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 11 March 2021

Decision of the

Dispute Resolution Chamber

passed on 11 March 2021

regarding an employment-related dispute concerning the player Jonas Gomes de Sousa

COMPOSITION:

Clifford Hendel (USA/France), Deputy Chairman

Muzammil Bin Mohamed (Singapore), member

Tomislav Kasalo (Croatia), member

CLAIMANT:

Jonas Gomes de Sousa, Brazil

Represented by Bichara e Motta Advogados

RESPONDENT:

Al Ittihad, Saudi Arabia

Represented by Bär & Karrer

I. FACTS OF THE CASE

1. On 9 July 2018, the Brazilian player, Jonas Gomes de Sousa (hereinafter: the player or the Claimant) and the Saudi club, Al Ittihad (hereinafter: the club or the Respondent) concluded an employment contract (hereinafter: the contract) valid as from 1 July 2018 until 30 June 2021.

2. Clause 4.1 of the contract stipulated the remuneration of the player during the different seasons, as follows:

 For the season 2018/2019: USD 1,600,000 net divided in 12 monthly salaries of EUR 93,333 each payable at the end of each month plus a sign-on fee of USD 480,000 payable 7 days after the player’s registration with the club;

 For the season 2019/2020: USD 1,600,000 net divided in 12 monthly salaries of EUR 93,333 each payable at the end of each month plus a sign-on fee of USD 480,000 payable 7 days after the club’s first match in the season;

 For the season 2020/2021: USD 1,600,000 net divided in 12 monthly salaries of EUR 93,333 each payable at the end of each month plus a sign-on fee of USD 480,000 payable 7 days after the club’s first match in the season.

3. Clause 4.2, 4.3 and 4.4 of the contract established the inter alia following benefits to the player:

a. A car plus insurance;

b. A 2 bedroom house;

c. 4 round-trip business class tickets;

d. Insurance “for the player and his family”.

4. Clause 6 of the contract reads as follows: “The [Club] may not delay payment of the [Player]’s salaries or terminate the contract due to the player’s injury during play or training. The Parties agree that if there is a delay of more than three (3) monthly salaries, the Player shall be entitled to terminate the employment contract and to request the payment of liquidated damages equal to one yearly salary as provided under Clause 10.4 of this Agreement.”

5. Clause 10.4 of the contract reads as follows: “4- If either party decides to prematurely terminate the contract without just cause, or if a breach of either party gives the other party just cause to terminate the contract, the party in breach has to pay the other party liquidated damages equal to one yearly salary. No further damage shall be due in such scenario and the parties further acknowledge that article 17.1 (ii) of the FIFA Regulations on the Status and Transfer of Players will not apply the sense that no additional compensation will be due to the Player and no deduction from the agreed amount will apply”.

6. After the club failed to pay the USD 480,000 due regarding the season 2019/2020, as well as part of the player’s salaries, the parties exchanged several correspondences between September and December 2019. Ultimately, the player agreed to receive such amount by no later than 31 January 2020.

7. On 10 February 2020, the parties executed a settlement agreement (hereinafter: the settlement agreement), according to which the club undertook to pay the player USD 480,000 within five working days, failing which the settlement agreement would be null and void.

8. During March 2020, the player suffered an injury in his right hand’s ring finger, which required a surgery.

9. During July 2020, the player suffered a severe stomach-ache and required medical attention at the local hospital.

10. On 30 September 2020, the player put the club in default of payment of the following, granting the club with a deadline of 10 days to cure the breach:

a. The medical expenses in connection with his stomach-ache;

b. Half of his monthly salaries falling due in February, March, April, May and June 2020; and

c. His entire monthly salaries falling due in July and August 2020.

11. On 26 October 2020, absent any reply from the club, the player reiterated his previous default notice and further requested payment of his salary of September 2020 and USD 480,000 of his sign-on fee, which had fallen due on 25 October 2020. The player awarded the club with additional 48 hours to cure its breach.

12. On 3 November 2020, the club replied informing that it was “legitimate” that the player sought his overdue payments but argued that since the player had left Saudi Arabia as from 10 September 2020 and not expressed his will to return, the player “no longer has any genuine interest anymore in returning to Saudi Arabia and to fulfil his contract.”

13. On 4 November 2020, the player terminated the contract in writing. The player furthermore refuted the club’s position that he did not want to fulfil his contract and referred to his letter of 29 September 2020

II. PROCEEDINGS BEFORE FIFA

14. On 2 December 2020, the Claimant 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 Claimant

15. In his claim, the player referred to the conduct of the club and held that it had already breached the contract several times before the termination, in spite of the numerous default notices sent. He further outlined that the settlement agreement had become null and void since the club did not pay the amounts due.

16. In his request for relief, the player requested to be awarded outstanding remuneration in the amount of USD1,564,195, plus 5% interest p.a. as from the corresponding due dates until the date of effective payment, broken down by the player as follows:

“Medical expenses:

a) SAR1,514.45 (one thousand five hundred fourteen Saudi Arabian Riyals and forty-five cents) net, plus 5% (five percent) interest per annum as of 23 July 2020 until the date of effective payment;

Signing-on fee:

b) USD480,000.00 (four hundred eighty thousand US Dollars) net, plus 5% (five percent) interest per annum as of 28 August 2019 until the date of effective payment;

c) USD480,000.00 (four hundred eighty thousand US Dollars) net, plus 5% (five percent) interest per annum as of 26 October 2020 until the date of effective payment; Monthly salaries:

d) February 2020 (approximately half): USD46,172.60 (forty-six thousand one hundred seventy-two US Dollars and sixty cents) net, plus 5% (five percent) interest per annum as of 1 March 2020 until the date of effective payment;

e) March 2020 (approximately half): USD46,172.60 (forty-six thousand one hundred seventy-two US Dollars and sixty cents) net, plus 5% (five percent) interest per annum as of 1 April 2020 until the date of effective payment;

f) April 2020 (approximately half): USD46,172.60 (forty-six thousand one hundred seventy-two US Dollars and sixty cents) net, plus 5% (five percent) interest per annum as of 1 May 2020 until the date of effective payment;

g) May 2020 (approximately half): USD46,172.60 (forty-six thousand one hundred seventy-two US Dollars and sixty cents) net, plus 5% (five percent) interest per annum as of 1 June 2020 until the date of effective payment;

h) June 2020 (approximately half): USD46,172.60 (forty-six thousand one hundred seventy-two US Dollars and sixty cents) net, plus 5% (five percent) interest per annum as of 1 July 2020 until the date of effective payment;

i) July 2020: USD93,333.00 (ninety-three thousand three hundred thirty-three US Dollars) net, plus 5% (five percent) interest per annum as of 1 August 2020 until the date of effective payment;

j) August 2020: USD93,333.00 (ninety-three thousand three hundred thirty-three US Dollars) net, plus 5% (five percent) interest per annum as of 1 September 2020 until the date of effective payment;

k) September 2020: USD93,333.00 (ninety-three thousand three hundred thirty three US Dollars) net, plus 5% (five percent) interest per annum as of 1 October 2020 until the date of effective payment; and l) October 2020: USD93,333.00 (ninety-three thousand three hundred thirty three US Dollars) net, plus 5% (five percent) interest per annum as of 1 November 2020 until the date of effective payment.”

17. The player further claimed that he had just cause to terminate the contract under art. 14 of the FIFA Regulations on the Status and Transfer of Players (RSTP) and sought payment of compensation of USD 1,600,000 corresponding to clauses 6 and 10.4 of the contract, “plus 5% (five percent) per annum until the date of effective payment”.

18. The requests for relief of the player were as follows:

a) Enforce its jurisdiction over the present matter, implementing a fast-track procedure, pursuant to article 12bis of the FIFA RSTP, or to adjudicate on it within 60 (sixty) days from receipt of this Statement of Claim, in line with article 25 of FIFA RSTP;

b) Declare the Club guilty for failing to comply with its obligations towards the Player as established in the Employment Contract, in breach of article 12bis of the FIFA RSTP;

c) Declare the Employment Contract terminated with just cause by the Player, pursuant to article 14 ff. of the FIFA RSTP;

d) Order the Club to pay the Player overdue payables or outstanding remuneration in the total amount of USD1,564,195.00 (one million five hundred sixty-four thousand one hundred and ninety-five US Dollars) net and SAR1,514.45 (one thousand five hundred fourteen Saudi Arabian Riyals and forty-five cents) net, plus 5% (five percent) per annum, as from the day after each of the amounts specified in Section IV.E) above fell due until the date of effective payment;

e) Order the Club to pay the Player compensation in the amount of USD1,600,000.00 (one million six hundred thousand US Dollars) for the termination of the Employment Contract by the Player with just cause, pursuant to Clauses 6 and 10 of the Employment Contract, plus 5% (five percent) per annum until the date of effective payment;

f) Sanction the Club in accordance with article 12bis and article 17 of the FIFA RSTP; and

g) Order the Club to bear all administrative and procedural costs related to this procedure (if any).

b. Position of the Respondent

19. Despite having been invited to do so, the club failed to reply to the claim by the deadline granted, i.e. 13 January 2021.

20. On 27 January 2021, the FIFA administration closed the investigation of the matter.

21. On 1 February 2021, the Respondent filed an unsolicited answer and enclosures.

III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

a. Competence and applicable legal framework

22. 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 2 December 2020 and submitted for decision on 11 March 2021. 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.

23. 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. a) and 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 Brazilian player and a Saudi club.

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

b. Burden of proof

25. 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.

26. 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

27. 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

28. The foregoing having been established, the Chamber moved to the substance of the matter, and took note of the fact that the player lodged a claim seeking payment of outstanding remuneration and compensation for breach of contract, claiming he had just cause to terminate the contract.

29. Subsequently, the DRC took into account that the Respondent, for its part, failed to present its response to the claim of the Claimant, in spite of having been invited to do so. In this way, the DRC considered that the Respondent renounced its right to defence and thus accepted the allegations of the Claimant.

30. For the sake of completeness, the DRC considered that the late response filed by the club is inadmissible in line with art. 9 par. 3 and 4 of the Procedural Rules, insofar as such submission was filed after the deadline granted and after the closure of the investigation phase of the dispute.

31. Furthermore, as a consequence of the aforementioned consideration, the DRC concurred that in accordance with art. 9 par. 3 of the Procedural Rules it shall take a decision upon the basis of the documents already on file, in other words, upon the statements and documents presented by the Claimant.

32. In this respect, the DRC turned to the evidence on file and noted that it was clear that upon the termination of the contract, not only the club had been warned and granted a deadline of 15 days to cure its breach, but also the payments defaulted amounted to almost an entire season of remuneration of the player.

33. Based on the foregoing and having in mind the contents of art. 14bis of the Regulations, the DRC decided that the Claimant had just cause to terminate the contract. For the sake of completeness, the Chamber stressed that the amounts owed to the player correspond to payments that fell outside the scope of the COVID-19 pandemic, or those supposedly affected by the COVID directives issued by the Saudi Arabian football Federation.

ii. Consequences

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

35. The Chamber observed that the outstanding remuneration at the time of termination, coupled with the specific requests for relief of the player, were the following:

a. Medical expenses of SAR1,514.45 net, which the Chamber decided that could be awarded as they were duly proven, coupled with the fact that the club was contractually obliged to provide the player with medical insurance;

b. Two instalments of the signing-on fee of USD 480,000 net each, respectively due on 27 August 2019 and 25 October 2020, i.e. 7 days after the club’s first match in each relevant season;

c. Monthly salaries, as follows:

i. February 2020: USD 46,172.60 net;

ii. March 2020: USD 46,172.60 net;

iii. April 2020 USD 46,172.60 net;

iv. May 2020: USD 46,172.60 net;

v. June 2020: USD46,172.60 net;

vi. July 2020: USD 93,333.00 net;

vii. August 2020: USD 93,333.00 net;

viii. September 2020: USD 93,333.00 net; and

ix. October 2020: USD 93,333.00 net.

36. 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 aforementioned amounts which were outstanding under the contract at the moment of the termination.

37. In addition, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest at the rate of 5% p.a. on the outstanding amounts as from the day following their due dates until the date of effective payment.

38. 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.

39. 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.

40. To this end, the Chamber confirmed that the contract possessed such clause. The question that remained was to assess if such clause was reasonable and proportionate in light of the particularities of the case and the extensive jurisprudence of the DRC in this respect.

41. The DRC then examined clauses 6 and 10.4 of the contract and concurred that such clauses were reciprocal, that is, the same amount would apply equally to both parties in case of termination. Furthermore, the Chamber observed that neither clauses posed an excessive commitment from any of the parties; in other words, the DRC found, while conducting its consolidated practice of a case-by-case analysis, that these clause were to be considered reasonable.

42. Additionally, given the fact that there were still 9 months on the contract to be performed, and that the liquidated damages clauses at hand equalled an entire season of remuneration, the DRC did not find them excessive, insofar especially as the difference between the agreed value and the residual value of the contract would correspond to only 3 months and less then USD 300,000.

43. Based on the foregoing, the DRC concurred that clauses 6 and 10.4 of the contract constitute a legitimate, reciprocal and proportionate liquidated damages contractual stipulation, and accordingly that they should be enforced.

44. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of USD 1,600,000 net as compensation for breach of contract, which was to be considered a reasonable and justified amount in the present matter.

45. Lastly, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest on said compensation at the rate of 5% p.a. as of the date of claim until the date of effective payment.

iii. Compliance with monetary decisions

46. 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.

47. 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 and for the maximum duration of three entire and consecutive registration periods.

48. Therefore, bearing in mind the above, the DRC 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 communicates the relevant bank details to the club, provided that the decision is final and binding, 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.

49. 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.

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

d. Costs

51. 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.

52. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.

IV. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, JONAS GOMES DE SOUSA, is partially accepted.

2. The Respondent, AL ITTIHAD, has to pay to the Claimant the following amounts:

- USD 480,000 net as outstanding remuneration plus 5% interest p.a. as from 28 August 2019 until the date of effective payment.

- SAR 1,514.45 net as outstanding remuneration plus 5% interest p.a. as from 23 July 2020 until the date of effective payment.

- USD 46,172.60 net as outstanding remuneration plus 5% interest p.a. as from 1 March 2020 until the date of effective payment.

- USD 46,172.60 net as outstanding remuneration plus 5% interest p.a. as from 1 April 2020 until the date of effective payment.

- USD 46,172.60 net as outstanding remuneration plus 5% interest p.a. as from 1 May 2020 until the date of effective payment.

- USD 46,172.60 net as outstanding remuneration plus 5% interest p.a. as from 1 June 2020 until the date of effective payment.

- USD 46,172.60 net as outstanding remuneration plus 5% interest p.a. as from 1 July 2020 until the date of effective payment.

- USD 93,333 net as outstanding remuneration plus 5% interest p.a. as from 1 August 2020 until the date of effective payment.

- USD 93,333 net as outstanding remuneration plus 5% interest p.a. as from 1 September 2020 until the date of effective payment.

- USD 93,333 net as outstanding remuneration plus 5% interest p.a. as from 1 October 2020 until the date of effective payment.

- USD 480,000 net as outstanding remuneration plus 5% interest p.a. as from 26 October 2020 until the date of effective payment.

- USD 93,333 net as outstanding remuneration plus 5% interest p.a. as from 1 November 2020 until the date of effective payment.

- USD 1,600,000 net as compensation for breach of contract without just cause plus 5% interest p.a. as from 2 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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