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 9 September 2020

Decision of the

DRC Judge

Passed on 9 September 2020,

regarding an employment-related dispute concerning the player Pedro Javier Manzi Cruz

BY:

Pavel Pivovarov (Russia), DRC Judge

CLAIMANT:

PEDRO JAVIER MANZI CRUZ, Spain

Represented by Mr. Alfonso León Lleó

RESPONDENT:

CHENNAI CITY FC, India

Represented by Mr. Srinivasan Saimani

I. FACTS OF THE CASE

1) On 1 July 2019, the Spanish player Pedro Javier Manzi Cruz (hereinafter: the Claimant or the player) and the Indian club Chennai City Football Club (hereinafter: the Respondent or the club) concluded an employment contract valid as from the date of signature until 30 June 2022.

2) In accordance with clause 6 of the contract, the player was entitled to a monthly salary of USD 9,000.

3) On 26 December 2019, the player and the club concluded an “agreement for mutual termination” (hereinafter: the termination agreement) by means of which they decided to “mutually and amicably terminate their existing contract with effect from 26 December 2019”.

4) On 30 December 2019, the parties concluded a settlement agreement, by means of which the parties agreed to “determine the remuneration to be paid by the Club to the Player as a result of the Player’s eventual transfer to the Japanese club Albirex Niigata”. This document is not signed by the parties.

5) As per Article 2.1 of the settlement agreement, “the Club will pay the Player the amount of USD 25,000 upon the effective credit of the agreed transfer fee from the Japanese club Albirex Nilgataon, […] all regulators approval and FIFA TMS approval subject to 30 days”.

6) Art. 2.2 of the settlement agreement stipulates that: “If the PLAYER does not return to the CLUB before the 31st of January 2021 he will have to reimburse the PAYMENT of USD 25,000.00 (twenty five thousand US dollar) to the CLUB”.

7) Art. 3 of the settlement agreement establishes that: “The PARTIES hereby declare to keep strictly confidential the terms of this DEBT RECOGNITION AGREEMENT which will be exchanged by electronic means between the PLAYER AND THE CLUB”.

8) According to the information contained in the TMS, on 27 December 2019 the club and the Japanese club Albirex Niigata signed a transfer agreement regarding the definitive transfer of the player from the club to Albirex Niigata.

9) Moreover, as per the information in the TMS, the player was registered with Albirex Niigata on 22 January 2020.

10) On 1 January 2020, the player signed an employment contract with the player valid as from the date of signature until 1 January 2022.

11) On 22 April 2020, the player sent a “final reminder” to the club, granting it until 7 May 2020 to pay him the outstanding amount of USD 25,000 as per the settlement agreement.

II. PROCEEDINGS BEFORE FIFA

A. Position of the Claimant

12) On 26 June 2020, the player lodged a claim against the club for overdue payables, requesting the amount of USD 25,000 plus 5% interest p.a. as from 1 January 2020.

13) The player further requested the imposition of sporting sanctions on the club and that the club pay the procedural and legal costs.

14) In his claim, the player held that, notwithstanding his letter dated 22 April 2020, the club failed to pay him the amount of USD 25,000 corresponding to the amount agreed in the Settlement Agreement of 30 December 2019.

B. Position of the Respondent

15) In its reply, the club first informs FIFA about the termination agreement signed by the parties on 26 December 2019, which had not been mentioned by the player in his claim.

16) The club further claims that on 30 December 2019, the club issued a letter addressed to the player, by means of which it agrees to “complete your professional contract fee which is due for November 2019 and December 2019 cumulatively amounting to USD 18,264.00 shall be remitted into your personal account on or before 31st January 2020”. The club indicates that such amount was transferred to the player on 28 January 2020 and provides the relevant bank statements.

17) The club does not deny having concluded the settlement agreement of 30 December 2019 with the player, still it does not provide a signed copy of it. In reply to the player’s default notice of 22 April 2020, the club sent the player a letter dated 7 May 2020, in which it explained the Covid-19 situation in India and asked him to confirm whether he intended to return to the club on or before 31 January 2021. The club claims that the player did not reply to such letter.

18) Based on the foregoing, the club claims that the player and the club agreed to terminate their employment contract on 26 December 2019 and that all debts related thereto were acknowledged by the club via its letter of 30 December 2019 and paid to him on 28 January 2020. Thus, his claim based on the settlement agreement of 30 December 2019 is not employment-related and therefore does not fall under the competence of FIFA.

19) In particular, the settlement agreement refers to a payment conditioned to the player’s registration with Albirex Niigata and is therefore a commercial agreement between the player and the club “in relation to a contingent event”, which should be submitted to the civil courts in India in case of dispute.

20) In case the DRC deems that the settlement agreement is employment-related, the club objects to the competence of FIFA in favour of that of the Indian NDRC, based on art. 19.3 of the contract, which stipulates that “If a dispute between the club and the player is not resolved within 10 days of the process contemplated in Clause 19.2 [“process of good faith negotiations and discussions”] then the dispute will be referred to solution to mediation under the relevant procedure set out in the AIFF Regulations. If a solution is not achieved within another 10 days of it being referred for mediation, the dispute shall be submitted to the AIFF Player Status Committee for adjudication”. The club did not provide any documentation related to the Indian NDRC. Furthermore, art. 19.1 of the contract stipulated that the contract is “governed by and construed in accordance with Indian law”.

21) As to the substance, the club claims that the payment of USD 25,000 stipulated in the settlement agreement was conditioned to the player’s return to the club before 31 January 2021, since they intended to have the player playing again in India as from that date. The club claims that after its letter of 7 May 2020 remained unanswered by the player, it contacted directly Albirex Niigata, which confirmed that it would not release the player before January 2021. Thus, the condition for the payment of USD 25,000 to the player did not occur and the club does not owe him any amounts. Consequently, the club requests FIFA to “dismiss the claim in its entirety”.

III. CONSIDERATIONS OF THE DRC JUDGE

A. Competence

22) In relation to the competence, the Dispute Resolution Chamber (DRC) Judge (hereinafter also referred to as the DRC judge) analysed whether he was competent to deal with the case at hand. In this respect, he took note that the present matter was submitted to FIFA on 26 June 2020. Consequently, 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).

23) Subsequently, the DRC Judge referred to art. 3 par. 1 and 2 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, he is competent to deal with employment-related disputes with an international dimension between a player and a club.

B. Admissibility

24) Notwithstanding the above, the DRC judge acknowledged that the club contested the competence of FIFA arguing that a) the dispute is not employment-related and b) in case it is considered by FIFA to be employment-related, the National Dispute Resolution Chamber (NDRC) of India is the competent tribunal to enter into the substance of this matter.

25) In this context, the DRC judge first focused on the club’s objection to the present dispute being employment-related. The DRC judge analyzed all the documentation on file, in particular the legal documents concluded between the player and the club. He noted that on 1 July 2019 the parties concluded an employment contract, originally valid as from the date of signature until 30 June 2022, which was mutually terminated on 26 December 2019 with immediate effect. The DRC judge also noted that subsequently, on 30 December 2019, the parties concluded a settlement agreement, described as “debt recognition agreement” in its art. 3, by means of which the club undertook to pay the player the amount of USD 25,000 upon his transfer to his new club in Japan. While the club claims that such agreement is not employment-related, it does not manage to discharge its burden of proving why, if not as a direct result of the termination of their employment relationship, the club and the player would sign a debt recognition agreement, right after terminating their contract. The fact that such agreement refers to the player’s subsequent transfer to a new club in Japan does not per se imply that it was not employment-related and not meant to settle the end of the employment relationship between the parties. Thus, the DRC judge concluded that such objection of the club had to be rejected and that the claim is employment-related.

26) Having established the foregoing, the DRC Judge addressed the second objection of the club to his competence: the alleged competence of the Indian NDRC to deal with the case, based on art. 19.3 of the contract. In this respect, the DRC judge noted that the claim of the player is based on the settlement agreement and not on the employment contract. Having said that, the DRC judge deemed it essential to verify whether such agreement indeed contained a clear and exclusive arbitration clause in favour of one specific deciding body under the auspices of the All India Football Federation. In this respect, the DRC judge noted that the settlement agreement did not contain any jurisdiction clause in favour of the Indian NDRC.

27) As a result of the aforementioned, the DRC judge concluded that the Respondent’s second objection towards the competence of FIFA to deal with the present matter has to be rejected, without any further analysis, as the first pre-requisite – the existence of a clear and exclusive arbitration clause agreed between the parties in the document at the basis of the dispute – is not met. Thus, the DRC judge is competent to consider the present matter as to the substance, on the basis of art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players and the claim is admissible.

C. Applicable legal framework

28) The DRC judge analysed which edition of the regulations should be applicable as to the substance of the matter. In this respect, he confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and considering that the present claim was lodged on 26 June 2020, the June 2020 edition of said regulations is applicable to the matter at hand as to the substance.

29) His competence and the applicable regulations having been established, the DRC judge entered into the substance of the matter. The DRC Judge continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. However, he emphasised that in the following considerations he will refer only to the facts, arguments and documentary evidence which he considered pertinent for the assessment of the matter at hand.

D. Burden of proof

30) The DRC judge 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.

E. Merits of the dispute

I. Main legal discussion

31) The DRC judge wished to recall in this respect the main elements of the dispute.

32) In this respect, he noted that while the player claims that the club has outstanding payments towards him in the total amount of USD 25,000, as per art. 2.1 of the settlement agreement, the club deems that such amount is not due to the player, as he did not confirm that he would return to the club before 31 January 2021, as per art. 2.2 of the settlement agreement.

33) In view of the foregoing, the DRC judge noted that the main issue to be solved in the present case is whether the amount claimed by the player is indeed due to him by the club.

II. Considerations

34) Having said this, the DRC judge noted that the parties freely agreed upon the payment of the amount of USD 25,000 by the club to the player upon the payment of the relevant transfer fee by the player’s new club to the Respondent.

35) The DRC judge also noted that according to the information contained in TMS, the transfer fee due by the Japanese club to the Respondent, which amounted to USD 100,000, was paid on 31 January 2020. In this context, the DRC judge concluded that, on the 30th day after the date on which the transfer compensation was paid, i.e. on 1 March 2020, the club should have paid the amount of USD 25,000 to the player, in accordance with clause 2.1 of the settlement agreement.

36) As to the possibility to claim the reimbursement of such amount based on art. 2.2. of the agreement, without entering the analysis of the validity of such a clause, directly interfering on the contractual freedom of the player, the DRC judge pointed out that the condition precedent to claim such reimbursement could only be assessed with certainty on 31 January 2021. Thus, for the moment, based on art. 2.1. of the agreement and in line with the wording of its art. 2.2, the amount of USD 25,000 is due to the player by the club.

37) Having said that, the DRC judge noted that the club did not provide any evidence of having paid such amount in full or in part to the player and the argument given by the club for the non-payment could not be upheld. Thus, the DRC judge concluded that the club did not manage to discharge its burden of proof.

38) In conclusion, the DRC judge referred to the basic legal principle of pacta sunt servanda, as per which the parties should comply with their contractual obligations in good faith, and concluded that the club must pay the player the amount of USD 25,000 as per art. 2.1 of the settlement agreement, as requested.

39) The DRC judge also determined that interest at the rate of 5% p.a. should apply on the aforementioned amount as from 2 March 2020 until the date of effective payment.

III. Conclusion

40) As a result of the aforementioned, the DRC judge decided that the player’s claim is partially accepted and that the club should pay the player the total amount of USD 25,000 as per the settlement agreement plus 5% interest p.a. as from 2 March 2020.

IV. Legal Consequences

41) Subsequently, taking into account the previous considerations, the DRC judge 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.

42) In this regard, the DRC judge pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

43) Therefore, bearing in mind the above, the DRC judge decided that, in the event that the club does not pay the amounts 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 the 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 the club in accordance with art. 24bis par. 2 and 4 of the Regulations.

***

IV. DECISION OF THE DRC JUDGE

1) The claim of the Claimant, Pedro Javier Manzi Cruz, is admissible.

2) The claim of the Claimant is partially accepted.

3) The Respondent, Chennai City FC, has to pay to the Claimant, the following amount:

- USD 25,000 plus 5% interest p.a. as from 2 March 2020 until the date of effective payment.

4) Any further claims of the Claimant are rejected.

5) 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.

6) 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).

7) 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 (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).

CONTACT INFORMATION:

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