, for the relevant period, the player’s average remuneration amounts to USD 562,649.

127) Having stated that, the Chamber recalled that the remuneration paid by the player’s new club is particularly relevant in so far as it reflects the value attributed to his services by his new club at the moment the breach of contract occurs and possibly also provides an indication towards the player’s market value at that time.

128) Furthermore, with regard to the criterion relating to the fees and expenses allegedly paid by the Claimant for the acquisition of the player’s services, the Chamber took due note that Albirex paid the amount of USD 1,200,000 to obtain the player’s services for 36 months, 17 of which were not amortised, due to the player’s unjustified breach. The non-amortised value of the contract thus amounts to USD 566,666.

129) This amount should be added to the average value of the player’s new and old contract, and the final amount compensation due to Albirex adds up to USD 1,129,499.

130) Considering the request of Albirex and the constant practice of the Chamber, 5% interest p.a. shall apply over the amount of USD 1,129,499 as from the date of claim, i.e. 29 March 2019.

131) Furthermore, in accordance with the unambiguous contents of art. 17 par. 2 of the Regulations, the Chamber established that the player’s new club shall be jointly and severally liable for the payment of compensation. In this respect, the Chamber was eager to point out that the joint liability of the player’s new club is independent from the question as to whether the new club has committed an inducement to contractual breach or any other kind of involvement by the new club.

132) At this point, the Chamber referred to the objection raised by CAP, which deems that Cruzeiro – and not CAP – should be considered as the new club of the player. In this respect, the Chamber pointed out that the employment contract between Cruzeiro and the player was formally terminated by the parties in writing on 30 March 2020 and de facto already at the moment Cruzeiro and Albirex entered the conversion of the player’s registration with the latter from loan into permanent.

133) Considering that the player had a valid ongoing contract with Albirex until 1 January 2020 and that CAP was the first club with which the player was registered (provisionally) after terminating de facto the contract with Albirex, the Chamber concluded that CAP is to be considered the new club of the player and therefore, should be held joint and severally liable for the payment of the aforementioned amount of compensation.

III. Sporting sanctions

134) In continuation, the Chamber focused its attention on the further consequences of the breach of contract in question and, in this respect, it addressed the question of sporting sanctions against the player in accordance with art. 17 par. 3 of the Regulations. The cited provision stipulates that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on any player found to be in breach of contract during the protected period.

135) In this respect, the Chamber referred to item 7 of the “Definitions” section of the Regulations, which stipulates, inter alia, that the protected period shall last “for three entire seasons or three years, whichever comes first, following the entry into force of a contract, where such contract is concluded prior to the 28th birthday of the professional, or two entire seasons or two years, whichever comes first, following the entry into force of a contract, where such contract is concluded after the 28th birthday of the professional”. In this regard, the DRC pointed out that independent of the player’s age, the breach occurred before the contract had run for 2 entire seasons or 2 years, entailing that the unilateral termination of the contract occurred within the protected period.

136) With regard to art. 17 par. 3 of the Regulations, the Chamber emphasised that a suspension of four months on a player’s eligibility to participate in official matches is the minimum sporting sanction that can be imposed for breach of contract during the protected period. This sanction, according to the explicit wording of the relevant provision, can be extended in case of aggravating circumstances. In other words, the Regulations intend to guarantee a restriction on the player’s eligibility of four months as the minimum sanction. Therefore, the relevant provision does not provide for a possibility to the deciding body to reduce the sanction under the fixed minimum duration in case of mitigating circumstances.

137) Consequently, taking into account the circumstances surrounding the present matter, the Chamber decided that, by virtue of art. 17 par. 3 of the Regulations, the Respondent player had to be sanctioned with a restriction of four months on his eligibility to participate in official matches.

138) Finally, the Chamber turned its attention to the question of whether, in view of art. 17 par. 4 of the Regulations, the player’s new club, i.e. CAP, must be considered to have induced the player to unilaterally terminate his contract with the Claimant without just cause during the protected period, and therefore shall be banned from registering any new players, either nationally or internationally, for two entire and consecutive registration periods.

139) In this respect, the Chamber recalled that, in accordance with art. 17 par. 4 of the Regulations, it shall be presumed, unless established to the contrary, that any club signing a professional player who has terminated his previous contract without just cause has induced that professional to commit a breach. Consequently, the Chamber pointed out that the party that is presumed to have induced the player to commit a breach carries the burden of proof to demonstrate the contrary.

140) In light of the aforementioned and given that CAP in fact went on to sign an employment contract with the player even after having been warned by Albirex that the latter had an ongoing valid contract with the player, the DRC had no option other than to conclude that CAP had not been able to reverse the presumption contained in art. 17 par. 4 of the Regulations and that, accordingly, the latter had induced the player to unilaterally terminate his employment contract with the Claimant.

141) In view of the above, the Chamber decided that in accordance with art. 17 par. 4 of the Regulations, CAP shall be banned from registering any new players, either nationally or internationally, for the two entire and consecutive registration periods following the notification of the present decision. The club shall be able to register new players, either nationally or internationally, only as of the next registration period following the complete serving of the relevant sporting sanction. In particular, it may not make use of the exception and the provisional measures stipulated in art. 6 par. 1 of the Regulations in order to register players at an earlier stage.

142) In accordance with the Circular no. 1686 of 8 August 2019, art. 24bis of the Regulations does not apply to decisions whereby sporting sanctions (registration ban or restriction to play in official matches) are imposed on the basis of art. 17 of the RSTP, the execution of which will still continue to be carried out by the Disciplinary Committee.

IV. Conclusion

143) As a result of the aforementioned, the Chamber decided to partially accept the claim of Albirex and to order the player and CAP to, jointly and severally, pay to Albirex the following amount of compensation:

- USD 1,129,499 plus 5% interest p.a. as from 29 March 2019.

144) A restriction of four months on his eligibility to play in official matches is imposed on the Respondent 1, Ronielson da Silva Barbosa. This sanction applies with immediate effect as of the date of notification of the present decision. The sporting sanctions shall remain suspended in the period between the last official match of the season and the first official match of the next season, in both cases including national cups and international championships for clubs.

145) The Respondent 2, Clube Athletico Paranaense, shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision.

146) The Chamber concluded its deliberations in the present matter by establishing that the claim of Albirex is admissible and partially accepted.

IV.DECISION OF THE DISPUTE RESOLUTION CHAMBER

1) The claim of the Claimant, Albirex Niigata, is admissible.

2) The claim of the Claimant is partially accepted.

3) The Respondent 1, Ronielson da Silva Barbosa, has to pay to the Claimant within 30 days as from the date of notification of this decision compensation for breach of contract in the amount of USD 1,129,499 plus 5% interest p.a. as from 29 March 2019 until the date of effective payment.

4) The Respondent 2, Clube Athletico Paranaense, is jointly and severally liable for the payment of the aforementioned compensation.

5) Any further claim lodged by the Claimant is rejected.

6) The Claimant is directed to inform the Respondent 1 and the Respondent 2, 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 1 and the Respondent 2 must pay the amount mentioned under point 3. above.

7) The Respondent 1 and the Respondent 2 shall provide evidence of payment of the due amount in accordance with point 3. to FIFA to the e-mail address psdfifa@fifa.org, duly translated into one of the official FIFA languages (English, French, German, Spanish).

8) If the aforementioned sum plus interest is not paid within the above-mentioned time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for its consideration and a formal decision.

9) A restriction of four months on his eligibility to play in official matches is imposed on the Respondent 1, Ronielson da Silva Barbosa. This sanction applies with immediate effect as of the date of notification of the present decision. The sporting sanctions shall remain suspended in the period between the last official match of the season and the first official match of the next season, in both cases including national cups and international championships for clubs.

10) The Respondent 2, Clube Athletico Paranaense, shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

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) within 21 days of receipt of the notification of this decision (cf. CAS Directives at Legal.FIFA.com).

NOTE RELATED TO THE PUBLICATION:

FIFA may publish this decision. For reasons of confidentiality, 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 Procedural Rules).

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