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 Denis Kramar

COMPOSITION:

Clifford J. Hendel (USA), Deputy Chairman

Tomislav Kasalo (Croatia), member

Mohamed Muzammil (Singapore), member

CLAIMANT:

Denis Kramar, Slovenia

Represented by Mr Juan de Dios Crespo Pérez

RESPONDENT:

Al Salt SC, Jordan

Represented by Ms Susanah Ng Sing Mei

I. FACTS OF THE CASE

1. On 20 January 2020, the Jordan club, Al Salt SC (hereinafter: club or Respondent) sent a document (hereinafter: terms) with the following content to the Slovenian player, Denis Kramar (hereinafter: player or Claimant):

“The proposed Contract details are as follows:

This contract enters the parties into the following agreement.

The initial agreement of the contract is for the duration of 10 months from February ending in November 2020. […]

The contract will include accommodation such as: An apartment, Wages and potential bonuses.

The terms of the contract will follow as such:

The initial contract will be set on the basis of $4,500 per month. A down payment consisting of a two months’ salary of $9,000 for the months of February and March will be paid upon the signing of the contract. After this down payment the player will not be paid until the third payment is due the beginning of April and this will then put the reoccurring payments into effect once a month at the rate of $4,500 dollars per month for the rest of the contract. This is a remaining 8 payments a total amount of $36,000 as salary. Starting with the third month April ending in the tenth month which is November. This would mean the total contract is in the amount of $45,000.

[…]

If agreed upon an official contract will be drafted and signed upon the completion of a medical examination by the club for the player.”

2. On 20 January 2020, the following WhatsApp conversation between the player and his agent took place:

Player, at 17:42: “When I sign the papers, is it 100%? Because I can terminate my contract here today or tomorrow. And would like to be 100%”.

Agent, at 17.45: “Ok, I should have answer today. Just wait the coach in meeting with the club now.”

Agent, at 18:01: “ok. Done the will send the official offer late today. We are ok now.”

3. On 20 January 2020, the player received the terms from the Respondent via his player’s agent and returned it signed.

4. On 20 January 2020, the Claimant and the Austrian club SV Lafnitz terminated their contractual relationship.

5. On 23 January 2020, the Respondent sent flight tickets to the Claimant in order for him to arrive in Jordan on 26 January 2020.

6. On 27 January 2020, the Claimant attended the team training of the Respondent.

7. On 29 January 2020, the Respondent “decided not to proceed with further negotiations for an employment contract” and notified the player’s agent of its decision.

8. On 8 February 2020, the Claimant requested the Respondent to issue a flight ticket in order to return home, which was organised by the Respondent for 9 February 2020.

9. On 27 February 2020, the Claimant sent a letter to the Respondent referring to the employment contract signed and requested the club to let him take the medical examination and to “allow him to join the team”.

10. On 4 March 2020, the Respondent sent a letter to the Claimant arguing that no contract was concluded and therefore no termination letter was sent. According to the Respondent, the Claimant refused to conduct the medical examination and joined a different club in Jordan.

11. On 5 August 2020, the player lodged a claim against the club for breach of contract, requesting compensation in the amount of USD 72,000, as follows:

- USD 45,000 as residual value of the contract;

- USD 27,000 as additional compensation corresponding to six monthly salaries.

Further, the player requested interest of 5% p.a. as from 27 February 2020 (i.e. alleged date of termination).

12. In this claim, the player argued that a binding contractual relationship was concluded between the parties on 20 January 2020 since all the essentialia negotii are contained in the terms and due to the fact that such offer was accepted by the player.

13. In this regard, the Claimant held that the Respondent denied the existence of such contract, referring to the conclusion of the “official contract”, which constitutes administrative formalities only, which have no influence on the actual conclusion of the contractual relationship.

14. Furthermore, the player pointed out that the club invited him to join the team in Jordan and that he started to train with the club, before the Respondent refused to take the medical examination.

15. As a result, the Claimant argued that the club terminated the contract without just cause and shall be held liable to pay compensation for breach of contract.

16. Additionally, considering that the player terminated his previous contract in order to join the Respondent, the player claimed additional compensation.

17. In its reply, the Respondent contested FIFA’s jurisdiction the matter at hand and stated that since no contract was concluded. the case at hand does not constitute an employment-related dispute in accordance with the applicable Regulations.

18. As to the substance, the club rejected the claim and argued that no contract was concluded between the parties.

19. The club acknowledged having signed the terms, but pointed out that the player refused to take the medical examination with the club and started training with another club in Jordan, Al Sahab Club, as of 1 February 2020.

20. The Respondent submitted a statement of the player’s agent confirming that the terms due to their wording were not an employment contract yet, as it refers to the conclusion of an official contract at a later stage. In such statement, the player’s agent stated that the player told him after starting to train with the club that “he did not feel comfortable with the quality of the training facilities and that they did not meet his expectations. He also seem to have other concerns such as living situation and did not have an overall high morale towards the venture and signing with Al Salt SC”.

21. In his replica, the Claimant reiterated his position and rejected the Respondent’s argumentation.

22. The player especially contested the alleged statements of his player’s agent while calling such statement a “blatant lie”.

23. In support of his argumentation, he brought forward that the parties started executing the contract as he started training with the club.

24. Moreover, the player confirmed having joined Al Sahab Club for trainings as the Respondent terminated his contract and he was seeking to mitigate his damages.

25. In its duplica, the Respondent reiterated its position and argued that the terms were drafted by the player’s agent, as a non-binding “formality” only. The club argued that it offers such terms “to any prospective player”, provided he passes the “try-outs” and the medical examination.

26. Moreover, the Respondent acknowledged that the player was training with the team but held that such training was a “try out”, which led the Respondent to refrain from concluding an employment contract.

27. Furthermore, the Respondent held that the Claimant only protested on 27 February 2020 against the club’s decision not to conclude an employment contract.

28. According to information contained in the Transfer Matching System (TMS), on 17 February 2020, the player joined the Slovenian club, ND Beltinci, as an amateur.

29. According to information contained in the TMS, on 16 July 2020, the player joined the Austrian club Weiz as an amateur.

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 5 August 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, in principle, competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension.

3. However, the DRC acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of the allegation that no employment-related dispute since no contractual relationship was concluded.

4. On account of the above, the DRC wished to point out that the question if a contractual relationship was in fact concluded or not will be examined in the substance of the matter and that it therefore has to reject the Respondent’s argumentation.

5. In view of all the above, the DRC established that the club’s objection to the competence of FIFA to deal with the present matter has to be rejected and that the Dispute Resolution Chamber is competent to consider the present matter as to the substance.

6. 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 5 August 2020, the June 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

7. 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. In particular, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

8. First of all, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that a valid and binding employment contract was concluded between the parties since he allegedly accepted the contract offer submitted by the Respondent on 20 January 2020. In this respect, the Claimant asks to be awarded compensation for breach of contract.

9. The Chamber then noted that the Respondent, for its part, rejected the player’s claim and argued that the terms dated 20 January 2020 did not represent an offer to which the player could have immediately consented to. In this regard, the Respondent pointed out that the player had to complete the “try outs” as well as a medical examination before an “official contract” could have been signed.

10. From the outset, the members of the Chamber highlighted that there does not seem to be any disagreement between the parties as to the fact that the terms of the alleged agreement were not performed, including the payment of the remuneration established therein. The fundamental disagreement between the Claimant and the Respondent – and the central issue to the present dispute – is whether the terms sent by the club on 20 January 2020 and the player’s answer accepting it, established a valid and binding employment contract between the parties.

11. Consequently, the Chamber first and foremost, focused its attention on the question as to whether a legally binding employment contract had been concluded by and between the Claimant and the Respondent.

12. At this point, the DRC deemed important to highlight that, in accordance with its well established jurisprudence, in order for an employment contract to be considered as valid and binding, it needs to contain the “essentialia negotii” of an employment contract, such as the parties to the contract and their role, the duration of their employment relationship as well as the remuneration. Moreover, the members of the Chamber highlighted that the denomination of the document is not an element of validity. In this context, after a careful study of the terms presented by the Claimant, the Chamber concluded that all such essential elements are included in the terms dated 20 January 2020, in particular, the fact that the relevant offer establishes a time period for the contractual relationship, i.e. February 2020 until November 2020, and the financial terms, i.e. a salary.

13. In this regard, the Chamber established that the terms dated 20 January 2020 contained all “essentialia negotii” of a contract and therefore represents a contract offer. Moreover, the members of the Chamber wished to emphasize that the Respondent’s remark at the end of the letter, according an “official contract” would be concluded at a later stage, does not change the fact that all requirements for a binding offer are present in the letter. In this regard, the DRC wished to emphasize that a contract cannot be subject administrative formalities (Art. 18 par. 4 RSTP) and a club wishing to employ a player has to exercise due diligence and carry out all relevant medical examination prior to entering into an employment contract with a player.

14. In fact, the player’s acceptance of such offer is not contested by the parties and is also shown in the a parties actions after 20 January 2020, when the player joined the club’s training in Jordan upon flight tickets issued by the club.

15. Having established that a valid and legally binding employment contract had been in force between the Claimant and the Respondent, the Chamber went on to analyse as to whether such contract had been breached and, in the affirmative, which party is to be held liable for breach of contract.

16. In this context, the Chamber was eager to emphasize, once established that the parties concluded a valid and legally binding contract, that the Respondent had not performed any of its obligations under said agreement and the DRC considered that it did not have just cause not to execute the contract which unavoidably, leads to the decision that such contract was breached by the Respondent.

17. On account of the above circumstances, the Chamber established that the Respondent had obviously no longer been interested in the Claimant’s services by sustaining that no valid employment contract existed between the parties and failing to remit any of the Claimant’s salaries. The Chamber concluded that such conduct clearly constitutes a breach of contract and, accordingly, decided that the Respondent has produced the premature termination without just cause of the employment contract entered into between the parties.

18. 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.

19. 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.

20. 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.

21. 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.

22. 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.

23. 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. Furthermore, the Chamber took into account the amount claimed by the player and consequently, the Chamber concluded that the amount of USD 45,000 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

24. 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.

25. In this respect, the Chamber noted that the Claimant had not found new employment since he was subsequently registered as an amateur player for two clubs.

26. Consequently, on account of the above-mentioned considerations, the Chamber decided that the Respondent must pay the amount of USD 45,000 as compensation for breach of contract to the Claimant, which is considered by the Chamber to be a fair and reasonable amount.

27. 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. 5 August 2020, until the date of effective payment.

28. The Chamber rejected the player’s request for additional compensation since the requirements of Art. 17 par.1 ii of the Regulations were not met.

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

30. Furthermore, taking into account the consideration under number II./6. 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.

31. 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.

32. 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.

33. 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, Denis Kramar, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Al Salt SC, has to pay to the Claimant the following amount:

- USD 45,000 as compensation for breach of contract plus 5% interest p.a. as from 5 August 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.

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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