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 27 February 2020

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 27 February 2020,

in the following composition:

Clifford Hendel (USA), Chairman

Roy Vermeer (The Netherlands), member

Stefano La Porta (Italy), member

on the claim presented by the club,

PT Prachuap FC, Thailand,

Represented by Mr Songkiat Limanoorak

as Claimant / Counter-Respondent

against the player,

Jonatan Ferreira Reis, Brazil,

represented by Mr Helio Camargo and Ms Rafaela Camargo

as Respondent / Counter-Claimant

with the club,

Suphanburi FC, Thailand,

Represented by Mr Menno Teunissen and Mr Thomas Spee

as Intervening Party

regarding an employment-related dispute

between the parties

I. Facts of the case

1. On 31 October 2017, the Thai club Nakhonpathom United (hereinafter: Nakhonpathom) and Mr Sonkiat Limanoonrak (hereinafter: Mr Limanoonrak), President of the Thai club PT Prachuap FC (hereinafter: Prachuap or the Claimant) executed a Memorandum of Understanding (hereinafter: MOU).

2. Pursuant to clause 2 of the MOU, Nakhonpathom promised to transfer the Brazilian player Jonatan Ferreira Reis (hereinafter: the player or the Respondent) to Mr Limanoonrak himself on a loan basis until 1 April 2018, for the amount of THB 5,000,000. Such amount was payable in two instalments, namely THB 3,000,000 on 31 October 2017 and THB 2,000,000 on 1 April 2018. Nakhonpathom and Mr Limanoonrak further agreed that should the transfer fee be fully and timely paid, the player’s transfer would be made permanent, as per clause 2, last paragraph, of the MOU. The MOU does not contain the signature of the Respondent.

3. On an unspecified date, the player and Nakhonpathom signed a “Professional Football Player Contract” valid from 1 January 2018 until “the end of season 2019” (hereinafter: the contract). Pursuant to the contract, the player was entitled to a monthly salary of THB 180,000 for the 2018 season and THB 200,000 for the 2019 season. Additionally, as per clause 5.1 of the contract, Nakhonpathom was entitled to loan or permanently transfer the Player “at its discretion”.

4. On 27 March 2018, two cash deposits of THB 1,000,000 each were made from an unspecified sender to an unspecified beneficiary.

5. On an unspecified date, the player started to render services to the Claimant (hereinafter: the employment relationship). Pursuant to the employment relationship, the player was allegedly entitled to a monthly remuneration of THB 180,000.

6. As of 1 April 2018, Prachuap and the player allegedly agreed to give the latter a raise, therefore his salary was supposedly increased to THB 250,000 per month.

7. On 31 May 2018, the player and Prachuap signed a handwritten document purportedly modifying some of the conditions of the employment relationship (hereinafter: the handwritten document). Pursuant to the handwritten document, the following was established:

“1. 300,000 THB from 1st June to the end of season 2019.

2. Goal bonus 10,000 THB each goal start from 1st June 2018.

3. Assist Bonus 10,000 THB each goal start from 1st June 2018.

4. Goal and assist bonuses for all tournament.

5. 130,000 THB bonuses for first leg 2018.

6. Hospital fee 40,000 THB”. (sic)

8. The handwritten document does not name the parties, nor makes any reference to the employment relationship.

9. On 23 October 2018, Prachuap issued instructions for its players to attend a training camp scheduled to 19 November 2018.

10. On 19 November 2018, the player did not show up to the assigned training camp. Subsequently, on 24 November 2019, Prachuap sent a letter to the Player requesting him to report “for duty” and made express mention to the contract.

11. On 2 December 2018, the player, via his attorney, sent an e-mail to Prachuap claiming, inter alia, that the whole transfer of the player to Prachuap was fraudulent and “in wrong conditions”. The player went further to state that he was free to sign with any club as “because have contract where player no sign and your transfer no stamp and signature of player” (sic).

12. On 6 December 2018, Prachuap, via its attorneys, send a notice to the player demanding him to report to the training camp within 7 days, under penalty of termination of the contract “based on your default action in material breach of the [contract]”.

13. On 7 December 2018, the Player’s attorney responded to Prachuap’s correspondence and, inter alia, reiterated his position.

14. On 14 December and 21 December 2018, the player sent respectively two letters to Prachuap, reiterating his position and requesting that Prachuap issued his “letter of release”.

15. On 28 December 2018, Prachuap sent a letter to the player terminating the contract.

16. On 8 January 2019, the player and Thai club Suphanburi FC (hereinafter: the Intervening Party) signed an employment agreement valid from the same date until 30 November 2019.

17. On 4 February 2019, Prachuap lodged a claim against the Player in front of FIFA, asking to be awarded compensation for breach of contract. In this sense, Prachuap claimed that the player consented to the employment relationship until the end of the 2019 season and submitted that he committed a material breach of the contract by not joining the training camp on 19 November 2018. To this extent, Prachuap held that clause 5.3(4) of the contract entitled it to terminate the contract should the player display inappropriate behaviour.

18. Prachuap is further of the opinion that once the second instalment foreseen in the MOU was paid, the player was transferred on a definitive basis to Prachuap and therefore it assumed the obligations and rights arising from the contract in lieu of Nakhonpathom.

19. Additionally, the Claimant submitted that due to the player’s breach of the contract, it is entitled to compensation in the amount of THB 11,150,000, broken down as follows:

- THB 2,500,000 as compensation for breach of contract;

- THB 6,300,000 as damages for finding a replacement and entering into a new employment agreement with player Stefano Pinho;

- THB 2,000,000 as damages for the loss of the opportunity to transfer the player in the 2019 season;

- THB 350,000 as legal fees.

20. Prachuap further asks that the player be imposed sporting sanctions of a “1-year restriction” in light of his “deliberate” violation of the contract. Finally, Prachuap asks that it be compensated for the “unforeseen cost” it incurred given the player’s alleged breach.

21. In response, the Respondent filed his statement of defense and counterclaimed against Prachuap. The player submitted that Prachuap’s claim is inadmissible as it was filed before the FIFA Players’ Status Committee and not the Dispute Resolution Chamber.

22. The Player submits that the MOU is not a valid and binding document as it does not bear his signature or fingerprint, in other words, that there is no evidence on file that demonstrates the player’s and Prachuap’s willingness to conclude a deal. He also stated that such document was executed between a club and a natural person, with no reference made to Prachuap in any part of the document. In the player’s view, the MOU does not bear the necessary essentia negotii. The player claimed that he had not explicitly accepted any offers from Prachuap nor executed an employment agreement.

23. The Player is further of the opinion that Nakhonpathom and Mr Limanoonrak engaged in a fraudulent business together with the Football Association of Thailand, as no document was ever signed by the Player which entitled him to be registered with Prachuap.

24. The Player also submitted that the contract, executed with Nakhonpathom, cannot be deemed as a valid and binding document towards Prachuap, as the latter is a third party to such contract.

25. As an alternative request for relief, the player is of the opinion that his absence on a training camp does not constitute ground for a termination with just cause by Prachuap. He player also challenged Prachuap’s calculation for breach of contract and stated that Prachuap failed to justify the claimed amount and its “causality”. The player, in a further alternative, counterclaimed against Prachuap and sought outstanding salaries of October, November and December 2018 in the amount of THB 900,000, as well as additional compensation for breach of contract on egregious circumstances in the amount of THB 1,800,000 i.e. equivalent to 6 months of salaries.

26. Despite having being invited to do so, the Claimant did not respond to the player’s counterclaim.

27. The Intervening Party provided its position in the present matter. It held that, while it could not be considered a party to the proceedings, it did not induce the Player to terminate the contract with Prachuap and therefore that it bears no connection with the “just cause” discussion. It further submitted that it cannot be held jointly liable for the termination should FIFA deem that such termination was made with just cause by the Claimant.

II. Considerations of the DRC

1. First of all, the Dispute Resolution Chamber (hereinafter: DRC or Chamber) analysed whether it was competent to deal with the matter at hand. 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 DRC referred to art. 3 par. 2 and par. 3 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) it is competent to deal with the matter at stake, which concerns an employment-related dispute with an international dimension between a Brazilian player and a Thai club. As such, the DRC concluded that the Claimant’s claim is admissible.

3. Furthermore, the DRC 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 par. 2 of the Regulations on the Status and Transfer of Players (edition January 2020), and considering that the present claim was lodged on 4 February 2019, the June 2018 edition of said regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance.

4. The competence of the DRC and the applicable regulations having been established, the DRC entered into the substance of the matter. In this respect, the DRC started by acknowledging all the above-mentioned facts as well as the arguments and the documentation on file. However, the DRC emphasized 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. Having said this, the DRC noted that, on one hand, Prachuap lodged a claim against the player in front of FIFA, asking to be awarded compensation for breach of contract. In this sense, Prachuap claimed that the player consented to the employment relationship until the end of the 2019 season and submitted that he committed a material breach of the contract by not joining the training camp on 19 November 2018. To this extent, Prachuap held that clause 5.3(4) of the contract entitled it to terminate the contract should the player display inappropriate behaviour.

6. The Chamber additionally took note that Prachuap is further of the opinion that once the second instalment foreseen in the MOU was paid, the player was transferred on a definitive basis to Prachuap and therefore it assumed the obligations and rights arising from the contract in lieu of Nakhonpathom.

7. The DRC further acknowledged that the Claimant deems it is entitled to compensation in the amount of THB 11,150,000 due to the player’s alleged breach of the contract, broken down as follows:

- THB 2,500,000 as compensation for breach of contract;

- THB 6,300,000 as damages for finding a replacement and entering into a new employment agreement with player Stefano Pinho;

- THB 2,000,000 as damages for the loss of the opportunity to transfer the player in the 2019 season;

- THB 350,000 as legal fees.

8. Finally, the DRC noted that Prachuap further asks that sporting sanctions be applied to the player and that he is ordered to pay procedural costs and legal fees.

9. Subsequently, the DRC proceeded to give consideration to the Respondent’s position. To this extent, the DRC acknowledged that the Respondent submitted that the MOU is not a valid and binding document as it does not bear his signature or fingerprint, in other words, that there is no evidence on file that demonstrates the player’s and Prachuap’s willingness to conclude a deal. The DRC further noted that the player is of the position that the MOU was executed between a club and a natural person, with no reference made to Prachuap in any part of the document, and that in the player’s view, the MOU does not bear the necessary essentia negotii.

10. The Chamber additionally acknowledged that the player claimed that he had not explicitly accepted any offers from Prachuap nor executed an employment agreement and that the contract, executed with Nakhonpathom, cannot be deemed as a valid and binding document towards Prachuap, as the latter is a third party to such contract.

11. As an alternative request for relief, the DRC observed that the player deems that his absence on a training camp does not constitute ground for a termination with just cause by Prachuap. He player also challenged Prachuap’s calculation for breach of contract and stated that Prachuap failed to justify the claimed amount and its “causality”. The player, in an further alternative, counterclaimed against Prachuap and sought outstanding salaries of October, November and December 2018 in the amount of THB 900,000, as well as additional compensation for breach of contract on egregious circumstances in the amount of THB 1,800,000 i.e. equivalent to 6 months of salaries.

12. The DRC further observed that despite having being invited to do so, the Claimant did not respond to the player’s counterclaim.

13. Lastly, the Chamber noted that the Intervening Party provided its position in the present matter and acknowledged that it held that, while it could not be considered a party to the proceedings, it did not induce the Player to terminate the contract with Prachuap and therefore that it bears no connection with the “just cause” discussion. It further submitted that it cannot be held jointly liable for the termination should FIFA deem that such termination was made with just cause by the Claimant.

14. From the outset, the members of the Chamber highlighted that the fundamental disagreement between the Claimant and the Respondent – and the central issue to the present dispute – is whether a valid and binding employment contract between the parties was executed.

15. In this sense, the Chamber took particular note that there seems to be no disagreement between the parties with regards to the fact that the player rendered his services to Prachuap for the season 2018. However, the Chamber noted that according to the Respondent, as opposed to the Claimant, no legally binding employment contract had come into effect between the Claimant and the Respondent for the season 2019.

16. Consequently, the Chamber, first and foremost, focused its attention on the question as to whether a legally binding employment contract had been concluded by and between the Claimant and the Respondent. By doing so, the Chamber recalled that in accordance with article 12 para. 3 of the Procedural Rules, a party claiming a right on the basis of an alleged fact carries the burden of proof of such fact.

17. In this regard, the Chamber highlighted that in order for an employment contract to be considered as valid and binding, and regardless of the name given to the document, it should contain the essentialia negotii of an employment contract, such as the parties to the contract and their role, the duration of the employment relationship, the remuneration, and the signature of both parties.

18. After a careful study of the documentation produced on file, the Chamber concluded that such essential elements are not fully included in any of the pertinent documents.

19. To this extent, the Chamber observed that neither the Claimant nor the Respondent are a party to the MOU, the effects of which therefore cannot apply to any of the parties to the dispute. Likewise, the DRC noted that Prachuap is not a party to the contract; as such, in cannot derive rights arising thereto in lieu of Nakhonpathom. In particular, the Chamber emphasized that such conclusion would be naturally drawn by examining the contents of the contract, but was further confirmed in light of the Chamber’s assessment regarding the non-application of the MOU to neither the Claimant nor the Respondent.

20. Further, the DRC highlighted that the handwritten document does not name the parties thereto, nor its object, nor has any other indication as to its purpose. Accordingly, the Chamber concluded that such document cannot sufficiently demonstrate that the Claimant and the Respondent were contractually bound regarding the player’s services for the season 2019.

21. Finally, the Chamber turned its attention to the player’s counterclaim, and in line with the aforementioned conclusions, decided that no evidence brought forward by the parties sufficiently demonstrate that the player was entitled to a salary of THB 300,000, let alone that he had overdue payables in the amount of THB 900,000.

22. In light of the foregoing, and bearing in mind the evidence produced on file, the DRC concluded that both the claim filed by the Claimant and the counterclaim filed by the Respondent should be rejected.

III. Decision of the Dispute Resolution Chamber

1. The claim of the Claimant / Counter-Respondent, PT Prachuap FC, is admissible.

2. The claim of the Claimant / Counter-Respondent is rejected.

3. The counterclaim of the Respondent / Counter-Claimant, Jonatan Ferreira Reis, is rejected.

*****

Note related to the publication:

The FIFA administration may publish decisions issued by the Players’ Status Committee or the Dispute Resolution Chamber. 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 anonymized or a redacted version (cf. article 20 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).

Note relating to the motivated decision (legal remedy):

According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS.

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

e-mail: info@tas-cas.org

For the Dispute Resolution Chamber:

Emilio García Silvero

Chief Legal & Compliance Officer