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 10 December 2020

Decision of the

Dispute Resolution Chamber

passed on 10 December 2020,

regarding an employment-related dispute concerning the player Felipe Dos Reis Pereira Vizeu

COMPOSITION:

Geoff Thompson (England), Chairman Angela Collins (Australia), member Aby Nayeem Shohag (Bangladesh), member

CLAIMANT:

CLUB ATHLETICO PARANAENSE, Brazil

FIRST RESPONDENT:

FELIPE DOS REIS PEREIRA VIZEU, Brazil

SECOND RESPONDENT:

UDINESE CALCIO, Italy

INTERVENING PARTY:

FC DFSH AKHMAT GROZNY, Russia

I. FACTS

1. On 31 December 2019, Club Athletico Paranaense (hereinafter: the Claimant or CAP), the player and Udinese Calcio (hereinafter: Udinese) signed a contract over the transfer –on loan– of the player from Udinese to CAP for a period as from 1 January 2020 until 31 December 2020 (hereinafter: the first loan agreement).

2. Clause 2 of the first loan agreement reads as follows: “This agreement is conditional upon the Player having become temporarily registered with CAP and if such condition has not been satisfied by 23:59 CET on 15 January 2020 then this Agreement shall be automatically determined and of no effect and neither party shall have any obligation to the other hereunder and Udinese shall be entitled to transfer the Player to any other football club (whether on a permanent or temporary basis)”.

3. Clause 3 of the first loan agreement stipulates the following: “This temporary transfer of the Player’s registration until 31 December 2020 is free of charge, namely CAP shall not have to pay any amounts to Udinese”.

4. Clause 4 of the first loan agreement provides that CAP “shall pay the player a salary for the loan period and such bonuses as a member of the CAP first team is normally entitled to. Such sums shall be paid directly to the player by CAP and shall be subject to deduction of any required taxation or mandatory social contributions”.

5. Furthermore, clause 6 of the first loan agreement stipulates that, during the term of the contract, CAP shall, at its own cost, “insure the player for the sole benefit of Udinese in the sum of USD 500,000 for an injury which results in the player being unable to pursue a career in professional football with Udinese and/or death which may occur whilst the player is engaged in any professional football activity during the loan period and CAP shall ensure that Udinese’s interest is noted on the terms of such insurance policy”.

6. Equally, CAP and the player signed a document titled “Proposta de Contrato de Trabalho” (hereinafter: the employment offer), which was valid for the same period.

7. The employment offer, signed by CAP and the player, contained the following provisions:

“Dear,

[CAP] hereby expresses its interest in signing an employment contract with you under the following conditions:

(i) Term: 01.01.2020 to 31.12.2020;

(ii) Monthly Remuneration: BRL 300,000 (three hundred thousand Brazilian Reais), being 60% (sixty percent) paid in accordance with the Brazilian Consolidated Labor Laws (CLT) and 40% (forty percent) paid as Image Rights;

(iii) Bonus of BRL 20,000 (twenty thousand Brazilian Reais) for every 5 (five) games in which you play at least 45 (forty-five) minutes, paid as Image Rights;

(iv) Match bonus in accordance with what was agreed with all the players;

(v) Qualification bonus of 30% (thirty per cent) of the net amount received by the club in connection with the qualification, shared between all the players, in the basis of the collective bargaining;

(vi) Bonus of USD 50,000 dollars in the event you score 10 goals this year;

(vii) Additional Bonus of USD 100,000 dollars in the event you score 10 more goals this year, totalizing 20 goals in the year;

(viii) All be match bonus will be paid in accordance with the Brazilian Consolidated Labor Laws (CLT) and the qualification and goals bonus will be paid as Image Rights;

(ix) Club standard house aid”.

8. On 3 January 2020, Udinese entered a transfer instruction in TMS in order to release the player on loan and transfer the latter to CAP. Nevertheless, on 5 January 2020, Udinese cancelled the transfer instruction. The first loan agreement was not uploaded into TMS, nor any other documentation pertaining the transfer of the player from Udinese to CAP.

9. On 5 January, the player contacted CAP via Whatsapp to inform the latter that he had received a transfer proposal from a Russian club, that he considered “very important” for him.

10. In this context, on the same day, i.e. 5 January 2020, CAP sent a letter to Udinese, requesting a clarification as to the situation and the latter replied thereto explaining that the player would finally not join CAP.

11. On 6 January 2020, the player sent a correspondence to CAP, by means of which the player explained, inter alia, the following: “I, Felipe dos Reis Pereira Vizeu do Carmo, by means of this e-mail and in absolute respect of the good relationship maintained with CAP, inform that I will be unable to proceed with the signing of the employment contract with your club. […]. I clarify that this impossibility is due to the receipt by Udinese of a proposal from an European club, being in the interest of Udinese to accept such proposal, in addition to the possibility of achieving my dream of obtaining sporting success in European football”.

12. In this context, on 16 January 2020, Udinese and the Russian club, FC DFSH Akhmat Grozny (hereinafter: Akhmat) entered into a loan transfer agreement (hereinafter: the second loan agreement) where the parties agreed, inter alia, upon the following conditions:

“Consideration

3. In consideration for the transfer on a loan basis Akhmat shall pay to Udinese a guaranteed fixed net sum of EUR 200,000 (two hundred thousand euros) by 31 January 2020 (hereinafter, the Loan Fee), to the following bank acount: […]”.

“Option Right

8. Akhmat is granted until 30 June 2020 the priority right for the acquisition of the definitive right of the Player. In the event Akhmat wants to make use of this right, it has to inform Udinese about the willingness to acquire the right of the Player on definitive basis in writing in accordance with clause 19 before 31 May 2020. The conditions for the definitive transfer of the Player will be established in a separate agreement to be signed by all the parties.

9. If Akhmat does not reach an agreement with Udinese, for the permanent transfer of the Player, before 30 June 2020, or Akhmat do[es] not reach an agreement with the Player before 30 June 2020, then the priority right mentioned in Clause 11 is null and void and Akhmat will not have any claim towards Udinese and/or the Player”.

13. Furthermore, on 16 January 2020, the player and Akhmat concluded an employment contract (hereinafter: the contract), valid as from the date of its signature until 31 December 2020, whereby Akhmat undertook to pay to the player a monthly salary of Russian Roubles (RUB) 18,000 (approx.: USD 290), “compensation, pay for-performance, incentive and social payment” excluded.

14. In its claim, the Claimant explained that, despite CAP, Udinese and the player having entered into a valid loan agreement and despite the player and CAP having signed the employment offer, on 5 January 2020, the player contacted CAP via whatsapp to inform CAP that he had received a “very important” offer from Akhmat and that he would no longer comply with the first loan agreement.

15. In this context, the Claimant explained that, after the conclusion of the first loan agreement, Udinese negotiated a more advantageous loan agreement (the second loan agreement) with Akhmat for the same duration of the first loan agreement with CAP; and that the reason behind the breach of the first loan agreement by Udinese was purely financial, insofar the transfer of the player from Udinese to CAP would have been free of charge, whereas the transfer of the player to Akhmat was against payment of EUR 200,000 from the latter to Udinese. In this respect, the Claimant argued that both, Udinese and FC Akhmat, induced the player to breach the employment offer concluded between the player and CAP and, thus, both clubs shall be jointly and severally liable to pay compensation to CAP upon the breach of the contract committed by the player.

16. On 8 May 2020, CAP lodged a claim before FIFA, requesting compensation for breach of contract, from the player, Udinese and Akhmat (jointly liable) in the amount of BRL 3,607,984 (approx.: USD 660,000) and USD 368,500, plus 5% interst p.a. on the said amounts “as from the day immediately after each of the amounts herein claimed fell due, until the date of effective payment”, calculated in accordance with the following reasoning:

- The average between the total remuneration the player would have received from CAP as per the employment offer, i.e. BRL 3,600,000, and the total remuneration of the player under his new contract with Akhmat, i.e. RUB 216,000 (which, according to the claimant, equals to BRL 15,968): BRL 1,807,984;

- In the absence of a transfer compensation agreed between CAP and Udinese (the transfer would have been free of payment, the average between the amount of USD 500,000, which CAP should have had to pay to Udinese as damages should the player had gotten injured and unable to deliver his services, and the amount paid by Akhmat to Udinese as transfer compensation, i.e. EUR 200,000 (approx.: USD 237,000): USD 368,500;

- Damages “in connection with the specificity of sport” in the amount of BRL 1,800,000.

17. Moreover, as to the salary that the player is entitled to receive from Akhmat under the contract uploaded into TMS, the Claimant maintained the following: “Nevertheless, it is evident that the Player would not suddenly step back from its agreed deal with CAP in order to accept to receive, for the whole year in FC DFSH Akhmat Grozny, less than 1/10 of a monthly remuneration he would receive in CAP”. In this regard, the Claimant argued that, should the remuneration of the player under his new contract with Akhmat amount to RUB 18,000 per month, the Claimant requested FIFA that: “an investigation is opened against the First and Third Respondents for possible violations of FIFA Regulations, in particular the upload of false or untrue data into the TMS for illegitimate purposes, all pursuant to art. 9, Annexe 3, of the FIFA RSTP”.

18. In his reply, the Respondent player argued that he “considered” the proposal of the Claimant, but only once “all the terms and conditions between the player and CAP were clarified, the player would have envisaged signing the compulsory standard forms required by [the Brazilian FA] for installing an employment relationship”. For clarification, the player explained that he “never met any CAP representatives in person, never passed the medical examination with CAP and, obviously, never negotiated the still open terms of the employment contract and image rights contracts”.

19. In addition to the above, the player stated that “CAP perfectly distinguished between the ‘Proposta’ and ‘Contrato do Trabalho’ as two separate documents, with obviously different legal meanings and scopes”; and that “The Proposal does not determine a description of functions of the Player, i.e. does not establish his role of an employee in the relevant contractual relationship and the rights and duties of the parties; the Proposal does not conform to the mandatory form of an employment contract required by Lei Pele and CBF”.

20. In view of the above, as to the employment offer concluded between the player and CAP, the player argues that the said document “cannot and shall not be considered as a valid employment contract, therefore, the Player literally was unable to terminate the inexistent employment contract”.

21. Furthermore, the player continued arguing that ”in the absence of any contractual bonds with CAP, the Player was fully entitled to sign the employment contract with Akhmat, whereas Udinese was fully entitled to agree with the latter on the relevant loan transfer”.

22. For clarification purpuses, the player explained that “once the plane had landed in Rio de Janeiro, the player took the decision to decline the Proposal and return to Udinese”. In this regard, the player “informed his agent that he was not convinced any longer to join CAP and the Player’s agent informed him that [Akhmat] was looking for a player with similar characteristics as his and it may be interested in his services. Since it was the player’s intention [was] – if possible – to remain in Europe rather than returning to Brazil, he took the possible interest of Akhmat seriously into consideration”.

23. Furthermore, the player argued that, acting in good faith, he “immediately informed CAP of his decision not to further negotiate the employment contract and reverted to Udinese, informing of his decision not to proceed with the transfer on loan basis and registration with CAP”.

24. According to the player, the latter “informed Udinese that no employment contract had been signed between him and CAP and that he did not intend any longer to sign any employment contract with CAP”. In this respect, the player maintained that, like the first loan agreement, the employment relationship that would bind the player and CAP “was made conditional upon the signature of the registration of the Player with CAP, which, however, never occurred”.

25. Moreover, the player alleges that, in order to respect what had been agreed with CAP under the first loan agreement (cf. point 2 above), he did not sign the new contract with Akhmat until 16 January 2020. 27. As a conclusion, the Claimant held the following: “Neither of the Respondents committed any violation of the effective regulatory framework; the Player in good faith and timely notified both CAP and Udinese of his refusal to join CAP; in the absence of any binding agreement with CAP the Player was free to join Akhmat following the expiry of the deadline provided for in clause 2 of the Loan Agreement”.

26. In connection with the request of the Claimant regarding a compensation for breach of contract, summed to the above reasons, the player maintained that “Neither Udinese nor Akhmat ever induced the player to any contractual violation, whereas all the Respondents acted in full compliance with the applicable FIFA regulations; - CAP had not incurred any damage”.

27. The player´s request for relief reads as follows: “1. To reject the Claim of CAP in full; 2. To establish that no compensation shall be payable to CAP; 3. To establish that no sporting sanctions shall be imposed on the Respondents”.

28. In its reply to the claim, Udinese also referred to clause 2 of the first loan agreement and held that, since the condition therein set, i.e. the player was not registered with CAP by 15 January 2020, the first loan agreement “became automatically determined and of no effect and neither party should have had any obligation to the other, whereas Udinese would be entitled to transfer the player to any other football club”.

29. Furthermore, Udinese explained that, on 6 January 2020, the player informed Udinese that no employment contract had been signed between him and CAP and that he did not intend any longer to sign any employment contract with CAP. In this regard, Udinese provided a document entitled “Declaration”, whereby the player declared the following: “I, Felipe Dos Reis Pereira Vezeu do Carmo, herewith declare that: - I have not signed and I do not have any intention to sign any employment contract with the Brazilian club Athletico Paranaense; - I do not wish to go on loan to Athletico Paranaense during the period 1.1.20 – 31.12.20”.

30. Throughout its statement of defence, Udinese referred to the same arguments wielded by the player. In particular, Udinese maintained, inter alia, the following:

- That the first loan agreement became null and void as from 15 January 2020, since the player was not registered with CAP, as clause 2 of the said agreement required for the said document to be binding upon the parties;

- That the employment offer was not a contract: it “does not determine a description of functions of the player, i.e. does not establish his role of an employee in the relevant contractual relationship and the rights and duties of the parties;

- That no employment contract between CAP and the player was uploaded into TMS.

31. In addition, Udinese wished to stress that it did not induce the player to any contractual violation, which did not occur, insofar the document concluded between the player and CAP was a proposal and not a contract; and that, “CAP had not incurred any damage”.

32. Udinese´s request for relief reads as follows: “1. To reject the Claim of CAP in full; 2. To establish that no compensation shall be payable to CAP; 3. To establish that no sporting sanctions shall be imposed on the Respondents”.

33. In its statement of defence, Akhmat explained that, in January 2020, it was looking for a striker, and got interested in the player, who –via his agent– confirmed “his potential interest to be transferred to Akhmat”. In this context, Akhmat stressed that it approached Udinese in order to negotiate the conditions of a loan agreement of the player from the latter to the former.

34. In this regard, Akhmat highlighted that, “until the current proceedings”, it was not aware of any loan agreement concluded between Udinese and CAP regarding the transfer of the player. Notwithstanding the aforesaid, Akhmat pointed that “Udinese indicated that any negotiations regarding the transfer of the player [was] feasible only from 16 January 2020”.

35. What is more –continued Akhmat– is that CAP never contacted it in connection with the player.

36. The above being clarified, as to the arguments exposed by the Claimant, Akhmat stated the following: “For the sake of procedural economy and avoidance of unnecessary repetition, Akhmat herewith would like to endorse the position of the Player entirely, since he is better placed to defend the present matter”.

37. Notwithstanding the above, Akhmat wished to further express that “it has always acted in good faith, in full compliance with RSTP as well as any other applicable laws and regulations”; and that “[w]hen negotiating and transferring the Player, Akhmat relied on its due diligence, information available on TMS and verified accordingly the details with Udinese”.

I. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analyzed whether it was competent to deal with the case at hand. 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 November 2019 edition of the Procedural Rules is applicable to the matter at hand.

2. Subsequently, the Dispute Resolution Chamber referred to art. 3 par. 1 of the Procedural Rules and emphasized 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, the Dispute Resolution Chamber is competent to deal with matters which concern employment-related disputes with an international dimension between players and clubs, such as the present one, which involves a Brazilian club, a Brazilian player, an Italian club and a Russian club.

3. In continuation, the Dispute Resolution Chamber analyzed which edition of the Regulations of the Status and Transfer of Players should be applicable to the present matter. In this respect, the Dispute Resolution Chamber 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 claim was lodged on 8 May 2020, the March 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

4. With the above having been established, the Dispute Resolution Chamber entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents contained in the file. However, the Dispute Resolution Chamber emphasized that in the following considerations it will refer only to facts, arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Chamber referred to the abovementioned facts and highlighted that, according to the Claimant, it concluded a valid loan agreement with both, Udinese and the player, for the period between 1 January 2020 and 31 December 2020, which led to the further conclusion of a contract between the Claimant and the player for the same term.

6. The Chamber further noted that, in its claim, the Claimant held that the player unilaterally terminated the contract on 5 January 2020 on the grounds that he had received a proposal from a European club, which he found best and which Udinese –his current club and parent club in any case– found of more interest. In this respect –continued the Chamber–, the Claimant held that the player terminated the contract without just cause and induced by Udinese, which profited from the transfer of the player to Akhmat, since the said loan agreement (the second loan agreement) was concluded against payment of EUR 200,000, whereas the loan agreement concluded between the Claimant and Udinese (the first loan agreement) was free of charge.

7. Subsequently, the Chamber acknowledged the position of the three Respondents (the player, Udinese and Akhmat) which followed the same line of defense. In particular, the Chamber observed that the Respondents held that the loan agreement concluded between the Claimant, Udinese and the player was not executed, since clause 2 thereof required the registration of the player with the Claimant by 15 January 2020 in order for the agreement to be valid, which did not occur. In addition, the Chamber took note of the fact that the Respondents held that the employment offer concluded between the player and the Claimant was not a contract, insofar it lacked of the necessary elements such as the obligations of the parties and that, therein, the parties specifically established that the objective of the employment offer was to define the conditions of a future employment contract to be eventually concluded between the player and the Claimant, but was not –in any case– an employment contract.

8. The DRC further noted that the Respondents argued that the Claimant has not suffered any loss and, thus, that no compensation is payable to the latter.

9. In this context, the DRC emphasized that, as per the wording of clause 2 of the first loan agreement, it is crystal clear that its validity was subject to the registration of the player with the Claimant by 15 January 2020, which –as acknowledged by all parties to the proceedings and as corroborated by the FIFA administration with the information displayed in TMS– did not occur.

10. Conversely –pointed out the Chamber– the legal basis of the present dispute is not the first loan agreement, but the employment offer concluded between the Claimant and the player. As to the employment offer, the DRC noted that it contains the necessary elements of a contract, i.e. the essentialia negottii, such as: the term of the contract, the remuneration of the player and the signatures of the parties as evidence of their acceptance. Nevertheless, stressed the Chamber, it is to be noted that, in the employment offer, it is stated that CAP “expresses its interest in signing an employment contract with you under the following conditions” (emphasis added), which also leads to the interpretation that the said document was closer to a Letter Of Intent (LOI), which –by definition– is not binding on the parties in their entirety, rather than to a contract stricto sensu.

11. In this respect, the Chamber pointed out that, prior to deciding whether such employment offer created binding effects on the parties, the following elements must be considered: 1.) the written expressions of intent present in the letter; 2.) demonstrative actions taken by both parties after the letter of intent is signed.

12. Firstly, the DRC observed that, as per the wording, it seems clear that it was a letter intending the conclusion of a further employment contract and, therefore, the parties could rely on the assumption that the said document was not creating an employment relationship between them. What is more, stressed the Chamber, is that, as to the steps taken by both parties after the conclusion of the employment offer, no documentation was uploaded into TMS regarding the eventual transfer of the player to CAP and no ITC was requested by the Brazilian FA from the Italian FA.

13. Furthermore, the Chamber observed that, when the Claimant and the player concluded the employment offer, the player was registered and under contract with Udinese, i.e. the player was not a free agent. Hence, determined the Chamber, being aware of the fact that the Claimant and Udinese had concluded a loan agreement which was finally not executed ex. clause 2 thereof, and having been acknowledged by the Claimant that the employment offer concluded with the player was concluded within the scope of the loan transfer of the player from Udinese to CAP, it shall be interpreted that the employment offer was subject to the execution of the loan agreement between CAP and Udinese, which did not occur.

14. In view of all of the above, concluded the Chamber, despite CAP and the player having concluded a valid employment offer or Letter Of Intent; from the wording of the said employment offer, the actions taken by the parties thereafter and the understanding that its validity was subject to the execution of the first loan agreement, which was not executed, it can be determined that the player was not contractually bound to the Claimant.

15. Furthermore, the Chamber wished to stress that the conduct of the Respondents shall also be taken into account. In this respect, the DRC noted that the player notified his will to not enter into a contract with CAP already on 5 January 2020, as well as that the second loan agreement was not concluded until 16 January 2020, i.e. until one day after the dies ad quem of the deadline granted as per the first loan agreement for the registration of the player, which would lead to the conclusion of the first loan agreement.

16. Consequently, the DRC unanimously determined that the player acted in good faith when informing the Claimant about his intention not to sign a contract with it and that so did the Respondents when they concluded the second loan agreement, after the expiry of the deadline contained in the first loan agreement.

17. Thus, in view of all of the above, in view of all of the above, the Chamber concluded that the argumentation of the Claimant cannot be upheld, in the view of the lack of conclusion of a binding employment contract. The DRC concluded its deliberations on the present matter by establishing that the claim of the Claimant is rejected.

II. DECISION OF THE DISPUTE RESOLUTION CHAMBER

1. The claim of the Claimant, Club Athletico Paranaense, is rejected.

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).

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