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, from country A
as Claimant / Counter-Respondent
against the club,
Club B, from country B
as Respondent / Counter-Claimant
and the club,
Club C, from country C
as intervening Party
regarding an employment-related dispute
between the parties
I. Facts of the case
1. On 1st January 2017, the Player A, from country a (hereinafter: the Claimant/Counter-Respondent or the player), and the Club B, from country B (hereinafter: the Respondent/Counter-Claimant, or the club or Club B) signed an employment agreement valid as from 18 January 2017 until 31 May 2018.
2. In accordance with the contract, the player is entitled to a total remuneration of USD 1,650,000, amount payable as follows:
USD 400,000 as advance payment payable as follows:
USD 250,000 on 20 January 2017;
USD 75,000 on 2 April 2017;
USD 75,000 on 16 April 2017.
USD 390,625 for the “first season from 18th January 2017 to 31st May 2017” payable in 5 monthly instalments of USD 78,125;
“USD 860,000” for the “second season from 1 June 2017 to 31st May 2018” payable in 11 monthly instalments of USD 78,182.
3. Art. 4.8 of the contract entitles the player to 2 airline tickets “on business class rate in the second season from country D to country E (round trip)”.
4. According to art. 5.1 of the contract: “the player shall participate in all matches, in all training sessions and in any other related activity as required by the Club either in country B or abroad, unless otherwise required by the Club or unless his health condition prevents him to do so subject to the medical reports issued by the Club.”.
5. Art. 5.12 of the contract provides the following: “The Player shall not leave the state without having a written permission from the Chairman of the Club or the Chief Executive Officer. […] In the event the Player, despite having been notified, does not return to the Club’s discipline within 5 days from the aforementioned notification, both Parties expressly and irrevocably agree that it shall be regarded as a material breach of the employment contract and the Club shall have the right to terminate the contract with just cause, being the Player liable to pay compensation to the Club in accordance with clause 6.3 of the present contract.”.
6. The contract provides in its art. 6.3 that “the Parties hereby expressly and irrevocably agree that in the event the Player terminates the contract without just cause in accordance with art. 17 of FIFA Regulations on the Status and Transfer of Players, the Player shall promptly pay to the Club, as compensation for the breach, the amount of five million USD (USD 5,000,000) (“Breach Compensation”).”
7. According to art. 6.4 of the contract : “in the event the club terminate the contract without just cause before its expiry date, the player will be compensated pursuant to the article no. 17 of (player status & transfer regulation of FIFA).”
8. According to the documentation on file, by means of a letter dated 10 October 2017, the player put the club in default requesting that the club pay him USD 75,000 regarding the advance payment due on 16 April 2017. The player also complained that he was no longer registered within the Football Association of country B (hereinafter: the Football Association of country B), on the list of players eligible to play for the season 2017/2018. The player gave the club 10 day to remedy the default. Subsequently, on 19 October 2017, the player reiterated his requests by means of a another letter.
9. On 1 November 2017, the player unilaterally terminated the contract with the club arguing that the club had breached its contractual obligations towards him by “de-registering” him from the Football Association of country B, by “excluding” him “from playing and training with the club’s first team with effect from 3rd October 2017”, and by failing to pay him USD 75,000 as advance payment.
10. On 6 November 2017, the player lodged a claim against the club before FIFA for outstanding remuneration and compensation for breach of contract requesting the total amount of USD 5,075,000, plus 5% interest p.a., amount broken down as follows:
USD 75,000 as outstanding remuneration corresponding to the last instalment of the advance payment due on 16 April 2017;
USD 5,000,000 as compensation for breach of contract corresponding to the application of art. 6.3 of the contract;
Alternatively, USD 1,494,574 corresponding to :
USD 547,274 corresponding to 7 monthly salaries of USD 78,182 each, for the period as from November 2017 until 31 May 2018;
USD 9,116 for the costs of two business class round trip tickets (country C to country E);
USD 938,184 “for the specificity of sport”;
Sporting sanctions to be imposed on the club;
Unspecified amount as reimbursement of legal fees.
11. In his claim, the player argued that pursuant to the Football Association’s Statutes, clubs playing in the first division can only register 2 foreign players. According to the player, after his first season with the club, it registered two other foreign players, making it impossible for him to play for the club. The player also alleged that it had been made clear by the coach that his services were no longer needed. According to him, since his two default notices remained unanswered by the club, he had just cause to terminate the contract on 1 November 2017.
12. Moreover, the player affirmed that as from beginning of October 2017 he was allegedly “sidelined […] from the first team’s training and tactical sessions”, not allowed to “train with and/or attend the team’s training sessions” and that he would have to train by himself.
13. Furthermore, the player claimed that the last instalment of the advance payment remains unpaid by the club.
14. Finally, the player sustained that art. 6.3 of the contract, which foresees the compensation payable in case of breach of contract by the player, should reciprocally also apply in the case of breach of contract by the club.
15. On 7 November 2017, the club replied to the termination letter of the player, arguing that since the player allegedly got injured during his vacations and despite the club paying for his medical fees, he was not fit to train during the first training session for the 2017-2018 season in August 2017. The club affirmed that since the player was not fit, he could not be registered for the 2017-2018 season and that the club, in order “to overcome the problem [had to sign] a new contract with another player”. The club further stated that the player had breached art. 6.3 of the contract, and was liable to pay compensation to the club. The club gave the player 10 days to remedy his default.
16. On 11 December 2017, the club lodged a claim against the player in front of FIFA for compensation for breach of contract and reimbursement of advance payments, requesting the total amount of USD 5,325,000, amount that corresponds to:
USD 325,000 as reimbursement of advance payment;
USD 5,000,000 as compensation for breach of contract in accordance with art. 6.3 of the contract;
Reimbursement of “all the expenses incurred by the club for the treatment of the respondent (player) for the injury sustained by him during vacation abroad including treatment in country F and other travel expenses related to the same”.
17. In its claim, the club argued that the player allegedly got injured during his vacations. The club argued that it allegedly paid for all of the player’s medical expenses and even sent him to a country F for rehabilitation procedure. According to the club, the player missed the first month of training of the 2017-2018 season, i.e. August 2017, and was allegedly not fit for the team when he came back in September 2017, which according to the club, explains why he was not registered for the 2017/2018 season.
18. According to the club, it did not register the player in application of art. 5 of the contract.
19. Moreover, the club added that due to the player’s injury and the restriction on the registration of foreign players, the club had to sign a new foreign player, as it could not take the risk of registering a player whose health situation was unsure. The club argued that it intended to register the player for the next season, but that by allegedly leaving the country without an authorization from the club, as stated in art. 5.12 of the contract, the player breached the contract.
20. In reply to the club’s claim, the player acknowledged that he was injured and missed 3 weeks from 1st August 2017 until 24 August 2017, but denied that he was unfit to play when he recovered. The player reiterated his allegations in particular that he followed the coach orders, and kept on training even out of the group as requested. The player reiterated his claim and requested that the claim of the club to be rejected.
21. On its part, in reply to the player’s claim, the club argued that the fact that they paid for all medical costs pertaining to an injury sustained during the player’s vacation proved the good faith of the club and its “willingness to count with the Claimant’ services”.
22. Moreover, the club argued that during a meeting with the player at its premises on 27 September 2017, both parties agreed that the player was not fit enough and that as such, they agreed to temporarily deregister the player until January 2018. As such, the club argued that the de-registration was “conducted with the agreement of the player and that (his) employment contract was in no way affected”. Regarding the request of the player for outstanding remuneration, the club acknowledged not having paid the requested amount but held that that one outstanding instalment is not enough to justify a unilateral termination of the contract and claimed that the player never requested said amount previously. The club further claimed that the player had sought a treatment for his injury without informing the club.
23. The club reiterated his claim and requested that the claim of the player to be rejected. In a subsidiary manner, the club requested that in case the DRC considers that the player had just cause to terminate his contract, the compensation should be equal to USD 555,274 minus mitigation, corresponding to:
USD 547,274 as remaining salaries, for 7 monthly salaries of USD 78,182 each;
USD 8,000 as “benefit”, for 2 business class round trip tickets (country D – country E).
24. After the closure of the investigation, the player submitted unsolicited correspondence.
25. In reply to FIFA’s request, the player informed FIFA that on 22 February 2018 he signed an employment contract with the country C club, Club C (hereinafter: the new club), valid as from the date of signature until 15 June 2019, according to which he was entitled to receive a monthly remuneration of 37,500 corresponding to EUR 5,000 according to the contract.
26. After being requested by FIFA’s administration to provide its comments on the current matter, the new club explained that the dispute between the club and the player was “their private thing” and that the termination by the player and all the events invoked by the player and the club “preceded the player signing“ the contract with the new club.
II. Considerations of the Dispute Resolution Chamber
1. First of all, the DRC analysed whether it was competent to deal with the case at hand. In this respect, the Chamber took note that the present matter was first submitted to FIFA on 6 November 2017. Consequently, the 2017 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 2017 and 2018 editions of the Procedural Rules).
2. Subsequently, the DRC referred to art. 3 par. 1 of the Procedural Rules and confirmed that, in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b) of the Regulations (edition 2018), it is competent to decide on the present litigation, which concerns an employment-related dispute with an international dimension between a country A player, country B club and a country C club as intervening party.
3. Furthermore, the DRC analysed which edition of the Regulations should be applicable as to the substance of the matter. In this respect, the Chamber confirmed that, in accordance with art. 26 par. 1 and 2 of the Regulations (editions 2016 and 2018) and considering that the present matter was submitted to FIFA on 6 November 2017, the 2016 edition of said Regulations is applicable to the present matter as to the substance.
4. The competence of the DRC and the applicable regulations having been established, the Chamber entered into the substance of the matter. In doing so, it started to acknowledge the facts of the case as well as the documents contained in the file. 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 DRC acknowledged that it was undisputed by the parties that the Claimant and the Respondent had signed an employment contract on 1 January 2017, valid as from 18 January 2017 until 31 May 2018.
6. The DRC recalled that in accordance with the contract, the player was entitled inter alia to the total remuneration of USD 1,650,000 composed of USD 390,625 payable in 5 instalment of USD 78,125 each for the first season, USD 860,000 payable in 11 instalments of USD 75,125 for the second season and USD 400,000 as advance payment. The advance payment was payable as follows: USD 250,000 on 20 January 2017, USD 75,000 on 2 April 2017 and USD 75,000 on 16 April 2017.
7. The DRC further noted that the player was entitled to 2 airline tickets “on business class rate in the second season from country D to country E (round trip)”.
8. In continuation, the Chamber took note that it is undisputed by the parties involved that the employment relationship had been terminated by the player, in writing, on 1 November 2017.
9. The Chamber then reviewed the claim of the player, who requested the total amount of USD 5,075,000 as follows: USD 75,000 as outstanding remuneration corresponding to the last instalment of the advance payment due on 16 April 12017, and USD 5,000,000 as compensation for breach of contract in application of art. 6.3 of the contract. Alternatively, the player requested as compensation USD 1,494,574 which corresponds, according to him, to USD 547,274 for 7 monthly salaries for the period of November 2017 until 31 May 2018, USD 9,1116 for the costs of two business class round trip tickets, and USD 938,184 for the “specificity of sports”.
10. The Chamber took note of the argumentation of the Claimant/Counter-Respondent who held that he was not paid the last instalment of the advance payment provided by the contract, and that he was deregistered by the club for the season 2017-2018, de facto making it impossible for him to play with Club B, and that despite his two default notices, Club B did not reply to him. The DRC further recalled that he held that he had been sidelined from the 1st team trainings.
11. Moreover, the DRC took note that Club B also lodged a claim on 11 December 2017 against the player, requesting the total amount of USD 5,325,000 corresponding to USD 325,000 as reimbursement of advance payments, and USD 5,000,000 as compensation for breach of contract by the player in application of art. 6.3 of the contract.
12. In its claim, Club B argued that the player injured himself during his vacations, before the beginning of the season and was not fit for the season when he came back and that in application of art. 5 of the contract, Club B could not register him. The DRC further recalled that Club B argued that in application of the Football Association of country B’s restriction on the registration of foreign players, it had to sign a new foreign player instead of the player. Club B affirmed that it intended on registering the player for the next season but that he left the country without any prior authorization from the club, breaching the contract.
13. In reply to the club’s claim, the DRC took note that the player acknowledged having been injured, but sustained that he came back in due course and was fit to play for the club.
14. The DRC noted that the club on its part replied to the player’s claim alleging that the deregistration had been agreed by both parties due to the player’s injury and that the player agreed to his deregistration until January 2018. The DRC further noted that Club B argued that it paid for the recovery of the player, which allegedly shows its “willingness to count with the Claimant’ services”.
15. In view of the foregoing and of the diverging opinions of the parties, the Dispute Resolution Chamber was of the opinion that the issue at stake, considering the claims lodged respectively by the parties against each other, was to determine whether the employment contract had been unilaterally terminated with or without just cause by the player on 1 November 2017, and which party was responsible for the early termination of the contractual relationship in question. The DRC also underlined that, subsequently, if it were found that the employment contract was breached by one of the parties without just cause, it would be necessary to determine the consequences for the party that caused the unjust breach of the relevant employment contract.
16. Reviewing the argumentations of both parties, the DRC took note that the player considered that he had just cause to terminate the contract as the club failed to pay him the last advance payment of USD 75,000 due on 16 April 2017, and deregistered him, thereby effectively preventing him “from playing and training with the club’s first team” despite several default notices which remained unanswered.
17. On the other hand, the DRC took note that Club B deemed that the deregistration was justified and allegedly mutually agreed with the player after he got injured and was allegedly unfit to play. In this regard, the DRC recalled that Club B considered that by leaving the country without prior authorization from the club, the player had breached the contract.
18. With regard to the claim of the player regarding USD 75,000 as outstanding remuneration, the DRC took note that Club B does not contest that amount as being outstanding at the time of termination but considered that said amount is not sufficient to justify a unilateral termination and claimed that the player did not request that amount before the default notice.
19. Following this, the Chamber considered that it remained uncontested that the player was injured for 3 weeks at the beginning of the 2017/2018 season, i.e. as from 1 August 2017 until 24 August 2017. The DRC further recalled that it also remained uncontested that Club B had deregistered the player for the season 2017/2018.
20. Moreover, the DRC recalled the content of 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, in that sense, the DRC was of the unanimous opinion that Club B did not provide conclusive evidence regarding the severity of the injury of the player. The DRC was also of the opinion that Club B had not provided conclusive evidence that the player had indeed agreed to his deregistration during a meeting held at its office since no evidence that the player had been part of that meeting was provided.
21. In continuation, the members of the DRC considered that at the time of termination, and in the absence a reply from Club B to the default notices of the player, in particular any communication to the player regarding the possible date of re-registration of the player. Against such background, the DRC was of the view that Club B did not give any indication to the player as to when he could be re-registered. In this context, the DRC was of the firm believe that such absence of reactions to the player’s default notices and requests for information with regard to his status within the team could have lead the player to legitimately believe that Club B was no longer interested in his services.
22. At this point, the members of the DRC first of all considered important to point out, as 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. In this context, the DRC emphasized that in principle, by refusing to register a player, a club is effectively barring, in an absolute manner, the potential access of a player to competition and, as such, violating one of his fundamental rights as a football player.
23. Therefore, the members of the DRC highlighted that, at the moment the player terminated the contract, he was deregistered by the club and had strong reasons to believe the club was no longer interested in him. Moreover, and as mentioned previously, at the time of termination, Club B owed the player USD 75,000 due on 16 April 2017, as such that amount was long overdue by the time of termination.
24. Consequently, and considering the situation of the player at the time of termination, the Chamber was of the opinion that the objective circumstances at the time did provide the player with just cause to terminate the employment contract.
25. In light of all of the aforementioned considerations, the DRC came to the conclusion that the player had terminated the contract on 1 November 2017, with just cause.
26. Having established that Club is to be held liable for the early termination of the employment contract, the Chamber focused its attention on the consequence of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the player is entitled to receive from Club B an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant employment contract.
27. First of all, the Chamber reverted to the player’s claim, which included the outstanding amount of USD 75,000 relating to the advance payment due on 16 April 2017.
28. At this stage, the Chamber considered relevant to recall that the club does not dispute the outstanding amount of USD 75,000.
29. Consequently, taking into account that the contract was terminated on 1 November 2017, and in accordance with the general legal principle of pacta sunt servanda, the Chamber decided that the club is liable to pay the player the amount of USD 75,000, corresponding to the last advance payment due on 16 April 2017, plus 5% interest as of 11 December 2017, as the claim for interest of the player was not specific enough.
30. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, the amount of compensation shall be calculated, in particular and unless otherwise provided for in the contract at the basis of the dispute, with due consideration for the law of the country concerned, the specificity of sport and further objective criteria, including, in particular, the remuneration and other benefits due to the player under the existing contract and/or the new contract, 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.
31. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent contract contained a provision by means of which the parties had beforehand agreed upon an amount of compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that the contract contained two provision in that sense, art. art. 6.3 that “the Parties hereby expressly and irrevocably agree that in the event the Player terminates the contract without just cause in accordance with art. 17 of FIFA Regulations on the Status and Transfer of Players, the Player shall promptly pay to the Club, as compensation for the breach, the amount of five million USD (USD 5,000,000) (“Breach Compensation”).” As well as art. 6.4 of the contract “in the event the club terminate the contract without just cause before its expiry date, the player will be compensated pursuant to the article no. 17 of (player status & transfer regulation of FIFA).”.
32. In continuation, the DRC took note that pertaining to the claim of the player, he had requested the application of art. 6.3 of the contract. However, the DRC took note of the fact that that provision only applied in case of termination of the player without just cause, and could not be applied in the case at hand.
33. As a consequence, the members of the Chamber determined that the amount of compensation payable by Club B to the player had to be assessed in application of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled that said provision provides for a non-exhaustive enumeration of criteria to be taken into consideration when calculating the amount of compensation payable.
34. Bearing in mind the foregoing as well as the claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract until 31 May 2018, taking into account that the player’s remuneration up to 1 November 2017 is included in the calculation of the outstanding remuneration (cf. point II. 29 above). Consequently, the Chamber concluded that the amount of USD 547,274 (i.e. salaries as from 1 November 2017 until 31 May 2018) serve as basis for the determination of the amount of compensation for breach of contract.
35. In continuation, the Chamber verified 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 the DRC, such remuneration under a new employment contract 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.
36. In this context, the Chamber noted that the player had signed on 22 February 2018 an employment contract with the Club C, valid as from the date of signature until 15 June 2019, by means of which he was entitled to receive a monthly remuneration of 37,500 corresponding to EUR 5,000 in accordance with the employment contract.
37. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of USD 529,274 to the player which was considered reasonable and proportionate as compensation for breach of contract in the case at hand.
38. Equally, as regards the player’s claim pertaining to air tickets, on the basis of the information provided by FIFA Travel and referring to the relevant terms of the employment contract, the Chamber decided that Club B must pay to the Claimant the amount of CHF 2,368 for 1 air tickets to return home.
39. In addition, taking into account the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the club must pay to the player interest of 5% p.a. on the amount of compensation as well as the air ticket, i.e. USD 529,274 and CHF 2,368 as of 11 December 2017 until the date of effective payment.
40. Subsequently, the DRC analyzed the request of the player for the amount of USD 938,184 as compensation “for the specificity of sport”. In this regard, the Chamber deemed it appropriate to point out that the request for said compensation presented by the Claimant had no contractual basis. Consequently the DRC deemed that such request could not be awarded.
41. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further request filed by the player is rejected. Equally and considering that the club was, overall, found to be in breach of contract, the counterclaim of the club is rejected
III. Decision of the Dispute Resolution Chamber
1. The claim of the Claimant / Counter-Respondent, Player A, is partially accepted.
2. The counterclaim of the Respondent / Counter-Claimant, Club B, is rejected.
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, outstanding remuneration in the amount of USD 75,000 plus 5% interest p.a. as from 11 December 2017 until the date of effective payment.
4. 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 amounts of USD 529,274, and CHF 2,368 plus 5% interest p.a. on said amounts as from 11 December 2017 until the date of effective payment.
5. In the event that the amounts plus interest due to the Claimant / Counter-Respondent in accordance with the above-mentioned numbers 3. and 4. are not paid by the Respondent / Counter-Claimant within the stated time limits, 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-Claimant 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.
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Note relating to the motivated decision (legal remedy):
According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00
Fax: +41 21 613 50 01
e-mail: info@tas-cas.org
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal Officer
Encl. CAS directives