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 3 October 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 3 October 2019,

in the following composition:

Geoff Thompson (England), Chairman

Stéphane Burchkalter (France), member

Jérôme Perlemuter (France), member

on the claim presented by the player,

Lovro Medic, Croatia,

represented by Mr Davor Radic

as Claimant

against the club,

Boavista FC, Portugal,

as Respondent

regarding an employment-related dispute between the parties

I. Facts of the case

1. On 1 July 2016, the Croatian player Lovro Medic (hereinafter; the Claimant) and the Portuguese club, Boavista FC (hereinafter; the Respondent) (hereinafter jointly referred to as the parties) signed an employment contract (hereinafter: first contract) valid as from 1 July 2016 until 30 June 2019, as well as an alleged “addendum” to said contract (hereinafter: annex).

2. In accordance with the first contract and its annex, the Respondent undertook to pay to the Claimant the following:

i. EUR 7,150, as a monthly salary payable each 15th day of the month in accordance with the contract;

ii. EUR 350, as housing benefits in accordance with the annex.

3. On 26 January 2017, the Respondent signed a statement declaring that “For dual effects, it declared that, despite the [first contract] concluded with [the Respondent], being terminated, [the Claimant] will continue to receive a monthly salary until 15 June 2017.”

4. On 1 July 2017, the parties signed a second employment contract (hereinafter: second contract) valid as from as from 1 July 2017 until 30 June 2019 according to which the Respondent undertook to pay the Claimant EUR 7,150 as a monthly salary, payable each 15th day of the month.

5. By correspondence dated 26 January 2018, the Claimant put the Respondent in default of payment of EUR 67,250, corresponding to outstanding salaries and housing benefits as from February 2017 until March 2018 in accordance with the first contract, the annex and the second contract, setting a 10 days’ time limit in order to remedy the default.

6. On 6 March 2018, the Claimant unilaterally terminated the second contract.

7. On 23 March 2019, the Claimant lodged a claim against the Respondent in front of FIFA requesting, as outstanding payments and compensation for breach of contract, the following monies :

a. EUR 83,002 as outstanding payments composed of:

i. EUR 27,300 as the salaries from February to May 2017;

ii. EUR 51,433.87 as the salaries from August 2017 to March 2018 composed of :

- EUR 7,150 as seven monthly salary from August 2017 to February 2018;

- EUR 1,383.87 as the salary for March 2018.

iii. EUR 4,267.74 as 13 monthly housing benefits.

b. EUR 96,816.13 as compensation for breach of contract equal to the residual value of the contract.

The player also requested interests at a rate of 5% p.a. on both amounts as of the respective due dates.

8. In his claim, the Claimant explained that the Respondent did not fulfil all its financial obligations in accordance with both contracts and the annex which had as a direct consequence the termination of the second contract.

9. Moreover, the Claimant added that after the termination of the first contract, he got loaned to a Portuguese club in the third league, after which, he started the sporting season 2017-2018 with the Respondent, until its termination, by training and being registered with the second team of the Respondent instead of the first team, thus, “notwithstanding the [Claimant]’s objection and demands that he be allowed to train and play with the rest of the team.”

10. As a consequence, the Claimant deemed that such behaviour from the Respondent justified as well the termination of the contract.

11. In reply to the claim, the Respondent alleged that it had appealed to a Portuguese judicial proceeding in order to recover economically and financially. In support of its allegations, the Respondent provided with the “Portuguese Court decision accepting the appeal to this Special Revitalization Plan”, dated 22 May 2018. Therefore, according to the Respondent, “all debt payment actions are immediately suspended”. The Respondent did not provide comments as to the substance.

12. Finally, the Claimant informed FIFA that, on 22 August 2018, he was registered as an amateur player with the Croatian club NK Zagreb until today.

II. Considerations of the Dispute Resolution Chamber

1. First of all, the Dispute Resolution Chamber (hereinafter: the DRC or the Chamber) 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 23 March 2019. Consequently, the DRC concluded that the 2018 edition of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber, (hereinafter: the Procedural Rules), is applicable to the matter at hand (cf. art. 21 par. 2 and 3 of the Procedural Rules).

2. Subsequently, the members of the Chamber referred to art. 3 par. 2 and 3 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition of October 2019), the Dispute Resolution Chamber is competent to deal with the present matter, which concerns an employment-related dispute with an international dimension between a Croatian player and a Portuguese club.

3. Furthermore, the Chamber analysed which edition of the Regulations on the Status and Transfer of Players 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 on the Status and Transfer of Players (edition of October 2019) and considering that the present claim was lodged in front of FIFA on 23 March 2019, the June 2018 edition of the Regulations on the Status and Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

4. At this point, the DRC took note that the Respondent requested FIFA to suspend the current proceedings, alleging that, in view of its financial difficulties, it had resorted to the “revitalization plan” in order to recover economically and financially, and, as a consequence, said proceedings having been accepted by “the Portuguese Court”, “all debt payment actions are immediately suspended”.

5. In this respect, the members of the DRC first wished to stress that when deciding a dispute before the DRC, FIFA’s regulations prevail over any national law chosen by the parties. In this regard, the Chamber emphasized that the main objective of the different FIFA Regulations is to create a standard set of rules to which all the actors within the football community are subject to and can rely on. This objective would not be achievable if the DRC would have to apply the national law of a specific party on every dispute brought to it. Therefore, the Chamber deemed that it is not appropriate to apply the principles of a particular national law to a dispute brought before it but rather the Regulations on the Status and Transfer of Players, general principles of law and, where existing, the Chamber’s well-established jurisprudence.

6. With respect to the request put forward on behalf of the Respondent to suspend the proceedings in which the Respondent is involved due to the ongoing “revitalization plan”, the Chamber stressed that in accordance with the jurisprudence of both the DRC and the Court of Arbitration for Sport, bankruptcy/insolvency procedures do not affect procedures in front of the DRC. In fact, the Chamber wished to outline that it is only requested to address the recognition of the Claimant’s claim and not the execution of a possible debt. What is more, the members of the Chamber noted that according to the correspondence received on 7 March 2019 from the Federação Portuguesa de Futbol (FPF), the Respondent remains affiliated to the FPF and is participating in the FPF competitions. Consequently, the Chamber decided that there is no reason to suspend the proceedings and that such request has to be dismissed and the claim of the Claimant considered as admissible.

7. The competence of the Chamber and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, the Chamber started by acknowledging the above-mentioned facts 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.

8. Having said this, the Chamber proceeded with an analysis of the circumstances surrounding the present matter, the parties’ arguments as well as 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.

9. In this respect and first of all, the members of the Chamber acknowledged that, on 1 July 2016, the Claimant and the Respondent had concluded an employment contract valid as from 1 July 2016 until 30 June 2019 as well as an alleged annex to the contract, which provided the following monies :

i. EUR 7,150, as a monthly salary payable each 15th day of the month in accordance with the contract;

ii. EUR 350, as housing benefits in accordance with the annex.

10. Moreover, the Chamber observed that on 26 January 2017, despite the first contract being terminated, the Respondent undertook to continue paying a salary amounting to EUR 7,150 until 15 June 2017. In continuation, the DRC also acknowledged the signature of the second contract on 1 July 2017, valid as from the date of its signature until 30 June 2017 and providing a monthly payment of EUR 7,150, payable each 15th of the month.

11. Within the above in mind, the Chamber observed that the Claimant held that he had been temporarily loaned to a club of a lower league as from January 2017 until July 2017 and, subsequently, that he had been registered with the second team of the Respondent until termination, albeit his various requests to reintegrate the first team. In addition, the DRC took note as well that, according to the Claimant, despite having put the Respondent in default of payment for a considerable amount, i.e. EUR 67,250, the Respondent did not react.

12. The Chamber further acknowledged that according to the Claimant, he had just cause to unilaterally terminate the contract on 6 March 2018, due to the fact that the Respondent failed to remit his salaries and housing benefits due as of February 2017 until March 2018 in spite of having been put in default of payment, as well as to the Respondent’s behavior towards him.

13. On account of the above, the Chamber highlighted that the underlying issue in this dispute was to determine as to whether the contract had been terminated by the Claimant with just cause and, subsequently, to determine the consequences thereof.

14. Having said that, the Chamber held that, on the date of termination of the contract by the Claimant, i.e. 6 March 2018, the Respondent had allegedly failed to pay the Claimant’s remuneration and housing benefits due as from February 2017, i.e. approximately 13 monthly salaries and housing benefits. In addition, the Chamber held as well that the Respondent also allegedly sent the Claimant to its second team after having him loaned to a third division club, which can be considered as an abusive behavior.

15. Furthermore, the DRC noted that the Respondent had been given the opportunity to reply to the claim submitted by the Claimant, but that the Respondent had failed to present its response as to the substance in this respect, referring only as to its request to suspend the current proceedings. In this way, the DRC deemed that the Claimant’s allegations as to the substance remained undisputed and therefore, that the Respondent accepted said allegations.

16. On account of the preceding consideration, the Chamber stated that the Respondent had seriously neglected its contractual obligations towards the Claimant. Therefore, the Chamber concluded that the Respondent was found to be in breach of the contract and that, in line with the Chamber’s longstanding and well-established jurisprudence the breach was of such seriousness that the Claimant had just cause to unilaterally terminate the employment contract with the Respondent on 6 March 2018. Consequently, the Chamber decided that the Respondent is to be held liable for the early termination of the contract with just cause by the Claimant.

17. In continuation, prior to establishing the consequences of the termination of the contract with just cause by the Claimant, the Chamber decided that the Respondent must fulfil its obligations as per the contract in accordance with the general legal principle of “pacta sunt servanda”.

18. On account of the aforementioned considerations, the DRC established that the Respondent is liable to pay to the Claimant outstanding remuneration, in particular, as agreed upon the first contract, its annex and the second contract.

19. In this respect, the DRC held that the Respondent failed to pay the Claimant EUR 27,300 as the salaries from February to May 2017, EUR 50,050 as the salaries from August 2017 to February 2018 and EUR 1,383.87 as the salary for March 2018, each due on the 15th of each month. In addition, the DRC decided that the Respondent is obliged to pay as well EUR 4,268.13 corresponding to the housing benefits, from February 2017 until termination. Consequently, the DRC concluded that, in accordance with the general legal principle of “pacta sunt servanda”, the Respondent is liable to pay the Claimant the total amount of EUR 83,002.

20. In continuation and with regard to the Claimant's request for interest, the DRC decided that the Claimant is entitled to receive interest at the rate of 5% p.a. on the outstanding partial amounts as follows:

i. as from 16 June 2017 on the amount of EUR 27,300;

ii. as from 16 September 2017 on the amount of EUR 7,150;

iii. as from 16 October 2017 on the amount of EUR 7,150;

iv. as from 16 November 2017 on the amount of EUR 7,150;

v. as from 16 December 2017 on the amount of EUR 7,150;

Player Lovro Medic, Croatia / Club Boavista FC, Portugal 8

vi. as from 16 January 2018 on the amount of EUR 7,150;

vii. as from 16 February 2018 on the amount of EUR 7,150;

viii. as from 16 March 2018 on the amount of EUR 7,150;

ix. as from 16 April 2018 on the amount of EUR 1,383.87;

x. as from 16 January 2018 on the amount of EUR 4,268.13.

21. Having established that the Respondent is to be held liable for the early termination of the employment contract with just cause by the Claimant, the Chamber further decided that, taking into consideration art. 17 par. 1 of the Regulations, the Claimant is entitled to receive from the Respondent compensation for breach of contract in addition to the aforementioned outstanding remuneration.

22. In this context, the Chamber outlined that in accordance with said provision 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 Claimant 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.

23. In application of the relevant provision, the Chamber held that it first of all had to clarify whether the pertinent employment contract contained any clause, by means of which the parties had beforehand agreed upon a compensation payable by the contractual parties in the event of breach of contract. In this regard, the Chamber established that no such compensation clause was included in the contract at the basis of the matter at stake.

24. As a consequence, the members of the Chamber determined that the amount of compensation payable by the Respondent to the Claimant 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. Therefore, other objective criteria may be taken into account at the discretion of the deciding body.

25. The members of the Chamber then turned their attention to the remuneration and other benefits due to the Claimant under the existing contract and/or the new contract, which criterion was considered by the Chamber to be essential. The members of the Chamber deemed it important to emphasise that the wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both the existing contract and the new contract in the calculation of the amount of compensation.

26. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract as from its termination and concluded that the Claimant would have received EUR 96,816.13 as remuneration had the employment relationship been executed until its regular expiry date of 30 June 2019, i.e. the monthly salaries and housing benefits as from 7 March 2018 until 30 June 2019. Consequently, the Chamber concluded that the amount of EUR 96,816.13 serves as the basis for the final determination of the amount of compensation for breach of contract in the case at hand.

27. In continuation, the Chamber assessed as to whether the Claimant has 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(s) 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.

28. The Chamber recalled that, after termination of the contract, the Claimant was not able to mitigate his damages, as he concluded an employment contract as an amateur.

29. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of EUR 96,816.13 to the Claimant as compensation for breach of contract.

30. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of compensation as of the date on which the claim was lodged, i.e. 23 March 2019, until the date of effective payment.

31. The DRC concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant, Lovro Medic, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Boavista FC, has to pay to the Claimant, within 30 days as from the date of notification of this decision, outstanding remuneration in the amount of EUR 83,002, plus interest at the rate of 5% p.a. until the date of effective payment, as follows :

xi. as from 16 June 2017 on the amount of EUR 27,300;

xii. as from 16 September 2017 on the amount of EUR 7,150;

xiii. as from 16 October 2017 on the amount of EUR 7,150;

xiv. as from 16 November 2017 on the amount of EUR 7,150;

xv. as from 16 December 2017 on the amount of EUR 7,150;

xvi. as from 16 January 2018 on the amount of EUR 7,150;

xvii. as from 16 February 2018 on the amount of EUR 7,150;

xviii. as from 16 March 2018 on the amount of EUR 7,150;

xix. as from 16 April 2018 on the amount of EUR 1,383.87;

xx. as from 16 January 2018 on the amount of EUR 4,268.13.

4. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, compensation for breach of contract in the amount of UER 96,816.13, plus interest at the rate of 5% p.a. until the date of effective payment as of 23 March 2019.

5. In the event that the amounts plus interest due to the Claimant in accordance with the above-mentioned numbers 3. and 4. are not paid by the Respondent within the stated time limit, 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 is rejected.

7. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received.

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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 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. 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