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

Stéphane Burchkalter (France), member

Philippe Diallo (France), member

Joseph Bell (Cameroun), member

on the claim presented by the player,

Player A, Country B

as Claimant / Counter-Respondent

against the club,

Club C

(formerly known as Club C), Country D

as Respondent / Counter-Claimant

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. On 23 July 2015, the player of Country B, Player A (hereinafter: the player or Claimant / Counter-Respondent) and the club of Country D, Club C (hereinafter: the club or Respondent / Counter-Claimant) concluded an employment agreement (hereinafter: the contract), valid as from 23 July 2015 until 22 July 2018.

2. According to article 3.A of the contract, the player was entitled to receive inter alia a monthly salary of EUR 166,667.67, to be paid ‘at the end of each month’.

3. Furthermore, according to article 3.B of the contract, the player was entitled to receive the following amounts as sign-on fees:

 EUR 500,000, due ‘upon the signature of the contract’;

 EUR 200,000, due on 1 August 2016;

 EUR 200,000, due on 1 August 2017.

4. What is more, based on article 3.C of the contract, the player was inter alia entitled to receive the following bonus payments:

 a bonus of EUR 150,000, in case the club ‘wins the Championship of Country D’;

 a bonus of EUR 50,000, in case the club ‘wins Tournament E’.

5. In addition, based on article 3.D of the contract, the player was inter alia entitled to receive the following benefits:

 an amount of EUR 100,000 per year as renting allowance;

 ‘Business class air tickets for the player and his family from his country of

residence (for a total of maximum 8 return tickets)’;

 a ‘luxury car or equivalent club sponsor vehicle for the duration of this agreement […]’;

 health insurance for ‘the player and his family (wife and children if any)’;

 school fees for ‘the player’s children, if any (maximum EUR 10,000 per child per

year’.

6. On 23 January 2017, the player put the club in default of payment of EUR 1,203,865.94, providing a deadline for payment until 6 February 2017, however to no avail. This amount corresponds to (a) 4 unpaid salaries for the months of May, November and December 2016, and January 2017, (b) an unpaid sign-on fee of EUR 200,000, (c) unpaid bonuses in the total amounts of EUR 200,000 and 500,000 in the currency of Country D (approximately EUR 111,550) and (d) unpaid school fees in the amount of EUR 10,000. Further, the player explains that on 8 February 2017, he sent a ‘final notice of default’ to the club, providing a deadline for payment until 15 February 2017, however again to no avail.

7. On 18 February 2017, the player unilaterally terminated the contract, because of the outstanding amounts, and provided the club a final deadline to pay him the overdue amount, as well as compensation for breach of contract, in the total amount of EUR 4,644,366.

8. On 22 February 2017, the club paid the player an amount of EUR 1,183,333.35. As this was only part of the total amount requested, on 24 February 2017, the player again sent a letter to the club, requesting for the payment of the remaining amount of EUR 3,461,032.65, however to no avail.

9. On 18 April 2017, the player lodged a claim against the club in front of FIFA, requesting that the club be ordered to pay him the total amount of EUR 4,611,032.50, specified as follows:

Outstanding remuneration in the amount of EUR 20,532.59, as follows:

 EUR 20,532.59 as outstanding salaries on the date of the claim, plus 5% interest p.a. as from 18 February 2017 until the date of effective payment. In this respect, the player explains that on 23 January 2017 the amount of EUR 1,203,865.94 was outstanding and that on 22 February 2017, he received a payment of EUR 1,183,333.35.

Compensation for breach of contract in the amount of EUR 3,440,500, as follows:

 EUR 200,000 as sign-on fee, due on 1 August 2017;

 EUR 3,000,000 as remaining value of the contract between February 2017 and July 2018, corresponding to the monthly salaries of EUR 166,667.67 each in the period between February 2017 and July 2018);

 EUR 100,000 as rental allowances;

 EUR 72,000 as costs of several air tickets;

 EUR 36,000 as payment of car benefit;

 EUR 22,500 as reimbursement of health insurance costs;

 EUR 10,000 as payment of schooling benefit.

Additional indemnity in the amount of EUR “1,150,000”, as follows:

 6 monthly salaries in the amount of EUR 166,666.67 each.

Further, the player requested 5% interest p.a. as from 18 February 2017 on the amounts of EUR 3,440,500 and EUR 1,150,000, as well as to impose sporting sanctions on the club.

10. In spite of being invited to do so, the club did not reply to the claim of the player before 28 May 2017. As a result, on 15 June 2017, the investigation phase of the matter at hand was closed.

11. The player informed FIFA that after the unilateral termination of the contract with the club, he remained unemployed.

12. On 24 July 2017, after closure of the investigation phase, the club submitted a position, referred to as ‘Claim submitted to FIFA DRC […] in relation to the employment agreement signed between the club and the player on the 23th of July 2015’, by means of which it submitted comments as to the substance of the matter at hand and lodging a “new claim” against the player.

13. After having been informed by the FIFA Administration that it will be up to the relevant decision-making body as to whether or not said position should be taken into account, the club insisted on adding its document dated 24 July 2017 to the file. Said documents were sent for information only to the player.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as 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 18 April 2017. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2017; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (editions 2016 and 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 of Country B and a club of Country D.

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 claim was lodged on 18 April 2017, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Chamber recalled that on 23 July 2015, the parties had signed an employment contract, valid as from 23 July 2015 until 22 July 2018, on the basis of which the player was entitled to receive inter alia a monthly salary of EUR 166,667.67, a sign-on fee of EUR 500,000, an amount of EUR 200,000 due on 1 August 2016 as well as an amount of EUR 200,000 on 1 August 2017. In addition, the player was also entitled to receive housing allowances in the yearly amount of EUR 100,000, 8 business class return flight tickets for himself and his family, a car, health insurance and compensation for school fees up to maximum of EUR 10,000 per year.

6. In continuation, the members of the Chamber noted that the player lodged a claim against the club, maintaining that he had terminated the employment contract with just cause on 18 February 2017, after previously having put the club in default. The player held that the club, as from the end of the 2015/2016 season, failed to pay him several amounts he was entitled to. The player further explains that on 18 February 2017 the total amount of EUR 1,203,865.94 remained outstanding, corresponding to four monthly salaries of EUR 166,667.67 each, as well as a sign-on fee of EUR 200,000 due on 1 August 2017, bonuses in the amounts of EUR 200,000 and 500,000 in the currency of Country D, as well as school fees in the amount of EUR 10,000.

7. What is more, the player confirms that on 22 February 2018, i.e. 4 days after the termination of the contract, the club paid him an amount of EUR 1,183,333.35, apparently consisting of a partial payment of the outstanding remuneration in the total amount of EUR 1,203,865.94. Consequently, in his claim before FIFA, the player requested to be awarded his outstanding dues, as well as compensation for breach of the employment contract.

8. Subsequently, the DRC observed that the club, in spite of having been invited to do so, had failed to present its reply to the claim of the player before the granted deadline of 28 May 2017. Subsequently, in the absence of a timely answer of the club, on 15 June 2017, the investigation phase in the matter at hand was closed by the FIFA Administration in accordance with art. 9 par. 3 of the Procedural Rules.

9. What is more, after the closure of the investigation phase in the matter at hand, on 24 July 2017, the club submitted unsolicited comments, which it refers to as ‘Claim submitted to the DRC […] in relation to the employment agreement signed between the club and the player on the 23th of July 2015’. Said document contains comments as to the substance of the player’s claim, as well as a counter-claim lodged by the club against the player.

10. Based on the foregoing, bearing in mind the Chamber’s constant jurisprudence in this regard, the DRC deemed it appropriate to remind the parties of the wording of art. 9 par. 3, which inter alia stipulates the following: ‘[…] If no statement or reply is received before the time limit expires, a decision shall be taken upon the basis of the documents already on file. Submissions received outside the time limit shall not be taken into account […]’. Furthermore, the members of the Chamber referred to art. 9 par. 4 of the Procedural Rules, which provides inter alia for the following: ‘The parties shall not be authorised to supplement or amend their requests or their arguments, to produce new exhibits or to specify further evidence on which they intend to rely, after notification of the closure of the investigation.’

11. In view of the foregoing regulatory provisions, the members of the Chamber decided not to take into account the unsolicited comments of the club submitted on 24 July 2017, including its counterclaim against the player, which were submitted after the expiry of the granted deadline until 28 May 2017, and even after the closure of the investigation phase on 15 June 2017. In the Chamber’s view, any other conclusion would lead to a potential circumvention of the Procedural Rules. As a result, the club’s counterclaim is considered to be inadmissible.

12. Furthermore, in view of all the foregoing, the DRC established that it shall take a decision on the basis of those documents on file that were provided prior to the deadline set by FIFA and prior to the subsequent closure of the investigation phase, in casu, on the statements and documents presented by the player.

13. Having established the aforementioned, the Chamber deemed that the underlying issue in this dispute was to determine whether the contract had been terminated by the player on 18 February 2017 with or without just cause, and subsequently, to determine the consequences of the early termination of the contractual relationship by the player.

14. In accordance with the employment contract, and taking into account the player’s statements that the club failed to pay him the remuneration he was entitled to as from the end of the 2015/2016 season, the DRC could establish that at the time the contract was terminated, i.e. on 18 February 2017, the club had failed to pay the player the monthly salaries for the months of May, November and December 2016, as well as January 2017, in the amount of EUR 166,667.67 each, as described in the player’s default notice of 23 January 2017. Furthermore, also considering the content of the player’s default notice of 23 January 2017, the club had failed to pay the player the sign-on fee in the amount of EUR 200,000 and school fees in the amount of EUR 10,000. What is more, according to the player, on the date of termination of the contract, the club also failed to pay bonuses in the amounts of EUR 200,000 and 500,000 in the currency of Country D, as per the contract. All this information remained uncontested by the club, in the context of these proceedings.

15. At this point, the members of the DRC deemed it vital to outline that according to the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, a party claiming a right on the basis of an alleged fact, shall carry the respective burden of proof.

16. In relation to the aforementioned legal principle, and taking into account the amounts the player claims to not have received from the club, the Chamber noted on the one hand that the player did not provide documentary evidence of his actual entitlement to receive the claimed bonuses in the amounts of EUR 200,000 and 500,000 in the currency of Country D. In this respect, the Chamber pointed out that, based on the contract and the documents submitted by the player, it could only be established that on the date of termination, the player was entitled to the amount of EUR 876,670.68, corresponding to the 4 outstanding salaries of EUR 166,667.67 each, the outstanding sign-on fee of EUR 200,000 and school fees in the amount of EUR 10,000.

17. On the other hand, the members of the Chamber were of the opinion that the club, by paying an amount of EUR 1,183,333.35 to the player on 22 February 2017, recognized that on that specific date, the player was entitled to a higher amount that the amount of EUR 876,670.68 (cf. point II./16. above), which undisputedly remained outstanding. What is more, the aforementioned payment made on 22 February 2017 was made after the player had the put the club in default for the payment of the amount of EUR 1,203,865.94 on 23 January 2017. In view of the foregoing circumstances, the Chamber deemed that it had no other option than to conclude that the club, with its payment of EUR 1,183,333.35 made on 22 February 2017, partially recognized the amounts claimed as bonus payments by the player by means of his default letter dated 23 January 2017, up to an amount of EUR 306,662.67, i.e. EUR 1,183,333.35 minus EUR 876,670.68.

18. Moreover, the Chamber noticed that the payment of EUR 1,183,333.35 was only made after the termination of the contract by the player on 18 February 2017. Therefore, such circumstance shall, in accordance with the well-established and longstanding jurisprudence of the DRC, have no influence whatsoever on the question of whether on 18 February 2017, the player had a just cause to terminate the contract.

19. On account of all the aforementioned considerations, in particular in view of the considerations under points II./16., II./17. and II./18. above, the Chamber established that the club, without any valid reason, failed to remit to the player, until 18 February 2017, the date on which the player terminated the contract, the total amount of EUR 876,670.68, corresponding to 4 monthly salaries, a sign-on fee of EUR 200,000 and school fees in the amount of EUR 10,000, as well as an amount of EUR 306,662.67 (cf. point II./17. above) related to bonus payments. Consequently, and considering that the club had repeatedly and for a significant period of time been in breach of its contractual obligations towards the player, the Chamber decided that the player had just cause to unilaterally terminate the employment contract on 18 February 2017. As a result, the club is to be held liable for the early termination of the employment contact with just cause by the player.

14. Having established the foregoing, the Chamber focused its attention on the consequences of such termination of the contract with just cause by the player.

15. First of all, the members of the Chamber concurred that the club must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda” and it has to pay all outstanding remuneration due to the player, if any.

16. However, in this respect, the Chamber referred to the fact that the player acknowledged to have received an amount of EUR 1,183,333.35 out of the amount of EUR 1,203,865.94 mentioned in the player’s default letter dated 23 January 2017. What is more, the Chamber deemed that the player was not able to provide documentary evidence, on the basis of which it could be concluded that he was entitled to the difference between the two aforementioned amounts, corresponding to bonuses. Based on the foregoing, the Chamber concluded that at the moment of rendering this decision, there were no outstanding amounts – supported by substantial evidence – still to be paid by the club to the player. Therefore, the Chamber decided to reject the player’s claim for the allegedly outstanding amount of EUR 20,532.59.

17. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the Regulations, the player is entitled to receive from the club compensation for breach of contract.

18. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club 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 player 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.

19. In application of the relevant provision, the Chamber held that first of all, it had to clarify as to whether the pertinent employment contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.

20. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.

21. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract until 22 July 2018, taking into account that the player was entitled to receive 18 payments of EUR 166,667.67 each for the period between February 2017 and July 2018, as well as a sign-on fee of EUR 200,000, due on 1 August 2017, rental allowances in the amount of EUR 100,000 per year for the 2017/2018 season and EUR 10,000 as school fee contribution for the 2017/2018 season. In this respect, the Chamber established that, in the absence of any monetary value in the contractual conditions relating to the car benefit and the health insurance costs, said benefits shall be not be taken into consideration when calculating the residual value of the contract. Consequently, the Chamber concluded that the amount of EUR 3,310,000 serves as the basis for the determination of the amount of compensation for breach of contract.

22. In continuation, the Chamber verified as to whether the player had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC, such remuneration under a new employment contract shall be taken into account in the calculation of the amount of compensation for breach of contract in connection with the player’s general obligation to mitigate his damages.

23. However, the Chamber noted that the player did not find new employment with another club during the relevant period of time and established that as a result thereof, no amounts shall be deducted from the amount of compensation for breach of contract as claimed by the player.

24. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of EUR 3,310,000 to the player, which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.

25. Furthermore, considering the player’s claim for interest and taking into account the Chamber’s longstanding jurisprudence, the Chamber ruled that the club must pay 5% interest p.a. on the amount of EUR 3,310,000 as from 18 April 2017, the date the claim was lodged by the player.

26. Furthermore, as regards the player’s claim pertaining to additional indemnity in the amount of EUR 1,150,000, the Chamber concluded that such claim is to be rejected due to a lack of legal basis.

27. Finally, as regards the player’s claim pertaining to air tickets, the Chamber decided that - on the basis of the information provided by FIFA Travel and referring to the relevant terms of the contract - the club must pay to the player the amount of CHF 4,489 for a business class air ticket from the Country D to Country B.

28. Additionally, taking into account the Chamber’s longstanding jurisprudence, the Chamber decided that the club has to pay 5% interest p.a. on the amount of CHF 4,489 as from 18 April 2017, the date the claim was lodged by the player.

29. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the player is rejected, as well as that the counter-claim of the club is inadmissible.

III. Decision of the Dispute Resolution Chamber

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

2. The counter-claim of the Respondent / Counter-Claimant is inadmissible.

3. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 3,310,000, plus 5% interest p.a. as from 18 April 2017 until the date of effective payment.

4. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, the amount of CHF 4,489 as the costs of a flight ticket, plus 5% interest p.a. as from 18 April 2017 until the date of effective payment.

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

6. Any further claim lodged by the Claimant / Counter-Respondent is rejected.

7. The Claimant / Counter-Respondent is directed to inform the Respondent / Counter-Claimant immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

*****

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