F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2020-2021) – fifa.com – atto non ufficiale – Decision 16 July 2020
Decision of the
Dispute Resolution Chamber
passed via videoconference, on 16 July 2020,
regarding an employment-related dispute concerning the player Xiao YUFENG
COMPOSITION:
Geoff Thompson (England), Chairman
Michele Colucci (Italy), member
Abu Nayeem Shohag (Bangladesh), member
CLAIMANT:
CD DA COVA DA PIEDADE FUTEBOL, Portugal
Represented by Mr. Pedro Macieirinha
RESPONDENT I:
XIAO YUFENG, China PR
RESPONDENT II:
CHANGCHUN YATAI FC, China PR
I. FACTS OF THE CASE
1. On 15 May 2010, the Chinese player, Mr Xiao Yufeng, born on 23 January 1995 (hereinafter: the player or the Respondent I), his legal guardian, and the Chinese club, Changchun Yatai FC (hereinafter: the Respondent II) executed an amateur contract for training purposes, valid as from the same date until 31 December 2016.
2. On 1 September 2011, the player, his legal guardian and the Respondent II signed a “training abroad agreement”, valid as from the same date until 30 June 2014, according to which the parties agreed that the player would be sent to Portugal for training for the term of the contract.
3. According to the information provided by the Portuguese Football Federation (hereinafter: FPF), the player was registered inter alia as follows:
a. From 5 March 2013 until 30 June 13, as an amateur with the Portuguese club SG Sacaverenense;
b. From 26 July 13 until 30 June 14, as a professional with an unknown Chinese club;
c. From 9 Mar 16 until 30 June 16, as an amateur with the Portuguese club, GS Loures.
4. On an unspecified date, the player and the Respondent II executed a professional employment contract, valid as from 1 January 2014 until 31 December 2018 (hereinafter: the First Chinese Contract).
5. On 31 July 2016, the player and the Portuguese club, CD da Cova da Piedade Futebol SAD (hereinafter: the Claimant) signed an employment agreement (hereinafter: the Portuguese Contract), with the conditions detailed below:
a. Term: 35 months, referring to three sports seasons (2016/2017, 2017/2018 and 2018/2019), from 1 August 2016 until 30 June 2019.
b. Financial terms:
“1 - [the Claimant] shall pay the Player:
a) regarding the 2016/2017 Sports Season, the gross global salary of €11.222,75 (eleven thousand two hundred and twenty-two euros and seventy-five cents) to be paid in 11 (eleven) monthly, equal and successive salary instalments of € 1,020.25 (one thousand and twenty euros and twenty-five cents), with the first instalment due on 15 September 2016 and the remaining instalments on the same day of subsequent months.
b) regarding the 2017/2018 Sports Season, the gross global salary of€ 12.243,00 (twelve thousand two hundred and forty-three euros) to be paid in 12 (twelve) monthly, equal and successive salary instalments of € 1,020.25 (one thousand and twenty euros and twenty-five cents), with the first instalment due on 15 August, 2017 and the remaining instalments on the same day of subsequent months.
c) regarding the 2018/2019 Sports Season, the gross global salary of€ 12.243,00 (twelve thousand two hundred and forty-three euros) to be paid in 12 (twelve) monthly, equal and successive salary instalments of€ 1,020.25 (one thousand and twenty euros and twenty-five cents), with the first instalment due on 15 August, 2017 and the remaining instalments on the same day of subsequent months”.
c. Termination clause:
- If one of the parties terminates this agreement for cause and the cause for termination is not duly recognized by the competent legal entities for that purposes, then such party shall indemnify the counterparty for the losses caused by the unlawful conduct, being agreed in advance as penalty clause that the indemnity amount to be paid is the following:
a) In the event that [the Claimant] illegally terminates the agreement, the Club shall pay the Player an indemnity corresponding to the amount of the remunerations falling due until the end of the agreement; however, the Club may proceed to deduct the indemnity from the amounts that he may receive for the provision of the same activity to another sports entity during the period corresponding to the term of the terminated agreement, with no right to other compensation on whatever grounds.
b) In the event that the Player illegally terminates the agreement, he shall pay, under legal and labour context, [the Claimant] an indemnity corresponding to the amount of the remunerations he would until the end of the terminated agreement, and its enrolment on by a third Club is dependent, under legal and labour context, on the payment of the amount of 5.000.000.00 (five million euros), corresponding to the valuation of the Player’s sports participation rights made by the parties in this Agreement.
c) If the Player is enrolled by a third Club dependent, under legal and labour context, on the payment of the amount of 5.000.000.00 (five million euros), corresponding to the valuation of the Player’s sports participation rights made by the parties in this Agreement.
2- For the purpose of determining the value of the aforementioned termination clause, the following elements have been considered:
a) the remuneration values to be earned by the Player during the term of this Agreement;
b) the Player’s age;
c) the commercial value of the Player’s representation and sports participation rights;
d) the enhancement and promotion of the Player provided by [the Claimant];
e) breach of the principle of contractual stability and [the Claimant]’s legitimate expectations;
f) the period in which the contractual termination occurred;
g) he expected amount to be spent on the acquisition of sports representation rights
of another athlete to replace the Player; and
h) [the Claimant]’s sporting and financial losses due to the behaviour described in paragraph 1 of this clause.
6. According to the information provided by the FPF, the player was registered with the Claimant and also loaned to third clubs, as follows:
7. On 11 February 2018, the player and the Respondent II executed a new professional employment contract, valid as from the same date until 10 February 2021 (hereinafter: the Second Chinese Contract), according to which the player was entitled inter alia to a fixed remuneration of RMB 54,100 per month.
II. PROCEEDINGS BEFORE FIFA
8. On 6 February 2020, the Claimant lodged a claim before FIFA against the Respondent I and the Respondent II for breach of contract. A brief summary of the position of the parties is detailed in continuation.
A. Claim of the Claimant
9. The Claimant explains that the player was registered with the club as evidenced by the player passport issued by the FPF. Along these lines, the Claimant argued it had found out that the player was hired by the Respondent II and played several matches with the Respondent II in the Chinese League One while being still under contract with the Claimant.
10. The Claimant stated that it did not authorise the player’s transfer to the Respondent II nor any signature of a contract between the player and the Respondent II.
11. Additionally, the Claimant asserted that the player’s conduct indicates “an intention to breach the employment contract with the Claimant with a view to its termination in order to facilitate a transfer to the [Respondent II] at zero cost”.
12. The Claimant therefore concluded that the player breached the Portuguese Contract by signing a contract with the Respondent II which was valid over the same period of time, in violation of art. 18 par. 3 of the FIFA Regulations on the Status and Transfer of Players. Moreover, the Claimant is of the opinion that the Respondent II induced the player to breach the contract, and shall be jointly and severally liable for the payment of compensation.
13. With regards to the damage arising from the player’s breach of contract, the Claimant alleged that the conclusion of the contract with the player represented an investment and that due to the acts of the player and the Respondent II, “the Claimant didn’t have any benefit from the player’s activity”.
14. With regards to the compensation for breach of contract, the Claimant referred to clause ten of the Portuguese Contract, i.e. the termination clause, which stipulates that if the player breaches the contract he shall pay the Claimant an amount of EUR 5,000,000.
15. Finally, the Claimant deems that the player and the Respondent II shall be imposed sporting sanctions in accordance with art. 17 par. 3, 4 and 5 of the FIFA Regulations on the Status and Transfer of Players.
16. The Claimant requested the following relief (quoted verbatim):
“a) declare that the Respondent Player and the Respondent Club disrespected the articles 2., 5.2, 5.3, 11., 13., 17.5, 18.2, 18.3 and 18.5 of the Regulations on the Status and Transfer of Players of FIFA as well as the employment contract signed between the Claimant Club and the Respondent Player;
b) condemn the Respondents Player and Club to recognize the request above mentioned in a);
c) declare that the Respondent Player refused to respect the labor contract, and so acted in a way that can be considered in breach of the contract, without just cause, moreover, the Respondent Player and the Respondent Club acted in a manner designed to induce the breach of the contract with the Claimant, in order to facilitate his transfer to a third club or sports company without any costs, so the Respondent Player and the Respondent Club caused to the Claimant serious an Important damages;
d) condemn the Respondents Player and Club to recognize the request above mentioned in a);
e) to declare that the Claimant Club has a right to compensation, according to article 17 of the Regulations on the Status and Transfer of Players of FIFA;
f) to condemn the Respondent Club and the Respondent Player to pay to the Claimant Club the compensation in the total amount of 5 000 000,00 €, more interests calculated at 5% rate since the date of the registration of the Respondent Player by the Respondent Club, pursuant article 17 of the Regulations on the Status and Transfer of Players of FIFA;
g) all according to the Contract signed by the parties, the FIFA Statutes and regulations, taking into account all relevant arrangements, laws and/or collective bargaining agreements that exist al national level, as well as the specificity of sport, and with the imposition of sporting sanctions to the Respondents”.
B. Position of the player
17. The player, for his part, rejected the Claimant’s claim. He argued that he did not violate any rule enacted by FIFA.
18. In particular, the player admits to have executed the Portuguese Contract, but held that the Claimant paid him only EUR 1,000 every month instead of EUR 1,020.25 as allegedly agreed. As such, the player deems himself entitled to terminate the Portuguese Contract unilaterally.
19. Further, the player argued that a Mr Long Baichuan, an alleged “investor” of the Claimant, had supposedly approved his return to China via an audio message sent via WeChat.
18. The player did not make any particular request for relief.
C. Position of the Respondent II
19. The Respondent II, for its part, also rejected the Claimant’s claim, and it too argued that it did not violate any FIFA regulation.
20. In this regard, the Respondent II held that the player had been registered with it uninterruptedly from 2010 until 2019, and explained that the player was part of the club’s youth category since 2010.
21. The Respondent II argued that it prematurely terminated the player’s training in Portugal so that the player could take part in the “12th China National Sports Meeting”. Further, the Respondent II claimed it had also terminated the “player training agreement”, and subsequently signed a professional agreement with the player as soon as he turned 18.
22. As to the Portuguese Contract, the Respondent II held that it was signed after the First Chinese Contract, and that therefore it reserved its rights to seek compensation from the Claimant for breach of contract.
III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
A. Competence and applicable legal framework
23. First of all, the Dispute Resolution Chamber (hereinafter referred to as DRC or the Chamber) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 6 February 2020. Taking into account the wording of art. 21 of the June 2020 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.
24. Subsequently, the DRC 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 June 2020), it is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Portuguese club, a Chinese player, and a Chinese club.
25. In this respect, the DRC emphasized that the parties do not dispute the competence of FIFA, and as such the Chamber concluded that it is competent to entertain the claim.
26. In continuation, the DRC analysed which 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 par. 2 of the Regulations on the Status and Transfer of Players (edition June 2020), and considering that the present claim was lodged on 6 February 2020, the January 2020 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.
27. The competence of the DRC and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, the DRC started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the DRC emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which he considered pertinent for the assessment of the matter at hand.
B. Burden of proof
28. 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. Likewise, the DRC stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed by the parties.
29. In this respect, the Chamber also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in TMS.
C. Merits of the dispute
I. Main legal discussion and considerations
30. The fundamental disagreement between the parties, at the basis of the present dispute, is weather the player has breached the Portuguese Contract by signing the Second Chinese Contract. While the Claimant affirms that such fact took place, the Respondent I denies it on the basis that he was entitled to terminate the Portuguese Contract due to an alleged lack of payment of salaries.
31. In this respect, the DRC also took note of the position of the Respondent II, according to which the Claimant had induced the breach a breach of contract since the Portuguese Contract was signed after the First Chinese Contract.
32. In view of the diverging positions of the Claimant and the respondents, the Chamber deemed fundamental to clarify that the dispute at hand concerns solely the alleged breach of the Portuguese Contract by the player, since no claim was filed by the Respondent II with regards to the First Chinese Contract.
33. Notwithstanding the above, and despite the fact that it remained undisputed between the parties that both the Portuguese Contract and the Second Chinese Contract were indeed executed by the relevant parties, the DRC was of the firm position that the factual circumstances of the case, and in particular the time of the player in Portugal after having signed the aforementioned contracts, are rather obscure.
34. In this respect, the DRC recalled that the position of the parties’ was not sufficiently accompanied by supporting evidence: on one hand, the player did not submit any proof regarding his alleged “release” from the Claimant; on the other hand, the Claimant provided as evidence an unclear excerpt from a website which mentions that the player was a member of the Respondent II in 2018 and 2019.
35. Accordingly, the Chamber emphasised that shedding light into the factual circumstances that led to the execution of both the Portuguese Contract and the Second Chinese Contract was of utmost importance due to the position of the parties and the lack of evidence on file.
36. Having the above in mind as in line with the contents of the Procedural Rules as outlined in Section “B” above, the Chamber turned its attention to the information provided to FIFA by the FPF as well as to the Claimant’s written submissions, and concluded that the player’s career in Portugal can be summarized as follows:
a. Immediately after the player was registered with the Claimant, he was loaned to Club Oriental Lisboa until 30 June 2017, i.e. one season;
b. Following his abovementioned loan, the player was then loaned again for one season (i.e. until 30 June 18) to GD Tourizense;
c. There was only one season remaining on the player’s Portuguese contract.
37. Consequently, the Chamber concluded that the Claimant really counted, if at all, on the player’s services for one season only. What is more, the DRC observed that by the time the player’s loan with GD Tourizense expired, the player had already signed the Second Chinese contract.
38. Given the overall circumstances, the DRC was of the position that the Claimant did not seem to be genuinely interested in the player’s services. Such conclusion is based not only on the facts outlined above but also on the following considerations.
39. Firstly, no default letter was ever sent by the Claimant to the player at the time of the facts; in fact, the Claimant never made any manifestation towards the player until the claim was filed shortly before the statute of limitations, as established under art. 25 para. 5 of the Regulations, would expire.
40. Secondly, the Claimant did not bring forward any evidence of the relevance of the player to its sporting plans – for instance, no replacement costs are mentioned, which indicates, in the Chamber’s view, that the player had little, if any, relevance to the Claimant.
41. Thirdly, it remained unproven if the player played any games, or even engaged in any training session, with the Claimant.
42. Accordingly, the DRC concluded that the facts, as they were presented before FIFA, demonstrate that the parties mutually ceased to observe the terms of the Portuguese Contract, as each went its own way: the player returned to China to carry out his obligations under the Second Chinese Contract, and the club continued its activities without ever seeking the player’s service. As such, the Chamber decided that the Claimant and the Respondent mutually departed from the Portuguese Contract, and that therefore no breach has taken place.
43. Consequently, the DRC concluded that no compensation for breach of contract is owed to the Claimant.
44. Although being confident of the exhaustiveness of the foregoing conclusion, the Chamber, for the sake of completeness, wished to point out that it found remarkable that the Claimant never asked the player to come back. In this respect, the Chamber found that under the principle of nemo auditur propriam turpitudinem allegans, it cannot enforce the Claimant’s claim for compensation for breach of contract by the player, since, as established above, the Claimant itself tacitly accepted the player’s conduct.
45. Along the same lines and in conclusion, the DRC was observant of the fact that even if the claim at hand was filed within the threshold of the statute of limitations established in art. 25 para. 5 of the Regulations, such rule has a procedural nature, whilst the Claimant’s conduct gives respect to the merits of the case, and as such it must be analysed in the context of the facts giving rise to the dispute.
46. In light of the foregoing considerations, the DRC unanimously decided that the Claimant’s claim should be rejected in its entirety.
II. Costs
47. The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC proceedings relating to disputes between clubs and players in relation to the maintenance of contractual stability as well as international employment related disputes between a club and a player are free of charge”. Accordingly, the Chamber decided that no procedural costs were to be imposed on the parties.
48. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.
IV. DECISION OF THE DISPUTE RESOLUTION CHAMBER
1. The claim of the Claimant, CD DA COVA DA PIEDADE FUTEBOL, is rejected.
2. The decision is pronounced free of costs (cf. article 18 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).
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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