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 21 September 2017

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 21 September 2017,

in the following composition:

Thomas Grimm (Switzerland), Deputy Chairman

John Bramhall (England), member

Johan van Gaalen (South Africa), member

Pavel Pivovarov (Russia), member

Mohamed Al Saikhan (Saudi Arabia), 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 22 August 2014, 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 30 June 2017.

2. According to art. 3 of the contract, the Claimant was entitled to a monthly salary of EUR 5,000 payable on the 10th day of each subsequent month.

3. Pursuant to art. 6 of the contract, “any disputes concerning the validity, existence or termination of the Contract shall be settled by the competent authorities of the Football Association of Country D, acting in accordance with separate regulations. Property disputes arising from this Contract shall be competence of the Football Arbitration Court”.

4. In accordance with art. 7 of the contract, “1. an integral part of this Contract are the ‘..XXX…’ (rules governing the relations between the sports club and a professional player), adopted by Resolution of the Football Association of Country D’s Board, which is enclosed to this contract. 2. By signing this Contract, the Player and the Club confirm acquaintance of the above provisions and agree to strictly respect them”.

5. Art. 8, par. 5, point a) of the aforementioned Resolution of the Football Association of Country D (hereinafter: the Resolution) stipulates that “a Club has the right to terminate unilaterally the contract with the player, with no fault of this player, by the declaration made in writing under the pain of nullity, i.e. if the player […] did not participate in at least 10% of official games of the first senior team in the entire season precedent the season when such termination is made, on condition that such statement is made within 7 days from the date of commencement of the period of change club membership, in accordance with the provisions of the Football Association of Country D”.

6. On 1 July 2016, the Respondent sent a letter to the Claimant, by means of which it terminated the contract with immediate effect. In particular, the Respondent stated that, pursuant to the regulations of the Football Association of Country D, it was entitled to terminate the contract if the player did not “participate in 10% of official games of the 1 Senior Team” of the club during the season 2015/2016.

7. On 19 September 2016, the Claimant lodged a claim in front of FIFA against the club for breach of contract, requesting the following:

a) outstanding salaries in the amount of EUR 5,000, plus 5% interest p.a. as from 10 July 2016;

b) compensation for breach of contract in the amount EUR 75,000, plus 5% interest p.a. as from 1 July 2016;

c) sporting sanctions on the club.

8. In his claim, the Claimant alleged that the Respondent terminated the contract without just cause and did not pay his salary of June 2016.

9. In particular, the Claimant argued that the participation of a player in less than 10% of official matches could not entitle the Respondent to the termination of the contract because such participation did not depend on his own will, but rather on the club’s decision only.

10. As a consequence, the Claimant requested the payment of compensation in the amount of EUR 75,000, corresponding to:

a) the remaining value of the contract, in the amount of EUR 60,000;

b) the compensation for breach of contract during the protected period, in the amount of EUR 15,000.

11. In its reply, the Respondent argued that FIFA has no jurisdiction to the deal with the dispute, as only the Sport Dispute Resolution Chamber of the Football Association of Country D (hereinafter also referred to as: the DRC of Country D) was competent pursuant to art. 6 of the contract. In particular, the Respondent stressed that the DRC of Country D was an independent arbitration tribunal, guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs, as provided by the Statutes of the Football Association of Country D.

12. Pursuant to art. 46 par. 3 of said Statutes, “the Sports Dispute Resolution Chamber is composed of […] a) Chairperson and three Deputy Chairpersons, elected unanimously by representatives of football players and clubs […] from a list of minimum eight individuals designated by the Board of the Football Association of Country D, b) six representatives of football players elected by the Board of the Football Association of Country D at the request of the Union of Footballers of Country D, c) six representatives of football clubs elected by the Board of the Football Association of Country D”. Equally, the Respondent submitted a statement from the Football Association of Country D, whereby the latter confirmed that the DRC of Country D was independent and compliant with the principle of equal representation.

13. As to the merits of the case, the Respondent argued that, pursuant to art. 7 of the contract, the Resolution was the law applicable to the case, according to which the Respondent was entitled to terminate the contract if the player had participated in less than 10% of the official matches in the precedent season.

14. In this context, the Respondent emphasised that the Claimant did not dispute that he participated in less than 10% of the official matches with the first team of the club and, consequently, it considered that it terminated the contract with just cause as per the Resolution.

15. In continuation, the Respondent alleged that, on 13 September 2016, it paid the player his salary of June 2016 and also stated that “all the other salaries payable to the Claimant were paid in full”. In this respect, the club provided a bank statement allegedly confirming that a payment of EUR 6,902.37 was made in favour of the Claimant on 13 September 2016 and argued that, due to a “typographical error”, said statement referred to “Salary 05 2016 and 06 2016” instead of “Salary 06 2016 and 07 2016”. Furthermore, as a proof of the alleged typographical error, the Respondent provided another bank statement for the amount of EUR 5,566.01, allegedly confirming the payment of May 2016, referred to as “Salary 05”.

16. In his replica, the Claimant contested the jurisdiction of the DRC of Country D, alleged by the Respondent. In particular, the Claimant emphasised that, according to the procedural rules of the DRC of Country D (hereinafter: the Procedural Rules of the Football Association of Country D), the Football Association of Country D’s Management Board selected the representatives of the players and of the clubs and also the list of persons among which the Chairman and the Deputy Chairmen of the DRC of Country D were selected. Consequently, the Claimant argued that, due the intervention of the Football Association of Country D’s Management Board, the principle of equal representation between players and clubs was not respected.

17. According to art. 3, par. 1 lit. a) of the Procedural Rules of the Football Association of Country D : “The Sports Dispute Resolution Chamber shall be composed [by]: a) the Chairman and 3 Deputy Chairmen jointly elected by representatives of the players and clubs […] from a list of at least 8 persons designated by the Management Board of the Football Association of Country D; b) six representatives of the players, selected by the Management Board of the Football Association of Country D upon request of the Union of Footballers of Country D […]; c) six representatives of the clubs, selected by the Management Board of the Football Association of Country D”.

18. Moreover, the Claimant added that, pursuant to the Procedural Rules of the Football Association of Country D, there was not an independent appeal body for the decisions issued by the DRC of Country D but, rather, the final decision was taken by the same tribunal, in second instance, and such decision was final and enforceable. In view of the above-mentioned considerations, the Claimant affirmed that the DRC of Country D was neither independent nor impartial.

19. Art. 5 of the Procedural Rules of the Football Association of Country D stipulates that “[…] 2. […] the party not satisfied with the result may file an appeal to the Chamber composed of 5 persons, covering an equal number of representatives of the players and the clubs, as well as the Chairman or the Deputy Chairman who were not members of the adjudicating panel at the first instance hearing. 3. […] decisions of the adjudicating panel composed of 5 members shall be final and enforceable”.

20. Furthermore, the Claimant asserted that, despite the club’s statement in its reply, he did not receive the payment of the outstanding salaries for the month of June and July 2016.

21. In its duplica, the Respondent rejected the arguments of the Claimant and insisted on the exclusive competence of the DRC of Country D. In particular, the Respondent reaffirmed that, pursuant to the Procedural Rules of the Football Association of Country D, the DRC of Country D respected the principle of equal representation between players and clubs and that the appointment of the players’ and clubs’ representatives by the Football Association of Country D’s Management Board was bound by the candidates listed by the players and the clubs.

22. Moreover, the Respondent argued that the DRC of Country D was independent because the Procedural Rules of the Football Association of Country D guaranteed the impartiality and independence of the arbitrators and, in its second instance, said Chamber was composed of different arbitrators. Furthermore, the Respondent underlined that, according to the Procedural Rules of the Football Association of Country D, the decisions of the second instance of the DRC of Country D were not technically final and enforceable, as they could be appealed before the Court of Arbitration for Sport. Along these lines, according to art. 35 of the Procedural Rules of the Football Association of Country D, “the party no satisfied with the decision may file an appeal to an independent and duly appointed court of appeal. If no such court can be found in Country D, all disputes shall be settled by the Court of Arbitration for Sport”.

23. Finally, the Respondent insisted that, on 13 September 2016, it paid the whole salary for June 2016 and a part of salary for July 2016.

24. Upon request of FIFA, the Claimant informed that he did not sign any further employment contract after the termination of the contract by the Respondent. Nonetheless, according to the information contained in the Transfer Matching System (TMS), the player entered into an employment contract with the club of Country E, Club F, on 20 February 2017.

25. In accordance with the above-mentioned contract uploaded in TMS, valid as from 1 March 2017 until 30 November 2019, the Claimant was entitled to receive from the Club F, a monthly salary of EUR 800.

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 19 September 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 and 2 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 would, in principle, be 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. However, the Chamber acknowledged that the Respondent contested the competence of FIFA’s deciding bodies on the basis of art. 6 of the contract, alleging that the competent body to deal with any dispute deriving from the relevant employment contract is the Sport Dispute Resolution Chamber of the Football Association of Country D.

4. On the other hand, the Chamber noted that the Claimant insisted on the competence of the FIFA DRC to adjudicate on the claim lodged by him against the Respondent.

5. Taking into account all the above, the Chamber emphasised that, in accordance with art. 22 lit. b) 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. Equally, the members of the Chamber 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 also 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, specific and exclusive arbitration clause.

8. In this respect, the Chamber recalled that art. 6 of the employment contract stipulates that: “any disputes concerning the validity, existence or termination of the Contract shall be settled by the competent authorities of the Football Association of Country D, acting in accordance with separate regulations. Property disputes arising from this Contract shall be competence of the Football Arbitration Court”.

9. Having examined the relevant provision, the Chamber came to the unanimous conclusion that art. 6 does not constitute a clear arbitration clause in favour of one specific court of arbitration or tribunal in Country D, since it only referred to not specified “competent authorities of the Football Association of Country D“. The foregoing conclusion is supported by the Respondent’s statements, whereby it refers to the “Sport Dispute Resolution Chamber of the Football Association of Country D”, which is not even mentioned in the invoked arbitration clause. Indeed, the only body mentioned in art. 6 of the contract is the Football Arbitration Court, which appears to be a completely different body.

10. Consequently, the Chamber established that the first condition in order for a body other than the DRC to be competent is not met in the present matter. Thus, the Chamber concluded that the Respondent’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, to deal with the present matter as to the substance.

11. 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 on the Status and Transfer of Players (edition 2016), and considering that the present claim was lodged on 19 September 2016, the 2016 edition of said regulations is applicable to the matter at hand as to the substance.

12. 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 members of 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.

13. First of all, the members of the Chamber acknowledged that, on 22 August 2014, the Claimant and the Respondent concluded an employment contract valid as from the date of signature until 30 June 2017, in accordance with which the player was entitled to a monthly salary of EUR 5,000.

14. The Chamber further observed that the Respondent unilaterally terminated the contract in writing on 1 July 2016, arguing that, pursuant to the Resolution of the Football Association of Country D, it was entitled to terminate the contract.

15. Subsequently, the members of the Chamber took note that, in his claim, the Claimant argued that the Respondent terminated the contract without just cause and requested, inter alia, the payment of outstanding salary for the month of June 2016, in the amount of EUR 5,000, and compensation for breach of contract in the total amount of EUR 75,000.

16. Along these lines, the members of the Chamber took note of the position of the Respondent, which argued that, pursuant to art. 7 the contract, it was entitled to terminate the contract in accordance with art. 8, par. 5, point a) of the Resolution of the Football Association of Country D, as the player allegedly had participated in less than 10% of the official matches of the first team of the club. Furthermore, the Respondent maintained that it had paid all the outstanding remuneration of the Claimant until the date of termination of the contract.

17. Consequently, considering the diverging position of the parties, the members of the Chamber highlighted that the central issue to address in this dispute was to determine as to whether the Respondent, on 1 July 2016, had terminated the employment contract with or without just cause as well as to decide on the consequences thereof.

18. In this context, the Chamber firstly recalled the content of art. 7 of the contract, according to which: “1. an integral part of this Contract are the […] (rules governing the relations between the sports club and a professional player), adopted by Resolution of the Football Association of Country D’s Board, which is enclosed to this contract. 2. By signing this Contract, the Player and the Club confirm acquaintance of the above provisions and agree to strictly respect them”. Subsequently, the DRC focussed its attention on the said art. 8, par. 5 point. a) of the aforementioned Resolution of the Football Association of Country D, which provides that the club can unilaterally terminate the contract if the player participates in less than 10% of the matches of the first team “in the entire season precedent the season when such termination is made, on condition that such statement is made within 7 days from the date of commencement of the period of change club membership, in accordance with the provisions of the Football Association of Country D”.

19. With the above in mind, and after a careful and exhaustive analysis of such provision, the Chamber was of the unanimous opinion that art. 8, par. 5 point. a) of the Resolution, which applicability is provided in art. 7 of the contract and it is invoked by the Respondent as just cause for the termination of the contract, appears to be to the benefit of the Respondent only. In this regard, the members of the Chamber wished to point out that the decision of the lining-up of players in a match is normally left fully to the discretion of the club. Hence, in the light of such potestative character of the pertinent provision of the Resolution, the members of the Chamber agreed that art. 8, par. 5, point a) of the Resolution is not acceptable and, thus, shall not have any effect.

20. In this context and for the sake of completeness, the members of the Chamber wished to highlight that, in general, potestative clauses, i.e. clauses that contain obligations which fulfilment is conditional upon an event that one party entirely controls, cannot be considered since they generally limit the rights of the other contractual party in an excessive manner and lead to unjustified disadvantage of the latter towards the other.

21. Therefore, the Chamber concurred that the said art. 8, par. 5, point a) of the Resolution does not constitute a reason that can be validly invoked nor a legal basis to unilaterally terminate the contract.

26. In view of all the aforementioned considerations, the Chamber concluded that the Respondent had no just cause to unilaterally terminate the employment contract on 1 July 2016 and, therefore, decided that the Respondent is to be held liable for the early termination of the employment contact without just cause.

27. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract without just cause by the Respondent.

28. First of all, the members of the Chamber concurred that the Respondent must fulfil its obligations as per employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”.

22. In this respect, the DRC recalled the basic principle of the burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof.

23. In continuation, the members of the Chamber noted that the Claimant alleged that he did not receive the monthly salary of June 2016, while the Respondent provided copy of a bank statement providing that a payment covering the entire month June 2016 had been made. Moreover, the members of the Chamber took note that the Claimant limited himself to deny the receipt of the monthly salary in question, without submitting any further argumentation.

24. Consequently, based on the evidence submitted by the Respondent and in accordance with the aforementioned principle of the burden of proof, the Chamber concluded that it was satisfied that the claimed outstanding remuneration had been paid by the Respondent and thus rejected the claim of the Claimant in that regard.

29. In continuation, the Chamber decided that, in view of termination of the contract without just cause by the Respondent, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for the breach of contract.

30. Subsequently, 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.

31. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains 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.

32. As a consequence, the members of the Chamber determined that the amount of compensation in the present matter 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber emphasised beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

33. In order to estimate the amount of compensation in the present case, the members of the Chamber first turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract, if any, in the calculation of the amount of compensation.

34. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract for the remaining duration of the contract until 30 June 2017 and concluded that the Claimant would have received a total remuneration of EUR 60,000.

35. 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.

36. Indeed, the Claimant found employment with the club of Country E, Club F, which entitled him to a total salary of EUR 3,200 for the period between 1 March until 30 June 2017.

37. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the DRC decided that the Respondent must pay the Claimant the amount of EUR 56,800, which is to be considered a reasonable and justified amount of compensation for breach of contract in the matter at hand.

38. In addition, and with regard to the Claimant's request for interest, the Chamber, pursuant to its well-established jurisprudence, decided that the Claimant is entitled to 5% interest p.a. on said amount, as of 19 September 2016.

39. The members of the Chamber concluded their deliberations by rejecting any further claim of the player.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Club C, 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 56,800 plus 5% interest p.a. as from 19 September 2016 until the date of effective payment.

4. In the event that the aforementioned sum plus interest is not paid by the Respondent within the stated time limit, the present matter shall be submitted, upon request, to FIFA’s 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