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 15 November 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 15 November 2018,

in the following composition:

Geoff Thompson (England), Chairman

Roy Vermeer (The Netherlands), member

Johan van Gaalen (South Africa), member

Wouter Lambrecht (Belgium), member

Pavel Pivovarov (Russia), member

on the claim presented by the player,

Player A, Country B

as Claimant

against the club,

Club C, Country D

as Respondent

regarding a dispute

arisen between the parties

I. Facts of the case

1. On 28 July 2017, the player of Country B, Player A (hereinafter: the Claimant), and the club of Country D, Club C (hereinafter: the Respondent), signed a settlement agreement “with the purpose of execution of the Decision of the Dispute Resolution Chamber of the Football Federation of Country D […] dated 17.07.2013 […] hereinafter – the DRC decision”.

2. More specifically, said agreement concerned the “failure by the [Respondent] to execute the DRC Decision”, according to which “the [Respondent] is obliged to settle the debt before the [Claimant] in the amount of 456 654,00 Euro […] on the basis of the exchange rate of the National Bank of Country D as of the date of the decision, and a compensation in the amount of 140 230,00 Euro […]”.

3. According to art. 2 of the settlement agreement, “the Parties have agreed to determine the order of execution of the DRC Decision on the basis of compromise terms as set out in this Settlement Agreement”.

4. Furthermore, according to art. 3 of the settlement agreement, “the Parties have agreed that the overall amount of debt of the [Respondent] before the [Claimant] […] shall be set in the amount of the equivalent of 300 000,00 Euro”.

5. Moreover, according to art. 4 of the settlement agreement, the Respondent undertook to pay the Claimant the above-mentioned sum in 24 instalments of different amounts (“the equivalent of” EUR 30,000 the first instalment, “the equivalent of” EUR 10,000 the following 7 and “the equivalent” of EUR 12,500 the remaining 16), falling due the 15th day of each month as from August 2017 until July 2019.

6. Art. 5 of the settlement agreement specified that the aforementioned amounts would be paid in EUR, USD “or any other currency agreed by the parties”.

7. Art. 8 of the settlement agreement established that “in the event that the [Respondent] delays the payment of the first payment, or any 2 (two) consecutive payments set out in para 4 of this Settlement Agreement”:

a. according to art. 8.1, “the [Respondent] shall pay to the [Claimant] as per his demand a fine in the amount of 5 per cent of the amount of the Debt that remains outstanding as of the moment of the receipt of the [Claimant]’s demand – in the event if the delay occurs in the period from the date of execution of this Settlement Agreement till 28.02.201[8]”;

b. according to the same provision, the Respondent shall pay “a fine in the amount of 10 per cent […] in the event the delay occurs in the period from 01.03.2018 till 31.08.2018”;

c. according to art. 8.2, “and/or (separately from payment of the fine in the relevant amount)” the Claimant “shall have the right to terminate this Settlement Agreement”. The same provision specified that, as a consequence of the termination, “the [Respondent] shall be obliged to pay the amounts specified by the DRC Decision reduced for the amounts already paid under the present Settlement Agreement […]”.

8. By letter dated 12 March 2018, the Claimant informed the Respondent that he had not received the total amount of EUR 30,000, corresponding to the instalments falling due on 15 December 2017, 15 January and 15 February 2018. With the same correspondence, the Claimant put the Respondent in default of payment of EUR 31,500 as per art. 8.1 of the settlement agreement and reminded the Respondent of the possibility of termination pursuant to art. 8.2 should the default persist within the following 10 days.

9. On 12 April 2018, the Claimant addressed the Respondent with a further correspondence, this time putting the latter in default of payment of EUR 33,000, as the instalments falling due on 15 January, 15 February and 15 March 2018 were outstanding.

10. By letter dated 25 April 2018, the Claimant unilaterally terminated the settlement agreement pursuant to its art. 8.2 due to the fact that the instalments falling due on 15 February, 15 March and 15 April 2018 were outstanding, asking to be paid the total amount of EUR 516,884. The Claimant informed the Respondent that said amount consisted in the difference between EUR 596,884 as “the amounts specified by the DRC Decision” and EUR 80,000 that the Respondent already paid under the settlement agreement.

11. On 2 May 2018, the Respondent replied to the Claimant acknowledging that the latter had “acquired the right […] to terminate” the settlement agreement and confirming their “resolute intention to return to the schedule of payments in course of May – beginning of June 2018” and to pay interest on the delayed payments. However, with the same correspondence, the Respondent disagreed on the amount claimed by the Claimant, pointing out that, instead, its indebtedness towards him was “approximately equal to” EUR 211,500.

12. On 16 May 2018, the Claimant lodged a claim against the Respondent in front of FIFA, requesting to be awarded the total amount EUR 516,884, plus 5% interest p.a. as from 26 April 2018 until the date of effective payment.

13. The Claimant further requested that the Respondent be ordered to pay “the legal costs and all other expenses of these proceedings”.

14. More specifically, the Claimant argued that, in July 2013, the DRC of the Football Federation of Country D had condemned the Respondent to pay him the total amount of EUR 596,884. The Claimant further recalled that, on 28 July 2017, the parties signed an agreement by means of which they agreed to settle their financial relationship with a payment of 24 instalments totalling EUR 300,000 that the Respondent should have performed following the schedule set out in art. 4 of the agreement (cf. point 5 above).

15. In this respect, the Claimant explained that, with significant delays concerning the payment of each instalment and after he had sent various default notices, the Respondent had paid the total amount of EUR 80,000. However, the Claimant maintained that the Respondent’s continuous delays exhausted his good faith and left him with no other choice than terminating the settlement agreement in accordance with its art. 8.2.

16. The Claimant added that the Respondent, through its correspondence dated 2 May 2018, recognised his entitlement to terminate the settlement agreement and consequently acknowledged its debt.

17. In its reply, the Respondent acknowledged being in debt towards the Claimant and recognised his right to terminate the settlement agreement, hoping to settle the case before it could be decided by FIFA. However, the Respondent pointed out that the DRC of the Football Federation of Country D had condemned it to pay the player EUR 456,654.25 “according to the exchange rate of the National Bank of Country D as of the day of this Decision passing” and compensation in the amount of EUR 140,230.60. Consequently, according to the Respondent, its indebtedness towards the Claimant consisted of 4,788,118.91 in the currency of Country D (i.e. the amount equivalent to EUR 456,654.25 as per the Respondent’s calculation) and EUR 60,230.60 (i.e. EUR 140,230.60 minus EUR 80,000 already paid under the settlement agreement).

18. In his replica, the Claimant reiterated his position, underlining that the Respondent’s alleged financial distress should not allow it to “refrain from complying with its payment obligations”. Concerning the amounts at stake, the Claimant explained that “the literal interpretation” of the agreement is “very clear and it is not necessary to go beyond” its text and, thus, confirmed his initial financial requests. In this respect, the Claimant argued that “any contrary interpretation” would mean to grant the Respondent “an additional discount as prize for having once again failed to comply with its long overdue payment obligations”.

19. In its duplica, the Respondent asked FIFA a postponement of the decision on the matter at hand in order to reach an amicable settlement with the Claimant, which, however, it deemed to be an unlikely scenario.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter also referred to as DRC or 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 16 May 2018. Consequently, the DRC concluded that 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 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 2018), the Dispute Resolution Chamber would, in principle, be competent to deal with the matter at stake, insofar as it would concern an employment-related dispute, between a player of Country B and a club of Country D.

3. Notwithstanding the above, the Chamber underlined that, as to its competence to entertain the present claim, it should consider the following facts which are at the basis of the specific litigation at hand.

4. In particular, the DRC recalled that the present claim stems from the Respondent’s alleged failure to comply with the obligations enshrined in a settlement agreement signed in July 2017, which – according to its preamble – had the “purpose of execution of the Decision of the Dispute Resolution Chamber of the Football Federation of Country D” of 2013.

5. Moreover, the members of the Chamber acknowledged that the above-mentioned agreement established the amount at which the parties agreed to settle the Respondent’s pending debt and provided, inter alia, that – in case the Respondent failed to observe the schedule of payments outlined therein – the Claimant would have the right to terminate the agreement and, as a consequence, the Respondent would be obliged to pay the “amounts specified by the [N]DRC Decision reduced for the amounts already paid”.

6. In other words, the DRC recalled, a national Dispute Resolution Chamber had already been called upon deciding on the financial consequences of the Respondent’s stance in relation the original employment relationship between the parties.

7. More in particular, the Chamber pointed out that, according to the parties’ submissions and related attachments, on 29 April 2013, the Claimant lodged a claim against the Respondent before the DRC of the Football Federation of Country D, requesting, inter alia, that the latter decide upon the “non-fulfilment by Respondent of financial obligations according to the contract and agreement about additional payments”.

8. In this respect, the Chamber emphasised that, on 17 July 2013, said national deciding body rendered its decision, condemning the Respondent, inter alia, “to pay in favour of [the Claimant] indebtedness in amount of 456 654 […] Euro 25 eurocents according to the exchange rate of the National Bank of Country D as of the day of this Decision passing […]” and “to pay in favour of [the Claimant] the compensation in amount for pre-term termination of the contract in amount of 140 250 […] Euro 60 eurocents”.

9. Moreover, the members of the Chamber recalled that the decision rendered by the DRC of the Football Federation of Country D on 17 July 2013 was final and binding.

10. In light of the above, and considering the literal tenor of the settlement agreement signed by the parties on 28 July 2017, it appeared to the members of the Chamber that, de facto, the purpose of the present claim was to execute a decision rendered by the DRC of the Football Federation of Country D on the parties’ employment relationship.

11. With the aforementioned considerations in mind, the DRC wished to recall the principle ‘electa una via non datur recursus ad alteram’ which establishes that any party who has chosen a forum in order to seek recourse cannot thereafter seek recourse in another. Equally, according to the principle ‘venire contra factum proprium non valet’, a party may not set himself in contradiction with his previous conduct.

12. In view of the above, the members of the Chamber were of the unanimous opinion that they were not in a position to entertain the claim of the Claimant. Indeed, as was previously mentioned, the Claimant sought recourse in front of the DRC of the Football Federation of Country D in relation to his employment relationship with the Respondent, thereby recognising the latter deciding body’s jurisdiction. In this respect, the Chamber highlighted that, although the parties entered into a subsequent settlement agreement, said document – as its content, in particular the preamble, unequivocally pointed out – had clearly the purpose of executing the findings of the decision of the DRC of the Football Federation of Country D of 17 July 2013.

13. Along those lines, the Chamber deemed it important to underline that the practice to have a case heard by a decision-making body, with the aim to get the most favourable judgment, known as “forum shopping”, cannot be upheld by the Chamber. In other words, once a party has chosen a competent decision-making body to adjudicate its claims in relation to a specific employment relationship, said party is precluded to seek recourse from the DRC. Indeed, if a party chooses to pursue the defence of his rights at national level, the said party should proceed that way.

14. Taking into account all the foregoing considerations, the Chamber decided that it is not competent to deal with the claim lodged by the Claimant.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Player A, is inadmissible.

*****

Note relating to the motivated decision (legal remedy):

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

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

Court of Arbitration for Sport (CAS)

Avenue de Beaumont 2

CH-1012 Lausanne

Switzerland

Tel: +41 21 613 50 00

Fax: +41 21 613 50 01

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Omar Ongaro

Football Regulatory Director

Encl.: CAS directives