F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2017-2018) – fifa.com – atto non ufficiale – Decision 15 February 2018

Decision of the Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 February 2018,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

Eirik Monsen (Norway), member

Stéphan Burchkalter (France), member

Philippe Diallo (France), member

Joseph Bell (Cameroon), member

on the matter between the player,

Player A, Country A

as Claimant

and the club,

Club B, Country B

as Respondent

regarding an employment-related dispute

arisen between the parties

I. Facts of the case:

1. On 20 July 2014, the player of country A, Player A (hereinafter: the Claimant), and the club from country B, Club B (hereinafter: the Respondent), concluded an employment contract (hereinafter: the contract) valid as from 1 July 2014 until 30 June 2017.

2. On 24 June 2017, the Claimant and the Respondent signed a document called “Settlement Agreement and Financial Clearance” (hereinafter: the settlement agreement).

3. Clause 2 of the settlement agreement stipulates that the “the first party [the Respondent] will have to pay to the second party [the Claimant] an amount of EUR 400,000 (only four hundred thousand Euros) in thirty days as from the date of signing this agreement…”.

4. Additionally, according to clause 3 of the settlement agreement “besides the amount provided by clause 2 above, the first party [the Respondent] will have to pay to the second party [the Claimant] the amount of EUR 268,000 (two hundred sixty eight thousand Euros), as per the second party’s [the Claimant] salaries of May and June 2017, within thirty (30) days from the date of execution hereof…”.

5. Furthermore, clause 4 of the settlement agreement reads as follow: “If the first party [the Respondent] fails to perform its obligations according to clause 2 or 3 within the time limits specified above, it shall pay to the second party [the Claimant] a penalty in the amount of EUR 133,600 (one hundred thirty-three thousand, six hundred Euros), which is equivalent to 20% (twenty percent) of the total due to by the first party [the Respondent] to the second party [the Claimant] under this agreement…”.

6. On 21 September 2017, the Claimant lodged a claim before FIFA against the Respondent and requested a total amount of EUR 533,600 plus 5% interest per annum. In addition, the Claimant also requested the legal expenses and procedural costs to be paid by the Respondent.

7. In support of his claim, the Claimant stated that the Respondent did not pay the amount of EUR 400,000 established in clause 2 of the agreement plus the penalty fee of EUR 133,600 stipulated in clause 4 of the agreement.

8. Despite having been invited by FIFA to provide its comments on the present matter, the Respondent did not respond to the Claimant’s claim.

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 21 September 2017. Consequently, the 2017 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 2017 edition 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 2018), 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 and a club.

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 (editions 2016 and 2018), and considering that the present matter was submitted to FIFA on 21 September 2017, 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. In this respect and first of all, the DRC acknowledged that following the conclusion of an employment contract on 20 July 2014, the Claimant and the Respondent had concluded a settlement agreement on 24 June 2017.

6. In continuation, the members of the Chamber observed that according to clause 2 of the settlement agreement “the first party [the Respondent] will have to pay to the second party [the Claimant] an amount of EUR 400,000 (only four hundred thousand Euros) in thirty days as from the date of signing this agreement…”.

7. Moreover, the DRC noted that clause 3 of the settlement agreement stipulates that “besides the amount provided by clause 2 above, the first party [the Respondent] will have to pay to the second party [the Claimant] the amount of EUR 268,000 (two hundred sixty eight thousand Euros), as per the second party’s [the Claimant] salaries of May and June 2017, within thirty (30) days from the date of execution hereof…”.

8. Furthermore, the DRC also observed that clause 4 of the settlement agreement reads as follow: “if the first party [the Respondent] fails to perform its obligations according to clause 2 or 3 within the time limits specified above, it shall pay to the second party [the Claimant] a penalty in the amount of EUR 133,600 (one hundred thirty-three thousand, six hundred Euros), which is equivalent to 20% (twenty percent) of the total due to by the first party [the Respondent] to the second party [the Claimant] under this agreement…”.

9. The DRC further observed that, on 21 September 2017, the Claimant lodged a claim against the Respondent before FIFA requesting the payment of EUR 533,600 plus 5% interest per annum. In particular, the DRC noted that the Claimant stated that the Respondent did not pay the amount of EUR 400,000 established in clause 2 of the settlement agreement plus the penalty fee of EUR 133,600 stipulated in clause 4 of the settlement agreement.

10. Furthermore, the members of the Chamber noted that the Respondent had been given the opportunity to reply to the claim submitted by the Claimant, but that the Respondent had failed to present its response in this respect. In this way, so the DRC deemed, the Respondent renounced to its right of defence and, thus, accepted the allegations of the Claimant.

11. As a consequence of the preceding consideration, the Chamber established that in accordance with art. 9 par. 3 of the Procedural Rules he shall take a decision upon the basis of the documents on file.

12. Having said this, the DRC observed that the Respondent did not pay to the Claimant the amount of EUR 400,000 established in clause 2 of the settlement agreement

13. In continuation, the DRC focussed its attention on clause 4 of the settlement agreement. In this respect, the DRC observed that the penalty fee established in clause 4 of said document would apply if the Respondent failed to pay any of the amounts established in clause 2 or 3 of the settlement agreement.

14. Subsequently, the members of the Chamber concluded that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness. In this respect, the Chamber highlighted that in order to determine as to whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before it shall also be taken into consideration.

15. In the specific case at hand, the members of the Chamber deemed that the penalty fee of 20% of the total amount, which the parties contractually agreed upon in the context of terminating the employment relation, is both proportionate and reasonable in the case at hand.

16. Consequently, the Chamber decided that said contractual penalty fee is valid and applicable in the present matter.

17. On account of the above considerations, the Chamber decided that in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant the amount of EUR 400,000 plus interest at the rate of 5% per annum as from 25 July 2017, i.e. the date on which the amount of EUR 400,000 fell due in the light of the Respondent’s failure to pay in a timely manner.

18. In addition, the Chamber decided that the Respondent is liable to pay to the Claimant the amount of EUR 133,600 relating to the penalty fee in accordance with clause 4 of the settlement agreement.

19. Furthermore, as regards the claimed legal expenses and procedural costs, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to the long-standing and well-established jurisprudence of the DRC, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the DRC decided to reject the Claimant’s request relating to legal expenses.

20. Finally, the Chamber concluded its deliberations by rejecting any further claim lodged by the Claimant is rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is partially accepted.

2. The Respondent, Club B, has to pay to the Claimant, within 30 days as from the date of notification of this decision, the outstanding amount of EUR 400,000 plus interest at 5% per year over said amount as from 25 July 2017 until the date of effective payment.

3. Within the same deadline, the Respondent has to pay to the Claimant the amount of EUR 133,600.

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

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 remittances are 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

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives