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 25 February 2021

Decision of the

Dispute Resolution Chamber

passed on 25 February 2021

regarding an employment-related dispute concerning the player Roman Rubilio Castillo Alvarez

COMPOSITION:

Geoff Thompson (England), Chairman

Stefano Sartori (Italy), member

Joseph Antoine Bell (Cameroon), member

CLAIMANT / COUNTER-RESPONDENT:

Roman Rubilio Castillo Alvarez, Honduras

RESPONDENT / COUNTER-CLAIMANT:

Nantong Zhiyun FC, China PR

INTERVENING PARTY:

CD Saprissa, Costa Rica

I. Facts

1. On 29 December 2018, the Honduran player, Roman Rubilio Castillo Alvarez, and the Chinese club, Nantong Zhiyun FC, entered into an agreement called “employment pre-contract”, valid as from January 2019 until December 2021, i.e. for 3 years.

2. Under the epigraph “General Principle”, the contract reads as follows:

“General Principle This Employment Pre-contract is by and between Nantong Zhiyun Football Club Co . Ltd (as Party A" below 1 and Mr Roman Rubilio Castillo Alvarez. (as "Party B" below), and it specifies that the structure of employment terms negotiated by Party A and Party B has come into an initial agreement expressing a hi-laterally agreed willingness to be the employer and the employee, respectively

However this Employment Pre-contract also suggests that a series of employment procedures have not settled yet, leading to a unfinished transfer without any signed formal employment contract between Party A and Party B. Thus, this Employment Pre-contract is by no means representing an official signed employment contract, whose signing will be subject to the medical check arranged for Party B and further negotiations over a certain subjects between the Parties

As well. this Employment Pre-contract only lists obligations and rights that belong to the structure of the employment negotiated and agreed over the weeks and more detailed terms will be negotiated in a discussion for the formal employment contract in China.”

3. Under the epigraph “base salary”, the contract provides the player’s fixed annual remuneration, which amounts to USD 400,000 net, being payable –for the first year– as follows:

 USD 50,000 net within 5 days following the signature of the pre-contract;

 USD 350,000 net within 12 months on average monthly salary at US 29,167 net.

4. According to the player, and after having concluded the pre-contract, on 9 January 2019, he flew to China, where he player was received by the club. On the following day, on 10 January 2020, the player was presented and underwent medical examinations, as well as an “intense” football training.

5. Allegedly, on 11 January 2019, the president of the club, Mr. Bin Fan, communicated to the player that, although the result of the medical examinations were not as expected, he should go to the city of Kunming, where the rest of the team was training and do a “sporting test”, upon which it would be decided whether the club wished to hire the player.

6. The player refused to do such a “sporting test” and argued that the contract was already signed and that the player should not undergo any further test or examination.

7. Thereto, Mr. Bin Fan allegedly replied that, in view of the player’s position, he would receive the flight tickets to return to his country.

8. By means of his letter dated 21 January 2019, the Claimant unilaterally terminated the contract in writing, arguing that the Respondent had breached the contract by not complying with the provision included in art. 18 para. 4 of the RSTP, in accordance with which “the validity of a contract may not be made subject to a successful medical examination and/or the grant of a work permit”.

9. By means of its correspondence dated 24 January 2019, the club replied thereto, stating that the player failed the medical examinations and that he is requested to go to the city of Kunming, China, to undergo a professional medical examination, as well as a sporting test.

10. Thereafter, the club sent a further notice, stating that the contract was unilaterally terminated by the club in view of the player’s absence at the medical examinations and sporting test.

11. On 1 February 2019, the player sent his last correspondence to the club, offering a settlement to the dispute. However, and according to himself, to no avail.

12. The player informed FIFA that he subsequently concluded the following contracts:

- On 28 January 2019, he signed a contract with CD Saprissa from Costa Rica, for a monthly salary of USD 15,650.

- On 18 July 2019, he signed a contract with CD Tondela from Portugal, for a monthly salary of EUR 20,000 (approx. USD 22,500 at the date of the contract).

- On 30 January 2020, he signed a contract with AFC Motagua from Honduras and valid, for a monthly salary of USD 7,500.

(from 28 January 2019 until 31 December 2021, the player would have earned the total amount of USD 314,825:

CD Saprissa: 15,650*5,5 (February 2019 – mid July 2019) = 86,075

CD Tondela: 22,500*6,5 (mid July 2019 – January 2020) = 146,250

AFC Motagua 7,500*11 (February 2019 – December 2021) = 82,500

13. On 8 June 2020, the player lodged a claim before FIFA against Nantong Zhiyun FC.

14. In his claim, the Claimant firstly explained that, despite the agreement concluded between the parties was named “employment pre-contract” said document actually constitutes a contract, since it contains the essential elements of a contract.

15. Furthermore, the Claimant held that, despite him complying with his contractual obligations, once the player had joined the club and signed the contract, the latter tried to make the employment relationship between the parties subject to a training session of the player with the team in order to allegedly assess whether the player’s skills were good enough to hire him.

16. In this context, since the Respondent tried to make the validity of the contract subject to the positive results of medical examinations and sporting tests as a new condition to complete the signing of the player, and since the club handed the player the flight tickets to go back to his country upon his refusal to undergo such further tests, the club de facto breached the contract.

17. In his request for relief, the Claimant requested to be awarded compensation for breach of contract in the amount of USD 1,200,000 (400,000*3) corresponding to the whole/residual value of the contract (cf. point I. 4.above).

18. In its reply, the Respondent rejected the claim of the player and simultaneously lodged a counterclaim.

19. In the opinion of the Respondent, the player terminated the contract without just cause.

20. According to the Respondent, the sequence of events is as follows: i) the Player failed the first medical exams ii) the Club insisted to the Player to repeat such exams iii) the Player abandoned by himself and apparently own its costs the Club’s facilities iv) the Player requested the Club to sign the Contract.

21. In this respect, the Respondent expressed that it was completely surprised by the Player’s claim because it never refused to sign the contract nor requested him to leave the Nantong FC’s site. On the contrary, the club argued that, despite the player having failed to perform the first medical exams, the Club insisted with the Player so that he could re-try after having some rest

22. In view of the above, the Respondent requested compensation in the amount of “no less than USD 1,200,000”.

23. The player’s new club, CD Saprissa (the Intervening Party) was invited to present its comments, in accordance with art. 17 par. 2 of the Regulations on the Status and Transfer of Players. However, it failed to provide its position to the claim.

II. Decision 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. Taking into account the wording of art. 21 of the January 2021 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 Dispute Resolution Chamber referred to art. 3 par. 1 of the Procedural Rules and emphasised 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, the Dispute Resolution Chamber is competent to deal with matters which concern employment-related disputes with an international dimension between players and clubs, such as the present one, which involves a Honduran player, a Chinese club and a Costa Rican club.

3. In continuation, the Dispute Resolution Chamber analysed which edition of the Regulations of the Status and Transfer of Players should be applicable to the present matter. In this respect, the Dispute Resolution Chamber confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering the date when the claim was lodged, the June 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

4. With the above having been established, the Dispute Resolution Chamber entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents contained in the file. However, the Dispute Resolution Chamber emphasized that in the following considerations it will refer only to facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Chamber noted that, on 29 December 2018, the parties entered into an agreement called “employment pre-contract”, valid as from January 2019 until December 2021, i.e. for 3 years.

6. Thereafter, the Chamber observed that the player lodged a claim against Nantong Zhiyun FC, requesting compensation for breach of contract, noting that he unilaterally terminated the contractual relationship with the player on 21 January 2019.

7. Conversely, the Chamber noted that Nantong FC considered for its part that the player terminated the contract without just cause, and that it lodged a counterclaim against him in this regard.

8. In view of the above, the Chamber understood that the first legal issue that it shall clarify is the legal nature of the so-called “employment pre-contract”

9. In this respect, the Chamber observed that this agreement of 29 December 2018 is properly signed between the parties and contains all the essentialia negotii, such as (but not limited to) the parties to the contract and their role, the duration of the employment relationship and the remuneration agreed upon between the parties.

10. However, the Chamber also noted that the contract contains a disclaimer clause (cf. point I. 3 above), which seemingly intends to modify the legal effect of the contract by stating that is “is by no means representing an official signed employment contract, whose signing will be subject to the medical check arranged for Party B and further negotiations over a certain subjects between the Parties”.

11. Nevertheless, the Chamber noted that the reference to the formal element of the contract bears no legal effect. Indeed, the Chamber recalled that, as a general principle, where the parties have agreed on all the essential terms, it is presumed that the contract will be binding notwithstanding any reservation on secondary terms.

12. Moreover, and in reference to the aforementioned disclaimer, pursuant to article 18 par. 4 of the FIFA Regulations on the Status and Transfer of Players (RSTP), the Chamber recalled that validity of a contract may not be made subject to a successful medical examination.

13. Consequently, the Chamber agreed that the document concluded on 29 December 2018 is a valid and binding employment contract and thus, affected by the principle of pacta sunt servanda.

14. Thereafter, the Chamber went on to examine the circumstances involving the termination of the aforementioned contract and, in particular, whether the player had a just cause to terminate the contract on 21 January 2019.

15. In this respect, the Chamber was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria, which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to ensure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

16. In particular, the Chamber noted that the player terminated the contract unilaterally on 21 January 2019 because he seemingly refused to perform a medical test (cf. point I.4 to I.8 for the specific sequence of events).

17. In this respect, and referring once again to art. 18 par. 4 of the Regulations, the Chamber recalled that, although the validity of a contract cannot be subject to a medical test, this does not mean that the player could simply refuse to take part in said test. More specifically, the Chamber was of the opinion that the participation in such tests can also be viewed as a part of his obligations as a football player, regardless of the possible decisions that a club may take afterwards.

18. As a result, the Chamber considered that that the player’s decision to simply refuse participating in said test while the club did not took yet an official decision at that point appears to be excessive.

19. In addition, the Chamber specifically underlined in this respect that it was the player himself, and not the club, who terminated the contract.

20. Within this context, the Chamber also observed that, in his termination letter of 21 January 2019, the player unilaterally offered to settle the matter for USD 200,000, without providing any prior formal default notice, opportunity to negotiate, or possible remedy. In the unanimous view of the Chamber, this letter appears to be premature and not compliant with the principle of ultima ratio, since the player could have tried to solve the matter in a less inflexible way. The Chamber understood that the player’s behavior and termination letter exposes a certain degree of bad faith, as it does not provide any alternative to solve the matter.

21.In view of the above, the Chamber understood that the player terminated the contract without just cause and that, as a result, in accordance with art. 17 par. 1 of the Regulations, the player is liable to pay compensation to the Respondent / Counter-Claimant.22.For the sake of completeness, the Chamber observed that the player signed a contract with CD Saprissa only 7 days after the termination (cf. point I.12 above). In the opinion of the Chamber, this circumstance exposes that the player was not interested in continuing his career with Nantong Zhiyun FC, as we was already looking for other opportunities within a short period of time.23.Furthermore, in accordance with the unambiguous contents of article 17 par. 2 of the Regulations, the Chamber established that the player’s new club, i.e. CD Saprissa, shall be jointly and severally liable for the payment of compensation. In this respect, the Chamber was eager to point out that the joint liability of the player’s new club is independent from the question as to whether the new club has induced the contractual breach. This conclusion is in line with the well-established jurisprudence of the Chamber and has been repeatedly confirmed by the CAS.24.Notwithstanding the aforementioned, the Chamber recalled that according to art. 17 par. 4 sent. 2 of the Regulations, it shall be presumed, unless established to the contrary, that any club signing a professional who has terminated his contract without just cause has induced that professional to commit a breach.25.In this context, the Chamber focused on the primacy of the principle of the maintenance of contractual stability, which represents a central element of the Regulations.26.Above all, the Chamber was eager to point out that the measures provided for by the above Regulations concerning in particular compensation for breach of contract without just cause serve as a deterrent aimed at discouraging the early termination of employment contracts by either contractual party and that a lack of a firm response by the competent deciding authorities would represent an inappropriate example towards all the football actors.27.In this respect, awarding compensation in favor of the damaged party has proven to be an efficient means and has always found a widespread acceptance since it guarantees that the fundamental principle of the respect of the contracts is duly accounted for.28.Above all, it was emphasized that the criteria contained in art. 17 of the Regulations are applied with the principle of reciprocity for clubs and players, signifying that clubs and professional players who are seen to have committed a breach of contract without just cause will in all cases be subject to pay compensation and, under specific circumstances, also be subject to the imposition of sporting sanctions.29.Having stated the above, 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 reiterated 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 Respondent I under the existing contract and/or the new contract(s), the time remaining on the existing contract up to a maximum of five years as well as the fees and expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period. The DRC recalled that the list of objective criteria is not exhaustive and that the broad scope of criteria indicated tends to ensure that a just and fair amount of compensation is awarded to the prejudiced party.

30.In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract between the player and Nantong Zhiyun FC contained any clause, by means of which the parties had beforehand agreed upon a 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.31.As a consequence, the members of the Chamber determined that the prejudice suffered by Nantong Zhiyun FC in the present matter had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. In this regard, the DRC emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.32.According to the documentation provided by the parties, it appears that in accordance with the player’s employment contract with Nantong Zhiyun FC, the player would receive the total amount of USD 350,000 for one season (cf. point I. 3 above).33.On the other hand, the value of the new employment contract, concluded between the player and the intervening party, which was apparently in force only until mid-July 2019, had a value of USD 86,076 (15,650*5,5, from February 2019 to mid July 2019)34.Accordingly, under the aforementioned employment contracts with said clubs, the player was to receive the approximate average income of USD 218,000 per year (i.e. USD 350,000 + 86,076 / 2). The Chamber understood that said amount shall serve as the payable compensation in view of its longstanding jurisprudence for comparable cases.35.Consequently, on account of the above-mentioned considerations, the Chamber decided that the player must pay the amount of USD 218,000 to Nantong Zhiyun FC as compensation for breach of contract. Furthermore, the Intervening Party, in line with art. 17 par. 2 of the Regulations, is jointly and severally liable for the payment of the relevant compensation.36.Nevertheless, the Chamber also wished to consider whether, at the date of termination, Nantong FC had any outstanding liability towards the player.37.In this respect, the Chamber noted that, according to the contract, the player was entitled to an amount of USD 50,000 net within 5 days following its signature.38.However, the Chamber observed that no evidence was provided as to the payment of said amount.

39.Consequently, taking into account the player’s request, and in strict application of the principle of pacta sunt servanda, the Dispute Resolution Chamber established that Nantong FC has to pay to the player, the total outstanding amount of USD 50,000, as agreed in the contract.40.Furthermore, taking into account the previous considerations, the Dispute Resolution 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.41.In this regard, the Dispute Resolution Chamber pointed out that, against players, a restriction will be imposed on the player on playing in official matches up until the due amounts are paid. The overall maximum duration of the restriction, including possible sporting sanctions, shall be of six months on playing in official matches.42.Therefore, bearing in mind the above, the Dispute Resolution Chamber decided that, in the event that the player does not pay the amount due as compensation to Nantong Zhiyun FC, a restriction will be imposed against him on playing in official matches up until the due amounts are paid. The overall maximum duration of the restriction, including possible sporting sanctions, shall be of six months on playing in official matches.43.In addition, the Dispute Resolution Chamber further underlined 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.44.In addition, taking into account the present decision, the DRC also established that, in the event that Nantong Zhiyun FC does not pay the outstanding amount due to the player within 45 days as from the moment in which the player, following the notification of the present decision, communicates the relevant bank details to said club, 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 Nantong Zhiyun FCin accordance with art. 24bis par. 2 and 4 of the Regulations.45.Finally, the Dispute Resolution 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 player, Roman Rubilio Castillo Alvarez, is partially accepted.

2. Nantong Zhiyun FC, has to pay to the player, the amount of USD 50,000 net as outstanding remuneration.

3. In the event that the amount due, plus interest as established above is not paid by Nantong Zhiyun FC to the player, Roman Rubilio Castillo Alvarez, within 45 days, as from the notification by the player of the relevant bank details to the aforementioned club, the following consequences shall arise:

1.

Nantong Zhiyun FC 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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players).

2.

In the event that the payable amount as per in this decision 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 the FIFA Disciplinary Committee.

4. The counterclaim of Nantong Zhiyun FC is partially accepted.

5. The player, Roman Rubilio Castillo Alvarez, has to pay to Nantong Zhiyun FC, the amount of USD 218,000 as compensation for breach of contract without just cause.

6. The intervening party, CD Saprissa is jointly and severally liable for the payment of the aforementioned compensation.

7. In the event that the amount due as compensation, as established above is not paid by the player, Roman Rubilio Castillo Alvarez, to Nantong Zhiyun FC, within 45 days, as from the notification by the club of the relevant bank details to the aforementioned player, the following consequences shall arise:

1.

A restriction will be imposed on the player on playing in official matches up until the due amounts are paid. The overall maximum duration of the restriction, including possible sporting sanctions, shall be of six months on playing in official matches.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players).

2.

CD Saprissa 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. The aforementioned ban will be lifted immediately and prior to its complete serving, once the due amount is paid.

(cf. art. 24bis of the Regulations on the Status and Transfer of Players).

3.

In the event that the aforementioned amount payable as per in this decision is still not paid by the end of the aforementioned ban and restrictions, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee.

8. Any further claims of the parties are rejected.

9. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

10. The parties shall provide evidence of payment of the due amounts in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

11. This decision is rendered without costs.

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.

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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