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 25 February 2021

Decision of the

Dispute Resolution Chamber

passed on 25 February 2021

regarding an employment-related dispute concerning the player Nestor Jesús Gordillo Benítez

COMPOSITION:

Geoff Thompson (England), Chairman

Stefano Sartori (Italy), member

Joseph Antoine Bell (Cameroon), member

CLAIMANT:

Nestor Jesús Gordillo Benítez, Spain

RESPONDENT:

Hyderabad FC, India

I. Facts

1. On the 1st of September 2019, the Claimant signed a Contract with the Respondent for a term of two seasons, i.e. until 30 April 2021.

2. According to the Schedule 1, the player was entitled to the following remuneration:

“1. Fee:

2019·20 Season:

Player Fee and Other Facilities The club shall pay to the player a total fee (net of Withholding tax) of USD 110,000/· [US Dollars One Hundred and Ten Thousand] (the "Fee") for the 2019-20 season which shall be paid in equal monthly instalments starting from September 2019 to May 2020 on the last day of every month.

2020-21 Season;

The club shall pay to the player a total fee (net of Withholding tax) of USD 145,000/· [US Dollars One Hundred and Forty Five Thousand] (the "Fee") for the 2020-21 season which shall be paid in equal monthly instalments starting from August 2020 to May 2020 on the last day of every month.”

3. Schedule 2 to the contract stipulated the following:

“7.1 This Agreement shall be governed by, and construed in accordance with Indian law.

7.2 In the event a dispute arises between the Club and the Player regarding any other issue than termination, both parties agree to seek to resolve the dispute in good faith through a process of good faith negotiations and discussions.

7.3 If a dispute between the Club and the Player is not resolved within 10 days, of the process contemplated in paragraph 7.2 then the dispute will be referred for solution to mediation under the relevant procedure set out in the League Rules (which form part of the Regulations). If a solution is not achieved within another 10 days of it being referred for mediation, the dispute shall be submitted to the FIFA Player Status Committee for adjudication.

7.4 All disputes relating to termination shall be referred to the FIFA Player Status Committee for adjudication directly without undergoing the process of the good faith negotiations and mediation referred to in paragraphs 7.2 and 7.3 unless both the Player and the Club mutually decide otherwise.

7.5 At any stage of the good faith negotiation process or the mediation process referred to in paragraphs 7.2 and 7.3 both the Player and Club can mutually agree to refer the matter to the FIFA Player Status Committee for an urgent decision and, in such circumstances the requirement for the 10 day windows for good faith negotiations and mediation under paragraphs 7.2 and 7.3 will not apply.

7.6 If is the dispute is not within the jurisdiction or scope of the FIFA Player Status Committee then it shall be referred to arbitration under a sole arbitrator appointed by mutual consent under the provisions of the Arbitration and Conciliation Act 1996 or any modification thereof then in effect. The Arbitration shall be in English and the seat and venue of Arbitration shall be Mumbai. Subject to the above, the Courts at Mumbai shall have sole and exclusive jurisdiction in respect of all matters_ addressed under this paragraph 7.6.”

4. Clause 5.7 of the schedule 2 to the contract stipulated the following:

“5.7. The Club and the Player agree that there is 5% an agency commissions fee for any such similar payment whatsoever that the Club shall make to the Player or his Agent as a part of this transaction over and above the Fee mentioned in Schedule 1 of the Agreement”

5. On 11 May 2020, the Respondent sent a letter to the player, requesting him to accept, due to the COVID-19 pandemic, “an offer of 30 % of the total amount due for April and May 2020”

6. On 24 June 2020, the Claimant sent a default notice to the Respondent.

7. On 20 May 2020, the Respondent sent a notice to the Claimant indicating, inter alia, the following:

“a. As you are aware that, following the rapid outbreak of respiratory illness caused by COVID-19 that was first reported in Wuhan, China at the end of 2019, the World Health Organization declared COVID-19 a “Public Health Emergency of International Concern” i.e. to be a pandemic on March 11, 2020.

(…)

3. In view of the force majeure event from 24.03.2020, Hyderabad FC will not be in a position to pay you your entire fees as intended under our Agreement originally termed till April 2021 as the club is unable to operate any business or generate revenues during these months of global and national emergency and a complete lockdown of business for reasons beyond our control (…)

(…)

5. Considering Force Majeure event due to COVID 19 with effect from 24 March 2020 we offer to put to rest all our impending dues and obligations:

a. Dues till March 2020 – Your balance amount for the month of February 2020 and March 2020 amounting to a total of USD 24,444 will be paid to you within 10 working days from the last date of the lockdown i.e. 31.05.2020 unless and otherwise extended by the GOI or the state of Telangana.

b. For the 2020 - 21 season – We would be giving you 30 % i.e. USD 43,500 only, of the total amount of USD 1,45,000 as full and final settlement payable to you by 31 August 2020.

6. Kindly also treat the current notice as a Termination Notice of the said Agreement w.e.f. 23.03.2020.”

8. On 1 June 2020, the AIFF Players’ Status Department sent a letter to the club, noting that it had outstanding payments towards the player for the total value of USD 48,888, detailed as follows:

“$12222 Salary for February 2020

$12222 Salary for March 2020

$12222 Salary for April 2020

$12222 Salary for May 2020”

9. On 24 June 2020, the legal representative of the player sent a correspondence to the club indicating the following:

“Your Club terminated the employment contract without just cause and made a ridiculous proposal to the Player in respect of his outstanding salaries and due compensation. Said good faith negotiations should be held prior to any termination whatsoever, not subsequently. No such continuous attempts from your end have existed.”

10. On 14 July 2020, the player’s agent sent a message via “WhatsApp messenger” enquiring about the player’s outstanding salaries.

11. On 22 July 2020, the club sent a letter to the player indicating that “[it] have processed your salaries for the month of February, March, April and May 2020” and that his “pending salariesshall be credited in your account by 31 July 2020”

12. On 6 November 2020, the legal representative of the player sent an email to FIFA and the club indicating the following:

“that the only settlement that has taken place between the parties is in accordance with the email dated 29.09.2020, the Club has fulfilled its obligations and the Employment Contract of the Player signed between the Parties on the 20th of August 2019 is still valid and binding in its original form as part of the settlement between the parties. Both the parties are bound by the terms and conditions of the Player Agreement dated 20th of August 2019. In view of the same the Player hereby withdraws the claim and decision against the Club.”

13. On 11 November 2020, the legal representative of the player sent a correspondence indicating that no settlement agreement was concluded and that the player “was misled by the Respondent”.

14. On 19 January 2021, the player sent a correspondence to the club, noting the following:

“even if the prior Settlement Agreement you referred to in the FIFA proceedings is considered as valid - quod non, please note that as you are already well-aware, the Player has been forced by your Club’s attitude to leave India and consider the employment contract as terminated with just cause from his end.”

15. The player remained unemployed following the termination of the contract.

16. On 7 July 2020, the Claimant lodged a claim before FIFA and requested the payment of the following amounts, plus 5% interest p.a. as from the due dates:

- USD 48,888 as outstanding remuneration at the time of termination of the contract, for his salaries from February 2020 until May 2020 (i.e. 12,222*4);

- USD 226,025 as compensation, further detailed as follows:

USD 145,500 as the residual value of the Contract;

USD 80,526 “as six monthly salaries under the specificity of sport due to the most abusive and discriminatory attitude displayed by the Club causing an irreparable harm to the Player”

17. In its reply to the claim, the Respondent contested the competence of FIFA and considered that the Arbitration Tribunal of the AIFF shall be competent.

18. As to the substance, referred to the COVID-19 pandemic.

19. In this respect, the Respondent explained that it “had been unable to get necessary signatories to sign on relevant documentations, submit remittance forms to the banks specially required for international remittances on account of both the heavily impacting issues the Club had to deal with during the tough global times.”

20. In relation to the termination notice, the Respondent explained that it was superseded and hence null and void due to continuing discussions between the player’s agent and the club.

21. In sum, the club requested to dismiss the claim without any costs and/or sanctions.

22. The club further expressed that it “intends to continue its attempt to arrive at an amicable solution with the Player for the 2021 season which yet has to commence.”

23. On 26 November 2020, the Claimant sent a correspondence amending his claim.

24. In particular, the Claimant noted that it received the following amounts:

- USD 48,888, corresponding to all the outstanding amounts

- USD 29,900, which shall be deducted from the payable compensation. As a result, the player considered that the residual value of the contract is USD 116,500.

- In addition, the player requested the payment of 5% over the full employment contract in accordance with clause 5.7, i.e. USD 12,750 (5% of USD 255,000).

- The player insisted to be paid with USD 80,526 net corresponding to six additional salaries under the specificity of sport.

25. In addition, the Claimant requested to be provided with the relevant tax certificates attesting the payment of all taxes to the competent tax authorities in relation to all his financial entitlements already paid and payable in accordance with the Employment Contract.

26. As to the alleged settlement, the Claimant argued that no any settlement agreement was signed by the Player and that the correspondence sent in this respect “was not sent wilfully on behalf of the Player but only under coercion and deceit and therefore is fully null and void and all attempts from the Respondent to rely on it are reprehensible to say the least, highly deceitful.”

II. Decision of the Dispute 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. 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.

2. Subsequently, the Dispute Resolution Chamber referred to art. 3 par. 1 of the Procedural Rules and emphasised 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. As a result, the DRC would be, in principle, competent to deal with the present matter, which concerns a Spanish player and an Indian club.

3. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies as, according to the Respondent, the present matter shall be adjudicated by the Arbitration Tribunal of the AIFF.

4. With the aforementioned considerations in mind, and prior to entering into the analysis of its competence, the Chamber wished to recall that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, without prejudice to the right of any player or club to seek redress before a civil court for employment-related disputes, it is competent to deal with a matter such as the one at hand, unless an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, has been established at national level within the framework of the association and/or a collective bargaining agreement.

5. In relation to the above, the Chamber also deemed it vital to outline that one of the basic conditions that needs to be met in order to establish that another organ than the DRC can settle an employment-related dispute between a club and a player of an international dimension, is that the competence of the relevant arbitration tribunal, respectively national court, derives from a clear reference in, inter alia, the employment contract at the basis of the dispute.

6. Therefore, while analysing whether it was competent to adjudicate the present matter, the Dispute Resolution Chamber considered that it should, first and foremost, analyse whether the employment contract at the basis of the present dispute actually contained a clear and exclusive jurisdiction clause in favour of the Arbitration Tribunal of the AIFF.

7. In this respect, the Chamber noted that the contract that is at the basis of the present dispute, stipulated the following:

“7.3 If a dispute between the Club and the Player is not resolved within 10 days, of the process contemplated in paragraph 7.2 then the dispute will be referred for solution to mediation under the relevant procedure set out in the League Rules (which form part of the Regulations). If a solution is not achieved within another 10 days of it being referred for mediation, the dispute shall be submitted to the FIFA Player Status Committee for adjudication.

7.4 All disputes relating to termination shall be referred to the FIFA Player Status Committee for adjudication directly without undergoing the process of the good faith negotiations and mediation referred to in paragraphs 7.2 and 7.3 unless both the Player and the Club mutually decide otherwise. “

8. After carefully examining the aforementioned clauses, the Chamber concluded that, undoubtedly, the parties agreed beforehand that the disputes arising from the aforementioned contract shall be settled before FIFA. As a result, the Chamber rejected the argument of the Respondent in this regard and confirmed that it is competent to deal with the present matter.

9. Subsequently, and for the sake of completeness, the Chamber further turned its attention to a series of events occurred during the proceedings, which may have consequences in relation to its competence.

10. In particular, the Chamber noted that, on 6 November 2020, the legal representative of the player sent a confusing correspondence to FIFA, referring to a settlement agreement. The Chamber noted, however, that said possible settlement agreement was not provided.

11. In this respect, the Chamber noted that, on 11 November 2020, the legal representative of the player went back on his words and denied the existence of any settlement, arguing that it was “misled”.

12. In relation to the aforementioned sequence of events, the Chamber acknowledged that, indeed, the Claimant acted in a confusing manner. However, considering that no documentary evidence was provided concerning a possible settlement, the Chamber understood that there is no legal basis to assume that the claim was withdrawn. Consequently, the Chamber reiterated that is competent to deal with the matter at stake.

13. In continuation, the Dispute Resolution Chamber analysed 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 the date when the claim was lodged, the January 2020 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand.

14. 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.

15. In this respect, the Chamber noted that, on 1 September 2019, the Claimant signed a contract with the Respondent, valid until 30 of April 2021.

16. Subsequently, the Chamber observed that the player lodged a claim before FIFA against the club for breach of contract without just cause, noting that the club terminated the contract on 20 May 2020 (with retroactive effect as of 23 March 2020) via a “Termination Notice”.

17. Conversely, the Chamber took note of the Respondent’s position, according to which the aforementioned notice was “superseded”.

18. The foregoing being established, the Chamber understood that, at this point, the main legal issue at stake is to determine whether the contract was terminated via said notice, and as from which date, without prejudice of the legal consequences that may arise thereof.

19. However, after duly examining the evidence gathered during the course of the investigation, the Chamber concluded that, de facto, it appears that the player never returned to the club after the notice of 20 May 2020. Hence, the Chamber considered that the contract was terminated as of said date, regardless of its presumed retroactive effects.

20. This being established, the Chamber went on to examine whether the Respondent would have had a just cause to terminate the contract as of 20 May 2020.

21. In this respect, the Chamber was eager to emphasise that only a breach or misconduct which is of a certain severity justifies the termination of a contract. In other words, only when there are objective criteria, which do not reasonably permit to expect a continuation of the employment relationship between the parties, a contract may be terminated prematurely. Hence, if there are more lenient measures which can be taken in order for an employer to ensure the employee’s fulfilment of his contractual duties, such measures must be taken before terminating an employment contract. A premature termination of an employment contract can only ever be an ultima ratio measure.

22. In relation to said principle, the Chamber analyzed the contents of the letter of 20 May 2020, and noted that the Respondent fundamentally grounded its decision on the basis of force majeure and the outbreak of the COVID-19 pandemic.

23. However, in relation to said letter, the Chamber first of all observed that the Respondent had unilaterally terminated the contract on 20 May 2020, without any prior indication or warning towards the player. What is more, the Respondent did not undertake any attempt to find an amicable solution with the player, and rather unilaterally terminated the contract with the player form the one day to the other.

24. Furthermore, regardless of the question whether the Claimant or the Respondent was to be held responsible for the effects of the COVID-19 pandemic on the contract, the Chamber was of the firm opinion that the Respondent, since such circumstance, in this particular situation could not legitimately be considered as being severe enough to justify the termination of the contract. The Chamber was of the opinion that there would have been more lenient measures to be taken (for instance, among others, a temporary amendment of the salary and/or a temporary suspension of the contract, in order to find a solution for the circumstances occurred as from March 2020.

25. On account of all the abovementioned considerations, the Chamber decided that the Respondent had no just cause to unilaterally terminate the employment relationship between the Claimant and the Respondent and, therefore, concluded that the Respondent had terminated the employment contract without just cause on 20 May 2020. Consequently, the Respondent is to be held liable for the early termination of the employment contact without just cause.

26. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract without just cause by the Respondent.

27. First of all, the members of the Chamber observed that the Claimant acknowledged that he received his remuneration until the termination of the contract.

28. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to any outstanding remuneration on the basis of the relevant employment contract.

29. In this context, the Chamber outlined that, in accordance with said provision, 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.

30. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a 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.

31. Subsequently, and in order to evaluate the compensation to be paid by the Respondent, the members of the Chamber took into account the remuneration due to the Claimant in accordance with the employment contract as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber pointed out that at the time of the termination of the employment contract on 20 May 2020, the contract would run until 30 April 2021. Consequently, taking into account the financial terms of the contract, the Chamber concluded that the remaining value of the contract as from its early termination by the Respondent until the regular expiry of the contract amounts to USD 145,000 (season 2020-2021, cf. point I.2 above) and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

32. In continuation, the Chamber remarked that following the early termination of the employment contract at the basis of the present dispute, the Claimant was not able to find new employment. As a result, no further amounts will be deducted from the compensation the player would be entitled to.

33. Nevertheless, the Chamber noted that the player acknowledged that the Respondent subsequently paid him the amounts of USD 29,900.

34. In view of all of the above, the Chamber decided that the Respondent must pay the amount of USD 115,100 (i.e. 145,000-29,900) to the Claimant as compensation for breach of contract without just case, which is considered by the Chamber to be a reasonable and justified amount as compensation.

35. In addition, taking into account the Claimant’s claim and the longstanding jurisprudence of the Chamber in this respect, the Chamber decided to award the Claimant interest of 5% p.a. as of the date of the claim.

36. Furthermore, the Chamber examined the Claimant’s request, to be awarded with 5% over the full employment contract in accordance with clause 5.7 of the schedule 2, i.e. USD 12,750.

37. However, after duly examining the aforementioned contract, the Chamber considered that said amount was not due to the player, and consequently decided to reject this part of the claim.

38. Besides, the Chamber also took note of the Claimant’s request to be provided with his tax certificate. In this regard, the Chamber noted that art. 7 par (b) of the contract stipulated that the club shall “ provide the Player with copies of all the Regulations (…) and any other rules/regulations which affect the Player and of the terms and conditions of any policy of insurance in respect of or in relation to the Player with which the Player is expected to comply”

39. Hence, in accordance with the aforementioned stipulation, the Chamber established that the Respondent shall provide the player with his tax certificate.

40. The Dispute Resolution Chamber concluded its deliberations in the present matter by rejecting any further claim lodged by the Claimant. In conclusion, the Claimant’s claim is admissible and partially accepted.

41. As to the requested legal fees, the Chamber referred to art. 18 pars. 2 and 4, 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” and “no procedural compensation shall be awarded in proceedings of the Players’ Status Committee and the DRC.”

42. Furthermore, taking into account the previous considerations, the Dispute Resolution 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.

43. In this regard, the Dispute Resolution 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.

44. Therefore, bearing in mind the above, the Dispute Resolution Chamber 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.

45. Finally, the Dispute Resolution 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, Nestor Jesús Gordillo Benítez, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Hyderabad FC, has to pay to the Claimant, the following amount:

- USD 115,100 as compensation for breach of contract without just cause, plus 5% interest p.a. as from 7 July 2020 until the date of effective payment.

4. The Respondent shall provide a tax certificate to the Claimant.

5. Any further claims of the Claimant are rejected.

6. 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.

7. 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).

8. 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.

9. 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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