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 24 November 2016

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 24 November 2016,

in the following composition:

Geoff Thompson (England), Chairman

Philippe Diallo (France), member

Takuya Yamazaki (Japan), 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

I. Facts of the case

1. On 15 March 2015, the player from country B, Player A (hereinafter: player or Claimant), and the club from country D, Club C (hereinafter: club or Respondent), signed an employment contract (hereinafter: contract) valid as from 15 March 2015 until 30 November 2015.

2. According to the contract, the club undertook to pay the player a monthly salary “based on Category I (first), as provided in the staff list”, which corresponds to the net amount of 4,250,000.

3. Furthermore, according to Art. 7.1 of the contract, the club undertook to pay the player a signing-on fee of 160,000,000 in two instalments as follows:

- 80,000,000 during the first round of the Championship 2015 of country D;

- 80,000,000 until the beginning of the second round of the Championship 2015 of country D.

4. Art. 9.2 of the contract reads as follows: “For systematic infringement by the player of his duties […], the management of the club has the right unilaterally to revise or cancel the art. 7.1 [“financial remuneration for signing the contract”, cf. point I./3. above] hereof”.

5. The contract refers to the club regulations as an integral part of the contract.

6. According to the club regulations, the monthly payments are due “until the tenth day of the next month”.

7. On 6 July 2015, the player put the club in default of outstanding remuneration in relation to salary, the signing-on fee and a bonus pointing out that as from April 2015 he had received no further payments. Furthermore, in his default notice, the player held that he would not return to the team’s training camp starting on 7 July 2015 due to the debt of the club and since the club’s new managers and coach allegedly informed him that they were not counting on him anymore and had decided to terminate the contract.

8. On 10 July 2015, the club sent a letter to the player requesting him to return to the club until 14 July 2015 and stating that “the issue of your future stay at the club is currently considered and directly connected to your participation in the training camp”. Furthermore, the club held that the matter of the existing debt would be discussed upon the player’s return.

9. In further exchanges of correspondence between the parties, the player held that he would not return to the club, unless his outstanding remuneration would be paid. The club, for its part, insisted that the player needed to return to the club in order to receive his receivables.

10. On 14 August 2015, the club sent a letter to the player, whereby it stated that the player breached his contractual obligations and requested him to return to the club until 17 August 2015 and to hand in an explanation for his absence since 6 July 2015. In said letter, the club informed the player that it would terminate the contract in case the player would not return and that it would issue a fine for the violation of the contract.

11. On 18 August 2015, the club terminated the employment contract with effect as of 6 July 2015, on the basis of the player’s absence. In said letter, the club referred to the “imposition of penalties” and that it would retain the “cost of the equipment out of the salary”.

12. On 18 August 2015, due to the player’s absence, the club imposed a fine of 90% of the signing-on fee on the player, leaving the club with the obligation to pay 16,000,000, which, in fact, it already paid.

13. On 9 September 2015, the player lodged a claim with FIFA against the club arguing that the club is to be held liable for the early termination of the contract without just cause. Therefore, he requested to be awarded payment of the following monies:

a. 64,000,000 corresponding to the remaining outstanding portion of the first instalment of the signing-on fee;

b. 750,000 corresponding to the remaining part of the salaries of May and June 2015;

c. 101,250,000 as compensation for breach of contract corresponding to the residual value of the contract;

Additionally, the player requested 5% interest p.a. on the aforementioned amounts.

14. In his arguments, the player held that he left country D after the first round of the championship on 2 July 2015 for holidays, but also due to the fact that the new management of the club had made it clear that they did no longer count on his services.

15. Furthermore, the player stated that his contractual situation remained unclear and that, on 2 July 2015, two monthly salaries, i.e. May and June 2015, plus a portion of the first instalment of the signing-on fee, i.e. 64,000,000 remained outstanding. The player specified having only received 1,5 month of salary payments and the amount of 16,000,000 as part of his signing-on fee as from the beginning of his contract.

16. Moreover, the player argued that along with the termination of the contract by the club on 18 August 2015, a fine corresponding to 90% of his signing-on fee was imposed on him and the amounts of 4,925,875 and 2,811,465, allegedly corresponding to two monthly salaries, were paid to him.

17. Additionally, the player highlighted that a fine cannot be used to set off against a debt.

18. Further, the player held that the fine represents more than half of his remuneration and that it therefore must be considered disproportionate. The player emphasized that a fine imposed for the absence of a player after the player put the club in default, “cannot be justified”.

19. Regarding article 9.2 of the contract, the player pointed out, that “without entering into the subject of the validity such clause”, there was no “systematic infringement” of the player as required in said article, and that the club therefore breached the contract without just cause, since it failed to fulfil its financial obligations.

20. In its reply, the club rejected the claim and held that the player did not return to the club on 6 July 2015, after holidays granted to the whole team, i.e. as from 2 July 2015 until 5 July 2015.

21. Further, the club acknowledged that it did delay certain salary payments due to financial difficulties and that the salary of May 2015 remained unpaid on 1 July 2015, whereas the salaries for March and April 2015 were paid. Furthermore, the club held that the salary of June 2015 was not yet due on 1 July 2015.

22. Regarding the signing-on fee, the club argued that 16,000,000 were paid and that the remaining part of the first instalment, i.e. 64,000,000 was to be paid as soon as the player would have returned to the club. The second instalment of the signing-on fee, i.e. 80,000,000, was not yet due and was to be remitted to the player on 1 August 2015.

23. The club concluded that at the moment of the player’s departure for holidays, it was indebted towards him with the salary of 1 month with a twenty-day delay and the signing-on fee “in the amount of 40% of the total sum with one-day delay”.

24. Moreover, the club held that on 18 August 2015 all outstanding dues, i.e. the amounts of 4,925,875 and 2,811,465, corresponding to the salaries of May to July 2015, were remitted to the player.

25. On 26 August 2015, the player signed a new employment contract with the club from country B, Club E, valid as from 26 August 2015 until 31 May 2016, including a monthly salary of 1,900.

II. Considerations 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 matter at hand. In this respect, it took note that the present matter was submitted to FIFA on 9 September 2015. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; 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 combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2016) the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player from country B and a club from country D.

3. Furthermore, the Chamber analysed which regulations should be applicable as to the substance of the matter. In this respect, it confirmed that in accordance with art. 26 par. 1 and par. 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged on 9 September 2015, the 2015 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the members of the Chamber acknowledged that, on 15 March 2015, the Claimant and the Respondent had concluded an employment agreement valid as from 15 March 2015 until 30 November 2015, on the basis of which the Claimant was entitled to receive a monthly salary of 4,250,000, payable until the 10th day of the following month, and a signing-on fee in the amount of 160,000,000, payable in two instalments of 80,000,000 each, the first one due “during the first round of Championship 2015 of country D” and the second one “until the beginning of the second round of country D’s Championship”.

6. In continuation, the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that the Respondent had terminated the contract without just cause, since he considers having had valid reasons to be absent, in particular, due to the outstanding remuneration and the unclarity about his contractual situation. Consequently, the Claimant asked to be awarded his outstanding receivables as well as payment of compensation for breach of contract.

7. Subsequently, the DRC observed that the Respondent rejected the Claimant’s claim and held that the Claimant was absent without a valid reason as of 6 July 2015. Further, the Chamber noted that the Respondent acknowledged that it was in delay with certain payments but sustained that, at the moment of the player’s departure for holidays on 2 July 2015, the club’s debt towards the player amounted to only one salary and part of the signing-on fee.

8. Having said that, the members of the Chamber highlighted that the underlying issue in this dispute was to establish as to whether the Respondent has terminated the employment contract with or without just cause and to determine the consequences thereof. In this context, the Chamber acknowledged that it had to examine whether the reasons put forward by the Respondent in its defence could justify the termination of the contract in the present matter.

9. Having stated the above, the DRC turned its attention to the reasons invoked by the Respondent for proceeding to the early termination of the employment contract concluded between the parties.

10. The members of the Chamber took into account that the Respondent terminated the contract on 18 August 2015 invoking the Claimant’s undisputed absence as of 6 July 2015, i.e. the moment when the player should have returned to the club from his holidays in order to resume his duties.

11. Furthermore, the DRC took notice that, on two occasions, i.e. on 10 July 2015 and on 14 August 2015, the Respondent sent notifications to the Claimant instructing him to resume work. In its letter of 14 August 2015, the Respondent granted the Claimant a final time limit until 17 August 2015 to explain his absence as of 6 July 2015 and to resume work. In addition, the Respondent warned the Claimant that it would terminate the contract in case the player would not return.

12. The DRC then took due note that according to the Claimant, his absence from the club as of 6 July 2015 was justified by the fact that his contractual situation remained unclear at the moment of his departure for holidays on 2 July 2015, since the club’s new management allegedly had indicated that they did not wish to continue making use of his services and since his salary for May and June 2015 plus a portion of the signing-on fee remained unpaid.

13. In this respect, the Chamber recalled the basic principle of the burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

14. With this in mind, regardless of the question as to whether an unclear contractual situation as described by the Claimant could be considered a valid reason not to resume duty at the club, the Chamber took into account that the Claimant had not presented convincing evidence in support of his allegation regarding the alleged uncertainty of his contractual situation. In addition, the Chamber noted that the Respondent, in reply to the Claimant’s notice of 6 July 2015, had replied to this specific part of the Claimant’s communication and made it clear to the Claimant that he was expected back at the club to resume work. Therefore, the members of the Chamber could not uphold the Claimant’s argumentation with respect to the alleged uncertainty in his contractual situation.

15. In continuation, the members of the Chamber turned their attention to the financial aspect surrounding the present matter, in particular, the remuneration that remained outstanding on 6 July 2015, date on which the Claimant undisputedly had to be back with the Respondent in order to resume work. According to the Claimant, part of the first instalment of the signing-on fee as well as his salary for May and June 2015 had remained outstanding. In this respect, the Chamber recalled that according to the contract and the club regulations, which form an integral part of the contract, monthly payments were due until the 10th day of the following month. In addition, according to the employment contract, the first instalment of the signing-on fee was due during the first round of the Championship 2015 of country D, without a specific date being specified. However, it has remained undisputed by the parties that the first round of said Championship ended on or about 2 July 2015 and that the Respondent had paid 16,000,000 out of the first instalment of 80,000,000 to the Claimant.

16. Consequently, the Chamber concluded that, as at 6 July 2015, part of the first instalment of the signing-on fee had fallen due since a few days as well as 1 monthly salary, i.e. May 2015, and highlighted that the salary for June 2015 had not yet fallen due.

17. In light of the above, the members of the Chamber agreed that the Claimant’s argumentation could not be upheld and established that the Claimant had no valid reasons not to return to the Respondent on 6 July 2015 in order to resume work.

18. On account of the above, and bearing in mind that the Respondent sent two notifications of default to the Claimant, requesting him to resume work and warning him that it would proceed with the termination of the contract in case of failure to comply, the Chamber established that the Respondent terminated the employment contract with just cause on 18 August 2015.

19. Therefore, the Chamber decided that the Claimant’s claim for compensation for breach of contract must be rejected.

20. Having established the above, the Chamber reverted to the Claimant’s claim relating to outstanding remuneration and focussed its attention on the remuneration that had remained unpaid for services rendered by the Claimant, in particular, until the date on which he had been instructed to return to the Respondent and as of which the Claimant was considered to have been absent without valid reasons.

21. In this regard, the DRC acknowledged that it had to address the question as to whether the deduction made by the Respondent from the Claimant’s receivables on the basis of the fine it imposed on the Claimant on 18 August 2015, i.e. the day on which it had terminated the employment contract, can be accepted.

22. In this respect, the Chamber concurred that the fine imposed on the Claimant by the Respondent must be considered disproportionate and shall thus be disregarded, since the total amount of the fine, i.e. 64,000,000, corresponds to 80% of the first instalment of the signing-on fee that had fallen due.

23. Furthermore, and irrespective of the foregoing consideration, the Chamber wished to point out that the imposition of a fine, or any other available financial sanction in general, shall not be used by clubs as a means to set off outstanding financial obligations towards players.

24. In this regard and taking into account the partial payments remitted by the Respondent to the Claimant on 18 August 2015 totalling 7,737,340, receipt of which was acknowledged by the Claimant, 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 amount of 65,435,484 as remuneration due to the Claimant in accordance with the employment contract for services rendered until 6 July 2015, i.e. the date as of which the Claimant stopped rendering his services to the Respondent without valid reasons. This amount includes the outstanding 64,000,000 of the first instalment of the signing-on fee as well as the claimed 750,000 for May and June 2015 plus 685,484 for 5 days of July 2015.

25. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of 65,435,484 as of the date of the claim, i.e. 9 September 2015.

26. The members of the Chamber concluded their deliberations on the present matter by rejecting any further claim of the Claimant.

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, outstanding remuneration in the amount of 65,435,484 plus 5% interest p.a. as from 9 September 2015 until the date of effective payment.

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.

*****

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:

Marco Villiger

Deputy Secretary General

Encl: CAS directives