F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2020-2021) – fifa.com – atto non ufficiale – Decision16 July 2020
Decision of the
Dispute Resolution Chamber
passed via videoconference, on 16 July 2020,
regarding an employment-related dispute concerning the player Lucas DE LIMA TAGLIAPIETRA
COMPOSITION:
Geoff Thompson (England), Chairman
Michele Colucci (Italy), member
Abu Nayeem Shohag (Bangladesh), member
CLAIMANT / COUNTER-RESPONDENT:
LUCAS DE LIMA TAGLIAPIETRA, Brazil
Represented by Mr. Daniel Cravo
RESPONDENT / COUNTER-CLAIMANT:
LDU QUITO, Ecuador
INTERVENING PARTY:
AL BATIN, Saudi Arabia
Represented by Mr. Nasr El-din Azzam
I. FACTS OF THE CASE
1. The Brazilian and Italian player, Lucas de Lima Tagliapietra (hereinafter: the player) and the Ecuadorian club, LDU Quito (hereinafter: Liga or the club) executed two documents, an employment contract and an addendum, both valid from 28 July 2017 until 30 June 2021 (hereinafter: the contract).
2. According to the contract, the player was entitled to the following remuneration:
a. Monthly Unified salary (“sueldo unificado”) of USD 593,00;
b. Monthly prime (“prima mensual”) of USD 9,407;
c. Monthly prime (“prima mensual”) of 15,000;
d. Yearly prime (“prima annual”) of USD 100,000, payable in two instalments each year, the first year USD 50,000 upon receipt of the player’s International Transfer Certificate and USD 50,000 until 28 February 2018; for the remaining years the dates would be “established before the beginning of the season”.
e. Monthly Housing allowance of USD 800;
f. 4 return flight tickets per year (route Quito – Porto Alegre);
g. A car.
3. On 14 June 2018, the player, via his legal representative, sent the club a default notice, in which he requested the total amount of USD 146,820.18 which was allegedly outstanding. The player gave the club a deadline of ten days to proceed to the relevant payment in accordance to art.12bis of the FIFA Regulations on the Status and Transfer of Players. Alternatively, the club was also granted a deadline of fifteen days, following which, should the player not receive the payment, he would be entitled to terminate the contract with just cause in accordance with art. 14bis of the FIFA Regulations on the Status and Transfer of Players.
4. The club did not reply to the aforementioned default notice.
5. On 22 June 2018, the player sent the club a second default notice reiterating his requests.
6. On 25 June 2018, the club made a deposit in favour of the player in the amount of USD 7,963.10.
7. On 2 July 2018, the player sent a letter to the club by means of which he terminated the contract on the basis of art. 14 and 14bis of the FIFA Regulations on the Status and Transfer of Players.
8. On 3 July 2018, the club sent the player and his counsel two separate letters, by means of which it stated having made a payment of USD 125,000 and it affirmed that this amount included the primes described in the contract.
9. On 4 July 2018, the player responded to the club’s letter of 3 July 2018, affirming, inter alia, that in spite of the payment made, he still had a just cause to terminate the employment relationship.
10. On the same date, the player filed a claim against the club before FIFA.
11. On 6 July 2018, the player and the Saudi club, Al Batin (hereinafter: Al Batin or the intervening party) signed an employment agreement valid from 6 July 2018 until 5 July 2019, according to which the player was entitled to a total remuneration of USD 550,000.
12. On 7 July 2018, the club paid USD 13,907.08 to the player.
13. On 26 July 2018, the club filed a claim against the player before the especial arbitral tribunal of the Ecuadorian Football Federation (hereinafter: NRDC of Ecuador).
14. On 15 July 2019, the player and the Portuguese club, Boavista FC, signed an employment agreement valid from 15 July 2019 until 30 June 2022, according to which the player was entitled to a total remuneration yearly remuneration of EUR 105,000.
II. PROCEEDINGS BEFORE FIFA
15. A brief summary of the position of the parties is detailed in continuation.
A. Position of the player
16. The player, as opposed to the club, affirmed that FIFA is competent to hear the dispute at hand on the grounds that the NDRC of Ecuador does not meet the criteria established by FIFA Circular no. 1010.
17. The player explained that, at the beginning of February 2018, the club ordered him to train separately from the rest of the club’s main squad. At the same time, the player maintained that the club failed to comply with its financial obligations under the contract.
18. In continuation, the player argued that on 14 June 2018 he sent the club a default notice in which he outlined that the club owed him the amount of USD 96,820.18, comprising of the amounts due to him under contract from January 2018 until May 2018 minus USD 28,179.82 the club had paid. Equally, the player underlined that the club had not paid him the amount of USD 50,000 as per clause 3 of the addendum, which fell due on 28 February 2018. Thus, the player concluded that the club owed him the total of USD 146,820.18.
19. The player claimed that by means of such notice the club was granted a grace period of at least 15 days to cure its breach, but argued that the club never replied to his notice and he therefore reiterated his requests by a second notice sent on 22 June 2018.
20. Subsequently, the player explained that on 25 June 2018, the club paid him USD 7,963.10 and that, consequently the outstanding debt of the club from January to May 2018 amounted to USD 138,857.08.
21. The player furthermore submitted that on 2 July 2018, in light of the failure by the club to cure its breach, he terminated the contract on the grounds of art. 14bis of the FIFA Regulations on the Status and Transfer of Players.
22. The player further confirmed having received USD 124,950 from the club on 3 July 2018, but argued that nevertheless the club remained in default of the net amount of USD 13,907.08. For this reason, the player explained that on 4 July 2018, he responded to the club’s letter of 3 July 2018, affirming, inter alia, that in spite of the payment made, he still had a just cause to terminate the employment relationship, and that there were still some outstanding amounts due to him, since the amounts payable under the contract should be considered as being net.
23. To summarise all the above, the player held that, from January to 2nd July 2018, the club failed to pay him the following salaries:
24. Furthermore, the player argued that the club had failed to pay the amount of USD 50,000 due on 28 February 2018 as per the addendum, making a total of overdue payables of USD 138,857.68 by the date of the termination of the contract. According to the player this amount corresponds to more than two monthly salaries and therefore he believes he had a just cause to terminate the contract in accordance with art. 14bis of the FIFA Regulations on the Status and Transfer of Players. As a consequence, the player is of the opinion that the club must pay him outstanding salaries as well as compensation for breach of contract.
25. Considering that on 7 July 2018 the club made a further payment of USD 13,907.08 and after the FIFA Administration requested the player to further clarify the amount claimed as compensation for breach of contract, the player made the following request for relief:
a. Payment of USD 25,000 corresponding to the player’s remuneration of June 2018 plus interest of 5% p.a. from its due date until the date of effective payment;
b. Mitigated compensation for breach of contract in the amount of USD 650,000 plus interest of 5% p.a. from its due date until the date of effective payment;
c. Additional compensation for breach of contract in the amount of USD 200,000 plus interest of 5% p.a. from its due date until the date of effective payment;
d. Alternatively, additional compensation for breach of contract in the amount of USD 100,000 plus interest of 5% p.a. from its due date until the date of effective payment.
B. Position of the club
26. The club, for its part, rejected the claim of the player and filed a counterclaim against him.
27. Firstly, Liga challenged the admissibility of the claim as it deemed the NDRC of Ecuador competent to hear the dispute.
28. As to the substance, the club argued that the player and his lawyers had already prepared the claim when the player sent notices to the club regarding overdue payables. In this respect, Liga deemed that such actions are a violation of the FIFA Code of Ethics, which would merit a sanction on the player in accordance with article 25 par. 4 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber.
29. The club also argued that it was not the player who had filed the claim, but that his lawyers were acting autonomously.
30. Furthermore, Liga filed a counterclaim against the player, requesting compensation for breach of contract in the amount of USD 1,500,000, broken down as follows:
a. USD 1,000,000 paid to Boavista FC as a transfer fee;
b. USD 500,000 as a lost transfer fee.
31. Lastly, LDUQ admitted to have filed a claim against the player before the NDRC of Ecuador on 26 July 2018.
C. Position of the intervening party
32. The Saudi club, Al Batin, at the request of FIFA, argued that the player had terminated the contract with just cause, and that it did not induce the player to breach it.
III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
A. Competence
33. The Dispute Resolution Chamber (hereinafter also referred to as 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 4 July 2018 and decided on 16 July 2020. Consequently, the June 2020 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 of the Procedural Rules).
34. Subsequently, the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of Players, the Dispute Resolution Chamber is in principle competent to deal with employment-related disputes with an international dimension between a Brazilian-Italian player and an Ecuadorian club.
B. Admissibility
35. Notwithstanding the above, the Chamber acknowledged that Liga contested the competence of FIFA arguing that pursuant to clause 9 of the contract the NDRC of Ecuador was the competent instance to enter the substance of the matter.
36. The Chamber then turned its attention to said clause 9 of the contract, according to which “En caso de controversias derivadas de la aplicación del presente contrato, las partes se comprometen a recurrir ante el Tribunal Arbitral Especial de la Federación Ecuatoriana de Fútbol, de acuerdo con Io previsto en el Art. 37 de la Ley del Futbolista Profesional”, which can be freely translated to English as follows: "In the event of disputes arising from the application of this contract, the parties undertake to resort to the Special Arbitration Tribunal of the Ecuadorian Football Federation, in accordance with the provisions of Article 37 of the Professional Football Player Law"
37. In this context, the Chamber emphasised that in accordance with art. 22 lit. b) of the Regulations on the Status and Transfer of Players it is competent to deal with ”employment-related disputes between a club and a player of an international dimension; the aforementioned parties may, however, explicitly opt in writing for such disputes to be decided by an independent arbitration tribunal that has been established at national level within the framework of the association and/or a collective bargaining agreement. Any such arbitration clause must be included either directly in the contract or in a collective bargaining agreement applicable on the parties. The independent national arbitration tribunal must guarantee fair proceedings and respect the principle of equal representation of players and clubs”.
38. With regard to the standards to be imposed on an independent arbitration tribunal guaranteeing fair proceedings, the Chamber referred to the FIFA Circular no. 1010 dated 20 December 2005 and to the principles contained in the FIFA National Dispute Resolution Chamber (NDRC) Standard Regulations, which came into force on 1 January 2008.
39. In this respect, the Chamber noted that in spite of the fact that clause 9 of the contract indicated that any dispute between the player and the club should be submitted to the NDRC of Ecuador, Liga did not sufficiently evidence that such body was indeed an independent arbitration tribunal guaranteeing fair proceedings and respecting the principle of equal representation of players and clubs. In particular, the DRC observed that due to the specific wording of the regulations of the NDRC of Ecuador filed by the club, it could not satisfactorily determine that the principles enshrined in both FIFA Circular no. 1010 and the NDRC Standard Regulations were met.
40. Therefore, the DRC decided that it is competent to deal with the substance of the present dispute.
C. Applicable legal framework
41. In continuation, the Chamber analysed which edition of the 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 4 July 2018, the June 2018 edition of said regulations is applicable to the matter at hand as to the substance (hereinafter: Regulations).
42. The competence of the Chamber and the applicable regulations having been established, the Chamber entered into the substance of the matter. The Chamber continued by acknowledging the above-mentioned facts as well as the documentation contained in the file in relation to the substance of the matter. 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.
D. Burden of proof
43. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 12 par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of an alleged fact shall carry the respective burden of proof. Likewise, the DRC stressed the wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed by the parties.
44. In this respect, the Chamber also recalled that in accordance with art. 6 par. 3 of Annexe 3 of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings pertaining to the application of the Regulations, any documentation or evidence generated or contained in the Transfer Matching System (TMS).
E. Merits of the dispute
I. Main legal discussion and considerations
45. In continuation, the members of the Chamber noted that the player lodged a claim against the club maintaining that he had terminated the contract with just cause on 2 July 2018, after previously having put the club in default, since the latter allegedly failed to pay the player’s remuneration. In this respect, the player submits to have only received part of his remuneration between January and May 2018, with USD 138,857.68 being outstanding at the time he terminated the employment contract. Consequently, the player asks, as amended, to be awarded his outstanding dues as well as the payment of compensation for breach of the contract.
46. The club, for its part, did not provide evidence of payment of the amounts claimed by the player, although it did, as acknowledged by the player, pay him various amounts after the latter had already terminated the contract. In addition, the club argued that the player’s claim had been supposedly already prepared by the time the player sent the club the default notices. Lastly, the club submitted that the player’s lawyers had supposedly acted autonomously and not upon the player’s instruction.
47. The Chamber also observed that Liga filed a counterclaim against the player, and requested compensation for breach of contract in the amount of USD 1,500,000, of which USD 1,000,000 correspond to a transfer fee paid to Boavista FC, and USD 500,000 to a lost transfer fee.
48. In this respect, the Chamber was eager to emphasize that no evidence was produced by Liga in support of the aforementioned allegations. Contrarily, it noted that the player’s attorney adequately provided a copy of a power of attorney signed by the player. Accordingly, the Chamber found that the argumentation of Liga could not be upheld.
49. In continuation, the DRC turned to the contract and the contents of both its principal part and its addendum, and observed that Liga was obliged to pay to the player at the time the contract was terminated by the latter, i.e. on 2 July 2012, the his salaries of January, February, March, April and May 2018, plus USD 50,000 corresponding to half of his annual prime. Accordingly, the Chamber noted that by 2 July 2019, the club should have paid USD 179,000 to the player since he was entitled to a total monthly remuneration of USD 25,800, comprising the various concepts found both in the main portion of the contract and the addendum.
50. Notwithstanding the above, it remained clear from the parties submissions as well as the evidence on file that by the termination date, i.e. 2 July 2018, only USD 36,142.32 had been paid by the club to the player.
51. On account of the aforementioned considerations, the Chamber established that the club, without any valid reason, failed to remit to the player, until 2 July 2018, date on which he terminated the contract, the total amount USD 142,857.68. Consequently, and considering that the club had repeatedly and for a significant period of time been in breach of its contractual obligations towards the player, the Chamber decided that in accordance with art. 14bis of the Regulations the player had just cause to unilaterally terminate the employment contract on 2 July 2018 and that, as a result, Liga is to be held liable for the early termination of the contact with just cause by the player.
52. In this respect and although confident of the exhaustiveness of the foregoing line of reasoning, the Chamber wished to confirm for the sake of completeness that it duly noted that one day after the termination of the contract the club paid USD 125,000 to the player. However, the Chamber stressed that such payment was not enough to cure the breach of contract for (a) it was performed late i.e. after the player had already terminated the contract and (b) in any event corresponded to less money than the player was owed at that point in time.
53. In continuation, having established that the club is to be held liable for the early termination of the employment contract with just cause by the player, the Chamber focused its attention on the consequences of such termination. In this regard and in light of the amended requests for relief of the player, the members of the Chamber determined that the club was not only to pay the amount of USD 25,000 as outstanding remuneration to the player, but also to pay compensation for breach of contract in conformity with art. 17 par. 1 of the Regulations.
54. In addition, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest at the rate of 5% p.a. on the outstanding amount of USD 25,000 as of 1 July 2018 until the date of effective payment.
55. Having stated the above, the Chamber turned to the calculation of the amount of compensation payable to the player by the club in the case at stake. In doing so, the members of the Chamber firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, 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 player 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.
56. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contained 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 breach of contract. In this regard, the Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake.
57. As a consequence, the members of the Chamber determined that the amount of compensation payable by the club to the player 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.
58. Bearing in mind the foregoing as well as the amended claim of the player, the Chamber proceeded with the calculation of the monies payable to the player under the terms of the contract until 30 June 2021. Consequently, the Chamber concluded that the amount of USD 1,228,800 (i.e. 3 years of monthly remuneration à USD 25,800 plus 3 yearly payments of USD 100,000 each as annual primes) serves as the basis for the determination of the amount of compensation for breach of contract.
59. In continuation, the Chamber verified as to whether the player had signed an employment contract with another club during the relevant period of time, by means of which he would have been enabled to reduce his loss of income. According to the constant practice of the DRC as well as art. 17 par. 1 lit. ii) of the Regulations, such remuneration under a new employment contract 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.
60. Indeed, the player found employment with the intervening party and subsequently with Boavista FC. In accordance with the pertinent employment contracts, the player was entitled to respectively receive USD 550,000 from Al Batin and approximately USD 236,600 from Boavista FC, as converted on the date of execution of such agreement, for the relevant period i.e. until the original expiry date of the contract, 30 June 2021. Therefore, the Chamber concluded that the player mitigated his damages in the total amount of USD 786,600.
61. Subsequently, the Chamber referred to art. 17 par. 1 lit. ii) of the Regulations, according to which a player is entitled to an amount corresponding to three monthly salaries as additional compensation should the termination of the employment contract at stake be due to overdue payables. In the case at hand, the Chamber confirmed that the contract termination took place due to said reason i.e. overdue payables by the club, and therefore decided that the player shall receive additional compensation.
62. In this respect, the Chamber recalled that albeit the fact that the player was entitled to a monthly salary of USD 25,800, his average monthly remuneration was in fact USD 34,133, since he was entitled to yearly primes of USD 100,000 under the contract. Therefore, the amount of additional compensation to which the player is entitled to is USD 102,399, i.e. three times USD 34,133.
63. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the club must pay the amount of USD 544,599 to the player (i.e. USD 1,228,800 minus USD 786,600 plus USD 102,399), which was to be considered a reasonable and justified amount of compensation for breach of contract in the present matter.
64. Lastly, taking into consideration the player’s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided to award the player interest on said compensation at the rate of 5% p.a. as of the date of claim, i.e. 4 July 2018, until the date of effective payment.
65. In conclusion, for all the above reasons, the Chamber decided to partially accept the player’s claim and reject the club’s counterclaim.
II. Consequences
66. Taking into account the consideration that the June 2018 of the Regulations are applicable to the issue at hand, the DRC 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.
67. In this regard, the DRC 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.
68. Therefore, bearing in mind the above, the DRC judge decided that, in the event that the club does not pay the amounts due to the player within 45 days as from the moment in which the player, following the notification of the present decision, communicates the relevant bank details to the club, 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 club in accordance with art. 24bis par. 2 and 4 of the Regulations.
69. Finally, the DRC 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.
F. Costs
70. The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC proceedings relating to disputes between clubs and players in relation to the maintenance of contractual stability as well as international employment related disputes between a club and a player are free of charge”. Accordingly, the Chamber decided that no procedural costs were to be imposed on the parties.
71. Likewise and for the sake of completeness, the Chamber recalled the contents of art. 18 par. 4 of the Procedural Rules, and decided that no procedural compensation shall be awarded in these proceedings.
IV. DECISION OF THE DISPUTE RESOLUTION CHAMBER
1. The claim of the Claimant/Counter-Respondent, LUCAS DE LIMA TAGLIAPIETRA, is admissible.
2. The claim of the Claimant/Counter-Respondent is partially accepted.
3. The counterclaim of the Respondent/Counter-Claimant, LDU QUITO, is rejected.
4. The Respondent/Counter-Claimant has to pay to the Claimant/Counter-Respondent the following amounts:
- USD 25,000 as outstanding remuneration plus 5% interest p.a. as from 1 July 2018 until the date of effective payment;
- USD 544,599 as compensation for breach of contract without just cause plus 5% interest p.a. as from 4 July 2018 until the date of effective payment.
5. Any further claims of the Claimant/Counter-Respondent are rejected.
6. The Claimant/Counter-Respondent is directed to immediately and directly inform the Respondent/Counter-Claimant of the relevant bank account to which the Respondent/Counter-Claimant must pay the due amounts.
7. The Respondent/Counter-Claimant shall provide evidence of payment of the due amounts in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).
8. In the event that the amounts due, plus interest as established above are not paid by the Respondent/Counter-Claimant within 45 days, as from the notification by the Claimant/Counter-Respondent of the relevant bank details to the Respondent/Counter-Claimant, the following consequences shall arise:
1.
The Respondent/Counter-Claimant 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. The aforementioned ban mentioned will be lifted immediately and prior to its complete serving, once the due amount is paid (cf. art. 24bis of the Regulations on the Status and Transfer of Players). 2.
In the event that the payable amount as per in this decision 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 the FIFA Disciplinary Committee.
9. The decision is pronounced free of costs (cf. art. 18 par. 2 of the Rules Governing the Procedures of the Players’ Status Committee and the Dispute Resolution Chamber).
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
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) within 21 days of receipt of the notification of this decision (cf. CAS Directives at Legal.FIFA.com).
NOTE RELATED TO THE PUBLICATION:
FIFA may publish this decision. For reasons of confidentiality, 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 Procedural Rules).
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