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. According to the Player of Country B, Player A, (hereinafter: the Claimant), on 1 February 2015, him and the Club of Country D, Club C, (hereinafter: the Respondent) signed a document titled ”CONTRACT for cooperation in the performance of sports activities..” (hereinafter: the contract) valid as from 1 February 2015 until 30 June 2015. In this respect, the contract established that “[the contract] has been concluded for a definite period of time, without establishing any employment or similar type of relationship.”.

2. Art. 8 of the contract stipulated the following:

“The [Claimant] agrees that, provided that the [Respondent] is interested, this contract shall continue to be valid for two additional years, i.e., until 30.06.2017. The [Respondent] must indicate its interest in writing no later than by 30.05.2015.

(…)

If the [Respondent] intends to exercise the option beyond the deadline specified above, this provision may only be invoked based on the [Claimant’s] written consent. In the absence of the [Claimant’s] consent, this Contract shall cease to be valid as of the date specified herein.”.

3. In accordance with the contract, the Claimant’s basic monthly remuneration is EUR 1,000.

4. Moreover, the contract established that it is an obligation of the Respondent “to pay to the [Claimant] the fixed monthly remuneration always by the 30th day of the following month;…”.

5. The contract stipulated several scenarios in which it shall terminate, inter alia:

“...

a) upon expiry of the term for which it has been concluded;

b) upon agreement of the parties, which must be executed in writing;

c) upon expiry of the notice period

(….)

- The [Respondent] may terminate this Contract if the [Claimant] breaches, in a gross manner, his basic obligations laid down herein;

(…)

- The [Claimant] may terminate this Contract if the [Respondent] is in default with its obligation…for two consecutive calendar months.

In all these cases, the notice shall be two months,…The notice must be executed in writing. The notice must contain the grounds for termination; if the grounds are not specified, the notice shall be ineffective.

…”.

6. Furthermore, the contract does not contain a clause relating to compensation for breach of contract.

7. In addition, according to the Claimant, on the same date of signature of the contract i.e. 1 February 2015, him and the Respondent signed a document titled “Annex to the Contract” (hereinafter: the annex), by means of which it was established that “The parties have agreed that [the Claimant] will, during his engagement in [the Respondent] as from 01.02.2015 to 30.6.2015, be paid a basic monthly remuneration in the amount of 2,000 EUR.”.

8. The annex further stipulated that: “The [Claimant] agrees that, provided that the [Respondent] is interested, this contract shall continue to be valid for two additional years, i.e., until 30.06.2017. The [Respondent] must indicate its interest in writing no later than by 30.05.2015…”.

9. On 23 November 2016, the Claimant lodged a claim against the Respondent before FIFA for outstanding remuneration and compensation for breach of contract requesting the total amount of EUR 52,000, plus 5% interest p.a. “starting from the respective date of maturity until the effective date of payment”, broken down as follows:

 EUR 13,000 as outstanding remuneration corresponding to the following salaries:

- EUR 2,000 as partial January 2016 salary, which according to the Claimant became due on 1 March 2016;

- EUR 2,000 as partial February 2016 salary, which according to the Claimant became due on 1 April 2016;

- EUR 3,000 as March 2016 salary, which according to the Claimant became due on 1 May 2016;

- EUR 3,000 as April 2016 salary, which according to the Claimant became due on 1 June 2016;

- EUR 3,000 as May 2016 salary, which according to the Claimant became due on 1 July 2016.

 EUR 39,000 as compensation for breach of contract, for the time frame from 1 June 2016 until 30 June 2017;

 The Claimant further requested sporting sanctions to be imposed on the Respondent as well as the payment of an unspecified amount relating to legal expenses and procedural costs.

10. In his claim, the Claimant held that in accordance with the contract and the annex, the Respondent undertook to pay him a monthly remuneration of EUR 3,000. Moreover, the Claimant held that both the contract and annex are valid from 1 February 2015 until 30 June 2017.

11. The Claimant sustained that on 31 May 2016, the Respondent “without any reason and thus without just cause” unilaterally terminated the contract in writing (hereinafter: the termination letter).

12. According to the Claimant, prior to the unilateral termination, the Respondent had failed to pay him partial remuneration for the months of January 2016 and February 2016, in the amount of EUR 2,000 each, as well as the months of March 2016 to May 2016, in the amount of EUR 3,000, each.

13. Along these lines, the Claimant declared that, on 10 October 2016, he sent a letter to the Respondent in which he put the Respondent in default, requesting the payment of EUR 13,000 as outstanding remuneration, as well as EUR 39,000 as compensation for breach of contract. The Claimant gave a 10 days’ deadline to the Respondent to settle the alleged debt, emphasizing that otherwise he would be “forced to file a claim to FIFA DRC…”.

14. Finally, the Claimant held that he has not received any of the amounts requested.

15. In its reply, the Respondent rejected the Claimant’s claim. The Respondent contested the validity of the contract, as the Respondent held that the Claimant “during his tenure in the [Respondent] was not signed any valid professional contract. [The Claimant] played in the [Respondent] with status amateur”. Moreover, the Respondent held that it ”considers [the contract and annex] as not valid” as according to it, the documents have not been signed by the legal representative of the Respondent, have not been registered in the Respondent and have not been registered in the “competent Football Association”.

16. The Respondent sustained that the contract with the Claimant was signed by Mr E, “which one has had not authorization to sign contract on behalf of [the Respondent]”. In this respect, the Respondent sustained that according to the “Abstract of the Companies Register”, “signed contracts with third parties also has been allowed only Chairman of the board” and therefore, held that the claim of the Claimant is “unfounded”, since allegedly, the Claimant does not have a contract or any legal relationship which would authorize him to claim the requested amounts.

17. Furthermore, the Respondent confirmed that the Claimant played for the Respondent from 1 February 2015 until 31 May 2016.

18. The Claimant submitted his replica, in which he rejected the Respondent’s argumentation that the contract and the annex are not valid.

19. In this respect, the Claimant referred to CAS jurisprudence and emphasized that the Respondent´s argument in respect to the non-registration of the contract is irrelevant, since the registration of the contract is an administrative act that does not have an impact on its validity.

20. Furthermore, the Claimant held that at the moment of the signature of both the contract and the annex, he was in good faith to believe that the person signing the relevant documents on behalf of the Respondent was legally authorized to do so. In this regard, the Claimant highlighted that the contract and annex were drafted on paper with the Respondent’s letterhead and provided to him by the Respondent.

21. Moreover, the Claimant explained that the termination letter dated 31 May 2016 confirmed that the Respondent was aware that a contract and annex were concluded with him.

22. Furthermore, the Claimant sustained that in accordance with art. 2 par. 2 of FIFA’s Regulations on the Status and Transfer of Players, and the remuneration provided in both the contract and annex, he should be considered a professional, “irrelevant of his nominated status in the players’ passport”.

23. The Claimant further held that the “Extract from the Companies Register” enclosed by the Respondent in its reply, holds no relevance to the matter at hand, since it was issued on 9 January 2017 and does not provide a “historical overview” of all the persons who were authorized to sign the contract and the annex at the time of signature of both documents.

24. Finally, the Claimant insisted on his request for relief.

25. The Respondent submitted its duplica only after the expiry of the deadline granted by FIFA to do so.

26. After being requested by FIFA, the Claimant confirmed that he signed a contract with the Club of Country F, Club G, valid from 6 February 2017 until 15 June 2017, according to which he is entitled to a monthly remuneration of 15,000, for a total remuneration for the overlapping period between the contract between 6 February 2017 and 30 June 2017 of 75,000.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or Chamber) 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 23 November 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 2015 and 2017 editions 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 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 2 of the Regulations on the Status and Transfer of Players (edition 2016), and considering that the present matter was submitted to FIFA on 23 November 2016, the 2016 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the members of the Chamber entered into the substance of the matter, while emphasizing that, although having acknowledged all the above-mentioned facts, 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. Firstly, the DRC acknowledged that, according to the Claimant, on 1 February 2015, him and the Respondent, signed a document titled “CONTRACT for cooperation in the performance of sports activities” valid as from 1 February 2015 until 30 June 2015. In accordance with the contract, the Claimant’s basic monthly remuneration is EUR 1,000.

6. Along with the above, the art. 8 of the contract stipulated that “[the Claimant] agrees that, provided that [the Respondent] is interested, this contract shall continue to be valid for two additional years, i.e., until 30.06.2017. [The Respondent] must indicate its interest in writing no later than by 30.05.2015”.

7. Furthermore, on the same date of signature of the contract i.e. 1 February 2015, the Claimant and the Respondent signed a document titled “Annex to the Contract” (hereinafter: the annex), by means of which it was established that “the parties have agreed that [the Claimant] will, during his engagement in [the Respondent] as from 01.02.2015 to 30.6.2015, be paid a basic monthly remuneration in the amount of 2,000 EUR.”.

8. Moreover, the Chamber took note that it is undisputed between the parties that the Respondent terminated the contract in writing on 31 May 2016.

9. The DRC further observed that, on 23 November 2016, the Claimant lodged a claim against the Respondent before FIFA requesting the payment of EUR 13,000 as outstanding remunerations, as well as EUR 39,000 as compensation for breach of contract.

10. In his claim, the Claimant held that in accordance with the contract and the annex, the Respondent undertook to pay him a monthly remuneration of EUR 3,000. Moreover, the Claimant stated that both the contract and the annex are valid from 1 February 2015 until 30 June 2017.

11. In continuation, the Dispute Resolution Chamber took note that the Respondent on its part contested the validity of the contract and the annex that were submitted by the Claimant, arguing that the documents were signed by a person who, according to it, did not have authorization to sign on behalf of the Respondent.

12. After having carefully examined the parties’ positions, the DRC decided that the argumentation of the Respondent cannot be upheld due to the fact that in accordance with the principle of good faith, bona fide, to be respected by the parties during the conclusion of contracts, the Claimant was in good faith authorized to believe that the person signing the relevant agreement on behalf of the Respondent was legally authorized to do so. In this respect, the Chamber pointed out that the contested documents were drafted on the Respondent’s letterhead, and the person signing the documents on behalf of the Respondent had done so as its “General Manager”.

13. Equally and in accordance with the basic principle of burden of proof, the members of the Chamber outlined that the Respondent never provided documentary evidence demonstrating that the Claimant was aware of the situation outlined by the Respondent at the moment of signing the pertinent contract and annex to it.

14. Furthermore, the Respondent’s argumentation regarding the lack of validity of the contract cannot be followed since the Respondent itself entered the corresponding transfer instruction in the Transfer Matching System in order to engage the player. According to the information in the Transfer Matching System, the Claimant was registered with the club on 17 February 2015. 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.

15. Therefore, it can be concluded that the contract and annex are valid and legally binding between the Claimant and the Respondent.

16. With respect to the duration of the contract and annex, they originally ran until 30 June 2015, with the possibility of an extension until 30 June 2017. In this regard, although there is no evidence that the Respondent and the Claimant expressly agreed on the extension, the conduct of the parties and the Respondent’s own admission that the Claimant rendered his services for it until 31 May 2016, indicate that the employment duration continued past its original end date. Therefore, 30 June 2017 can be considered as the expiration date of the contract.

17. With the abovementioned consideration in mind, the Chamber noted that the Respondent did not present any evidence that the partial remuneration for the months of January and February 2016, as well as the Claimant’s salaries for March, April and May 2016 were paid. The members of the Chamber also stressed that the Claimant was entitled to a monthly remuneration of EUR 3,000, based on both the contract and the annex, which was not contested by the Respondent.

18. In view of all of the above, the Chamber decided that the Respondent must pay the amount of EUR 13,000 to the Claimant as outstanding remuneration.

19. 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 on the above-mentioned amount as follows:

a) 5% p.a. over the amount of EUR 2,000 as from 2 March 2016 until the date of effective payment;

b) 5% p.a. over the amount of EUR 2,000 as from 2 April 2016 until the date of effective payment;

c) 5% p.a. over the amount of EUR 3,000 as from 2 May 2016 until the date of effective payment;

d) 5% p.a. over the amount of EUR 6,000 as from 31 May 2016 until the date of effective payment.

20. Having established the above and, considering the conflicting position of the parties, the Chamber went on to analyse if the contract had been terminated by the Respondent with or without just cause. As the termination by the Respondent does not provide any reason or justification for the unilateral and premature termination of the contract, the DRC considered that the Respondent had no just cause to terminate the contract. In view of the foregoing, the Chamber decided that the Claimant is entitled to compensation for breach of contract.

21. 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.

22. The Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained any 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 Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

23. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations.

24. Having recalled the aforementioned, and in order to establish the amount of compensation to be paid by the Respondent, the members of the Chamber took into account the remuneration due to the Claimant in accordance with the employment contract as well as the time remaining on the same contract, along with the professional situation of the Claimant after the early termination occurred. In this respect, the Chamber pointed out that at the time of the termination of the employment contract, the contract would run for another 13 months. Consequently, the Chamber concluded that the remaining value of the contract as from its early termination by the Claimant until the regular expiry of the contract amounts to EUR 39,000, for the period between 1 June 2016 and 30 June 2017.

25. In continuation, the Chamber verified as to 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.

26. In this regard, the Claimant confirmed that he signed a contract with the Club of Country F, Club G, valid from 6 February 2017 until 15 June 2017, according to which he is entitled to a monthly remuneration of 15,000, for a total remuneration for the overlapping period between the contract between 6 February 2017 and 30 June 2017 of 75,000 (approx. EUR 10,000).

27. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of EUR 29,000 as compensation for breach of contract to the Claimant.

28. 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 amount of compensation as of the date on which the claim was lodged, i.e. 23 November 2016, until the date of effective payment.

29. Lastly, as regards the claimed legal expenses, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to 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.

30. The DRC concluded its deliberations in the present matter by establishing that any further claims lodged 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, outstanding remuneration in the amount of EUR 13,000.

3. Within the same deadline, the Respondent has to pay to the Claimant interest as follows:

- 5% p.a. over the amount of EUR 2,000 as from 2 March 2016 until the date of effective payment;

- 5% p.a. over the amount of EUR 2,000 as from 2 April 2016 until the date of effective payment;

- 5% p.a. over the amount of EUR 3,000 as from 2 May 2016 until the date of effective payment;

- 5% p.a. over the amount of EUR 6,000 as from 31 May 2016 until the date of effective payment.

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 EUR 29,000 plus 5% interest p.a. on said amount as from 23 November 2016 until the date of effective payment.

5. In the event that the amounts due to the Claimant in accordance with the above-mentioned numbers 2., 3., and 4. are 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.

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.

*****

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