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 24 August 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 24 August 2018,

in the following composition:

Geoff Thompson (England), Chairman

Johan van Gaalen (South Africa), member

Joaquin Evangelista (Portugal), member

Todd Durbin (USA), member

Stefano La Porta (Italy), member

on the claim presented by the club,

Club A, Country B

as Claimant

and the player,

Player C, Country D

as Respondent I

and the club,

Club E, Country D

as Respondent II

regarding an employment-related dispute between the parties

between the parties

I. Facts of the case

1. According to Club A (hereinafter: club or Claimant), on 1 July 2015, the player Player C, born on 25 March 1989 (hereinafter: player or Respondent I), signed a document entitled “Agreement” (hereinafter: agreement). In this regard, the Claimant submitted the alleged original version of said document, containing the signature of Mr X on behalf of the club, the alleged signature of the player, a signature of Mr XX “on behalf of the player”, as well as signatures of two witnesses.

2. According to the agreement, the parties “undertake to sign a Contract (definitive labor and federative contract) for a period of four and a half seasons, effective from January 2, 2016 until May 31, 2020, under the conditions set below”.

3. According to the agreement, the club undertook to pay the player, inter alia, the following amounts:

- EUR 150,000 within 2 days of signing the agreement;

- EUR 150,000 upon signing of “the definitive contract”, after a medical test.

- EUR 38,000 payable on 31 May 2016.

- EUR 177,500 payable in 5 instalments of EUR 35,500 between January 2016 and June 2016;

- EUR 355,000 for each of the football seasons 2016/2017, 2017/2018, 2018/2019 and 2019/2020 payable in 10 instalments of EUR 35,500 between September and June of the respective years.

4. According to Art. 2.6 of the agreement, “Both sides also declare that that, they will sign the official Football Federation of Country B Professional Football Players’ Contract with the same conditions”.

5. Art. 2.7 of the agreement reads as follows: “The parties agree that the breach by either party of the obligations undertaken in this contract will be settled in accordance with Article 17 of the RSTP, leaving the infringing party obliged to pay the innocent party a penalty of US$ 1,000,000 (one million american dollars). In the event that the player refrains from signing the Contract (definitive labor and federative contract) and/or does not provide the necessary documents for registration despite the payment of 150,000 EUR signing fee by the Club […] the Player shall be obliged to pay this US$ 1,000,000 (one million american dollars) settled above to the Club”.

6. According to Art. 2.8 of the agreement: “Mr XX signs this Agreement on behalf of the player and in accordance with the public instrument of powers attached, valid and effective at the moment of the signature of the contract, although the player will signs this agreement too”.

7. On 2 July 2015, the club made a payment to the player in the amount of EUR 150,000.

8. On 8 December 2015, the player signed a contract with the club of Country D, Club E (hereinafter: Club E or Respondent II), valid as of 8 December 2015 until 31 December 2018, including a monthly gross salary of currency of Country D (currency of Country D) 90,000.

9. On 8 December 2015, the Claimant sent a letter to the player asking him when he would arrive in Country B and if he would need any further assistance from the club.

10. On 25 January 2016, the club sent a letter to Club E informing it about “a contractual breach without just cause” committed by the player, since he signed an agreement with the Claimant.

11. On 27 January 2016, an alleged legal representative of the player sent a letter to the Claimant stating that the player’s new born child has serious health issues, which prevent the player to travel to Country B in connection with the “contract with Club A”.

12. On 28 January 2016, the club sent a letter to the player referring to their previous letter dated 8 December 2015 and requesting him to fulfil his contractual obligations. The club provided the player with flight tickets and warned him that it would lodge a claim with FIFA if he would not honour the contract.

13. On 8 February 2016, the club sent an email to the player stating that its previous correspondence remained unanswered and that it would lodge a claim with FIFA since the player apparently signed another contract covering the same period than the contract signed with the Claimant.

The claim of the club:

14. On 31 May 2016, the club lodged a claim against the player and the club, Club E, in front of FIFA, and requested to be awarded the following monies, plus 5% interest p.a. as of 1 January 2016:

- USD 1,000,000 as compensation for breach of contract referring to art. 2.7 of the agreement;

- EUR 150,000 as reimbursement of the signing fee;

- CHF 10,000 as contribution to the club’s legal fees.

15. Furthermore, the club requested FIFA to “cancel the registration” of the player in Country D and instruct the player to fulfil his contract in Country B or, alternatively, award the club an additional compensation. Moreover, the club requested to impose sporting sanctions on the player as well as to declare the player’s new club jointly and severally liable. Finally, the club requested to be awarded reimbursement of its legal fees.

16. In its arguments, the club held that the parties signed a “pre-contract” on 1 June 2015, which represents a valid and binding employment contract since it contains all the essentialia negotii.

17. In this regard, the club referred to Art. 2.6 of the agreement (cf. par. I.4 above) and argued that, upon arrival in Country B, the player would have had to sign the same agreement on the template of the Football Federation of Country B.

18. Furthermore, the club maintained that the player decided long before his communication on 27 January 2016 that he would stay in Country D and that he breached his contract with the club without just cause.

19. Regarding the reported health issues of his child, the club brought forward that it could have been treated with the same quality in Country B as well.

20. In addition, the club held that Club E induced the player to breach his contract with the club.

21. Moreover, in case art. 2.7 of the agreement would not be applied, the club submitted its calculation of compensation, amounting to a total of EUR 760,052, as follows:

- EUR 104,764 as residual value of the contract;

- EUR 5,870 as reimbursement of the already paid “leave compensation”;

- EUR 500,000 as “loss of the player’s services and replacement value”;

- EUR 149,418 as additional compensation in accordance with the “specificity of sport” corresponding to six monthly salaries of the player.

Reply of the player:

22. In his answer, the player rejected the club’s claim and held having never signed the agreement or empowered anyone to sign on his behalf. In this regard, the player claimed that his signature on the agreement was forged.

23. Alternatively, in case the Dispute Resolution Chamber would decide that the player breached a contract, he requested to be liable to pay compensation in the amount of EUR 150,000 only, as reimbursement of the amount received.

24. The player argued that he was contacted by the club for the first time in May 2015, when he referred to his current employment contract still running for more than 6 months.

25. According to the player, the club sent him an offer and a draft of a pre-contract in June 2015, when he agreed to open “exclusive negotiations for the upcoming couple of months” with the club under the condition of a payment of EUR 150,000.

26. Subsequently, in September 2015, the player’s wife gave birth to their son, who allegedly suffers “serious congenital problems”.

27. According to the player, in October 2015, he continued negotiating with the club, but finally communicated that he decided to stay in Country D.

28. Later, in November 2015, the player explained that he started negotiating a new contract with his club, Club E, which led to the employment contract signed on 8 December 2015 (cf. point I.8. above).

29. The player argued that, after comparing the signatures of the player in the employment contract concluded with Club E and the agreement, it is clear that the signature in the agreement was forged.

30. Furthermore, the player held that Art. 2.8 of the agreement (cf. point I.6. above) makes no sense. In this regard, he maintained that the wording of the clause is confusing since it refers to “agreement” and then to “contract” again.

31. Moreover, the player brought forward that the power of attorney attached to the agreement does not specifically entitle Mr XX to sign pre-contracts or employment contracts on behalf of the player.

32. Nevertheless, he argued that it is “bizarre” and “not logical” that the clause allegedly empowers Mr XX to sign on behalf of the player, if the player himself signs the agreement anyway.

33. The player raised further indications about the forgery of the agreement and pointed out, that:

- Art. 2.7 of the agreement is “scratched, scribbled and words adultered, as well as inserted”;

- Page 6 of the agreement contains an “unreadable fourth signature”.

On account of the above, the player argued that the agreement is “invalid”.

34. Additionally, the player held that the club has not presented evidence of any damages suffered due to the alleged breach and that under the special circumstances of the case at hand, only if such breach indeed occurred, the player should only be compelled to reimburse the amount paid by the club, i.e. EUR 150,000, as compensation.

Reply of Club E:

35. In its reply to the claim, Club E rejected the club’s arguments and pointed out that neither the player nor the Claimant did inform it about such an alleged agreement.

36. In this regard, Club E confirmed that there were rumours about such an agreement, which were categorically denied by the player.

37. Further, the Respondent II brought forward that it remained undisputed that it never received any communication from the club. In this regard, Club E argued that according to FIFA regulations, the club should have informed it about the negotiations and the alleged agreement.

38. On account of the above, in case there was a valid and binding agreement between the player and the Claimant, Club E argued that it should not be held jointly and severally liable for a possible compensation, since it was not aware of such agreement.

39. Moreover, and in line with the above, the Respondent II rejected having induced the player to breach the agreement.

The club’s replica:

40. The club reiterated its position and argued that there is no evidence of the player’s allegation that the payment of EUR 150,000 was made in order to start negotiations, but it is directly linked to the agreement signed.

41. In order to proof that the player himself signed the agreement, the club submitted the following documents:

- A witness statement of Mr X, dated 11 April 2017, who stated that he travelled to Country D on behalf of the club and signed the agreement, in presence of the the player and his father, Mr XX.

- A printout of a tweet of the player’s alleged Twitter account (@Player C), dated 5 July 2015, allegedly showing the player signing the agreement. The tweet reads as follows: “Sad but happy, I am leaving although with my head high. I would like to thank everyone for your support until today”.

- A printout of a retweet of the player’s alleged Twitter account (@Player C), dated 12 July 2015, showing the player in the shirt of the club.

The player’s duplica:

42. The player reiterated his position and denied having posted anything about the matter at stake on twitter. He argued that his official twitter account is @Player C and not the account referred to by the club (@Player C). In this regard, the player held that the account the club refers to does not contain the “blue verified badge”, which confirms the authenticity of the account.

43. Furthermore, the player maintained that even if he would have posted the alleged tweets, there is still no proof that he actually signed the agreement and that the piece of paper in front of him in the picture indeed is the agreement.

44. Moreover, the player explained that even if he would wear the jersey of the club, this would not mean that an employment relationship was established. In this regard, the player submitted a printout of a picture showing the players Player F, Player G, Player H and Player J in a shirt of the Club K, which did not mean they signed contracts with this club.

45. Additionally, the player submitted an “Expert’s Forensic signature examination opinion” dated 9 October 2017, comparing the signature of the player of an employment contract dated 1 May 2011 as well as the signature of an addendum signed by the player on 6 September 2014, to the alleged signature of the player on the agreement.

46. The result of the examination reads as follows: “In the opinion of this Expert, the challenged signatures were not made by Mr. Player C”. The expert lists divergences of the signatures in “graphic pace”, “attack and finishing off”, “method of contruction”, “graphic rhythm”, “graphic moments”, “graphic minimums”, “morphogenesis”, “grams” as well as in the “angels and curve values”.

The Club E’s duplica:

47. Club E reiterated its position and pointed out that the Claimant did not submit any comments about the fact that it never communicated about negotiations or the conclusion of an agreement with the player to Club E.

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 31 May 2016. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2015; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition June 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 club of Country B, a player of Country D 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 (edition June 2018), and considering that the present claim was lodged on 31 May 2016, the 2015 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 the Claimant lodged a claim against the Respondent I on the basis of an alleged agreement signed on 1 July 2015. The Claimant held that the parties signed said agreement with the specific objective to sign a definite contract six months later. What is more, the Claimant requested the reimbursement of the signing fee paid in connection with the agreement as well as the reimbursement of the occurred legal fees.

6. The Respondent I, on the other hand, denied having signed said agreement and claimed the signature on this document was forged. In this regard, he rejected the club’s claim and stated that the payment he received had the sole purpose of starting to negotiate terms of a contractual relationship that was never established.

7. In view of the allegations and arguments presented by the parties involved in the present matter, the Chamber underlined that, in order to be able to establish as to whether, as claimed by the Claimant, a breach of contract had been committed by the Respondent I, it should first of all pronounce itself on the issue of the validity of the relevant agreement dated 1 July 2015.

8. In view of this dissent between the Claimant and the Respondent I in respect of the basic above-mentioned underlying question, the members of the Chamber firstly referred to art. 12 par. 3 of the Procedural Rules, according to which any party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. The application of the said principle in the present matter led the DRC to conclude that it was up to the Claimant to prove that the alleged agreement, on the basis of which it claimed compensation for breach of contract from the Respondents, indeed was concluded between the Claimant and the Respondent I. In this respect, the members of the Chamber took into account different indications.

9. First, the Chamber took note of the evidence provided by the Claimant and recalled that the club produced the alleged original version of the document at the basis of the dispute.

10. However, the members of the Chamber deemed it important to recall that, according to the DRC’s well established jurisprudence, as a general rule, FIFA’s deciding bodies are not competent to decide upon matters of criminal law, such as the ones concerning falsified signature of documents, and that such affairs fall into the jurisdiction of the competent national criminal authority.

11. In respect of the above, the members of the Chamber, nevertheless, pointed out that, that pursuant to art. 12 par. 6 of the Procedural Rules, all the documentation remitted would be considered with free discretion and, therefore, they focused their attention on the version of the alleged agreement produced by the Claimant as well as on other documents uncontestably containing the Respondent I’s signature, provided by the parties in the context of the present dispute.

12. The members of the DRC, thus, proceeded to thoroughly examine the documents on file. In particular, they compared the relevant signatures of the Respondent I in the various documents provided in the present affair and had no other option but to conclude that, for a layman, the signatures on the documents the validity of which was not contested, such as the Respondent I’s new employment contract with the Respondent II, appear to be similar to the one placed on the alleged agreement.

13. In addition, even though disputing having signed the agreement, the player acknowledged having held negotiations with the Claimant as well as having received an amount of EUR 150,000 (cf. point I.3 and I.7 above). The Respondent I claimed having received said amount for the purpose of entering into negotiations with the Claimant. However, taking into account the specific circumstances as well as the content of the agreement in question, which provided a sign-on fee of EUR 150,000, the DRC assessed said payment as an indication that the parties executed the agreement at hand.

14. Finally, as a further indication, the Chamber took note of an implicit acknowledgement of the agreement by a representative of the player in a letter sent to the club on 27 January 2016 (cf. point I.11. above). In said correspondence, the reasons why the player would be unable to travel to Country B in connection with the “contract with Club A” were explained.

15. Nevertheless, the DRC also took into account the expert opinion provided by the Respondent I (cf. point I.45. above), but concluded that said opinion is not sufficient, in and of itself, to outweigh the indications mentioned before (cf. point II.12., II.13. and II.14.).

16. In light of the foregoing, the members of the Chamber decided that the document presented by the Claimant in support of its allegation of having concluded the agreement with the Respondent I would be taken into account and that the agreement therefore was legally binding between the parties.

17. On account of the above, the DRC continued to establish the legal nature of the agreement. In this regard, the members of the Chamber noted that the agreement clearly refers to the intention of the parties to conclude an actual contract at a later stage. It defines the payments, the amounts and a penalty in case one party would refrain from signing a contract at a later stage. As such, it appears that the agreement is an actual pre-contract, according to which the parties’ sole obligation was to conclude a definitive contract in the future.

18. In this respect, the Chamber noted that, contrary to the agreement signed on 1 July 2015, the player concluded an employment contract with the Respondent II on 8 December 2015. Therefore, it is evident that the obligation to conclude a definitive contract between the Claimant and the Respondent I was not fulfilled by the player. In this context, the DRC concluded that the Respondent I, by not concluding a definitive contract with the Claimant, breached the agreement and thus, triggered the penalty clause under art. 2.7. of the same agreement.

19. Having stated the aforementioned, the Chamber turned its attention to the content of the above-mentioned penalty clause (cf. point I.5. above), which stipulates, inter alia, that “In the event that the player refrains from signing the Contract (definitive labor and federative contract) and/or does not provide the necessary documents for registration despite the payment of 150,000 EUR signing fee by the Club […] the Player shall be obliged to pay this US$ 1,000,000 (one million american dollars) settled above to the Club”.

20. In this respect, the DRC, as deciding body, has the discretion to analyse and, if necessary, to reduce the penalty in case it finds it to be excessive and disproportionate.

21. Considering the terms of the agreement, which pre-determined the player’s remuneration between 2 January 2016 until 31 May 2020 in case of an established employment relationship, the Chamber noticed that said penalty clause amounts to more than twice the value of the player’s yearly income.

22. As a result, the Chamber unanimously concluded that such an amount provided as penalty fee under art. 2.7. of the agreement is excessive and disproportionate and therefore not acceptable.

23. On account of the above, the members of the Chamber decided to reduce the penalty fee and in this regard, to follow the provisions of Swiss law regarding interest rates by analogy. In doing so, the DRC reduced the penalty fee to the maximum interest rate allowed by Swiss law and the DRC jurisprudence, i.e. 18%. As a consequence, the Chamber reduced the penalty fee payable by the Respondent I to the Claimant to USD 180,000.

24. In addition, as regards the claimed legal expenses, the Chamber referred to art. 18 par. 4 of the Procedural Rules as well as to its long-standing and well-established jurisprudence, in accordance with which no procedural compensation shall be awarded in proceedings in front of the Dispute Resolution Chamber. Consequently, the Chamber decided to reject the Claimant’s request relating to legal expenses.

25. The Chamber concluded its deliberations in the present matter by establishing that any further claims of the Claimant are rejected.

III. Decision of the Dispute Resolution Chamber

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

2. The Respondent I, Player C, has to pay to the Claimant, the amount of USD 180,000 as penalty fee, within 30 days as from the date of notification of this decision.

3. In the event that the aforementioned amount is not paid by the Respondent I 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.

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

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

*****

Note relating to the motivated decision (legal remedy):

According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).

The full address and contact numbers of the CAS are the following:

Court of Arbitration for Sport (CAS)

Avenue de Beaumont 2

CH-1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl.: CAS directives