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

• Data decisione: 7 giugno 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 – Decision 7 June 2018

Decision of the Dispute Resolution Chamber

passed in Zurich, Switzerland, on 7 June 2018,

in the following composition:

Geoff Thompson (Country D), Chairman [did not take part in the deliberations]

Roy Vermeer (The Netherlands), member

Jon Newman (USA), member

Wouter Lambrecht (Belgium), member

Pavel Pivovarov (Russia), member

on the matter between the player,

Player A, Country B

as Claimant

and the club,

Club C, Country D

as Respondent 1

and the club,

Club E, Country F

as Respondent 2

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 8 July 2011, the player from country B, Player A (hereinafter: the Claimant), born on 12 April 1988, and the club from Country F, Club E (hereinafter: the Respondent 2) concluded an employment contract (hereinafter: the contract with the Respondent 2), valid as from the date of signature until 30 June 2016.

2. According to the contract with Respondent 2, the Claimant was entitled to a yearly remuneration in the amount of EUR 1,790,000 gross or EUR 1,000,000 net.

3. In addition, clause 1 of the contract with the Respondent 2 stipulated the following:

“El presente contrato está convenido e integralmente regulado por las normas del convenio colectivo entre la Liga Profesional Nacional y la Federación italiana de futbolistas, vencido el 30/06/2010”

“This contract is voluntarily and completely governed by the provisions of the collective bargaining agreement between the National Professional League and the players’ union of Country F dated 30 June 2010.” (free translation from Spanish)

4. Subsequently, on 30 August 2014, the Respondent 2 concluded an agreement for the loan of the player (hereinafter: the loan agreement) to Club C from Country D (hereinafter: the Respondent 1), for a loan fee in the amount of EUR 900,000.

5. In particular, the loan agreement stipulated a period of validity as from its “effectiveness date” (i.e. 30 August 2014) until “the end of the sports season 2014/2015 (30 June 2015)”.

6. Moreover, the loan agreement included the following stipulations:

“2.4 (…) in the event that [the Respondent 1]’s first team, at the end of the current National League of Country D – edition 2014/2015 obtains the right to participate in the next National League of Country D (…) [the Claimant] shall be automatically and permanently transferred from [the Respondent 2] to [the Respondent 1] starting from 1 July 2015. In this event, [the Respondent 1] shall pay [the Respondent 2] (…) for the permanent transfer of the [the Claimant], the net amount of €10,500,000 (…) as follows:

a) EUR 2,500,000.00 on 31st August 2015

b) EUR 2,500,000.00 on 31st August 2016

c) EUR 2,500,000.00 on 31st August 2017

d) EUR 3,000,000.00 on 31st August 2018

(…)

2.6 Parties acknowledge and accept that the [Claimant] has chronic patellar tendonitis in the left knee. In the event that the mentioned physical problem has accelerated during the season 2014/2015 to a level that would result in the [Claimant] being unable to play football at a professional level in the National League of Country D, then clause 2.4. shall not apply”

7. In this context, the Claimant concluded an employment contract with the Respondent 1 (hereinafter: the contract with the Respondent 1), valid, according to Clause 2 of its Schedule 2, as from 31 August 2014 until 30 June 2015.

8. Nevertheless, and in reference to the period of validity of the contract with Respondent 1, clause 8.2 of said employment contract stipulated the following:

“In the event of the permanent transfer of [the Claimant] as per [the loan agreement], the [Claimant] will be registered by [the Respondent 1] (…) from 1 July 2015 until 30 June 2018.”

9. According to the contract with the Respondent 1, the Claimant was entitled, inter alia, to a basic wage in the amount of 56,000 per week in the currency of Country D, payable in monthly instalments from 31 August 2014 until 30 June 2015.

10. In addition, following the contract with the Respondent 1 and subject to the permanent transfer of the Claimant (cf. point I.5 and I.7 above), the latter would be entitled to a weekly remuneration of 44,000, payable in monthly instalments as from 1 July 2015 until 30 June 2018.

11. Furthermore, the contract with the Respondent 1 contained the following stipulations:

Schedule I

“8.2.2. Image Rights

(…)

(ii) Pursuant to an agreement made between the [Respondent 1] and the Image Rights Company, the [Respondent 1] shall pay the Image Rights Company an amount equivalent to 260,000 per annum in four equal quarterly instalments, on receipt of a valid invoice, from the date of signing.

8.2.3 Loyalty Bonus

Provided that the [Claimant] is registered with the [Respondent 1] on the date such becomes due, loyalty payments in respect of that season shall be paid as below:

(i) 156,000 on the standard pay date in September 2016;

(ii) 156,000 on the standard pay date in September 2017;

(iii) 156,000 on the standard pay date in June 2018.”

12. Moreover, the contract with Respondent 1 included the following provisions:

“17. Any dispute between the [Respondent 1] and the [Claimant] not provided for in clauses 9, 10, 11, 12 and Schedule 1 hereof shall be referred to arbitration in accordance with the League Rules or (but only if mutually agreed by the [Respondent 1] and the [Claimant]) in accordance with the FA rules."

(…)

21. Jurisdiction and Law

This contract shall be governed and construed in accordance with Country D law and the parties submit to the non exclusive jurisdiction of the Country D Courts.”

13. Furthermore, Schedule 2 to the contract with the Respondent 1 included the following:

“14.10 For the avoidance of doubt, the [Claimant] and the [Respondent 1] submit to the exclusive jurisdiction of Country D. The parties accept that due regard should be given to such laws of the country in the event of a dispute arising from any provision contained herein.”

14. On 30 September 2014, the Respondent 1 informed the Respondent 2 about an injury in the Claimant’s right knee.

15. On 1 October 2014, the Respondent 1 informed the Respondent 2 that the Claimant was undergoing surgery on 3 October 2014.

16. On 26 March 2015, the Respondent 1 notified the Respondent 2 of i) the Claimant’s injury history during his loan spell at the Respondent 1, ii) that in March 2015 the injury in the Claimant’s right knee had been examined again, and iii) that depending on the chosen treatment, the Claimant would only return to training in 3-4 months or 6-9 months.

17. On 30 March 2015, the Respondent 1 informed the Respondent 2 of possible therapeutic options and that it provisionally booked a surgery for the Claimant on 1 April 2015.

18. On 31 March 2015, the Respondent 2 replied to the Respondent 1 stating that there were no “contractual issues” as the agreement only specified a condition in relation to the Claimant’s left knee. On 8 April 2015, the Respondent 2 informed the Respondent 1 that it had visited the Claimant and that it was of the opinion that conservative treatment would be preferred over surgery.

19. On 6 and 11 May 2015, the Respondent 1 informed the Respondent 2 that the Claimant was now in a position to undergo surgery and that it understood that the Claimant had received consent from the Respondent 2 to proceed with the surgery.

20. On 12 May 2015, the Respondent 2 replied to the Respondent 1 indicating that it did not consent to the surgery and suggesting that conservative treatment would be more appropriate.

21. On 15 May 2015, the Respondent 1 informed the Respondent 2 that it terminated the loan agreement, indicating the following:

- The Respondent 2 failed to respond promptly to reasonable requests to allow surgery, which is a breach of the implied terms of the agreement;

- The Respondent 2’s refusal to allow the Claimant to undergo surgery is a further breach of the agreement;

- The right knee injury has been indirectly caused by the patellar tendonitis in the left knee;

- The Claimant is unable to play football at a professional level in the National League of Country D.

- As a result and pursuant to art. 2.6 of the agreement, art. 2.4. of the agreement does not apply and there will be no permanent transfer.

22. On 19 May 2015, the Respondent 2 informed the Respondent 1 that the agreement is fully valid and binding.

23. On 7 July 2015, the Respondent 2 lodged a claim in front of the FIFA PSC against the Respondent 1, requesting, inter alia, the payment of EUR 10,500,000 plus 5% interest as from 15 May 2015 regarding the transfer fee.

24. On 15 March 2016, the Bureau of the FIFA PSC rendered its decision (hereinafter: the PSC decision), by means of which it partially accepted the claim of the Respondent 2 and, inter alia, ordered the Respondent 1 to pay to the Respondent 2, the amount of EUR 2,500,000 plus 5% interest p.a. on said amount as from 1 September 2015 until the data of effective payment (note: excl. procedural costs).

25. In particular, the Bureau of the FIFA PSC considered that “[the Respondent 1] was aware of the injury history of the [Claimant] and that it could have readily broadened the scope of art. 2.6 of the agreement to both knees of the [Claimant] or his overall fitness. Yet, it agreed to limit the scope of art. 2.6 to the [Claimant’s] left knee and explicitly agreed to the definitive transfer of the [Claimant] independently from the performances, attendances, or physical conditions of the [Claimant] during the season 2014/2015” (cf. point II. 8 of the aforementioned decision).

26. As to the payable compensation, the Bureau of the FIFA PSC considered that “only the first installment to be paid on 31 August 2015 has fallen due at the moment of passing its decision” and consequently it could only award to the Respondent 2 at that time “the first installment of the transfer fee in the amount of EUR 2,500,000.”

27. On 4 May 2016, the Respondent 1 lodged an appeal before the Court of Arbitration for Sport (CAS), against the decision of the Bureau of the FIFA PSC. On 6 May 2016, the Respondent 2 lodged its appeal before the CAS, and as a consequence, both procedures were consolidated.

28. On 15 June 2017, the CAS rendered its Arbitral Award (hereinafter: the Arbitral Award) and dismissed the appeal filed by the Respondent 1 and partially upheld the appeal lodged by the Respondent 2.

29. In particular, the CAS partially annulled the decision rendered by the Bureau of the FIFA PSC, and ordered the Respondent 1 to pay to the Respondent 2, inter alia, the amount of EUR 10,000,000 (excl. procedural and legal costs), in accordance with the payment schedule agreed under art. 2.4 of the loan agreement, plus related interest.

30. In this regard, the Panel considered that “the grounds advanced by [the Respondent 1] in its termination letter do not constitute just cause to terminate the Agreement in the sense of the meaning of just cause” (cf. point 117 of the Arbitral Award) and that “[the Respondent 1] has failed to establish a fundamental error or fraudulent misrepresentation on the part of [the Respondent 2].” (cf. point 131 of the Arbitral Award).

31. On 21 July 2016, the Claimant lodged a claim before the FIFA Dispute Resolution Chamber (DRC) against both the Respondent 1 and the Respondent 2 for breach of contract without just cause, and requested the payment of 9,041,414 by Respondent 1 as compensation, plus 5% interest p.a. as from 15 May 2015, detailed as follows:

- 8,112,000, corresponding to the residual value of the contract with the Respondent 1, further detailed as follows:

- “Basic salary”: 6,864,000;

- Image rights: 7,800,000;

- “Loyalty bonus”: 468,000;

- 1,144,000, as “specificity of sport”;

- minus EUR 214,586, as mitigation related to the Claimant’s contract with his new club, Club G (salaries from January 2016 until May 2016).

32. Notwithstanding the above, the Claimant requested that the aforementioned payment should also be “individually or jointly” borne by the Respondent 2 and/or the Respondent 1, “should the DRC consider [the Respondent 2] as responsible in the breach of the contract concluded with [the Respondent 1]”.

33. In a subsidiary manner, and should the DRC determine that Respondent 2 is to be held responsible, the Claimant requested said party to be ordered to pay him the amount of EUR 2,427,690, plus 5% interest p.a. as from 3 August 2015, on the basis of the following calculation:

- EUR 1,790,000, corresponding to the residual value of the contract with the Respondent 2;

- EUR 895,000, as “specificity of sport” and corresponding to six months of salaries;

- minus EUR 257,310, as mitigation related to the Claimant’s new club, Club G.

34. In addition, the Claimant requested the imposition of sporting sanctions against the Respondent 1 and/or the Respondent 2.

35. As to the facts, the Claimant explained that, on 15 May 2015, he received a termination letter from the Respondent 1, informing him that his loan period has terminated and that he consequently should return to the Respondent 2. The termination letter addressed to the Claimant contained, inter alia, the following statements:

“(…) [the Respondent 2 is] in breach of the terms of the Transfer Agreement dated 30th August 2014 and as a consequence of that breach [the Respondent 1] have terminated the Agreement with effect from today 15th May 2015. Hence we must inform you that your loan period with [the Respondent 1] is terminated.

(…)

without prejudice to the termination of the Agreement and the impossibility of continuing to perform under your National League of Country D Contract, we will as a gesture of goodwill continue to pay you an amount equal to the payments due to you under the National League of Country D Contract until 30th June 2015.

(…)

As such during the 2014/15 National League of Country D season there has been a biomechanical stress placed upon the right knee as a result of the underlying left patella tendon problem which has resulted in a situation where the [Claimant] is unable to play football at a professional level in the National League of Country D.

In those circumstances, if (which is denied) the Agreement has not been terminated pursuant to this letter, [the Respondent 1]’s position is that as consequence of the facts set out above, pursuant to clause 2.6 of the Agreement, clause 2.4 of the Agreement does not apply and there will be no permanent transfer.”

36. In this regard, the Claimant explained that “in view of the clarity and severity” of the letter of the Respondent 1, he did not have any other option than to simply accept its terms, without prejudice from taking further legal action in order to protect his rights.

37. Subsequently, the Claimant explained that, on 5 June 2015, he received a letter from the Respondent 2, by means of which said club informed him that it disagreed with the position of the Respondent 1, and that, in view of the contents of the loan agreement, it understood that he was automatically transferred to the Respondent 1, and that no further activity from the Claimant at Respondent 2 should be expected.

38. At a later stage, the Claimant explained that, on 30 July 2015, he sent a letter to the Respondent 2 requesting the latter to inform him about when and where his training should start.

39. In this respect, the Claimant further explained that, on 3 August 2015, he received a new letter from the Respondent 2, by means of which it expressed its “surprise” with respect to the Claimant’s letter dated 30 July 2015, since the contractual relationship between him and the Respondent 2 “is not effective any longer”.

40. In its reply to the claim lodged by the Claimant, the Respondent 2 contested the jurisdiction of the DRC to deal with the matter, and referred to the contents of clause 1 of the contract with the Respondent 2. In particular, the Respondent 2 explained that said clause refers to the Collective Bargaining Agreement (hereinafter: the CBA of Country F) concluded between the National Professional League and the players’ union of Country F and dated 30 June 2010. Consequently, the Respondent 2 considered that the matter should be referred to the arbitration board under the Football Federation of Country F (hereinafter: NDRC of Country F).

41. In this respect, the Respondent 2 explained that art. 21 of the CBA of Country F reads as follows:

"21.1. In conformity to the provision of Art. 4 par. 5 of the law of 23 March 1981 (…), the individual contract for sports performance shall contain a dispute resolution clause under which the resolution of all disputes concerning the interpretation, execution or termination of the said contract or in any way related to the effects of the labour relations accruing thereof shall be referred to the resolution of the Arbitral Tribunal which will decide in an agreed proceedings.

21.2. By signing the Agreement, the parties commit themselves - by virtue of their common belonging to the sporting sector, of their obligations agreed accordingly with their membership registration or by the affiliation as well as by virtue of the specialty of the law applicable to the matter — to accept without reservation the jurisdiction and the decisions of the Arbitral Tribunal.”

42. As to the substance, the Respondent 2 considered that, in accordance with the loan agreement, the Claimant was transferred to the Respondent 1 on a definitive basis and as a consequence, the Claimant was only contractually bound to the Respondent 1.

43. In addition, the Respondent 2 was of the opinion that nothing in its conduct may be understood as a valid reason for the Respondent 1 to terminate the employment relationship with the Claimant. In particular, the Respondent 2 considered that the employment contract with the Respondent 1 is an independent contractual relationship and was not affected anyhow by the performance of the loan agreement. Therefore, the Respondent 2 considered that it cannot be held liable in relation to the employment contract concluded between the Claimant and the Respondent 1.

44. In relation to the contract concluded between the Respondent 2 and the Claimant, the Respondent 2 insisted that it committed no breach of said agreement, and that it was terminated “in pursuance of the national regulations”. More specifically, the Respondent 2 stated that the transfer of a player through a transfer contract represents an assignment of his employment contract with the consequence that the employment relationship between a player and his former club is automatically terminated through the effects of the transfer contract between the clubs and the acceptance of such transfer by a player.

45. As a result, the Respondent 2 concluded that it should not bear any responsibility in relation to what it considered as a dispute between the Respondent 1 and the Claimant.

46. In its reply to the claim lodged by the Claimant, the Respondent 1 contested the jurisdiction of the DRC to deal with the matter.

47. In support of its arguments concerning the competence, the Respondent 1 referred to clauses 17 and 21 of the contract it concluded with the Claimant. In particular, the Respondent 1 considered that, in accordance with the aforementioned clause 17, the dispute “is to be determined at the national level by arbitration as provided for in the Rules of the National League of Country D”.

48. In this respect, the Respondent 1 referred to the “National League of Country D Handbook” and explained that “the arbitration procedures contained within the League Rules provides for fair proceedings which respect the principle of equal representation of player and clubs.”

49. Moreover, the Respondent 1 considered that the fact that there was a previous dispute before the Bureau of the PSC concerning the loan agreement does not mean that the DRC has jurisdiction in relation to the (labour) claim lodged by the Claimant against it.

50. Notwithstanding the above, the Respondent 1 lodged a counterclaim against the Claimant “in the alternative”, and requested the payment of the following amounts, plus 5% interest “from the date each of the losses was occasioned”:

- EUR 1,760,702, corresponding to the sums paid to the Claimant by the Respondent 1 during the loan period for the 2014/2015 (i.e. 63% of the Claimant’s salary, which takes into account the period of time during which the Claimant was unable to play);

- EUR 510,000, as “agency fees” paid by the Respondent 1 in relation to the employment contract with the player (i.e. EUR 350,000 on behalf of the Respondent 1 and EUR 160,000 on behalf of the Claimant);

- “Any sums ultimately found by the Court of Arbitration for Sport to be due and owing by [the Respondent 1] to [the Respondent 2] under the Loan and Transfer Agreement.”

- EUR 567,000, corresponding to 63% of the fee payable to [the Respondent 2] by the Respondent 1 for the loan of the Claimant.

51. As to the facts, the Respondent 1 considered that the Claimant misled it as to his medical condition and made the related representations, “knowing them to be false (and knowing that it was unlikely [it] would sign him if they knew the true position) with the intention of deceiving” it in order to conclude the relevant loan and employment contracts.

52. Therefore, the Respondent 1 considered that it “validly avoided” the Loan and Transfer Agreement, “on account of the Swiss law doctrines of fundamental error and/or third party misrepresentation.”

53. Consequently, and in view of the “fraudulent misrepresentations/deceit”, the Respondent 1 considered that the Claimant is not entitled to any amount and explained that it paid his salary until the termination of the contract.

54. In his replica, the Claimant insisted in the jurisdiction of the DRC to deal with the matter.

55. In relation to the arguments provided by the Respondent 1 regarding the competence, the Claimant explained that the matter at stake does not refer only to the employment contract he concluded with said club, but also to the loan agreement concluded between the Respondent 1 and the Respondent 2. In addition, the Claimant highlighted that clause 17 of the contract was a “non-exclusive” jurisdiction clause. Furthermore, the Claimant considered that said clause is “abusive” in view of the Respondent 1’s higher “bargaining power”. Moreover, the Claimant considered that the contract with the Respondent 1 does not include a clear reference to one specific court or tribunal, and quoted jurisprudence of the DRC in this regard. Furthermore, the Claimant considered that, in view of the previous procedure before the Bureau of the PSC and the CAS, there is no other organization than FIFA to deal with the matter, and highlighted that the Country D courts would not be able to decide over the role of the Respondent 2 in the matter at stake.

56. In reference to the position of the Respondent 2 concerning the competence, the Claimant considered that he did not explicitly acknowledge the competence of the NDRC of Country F and that the relevant contract is not specific enough in this regard.

57. In reply to the Claimant’s replica, the Respondent 2 insisted that FIFA should not be competent due to the applicability of the CBA of Country F. The Respondent 2 further considered that, since the Claimant subsequently transferred to another club from Country F (Club G), he would still be subject to the Football Federation of Country F. Moreover, the Respondent 2 considered that the NDRC of Country F grants a relevant role to the players’ union. As a result, the Respondent 2 considered that the Claimant is “merely committing forum shopping” and even “party shopping”, since he “has not himself decided which of the two clubs to go against and merely imposes on the FIFA DRC the obligation to make the right choice for him.”

58. In addition, the Respondent 2 was of the opinion that there is “no three-party employment dispute” and that, “from the legal viewpoint, it is therefore necessary to conduct the different procedures and to discuss first of all the employment-related dispute between the [Claimant] and [the Respondent 1], as this was the contract in force which was unilaterally terminated by [the Respondent 1].”

59. Furthermore, the Respondent 2 insisted that the contract with the Claimant was automatically terminated in view of the latter’s transfer to the Respondent 1.

60. In sum, the Respondent 2 considered that it acted in compliance with the employment contract it signed with the Claimant as well as with the transfer agreement, and that it should not be responsible for the termination of the employment contract of the Claimant with the Respondent 1.

61. Furthermore, in the light of the Arbitral Award rendered by the CAS, the Respondent 2 provided additional unsolicited comments.

62. In this regard, and in relation to said Award, the Respondent 2 considered that “since it has been established in the Award that [the Respondent 1] terminated the Transfer Agreement without just cause it is evident that [the Respondent 2] cannot be held responsible for the termination of the employment contract between the [Claimant] and [the Respondent 1].”

63. In relation to the aforementioned Arbitral Award rendered by the CAS, the Respondent 1 submitted an additional correspondence, and considered that said Award “is not determinative of any issue bearing on the current tripartite dispute and certainly does not have the effect of discharging [the Respondent 2]’s (…) liability in the proceedings” since the Claimant’s requests are “entirely separate”.

64. Consequently, the Respondent 1 was of the opinion that the Respondent 2 “has erred in requesting that FIFA‘s DRC acknowledge that the [Claimant]'s prayer for relief in its submissions has become null and void as against [it]”.

65. Finally, the Claimant was invited to submit additional comments as to the Respondent 2 and the Respondent 1’s additional comments and as to the Arbitral Award rendered by the CAS.

66. In this respect, the Claimant insisted in the competence of FIFA, and considered that it is contradictory that the Respondent 2 and the Respondent 1 had a previous legal dispute in relation to the loan agreement before FIFA, whereas they reject FIFA’s competence in the matter at stake.

67. Moreover, the Claimant considered that the competence of FIFA is necessary in the matter at stake, since it would be unfeasible to simultaneously hold two different procedures in Country F and/or Country D against the Respondent 2 and/or the Respondent 1. Therefore, the Claimant underlined that he had no will of “forum shopping”, but that FIFA represents the best option to obtain a “fair decision” in a matter between three parties.

68. As to the CAS Arbitral Award, the Claimant considered that the most relevant aspect is that it underlines that “the grounds advanced by [the Respondent 1] in its termination letter [to the Respondent 2] do not constitute just cause to terminate the [loan] Agreement in the sense of the meaning just cause" and that “[the Respondent 1] has failed to establish any fundamental error or fraudulent misrepresentation on the part of [the Respondent 2]” (cf. points 117 and 118 of the Arbitral Award).

69. As a consequence, the Claimant was of the opinion that 1) the Respondent 1 had no just cause to terminate the employment contract and 2) there was no bad faith from the Claimant in relation to his medical history. Therefore, the Claimant requested the DRC to take into account the arguments of the CAS in relation to the current matter.

70. On 4 January 2016, the Claimant and the club from Country F, Club G (hereinafter: Club G) concluded an employment contract, valid as from the date of signature until 30 June 2016, for a “fixed” remuneration in the amount of EUR 555,000.

71. Furthermore, on 24 June 2016, the Claimant and Club G concluded an additional employment contract, valid as from 1 July 2016 until 30 June 2019, for the following “fixed” remuneration;

- EUR 1,850,000 for the season 2016/2017;

- EUR 1,850,000 for the season 2017/2018;

- EUR 1,850,000 for the season 2017/2019.

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 July 2016. Consequently, the 2015 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at hand (cf. art. 21 of the 2015, 2017 and 2018 editions of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition 2018) the Dispute Resolution Chamber shall adjudicate on employment-related disputes between a player and a club that have an international dimension.

3. As a consequence, the Dispute Resolution Chamber would, in principle, be competent to decide on the present litigation which involves a player from country B, a club from Country D and a club from Country F regarding an employment-related dispute.

4. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 30 May 2018 by means of which the parties were informed of the composition of the Chamber, the Chairman, Mr Geoff Thompson, refrained from participating in the deliberations in the case at hand, due to the fact that he has the same nationality as the Respondent 1.

5. Moreover, the Chamber acknowledged that the Respondent 1 and the Respondent 2 contested the competence of FIFA’s deciding bodies. More specifically, the Chamber noted that the Respondent 1 considered that the dispute, in accordance with clauses 17 and 21 of the employment contract it concluded with the Claimant, “is to be determined at the national level by arbitration as provided for in the Rules of the National League of Country D”, whereas the Respondent 2 considered that, on the basis of clause 1 of the employment contract it concluded with the Claimant, the matter should be referred to the arbitration board under the Football Federation of Country F.

6. In relation to the above-mentioned arguments regarding the competence, the Chamber took note of the Claimant’s allegations, according to which, inter alia, clause 17 of the contract concluded with the Respondent 1 was a “non-exclusive” jurisdiction clause. Moreover, the Chamber took note that, according to the Claimant, the contract concluded by the latter with the Respondent 1 does not include a clear reference to one specific court or tribunal. In addition, and in reference to the position of the Respondent 2 concerning the competence, the Chamber also observed that, according to the Claimant, the relevant contract is not specific enough.

7. In this respect, the Chamber wished to clarify, without prejudice to the further substantive analysis of the matter, that the claim lodged by the Claimant, is essentially rooted in determining the legal consequences of a termination letter received from the Respondent 1 on 15 May 2015. Thus, the Chamber understood that it should beforehand examine its competence as to the employment-related dispute concluded between the Claimant and the Respondent 1.

8. In this regard, the Chamber noted that the Claimant and the Respondent 1 concluded an employment contract that was in principle and without prejudice to the existence of a possible extension clause valid, according to Clause 2 of its Schedule 2, as from 31 August 2014 until 30 June 2015.

9. Within this context, the Chamber observed, in relation to the competence, that the aforementioned contract included the following clauses:

(…)

21. Jurisdiction and Law

This contract shall be governed and construed in accordance with Country D law and

the parties submit to the non exclusive jurisdiction of the Country D Courts.”

10. For the sake of completeness, the Chamber also noted that clauses 9,10,11 and 12 of the aforementioned contract respectively refer to “Disciplinary Procedure”, “Termination by the Club”, “Termination by the Player” and “Grievance Procedure”.

11. The Chamber also noted that Schedule 2 to the aforementioned contract included the following:

“14.10 For the avoidance of doubt, the [Claimant] and the [Respondent] submit to the exclusive jurisdiction of Country D. The parties accept that due regard should be given to such laws of the country in the event of a dispute arising from any provision contained herein.”

12. After duly examining the contents of the aforementioned clauses, the members of the DRC observed that, in relation to the Respondent 1’s allegation that the matter at stake “is to be determined at the national level by arbitration as provided for in the Rules of the National League of Country D ”, art. 17 of the relevant contract establishes that “any contractual dispute shall be referred to arbitration in accordance with the League Rules or (but only if mutually agreed by the [Respondent 1] and the [Claimant]) (…)” (emphasis added).

13. Within this context, the Chamber observed that the Claimant preferred to submit a claim before the FIFA DRC instead of the national arbitration system established within The Football Association and/or the National League of Country D and that, as a result, it should understand that the Claimant and the Respondent 1 ultimately failed to mutually agree to submit the present matter to the relevant decision-making bodies established within The Football Association and/or the National League of Country D. In view of the above, the Chamber decided that the Respondent 1 could not validly argue, on the basis of art. 17 of the applicable contract, that the matter at stake “is to be determined at the national level by arbitration as provided for in the rules of the National League of Country D”.

14. For the sake of completeness, the Chamber further noted that, while clause 17 of the relevant contract seems to refer the matter to the national arbitration system established within The Football Association and/or the National League of Country D, clause 21 of the same contract appears to be a jurisdiction clause in favor of the “non exclusive jurisdiction of the Country D [ordinary] Courts” and that, in addition, clause 14.10 of the Schedule 2 to the relevant contract further establishes that any dispute should be referred to the “exclusive jurisdiction of Country D”.

15. Besides, the Chamber noted that the aforementioned clause 17 appears to not be applicable to matters concerning the termination of the contract by the Respondent 1, since said clause clearly stipulates that “arbitration in accordance with the League Rules or (…) in accordance with the FA rules” is applicable for matters “not provided for in clauses 9, 10, 11, 12 and Schedule 1”. In this respect, the Chamber noted that the termination of the contract by the Respondent 1 is included in clause 10 of the contract.

16. In view of the above-mentioned considerations, the Chamber noted that the relevant contract presents a series of mutually exclusive and contradictory clauses. Therefore, the members of the Chamber unanimously understood that, on the basis of said clauses, it cannot be established with sufficient clarity which of the referred decision-making bodies, if any, would be competent to hear the present dispute. In addition, the Chamber also observed that clause 17 of the employment contract concluded between the Claimant and the Respondent 1 does not appear to be applicable to disputes related to the termination of the contract by the Respondent 1.

17. Therefore, considering the absence of a clear and unequivocal jurisdiction clause and in compliance with its own well-established jurisprudence, the members of the Chamber agreed that the DRC is competent as to the employment-related dispute arisen between the Claimant and the Respondent 1. Furthermore, in view of its considerations in point II.7 above as well as its aforementioned conclusion, the Chamber decided to dismiss the arguments raised by the Respondent 2 as to the competence.

18. The competence of the Chamber having been established, the Chamber analysed which edition of the Regulations on the Status and Transfer of Players 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 July 2016, the 2016 edition of the aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

19. Having established the foregoing, and entering into the substance of the matter, the Chamber continued by acknowledging 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.

20. In continuation, the Chamber duly noted that the Claimant concluded an employment contract with the Respondent 1 valid, according to Clause 2 of its Schedule 2, as from 31 August 2014 until 30 June 2015.

21. In relation to the period of validity of said contract, the Chamber noted that clause 8.2 of said employment contract stipulated the following:

“In the event of the permanent transfer of the [Claimant] as per [the loan agreement], the [Claimant] will be registered by [Respondent 1] (…) from 1 July 2015 until 30 June 2018.”

22. In this regard, the DRC noted that the aforementioned clause was built on the basis of a loan agreement concluded on 30 August 2014 for the temporary transfer of the Claimant from the Respondent 2 to the Respondent 1. In particular, the Chamber observed that the loan agreement stipulated a period of validity as from its “effectiveness date” (i.e. 30 August 2014) until “the end of the sports season 2014/2015 (30 June 2015)”.

23. Within this framework, the Chamber noted that said loan agreement stipulated the following:

24. In this regard, the Chamber recalled that, on 15 March 2016, the Bureau of the FIFA PSC decided that the Respondent 1 cannot justify the termination of the transfer agreement dated 30 August 2014. In other words, the Bureau of the FIFA PSC understood that the Claimant should have been permanently transferred to the Respondent 1, in compliance with art. 2.4 of the loan agreement.

25. As a result, and in strict application of the aforementioned reasoning and decision, the Chamber unanimously agreed that clause 8.2. of the employment contract concluded between the Claimant and the Respondent 1 was automatically executed and that, as a consequence, the employment contract concluded between the Claimant and the Respondent 1 was valid until 30 June 2018.

26. For the sake of completeness, the Chamber wished to highlight that, on 15 June 2017, the Court of Arbitration for Sport (CAS) rendered an Arbitral Award confirming the reasoning of the Bureau of the FIFA PSC by stating, in particular, that “the grounds advanced by [the Respondent 1] in its termination letter do not constitute just cause to terminate the Agreement in the sense of the meaning of just cause” (cf. point 117 of the Arbitral Award) and that “[the Respondent 1] has failed to establish a fundamental error or fraudulent misrepresentation on the part of [the Respondent 2].” (cf. point 131 of the Arbitral Award).

27. Subsequently, the Chamber noted that the Claimant lodged a claim against the Respondent 1, maintaining that the latter terminated the employment contract concluded between the Claimant and the Respondent 1 on 15 May 2015 via a termination letter informing him that his loan period has terminated and that he consequently should return to the Respondent 2.

28. In this respect, the Chamber took note of the Respondent 1’s allegations, according to which said termination was based on the following reasons:

“As such during the 2014/15 National League of Country D season there has been a biomechanical stress placed upon the right knee as a result of the underlying left patella tendon problem which has resulted in a situation where the [Claimant] is unable to play football at a professional level in the National League of Country D. In those circumstances, if (which is denied) the Agreement has not been terminated pursuant to this letter, [the Respondent 1]’s position is that as consequence of the facts set out above, pursuant to clause 2.6 of the Agreement, clause 2.4 of the Agreement does not apply and there will be no permanent transfer.”

29. In this respect, the Chamber observed that, according to the Respondent 1, the Claimant misled it as to his medical condition and made the related representations, “knowing them to be false (and knowing that it was unlikely the club would sign him if they knew the true position) with the intention of deceiving”.

30. In relation to said allegation, the Chamber recalled that, in its decision dated 15 March 2016, the Bureau of the FIFA PSC already observed that “[the Respondent 1] was aware of the injury history of the [Claimant]” and that, the Respondent 1 failed in the matter at stake to bring any new and convincing evidence in order to support its allegation that it was “misled” by the Claimant in relation to his medical condition.

31. In addition, the Chamber wished to underline that the matter at stake is an employment-related dispute and, as a result, it should first refer to the contents of the special provisions established in art. 18 par. 4 of the Regulations, according to which, in relation to contracts concluded between professionals and clubs, “the validity of a contract may not be made subject to a successful medical examination and/or the grant of a work permit”.

32. In this context, the members of the Chamber wished to stress that the content of art. 18 par. 4 of the Regulations is of mandatory nature and cannot be contractually amended or circumvented.

33. Furthermore, the Chamber understood that the scope of the aforementioned article includes not only medical situations occurred prior to the entry into force of a contract, but also medical issues arisen during the period of execution of a contract. Within this context, the Chamber recalled its own jurisprudence in relation to the termination of employment contracts on the basis of medical reasons, and underlined that under no circumstance an injury can be a valid reason to terminate an employment contract.

34. As a result, the members of the Chamber understood that the Respondent 1 could not validly invoke any medical reason, even if stipulated in the loan agreement between the Respondent 1 and the Respondent 2, to terminate its employment contract with the Claimant on 15 May 2015. In particular, the members of the Chamber wished to emphasize, as stated above, that contracts between professionals and clubs may be subject to specific provisions, which may differ from those regulating transfer or loan contracts concluded between clubs. Therefore, the members of the Chamber wished to underline that under no circumstance the validity of a professional football employment contract may be made subject to a successful medical examination or the medical fitness of player during the period of execution of a contract.

35. In view of the above, the DRC established that the Respondent 1 terminated its employment contract with the Claimant on 15 May 2015 without just cause and that, as a result, the Claimant is entitled to compensation.

36. Subsequently, the Chamber focused its attention on the consequences of the breach of contract in question and, in this respect, it decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent 1 compensation for breach of contract on the basis of the relevant employment contract.

37. In continuation, the Chamber outlined that, in accordance with said provision, 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.

38. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract. In this regard, the members of the Chamber noted that no such clause was included in the contract concluded between the Claimant and the Respondent 1.

39. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent 1 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body.

40. Bearing in mind the foregoing as well as the claim of the Claimant, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from 1 July 2015 (i.e. the date as from which the Claimant requests compensation) until 30 June 2018 (i.e. the original date of expiration of the contract, as previously established). In this regard, the members of the Chamber observed, as detailed above, that under the contract, the Claimant would have earned the amount of 7,332,000 (i.e. weekly salary 1 July 2015 until 30 June 2018 (156 weeks): 44,000*156=6,864,000 plus “Loyalty bonus” for the amount of 468,000, i.e. 156,000*3).

41. In this regard, the Chamber noted that the Claimant considered that, in the calculation of the payable compensation, an amount related to “image rights” should be included (cf. point I. 12 above). However, and after reviewing the pertinent clause, the Chamber considered that the pertinent amount is not payable per the employment contract, since it is subject to a separate agreement and no evidence was provided as regards to its conclusion.

42. As a result, the members of the Chamber therefore established that the amount of 7,332,000 shall serve as the basis for the calculation of the payable compensation.

43. 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 Claimant’s general obligation to mitigate his damages.

44. In this respect, the DRC noted, subsequently, that, on 4 January 2016, the Claimant concluded an employment contract with the club from Country F, Club G, valid as from the date of signature until 30 June 2016 and that, according to said contract, the Claimant was entitled to a “fixed” remuneration in the amount of EUR 555,000.

45. In addition, the DRC also noted that, on 24 June 2016, the Claimant and Club G concluded an additional employment contract, valid as from 1 July 2016 until 30 June 2019, for the following “fixed” remuneration;

- EUR 1,850,000 for the season 2016/2017;

- EUR 1,850,000 for the season 2017/2018;

- EUR 1,850,000 for the season 2017/2019.

46. In consideration of the aforementioned contracts, the DRC understood that the Claimant would have earned from the aforementioned club from Country F until 30 June 2018 (i.e. the date of expiration of the contract with the Respondent 1) the total amount of EUR 4,250,000, equivalent to approx. 3,134,000.

47. As a result of the difference between the aforementioned amounts, the DRC determined that the payable compensation amounts to 4,198,000 (i.e. 7,332,000 - 3,134,000).

48. In conclusion, for all the above reasons, the Chamber decided to partially accept the Claimant’s request and held that the Respondent 1 must pay to the Claimant the amount of 4,198,000 as compensation for breach of contract without just cause, which is considered by the Chamber to be a reasonable and justified amount as compensation.

49. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber, the Chamber decided that the Respondent 2 must pay to the Claimant interest of 5% p.a. on the compensation as of the date of the claim.

50. Furthermore, and for the sake of completeness, the Chamber wished to underline at this point that, as seen in the previous considerations, the matter at stake essentially involves the employment contract concluded between Claimant and the Respondent 1 as well as the consequences of its early termination by the latter. As a result, the members of the Chamber understood that the Respondent 2 could not be held liable for the consequences deriving from the early termination of the aforementioned contract. Thus, the members of the Chamber concluded that the Respondent 2 has no legal standing in the present matter and consequently, the procedural and substantive arguments arisen by said party are not relevant to the current matter.

51. Moreover, and as a logical consequence of the previous considerations, which determine the Respondent 1’s liability in the present matter for breach of contract without just cause, the DRC decided to reject said party’s requests “in the alternative” to be reimbursed with certain sums paid to the Claimant during the execution of the contract (cf. point I.50 above). In this respect, the Chamber observed that said request for reimbursement had no legal or contractual basis, since the relevant amounts were duly paid for the execution of the employment contract concluded between the Claimant and the Respondent 1.

52. Finally, the Chamber concluded its deliberations by rejecting any further claim lodged by the parties.

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 1, 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 4,198,000, plus 5% interest p.a. on said amount as from 21 July 2016 until the date of effective payment.

4. In the event that the amount plus interest due to the Claimant is not paid by the Respondent 1 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 1 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 (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

Enclosed: CAS directives