F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision9 November 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 November 2017,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Stijn Boeykens (Belgium), member

Mario Gallavotti (Italy), member

Joel Talavera Zárate (Paraguay), 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 1 July 2015, the Player of Country B, Player A (hereinafter: the Claimant or the player) and the Club of Country D, Club C (hereinafter: the Respondent or the club) signed an employment contract (hereinafter: the contract) valid as from the date of signature until 31 May 2017.

2. According to the contract, the Claimant was entitled to a salary of USD 280,000 for season 2015/2016 and of USD 760,000 for season 2016/2017.

3. Art. 2 of the contract stipulates that: “The remuneration of the Player shall be set out in the Schedule attached to this Contract and signed by the parties (…). Player’s salary, housing allowance and the advanced payment will be amended annually and gradually”. Furthermore, art. 14 par. 2 of the contract provides that “any amendments, additions or deletions to this Contract must be put in writing”.

4. On 26 May 2016, the Claimant and the Respondent signed a document named “Final Clearance” (hereinafter: the clearance) which reads as follows: “I, the undersigned Player A (…) confirm that I received all my dues from Club C Football Co. at the date of this clearance. I also confirm that I have no right in future to claim any physical or moral obligations from Club C Football Co. in any way for the contract that was entered by the both of us previously and this is a final clearance and confirmation from me of the above statement”.

5. On 19 July 2016, the Claimant sent a letter to the Respondent complaining that the latter prevented him from training with the team on 13 July 2016, based on the alleged termination of the contract with the club. In the same letter, the Claimant recalled that his contract with the Respondent was valid until the end of season 2016/2017 “with a value of 280 thousand dollars” and he had not received any notification of the alleged termination from the Respondent.

6. On 10 August 2016, the Claimant sent a new letter to the Respondent, requesting a reply to his previous letter and informing that “a copy of [his] new contract of 2016/2017 which was signed with the club in May 2016” was in his possession.

7. By means of letter addressed to the Claimant on a not specified date, the Respondent replied that, by virtue of the clearance, the contract had been terminated.

8. On 16 August 2016, the Claimant sent a letter to the Respondent, stating that, on 29 May 2016, the player and the club had signed a new employment contract, dated 1 July 2016 and valid as of such date until 31 May 2017 (hereinafter: the new contract). Moreover, within the same letter, the Claimant requested the Respondent to pay the outstanding remuneration for the month of July 2016 as set out in the new contract and to be allowed “to join the Club’s trainings and facilities”.

9. According to said new contract, the Claimant would be entitled to a salary of USD 250,000 for season 2016/2017, payable as follows:

a) USD 17,636.36 as monthly salary for the period between 1 July 2016 and 31 May 2017;

b) USD 28,000 as sign-on fee payable on 1 October 2016;

c) USD 28,000 as sign-on fee payable on 30 May 2107.

In addition to the above, the player was entitled to the following benefits:

a) 15,000, “instead of the [flight] tickets”;

b) 8,000, “instead of the car and the house”.

10. On 17 August 2016, the Respondent sent a letter to the Claimant reaffirming that the contract had been terminated through the clearance and stating that the new contract “isn’t issued by Club C and its under investigation”.

11. On 19 August 2016, the Claimant wrote a letter to the Football Association of Country D (Football Association E) explaining that he had “no intention to raise a dispute against a Club of Country D” and requesting Football Association E’s “immediate assistance and mediation”. The same request to the Football Association E was reiterated by means of letters dated 25 and 31 August 2016.

12. On 25 September 2016, a meeting was held at the Football Association E’s headquarters with the presence of the Claimant and of the representatives of the Respondent. On 28 September 2016, the player informed the Football Association E that such meeting “did not lead to a solution in this matter”, as “Club C still contests the existence of an original employment agreement signed by a player and an authorized director on behalf of the Club”.

13. On 3 October 2016, the Claimant put the Respondent in default for the payment of the total remuneration set out in the new contract for the months of July, August and September 2016, in the amount of USD 91,619.77, setting a two days’ time limit in order to remedy the default.

14. On 6 October 2016, the Claimant sent a letter to the Respondent by means of which he “terminated the employment contract with [the] Club with just cause”, with immediate effect.

15. On 10 November 2016, the Claimant lodged a claim before FIFA for the breach of the new contract, requesting the following:

a) USD 80,909.08 as outstanding salary for the period between 1 July and 6 October 2016 (included a sign-on fee in the amount of USD 28,000), plus 5% interest p.a. as of 6 October 2016 until the date of payment;

b) USD 8,513.54 as outstanding benefits (i.e. USD 4,119.24 for flight tickets, USD 2,197.15 for car allowance and USD 2,197.15 for house allowance), plus 5% interest p.a. as of 6 October 2016 until the date of payment;

c) USD 169,090.88 as compensation for breach of the employment contract corresponding to the remaining value of the new contract, plus 5% interest as of the due dates until the date of payment;

d) sporting sanctions and payment of the legal expenses on the Respondent.

16. In his claim, the Claimant affirmed that, on 26 May 2016, he negotiated with the Respondent the payment of his outstanding salaries for season 2015/2016 as well as a reduction of his remuneration for season 2016/2017, which led to the signature of the new contract, allegedly on 29 May 2016. In this context, the player submitted written statements signed by Mr Employee F and Mr Employee G, who were allegedly the club’s vice-president and secretary at that time. What is more, the Claimant alleged that the same vice-president had also signed the former contract, dated 1 July 2015.

17. In particular, the Claimant stressed that, as he had not received different indication from the Respondent, he “could understand in good faith” that club’s vice-president was duly empowered and authorized to sign the new contract on behalf of the Respondent.

18. Moreover, the Claimant stated that no termination had been negotiated with the Respondent and, in any event, the new contract superseded the previous contract.

19. Furthermore, the Claimant affirmed that the Respondent excluded him, without notice, from the trainings and did not pay the remuneration provided in the new contract. In continuation, he argued that, as he did not receive any payment from 1 July to 6 October 2016, he terminated the new contract with just cause.

20. In its reply, the Respondent stated that the contract had been terminated by means of the clearance signed on 26 May 2016 and that the new contract was not issued by the club.

21. In particular, the Respondent pointed out that the new contract was signed by a person not authorized: the former vice-president, Mr Employee F. In this context, the Respondent considered that the latter “was aware of the elections procedures that started on 27/05/2016 for a new board” and signed the new contract in violation of art. 98 of the club’s statute, which prohibits the Board of Directors to conclude contracts exceeding its term in office. Consequently, the Respondent argued that the new contract was not valid. In this respect, the Respondent stated that “there is a criminal investigation initiated by the judicial authorities in Country D in relation to the validity of the [new contract]”.

22. Moreover, the Respondent argued that the Claimant acted in bad faith as, in his first letter, he referred to the amount set out in the first contract (USD 280,000) and, only after he received -allegedly on 28 July 2016- the club’s reply, he mentioned that he was in possession of the new contract (providing a salary of USD 250,000).

23. Furthermore, the Respondent also held that, should the contract dated 1 July 2015 be not terminated as alleged by the Claimant, the player and the club would not have signed the new contract but, rather, just an amendment of the appendix of the contract, containing the economic terms.

24. In continuation, the Respondent rejected the witness statements submitted by the Claimant, on the basis of an alleged conflict of interests of the witness invoked by the latter.

25. In his replica, the Claimant rejected the club’s arguments and affirmed that the clearance signed on 26 May 2016 was “just a formality” during the completion of season 2015/2016 and the parties never discussed the termination of the contract, nor the Claimant received a termination notice from the Respondent.

26. As to his letter dated 19 July 2016, the Claimant affirmed that he erroneously indicated the salary of the contract dated 1 June 2015 instead of the new contract’s. In continuation, he argued that the parties signed the new contract and not an appendix because the Regulations of the Football Association E required so for the purposes of the registration of foreign players’ employment contracts.

27. Furthermore, the Claimant stated that, during the meeting held with Football Association E on 25 September 2016, “the attendees have established the authenticity of this original copy of the [new contract]” showed by the player and argued that the same was validly signed by the club’s vice-president.

28. What is more, the Claimant stressed that, during such meeting, the club’s representative reportedly showed other four copies of the new contract. The Claimant stressed that such circumstance proved that the Respondent was aware of the content of such new contract.

29. In its duplica, the Respondent insisted on his previous arguments and affirmed that is “false and untrue” that Regulations of the Football Association E prohibit to conclude an appendix in case of amendment of the contract. In particular, the Respondent argued that art. 4 and art. 14 par. 2 of the contract stipulate the conclusion of an annex in case of amendment.

30. Furthermore, the Respondent affirmed that the Football Association E did not authenticate the new contract and that the four copies showed by the club’s representative during the meeting before Football Association E had been previously delivered to the club’s Board of Directors by the former vice-president within the scope of art. 14 par. 3 of the new contract, according to which “the Contract has been drafted in four (4) original copies”. Nonetheless, the Respondent emphasised that the club’s Board of Directors refused to sign them “as it is not willing to maintain Player A within the ranks of the Club”.

31. Upon request of the FIFA Administration, the Claimant informed that he did not conclude any other employment contract with other club between 6 October 2016 and 31 May 2017.

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 10 November 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 – hereinafter: Regulations), 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. 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, and considering that the present claim was lodged on 10 November 2016, the 2016 edition of 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. First, the Chamber noted that the parties entered into an employment contract valid as from 1 July 2015 until 31 May 2017, which the parties terminated by means of the clearance they signed on 26 May 2016.

6. Then, the Chamber went to analyse the position of the Claimant, which maintains that, on 29 May 2016, a new employment contract was concluded between him and the Respondent, valid as from 1 July 2016 until 31 May 2017. According to said new contract, the Claimant was entitled to a monthly salary of USD 17,636.36, to two sign-on fees payable on 1 October 2016 and 30 May 2017 respectively, and to benefits in the amount of 15,000 for flight tickets and to 8,000 for “the car and the house”.

7. In this respect, the DRC took note that the Claimant put the Respondent in default for the payment of outstanding remuneration, for the last time on 3 October 2016, and thereafter terminated the new contract on 6 October 2016. Furthermore, the Chamber noted that the Claimant requested, inter alia, outstanding remuneration until the date of termination and compensation for breach of contract without just cause by the Respondent, corresponding to the remaining value of the new contract.

8. The Chamber further noted that, conversely, according to the Respondent, the new contract had been signed by a person not authorised by the club, i.e. the allegedly former club’s vice-president. In this respect, the Respondent maintained that the new contract was signed in violation of the club’s statutes, pursuant to which the club’s board of directors is not entitled to sign contracts whose period of validity exceed the term in office of the board. In particular, the Respondent argued that, when the new contract was signed, the procedures for the elections of the new club’s board had already started and, consequently, concluded that the new contract was not valid.

9. In view of the foregoing, the members of the Chamber highlighted that the first issue to be analysed, considering the diverging position of the parties, was to determine whether the new contract, provided a term as from 1 July 2016 until 31 May 2017, constituted a valid and binding employment contract.

10. In this respect, the members of the Chamber decided that the Respondent’s argumentation, according to which the new contract had no legal effect since it had been signed on behalf of the Respondent by a non-authorized person, 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 could reasonably believe, in good faith, that the person signing the relevant agreement on behalf of the Respondent was legally authorized to sign it. The members of the Chamber were comforted with such conclusion also by the fact that it remained undisputed by the parties that the person who signed the new contract indeed had been the Vice-President of the club previously.

11. Moreover, in accordance with the principle under art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof, the DRC outlined that the Respondent failed to present documentary evidence demonstrating that the Claimant was aware of the situation outlined by the Respondent at the moment of signing the new contract, let alone that the person who signed the new contract, at that time, was not anymore the Vice-President of the club.

12. Furthermore, the Chamber recalled its well-established jurisprudence which dictates that, in order for an employment contract to be considered as valid and binding, apart from the signature of both the employer and the employee, it should contain the essentialia negotii of an employment contract, such as the parties to the contract and their role, the duration of the employment relationship, the remuneration and the signature of both parties. In this respect, the members of the Chamber concurred that it remained undisputed that all the aforementioned elements were indeed included in the new contract.

13. On account of the aforementioned considerations, the members of the Chamber concluded that the new contract, providing a term as from 1 July 2016 until 31 May 2017, was valid and binding.

14. Having found so, the members of the Chamber concurred that the second issue to be addressed was to determine if, on 6 October 2016, the Claimant terminated the new contract with just cause and the consequences thereof.

15. In view of the above, the DRC first of all took into consideration the content of art. 14 of the Regulations, which provides that “a contract may be terminated by either party without consequences of any kind (either payment of compensation or imposition of sporting sanctions) where there is just cause”.

16. In continuation, the Chamber stressed that the definition of just cause and whether just cause exists shall be established in accordance with the merits of each particular case.

17. In this context, the members of the Chamber took into consideration that it remained undisputed that, at the time the Claimant terminated the new contract, the Respondent failed to pay his remuneration in the total amount of USD 80,909, corresponding to, according to the new contract, his salaries for the months from July until September 2016 and to a sign-on fee amounting to USD 28,000.

18. Consequently, considering that the Respondent had for a significant period of time (i.e. more than three months) been in breach of its contractual obligations towards the Claimant, the Chamber decided that the Claimant had just cause to unilaterally terminate the new contract on 6 October 2016 and that, as a result, the Respondent is to be held liable for the early termination of said employment contact with just cause by the Claimant.

19. In continuation, having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the player, the Chamber focused its attention on the consequences of such termination. In this regard, in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay to the player the amounts which were outstanding under the new contract at the moment of the termination, i.e. USD 80,909.

20. 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 at the rate of 5% p.a. on the outstanding amount of USD 80,909 as of 6 October 2016, as requested by the Claimant.

21. In continuation, the members of the Chamber determined that the Respondent was not only to pay the amount of USD 80,909 as outstanding remuneration to the Claimant, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.

22. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the Claimant by the Respondent 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.

23. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of 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.

24. 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. 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.

25. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 31 May 2017 and concluded that the player would have received a total remuneration of USD 169,090, equal to eight monthly salaries – for the period between October 2016 and May 2017 – plus the second instalment of the signing fee, plus 23,000, corresponding to flight tickets and rent and car allowance, had the contract been executed until its expiry date (cf. point I.9 above).

26. 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.

27. However, the members of the Chamber took note that, after the termination of the employment contract on 6 October 2016, the Claimant did not enter into other employment contract with any other club.

28. 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 USD 169,090 plus 23,000 to the Claimant as compensation for breach of contract in the case at hand.

29. In continuation, and with regard to the player's request for interest, the Chamber decided that the Claimant, in accordance with the long-standing jurisprudence of the Chamber in this regard, is entitled to 5% interest p.a. on the aforementioned amounts as of 10 November 2016.

30. Finally, the members of the Chamber concluded their deliberations on the present matter by rejecting any further claim lodged by 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 USD 80,909 plus 5% interest p.a. as of 6 October 2016.

3. 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 USD 169,090 and 23,000, plus 5% interest p.a. as of 10 November 2016.

4. In the event that the amounts plus interest due to the Claimant in accordance with the above-mentioned numbers 2. and 3. are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. Any further claim lodged by the Claimant is rejected.

6. 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 / www.tas-cas.org

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl.: CAS directives