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 23 March 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 23 March 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Theo van Seggelen (Netherlands), member

Carlos G. Puche (Colombia), member

Alejandro Marón (Argentina), member

Wouter Lambrecht (Belgium), member

on the claim presented by the player,

Player A, from Country B

as Claimant

against the club,

Club C, from Country D

as Respondent

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 12 August 2015, the Player of Country B, Player A (hereinafter: the Claimant) and the Club of Country D, Club C (hereinafter: the Respondent) signed an employment contract (hereinafter: the contract) valid for two seasons, as from the date of signature until 31 May 2017.

2. According to the contract, the Claimant was entitled to a salary of EUR 110,000 for the first season (2015/2016) and of EUR 124,000 for the second season (2016/2017).

3. On 7 January 2016, the parties entered into a termination agreement (hereinafter : the termination agreement) by means of which they terminated the contract with immediate effect.

4. Pursuant to art. 3 of the termination agreement, the Respondent committed to pay the following amounts to the Claimant:

“ 3.1. EUR 7,000 with a post-dated cheque payable on 25/01/2016 (hereinafter: the first cheque)

3.2. EUR 7,000 with a post-dated cheque payable on 25/02/2016 (hereinafter: the second cheque)

3.3. EUR 30,000 in cash before 30/03/2016 ”.

5. According to art. 6 of the termination agreement: “should the cheques mentioned in paragraphs 3.1 and 3.2 be honoured and paid by the bank within a maximum of twenty working days from the date that they will be presented to the bank for payment, the [Claimant] shall waive his right to the payment of EUR 30,000 mentioned in paragraph 3.3 and he shall accept the total payment of EUR 14,000 as full and final settlement of his employment termination”.

6. On 25 January 2016, the Claimant presented the first cheque to the bank, which returned it unpaid on 28 January 2016.

7. On 28 January 2016, the Claimant presented again the first cheque to the bank, which was again returned unpaid on 29 January 2016.

8. On 29 February 2016, the Claimant presented the second cheque to the bank.

9. On 1 March 2016, the Claimant presented again the first cheque to the bank.

10. On 2 March 2016, the second cheque was paid.

11. On 3 March 2016, the first cheque was paid.

12. On 6 May 2016, the Claimant sent a letter to the club, by means of which it informed that the first cheque “was not paid and honoured” within the time limit set in art. 6 of the termination agreement. As a consequence thereof, the Claimant put the Respondent in default for the payment of EUR 30,000, granting it ten days in order to remedy the default.

13. On 20 May 2016, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract, requesting the payment of EUR 30,000 plus 5% interest as from 30 March 2016.

14. In his claim, the Claimant stated that the deadline set in his default notice expired, but the Respondent did not pay the requested amount.

15. In particular, the Claimant explained that, since the first cheque was paid more than twenty working days as from the date it was presented to the bank, he was entitled to the amount provided under art. 3.3 of the termination agreement.

16. Furthermore, the Claimant affirmed that the Respondent, on 29 February 2016 asked him to present the first cheque to bank again.

17. In its reply, the Respondent contested the FIFA’s jurisdiction, arguing that the “deciding body under the Football Association of Country D” was competent, “since the contract of employment provide this option to the parties […] please see art. 19 of the employment contract”.

18. In particular, the Respondent considered that such deciding body was “an independent arbitration tribunal guaranteeing fair proceedings” and compliant with FIFA regulations, as provided by the Regulations for the Registration and Transfer of Football Players and the Procedural Regulations 2013 of the Football Association of Country D.

19. As to the merits of the case, the Respondent acknowledged that the first cheque was paid more than twenty working days after that it was presented to the bank. Nonetheless, the Respondent argued that the Claimant was not entitled to the claimed amount as he had “orally accepted and impliedly agreed with the late payment of the first cheque”.

20. More in detail, the Respondent alleged that, on the date the second cheque was presented to the bank, “he accepted and orally agreed with the [Respondent] to present the first cheque to the bank, which it has been fully paid”.

21. Moreover, the Respondent considered that, as a proof of the agreement, the Claimant accepted the payment of the second cheque earlier than the payment of the first cheque and he did not complain about it. What is more, according to the Respondent, the Claimant presented the second cheque “according to the instructions (agreement) of the [Respondent]”.

22. Furthermore, the Respondent held that art. 6 of the agreement constitutes an invalid penalty clause as “it is disproportionate comparing to the amount of EUR 14,000”. Alternatively, the Respondent considered that said penalty clause, “according to article 163 (I) of the Swiss Code of Obligations” should be at least mitigated.

23. In his replica, the Claimant rejected the competence of the NDRC of Country D, as he considered that the same was not independent and impartial because the appointment of its players’ representatives “is not independent but it is subject to the approval and supervision of the Football Association of Country D”.

24. Moreover, the Claimant emphasized that neither the contract contains an explicit arbitration clause or “a reference to article 19”, nor there is any collective bargaining agreement in force in Country D.

25. Furthermore, the Claimant affirmed that he “never impliedly waived his right to the payment of EUR 30,000” and argued that such payment did not constitute a penalty clause. In particular, the Claimant emphasized that, compared to the remaining value of the contract, said payment was not excessive.

26. In its duplica, the Respondent maintained its position and rejected the further Claimant’s arguments.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as: the 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 20 May 2016. 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 would be in principle 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. With the above considerations in mind, the Chamber wished to recall that, in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, 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. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005. Equally, the members of the Chamber referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

4. 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 international dimension, is that the competence of the relevant arbitration tribunal derives from a clear reference in the employment contract.

5. Therefore, while analysing whether it was competent to hear 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 arbitration clause in favour of the “deciding body under the Football Association of Country D”.

6. With the above-mentioned considerations in mind and after a thorough analysis of the contract at the basis of the present dispute, the members of the Chamber concluded that said contract did not contain and arbitration clause in favour of the “deciding body under the Football Association of Country D” or any other national body. Therefore, the members of the Chamber came to the unanimous conclusion that, in the present matter, one of the indispensable requirements in order to determine that another body than the DRC is competent to deal with an international employment-related dispute is not met.

7. On account of the above, the Chamber established that the Respondent’s objection towards the competence of FIFA to deal with the present matter has to be rejected and that, thus, the Dispute Resolution Chamber is competent, on the basis of art. 22 lit. b) of the Regulations on the Status and Transfer of Players, to entertain the Claimant’s claim as to the substance.

8. In continuation, 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 20 May 2016, the 2015 edition of said 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. 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.

10. First, the Chamber noted that, on 7 January 2016, the parties entered into a termination agreement, by means of which they terminated the contract.

11. Furthermore, the DRC took note that, according to art. 3 of the termination agreement, the Claimant was entitled to the amount of EUR 14,000, to be paid with two cheques on 25 January and 25 February 2016 respectively, and to EUR 30,000 within 30 March 2016.

12. Moreover, the members of the Chamber noted that art. 6 of the termination agreement stipulates that the Claimant, “should the cheques be paid within a maximum of twenty working days from the date they will be presented to the bank for payment”, committed to waive the above-mentioned amount of EUR 30,000.

13. In this context, the DRC noted that the Claimant alleged that the Respondent did not pay him the first cheque within the deadline of twenty working days and, consequently, he was entitled to the amount of EUR 30,000 provided in the termination agreement.

14. In continuation, the members of the Chamber highlighted that the Respondent, for its part, acknowledged that the first cheque indeed had been paid more than twenty working days after its first presentation to the bank by the Claimant.

15. Notwithstanding the above, the DRC took note that the Respondent pointed out that the Claimant had presented the first cheque to the bank in two different occasions pursuant to the Respondent’s instructions, because he allegedly agreed on the delayed payment.

16. In continuation, the Chamber noted that the Respondent argued that art. 6 of the termination agreement provided a disproportionate and, thus, invalid penalty clause.

17. In view of the aforementioned positions of the parties, the members of the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the Claimant accepted the delayed payment of the first cheque and, thus, triggered the waiver under art. 6 of the termination agreement.

18. In this regard, the DRC, after having duly analysed the clause at stake, held that art. 6 of the termination agreement clearly required the timely payment of both cheques for triggering the Claimant’s waiver of the claimed amount.

19. Moreover, the members of the Chamber concurred that, in accordance with the principle of the burden of the proof under art. 12 par. 3 of the Procedural Rules, the Respondent did not prove that the fact that the Claimant required the payment of the first cheque twice would entail his acceptance of the delayed payment.

20. As to the dissenting viewpoint of the parties with respect to the proportionality of the penalty fee contained in art. 6 of the termination agreement, the Chamber again focussed its attention on said contractual clause.

21. In this regard, the members of the Chamber concurred that art. 6 of the termination agreement did not consist in a penalty clause, but rather in a right that could be waived in case certain conditions were met, which, in the case at stake, were not.

22. Nonetheless, the members of the DRC deemed that, even if considering art. 6 as a penalty clause, in consideration of the remaining duration of the contract after the execution of the termination of contract, the claimed amount is both proportionate and reasonable in the case at hand and, thus, the relevant clause is valid and applicable in the present matter.

23. On account of the aforementioned considerations, and in accordance with the general legal principle of pacta sunt servanda, the Chamber concluded that the Respondent must fulfil its obligations and, consequently, is to be held liable to pay the Claimant the amount of EUR 30,000, as stipulated in the termination agreement.

24. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the aforementioned amount as from the date it fell due, i.e. 30 March 2016, until the date of effective payment.

25. As a consequence thereof, the members of the Chamber accepted the player’s claim in its entirety.

III. Decision of the Dispute Resolution Chamber

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

2. The claim of the Claimant is accepted.

3. The Respondent, Club C, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of EUR 30,000 plus 5% interest p.a. as from 30 March 2016 until the date of effective payment.

4. In the event that the aforementioned sum plus interest is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

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

Chief Legal & Integrity Officer