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 7 March 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 7 March 2019,

in the following composition:

Geoff Thompson (England), Chairman

Stijn Boeykens (Belgium), member

Tomislav Kasalo (Croatia), member

Daan de Jong (The Netherlands), member

Elvis Chetty (Seychelles), member

on the matter between the player,

Player A, Country B,

as First Claimant / Respondent II

and the club,

Club C, Country B

as Second Claimant / Respondent I

and the club,

Club D, Country E,

as Respondent III

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 25 January 2015, the player of Country B, Player A (hereinafter: the player or First Claimant / Respondent II) and the club of Country B, Club C (hereinafter: Club C or Second Claimant / Respondent I) concluded an employment contract (hereinafter: the contract) valid as from 1 February 2015 until 31 December 2018.

2. According to article 6 of the contract, the player was entitled, inter alia, to the following:

“The monthly base salary of the Football Player minus the withholdings required by the law of the Republic of Country B shall be currency of Country B [currency of Country B] 6,000,000.”

3. On 26 July 2016, the player and Club C concluded an additional Agreement (hereinafter: the additional agreement), stipulating in article 1.1. the following:

“To add to article 7 the following paragraph 7.8 to read as follows: “In case of receipt of offers from European clubs, the transfer amount should be the transfer price 300,000 (three hundred thousand) Euro.” If a foreign club will carry out the transfer the Player to another football club, the club remits 15% of the transfer amount to the account of the football club “Club C”.”

4. On 25 January 2018, Club D (hereinafter: Club D or Respondent III) contacted Club C and informed the club of Country B of its interest in the transfer of the player.

5. On 2 February 2018, Club D contacted Club C once again and reaffirmed its interest in the player and its readiness “to activate the buy-out option” in the player’s contract and pay the amount of EUR 300,000.

6. On 8 February 2018, Club C informed Club D in writing that a transfer “is possible” but that it would only consider a transfer of the player for “a higher transfer price”.

7. On 13 February 2018, Club D sent a “formal transfer offer” for the player and offered to pay the amount of EUR 300,000. In addition, the aforementioned club offered Club C “the amount of 15 (fifteen) % of the transfer amount in connection with such transfer”, “should Club D subsequently transfer the Football Player to another football club” and attached a draft of a transfer contract.

8. On 14 February 2018, the player sent Club C a letter, informing the club that he wishes to be transferred to Club D.

9. On 17 February 2018, the player once more contacted Club C in writing and asked the club to fulfil its “obligations” and sign the transfer contract with Club D “by 2:00 pm (City F time) on February 19, 2018”.

10. Furthermore, the player informed the club of Country B that “should Club C fail to comply with the above request by the specified deadline, [the player] shall reserve the right to unilaterally terminate the employment contract and independently transfer to Club D”.

11. On 19 February 2018, Club C sent a letter to Club D with an amended and signed transfer contract, adding inter alia the following clause:

“This transfer fee doesn’t include training compensation for preparation and training of the football player. The sum of training compensation will be separately counted and transferred to the settlement account by Club C according to Annex 4 of FIFA Regulations on the Status and Transfer of Players.”

12. In addition, on 19 February 2018, Club C informed the player in writing that it has “sent the transfer contract to Club D to ensure [the player’s] successful transfer from Club C to Club D.”

13. On the same day, the player unilaterally terminated the contract with Club C in writing due to Club C’s “none fulfilment of its obligations”.

14. On 20 February 2018, the player signed an employment contract with Club D (cf. point 30 below) and was, in accordance with the information contained in TMS, subsequently registered with his new club on 10 March 2018.

15. On 27 February 2018, the player lodged a claim in front of FIFA against Club C for breach of contract, requesting the payment of the total amount of currency of Country B 96,000,000 as compensation, plus 5% interest p.a. as from 19 February 2018.

16. In his claim, the player argued that “the Club by denying the transfer offer of Club D and suggesting transferring the Player for a much higher transfer fee, which includes training compensation for preparation and training of the Player, is breaching the Contract.”

17. Furthermore, the player deemed that “according to established FIFA and CAS practice the training compensation is included into the transfer amount to the previous Club in case the parties do not established the opposite into the contract. Since the Player and the Club didn’t establish this into the contract, the buy-out amount, mentioned into the par. 7.8. of the contract, should be considered as having training compensation inside”.

18. In addition, the player pointed out that because “training camps had already started within clubs of the Country E Football Premier League and the transfer window in Country E was closing on 22 February 2018 and that the Player would not be able to prepare for a season and might not even be duly registered in case of delays, the Player kindly asked the Club to fulfil the contractual obligations and then kindly requested to stop violating the Contract and execute the transfer contract offered to the Club and e-mail to Club D the copy of the mentioned contract.”

19. Consequently, the player stressed that by denying his transfer to Club D, Club C “seriously breached the contract” and therefore, the player terminated the contract with just cause “as not to jeopardize his future career”.

20. On 15 March 2018, Club C lodged a separate claim in front of FIFA against the player and Club D for breach of contract and inducement, respectively, requesting from both the player and Club D the payment of the following:

- EUR 300,000, as compensation for the unilateral termination of the contract;

- “training compensation to Club C for training and education of football player Player A for period from 2009 to 2017”;

- “compensation to Club C for damage, caused by absence of key player in most important moments”.

Furthermore, Club C requests the imposition of sporting sanctions on the player and Club D.

21. In its claim, Club C argued that the player “has not been appearing and participating in trainings and official since February 24, 2018 without warning of anyone and without consent and permission of club management and coaches.”

22. In addition, Club C claimed that despite having “an effective labor contract with Club C” the player signed a new contract with Club D.

23. Moreover, Club C stressed that despite not giving Club D any “official consent for conducting negotiations” with the player, Club C “found that Club D and personally Player A had conducted negotiations, by this initially roughly breaking FIFA Regulations”.

24. Furthermore, Club C highlighted “that player was empowered to notify Club C about transfer contract with Club D of his transfer. But he has no right to set rough terms before Club C about sending of transfer contract to club Club D not later than 14:00 by City F time February 19, 2018.”

25. Finally, Club C pointed out that the player “is factually trains in Club C and started playing when he was 13 years old, for nine years, starting from 2009” and therefore ”acting according to FIFA Regulations, and using our right, we added special article to the transfer contract [cf. point 10 of the summary]”. Based on the foregoing, Club C deems that the player, induced by Club D, terminated his employment contract with the club of Country B without just cause.

26. In his reply to Club C’s claim, the player reiterated the position expressed with his own claim and stressed that “having twice asked the Club to fulfil its contractual obligations, warned the Club on intention to terminate the Contract with just cause in case the transfer to Club D will not be duly formalized with the financial transfer conditions set by par. 7.8 of the Contract and even given the Club an adequate time limit to accomplish its obligations, on 19 February 2018 the Player terminated the Contract”. Consequently, the player rejects Club C’s claim.

27. In spite of having been invited to do so, Club C did not reply to the claim of the player.

28. In its reply to Club C’s claim, Club D mainly repeated the player’s position while adding that “Club C was for sure informed in writing about the possible negotiations between the Player and Club D” and that the letter sent on 8 February 2018, “clearly indicates that Club C was consent with the idea of a possible transfer of the Player, it was only the amount of transfer fee that mattered in this case.”

29. Furthermore, Club D argued that it is a “well-established jurisprudence of the FIFA DRC […] that training compensation is considered as being included in the transfer compensation, if contrary is not explicitly mentioned in a transfer agreement (or, accordingly, in a contract clause establishing such buy-out-clauses).” Thus, Club D asks for the rejection of Club C’s claim against it and the player.

30. The player signed an employment contract with Club D on 20 February 2018, valid as from 20 February to 31 May 2019, and according to which he was entitled to receive a monthly salary in the amount of USD 5,748.

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 27 February 2018 by the player, respectively, on 15 March 2018 by the club. Consequently, the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (edition 2018; hereinafter: Procedural Rules) are applicable to the matter at hand (cf. article 21 par. 2 and 3 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 2018; hereinafter: Regulations) the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns a dispute between a club and a player in relation to the maintenance of contractual stability in which there has been an ITC request and a claim in relation to said ITC request and compensation for breach of contract.

3. Furthermore, the DRC analyzed which regulations should be applicable as to the substance of the matter. In this respect, the DRC confirmed that in accordance with art. 26 par. 1 and 2 of the Regulations (editions January and June 2018) and also considering that the present claim was lodged in front of FIFA on 27 February 2018 by the player, respectively on 15 March 2018 by the club, the January 2018 edition of said 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 analysis of the substance of the dispute at stake. In this respect, the Chamber started by acknowledging all the above-mentioned facts as well as the arguments and the documentation submitted by the parties. However, the Chamber emphasised that in the following considerations it will refer only to the facts, arguments and documentary evidence, which it considered pertinent for the assessment of the matter at hand.

5. In this respect, the Chamber recalled that on 15 January 2015, the player and Club C had entered into an employment contract valid as from 1 February 2015 until 31 December 2018.

6. Furthermore, the Chamber recalled that on 26 July 2016, the player and Club C concluded an additional agreement (cf. point I.3.)

7. In continuation, the Chamber observed that the player terminated the aforementioned contract on 19 February 2018 via a termination letter invoking that Club C had failed to fulfil its obligations.

8. In this regard, the Chamber noted that the player lodged a claim against Club C arguing that the latter failed to comply with its contractual obligation stipulated in article 1.1. of the additional agreement entitling him to terminate the contract with just cause. Equally, the Chamber noted that Club C simultaneously lodged a claim against the player on the grounds that the latter terminated his contract without just cause.

9. Within this context, the members of the Chamber noted that the player stressed that he had asked Club C twice to “fulfil its contractual obligations”, i.e. accepting the offer of Club D in view of article 1.1. of the additional agreement, and warned the club that he would terminate the contract if it failed to do so, as he would not want to risk to “jeopardize his future career” as the preparation for the new season had already started in Country E and the registration period would soon come to an end. Indeed, the player as well as Club D argued that article 1.1 of the additional agreement constitutes a “buy-out clause” entitling the player to terminate the contract unilaterally and without any consequences against payment of the fixed amount of EUR 300,000.

10. In this regard, the Chamber took note of the player’s argument that by not specifically mentioning training compensation in article 1.1 of the additional agreement, training compensation was already included in the “buy-out amount” and that by asking for “a much higher transfer fee” Club C breached the contract. The Chamber also observed that the player claimed that Club C shall be sentenced to pay compensation for breach of contract in the amount of currency of Country B 96,000,000, plus 5% interest per annum.

11. The Chamber then turned its attention to the arguments of Club C and acknowledged that Club C accepted that it was the player’s right to ask to be transferred to Club D, however, the player was not in a position to “set rough terms” and giving Club C a deadline until “14:00 by City F time February 19, 2018”. The Chamber further took note that Club C submitted that the player unilaterally terminated the employment contract on 19 February 2018 without just cause and subsequently, signed one day later an employment contract with Club D. On such basis, Club C deemed that the player shall be sentenced to pay compensation for breach of contract in the amount of EUR 300,000 as well as training compensation and damages. The members of the Chamber further acknowledged that Club C argued that the player’s new club, i.e. Club D, shall be jointly and severally liable for the payment of the aforementioned amounts to be paid by the player to Club C.

12. In view of the parties’ divergent positions, the Chamber understood that the matter at stake essentially consists in examining whether the arguments invoked by the player as to the reason for the termination of the contract could constitute a valid cause to terminate the contract. In other words, the Chamber must analyse whether the player had a contractually agreed right to terminate the contract on the basis of article 1.1 of the additional agreement.

13. In this context, first of all, the Chamber recalled the terms of article 1.1 of the additional agreement, which reads as follows: “To add to article 7 the following paragraph 7.8 to read as follows: “In case of receipt of offers from European clubs, the transfer amount should be the transfer price 300,000 (three hundred thousand) Euro.” If a foreign club will carry out the transfer the Player to another football club, the club remits 15% of the transfer amount to the account of the football club “Club C”.

14. After a careful analysis of the contents of the relevant clause in the contract, the DRC deemed that the clause in question does not constitute a “buy-out clause”. In particular, the Chamber emphasised that the relevant provision does not establish a right for the player to terminate the contract by paying a specific, clearly predetermined amount but only seeks to fix the amount of a possible, future transfer fee, should the player be transferred before the expiry of his employment contract with Club C. Furthermore, the Chamber wished to point out that the standard practice with “buy-out clauses” is, that in order to trigger such a clause, the amount specified in said clause needs to be effectively paid to the bank account of the selling club, which the DRC pointed out did not occur in this case.

15. Furthermore, the members of the Chamber referred to the well established jurisprudence of the DRC, that if two parties enter into a transfer agreement which provides, inter alia, for the financial conditions of the relevant transfer, i.e. the payment of a transfer compensation, training compensation is considered as being included in the transfer compensation unless stipulated otherwise. The DRC further noted, that despite having a fixed transfer fee in the relevant clause in the employment contract, the clubs in this case have not concluded a transfer agreement, but were still in the phase of transfer negotiations when the player terminated his contract with Club C.

16. Based on the aforementioned, the Chamber considered that the player did not have a contractually stipulated right to prematurely terminate the contract. Furthermore, the Chamber stressed that a unilateral termination of an employment contract should always be considered as an ultima ratio and in the present case, the two clubs were still in negotiations with respect to his possible transfer to Club D. In this respect, the Chamber highlighted, in particular, the fact that Club C had informed the player on 19 February 2018 that it had returned a signed draft of a transfer agreement to Club D, requesting the player to co-sign said document, but that the player, regardless, proceeded to terminate his contract with Club C on that same day. Equally, the Chamber, referring to the relevant information available in TMS, pointed out that the registration period in Country E was still open for 3 more days.

17. Considering the aforementioned elements, the Chamber could not concur with the player’s reasoning that his future career was at risk and concluded that the player could not have reached a point in which he could no longer reasonably believe that the clubs would agree on his transfer. As a result, the Chamber decided that the player did not have just cause to terminate the contract on 19 February 2018.

18. However, at the same time, the members of the Chamber wished to emphasize that there was a certain degree of bad faith on the side of Club C. In particular, the members of the Chamber were of the opinion that, based on the clear wording of article 1.1 of the additional agreement, the player could expect to be released in case of a matching offer from another club, offer which was undeniably made by Club D. By suddenly amending the aforementioned provision in order to secure the payment of training compensation, which could significantly increase the total compensation for the player’s transfer, the DRC found that Club C had acted in bad faith, and that such bad faith on Club C’s part could not be held against the player.

19. As a consequence, considering the very specific circumstances of the case at hand, in particular that the player terminated the employment contract without just cause but at the same time that Club C had acted in bad faith by not agreeing to the player’s transfer to Club D on the terms specified under article 1.1 of the additional agreement, the Chamber decided that it was fair and reasonable not to grant any compensation for breach of contract to Club C, and, therefore, disregard the application of art. 17 par. 1 of the Regulations in this matter.

20. The Chamber concluded its deliberations by rejecting the claim of the player and partially accepting the claim of Club C.

III. Decision of the Dispute Resolution Chamber

1. The claim of the First Claimant / Respondent II, Player A, is rejected.

2. The claim of the Second Claimant / Respondent I, Club C, is partially accepted.

3. It is established that the First Claimant / Respondent II has terminated the employment relationship with the Second Claimant / Respondent I without just cause.

4. The claim of the Second Claimant / Respondent I for compensation for breach of contract 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

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer

Encl. CAS directives