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 4 June 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 4 June 2020,

in the following composition:

Clifford Hendel (USA/France), Deputy Chairman

Elvis Chetty (Seychelles), member

Tomislav Kasalo (Croatia), member

on the claim presented by the player,

Oriol Lozano Farrán, Spain,

represented by Asociación de Futbolistas Españoles

as “Claimant”

against the club

Aris FC (Athlitikos Syllogos Thessalonikis o Aris Podosferiki Anonymi Eteria), Greece

as “Respondent”

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 9 July 2010, the Spanish player, Oriol Lozano Farrán (hereinafter: the Claimant or the player), and the Greek club, PAE O Aris Thessaloniki (hereinafter: PAE) signed an employment contract valid as from the date of signature until 30 June 2013.

2. In accordance with the employment contract, the player was, inter alia, entitled to the following remuneration:

“1) EUR 10,000 due on 21 June 2010

2) EUR 20,000 due on 31 August 2010

3) EUR 80,000 due on 31 October 2010

4) EUR 100,000 due on 31 January 2011

5) EUR 120,000 due on 31 May 2011

6) EUR 30,000 due on 31 August 2011

7) EUR 85,000 due on 31 October 2011

8) EUR 110,000 due on 31 January 2012

9) EUR 125,000 due on 31 May 2012

10) EUR 35,000 due on 31 August 2012

11) EUR 90,000 due on 31 October 2012

12) EUR 110,000 due on 31 January 2013

13) EUR 135,000 due on 31 March 2013

3. On 5 July 2011, the Claimant and PAE signed a termination agreement, by means of which PAE undertook to pay to the Claimant the amount of EUR 300,000.

4. On 30 March 2012, the abovementioned parties signed an “agreement for the novation of the contract of 5 July 2011” (hereinafter: the novation), as per which the PAE should pay the Claimant the amount of EUR 350,000 in instalments in virtue of the early termination of the contract. The novation, as per its clause 4, also stipulated that in case any of the instalments remained outstanding for more than 30 days, the player had the right to claim the full compliance with the employment agreement signed on 9 July 2010.

5. The first instalment of the novation, corresponding to EUR 90,000, was duly paid by PAE.

6. On 29 May 2014, the Claimant lodged a first claim in front of FIFA against the Respondent, claiming the total amount of EUR 750,000, corresponding to the residual amount of the employment contract, based on the non-compliance of PAE with the novation.

7. On 1 October 2014, the Hellenic Football Federation (hereinafter: the HFF) informed FIFA that “due to their dissolution/entering in liquidation process, the following FSAs are already inexistent and no longer affiliated with HFF: - FC ARIS [PAE]”.

8. On 24 February 2015, the Claimant was informed that in consideration of the information received by FIFA from the HFF on 1 October 2014, FIFA was not competent to hear the dispute in light of the fact that the club PAE was no longer affiliated to the HFF.

9. The HFF further informed FIFA that whilst PAE is automatically fully disaffiliated from the Hellenic Football Federation, it is “without having any direct or indirect relation to the HFF any more”. The HFF also stated that ‘Aris Thessalonikis AS’ (hereinafter: FC Aris) competes in the C National Division Championship for the 2014/2015 season. It is the “founding association” of PAE” and should not be confused with it “since they are two totally different legal entities that operate parallel to and independently of each other, have different administrations, different tax registry numbers, different assets and liabilities and different rights and obligations”. In addition, the HFF states “more specifically, PAE was established as a football société anonyme by converting only the amateur football players department of the above association, in accordance with the provisions of the Law of Amateur and Professional Sports and operated as such until its aforementioned dissolution by law”.

10. On 8 May 2018, the Claimant lodged a claim against “Aris FC” in front of FIFA, requesting the payment of the amount of EUR 750,000, corresponding to the residual amount of the employment contract, based on the non-compliance of the novation and in particular referencing its clause 4, claiming that the respondent club was reaffiliated to the HFF.

11. The club Athlitikos Syllogos Thessalonikis o Aris PAE (hereinafter: the Respondent or AST) replied to the claim by means of a letter which letterhead reads “Aris FC”. The contents of the club’s reply are detailed in continuation.

12. On 4 October 2018, the Court of Arbitration for Sport (CAS) passed a decision in the matter CAS 2016/A/4918 Ikechukwu John Kingsley Ibeh v. Aris Thessaloniki AS & PAE O Aris FC & FIFA. In this regard, CAS decided the following:

“166. This CAS Award confirms that the Player has a final and binding, enforceable debt against PAE. However, the Sole Arbitrator acknowledges that PAE is now in liquidation, so it is unlikely that the Player will be able to recover much, if any, of his debt from PAE.

167. Accordingly, if the Player believes that AST [the Respondent] is the legal or sporting successor of PAE, the Player may wish to enforce his debt against AST. If the Player wished to do so, then that is a new claim against a different legal entity. The Player should bring his claim against AST following Article 22 of the RSTP, through the FIFA DRC, respecting the time limitations of the RSTP (noting that the information regarding the existence of AST perhaps only became available from the HFF on 13 July 2018 during these CAS proceedings). He should then seek to convince the FIFA DRC that AST is the sporting successor of PAE and should, somehow, be responsible for the debt that PAE owes to him under this CAS Award.”

13. During the procedure in front of CAS, the Sole Arbitrator noted that in the 2017/2018 season a team called “Aris Thessaloniki” was playing in the 2nd highest Greek Football League and requested from the HFF to clarify why such a team was playing in the Greek second division, which the Sole Arbitrator understood to be a professional league, “not amateur”.

14. The HFF confirmed on 13 July 2018 that during the 2015/2016 season, a team competing under the name “FC Aris” had “won the championship and thus gained the right to be promoted to the Football League division, which is the Greek second professional division” and according to Greek Law “only football societés anynomyes are entitled to participate in professional division championships; therefore, in case of a promotion of an amateur sports association’s football team to a professional division, the association is obliged to establish a football societé anonyme which will replace the association and participate in the championship of that division”.

15. On 21 February 2020, the FIFA Dispute Resolution Chamber passed a decision in the matter 19-00332 and, inter alia, decided that the Respondent was the legal successor of PAE.

16. In his claim, the player claims that for season 2014/2015 the Respondent finished 2nd in the third division; for season 2015/2016 the Respondent finished 1st in the third division and was promoted to the second division, after having player its last match of the season on 15 May 2016.

17. The Claimant further claims that as from 1 July 2016, i.e. the beginning of the 2016/2017 season, the “2-year delay” for lodging a claim against the club was renewed, and thus the present claim was timely lodged. The Claimant explicitly states that its new claim is based on the employment contract signed between the parties on 9 July 2010.

18. Accordingly, the player requested that the Respondent is ordered to pay him the total amount of EUR 750,000, corresponding to the instalments no. 5 to 13 of the employment agreement, plus 5% interest p.a. as from 31 May 2012 until the date of actual payment.

19. In its reply to the claim, the Respondent rejected the player’s claim and argued and argued as follows:

“Regarding the case with Ref.nr. 18-00978 we would like to refer that Athlitikos Syllogos Thessalonikis o Aris Podosfairiki Anonymi Etaireia is a different entity and S.A. PAE O ARIS FC is now a S.A. under liquidation, so have to claim your requests and debts from them. Athlitikos Syllogos Thessalonikis o Aris Podosfairiki Anonymi Etaireia is a different company with different owners, with different Board of Directors, different VAT number and different legal entity. There is no legal or financial relevance between Athlitikos Syllogos Thessalonikis o Aris Podosfairiki Anonymi Etaireia and PAE O ARIS FC under liquidation S.A. The only relevance between Athlitikos Syllogos Thessalonikis o Aris Podosfairiki Anonymi Etaireia and PAE O ARIS FC under liquidation S.A. is the use of the same stadium. Regarding the Global Commercial Law, a newly established S.A. cannot undertake the financial obligations of another S.A. because there are different shareholders and VAT number. This can happen only in case of buy-out or merger but it’s not applied in this case”.

20. As such, the Respondent requested FIFA the following:

a) “stop persecuting our company for cases of other company because you are harming our reputation,

b) acknowledge that Athlitikos Syllogos Thessalonikis o Aris Podosfairiki Anonymi Etaireia with VAT No EL997350594, established in 2016 and is newly established S.A.

c) take into consideration and the correspondence between FIFA and Hellenic Football Federation about relevant claims (as attached)”.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 8 May 2018. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition March 2020), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Spanish player and a Greek club.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, the Chamber confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition March 2020), and considering that the claim was lodged on 8 May 2018, the June 2018 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand. In particular, the Chamber recalled that, in accordance with art. 6 par. 3 of Annex 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the TMS.

5. Having said this, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof.

6. First of all, the DRC referred to art. 25 par. 5 of the Regulations, according to which the Dispute Resolution Chamber shall not hear any case subject to the Regulations if more than two years have elapsed since the event giving rise to the dispute. Considering that the claim of the Claimant was lodged on 8 May 2018, the Chamber deemed that, in principle, it could not enter into any claim for salaries that fell due prior to 8 May 2016. However, the members of the Chamber wished to highlight the special circumstances of the present case, in particular, that the information regarding the existence of the Respondent only became available after the letter from HFF on 13 July 2018 during the aforementioned CAS proceedings.

7. Consequently, the members of the DRC shared the view respectively of the CAS and the FIFA DRC on case 19-00332, and concluded that the request for the salaries accrued before the date of 8 May 2016 are not barred by the statute of limitations in accordance with art. 25 par. 5 of the Regulations.

8. Subsequently, the Chamber wished to emphasise that the parties do not dispute neither the contents of the employment agreement nor of the novation.

9. Having established the above, the DRC considered that the underlying issue in this dispute, considering the parties’ position, was to determine as to whether the Respondent can be considered as a sporting successor of PAE and if so, whether the Respondent is liable to pay PAE’s debts towards the player.

10. With this in mind, the DRC started by acknowledging the position of the player, who directed a claim against the Respondent and therefore deems it to be liable for the obligations of PAE towards the player.

11. Having said this, the members of the Chamber took note of the Respondent’s position which, in short, affirms that it is a different legal entity from PAE.

12. With the above-mentioned considerations in mind and in relation to the new club’s position, the DRC referred to previous decisions of FIFA’s decision-making bodies related to this particular issue as well as to the CAS Award 2013/A/3425 which mutatis mutandis can be applied to the present matter. Indeed, in said Award, CAS, while confirming a previous decision of FIFA, established that a club is a sporting entity identifiable by itself, which is formed by a combined set of elements that constitute its image.

13. In particular, the DRC fully adopted the reasoning of the Sole Arbitrator in the aforementioned Award that reads as follows:

“The Sole Arbitrator highlights that the decisions that had dealt with the question of the succession of a sporting club in front of the CAS (CAS 2007/A/1355; TAS 2011/A/2614; TAS 2011/A/2646; TAS 2012/A/2778) and in front of FIFA’s decision-making bodies (…), have established that, on the one side, a club is a sporting entity identifiable by itself that, as a general rule, transcends the legal entities which operate it. Thus, the obligations acquired by any of the entities in charge of its administration in relation with its activity must be respected; and on the other side, that the identity of a club is constituted by elements such as its name, colours, fans, history, sporting achievements, shield, trophies, stadium, roster of players, historic figures, etc. that allow it to distinguish from all the other clubs. Hence, the prevalence of the continuity and permanence in time of the sporting institution in front of the entity that manages it has been recognised, even when dealing with the change of management companies completely different from themselves” (original text in Spanish).

14. Having said this, the members of the Chamber focused their attention on the following facts:

a. Both, PAE and AST competed in the Greek league under the name of “Aris FC” or “Aris Thessaloniki”;

b. The logo of PAE and AST are almost identical;

c. Both clubs held their local matches in the same stadium;

d. Both clubs have their registered office at the same address;

e. The colours of the clubs are the same;

f. Both clubs share the same history. In particular, according to AST’s website, the club was established in 25 March 1914 and won three Championship titles (1928, 1932 and 1946).

15. On account of all the above, the DRC reached the following conclusions:

a. There are sufficient elements to establish that AST has been the same club as PAE throughout its history, despite the alleged change of owners, board of directors etc.;

b. Moreover, by using the same name (“Aris FC”), logo, stadium and, in particular, the history, it is evident that the new club had the intention to maintain the identity and image of PAE in order to be considered the same club.

16. In view of the foregoing conclusions, the DRC unanimously decided that AST is the sporting successor of PAE. As such, the Chamber decided that the Respondent has standing to be sued and it is therefore liable to pay to the Claimant the amounts due under the employment agreement and the novation.

17. In continuation, the Chamber turned to the issue of the amount sought by the player, and recalled, once again, that the Respondent made no submissions regarding the substance of the matter.

18. Accordingly, the Chamber observed that clause 4 of the novation is equivalent to a financial disposition in a settlement agreement. In other words, it means the same as if the parties had written that the Claimant, should the Respondent fail to make the payments as agreed, was entitled to EUR 750,000. This amount therefore is not compensation for breach of contract, but in fact an outstanding payment, hence no mitigation shall be considered.

19. Further, the DRC noted that the initial breakdown of amounts claimed, as filed by the player in his statement of claim, adds up to EUR 840,000, and that he had acknowledged receipt of EUR 90,000, therefore arriving at the requested amount of EUR 750,000.

20. In regards to the Claimant’s claim for interest, he Chamber observed the request made by the Claimant requested that it all applies from 31 May 2012, i.e. the date of default. However, the Chamber concluded that some installments were not due by such date, and no disposition of the novation states that all the instalments fell automatically due. Accordingly, the Chamber decided that the request for interests should be partially granted, as follows:

- From 31 May 2012 for payments due up to that date (otherwise the decision would be ultra petita);

21. From the due dates for payments agreed to be made after 31 May 2012 (as clause 4 of the novation reverts back to the employment agreement).

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Oriol Lozano Farrán, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Aris FC (Athlitikos Syllogos Thessalonikis o Aris Podosferiki Anonymi Eteria), has to pay to the Claimant within 30 days as from the notification of this decision, the amount of EUR 750,000, plus interest at the rate of 5% p.a. as follows:

- On the amount of EUR 380,000 as from 31 May 2012 until the date of effective payment;

- On the amount of EUR 35,000 as from 31 August 2012 until the date of effective payment;

- On the amount of EUR 90,000 as from 31 October 2012 until the date of effective payment;

- On the amount of EUR 110,000 as from 31 January 2013 until the date of effective payment;

- On the amount of EUR 135,000 as from 30 March 2013 until the date of effective payment.

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

5. In the event that the amounts plus interest due to the Claimant in accordance with the above-mentioned number 3 are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

6. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittances are to be made and to notify FIFA of every payment received.

*****

Note relating to the findings of the decision (art. 15 and 18 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber):

A request for the grounds of the decision must be received, within 10 days of receipt of notification of the findings of the decision. Failure to do so within the stated deadline will result in the decision becoming final and binding and the parties being deemed to have waived their rights to file an appeal.

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer