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 26 March 2020

Decision of the Dispute Resolution Chamber

passed by videoconference, on 26 March 2020,

in the following composition:

Clifford J. Hendel (USA & France), Deputy Chairman

Michele Colucci (Italy), Member

Pavel Pivovarov (Russia), Member

on the claim presented by the player,

Aguinaldo Policarpo Mendes da Veiga, Portugal

represented by Mr Emre Koçak

as Claimant

against the club,

C.S.M. Poli Iasi, Romania

represented by Mr Claudius-Noris Pintilie

as Respondent

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 10 August 2018, the Brazilian player Aguinaldo Policarpo Mendes da Veiga (hereinafter: the Claimant or the player) and the Romanian club C.S.M. Poli Iasi (hereinafter: the Respondent or the club) concluded an employment contract, valid as from the date of signature until 15 June 2019, according to which the player was entitled to a sign-on fee of EUR 6,000 net and a monthly salary of EUR 5,000 net, inter alia.

2. Clause XIII of the contract named “Applicable law” also stipulates that:

“13.1 This convention shall be governed and construed in accordance with the provisions of the Law on Physical Education and Sports no. 69/2000 of the Civil Code, of the Regulations on the Status and Transfer of Football Players of Law 227/2015 on the Fiscal Code, and on the FIFA, UEFSA, FRF/LPF Regulations.

13.2 Once litigation regarding improper execution or non-fulfilment of the obligations assumed by the parties through this contract amicably settles. The conflicts in connection with the execution, the modification, the suspension of the termination of this contract ae solved by FRF/LPF Commission as appropriate, and / or the competent courts and tribunals in accordance with the law”.

3. On 19 December 2018, the player put the club in default of payment of the total amount of EUR 10,265.58 net, corresponding to 2 monthly salaries and EUR 265.58 as “operation cost”, granting it a 15-day deadline to remedy the default, however to no avail.

4. On 14 January 2019, the player unilaterally terminated the contract with the club, based on the non-payment of the aforementioned amounts within the granted deadline.

5. On 1 March 2019, the player lodged a claim against the club, requesting the payment of outstanding remuneration and compensation, as detailed below:

a. EUR 10,265.58 as outstanding remuneration plus interest as from the due dates;

b. EUR 30,000 as compensation for breach of contract plus interest as from the date of termination;

c. EUR 30,000 as additional compensation plus interest as from the date of termination;

d. Procedural costs to be borne by the club.

6. The club in its reply contests the competence of FIFA to deal with the present dispute, in favour of the Romanian NDRC, based on clause 13.2 of the contract, claiming the aforementioned national deciding body complies with all NDRC pre-requisites.

7. As to the substance, the club claims that Romanian law and the RSTP of the Romanian Football Federation should be applicable to the case, in accordance with clause 13.1 of the contract.

8. The club acknowledges not having paid the player 2 monthly salaries for October and November 2018 on time, as the club was facing financial difficulties. The club, however, claims to have transferred a total amount of approximately EUR 20,000 to the player’s bank account on 1 March 2019, 22 March 2019 and 11 April 2019.

9. Furthermore, the club deems that the player did not have a just cause to terminate the contract as the RSTP of the Romanian Football Federation, applicable to the case at hand, provides for a grace period of 90 days to pay players’ wages.

10. The club also claims that the player was absent in December 2018 and January 2019 and thus any remuneration due for this period should be deducted from an eventual amount of compensation due to the player, in case it is decided that he had a just cause to terminate the contract.

11. Finally, the club disputes the player’s right to receive any additional compensation, let alone under “egregious circumstances”, claiming that the player did not sign any new contract after the termination and that the compensation cannot exceed the residual value of the contract.

12. In his replica, the player first deems that FIFA should be competent to deal with the case, as he did not contractually agree upon the jurisdiction of the Romanian NDRC and the latter is not an independent arbitration tribunal guaranteeing fair proceedings.

13. On the substance of the matter, the player denied that he had been absent from the club in December 2018 and January 2019 without authorisation. He points out that during this period, the club had its Christmas and New Year holidays. In addition, he points out that the club did not at any moment request his return.

14. In its duplica, the club reiterates its previous arguments.

15. Upon FIFA’s request, the player informed that on 13 May 2019, he signed a new employment contract with the Malaysian club, Sabah, valid as from the date of signature until 30 November 2019, according to which he was entitled to a monthly salary of USD 8,000 (approx. EUR 7,177).

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter: “the DRC or the Chamber”) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 1 March 2019. Considering the wording of art. 21 of the 2019 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 conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the Dispute Resolution Chamber is competent to deal with employment-related disputes with an international dimension between a player and a club.

3. Notwithstanding the above, the members of the Chamber acknowledged that the Respondent contested the competence of FIFA arguing that pursuant to clause 13.2 of the contract the Romanian NDRC was the competent tribunal to enter into the substance of this matter.

4. In this context, the Chamber first deemed it essential to verify whether the contract indeed contained a clear and exclusive arbitration clause in favour of one specific deciding body under the auspices of the Romanian Football Federation. In this respect, the Chamber referred to the wording of clause 13.2 of the contract, which stipulates that: “13.2 Once litigation regarding improper execution or non-fulfilment of the obligations assumed by the parties through this contract amicably settles. The conflicts in connection with the execution, the modification, the suspension of the termination of this contract ae solved by FRF/LPF Commission as appropriate, and / or the competent courts and tribunals in accordance with the law”.

5. Having analysed the aforementioned clause, the Chamber concluded that its wording is by no means clear and appears to mention two different deciding bodies, not specifying however the framework of their competence. Thus, clause 13.2 of the contract cannot be considered as a valid arbitration clause, stipulating the clear and exclusive jurisdiction of one specific deciding body of the Romanian NDRC.

6. As a result of the aforementioned, the Chamber concluded that the Respondent’s objection towards the competence of FIFA to deal with the present matter has to be rejected, without the need of any further analysis of the NDRC Regulations, as the first pre-requisite – that of a clear and exclusive arbitration clause contractually agreed between the parties – is not met. Thus, the Dispute Resolution Chamber 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.

7. Subsequently, 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 1 March 2019, the June 2018 edition of said regulations (hereinafter: “the Regulations”) is applicable to the matter at hand as to the substance.

8. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. The DRC continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. However, the 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.

9. In this respect, the Chamber recalled that the Claimant and the Respondent concluded a contract valid as from 10 August 2018 until 15 June 2019, according to which the player was entitled to a sign-on fee of EUR 6,000 and a monthly salary of EUR 5,000 inter alia.

10. Moreover, the DRC acknowledged that on 14 January 2019, the player unilaterally terminated the contract, after having put the club in default on 19 December 2018, for the non-payment of the total amount of EUR 10,000, consisting of his monthly salaries for October and November 2018 and EUR 265.58 as “operation cost”, granting it a 15-day deadline to remedy the default, however to no avail.

11. The Chamber also noted that the club acknowledges not having paid the player 2 monthly salaries for October and November 2018 on time, alleging financial difficulties and Romanian law, which supposedly allows for a grace period of 90 days. The club further claimed that the player way absent from the club in December 2018 and January 2019, without authorisation. Finally, the DRC noted that the club claims to have transferred approximately EUR 20,000 to the player’s bank account on 1 March 2019, 22 March 2019 and 11 April 2019.

12. In view of the foregoing, the Chamber established that the issue at stake was to determine whether the employment contract had been unilaterally terminated by the player with or without just cause on 14 January 2019.

13. At this point, the Chamber deemed it appropriate to refer the parties to art. 12 par. 3 of the Procedural Rules, according to which “Any party claiming a right on the basis of an alleged fact shall carry the burden of proof”. In the present case, the Chamber emphasised that the club carried the burden of proving the correct payment of the player’s salaries before the termination or the existence of a valid reason not to have done so.

14. In this respect, the Chamber was first eager to point out that the difficult financial situation of a club is not a valid justification for the non-compliance with the contractual obligations it previously engaged in, let alone to justify the non-payment of an employee for service effectively rendered. This argument of the club must be rejected.

15. With respect to the player’s alleged absence in December 2018 and January 2019, the Chamber noted that not only the club failed to prove such allegations, but the player also disputed them and explained that his partial absence in December 2018 and January 2019 was due to the year-end holidays, which the Chamber deemed to be a plausible explanation. Thus, this argument of the club cannot be upheld.

16. As to the application of Romanian law and the 90-day grace period for the payment of salaries allegedly provided for therein, the Chamber was eager to refer to art. 18 par. 3 of the June 2018 edition of Regulations, applicable to the present matter, as per which “Contractual clauses granting the club additional time to pay to the professional amounts that have fallen due under the terms of the contract (so-called “grace periods”) shall not be recognised. Grace periods contained in collective bargaining agreements validly negotiated by employers’ and employees’ representatives at domestic level in accordance with national law shall, however, be legally binding and recognised. Contracts existing at the time of this provision coming into force shall not be affected by this prohibition”. As the contract between the parties was concluded on 10 August 2018, i.e. after the entry into force of the June 2018 edition of the Regulations, such grace periods cannot be accepted. Thus, this argument of the club must also be rejected.

17. Subsequently, the Chamber referred to the payment slips presented by the club as alleged evidence of payment of approximately EUR 20,000. The Chamber first noted that these payments were all made after the termination and therefore have no influence on the analysis of the justice of the early termination of the contract by the player. Furthermore, the Chamber, referring to art. 12 par. 3 of the Procedural Rules, noted that such slips were not signed by the player and did not even indicate the currency of the alleged payments. The Chamber concurred that such evidence was not enough to discharge the club’s burden of proof and therefore could not be taken into account.

18. Having said that, the Chamber referred to art. 14bis par. 1 of the Regulations, according to which “In the case of a club unlawfully failing to pay a player at least two monthly salaries on their due dates, the player will be deemed to have a just cause to terminate his contract, provided that he has put the debtor club in default in writing and has granted a deadline of at least 15 days for the debtor club to fully comply with its financial obligation(s). Alternative provisions in contracts existing at the time of this provision coming into force may be considered”.

19. Bearing in mind the foregoing, the Chamber noted that the player correctly followed the proceedings established in art. 14bis of the Regulations and therefore, in the absence of any valid justification presented by the club, on 14 January 2019 he terminated the contract with just cause, based on the non-payment of at least 2 monthly salaries.

20. As a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

21. 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 the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.

22. In this regard, the DRC first addressed the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant and decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of EUR 10,000, corresponding to the 2 claimed outstanding salaries. The Chamber deemed that the player’s claim for EUR 265.58 as “operation cost” must be rejected, as it lacks a contractual basis and no evidence thereof was provided.

23. In addition, taking into consideration the Claimant’s claim, the DRC decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 10,000 as outstanding salaries, as from the due dates until the date of effective payment.

24. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the DRC focussed its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the DRC decided that the Claimant is entitled to receive an amount of money from the Respondent as compensation for the termination of the contract with just cause in addition to any outstanding payments on the basis of the relevant employment contract.

25. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the Respondent in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including in particular, the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

26. 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 established that no such compensation clause was included in the employment contract at the basis of the matter at stake, as clause 9.1 of the contract does not clearly stipulate the consequences of the termination by the player with just cause and even refers to the FIFA Regulations.

27. As a consequence, the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The 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.

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

29. Bearing in mind the foregoing as well as the claim of the Claimant, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract from its date of termination with just cause by the Claimant, i.e. 14 January 2019 until 15 June 2019 and concluded that the Claimant would have received in total EUR 30,000 as remuneration had the contract been executed until its expiry date. Consequently, the Chamber concluded that the amount of EUR 30,000 serves as the basis for the determination of the amount of compensation for breach of contract.

30. In continuation, the Chamber verified whether the Claimant had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. Such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

31. The Chamber noted that on 13 May 2019 the Claimant signed a new employment contract with the Malaysian club, Sabah, valid as from the date of signature until 30 November 2019, as a consequence of which he was able to mitigate his damages in the amount of EUR 7,177. Therefore, the mitigated compensation amounts to EUR 22,823.

32. Subsequently, the Chamber referred to art. 17 par. 1 point ii. and established that, since the termination was due to overdue payables, the player should also be entitled to additional compensation in the amount of 3 monthly salaries, amounting in total to EUR 15,000. As the sum of the mitigated compensation and the additional compensation would in fact exceed the residual amount of the contract, the Chamber stipulated that the player was entitled to receive compensation in the amount of EUR 30,000, corresponding to the claimed residual amount of the contract.

33. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the DRC decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date of the claim, i.e. 1 March 2019 until the date of effective payment.

34. Furthermore, taking into account the consideration under number II./7. above, the DRC referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

35. In this regard, the DRC pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

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

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

38. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Aguinaldo Policarpo Mendes da Veiga, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, C.S.M. Poli Iasi, has to pay to the Claimant outstanding remuneration in the amount of EUR 10,000, plus interest as follows:

- EUR 5,000, plus 5% interest p.a., as from 1 November 2018 until the date of effective payment;

- EUR 5,000, plus 5% interest p.a., as from 1 December 2018 until the date of effective payment.

4. The Respondent has to pay to the Claimant compensation in the amount of EUR 30,000 plus interest of 5% p.a. as from 1 March 2019 until the date of effective payment.

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

6. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision, of the relevant bank account to which the Respondent must pay the amounts mentioned under points 3. and 4. above.

7. The Respondent shall provide evidence of payment of the due amounts in accordance with points 3. and 4. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

8. In the event that the amounts due in accordance with points 3. and 4. above is not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

9. The ban mentioned in point 8. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

10. In the event that the aforementioned sums are still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the Dispute Resolution Chamber-. Where such decisions contain confidential information, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note relating to the motivated decision (legal remedy):

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

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For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer