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 June 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 14 June 2019,

in the following composition:

Geoff Thompson (England), Chairman

Tomislav Kasalo (Croatia), member

Wouter Lambrecht (Belgium), member

on the claim presented by the club,

Club A, Country B

as Claimant

against the player,

Player C, Country D

as Respondent 1

the club,

Club E, Country F

as Respondent 2

and the club,

Club G, Country H

as Respondent 3

regarding an employment-related dispute

arisen between the parties

I. Facts of the case

1. In January 2016, the player of Country D, Player C (hereinafter: the player or the Respondent 1) signed an employment contract with the club of Country F, Club E (hereinafter: Club E or the Respondent 2) which was renewed on 13 February 2018 and valid until 31 December 2020.

2. On 31 July 2018, the club of Country B, Club A (hereinafter: Club A or the Claimant) contacted an intermediary, Mr X, to forward an offer to Club E for the transfer of the player.

3. On 2 August 2018, Club E replied to Mr X with a counter-offer. On 5 August 2018, Club A contacted Club E directly with a reply to the counter-offer. On 6 August 2018, the exchange of offers and counter-offers went back and forth between the two clubs.

4. Following negotiations, on 7 August 2018, Club A provided Club E with a final offer (hereinafter: the offer).

5. The offer which was set to be valid until 9 August 2018, provided the following:

 The transfer of the player against payment of the amount of EUR 3,000,000

 20% as sell-on fee.

6. On 7 August 2018, Club E replied to Club A via email stating: “the offer is ok. Can you please draft an agreement contract?”. To which Club A replied the same day by sending a draft of the transfer agreement (hereinafter: the draft).

7. In accordance with the draft, “its validity is subject to the following conditions:

 Club A reaches an agreement with the player and becomes ready to sign the employment contract;

 Club E sends the ITC and prepare and submit the necessary documents to the relevant federation,

 Club A pays the first instalment to Club E.”

8. The draft further provides that Club A is to pay to Club E a transfer fee of EUR 2,300,000.

9. On 7 August 2018, Club A and the player signed an employment contract (hereinafter: the contract) valid as from the date of signature until 30 June 2022.

10. In accordance with the contract, the player shall pass a medical examination 15 days following the signature of the contract. The annex of the contract stipulates the following: “Both parties recognize each other with the necessary capacity and competence to contract, in the respective capacities in which they intervene, the rights and obligations regulated in this agreement, and to that effect.” (free translation from Spanish, original reads as follows: “Ambas partes se reconocen con la capacitad y competencia necesarias para contraer, en las respectivas calidades en que intervienen, los derechos y obligaciones que en este acuerdo se regulan, y a tal efecto.”)

11. On the same day, the player and Club A signed an annex to the contract (hereinafter: the annex) in accordance with which the player was entitled to the following remuneration:

 For the season 2018/2019: the total amount of EUR 600,000 payable in 11 instalments of EUR 6,000 from August 2018 until June 2019 and EUR 534,000 payable in December 2018;

 For the season 2019/2020: the total amount of EUR 600,000 payable in 12 instalments of EUR 6,000 from July 2019 until June 2020 and EUR 528,000 payable in two installments of EUR 264,000 each, on December 2019 and June 2020;

 For the season 2020/2021: the total amount of EUR 600,000 payable in 12 instalments of EUR 6,000 from July 2020 until June 2021 and EUR 528,000 payable in two installments of EUR 264,000 each, on December 2020 and June 2021;

 For the season 2021/2022: the total amount of EUR 600,000 payable in 12 instalments of EUR 6,000 from July 2021 until June 2022 and EUR 528,000 payable in two installments of EUR 264,000 each, on December 2021 and June 2022.

12. The annex provides the following:

“1.2. By mutual agreement of the parties: Both parties may agree on the early termination of the contract and its consequences.

1.3. By unilateral decision of the PLAYER to be able to render services to another Club, Federation or sports entity The international federative rules, as well as community and international customs and practices, prevent that during the validity of the contract a player can terminate in advance his contract to render services for another Club, Federation or sports entity in the temporary terms contained in its regulatory rules such as the FIFA Regulations on the status and transfer of players. However, article 16 of RD 1006/85 empowers the parties to agree on compensation in the event that the player decides to terminate the contract early and unilaterally. FIFA admits the application of the aforementioned Royal Decree as it is a matter of public order. Consequently, the PLAYER may terminate this employment contract without being subject to stability or binding terms ("protected period" or "free period" in FIFA terminology), as long as he indemnifies the CLUB in the amount and terms established below by mutual agreement between the parties and absolute freedom. Thus, by mutual agreement, the parties establish that, for this reason of termination, the PLAYER and/or the subsidiary responsible, as the case may be, in accordance with art. 16 of RD 1006/85, or the jointly and severally liable party in accordance with FIFA regulations, must pay as compensation to Club A on the date of termination and in cash, the amount of FORTY MILLION EUROS (EUR 40,000,000.), plus the corresponding taxes. This amount will be updated with the increase in the CPI for the national group, referring to the period between the first day of the month in which this contract commences and the last day of the penultimate month prior to the termination. The PLAYER will not be able to cancel the present contract, nor will the CLUB authorize the transfer of his Federative File, nor will the PLAYER be able to be contracted by Club or sports entity of any kind, if previously the indemnifying payment agreed here plus the corresponding taxes has not been materialized in full. The player's failure to start "de facto" to this contract by his refusal to extend his effective relationship with the CLUB after this signing today or by having signed a contract with another Club prior to this act or subsequent to it, will automatically grant the same right to compensation in favor of the CLUB, plus taxes.

1.4. By unilateral decision of the Club A. In the event that the Club A unilaterally decides to dismiss the PLAYER, basing its termination on a very serious breach of contract, the PLAYER shall not be entitled to any compensation. If, on the contrary, and for the purposes set out in art. 15.1 of Royal Decree 1006/1985, of 26 June, the dismissal proceeded unilaterally by the Club, is qualified as inappropriate, it is expressly agreed that only in such a case, the Club will be obliged to pay the player the full outstanding salary amounts provided for until the end of this contract.”

(free translation from Country B, original text reads as follows: “Recisión del contrato […] 1.2. Por mutuo acuerdo de las partes: Ambas partes podrán pactar la resolución anticipada del contrato y sus consecuencias.

1.3. Por decisión unilateral del JUGADOR para poder prestar sus servicios a otro Club, Federación o entidad deportiva Las normas federativas internacionales, así como los usos y costumbres comunitarios e internacionales, impiden que durante la vigencia del contrato un jugador pueda rescindir anticipadamente su contrato para prestar sus servicios a otro Club, Federación o entidad deportiva en los términos temporales contenidos en sus normas reguladoras como el Reglamento FIFA sobre el estatuto y la transferencia de jugadores. Sin embargo, El RD 1006/85, en su artículo 16, faculta a las partes a pactar una indemnización para el caso que el jugador decida resolver anticipada y unilateralmente el contrato. El organismo FIFA admite la aplicación del reseñado Real Decreto por tratarse de normativa de orden público. En consecuencia, el JUGADOR puede rescindir el presente contrato de trabajo sin sujeción a plazos de estabilidad o vinculación ("periodo protegido" o periodo "libre" en terminología FIFA), siempre y cuando indemnice al CLUB en la cuantía y términos que más adelante se establecen de mutuo acuerdo entre las partes y absoluta libertad. Así, de común acuerdo, las partes establecen que, por esta causa de rescisión, el JUGADOR y/o el responsable subsidiario, en su caso, de acuerdo con el art. 16 del RD 1006/85, o el responsable solidario conforme a la normativa FIFA, deberá abonar en concepto de indemnización a la Club A a la fecha de cese y al contado, la cantidad de CUARENTA MILLONES DE EUROS (EUR 40.000.000.) todo ello más los impuestos correspondientes. Este importe se actualizará con el incremento del IPC para el conjunto nacional, referido al periodo comprendido entre el primer día del mes de inicio de este contrato y el ultimo día del mes penúltimo anterior al cese. El JUGADOR no podrá rescindir el presente contrato, ni el CLUB autorizará la transferencia de su Ficha Federativa, ni podrá el JUGADOR ser contratado per Club o entidad deportiva de ninguna clase, si previamente no se ha materializado, íntegramente, el pago indemnizatorio aquí convenido más los impuestos correspondientes. El incumplimiento del jugador a dar inicio de "facto" al presente contrato por su negativa a prorrogar su vinculación efectiva con El CLUB tras la presente firma en el día de hoy o por haber firmado contrato con otro Club con anterioridad a este acto o posterior al mismo, otorgará automáticamente el mismo derecho indemnizatorio a favor del CLUB, más los impuestos correspondientes.

1.4. Por decisión unilateral de la Club A. En el supuesto de que la Club A decidiera de forma unilateral el despido del JUGADOR, fundando mencionada rescisión en un incumplimiento laboral muy grave del mismo, el JUGADOR no tendrá derecho a indemnización alguna. Si, por el contrario, y a los efectos preceptuados en el art. 15.1 del Real Decreto 1006/1985, de 26 de junio, el despido procedido de forma unilateral por parte del Club, fuere calificado como improcedente, se pacta expresamente que únicamente en tal caso, el Club estará obligado a abonar al jugador la totalidad de las cantidades salariales pendientes de pago previstas hasta la finalización del presente contrato.)

13. On 8 August 2018, Club E wrote to Club A regarding the draft agreement pointing out that it contained some mistakes “for example in the fee where it said 2,3 Million euro. Do you want me to change my end or do you change your end?”

14. On the same day, Club A answered “please change the mistakes and sent us the contract signed ok? The player has just signed too”.

15. On 8 August 2018, the player signed the registration request with the Football Federation of Country B (Football Federation of Country B) for the season 2018/2019.

16. In accordance with the documentation on file, the player went through a medical examination with Club A on 8 August 2018.

17. In accordance with the documentation on file, the player went back to Club E on 8 August 2018.

18. On 14 August 2018, Club A put Club E in default by means of a letter, requesting that within 24 hours of receipt, Club E “proceed to formalize in writing the transfer agreement and introduce in the TMS [Transfer Matching System] both the transfer order of the player and the information and documents required by the system”.

19. On 18 August 2018, the player terminated the contract with Club A by means of a letter, arguing the following:

a) that he was misled into signing the contract by Club A’s intermediary and Club A,

b) that he did not understand Spanish and;

c) that he signed the contract under the belief that “it was a standard template necessary to be signed with the sole scope to possibly undergo medical visits at a later stage and for [Club A] to officially starting negotiations with [Club E] for [his] transfer.”

20. The player further argued that since Club A and Club E did not agree on a transfer agreement, he could not be registered with Club A. The player added that Club A did not request him to come back to the club after he went back to Country F to Club E and that he kept on playing with the latter.

21. On 22 August 2018, Club E and the club of Country H, Club G (hereinafter: Club G or the Respondent 3) signed a transfer agreement (hereinafter: the final transfer agreement) for the definitive transfer of the player from the former to the latter.

22. In accordance with the final transfer agreement, Club G had to pay EUR 4,000,000 to Club E as transfer compensation for the definitive transfer of the player, amount payable in 3 instalments as follows:

 EUR 2,500,000 following the receipt of the ITC;

 EUR 1,000,000 by no later than 10 January 2019;

 EUR 500,000 by no later than 10 August 2019.

23. Club E is further entitled to an additional transfer fee of EUR 250,000 “each time the player has played in 75% of the official matches during a season […] To have played one official match the player shall have played at least one minute in the relevant match”, and to a sell-on fee.

24. On 23 August 2018, the player and Club G signed an employment contract valid as from 23 August 2018 until the end of the season 2022/2023 according to which he is entitled to a monthly remuneration of EUR 66,800 for the season 2018/2019 and to a monthly remuneration of EUR 79,000 for the seasons 2019/2020, 2020/2021, 2021/2022, 2022/2023.

25. According to the information contained on the Transfer Matching System (TMS), on 24 August 2018, the player was registered with Club G.

26. On 31 August 2018, Club A lodged a claim against the player, Club E and Club G in front of FIFA’s Dispute Resolution Chamber (hereinafter: the DRC) for breach of contract requesting the following:

 That FIFA consider the transfer agreement between Club A and Club E as valid and binding;

 That FIFA declare the nullity of the transfer agreement between Club E and Club G due to fraud;

 That FIFA urges Club E to implement the transfer agreement and the delivery of the ITC of the player to Club A;

 “and/or” a compensation for breach of contract in the amount of EUR 40,000,000 corresponding to an amount agreed with the player in the contract, payable jointly by Club E, Club G and “if applicable” by the player.

27. In its claim, Club A argued that the transfer agreement between it and Club E was valid and perfected from the moment the offer was accepted by Club E. Club A considered that the offer contained all the necessary elements and was sufficient in and of itself to be considered valid. Club A considered that the acceptation of the offer was explicit taking into account that a member of the management team of Club E replied to the offer “the offer is ok; can you draft an agreement contract?”.

28. Club A further argued that the player signed the contract, the annex of the contract and the registration with the Football Federation of Country B. The player submitted himself to a medical exam with Club A. Club A affirmed that the player wanted to play in Club A but was influenced by Club E upon his return to Country F. Club A based this affirmation on a text message received from the player which stated “hello Mr president […] I just wanted to say that I am talking to my president and trying to calm the situation down […] to sort things out with him”. In any case, Club A argued that the player breached the contract, and that should the player have wanted to terminate the contract before its expiry to sign with another club, he should have proceed with the payment to Club A of the amount of EUR 40,000,000 as provided by the contract.

29. Club A put forward that several clubs were interested in acquiring the player, but stopped when they got knowledge that he had already signed a contract with Club A. Club A argued that Club G was aware of the player’s situation and still signed a contract with him. Club A provided an exchange of correspondence between Club A and a member of Club G’ staff in which Club G requested the transfer agreement between Club A and Club E, and Club A refused to provide it, invoking that it was confidential.

30. In reply to the claim of Club A, the player underlined that no transfer agreement had been signed between Club A and Club E and that for an employment contract to be valid, a valid transfer agreement between the former club and the new club must exist beforehand and it must have been executed. Moreover, no ITC was issued and the player was not registered in Country B with Club A.

31. In reply to the claim of Club A, Club E argued that most of the requests of the Claimant are declaratory requests and should be disregarded. Regarding the pecuniary request of EUR 40,000,000, Club E deemed that it was not a party to the negotiations leading to the employment contract, and that it does not bear any joint liability on the basis of the RSTP.

32. Club E asserted that during the summer 2018, it started negotiating with several clubs, including Club A, regarding the international transfer of the player. According to Club E, the player requested on 6 August 2018 to be allowed to travel to Club A to visit it, which Club E agreed to, allegedly, with the player’s guarantee that he would not sign any employment contracts.

33. According to Club E, the player informed them on 8 August 2018 that he had signed with the Claimant but only “so that [he] could do the medical exam”.

34. According to Club E, the offer between Club E and Club A does not respect the form of a transfer agreement, as it was not written and signed by both parties. Moreover, Club E argued that not all the essentialia negotii had been agreed by the parties, for example the exact date of the transfer. Club E also invoked art. 18 par. 3 and 5 of the RSTP arguing that as Club A did not have the consent of Club E when it made the player sign the contract, it cannot be valid and binding.

35. Regarding the contract between Club A and the player, Club E considered that since the contract was in Spanish, a language that the player allegedly does not understand, it should not be valid and binding. Club E also pointed out that the fact Club A made the player sign the contract before formalizing the transfer agreement also meant that the contract is not valid and binding.

36. Regarding the compensation, Club E deemed that it should not be held liable as it is not bound by the player’s contract, Club E contested the validity of the transfer agreement as it has not been formalized. Regarding joint liability, Club E considered that it is not the “new club” for the purpose of art. 17 par. 2 of the RSTP. Club E argued that it already had a valid employment contract with the player by the time he signed with Club A, and that if the DRC was to find a breach of contract by the player, the contract that would have led to that breach would have been the one between the player and Club G.

37. In reply to the claim of Club A, Club G underlined that its alleged liability is directly linked to the existence of a valid employment contract between the player and Club A and a breach by the player of such contract. Club G argued that there is no valid transfer agreement between Club E and Club A as no transfer agreement was signed and no TMS instructions entered. Consequently, Club G affirmed that without a valid transfer agreement, no valid employment contract could have been entered between the player and Club A and that in any case, the player could not understand what he was signing due to a language issue. Club G argued that the player would not have signed the contract had he known that no transfer agreement had been signed prior.

38. If a breach of contract was to be recognized by the DRC, Club G rejected any liability on its part, arguing that it never induced the player into the alleged breach. In any case, Club G considered that it would be up to Club A to demonstrate any inducement on its part. Moreover Club G argued that it had been in contact with Club E since 20 July 2018 regarding the transfer of the player, as it sent to Club E several offers between then and the signature of the transfer agreement. Club G considered that it did not directly profit from the alleged breach of contract since the player left Club A not to go to Club G, but first returned to Club E and played an official match on 12 August 2018 with Club E. The player notified his termination on 18 August 2018, and was transferred to Club G on 23 August 2018, meaning that he was still with Club E during 5 days before going to Club G.

39. Moreover, Club G denied having had any influence on the player’s decisions regarding Club A, as Club G held not having had any contact with the player before the alleged breach. Club G argued that it had acted cautiously when it became aware of the issues between Club A and Club E. Before signing with the player, Club G requested from Club E documents regarding the termination by the player of the contract with Club A, such as an attestation from Club E signed by the player. Club G argued that it had waited to see if any transfer had been formalized between Club A and Club E for the player in the TMS. Club G further alleged that it had waited 11 days before starting the negotiations again. Club G argued that it was only contacted by Club A after signing the transfer agreement with Club E, and that Club A refused to provide any official documents to confirm its allegations.

40. On the joint liability, Club G considered that it is not the new club and cannot be jointly and severally liable under art. 17 par. 2 of the RSTP since the player went back to Club E and played an official game there after the termination.

41. In its replica, Club A reiterated that the offer for the transfer of the player was accepted by Club E and that at that moment, the offer became binding for both parties, and that the player signed the contract with Club A following the acceptance. According to Club A, it was Club E which refused to formalize the transfer in writing and did not allow the issuance ITC of the player.

42. With respect to the contract, Club A argued that it is a standard contract from the Football Federation of Country B and that the annex was also provided in English to the player. In any case, Club A considered that by the very nature of the clauses in it, the annex was understood by the player.

43. Club A held that that the DRC and CAS jurisprudence “qualifies the transfer agreement as a complex legal act, the validity of which is not affected even if certain administrative procedures necessary for the provision of the service are not completed or missing”.

44. On Club E’ liability, Club A reaffirmed that it should be held liable under art. 17 of the RSTP, as following the alleged breach of contract of the player, he returned to Club E on 9 August 2018 before being transferred to Club G on 23 August 2018. Club Aconsidered that the return to Club E can even be considered as a second employment contract between the player and Club E or even as a bridge or intermediate status before the definitive transfer to Club G.

45. Club A maintained its claim of EUR 40,000,000 in application of the contract, and maintained that the contractual clause providing for such amount is valid under the law of Country B. Club A added that FIFA’s Regulations as well as its jurisprudence recognize the freedom of the parties to agree on compensation clauses.

46. Club A explained that should the DRC deem said amount as too high, the value of the player should be equal to EUR 10,000,000 taking into consideration the transfer agreement between Club E and Club G.

47. Regarding Club G’s joint liability, Club A put forward that many clubs were interested in the player, but when they learnt about his situation with Club A, all clubs renounced to transfer him except for Club G. In line with this, Club A provided a WhatsApp communication with a man allegedly representing the interests of the Country H club Club J, in which upon hearing about the player’s situation, that man replied “I leave this with you, Club J is out”. Consequently, Club A proclaimed that Club G and Club E should be jointly and severally liable together with the player.

48. In his duplica, the player asserted that he only went to Club A to visit the club and that upon his arrival in Club A, he was informed by the agent that put him in contact with Club A that Club E and Club A had reached an agreement on his transfer.

49. The player contested receiving a copy in English of the contract or of any of the documents he signed in Club A.

50. He alleged that Club E was aware that he willingly signed the employment contract (“le joueur avait volontairement signé le contrat de travail”) with Club A but was requested by Club E to come back to Country F. Upon his return, the player argued that Club E tried to convince him that the contract with Club A was not valid and made him sign the termination letter, while he himself did not agree with the terms of the termination letter, and that the club “threatened to keep [him] for the next season and to refuse any transfer offer if [he] did not sign the [termination] letter”. The player stated that he regretted signing the termination letter as he argued that he really wanted to join Club A but was manipulated by Club E into signing the termination letter.

51. In its duplica, Club E reiterated its argument that no binding transfer agreement had been signed between Club E and Club A. Club E affirmed that Club A was the party acting in bad faith as it signed the player while no agreement had been formalized between Club A and Club E for the transfer of the player. Club E added that Club A did not start the administrative process in TMS for the transfer of the player.

52. Club E explained that at the time of the signing of the transfer agreement, Club G was “fully aware of the course of events that had taken place in Club A and thereafter”.

53. In any case, Club E reaffirmed that it is not the new club of the player and cannot as such be held jointly and severally liable.

54. In its duplica, Club G reiterated that it was never in contact with the player during the discussions between the player and Club A nor immediately upon his return in Club E. Club G further contested that the man talking with Club A was really someone representing Club J.

55. Club G argued that Club A never provided it with the employment contract between Club A and the player despite its request to do so, which did not help to give credibility to Club A’s claim according to Club G. Club G reiterated that it checked TMS to see if any instructions regarding the player had been entered, which was not the case. Club G held again that it is not the new club of the player since he terminated the contract with Club A on 18 August 2018, remained in Club E and then was transferred from Club

E to Club G on 23 August 2018. Club G argued that in its submissions, Club A also recognized that Club E was the new club and not Club G.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter: the DRC or the Chamber) analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was submitted to FIFA on 31 August 2018. Consequently, the 2018 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 par. 2 and par. 3 of the Procedural Rules).

2. Subsequently, the DRC referred to art. 3 par. 1 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2019), it is competent to decide on the present litigation, which concerns an employment-related dispute with an international dimension between a club of Country B, an player of Country D, a club of Country F and a club of Country H.

3. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 12 June 2019 by means of which the parties were informed of the composition of the Chamber, the member XX and the member Y did not participate in the deliberations in the case at hand, due to the fact that the member XX was unable to participate due to certain personal circumstances and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member Y did not participate and thus the Dispute Resolution Chamber adjudicated the case in presence of three members in accordance with art. 24 par. 2 of the Regulations.

4. Furthermore, the DRC analysed which edition of the regulations should be applicable as to the substance of the matter. In this respect, the Chamber confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (edition 2019) and considering that the present matter was submitted to FIFA on 31 August 2018, the June 2018 edition of said Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the present matter as to the substance.

5. 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 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 TMS.

6. From the outset, the DRC noted that from the allegations and arguments presented by the parties involved in the present matter, in order to be able to establish whether, as claimed by Club A, a breach of contract had been committed by the player, it should first of all pronounce itself on the issue of the validity of the contract signed by the player with Club A on 7 August 2018, i.e. whether said document consists in a valid and biding employment contract between Club A and the player.

7. In this respect, the DRC took note that prior to the signing of the contract, Club E and Club A had been negotiating with the purpose of entering into a transfer agreement for the permanent transfer of the player from the former to the latter. The DRC duly noted that although no transfer agreement had been formally signed between the parties, on 7 August 2018, Club E accepted the offer provided by Club Afor a transfer fee of EUR 3,000,000 via email.

8. In this context, the DRC further underlined that the player did not challenge having signed the contract on 7 August 2018, but rather argued that as the document was in Spanish, he could not understand it. The DRC also took note that the player first argued that he was misled into signing the contract as he believed that a transfer agreement between Club E and Club A would be formalized. The player also added that since no transfer agreement had been signed, the contract could not be valid. Notwithstanding, the DRC emphasised that the player in his duplica admitted that he signed the contract with Club A willingly with the final purpose of joining it.

9. On this point, the DRC noted that both Club E and Club G argued that without a valid transfer agreement signed between Club A and Club E, the contract could not be deemed a valid and binding employment contract. Both parties also emphasized that the player did not understand Spanish, the language in which the document was drafted. Club E further invoked art. 18 par. 3 and 5 of the Regulations arguing that since Club A did not have the consent of Club E when it signed the player, the contract could not be valid and biding.

10. With respect to the player’s allegation that the contract was in Spanish, a language that he presumably does not understand, the Chamber deemed it fit to emphasise that in accordance with the constant jurisprudence of the DRC, a party signing a document of legal importance without knowledge of its precise contents, as a general rule, does so on its own responsibility. Consequently, the Chamber concluded that such argument could not be upheld. The Chamber felt comfortable with this conclusion in view of the unequivocal acknowledgment of the player at a later stage regarding his intention to conclude a contract with Club A.

11. With this established, the Chamber went on to analyse the Respondents’ argumentation that since no transfer agreement had been formalized and signed between Club A and Club E, the contract should be rendered invalid. First of all, the DRC considered appropriate to highlight that the transfer agreement and the employment contract are two separate agreements with different objects and parties. Furthermore, the DRC considered of the utmost importance to highlight that, in principle, the validity of the employment contract cannot be made conditional upon the formalization of a transfer agreement, which is a legal act between clubs on which the player has no influence.

12. In any case, the DRC put forward that the contract did not contain a clause which would subject the validity of the contract to the signature of a transfer agreement between Club A and Club E.

13. For these reasons, the members of the Chamber decided to reject the Respondents’ argumentation in this regard.

14. Regarding the argumentation of Club Ethat as per art. 18 par. 3 and 5 of the Regulations, the contract could not be deemed a valid and binding employment contract, the DRC noted that these provisions do not concern the validity of an employment contract but rather the steps which a club must follow prior to concluding an employment contract with a player (art. 18 par. 3), respectively the consequences for a player concluding two employment contracts covering the same period (art. 18 par. 5), and therefore did not endorse Club E’ line of argumentation in this respect.

15. Finally, the Chamber was eager to underline that not only had the player signed the contract, but he had also signed a registration request with the Football Federation of Country B, and went through a medical examination, which was mentioned as mandatory, in the contract, thus, in the opinion of the Chamber, demonstrating a strong will of the player to join Club A under the clear terms defined in the contract.

16. On account of all of the above, the members of the Chamber unanimously concluded that a valid and binding employment contract had been entered into by and between the player and Club A on 7 August 2018.

17. Having established that a valid and legally binding employment contract had been in force between the player and Club A, the Chamber went on to analyse as to whether such contract had been breached and, in the affirmative, which party is to be held liable for such possible breach.

18. In this respect, the DRC first started by recalling that the player and Club A had signed an employment contract valid as from 7 August 2018 until 30 June 2022, and that on 8 August 2018, the player left Club A and went back to Club E. The Chamber further recalled that it is uncontested that on 12 August 2018, the player played an official game with Club E, and that on 18 August 2018, he terminated the contract with Club A arguing, initially, that he believed that no valid contract had been signed since the transfer agreement had not been formalized, that he did not understand that he was signing an employment contract, and that he was misled by Club A and an intermediary.

19. The Chamber further recalled that in his duplica, the player asserted that he actually intended to sign the contract with Club A, wanted to join the club, and regretted signing the termination letter as well as that he was pressured by Club E to sign the termination letter even though he did not agree with the terms of said letter.

20. Taking all of the above into account, the Chamber was of the unanimous opinion that the player did not provide any valid reason as to the termination of the contract with Club A, and what is more, that he actually acknowledged that he regretted signing said termination.

21. On account of the above, the DRC was of the view that the player unilaterally terminated the contract without any valid reason, and consequently, is to be held liable for the early termination of the employment contract without just cause.

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

23. As a consequence of the aforementioned conclusion, the DRC established that, in accordance with art. 17 par. 1 of the Regulations, the player is liable to pay compensation to Club A. Furthermore, in accordance with the unambiguous contents of art. 17 par. 2 of the Regulations, the Chamber established that the new club shall be jointly and severally liable for the payment of compensation. In this respect, the Chamber was nonetheless eager to point out that the joint liability of the new club is independent from the question as to whether the new club has induced the contractual breach. This conclusion is in line with the well-established jurisprudence of the Chamber and has been confirmed by CAS.

24. With regards to the identity of the new club, the Chamber duly considered that the present matter is not a straight forward affair in this respect and required a thorough examination in order to determine the identity of the new club. The DRC further noted that both Club E and Club G deemed that they, respectively, were not the new club and provided several arguments in this respect.

25. In this regard, the DRC recalled that Club E argued that it cannot be considered the new club as it was, prior to the breach of contract of the player, his former club. Club E added that the player was continuously registered with Club E as from the beginning of his contract with Club E in 2016 until his transfer to Club G and subsequent registration on 24 August 2018.

26. The DRC recalled that Club G on its end argued that it should not be considered the new club, as the player left Club A and went back to Club E where he resumed his obligations towards Club E, to the benefit of the latter since he played an official game with Club E.

27. In this regard, the DRC took into account that in accordance with the FIFA Commentary on the Regulations for the Status and Transfer of Players, “whenever a player has to pay compensation to his former club, the new club, i.e. the first club for which the player registers after the contractual breach, shall be jointly and severally liable for its payment.” In this context, the DRC found it important to underline that in the matter at hand, the player was in fact never registered with Club A, and hence he remained registered with Club E, until he was finally registered with Club G on 24 August 2018.

28. In continuation, the DRC was of the firm opinion that in the sense of art. 17 par. 2 of the Regulations and taking into account the specificity of the case at hand, the new club should be understood as the club benefitting directly from the breach of the contract by the player. With that in mind, the members of the Chamber reached a consensus that Club E was the club which benefitted directly from the breach as the player went back to Club E following the signing of the employment contract with Club A, and was subsequently transferred by Club E to Club G in exchange of a transfer fee of EUR 4,000,000.

29. Indeed, it needs to be emphasised that due to the breach of contract of the player, Club E was able to transfer the player to Club G in exchange of a transfer fee of EUR 4,000,000 which was higher than the amount initially agreed upon by Club E and Club A of EUR 3,000,000, and therefore, without a doubt, benefitting directly in the form of a profit of EUR 1,000,000 from the breach of contract by the player.

30. Consequently, the members of the DRC concluded that Club E is to be considered the new club of the player in the sense of art. 17 par. 2 of the Regulations.

31. Having stated the above, the Chamber focussed its attention to the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly pointed out 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(s), the time remaining on the existing contract up to a maximum of five years as well as the fees and other expenses paid or incurred by the former club (amortised over the term of the contract) and whether the contractual breach falls within a protected period. The DRC recalled that the list of objective criteria is not exhaustive and that the broad scope of criteria indicated tends to ensure that a just and fair amount of compensation is awarded to the prejudiced party.

32. 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 Chamber reverted to the two clauses of the contract invoked by the Claimant in support of its claim for compensation.

33. The Chamber recalled art. 1.2 and 1.3 of the annex to the contract provide that “the player may terminate this employment contract without being subject to stability or binding terms […] as long as he indemnifies the club in the amount and terms established below by mutual agreement between the parties and absolute freedom. […] [the player] must pay as compensation to Club A on the date of termination and in cash, the amount of EUR 40,000,000, plus the corresponding taxes […].”

34. In this regard, the DRC took note of the argumentation of the Claimant according to which the amount of EUR 40,000,000 must be awarded to it as compensation for breach of contract, in application of the employment contract, in particular art. 1.3 of the annex to the contract. Club A added that that clause is valid in application of Country B law.

35. In this respect, the Chamber duly analysed the contents of said clause and was of the unanimous opinion that the amount provided in it was clearly and grossly disproportionate and that said amount cannot be used as the basis for determining the compensation for breach of contract in this matter. Therefore, the DRC decided to disregard such clause.

36. With regards to art. 1.4 of the annex to the contract, the DRC recalled that such clause would be applicable in the case of a termination by Club A. In the matter at hand, the contract was terminated by the player, consequently the scenario provided by art. 1.4 of the annex did not happen in the matter at hand.

37. In light of the above, the Chamber considered that the analysed clauses cannot be considered by the DRC when establishing the amount of compensation for breach of contract.

38. As a consequence, the members of the Chamber determined that the amount of compensation payable in the case at stake had to be assessed in application of art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable. Therefore, other objective criteria may be taken into account at the discretion of the deciding body. In this regard, the Dispute Resolution Chamber stated beforehand that each request for compensation for contractual breach has to be assessed by the Chamber on a case-by-case basis taking into account all specific circumstances of the respective matter.

39. Consequently, in order to estimate the amount of compensation due to Club A in the present case, the Chamber determined that an objective criteria is the market value of the player at the time of termination. In this regard, the DRC recalled that the player terminated the contract on 18 August 2018. The DRC further recalled that on 22 August 2018, i.e. 4 days after the termination, the player was transferred to Club G for the total amount of EUR 4,000,000.

40. In this regard, the members of the Chamber were of the unanimous opinion that the amount of money a club is willing to pay for the transfer of the player at practically the day of the breach, can be considered an objective indicator of the market value of the player at the date of breach.

41. Taking into account this objective criteria and the specific facts of the matter at hand, the Dispute Resolution Chamber decided that the total amount of EUR 4,000,000 was to be considered a reasonable and justified compensation for breach of contract in the case at hand.

42. As a consequence, on account of all of the above-mentioned considerations, the Chamber decided that the player must pay the amount of EUR 4,000,000 to the Claimant as compensation for breach of contract. Furthermore, in accordance with art. 17 par. 2 of the Regulations, the Respondent 2, i.e. Club E is jointly and severally liable for the payment of the relevant compensation.

43. In continuation, the Chamber focused on the further consequences of the breach of contract in question and, in this respect, addressed the question of sporting sanctions against the player in accordance with art. 17 par. 3 of the Regulations. The cited provision stipulates that, in addition to the obligation to pay compensation, sporting sanctions shall be imposed on any player found to be in breach of contract during the protected period.

44. With regard to the quoted provision, the Chamber emphasised that a suspension of four months on a player’s eligibility to participate in official matches is the minimum sporting sanction that can be imposed for breach of contract during the protected period. This sanction, according to the explicit wording of the relevant provision, can be extended in case of aggravating circumstances. In other words, the Regulations intend to guarantee a restriction on the player’s eligibility of four months as the minimum sanction. Therefore, the relevant provision does not provide the possibility for the deciding body to reduce the sanction under the fixed minimum duration in case of mitigating circumstances.

45. In this regard, the Chamber recalled that the breach of contract by the player had occurred during the applicable protected period. Consequently, the Chamber decided that, by virtue of art. 17 par3 of the Regulations, the player had to be sanctioned with a restriction of four months on his eligibility to participate in official matches.

46. Finally, the members of the Chamber turned their attention to the question of whether, in view of art. 14 par. 4 of the Regulations, the player’s new club, i.e. Club E, must be considered to have induced the player to unilaterally terminate his contract with the Claimant without just cause during the protected period, and therefore shall be banned from registering any new players, either nationally or internationally, for two entire and consecutive registration periods.

47. In this respect, the Chamber recalled that, in accordance with the aforementioned provision, it shall be presumed, unless established to the contrary, that any club signing a professional player who has terminated his previous contract without just cause has induced that professional to commit a breach.

48. With the above in mind, the members of the Chamber considered it important to recall that, in consideration of the entire circumstances of the matter at hand, the timeline of events, the documentation on file and especially the duplica of the player in which he explicitly explained that he only signed the termination letter, under pressure and following a threat from Club E, the DRC formed the firm belief that Club E was in fact involved directly with the player’s decision to unilaterally terminate his employment contract with the Claimant.

49. In light of the aforementioned and given that Club E did not provide any specific or plausible explanation as to its possible non-involvement in the player’s decision to unilaterally terminate his employment contract with the Claimant, the DRC had no option other than to conclude that Club E had not been able to reverse the presumption contained in art. 17 par. 4 of the Regulations and that, accordingly, the latter had induced the player to unilaterally terminate his employment contract with the Claimant.

50. In view of the above, the Chamber decided that in accordance with art. 17 par. 4 of the Regulations, Club E shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision. On account thereof, in accordance with the fourth sentence of art. 17 par. 4, the club shall be able to register new players, either nationally or internationally, only as of the next registration period following the complete serving of the relevant sporting sanction.

51. In conclusion, the DRC decided that the claim of Club A is partially accepted and that the player has to pay to Club A EUR 4,000,000 as compensation for the unilateral and premature termination of the contract without just cause during the protected period.

In this respect, the DRC also determined that Club E is jointly and severally liable for the payment of the above-mentioned amount of compensation to Club A.

52. Furthermore, the Chamber decided that the player shall be sanctioned with a restriction of four months on his eligibility to participate in official matches.

53. And finally, the Chamber established that Club E shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision.

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

III. Decision of the Dispute Resolution Chamber

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

2. The Respondent 1, Player C, is ordered to pay to the Claimant within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 4,000,000.

3. The Respondent 2, Club E, is jointly and severally liable for the payment of the aforementioned compensation.

4. In the event that the amount due to the Claimant in accordance with above-mentioned point 2 is not paid within the stated time limit, interest at the rate of 5% p.a. will fall due as of expiry of the aforementioned time limit and the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. The Claimant is directed to inform the Respondent 1, and the Respondent 2, 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.

6. A restriction of four months on his eligibility to play in official matches is imposed on the Respondent 1. This sanction applies with immediate effect as of the date of notification of the present decision. The sporting sanctions shall remain suspended in the period between the last official match of the season and the first official match of the next season, in both cases including national cups and international championships for clubs.

7. The Respondent 2 shall be banned from registering any new players, either nationally or internationally, for the two next entire and consecutive registration periods following the notification of the present decision.

8. Any further claims lodged by the Claimant are rejected.

*****

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:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl. CAS directives