Labour Disputes
Texto da decisão
Decision of the
Dispute Resolution Chamber
passed in Zurich, Switzerland, on 28 June 2013,
in the following composition:
Geoff Thompson (England), Chairman
Jon Newman (USA), member
Essa M. Saleh Al-Housani (UAE), member
on the claim presented by the player,
Player W, from country B
as Claimant/Counter-Respondent
against the club,
Club Y, from country C
as Respondent/Counter-Claimant
and the club,
Club A, from country B
as Intervening Party
regarding an employment-related dispute
arisen between the parties
I.
Facts of the case
1.
On 27 January 2011, Player W, from country B (hereinafter: player or
Claimant/Counter-Respondent) and the Club Y, from country C (hereinafter: club or
Respondent/Counter-Claimant), signed an employment contract valid as of 28
January 2011 until 31 December 2011 (hereinafter: contract).
2.
In accordance with the contract, the player was entitled to receive, inter alia, salaries
in the total amount of USD 400,000 (USD 36,363 per month) for the whole duration
of the contract as well as bonuses and other benefits as follows:
-
`League bonus according to match appearance’
(bonus per match won)
`League bonus according to match appearance’
(bonus per draw match)
Economy air ticket (three round trip tickets)
Rental of a standard apartment
USD 3,000
USD 1,000
3.
Clause 12 of the contract stipulates that the contract will be effective upon signature
on the condition that the player meets certain requirements such as ``gaining the
certificate of international transfer of football player from one club to another that
has been proved by the country C Football Association’’. Otherwise the club ``has the
right to terminate the contract at any time’’ and the player must pay ``USD 50,000 as
compensation’’.
4.
Clause 25 of the contract stipulates that the player ``agreed commitments and in
particular: as a result of registration of foreign players quota restrictions or other
causes B [the player] can not be registered, this contract null and void’’.
5.
On 27 April 2011, the player informed the club of his intention to comply with his
contractual duties and he requested from the club its position regarding its failure to
comply with its financial and sportive obligations and indicated his intention to take
further action in case of failure to do so.
6.
The letter having remained unanswered, on 13 May 2011, the player lodged a claim
against the club in front of FIFA requesting that the club be ordered to pay
compensation for breach of contract, which was detailed as follows:
-
USD 400,000 relating to salaries;
USD 7,050 or other amount the Chamber deems fair ex aequo et bono,
corresponding to round trip air tickets (country C – country B);
Player W, from country B / Club Y, from country C / Club A, from country B
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-
USD 90,000 relating to winning match bonuses (30 matches in the country C
National Championship x USD 3,000);
USD 218,181 relating to the specificity of sport, corresponding to a sum
equivalent to six months of salary;
The costs of a standard apartment in Club Y.
7.
The player also requested to be awarded 5% interest p.a. over the total amount due
as compensation, as from the date on which the breach of the contract occurred.
Furthermore, the player requested that sporting sanctions be imposed on the club
and that the club be ordered to pay legal fees.
8.
The player explained that, upon signature of the contract, the club informed him
that his services were no longer required and released him without any valid reason
or just cause. Furthermore, the player sustained that the club failed to make the
payment of the remuneration due under the contract as well as to provide any
support during the four months that he remained in country C.
9.
In its response to the player’s claim, the club maintained that the validity of the
contract was subject to two conditions. Firstly, the club and Club A would have had
to sign a loan agreement, which, according to the club, was never signed. Secondly,
Club A would have had to send the player’s International Transfer Certificate
(hereinafter: ITC) to country C, which apparently never transpired. Hence, according
to the club, the employment relation between the parties was not effectively
initiated.
10.
As regards the ineffectiveness of the contract, the club also referred to provision 25
of the contract, which stipulates that if as a consequence of the foreign players’
quota restrictions or other causes the player cannot be registered, the contract is null
and void. Thus, the club claimed not to have any obligation to pay compensation to
the player.
11.
Subsequently, the club lodged a counterclaim against the player, requesting
compensation in the amount of USD 50,000 for damages caused to the club in
accordance with clause 12 of the contract.
12.
The player, for his part, contested the club’s allegations regarding the validity of the
contract. In this respect, the player stated that the contract was duly signed by the
parties and contained all the essential elements of an employment contract, thus, it
was valid and binding.
13.
In continuation, the player addressed the club’s allegations in relation to the issuance
of the ITC being a condition for the validity of the contract. In this regard, the player
asserted that such administrative formality constitutes an obligation for the new club
Player W, from country B / Club Y, from country C / Club A, from country B
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14.
and the relevant association and cannot invalidate or jeopardize the labour rights of
a party acting in bona fide. In this respect, the player maintained that any club
intending to sign a professional player is expected to exercise due diligence,
undertake all necessary research and take all appropriate administrative steps before
concluding an employment contract with the player.
15.
Furthermore, in order to contest the club’s allegation related to the absence of the
parties’ signatures in the agreement between the club and Club A over the loan of
the player (hereinafter: loan agreement), the player submitted a copy of the loan
agreement duly signed and stamped by both clubs. In addition, the player submitted
a letter, dated 22 March 2011, sent by the president of the country C club to the
president of Club A informing that the club had decided to release the player due to
``technical and attitude condition’’.
16.
Moreover, in respect of the liability for the breach of the contract and as to the
sportive and financial damages suffered by the parties, the player asserted that the
harm he endured was more severe than the club would have suffered had the breach
been caused by him.
17.
Finally, as to the compensation in the total amount of USD 50,000 requested by the
club, the player maintained that the club fell in contradiction when claiming
compensation on the basis of a clause contained in a contract which it alleges to be
ineffective. According to the player, this constitutes clear evidence that the contract
was valid and binding and that the club is to be held liable for the breach of the
contract.
18.
In its final position, the club contested the player’s allegations related to the
signature of the loan agreement by both clubs. In this respect, the club questioned
the authenticity of both the signature and the stamp and stated that, if necessary, it
would perform a polygraph examination in order to verify their authenticity as well
as taking further action in the event that the evidence was forged.
19.
Moreover, the club referred to provisions 12 and 25 of the contract and reiterated its
position with regard to the amount of USD 50,000 claimed as compensation as well
as with regard to the validity of the contract.
20.
In his final position, the player insisted on his previous allegations and stressed that,
in the event that clauses 12 and 25 were declared null and void, the contract would
still be valid and should produce all legal effects.
21.
According to the employment contract with his new club, Club A, valid as of 20
January 2011 until 2 February 2013, the player was entitled to receive a monthly
salary of currency of country B 40,000. Furthermore, on 20 June 2011 Club A and Club
Player W, from country B / Club Y, from country C / Club A, from country B
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F signed an agreement over the loan of the player to the latter, which was also
signed by the player, as from 21 June 2011 until 31 December 2011, according to
which the player was also entitled to receive a monthly salary of currency of country
B 40,000.
22.
Having been invited by FIFA to submit its comments on the matter, the intervening
party, Club A, admitted to have concluded a loan agreement with the club on 27
January 2011, which was valid and binding. Moreover, Club A referred to art. 1.2 of
the loan agreement, in accordance with which, failing to receive from the country C
club payment of the agreed loan compensation in the amount of USD 150,000 on or
before 20 February 2011, Club A would not be ``obliged to react affirmatively to the
consult made by the country C Football Association requesting the issuance of the
player’s International Transfer Certificate (ITC)’’. According to Club A, the club did
not pay the compensation for the player’s loan to the club, hence, the player’s ITC
was never issued.
23.
In addition, Club A sustained that, in March 2011, it was informed by the club that
``due to the Player’s technical and attitude condition, they decided not to keep him
in the team’’ and maintained that a few days after receipt of that letter, the player
went back to country B.
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 13 May 2011.
Consequently, the Rules Governing the Procedures of the Players’ Status Committee
and the Dispute Resolution Chamber (edition 2008; hereinafter: Procedural Rules) are
applicable to the matter at hand (cf. art. 21 par. 2 and par. 3 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 and par. 2 in
conjunction with art. 22 lit. b) of the Regulations on the Status and Transfer of
Players (edition 2012), 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 B player and a country C club.
3.
In this respect, the Chamber was eager to emphasize that contrary to the
information contained in FIFA’s letter dated 24 June 2013 by means of which the
parties were informed of the composition of the Chamber, the member Mr M and
the member Mr G refrained from participating in the deliberations in the case at
hand, due to the fact that the member Mr M has the same nationality as the
Player W, from country B / Club Y, from country C / Club A, from country B
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Claimant and that, in order to comply with the prerequisite of equal representation
of club and player representatives, also the member Mr T refrained from
participating and thus the Dispute Resolution Chamber adjudicated the case in
presence of three members in accordance with art. 24 par. 2 of the Regulations.
4.
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 par. 2 of the Regulations on the Status and Transfer of Players (editions
2012 and 2010), and considering that the present claim was lodged on 13 May 2011,
the 2010 edition of said regulations (hereinafter: Regulations) is applicable to the
matter at hand as to the substance.
5.
The competence of the DRC and the applicable regulations having been established,
the Chamber entered into the substance of the matter. The members of the Chamber
started by acknowledging the facts of the case as well as the documents contained in
the file.
6.
In this respect, the Chamber recalled that the parties had signed an employment
contract valid as from 28 January 2011 until 31 December 2011, in accordance with
which the Claimant/Counter-Respondent was entitled to receive, inter alia, salaries in
the total amount of USD 400,000. According to the Claimant/Counter-Respondent
the club is to be held liable for breach of contract and payment of compensation for
breach of contract, whereas the Respondent/Counter-Claimant mainly held that no
valid employment contract had been entered into between the parties.
7.
In continuation, the members of the Chamber highlighted that the fundamental
disagreement between the parties of the present dispute and, thus, the central issue
in the matter at hand is whether the employment contract signed between the
parties constitutes a valid and binding contract between the parties.
8.
The Chamber recalled that according to provision 12 of the contract, the contract
would be effective upon signature on the condition that the player would meet the
requirement, inter alia, of ``gaining the certificate of international transfer of
football player from one club to another that has been proved by the country C
Football Association’’. Said clause further stipulates that, otherwise, the
Respondent/Counter-Claimant ``has the right to terminate the contract at any time’’
and the Claimant/Counter-Respondent must pay ``USD 50,000 as compensation’’.
9.
The members of the Chamber noted that the Respondent/Counter-Claimant
sustained that the employment contract between the parties never entered into
force, since the validity of the contract was subject to two conditions, which,
according to the Respondent/Counter-Claimant were not met. In this respect, the
members of the Chamber duly noted that, according to the Respondent/Counter-
Player W, from country B / Club Y, from country C / Club A, from country B
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Claimant, for the contract to be valid, a loan agreement would have had to be
signed between the Respondent/Counter-Claimant and Club A and the latter club
would have had to send the relevant ITC. As regards the alleged invalidity of the
contract, apart from the aforementioned clause 12, the Respondent/CounterClaimant also invoked provision 25 of the contract, which stipulates that if as a
consequence of the foreign player’s quota restrictions or other causes the player
cannot be registered, the contract is null and void.
10.
The DRC then turned its attention to the arguments of the Claimant/CounterRespondent and acknowledged that, according to the latter, the contract was duly
signed by the parties and contained all essential elements of an employment contract
and was thus valid and binding. Moreover, the Claimant/Counter-Respondent
maintained that the issuance of the ITC is an administrative formality which
constitutes an obligation for the new club and the relevant association and cannot
invalidate or jeopardize the labour rights of a party acting in bona fide. It was duly
noted that according to the Claimant/Counter-Respondent, as opposed to the
position of the Respondent/Counter-Claimant, the Respondent/Counter-Claimant and
Club M did, in fact, sign a loan agreement, a duly signed copy of which was
presented.
11.
In this regard, bearing in mind art. 18 par. 4 of the Regulations, the Chamber
considered relevant to recall its 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 are of the sole
responsibility of a club and on which a player has no influence. Bearing in mind that
according to Annexe 3 of the Regulations an ITC request depends on the new club’s
application to the new association to register a professional, the club is actually in
the position to prevent the occurrence of the condition precedent of receipt of an
ITC by wilfully choosing not to proceed with the application for an ITC request.
12.
In view of the foregoing, and in line with the Chamber’s constant jurisprudence in
this regard, the Chamber concluded that the Respondent/Counter-Claimant’s
arguments related to arts. 12 and 25 of the contract could not be upheld by the DRC.
13.
Subsequently, the Chamber focused its attention on the second argument of the
Respondent/Counter-Claimant, according to which the contract cannot be considered
as valid and binding as the Respondent/Counter-Claimant and Club A would have
had to sign a loan agreement, which allegedly never transpired.
14.
In this regard, the Chamber noted that the Claimant/Counter-Respondent had
submitted a copy of the loan agreement concluded between the
Player W, from country B / Club Y, from country C / Club A, from country B
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Respondent/Counter-Claimant and Club A and, after a careful examination of the
loan agreement, the Chamber concluded that it did, in fact, bear the signature of
both parties. Furthermore, Club A, for its part, had confirmed that it had concluded a
valid and binding loan agreement with the Respondent/Counter-Claimant.
15.
Therefore, and bearing in mind that the employment contract does, in fact, not
include any clause stipulating the condition precedent of a valid loan agreement, the
Chamber deemed that it did not need to analyse the question as to whether any such
alleged condition precedent in the employment contract can be considered valid.
16.
In addition, taking into consideration the above, the Chamber rejected the
arguments put forward by the Respondent/Counter-Claimant relating to the loan
agreement.
17.
On account of all of the above, the members of the Chamber established that, on 27
January 2011, the parties signed a valid and binding employment contract containing
all the essentialia negotii.
18.
Having established that a valid and legally binding employment contract had been in
force between the Claimant/Counter-Respondent and the Respondent/CounterClaimant, the Chamber went on to analyse as to whether such contract had been
breached and, in the affirmative, which party is to be held liable for breach of
contract.
19.
In this context, the Chamber was eager to emphasize that, the Respondent/CounterClaimant did not contest the allegations of the Claimant/Counter-Respondent that it
had not performed any of its obligations under the employment contract and that, in
fact, it merely disputed the legal validity of such contract.
20.
On account of the above circumstances, the Chamber established that the
Respondent/Counter-Claimant had obviously no longer been interested in the
Claimant/Counter-Respondent’s services by sustaining that no valid employment
contract existed between the parties. Consequently, the pertinent employment
contract was never executed due to the refusal of the Respondent/Counter-Claimant
to accept the player’s services without any valid reason. The Chamber concluded that
such conduct clearly constitutes a breach of contract and, accordingly, decided that
the Respondent/Counter-Claimant has produced the premature termination without
just cause of the employment contract entered into between the parties.
21.
Having established that the Respondent/Counter-Claimant is to be held liable for the
early termination of the employment contract without just cause, the Chamber
focused its attention on the consequences of such termination. Taking into
consideration art. 17 par. 1 of the Regulations, the Chamber decided that the
Player W, from country B / Club Y, from country C / Club A, from country B
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Claimant/Counter-Respondent is entitled to receive from the Respondent/CounterClaimant an amount of money as compensation for breach of contract.
22.
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 Claimant/Counter-Respondent 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.
23.
In application of the relevant provision, the Chamber held that it first of all had to
clarify as to whether the pertinent employment contract contains a provision by
means of which the parties had beforehand agreed upon an amount of
compensation payable by the contractual parties in the event of breach of contract.
In this regard, the Chamber established that no such compensation clause was
included in the employment contract at the basis of the matter at stake.
24.
Bearing in mind the foregoing, the Chamber proceeded with the calculation of the
monies payable to the player under the terms of the employment contract as from
January 2011 until 31 December 2011 and concluded that the Claimant/CounterRespondent would have received in total USD 400,000 as salaries had the contract
been executed until its expiry date.
25.
In continuation, the Chamber assessed whether the Claimant/Counter-Respondent
had signed an employment contract with another club during the relevant period of
time, by means of which he would have been enabled to reduce his loss of income.
According to the constant practice of the DRC, 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.
26.
In this respect, the Chamber noted that the Claimant/Counter-Respondent had
returned to his former club, Club A, with which club he was under contract until 2
February 2013, which entitled the Claimant/Counter-Respondent to receive a
monthly salary of currency of country B 40,000. Moreover, the Chamber
acknowledged that, on 20 June 2011, Club A and Club F signed an agreement over
the loan of the Claimant/Counter-Respondent to the latter, which was also signed by
the Claimant/Counter-Respondent, as from 21 June 2011 until 31 December 2011,
Player W, from country B / Club Y, from country C / Club A, from country B
Page 9 of 12
according to which the Claimant/Counter-Respondent was also entitled to receive a
monthly salary of currency of country B 40,000.
27.
As regards the match bonuses included in the employment contract and in the
player’s claim for compensation, the Chamber emphasized that due to their variable
and performance-related character it could not undoubtedly establish that the
Claimant/Counter-Respondent would have been paid such bonuses and, if any, in
what proportion. Consequently, the Chamber agreed that it could not take any such
bonuses into account while assessing the residual value of the contract. The
members, referring to the principle of the burden of proof stipulated in art. 12 par. 3
of the Procedural Rules, also stressed that the Claimant/Counter-Respondent had not
submitted any convincing documentary evidence in this respect.
28.
The Chamber also considered important to point out that, although the employment
contract was fully valid and enforceable, the execution of the contract had never
started.
29.
Consequently, on account of all of the above-mentioned considerations and the
specificities of the case at hand, the Chamber decided that the Respondent/CounterClaimant must pay the amount of USD 50,000 to the Claimant/Counter-Respondent
as compensation for breach of contract.
30.
Furthermore, taking into account the Claimant/Counter-Respondent’s petition and
the constant practice of the Dispute Resolution Chamber, the members of the
Chamber decided to award the Claimant/Counter-Respondent interest at the rate of
5% p.a. on the amount of USD 50,000 as of 28 June 2013 until the date of effective
payment.
31.
In addition, on account of the fact that the Claimant/Counter-Respondent was
entitled to receive air tickets from the Respondent/Counter-Claimant on the basis of
the employment contract, taking into account the information received from FIFA’s
travel office, the Chamber decided that the Respondent/Counter-Claimant must pay
to the Claimant/Counter-Respondent the amount of USD 2,500 for the flight to
return home.
32.
Taking into account all of the above, the DRC decided to partially accept the claim of
the Claimant/Counter-Respondent and to entirely reject the Respondent/CounterClaimant’s request for compensation in the amount of USD 50,000.
Player W, from country B / Club Y, from country C / Club A, from country B
Page 10 of 12
33.
The Dispute Resolution Chamber concluded its deliberations in the present matter by
establishing that any further claims lodged by the Claimant/Counter-Respondent are
rejected.
III.
Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant/Counter-Respondent, Player W, is partially accepted.
2.
The counterclaim of the Respondent/Counter-Claimant, Club Y, is rejected.
3.
The Respondent/Counter-Claimant has to pay to the Claimant/Counter-Respondent,
within 30 days as from the date of notification of this decision, compensation for
breach of contract in the amount of USD 50,000 plus interest at 5% p.a. as of 28 June
2013 until the date of effective payment.
4.
The Respondent/Counter-Claimant, Club Y, has to pay to the Claimant/CounterRespondent the amount of USD 2,500 relating to air tickets within 30 days as from
the date of notification of the present decision.
5.
In the event that the above-mentioned amounts due to the Claimant/CounterRespondent are not paid by the Respondent/Counter-Claimant within the stated time
limits, the present matter shall be submitted, upon request, to the FIFA Disciplinary
Committee for consideration and decision.
6.
Any further claim lodged by the Claimant/Counter-Respondent is rejected.
7.
The Claimant/Counter-Respondent is directed to inform the Respondent/CounterClaimant 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 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
Player W, from country B / Club Y, from country C / Club A, from country B
Page 11 of 12
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:
Markus Kattner
Deputy Secretary General
Encl.: CAS directives
Player W, from country B / Club Y, from country C / Club A, from country B
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