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 arisen between the parties

I. Facts of the case

1. On 11 February 2015, the Player of Country B, Player A (hereinafter: the Claimant), and the Club of Country D, Club C (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract) valid as of the date of signature until 30 June 2019.

2. Pursuant to the contract, the Claimant was entitled to the following remuneration:

 2014-15 season: EUR 200,000 payable as follows:

- EUR 40,000 as “advanced payment, to be paid within a February 2015”;

- EUR 40,000 as “as Monthly Salary, per month to be paid from 01/03/2015 to 30/06/2015. (Four months)”.

 2015-16 season: EUR 400,000 payable as follows:

- EUR 80,000 as “advanced payment, to be paid within a July 2015”;

- EUR 27,400 as “Salary of July 2015”;

- EUR 26,600 as “Monthly Salaries, per month to be paid from 01/08/2015 to 30/06/2016. (Eleven months)”;

 2016-17 season: EUR 450,000 payable as follows:

- EUR 90,000 as “advanced payment, to be paid within a July 2016”;

- EUR 30,000 as “Monthly Salaries per month, to be paid from 01/07/2016 to 30/06/2017. (Twelve months)”;

 2017-18 season: EUR 500,000 payable as follows:

- EUR 100,000 as “advanced payment, to be paid within a July 2017”;

- EUR 33,700 as “Salary of July 2017”;

- EUR 33,300 as “Monthly Salaries, per month to be paid from 01/08/2017 to 30/06/2018. (Eleven months)”;

 2018-19 season: EUR 600,000 payable as follows:

- EUR 120,000 as “advanced payment, to be paid within a July 2018”;

- EUR 40,000 as “Monthly Salaries per month, to be paid from 01/07/2018 to 30/06/2019. (Twelve months)”.

3. In addition, the contract provides for the following bonuses:

- EUR 10,000 “for wining League E”;

- EUR 5,000 “for wining Cup F”;

- EUR 5,000 “for wining Cup of Country D”;

- EUR 5,000 “for wining Cup G”;

- EUR 10,000 “for wining League H”.

4. The contract further specifies that the Claimant is entitled to a house, a car and two business class flight tickets for the route City J – City K – City J per season.

5. On 13 July 2015, the Claimant requested the Respondent to pay his salaries for April, May and June 2015, as well as to provide him with a car and a house within five days.

6. On 20 July 2015, the Claimant sent an e-mail to the Respondent, informing the latter that he was in Country D and reiterating his previous request.

7. On 27 July 2015, the Claimant sent a third default notice to the Respondent, requesting to be reinstated in the team within two days and giving it fourteen days to comply with its financial obligations.

8. On 29 July 2015, and in absence of response to his last correspondence, the Claimant requested the Respondent’s authorisation to leave the country and find a new club, while reiterating his financial claims.

9. On 3 August 2015, the Respondent authorised the Claimant to travel to Country B until 13 August 2015.

10. On 4 August 2015, the Claimant sent a new correspondence to the Respondent, giving the latter a deadline until 10 August 2015 to comply with its financial obligations.

11. On 12 August 2015, the Claimant terminated the contract.

12. On 10 February 2016, the Claimant entered into an employment contract with the Club of Country B, Club L, valid until 30 June 2016 and entitling him to receive a monthly salary of EUR 1,525.

13. On 11 February 2016, the Claimant and the Respondent concluded a settlement agreement (hereinafter: the settlement agreement) in accordance with which the Respondent undertook to pay the amount of EUR 950,000 by no later than 1 March 2016 at 6pm.

14. In particular, clause 2 of the settlement agreement reads as follows:

“Payment of the Settlement Sum is a in full and final settlement of, and each Party hereby releases and forever discharges, all and/or any actions, claims, complaints, rights, demands and set-offs:

(…)

(b) whether actionable before any court or judicial authority, including, but not limited to, FIFA, any judicial body of FIFA and/or the Court of Arbitration for Sport (the ‘CAS’);

(…)

that it, its Related Parties or any of them ever had, may have or hereafter can, shall or may have against the other Party of any of its Related Parties arising out of or connected with:

(e) the Employment contract;

(f) any agreement between, or act by, the Parties or their Related Parties or any of them; and

(g) any other matter arising out of, or connected with, the relationship between the parties.”

15. Furthermore, clause 6 of the settlement agreement provides that “[i]n the event that [the Respondent] fails to pay the Settlement Sum (…), it shall be liable to pay interest to the [Claimant] on the Settlement Sum, or any outstanding amount of the Settlement Sum, from the date it falls due until the date of actual payment at a rate of 10% per annum.”

16. On 7, 10 and 16 March 2016, the Claimant sent several e-mails to the Respondent, stressing on its default of payment.

17. On 16 March 2016, the Respondent replied to the Claimant, stating that “[it was] still waiting for the budget from the ministry and [it] will inform [him] immediately when received the payment”.

18. On 17 March 2016, the Claimant sent a correspondence to the Respondent, giving it a deadline of 48 hours to comply with the settlement agreement.

19. On 31 March 2016, the Claimant sent a correspondence to the Respondent, giving it a final deadline of seven days to comply with the settlement agreement. In this respect, the Claimant explains that should it fail to do so, he would annul the settlement agreement and would lodge a claim in front of FIFA for breach of contract based on the original employment contract.

20. On 26 April 2016, the Claimant lodged a claim in front of FIFA against the Respondent for breach of contract, requesting the following:

“Primary:

1. To dissolve the settlement agreement dated 11 February 2016;

2. To establish that [the Respondent] breached the employment contract with [the Claimant] without just cause during the protected period;

3. To establish that [the Claimant] validly unilaterally terminated the employment agreement with [the Respondent] with just cause;

4. To state that [the Respondent] is obliged to fulfil all agreed financial conditions of the employment agreement between [the Claimant] and [the Respondent] until 30 June 2019 and to condemn [the Respondent] to pay to [the Claimant] compensation in the amount of € 2.235.500,00 net + P.M., to be increased by the interest of 5% per year as from 12 August 2015 until the effective date of payment;

Subsidiary

5. To State that [the Respondent] is obliged to fulfil all agreed financial conditions of the settlement agreement between [the Claimant] and [the Respondent] and to condemn [the Respondent] to pay to [the Claimant] compensation in the amount of € 950.000,00 net, to be increased by the contractual interest of 10% per year as from 1 March 2016 until the effective date of payment;

In any case

6. To impose sporting sanctions on [the Respondent] and ban [it] from registering any players, either nationally or internationally, for two registration periods;

7. To condemn [the Respondent] to the payment in favor of [the Claimant] of the legal expenses incurred;

8. To order [the Respondent] to pay the costs of this proceeding.”

21. In his claim, the Claimant explains that when he terminated the contract on 12 August 2015, he had just cause to do so, in particular considering that the Respondent had side-lined him and had failed to pay the following amounts: (i) his salaries for May, June and July 2015 in the amount of EUR 107,400; (ii) the “advanced payment” of EUR 80,000 due in July 2015; (iii) the costs for the airline tickets; (iv) the accommodation costs; and (v) the costs for the car.

22. In continuation, the Claimant argues that the only reason why he accepted to sign the settlement agreement was the prospect of receiving the money in the short term. Consequently, the Claimant considers that the Respondent’s failure to comply with the settlement agreement entitles him to dissolve the latter and to claim outstanding remuneration as well as compensation based on the termination of the contract with just cause on 12 August 2015. In particular, the Claimant claims the total amount of EUR 2,235,500 plus “P.M.” as follows:

 Season 2014-15:

- EUR 80,000 as “salary”;

- EUR 4,000 as “airline tickets (2 tickets)”;

- EUR 12,500 as “housing allowance (5 months)”;

- EUR 5,000 as “car (5 months)”;

- “bonuses P.M.”

 Season 2015-16:

- EUR 320,000 as “salary”;

- EUR 80,000 as “advance payment (July 2015)”

- EUR 4,000 as “airline tickets (2 tickets)”;

- EUR 30,000 as “housing allowance (12 months)”;

- EUR 12,000 as “car (12 months)”;

- “bonuses P.M.”

 Season 2016-17:

- EUR 360,000 as “salary”;

- EUR 90,000 as “advance payment (July 2016)”

- EUR 4,000 as “airline tickets (2 tickets)”;

- EUR 30,000 as “housing allowance (12 months)”;

- EUR 12,000 as “car (12 months)”;

- “bonuses P.M.”

 Season 2017-18:

- EUR 400,000 as “salary”;

- EUR 100,000 as “advance payment (July 2017)”

- EUR 4,000 as “airline tickets (2 tickets)”;

- EUR 30,000 as “housing allowance (12 months)”;

- EUR 12,000 as “car (12 months)”;

- “bonuses P.M.”

 Season 2018-19:

- EUR 480,000 as “salary”;

- EUR 120,000 as “advance payment (July 2018)”

- EUR 4,000 as “airline tickets (2 tickets)”;

- EUR 30,000 as “housing allowance (12 months)”;

- EUR 12,000 as “car (12 months)”;

- “bonuses P.M.”

23. In spite of having been invited to do so, the Respondent did not reply to the Claimant’s claim.

II. Considerations of the Dispute Resolution Chamber

1. First, the Dispute Resolution Chamber (hereinafter also referred to as the Chamber or the 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 26 April 2016. Consequently, the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is 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 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 of Country B and a Club of 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 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged on 26 April 2016, the 2015 edition of said regulations (hereinafter: the 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 and first of all, the DRC acknowledged that, on 11 February 2015, the Claimant and the Respondent concluded an employment contract, which was subsequently unilaterally terminated by the Claimant on 12 August 2015 due to the Respondent’s alleged failure to pay him several monthly salaries.

6. Furthermore, the Chamber observed that on 11 February 2016, the parties decided to enter into a settlement agreement by means of which the Claimant committed to pay the amount of EUR 950,000 by no later than 1 March 2016 at 6pm.

7. In continuation, the members of the Chamber noted that the Claimant lodged a claim against the Respondent maintaining that the latter did not proceed to the payment established in the settlement agreement.

8. Subsequently, the DRC observed that the Respondent failed to present its response to the claim of the Claimant, in spite of having been invited to do so. Consequently, the Chamber deemed that the Respondent had renounced to its right of defence and, thus, had accepted the allegations of the Claimant.

9. As a consequence of the aforementioned consideration, the DRC held that, in accordance with art. 9 par. 3 of the Procedural Rules, a decision shall be taken upon the basis of the documents on file, in other words, upon the statements and documents presented by the Claimant.

10. In view of the foregoing, and since it remains uncontested that the Respondent did not proceed to the payment established in the settlement agreement, the members of the Chamber had to focus their attention on the consequences of said fact. In this regard, the Chamber noted that the Claimant argues that the Respondent’s failure to comply with the settlement agreement entitles him to dissolve the latter and to claim outstanding remuneration as well as compensation based on the termination of the contract with just cause on 12 August 2015.

11. Having the above in mind, the Chamber emphasised that the settlement agreement provides for a specific sanction in case of non-payment of the amount therein established, which is not the invalidity of the latter as argued by the Claimant, but the imposition of penalty on the Respondent in accordance with clause 6 of the settlement agreement. Indeed, the Chamber pointed out that the settlement agreement does not contain any clause which would allow the Claimant to claim all the amounts contained in the contract in case of non-compliance with the settlement agreement. In this respect, the DRC pointed out that the penalty, consisting in a default interest of 10% per annum, is not disproportionate or unreasonable and must therefore be applicable. As a consequence, the Chamber decided to reject the principal claim of the Claimant and to accept his subsidiary claim.

12. On account of the aforementioned consideration, the members of the Chamber established that by virtue of the legal principle of pacta sunt servanda, the Respondent is liable to pay the Claimant the amount of EUR 950,000.

13. In addition, and in accordance with clause 6 of the settlement agreement, the Chamber decided that the Respondent must pay to the Claimant interest of 10% p.a. on the amount of EUR 950,000 as from 2 March 2016 until the date of effective payment.

14. Moreover, the Chamber rejected any claim for procedural costs in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence in this regard.

15. The Chamber concluded his deliberations in the present matter by establishing that any further claims filed by the Claimant are rejected.

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, the amount of EUR 950,000 plus 10% interest p.a. on said amount as from 2 March 2016 until the date of effective payment.

3. In the event that the abovementioned amount plus interest is not paid 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