Dispute Resolution Chamber
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed on 6 May 2021
regarding an employment-related dispute concerning the player A
COMPOSITION:
Omar Ongaro (Italy), Deputy Chairman
Angela Collins (Australia), member
Stefano La Porta (Italy), member
CLAIMANT:
A, Country A
Represented by
RESPONDENT:
B, Country B
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I.
FACTS OF THE CASE
1.
On 15 June 2020, the Country A player A (hereinafter: “the player” or “the Claimant”) and
the Country B club B (hereinafter: “the club” or “the Respondent”) signed a document
written on the club´s letterhead named “Proposal letter for the player” (hereinafter: “the
proposal”) according to which the club expressed its intention to hire the services of the
player under the following conditions:
1) Term of the contract: valid from 1 July 2020 until 30 June 2021;
2) The club has the exclusive right to extend the contract by one year under the following
conditions: The club will notify you of the content by 31 May 2021;
3) Signing-on fee: Season 2020-2021 USD 30,000 gross;
4) Basic Annual Salary: Season 2020-2021 USD 120,000 gross, ”(Provide USD 30,000-as
signing-on fee, the total salary until 31 December 2020 will be USD 45,000- and USD
75,000- for the January-June period 2021)”.;
5) Performance bonuses;
6) Exchange rate policy: “A dollar on the contract translates into 1,200 Country B
currency”.
7) Other benefits: The club provides the player accommodation, a vehicle and return flight
ticket;
8) Terms and conditions of contract completion:
- Need to pass the Corona virus test before entering Country B;
- Need to pass the physical medical test after entering Country B;
- The contract will be cancelled if the player fails to register with the Country B
Football Association by July 22 due to problems such as visa issuance and entry into
Country B by the current global disaster situation.
9) Other Specifics:
- Due to the current corona virus problem, player must quarantine at the
accommodation provided by the club for 14 days after entering Country B;
- The first offer sent on 12 June was rejected by the player and this is the second;
- If the player does not sign this proposal by 24:00 on June 18th, the current time in
Country B, and deliver it to the club, the offer will be cancelled.
2.
In addition, the proposal stated, “The official contract (Country B-League Standard Contract)
will be signed by parties only after the player is approved on medical test and other
mandatory procedures”.
3.
On an unspecified date, the club send a letter to the player (hereinafter: “the letter of
cancellation”) stating “… I deeply thank you for your positive response to our team´s
proposal. Sadly, B is about to cancel the proposal as the club´s financial situation has
deteriorated sharply following the coronavirus …”
4.
On 10 July 2020, the player sent a default notice to the club requesting a compensation
amounting to USD 150,000 and granting 10 days to remedy its default, to no avail.
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5.
According to TMS, the player signed an employment contract with the Country C club, C
valid from 9 January 2018 until 30 June 2018 with an option to extend it until 8 January
2020.
6.
On 29 September 2020, the player signed an employment contract with the Country C club,
D valid from 1 October 2020 until 30 June 2021.
II.
PROCEEDINGS BEFORE FIFA
7.
On 20 August 2020, the Claimant filed the claim at hand before FIFA. A brief summary of
the position of the parties is detailed in continuation.
a.
The claim of the Claimant
8.
The Claimant lodged the present claim requesting the amount of USD 150,000 to the
Respondent as damage compensation due to the alleged breach of the contract by the club
without just cause. The player also requested the application of a default interest at the
rate of 5% per annum as from 25 June 2020 until the effective date of payment.
9.
In addition, the player requested that the club should be banned from registering any new
players for two entire and consecutive registration periods taking into account that the
termination of the contract was done during the protected period.
10.
First, the player stated that the proposal should be considered as a valid and binding contract
between the parties since it contains all essential terms and conditions necessary for the
constitution of an employment relationship between the club and the player. The player
indicated that pursuant to CAS jurisprudence the contract contained the essentialia negotii
elements, i.e. name of the parties; object; duration of the employment relationship,
remuneration and signature of the parties.
11.
The player further explained that the condition established in the proposal that the parties
had to sign a standardised contract imposed by the Country B Football Association was just
a formality and certainly not enough to disregard or invalidate the contract.
12.
In particular, the player underlined that “… in general such proposals or letters of
intent are often considered as pre-contracts, as the parties agree on some important
elements in view of the negotiation of the final contract and may provide for
sanctions to be imposed in case of violation of specific commitments. Accordingly, the
consistent lex sportiva has defined pre-contracts as the reciprocal commitment of at
least 2 (two) parties to later enter into a contract. Furthermore, it is necessary to
clarify that the jurisprudence of the FIFA DRC has been unanimous in establishing
that pre-contract is a valid and binding employment contract when the contract
contains the essentialia negotii of an employment relationship…”.
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13.
The player stated that the Covid-19 pandemic had already spread in Country B at the
moment the parties signed the contract and proof of that, it is that the parties decided to
include specific provisions in the proposal related to the Covid-19 outbreak.
14.
Moreover, the player maintained: “It is obvious thus that before the start of negotiations
with the Player and, in particular, having concluded the Contract, the Club had (or
should have had) a complete outlook regarding the financial consequences deriving
from the crises caused by COVID-19 pandemic”.
15.
The player further stated that “In light of the above, it is incontestable that the
allegation raised by the Club in its Letter of Termination, namely, that had to
terminate the Contract unilaterally because of the financial crisis faced because of
COVID-19 has no factual or legal basis whatsoever”.
16.
The player concluded that the club terminated the contract unilaterally and without just
cause and hence it should be liable to pay compensation to him.
b.
Position of the Respondent
17.
The Respondent stated that the key issue in this matter is whether the proposal is an official
contract or not. In this respect, the Respondent explained that they prepared a proposal with
various conditions and sent it to the player, before signing an official contract.
18.
Moreover, the Respondent stated that by including the final sentence of the proposal, the
parties established that they would sign, “The official contract (Country B League Standard
Contract) after the player is approved on medical test and other mandatory procedures”.
The Respondent added that also clause 9 of the proposal shows that it is only an offer and
not an official contract.
19.
The club further explained that the proposal only contains the club´s obligations and not the
player´s ones. In addition, the club held that by signing the proposal the player also agreed
to the fact that he must pass the medical test before the can sign the final official contract.
20.
Furthermore, the club stated that by the letter of cancellation, the club only withdrew its
offer and not terminated any contract.
21.
The club further explained, “During the negotiation, the club was also informed by the agent
that there was a problem with the player’s contract termination date with the current team.
As a result, the player was told when the contract expired on 30 June, 2020 on the original
expiration date of the existing contract, the player has to come out at a certain amount of
damage (about 40,000 EUR) Also, the player asked the club for some preservation of a
certain amount money, but the club refused. As a result, the club inquired about this matter
to Country C Football League, and in this regard, the club wanted to organize the related
conditions and confirm the facts before signing an official contract”.
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22.
The club alleged having sent an email dated “20.06.23” to the Country C League (i.e. email
address xxx) stating “To whom it may concern, This is xxxx in charge of player scout at B in
Country B League. We are looking for in a player playing in the Country C league, who
contract will be expire on June 30 2020. However, the player´s agent said that the Country
C Football Association unilaterally adjusted the player´s contract termination period because
the league has been suspended due to the Korona Virus. For this reason, the contract with
the player is proceeding slowly and we need to confirm the facts. Before signing a contract
with a player, I would like to ask you to confirm the facts of these situations”.
23.
The club maintained that since the player´s previous club did not send a confirmation that
the relevant employment contract was terminated, the club decided to withdrew its offer to
the player. The club alleged that the reason of withdrawal is attributable to the player, i.e.
not receiving the bonus from his previous club and asking the Respondent to pay it instead,
not sending the contract expiration confirmation letter from the previous club.
24.
The club further stated, “The club is sorry that this proposal has been withdrawn. For the
avoidance of any doubt, the club withdrew this proposal because of the incomprehensible
details of the transfer (extending the contract termination date of the current club, giving
up the bonus) and the economic loss caused by the continued time-consuming due to the
failure to confirm the contract termination (decreased number of available games due to
late registration on Country B league)”.
25.
With regard to the Corona-19 pandemic, the club argued that the outbreak caused huge
economic losses to Country B League teams. The club further stated that due to the financial
constraints, the club wanted to hire the player quickly to minimize financial losses. In this
respect, the club stated: “it was expected to take about two months to get a visa and to go
through a two weeks period of self-quarantine after entering Country B and then boosting
their condition”.
26.
Finally, the club argued that the player did not perform any medical tests or Covid-19 testing,
not fulfilling certain mandatory conditions to recruit players.
III.
CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
a.
27.
Competence and applicable legal framework
First of all, the Dispute Resolution Chamber (hereinafter also referred to as “the Chamber”
or “the DRC”) analysed whether it was competent to deal with the case at hand. In this
respect, it took note that the present matter was presented to FIFA on 20 August 2020 and
submitted for decision on 06 May 2021. Taking into account the wording of art. 21 of the
2021 edition of the Rules Governing the Procedures of the Players’ Status Committee and
the Dispute Resolution Chamber (hereinafter: “the Procedural Rules”), the aforementioned
edition of the Procedural Rules is applicable to the matter at hand.
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28.
Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules
and observed that in accordance with art. 24 par. 1 in combination with art. 22 lit. a) and
b) of the Regulations on the Status and Transfer of Players (edition February 2021), 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 Country A
player and a Country B club.
29.
Subsequently, the Chamber analysed which regulations should be applicable as to the
substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par. 1
and 2 of the Regulations on the Status and Transfer of Player (edition February 2021), and
considering that the present claim was lodged on 20 August 2020, the June 2020 edition
of said regulations (hereinafter: “the Regulations”) is applicable to the matter at hand as to
the substance.
b.
Burden of proof
30.
The Chamber recalled the basic principle of burden of proof, as stipulated in art. 12
par. 3 of the Procedural Rules, according to which a party claiming a right on the basis of
an alleged fact shall carry the respective burden of proof. Likewise, the DRC stressed the
wording of art. 12 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the parties.
31.
In this respect, the Chamber also recalled that in accordance with art. 6 par. 3 of Annexe 3
of the Regulations, FIFA’s judicial bodies may use, within the scope of proceedings
pertaining to the application of the Regulations, any documentation or evidence generated
or contained in TMS.
c.
32.
Merits of the dispute
The competence of the DRC and the applicable regulations having been established, the
DRC entered into the merits of the dispute. In this respect, the DRC started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the DRC emphasised that in the following considerations
it will refer only to the facts, arguments and documentary evidence, which it considered
pertinent for the assessment of the matter at hand.
i. Main legal discussion and considerations
33.
The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that the parties has opposing positions regarding the legal nature
of the proposal concluded between them.
34.
The Chamber observed that the Claimant considered the proposal as a valid employment
contract whereas the Respondent held that it was only an offer and not an official contract.
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35.
Consequently, the Chamber highlighted that the main aspect of the dispute lies in whether
the employment proposal signed by the parties is to be considered as a valid and binding
employment contract between the parties and, if so, whether either of them is liable for the
consequences of an unlawful termination.
36.
In this context, we deem essential to highlight the FIFA long-standing jurisprudence according
to which, in order for an employment contract to be considered as valid and binding, and
regardless of the name given to the document, it should contain the essentialia negotii of an
employment contract, such as: (i) the parties to the contract and their role; (ii) the duration of
the employment relationship; (iii) the remuneration; and (iv) the signature of both parties.
37.
In light of above, the DRC focused its attention to the content of the proposal in casu and
pointed out that it was written on the club´s official letterhead and signed by both parties. In
addition, the Chamber pointed out that the proposal expressly mentioned the following:
the document was defined as “Proposal letter for the player”;
“The official contract (Country B League Standard Contract) will be signed by parties only
after the player is approved on medical test and other mandatory procedures”;
the term of the employment was “2020.07.01 – 2021.06.30” with the possibility to
extend it for one more year. In case of extension, the club should informed the player by
31 May 2021;
the player´s remuneration was indicated as follows:
• Signing-on fee: Season 2020-2021 USD 30,000 gross;
• Basic Annual Salary: Season 2020-2021 USD 120,000 gross, ”(Provide USD 30,000as signing-on fee, the total salary until 31 December 2020 will be USD 45,000- and
USD 75,000- for the January-June period 2021)”;
• Performance bonuses;
• Other benefits: accommodation, a vehicle and return flight ticket,
An exchange rate policy was established “A dollar on the contract translates into 1,200
Country B currency”;
Terms and conditions of contract completion
• Need to pass the Corona virus test before entering Country B;
• Need to pass the physical medical test after entering Country B;
• The contract will be cancelled if the player falls to register with the Country B Football
Association by July 22 due to problems such as visa issuance and entry into Country
B by the current global disaster situation.
Other Specifics:
• Due to the current corona virus problem, player must quarantine at the
accommodation provided by the club for 14 days after entering Country B;
• The first offer sent on 12 June was rejected by the player and this is the second one;
• If the player does not sign this proposal by 24:00 on June 18th, the current time in
Country B, and deliver it to the club, the offer will be cancelled.
38.
After analysing in detail the proposal, the Chamber concluded that the proposal contained
all the essential elements of an employment relationship and it was signed by both parties.
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39.
What is more, the Chamber took note that in the letter of cancellation, the Respondent
expressly stated “…thank you [i.e. the Claimant] for your positive response to our team´s
proposal. Sadly B is about to cancel the proposal…”.
40.
In view of all the above, the DRC concluded that from the content of the proposal and the
cancellation letter, it was clear that the club offered an employment relationship to the
player and the latter accepted it.
41.
At this stage, the Chamber took note that the proposal/contract included, inter alia, the
following conditions: “…The official contract (Country B League Standard Contract) will be
signed by parties only after the player is approved on medical test and other mandatory
procedures (…) The contract will be cancelled if the player falls to register with the Country
B Football Association by July 22 due to problems such as visa issuance and entry into
Country B by the current global disaster situation…”.
42.
In this respect, the DRC was eager to emphasise the content of art. 18 par. 4 of the
Regulations which states “The validity of a contract may not be made subject to a successful
medical examination and/or the grant of a work permit”.
43.
Moreover, the Chamber, referring to the aforementioned provision, insisted that once the
parties conclude an employment contract, they had the obligation to implement its terms
and a club could not unilaterally question the validity of the contract due to formalities or
health of the player.
44.
Furthermore, the Chamber stressed that it was the obligation of the Respondent to act with
due diligence and perform all the necessary administrative steps and medical exams prior to
signing the contract, in casu, sending the proposal.
45.
In addition, the Chamber observed that the proposal established an obligation to the player
to pass a Corona virus test before entering Country B. In this respect, the DRC was keen to
emphasise that this condition was irrelevant since the employment relationship between the
parties started at the moment the player accepted the proposal.
46.
Consequently, the Chamber concluded that the conditions included in the proposal/contract
were invalid.
47.
In light of all the above, the DRC decided that on 15 June 2020, the Claimant and the
Respondent concluded an employment contract valid from 1 July 2020 until 30 June 2021.
48.
In continuation, the Chamber took note that it remained uncontested by the parties that on
25 June 2020 the Respondent cancelled the employment relationship, inter alia, invoking
financial hardship due to the COVID-19 pandemic.
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49.
As a result, the DRC highlighted that on 25 June 2020 the contract was terminated by the
Respondent.
50.
At this stage, the Chamber pointed out that on 15 June 2020 when the parties concluded
the contract, the COVID-19 pandemic was ongoing for several months.
51.
In this respect, the DRC underlined that the proposal contained certain requisites related to
the COVID-19 outbreak.
52.
In view of the above, the Chamber rejected cited Respondent´s reasons taking into account
that, at the moment, of starting its employment relationship with the Claimant, the latter
was well aware of the COVID-19 pandemic.
53.
Moreover, the DRC focussed its attention to the Respondent´s argument that due to the lack
of confirmation of the termination of the player’s previous contract, the Respondent decided
to withdrew its offer to the Claimant.
54.
In this respect, the DRC reiterated that the Respondent by proposing an employment
relationship to the Claimant and the latter accepting it, the parties concluded an
employment contract.
55.
Notwithstanding the above, the Chamber highlighted that according to TMS the player
signed an employment contract with the Country C club, C valid from 9 January 2018 until
30 June 2018 with an option to extend it until 8 January 2020.
56.
Therefore, the DRC decided to reject the Respondent’s allegation since the employment
relationship with the Claimant started 5 months after the end of the player´s previous
contract.
57.
On account of all of the above, the members of the Chamber unanimously reached the
conclusion that the Respondent terminated the contract without just cause on 25 June 2020
and it is therefore liable to pay compensation to the Claimant.
ii. Consequences
58.
Having stated the above, the members of the Chamber turned their attention to the
question of the consequences of such unjustified breach of contract committed by the
Respondent in accordance with art. 17 par. 1 of the Regulations.
59.
In this respect, the DRC reiterated that the termination of the contract by the Respondent
occurred on 25 June 2020. Therefore, the Chamber pointed out that since the execution of
the contract would start as from 1 July 2020, no outstanding remuneration was due to the
Claimant.
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60.
Having stated the above, the Chamber focused its attention on the calculation of the
amount of compensation payable to the Claimant by the Respondent 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
Claimant 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.
61.
In application of the relevant provision, the Chamber held that it first had to clarify as to
whether the pertinent employment contract contained a provision by means of which the
parties had beforehand agreed upon an amount of compensation payable by the
contractual parties in the event of breach of contract. In this regard, the Chamber
established that no such compensation clause was included in the contract at the basis of
the matter at stake.
62.
As a consequence, the members of the Chamber determined that the amount of
compensation payable by the Respondent to the Claimant had to be assessed in application
of the other parameters set out in art. 17 par. 1 of the Regulations. The Chamber recalled
that said provision provides for a non-exhaustive enumeration of criteria to be taken into
consideration when calculating the amount of compensation payable.
63.
In order to estimate the amount of compensation due to the Claimant in the present case,
the members of the Chamber first turned their attention to the remuneration and other
benefits due to the Claimant under the existing contract and/or any other earnings made
within the residual contractual period, which criterion was considered by the Chamber to
be essential. The members of the Chamber deemed it important to emphasise that the
wording of art. 17 par. 1 of the Regulations allows the Chamber to take into account both
the existing contract and any subsequent earnings, if any, in the calculation of the amount
of compensation.
64.
Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies
payable to the Claimant under the terms of the contract until 30 June 2021. Consequently,
the Chamber concluded that the amount of USD 150,000 (i.e. USD as signing on fee and
USD 120,000 as annual salary) serves as the basis for the determination of the amount of
compensation for breach of contract.
65.
In continuation, the Chamber remarked that following the early termination of the
employment contract at the basis of the present dispute, the Claimant was able to find new
employment and to mitigate his damages in an amount of EUR 48,600 (i.e. EUR 5,400 x 9
months) equivalent to USD 58,400.
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66.
Therefore, the Chamber established that the Claimant, in principle, would be entitled to a
mitigated compensation amounting to USD 91,600.
67.
Consequently and bearing in mind all of the above-mentioned considerations and the
specificities of the case at hand, the Chamber decided that the Respondent must pay the
amount of USD 91,600 to the Claimant, which was to be considered a reasonable and
justified amount of compensation for breach of contract in the present matter.
68.
Furthermore, taking into consideration the Claimant’s claim, the Chamber decided to award
the Claimant interest at the rate of 5% p.a. on the amount of USD 91,600 as from 20
August 2020 until the date of effective payment.
iii. Compliance with monetary decisions
69.
Finally, taking into account the consideration under number 29. above, the Chamber
referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that, with its
decision, the pertinent FIFA deciding body shall also rule on the consequences deriving from
the failure of the concerned party to pay the relevant amounts of outstanding remuneration
and/or compensation in due time.
70.
In this regard, the DRC highlighted that, against clubs, the consequence of the failure to
pay the relevant amounts in due time shall consist of a ban from registering any new players,
either nationally or internationally, up until the due amounts are paid and for the maximum
duration of three entire and consecutive registration periods.
71.
Therefore, bearing in mind the above, the DRC decided that, in the event that the
Respondent does not pay the amounts due to the Claimant within 45 days as from the
moment in which the Claimant, communicates the relevant bank details to the Respondent,
provided that the decision is final and binding, a ban from registering any new players,
either nationally or internationally, for the maximum duration of three entire and
consecutive registration periods shall become effective on the Respondent in accordance
with art. 24bis par. 2 and 4 of the Regulations.
72.
The DRC recalled that the above-mentioned bans will be lifted immediately and prior to its
complete serving upon payment of the due amounts, in accordance with art. 24bis par. 3
of the Regulations.
73.
Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the parties.
d.
74.
Costs
The Chamber referred to article 18 par. 2 of the Procedural Rules, according to which “DRC
proceedings relating to disputes between clubs and players in relation to the maintenance
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of contractual stability as well as international employment related disputes between a club
and a player are free of charge”.
75.
Accordingly, the Chamber decided that no procedural costs were to be imposed on the
parties.
IV. DECISION OF THE DISPUTE RESOLUTION CHAMBER
1.
The claim of the Claimant, A, is partially accepted.
2.
The Respondent, B, has to pay to the Claimant, the following amount:
- USD 91,600 as compensation plus 5% interest p.a. as from 20 August 2020 until the date of
effective payment.
3.
Any further claims of the Claimant are rejected.
4.
The Claimant is directed to immediately and directly inform the Respondent of the relevant bank
account to which the Respondent must pay the due amount.
5.
The Respondent shall provide evidence of payment of the due amount in accordance with this
decision to [email protected], duly translated, if applicable, into one of the official FIFA languages
(English, French, German, Spanish).
6.
In the event that the amount due, plus interest as established above is not paid by the
Respondent within 45 days, as from the notification by the Claimant of the relevant bank
details to the Respondent, the following consequences shall arise:
1. The Respondent shall be banned from registering any new players, either nationally or
internationally, up until the due amount is paid and for the maximum duration of three
entire and consecutive registration periods. The aforementioned ban mentioned will be
lifted immediately and prior to its complete serving, once the due amount is paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players).
2. In the event that the payable amount as per in this decision is still not paid by the end of
the ban of three entire and consecutive registration periods, the present matter shall be
submitted, upon request, to the FIFA Disciplinary Committee.
7.
This decision is rendered without costs.
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
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NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 58 par. 1 of the FIFA Statutes, this decision may be appealed against before the
Court of Arbitration for Sport (CAS) within 21 days of receipt of the notification of this decision.
NOTE RELATED TO THE PUBLICATION:
FIFA may publish this decision. For reasons of confidentiality, FIFA may decide, at the request of a party
within five days of the notification of the motivated decision, to publish an anonymised or a redacted
version (cf. article 20 of the Procedural Rules).
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