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 16 August 2019

Decision of the

Dispute Resolution Chamber

passed in Zurich, Switzerland, on 16 August 2019,

in the following composition:

Geoff Thompson (England), Chairman

Eirik Monsen (Norway), member

Johan van Gaalen (South Africa), member

Pavel Pivovarov (Russia), member

Daan de Jong (the Netherlands), member

on the claim presented by the player,

Ricardo Mauricio Clarke Hamilton, Panama

represented by Mr Evaristo Javier Dominguez

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 2 July 2017, the Panamanian player, Ricardo Mauricio Clarke Hamilton (hereinafter: the Claimant or the player) concluded an employment contract (hereinafter: the contract) with the Portuguese club, Boavista FC, S.A.D. (hereinafter: the Respondent or the club), valid as from 3 July 2017 until 30 June 2020.

2. On 11 May 2018, the Claimant and the Respondent signed a Revocation of Sport Employment Contract by Consent (hereinafter: the termination agreement).

3. In accordance with the termination agreement, the Claimant was entitled to receive from the Respondent the total amount of EUR 47,000 payable as follows:

i. EUR 12,000 on 11 May 2018;

ii. EUR 7,000 on 30 May 2018;

iii. EUR 14,000 on 31 July 2018;

iv. EUR 14,000 on 30 September 2018.

4. The termination agreement further provided that “an exclusion period of 15 days is allocated on the above mentioned dates. After which the [club] shall be declared in default” […] the non payment of an instalment on the maturity date implies the immediate maturity of the remaining instalments”.

5. Clause 5 of the termination agreement provided the following: “1. In the event of definitive non-compliance of this agreement by any of the contracting parties, the party in default shall be liable of indemnifying the counterparty.

2. The amount to pay stated herein as penalty clause, shall be of EUR 7,000 to be paid in the term of 15 days as of the corresponding demand made for payment”

6. According to the Claimant, on 11 May 2018, he received the first instalment provided by the termination agreement, in the amount of EUR 12,000.

7. On 5 December 2018, the Claimant put the Respondent in default, requesting the payment of EUR 35,000 corresponding to the last three instalments of the termination agreement, granting 10 days for the club to remedy its default.

8. On 31 January 2019, the Claimant lodged a claim against the Respondent in front of FIFA for outstanding remuneration and compensation for breach of contract and requested the payment of the total amount of EUR 42,000 corresponding to the following amounts, plus 5% interest p.a. on the total amount as from 30 May 2018 “the time in which the breach occurred “ until the date of effective payment:

 EUR 35,000 corresponding to the last three instalments of the termination agreement;

 EUR 7,000 corresponding to the penalty clause provided in the termination agreement;

 The Claimant further requested the imposition of sporting sanctions against the Respondent as well as for the club to cover all costs of the proceedings.

9. The Claimant argued that beside the first instalment of the termination agreement, he did not receive any amounts from the Respondent, despite his default notice, which remained unanswered.

10. 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.

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 31 January 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 June 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 Panamanian 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 June 2019) and considering that the present claim was lodged in front of FIFA on 31 January 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. 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.

5. Having said this, the Chamber proceeded with an analysis of the circumstances surroundings 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.

6. In this respect and first of all, the members of the Chamber acknowledged that, on 2 July 2017, the Claimant and the Respondent had concluded an employment contract valid as from 1 July 2016 until 30 June 2019.

7. Equally, the Chamber took note that, on 11 May 2018, the parties had concluded an agreement by means of which the Respondent undertook to pay to the Claimant, inter alia, a compensation of EUR 47,000, and, subsequently, agreed upon the following payment schedule:

- EUR 12,000 on 11 May 2018;

- EUR 7,000 on 30 May 2018;

- EUR 14,000 on 31 July 2018;

- EUR 14,000 on 30 September 2018.

8. In the same line, the Chamber noted that the termination agreement further provided in its art. 5 that “1. In the event of definitive non-compliance of this agreement by any of the contracting parties, the party in default shall be liable of indemnifying the counterparty.

2. The amount to pay stated herein as penalty clause, shall be of EUR 7,000 to be paid in the term of 15 days as of the corresponding demand made for payment”

9. In continuation, the Chamber observed that the Claimant claimed from the Respondent the amount of EUR 42,000, plus 5 % interest as of 30 May 2018, thereby asserting that the Respondent had not complied with the above-mentioned termination agreement, as to the second, the third and fourth instalments, and that it had not paid him said amounts despite having duly received the Claimant’s default notice. Moreover, the Chamber also noted that the Claimant was further claiming EUR 7,000 corresponding to the penalty clause provided in the termination agreement. In addition, the Chamber further took note that the Claimant requested the Respondent to be ordered to pay legal and procedural costs.

10. At this point, the Chamber took note that, for its part, 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”.

11. 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.

12. With respect to the request put forward on behalf of the Respondent to suspend 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 dated 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.

13. In this context, the DRC was eager to emphasise that the parties signed a termination agreement on 11 May 2018 by means of which the parties agreed that the Respondent would pay to the Claimant the amount EUR 47,000, payable in the following four instalments: EUR 12,000 on 11 May 2018; EUR 7,000 on 30 May 2018, EUR 14,000 on 31 July 2018 and EUR 14,000 on 30 September 2018.

14. Subsequently, the DRC observed that the Claimant reverted to FIFA indicating that the Respondent had not fulfilled its obligations as established in the termination agreement, since it paid to the Claimant the first instalment only. Therefore, the Claimant requested to be paid the alleged outstanding three instalments in the total amount of EUR 35,000, as well as interest at the rate of 5% p.a. as from 30 May 2018 “the time in which the breach occurred”.

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 aforementioned considerations, the DRC established that the Respondent had failed to pay to the Claimant the amounts as agreed upon in the agreement, totalling EUR 35,000.

17. Moreover, regarding the penalty clause provided in art.5 of the termination agreement, the members of the DRC concluded that penalty clauses may be freely entered into by the contractual parties and may be considered acceptable, in the event that the pertinent written clause meets certain criteria such as proportionality and reasonableness. In this respect, the Chamber highlighted that in order to determine as to whether a penalty clause is to be considered acceptable, the specific circumstances of the relevant case brought before it shall also be taken into consideration.

18. In this specific case at hand, the member of the Chamber deemed that the penalty clause of art. 5 of the termination agreement of EUR 7,000, which the parties contractually agreed upon in the context of settling a dispute, is both proportionate and reasonable in the case at hand.

19. 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 amount of EUR 35,000 as outstanding remuneration and EUR 7,000 as penalty, making it a total of EUR 42,000.

20. Regarding the Claimant’s request in connection to interest on the penalty clause of art. 5 of the termination agreement, the DRC decided that the amount of EUR 7,000 of the penalty clause already represents a penalty on itself, and that in accordance with the longstanding jurisprudence of the Chamber in this regard, no further interest should be awarded on that amount.

11. Finally, the Dispute Resolution Chamber held that the Claimant’s claim for legal and procedural costs is rejected in accordance with art. 18 par. 4 of the Procedural Rules and the Chamber’s respective longstanding jurisprudence.

12. 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, Ricardo Mauricio Clarke Hamilton, is admissible.

2. The claim of the Claimant is partially accepted.

3. The Respondent, Boavista Futebol Clube, 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 35,000 plus 5% interest p.a. as from 1 June 2018 until the date of effective payment.

4. The Respondent had to pay to the Claimant the amount of EUR 7,000 as penalty, within 30 days as from the date of notification of this decision.

5. In the event that the amount plus interest due to the Claimant in accordance with the above-mentioned points 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