Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 21 January 2015,
in the following composition:
Thomas Grimm (Switzerland), Deputy Chairman
Eirik Monsen (Norway), member
Zola Majavu (South Africa), member
on the claim presented by the club,
Club A, country B,
as Claimant
against the player,
Player C, country B,
as Respondent I
and the club,
Club D, country E,
as Respondent II
regarding an employment-related dispute between the parties
I.
Facts of the case
1.
On 27 July 2005, the player from country B, Player C (hereinafter: the
Respondent I), born on 6 October 1986, and the club from country B, Club A
(hereinafter: the Claimant or the player), signed an employment contract
(hereinafter: the contract) valid from 1 July 2005 until 30 June 2010.
2.
According to art. 5 of the contract, the Claimant undertakes to pay the player,
inter alia, the following amounts:
- 2005-06 Season:
o 54,000 as salary, paid in equal monthly amounts of 4,500;
o 6,000 for the transfer of image rights, paid in monthly amounts of 500;
- 2006-07 Season:
o 54,000 as salary, paid in equal monthly amounts of 4,500;
o 6,000 for the transfer of image rights, paid in monthly amounts of 500;
- 2007-08 Season:
o 84,000 as salary, paid in equal monthly amounts of 7,000;
o 6,000 for the transfer of image rights, paid in monthly amounts of 500;
- 2008-09 Season:
o 84,000 as salary, paid in equal monthly amounts of 7,000;
o 6,000 for the transfer of image rights, paid in monthly amounts of 500;
- 2009-10 Season:
o 108,000 as salary, paid in monthly amounts of 9,000;
o 6,000 for the transfer of image rights, paid in monthly amounts of 500.
Each of the above amounts is due on the 10th day of the subsequent month
on which they fell due.
3.
Pursuant to art. 2.1 of the contract, “[The Claimant] reserves the right to early
termination of the Contract in the event of breach of basic duties and
obligations of the Player specified by the provisions of Football Association of
country B … FIFA, UEFA, arising from this Contract and [the Claimant]’s
regulations.”
4.
Art. 3.4 of the contract further stipulates that “regardless of the disciplinary
liability of the Player specified in clause 3, in the event of a breach of the
Player’s basic duties by the Player, [the Claimant] shall be entitled to claim
contractual damage at the amount of 20 000 euro. Regardless of the above,
[the Claimant] shall be entitled to claim damages according to general
principles up to the amount of actually incurred loss.”
5.
On 1 March 2007, the Respondent I and the Claimant signed an annex
(hereinafter: the first annex), by means of which they agreed to amend the
Respondent I’s remuneration. The first annex specifies that “other provisions
of the contract remained unchanged”.
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6.
According to the first annex, in addition to the obligations stated in the
contract concerning the 2006-07 season, the Claimant also undertakes to pay
the Respondent I during said season the following bonus amounts:
4,000 for each game played in the championship tournament of country B,
in which the Respondent I participated for at least 45 minutes;
2,000 for each game played in the championship tournament of country B,
in which the Respondent I participated for less than 45 minutes.
7. On 25 January 2008, the Respondent I and the Claimant signed an annex
(hereinafter: the second annex), by means of which they agreed to again
amend the Respondent I’s remuneration. The second annex specifies that
“other provisions of the contract shall remain unchanged”.
8.
According to the second annex, in addition to the obligations stated in the
contract, as of 1 January 2008, the Claimant also undertakes to pay the
Respondent I “special rewards” for each point the Claimant earns during
professional league games, depending on how much time the Respondent I
spends on the field, but not more than 90,000 per season. In addition, the
Claimant will pay the Respondent I an additional remuneration of 5,200 by 15
February 2008.
9.
On 22 May 2008, the Respondent I sent a letter to the Claimant which reads as
follows:
“According to the paragraph 17 of FIFA Regulations and the rights arising
hereof concerning the status and transfers of football players, I hereby
formally inform that I terminate my contract on professional football playing
concluded between me and [the Claimant], I have been bound by from July 1,
2005.
The notice of termination has been sent in accordance with the principles
stipulated in the aforementioned FIFA Regulations, i.e.
a) within 15 days from the last official match in league of country B
b) upon the lapse of three years from the date of contract conclusion, in case
of the applicant (signed below) at the end of 2007/2008.
Pursuant to the regulations and applicable provisions, my contract will be
definitively terminated by the end of 2007/2008 season, on June 30 th 2008, that
is why, from the beginning of season 20008/2009 I am a freelance player, who
may accept contract offers from other football clubs”.
10. On 15 June 2008, the Claimant sent a letter of response to the Respondent I in
which it refused to acknowledge his termination of the contract and stated
that, should the Respondent I wish to change clubs during the contract term,
its management must give its consent and it would be entitled to
“compensation for the player’s training”. The Claimant’s letter also states that
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the Respondent I still is one of its member and that he is expected to appear
for trainings after the holiday period.
11. On 10 July 2008, the Claimant sent a second letter to the Respondent I stating
that, because he had failed to appear for its training camp in country F, he
should appear for training within seven days of delivery of the letter. The
letter also warned that the Respondent I may be subject to disciplinary
measures and financial penalty by its management board should he fail to
comply.
12. On 4 August 2008, the Claimant sent a third letter to the Respondent I because
it apparently had not received a response from him. In the letter, the Claimant
informs the Respondent I that it had opened disciplinary procedures against
him for “breach of the regulations related to change of the club and failure to
carry out the contract as of 27th July 2005 which has been binding between you
and the [Claimant]”. The Claimant further informed the Respondent I about
the date and location of the disciplinary proceedings of the management
board and called him on to appear.
13. On 30 July 2008, the Respondent I and the club from country E, Club D
(hereinafter: the Respondent II or Club D) concluded an employment contract
valid as of 1 August 2008 until 30 June 2013, according to which the
Respondent I was entitled to the following remuneration:
-
2008-09 season: EUR 176,940 gross, i.e. EUR 100,000 net;
2009-10 season: EUR 221,930 gross, i.e. EUR 125,000 net;
2010-11 season: EUR 266,920 gross, i.e. EUR 150,000 net;
2011-12 season: EUR 311,915 gross, i.e. EUR 175,000 net;
2012-13 season: EUR 356,910 gross, i.e. EUR 200,000 net.
14. After discovering that the Respondent I had signed a contract with the
Respondent II, the Claimant requested the Football Association of country B
(hereinafter: Football Association of country B) to provide it with an official
opinion concerning this matter.
15. On 24 September 2008, the Football Association of country B provided the
requested “Consultancy opinion” in which it found, inter alia that the
Respondent I and his new club “shall be obliged to pay an equivalent amount
for the training and development of the footballer as the member of the
national representation of country B and the potential defender and to pay an
indemnity for the termination of the agreement in the manner which is in
breach with the civil and sports law of country B”.
16. On 11 August 2008, following an inquiry from the Football Association of
country B concerning an ITC request made by the Football Federation of
country E (hereinafter: Football Federation of country E) regarding the
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Respondent I, the Football Association of country B informed the Football
Federation of country E that the Respondent I was under contract with the
Claimant until 30 June 2010 and thereafter, the Football Association of country
B rejected the issuance of the ITC.
17. On 10 October 2008, the Single Judge of the Players’ Status Committee
(hereinafter: SJPSC) authorised the provisional registration of the Respondent
I, which was confirmed by the Court of Arbitration for Sport (hereinafter: CAS)
on 3 July 2009.
18. On 20 April 2010, the Claimant lodged a claim in front of FIFA against the
Respondent I and his new club, Club D, holding them jointly and severally
liable for breach of contract without just cause. The Claimant requested the
following:
- “a minimum amount still to be determined in view of the future analysis of
the player’s employment contract with [the Respondent II]”;
- “a minimum amount of € 1.000.000,00 (one million Euros) as compensation
for all the moral and sporting damages suffered as a direct consequence of
the player’s contractual breach”;
- 5% interest p.a. over the total due amount, from 22 May 2008 until the
effective payment.
In addition, the Claimant requested disciplinary sanctions against the
Respondent I and the Respondent II.
19. In its claim, the Claimant outlines that it has always complied with its
contractual obligations towards the Respondent I, including the payment of all
of his salaries and bonuses. In particular, the Claimant stresses that in order to
justify the termination of the contract, the Respondent I relied on art. 17 of
the FIFA Regulations on the Status and Transfer of Players (hereinafter: the
Regulations) and did not make reference to any outstanding remuneration.
According to the Claimant, by referring to art. 17 of the Regulations, the
Respondent I actually acknowledged that he had committed a breach of
contract, and should be therefore liable to pay compensation, but defended
himself against the imposition of sporting sanctions.
20. In view of the above, the Claimant concludes that it is entitled to receive
compensation. In this regard, the Claimant sustains that it is entitled to receive
“all the salaries and bonuses (remuneration) which were contractually due to
him until the end of the parties’ employment contract, multiplied by a
coefficient adequate to the seriousness of his unlawful contractual breach”,
which amounts, according to the Claimant, to 624,000, i.e. 204,000 as
remaining salaries until 30 June 2010 + 240,000 as league bonuses until 30
June 2010 + 180,000 as special rewards provided by the second annex. In this
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respect, the Claimant asserts that the bonuses provided by the first and the
second annex constitute an integral part of the Respondent I’s remuneration.
21. In continuation, the Claimant asserts that the remuneration due to the
Respondent I under his new contract with the Respondent II, has to be taken
into consideration while calculating the compensation.
22. The Claimant further requests to be awarded a minimum amount of EUR
1,000,000 in compensation for the moral and sporting damages it suffered due
to the Respondent I’s breach of contract. As far as the sporting damage is
concerned, the Claimant requests FIFA to take into consideration the
important contribution made by the Claimant to his sporting development
since he was fifteen as well as his future potential.
23. The Claimant further highlights its many failed attempts to have the
Respondent I reporting for duty (cf. point I.10 et seq.).
24. Regarding the Respondent II, the Claimant argues that the Respondent II was
aware that the Respondent I was registered with the Claimant and that, by
signing the Respondent I, the Respondent II is liable for having induced him to
breach the contract without just cause. Moreover, according to art. 17 par. 4 of
the Regulations, it is presumed that the Respondent II, as the club that signed
the Respondent I who terminated his contract without just cause, indeed
induced the Respondent I to breach the contract. In addition, the Claimant
asserts that the Respondent II also failed to inform it of its intention to enter
into negotiations with the Respondent I as stipulated under art. 18 par. 3 of
the Regulations.
25. Therefore, the Claimant concludes that the Respondent I and the Respondent
II voluntarily violated art. 18 par. 3 of the Regulations and should be
disciplinary sanctioned accordingly.
26. In its response to the Claimant’s claim, the Respondent II states that the
Respondent I was presented to it by a agent from country B who informed it
that the Respondent I was out of contract and that any compensation due to
the Claimant would be “modest”. The Respondent II asserts that it learned
that the Respondent I had terminated his contract with the Claimant, but that
the Respondent II cannot take a position in this regard as it has no first-hand
knowledge of the termination or surrounding circumstances.
27. In continuation, the Respondent II considers that the Claimant exaggerates the
potential of the Respondent I, who, according to the Respondent II, is nothing
more than a regular player.
28. In addition, the Respondent II holds that the Claimant’s reference to art. 18
par. 3 is meritless considering that when it entered into negotiations with the
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Respondent I, the latter had already terminated his employment contract with
the Claimant.
29. As to the compensation, the Respondent II emphasises that the contract
between the Respondent I and Claimant contained a liquidated damages
clause (cf. art. 3.4 of contract), according to which the Claimant can only claim
EUR 20,000 in compensation, plus damages of up to “the amount of actually
incurred loss.” As a consequence, and even though it outlines the nonreciprocal and disproportionate nature of the clause which allows the Claimant
to claim an amount equalling the salary of the Respondent I for one entire
year, the Respondent II concludes that the Claimant would be entitled to
receive a maximum amount of EUR 20,000. Indeed, according to the
Respondent II, the Claimant did not submit any evidence that the
remuneration due to the Respondent I would constitute a loss. Nevertheless,
the Respondent II holds that should the DRC take the remuneration into
account, the bonuses included in the contract should not be considered as part
of the remuneration due to the Respondent I because they are not automatic,
but rather, are subject to stringent conditions that were highly unlikely to be
fulfilled given the limited participation of the Respondent I with the first team.
Under this approach, the Respondent II asserts that the Respondent I would
have been entitled to receive EUR 46,920, i.e. 90,000, or EUR 20,700, for 200809 season and 114,000, or EUR 26,220 for 2009-10 season, as remuneration,
had he remained with the Claimant throughout the contract.
30. Furthermore, the Respondent II argues that the Claimant’s claim on EUR
1,000,000 in moral and sporting damages should be dismissed because the
Claimant has failed to provide any basis for the claim. The Respondent II
argues that neither the regulations nor any other law allows for a football club
to receive compensation for moral damages. With regard to sporting damages,
the Respondent II asserts that the Claimant has failed to show that it would
have incurred any loss due to the Respondent I’s departure.
31. In addition, the Respondent II maintains that the CAS has consistently
recognised that, in the event of an early termination of contract by a player,
the salaries saved by the previous club are taken into account to reduce the
amount of the compensation. In this regard, the Respondent II asserts that the
Claimant effectively saved EUR 46,920 (cf. point I.29 above) in salary payments
that would have become due to the Respondent I had he not terminated the
contract.
32. The Respondent II also states that the Claimant has filed another claim against
it, also in front of FIFA, to recover EUR 280,000 as training compensation with
respect to the Respondent I. Therefore, the Respondent II argues that the
Claimant is attempting to gain unjust enrichment by claiming on the one hand
that the Claimant suffered injury from the Respondent I’s departure, while on
the other hand also claiming training compensation from the Respondent II
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that only became due on account of the Respondent I’s departure. Indeed,
according to the Respondent II, the Claimant could not have benefited from
training compensation had the Respondent I not signed with the Respondent II
and stayed until the end of his contract with the Claimant, i.e. until the age of
24.
33. In light of the fact that the Claimant will be in a better financial position due
to the termination of the contract by the Respondent I, and taking into
consideration the Claimant’s other claim for training compensation, the
Respondent II concludes that the DRC should not award any compensation, or
in the alternative, decide that the maximum amount of compensation due to
the Claimant is EUR 20,000.
34. The Respondent II lastly argues that the Claimant’s request for 5% interest
should be denied because the delay in the Claimant’s receiving compensation
is the fault of the Claimant itself for having waiting nearly two years to file its
claim with FIFA from the time its claim for compensation arose.
35. The Respondent I, in his response to the Claimant’s claim, argues that he
terminated the contract with just cause and that he should not be obliged to
pay any compensation. The Respondent I states that he left the Claimant to
join the Respondent II because the latter offered him the required training and
opportunity to develop his skills and play a number of matches, whereas the
Claimant did not. In addition, the Respondent I states that he had “justified
reasons” for leaving the Claimant and that his departure met the requirements
of Art. 17 of the Regulations, which he argues only requires that (i) the player
terminates his contract at least 15 days before the last match of the season; (ii)
the player is transferred to a new club from another country; and (iii) the
acquiring club pays compensation to the former club.
36. In this regard, the Respondent I argues that, in accordance with art. 17 of the
Regulations, the Claimant is entitled to receive compensation equal to his
contractual remuneration until the end of his employment period. In this
respect, the Respondent I asserts that the amounts paid for the transfer of his
image rights are not paid in exchange for his sport services and therefore
cannot be taken into account. Moreover, the Respondent I alleges that the
amounts due under the contract as “special prizes” and the performancebased bonuses provided for in the first and second annexes cannot be included
in his remuneration as there is no certitude that he would have been entitled
to them. In addition, the Respondent I sustains that art. 17 of the Regulations
does not allow to take into consideration the remuneration received from the
Respondent II.
37. In continuation, the Respondent I states that the Claimant’s claim of EUR
1,000,000 in moral and sporting damages should be dismissed because the
Claimant failed to show which moral losses it suffered and how it calculated
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the amount it claims. Moreover, the Respondent I asserts that the Claimant
failed to provide any evidence that its public image suffered any loss.
38. Finally, the Respondent I maintains that according to art. 17 and the common
sense, it is the acquiring club’s responsibility to pay compensation.
39. In its replica, the Claimant reiterates that by referring to art. 17 in his
termination notice, the Respondent I acknowledged being in breach of the
contract.
40. The Claimant then rejects the Respondent II’s assertion as to the application of
art. 3.4 of the contract. In this regard, the Claimant questions how such a
clause could be deemed a liquidated damages clauses given the second
sentence which provides that “regardless of the above, [the Claimant] shall be
entitled to claim damages according to general principles up to the amount of
actually incurred loss.” According to the Claimant, the amount of EUR 20,000
stipulated in the clause rather constitutes a disciplinary sanction, such as a fine.
41. Having stated the above, the Claimant focuses on the calculation of the
compensation. In this respect, the Claimant reiterates that the various bonuses
provided by the first and second annexes constituted an integrant part of the
Respondent I’s remuneration. In support of its assertion, the Claimant outlines
the significance of the bonuses’ amount in comparison with the Respondent I’s
fixed salary.
42. In continuation, the Claimant sustains that the residual value of the breached
contract cannot be deemed as the unique criteria to be taken into account.
According to the Claimant, such a solution would lead to the payment of
ridiculous small amounts as compensation and therefore would be an incentive
to contractual breaches. As a consequence, the Claimant maintains that the
remuneration earned under the contract with the Respondent II should also be
taken into account.
43. Moreover, the Claimant stresses that the Respondent I’s bad faith, who
accepted an increase of his remuneration shortly before breaching the
contract, has to be considered while calculating the amount due as
compensation.
44. Lastly, the Claimant asserts that the transfer offer of 1,000,000.00 (EUR
240,246.23 according to the Claimant) made by Club G on 11 July 2007, and
considered by the Claimant as insufficient, constitutes a clear indicative of the
Respondent I’s market value to be included in the calculation of the
compensation.
45. In light of the foregoing, the Claimant amends its financial claim and requests
to be awarded “a minimum amount of € 1.000.000,00 (one million Euros) for
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all the financial, image and sporting damages that the latter has suffered as a
consequence of his contractual breach” plus 5% interest p.a. over the total
amount as of 22 May 2008 until the date of effective payment.
46. Finally, the Claimant reiterates its claim for disciplinary sanctions and requests
FIFA to condemn the Respondent I and the Respondent II to bear the costs
incurred.
47. In his final comments, the Respondent I reiterates that he had just cause to
terminate the contract. In this respect, he explains that during the three
seasons he was playing for the Claimant, he only took part in 20% of the
games. In addition, the Respondent I points out that the Claimant did not
provide him with an adequate environment to develop his football skills, in
particular due to the numerous changes of coaches. Finally, the Respondent I
asserts that between 2001 and 2005, i.e. while he was playing as an amateur
without receiving salary, the Claimant treated him badly.
48. In continuation, the Respondent I alleges that the Single judge, and later CAS,
recognised his right to terminate the contract and conclude an employment
contract with a new club without having to pay any compensation.
49. Notwithstanding the above, and should the DRC hold him responsible for
breach of contract, the Respondent I outlines that the parties resorted to the
possibility provided by art. 17 par. 1 of the Regulations to contractually set the
amount due as compensation in art. 4.3 of the contract and therefore such
article should prevail while calculating the compensation. In light of the
foregoing, the Respondent I concludes that the Claimant cannot claim more
than the amount of EUR 20,000 provided by the “penalty clause” since it failed
to prove that its loss was higher.
50. In support of his assertion, the Respondent I sustains that the services that he
rendered to the Claimant, i.e. the four years during which he played for the
Claimant without receiving remuneration, compensated any loss that the
Claimant might have suffered.
51. Moreover, the Respondent I stresses that CAS already rejected the possibility
for a club to claim the market value of a player as lost profit, and refused to
take into account the remuneration received under the new contract as valid
criteria to determine the loss.
52. Furthermore, the Respondent I questions how the Claimant can claim an
amount of EUR 1,000,000 as damage while it acknowledges that the market
value of the player was of 1,000,000 (approx. EUR 240,246.23 according to the
Claimant).
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53. Finally, the Respondent I requests the DRC to take into consideration the fact
that he terminated his contract in accordance with art. 17 of the Regulations,
i.e. within 15 days of the end of the season and that the Claimant did not take
any measure to mitigate its loss.
54. In its final comments, the Respondent II first of all stresses that art. 3.4 of the
contract provides for a liquidated damages clause that has to prevail over the
criteria set forth in art. 17 of the Regulations in order to determine the
compensation. In this regard, the Respondent II sustains that the amount
stipulated in the clause cannot be considered having a disciplinary nature as
stated by the Respondent I insofar as the clause uses the wording “claim
contractual damage in the amount of EUR 20.000,00” in order to identify its
nature and effect. In continuation, the Respondent II outlines that should the
DRC share the Claimant’s interpretation of the clause, according to which its
sentence allows it to claim compensation on the basis of the criteria set forth
in art. 17 of the Regulations, the latter clause would be devoid of substance in
violation of the principle of effectiveness. Moreover, the Respondent II alleges
that neither the Regulations nor Swiss law provide that a liquidated damages
clause must be reciprocal in order to be considered valid. In light of the
foregoing, the Respondent II concludes that in the event of a breach of
contract by the Respondent I, the Claimant is entitled to claim the amount of
EUR 20,000 unless it can demonstrate that it incurred an actual loss quod non;
in which case, it would be entitled to claim this loss in accordance with the
general principles regarding contractual damages.
55. The Respondent II further asserts that from a legal perspective, there is no
distinction between a transfer of a player that gives rise to the right of the
training club to receive compensation in accordance with art. 17 of the
Regulations and a transfer where the compensation arises from a transfer
agreement between the previous and the new club of the player. Therefore,
the Respondent II sustains that the amount due as training compensation is to
be deemed included in the compensation arising from art. 17 of the
Regulations. In view of the above, the Respondent II concludes that should the
DRC award more than EUR 20,000 as compensation for breach of contract, the
amount payable as training compensation should be deducted from this extra
amount payable as compensation.
56. Furthermore, the Respondent II points out that the Claimant did not submit
relevant elements evidencing that it actually suffered a damage amounting to
EUR 1,000,000, which is blatantly excessive considering that the residual net
value of the contract at the time of the termination amounted to 115,000
(corresponding to approx. EUR 25,572). In this respect, the Respondent II also
emphasises that even the amount of EUR 20,000 is really high given the
Respondent I’s financial means.
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57. In addition, the Respondent II insists that neither the bonuses nor the alleged
transfer offer can be taken into consideration in order to calculate the
compensation. In support of its assertion, the Respondent II argues that
bonuses have an hypothetical nature and that “a private person [i.e. a player]
that is the merchandise in a transaction cannot be considered liable to
compensate the owner of the merchandise for a sales profit being lost because
he has terminated an employment contract”.
58. In continuation, the Respondent II sustains that due to the termination of the
contract, the Claimant received a benefit amounting to EUR 237,528.76, i.e.
EUR 46,920 as saved salaries (cf. point I.31 above) and EUR 188,328.78 as
alleged training compensation due, which should be deducted from the
potential compensation awarded.
59. Finally, the Respondent II requests the Claimant to be condemned to bear the
legal and procedural costs.
II. Considerations of the Dispute Resolution Chamber
1.
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 submitted to
FIFA on 20 April 2010. Consequently, the 2008 edition of the Rules Governing
the Procedures of the Players’ Status Committee and the Dispute Resolution
Chamber (hereinafter: Procedural Rules) is applicable to the matter at hand (cf.
art. 21 of the Procedural Rules).
2.
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the
Procedural Rules and confirmed that in accordance with art. 24 par. 1 in
combination with art. 22 lit. a) of the Regulations on the Status and Transfer
of Players (edition 2014) the Dispute Resolution Chamber is competent to deal
with the matter at stake, which concerns a dispute between a club and a
player as well as his new club in relation to the maintenance of contractual
stability where there has been an ITC and a claim from an interested party
regarding the payment of compensation for breach of contract.
3.
In continuation, 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 Players (editions 2009, 2010, 2012 and 2014), and considering that
the original claim in the present matter was lodged on 20 April 2010, the 2009
edition of said Regulations is applicable to the matter at hand as to the
substance.
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4.
The competence of the Chamber and the applicable regulations having been
established, entering into the substance of the matter, the members of the
Chamber started by acknowledging the facts as well as the documentation
contained in the file. However, the Chamber emphasised that in the following
considerations it will refer only to facts, arguments and documentary evidence
which it considered pertinent for the assessment of the matter at hand.
5.
In this respect, the DRC acknowledged that, on 27 July 2005, the parties signed
an employment contract, valid as from 1 July 2005 until 30 June 2010.
Furthermore, the Chamber also took note that it is uncontested by the parties
that on 22 May 2008, and referring to art. 17 of the Regulations, the
Respondent I terminated in writing the contractual relationship with the
Claimant.
6.
In this regard, the Chamber took note of the Respondent I’s affirmation
according to which he had “justified reasons” to terminate the contract. In
particular, the members of the Chamber noted that the Respondent I considers
that the Claimant, unlike the Respondent II, did not offer him the required
training and opportunity to develop his skills. The DRC further observed that
the Respondent I acknowledges that the Claimant is entitled to receive
compensation.
7.
In continuation, the Chamber noticed that, according to the Claimant, by
referring to art. 17 of the Regulations in the termination notice, the
Respondent I explicitly recognised that he was terminating the contract
without just cause.
8.
Having established the aforementioned, the Chamber deemed that the
underlying issue in this dispute, considering the claim of the Claimant and the
allegations of the Respondent I, was to determine whether the employment
contract had been unilaterally terminated with or without just cause by the
Respondent I, and which party was responsible for the early termination of the
contractual relationship in question. The DRC also underlined that,
subsequently, if it were found that the employment contract was breached by
one of the parties without just cause, it would be necessary to determine the
consequences for the party that caused the unjust breach of the relevant
employment contract.
9.
In this context, the Chamber deemed it fit to outline that although the
Respondent I seems to invoke sporting reasons in order to justify the
termination, he expressly bases the latter on art. 17 of the Regulations which is
titled “Consequences of terminating a contract without just cause”. In
continuation, whilst referring to art. 12 par. 3 of the Procedural Rules,
according to which any party claiming a right on the basis of an alleged fact
shall carry the burden of proof, the Chamber deemed necessary to highlight
Club A, country B / Player C, country B / Club D, country E
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that the Respondent I had not presented evidence proving that he fell under
the scope of art. 15 of the Regulations.
10. Accordingly, and taking into account the above-mentioned considerations,
the Chamber concluded that the Respondent I did not have just cause to
unilaterally terminate the employment contract on 22 May 2008 and that,
consequently, the Respondent I is to be held liable for the early termination of
the contract without just cause.
11. In light of the foregoing, the DRC established that, in accordance with art. 17
par. 1 of the Regulations, the Respondent I is liable to pay compensation to
the Claimant. Furthermore, in accordance with the unambiguous content of
article 17 par. 2 of the Regulations, the Chamber established that the
Respondent I’s new club, i.e. the Respondent II, shall be jointly and severally
liable for the payment of compensation. In this respect, the Chamber was
eager to point out that the joint liability of the Respondent I’s new club is
independent from the question as to whether the new club has induced the
contractual breach. This conclusion is in line with the well-established
jurisprudence of the Chamber and has been repeatedly confirmed by the Court
of Arbitration for Sport.
12. Having stated the above, the Chamber focused its attention on the calculation
of the amount of compensation for breach of contract in the case at stake. In
doing so, the members of the Chamber firstly reiterated 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 Respondent I under
the existing contract and/or the new contract(s), the time remaining on the
existing contract up to a maximum of five years as well as the fees and
expenses paid or incurred by the former club (amortised over the term of the
contract) and whether the contractual breach falls within a protected period.
The DRC recalled that the list of objective criteria is not exhaustive and that
the broad scope of criteria indicated tends to ensure that a just and fair
amount of compensation is awarded to the prejudiced party.
13. In application of the relevant provision, the Chamber held that it first of all
had to clarify as to whether the relevant employment contract between the
Respondent I and the Claimant contains a provision by means of which the
parties had beforehand agreed upon an amount of compensation for breach
of contract. The members of the Chamber recalled the content of art. 3.4 of
the contract which provides, inter alia, that “regardless of the disciplinary
liability of the Player specified in clause 3, in the event of a breach of the
Player’s basic duties by the Player, [the Claimant] shall be entitled to claim
contractual damage at the amount of 20 000 euro. Regardless of the above,
Club A, country B / Player C, country B / Club D, country E
Page 14 of 18
[the Claimant] shall be entitled to claim damages according to general
principles up to the amount of actually incurred loss”.
14. In this regard, the members of the Chamber observed that this clause is not
clear and does not set a fixed amount in case of termination of the contract
without just cause by either of the parties. Accordingly, the DRC was of the
opinion that the clause merely provides that in case of breach of contract, the
Claimant is automatically entitled to receive a minimum amount of EUR
20,000, which can be increased in case the latter proves that it actually
incurred a higher loss. Thus, the members of the Chamber agreed that the
wording of this clause is insufficiently clear for it to be taken into
consideration in the determination of the amount of compensation.
15. As a consequence, the members of the Chamber determined that the setback
suffered by the Claimant in the present matter had to be assessed in
application of the other parameters set out in art. 17 par. 1 of the Regulations.
In this regard, the DRC emphasised beforehand that each request for
compensation for contractual breach has to be assessed by the Chamber on a
case-by-case basis taking into account all specific circumstances of the
respective matter, as well as the Chamber’s specific knowledge of the world of
football and its experience gained throughout the years.
16. Consequently, in order to estimate the amount of compensation due to the
Claimant in the present case, the Chamber firstly turned its attention to the
remuneration and other benefits due to the Respondent I under the existing
contract and the new contract(s), which criterion was considered by the
Chamber to be essential. In this context, the members of the Chamber deemed
it important to emphasise that the wording of art. 17 par. 1 of the Regulations
allows the DRC to take into consideration both the existing contract and the
new contract(s) in the calculation of the amount of compensation, thus
enabling the Chamber to gather indications as to the economic value
attributed to a player by both his former and his new club(s).
17. In this regard, the DRC established, on the one hand, that the employment
contract between the Claimant and the Respondent I, signed on 27 July 2005,
had been set to expire on 30 June 2010. Therefore, as of 22 May 2008, i.e. the
date of the breach, the total value of the Respondent I’s employment
agreement with the Claimant for the remaining contractual period amounted
to 192,000, corresponding to EUR 49,110. In this regard, the Chamber wished
to point out that in accordance with its longstanding jurisprudence, it did not
take into account the amounts paid to the player in exchange for the transfer
of his image rights. Moreover, and as regards the Claimant’s claim relating to
the inclusion of bonuses in the value of the contract for the remaining
contractual period, the members of the Chamber stressed that the payment
and the amount of such bonuses are linked to matches to be played in the
future, i.e. after the termination of the relevant contract, and, therefore, are
Club A, country B / Player C, country B / Club D, country E
Page 15 of 18
fully hypothetical. Consequently, the Chamber decided to not consider such
amounts for the total value of the contract as of 22 May 2008.
18. On the other hand, the members of the Chamber established that the value of
the new employment contract concluded between the Respondent I and the
Respondent II amounts to a total of EUR 398,870 for the period running until
30 June 2010. On the basis of the aforementioned financial contractual
elements, the Chamber concluded that the average of remuneration between
the contracts concluded by the Respondent I respectively with the Claimant
and the Respondent II over the relevant period amounted to EUR 223,990.
19. Having stated the above, the DRC recalled that the remuneration paid by the
Respondent II to the Respondent I is particularly relevant insofar as it reflects
the value attributed to his services by his new club at the moment the breach
of contract occurs and possibly also provides an indication towards the
Respondent I’s market value at that time. In this regard, the DRC took due
note that the Respondent I appeared to have increased his income
considerably by concluding an employment contract with the Respondent II.
20. Consequently, on account of the above-mentioned considerations, the
Chamber decided that the Respondent I must pay the amount of EUR 223,990
to the Claimant as compensation for breach of contract. Furthermore, the
Respondent II is jointly and severally liable for the payment of the relevant
compensation (cf. point II.11 above).
21. In addition and with regard to the Claimant’s request for interest, the
Chamber decided that the Claimant is entitled to 5% interest p.a. on said
amount as of 20 April 2010 until the date of effective payment.
22. For the sake of completeness, the Chamber finally analysed whether the
breach of contract by the Respondent I had occurred within the protected
period. In this regard, the members of the Chamber referred to item 7. of the
“Definitions” section of the Regulations, which stipulates inter alia that the
protected period comprises “three entire seasons or three years, whichever
comes first, following the entry into force of a contract, where such contract is
concluded prior to the 28th birthday of the professional, or two entire seasons
or two years, whichever comes first, following the entry into force of a
contract, where such contract is concluded after the 28th birthday of the
professional”. Having stated the above, the DRC recalled its longstanding
jurisprudence according to which the protected period starts again when,
while renewing the contract, the previous contract is extended. In this context,
the Chamber pointed out that the annexes signed by the parties on 1 March
2007 and 25 January 2008 and by means of which certain bonuses are added,
clearly stipulate that the other provisions of the contract, and in particular the
duration of the contractual relationship, remain unchanged. Therefore, the
members of the Chamber concurred that 27 July 2005 was the date to be
Club A, country B / Player C, country B / Club D, country E
Page 16 of 18
deemed as starting point of the protected period. In view of the above, and
considering that the player was 19 when he signed the contract and that he
breached the contract on 22 May 2008, the Chamber concluded that the
breach occurred after the expiry of the third season and thus, outside the
protected period.
23. In conclusion, the DRC decided that the claim of the Claimant is partially
accepted and that the Respondent I has to pay to the Claimant EUR 223,990,
plus 5% interest p.a. on said amount as from 20 April 2010 until the date of
effective payment, as compensation for the unilateral termination of the
contract without just cause. In this respect, the DRC also determined that the
Respondent II is jointly and severally responsible for the payment of the abovementioned amount of compensation to the Claimant.
24. Furthermore, the Chamber held that the Claimant’s claim pertaining to legal
costs is rejected in accordance with art. 18 par. 4 of the Procedural Rules and
the Chamber’s respective longstanding jurisprudence.
25. The Dispute Resolution Chamber 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, Club A, is partially accepted.
2.
The Respondent I, Player C, is ordered 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 EUR 223,990 plus 5% interest p.a. on said amount as
from 20 April 2010 until the date of effective payment.
3.
The Respondent II, Club D, is jointly and severally liable for the payment of the
aforementioned compensation.
4.
In the event that the amount plus interest due to the Claimant in accordance
with the above-mentioned point 2 is not paid by the Respondents within the
stated time limit, the present matter shall be submitted, upon request, to the
FIFA Disciplinary Committee for consideration and a formal decision.
5.
The Claimant is directed to inform the Respondent I and the Respondent II
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.
Club A, country B / Player C, country B / Club D, country E
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6.
Any further claims lodged by the Claimant are rejected.
*****
Note relating to the motivated decision (legal remedy):
According to art. 67 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 (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: [email protected] / www.tas-cas.org
For the Dispute Resolution Chamber:
Jérôme Valcke
Secretary General
Encl. CAS directives
Club A, country B / Player C, country B / Club D, country E
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