F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – overdue payables / debiti scaduti – (2017-2018) – fifa.com – atto non ufficiale – Decision 19 April 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 19 April 2018,

in the following composition:

Geoff Thompson (England), Chairman

Takuya Yamazaki (Japan), member

Abu Nayeem Shohag (Bangladesh), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C, Country D

as Respondent

regarding an employment-related dispute

between the parties in connection with overdue payables

I. Facts of the case

1. On 1 July 2017, the Player of Country B, Player A (hereinafter: Claimant), and the Club of Country D, Club C (hereinafter: Respondent), signed an employment agreement valid as from the signature date until 31 May 2018.

2. The employment agreement contains a clause stipulating that it is regulated by the provisions of a standard employment contract, which constitute an integral part of the employment agreement. In addition, the employment agreement contains a clause stipulating that in case of conflict, the terms of the standard employment contract shall take precedence over the terms of the employment agreement. The employment agreement does not include a jurisdiction clause.

3. The copy of the standard employment contract on file contains the apparent signatures of the parties. The wording of the standard employment contract does not include any denomination of the parties, since it simply refers to, inter alia, “club” and “player”. In addition, the standard employment contract does not contain any dates. It does contain an exclusive jurisdiction clause in favour of the national dispute resolution chamber (NDRC) of the Football Association of Country D (Football Association E).

4. On 29 September 2017, the parties signed a termination agreement by means of which the employment agreement and “every other agreement related to the player’s employment by the club” were terminated by mutual consent with immediate effect.

5. Article 12 of the termination agreement stipulates, inter alia, that “FIFA shall have exclusive jurisdiction of all disputes arising from this Agreement, its execution and its interpretation, with the right to appeal to the Court of Arbitration for Sports (CAS) in Lausanne/Switzerland.”

6. In addition, in accordance with the termination agreement, the Respondent undertook to pay to the Claimant the amount of EUR 55,000 in the following 4 instalments, each payable within a grace period of 15 days following the due date:

a. EUR 15,000 until 30 September 2017;

b. EUR 15,000 until 31 October 2017;

c. EUR 15,000 until 30 November 2017;

d. EUR 10,000 until 31 December 2017.

7. Furthermore, the termination agreement stipulates that in the event that the club does not pay an instalment in full or in part within the 15 days’ grace period, all remaining instalments shall become immediately due and payable automatically without the need of any notice.

8. On 17 October 2017, the Claimant put the Respondent in default of payment of the full amount of EUR 55,000 setting a 10 days’ time limit in order to remedy the default. In his default notice, the player highlighted that since the first instalment had remained unpaid, the full amount had fallen due in accordance with the acceleration clause of the termination agreement.

9. On 1 November 2017, completed on 20 November 2017, the Claimant lodged a claim against the Respondent in front of FIFA asking that the Respondent be ordered to pay to him overdue payables in the amount of EUR 55,000 corresponding to the full amount due to him in accordance with the termination agreement, which he considers to have fallen due on 16 October 2017 in light of the contractual acceleration clause.

10. The Claimant further asks to be awarded interest of 5% p.a. as of 30 September 2017 on the amount of EUR 15,000 and as of 16 October 2017 on the amount of EUR 40,000.

11. In addition, he asks that the Respondent shall bear his legal fees and the judicial costs.

12. The Respondent, for its part, contested FIFA’s competence to deal with the present matter invoking the competence of the Dispute Resolution Chamber of the Football Association of Country D, which it considers to be an independent and impartial NDRC, on the basis of the Football Association E Regulations on the registration and transfer of players as well as the standard employment contract.

13. In addition, the Respondent held that it is not a member of FIFA since it is a public company registered according to Law of Country D.

14. As to the substance of the matter, the Respondent held that despite the fact that the agreed instalments were not paid on time, during a phone conversation with the club president, the Claimant had explicitly accepted that all instalments be paid by the end of March 2018.

15. In addition, the Respondent deems that the Claimant is not entitled to claim any of the payments of the termination agreement, since after the termination he found new employment providing a higher remuneration, as a result of which he had allegedly suffered no damages from the termination of the employment contract.

16. In his replica, the Claimant rejected the Respondent’s position as to the competence of FIFA’s DRC referring inter alia to clause 12 of the termination agreement and the fact that the Respondent is registered under a national football federation.

17. Furthermore, the Claimant fully rejected the Respondent’s allegations and position as to the substance of the matter.

18. In its duplica, the club rejected the player’s comments and adhered to its position.

II. Considerations of the Dispute Resolution Chamber

1. First, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 1 November 2017. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2017; hereinafter: Procedural Rules) are 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 and par. 2 in conjunction with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2018) the Dispute Resolution Chamber, would, in principle, be competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Player of Country B and a Club of Country D.

3. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 13 April 2018 by means of which the parties were informed of the composition of the Chamber, the member Tomislav Kasalo and the member Daan de Jong refrained from participating in the deliberations in the case at hand, due to the fact that the member Tomislav Kasalo has the same nationality as the Claimant and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member Daan de Jong refrained from participating and thus the Dispute Resolution Chamber adjudicated the case in presence of three members in accordance with art. 24 par. 2 of the Regulations on the Status and Transfer of Players.

4. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s Dispute Resolution Chamber on the basis of, inter alia, the Football Association E Regulations and the above-mentioned standard employment contract, which, as opposed to the aforementioned employment contract dated 1 July 2017, contains an exclusive jurisdiction clause in favour of the national dispute resolution chamber of the Football Association of Country D.

5. In this regard, the Chamber noted that the Claimant rejected such position and insisted that FIFA has jurisdiction to deal with the present matter.

6. While analysing whether it was competent to hear the present matter, first and foremost, the Chamber deemed it of utmost importance to highlight that the employment contract dated 1 July 2017 as well as “every other agreement related to the player’s employment by the club” were terminated by mutual consent of the parties with immediate effect on 29 September 2017 in accordance with the termination agreement.

7. In addition, the Chamber pointed out that the claim of the Claimant is solely based on the termination agreement, which, in its article 12, assigns exclusive jurisdiction to FIFA for all disputes arising from such agreement.

8. In view of these circumstances, the Chamber established that the Respondent’s objection to the competence of FIFA to deal with the present matter has to be rejected and that there was no need to further analyse the validity of the standard employment contract and the documentation presented by the Respondent in relation to the constitution of the NDRC of Country D.

9. In addition, the Chamber decided to reject the Respondent’s argument alleging that it is not a member of FIFA as it is a public company registered according to Law of Country D. Indeed, the Respondent is a club duly affiliated to and operating under the auspices of the Football Association of Country D.

10. On account of the above, the Dispute Resolution Chamber decided that it is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to consider the present matter as to the substance.

11. Having established the above, 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 par. 2 of the Regulations on the Status and Transfer of Players (edition 2018), and considering that the present claim was lodged on 1 November 2017, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

12. 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 on file. 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.

13. Having said this, the DRC acknowledged that, on 1 July 2017, the Claimant and the Respondent signed an employment contract, which was terminated by the parties with mutual consent on 29 September 2017 in accordance with the termination agreement.

14. The members of the Chamber duly noted that in accordance with the termination agreement, the Respondent undertook to pay the amount of EUR 55,000 to the Claimant in four instalments, each payable with a grace period of 15 days of the following due dates: 30 September 2017, 31 October 2017, 30 November 2017, 31 December 2017.

15. The termination agreement further stipulates, inter alia, that in the event that the Respondent would not pay an instalment in full or in part within the 15 days’ grace period, all remaining amounts would become due and payable immediately.

16. The Chamber noted that the Claimant lodged a claim against the Respondent in front of FIFA, maintaining that the Respondent has overdue payables towards him in the amount of EUR 55,000 based on the fact that the Respondent had failed to pay the first instalment of EUR 15,000 that fell due on 30 September 2017 in accordance with the termination agreement. Therefore, the Claimant asked to be awarded the amount of EUR 55,000 pertaining to the entirety of the unpaid instalments in accordance with the termination agreement as well as 5% interest p.a. on EUR 15,000 as of 30 September 2017 and on EUR 40,000 as of 16 October 2017.

17. In this context, the DRC took particular note of the fact that with his correspondence dated 17 October 2017, the Claimant put the Respondent in default of payment of the amount of EUR 55,000 setting a 10 days’ time limit to remedy default.

18. Consequently, the DRC concluded that the Claimant had duly proceeded in accordance with art. 12bis par. 3 of the Regulations, which stipulates that the creditor (player or club) must have put the debtor club in default in writing and have granted a deadline of at least ten days for the debtor club to comply with its financial obligation(s).

19. In continuation, the Chamber took into account that the Respondent had not presented any documentation in support of its allegation that the Claimant had agreed to postpone payment of all instalments until the end of March 2018, which allegation was contested by the Claimant. In this context, the Chamber referred to the general principle of the burden of proof contained in art. 12 par. 3 of the Procedural Rules.

20. Furthermore, the members of the Chamber agreed that the Respondent’s further argument, in accordance with which the Claimant would not be entitled to claim any of the payments under the termination agreement, since after the termination he found new employment providing for a higher remuneration, as a result of which he allegedly had suffered no damages from the termination of the employment contract, had to be rejected due to a lack of a legal basis.

21. On the basis of the above considerations, the Chamber concluded that the Respondent failed to pay the instalment of EUR 15,000 that fell due on 30 September 2017 and that, consequently, in accordance with the termination agreement, in particular, its acceleration clause, all of the unpaid instalments totalling EUR 55,000 have fallen due as from 16 October 2017.

22. In addition, the DRC established that the Respondent had delayed a due payment for more than 30 days without a prima facie contractual basis.

23. On account of the above, the DRC decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant overdue payables in the amount of EUR 55,000.

24. In addition, taking into consideration the Claimant’s request as well as the Chamber’s constant jurisprudence, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of EUR 15,000 as of 1 October 2017 and on the amount of EUR 40,000 as from 17 October 2017 until the date of effective payment.

25. Moreover, the Dispute Resolution Chamber decided to reject the Claimant’s claim pertaining to legal costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

26. In continuation, taking into account the consideration under number II./22. above, the DRC referred to art.12bis par. 2 of the Regulations which stipulates that any club found to have delayed a due payment for more than 30 days without a prima facie contractual basis may be sanctioned in accordance with art. 12bis par. 4 of the Regulations.

27. The DRC established that by virtue of art. 12bis par. 4 of the Regulations it has competence to impose sanctions on the Respondent. Bearing in mind that the Respondent duly replied to the claim of the Claimant and in the absence of the circumstance of repeated offence, the DRC decided to impose a warning on the Respondent in accordance with art. 12bis par. 4 lit. a) of the Regulations.

28. In this connection, the DRC wished to highlight that a repeated offence will be considered as an aggravating circumstance and lead to more severe penalty in accordance with art. 12bis par. 6 of the Regulations.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, overdue payables in the amount of EUR 55,000 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. on the amount of EUR 15,000 as of 1 October 2017;

b. 5% p.a. on the amount of EUR 40,000 as of 17 October 2017.

3. In the event that the amount plus interest due to the Claimant is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

4. Any further claim lodged by the Claimant is rejected.

5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

6. A warning is imposed on the Respondent.

*****

Note relating to the motivated decision (legal remedy):

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport

Avenue de Beaumont 2

1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl: CAS directives