DECISIONI DI GIUSTIZIA SPORTIVA • F.I.F.A. - CAMERA DI RISOLUZIONE DELLE CONTROVERSIE - CONTROVERSIE DI LAVORO

• Data decisione: 17 maggio 2018 • Stagione sportiva: 2017/2018

F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision17 May 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 17 May 2018,

in the following composition:

Geoff Thompson (England), Chairman

John Bramhall (England), member

Stijn Boeykens (Belgium), member

Philippe Diallo (France), member

Jérôme Perlemuter (France), member

on the matter between the player,

Player A, Country B

as Claimant / Counter-Respondent

and the club,

Club C, Country D

as Respondent / Counter-Claimant

and the club,

Club E, Country B

as Intervening Party

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 18 December 2015, the Player of Country B, Player A (hereinafter: Claimant / Counter-Respondent), and the Club of Country D, Club C (hereinafter: Respondent / Counter-Claimant), concluded an employment contract (hereinafter: the contract), valid as from 1 January 2016 until 30 June 2018.

2. Pursuant to clause 22 of the contract, the Claimant / Counter-Respondent was entitled to receive the following amounts:

- 2015-16 season: EUR 24,000 gross paid in monthly instalments of EUR 4,000 gross;

- 2016-17 season: EUR 48,000 gross paid in monthly instalments of EUR 4,000 gross;

- 2017-18 season: EUR 60,000 gross paid in monthly instalments of EUR 5,000 gross.

3. In addition, clause 24 of the contract provides for the following bonuses:

a. “for participation of [the Claimant / Counter-Respondent] in a winning match of the first team in Professional Football League of Country D in the total of at above 45 minutes [the Claimant / Counter-Respondent] will receive 1.500 EUR (…) gross.

b. for participation of [the Claimant / Counter-Respondent] in a winning match of the first team in Professional Football League of Country D in the total of 45 minutes or less but more than 15 minutes [the Claimant / Counter-Respondent] will receive 750 EUR (…) gross.

c. for participation of [the Claimant / Counter-Respondent] in a winning match of the first team in Professional Football League of Country D in the total less than 15 minutes [the Claimant / Counter-Respondent] will receive 150 EUR (…) gross.

d. for participation of [the Claimant / Counter-Respondent] in a draw match of the first team in Professional Football League of Country D in the total of at above 45 minutes [the Claimant / Counter-Respondent] will receive 500 EUR (…) gross.

e. for participation of [the Claimant / Counter-Respondent] in a draw match of the first team in Professional Football League of Country D in the total of 45 minutes or less but more that 15 minutes [the Claimant / Counter-Respondent] will receive 250 EUR (…) gross.

f. for participation of [the Claimant / Counter-Respondent] in a draw match of the first team in Professional Football League of Country D in the total less than 15 minutes [the Claimant / Counter-Respondent] will receive 50 EUR (…) gross.”

4. In this respect, clause 24 further specifies that the bonuses “will be paid after the end of the season before 15th of July each year of contract”.

5. Clause 28 of the contract enshrines: “Parties mutually agree “release clause” of [the Claimant / Counter-Respondent] in amount of EUR 300,000 net until 31 December 2016 and EUR 250,000 net after 31 December 2016”.

6. Clause 29 of the contract provides that “[i]n case of a drop to a lower class, the Parties undertake to renegotiate the terms of this contract. If the parties fail to agree on the new contract provisions the legal relationship between the parties expires”.

7. Furthermore, clause 33 and 34 of the contract stipulate the following:

33. “In respect of any disputes that can occur between the parties in relation to the present Contract, including in particular concerning validity, existence or termination of the Contract, the proper bodies of the Football Association of Country D will decide: acting in accordance with separate regulations.”

34. “All and any financial disputes resulting from this Contract will be subject to decision by the Football Arbitration Court of the Football Association of Country D.”

8. According to the Claimant / Counter-Respondent, the contract had expired on 18 July 2016 by virtue of Clause 29 of the contract.

9. Pursuant to the information contained in the Transfer Matching System (TMS), the Club of Country B, Club E (hereinafter: Intervening Party) requested an ITC for the Claimant / Counter-Respondent’s transfer on 27 July 2016, which was subsequently rejected by the Football Association of Country Don 4 August 2016. Following a decision by FIFA, the Claimant / Counter-Respondent was provisionally registered with the Intervening Party on 25 August 2016 as a free agent.

10. By correspondence dated 14 September 2016, the Claimant / Counter-Respondent put the Respondent / Counter-Claimant in default of payment of EUR 5,250 setting a time limit expiring on 24 September 2016 in order to remedy the default.

11. On 10 October 2016, with amendments made on 6 December 2016, the Claimant / Counter-Respondent lodged a claim against the Respondent / Counter-Claimant in front of FIFA. In his claim, the Claimant / Counter-Respondent requested inter alia that FIFA:

a. Declare that the Respondent / Counter-Claimant pays the Claimant / Counter-Respondent overdue payables in the amount of EUR 5,250 plus 5% p.a. on said amount as from 15 July 2016 until the date of effective payment;

b. Declare that the contract expired by virtue of Clause 29 of the contract;

c. Conclude that the Respondent / Counter-Claimant is liable for the breach of the employment contract and, therefore, is liable to pay compensation to the Claimant / Counter-Respondent;

d. Conclude that the Respondent / Counter-Claimant is liable to pay EUR 300,000 to the Claimant / Counter-Respondent as a compensation for the breach of the contract as submitted under Clause 28 of the contract;

e. Alternatively, conclude that the Respondent / Counter-Claimant is liable to compensate the Claimant / Counter-Respondent the sum of EUR 500, “alternative submission on compensatory damages, suffered by the [the Claimant / Counter-Respondent] – financial damages”;

f. “The amount equal to 10% of the value of the employment contract (…) – Compensation – Specificity of Sport.”

12. According to the Claimant / Counter-Respondent, the Respondent / Counter-Claimant failed to pay him EUR 5,250 related to bonuses for participating in certain matches pursuant to Clause 24 of the contract.

13. The Claimant / Counter-Respondent further highlighted that Clause 29 is valid, binding and reciprocal. Under this Clause, as per the Claimant / Counter-Respondent, once the Respondent / Counter-Claimant is relegated, the Respondent / Counter-Claimant and the Claimant / Counter-Respondent renegotiate the terms of a new contract. If the parties do not agree on a new contract, then the contract expires.

14. In continuation, the Claimant / Counter-Respondent explained that after the 2015/2016 season, the Respondent / Counter-Claimant relegated “from the Professional Football League of Country D to Professional Football League of Country G”.

15. The Claimant / Counter-Respondent argued that on 11 July 2016 he asked the Respondent / Counter-Claimant via email for a renegotiation of the contract under Clause 29. On this same day, the Respondent / Counter-Claimant’s president replied via email that Clause 29 is invalid under the rules of the Football Association of Country D and therefore have no legal effect. The Respondent / Counter-Claimant further told the Claimant / Counter-Respondent that it “is entitled to request to Football Association of Country D for termination of Contract due to fault of [the Claimant / Counter-Respondent] which has not participated in training of [the Respondent / Counter-Claimant] since 20 June 2016. In reply, dated 12 July 2016, the Claimant / Counter-Respondent admitted that the contract was still valid, but that he had not returned to Country D due to illness.

16. In another email by the Claimant / Counter-Respondent, dated 13 July 2016, he once again asked the Respondent / Counter-Claimant to clarify its position in light of Clause 29 by 15 July 2016. However, on 15 July 2016, the Respondent / Counter-Claimant’s legal counsel wrote back, holding that “Clause 29 is against the Football Association of Country D rules and shall have no legal effect”. Moreover, the Respondent / Counter-Claimant’s legal counsel told the Claimant / Counter-Respondent that if he did not return by 18 July 2016, it will request the Football Association of Country D to disqualify the Claimant / Counter-Respondent “for 12 months and penalty in amount of 100,000 in the Currency of Country D.

17. Finally, on 18 July 2016, the Claimant / Counter-Respondent wrote to the Respondent / Counter-Claimant that, since the Respondent / Counter-Claimant had failed to present him a new contract proposal, he had “no other choice but to treat the contract as expired in the light of Clause 29”.

18. Taking account of the above, the Claimant / Counter-Respondent was of the opinion that, by not respecting Clause 29, the Respondent / Counter-Claimant breached the contract. As a result, the Claimant / Counter-Respondent is entitled to compensation for breach of contract.

19. In this sense, the Claimant / Counter-Respondent held that the release clause enshrined in Clause 28 is a “liquidated damages clause”, and as such the Respondent / Counter-Claimant is liable to pay EUR 300,000 to the Claimant / Counter-Respondent as compensation, “as submitted under liquidated damages”.

20. Alternatively, the Claimant / Counter-Respondent believes that he is entitled to EUR 500 as compensation from the Respondent / Counter-Claimant, because he “suffered a loss of income, directly, caused by the breach of the employment contract”. In particular, the Claimant / Counter-Respondent refered to a “Statement” made by the Intervening Party, which stipulated that the Claimant / Counter-Respondent would have earned EUR 500 in match bonuses had he been able to participate in matches for the Intervening Party between 8 August 2016 and 20 August 2016.

21. On 2 November 2016, the Respondent / Counter-Claimant submitted its reply with regard to the Claim’s claim of 10 October 2016.

22. In its reply, the Respondent / Counter-Claimant firstly challenged the competence of FIFA to deal with the matter at hand, arguing that the Football Arbitration Court of the Football Association of Country D (hereinafter: the NDRC of Country D) is the competent body in accordance with clauses 33 and 34 of the contract.

23. In this respect, the Respondent / Counter-Claimant alleged that the NDRC of Country D constitutes an independent arbitration tribunal guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs.

24. In support of its assertion, the Respondent / Counter-Claimant submitted a copy of the 2012 edition of the Statutes of the Football Association of Country D as well as a copy of the 2012 edition of the Regulations of the Football Arbitration Court.

25. In this regard, Article 47 of the Statutes of the Football Association of Country D(“Competence”) is outlined as follows:

“§2 – Claims for payments and petitions to establish and settle legal relationship or rights can be submitted to the [NDRC of Country D].

§3 –Members of the Football Association of Country D, players, coaches, instructors and players’ agents are obliged to include clauses providing for exclusive competence of [NDRC of Country D] in civil law agreements concerning disputes with regard to (…) football.

§4 – The clauses referred to §3 should include the following wording: “Disputes which may result on the grounds of establishment, existence, validity, execution and termination of agreements between members of Football Association of Country D, players, coaches, instructors and players’ agents, which may be subject to arbitration, arising in connection with (…) football, shall be submitted by the parties for resolution to the [NDRC of Country D].”

26. Furthermore, Article 57 (“Jurisdiction”) stipulates the following: “[The NDRC of Country D] shall have jurisdiction in internal national disputes, i.e. disputes between parties belonging to the [Football Association of Country D]. FIFA shall have jurisdiction on international disputes, i.e. disputes between parties belonging to different national football Associations and/or Confederations.”

27. In the alternative, the Respondent / Counter-Claimant requested FIFA “to suspend legal proceeding in case regarding the [Respondent] motion for termination Contract and compensation for termination contract lodged to NDRC of Country D which has decided that has no jurisdiction to resolve above mentioned case and referred this case to the FIFA DRC”.

28. In this context, the Respondent / Counter-Claimant held that during a meeting held between the Respondent / Counter-Claimant and the Claimant / Counter-Respondent on 4 July 2016, the Claimant / Counter-Respondent informed the Respondent / Counter-Claimant that he “did not wish to play any longer for the [Respondent] after relegation”. In response, the Respondent / Counter-Claimant told the Claimant / Counter-Respondent that he still had a contract with the Respondent / Counter-Claimant and that it was still interested in his services.

29. According to the Respondent / Counter-Claimant, the Claimant / Counter-Respondent failed to show up to the Respondent / Counter-Claimant after said meeting. Consequently, on 19 July 2016, the Respondent / Counter-Claimant lodged a claim in front of the NDRC of Country D, alleging termination of contract by the Claimant / Counter-Respondent without just cause.

30. On 23 August 2016, the NDRC of Country D declared itself incompetent to consider the case and “decided” to submit the case to the FIFA DRC.

31. Regarding FIFA’s competence and jurisdiction, the Claimant / Counter-Respondent commented on 5 December 2016, that Clauses 33 and 34 of the contract do not provide exclusive competence to the NDRC of Country D.

32. On 13 February 2017, the Respondent / Counter-Claimant submitted a reply regarding the Claimant / Counter-Respondent’s amended claim of 6 December 2016, as well as a counterclaim against the Claimant / Counter-Respondent. In its reply and counterclaim, the Respondent / Counter-Claimant inter alia requested that FIFA:

a. Declare itself incompetent to deal with the matter;

b. Alternatively, declare that the contract did not expire on 30 June 2016;

c. Dismiss all the claims of the Claimant / Counter-Respondent;

d. Conclude that Clause 28 is not a liquidated damages clause;

e. Conclude that the Claimant / Counter-Respondent terminated the contract without just cause;

f. Conclude that the Claimant / Counter-Respondent is liable to pay the Respondent / Counter-Claimant the amount of EUR 108,000, “which is equal to [the Claimant / Counter-Respondent’s] salary until the end of the contract (from 1 July 2016 until 30 June 2017)” as a compensation for termination of the contract without just cause.

33. As regards the competence of FIFA, the Respondent / Counter-Claimant referred to the decision of 23 August 2016 by the NDRC of Country D (cf. I.30), but claimed that it has never received a written justification of the decision. According to the Respondent / Counter-Claimant, this decision has therefore never entered into force. Moreover, the Respondent / Counter-Claimant claimed that it filed an appeal on 21 November 2016 and that the case is still pending in front of the NDRC of Country D.

34. With regard to the alternative requests made by the Respondent / Counter-Claimant, the Respondent / Counter-Claimant argued that the Claimant / Counter-Respondent failed to show up at the Respondent / Counter-Claimant’s first training session of the new season on 20 June 2016. As a result, the Respondent / Counter-Claimant sent the Claimant / Counter-Respondent a letter on 20 June 2016 requesting him to comply with his contractual obligations. By means of this letter, the Respondent / Counter-Claimant also warned the Claimant / Counter-Respondent that he could be held liable under the disciplinary rules of the Football Association of Country D. Nonetheless, as per the Respondent / Counter-Claimant, the Claimant / Counter-Respondent only presented himself on 4 July 2016, 14 days after the first training.

35. The Respondent / Counter-Claimant reiterated that during the meeting of 4 July 2016, the Claimant / Counter-Respondent stated that he did not wish to play for the Respondent / Counter-Claimant anymore. Moreover, according to the Respondent / Counter-Claimant, the Claimant / Counter-Respondent explained that he had begun treatment in Country B regarding an illness. In this regard, the Respondent / Counter-Claimant stated that the Claimant / Counter-Respondent had never informed it about his illness before the meeting.

36. Even so, the Respondent / Counter-Claimant argued that during this meeting it informed the Claimant / Counter-Respondent that the contract was still valid, that he was contractually obliged to attend trainings, and that the Respondent / Counter-Claimant was still interested in his services. Moreover, it requested the Claimant / Counter-Respondent to provide documentation concerning the disease, and told him that he could only leave for Country B following the decision of the Respondent / Counter-Claimant’s doctor with regard to the medical documentation. Nonetheless, as per the Respondent / Counter-Claimant, the Claimant / Counter-Respondent left for Country B anyway without the Respondent / Counter-Claimant’s permission.

37. According to the Respondent / Counter-Claimant, during the days 10 – 12 July 2016, the Respondent / Counter-Claimant’s team manager and the Claimant / Counter-Respondent had several conversations via SMS text messaging. In these conversations, the Claimant / Counter-Respondent inter alia told the Respondent / Counter-Claimant that he would return to the Respondent / Counter-Claimant, if it pays for the plane ticket.

38. The Respondent / Counter-Claimant further held that the team manager bought a plane ticket for the Claimant / Counter-Respondent (Country B – Country D - Country D) for 12 July 2016, at 18:30.

39. However, notwithstanding the flight ticket, the Claimant / Counter-Respondent did not show up at the Respondent / Counter-Claimant.

40. In addition, the Respondent / Counter-Claimant referred to an SMS text message exchange between the Respondent / Counter-Claimant’s president and the Claimant / Counter-Respondent between 29 June 2016 and 28 July 2016. In particular, on 21 July 2016 the Claimant / Counter-Respondent asked the president via text message whether the Respondent / Counter-Claimant still wanted him, and whether the Respondent / Counter-Claimant is “ready to pay the salary on time”. On that same day, the Respondent / Counter-Claimant’s president replied in the affirmative to both questions.

41. The Respondent / Counter-Claimant claimed that subsequently, on 28 July 2016, the Claimant / Counter-Respondent wrote to the Respondent / Counter-Claimant and stated that he had bought a ticket to Country D for 31 July 2016. He wrote: “We can meet and talk about everything. About my illness. So I can start to train. I want you to [help] me with doctors. So it will be easier for me to play”.

42. According to the Respondent / Counter-Claimant, these text messages written by the Claimant / Counter-Respondent demonstrate that the Claimant / Counter-Respondent was aware that the contract was still valid, and that the Claimant / Counter-Respondent breached his contractual obligations by not appearing at trainings.

43. The Respondent / Counter-Claimant therefore concluded that it “suffered an obvious damage, since it does not have [the Claimant / Counter-Respondent] whose market value was EUR 300,000. [The Respondent / Counter-Claimant] signed a new contract with another player [as a replacement] and incurred specific image loss due to the fact that [the Claimant / Counter-Respondent] did not appear at training”.

44. On 13 March 2017, the Claimant / Counter-Respondent replied to the Respondent / Counter-Claimant’s counterclaim. In his reply, he firstly held that he was only made aware of the start of the pre-season on 20 June 2016, i.e. on the same day as the first training. On such short notice, it was impossible for him to attend.

45. In addition, the Claimant / Counter-Respondent held that the Respondent / Counter-Claimant had been constantly in breach of its contractual obligations by not paying him, and that he had put the Respondent / Counter-Claimant in default by means of a letter dated 19 June 2016 and sent on 20 June 2016.

46. The Claimant / Counter-Respondent then argued that only after the said default letter did the Respondent / Counter-Claimant start paying him the outstanding remuneration.

47. Furthermore, the Claimant / Counter-Respondent claimed that he started suffering from his illness between 20 June and 24 June 2016, and that “this could have been triggered by the stress suffered by [the Claimant / Counter-Respondent] due to persistent failure of [the Respondent / Counter-Claimant] to pay his remuneration and the unreasonably short notice of the commencement of the pre-season of [the Respondent / Counter-Claimant]”.

48. Moreover, the Claimant / Counter-Respondent argued that, after a “brief absence” of 14 days, during the meeting of 4 July 2016, he was granted permission verbally to travel to Country B to cure his illness until 11 July 2016.

49. The Claimant / Counter-Respondent was of the opinion that his absence between 12 July 2016 and 18 July 2016 is too short to be considered a fundamental breach of the employment contract. In this light, the Claimant / Counter-Respondent argued that during this time he constantly informed the Respondent / Counter-Claimant that it was his intention to stay at the Respondent / Counter-Claimant.

50. Lastly, the Claimant / Counter-Respondent reiterated that the contract had expired on 18 July 2016, since the Respondent / Counter-Claimant failed to make a contract proposal in light of Clause 29 of the contract.

51. In its final comments dated 3 April 2017, the Respondent / Counter-Claimant once again argued that the NDRC of Country D is competent to deal with the matter, and that the Claimant / Counter-Respondent did not sufficiently prove otherwise.

52. Moreover, the Respondent / Counter-Claimant stated that an absence of 14 days cannot be considered “brief”, as the Claimant / Counter-Respondent claimed, and that he only informed the Respondent / Counter-Claimant of his illness on 4 July 2016.

53. The Respondent / Counter-Claimant further held that it did not owe the Claimant / Counter-Respondent outstanding remuneration on 20 June 2016, and even if it had, this would not allow the Claimant / Counter-Respondent to be absent for 14 days.

54. Contrary to what the Claimant / Counter-Respondent stated, the Respondent / Counter-Claimant held that during the meeting of 4 July 2016 it never gave the Claimant / Counter-Respondent permission to travel back to Country B.

55. Lastly, given that the Claimant / Counter-Respondent claimed that the contract expired on 18 July 2016, the Respondent / Counter-Claimant wondered why the Claimant / Counter-Respondent wrote to the Respondent / Counter-Claimant after this date telling it that he wanted to come back.

56. The Claimant / Counter-Respondent informed FIFA, submitting copies of the relevant contract, that he signed an employment contract with the Intervening Party on 26 July 2016, valid from the date of signature until 30 June 2017. The Claimant / Counter-Respondent’s monthly salary at the Intervening Party amounted to EUR 800 gross. The Claimant / Counter-Respondent further informed FIFA that on 20 February 2018, he signed an employment contract with the Club of Country B, Club H, valid from the date of signature until 20 November 2018. According to the contract, the Claimant / Counter-Respondent is entitled to a monthly salary of EUR 733.14 gross.

57. Although the Intervening Party was invited to provide its comments to the present matter, it did not submit any comments.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber, DRC or deciding body) 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 10 October 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. article 21 of the 2015, 2017 and 2018 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 2018) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a club and a player that have an international dimension.

3. Within this context, the Chamber understood that, in principle, it would be competent to decide on the present litigation which involves a Player of Country B and a Club of Country D regarding an employment-related dispute.

4. However, the Chamber acknowledged that the Respondent / Counter-Claimant contested the competence of FIFA’s deciding bodies and considered that the matter should have been submitted to the Football Arbitration Court of the Football Association of Country D (hereinafter: NDRC of Country D) instead (cf. I.22).

5. Taking into account the above, the Chamber emphasised that, in accordance with art. 22 lit. b) of the 2018 edition of the Regulations, 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. In this regard, the members of the Chamber further referred to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.

6. In relation to the above, the Chamber 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 is competent to settle an employment-related dispute between a club and a player of an international dimension is that the jurisdiction of the relevant national arbitration tribunal or national court derives from a clear reference in the employment contract.

7. 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 contained a clear and specific jurisdiction clause.

58. In this respect, the Chamber recalled that Clauses 33 and 34 of the employment contract stipulate the following:

a. “In respect of any disputes that can occur between the parties in relation to the present Contract, including in particular concerning validity, existence or termination of the Contract, the proper Football Association of Country D bodies will decide: acting in accordance with separate regulations. (clause 33);

b. All and any financial disputes resulting from this Contract will be subject to decision by the Football Arbitration Court of the Football Association of Country D (clause 34).

8. In view of the above, the members of the DRC were of the unanimous opinion that the employment contract did not make reference to one specific national dispute resolution chamber in the sense of art. 22 lit. b) Of the aforementioned Regulations, but, to the contrary, to two “justice institutions” of Country G. Therefore, the members of the Chamber deemed that said clause can by no means be considered as an exclusive arbitration clause in favour of the NDRC of Country D, as asserted by the Respondent / Counter-Claimant.

9. In addition, the deciding body highlighted that, under Article 47 §3 of the Statutes of the Football Association of Country D, inter alia players are obliged to include in the employment contract a competence clause in accordance with the exact wording of Article 47 §4 of said Statutes, in order to guarantee the exclusive competence of the NDRC of Country D. In a similar vein, the DRC recalled that, in accordance with Article 47 §4 of the Statutes, the competence clause should include the following: “Disputes which may result on the grounds of establishment, existence, validity, execution and termination of agreements between members of Football Association of Country D, players, coaches, instructors and players’ agents, which may be subject to arbitration, arising in connection with (…) football, shall be submitted by the parties for resolution to the [NDRC of Country D].”

10. Thus, the Chamber established that the wording of Clause 33 of the employment contract (cf. II.58.a) differs from the wording of Article 47 §4 of the Statutes of the Football Association of Country D. Consequently, given the wording chosen by the parties in Clause 33 of the contract, the DRC agreed that said clause does not provide for the exclusive competence of the NDRC of Country D.

11. Furthermore, the deciding body referred to Article 57 of the Statutes of the Football Association of Country D (cf. I.26). In this sense, although the Chamber found this provision not to have been drafted in a clear way, the DRC did concur that it appears to indicate that for disputes with an international dimension, such as the case at hand, FIFA is competent.

12. Given all of the above, the Chamber established that the Respondent / Counter-Claimant’s objection towards the competence of FIFA to deal with the present matter has to be rejected, and that 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 consider the present matter as to the substance and that the claim of the Claimant / Counter-Respondent is admissible.

13. 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 documentation contained in the file in relation to the substance of the matter. 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.

14. In continuation, the Chamber first acknowledged that the Claimant / Counter-Respondent and the Respondent / Counter-Claimant signed an employment contract on 18 December 2015, valid as from 1 January 2016 until 30 June 2018. Moreover, the deciding body recalled that the Respondent / Counter-Claimant was registered with the Intervening Party on 25 August 2016 as a free agent.

15. The Chamber further took note of the Claimant / Counter-Respondent’s argumentation, who inter alia held that the contract had expired by virtue of Clause 29. Similarly, the DRC acknowledged that the Respondent / Counter-Claimant inter alia alleged in its counterclaim that the Claimant / Counter-Respondent had terminated the contract without just cause, and that, as a consequence, is liable to compensate the Respondent / Counter-Claimant.

16. In this context, the Chamber unanimously agreed that the primary issue at stake is determining whether Clause 29 of the employment contract is valid and binding. By way of reminder, the DRC recalled that said Clause established the following: “[i]n case of a drop to a lower class, the Parties undertake to renegotiate the terms of this contract. If the parties fail to agree on the new contract provisions the legal relationship between the parties expires”.

17. After a careful evaluation, the deciding body felt that Clause 29, which is also known as a relegation clause in accordance with DRC jurisprudence, left little ambiguity: once the Respondent / Counter-Claimant is relegated, the Claimant / Counter-Respondent and the Respondent / Counter-Claimant renegotiate the terms of the contract. The Chamber further understood that, if no new agreement is reached, the contract expires. In this context, the deciding body further interpreted the relegation clause as signifying that both parties need to be willing to continue the employment relationship. Thus, as per the DRC, the willingness of, e.g. only the Respondent / Counter-Claimant would not be sufficient for the employment relationship to continue.

18. Furthermore, the DRC determined that the relegation clause is both reciprocal and proportionate, i.e. it does not provide an advantage of one party over the other. Furthermore, the Chamber referred to its previous jurisprudence, and recalled that relegation clauses have been declared valid in previous decisions.

19. The DRC then proceeded to analysing whether the relegation clause had actually been invoked by one or both of the parties. In this sense, and in accordance with publicly available information, the DRC established that the Respondent / Counter-Claimant got relegated to a lower division at the end of the 2015/2016 football season. Furthermore, the deciding body highlighted that the Respondent / Counter-Claimant never submitted any evidence to the contrary.

20. In addition, the Chamber took note of the evidence provided by the parties and concluded that attempts were made to renegotiate the contract. In particular, the DRC determined that it remained uncontested that the parties held a meeting on 4 July 2016 (cf. I.28 and I.48), while it is clear from the Claimant / Counter-Respondent’s submissions that he sent emails to the Respondent / Counter-Claimant on 11 and 13 July 2016, inviting it to renegotiate the contract (cf. I.15 and I.16).

21. The deciding body further took note from the evidence on file that no new agreement was reached between the Claimant / Counter-Respondent and the Respondent / Counter-Claimant. In this light, the Chamber placed particular emphasis on the letter sent by the Claimant / Counter-Respondent to the Respondent / Counter-Claimant on 18 July 2016 (cf. I.17) in which he wrote that he treated “the contract as expired in the light of Clause 29”. Thus, the Chamber concluded that the employment relationship between the Claimant / Counter-Respondent and the Respondent / Counter-Claimant was finalised on 18 July 2016 by virtue of Clause 29 of the employment contract.

22. With regard to the consequences of the finalisation of the contract by virtue of Clause 29 of the contract, the DRC recalled that, in his claim, the Claimant / Counter-Respondent requested EUR 5,250 as outstanding remuneration related to match bonuses, an unspecified amount of compensation by the Respondent / Counter-Claimant for breach of contract, a further EUR 300,000 as compensation for breach of contract by the Respondent / Counter-Claimant in light of Clause 28 of the contract or, in the alternative, EUR 500 as “compensatory damages, suffered by the [Claimant / Counter-Respondent]” (cf. I.11). Similarly, the deciding body took note of the Respondent / Counter-Claimant’s counterclaim, by which it requested EUR 108,000 as compensation for termination without just cause by the Claimant / Counter-Respondent (cf. I.32).

23. As regards the Claimant / Counter-Respondent’s request for outstanding remuneration related to match bonuses, the DRC firstly referred to the employment contract and recalled that the Claimant / Counter-Respondent was contractually entitled to inter alia EUR 1,500 per won match in which the Claimant / Counter-Respondent participated at least 45 minutes; EUR 500 per drawn match in which the Claimant / Counter-Respondent participated at least 45 minutes; and EUR 250 per drawn match in which the Claimant / Counter-Respondent participated between 15 and 45 minutes (cf. I.3).

24. In continuation, the Chamber turned to the evidence provided by the Claimant / Counter-Respondent, and noted that he had submitted internet extracts which show that he had participated in seven games during the 2015/2016 season (cf. I.12). Moreover, the internet extracts also indicate the amount of minutes the Claimant / Counter-Respondent participated per game. In this regard, the deciding body was eager to emphasize that the Respondent / Counter-Claimant never disputed the Claimant / Counter-Respondent’s claim that he had participated in these seven games. Taking into account the wording of the contract, the Chamber thus concluded that the Claimant / Counter-Respondent was entitled to EUR 5,250 as match bonuses.

25. On account of the aforementioned considerations, the DRC established that the Respondent / Counter-Claimant failed to remit the Claimant / Counter-Respondent’s pending remuneration in the total amount of EUR 5,250.

26. Consequently, the DRC decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent / Counter-Claimant is liable to pay to the Claimant / Counter-Respondent outstanding remuneration in the total amount of EUR 5,250.

27. In addition, taking into consideration the Claimant / Counter-Respondent’s claim, the Chamber decided to award the Claimant / Counter-Respondent interest at the rate of 5% p.a. on the amount of EUR 5,250, as of the day of the contract finalisation, i.e. 18 July 2016.

28. Next, regarding the Claimant / Counter-Respondent’s request for an unspecified amount of compensation by the Respondent / Counter-Claimant for breach of contract, the Chamber firstly reiterated that the contract was terminated by virtue of the relegation clause (cf. II.21). Moreover, even though the DRC acknowledged that the Respondent / Counter-Claimant might have been in breach of the contract up until 20 June 2016 for not paying the Claimant / Counter-Respondent his salary (cf. I.45), the Chamber understood that this breach had been remedied by the Respondent / Counter-Claimant once it paid the Claimant / Counter-Respondent the amounts due to him (cf. I.46). Consequently, the deciding body concluded that no compensation is due to the Claimant / Counter-Respondent for an alleged breach of contract by the Respondent / Counter-Claimant.

29. In continuation, the Chamber turned to the Claimant / Counter-Respondent’s claim for EUR 300,000 as compensation in accordance with Clause 28 of the contract, arguing that this is a “liquidated damages clause”. In this context, the DRC noted that Clause 28 held the following: “Parties mutually agree “release clause” of [the Claimant / Counter-Respondent] in amount of EUR 300,000 net until 31 December 2016 and EUR 250,000 net after 31 December 2016” (cf. I.5).

30. After a careful analysis, the Chamber unanimously concluded that said clause was not a liquidated damages clause, as the Claimant / Counter-Respondent argued, but rather a release clause. In other words, as per the DRC, the clause established the amount a party has to pay in order to unilaterally terminate the contract. In this light, the deciding body referred to its previous deliberations, and determined that since the contract was finalised by virtue of the relegation clause, the release clause does not apply. As a result, the Chamber established that the compensation in the amount of EUR 300,000 is not due to the Claimant / Counter-Respondent.

31. The DRC then referred to the Claimant / Counter-Respondent’s alternative claim of EUR 500 in damages, which, as per the Claimant / Counter-Respondent, correspond to the amount he would have earned at the Intervening Party in match bonuses, had he been able to participate (cf. I.20). However, the Chamber was of the opinion that this amount is not due to the Claimant / Counter-Respondent, because the Respondent / Counter-Claimant cannot be held liable for any possible match bonuses the Claimant / Counter-Respondent could have obtained at a new club, such as the Intervening Party, regardless of whether or not he participates.

32. With regard to the Respondent / Counter-Claimant’s counterclaim, by which it requested EUR 108,000 as compensation for termination without just cause by the Claimant / Counter-Respondent, the deciding body again referred to its previous deliberations and recalled that the contract had expired by virtue of the relegation clause (cf. II.21). On the basis of this, the Chamber also established that the Claimant / Counter-Respondent had not terminated the contract without just cause. Thus, the DRC concluded that the Respondent / Counter-Claimant is not entitled to any compensation by the Claimant / Counter-Respondent.

33. Consequently, the Chamber decided to reject the Respondent / Counter-Claimant’s counterclaim for payment of compensation in its entirety.

34. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant / Counter-Respondent and the Respondent / Counter-Claimant are rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant / Counter-Respondent, Player A, is admissible.

2. The claim of the Claimant / Counter-Respondent is partially accepted.

3. The Respondent / Counter-Claimant, Club C, has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 5,250, plus 5% interest p.a. on the said amount as from 18 July 2016 until the date of effective payment.

4. In the event that the amount due plus interest to the Claimant / Counter-Respondent in accordance with the above-mentioned point 3. Is not paid by the Respondent / Counter-Claimant within the stated time limit, 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 / Counter-Respondent is rejected.

6. The Claimant / Counter-Respondent is directed to inform the Respondent / Counter-Claimant 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.

7. The counterclaim of the Respondent / Counter-Claimant is rejected.

*****

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 (CAS)

Avenue de Beaumont 2

CH-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