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 29 January 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 29 January 2020,

in the following composition:

Geoff Thompson (England), Chairman

Alexandra Gómez Bruinewoud (Uruguay), member

Daan de Jong (the Netherlands), member

on the claim presented by the player,

Nuno Henrique Gonçalves Nogueira, Portugal

represented by Mr José Duarte Reis

as Claimant

against the club,

Pafos FC, Cyprus

represented by Mr Christoforos Florou

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 20 July 2018, the Portuguese player Nuno Henrique Gonçalves Nogueira (hereinafter; the Player or the Claimant) and the Cypriot club, Pafos FC (hereinafter; the Club or the Respondent) signed an employment contract, valid as from 15 July 2018 until 31 May 2020 (hereinafter; the contract).

2. According to Art 1.3 of the contract, the Player was entitled to the following remuneration:

 1.3.1; “From 15/07/2018 until 31/12/2018 the monthly gross salary of EUR 11,658.48 (EUR 10,000.00 net) in six monthly instalments with the first for the gross amount of EUR 6658.48 (EUR 5000 net) payable on 20th of August 2018 and the other five for the gross amount of 11658.48 (EUR 10000 net) each payable on the 20 day of each next month, starting on the 20/09/2018 and the last payment will be payable on the 20/01/2019”.

 1.3.2; “From 01/01/2019 until 31/05/2019 the monthly gross salary of EUR 11,712.02 (EUR 10,000.00 net) in Five equal monthly instalments payable on the 20th day of each next month, starting on the 20/02/2019 and the last payment will be payable on the 20/06/2019”.

 1.3.3; “From 01/06/2019 until 31/12/2019 the monthly gross salary of EUR 11,712.02 (EUR 10,000.00 net) in Seven equal monthly instalments payable on the 20 day of each next month, starting on the 20/07/2019 and the last payment will be payable on the 20/01/2020”.

 1.3.4; “From 01/01/2020 until 31/05/2020 the monthly gross salary of EUR 11,958.48 (EUR 10,000.00 net) in Five equal monthly instalments payable on the 20th day of each next month, starting on the 20/02/2020 and the last payment will be payable on the 20/06/2020”.

 “All taxes payable to the Tax Department, as per the applicable legislation, shall be paid by the Club”.

3. According to Art 2.1 of the contract, “The present contract is regulated by the provision of the Standard Employment Contract, as these have been agreed between the Cyprus Football Association (CFA) and the Cyprus Footballer’s Union (PASP) and as these provisions have been codified in Annex 1 of the CFA Registration and Transfer of Players Regulations”.

4. According to Art 2.2 of the contract, “The terms of the Standard Employment Contract constitute an integral part of the present contract having full and direct implementation and it has been attached as Appendix A on the present agreement initialled by the parties and by consent made an inseparable part hereof”.

5. According to Art. 13 of Appendix A of the contract entitled “Standard Employment Contract”:

“Any employment dispute between the Club and the Player shall fall under the exclusive jurisdiction of the National Dispute Resolution Chamber of the CFA and shall be resolved according to the application regulations of the CFA”.

6. On the same date i.e. 20 July 2018, the Player and the Club signed a supplementary agreement to the contract (hereinafter: the supplementary agreement), concerning “the extra benefits and/or bonuses of the Employee”. In accordance, with the supplementary agreement, the Player was entitled to different bonuses and benefits, inter alia, “an additional amount of EUR 800 per month for the rent of an apartment”.

7. According to Art 5 of the supplementary agreement, “This Agreement will be governed by the laws of the Republic of Cyprus and FIFA Regulations or/ and C.F.A Regulations and the FIFA bodies will be competence to hear any dispute between the parties in respect to the current agreement”.

8. On 10 September 2018, the Club unilaterally terminated the contract in writing.

9. In accordance with the termination notice of 10 September 2018 on file, the Club held that “due to the unprofessional behaviour” of the Player and “despite our efforts”, the Player “could not be registered at the Club”. Moreover, it stated, inter alia, the following:

 “as a result of his nonregistration, we have been forced to register another football player to our team. during the last hours of the transfers, firstly without be trained with the football team and secondly, without passing any medical examination.

 is unfortunate to state we have to state that as the Agent of the Football Player. you have acted with this unprofessional way and despite the fact that you and the football player have been notified. you omitted to deposit the necessary documents that you have been asked. in order for our team to be able to register the aforesaid football player to the team's force.

 For all the above reasons and events. our Football Club does not have any other option but to terminate the employment agreement with your client. i.e. the Football Player. because of your negligence and also to reserve the Football Club's legal rights to claim compensation. not only from you but also from the Football Player.”

10. On 18 October 2018, the Player sent to the Club, by email and fax, a notification for the payment of amounts in debt that according to the Player correspond to EUR 262,287.52. The Player gave the Club 15 days to cure its alleged default.

11. On 29 January 2019, the Player lodged a claim in front of FIFA against the Club, and requested the latter be order to pay him EUR 264,287.52, broken down as follows:

a) EUR 17,316.96 in outstanding remuneration for salary owed at the date of termination due on “20 August 2018 and 20 September 2018”;

b) EUR 246,970.56 in compensation corresponding to amounts due from October 2018 until 31 May 2020.

c) Interest of 5% “from the date when the first salary was due until full payment”.

12. The Player claims that the Club did not pay him any of the salaries stipulated in the contract, and that because he was “ordered to leave the house he was living” he was “obliged to return to his country”.

13. According to the Player, the Club terminated the contract without just cause since it did not have a valid reason not to register the contract with the Cyprus Football Association. In this regard, the Player argued that the contract had been signed on 20 July 2018, “long before the end of the registration period”, and that his intermediary provided the Club with all the documents necessary to register the Player.

14. Furthermore, the Player states that he was forbidden to train and was ordered to leave the Club and the house where he was living in.

15. The Club, for its part, contested the competence of FIFA to deal with the present matter since the contract “contained a clear and exclusive arbitration clause in favour of the judicial bodies of Cyprus Football Association” i.e. the National Dispute Resolution Chamber of the CFA (hereinafter; the Cypriot NDRC) while referring to Art. 13 of Appendix A of the contract.

16. According to the Club, the terms of the Standard Employment Contract had been attached as an appendix to the contract and had been initialled by the parties, so that “both parties had fully accepted the said terms at the time of the signature of the employment agreement”.

17. Along these lines, the Club enclosed a copy of a document entitled “Regulations for the Registration and Transfer of Football Players and the DRC Procedural Regulations 2013” (hereinafter; the NDRC Regulations) and held that it is “clear that the NDRC of CFA is an independent judicial body protecting the legitimacy interest of each party”.

18. In support of its argumentation, the Club held the following:

 In regards to equal representation, the Club argues that the Cypriot NDRC duly respects that principles of parity and equal representation;

 In regards to the independence and impartiality of the tribunal, according to the Club, the procedural regulations of the Cypriot NDRC and its appeal body are “almost a word per word translations into Greek of the FIFA DRC procedural regulations”;

 According to the Club, the principle of a fair hearing is respected, the parties may appoint a licensed lawyer of their choice, and the decision of the NDRC Appeal Body can be challenged before the Court of Arbitration for Sport (TAS-CAS).

19. As to the substance, the Club rejected the claim of the Player and held that it terminated the contract with just cause on 20 September 2018.

20. According to the Club, it was the obligation of the Player and his agent to provide the Club with all the necessary documents in order to register the Player with the Cyprus FA.

21. The Club claimed that, in accordance with Art 3.3 of the FIFA Regulations on Working with Intermediaries, the Club required the Player to provide it with his “intermediary’s declaration and/or representation agreement in order to file it into the Cyprus Association”. The Club alleges that the Player “never responded” to the “repeated” invitations of the Club.

22. According to the Club, it was not able to register the Player with the Cyprus FA due to the “non-provision” of the documents and that the “actions of the Claimant’s agent are connected with the Claimant since the obligation for the provision of these documents was on the Claimant’s shoulders”.

23. Consequently, the Club argued that the contact was terminated with just cause as according to the Club the Player “breached essential terms of the employment agreement and also of the regulations”.

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 29 January 2019. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition January 2020) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a club and a player that have an international dimension.

3. As a consequence, the DRC would, in principle, be competent to decide on a litigation which involves a Portuguese player and a Cypriot club regarding an employment-related dispute.

4. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of Art. 13 of Appendix A of the contract.

5. On the other hand, the Chamber noted that the Claimant insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the Respondent.

6. Taking into account all the above, the Chamber emphasised that in accordance with art. 22 lit. b) of the January 2020 edition of the Regulations on the Status and Transfer of Players it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement. 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. Equally, the members of the Chamber referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

7. In this respect, the DRC turned its attention to the principle of equal representation of players and clubs and underlined that this principle is one of the very fundamental elements to be fulfilled, in order for a national dispute resolution chamber to be recognised as such. Indeed, this prerequisite is mentioned in the Regulations on the Status and Transfer of Players, in the FIFA Circular no. 1010 as well as in art. 3 par. 1 of the NDRC Regulations, which illustrates the aforementioned principle as follows: “The NDRC shall be composed of the following members, who shall serve a four-year renewable mandate: a) a chairman and a deputy chairman chosen by consensus by the player and club representatives (…); b) between three and ten player representatives who are elected or appointed either on proposal of the players’ associations affiliated to FIFPro, or, where no such associations exist, on the basis of a selection process agreed by FIFA and FIFPro; c) between three and ten club representatives (…).” In this respect, the FIFA Circular no. 1010 states the following: “The parties must have equal influence over the appointment of arbitrators. This means for example that every party shall have the right to appoint an arbitrator and the two appointed arbitrators appoint the chairman of the arbitration tribunal (…). Where arbitrators are to be selected from a predetermined list, every interest group that is represented must be able to exercise equal influence over the compilation of the arbitrator list”.

8. On account of the above, the Chamber went on to examine the documentation presented by the Respondent. From the NDRC Regulations submitted by the Club, as well as the argumentation submitted by the parties, it follows that the appointment of the members chosen by the players’ association must be approved by the Cyprus Football Association (article 22.4.4), whereas such condition does not apply to the appointment of club members. Moreover, article 22.4.5 of the NDRC Regulations also appears to grant the Cyprus Football Association influence on the selection process of player members as opposed to club members.

9. Based on the foregoing circumstances, the Chamber concluded that the Cypriot NDRC does not fully respect the principle of equal representation and hence cannot be considered an independent arbitration tribunal guaranteeing fair proceedings. Therefore, the Chamber concluded it is competent to deal with the matter at hand and that the claim of the Player is admissible.

10. Subsequently, the Chamber analysed which edition of the Regulations on the Status and Transfer of Players should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition January 2020), and considering that the present claim was lodged on 29 January 2019, the June 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

11. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In doing so, the members of the Chamber started by acknowledging that the parties to the dispute had signed the contract on 20 July 2018 in accordance with which the Respondent would pay the Claimant a monthly salary of EUR 10,000 net.

12. In continuation, the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that the Respondent had breached the contract by terminating it without just cause and by failing to remit his salaries.

13. Thereafter, the members of the Chamber took note of the reply of the Respondent, who alleged that the termination of the contract by its initiative was made with just cause as the Claimant allegedly failed to provide the Club with certain documents necessary for his registration with the Cyprus Football Association.

14. In this context, the Chamber considered relevant to recall its jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of (administrative) formalities, such as, but not limited to, the registration procedure in connection with the international transfer of a player, which is the sole responsibility of a club and on which a player has no influence. As regards the matter at stake, the Respondent acknowledged that it did not proceed to the registration of the contract and asserted that the Claimant did not provide him with documentation to this extent. In this regard, the Chamber emphasized that, in accordance with art. 2 par. 1 of Annexe 3 of the Regulations, an application to register a professional shall be accompanied by a copy of the contract between the new club and the professional. For these reasons and whilst emphasizing once more that it is the responsibility of the club to register a player’s contract with its national association, the members of the Chamber decided to reject the Respondent’s arguments in this regard.

15. On account of the above, in particular, by not carrying out the relevant steps for the registration procedure of the contract although this being the responsibility of the Respondent, the Chamber established that the Respondent had refused to accept the Claimant’s services without any valid reason. Such conduct constitutes, in the Chamber’s view, a clear breach of contract without just cause. Accordingly, the Chamber concurred that the Respondent is to be held liable for the early termination of the employment contact without just cause.

16. Having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber focussed 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 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.

17. Consequently, on account of the above and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 5,000 in connection with the remuneration due to the Claimant in accordance with the contract until its early termination.

18. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the day following the day on which such payment of EUR 5,000 fell due in accordance with the pertinent contract, i.e. 21 August 2018.

19. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the 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.

20. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

21. As a consequence, the members of 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, in particular, the contents of lit. i) of the aforementioned article, according to which, as a general rule, in case the player did not sign any new contract following the termination of his previous contract, the compensation shall be equal to the residual value of the contract that was prematurely terminated.

22. The members of the Chamber then turned their attention to the fact that the Player did not sign any new contracts for the relevant period and, accordingly, the DRC proceeded to examine the remuneration and other benefits due to the Claimant under the existing contract.

23. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract as from its date of termination without just cause by the Respondent, i.e. 10 September 2018, until 31 May 2020, and concluded that the Claimant would have received in total EUR 225,000 as remuneration had the contract been executed until its expiry date.

24. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 225,000 as compensation for breach of contract in the case at hand.

25. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber 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. 29 January 2019 until the date of effective payment.

26. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

27. Furthermore, taking into account the consideration under points II./18 and II./24. above, the Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

28. In this regard, the Chamber 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.

29. 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.

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

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Nuno Henrique Gonçalves Nogueira, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Pafos FC, has to pay to the Claimant outstanding remuneration in the amount of EUR 5,000, plus interest at the rate of 5% p.a. on said amount as from 21 August 2018 until the date of effective payment.

4. Furthermore, the Respondent has to pay the Claimant compensation for breach of contract in the amount of EUR 225,000, plus interest at the rate of 5% p.a. on said amount as from 29 January 2019 until the date of effective payment.

5. Any further claim of 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 amount mentioned under points III./2. & III./3. above.

7. The Respondent shall provide evidence of payment of the due amount in accordance with points III./2. & III./3. above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

8. In the event that the amount due in accordance with points III./2. & III./3. above are not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

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

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

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Note related to the publication:

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

Note 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).

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

Court of Arbitration for Sport (CAS)

Avenue de Beaumont 2, CH-1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer