F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2019-2020) – fifa.com – atto non ufficiale – Decision 17 January 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 17 January 2020,

in the following composition:

Omar Ongaro (Italy), Deputy Chairman Stefano Sartori (Italy), member

José Luis Andrade (Portugal), member

on the claim presented by the player,

Jaimen Javier Ayovi Corozo, Ecuador

represented by Mr Jaime Castillo

as Claimant

against the club,

Shabab Al Ahli Dubai Club, United Arab Emirates

represented by Mr Rafael Quieroz Botelho

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 18 July 2018, the Ecuadorian player Jaimen Javier Ayovi Corozo (hereinafter: the player or the Claimant) concluded an employment contract (hereinafter: the contract) with the Emirati club, Shabab Al Ahli Dubai Club, valid as from 18 July 2018 until 30 June 2020.

2. According to the contract, the club undertook to pay the player the following monies:

- EUR 200,000 “after receiving the ITC”;

- EUR 100,000 payable until 31 July 2018;

- EUR 170,000 as monthly salary between August 2018 and May 2019 (10 payments);

- EUR 300,000 payable on 31 July 2019;

- EUR 170,000 as monthly salary between August 2019 and May 2020 (10 payments).

3. In addition, the contract contains the following clause: “The winning rewards shall be paid in accordance with the [club’s] rewards regulations”.

4. Art. 7 of the contract , titled “Information of termination by the parties from 01/04/2019 until 30/04/2019”, establishes, inter alia, the following: “The parties agreed that each party is entitled to request termination of the contract individually as from 30/06/2019 by informing the other about the decision from 01/04/2019 up to 30/04/2019 regarding the termination. In this case the party desired to terminate the contract shall pay to the other party 300,000 Euro. The two parties acknowledged that this amount will be enough compensation for termination of the contract before its duration as well as the parties acknowledged that they will not request additional or reducing the amount legally or financially for termination of the contract. For avoidance of doubt, in the case that a notification is presented to one party, the employment relationship must exist up to 30/06/2019, i.e., the Player and the club must fulfill them contractual obligations hereby assumed plus compensate the other with the amount of 300,000 Euro. In case that no notification or communication is delivered until 30/04/2019 this contract shall remain valid and binding until 30/06/2020.”

5. Art. 9.15 of the contract reads as follows: “In the event of an unlawful breach by the Player of this Agreement the Player and the Club acknowledge and agree that the market value of the Player at the time of such unlawful breach, as determined by the Dispute Resolution Chamber of FIFA, shall be used (in addition to the existing criteria as set out at Article 17 of the FIFA regulations to the Status and Transfer of Players) (as amended) when calculation the compensation due and payable by the Player to the Club for the Player’s unlawful breach of Agreement. The Player agrees and acknowledges that such market value represents the actual loss sustained by the Club and the true and fair cost to the Club of replacing the Player as at the time of his unlawful breach not at the date this Agreement was entered into. Nothing in this Agreement shall infer or imply an acceptance by the Club of the Players ability to terminate this Agreement.”

6. On 29 April 2019, the club sent a letter to the player terminating the contract with effect as of 30 June 2019 in accordance with art. 7 of the contract.

7. On 10 July 2019, the player sent a letter to the club rejecting its termination since the latter failed to comply with one of the conditions, i.e. to pay the compensation of EUR 300,000. Therefore, the player argued that the contract would run until 30 June 2020 and offered his services to the club. Further, he put the club in default of EUR 170,000 for the salary of May 2019.

8. On 15 July 2019, the club sent a letter to the player insisting that the contract was duly terminated with its correspondence dated 29 April 2019 and that it has not “denied you the right to be paid the 300,000 euro that should take place as soon as you duly finalise the logistical needs with the Club in accordance with the applicable rules and regulations before the UAEFA and the UAE authorities”. Additionally, the club maintained in said letter having paid the salary for May 2019.

9. On 17 July 2019, the player sent a letter to the club reiterating his position.

10. On 22 July 2019, the player lodged a claim for breach of contract against the club and requested payment of the following monies:

- EUR 170,000 corresponding to the salary of May 2019;

- United Arab Emirates Dirham (AED) 400,000 corresponding to alleged bonuses;

- EUR 2,000,000 as compensation for breach of contract.

In addition, the player requested interest of 5% p.a. as of “the date the contract was terminated” and that sporting sanctions are imposed on the club.

11. In his claim the player argued that the club did not act in accordance with art. 7 of the contract and therefore terminated the contract without just cause.

12. Referring to art. 7 of the contract, the player held that two conditions had to be met in order to terminate the contract in accordance with such clause, i.e. the termination notice and the payment of the compensation until 30 April 2019.

13. According to the player, the club failed to duly exercise the early termination since it did not remit the compensation agreed upon.

14. Notwithstanding his argumentation above, the player argued that the clause as such should be deemed invalid by the DRC, since it is “unequitable, unfair and abusive”.

15. The player held that the clause was designed in the club’s interest and would grant favorable conditions to the club. In this regard, he pointed out that the compensation defined in such clause amounts to “less than 1/6th” of the amount he would have earned during the residual value of the contract.

16. Furthermore, the player referred to art. 9.15 of the contract in order to demonstrate the “unfair manner” the contract was drafted. According to such clause, the player would have needed to reimburse the actual “market value” instead of the pre-defined compensation.

17. On account of the above, the player argued that the club terminated the contract without just cause and he requested to be awarded with his outstanding dues as well as compensation in the amount of the residual value of the contract.

18. Regarding the outstanding salary for May 2019, the player held that the club provided a payment slip dated 28 May 2019 in its correspondence dated 15 July 2019, but that such payment corresponded to a late payment of April and not May 2019.

19. Regarding the claimed bonuses, the player held that he would be entitled to a reward in connection with the victory of the “UAE’s Presidents Cup 2018/2019”, i.e. AED 100,000 (approx. EUR 24,000), and the “Arabian Gulf Cup 2018/2019”, i.e. AED 300,000 (approx. EUR 73,000), according to the club’s regulations.

20. In its reply, the club rejected the player’s argumentation and held that the contract was duly terminated in accordance with its art. 7 since only one condition, the termination notice, is mentioned in the article and the payment of the EUR 300,000 as compensation is a result thereof.

21. Furthermore, the club pointed out that such clause is “more than equitable, proportional and fair” and therefore perfectly valid.

22. In this regard, the club stated never having refused to make such payment, but held the player, “has refused to collect it”.

23. Moreover, regarding the claimed outstanding remuneration, the club maintained having complied with its financial obligations. In this regard, the club submitted bank statements for all ten salary payments due between August 2018 and May 2019, indicating that the amounts were paid.

24. Regarding the claimed bonuses, the club denied that it owes any amounts in connection with said achievements. Additionally, the club pointed out that the player did not submit the regulations on which he bases said part of the claim.

25. The player informed FIFA that he remained unemployed as of 1 July 2019 until today.

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 case at hand. In this respect, it took note that the present matter was submitted to FIFA on 22 July 2019. Taking into account the wording of art. 21 of the 2019 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at hand.

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 conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition January 2020), the Dispute Resolution Chamber is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Ecuadorian player and an Emirati club.

3. Furthermore, 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, and considering that the present claim was lodged on 22 July 2019, the June 2019 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. The members of the Chamber started by acknowledging the facts of the case, as well as the documentation 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 Chamber noted that the parties concluded an employment contract on 18 July 2018, valid as from 18 July 2018 until 30 June 2020. Furthermore, the DRC took notice of the Respondent’s unilateral termination of said contract on 29 April 2019.

6. In this framework, the members of the Chamber noted duly noted the Claimant’s argumentation that the requirements of art. 7 of the contract regarding such termination were not met, since the club failed to make payment of the compensation during April 2019. Alternatively, the player held that the clause should not be taken into account since it is “unequitable, unfair and abusive” and was drafted in the club’s favour. Therefore, the player claims one outstanding salary, i.e. from May 2019, outstanding bonuses and compensation for breach of contract corresponding to the residual value of the contract.

7. Moreover, the DRC acknowledged that the Respondent rejected the player’s claim and insisted that it terminated the contract in accordance with the relevant clause, since the only requirement was to give notice. In this regard, the club maintained that payment of compensation was only a result of the termination, but not a requirement for its validity. The club held having paid regarding the salary of May 2019 and held that the Claimant did not substantiate his claim regarding the bonuses.

8. On account of the above, the DRC acknowledged that the central issue in the matter at stake was to determine as to whether the contract was terminated with or without just cause and to decide on the consequences thereof.

9. With the above in mind, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well the documentation on file, 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.

10. In doing so, the DRC turned its attention to art. 7 of the contract, which defined the possibility to terminate the contract.

11. The Chamber recalled that said clause reads as follows: “The parties agreed that each party is entitled to request termination of the contract individually as from 30/06/2019 by informing the other about the decision from 01/04/2019 up to 30/04/2019 regarding the termination. In this case the party desired to terminate the contract shall pay to the other party 300,000 Euro. The two parties acknowledged that this amount will be enough compensation for termination of the contract before its duration as well as the parties acknowledged that they will not request additional or reducing the amount legally or financially for termination of the contract. For avoidance of doubt, in the case that a notification is presented to one party, the employment relationship must exist up to 30/06/2019, i.e., the Player and the club must fulfill them contractual obligations hereby assumed plus compensate the other with the amount of 300,000 Euro. In case that no notification or communication is delivered until 30/04/2019 this contract shall remain valid and binding until 30/06/2020.”

12. In this respect the DRC noted that the termination notice of the Respondent was undisputedly delivered during the period defined in art. 7 of the contract. Furthermore, the Chamber analysed the content of the clause in question and considered that the clause provides for equal rights for both parties and that the payment of the amount was not a condition, but was to be considered a consequence of triggering the clause on time.

13. Therefore, the members of the Chamber had to reject the Claimant’s argumentation regarding the application as well as to the validity of the clause, and concluded that the Respondent had validly terminated the contractual relationship as foreseen in art. 7 of the contract.

14. Bearing in mind the previous considerations, the Chamber went on to deal with the consequences of the early termination of the employment contract by the Respondent.

15. In application of art. 7 of the contract, since the pertinent employment contract contains 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 an early termination, the Chamber established that the Respondent has to pay compensation in the amount of EUR 300,000 to the Claimant.

16. In addition, and taking into consideration the player’s claim and the jurisprudence of the Chamber, the DRC decided to award on the aforementioned amount interest of 5% p.a. as of 1 July 2019 until the date of effective payment .

17. Furthermore, as to the outstanding remuneration claimed by the player, the Chamber established that the Claimant failed to substantiate his claim regarding bonuses. What is more, from the documentation on file it can be established that the club remitted the salary payments due between August 2018 and May 2019.

18. In conclusion, the DRC maintained that no outstanding remuneration shall be granted.

19. In addition, the DRC established that any further claim lodged by the Claimant is rejected.

20. Furthermore, taking into account the consideration under number II./3. above, the Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from the failure of the concerned party to pay the relevant amounts of outstanding remuneration and/or compensation in due time.

21. In this regard, the Chamber pointed out that, against clubs, the consequence of the failure to pay the relevant amounts in due time shall consist of a ban from registering any new players, either nationally or internationally, up until the due amounts are paid and for the maximum duration of three entire and consecutive registration periods.

22. Therefore, bearing in mind the above, the DRC decided that, in the event that the Respondent does not pay the amounts due to the Claimant within 45 days as from the moment in which the Claimant, following the notification of the present decision, communicates the relevant bank details to the Respondent, a ban from registering any new players, either nationally or internationally, for the maximum duration of three entire and consecutive registration periods shall become effective on the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.

23. Finally, the Chamber recalled that the above-mentioned ban will be lifted immediately and prior to its complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3 of the Regulations.

* * * * *

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Jaimen Javier Ayovi Corozo, is partially accepted.

2. The Respondent, Shabab Al Ahli Dubai Club, has to pay to the Claimant the amount of EUR 300,000 as compensation, plus interest of 5% p.a. as of 1 July 2019 until the date of effective payment.

3. Any further claim lodged by the Claimant is rejected.

4. The Claimant is directed to inform the Respondent, immediately and directly, preferably to the e-mail address as indicated on the cover letter of the present decision of the relevant bank account to which the Respondent must pay the amount mentioned under point 2 above.

5. The Respondent shall provide evidence of payment of the due amount in accordance with point 2 above to FIFA to the e-mail address psdfifa@fifa.org, duly translated, if need be, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount due plus interest in accordance with point 2 above is not paid by the Respondent within 45 days as from the notification by the Claimant of the relevant bank details to the Respondent, the Respondent shall be banned from registering any new players, either nationally or internationally, up until the due amount is paid and for the maximum duration of three entire and consecutive registration periods (cf. art. 24bis of the Regulations on the Status and Transfer of Players).

7. The ban mentioned in point 6. above will be lifted immediately and prior to its complete serving, once the due amounts are paid.

8. In the event that the aforementioned sum plus interest is still not paid by the end of the ban of three entire and consecutive registration periods, the present matter shall be submitted, upon request, to FIFA’s Disciplinary Committee for consideration and a formal decision.

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the DRC. Where such decisions contain confidential information, FIFA may decide, at the request of a party within five days of the notification of the motivated decision, to publish an anonymised or a redacted version (cf. article 20 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note related to the appeal procedure:

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. 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.

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