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 9 May 2019

Player A, Country B / Club C, Country D / Club E, Country B Page 1 of 12

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 9 May 2019,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), member

Eirik Monsen (Norway), member

Todd Durbin (USA), member

Pavel Pivovarov (Russia), member

on the claim presented by the player,

Player A, Country B,

as Claimant / Counter-Respondent

against the club,

Club C, Country D,

as Respondent / Counter-Claimant

and the club,

Club E, Country B,

as Intervening Party

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 14 February 2015, the Player of Country B, Player A (hereinafter: the player or Claimant / Counter-Respondent) and the Club of Country D, Club C (hereinafter: Club C or Respondent / Counter-Claimant), signed an employment contract, valid as from the date of signature until 30 June 2019.

2. By means of the “Football Player’s Contract Schedule”, included in the contract, the player was entitled to a total remuneration of EUR 8,000,000, as follows:

a. EUR 500,000 for the 2014/2015 season.

b. EUR 1,500,000 for the 2015/2016 season, as follows:

i. EUR 300,000 as “advanced payment” due “in September 2015”;

ii. EUR 100,000 as monthly salary as from 1 July 2015 until 30 June 2016.

c. EUR 2,000,000 for the 2016/2017 season, as follows:

i. EUR 400,000 as “advanced payment” due “in September 2016”;

ii. EUR 160,000 as monthly salary as from 1 September 2016 until 30 June 2017.

d. EUR 2,000,000 for the 2017/2018 season, as follows:

i. EUR 400,000 as “advanced payment” due “in September 2017”;

ii. EUR 160,000 as monthly salary as from 1 September 2017 until 30 June 2018.

e. EUR 2,000,000 for the 2018/2019 season.

3. According to art. 10 (3) of the contract, “when the termination of the Contract is not due to a just cause or a mutual agreement between the Parties concerned, [Club C] or the Player shall be entitled to receive from the other party in breach of the Contract a compensation for a net amount:

- To [Club C], Euro 20.000.000

- To the player (…), (the remaining salary of the contract)”.

5. On 17 March 2016, the player wrote a letter to Club C, requesting the payment of the outstanding monthly salaries corresponding to January, February and March 2016.

6. By letter dated 3 April 2016, the player communicated to Club C that it had not paid his salaries for the last three months, that his default letter of 17 March 2016 had remained unanswered and that, as a consequence, he terminated the contract with immediate effect.

7. On 6 September 2017, the player lodged a claim in front of FIFA against Club C, maintaining that Club C had breached the contract and that he terminated it with just cause. In particular, the player requested:

a. EUR 300,000 as outstanding remuneration for the months January, February and March 2016, plus 5% interest p.a. as from the last day of each respective month until the date of effective payment;

b. EUR 6,300,000 as compensation for breach of contract;

c. Sporting sanctions on Club C.

8. According to the player, on 31 January 2016, Club C signed another foreign player. In this light, the player explained that the Regulations of the Football Association of Country D (hereinafter: “Regulations of Country D”) only permitted clubs to register 3 foreign players + 1 foreign player whose nationality is one of the Asian member federations.

9. As a result of this signing, the player argued that Club C de-registered him from playing competitions for the continuation of the 2015/2016 season.

10. As per the player, following his de-registration, Club C allegedly obliged him to train with the under-20 team or on his own.

11. Furthermore, as per the player, he did not receive his remuneration for the months of January, February and March 2016.

12. On 11 November 2017, Club C submitted its reply to the claim and lodged a counterclaim against the player, maintaining that the latter did not have a just cause to terminate the contract. In particular, Club C requested:

a. EUR 20,000,000 as compensation for breach of contract;

b. Sporting sanctions to be imposed on the player.

14. With regard to the alleged outstanding remuneration, Club C argued that, on the date it received the default letter (cf. supra point 5), only two salaries had been outstanding, and not three as the player claimed.

15. Consequently, according to Club C, and considering that up until that moment “only 13% of his annual payments were delayed”, the termination of the contract by the player was completely disproportional.

16. In addition, Club C argued that, in his default letter, the player had not warned it about his intention to terminate the contract. According to Club C, the player had failed to give it a chance to cure its default.

17. As regards the player’s alleged de-registration, Club C held that any de-registration would require the player’s consent, “otherwise it could not be done”.

18. Nevertheless, as per Club C, even in the case it de-registered the player for only half of the season, this would not have affected the contract, which was still valid and in force. In particular, this was demonstrated by the fact that the player was training regularly and being paid, “except for the months of January and February 2016”.

19. Furthermore, Club C considered that the player failed to substantiate that he was sent to train with the under-20 team, even though there is no provision in the contract that he must always train with the first team.

20. In his replica and reply to the counterclaim, the player firstly held that it remained undisputed that Club C had received his default letter of 17 March 2016. Consequently, as per the player, the legal pre-requisite of warning the club about its contractual breach had been fulfilled.

21. Moreover, the player argued that Club C owed him three salaries when he terminated the contract. In this context, the player claimed that, in addition to the January and February 2016 salaries, he had not received the March 2016 salary either.

22. Furthermore, the player pointed out that Club C never responded to the default letter nor to the subsequent termination letter. According to the player, Club C had not provided any statement whatsoever regarding the matter at stake until having submitted its reply to FIFA.

23. The player further argued that, after the alleged de-registration, he never played a match for Club C again, while four other foreign players were included in Club C’s team.

24. According to the player, it was thus beyond reasonable doubt that his de-registration occurred.

25. As regards his assertion that he was sent to train with the under-20 team, the player enclosed a number of messages exchanged between him and the coach during February 2016 and March 2016.

26. In its duplica, Club C firstly maintained that it had always fulfilled its contractual obligations, that only two months’ salary had been outstanding, that the player failed to warn it that it would terminate the contract and that, consequently, the player did not have a just cause to terminate the contract.

27. Moreover, Club C highlighted that the player’s arguments regarding his alleged de-registration are speculations since there was no evidence in support of them. As per Club C, the exhibits submitted by the player are general information as to its squad and performance.

28. With regard to the attached WhatsApp conversation between the player and the coach, Club C stated that there was no confirmation that this number belonged to the coach. Moreover, the conversation lacked any indication as to why Club C was preventing him from joining the main team, and/or that he was separated.

29. Upon request of the FIFA Administration, the player held that, on 14 July 2016, he signed an employment contract with Club E (hereinafter also referred to as: Intervening Party or Club E), valid as from the date of signature until 30 April 2017. According to the contract, the player was to obtain a monthly salary of 100,000.

30. The player further informed FIFA that, on 18 January 2017, he signed an employment contract with Club F, valid as from the date of signature until 15 December 2017. According to this contract, the player was to obtain a monthly salary of 36,000.

31. Moreover, the player informed FIFA that, on 30 January 2018, he signed an employment contract with Club G, valid as from 3 January 2018 until 31 December 2019. According to this contract, the player was to obtain a monthly salary of 180,000.

32. Furthermore, the player informed FIFA that on 18 July 2018 he signed an employment contract with Club H, valid as from the date of signature until 31 December 2018. According to this contract, the player was to obtain a monthly salary of 180,000.

33. Finally, the player informed FIFA that he signed an employment contract with the Club of Country J, Club K, valid as from 1 January 2019 until 30 June 2019. According to this contract, the player shall obtain the total amount of USD 850,000.

34. On 13 December 2018, upon invitation of the FIFA Administration, Club E submitted its comments on the present matter explaining that, in July 2016, the player informed it that he had terminated the contract due to outstanding remuneration by Club C.

35. Subsequently, as per Club E, after signing the employment contract on 14 July 2016, the Football Association of Country D delivered the ITC on 18 July 2016.

36. With regard to Club C’s counterclaim of 11 November 2017, Club E highlighted that the counterclaim was only filed against the player. As per Club E, Club C never accused it of inducing the player to terminate the contract, nor was Club E ever mentioned in any of the parties’ submissions.

37. According to Club E, it is easy to verify that the player terminated the contract with Club C with just cause, given the outstanding salaries and the default letter. Therefore, Club C was not entitled to claim compensation.

38. Furthermore, Club E pointed out that it negotiated the employment contract with the player several months after the termination of the contract with Club C.

39. For these reasons, Club E concluded that Club C’s counterclaim should be rejected in full.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as Chamber or DRC) analysed whether it was competent to deal with the matter at hand. In this respect, it took note that the player’s claim was submitted to FIFA on 6 September 2017 and that Club C’s counterclaim was submitted to FIFA on 11 November 2017. Consequently, the 2017 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: Procedural Rules) is 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. a of the Regulations on the Status and Transfer of Players (edition June 2018), the Dispute Resolution Chamber is in principle competent to deal with the matter at stake, which concerns an employment-related dispute between a Player of Country B and a Club of Country D.

3. In continuation, 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 player’s claim was lodged on 6 September 2017, as well as that Club C’s counterclaim was lodged on 11 November 2017, the 2016 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

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

5. Having said that, the members of the Chamber acknowledged that, on 14 February 2015, the player and Club C concluded an employment contract, valid as from the date of signature until 30 June 2019, according to which the player was entitled to a total remuneration of EUR 8,000,000. More specifically, with regards to the season 2015/2016, the members of the DRC observed that the player, on top of an “advance payment” of EUR 300,000, was entitled to a monthly salary of EUR 100,000 as from 1 July 2015 until 30 June 2016.

6. The DRC further acknowledged that, according to the player, he had just cause to unilaterally terminate the employment contract on 3 April 2016, due to the fact that, by the time of termination, Club C had failed to remit him the total amount of EUR 300,000, consisting of his salaries for the months of January, February and March 2016.

7. The members of the Chamber equally took into account that, according to the player, Club C de-registered him on 31 January 2016.

8. In continuation, the members of the Chamber noted that Club C, for its part, held that the player had no just cause to prematurely put an end to the employment relationship, mainly due to the fact that, according to it, at the time he terminated the contract, only the salaries for January and February 2016 were outstanding.

9. On account of the above, the Chamber highlighted that the underlying issue in this dispute was to determine whether the employment contract had been terminated by the player with just cause or not and, in the affirmative, to determine the consequences thereof.

10. In this respect, the members of the DRC first turned their attention to the player’s allegation that, on 31 January 2016, Club C signed another foreign player and, consequently, de-registered him from playing competitions for the continuation of the 2015/2016 season. In this respect, the Chamber – bearing in mind art. 12 par. 3 of the Procedural Rules, in accordance with which any party claiming a right on the basis of an alleged fact shall carry the burden of proof – observed that the player provided excerpts of the Regulations of the Football Association of Country D (hereinafter: Football Association L), which seem to provide that Clubs of Country D may only register 3 foreign players + 1 foreign player whose nationality is one of the Asian member federations. Furthermore, according to the player’s passport issued by the Football Association L and available on the Transfer Matching System (TMS), the player was indeed de-registered from Club C on 31 January 2016.

11. Although confident of the exhaustiveness of the foregoing line of reasoning, the DRC further observed, for the sake of completeness, that the player provided abstracts from ‘Transfermarkt’ from which, inter alia, it emerges that he played in 13 games between 12 September 2015 and 28 January 2016, whereas he was not included in the complete line-ups of players for three games played between 5 February 2016 and 28 February 2016.

12. In light of all the above, the DRC could, therefore, concur in the conclusion that the player had been de-registered from Club C on 31 January 2016.

13. In continuation, the members of the Chamber also took due note of Club C’s position that any de-registration requires a player’s consent “otherwise it could not be done” and that, even in the case it de-registered the player for only half of the season, this would not have affected the contract, which was still valid and in force.

14. In this respect, first of all, the members of the Chamber considered important to point out, as it has been previously sustained by the DRC, that among a player’s fundamental rights under an employment contract, is not only his right to a timely payment of his remuneration, but also his right to access training and to be given the possibility to compete with his fellow team mates in the team’s official matches.

15. Moreover, and referring to Club C’s position, the DRC deemed it worth recalling that, by de-registering a player, even for a limited time period, a club is effectively barring, in an absolute manner, the potential access of a player to competition and, as such, is violating one of his fundamental rights as a football player. Therefore, the Chamber established that the de-registration of a player could in principle constitute a breach of contract, in and by itself, since it de facto prevents a player from being eligible to play for his club.

16. The foregoing having been established, and bearing in mind that the player alleged that he had accrued 3 month-salary worth of outstanding remuneration towards Club C, the members of the DRC turned their attention to the core of the matter in order to establish whether the player had terminated the employment contract with or without just cause on 3 April 2016.

17. In this respect, first of all, the DRC observed that it remained undisputed that Club C failed to remit to the player his salaries of January and February 2016. Therefore, the DRC concluded that it remained to be seen whether the player’s salary of March 2016 remained outstanding as well by the time he terminated the employment contract on 3 April 2016.

18. In this context, the Chamber deemed important to point out, bearing in mind the recalled art. 12 par. 3 of the Procedural Rules, that – on the one hand – the player provided a copy of his bank balance for the period between 1 March and 3 April 2016 from which no payments from Club C are to be seen anywhere. The DRC then observed that, on the other hand, Club C did not provide any documentary evidence in relation to a payment performed towards the player concerning his salary of March 2016.

19. Consequently, the DRC underlined that, by the time the player terminated the employment contract on 3 April 2016, his salaries of January, February and March 2016 were outstanding, for a total amount of EUR 300,000.

20. On account of all the aforementioned considerations, the Chamber decided that the player had just cause to terminate the employment contract on that day and that Club C is to be held liable for the early termination of the employment contract with just cause by the player.

21. Consequently, the Chamber decided to fully reject Club C’s argumentation and counterclaim.

22. In continuation, prior to establishing the consequences of the termination of the employment contract with just cause by the player, the Chamber decided that Club C must fulfil its obligations as per the employment contract in accordance with the general legal principle of “pacta sunt servanda”. Consequently, the Chamber decided that Club C is liable to pay to the player the remuneration that was outstanding at the time of the termination. In this regard, the Chamber established that the amount of EUR 300,000, consisting of the player’s salary for the months of January, February and March 2016, remained unpaid at the time.

23. Therefore, the Chamber decided that Club C must pay outstanding remuneration in the amount of EUR 300,000 to the player.

24. In addition, taking into consideration the player’s claim and bearing in mind that the employment contract does not contain any provision concerning the day on which the monthly salaries were due, the Chamber decided to award him interest at the rate of 5% p.a. on each monthly salary overdue as of the first day following the relevant month.

25. In continuation and having established that Club C is to be held liable for the early termination of the employment contract with just cause by the player, the Chamber decided that, taking into consideration art.17 par. 1 of the Regulations, the player is entitled to receive from Club C compensation for breach of contract in addition to the aforementioned outstanding remuneration.

26. In this context, the Chamber outlined that, in accordance with the recalled provision, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the player under the existing contract and/or the new contract, the time remaining on the existing contract up to a maximum of five years, and depending on whether the contractual breach falls within the protected period.

27. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract. In this regard, the members of the Chamber recalled that, according art. 10 (3) of the contract, “when the termination of the Contract is not due to a just cause or a mutual agreement between the Parties concerned, [Club C] or the Player shall be entitled to receive from the other party in breach of the Contract a compensation for a net amount: - To [Club C], Euro 20.000.000; - To the player […], (the remaining salary of the contract)”. In other words, the DRC observed that the compensation clause contained in the employment contract granted, for the same occurrence, EUR 20,000,000 to Club C and the residual value of the employment contract to the player, depending on which party was found to be responsible.

28. The members of the Chamber agreed that this clause determines a disproportionate benefit in favour of Club C, i.e. although being reciprocal, it does not grant the same financial rights to the player, envisaging an amount of compensation which is, at the very least (i.e. a termination occurred three months after the signing of the contract), more than two times higher for Club C. Therefore, the DRC held that said clause cannot be taken into consideration in the determination of the amount of compensation.

29. As a consequence, the members of the Chamber determined that the amount of compensation payable by Club C to the player had to be assessed in application of the other parameters set out in art. 17 par. 1 of the regulations. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the employment contract as from its termination and concluded that the player would have received EUR 6,300,000 as remuneration had the employment contract been executed until its regular expiry date, i.e. until 30 June 2019 and that such amount shall serve as the basis for the final determination of the amount of compensation for breach of contract.

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

31. In respect of the above, the members of the DRC observed that, after the termination of the employment contract at stake, the player entered into 5 subsequent employment relationships with 5 different clubs.

32. More specifically, the Chamber recalled that, on 14 July 2016, the player signed an employment contract with Club E, valid as from the date of signature until 30 April 2017. According to the contract, the player was to obtain a monthly salary of 100,000. The DRC further noted that, on 18 January 2017, the player signed an employment contract with Club F, valid as from the date of signature until 15 December 2017, according to which, he was to obtain a monthly salary of 36,000. Furthermore, the Chamber took note that, on 30 January 2018, the player signed an employment contract with Club G, valid as from 3 January 2018 until 31 December 2019. According to this contract, he was to obtain a monthly salary of 180,000. Moreover, the DRC recalled that, on 18 July 2018, the player signed an employment contract with Club H, valid as from the date of signature until 31 December 2018. According to this contract, the player was to obtain a monthly salary of 180,000. Finally, the DRC recalled that the player signed an employment contract with the Club of Country J Club K, valid as from 1 January 2019 until 30 June 2019, according to which he was entitled to the total amount of USD 850,000.

33. In light of the above and applying the appropriate conversion rates, the members of the DRC concluded that, for the relevant period, the player was able to mitigate his damages for a total amount of EUR 1,575,000.

34. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that Club C must pay the amount of EUR 4,725,000 to the player as compensation for breach of contract.

35. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claim lodged by the player is rejected.

III. Decision of the Dispute Resolution Chamber

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

2. The Respondent / Counter-Claimant, Club C, has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 300,000, plus interest at the rate of 5% p.a. until the date of effective payment, as follows:

a. as from 1 February 2016, on the amount of EUR 100,000;

b. as from 1 March 2016, on the amount of EUR 100,000;

c. as from 1 April 2016 on the amount of EUR 100,000.

3. The Respondent / Counter-Claimant has to pay to the Claimant / Counter-Respondent, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of EUR 4,725,000.

4. In the event that the amount plus interest due to the Claimant / Counter-Respondent in accordance with the above-mentioned point 2. is not paid by the Respondent / Counter-Claimant within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision.

5. In the event that the amount due to the Claimant / Counter-Respondent in accordance with the above-mentioned point 3. is not paid by the Respondent / Counter-Claimant 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.

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

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

8. The counterclaim of the Respondent / Counter-Claimant is 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 / www.tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl. CAS directives