F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2016-2017) – fifa.com – atto non ufficiale – Decision 18 May 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 18 May 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

John Bramhall (England), member

Takuya Yamazaki (Japan), member

Mohamed Al Saikhan (Saudi Arabia), member

Wouter Lambrecht (Belgium), 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 arisen between the parties

I. Facts of the case

1. On 21 June 2016, the Player of Country B, Player A (hereinafter: the Claimant) signed an employment contract with the Club of Country D, Club C (hereinafter: the Respondent) valid until 30 June 2018.

2. The contract provides for the total payment of USD 470,000, with USD 220,000 payable during the first season and USD 250,000 during the second season, in addition to other amenities, as follows:

a. USD 33,000 after signing the contract and receiving the International Transfer Certificate (ITC);

b. USD 15,583 as a monthly payment between 21 July 2016 and 21 July 2017;

c. USD 20,833 as a monthly payment “for the 2nd year”;

d. bonuses applicable to each year of the contract:

i. USD 30,000 “League Championship title win”;

ii. USD 20,000 “League Cup final win“;

iii. USD 30,000 “qualification for Asian Champions League 3rd round”;

iv. USD 10,000 “Asian Champions League Final participation (loss)”;

v. USD 50,000 “Asian Champions League Final participation (win)”.

e. “to provider a suitable apartment with necessary equipment and furniture for residence of the player. This apartment may be private and the payments for water, electricity, gas, telephone and monthly charges of the apartment will be paid by the club”;

f. “two round tickets” Country D – Country E – Country D.

3. The contract provides in its article 8.2 “in case of any dispute between both parties, the issue will be taken to Football Federation of Country D and only decision of Football Federation of Country D and its disciplinary committee is valid”.

4. The contract provides in its article 4.10 “for the [Claimant]’s absence more than 10 days, the [Respondent] is legally permitted to terminate the contract unilaterally as well as to follow the legal actions through official authorities for compensation of the damages made to the club. In this case, the [Claimant] will be suspended until the [Respondent]’s rights have been restored and will have no right for negotiating or concluding contract with other clubs”.

5. On 26 July 2016, the Claimant put the Respondent in default of a total of USD 48,583 pertaining to the signing-on fee of USD 33,000 due on 22 June 2016 and the first monthly instalment of USD 15,583 due on 21 July 2016, setting a ten-day deadline for the Respondent to cure the default.

6. On 23 August 2016, whilst acknowledging having received the payment of USD 33,000 “in the end of July 2016”, the Claimant put the Respondent in default of the total amount of USD 31,166 pertaining to the monthly instalments due 22 July 2016 and 21 August 2016. The Claimant set a five-day deadline for the Respondent to cure the default. The Claimant put the Respondent in default of the same amount on 15 September 2016.

7. On 22 September 2016, the Claimant formally notified the Respondent of the unilateral termination of the employment relationship on the basis that a total of USD 46,749 had remained outstanding, pertaining to the monthly salary payments due on 21 July 2016, 21 August 2016 and 21 September 2016.

8. On 3 November 2016, the Claimant lodged a claim against the Respondent before FIFA requesting to be paid the following amounts and an unspecified sum as legal fees:

a. USD 46,749 as outstanding remuneration, plus 5% interest p.a. from the day following the respective due dates, broken down as follows:

i. USD 15,583 having fallen due on 21 July 2016;

ii. USD 15,583 having fallen due on 21 August 2016;

iii. USD 15,583 having fallen due on 21 September 2016.

b. USD 681,493 as compensation for breach of contract plus 5% interest p.a. as of 3 November 2016, including the residual value of the contract, contractually provided bonuses, flight tickets and rent.

9. The Claimant claims to have had just cause to terminate the employment contract on the basis of the outstanding remuneration due in spite of having sent multiple default notices to the Respondent.

10. In reply to the Claimant’s claim, the Respondent referred to article 8.2 of the employment contract and stated that a claim was lodged before the “Disciplinary Committee of the Football Federation of Country D” and claims to be waiting for the decision of said committee. In spite of having been invited by the FIFA administration to provide it with the documents relating to any procedure in front of a deciding body of the Football Federation of Country D or any documentation demonstrating that the Disciplinary Committee of the Football Federation of Country D respects the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Respondent failed to submit any documentation.

11. Furthermore, the Respondent asserted that the Claimant was in clear contractual breach, as has been noted by the Respondent’s team manager on 3 October 2016, who indicated that on “26-Sep/2016, after team Holiday, our player [the Claimant] has not participated in the team training sessions. After research we found the mentioned player has not returned to Country D yet”.

12. In addition, the Respondent simply referred to the contract’s article 4.10. It further stated that a letter was sent to the Claimant notifying him that the money “is ready at the club” and he is invited to collect it. It also stated it was willing to resolve any issue amicably.

13. According to the information provided by the Claimant, on 10 January 2017, the Claimant signed an employment contract with the Club of Country F, Club G, valid from 1 February 2017 until 31 December 2018. Said contract was subsequently terminated by mutual agreement on 22 February 2017 and Club G undertook to pay the Claimant the total amount of USD 45,454. On 20 April 2017, the Claimant signed an employment contract valid from 1 June 2017 until 31 May 2018, providing for an annual salary of USD 67,125.

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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 3 November 2016. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (2015 edition; hereinafter: the Procedural Rules) are applicable to the matter at hand (cf. article 21 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 2016), 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. The Chamber, however, acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis that a claim was allegedly lodged before the “Disciplinary Committee of the Football Federation of Country D” and that a decision was pending.

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

5. In continuation, the Chamber duly noted that FIFA’s administration requested the Respondent to provide it with documentary evidence relating to any alleged procedure pending in front of a deciding body of the Football Federation of Country D as well as documentation demonstration that the Disciplinary Committee of the Football Federation of Country D respects the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings. In this regard, the members of the Chamber took note that the Respondent had not submitted any documentation in this regards.

6. Therefore, referring to art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof, the DRC took into account that the Respondent had failed to present any documentary evidence in support of its allegation that a decision was pending in front of the relevant deciding bodies of the Football Federation of Country D and that the present claim was inadmissible due to litispendence. Consequently, the Chamber decided that the Respondent’s allegations in this regard cannot be accepted.

7. In view of the above, the DRC established that since the Respondent had not been able to substantiate its allegation, the Respondent’s objection to the competence of FIFA to deal with the present matter had to be rejected and the Chamber 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. Thus, the claim of the Claimant is admissible.

8. Subsequently, 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 Players (2016 edition), and considering that the present claim was lodged on 3 November 2016, the 2016 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

9. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. The members of the Chamber started by acknowledging the facts of the case, as well as the documentation contained in the file. The Chamber, however, 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 (hereinafter: TMS).

10. In continuation, the Chamber recalled that the parties had signed an employment contract valid from 21 June 2016 until 30 June 2018 and noted that the Claimant was entitled to the payment of USD 220,000 during the first season. In this regard, it noted that the Claimant was set to be paid USD 33,000 upon signing the employment contract and a further USD 15,583 as a monthly salary. Thereafter, the Claimant would be entitled to a monthly USD 20,833 “for the second year”.

11. Furthermore, it was noted by the Chamber that the Claimant had lodged a claim against the Respondent on the basis that he had just cause to terminate the employment contract signed between the parties on 22 September 2016. The Claimant asserts that at the time of termination, and after having previously put the club in default multiple times, a total of USD 46,749 had remained outstanding, which pertains to the monthly salaries due on 21 July 2016, 21 August 2016 and 21 September 2016.

12. The members of the Chamber noted that in addition to the allegation a decision was currently pending in front of the relevant deciding bodies of the Football Federation of Country D, which remained unproven, the Respondent asserted that the Claimant did not have just cause to terminate the employment contract since the Claimant was absent from 26 September 2016. In this regard, the members of the Chamber agreed that the evidence submitted by the Respondent can not be taken into account since it was provided by a member of the Respondent’s own staff and is not considered independent. Furthermore, and for the sake of completion, the Chamber deemed that said argument could not be upheld since the Claimant had already sent the club notice of the unilateral termination of the employment contract on 22 September 2016, on the basis of having had just cause to do so.

13. In view of all of the above and in particular taking into account that the Respondent did not contest that the claimed salaries had remained unpaid, the members of the Chamber established that three monthly salaries due on 21 July 2016, 21 August 2016 and 21 September 2016, i.e. the very first three salaries to be paid to the Claimant during his employment with the Respondent, had remained outstanding at the time of termination of the contract by the Claimant. Consequently, the Chamber concurred that the Respondent had seriously neglected its financial contractual obligations towards the Claimant during a considerable period of time and as from the beginning of their contractual relationship and decided that the Claimant had just cause to unilaterally terminate the employment contract on 22 September 2016 and that the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

14. Consequently, the Chamber decided that in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant the amounts which were outstanding under the contract at the moment of the termination, i.e. a total of USD 46,749, corresponding to three monthly salaries for July to September 2016.

15. In addition, taking into consideration the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the members of the Chamber decided to award the Claimant interest at a rate of 5% p.a. on the total outstanding of USD 46,749 as of the day following the relevant due dates of each instalment of USD 15,583, i.e. 22 July 2016, 22 August 2016 and 22 September 2016, respectively.

16. In continuation, having established that the Respondent is to be held liable for the termination of the contract with just cause by the Claimant, the Chamber focussed its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract.

17. 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.

18. In application of the relevant provision, the Chamber held that it first 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.

19. As regards the Claimant’s claim relating to the estimated loss of USD 140,000 for bonuses relating to the 2017/2018 season, the members of the Chamber stressed that the payment and the amount of such bonuses are linked to matches and performances to be played in the future, i.e. after the termination of the relevant contract, and, therefore, are fully hypothetical. Consequently, the Chamber decided to reject such claim.

20. Bearing the foregoing in mind, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 30 June 2018 and concluded that the Claimant would have received total remuneration of USD 390,251, i.e. USD 140,251 for the first season and USD 250,000 for the second season, had the contract been executed until its expiry date.

21. In continuation, the Chamber verified 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.

22. Indeed, on 1 February 2017 the Claimant signed an employment contract with the Club of Country F, Club G which was subsequently terminated on 22 February 2017. The mentioned termination agreement provides that the Claimant would receive USD 45,454 on 22 February 2017. The Claimant then signed an employment contract with the Club of Country B, Club H, effective from 1 June 2017 until 31 May 2018, by means of which the Claimant is entitled to the annual payment of USD 67,125.

23. In accordance with the constant practice of the Dispute Resolution Chamber and the general obligation of the player to mitigate his damages, such remuneration under the new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract.

24. Consequently, on account of all of the aforementioned considerations and the specificities of the case at hand, the DRC decided that the Respondent must pay the Claimant the amount of USD 277,672 which was to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.

25. In addition and with regard to the Claimant’s request for interest, the Chamber decided that the Claimant is entitled to 5% interest p.a. on said amount as of 3 November 2016.

26. Furthermore, as regards to the claimed legal expenses, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as its long-standing and well established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the Chamber decided to reject the Claimant’s request relating to legal expenses.

27. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the Claimant is rejected.

*****

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 46,749 plus 5% interest p.a. until the date of effective payment as follows:

a. 5% p.a. as of 22 July 2016 on the amount of USD 15,583;

b. 5% p.a. as of 22 August 2016 on the amount of USD 15,583;

c. 5% p.a. as of 22 September 2016 on the amount of USD 15,583.

4. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of USD 277,672 plus 5% interest p.a. as from 3 November 2016 until the date of effective payment.

5. In the event that the amounts plus interest due to the Claimant in accordance with the aforementioned numbers 3. and 4. are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

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

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

*****

Note relating to the motivated decision (legal remedy):

According to art. 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