Labour Disputes
Texto da decisão
Decis ion of the
Dis pute Res olution Cham ber
passed in Zurich, Switzerland, on 8 March 2018,
in the following composition:
Geoff Thom ps on (England), Chairman
Johan v an Gaalen (S outh Africa), member
S tefano S artori (Italy ), member
Pav el Piv ov arov (Rus s ia), member
Muzam m il bin Moham ed (S ingapore), member
on the matter between the club,
Club A, Country B
as First Claimant / Respondent II
and the player,
Play er C, Country D
as Second Claimant / Respondent I
and the club,
Club E, Country D
as Respondent III
regarding an employment-related dispute
between the parties
I.
Facts of the cas e
1.
On 8 September 2012, the player of Country D, Player C (hereinafter: the
player or Second Claimant / Respondent I) and the club of Country D, Club E
(hereinafter: Club E or Respondent III) concluded a contract, valid between 8
September 2012 and 8 September 2017, according to which the player was
entitled to receive a monthly salary of 40,000 in the currency of Country D
(approximately USD 19,691 on 8 September 2012).
2.
On 22 May 2015, the player, Club E and the club of Country D, Club F, agreed
upon a transfer on loan basis of the player in the period between 21 May and
30 November 2015.
3.
On 17 September 2015, the club of Country B, Club A (hereinafter: Club A or
First Claimant / Respondent II), via a player’s agent, Player’s agent G, made an
offer to Club E for a transfer of the player on loan basis to its club. The next
day, 18 September 2015, Club E made the necessary arrangements in order to
conclude the loan transfer of the player to Club A, claiming that the transfer
window in the Country B would close on 21 September 2015.
4.
In this respect, the loan agreement between the player, Club E and Club F was
terminated and on 19 September 2015, Club E sent a draft version of a loan
agreement to Club A.
5.
On 20 September 2015, Club E, Club A and the player signed a loan transfer
agreement (hereinafter: the loan agreement), based on which the player was
loaned from Club E to Club A in the period between 21 September 2015 and
30 June 2016, ‘free of charge’.
6.
In article 7.1 of the loan agreement, the following is stipulated: ‘Notices
between the parties relating to this Agreement must be in writing and must
be delivered personally or sent by prepaid first-class post, prepaid air mail post
or facsimile transmission to the address set out opposite the parties above or
to the fax number as set out below, unless alternative details have been
notified by a party for the purpose of this clause: […] Club A: Fax number: XXX
’.
7.
Article 13.1 of the loan agreement inter alia holds the following: ‘All the
parties to this agreement shall keep confidential all the information contained
in this agreement and/or any information which it receives in relation to any
other party (the ‘Confidential Information’) and shall not use it or disclose it
except for the purposes of exercising or performing its rights and obligations
under this agreement […]’.
Club A, Country B / Player C, Country D / Club E, Country D
2/21
8.
On 21 September 2015, the player and Club A concluded an employment
contract (hereinafter: the contract), valid between 21 September 2015 and 30
June 2016.
9.
According to article 3 of the contract, the player was entitled to receive the
following amounts:
a signing fee of USD 100,000, due upon signature of the contract;
a payment of USD 100,000, due on 20 January 2016;
9 monthly payments of USD 44,444, due at the end of each month, in the
period between 31 October 2015 and 30 June 2016.
10.
Furthermore, the contract stipulates that the player is entitled to an amount of
100,000 in the currency of Country B (corresponding to approximately USD
27,220 on 21 September 2015) as housing allowance, ‘or the provision of
suitable accommodation’, as well as a car and ‘family air tickets for his wife
and one member of his family’, ‘once years (round trip) (economic class) of the
Country B to Country D’.
11.
In addition, article 7 par. 2 of the contract stipulates the following: ‘In case of
the breach of the contract by the first party [Club A] except for a serious
violation of the second party [the player], the second party will receive the full
payment and advantages stipulated in article 3 until the end of the contract’.
12.
Article 13 of the employment contract holds the following clause: ‘This
contract shall be deemed valid on signature by the two parties and after the
player registered with the Football Association of Country B to this the two
parties and witnesses have signed on the day and date specified above’.
13.
Also on 21 September 2015, Club A sent an e-mail to Club E, indicating that it
‘cancelled the TMS procedure because the player did not arrive to Country B
on 21/09/2015 which was mentioned in the contract so we could not have time
to finish our procedures with Football Association of Country B’.
14.
On 22 September 2015, Club A sent a letter to Club E by means of which it
informed Club E that ‘our triple loan agreement is terminated because of the
essential violation by the player for not coming in the agreed date for
registration which was agreed in loan agreement’. Further, in said letter, Club
A explained that the player did not join its club ‘till this moment 22/09/2015’
and that the last day to register players in the Country B was ‘in 21/09/ 2015
and the federation offices officially close at 05:00 o’clock’. Also, Club A argued
Club A, Country B / Player C, Country D / Club E, Country D
3/21
that ‘entering the player to Country B is obligatory term to register in Football
Association of Country B and it was impossible to complete the registration for
reason beard by the player and his club, Club E, where Club A has no
responsibility for this violation’.
15.
Moreover, on 23 September and 1 October 2015, Club E requested Club A to
comply with its contractual obligations as per the loan agreement. On 1
October 2015, Club A replied to Club E, explaining that Club E’ letters were
sent to the wrong fax number and referring to the fact that the player did not
show up on the agreed date.
16.
On 24 September 2015, the player sent a letter to Club A, requesting it to fulfil
the necessary procedures for the ‘employment agreement fulfilment’. On 28
September 2015, Club A requested a deadline of 48 hours to answer to the
player’s letter, however never did so. As a result, on 1 October 2015, the player
sent a letter to Club A, explaining that he deemed both the loan agreement
and the contract terminated by Club A’s ‘unilateral and unmotivated initiative
due to the player’s and Club E’ unequivocal contractual breach’.
17.
On 15 October 2015, Club A lodged a claim against both the player and Club E
in front of FIFA, requesting the following:
18.
‘the establishment of the annulment of the loan contract’, concluded
between Club A, Club E and the player;
‘the establishment of the annulment of the bilateral work agreement’,
concluded between Club A and the player;
to hold both the player and Club E responsible for the payment of USD
2,200,000 as compensation for the ‘moral and material damages’,
arising from the player’s non-execution of the contract;
to hold both the player and Club E responsible for the payment of USD
500,000 as compensation for ‘violation of the breach of confidentiality
and privacy obligations’;
to hold both the player and Club E responsible for the payment of USD
5,000 as ‘value of fees and expenses’.
In its claim, Club A explains that during the negotiations regarding the transfer
on loan basis of the player from Club E to Club A, the most important
condition ‘of the nominated player was to be able to arrive Country B before
the expiry of the registration and transfers deadline’. After the parties had
concluded a final version of the loan agreement and the contract, Club A holds
Club A, Country B / Player C, Country D / Club E, Country D
4/21
to have instructed Player’s agent G that the player had to come to ‘Country B
without waiting for signing the contract’, because of the importance of arrival
before the expiry of the registration period. According to Club A, Player’s
agent G confirmed that the player was ready ‘to arrive before the expiry of the
registration period and that he will comply with the terms and conditions of
the contract, especially, the start date of 21/09/2015’.
19.
In addition, ‘due to the importance of early arrival to Country B’, Player’s
agent G was entitled to finalize the flight booking procedure ‘on the basis that
the air tickets value will be reimbursed to Player’s agent G as soon as the
player arrives’. According to Club A, Player’s agent G booked a flight for the
player.
20.
Moreover, Club A explains that on 20 September 2015, it obtained the entry
visa for the player and that afterwards, the player and Club E, via Player’s
agent G, confirmed that the player would arrive on Sunday 20 September 2015
in the Country B. However, Club A states that the player delayed his arrival a
couple of times ‘for reasons that were not understood, last one was losing the
player for his passport’ and that on 21 September 2015, the player was still in
Country D.
21.
Furthermore, Club A explains that Club E delayed the signing of the final
version of the contract and the loan agreement, and that only on 21
September 2015, it received the signed version of the loan agreement. After
having uploaded said document in the TMS on 21 September 2015, Club A
explains that it found out that Club E made a mistake in the TMS by ‘not
mentioning the amount of transfer allowance or contract value’.
22.
Club A further argues that, despite the delay in the arrival of the player in the
Country B and the fact that it could not finish the procedure in the TMS, it
‘exerted all-out efforts to register the player, […], such as finalizing the
registration procedures and requesting to allow delaying the stamp document
of entry to Country B […]’. However, Club A points out that the Registration
Division of the Football Association of Country B rejected the registration of
the player, ‘due to not attaching the afore-mentioned document’ (i.e. the
stamp document of entry in the Country B). As a result of the foregoing, Club
A states that there was ‘no chance left for the player to participate in the next
period’.
23.
What is more, Club A argues that, due to the fact that the player did not arrive
in the Country B on 21 September 2015 and was still in Country D on 22
September 2015, the loan agreement signed between the parties was violated.
Consequently, Club A deemed the loan agreement to be null and void and
Club A, Country B / Player C, Country D / Club E, Country D
5/21
confirmed this in a letter sent to Club E. What is more, Club A explains that the
work visa it requested for the player is still valid.
24.
In addition, Club A explains that the foregoing circumstances caused serious
damages to its club, as it was not able to replace its injured player and/or to
sign a new player, as well as that it lost an important game against Club H and
further lost ‘its ability to compete’ with other clubs in the Country B.
25.
Finally, Club A explains that on 30 September and 1 October 2015, both Club E
and the player breached the confidentiality clauses included in article 13 of the
contract, by sending correspondence to an ‘unreliable fax number’, i.e. the
number YYY. This number did not correspond to the number specified in
article 7.1 of the loan agreement, namely, XXX.
26.
In conclusion, Club A argues that, because the player did not arrive on 21
September 2015, the start date of the contract, ‘all contractual obligations
between the parties of the player loan agreement became legally valueless’.
27.
On 2 February 2016, Club E answered to the claim of Club A, by arguing that
after the parties signed the transfer agreement and the contract, Club A
bought flight tickets for the player, in order for him to be able to travel to the
Country B. Furthermore, Club E explains that it was ‘unexpectedly informed’
that ‘Club A had failed to enter significant information in the TMS’, as well as
that ‘the Player’s ITC had been cancelled by Club A’.
28.
After having requested Club A to comply with its contractual obligations, Club
E holds that Club A only provided ‘absolutely unfounded answers’ and stated
that it was the player’s fault that he failed to enter the territory of the Country
B on 21 September 2015. Moreover, Club E explicitly denies Club A’s
allegations that Club E incorrectly entered information in the TMS.
29.
In addition, Club E argues that neither the loan agreement, nor the contract,
contain any clauses obliging the player to enter the territory of the Country B
by no later than 21 September 2015. What is more, Club E argues that there is
no proof on file that Player’s agent G guaranteed that the player would arrive
in the Country B on 21 September 2015.
30.
Furthermore, Club E explains that Club A should be aware of any procedures
and obligations to register players in the Country B, and that it cannot uphold
the alleged circumstance that the player could not be registered in time
against Club E and the player.
31.
With regard to the confidentiality clauses in article 13 of the loan agreement,
Club E argues that it did not breach said clauses, as on 21 January 2016, ‘the
Club A, Country B / Player C, Country D / Club E, Country D
6/21
last fax sent by Club E was on 12 June 2015, months before the exchange of
correspondence between Club E and Club A’. In addition, Club E explains that
the website of Club A also shows the fax number YYY and that as such, Club A
‘itself indicated such number for communication’.
32.
Moreover, Club E explains that Club A failed to provide evidence of the ‘moral
and material damages’ in the amount of USD 2,200,000 it allegedly suffered. In
addition, Club E states that Club A did not lose the game against Club H, but
that said game ended in a score of 1-1.
33.
According to Club E, Club A further failed to provide evidence of the alleged
obligation of the player to arrive in the Country B on 22 September 2015, the
alleged confirmation of Club E that the player would arrive on 21 September
2015, the calculations able to confirm the compensation amount requested
and the alleged fees and expenses incurred. As a result, Club E asks for the
rejection of Club A’s claim, as well as to impose procedural costs on Club A, to
oblige Club A to reimburse legal costs of Club E and to impose a penalty for
procedural bad faith on Club A.
34.
On 3 February 2016, the player replied to the claim of Club A, first of all
pointing out that after the signing of the loan agreement on 20 September
2015, ‘the relevant authorities’ issued a visa, as well as that ‘plane tickets for
the player were issued’.
35.
Further, the player explains that, on an unspecified date, he was ready to
travel to the Country B, but that upon arriving at the airport, he was ‘surprised
with the news that Club A had cancelled the TMS proceedings and also
unilaterally terminated the employment agreement and transfer agreement,
by means of a notification’.
36.
Furthermore, the player argues that Club A terminated the contract on the
very same day as it was signed, as well as that there is no contractual provision
that required the player to arrive in the Country B on 21 September 2015.
Therefore, according to the player, he could not have breached his contractual
obligations by not arriving in the Country B on 21 September 2015. Moreover,
the player explains that he ‘does not need to be physically present in order for
the data to be entered in the TMS’, as this was Club A’s responsibility.
37.
Furthermore, the player argues that Club A did not submit evidence, proving
that Player’s agent G guaranteed that the player would arrive in the Country B
on 21 September 2015.
38.
In addition, the player explains that he also suffered sports related damage, as
after the unilateral termination of the contract by Club A, he could not be
Club A, Country B / Player C, Country D / Club E, Country D
7/21
registered with Club F or Club E anymore, as the registration period in Country
D had closed on 15 September 2015.
39.
Moreover, the player concludes that the loan agreement and the contract
effectively came into force, and that it was Club A which decided to terminate
them, by sending its correspondence dated 21 and 22 September 2015.
40.
With regard to the confidentiality clauses in article 13 of the loan agreement,
the player argues that he did not breach said clauses, as the website of Club A
also shows the fax number YYY and that as such, Club A ‘itself indicated such
number for communication’.
41.
Moreover, the player explains that Club A failed to provide evidence of the
‘moral and material damages’ in the amount of USD 2,200,000 it allegedly
suffered. In addition, the player states that Club A did not lose the game
against Club H, but that said game ended in a score of 1-1.
42.
According to the player, Club A further failed to provide evidence of the
alleged obligation of the player to arrive in the Country B on 22 September
2015, the alleged confirmation of Club E that the player would arrive on 21
September 2015, the calculations able to confirm the compensation amount
requested and the alleged fees and expenses incurred. As a result, the player
asks for the rejection of Club A’s claim, as well as to impose procedural costs
on Club A, to oblige Club A to reimburse his legal costs and to impose a
penalty for procedural bad faith on Club A.
43.
On 15 December 2015, the player lodged a separate claim against Club A,
claiming compensation for breach of contract in the total amount of USD
1,125,063 to be paid by Club A, specified as follows:
USD 898,397 as residual value of the contract in the period between
21 September 2015 and 30 June 2016, consisting of:
-
USD 600,000 as salary payments, due between 31 October 2015
and 30 June 2016;
USD 245,070 as total amount of the housing allowance, consisting
of 9 monthly payments of 100,000 in the currency of country B
(approximately USD 27,220 on 21 September 2015);
USD 19,000 as ‘average values of a car rental in the Country B’;
USD 34,327 as ‘average values of a round trip flight tickets for 3
people from the Country B to Country D’;
Club A, Country B / Player C, Country D / Club E, Country D
8/21
USD 226,666 as ‘compensation for career damages’, corresponding to
the contractual value for the period of 102 days between 21
September 2015 and 31 December 2015, based on an average
monthly salary of USD 66,666.66.
Furthermore, the player requested 5% interest p.a. on the total amount of
USD 1,125,063 as from 21 September 2015, as well as that sporting sanctions
are imposed on Club A. In addition, the player asks Club A to be condemned to
pay procedural costs.
44.
In his claim, the player explains that after the parties signed the transfer
agreement and the contract, he bought plane tickets and was ready to travel
to the Country B to perform his duties with Club A. However, when arriving on
the airport, he was ‘surprised with the news that Club A had cancelled the TMS
proceedings and also unilaterally terminated the employment agreement and
transfer agreement, by means of a notification’.
45.
What is more, the player explains that by sending its letter dated 22
September 2015, Club A terminated the loan agreement and ‘consequently,
the employment agreement was also terminated’.
46.
Furthermore, the player argues that Club A ‘never informed him that being
physically present at the Country B was a legal requirement for the registration
of the athlete with the Football Association of Country B’. Moreover, the
player states that ‘it is very clear from the employment agreement, in article 9,
that the term of the validity was from September 21st 2015 to June 30 th 2016,
independently of any registration with the Football Association of Country B’.
In addition, the player argues that neither the loan agreement, nor the
contract, contain any clauses obliging the player to enter the territory of the
Country B by no later than 21 September 2015.
47.
According to the player, on 24 September 2015, the player put Club A in
default and asked it to take the necessary measures in order to make it
possible for the player ‘to engage the activities of a professional football
player with Club A’s squad’. Moreover, the player states that on 1 October
2015, Club A replied to his default letter, holding that the player should
provide valid reasons ‘for not showing in the agreed date’ and that it is ‘still
keeping its rights in asking for compensation for all the moral and material
damages’.
48.
Based on the foregoing circumstances, the player deems that ‘because of Club
A’s unilateral and unmotivated initiative […]’, Club A had terminated both the
loan agreement and the contract without just cause.
Club A, Country B / Player C, Country D / Club E, Country D
9/21
49.
Finally, the player explains that he also suffered sports related damage, as
after the unilateral termination of the contract by Club A, he could not be
registered with Club F or Club E anymore, as the registration period in Country
D closed on 15 September 2015.
50.
In its reply to the player’s claim, Club A explained that it acquired the services
of a player’s agent, Player’s agent G, in order to find a new striker.
51.
After Player’s agent G introduced the player to Club A, an offer was made to
Club E and Club A informed Player’s agent G that the player should be in the
Country B by no later than 20 September 2015. According to Club A, it was
informed by Player’s agent G that the player had acknowledged this
information and stated that he was fully aware of the short time frame.
52.
Club A further points out that after negotiations with Club E, on 20 September
2015, both the loan agreement and the contract were signed by Club A, as it
‘was pushing very hard to make it happen’. In relation to the contract, Club A
points out that after signing said document, it sent the contract via Player’s
agent G to the player, as the player ‘has confirmed that he would arrive before
Monday 21st of September to execute his obligations as a professional football
player’. Club A explains that for this reason, the starting date of the contract
was 21 September 2015.
53.
Furthermore, Club A explains that it arranged a visa for the player in order to
be able to travel to the Country B, however that on 20 September 2015, it
noted that the player kept on delaying his arrival. In addition, Club A argues
that it put an obligation on the player to arrive by no later than 21 September
2015, 5:00 pm, as the ‘Football Association of Country B Regulations requires
attaching the entry stamp of the player’s passport to the Country B to finalize
the registration’. Club A further indicates that this ‘was clearly understood by
the intermediary who passed it to Club E and to the player’.
54.
As the player did not arrive in the Country B on 21 September 2015, Club A
holds that ‘the loan agreement will not be completed and the player will not
be able to play with Club A’. As a result, Club A holds to have had no other
choice than to terminate the loan agreement with just cause. Moreover, Club
A explains that the loan agreement did not come to the point to be effective
due to the player’s absence, and that consequently ‘the employment
agreement between Club A and the player was not effective as well’.
55.
Regarding the amounts claimed by the player, Club A argues that the case
should be considered as a non-execution case. Moreover, Club A argues that it
cannot be held responsible for the (financial) consequences of any contracts
the player signed with Club E and Club F.
Club A, Country B / Player C, Country D / Club E, Country D
10/21
56.
What is more, Club A explains that on 4 January 2016, the player signed a
contract with the club of Country D, Club L, on a loan basis. Therefore,
according to Club A, the amounts claimed by the player as career damages are
groundless.
57.
In conclusion, Club A asks for the rejection of the player’s claim, and to oblige
him to pay procedural costs as well as Club A’s legal expenses. Furthermore,
Club A requests that sporting sanctions be imposed on the player.
58.
In his replica, the player reiterated his initial claims and further explains that
the fact that he was not present in the Country B on 21 September 2015,
cannot be considered as a valid reason to terminate the loan agreement, as
there was no contractual provision obliging him to be physically present in the
Country B.
59.
Moreover, the player points out that Player’s agent G is not Club E’ agent and
that Club E was not aware of any communications between Club A and
Player’s agent G. What is more, the player explains that Player’s agent G ‘may
be considered’ as Club A’s agent.
60.
In addition, the player states that the Football Association of Country B
Regulations allegedly not allowing a club to register a player if he is not
present in the Country B ‘does not make a transfer agreement invalid and
neither an employment agreement’.
61.
Moreover, the player explains that the amounts claimed as salaries and
benefits, in the total amount of USD 898,397, can be granted to him, based on
article 7 par. 2 of the contract. Also, the player argues that his claims related to
career damages and specificity of the sport can be upheld, as he ‘was
developing quite well and, out of the sudden, he could no longer play official
matches because of the early termination of the employment agreement’. The
player more precisely points out that for 102 days, the period between 21
September 2015 and 31 December 2015, he could not play any official
matches.
62.
In its duplica, Club A reiterated its previous arguments, and further explained
that it always acted in good faith. In this respect, Club A points out that it
issued a visa for the player, and that it allowed him to book the flight tickets
from Country D to the Country B. Moreover, by signing both the loan
agreement and the contract, Club A holds to have done its utmost efforts to
finalize the transfer, despite the player’s physical absence.
Club A, Country B / Player C, Country D / Club E, Country D
11/21
63.
Furthermore, Club A explains that, because the contract started on 21
September 2015, the player should have understood that he needed to be
physically on the territory of the Country B by that date. According to Club A,
it is otherwise ‘not understandable how can the Athlete start executing his
contractual obligations’.
64.
Further, Club A explains that if the player would have arrived on time ‘as per
the terms of the contract’, he would not have had to bear the consequences of
not being registered in line with the Football Association of Country B
Regulations. Moreover, Club A states that both the player and Club E were
aware of Player’s agent G’ role in concluding the transfer.
65.
In addition, Club A reiterates that the loan agreement never became effective,
as well as that the contract was never executed by the player.
66.
In conclusion, Club A requests for the rejection of all the player’s financial and
disciplinary claims, as the ‘agreement was terminated for just cause due to
external factors Club A could not control’. In this respect, Club A also points
out that the player could not prove that his market value decreased as of
September 2015, and in any case that from January 2016, he continued his
career by playing for the club of Country D, Club L.
67.
In conclusion, Club A explains that it suffered severe damages due to the fact
that the player could not be registered with its club. Therefore, it requests for
the rejection of all the player’s claims.
68.
After being requested to do so, the player informed FIFA that on 21
September 2015, he returned to Club E, where he ‘trained separated from his
work colleagues’. In the period between 21 September 2015 and 5 January
2016, he was entitled to receive a monthly salary of 40,000 in the currency of
Country D or – according to the player - USD 10,250.89.
69.
Moreover, on 6 January 2016, the player holds to have signed a contract with
the club of Country D, Club L, according to which he was entitled to a monthly
salary of 60,000 in the currency of Country D or – according to the player - USD
14,887.23. As a result, in the period between 21 September 2015 and 30 June
2016, the player received a total amount of approximately 493,200 in the
currency of Country D or approximately USD 122,700.
II.
Cons iderations of the Dis pute Res olution Cham ber
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 matter
Club A, Country B / Player C, Country D / Club E, Country D
12/21
at hand. In this respect, it took note that the present matter was submitted by
Club Ato FIFA on 15 October 2015, and that the player submitted his claim to
FIFA on 15 December 2015. Consequently, the Rules Governing the Procedures
of the Players’ Status Committee and the Dispute Resolution Chamber (edition
2015; hereinafter: Procedural Rules) are 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. b of the Regulations on the Status and Transfer of
Players (edition 2018) 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 club of Country B and a player of
Country D, with the involvement of a club of Country D.
3.
Furthermore, 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 (edition 2018), and considering that the present claim was lodged by
Club A on 15 October 2015 and by the player on 15 December 2015, the 2015
edition of said regulations (hereinafter: Regulations) is applicable to the
matter at hand as to the substance.
4.
The competence of the Chamber and the applicable regulations having been
established, the Chamber entered into the substance of the matter. In this
respect, the Chamber started by acknowledging all the above-mentioned facts
as well as the arguments and the documentation submitted by the parties.
However, the Chamber emphasised that in the following considerations it will
refer only to the facts, arguments and documentary evidence, which it
considered pertinent for the assessment of the matter at hand.
5.
In doing so, the members of the Chamber started by acknowledging that Club
A, Club E and the player signed a loan transfer agreement, based on which the
player was loaned from Club E to Club A in the period between 21 September
2015 and 30 June 2016.
6.
Furthermore, the members of the Chamber noted that Club A and the player
had also signed an employment contract on 21 September 2015, valid as from
21 September 2015 until 30 June 2016, in accordance with which Club A would
pay the player a sign-on fee of USD 100,000, another payment of USD 100,000
due on 20 January 2016, as well as 9 monthly payments of USD 44,444.
Furthermore, the player was entitled to an amount of 100,000 in the currency
of Country B as housing allowances.
Club A, Country B / Player C, Country D / Club E, Country D
13/21
7.
In continuation, the Chamber noted that on 15 October 2015, Club A lodged a
claim against both the player and Club E, maintaining that the player and Club
E breached – respectively, induced the breach of – the loan agreement and the
employment contract, as on the starting date of the loan period, i.e. 21
September 2015, the player had not arrived on the territory of the Country B,
in order to start rendering his services under the employment contract.
Further, Club A held that since the player did not timely arrive in the Country
B, it terminated the loan agreement with just cause and that as a result, as
from 22 September 2015, also the employment contract signed between the
parties ‘was not effective’. Based on the foregoing, Club A claims that it is
entitled to compensation for breach of contract to be paid by the player
and/or Club E.
8.
Moreover, the members of the Chamber took due note of the separate claim
of the player, as well as the argumentation contained therein, by means of
which the player explained that the breach of the contract occurred due to the
fault of Club A, since on 21 September 2015, Club A cancelled the TMS
registration procedure and terminated the loan agreement, as well as on 22
September 2015, Club A unilaterally terminated the employment contract. The
player points out that the reason for termination brought forward by Club A,
i.e. the alleged fact that the player did not arrive on the supposedly agreed
date (21 September 2015) in the Country B, does not constitute a just cause to
terminate the employment contract. As a result, the player deems that Club A
terminated – both the loan agreement and – the employment contract with
just cause and requests to be awarded compensation for breach of contract.
9.
With the aforementioned considerations in mind, in particular, the opposite
position of the parties, the Chamber deemed that the underlying issue in this
employment-related dispute was to determine whether the employment
contract had been unilaterally terminated on 22 September 2015 with or
without just cause by Club A, and subsequently, to determine the
consequences of said early termination of the employment relationship by
Club A.
10.
Entering into the substance of the matter at hand, the Chamber first pointed
out that it remained uncontested that Club A and the player had concluded an
employment agreement on 21 September 2015, valid as from 21 September
2015 until 30 June 2016 and that, as per its article 13, said contract was valid
upon signature of the parties and upon registration of the player by the
Football Association of Country B.
11.
Thereafter, the members of the Chamber analysed the claim of Club A, as well
as its reply to the claim of the player, in which it alleged that due to the fact
that the player did not arrive on 21 September 2015 on the territory of the
Club A, Country B / Player C, Country D / Club E, Country D
14/21
Country B, he did not receive the entry stamp in his passport, which is
according to Club A a prerequisite for properly registering the player with the
Football Association of Country B. Club A further holds that the player was
aware of his obligation to arrive on time in the Country B and that, due to his
own fault, he could not be properly registered.
12.
The player, on the other hand, stated that Club A did not prove that both the
player and Club E were aware of the alleged requirement to arrive on 21
September 2015 in order to be registered at the Football Association of
Country B. What is more, the player states that the employment contract does
not hold a clause, stipulating that he needed to arrive on the territory of the
Country B by no later than 21 September 2015. Such arguments are also
brought forward by Club E, which also indicated that Club A should be the
party aware of any procedures and obligations for the valid registration of
players in the Country B, and that it should bear the (legal) consequences of an
eventual non-compliance with them, if the player cannot be properly
registered.
13.
At this point, the members deemed it vital to refer to the contents of art. 12
par. 3 of the Procedural Rules, in accordance with which any party claiming a
right on the basis of an alleged fact shall carry the burden of proof. Based on
the aforementioned legal principle, the members of the Chamber noted that
Club A was not able to provide documentary evidence, proving that the player,
his agent or Club E were duly informed that the player needed to be physically
present on the territory of the Country B on 21 September 2015 in order to be
registered with Club A.
14.
What is more, after analysing both the employment contract as well as the
loan agreement, the Chamber established that none of these documents held
a clause, stipulating that the player needed to be present on the territory of
the Country B by no later than 21 September 2015. As such, according to the
members of the Chamber, the circumstance that the player did not arrive in
the Country B on said date could not be upheld against him or against Club E,
as it was not a contractual obligation of any of these parties.
15.
In addition, irrespective of the fact of whether there was a contractual clause
obliging the player to timely arrive in the Country B in order to be properly
registered, the Chamber considered relevant to recall its longstanding
jurisprudence in accordance with which the validity of an employment contract
cannot be made conditional upon the execution of (administrative) formalities,
such as, but not limited to, the registration procedure in connection with the
international transfer of a player, which is the sole responsibility of a club.
Club A, Country B / Player C, Country D / Club E, Country D
15/21
16.
As regards the matter at stake, Club A asserted that in order to properly
register the player at the Football Association of Country B, the player had the
obligation to obtain an entry stamp on his passport dated 21 September 2015
– the final date of the registration window in the Country B –, at the latest.
Bearing in mind the general rule that the registration of a player and/or a
contract at a national federation and/or in the TMS, does not constitute a
condition for the validity of a contract, the Chamber further wished to point
out that Club A would actually have been in the position to prevent the
occurrence of the non-registration, had it only made clear arrangements with
the player, his agent and/or Club E about the date of arrival of the player,
considering the short period of time between the negotiations, the signature
of the contract and the closure of the registration window. For these reasons,
and whilst emphasizing once more that it is the responsibility of the engaging
club to properly register a player’s contract with its national association, as
well as taking into account that Club A and the player had already signed a
contract, the members of the Chamber decided to reject Club A’s arguments in
this regard.
17.
Subsequently, the Chamber finally wished to emphasize that only a breach or
misconduct which is of a certain severity justifies the termination of a contract.
In other words, only when there are objective criteria which do not reasonably
permit to expect the continuation of the employment relationship between
the parties, a contract may be terminated prematurely. Hence, if there are
more lenient measures which can be taken in order for an employer to ensure
the employee’s fulfilment of his contractual duties, such measures must be
taken before terminating an employment contract. A premature termination
of an employment contract can only ever be an ultima ratio measure.
18.
In view of the above, the Chamber observed that Club A already cancelled the
TMS instructions on 21 September 2015, and that on 22 September 2015, both
the loan agreement and the contract were terminated, as the player would
only arrive on 22 September 2015 in the Country B. Equally, the Chamber
observed that there was no evidence submitted by Club A that the player was
indeed supposed to arrive in the Country B on 21 September 2015 and, even if
such evidence had been presented, the Chamber deems that a delay of only
one day could not legitimately be considered as a breach severe enough to
justify the termination of the contract. Thus, the Chamber concluded that Club
A had no just cause to cancel the relevant TMS instructions on 21 September
2015 and to announce to the player on 22 September 2015 that it would not
carry on with the execution of the employment contract duly concluded with
him on 21 September 2015.
19.
On account of the above, the Chamber established that Club A, in particular by
not carrying out the relevant steps for the registration procedure of the
Club A, Country B / Player C, Country D / Club E, Country D
16/21
employment contract, which were in its responsibility, and for the player’s
transfer in TMS, refused to accept the player’s services without any valid
reason.
20.
In light of the aforementioned, the DRC came to the unanimous conclusion
that, considering the contents of the employment contract and the fact that
Club A is responsible for any administrative formalities regarding inter alia the
registration of the player, Club A’s conduct of 22 September 2015 constituted,
in the Chamber’s view, a breach of contract without just cause and, thus Club
A has to be held responsible for the consequences of such.
21.
Having established that Club A is to be held liable for the early termination of
the employment contract, the Chamber focused its attention on the
consequences of such termination. Taking into consideration art. 17 par. 1 of
the Regulations, the Chamber decided to reject Club A’s claim against the
player and Club E and established that the player is entitled to receive from
Club A an amount of money as compensation for breach of contract, in
addition to any outstanding payments – if any – on the basis of the relevant
employment contract.
22.
Along those lines, the Chamber firstly referred to the fact that, at the time of
the unilateral termination of the contract, the parties had not yet started
executing the contract and the player never had the chance to render his
services to Club A.
23.
Consequently, the Chamber decided that on the date of the termination of the
employment contract – or rather of the communication of its non-execution –,
there was no outstanding remuneration payable to the player and that such
contract was in fact never executed, and that due to the unjustified failure of
Club A to obtain his registration at the Football Association of Country B.
24.
In continuation, 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 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.
Club A, Country B / Player C, Country D / Club E, Country D
17/21
25.
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 noted that the clause in article
7 par. 2 of the contract, which stipulates the consequences of a unilateral
termination of the contract by Club A, i.e. that the player is entitled to receive
the full value of the contract, in case of a breach of the contract by Club A.
26.
The members of the Chamber analysed the content of the aforementioned
clause and deemed that the circumstances therein described do not exactly
match the ones of the present case, as in fact, the contract was not terminated
during its course, but rather it never started being executed by any of the
parties, due to the fault of Club A. For such very specific situation, the
Chamber deemed that the clause in article 7 par. 2 of the contract – which is
also not reciprocal – cannot be applied in the present case to determine the
amount of compensation due by Club A to the player for the non-execution of
a validly concluded employment contract.
27.
Thus, the Chamber deemed it appropriate to calculate the amount of
compensation payable by Club A to the player in application with its wellestablished jurisprudence regarding the non-execution of employment
contracts as well as in line with the other parameters set out in art. 17 par. 1 of
the Regulations. The Chamber recalled that said provision provides for a nonexhaustive enumeration of criteria to be taken into consideration when
calculating the amount of compensation payable.
28.
Bearing in mind the foregoing, as well as the claim of the player, the Chamber
proceeded with the calculation of the monies payable to the player under the
terms of the employment contract until 30 June 2016. Consequently the
Chamber concluded that, in line with the player’s request, the amount of EUR
USD 627,216 (i.e. the 9 monthly salary payments in the amount of USD 44,444
each, the sign-on fee of USD 100,000, the additional payment of USD 100,000,
as well as the housing allowances in the amount of 100,000 in the currency of
Country B (approximately USD 27,220), serves as the basis for the
determination of the amount of compensation for breach of contract. At this
point, the Chamber deemed it appropriate to explain that the contract
stipulates that a housing allowance of 100,000 in the currency of Country B is
in fact due to the player, but it does not specify that this should be a regularly
repeated payment. In view of the foregoing, and considering that such
amount corresponds to approximately USD 27,220, the Chamber considered it
unlikely – and in any case nowhere contractually established – that such
payment would be due on a monthly basis, but rather that is constituted a
single payment to be made to the player for housing costs.
Club A, Country B / Player C, Country D / Club E, Country D
18/21
29.
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 able to reduce his loss of income.
According to the constant practice of the DRC, 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.
30.
In this context, the Chamber noted that the player had returned to Club E, his
previous club, where he earned in the period between 21 September 2015 and
5 January 2016 an amount of approximately USD 35,478. Furthermore, on 6
January 2016, the player signed a new employment contract with the club of
Country D, Club L, valid as from 6 January 2016 until 30 June, by means of
which he would receive the total amount of approximately USD 86,920. In
conclusion, the Chamber deemed that the player was able to mitigate his
damages with the total amount of USD 122,398 in the relevant period.
31.
At this point, the Chamber established that the player had allegedly suffered
damages in the total amount of USD 504,818, that is, the difference between
the remaining value of the contract with Club A in the amount of USD
627,216, minus the amount of USD 122,398, which corresponds to the value of
contracts with Club E and Club L.
32.
What is more, the Chamber considered important to point out that, although
the employment contract was fully valid and enforceable, the execution of the
contract had never started. In this respect, the members of the Chamber
deemed that such circumstance should be taken into consideration in the
calculation of the amount of compensation for breach of contract, and
decided – in accordance with its well-established jurisprudence in cases of nonexecution of a contract - to reduce the aforementioned amount of USD
504,818 to one-third of it, i.e. to USD 168,272.
33.
Consequently, on account of all of the above-mentioned considerations and
the specificities of the case at hand, the Chamber decided that Club A must
pay the amount of USD 168,272 to the player as compensation for breach of
contract without just cause.
34.
Further, with regard to the player's request for interest, the Chamber decided
that the player – in line with the Chamber’s longstanding and well-established
jurisprudence - is entitled to receive interest at the rate of 5% p.a. on the
amount of USD 168,272 as from 15 December 2015, the date on which the
player lodged his claim against Club A.
Club A, Country B / Player C, Country D / Club E, Country D
19/21
35.
Furthermore, the members of the Chamber decided to reject any further claim
lodged by the player.
36.
The Chamber concluded its deliberations in the present matter by rejecting the
claim lodged by Club A, as it has been established that Club A had no just
cause to terminate the employment contract on 22 September 2015.
III.
Decis ion of the Dis pute Res olution Cham ber
1.
The claim of the First Claimant / Respondent II, Club A, is rejected.
2.
The claim of the Second Claimant / Respondent I, Player C, is partially accepted.
3.
The First Claimant / Respondent II has to pay to the Second Claimant /
Respondent I, w ithin 30 day s as from the date of notification of this decision,
the amount of USD 168,272, plus 5% interest p.a. on said amount as from 15
December 2015 until the date of effective payment.
4.
In the event that the amount due to the Second Claimant / Respondent I in
accordance with the above-mentioned number 3. is not paid by the First
Claimant / Respondent II 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.
Any further claim lodged by the Second Claimant / Respondent I is rejected.
6.
The Second Claimant / Respondent I is directed to inform the First Claimant /
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.
*****
Note relating to the m otiv ated decis ion (legal remedy):
According to art. 58 par. 1 of the FIFA Statutes, this decision may be appealed
against before the Court of Arbitration for Sport (CAS). The statement of appeal
must be sent to the CAS directly within 21 days of receipt of notification of this
decision and shall contain all the elements in accordance with point 2 of the
directives issued by the CAS, a copy of which we enclose hereto. Within another 10
days following the expiry of the time limit for filing the statement of appeal, the
Club A, Country B / Player C, Country D / Club E, Country D
20/21
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:
Omar Ongaro
Football Regulatory Director
Encl. CAS directives
Club A, Country B / Player C, Country D / Club E, Country D
21/21