F.I.F.A. – Dispute Resolution Chamber / Camera di Risoluzione delle Controversie – labour disputes / controversie di lavoro (2020-2021) – fifa.com – atto non ufficiale – Decision 24 September 2020

Decision of the

Dispute Resolution Chamber

Passed on 24 September 2020,

regarding an employment-related dispute concerning the player Hugo Filipe da Costa Oliveira

COMPOSITION:

Geoff Thompson (England), Chairman Bin Mohamed (Singapore), member Tomislav Kasalo (Croatia), member

CLAIMANT:

HUGO FILIPE DA COSTA OLIVEIRA, Portugal

Represented by Mr. Nelson Soares

RESPONDENT:

SIVASSPOR KULÜBÜ DERNEĞI, Turkey

I. FACTS OF THE CASE

1. On 26 January 2019, the Portuguese player, Hugo Filipe da Costa Oliveira (hereinafter: the Player or the Claimant), and the Turkish club, Sivasspor Kulübü Derneği (hereinafter: the Club or the Respondent) signed an employment contract, valid from 26 January 2019 to 31 May 2020 (hereinafter: the employment agreement), according to which the player was inter alia entitled to a remuneration of EUR 1,350,000, broken down as follows:

- Remainder of season 2018-2019: EUR 450,000 net of taxes, in 5 equal monthly installments of EUR 90,000 each;

- Season 2019-2020: EUR 900,000 net of taxes, in 10 equal monthly installments of EUR 90,000 each.

2. On 22 January 2020, the parties signed a termination agreement (hereinafter: termination agreement), which inter alia established the following:

3.1 For all due and legal effects, the PARTIES hereby agree that as compensation for the early termination of the employment contract the PLAYER will be entitled to receive from SIVASPOR a financial compensation of Eur. 650.000,00 (six hundred and fifty thousand euros) net of taxes, levies, social security payments and other governmental obligations under Turkish law, if any (henceforward the "financial compensation").

3.2 The CLUB expressly and irrevocably recognizes and confesses that owes to the PLAYER the mentioned financial compensation in the amount of Eur. 650.000,00 (six hundred and fifty thousand euros) and hereby recognizes that the PLAYER's right to that financial compensation had been an essential condition for the PLAYER to accept terminating his employment contract.

(…)

4.1 From the financial compensation amount recognized and confessed by SIVASPOR In the "THIRD CLAUSE", the CLUB undertakes to pay to the PLAYER the amount of Eur. 450.000,00 (four hundred and fifty thousand euros) in three monthly, equal and successive instalments of Eur. 150.000,00 (one hundred and fifty thousand euros) each, in the following dates:

a) Eur. 150.000,00 (one hundred and fifty thousand euros) on or before 10 February 2020;

b) Eur. 150.000,00 (one hundred and fifty thousand euros) on or before 10 March 2020; and

c) Eur. 150.000,00 (one hundred and fifty thousand euros) on or before 10 April 2020;

4.2 The PARTIES hereby agree that in case of full compliance by SIVASPOR of the terms agreed under previous clause 4.1 (by paying to the PLAYER the amount of Eur. 450.000,00 (four hundred and fifty thousand euros within the dates and terms agreed in that paragraph), and cumulatively releasing the PLAYER's ITC within 48 hours (maximum) after its request (applicable only in case of an actual request of ITC), the CLUB will be discharged from the difference between this amount and the amount confessed in the "THIRD CLAUSE".

4.3 However, in case the CLUB fails to pay to the PLAYER any of the instalments stipulated under the point 4.1 supra (totally or partially) in the respective due dates nor within the subsequent 10 (ten) calendar days, counted from the date that the instalment in question has become due, or even if it does not release the PLAYER's ITC within 48 hours after its request, this agreement should be considered definitely breached. In this case the PLAYER will be entitled to request immediately the payment of the totality of the amount confessed by the CLUB in that "THIRD CLAUSE". i.e. Eur. 650.000,00 (six hundred and fifty thousand euros), together with overdue and falling due interests at the rate of 5% p.a . counted from the breach date, until its effective and integral payment, and deducted from any eventual amount that CLUB may had paid to the PLAYER under this termination agreement.

4.4 ALL payments shall be made by the CLUB in EUROS currency by way of bank transfer to the PLAYER's personal bank account in Turkey with IBAN TR90 0004 6000 8603 6000 2632 63. Any possible tax, cost or charge regarding such bank transfers arising from Turkish legislation and banking practice, if any, shall be paid exclusively by the CLUB”.

II. PROCEEDINGS BEFORE FIFA

3. On 17 March 2020, the Claimant filed the claim at hand before FIFA. A brief summary of the position of the parties is detailed in continuation.

a. The claim of the Claimant

4. The Claimant lodged a claim for outstanding remuneration, and requested the payment of EUR 500,000, corresponding to the remaining amount of the financial compensation agreed between under the termination agreement, plus 5% interest p.a. as from 20 February 2020. In addition, the Claimant requested that the Respondent be ordered to pay the procedural costs.

5. The Claimant explained that, despite the termination agreement’s terms, the Club did not pay to him the first instalment of EUR 150,000 that was due on 10 February 2020.

6. However, the Claimant explained that, on 10 March 2020, i.e. one month later, the Club paid him the amount of EUR 150,000.

7. Consequently, the Claimant considered that, as direct and necessary result of the Club’s breach of the termination agreement, the payment set under clause 4.2 shall deemed automatically and definitely breached as from 20 February 2020, having as consequence the enforceability of the total amount of EUR 650.000,00 agreed under clauses 3.1 and 3.2, that became “immediately mandatory”.

b. Position of the Respondent

8. The Respondent rejected the Player’s claim. In this regard, it explained that it was misled by the Player, who allegedly faked an injury in order to convince the Club to sign a termination agreement. The Respondent further explained that subsequently to the execution of the termination agreement, the Player was hired by the Portuguese club, Gil Vicente FC.

9. Nevertheless, the Club explained that “due to the extreme financial difficulties it was going through, [it] could not pay the Player’s remuneration until 31 May 2019”. As such, “In order to restructure the total remuneration set under the employment contract, consisting of the overdue remuneration from the 2018/2019 season and upcoming remuneration of the 2019/2020 season, the Club provided the Player with an official offer. This offer was accepted by the Player and the payment plan provided therewith was followed with the Club’s payments”.

10. In continuation, the Respondent confirmed both (a) to have paid EUR 150,000 on 10 March 2020 as acknowledged by the Player, and (b) that such payment was delayed due to financial difficulties the Club was facing. As such, the Club stated that the Player was informed of such difficulties, and that he had promised he would not submit a claim as he had waived his EUR 200,000.

11. The Club also claimed to have paid EUR 700,000 to the player.

12. The Club is also of the position that the Player failed to put it in default of payment, which would lead to the Player not being entitled to the EUR 500,000 sought by the latter. In particular, the Respondent deems the EUR 200,000 “difference” requested by the player to be a penalty. As such, the Club referenced art. 160 (2) of the Swiss Code of Obligations, and argued that the Player cannot both claim the performance of the termination agreement and its penalty since he accepted the performance/payment of EUR 150,000 on 10 March 2020.

13. Additionally, the Club submitted that the amount of EUR 200,000 corresponds to 44.4% of the compensation due, which, in addition to the interest of 5% requested, is superior to the maximum of 18% permitted under Swiss Law.

14. The Club requested that “all claims of the Claimant” be dismissed.

c. Further correspondence from the parties

15. On 21 April 2020, upon submission of the reply of the Club, the FIFA administration closed the investigation phase of the proceeding. Subsequently, on 15 July 2020, the parties were notified by FIFA that the case would be referred to the Dispute Resolution Chamber for consideration and a formal decision on the occasion of the meeting on 30 July 2020.

16. On 24 July 2020, the Respondent filed an unsolicited correspondence, by means of which it stated that it had paid the amount of EUR 300,000 to the Player, enclosing an alleged proof of bank transfer. Such correspondence read as follows:

“We refer to the above-captioned matter and to your correspondence dated 15 July 2020, with which you notified the parties that the case at hand will be submitted to the Dispute Resolution Chamber for a formal decision on 30 July 2020.

Please note that, reserving our answers to the present claim, the Respondent has paid the amount of 300.000.-Euro to the Claimant on 24 July 2020. Please find enclosed the proof of payment.

The Respondent has also contacted the Claimant for the amicable solution of the matter. The Parties are currently negotiating and therefore, the Honourable Chamber is respectfully

requested to suspend the ongoing procedure”.

17. On 29 July 2020, the FIFA Administration informed the parties that contrarily to its previous correspondence and due to administrative reasons, the matter would be submitted to the Dispute Resolution Chamber for a formal decision on the occasion of its the meeting on 5 August 2020.

18. On 4 August 2020, the Player filed an unsolicited correspondence, by means of which he requested the “suspension of the procedure until 21 August 2020 and consequently the postponement of its submission to DRC to the next meeting that will happen from 24 August forward”.

19. On 5 August 2020, the FIFA Administration requested the parties to inform by 24 August 2020 at the latest if an amicable resolution to the dispute had been found, failing which the case would be submitted to examination and a formal decision by the Dispute Resolution Chamber.

20. On 24 August 2020, the Claimant and the Respondent both wrote to FIFA and requested that the proceeding be suspended until 7 September 2020 on account of ongoing amicable negotiations.

21. On 31 August 2020, the FIFA Administration requested the parties to inform by 7 September 2020 at the latest if an amicable resolution to the dispute had been found, failing which the case would be submitted to examination and a formal decision by the Dispute Resolution Chamber.

22. On 8 September 2020, absent any information from the parties, the FIFA administration notified the parties that the case would be referred to the Dispute Resolution Chamber for consideration and a formal decision on the occasion of the meeting on 24 September 2020.

III. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER

a. Competence and applicable legal framework

23. 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 presented to FIFA on 17 March 2020 and submitted for decision on 24 September 2020. Taking into account the wording of art. 21 of the June 2020 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.

24. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and observed that in accordance with art. 24 par. 1 in combination with art. 22 lit. a) and b) of the Regulations on the Status and Transfer of Players (edition August 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 Portuguese player and a Turkish club.

25. Subsequently, 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 Player (edition August 2020), and considering that the present claim was lodged on 17 March 2020, the March 2020 edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof

26. 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.

27. 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 TMS.

c. Merits of the dispute

28. The competence of the DRC and the applicable regulations having been established, the DRC entered into the merits of the dispute. 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 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.

i. Main legal discussion and considerations

29. The foregoing having been established, the Chamber moved to the substance of the matter, and took note of the fact that the parties strongly dispute the amounts owed to the Player – particularly, the DRC was observant of the fact that the Club deems that EUR 200,000 is in fact a hidden penalty.

30. In this context, the Chamber acknowledged that it its task was to determine what amounts were due to the Player, if any, under the termination agreement.

31. In this regard, the DRC noted that the Club has failed to timely submit proof of payment regarding the amounts sought by the Player, despite having challenged the Player’s entitlement to such monies. At this point, the DRC deemed it important to underline that according to art. 9 par. 4 of the Procedural Rules, the parties shall not be authorised to supplement or amend their requests or their arguments, to produce new exhibits or to specify further evidence on which they intend to rely, after notification of the closure of the investigation. Equally, the DRC referred to art. 9 par. 3 of the Procedural Rules, pursuant to which both submissions received outside the time limit shall not be taken into account.

32. Consequently, the Chamber decided the evidence and submission filed by the Respondent on 24 August 2020 could not be taken into account on the basis of art. 9 par. 3 and 4 of the Procedural Rules, since they were filed after the closure of the investigation phase of the matter and outside the time limited granted to the Respondent. Nevertheless, the DRC outlined that it would be up for the relevant body to consider whether such proof of payment could be taken into account for purposes of enforcement of this decision, should it be necessary.

33. In continuation, the DRC turned to the termination agreement and the argumentation of the Respondent concerning the supposed hidden penalty of EUR 200,000, and decided that it could not uphold such argumentation because of the reasons detailed in continuation.

34. Firstly, the Chamber noted that the Player was entitled to a global remuneration of EUR 1,350,000 under the employment agreement, EUR 700,000 of which were paid by 2 January 2020 and which the parties do not dispute. Therefore, the DRC concluded that the amount of EUR 650,000 corresponds to the residual value of the employment agreement, which was settled under the termination agreement as per the clear wording of its clauses 3.1 and 3.2.

35. Secondly, the Chamber highlighted the contents of clauses 4.2 and 4.3 of the termination agreement, according to which the Club would be “discharged” of payment of EUR 200,000 (i.e. EUR 650,000 minus EUR 450,000) should it timely perform payments. The DRC found this to be a clear compromise by the Player, who was willing to waive EUR 200,000 should payments be timely made by the Respondent – something that undisputedly did not happen.

36. Thirdly, the Chamber observed that the termination agreement bears no requirement that the Player put the Club in default for entitlement to such amount.

37. Consequently, the DRC decided that since the parties confirm that the first instalment of EUR 150,000 due on 10 February 2020 as per clause 4.1 lit. a) of the termination agreement was paid late, the Player is entitled to the full amount of EUR 650,000, of which EUR 150,000 was already paid, as also confirmed by the parties. Hence, in accordance with the principle of pact sunt servanda, the DRC decided that the Club has to pay EUR 500,000 to the Player.

38. For the sake of completeness, the DRC clarified that since the amount derives from the termination agreement, it constitutes outstanding remuneration and not compensation for breach of contract, therefore not being subject to mitigation.

39. In addition, taking into account the Claimant’s request as well as the constant practice of the Dispute Resolution Chamber, the DRC decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of EUR 500,000 as from 20 February 2020 until the date of effective payment.

ii. Compliance with monetary decisions

40. Finally, taking into account the consideration under number 25. 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.

41. In this regard, the DRC highlighted 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.

42. 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, communicates the relevant bank details to the Respondent, provided that the decision is final and binding, 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.

43. The DRC recalled that the above-mentioned bans 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.

44. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any of the parties.

d. Costs

45. 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.

46. 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, HUGO FELIPE DA COSTA OLIVEIRA, is partially accepted.

2. The Respondent, SIVASSPOR KULÜBÜ DERNEĞI, has to pay to the Claimant the following amount:

- EUR 500,000 as outstanding remuneration plus 5% interest p.a. as from 20 February 2020 until the date of effective payment.

3. Any further claims of the Claimant are rejected.

4. The Claimant is directed to immediately and directly inform the Respondent of the relevant bank account to which the Respondent must pay the due amount.

5. The Respondent shall provide evidence of payment of the due amount in accordance with this decision to psdfifa@fifa.org, duly translated, if applicable, into one of the official FIFA languages (English, French, German, Spanish).

6. In the event that the amount due, plus interest as established 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 following consequences shall arise:

 1.

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. 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.

7. The decision is rendered free of costs.

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.

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).

CONTACT INFORMATION:

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