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 March 2021

Decision of the

Dispute Resolution Chamber

passed on 25 March 2021

regarding an employment-related dispute concerning the player Borja Valle Balonga

COMPOSITION:

Omar Ongaro (Italy), Deputy Chairman

Daan de Jong (Netherlands), member

Alexandra Gómez Bruinewoud (Uruguay and Netherlands), member

CLAIMANT:

Borja Valle Balonga, Spain

Represented by Tayba Jawad

RESPONDENT:

SC Dinamo 1948, Romania

I. FACTS OF THE CASE

1. On 6 September 2020, the Spanish player, Borja Valle Balonga (hereinafter: player or Claimant) and the Romanian club, SC Dinamo 1948 (hereinafter: club or Respondent) signed an employment contract (hereinafter: the contract) valid as of 6 September 2020 until 30 June 2022.

2. According to the contract, the Respondent undertook to pay the Claimant the following monthly salaries:

- EUR 32,500 between September 2020 and June 2021;

- EUR 27,083 between July 2021 and June 2022.

3. According to the contract, the monthly salaries are payable “till no later than the 15 day of the month following the one wherefore payment is due”.

4. On 16 November 2020, the Claimant put the Respondent in default and requested payment of EUR 65,000, corresponding to his salaries of September and October 2020, within 15 days.

5. On 3 December 2020, the Claimant terminated the contract with the Respondent referring to Art. 14bis of the RSTP, due to its failure to comply with its financial obligations.

6. On 5 December 2020, the Respondent replied to the Claimant stating that the club is facing financial difficulties and that it requests the player to “suspend until December 22nd the term of payment” indicated in his letter since the club was negotiating an advance payment in relation to TV rights.

7. According to information contained in the Transfer Matching System (TMS), on 30 December 2020, the player signed an employment contract with the Spanish club, Real Oviedo, valid as from 20 December 2020 until 30 June 2022, including the following monthly remuneration:

- EUR 25,000 between January 2021 and June 2021;

- EUR 29,000 between July 2021 until June 2022.

8. On 14 December 2020, the player lodged a claim for breach of contract against the Respondent in front of FIFA and requested the following monies:

- EUR 97,500 as outstanding remuneration plus interest of 8% p.a. as of the respective due dates;

- EUR 552,496 as compensation plus interest of 8% p.a. as of “the date the decision is rendered”;

- EUR 5,000 as contribution to the player’s legal costs.

9. In his claim, the player referred to art. 14bis RSTP and maintained that he had just cause to terminate the contract on 3 December 2020 as the Respondent failed to react to his default notice.

10. He further argued that the club had outstanding dues in the amount of EUR 97,500 (3 monthly salaries, September until November 2020) to him at the moment of termination.

11. Moreover, he held being entitled to compensation for breach of contract corresponding to the residual value of the contract, which amounts to EUR 552,496 (7x EUR 32,500, starting December 2020 as well as 12x EUR 27,083).

12. The Respondent failed to submit its reply to the claim within the given time-limit and submitted comments after the investigation phase was already closed.

II. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

1. First of all, the Dispute Resolution Chamber (hereinafter also referred as DRC or Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 14 December 2020. Consequently, the DRC concluded that the June 2020 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition February 2021), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player and a club.

3. Furthermore, the Chamber 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 2 of the Regulations on the Status and Transfer of Player (edition February 2021), and considering that the present claim was lodged on 14 December 2020, the October 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. First of all, the members of the Chamber recalled that, on 6 September 2020, the parties concluded a contract, valid as of the date of signature until 30 June 2022.

6. In continuation, the DRC noted that the Claimant lodged a claim against the Respondent maintaining that he had terminated the contract with just cause on 3 December 2020 since the club failed to remit remuneration in the total amount of EUR 65,000, corresponding to two monthly salaries. Consequently, the Claimant asks to be awarded his outstanding dues as well as the payment of compensation for breach of the employment contract.

7. Subsequently, the DRC observed that the Respondent submitted its reply to the claim after notification of the closure of the investigation of the matter at hand. As a result, in line with art. 9 par. 4 of the Procedural Rules as well as the Chamber’s constant jurisprudence in this regard, the members of the DRC decided not to take into account the reply of the Respondent and established that, in accordance with art. 9 par. 3 of the Procedural Rules, they shall take a decision upon the basis of those documents on file that were provided prior to the closure of the investigation-phase, in casu, upon the statements and documents presented by the Claimant.

8. Having said this, the DRC acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated by the Claimant with or without just cause and to decide on the consequences thereof.

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

10. Subsequently, the DRC recalled, that the Claimant put the club in default on 16 November 2020, giving the Respondent 15 days to remedy its default, before the Claimant terminated the contract on 3 December 2020 by means of a letter, referring to outstanding remuneration and art. 14bis of the Regulations.

11. Consequently, considering that it remained undisputed that the Respondent had thus been in breach of its contractual obligations towards the Claimant, and in accordance with art. 14bis of the Regulations, the Chamber decided that the Claimant had just cause to unilaterally terminate the employment contract on 3 December 2020 and that, as a result, the Respondent is to be held liable for the early termination of the employment contact with just cause by the Claimant.

12. Subsequently, prior to establishing the consequences of the termination of the employment contract with just cause by the Claimant in accordance with art. 17 par. 1 of the Regulations, the Chamber held that it, in general, had to address the issue of unpaid remuneration at the moment when the contract was terminated by the Claimant.

13. Bearing in mind the considerations above, and in accordance with the general legal principle of pacta sunt servanda, the Chamber established that the Claimant is entitled to EUR 97,500, corresponding to the salaries between September and November 2020.

14. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the respective due dates and as of the day after the termination for the salary of November 2020..

15. Moreover, and taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive compensation for breach of contract from the Respondent.

16. 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.

17. 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.

18. 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 that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber 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.

19. The members of the Chamber then turned their 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 Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

20. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from the date of termination with just cause by the Claimant until its natural expiration, bearing in mind that he would have received in total EUR 552,496 as remuneration for the period as from December 2020 until June 2022. Consequently, the Chamber concluded that the amount of EUR 552,496 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

21. In continuation, the Chamber verified as to 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. According to the constant practice of the DRC, 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.

22. In this respect, the Chamber noted that the Claimant indeed found new employment with the Spanish club, Real Oviedo for the period of January 2021 until 30 June 2022 , including a total remuneration of EUR 498,000, which shall be deducted, leading to a mitigated compensation in the amount of EUR 54,496.

23. Subsequently, the DRC turned its attention to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an additional compensation of three monthly salaries, subject to the early termination of the contract being due to overdue payables. In case of egregious circumstances, the additional compensation may be increased up to a maximum of six monthly salaries, whereby the overall compensation may never exceed the residual value of the prematurely terminated contract.

24. With the above in mind, the Chamber decided to award the Claimant additional compensation corresponding to three monthly salaries, i.e. EUR 97,500, in accordance with the above-mentioned provision.

25. Consequently, on account of the above-mentioned considerations, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of EUR 151,996 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

26. In addition, taking into consideration the player’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. as of the date of the claim, i.e. 14 December 2020, until the date of effective payment.

27. The DRC concluded its deliberations by rejecting any further claim of the Claimant.

28. Furthermore, taking into account the consideration under number II./3. 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.

29. In this regard, the Chamber established that, in virtue of the aforementioned provision, it has competence to impose a sanction on the Respondent. More in particular, the DRC pointed out that, against clubs, the sanction shall consist in a ban 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.

30. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amount 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.

31. Finally, the Chamber recalled that the above-mentioned sanction 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, Borja Valle Balonga, is partially accepted.

2. The Respondent, SC Dinamo 1948, has to pay to the Claimant, the following amounts:

- EUR 32,500 as outstanding remuneration plus 5% interest p.a. as from 16 October 2020 until the date of effective payment;

- EUR 32,500 as outstanding remuneration plus 5% interest p.a. as from 16 November 2020 until the date of effective payment;

- EUR 32,500 as outstanding remuneration plus 5% interest p.a. as from 4 December 2020 until the date of effective payment;

- EUR 151,996 as compensation for breach of contract plus 5% interest p.a. as from 14 December 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

4. 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.

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

6. In the event that the amount due, plus interest as established 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 following consequences shall arise:

 1.

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. 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.

7. 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).

CONTACT INFORMATION:

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