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 9 February 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 February 2017,

in the following composition:

Thomas Grimm (Switzerland), Chairman

Eirik Monsen (Norway), member

Joaquim Evangelista (Portugal), member

Taku Nomiya (Japan), member

Todd Durbin (USA), 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 2 August 2013, the Player of Country B, Player A (hereinafter: the player or Claimant) and the Club of Country D, Club C (hereinafter: the club or Respondent) concluded an employment contract, valid as of the date of its signature until 30 June 2015.

2. According to the contract, the player was entitled to receive from the club, inter alia, a “weekly basic wage” of 40,000.

3. Moreover, clause 8.3.v of the contract stipulates that: ‘Should the player make an appearance […] in fewer than 19 (nineteen) Games of League E for the club during the 2013-2014 season then the club shall have the option to terminate the contract with immediate effect on 30 June 2014 provided that they give the player 21 days-notice following the club’s last competitive game of the season 2013-2014 and, for the avoidance of doubt, no further sums shall be due under the contract from the date of termination. If the club invokes its option to terminate the contract under this clause […] then the player will not be entitled to any indemnity, compensation or damages for any loss’.

4. Equally, clause 14.vi of the contract reads, inter alia, as follows: ‘The player and the club acknowledge and agree that in the event that the player shall without just cause unlawfully and unilaterally terminate and/or breach this agreement, including but without limitation any termination pursuant to article 17(3) of the FIFA Regulations […] in addition to any sporting sanctions […] compensation shall be payable to the club for the club’s loss of the services of the player and/or the opportunity to transfer his registration […]’.

5. Furthermore, clause 21 of the contract provides for the following: ‘This contract shall be governed and construed in accordance with Law of Country D and the parties submit to the non-exclusive jurisdiction of the Courts of Country D’.

6. On 16 October 2015, the player lodged a claim against the club in front of FIFA, requesting compensation for breach of contract in the amount of 1,920,000, as residual value of the contract in the period between 1 July 2014 and 30 June 2015. Further, the player requested for 5% interest p.a. as of 1 July 2014 until the date of effective payment, as well as sporting sanctions to be imposed on the club.

7. In particular, the player explained that on 7 May 2014, the club addressed a letter to him which reads, inter alia, as follows: ‘I am writing to confirm that the club will be exercising its option to terminate your contract with the club. Therefore, the club hereby give you 21 days – notice if termination as required under your contract and therefore your contract shall expire on 30 June 2014 […]’.

8. In this respect, the player stressed that the club did not provide any reasons why it terminated the contract and therefore, it must be concluded that said termination was without just cause. Furthermore, the player argued that it is irrelevant whether there is a clause in the contract which granted the club the option to early terminate the contract, since said clause is according to the player, ‘clearly potestative’, ‘ambiguous, non-reciprocal and […] indubitably unclear’ and would be ‘legally baseless in accordance to the terms and conditions set out in the FIFA RSTP’.

9. Moreover, the player exposed that even though on 20 March 2015, he signed a new contract with the Club of Country F, Club G, ‘the ongoing matter is one of those cases in which the compensation due shall not suffer any reduction or mitigation […]’.

10. In its reply to the claim, the club firstly stressed that in accordance with clause 8.3.v of the contract, it had the right to terminate the contract in case the player would participate in less than 19 matches with the club in League E in the 2013/2014 season. In this respect, the club stressed that the player only participated in 7 matches.

11. The club further argued that the aforementioned clause was mutually negotiated and explicitly accepted by the player, who was always assisted by his agent during said negotiations. In this respect, the club explained that it was interested in concluding a contract with the player for one year only, however, the player insisted in a two-year contract, for which reason clause 8.3.v was negotiated and agreed between the parties.

12. In continuation, the club argued that clause 8.3.v of the contract is neither unilateral nor potestative, as it was freely negotiated between the parties and which was accepted by the player, who has been a professional for 15 years. Therefore, there was neither inequality of bargaining power, nor a limitation of the player’s rights. In order to support its allegations, the club enclosed certain emails exchanged between itself, the player’s agent and the player.

13. As such, according to the club, in view of the aforementioned clause, the early termination of the contract should be considered either a mutual termination of the contract or, in the alternative, a justified termination of the contract.

14. In view of the above, the club alleged that the player has not presented any ground, which would make the clause invalid in accordance with the Law of Country D, which is the law applicable in accordance with clause 21 of the contract.

15. In his replica dated 1 September 2016, the player emphasised that clause 8.3.v of the contract is unilateral, as it only gives the club the right to terminate the contract. Consequently, the player argues that if he would have terminated the contract, the club would have been entitled to claim compensation from him as per clause 14.vi of the contract.

16. Moreover, the player argued that the main criteria used by the club to terminate the contract, in view of the content of clause 8.3.v, was his sporting performance, which argument cannot be upheld. In addition, the player held that the ‘failure to attend matches in view of decision or instructions received from the technical staff of the club, is not an acceptable reason for eventually granting the Club just cause to terminate the contract’.

17. In view of the above, the player pointed out that the clause is clearly potestative and therefore cannot be taken into account. As a result, the player holds that the club terminated the contract without just cause.

18. Moreover, the player stated that after the termination of the contract by the club, on 18 June 2014, he suffered an injury while playing an international game with the national team, of Country B. In this respect, the player argued that the club failed to provide him medical assistance, as a result of which he had to pay himself medical expenses for medical treatment in Country H in the amount of USD 28,500 and USD 10,000 as ‘indirect estimation of expenditures’.

19. As a result, the player amended his claim, and requested that the club be ordered to pay, in addition to his initial the claim, the additional amounts of USD 38,500 (consisting of USD 28,500 as medical expenses and USD 10,000 as expenditures) and 966,000 (consisting of additional compensation in the amount of 6 monthly salaries of 160,000 per month).

20. In its duplica, the club reiterated its position and argued that on 11 February 2014, the player had only played 6 matches in League E. Since on said day only 12 matches were to be played in the rest of the season, the club states that the player knew that he could no longer reach the required number of 19 matches as per clause 8.3.v of the contract.

21. Furthermore, the club argues that it did not terminate the contract based on the player’s sporting performance, and also stated that the player never contacted the club’s doctor, as he was required to do, while suffering from his injury.

22. Finally, the club requested for the dismissal of all the player’s claims, and highlighted that the net loss of the player only amounted to 1,098,000, that the claimed additional compensation is ‘an unenforceable penalty under the Law of Country D’, as well as that it cannot be held responsible for the medical expenses.

23. After having been requested by FIFA, the player informed that on 20 March 2015, he signed a contract with the Club of Country F, Club G, valid between 20 March 2015 and 4 June 2015, which ’has been timely sent’. According to the information contained in the Transfer Matching System (TMS), based on said contract, the player was entitled to receive from Club G a ‘salary in Country F in Currency of Country F’ of EUR 10,000, as well as a sign-on fee of EUR 20,000.

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 16 October 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 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 of Country B and an Club of Country D. What is more, the DRC acknowledged that none of the parties challenged FIFA’s competence to adjudicate the present matter as to the substance.

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 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged on 16 October 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. First of all, the members of the Chamber acknowledged that on 2 August 2013, the player and the club signed an employment contract valid as from the date of signature until 30 June 2015. In this respect, the Chamber noted that the player, on the one hand, maintains that the club breached the contract by sending him a letter, on 7 May 2014, maintaining that the contract would be terminated, based on clause 8.3.v of the contract. The club, on the other hand, rejects such claim and submits that since the player failed to play in at least 19 Games of League E with it and that based on article 8.3.v of the contract, it subsequently had the right to terminate the contract ‘with immediate effect on 30 June 2014’.

6. In this framework, the Chamber deemed that the underlying issue in this dispute was to determine whether the termination of the contract by the club, based on article 8.3.v of the contract, was made with or without just cause, and subsequently, to determine the consequences of such early termination by the club.

7. In this respect, the members of the Chamber further noted that from the information on file, it can be established that the player wanted to conclude a two-year contract with the club, which was on the other hand, only willing to offer the player a one-year contract. It appears from the information on file that the club and the player negotiated on the wording of clause 8.3.v and that after several email exchanges between the club and the player’s representative, the parties agreed upon the exact wording of said clause. What is more, the Chamber took note of the club’s allegations that, because the player was an experienced player who negotiated with the assistance of his agent on the wording of the clause, said clause is valid and binding upon the parties.

8. With the aforementioned considerations in mind, the members of the Chamber first wished to recall that when deciding a dispute before the DRC, FIFA’s regulations prevail over any national law chosen by the parties. In this regard, the Chamber emphasised that the main objective of the FIFA regulations is to create a standard set of rules to which all the actors within the football community are subject to and can rely on. This objective would not be achievable if the DRC would have to apply the national law of a specific party on every dispute brought to it. This should apply, in particular, also to the termination of a contract. In this respect, the DRC wished to point out that it is in the interest of football that the termination of a contract is based on uniform criteria rather than on provisions of national law that may vary considerable from country to country. Therefore, the Chamber deemed that it is not appropriate to apply the principles of a particular national law to the termination of the contract but rather the Regulations, general principles of law and, where existing, the Chamber’s well-established jurisprudence.

9. Having concluded the above, the Chamber went on with to analyse article 8.3.v of the contract, which reads as follows: ‘Should the player make an appearance […] in fewer than 19 (nineteen) Games of League E for the club during the 2013-2014 season then the club shall have the option to terminate the contract with immediate effect on 30 June 2014 provided that they give the player 21 days-notice following the club’s last competitive game of the season 2013-2014 and, for the avoidance of doubt, no further sums shall be due under the contract from the date of termination. If the club invokes its option to terminate the contract under this clause […] then the player will not be entitled to any indemnity, compensation or damages for any loss’. In this respect, the members of the Chamber wished to point out that the decision on the lining-up of a player in a match is normally left fully to the discretion of the club. As such, the player had no influence on the question of whether or not he would be fielded in a specific number of matches in the relevant season.

10. In this context, the members of the Chamber highlighted that, in general, potestative clauses, i.e. clauses that contain obligations which fulfilment are conditional upon an event that one party entirely controls, can in general not be applied, since they limit the rights of the other contractual party in an excessive manner and lead to an unjustified disadvantage of the latter towards the other.

11. Along those lines, the members of the Chamber agreed that article 8.3.v cannot be taken into consideration due to its potestative nature. Indeed, as previously mentioned, the club totally controlled the fielding of the player and therefore, only the club was in a position to decide whether or not to terminate the contract. In this respect, the Chamber pointed out that not only the player did not have the same possibility to early terminate the contract, for that particular reason but that, according to clause 14.vi of the contract, he had to pay the club compensation in case he would terminate the contract.

12. Having taken into account the previous considerations, the Chamber decided that article 8.3.v of the contract does not constitute a reason that can be validly invoked, to unilaterally terminate the contract. As a result of the foregoing, the members of the Chamber came to the conclusion that, by means of its letter dated 7 May 2014, the club terminated the contract with the player without just cause.

13. 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 club.

14. Along those lines, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the player is entitled to receive from the club compensation for breach of contract.

15. Subsequently and prior to assessing the relevant criteria in determining the amount of compensation due to the player by the club, the Chamber first of all recalled that the player, in addition to his claim for compensation for breach of contract in the amount of 1,920,000, is also claiming the amounts of 966,000 as additional compensation and the amount of USD 38,500 as medical expenses and expenditures.

16. Turning to the amount of 966,000 claimed as additional compensation, the members of the Chamber noted that this part of the player’s claim, was only introduced by the player on 1 September 2016, i.e. more than two years after the event giving rise to the dispute, this being the unilateral termination of the contract. As a result, the Chamber deemed that this part of the player’s claim must be considered barred by the statute of limitations in accordance with art. 25 par. 5 of the Regulations, and is therefore inadmissible.

17. Moreover, and in relation to the claim of the player for medical expenses, the members of the Chamber wished to point out that the player had only submitted an extract of a non-signed overview of costs from an alleged medical expert, Mr Sampson, in order to substantiate his allegations. As a result of the foregoing, the Chamber decided that the player could not prove, at the Chamber’s satisfaction, that costs in the amount of USD 38,500 were incurred by him and that the club was obliged to reimburse said costs. What is more, the alleged medical treatment underwent by the player, occurred in October 2014 at the earliest, i.e. more than 4 months after the player’s alleged injury. As such, the members of the Chamber decided that no direct link could be established between the costs of said medical treatment and the injury suffered by the player. Therefore, the members of the Chamber decided to reject this part of the player’s claim.

18. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club 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, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the player 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.

19. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained a 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 members of the Chamber reiterated article 8.3.v. of the contract, is to be considered null and void.

20. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

21. In order to estimate the amount of compensation due to the player in the present case, the members of the Chamber also turned their attention to the remuneration and other benefits due to the player under the existing contract and/or the new contract. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

22. In this respect, the Chamber pointed out that at the time of the termination of the employment contract, the contract would run for another 12 months, i.e. until 30 June 2015. Consequently, taking into account the financial terms of the contract as well as the claim of the player, the Chamber concluded that the remaining value of the contract as from its early termination by the club until the regular expiry of the contract amounted to 1,920,000, which amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

23. In continuation, the Chamber verified as to whether the player 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.

24. In this respect, the Chamber remarked that the player, on 20 March 2015, signed a contract with the Club of Country F Club G, valid between 20 March 2015 and 4 June 2015. According to said contract, and based on the information from the Transfer Matching System (TMS), the player was entitled to receive the total amount of EUR 30,000 or approximately 21,665, which amount shall be taken into account for the calculation of the amount of compensation for breach of contract.

25. Further, the Chamber went on to analyse whether there were other mitigating factors which had to be taken into account in the specific matter at hand, when calculating the total amount of compensation the player is entitled to.

26. In this respect, the Chamber was not blind to the fact that seemingly there were negotiations between the parties regarding the content of the employment contract. Moreover, the Chamber took note that the player lodged his claim against the club more than one year after the termination of the contract.

27. Consequently, and using its absolute discretion to assess the facts and evidence submitted within the context of a dispute, the Chamber decided that the club must pay the amount of 600,000 to the player as compensation for breach of contract, which is considered by the Chamber to be reasonable and justified amount.

28. In continuation and with regard to the player's request for interest, the Chamber decided that the player is entitled to receive interest at the rate of 5% p.a. on the amount of 600,000 as from 16 October 2015.

29. 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 partially accepted, insofar as it is admissible.

2. The Respondent, Club C, 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 600,000 plus 5% interest p.a. on said amount as from 16 October 2015 until the date of effective payment.

3. In the event that the amount plus interest due to the Claimant in accordance with the above-mentioned number 2. 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 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