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 22 October 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 22 October 2020,

regarding an employment-related dispute concerning the player Vagner Silva de Souza

COMPOSITION:

Clifford J. Hendel (USA), Deputy Chairman Angela Collins (Australia), member Abu Nayeem Shohag (Bangladesh), member

CLAIMANT:

VAGNER SILVA DE SOUZA, Brazil

Represented by Mr. Diogo Lima de Souza & Mr Igor Gomes Ferreira

RESPONDENT:

BESIKTAS FUTBOL, Turkey

I. FACTS

1. On 29 January 2018, the Brazilian player Vagner Silva de Souza (hereinafter: the player or Respondent) and the Turkish club Besiktas Futbol (hereinafter: the club or Respondent) concluded an employment contract starting as of that day until 31 May 2020.

2. On 24 January 2019, the parties signed the “Mutual Termination Agreement” to amicably terminate the employment contract and to settle the payments that were due to the player. According to this agreement, the parties agreed on the following:

“2. The Player hereby agrees and accepts that until 31.01.2019, the Player’s total due and overdue guaranteed salary, signing fee, point and appearance bonuses, individual bonuses, team bonuses and house rent allowance from the Club is equal to net 900,000 EUR. (Nine Hundred Thousand Euros) The Parties agree and accept that this amount shall be paid by the Club to the Player as following:

- Net 250.000 EUR net on 24.01.2019

- The remaining net 650.000 EUR to be paid in 10 equal instalments of net 65.000 EUR each starting from 30.04.2019 and at the end of each following month.”

3. The Mutual Termination Agreement also contains a penalty clause:

“3. In case the Club fails to pay any of the amounts mentioned in clause 2 within 15 days following their respective due dates, the Club agrees to pay the Player an additional penalty equal to 20% of the overdue instalment.”

4. On 8 April 2020, the Claimant lodged a claim against the Respondent, claiming the total amount of EUR 403,000, corresponding to:

- The unpaid instalments due on 30 October 2019, 30 November 2019, 31 December 2019 and 31 January 2020, as well as

- The penalty clause of 20% regarding the not (timely) paid instalments of 30 July 2019, 31 August 2019, 30 September 2019, 30 October 2019, 30 November 2019, 31 December 2019 and 31 January 2020.

5. The Claimant explains that the Respondent duly paid the first instalment in the amount of EUR 250,000 on 24 January 2019.

6. On 5 July 2019 the Claimant sent a notification letter to the Respondent regarding the instalments of 30 April 2019, 30 May 2019 and 30 June 2019 which remained unpaid, plus 20% as per the penalty clause.

7. On 17 July 2019, the Claimant received the amount of EUR 221,000 in connection with the aforementioned instalments, plus 20% in connection with the first two instalments.

8. On 24 October 2019, the Claimant sent a second notification letter to the Respondent requesting the payment of the instalments due on 30 July 2019, 30 August 2019 and 30 September 2019, plus 20% as per the penalty clause.

9. On 25 October 2019, the Respondent informed the Claimant by email that they had paid EUR 195,000 regarding the aforementioned instalments and mentioned that they would pay the 20% penalty clause in the “following days”, however, the penalty remained unpaid.

10. On 19 February 2020, the Claimant sent a third notification letter requesting the payment within the next ten days of a total amount of EUR 351,000, as follows:

1) the instalments due on 31 October 2019, 30 November 2019, 31 December 2019 and 31 January 2020, plus 20% as per the penalty clause, i.e. in total EUR 312,000;

2) penalty fee of 20% (twenty per cent) concerning the instalments of 30 July 2019, 30 August 2019 and 30 September 2019, which were paid 15 days after the due dates, i.e. in total EUR 39,000.

11. According to the Claimant, the Respondent did not make any further payment at the time of lodging the present claim.

12. In its reply to claim, the Respondent asked the rejection of the Claimant’s claim and first observed that to the contrary of what indicated by the Claimant in its claim, the addition of the requested amounts is EUR 351,000 and not EUR 403,000.

13. Moreover, the Respondent referred to the financial difficulties it was undergoing prior and after the new management allegedly took office in October 2019 as well as the loss of earnings it was faced to due to the Covid-19 pandemic.

14. In continuation, the Respondent explained that it paid EUR 195,000 on 30 April 2020 corresponding to the instalments due on 30 October 2019, 30 November 2019 and 31 December 2019 (note: alleged evidence of payment provided). In addition, the Respondent explained that it would pay the remaining instalment due on 31 January 2020, i.e. EUR 65,000, once it had established the relevant financial channels to do it.

15. Furthermore, as to the claimed amounts related to the penalty, the Respondent explained that in its opinion, said penalty was to be considered as excessive, out of proportion and goes beyond the aim of curing the Claimant’s damages but simply punishes it.

16. In respect to the above, the Respondent recalled various CAS, FIFA DRC and PSC jurisprudence referring to excessive and disproportionate penalties and sustained that, in the present case, when concluding the termination agreement, the Respondent had been forced by the Claimant to sign the penalty clause during a period in which the Respondent was facing financial difficulties and that, considering today’s financially hard times linked to Covid-19, such penalty amounting to EUR 91,000 has to be abolished by the DRC considering the outstanding main amount of EUR 65,000. In the alternative, the Respondent requested said penalty to be reduced.

17. In addition, the Respondent rejected the application of any sanction under art. 12bis RSTP deeming that the default notice of 19 January 2020 did not met the conditions of said provision, i.e. the instalment of 65.000 EUR with the due date of 31 January 2020 was not delayed more than 30 days. In addition, the Respondent reminded that it paid already the other instalments, which would have met the conditions of the default notice.

18. Furthermore, in an unsolicited correspondence received on 3 August 2020, the Respondent sustained that it paid EUR 65,000 to the Claimant via bank transfer on 30 July 2020. As such, the Respondent requested that the penalty should be rejected, the full amount in accordance with the termination agreement having been paid, and that the claim of the claim should be rejected.

19. Upon being requested by FIFA to confirm the reception of said payment, the Claimant confirmed that he received the amount of EUR 65,000 corresponding to the instalment payable on 31 December 2019. As such, the Claimant requested the payment of the penalty.

II. CONSIDERATIONS OF THE DISPUTRE RESOLUTION CHAMBER

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 8 April 2020. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the 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 October 2020), the Dispute Resolution Chamber is competent to deal with the matter at stake. The matter concerns an employment-related dispute with an international dimension between a Brazilian player and a Turkish club, and the competence is not disputed by the parties.

3. In continuation, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, the DRC confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (August 2020 edition), and considering that the claim was lodged on 8 April 2020, the March 2020 edition of the aforementioned 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 and foremost, the Chamber acknowledged that the parties – after having concluded an employment agreement for the period between 29 January 2018 and 31 May 2020 2- had terminated their employment relation by mutual consent by entering into the termination agreement on 24 January 2019. In accordance with the termination agreement, the Respondent inter alia undertook to pay to the Claimant an amount of EUR 900,000, as follows: (a) EUR 250,000 on 24 January 2019 and (b) an amount of EUR 650,000 in 10 instalments of EUR 65,000 each, the first instalment due on 30 April 2019, to be paid at the end of each following month.

6. Furthermore, the parties had agreed upon a penalty clause of 20% of the overdue instalment, in case any of the aforementioned amounts would be paid within 15 days of the respective due date.

7. In continuation, the members of the Chamber noted that according to the Claimant, the Respondent had timely paid the amount of EUR 250,000, but failed to remit him:

(a) the penalty of 20% in connection with the late of payment of the instalments of EUR 65,000 each due on 30 July , 30 August and 30 September 2019, i.e. EUR 39,000;

(b) the instalments of EUR 65,000 each due on 31 October, 30 November and 31 December 2019 and 31 January 2020, i.e. EUR 260,000, and;

(c) penalty of 20% in connection with the non-payment of the instalments of EUR 65,000 each due on 31 October, 30 November and 31 December 2019 and 31 January 2020, i.e. EUR 52,000.

In total, the Claimant deems that he is entitled to the amount of EUR 403,000, plus 5% interest p.a. as from the respective due dates of these amounts.

8. The Chamber took into account that the Respondent, for its part, argues that the amount specified by the Claimant, only adds up to EUR 351,000 and that due to the effects of the COVID-19 pandemic, it suffered financial difficulties. Moreover, the Respondent points out that it paid the Claimant an amount of EUR 195,000 on 30 April 2020, as well as an additional amount of EUR 65,000 on 30 July 2020, by means of which all the outstanding amounts were duly paid by the Respondent to the Claimant. The Chamber also noted that the Claimant confirmed receipt of these payments.

9. Further, the Respondent rejects the claim of the Claimant relating to the 20% penalty fee of the 7 instalments of EUR 65,000 each that were paid late, since, so the Respondent deems, penalty was to be considered as excessive, out of proportion and goes beyond the aim of curing the Claimant’s damages, but ‘simply punishes it’.

10. Taking into account the aforementioned circumstances, the parties seem to agree that the main amount of EUR 260,000 has bene paid, but only have dissenting opinions as to the applicability of the penalty clause of 20%, contained in clause 3 of the termination agreement, for each instalment that was paid late, i.e. the total amount of EUR 91,000.

11. In view of the dissenting viewpoint of the parties with respect to the applicability of the penalty fee, the Chamber, to start with, focussed its attention on said contractual clause.

12. After due deliberation, the members of the Chamber concluded that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness. In this respect, the Chamber highlighted that in order to determine as to whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before it shall also be taken into consideration.

13. In the specific case at hand, the members of the Chamber deemed that the penalty fee of 20% of each instalment of EUR 65,000 each that was paid late, which the parties contractually agreed upon in the context of terminating the employment relation, is – taken into account the Chamber’s jurisprudence in this respect - both proportionate and reasonable in the case at hand.

14. In addition, the Chamber noted in addition that the Respondent had already paid the penalty of 20% for several other instalments that were paid late, and even acknowledged that it would pay the penalty in respect to the instalments July, August and September 2019.

15. On account of all of the above, the Chamber decided that said contractual 20% penalty fee is valid and applicable in the present matter.

16. Consequently, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 91,000 relating to the 20% penalty fee in accordance with clause 3 of the termination agreement.

17. Finally, the Chamber outlined that no interest on the abovementioned amount of EUR 91,000 as penalty shall be awarded, as this would constitute a double penalty for the Respondent. Therefore, the Chamber decided to reject the Respondent’s argument in this respect.

18. The Chamber concluded its deliberations in the present matter by rejecting any further request filed by the Claimant.

19. 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.

20. In this regard, the Chamber 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.

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

22. Finally, the Chamber recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

III. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, Vagner Silva de Souza, is partially accepted.

2. The Respondent, Besiktas Futbol, has to pay to the Claimant, the following amount:

- EUR 91,000 as outstanding remuneration.

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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