F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2018-2019) – fifa.com – atto non ufficiale – Decision 14 September 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 14 September 2018,

in the following composition:

Geoff Thompson (England), Chairman

Elvis Chetty (Seychelles), member

Takuya Yamazaki (Japan), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C (formerly known as Club C), Country D

as Respondent

regarding an employment-related dispute arisen between the parties

I. Facts of the case

1. On an unknown date and after already having been contractually bound during the previous season, the player of Country B, Player A (hereinafter: the Claimant) and the club of Country D, Club C (formerly known as Club C; hereinafter: the Respondent) signed an employment contract valid “from the beginning of (2017-2018) season until the end of (2017-2018) full season _ from 04 -07-2017 until 19-06-2018”.

2. Articles 2 and 3 of the employment contract set forth that the Claimant is entitled to receive the total amount of USD 110,000 for the “League of Country D Season”, to be paid as follows:

a) USD 27,500 “after passing the medical check-ups”;

b) USD 27,500 “after the half season”;

c) USD 16,500 “at the end of the year of Country D”;

d) USD 38,500 “at the end of the full season”.

3. As per article 7 of the employment contract, the Respondent is, inter alia, responsible:

a) “(T)o fulfill all of the financial commitments explicitly specified in article “2” if [the Respondent] don’t do his duty until 22 December [the Claimant] can cancel the contract by itself and [the Respondent] should pay the rest of contract up to 55,000$” (cf. article 7.1);

b) (F)or the expenses regarding [the Claimant’s] sport insurance, (…) and visa during the term of contract” (cf. article 7.5).

4. In accordance with article 11 of the employment contract, the “[Respondent] shall provide [the Claimant] with Federation’s insurance”.

5. Article 12 of the employment contract stipulates that the Respondent “shall provide [the Claimant] 2 economic round trip tickets from Country E – Country D. [The Respondent] will also provide 2 economic round trip from Country E – Country D for his family too”.

6. By correspondence dated 11 October 2017, the Claimant put the Respondent in default, stating, inter alia, that if the Respondent does not fulfil its “obligations of paying the debt towards [the Claimant] within 10 days from the receipt of this warning notice, we shall be forced to unilaterally terminate the contract”.

7. On 23 November 2017, the Claimant unilaterally terminated the employment contract.

8. On 28 December 2017, the Claimant lodged a claim against the Respondent in front of FIFA for breach of contract requesting to be awarded the following:

a) USD 110,000 corresponding to the total value of the contract;

b) EUR 754, corresponding to flight ticket costs (EUR 740) and insurance costs (EUR 14);

c) A yearly interest rate of 5% “for every payment starting from the date of debt maturity until the date of payment”.

The Claimant further asked that sporting sanctions be imposed on the Respondent.

9. According to the Claimant, the relevant employment contract was signed on 7 July 2017 and he duly fulfilled his contractual obligations, whereas the Respondent failed to comply with its financial contractual obligations as from the start of the employment relationship without valid reasons. In this respect, the Claimant highlighted that the payment of USD 2,500 he received from the Respondent on 18 November 2017 was related to an overdue payable based on the employment contract the parties had entered into for the previous season.

10. The Claimant deemed that due to the Respondent’s breach of its contractual obligations he had just cause to unilaterally terminate the employment contract. Furthermore, the Claimant held that, therefore, he “has the right to demand payment of the entire contracted amount for the whole period of the contract”.

11. Despite being invited to respond to the Claimant’s claim, the Respondent has not presented any comments in relation with this matter.

12. According to the information in the Transfer Matching System (TMS), on 17 January 2018, the Claimant signed an employment contract with the Club of Country F, Club G, valid as from 1 January 2018 until 31 October 2018. According to clause 2 of said employment contract, the Claimant is to obtain a monthly salary of USD 7,000, as well as a sign-on fee of USD 9,090.

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 case at hand.

In this respect, it took note that the present matter was submitted to FIFA on 28 December 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 and par. 2 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2018) the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a player of Country B and a club of Country D.

3. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 5 September 2018 by means of which the parties were informed of the composition of the Chamber, the member, Member J and the member, Member H, refrained from participating in the deliberations in the case at hand, due to the fact that the Member J has the same nationality as the Claimant and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member Member H refrained from participating and thus the Dispute Resolution Chamber adjudicated the case in the presence of three members in accordance with art. 24 par. 2 of the Regulations.

4. 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 (edition 2018) and considering that the present claim was lodged on 28 December 2017, the 2016 edition of the said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

5. 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 and arguments as well as the documentation on file. 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. In particular, the Chamber recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).

6. In this respect, the Chamber recalled that the Claimant and the Respondent signed an employment contract which was valid as from 4 July 2017 until 19 June 2018. The Chamber acknowledged that, in accordance with the employment contract, the Respondent was obliged to pay to the Claimant, inter alia, the total amount of USD 110,000 in various instalments.

7. The DRC further took into consideration that the Claimant unilaterally terminated the contract on 23 November 2017, after having put the Respondent in default of payment of his contractual receivables on 11 October 2017.

8. In continuation, the DRC recalled that the Claimant requested to be awarded inter alia the amount of USD 110,000 corresponding to the value of the contract as well as EUR 740 for flight ticket costs and EUR 14 for insurance costs he allegedly incurred.

9. Subsequently, the Chamber noted that the Respondent failed to present its response to the claim of the Claimant, in spite of having been invited to do so. By not presenting its position to the claim, the DRC was of the opinion that the Respondent renounced its right of defence and, thus, accepted the allegations of the Claimant.

10. Furthermore, as a consequence of the aforementioned consideration, the Chamber concurred that in accordance with art. 9 par. 3 of the Procedural Rules, it shall take a decision upon the basis of the documentation already on file; in other words, upon the statements and documents presented by the Claimant.

11. As a result, the Chamber established that the primary issue at stake is determining whether the Claimant had a just cause to terminate the contract with the Respondent on 23 November 2017. In this respect, the Chamber deemed it essential to make a brief recollection of the Claimant’s arguments regarding the contract termination, and in particular, verify which contractual obligations, if any, had in fact remained unfulfilled by the Respondent on the date of termination.

12. In continuation, the Chamber evoked that, according the Claimant, the Respondent had failed to fulfil any of its contractual obligations under the relevant employment contract without valid reasons. In other words, the Chamber concluded that, following the Claimant’s submissions, the Respondent had been in breach of contract for more than four months by the time the Claimant terminated the contract.

13. In this context, the DRC highlighted that the due dates of payment of the Claimant’s remuneration are not clearly specified in the employment contract. In particular, the Chamber noted that articles 2 and 3 of the employment contract merely refer to certain events or the expiry of a time period of the championship of Country D.

14. Having said this, the DRC agreed that it can safely be assumed that at least the first instalment of USD 27,500, which was defined in the contract as payable “after passing the medical checks”, was due in July 2017, since, in principle, medical examinations are to take place prior to the conclusion of the employment contract. In this respect, the members of the DRC took into consideration that the Claimant’s allegation that the employment contract was signed on 7 July 2017 has remained uncontested by the Respondent.

15. The second instalment of USD 27,500, however, which was to be paid by the Respondent to the Claimant “after the half season”, was interpreted by the Chamber as being due in December 2017, because December 2017 would be the sixth month as of the signing of the employment contract. In this sense, and given that the contract was terminated on 23 November 2017, the DRC concluded that the second instalment of USD 27,500 was not yet due on the day the Claimant terminated the contract.

16. Nonetheless, the Chamber deemed it important to emphasise that, bearing in mind the contractual duration of 4 July 2017 until 19 June 2018, the first instalment of USD 27,500 would equal an amount corresponding to three monthly salaries. Furthermore, it can be established that, on 23 November 2017, when the Claimant terminated the employment contract, the Claimant had not received a single payment from the Respondent on the basis of the relevant employment contract since the starting date of 4 July 2017, i.e. during a period of about four months.

17. In addition, the DRC recalled that, on 11 October 2017, the Claimant had put the Respondent in default of payment prior to proceeding with the termination of the employment contract on 23 November 2017.

18. Taking into account all of the above considerations as well as the well-established case law of the Chamber, the DRC concluded that the Claimant had just cause to terminate the employment contract on 23 November 2017.

19. That said, the Chamber concluded that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant and should therefore bear the consequences of its unjustified breach of the employment contract.

20. In continuation, prior to entering into the issue of the consequences of the early termination of the employment contract with just cause by the Claimant, the members of the Chamber concurred that the Respondent must fulfil its obligations as per the employment contract up until the date of termination of the contract in accordance with the general legal principle of “pacta sunt servanda”.

21. In this light, the Chamber firstly referred to its previous deliberations (cf. II./14-15 above) and determined that the amount of USD 27,500 corresponding to the first instalment of the employment contract has fallen due and is payable to the Claimant.

22. Secondly, with respect to the Claimant’s request for insurance costs amounting to EUR 14, the DRC recalled that, as stipulated in the contract, the Respondent was responsible for “the expenses regarding [the Claimant’s] sport insurance” (cf. I./3.b above) and to provide [the Claimant] with Federation’s insurance” (cf. I./4. above). In this regard, apart from the fact that the contract does not specify what the exact value of such insurance was, the Chamber took into account that the Claimant had not presented documentation corroborating that he effectively incurred such costs.

23. Consequently, taking into account the documentation presented by the Claimant in support of his petition, the DRC concluded that the Claimant had not fully substantiated his claim with pertinent documentary evidence in accordance with art. 12 par. 3 of the Procedural Rules. That is, there is no supporting documentation relating to the Claimant’s claim pertaining to sport insurance. Consequently, the DRC decided to reject this part of the Claimant’s claim.

24. On account of the above, the DRC decided that, in accordance with the general legal principle of pacta sunt servanda, the Respondent is liable to pay to the Claimant outstanding remuneration in the total amount of USD 27,500.

25. In addition, taking into consideration the Claimant’s claim, the Chamber decided to award the Claimant interest at the rate of 5% p.a. on the amount of USD 27,500, as of 31 July 2017 until the date of effective payment.

26. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract payable by the Respondent to the Claimant in the case at stake. In doing so, the members of the Chamber first 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.

27. In application of the relevant provision, the Chamber held that it first of all 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.

28. In this regard, the Chamber recalled that under article 7.1 of the employment contract the Respondent is responsible to “fulfill all of the financial commitments (…), if [the Respondent] don’t do his duty until 22 December [the Claimant] can cancel the contract by itself and [the Respondent] should pay the rest of contract up to USD 55,000” (cf. I./3.a) above).

29. That said, the DRC unanimously agreed that, irrespective of the consideration as to whether said article can be considered valid, article 7.1 of the contract is not applicable to the case at hand, since the Claimant terminated the contract with just cause prior to 22 December 2017, i.e. on 23 November 2017.

30. As a consequence, the Chamber determined that the amount of compensation payable by the Respondent to the Claimant had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The DRC 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 DRC emphasized beforehand that each request for compensation for contractual breach has to be assessed on a case-by-case basis taking into account all specific circumstances of the respective matter.

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

32. 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 as from its date of termination with just cause by the Claimant, i.e. 23 November 2017, until 19 June 2018, and concluded that the Claimant would have received USD 82,500 in total as remuneration had the contract been executed until its expiry date, USD 55,000 of which would have fallen due as of 1 January 2018. Consequently, the Chamber concluded that the amount of EUR 82,500 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

33. 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 able 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 termination of contract with just cause in connection with the player’s general obligation to mitigate his damages.

34. The Chamber recalled that, on 17 January 2018, the Claimant signed an employment contract with the club of Country F, Club G, valid as from 1 January 2018 until 31 October 2018. According to clause 2 of said employment contract, the Claimant was to obtain a monthly salary of USD 7,000, as well as a sign-on fee of USD 9,090.

35. The Chamber thus established that between 1 January 2018 and 19 June 2018, i.e. the expiry date of the employment contract with the Respondent, the Claimant was able to earn an income of approx. USD 51,090 (six monthly salaries of USD 7,000 each, plus a sign-on fee of USD 9,090). Furthermore, the Chamber took into account that during the month of December 2017, during which the Claimant was entitled to receive the second instalment of USD 27,500, the player had remained unemployed.

36. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand as well as the Claimant’s general obligation to mitigate his damage, the Chamber decided to partially accept the Claimant’s claim and that the Respondent must pay the amount of USD 31,410 to the Claimant as compensation for breach of contract.

37. In addition, as regards the Claimant’s claim pertaining to air tickets in the total amount of EUR 740, the DRC recalled that, under article 12 of the contract, the Respondent “shall provide [the Claimant] 2 economic round trip tickets from Country E – Country D. [The Respondent] will also provide 2 economic round trip from Country E – Country D for his family too”. However, the Chamber emphasized that, in this regard, the contract does not provide for a monetary value and the Claimant had not been able to corroborate his claim for EUR 740 with documentary evidence.

38. Consequently, on the basis of the information provided by FIFA Travel, the Chamber decided that the Respondent must pay to the Claimant the amount of CHF 543 as compensation for the return flight Country D – Country E.

39. In addition, taking into account the Claimant’s request, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amounts of compensation as of the date on which the claim was lodged, i.e. 28 December 2017, until the date of effective payment.

40. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

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III. Decision of the Dispute Resolution Chamber

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

2. The Respondent, Club C(formerly known as Club C), has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of USD 27,500 plus 5% interest p.a. as of 31 July 2017 until the date of effective payment.

3. The Respondent 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 amounts of USD 31,410 and CHF 543, plus 5% interest p.a. as of 28 December 2017 until the date of effective payment.

4. In the event that the amounts plus interest due to the Claimant are not paid by the Respondent within the stated time limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. Any further claim lodged by the Claimant is rejected.

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

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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

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl. CAS directives