Labour Disputes
Texto da decisão
Decision of the Dispute Resolution Chamber
passed in Zurich, Switzerland, on 7 April 2011,
in the following composition:
Geoff Thompson (England), Chairman ad interim
Michele Colucci (Italy), member
Jon Newman (USA), member
Mario Gallavotti (Italy), member
Todd Durbin (USA), member
on the claim presented by the player
M,
as Claimant
against the club
FC K,
as Respondent
regarding an employment-related dispute arisen between the parties
I.
Facts of the case
1.
The player, M (hereinafter: the Claimant), and the club, FC K (hereinafter: the
Respondent), concluded an employment contract (hereinafter: the contract), valid
from 24 January 2008 until 31 May 2011.
2.
In accordance with this contract, the Claimant was entitled to receive, inter alia, a
total remuneration in the amount of EUR 670,000, payable as follows:
a)
b)
c)
d)
For the second half of the season 2007/2008: EUR 70,000 net, being EUR 14,000
in cash and the remaining divided in 4 equal monthly instalments due in
February, March, April and May;
For the season 2008/2009: EUR 200,000 net, being EUR 80,000 in cash, payable in
two instalments of EUR 40,000 net, due in January and June, respectively;
For the season 2009/2010: EUR 200,000 net, being EUR 80,000 in cash, payable in
two instalments of EUR 40,000 net, due in January and June, respectively;
For the season 2010/2011: EUR 200,000 net, being EUR 80,000 in cash, payable in
two instalments of EUR 40,000 net, due in January and June, respectively.
3.
Furthermore, the contract established that all payments were due until the 10th of
each month, and that the Claimant was entitled to a furnished house, a car and two
round-trip tickets to country S.
4.
On 16 June 2009, the Claimant sent a correspondence through a notary to the
Respondent, warning the latter that it should pay the outstanding remuneration
amounting to EUR 135,000 within ten days, otherwise he would terminate the
contract.
5.
On 1 July 2009, the Claimant sent another correspondence to the Respondent, also
through notary, referring to his previous letter dated 16 June 2009 (cf. point 4), by
means of which the Claimant unilaterally terminated the contract, considering that
the Respondent had allegedly not paid the outstanding remuneration.
6.
On 6 July 2009, the Claimant lodged a claim before FIFA against the Respondent,
requesting the payment of EUR 145,000 as outstanding salaries, as well as of EUR
410,000 as compensation for breach of contract.
7.
In this regard, the Claimant alleged that the Respondent did not comply with its
contractual obligations, failing to pay him his remuneration. Despite the warning, the
Respondent never reacted and continued to fail to pay him his remuneration
allegedly due for almost ten months, and, consequently, the Claimant terminated the
contract with alleged just cause, informing the Football Federation T (FFT) about it on
1 July 2009.
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8.
According to the Claimant, the remuneration for the 2008/09 season, corresponding
to EUR 200,000, was payable as follows:
a)
b)
EUR 80,000 in two equal instalments in June 2008 and January 2009;
EUR 120,000, divided in 12 instalments of EUR 10,000, starting in August 2008
and ending in July 2009.
9.
In this respect, the Claimant stated that for the 2008/09 season, the Respondent only
paid him the amount of EUR 40,000, corresponding to the instalment allegedly due in
June 2008, as well as another payment of EUR 5,000. Therefore, according to the
Claimant, by the time of the termination of the contract, the Respondent had
allegedly failed to pay him the second instalment of EUR 40,000 due in January 2009,
as well as eleven monthly salaries amounting to EUR 110,000, being a total
outstanding amount of EUR 145,000.
10.
Finally, the Claimant requested the amount of EUR 410,000 as compensation for
breach of contract, corresponding to the residual value of the contract. He submitted
a detailed breakdown of the amount claimed as compensation, being EUR 10,000 as
monthly salary for July 2009, EUR 200,000 corresponding to the season 2009/10 and
another EUR 200,000 for the season 2010/11.
11.
The Respondent, on its part, rejected the claim, stating that the “cancellation
process” made by the Claimant was null. It further argued that in accordance with the
contract, the parties had agreed to obey the Regulations of the Football Federation T,
which allegedly establish in their article 28 that:
“If the club failed to pay the payments of player and if the player wants
to cancel the contract, the player must issue a notification through notary
to both club and Football Federation T and stated that his receivables
should be paid within 30 days. Although mentioned expiry date, if the
club doesn’t pay the receivables of player, the player can cancel his
contract after 7 days from expiry date of notification.”
In this respect, the Respondent emphasized that these regulations do not discriminate
native players from foreign players, being applicable to both.
12.
In this respect, the Respondent affirmed that the termination of the contract by the
Claimant was an “illegal unilateral cancellation”, since the warning notified on 16
June 2009 set a deadline of only ten days, instead of the thirty days required by the
Football Federation T Regulations. Moreover, the Respondent asserted that it did not
accept the cancellation, but invited the Claimant to join training for the 2009/10
season. However, the Claimant never showed up.
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13.
The Respondent challenged the amount claimed as outstanding remuneration by the
Claimant, maintaining that the warning was originally issued for the amount of EUR
135,000, while the Claimant then requested the payment of EUR 145,000 in its claim.
14.
The Respondent further alleged that after the notification of termination, the
Claimant would have been entitled to the salary of July 2009, amounting to EUR
10,000, as well as to the amount of EUR 410,000 for the residual value of the contract,
but that he lost his entitlement when he cancelled the contract “unjustly and
illegally”.
15.
Finally, the Respondent held that the claim should be rejected because the damages
suffered by the Claimant were caused by himself, i.e. for not respecting the
Regulations of the Football Federation T. Additionally, the Respondent asserted that
the damages suffered by the Claimant were already compensated, considering the
fact that the Claimant signed an employment contract with another club.
16.
In his replica, the Claimant stated that it is undisputed that the Respondent had not
paid the total amount of EUR 145,000, allegedly due at the date of the termination of
the contract. With respect to the applicable rules, the Claimant insisted that the FIFA
Regulations on the Status and Transfer of Players are applicable, since the Claimant is
of country S nationality. Moreover, the Claimant stated that, in any case, the
Respondent failed to pay ten monthly salaries, and, in that situation, the Claimant
could have terminated the contract at any time. The Claimant emphasised having
notified the Respondent, acting in good faith, but that the latter never reacted.
17.
Additionally, regarding the different amounts requested as outstanding
remuneration, the Claimant explained that between the moment of the first
notification to the Respondent to pay the outstanding remuneration and the
moment of the actual termination of the contract, another salary became due, in casu
the one for the month of June 2009. The Claimant insisted that the Respondent did
not deny owing this amount.
18.
The Respondent, in its duplica, asserted that the article 3 of the contract establishes
that “ Football Federation T and Arbitration Board are authorized at the disputes due
to this contract.” As a consequence, the Respondent alleged that the Claimant is not
entitled to compensation, since the termination of the contract did not respect the
procedure established by the Regulations of the Football Federation T. It further
explained that the Claimant did not respect the “arbitration agreement” by not
obeying the regulations and instructions of the Football Federation T.
19.
Finally, the Respondent insisted in its previous arguments and requested the rejection
of the claim.
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20.
On 22 August 2009, the Claimant concluded an employment contract with the FC X,
valid for a period lasting from 24 August 2009 until 30 December 2009, during which
he was entitled to four equal monthly instalments of EUR 6,000 net, due respectively
on 15 September, 15 October, 15 November and 15 December 2009. Furthermore, the
Claimant was also entitled to an extra payment of EUR 6,000 net, in case he would
perform as a “titular player” in at least 6 official matches in the First Division during
the 2009/10 season.
21.
Later on, the Claimant also concluded an employment contract with the club, Club Y,
valid from 12 July until 10 November 2010, during which he was entitled to a monthly
salary of USD 20,000 net, payable until the 12th of the next month.
22.
Finally, on 26 February 2011, the Claimant concluded another employment contract
with the FC Z, valid until 1 December 2012, during which he is entitled to a monthly
salary of USD 10,111, payable in country K’s currency until the first quarter of each
month.
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 6 July 2009,
thus after 1 July 2008. Consequently, the Rules Governing the Procedures of the
Players’ Status Committee and the Dispute Resolution Chamber (edition 2008;
hereinafter: the Procedural Rules) are applicable to the matter at hand (cf. art. 21 par.
2 and 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 in combination with art. 22
lit. b) of the Regulations on the Status and Transfer of Players (edition 2008) the
Dispute Resolution Chamber would be competent to deal with the matter at stake,
which concerns an employment-related dispute with an international dimension
between a player and a club.
3.
In this respect, the Chamber deemed it appropriate to consider, on a preliminary
basis, the arguments of the Respondent regarding the existence of a jurisdiction
clause. In this regard, the Dispute Resolution Chamber took note of the allegations of
the Respondent, according to which the latter affirmed the contract established an
arbitration clause and the Regulations of the Football Federation T (FFT) Regulations
as applicable.
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4.
Nevertheless, the Chamber took note that the employment contract concluded
between the Claimant and the Respondent did not contain any clause regarding any
choice of forum or of regulations, and consequently the Dispute Resolution Chamber
is the competent body to deal with the present dispute due to its international
dimension.
5.
Notwithstanding the above, for the sake of completeness, the members of the
Chamber also added that in any case the Respondent did not challenge the
competence of FIFA in its first pleadings, entering so into the substance of the matter.
Therefore, the members of the Chamber were of the opinion that the Respondent
could not raise such question at a later stage.
6.
Once its competence to deal with the present dispute established, the Chamber
analysed which regulations should be applicable as to the substance of the matter. In
this respect, the Dispute Resolution Chamber confirmed that in accordance with art.
26 par. 1 and 2 of the Regulations on the Status and Transfer of Players (editions
2010, 2009 and 2008), and considering that the present claim was lodged on 6 July
2009 and that the employment contract at the centre of the dispute was signed
around the 24 January 2008, the 2008 edition of the Regulations on the Status and
Transfer of Players (hereinafter: the Regulations) is applicable to the matter at hand
as to the substance.
7.
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 acknowledged that the Claimant and the Respondent had concluded an
employment contract valid from 24 January 2008 until 31 May 2011, in accordance
with which the Claimant was entitled to receive a total remuneration of EUR 670,000,
being EUR 70,000 net for the second half of the 2007/08 season and EUR 200,00 net
for the following (the 2008/09, the 2009/10 and the 2010/11) seasons.
8.
The Chamber then reviewed the claim of the Claimant, who maintained that the
Respondent had breached the contract by failing to pay the remuneration established
in this contract during eleven months, even after having been put on default through
a notarial notification (cf. point I.4.). Consequently, the Claimant alleged having
terminated the contract with just cause, notifying the termination through a notary
and also informing the Football Federation T about it (cf. point I.5.). The Respondent,
on its part, accepted the fact that it did not pay the salaries for a long period of time.
However, it rejected the claim and held that the applicable rules to the contract were
the Regulations of the Football Federation T, which apparently stipulate proceedings
to put the club in default, and to, subsequently, terminate the contract. In this
respect, the Respondent argued that the Claimant did not respect such rules and, in
particular, the deadline of thirty days between the notification of the warning and
the actual termination of the contract, considering the fact that the notification of
the Claimant contained a deadline of ten days only, and that, for that reason, the
termination of the contract would be therefore invalid.
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Moreover, as a consequence, the Respondent stated that the Claimant had lost his
right to claim any compensation for breach of contract.
9.
The Chamber stated that in view of the contradictory positions of the parties, it first
had to analyse whether or not the Claimant had terminated the contract with just
cause, and to determine whether or not one of both party to the contract is
accountable for outstanding salaries and/or compensation.
10.
With respect to the Respondent’s argumentation, the Chamber first and foremost
deemed important to stress that the Respondent never denied owing the Claimant
several instalments claimed by the Claimant as outstanding salaries at the moment of
the termination of the contract, i.e. the salaries corresponding to the months from
August 2008 until June 2011.
11.
The Respondent’s defence is solely based on the allegation that the Claimant had
terminated the contract ten days after the first notice (cf. point I.4.), whereas in
reality, in accordance with the allegedly applicable Regulations of the Football
Federation T, he should have given a thirty days deadline.
12.
In this regard, the Chamber noted that the Respondent failed to present any
documentation corroborating such allegations in accordance with art. 12 par. 3 of the
Procedural Rules, which stipulates that any party claiming a right on the basis of an
alleged fact shall carry the burden of proof. Regardless of the accuracy of such
allegation, the Chamber deemed that, in line with the foregoing consideration, even
after having been put on default, the Respondent never reacted to both notices.
13.
Additionally, the DRC argued that the contract had no specific provision establishing
a procedure to put the Respondent on default. In the case at hand, the Respondent
failed to pay the salaries of the Claimant for almost a year, clearly breaching the
contract. The members of the DRC added that, in these circumstances, the Claimant
could have terminated the contract immediately, regardless of any notice.
14.
In continuation, for the sake of the argumentation, the members of the DRC agreed
that even if the Regulations of the Football Federation T were applicable to the
contract, the Respondent never paid any of the outstanding salaries to this date, i.e.
even after the thirty seven days deadline (thirty days to pay the outstanding amount,
plus seven days to terminate the contract). Therefore, the alleged nullity of the
termination would have then no longer existed.
15.
In any case, the members of the Chamber took the view that the reason put forward
by the Respondent in its defence, i.e. the invalidity of the termination of the contract
by the Claimant, cannot be sustained by any convincing evidence and cannot be
considered as a valid argument to hinder the Claimant’s right to seek for
compensation regarding the serious breach of the contract committed by the
Respondent.
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16.
In this context, the Chamber deemed appropriate to consider the fact that even if the
Regulations of the Football Federation T were applicable, it could not restrict the
right of the player to terminate the contract with just cause as established and
recognized by the FIFA Regulations.
17.
For all these reasons as well as bearing in mind that the contract had been validly
concluded between the parties to the dispute, the Chamber decided to reject the
Respondent’s arguments and to accept the Claimant’s argumentation according to
which he had terminated the contract with just cause in July 2009, after almost a year
without having received the remuneration established in the contract.
18.
In continuation, the Chamber recalled that the employment contract at the basis of
the present dispute was terminated by the Claimant in reaction to the behaviour of
the Respondent that failed to fulfil its contractual obligations for a relevant period of
time. The Claimant undisputedly rendered its services to the Respondent until June
2009, while the latter failed to pay him as from August 2008 (i.e. the Respondent only
paid EUR 5,000 out of the EUR 10,000 due) until June 2009.
19.
In view of all the above, the Chamber considered that, in the present case, it is
established that the Respondent seriously violated the terms of the relevant
employment contract by clearly disrespecting its financial obligations for a relatively
long period of time.
20.
In this regard, the Chamber decided that the Respondent was found to be in breach
of contract, and, in particular, that this breach of contract has reached such a level
that the Claimant, who suffered the breach, was entitled to terminate the contract
unilaterally.
21.
Considering all the facts and arguments previously mentioned, the Chamber reached
the conclusion that the Claimant terminated the relevant employment contract with
just cause.
22.
As a consequence, the Chamber decided that the Respondent is liable to cancel all
outstanding amounts under the relevant employment contract until the date on
which the employment contract was terminated, i.e. until 1 July 2009 (cf. point I.5.).
23.
Additionally, the Chamber analysed the remuneration due until the termination of
the contract and the payments actually made, in accordance with the evidence and
arguments submitted by the parties. The members of the DRC established that, until
the date of the termination of the contract and for the season 2008/09, the
Respondent had only paid the amount of EUR 40,000 corresponding to the instalment
of January 2009 and another EUR 5,000, but failed to pay the second instalment of
EUR 40,000 due in June 2009, as well as 11 monthly salaries amounting to EUR
110,000.
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24.
Consequently, the Chamber decided that the Respondent is liable to pay to the
Claimant the amount of EUR 145,000 relating to the Claimant’s remuneration until
July 2009.
25.
Having established that the Claimant had terminated the contract with just cause, as
well as that the Respondent is to be held liable for the early termination of the
employment contract, the Chamber focused its attention on the consequences of such
breach of contract. Therefore, in accordance with art. 17 par. 1 of the Regulations,
the Chamber decided that the Respondent is also liable to pay compensation for the
damages suffered by the Claimant as a consequence of said early termination.
26.
In continuation, the Chamber established that the Respondent, in accordance with
art. 17 par. 1 of the Regulations, is also liable to pay compensation for the damages
suffered by the Claimant as a consequence of the early termination of the contract
due to the breach of contract committed by the Respondent (cf. point II. 21.).
27.
In this context, 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 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 fell within the protected period.
28.
In application of the relevant provision, the Chamber held that it first of all had to
clarify as to whether or not 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.
The Chamber established that no such compensation clause was included in the
employment contract at the basis of the matter at stake.
29.
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. Therefore, other objective criteria may be also taken into account at the
discretion of the decision-making body.
30.
On this basis, the members of the Chamber once more highlighted that the early
termination of the employment contract had been performed by the Claimant with
just cause and occurred because of the breach of the financial obligations by the
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Respondent for a considerable period of time, still during the protected period.
Furthermore, the Respondent neither denied those facts, nor tried to settle the
matter, nor to undermine the damages of the Claimant. The Chamber deemed that it
should consider this fact in determining the amount of compensation to be paid by
the Respondent.
31.
Equally, and in order to evaluate the compensation to be paid by the Respondent, the
members of the Chamber took, inter alia, into account, in line with art. 17 par. 1 of
the Regulations, the remuneration due to the Claimant in accordance with the
contract, the time remaining on the same contract, as well as the contractual
situation of the Claimant after the early termination occurred.
32.
Bearing in mind the foregoing, the Chamber proceeded with the calculation of the
amounts payable to the Claimant under the terms of the employment contract until
31 May 2011, taking into account that the Claimant’s salary for July 2009 is not
included in the calculation of the outstanding remuneration, since the termination
occurred at the beginning of this month. Consequently, the Chamber concluded that
the amount of EUR 410,000 (i.e. EUR 10,000 as monthly salary for July 2009, EUR
200,000 corresponding to the season 2009/10 and another EUR 200,000 for the season
2010/11) serves as a basis for the final determination of the amount of compensation
for breach of contract.
33.
Indeed, on 22 August 2009, the Claimant signed an employment contract with the FC
X. In accordance with this employment contract, valid for the period from 24 August
2009 until 30 December 2009, the Claimant was entitled to receive 4 equal monthly
instalments of EUR 6,000 net, amounting to a total of EUR 24,000.
34.
Furthermore, the Claimant also signed an employment contract with the Club Y, valid
as from 12 July 2010 until 10 November 2010, during which he was entitled to a
monthly salary of USD 20,000, payable until the 12th of the next month, i.e. a total
amount of USD 80,000.
35.
Finally, on 26 February 2011, the Claimant signed another employment contract with
the FC Z, valid until 1 December 2012, during which he was entitled to a monthly
salary of USD 10,111, payable in country K currency until the first quarter of each
month. In this regard, the relevant period is the period between 26 February 2011
and 31 May 2011, i.e. 3 months for a total amount of USD 30,333.
36.
Consequently, in accordance with the constant practice of the Dispute Resolution
Chamber and the general obligation of the Claimant to mitigate his damages, such
remuneration under the new employment contract shall be taken into account in the
calculation of the amount of compensation for breach of contract.
37.
Therefore, on account of all of the above-mentioned considerations and the
specificities of the case at hand, the Chamber decided that the Respondent does not
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have to pay the entire residual value of the contract but the amount of EUR 300,000,
which was considered reasonable and justified by the Chamber as compensation for
breach of contract.
38.
In conclusion, the Chamber decided to accept the claim of the Claimant and that the
Respondent is liable to pay the total amount of EUR 455,000 to the Claimant,
consisting of EUR 145,000 relating to outstanding salaries until June 2009, as well as
EUR 300,000 as compensation for breach of contract.
39.
The DRC then tackled the question of possible sporting sanctions on the Respondent
in accordance with art. 17 par. 4 of the Regulations. The cited provision stipulates
that, in addition to the obligation to pay compensation, sporting sanctions shall be
imposed on any Respondent found to be in breach of contract during the protected
period.
40.
The protected period comprises a period of three entire seasons or three years,
whichever comes first, following the entry into force of an employment contract, if
such contract was concluded prior to the 28th birthday of the professional player, or
to a period of two seasons or two years, whichever comes first, following the entry
into force of the employment contract, if such contract was concluded after the 28th
birthday of the professional player (cf. point 7 of the definitions of the Regulations).
41.
In the present case, the relevant employment contract was valid as of 24 January
2008, and the justified breach of contract by the Claimant occurred on 1 July 2009, i.e.
1 year and 5 months later. Consequently, regardless of the age of the Claimant at the
time of signing the contract, the breach of the contract occurred during the protected
period. The DRC had thus, in principle, the power to impose a sporting sanction on
the Respondent for breach of contract, as the unjustified breach occurred within the
protected period.
42.
Therefore, the DRC decided that the Respondent had to be banned from registering
any new players, either nationally or internationally, for two registration periods.
III.
Decision of the Dispute Resolution Chamber
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1.
The claim of the Claimant, M, is partially accepted.
2.
The Respondent, FC K, has to pay to the Claimant, M, the outstanding remuneration
amounting to EUR 145,000, within 30 days as from the date of notification of this
decision.
3.
The Respondent, FC K, has to pay to the Claimant, M, compensation for breach of
contract in the amount of EUR 300,000, within 30 days as from the date of
notification of this decision.
4.
In the event that the amounts due in accordance with the aforementioned numbers 2
and 3 are not paid by the Respondent, FC K, within the stated deadline, interest at
a rate of 5% per annum will fall due as of expiry of the aforementioned time limit
and the present matter shall be submitted, upon request, to the FIFA’s Disciplinary
Committee for its consideration and a formal decision.
5.
Any further requests lodged by the Claimant, M, are rejected.
6.
The Claimant, M, is directed to inform the Respondent, FC K, immediately and directly
of the account number to which the remittances are to be made and to notify the
Dispute Resolution Chamber of every payment received.
7.
The Respondent, FC K, shall be banned from registering any new players, either
nationally or internationally, for the two next entire and consecutive registration
periods following the notification of the present decision.
*****
Note relating to the motivated decision (legal remedy):
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According to art. 63 par. 1 of the FIFA Statutes, this decision may be appealed against
before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to
the CAS directly within 21 days of receipt of notification of this decision and shall contain
all the elements in accordance with point 2 of the directives issued by the CAS, a copy of
which we enclose hereto. Within another 10 days following the expiry of the time limit for
filing the statement of appeal, the appellant shall file a brief stating the facts and legal
arguments giving rise to the appeal with the CAS (cf. point 4 of the directives).
The full address and contact numbers of the CAS are the following:
Court of Arbitration for Sport
Avenue de Beaumont 2
1012 Lausanne
Switzerland
Tel: +41 21 613 50 00
Fax: +41 21 613 50 01
e-mail: [email protected]
www.tas-cas.org
For the Dispute Resolution Chamber
Markus Kattner
Deputy Secretary General
Encl.: CAS directives
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