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 25 October 2018

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 25 October 2018,

in the following composition:

Geoff Thompson (England), Chairman

Muzammil Bin Mohamed (Singapore), member

Joaquim Evangelista (Portugal), member

on the claim presented by the club,

Club A, Country B

as Claimant

against the player,

Player C, Country D

as Respondent I

and the club,

Club E, Country F

as Respondent II

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 26 January 2016, the player, Player C (hereinafter: player or Respondent I), born on 26 June 1989, entered into an employment contract (hereinafter: contract 1) with the Club of Country B, Club A (hereinafter: club or Claimant), valid as from 20 January 2016 until 30 June 2018. During the season 2015/2016, the club was playing in the third League in Country B.

2. Said contract 1 stipulated: “The contract is valid during the club’s participation in the third league and the second league“ (Free Translation from Language of Country B).

3. According to contract 1, the club undertook to pay the player, inter alia, a monthly basic salary of EUR 8,000. Furthermore, contract 1 provided that in case of promotion to the second league, the player would be entitled to a basic monthly salary of EUR 12,000.

4. At the end of the season 2015/2016, the club was promoted to the second League in Country B.

5. On 1 July 2016, the parties signed a new contract (hereinafter: contract 2), valid as from 1 July 2016 until 30 June 2018.

6. Said Contract 2 contains the following clause: “Due to the expressed wish of the player this contract is only valid during the club’s participation in the second League. If the club is promoted to the first League or gets relegated to the third League, this contract shall be terminated on 30 June of the respective year” (Free Translation from Language of Country B).

7. According to contract 2, the club undertook to pay the player, inter alia, a basic monthly salary of EUR 12,000.

8. Furthermore, contract 2 contains clause I.3., which reads as follows: “For all disputes between the parties regarding the player’s contract the Labour Courts of Country B are exclusively competent” (Free Translation from Language of Country B).

9. Moreover, clause I.5. of contract 2 states: “In case of a possible procedure regarding a dispute between the parties in front of FIFA or the Court of Arbitration for Sport in Lausanne (hereinafter CAS)” (Free Translation from Language of Country B). Furthermore, according to the same clause, the parties agreed upon the application of Law of Country B, Language of

Country B as procedural language and in case of a procedure in front of CAS, that only Judges from Country B will be chosen from the arbitrator list.

10. Further, clause J.5. of contract 2, inter alia, establishes: “[…] This player contract, including its annexes, contains all agreements between the parties […]”.

11. According to contract 2, the Regulations about the licensing of players (“Players Regulations”; hereinafter: Regulations G) and the “Regulations of the Football Association of Country B” (hereinafter: Regulations H) are applicable.

12. Moreover, § 5 par. 7 of the Regulations G reads as follows: “All contracts with players and transfer agreements with other clubs […] need to uploaded immediately to the national registration System of the Football League K in all copies and with all attachments and additional agreements” (Free Translation from Language of Country B).

13. Additionally, § 22 par. 2 of the Regulations H, inter alia, reads as follows: “Contracts, contract amendments, contract extensions or contract terminations which were not immediately submitted cannot be taken into account during the transfer proceedings” (Free Translation from Language of Country B).

14. On 1 August 2016, the parties signed a document titled “Supplementary agreement to the contract of Player C for the third league” (Free Translation from Language of Country B; hereinafter: supplementary agreement), which, inter alia, reads as follows:

- “The contract is valid between 21 January 2016 until 30 June 2018. It is valid for the club’s participation in the second league. If the club participates in the third league the player is entitled to a basic monthly salary of EUR 8,000” (Free Translation from Language of Country B);

- “Besides that the already concluded contractual provisions shall apply between the parties” (Free Translation from Language of Country B).

15. At the end of the season 2016/2017, the club was relegated to the third League in Country B.

16. On 20 June 2017, the club sent an email to the player, requesting him to immediately resume work since he missed the start of the season’s preparation dated 19 June 2017, without a valid reason.

17. On 8 July 2017, the club sent another email to the player, requesting him to return to the club due to the valid employment relationship.

18. On 31 July 2017, the Club of Country F, Club E (hereinafter: Club E or Respondent II), contacted the club requesting it to sign a confirmation of the player’s “last contract end date“.

19. On 4 August 2017, the club replied to Club E’s request by refusing to sign such confirmation and insisting that it had a valid contract with the player. Furthermore, the Club of Country B explained that signing a contract with the player would be a breach of contract with all the consequences foreseen in the FIFA regulations.

20. According to information contained in the Transfer Matching System (TMS), on 31 July 2017, the player signed a contract with Club E valid as from 1 August 2017 until 30 June 2018, including a total salary of EUR 187,820.

21. Further, the contract between the player and Club E contains the following clause: “If [the club] file against the Player with any claim relating to validity of the contract between the Player and the Club A in the Court of Labour, this contract-agreement shall be deemed invalid”.

22. According to information contained in TMS, on 3 August 2017, the Football Association of Country B (Football Association J) issued the International Transfer Certificate (ITC) and the player was subsequently registered with Club E in Country F.

23. On 11 August 2017, the club sent a notification to Club E, stating that the player breached a contract and that it is entitled to compensation. The club offered an amicable settlement.

24. On 21 August 2017, the club lodged a claim against the player and his new club, Club E, in front of FIFA, and requested to be awarded compensation for breach of contract in the amount of EUR 700,000 plus 5% interest p.a. as of 17 August 2017. Furthermore, the club requested to impose sporting sanctions on the player and Club E as well as to declare the player’s new club jointly and severally liable for the payment of compensation.

25. In its arguments, the club held that the player was contractually bound to the club until 30 June 2018.

26. In particular, the club explained that the team was promoted to the second League at the end of the season 2015/2016. Equally, the Claimant argued that the third League is governed by the Football Association J, whereby the first and second League are governed by the Football League of Country B (hereinafter: Football League K).

27. In view of the above, the club maintained that due to formal reasons the parties were obliged to use a different form for the contract during the participation in the second league, which is why contract 2 was concluded even though contract 1, in principle, would have been valid for the second league as well.

28. Moreover, the club brought forward that the contract form of the Football League K only provides limited options regarding the validity and that it was not possible to choose that the contract would remain valid for the third league as well.

29. Nevertheless, the club argued that contract 1 remained valid and the player as a conclusion was contractually bound for the third league as well.

30. Further, the club stated that, as a matter of precaution, the parties signed the supplementary agreement in order to clarify that the employment relationship would continue in case of relegation to the third league.

31. The club further maintained that a Club of Country L and a club from Country B’s second League was interested in hiring the player, but after contacting the club and the Football League K, the conclusion was drawn that the player remained contractually bound to the club.

32. In addition, the club acknowledged that it omitted to upload the supplementary agreement in the national registration System of the Football League K, but held that this is without consequence to the validity of the employment contract between the parties.

33. Moreover, the club stated that it explicitly objected to the issuance of the ITC on 2 August 2017 via email, but that the Football Association J nevertheless issued the ITC.

34. As a conclusion, the club argued that the player breached the contract by signing a new contract with Club E.

35. Regarding the amount of compensation, the Claimant maintained that the player’s market value according to www.transfermarkt.de was EUR 500,000, but that in times of “exploding transfer fees” other clubs would have been prepared to pay between EUR 700,000 and EUR 800,000 for the player. As a conclusion, the club stated that a compensation of EUR 700,000 “seems to be more than fair and adequate”.

36. In his reply to the claim, the player argued that FIFA is not competent to deal with the matter at hand on the basis of art. 22 lit. a or b of the Regulations on the Status and Transfers of Players (hereinafter: RSTP).

37. In this regard, the player held that according to 22 lit. a RSTP, a breach of contract is necessary in order for FIFA to be competent, which is not the case in the present matter.

38. Furthermore, the player referred to clause I.3. of contract 2 and maintained that the parties agreed on the exclusive competence of the Labour Courts of Country B (cf. point I.8. above).

39. As to the substance, the player rejected the player’s claim. In this regard, he referred to the Regulations G and the Regulations H (cf. points I.10. to I.12. above) and argued that only contracts duly submitted to the Football League K could be taken into account during the present proceedings. In this regard, the player held that the supplementary agreement cannot be taken into account, since the club undisputedly failed to upload it in the national registration system of the Football League K.

40. Furthermore, the player maintained that, even if the supplementary agreement is taken into account, combined with contract 1, no contractual relationship can exist after 30 June 2017 due to the fact that contract 2 clearly established the termination of the contract in case of a relegation.

41. On account of the above, the Football Association J correctly confirmed the issuance of the ITC during the procedure.

42. Moreover, the player argued that contract 2 replaced contract 1 and that it is impossible that two contracts existed parallel to each other.

43. Further, the player brought forward that the club did not specify its claim for compensation, without submitting evidence as to the damage occurred, but rather submitted a vague estimation of the value of the player, which cannot be accepted.

44. In its reply to the claim, Club E stated that the player signed as a “free agent” and made a statement to Club E that he had no other contract. Furthermore, the Club of Country F argued that the player showed them contract 2, according to which he was not contractually bound anymore in case of relegation.

45. Furthermore, Club E argued that the Football Association J confirmed “that it all is correct, Player is free and we can register him”.

46. In its replica, the club reiterated its position and rejected the player’s and Club E’s arguments.

47. Regarding the competence, the club insisted that the undisputed international dimension in combination with the possible breach of contract is enough to declare FIFA competent.

48. Furthermore, the club insisted that in addition to the clause referred to by the player, contract 2 also contains a reference to FIFA and CAS (cf. point I.9. above), which indicates that a dispute can be submitted to FIFA as well.

49. As to the substance, the club pointed out that if one would follow the argumentation of the player, every club relegated from the second league would immediately lose all of their player’s due to the fact that it is impossible to bind a player with the standard contract of the Football League K for the third League in Country B. In this regard, the club maintained that said argumentation must be rejected.

50. Furthermore, the club argued that the player did not deny the existence of the supplementary agreement and that it is irrelevant if it was duly registered. Since it was concluded after contract 2, it must prevail, even though it only refers to what was already agreed upon in contract 1 before the club was promoted.

51. Moreover, the club denies that the two contracts were running parallel, but explains that contract 2 was applicable to the second League and contract 1 to the third league.

52. In addition, the club brought forward that the player did act in bad faith since he knew exactly that he was still bound to the club for the third league as well.

53. In its duplica, the player reiterated his position and rejected the Claimant’s arguments and specifically insisted that FIFA is not competent.

54. He pointed out that contract 2 replaced contract 1, which means contract 1 was not in force anymore.

55. Furthermore, the player maintained that the supplementary agreement shall not be taken into account, but that even if taken into account the wording of it only supplements contract 2 and does not change the duration of the contractual relationship established therein.

56. In this regard, the player insisted that no breach of contract occurred.

57. Despite being invited to do so, Club E has not submitted its duplica.

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 present matter was submitted to FIFA on 21 December 2017. Consequently, the Rules governing the procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2017; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. art. 21 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 and par. 2 in combination with art. 22 lit. b of the Regulations on the Status and Transfer of Players (edition June 2018) the Dispute Resolution Chamber would, in principle, be 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 F.

3. In this respect, the Chamber was eager to emphasize that contrary to the information contained in FIFA’s letter dated 17 October 2018, by means of which the parties were informed of the composition of the Chamber, the member, Mr Stefano La Porta and the member, Mr Tomislav Kasalo, refrained from participating in the deliberations in the case at hand, due to the fact that the member Mr Stefano La Porta has the same nationality as the Respondent I and that, in order to comply with the prerequisite of equal representation of club and player representatives, also the member Mr Tomislav Kasalo refrained from participating 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. In continuation, the Chamber acknowledged that the Respondent I contested the competence of the FIFA DRC to deal with the present case, alleging the exclusive competence of the Labour Courts of Country B, based on clause I.3. of contract 2.

5. Furthermore, the DRC noted that the Claimant rejected the player’s argumentation, alleging that contract 1 was still valid and contract 2 would not be applicable for the third League. Moreover, the Claimant argued that contract 2 would not establish exclusive competence of the Courts of Country B, since clause I.5. of contract 2, in contradiction, refers to FIFA as well. Therefore, the Claimant deems that the FIFA DRC should have jurisdiction over the present case.

6. Bearing in mind the foregoing, and before the DRC started to address the question of its own competence, the Chamber deemed it first necessary to determine first on which contract the club based its claim. In this regard, the DRC noted that the Claimant alleged that contract 1 remained valid for the club’s participation in the Third League of Country B, while contract 2 was valid during its participation in the second League.

7. In this framework, the Chamber turned its attention to contract 2, which was undisputedly signed at a later stage than contract 1. Examining its content and taking into account clause J.5. (cf. point I.10. above), which establishes that contract 2 contains all agreements between the parties on 1 July 2016, the Chamber concluded that contract 2 superseded contract 1.

8. Furthermore, the DRC noted that the parties, on 1 August 2016, signed the supplementary agreement (cf. point I.14. above), according to which certain terms of the contractual relationship, i.e. duration and validity in case of a relegation, were amended. Taking into account the content and the clear wording of said supplementary agreement, the Chamber considered that, by means of the supplementary agreement, the parties intended to guarantee the continuation of their contractual relationship in the event of the club’s future participation in the third league. As such, the Chamber qualified said document as an amendment to the already existing contractual relationship, namely constituted of contract 2 only (cf. point II.7. above).

9. In continuation, the DRC rejected the Claimant’s argument that contract 1 remained valid parallel to contract 2. As established above, in the Chamber’s opinion, contract 2 superseded contract 1 and was subsequently amended by the supplementary agreement in order to establish the continuation of the same employment relationship for the Third League of Country B, at the same economic terms agreed upon in contract 1.

10. On account of the above, the DRC started examining the Chamber’s competence focussing its attention on the content of contract 2.

11. Therefore, for the sake of good order, the Chamber wished to recall the wording of the relevant clauses in contract 2, which read:

“For all disputes between the parties regarding the player’s contract the Labour Courts of Country B are exclusively competent” (clause I.3.).

“In case of a possible procedure regarding a dispute between the parties in front of FIFA or the Court of Arbitration for Sport in Lausanne (hereinafter CAS)” (clause I.5.).

12. In this context, the Dispute Resolution Chamber duly analysed the above-mentioned clauses and wished to emphasize that clause I.3 of the contract unequivocally establishes exclusive competence of Labour Courts of Country B in relation to “all disputes […] regarding the player’s contract”.

13. On the other hand, clause I.5. of contract 2 indeed mentions a “possible procedure” in front of FIFA. The Chamber stressed that, taking into account the different and less specific wording, namely the words “possible” and “procedure”, such clause appears not to refer to employment related disputes, but rather to those residual and eventual “procedures”, which are not governed by the employment contract. In other words, the DRC concluded that clause 1.5. of contract 2 is limited only those “procedures”, which do not refer to the employment relationship between the parties and, as such, does not address the employment related disputes already governed by the previous clause, i.e. clause 1.3.

14. On account of the above, the DRC established that the jurisdiction clause established in clause I.3. of contract 2 is very specific, clear and literally refers to all the disputes related to the employment relationship between the parties, such as the one at stake.

15. At this point, the Chamber deemed it appropriate to emphasise that art. 22 of the Regulations is clearly “without prejudice” to the parties “right to seek redress before a civil court for employment related disputes”. As such, the aforementioned provision indeed allows players and clubs to refer any employment-related disputes possibly arisen between them to the local, national courts.

16. In view of the foregoing, the Chamber concluded that, in the present case, the parties had voluntarily and beforehand agreed upon the content and the applicability of clause I.3. of contract 2 and, therefore, accepted the exclusive jurisdiction of the Labour Courts of Country B to decide upon any employment-related dispute arisen between them.

17. In consideration of the foregoing, the Chamber concluded that the Claimant’s claim before the FIFA DRC is inadmissible.

III. Decision of the Dispute Resolution Chamber

The claim of the Claimant, Club A, is inadmissible.

*****

Note relating to the motivated decision (legal remedy):

According to article 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