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 29 September 2020

Decision of the

Dispute Resolution Chamber

passed on 29 September 2020

regarding an employment-related dispute concerning the player Hugo Lopez Martinez

COMPOSITION:

Omar Ongaro (Italy), Chairman

Roy Vermeer (Netherlands), member

José Luis Andrade (Portugal), member

CLAIMANT:

Hugo Lopez Martinez, Spain

Represented by Ms. Rosalia Ortega Pradillo

RESPONDENT:

Club Dhofar, Oman

I. FACTS OF THE CASE

1. On 23 June 2019, the Spanish player, Mr. Hugo López Martínez (hereinafter: the player), and the Omani club, Club Dhofar (hereinafter: the club), signed an employment contract valid as from 23 July 2019 until 30 June 2021 (hereinafter: the contract).

2. In accordance with Clause 2 of the contract, the club undertook to pay to the player the total fixed remuneration of USD 260,000 for both the seasons of 2019/2020 and 2020/2021, as follows:

a. a lump sum of USD 25,000 in the beginning of each sporting season in Oman;

b. a lump sum of USD 20,000 in the beginning of the second round of each sporting season in Oman;

c. a lump sum of USD 25,000 in the end of each sporting season in Oman; and

d. a monthly salary of USD 6,000 for ten months, totalizing USD 60,000 per season.

3. In addition, Clause 10 of the contract established bonuses the player would be entitled to obtain, as follows:

a. USD 200 in the event of scoring or assisting a goal in the Omantel League, provided that the club won the game in reference;

b. USD 5,000 in the event of the club wining the Omantel League;

c. USD 7,000 in the event of the club wining the Sultan Qaboos Cup;

d. USD 500 in the event of scoring or assisting a goal in the Arab Championship;

e. USD 50,000 in the event of the club receiving a trophy of the Arab tournament in which the club participates “in the level of the Arab World”;

f. USD 300 in the event of scoring or assisting a goal in the AFC Championship.

4. On 15 March 2020 and due to the COVID-19’s pandemic, the Ministry of Sports Affairs in Oman decided, inter alia, “to close all sporting clubs and to stop all sporting events and all hosting of international competitions by all Sporting Associations in the Sultanate of Oman” as from 18 March 2020 and “until further notice”.

5. On 20 March 2020, the player put the club in default of payment of the following amounts, granting it with a 12 days’ deadline to cure the breach:

a. USD 42,000, corresponding to his monthly salaries between September 2019 and March 2020;

b. USD 20,000, due since the beginning of the second round of the 2019/2020 sporting season;

c. USD 3,000 as bonus for “scores and assists”.

6. According to the information available in the Transfer Match System (TMS), the 2019/2020 season in Oman started on 16 September 2019 and was originally schedule to end on 20 May 2020.

II. PROCEEDINGS BEFORE FIFA

7. On 4 May 2020, the player filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a. The claim of the player

8. The player filed the claim at hand and stated that he had just cause under article 14 of the Regulations on the Status and Transfer of Players (RSTP) to terminate the contract.

9. In his claim, the player stated that despite him complying with his contractual obligations, the club failed to pay his monthly entitlements as from September 2019 until the date of the claim (i.e. May 2020).

10. In particular, the player explained that, by means of his letter dated 21 March 2020, he put the club in default of payment of the amount of USD 65,000, granting the club a 12 days’ deadline to remedy its default, to no avail.

11. As a consequence, the player requested to be awarded the payment of USD 71,000 as outstanding remuneration, broken down as follows:

a. USD 48,000 corresponding to 8 monthly instalments (from September 2019 to April 2020), in the amount of USD 6,000 each;

b. USD 20,000 corresponding to the payment due at the beginning of the second round of the first season; and

c. USD 3,000 corresponding to the goals scored and assisted.

12. In addition, the player invoked the content of article 17 par. 1 of the RSTP and claimed that he also was also entitled to a compensation for breach of contract equal to the residual value of the contract (i.e. USD 162,000).

13. In this regard, the player further requested an additional “compensation for the specificity of sport” in the amount of USD 36,000, corresponding to 6 monthly salaries.

14. Finally, the requests for relief of the player, freely translated to English, were the following:

a. to recognize that the player terminated the contract with the club with just cause and as result of the club’s severe breaches;

b. to recognize that the club was responsible for the abovementioned termination;

c. to order the club to pay the player the amount of USD 296,000 as compensation, accrued by an interest of 5% p.a. as from the due dates and until the date of effective payment;

d. to impose a disciplinary sanction on the club consisting of a prohibition to registering new players, either nationally or internationally, for two entire and consecutive registration periods.

b. Position of the club

15. In its reply, the club rejected the player’s claim and deemed that he was the party who breached the contract.

16. Firstly, the club denied having received the player’s default notice of 21 March 2020 and argued that the player acted in bad faith since he was aware of the fact that the club had suspended all its activities as from mid-March 2020, due to the COVID’s pandemic, “as per the government and the Omani Ministry of Sorts affaire decisions”. According to the club, its activities were still suspended on the date in which the reply was submitted.

17. In support of its allegations, the club presented a print-screen of its mailbox between 16 and 29 March 2020, indicating that it does not contain any email from the player. Moreover, the club stated that “the unreceived e-mail lacks relevant representation document (POA)” and, thus, “the club must be released from the performance of his obligations as of the date of its closure (18 March 2020) (Annex 2) as would not have been able to act accordingly due to its closure (Force Majeure)”.

18. The club also indicated that the player’s default letter is in any case not in accordance with article 14bis of the RSTP as it only gives the club a 12 days’ deadline to remedy the default.

19. The club also noted that the player’s claim does not mention any formal termination notice sent to the club. In this respect, the club considered that the player de facto terminated the contract by lodging his claim at FIFA. Thus, the club deemed that the player terminated the contract without just cause, without previous warning and, hence, not as an ultima ratio measure.

20. The club also then stressed that “up until this date, the club still provides the player with his living expenses including a car and a home (Annex 7) in time he claims that he terminated the contract. This can only show his bad faith and in contrary the good faith of the club”.

21. As a consequence of his termination without just cause, the club deemed that the player should not be entitled to any compensation from the club.

22. Alternatively, the club requested that in case the DRC accepts the player’s claim, the latter shall only be entitled to outstanding remuneration due prior to 15 March 2020, since as from this date the club has been facing a situation of force majeure generated by the COVID-19 pandemic.

23. As per all the above, the club also claimed that the player shall bear any and all costs of the present proceedings.

III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

a. Competence and applicable legal framework

24. 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 presented to FIFA on 4 May 2020 and submitted for decision on 30 September 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.

25. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and observed 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 of August 2020), 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 Spanish player and an Omani club.

26. Subsequently, 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 of August 2020), and considering that the present claim was lodged on 4 May 2020, the March 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

27. 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.

28. 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

29. The competence of the DRC and the applicable regulations having been established, the DRC entered into the merits of the dispute. 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 it considered pertinent for the assessment of the matter at hand.

i. Main legal discussion and considerations

30. The foregoing having been established, the Chamber moved to the substance of the matter, and took note of the fact that the parties strongly dispute whether the player had just cause to terminate the contract. The Chamber equally took due note of the club’s argumentation regarding the effects of the COVID-19 pandemic.

31. In this context, the Chamber, first of all, wished to highlight that FIFA issued a set of guidelines, the COVID-19 Guidelines, which aim at providing appropriate guidance and recommendations to member associations and their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19 and ensure that any response is harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an additional document, referred to as FIFA COVID-19 FAQ, which provides clarifications on the most relevant questions in connection with the regulatory consequences of the COVID-19 outbreak and identifies solutions for new regulatory matters.

32. The DRC also wished to refer to the fact that said guidelines – as per the explicit wording of FAQ no. 16, as well as pages 6 and 7 of the FIFA COVID-19 Guidelines – are only applicable to “unilateral variations to existing employment agreements”. Therefore, except where a termination of a contract occurred following a unilateral variation made as a result of COVID-19 (in which case the validity of the variation must first be assessed under the guidelines), said guidelines do not apply to assess unilateral terminations of existing employment agreements. The Chamber further noted that for the assessment of disputes that are presented before the FIFA judicial bodies concerning the unilateral termination of a contract, the FIFA Regulations as well as the established jurisprudence of the Chamber shall apply.

33. Analysing the concept of a situation of force majeure, the members of the Chamber also noted that, based on the contents of the FIFA COVID-19 Guidelines and the FIFA COVID-19 FAQ, FIFA did not declare that the COVID-19 outbreak was a force majeure situation in any specific country or territory, or that any specific employment or transfer agreement was impacted by the concept of force majeure.

34. In other words, in any given dispute, it is for a party invoking force majeure to establish the existence of said event under the applicable law/rules as well as the consequences that derive in connection thereto. The analysis of whether a situation of force majeure existed has to be considered on a case-by-case basis, taking into account all the relevant circumstances.

35. Following these general observations, the Chamber noted that, in the case at stake, there was no variation of the contract prior to its termination, but an alleged abruptly “suspension” of the activities. Furthermore, the DRC observed that the club did not submit any form of documentary evidence or allegations that the situation it faced was to be legally considered a situation of force majeure. In this regard, the Chamber referred to the fact that the club only mentioned that the competitions in Oman would supposedly be suspended, but did not further indicated what consequences said suspension would have for the contractual relationship with the player. As a result, no situation of force majeure could be established.

36. The members of the Chamber also deemed it important to outline that it remained uncontested that the club had not fulfilled its financial obligations set forth in the contract signed between the parties and that it failed to pay to the player: (i) the lump sum payment of USD 20,000 due since the beginning of the second round of the 2019/2020 sporting season; (ii) the monthly salaries from September 2019 to March 2020; and (iii) USD 3,000 as bonus for “scores and assists”.

37. Alike, the members of the Chamber acknowledged that, by 18 March 2020, at least six monthly salaries (from September 2019 to February 2020) and a lump sum due at the beginning of the second half of the season were outstanding. In other words, the DRC deemed that a substantial amount should have been already paid to the player before the suspension of the footballing activity in Oman due to the outbreak of the pandemic. Consequently, the Chamber concurred that the COVID-19 outbreak shall not be used as an opportunity to escape from debts that arose from contractually agreed payments that fell due already at an earlier stage.

38. Bearing in mind the above considerations, the DRC concluded that the club had not provided any valid justification for the non-payment of the amounts that were outstanding at the time of the premature termination of the contract by the player.

39. Subsequently, the Chamber observed that the player had put the club in default and granted a 12 days’ deadline for the club to comply with its financial obligations. In this respect, the DRC noted that the parties dispute whether the default notice was sent by the player to the club, as well as whether the supposed-sent notice met the criteria of 14bis par. 1 of the Regulations.

40. After analyzing the evidence brought forward by both parties in support of their allegations on this matter, the members concurred that the player sufficiently established that such correspondence was sent to the club, to the e-mail address indicated in the contract’s footer. In other words, the DRC confirmed that the club was put in default by the player.

41. In addition, the DRC was firm to set aside the club’s line of argumentation about the validity of the default notice under the clear and unambiguous contents of the article 14 of the Regulations and the well-established practice of the Dispute Resolution Chamber. In this respect, the Chamber clarified that the player is grounding his claim on art. 14 of the Regulations and not article14bis. To this end, the DRC underlined that a substantial part of the player’s remuneration had undisputedly remained unpaid by the club without a prima facie contractual basis, meaning that the club substantially breached the contract.

42. Based on the foregoing, the DRC decided that the player had just cause to terminate the contract.

43. For the sake of completeness, the DRC also underlined that by filing a claim before FIFA in request of outstanding remuneration and compensation for breach of contract, the player deemed the contract to be terminated. Consequently, the Chamber reverted to the DRC longstanding jurisprudence in order to consider the date of the claim as the date of termination of the contract previously signed between the parties.

ii. Consequences

44. Having stated the above, the members of the Chamber turned their attention to the question of the consequences of such unjustified breach of contract committed by the club.

45. Initially, the Chamber decided that the outstanding remuneration requested by the player in his claim are both contractually based and undisputed by the club. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amounts which were outstanding under the contract at the moment of the termination, as follows: (i) USD 48,000 corresponding to 8 monthly salaries under the contract, i.e. from September 2019 to April 2020; (ii) USD 20,000 corresponding to the payment due at the beginning of the second round of the first season; and (iii) USD 3,000 corresponding to the goals scored and assisted.

46. In addition, taking into account the player’s claim as well as the Chamber’s longstanding jurisprudence in this respect, it was decided to award the player interest of 5% p.a. as of the due dates of each instalment.

47. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club in the case at stake. In doing so, 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 player 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.

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

49. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

50. Bearing in mind the foregoing as well as the player’s claim, the Chamber proceeded with the calculation of the monies payable to the player under the contract until its expiry date. Consequently, the Chamber concluded that the amount of USD 161,000 (i.e. the salary of May 2020, plus USD 25,000 corresponding to the amount due at the end of the first season, plus the entire remuneration for season 2020/2021) serves as the basis for the determination of the amount of compensation for breach of contract.

51. In continuation, the Chamber verified as to whether the player 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 as well as art. 17 par. 1 lit. ii) of the Regulations, 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.

52. Indeed, the Chamber analyzed the documentation brought forward by the parties and concluded that following the early termination of the employment contract at the basis of the present dispute, the player was not able to find new employment. As a result, the player was not able to mitigate his damages.

53. In view of all of the above, the Chamber decided that the club must pay the amount of USD 161,000 to the player as compensation for breach of contract without just case, which is considered by the Chamber to be a reasonable and justified amount as compensation. Moreover, the members agreed that no additional amounts under the specificity of sport shall be granted due to the lack of regulatory and/or contractual basis, moreover due to the fact that the player had not been able to find new employment.

54. In addition, taking into account the player’s claim as well as the Chamber’s longstanding jurisprudence in this respect, the DRC decided to award the player interest of 5% p.a. as of the date of the claim on the compensation payable (i.e. 4 May 2020).

55. The Dispute Resolution Chamber concluded its deliberations in the present matter stipulating that any further claim lodged by the player is rejected. In conclusion, the player’s claim is partially accepted.

iii. Compliance with monetary decisions

56. Finally, taking into account the applicable Regulations, 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.

57. In this regard, the DRC highlighted 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. The overall maximum duration of the registration ban shall be of up to three entire and consecutive registration periods.

58. Therefore, bearing in mind the above, the DRC decided that the club must pay the full amount due (including all applicable interest) to the player within 45 days of notification of the decision, failing which, at the request of the player, 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 club in accordance with art. 24 bis par. 2 and 4 of the Regulations.

59. The DRC recalled that the above-mentioned bans 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.

d. Costs

60. 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.

61. 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.

62. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties.

IV. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, Hugo Lopez Martinez, is partially accepted.

2. The Respondent, Club Dhofar, has to pay to the Claimant, the following amounts:

- USD 71,000 as outstanding remuneration plus 5% interest p.a. as follows:

o on USD 6,000 5% interest p.a. as from as from 1 October 2019 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 November 2019 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 December 2019 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 January 2020 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 February 2020 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 March 2020 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 April 2020 until the date of effective payment;

o on USD 6,000 5% interest p.a. as from as from 1 May 2020 until the date of effective payment;

o on USD 20,000 5% interest p.a. as from as from 1 February 2020 until the date of effective payment;

o on USD 3,000 5% interest p.a. as from as from 4 May 2020 until the date of effective payment;

- USD 161,000 as compensation for breach of contract without just cause plus 5% interest p.a. as from 4 May 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.

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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