Acórdão do FIFA
Processo Cabezas_2024-02-14

REF. FPSD-12515

Decision of the
Dispute Resolution Chamber
passed on 14 February 2024
regarding an employment-related dispute concerning the player Jairón
Andrés Charcopa Cabezas

COMPOSITION:
Martín AULETTA (Argentina), Deputy Chairperson
Jorge GUTIÉRREZ (Costa Rica), Member
Stella MARIS JUNCOS (Argentina), Member

CLAIMANT:
FC Lugano, Switzerland
Represented by Elite Law

RESPONDENT 1:
Jairón Andrés Charcopa Cabezas, Ecuador
Represented by Daniel Mario Crespo

RESPONDENT 2:
L.D.U. Quito, Ecuador
Represented by Daniel Mario Crespo

pg. 2

REF. FPSD-12515

I. Facts of the case
The parties
1.

The parties to the dispute are:
•

the Swiss club, FC Lugano (hereinafter: Lugano or Claimant), affiliated to the
Swiss Football Association (SFA);

•

the Ecuadorian player, Mr Jairón Andrés Charcopa Cabezas (hereainfter: Player
or Respondent 1) born on 27 January 2004; and

•

the Ecuadorian club, L.D.U. Quito (hereinafter: LDU or Respondent 2), affiliated
to the Ecuadorian Football Federation (FEF).

2.

The Player and LDU are hereinafter jointly referred to as the Respondents.

3.

Lugano, the Player, and LDU are hereinafter jointly referred to as the Parties.

The transfer of the Player from Clube Atlético Santo Domingo to Lugano
4.

In 2022, the Player was under contract with the Ecuadorian club, Clube Atlético Santo
Domingo (hereinafter: CASD).

5.

On 8 February 2022, CASD and Lugano entered into a transfer agreement by means of
which the services of the Player would be permanently transferred from the former to the
latter as from 1 July 2023 (hereinafter: the CASD Agreement).

6.

The recitals section of the CASD Agreement reads as follows:
“WHEREAS:
a) [CASD] is presently party to an Employment Contract with [the Player] valid until
31st December 2023;
b) [Lugano] is interested in engaging the services of the Player, according to the terms
and the conditions of the present transfer agreement (hereinafter, Contract);
c) [CASD] is willing to release and permanently transfer the Player's registration rights
to [Lugano], according to the terms and the conditions of the Contract;

pg. 3

REF. FPSD-12515

d) the Player is willing to accept to be permanently transferred from [CASD] to [Lugano]
and, simultaneously with this Contract, the Player agrees terms and conditions with
[Lugano] of a separate Employment Contract as of 1st July 2023;
e) the Parties confirm that, in accordance with art. 18ter of the FIFA Regulations on
Status and Transfer of Players, they did not enter into any agreement with a third
party (defined, pursuant to the FIFA RSTP, as any other party than two clubs referring
the player or any previous club with which the player has been registered) regarding
the Player's economic rights;
f)

the Parties shall make any due step· to allow the Player to play for [Lugano]
procuring any documents and/or allowance, as release of the International Transfer
Certificate (ITC) of the Player, as well as the proper steps in order to fulfil the FIFA TMS
procedure, and vice-versa, not later than 10.07.2023;

g) The individuals executing this Contract on behalf of [CASD] and [Lugano] represent
that they have the right, the power, legal capacity and authority to enter into this
Contract on behalf of the above-mentioned parties”.
7.

Clause 2 of the CASD Agreement reads as follows:
“2. Permanent transfer
2.1. [CASD] and the Player agree on the release and the permanently transfer of the
Player to [Lugano] on 1st July 2023 (‘Transfer Date’) and [Lugano] agrees, subject to the
terms and conditions hereof, to engage the services of the Player, in compliance with a
separate Employment Contract as of 1st July 2023. For the sake of clarity, although the
Parties set the release and permanent transfer of the Player on the Transfer Date this
Transfer Agreement is immediately valid and binding between the Parties as of the date
of its mutual· signature. Besides, [Lugano] shall have the right in its discretion to
anticipate the Transfer Date by serving written notice to both [CASD] and the Player.
2.2. The permanent transfer is subject to the following conditions precedent which
[Lugano] shall be entitled to waive in its absolute and sole discretion (‘Conditions
precedent transfer’):
a) the release of the ITC by the Ecuadorian Football Federation (FEF) before 18.00 pm
(CET) on 10th July 2023 or the anticipated Transfer Date if that is the case;
b) [Lugano] reaches an agreement with the Player on the terms of the Employment
Contract and formally conclude it with the Player;
c) the Player passes to the absolute satisfaction of [Lugano] medical examination
pursuant to FIFA Pre-competition Medical Assessment (PCMA) and Swiss Football

pg. 4

REF. FPSD-12515

League (SFL) requirements. The first medical examination shall be held before 15th
February 2022 and the second medical examination shall be held before 15th June
2023, save for the possible anticipation of the Transfer Date;
d) the Player is not under a certified illness or injury preventing him to play professional
football in his full capacity and this status is going to stay for at least 6 months or
longer.
2.3. In the event that the ITC is not released within the 10th July 2023 then this Contract
shall be automatically terminated. In such event:
a) this Contract shall cease to have effect, save for articles 3., 6., 12., 13 and 15.; and
b) no payment shall be due by [Lugano] to [CASD], thus the latter shall reimburse the
former all amounts paid until such date or pay, if applicable, the Liquidated
Damages specified at clause 3.1; and
c) neither party will be released from any liability or right of action or claim which at
the time of determination had already accrued or may accrue in respect of any act
or omission prior to termination.
2.4. The Parties shall ensure that rights of each party related to the present Contract are
safeguarded from the signature of the present Contract until the execution of the
permanent transfer of the Player to [Lugano] on the Transfer Date at the latest, i.e.
01.07.2023.
2.5. [CASD] shall provide [Lugano] with any relevant documentation and/or promptly
complete any relevant procedure (included but not limited to FIFA TMS), to permanently
and promptly transfer the Player to [Lugano] on the Transfer Date or no later than 10
July 2023. In particular, [CASD] will give the (necessary) permission to the FEF involved
to issue the ITC for the international transfer of the Player from [CASD] to [Lugano].
2.6. [CASD] shall release an authorisation to [Lugano] in order to allow the Player to (i)
travel to Lugano (Switzerland) and/or to the USA to undergo medical test in February
2022 and in May/June 2023 or any other test when scheduled and (ii) train and play
friendly matches with [Lugano] until the TMS procedure has successfully completed”.
8.

Clause 3 of the CASD Agreement reads as follows:
“3. Breach & Liquidated damages clause
3.1. In the event that condition under clause 2.2, let. a) (ITC release by the FEF), shall not
have been satisfied by such date, i.e. 10.07.2023, due to culpable and/or reckless and/or
negligent conduct of [CASD] either actively or passively, then the present Contract shall

pg. 5

REF. FPSD-12515

be automatically terminated and of no effect and [Lugano] shall be entitled to USD
325,000 (three hundred twenty-five thousand US Dollar) (‘Liquidated Damages’) payable
within 10 days.
3.2. [CASD] or the Player respectively shall be deemed to be in breach of the present
Contract and therefore jointly and severally liable to pay the Liquidated Damages (save
for cases in which the liability of a unique party is clear and evident), including but not
limited to the following cases:
a) The Player is transferred from [CASD] to a third club on a permanent basis prior to
Transfer Date;
b) The Player is transferred to a third club on a temporary basis for a Loan Period
overtaking 1st July 2023;
c) [CASD] and the Player enter into a Termination Agreement prior to Transfer Date,
preventing [Lugano] from registering the Player as of 1st July 2023;
d) The Player has been disqualified, suspended or banned for a period longer than 6
months and is thus not able to perform his duty/services in favour of [Lugano] at the
Transfer Date due to (i) a disqualification, a suspension, a ban (ii) and/or in case of
termination of his Employment Contract with [CASD] for any reasons;
e) [CASD] induces or causes the Player to unilaterally terminate the Employment
Contract prior to Transfer Date. In turn, the Player terminates without just cause the
Employment Contract with [CASD];
f)

[CASD] loses for non-pure sporting reasons its affiliation to a category where is
entitled to keep the Employment Contract with the Player and therefore the Player
becomes free agent. In case this happens for sporting reasons, the Parties shall have
the duty to liaise each other and decide how to proceed in order to respect the right
of [Lugano] to obtain the Player’s permanent registration.

3.3. [Lugano], the Player and [CASD] agree that in the event [CASD] and/or the Player
fails to comply with clause 2.2 let. a) of the present Contract and/or in case of breach of
the present Contract, [Lugano] ́s damages would be uncertain and difficult (if not
impossible) to accurately estimate because of the parties ́ inability to predict future.
Accordingly, [Lugano], the Player and [CASD] agree that any fees, balance adjustments,
default interest or other charges assessed under clause 3 are not penalties but instead
are intended by the Parties to be, and shall be deemed, liquidated damages.
3.4. Where the loss or damage suffered by [Lugano] exceeds the afore said amount,
[Lugano] could ask [CASD] for further compensation.

pg. 6

REF. FPSD-12515

3.5. Besides, [Lugano] will be entitled to obtain from [CASD] the reimbursement, within
10 (ten) days after written notification, of all the Instalments that would have been paid
as a Fixed Transfer Fee in case of the non-fulfilment of the Conditions Precedent Transfer
provided for in clause 2.2 let. a), b) and c). Any delay in the reimbursement will be subject
to an interest of 7% (seven per cent) per year from the original date of payment by
[Lugano] until the complete and effective payment by [CASD]. For the sake of clarity, if
the failure to comply with the clause 2.2 let (a) is due to culpable and/or reckless and/or
negligent conduct on the part of [CASD], whether actively or passively, only the
Liquidated Damages shall be applicable and due as per clause 3.1.”
9.

Pursuant to clauses 4 and 5 of the CASD Agreement, Lugano undertook to pay CASD a
total transfer fee of USD 95,600 for 90% of the Player’s economic rights, payable as
follows:
•
•
•
•

10.

USD 5,000 upon signature of the CASD Agreement;
USD 69,000 by 28 February 2022;
USD 10,800 by 5 July 2022; and
USD 10,800 by 5 January 2023.

Clause 6.2 and 6.3 of the CASD Agreement read as follows:
“6.2. [CASD] and the Player will keep immediately informed [Lugano] about any possible
change in the Player's current situation of the abovementioned condition and
guarantees from the date of signature of the Contract until the Transfer Date. Besides,
they undertake to respect such guarantees until the Transfer Date.
6.3. [Lugano] has entered into this Contract and has agreed to make payments to
[CASD] in reliance on the representations and warranties given by [CASD]. [CASD] shall
indemnify [Lugano] on demand now and on a continuing basis, against all liabilities,
costs, expenses, damages and losses (including any direct, indirect or consequential
losses, loss of profit / value, penalties and legal costs - calculated on a full indemnity
basis - and all other professional costs and expenses) suffered on incurred by [Lugano]
arising out of or in connection with any breach of the representations and warranties
given by Santo Domingo in an amount not less than the Liquidated Damages stipulated
at clause 3.1.”

11.

Also on 8 February 2022, the Player and Lugano concluded an employment contract valid
as from 1 July 2023 until 30 June 2026 (hereinafter: the Lugano Employment Contract).
Accordingly, the Player would be entitled to CHF 5,400 as monthly salary plus CHF 2,000
as house allowance.

12.

The Lugano Employment Contract does not establish any condition precedent.

pg. 7

REF. FPSD-12515

The relegation of CASD and the employment relationship between the Player and LDU
13.

On 17 May 2022, the Player and CASD concluded an employment contract valid as from
said date until 31 December 2023. Accordingly, the Player would be entitled to a monthly
salary of USD 1,800.

14.

On 30 October 2022, CASD was relegated to the third tier of the Ecuadorian national
league (i.e., the “Serie C de Ecuador”). It has to be noted, in this respect, that in line with the
national regulations of the FEF (i.e., Reglamento del Jugador de la Federación Ecuatoriana de
Fútbol) (hereinafter: the FEF Regulations) (freely translated to English):
“Chapter IX. Termination of Contracts
Art. 44. The following are causes for the termination of the contract concluded between
the club and the player:
a) the Inactivity of the club in the national championships or the loss of its status”.

15.

On 15 January 2023, the Player and LDU concluded a new employment contract, valid as
from said date until 30 July 2025 (hereinafter: the LDU Employment Contract).

16.

Pursuant to clause 5 of the LDU Employment Contract, the Player is entitled to a monthly
remuneration of USD 641.65, as well as a monthly bonus of USD 858.35 as long as the
Player rendered services to LDU.

The warning letters by Lugano
17.

On 23 January 2023, a representative from the Lugano allegedly contacted the Player via
electronic application WhatsApp and requested information concerning the status of the
latter’s employment with CASD, to no avail.

18.

On 3 February 2023, Lugano sent a first warning letter to the Player and LDU. Contextually,
Lugano recalled that it had signed a valid employment contract with the Player (i.e., the
Lugano Employment Contract), hence that “the eventual signature of an employment
contract with [LDU] will be considered as a unilateral termination without just cause according
to article 17 of the FIFA RSTP and [Lugano] reserves its right to submit a claim to the competent
decision-making body of FIFA in order to seek compensation for such breach”.

19.

On 13 February 2023, Lugano sent a second warning letter to the Player and LDU
reiterating the contents of its previous communication and going into further details as to
the consequences of the breach of the Lugano Employment Contract. A copy of this letter
was also sent by a representative of Lugano to the Player via WhatsApp.

pg. 8

REF. FPSD-12515

20.

On 3 March 2023, Lugano sent a third warning letter to the Player and LDU. Contextually,
Lugano (i) recalled the terms of the CASD Agreement and the Lugano Employment
Contract; (ii) provided the Player with flight tickets from Quito (Ecuador) to Zurich
(Switzerland) for 1 July 2023; (iii) informed the Player that it had already adopting the
necessary steps for the issuance of his Swiss work permit; and (iv) requested the Player
and LDU to terminate any contract signed for the overlapping period between the Lugano
Employment Contract and the LDU Employment Contract, and adopt the administrative
steps for the transfer to be completed. A copy of this letter was also sent to the FEF and
the Ecuadorian League, i.e., Liga Profesional de Fútbol Ecuatoriano (LPFE).

21.

On 12 April 2023, Lugano sent a fourth warning letter to the Player and LDU. Contextually,
Lugano (i) acknowledged that the Player was registered with LDU within the FEF, with
colliding terms to the Lugano Employment Contract; and (ii) requested the Player to
answer its communications and provide documentation for his Swiss work permit. A copy
of this letter was also sent to the FEF and LPFE, as well as to the Player via WhatsApp.

22.

On 22 June 2023, Lugano sent a fifth and last warning letter to the Player and LDU.
Contextually, Lugano referred to its previous four letters and acknowledged that no reply
had been provided by any of the Respondents. Consequently, Lugano stressed that in
case the Player failed to cooperate with the application to his work permit and/or provide
any position in this respect, the Lugano Employment Contract would be deemed
terminated without just cause and Lugano would seek relief before FIFA against him and
LDU, as inducer of breach of contract. A copy of this letter was also sent to the FEF and
LPFE, as well as to the Player via WhatsApp.

23.

No further communication was exchanged between the Parties following the last notice
sent by Lugano.

II. Proceedings before FIFA
24.

On 3 November 2023, Lugano filed the claim at hand before FIFA. A brief summary of the
position of the Parties is detailed in continuation.

a. Claim of Lugano
25.

In its claim, Lugano argued that the Player terminated the Lugano Employment Contract
without just cause, induced by LDU. It referred, in this respect, to art. 13 and 14 of the
FIFA Regulations on the Status and Transfer of Players (FIFA RSTP) and the Swiss Code of
Obligations (SCO) and argued that despite Lugano having always acted in good faith the
Player decided to depart from their mutual commitment and pursue his career with LDU
without any notice or authorization.

pg. 9

REF. FPSD-12515

26.

Lugano recalled in this respect its five warning letters and highlighted that the Player has
never replied to any of them. To the contrary, he signed with LDU (and joined such club)
after having concluded the Lugano Employment Contract, hence acting against the
fundamental principle of contractual stability.

27.

In light of the above, Lugano claimed that the Player and LDU shall be jointly liable to the
payment of compensation for breach of contract in line with art. 17 of the FIFA RSTP. It
made the following remarks concerning the calculation:

28.

•

Lugano, CASD and the Player agreed upon a liquidated damages clause in the
CASD Agreement (clause 3.1), hence the Respondents should be liable for the
payment of USD 325,000;

•

Alternatively, should the DRC decide that clause 3.1 of the CASD Agreement is
not applicable, the compensation shall take into consideration:
o

USD 83,559.38 as the part of the transfer fee that has already been paid by
Lugano to CASD per the CASD Agreement and was not amortized;

o

the average of the remuneration of the Player per the Lugano Employment
Contract (CHF 266,400) and the LDU Employment Contract (speculated as
being approx. USD 334,630);

o

a total, in principle, of USD 418,189.38, which should however be increased
due to the several aggravating circumstances and the specificity of sport,
namely the facts that (i) the Player had been recently called-up to the
Ecuadorian U-20 national team; and (ii) the breach occurred during the
protected period;

o

hence leading to the final plead of USD 467,764.20 (i.e., USD 418,189.38 plus
USD 49,574.82 corresponding to 6 salaries of the Player per the Lugano
Employment Contract).

In conclusion, Lugano requested the following relief:
“I. The claim filed by [Lugano] before the FIFA DRC against [the Player] and [LDU] is
upheld.
As a consequence, primarily
II. [The Player] is condemned to pay [Lugano] compensation for breach of Contract of
USD 325,000 (three hundred twenty-five thousand US Dollars) as Liquidated Damages
plus 5% p.a. interests as of 1 July 2023 until the date of its effective payment;

pg. 10

REF. FPSD-12515

Alternatively,
III. [The Player] is condemned to pay [Lugano] compensation for breach of Contract of
USD 467’764,20 (four hundred sixty-seven thousand seven hundred sixty-four /20 US
Dollars), as per the criteria under article 17.1 FIFA RSTP, plus 5% p.a. interests as of 1 July
2023 until the date of its effective payment;
In any case,
IV. [LDU] is condemned to pay [Lugano] the same compensation of [the Player] as
jointly and severally liable debtor in accordance with article 17.2 of the FIFA RSTP.
V. [The Player] is imposed sporting sanctions consisting on a six-month restriction on
playing in official matches, or any other duration that the FIFA DRC may deem
appropriate but never lower than four months, as per article 17.3 FIFA RSTP and the
aggravating circumstances given in this case;
VI. [LDU] is imposed sporting sanctions consisting on ban from registering new players,
either nationally or internationally, for two entire and consecutive registration periods
as per article 17.4 FIFA RSTP and the aggravating circumstances given in this case;
VII. [The Player] and [LDU] shall bear any and all the possible costs of this procedure”.

b. Joint reply of the Respondents
29.

On 3 December 2023, the Respondents filed a joint reply to the claim of Lugano.

30.

Firstly, the Respondents alleged that the Player is not liable for the termination of his
employment relationship with CASD but rather that it was solely a consequence of CASD’s
relegation and the FEF Regulations. By the same token, the Player would also not liable to
the non-performance of the CASD Agreement. To the contrary: the conditions for the
termination of the CASD Agreement were triggered and the Player became free to sign
with any other club.

31.

Secondly, the Respondents also added that the Lugano Employment Contract has never
entered into force, hence that it was never breached let alone terminated without just
cause. Furthermore, between October 2022 and February 2023, Lugano did not contact
the Player and the conditions precedent established in the CASD Agreement were not
fulfilled (i.e., medical examinations).

32.

As the CASD Agreement did not go through, the Respondents stressed that the Lugano
Employment Contract could also not come into force. Had the case been different and the
transfer completed, the Respondents stated that per the FEF Regulations the Player
should also have received 15% of the transfer fee (USD 14,340), which did not happen.

pg. 11

REF. FPSD-12515

33.

Thirdly, the Respondents pointed out to the fact that Lugano was aware of CASD’s
relegation in October 2022, however failed to contact either the Player or CASD
straightaway (cf. clause 3.2 of the CASD Agreement). In this respect, the Respondents
suggested that it was the responsibility of Lugano to react accordingly and “protect” the
Player instead of allowing a situation of legal uncertainty, notifying his subsequent
employer, and then claiming such high compensation as it did.

34.

Finally, and as to the compensation, the Respondents argued that the quantum claimed
would lead the jeopardize the Player’s financial stability and sporting career. Likewise,
they established that LDU should not be jointly liable as there was no inducement in the
current case for that the CASD Agreement and the Lugano Employment Contract were
completely unknown.

35.

The Respondents requested that the claim of Lugano be rejected and, specifically, that no
sporting sanction is imposed.

c. Rejoinder of Lugano
36.

On 19 December 2023, Lugano filed its rejoinder. In doing so, Lugano challenged the
Respondents position as follows:
•

Lugano has never abandoned the Player. Conversely, it was in direct contact with
the Player and repetitively tried to understand the situation and solve any
pending issues. In support of this allegation, Lugano filed a written statement of
its representative, Mr Adwin Jorge Rivera Cerezo (hereinafter: Mr Rivera), who
allegedly scouted the Player in 2021 and attended the Player’s matches and
trainings in the end of 2022. Likewise, Lugano filed WhatsApp messages
exchanged between the Player and Mr Rivera alleging that they tried to remedy
the situation, find a new club for the Player during the first half of 2023, and
prevent the breach of the Lugano Employment Contract;

•

the CASD Agreement was not automatically terminated with CASD’s relegation
to the lower division in Ecuador. To contrary, the Player was the one deciding to
depart from his commitment based on art. 44 of the FEF Regulations. As such,
the Player was not liable to the termination of his relationship with CASD, but
rather to his reaction to such fact;

•

Lugano acted in its best effort to guarantee a smooth move of the Player to
Europe. Nevertheless, he just acted as he was free agent and ignored the
multiple notifications addressed to him and LDU;

•

the fact that the Lugano Employment Contract would only enter into force 17
months after its signature does not prevent its validity. Such an arrangement is

pg. 12

REF. FPSD-12515

a common practice in football and the Lugano Employment Contract was not
jeopardized in any way by the new circumstances of the case (i.e., the relegation
of CASD and the termination of its employment with the Player);

37.

•

the medical examinations were only added as a condition to the CASD
Agreement and not to the Lugano Employment Contract. The latter could not, in
any event, be subject to medical examinations (cf. art. 18, par. 4 of the FIFA RSTP).
Conversely, the only reason preventing the execution of the Lugano Employment
Contract was in fact the Player’s decision to join LDU for an overlapping period;

•

“the Player should rather better explain how is possible that, to avoid a ‘penuria
economica’, he allegedly signed an employment contract with LDU, the top club of
Ecuador, for just USD 1,500 monthly (…) when at CASD, a much smaller club of 3rd
division he had a remuneration of USD 1,800 per month (…) and the [Lugano
Employment Contract] he signed one year before had a salary of USD 5,832 monthly
(CHF 5,400 at the exchange rate of 1.08 of February 2022). This shows the level of bad
faith and lack of transparency of the Respondents that will not escape the judgment
of the FIFA DRC”.

In light of the above, Lugano reiterated its requests for relief, as well as it filed a request
of evidentiary measures to be disclosed by the Respondents, namely:
“a. The full version of any employment agreement as well as any other agreement signed
by the Player with LDU or any linked company (including but not limited to image rights
contracts, annexes or addendums related to bonuses, etc.);
b. Any mandate of football intermediary or representation agreement or similar
document signed by the Player and/or LDU with any agent or intermediary linked to the
Respondent’s registration with LDU”.

d. Final comments of the Respondents
38.

On 5 January 2024, the Respondents filed their final comments on this matter.

39.

In doing so, the Respondents reiterated that (i) the CASD Agreement was automatically
terminated upon relegation of CASD (cf. art. 44 of the FEF Regulations and clause 3.2 of
the CASD Agreement); and (ii) such termination (or its financial consequences) cannot be
attributable to the Player.

40.

The Respondents also disputed Lugano’s narrative concerning its initiative to keep in
contact with the Player. They argued, in this respect, that Mr Rivera’s messages indeed
showed that Lugano wanted to control the Player’s destiny before July 2023, and force
him to play in the United States against his free will. Furthermore, the Respondents also
challenged the impartiality of Mr Rivera.

pg. 13

REF. FPSD-12515

41.

The above, in the Respondents’ view, corroborate Lugano’s bad faith, abuse of power and
violation of the Player’s essential labour rights. They also reiterated that such conversation
only happened in February 2023 whereas the relegation of CASD took place in October
2022 – entailing that the Player was left at his own luck and with no other option rather
than pursuing his sporting career with another club.

42.

In the end, the Respondents insisted that the claim should be rejected.

e. Additional comments of the Respondents concerning the LDU
Employment Contract
43.

In view of Lugano’s request for evidentiary measures and for the sake of completeness,
on 18 January 2024, the FIFA general secretariat requested the Respondents “confirm via
the FIFA Legal Portal the global remuneration agreed upon for the duration of their
employment relationship and, in particular, to provide (…) a copy of any related annexe, private
contract, or supplementary agreement, if existent”.

44.

On 24 January 2024, the Respondents stated that the LDU Employment Contract was the
only document signed between them for the relevant period.

III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
45.

First of all, the Dispute Resolution Chamber (hereinafter: 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 presented to FIFA on 3 November 2023 and submitted for decision
on 14 February 2024. Taking into account the wording of art. 34 of the March 2023 edition
of the Procedural Rules Governing the Football Tribunal (hereinafter: the Procedural
Rules), the aforementioned edition of the Procedural Rules is applicable to the matter at
hand.

46.

Furthermore, the Chamber referred to art. 2 par. 1 of the Procedural Rules and observed
that in accordance with art. 23 par. 1 in combination with art. 22 par. 1 lit. b) of the FIFA
RSTP (May 2023 edition), 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 Swiss club, an Ecuadorian player, and an Ecuadorian club.

47.

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 FIFA RSTP (May 2023 edition) and considering that the present claim was

pg. 14

REF. FPSD-12515

lodged on 3 November 2023, the May 2023 edition of said regulations (hereinafter: the
Regulations) is applicable to the matter at hand as to the substance.

b. Burden of proof
48.

The Chamber recalled the basic principle of burden of proof, as stipulated in art. 13
par. 5 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 Chamber stressed
the wording of art. 13 par. 4 of the Procedural Rules, pursuant to which it may consider
evidence not filed by the Parties, including without limitation the evidence generated by
or within the Transfer Matching System (TMS).

c. Merits of the dispute
49.

The competence and the applicable regulations having been established, the Chamber
entered into the merits of the dispute. In this respect, the Chamber started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. 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.

i. Main legal discussion and considerations
50.

The foregoing having been established, the Chamber moved to the substance of the
matter, and took note of the fact that it pertains to a claim for breach of contract lodged
by Lugano against the Player and LDU.

51.

As a departure point, the Chamber acknowledged that the following facts remained
undisputed between the Parties and are relevant for resolving the dispute at hand:

•

on 8 February 2022, Lugano, CASD, and the Player entered into the CASD
Agreement, by means of which the services of the Player would be transferred
from CASD to Lugano in the following year (i.e., as from July 2023);

•

also on 8 February 2022, Lugano and the Player concluded the Lugano
Employment Contract, valid as from 1 July 2023 until 30 June 2026;

•

before the transfer could take place, in October 2022, CASD was relegated to the
lower division of the Ecuadorian national league, and its employment
relationship with the Player was terminated;

•

on 15 January 2023, the Player and LDU concluded the LDU Employment

pg. 15

REF. FPSD-12515

Contract valid as from 15 January 2023 until 30 July 2025; and
•

between February and June 2023, Lugano sent multiple notices to the
Respondents, all of which remained unanswered.

52.

Against this background, the DRC recalled that the Claimant claims that by signing with
LDU while having already committed himself to join Lugano for an overlapping period, the
Player breached both the CASD Agreement and the Lugano Employment Contract.
Consequently, Lugano requests inter alia to be awarded compensation for breach of
contract calculated based on either in the liquidated damages clause included in the CASD
Agreement or of art. 17 of the Regulations, to be jointly paid by the Player and LDU.

53.

On the other hand, the Respondents strongly dispute their liability and especially the
occurrence of any breach of contract from their side. In the Respondents’ view, CASD’s
relegation caused the immediate termination of both the CASD Agreement and the
Lugano Employment Contract, entailing that the Player became a free agent. In support
of their argumentation, the Respondent’s referred to the conditions precedent and the
termination clause included in the CASD Agreement, as well as they stressed Lugano’s bad
faith towards the Player while handling this matter.

54.

In view of this dissent between the Parties, the DRC determined that its task was to
determine:
A. Was the Lugano Employment Contract valid and binding despite CASD’s relegation?
B. In the affirmative, when was the Lugano Employment Contract terminated? Was
there just cause?
C. In the affirmative, what are the consequences that follow from such termination?

55.

The Chamber then moved to the analysis of each topic in turn.
A. Was the Lugano Employment Contract valid and binding despite CASD’s relegation?

56.

First and foremost, the Chamber underlined that the factual framework of the case was
not disputed, especially that: (i) in February 2022, the Player agreed to join Lugano as of
July 2023; (ii) in October 2022, the Player’s previous employment relationship with CASD
was terminated as a consequence of its relegation to the lower division in Ecuador; and
(iii) following such relegation, the Player signed with LDU for a period overlapping with the
Lugano Employment Contract.

57.

For the DRC, the dispute between the Parties is of law. The Parties have divergent views
as to the effects of CASD’s relegation over the CASD Agreement and the Lugano
Employment Contract. As such, the underlying (first) question to be answered by the DRC

pg. 16

REF. FPSD-12515

is whether the Player was in fact obliged to join Lugano despite the termination of his
relationship with CASD and, if so, whether there was indeed a breach of contract by any
of the Parties.
(i)
58.

The “immediate termination” of the CASD Agreement

According to the Respondents, the CASD Agreement was immediately terminated as a
result of CASD’s relegation, and the consequent lost of the Player’s registration rights, in
line with the following clauses (emphasis added by the DRC):
“2.3. In the event that the ITC is not released within the 10th July 2023 then this
Contract shall be automatically terminated. In such event:
a) this Contract shall cease to have effect, save for articles 3., 6., 12., 13 and
15.; and
b) no payment shall be due by [Lugano] to [CASD], thus the latter shall reimburse
the former all amounts paid until such date or pay, if applicable, the Liquidated
Damages specified at clause 3.1; and
c) neither party will be released from any liability or right of action or claim
which at the time of determination had already accrued or may accrue in
respect of any act or omission prior to termination.
2.4. The Parties shall ensure that rights of each party related to the present
Contract are safeguarded from the signature of the present Contract until the
execution of the permanent transfer of the Player to [Lugano] on the Transfer
Date at the latest, i.e. 01.07.2023.
2.5. [CASD] shall provide [Lugano] with any relevant documentation and/or promptly
complete any relevant procedure (included but not limited to FIFA TMS), to permanently
and promptly transfer the Player to [Lugano] on the Transfer Date or no later than 10
July 2023. In particular, [CASD] will give the (necessary) permission to the FEF involved
to issue the ITC for the international transfer of the Player from [CASD] to [Lugano].
[...]
3.2. [CASD] or the Player respectively shall be deemed to be in breach of the present
Contract and therefore jointly and severally liable to pay the Liquidated Damages (save
for cases in which the liability of a unique party is clear and evident), including but not
limited to the following cases:
[...]

pg. 17

REF. FPSD-12515

f) [CASD] loses for non-pure sporting reasons its affiliation to a category where is
entitled to keep the Employment Contract with the Player and therefore the Player
becomes free agent. In case this happens for sporting reasons, the Parties shall have
the duty to liaise each other and decide how to proceed in order to respect the
right of [CASD] to obtain the Player’s permanent registration.”
59.

Notwithstanding the above, while analysing the abovementioned provisions, the
Chamber considered that the mens legis of the contractual arrangement was diametrically
opposite to the one the Respondents intend to rely on. Whilst the Respondents refer to
the abovementioned provisions as the basis for an immediate termination without
consequences to the Player, the DRC underscored that (i) the CASD Agreement shall be
interpreted as a whole, especially clauses 2.3, 2.4, and 3.2, f); and (ii) the true intention of
the parties was in fact to establish in advance their commitment to find a solution for the
future transfer of the Player to Lugano even if the affiliation of CASD was lost for sporting
reasons – as occurred, due to its relegation to the lower division in Ecuador.

60.

In the Chamber’s opinion and as confirmed by the Parties in their submissions, the Player,
Lugano and CASD already anticipated upon the conclusion of the CASD Agreement that
CASD could potentially lose the Player’s registration rights thereby impacting his
subsequent transfer to Lugano; reason why they undertook to liaise among themselves
to facilitate the transfer. This interpretation, according to the Chamber, is further
supported by the wording of clause 3.2, c).

61.

Therefore, the Chamber established that the Respondents’ argumentation in the sense
that CASD’s relegation led to the immediate termination of the CASD Agreement and the
Player becoming free agent without any restriction to finding a new club, is flawed. It is
accordingly rejected.
(ii)

The termination of the Lugano Employment Contract

62.

Even if considered, ad argumentandum tantum, that CASD’s relegation entailed the
immediate termination of the CASD Agreement because of the failure to fulfill all the
conditions precedent (i.e., the issuance of the International Transfer Certificate (ITC)
and/or the medical examinations), the DRC was not convinced that it also prompted the
Player’s release from his employment relationship with Lugano.

63.

The reason for the above is simple: besides signing the CASD Agreement committing to a
future transfer of the Player’s services, Lugano and the Player also concluded the Lugano
Employment Contract on the very same date, 8 February 2022. Therefore, the DRC
considered that any analysis should be conducted in consideration of two different
agreements:
•

Firstly, the CASD Agreement between CASD, Lugano, and the Player, which set
out the terms and conditions for the Player’s future transfer from CASD to

pg. 18

REF. FPSD-12515

Lugano in July 2023, as well as the consequences (and liabilities) of any anomaly
in the meanwhile; and
•

Secondly, the Lugano Employment Contract between Lugano and the Player,
which set out the terms and conditions for the employment relationship
between said parties between July 2023 and June 2026.

64.

It follows that, despite the two contracts being factually connected and signed on the
same date, they concern different parties, objects, rights, and obligations. Most
importantly, the DRC highlighted that whilst the signature of a future employment
contract was one of the conditions precedents for the validity of the CASD Agreement, the
opposite was not true i.e., the fulfillment of the CASD Agreement was not a condition sine
qua non for the validity of the Lugano Employment Contract.

65.

In other words: as Lugano and the Player agreed upon the conditions of their future
employment relationship upfront, they committed themselves to both the CASD
Agreement and the Lugano Employment Contract. As such, the DRC established that the
termination of the former could not be simply read as the termination of the latter. To the
contrary, the validity of the Lugano Employment Contract is irrespective of the CASD
Agreement. Indeed, the Chamber remarked that in line with art. 18, par. 4 of the
Regulations and the well-established jurisprudence of the Football Tribunal, the validity of
employment contracts cannot be made subject to administrative measures, including but
not limited to registration and/or issuance of a player’s ITC.

66.

Consequently, even if considered that the CASD Agreement was automatically terminated
with CASD’s relegation, the Chamber did not concur with the Respondents to the degree
that such termination would also render the Lugano Employment Contract null and void.
Contrario sensu, the DRC did not find on the case file any evidence capable of suggesting
that the execution of the Lugano Employment Contract would be anyhow harmed by
CASD’s relegation. In fact, the immediate conclusions that the Chamber could draw from
such scenario would be:
•

instead of the Player being engaged by Lugano in TMS as permanently
transferred from CASD, he could be engaged as “out of contract”;

•

the Player would be free to render services to a new club between the date of
termination of his employment with CASD and the beginning of the Lugano
Employment Contract, subject to the rules on registration and/or to a new
agreement between the Player and Lugano regarding the commencement of
their employment; and

•

any further financial consequence arising in connection with inter alia the
payment of the transfer fee by Lugano to CASD would have to be settled between
them vis-à-vis the contents of CASD Agreement.

pg. 19

REF. FPSD-12515

67.

Therefore, and once again as opposed to the narrative of the Respondents, the DRC found
no nexus causalis between CASD’s relegation and the alleged termination of the Lugano
Employment Contract without any consequence to any of the parties. While the Chamber
considered it true that the signature of an employment contract 17 months in advance
was not common in the football market (cf. §7 of the Respondents’ final comments), the
Chamber was firm to determine that it does not grant any of the parties the possibility of
departing from their undertakings without a valid justification.

68.

For completeness, the DRC highlighted that if the circumstances of the case were different
and Lugano was the party intending to depart from the execution of the Lugano
Employment Contract for any reason such as the lack of proper registration or issuance
of ITC of the Player, the conclusion of the Chamber would be exactly the same: the parties
entered into an independent, valid, and binding employment contract, the validity of
which cannot be made subject to administrative measures. As such, the DRC deemed that
the Player cannot now opt out and conveniently argue the opposite to avoid the
consequences thereto.

69.

Again for completeness, the Chamber stressed that the whole analysis would be different
had the Player and Lugano only signed the CASD Agreement and committed to a signature
of an employment contract in the future – such as it is often seen in the football industry.
Nevertheless, by signing the Lugano Employment Contract straightaway, the Chamber’s
conclusion is that the Parties entered into an independent, valid, and binding agreement,
hence that should have been complied with.
B. If affirmative, when was the Lugano Employment Contract terminated? Was there
just cause?

70.

Having established that the Lugano Employment Contract was valid and binding and
taking into account that a Player is not allowed to enter into two contracts for the same
period (cf. art. 18, par. 5 of the Regulations), it was only logical for the DRC to establish
that the Lugano Employment Contract was terminated by the Player on 15 January 2023
i.e., when he signed the LDU Employment Contract for the overlapping period.

71.

Thereafter, the Chamber moved to the analysis of the just cause.

72.

On this topic, the DRC took due consideration that the Respondents alleged that the
signature of the LDU Employment Contract was merely a consequence of: (i) the Player
becoming free agent; (ii) Lugano’s inertia to proactively contact the Player following CASD’s
relegation, allowing for a scenario of legal uncertainty; and (iii) the abusive concessions
set out in CASD Agreement in which the Player would remain unemployed for months
until being finally engaged by Lugano.

pg. 20

REF. FPSD-12515

(i)

The Player becoming free agent

73.

As thoroughly explained in the item A, supra, it was the understanding of the Chamber
that the Player was a free agent only during the termination of his employment with CASD
and the commencement of the Lugano Employment Contract’s initial term.

74.

Therefore, the Chamber decided that the Respondents’ allegations in this respect should
be disregarded.
(ii)

Lugano’s alleged inertia and the legal uncertainty

75.

The DRC also noted that the Respondents stated both in their reply and final comments
that Lugano was responsible for the legal uncertainty around the Player’s situation for
that it kept inert following CASD’s relegation and the consequent termination of its
employment relationship with the Player. Nevertheless, having carefully analysed the
documentation on file, the Chamber was not convinced that this was indeed the case.

76.

In this respect, the DRC noted that:
•

under the CASD Agreement, CASD committed itself to keep Lugano informed
about any updates concerning the Player’s employment situation. Nevertheless,
it appears that no information was formally addressed to Lugano, entailing that
it could only become aware of the situation through the Player or through the
media;

•

the Player, as the most interested party, has also not advanced any proof that
he reached out to Lugano to inform it about the CASD relegation and the ensuing
consequences. This is particularly relevant taking into consideration that
according to clause 3.2, f) of the CASD Agreement, in case of relegation of CASD
due to sporting reasons "[...] the Parties shall have the duty to liaise each other
and decide how to proceed in order to respect the right of FC Lugano to obtain
the Player's permanent registration”;

•

the evidence on file suggests that, as soon as the Player’s unemployment and
subsequent agreement LDU was made public in the news (and, in any event, less
than 3 months following the CASD’s relegation), Lugano tried to contact the
Player both via WhatsApp and e-mail, to no avail;

•

Lugano put the Player and LDU in default in 5 different opportunities, to no avail;
and

•

the Respondents tacitly confirmed in their submissions that they refrained from
responding to the notices, as well as failed to ever contact Lugano to remedy the

pg. 21

REF. FPSD-12515

situation and/or find an amicable solution.
77.

In light of the above, the Chamber concluded that the Respondents’ position as to the
alleged inertia of Lugano was not substantiated (cf. art. 13, par. 5 of the Procedural Rules),
hence should be dismissed.
(iii)

The imbalanced concessions set out in the CASD Agreement and the obstacle to the
Player’s sporting career

78.

Subsequently, the DRC remarked that the Respondents also argued that the conditions
established in the CASD Agreement for the 17-months-delayed transfer of the Player
granted an unfair and imbalanced advantage to Lugano, as well as endangered the
Player’s sporting career.

79.

In this regard, the Chamber initially recalled that there is no regulatory restriction to the
parties’ contractual freedom to conclude an employment contract 17 months in advance,
provided that this is done with the consent of the player and the two clubs involved in the
transaction, where applicable. In casu, the Respondents did not point out nor provide any
documentation suggesting duress and/or lack of consent by the Player with the future
transfer and/or employment by Lugano. In fact, neither Lugano nor the Player explained
the reason for such a transaction, which the Chamber deemed to be in any event within
the boundaries of their contractual freedom.

80.

Consequently, the DRC could not follow the Respondents’ argumentation concerning the
unfairness of the CASD Agreement in abstract. Put differently, the Chamber determined
that the Respondents did not advance any evidence that by signing the Lugano
Employment Contract in advance, Lugano made use of a dominant position and/or
structural advantage to the Player’s detriment.

81.

Notwithstanding the above, when considering the concrete scenario at hand i.e., the limbo
between the termination of the Player’s employment with CASD in October 2022 and the
new employment with Lugano in July 2023; the DRC considered that the Respondents’
position concerning obstacle to the Player’s sporting career could indeed be arguable.
Taking the specificity of a footballer’s profession into account, the Chamber was of the
opinion that a pause of around 7 months could be deemed far excessive for the Player to
remain unemployed.

82.

Nevertheless, the DRC found it essential that the Respondents’ defence misses one crucial
point: whilst the Chamber concurred that the Player had no fault in the relegation of CASD,
there was no evidence whatsoever suggesting that Lugano was somehow responsible for
the consequences thereto, let alone the party in breach. In other words, the DRC found
that the Respondents did not demonstrate that they (or at least the Player) ever tried to
contact Lugano to find an amicable solution, being that finding a temporary employment,

pg. 22

REF. FPSD-12515

entering into a loan agreement, anticipating, postponing, or altering the terms of the
Lugano Employment Contract in any manner.
83.

The Respondents remarked that Lugano could have anticipated the Player’s arrival per
clause 2.1 of the CASD Agreement, however, once again, the Chamber found no evidence
on file corroborating that such possibility was even discussed between the Parties. This
was without forgetting that such anticipation was not anyhow mandatory, but facultative
to Lugano, insofar as it could legitimately have other sporting plans for such season
and/or a squad and registration limitations.

84.

Despite alleging bad faith, the DRC added that the Respondents equally failed to prove
that Lugano adopted a controversial behaviour towards the Player. The only allegation of
the Respondents in this respect concerns the attempted transfer of the Player to the
Major League Soccer (MLS) against his free will. However, the DRC highlighted that the
unique evidence in this respect (i.e., a disputed WhatsApp conversation between the
representatives of Lugano and the Player), in its view, does not alone support the
existence of bad faith by Lugano, but rather a frustrated attempt to solve the problem in
a way of preserving the interests of both parties.

85.

Consequently, the Chamber was of the opinion that the Respondents failed to advance
any documentation corroborating that Lugano was indeed acting in a problematical
manner against the Player. Likewise, the DRC found no proof that such behaviour (even if
existent) was severe enough to justify the abrupt termination or the departure from
execution of the Lugano Employment Contract as an ultima ratio measure in line with the
well-established jurisprudence of the Football Tribunal.

86.

Therefore, the DRC concluded that the Respondents’ position in this respect should also
be dismissed.
(iv)

87.

Interim conclusion

All in all, the Chamber decided that none of the arguments put forward by the
Respondents against Lugano’s right to enjoy the Player’s services stands. Therefore, the
DRC determined that the Lugano Employment Contract was terminated by the Player on
15 January 2023 without just cause.
C. If affirmative, what are the consequences that follow from such termination?

88. Having stated the above, the Chamber turned its attention to the question of the
consequences of the unjustified breach of contract committed by the Player.
(i)

Outstanding remuneration

pg. 23

REF. FPSD-12515

89.

Initially, once established that the Lugano Employment Contract never came into force,
the Chamber firstly determined that no outstanding remuneration was owed to the
Player.

(ii)

Compensation for breach of contract

90.

In continuation, the Chamber established that Lugano should be entitled to compensation
for breach of contract.

91.

In doing so, 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, the fees and expenses paid or incurred by the former club
(amortised over the term of the contract) and depending on whether the contractual
breach falls within the protected period.

92.

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.

93.

In this connection, the Chamber noted that Lugano referred to the liquidated damages
clause included in the CASD Agreement as the basis for the calculation. For ease of
reference, the Chamber recalled that such provision reads as follows:
“3. Breach & Liquidated damages clause
3.1. In the event that condition under clause 2.2, let. a) (ITC release by the FEF), shall not
have been satisfied by such date, i.e. 10.07.2023, due to culpable and/or reckless and/or
negligent conduct of [CASD] either actively or passively, then the present Contract shall
be automatically terminated and of no effect and [Lugano] shall be entitled to USD
325,000 (three hundred twenty-five thousand US Dollar) (“Liquidated Damages”) payable
within 10 days.
3.2. [CASD] or the Player respectively shall be deemed to be in breach of the present
Contract and therefore jointly and severally liable to pay the Liquidated Damages (save
for cases in which the liability of a unique party is clear and evident), including but not
limited to the following cases:

pg. 24

REF. FPSD-12515

a) The Player is transferred from [CASD] to a third club on a permanent basis prior to
Transfer Date;
b) The Player is transferred to a third club on a temporary basis for a Loan Period
overtaking 1st July 2023;
c) [CASD] and the Player enter into a Termination Agreement prior to Transfer Date,
preventing [Lugano] from registering the Player as of 1st July 2023;
d) The Player has been disqualified, suspended or banned for a period longer than 6
months and is thus not able to perform his duty/services in favour of [Lugano] at the
Transfer Date due to (i) a disqualification, a suspension, a ban (ii) and/or in case of
termination of his Employment Contract with [CASD] for any reasons;
e) [CASD] induces or causes the Player to unilaterally terminate the Employment
Contract prior to Transfer Date. In turn, the Player terminates without just cause the
Employment Contract with [CASD];
f)

[CASD] loses for non-pure sporting reasons its affiliation to a category where is
entitled to keep the Employment Contract with the Player and therefore the Player
becomes free agent. In case this happens for sporting reasons, the Parties shall have
the duty to liaise each other and decide how to proceed in order to respect the right
of [CASD] to obtain the Player’s permanent registration.

3.3. [Lugano], the Player and [CASD] agree that in the event [CASD] and/or the Player
fails to comply with clause 2.2 let. a) of the present Contract and/or in case of breach of
the present Contract, [Lugano] ś damages would be uncertain and difficult (if not
impossible) to accurately estimate because of the parties ́ inability to predict future.
Accordingly, [Lugano], the Player and [CASD] agree that any fees, balance adjustments,
default interest or other charges assessed under clause 3 are not penalties but instead
are intended by the Parties to be, and shall be deemed, liquidated damages.
3.4. Where the loss or damage suffered by [Lugano] exceeds the afore said amount,
[Lugano] could ask [CASD] for further compensation.
3.5. Besides, [Lugano] will be entitled to obtain from [CASD] the reimbursement, within
10 (ten) days after written notification, of all the Instalments that would have been paid
as a Fixed Transfer Fee in case of the non-fulfilment of the Conditions Precedent Transfer
provided for in clause 2.2 let. a), b) and c). Any delay in the reimbursement will be subject
to an interest of 7% (seven per cent) per year from the original date of payment by
[Lugano] until the complete and effective payment by [CASD]. For the sake of clarity, if
the failure to comply with the clause 2.2 let (a) is due to culpable and/or reckless and/or

pg. 25

REF. FPSD-12515

negligent conduct on the part of [CASD], whether actively or passively, only the
Liquidated Damages shall be applicable and due as per clause 3.1.”
94.

Nevertheless, while considering the above, the DRC was of the opinion that such provision
concerned a potential breach of the CASD Agreement by the Player and/or CASD.
Consequently, it was not intended to address the premature termination of the Lugano
Employment Contract, as in the Chamber’s ruling for the case at hand.

95.

Consequently, the DRC established that clause 3.2 of the CASD Agreement was not
applicable, hence that the compensation to Lugano should be calculated based on the
other elements mentioned in art. 17 of the Regulations.

96.

Bearing in mind the foregoing as well as the claim of Lugano, the Chamber proceeded
with the calculation of the monies payable to the Player under the terms of the Lugano
Employment Contract. Consequently, the Chamber concluded that the amount of CHF
266,400 serves as the basis for the determination of the amount of compensation for
breach of contract, broken down as follows:
•

CHF 44,400 as the salaries and accommodation allowance from July until
December 2023 (i.e., 6 months à CHF 7,400 each);

•

CHF 88,800 as the salaries and accommodation allowance from January until
December 2024 (i.e., 12 months à CHF 7,400 each);

•

CHF 88,800 as the salaries and accommodation allowance from January until
December 2025 (i.e., 12 months à CHF 7,400 each);

•

CHF 44,400 as the salaries and accommodation allowance from January until
June 2026 (i.e., 6 months à CHF 7,400 each).

97.

In continuation, the Chamber recalled that according to its constant practice as well as
art. 17 par. 1 of the Regulations, the remuneration under any new employment contract
signed by the player shall be taken into account in the calculation of the amount of
compensation for breach of contract due to his former club. In particular, the Chamber
explained that its standard practice is to calculate the average between the Player’s
remuneration with his former club and his remuneration with the new club, for the exact
same period of time comprised between the early termination of the employment
contract with the old club and the original expiry date of such contract.

98.

In this respect, the Chamber confirmed that the Player found new employment with LDU.
Furthermore, in accordance with the LDU Employment Contract, the Player was entitled
to approximately USD 1,500 per month between July 2023 until July 2025, comprising both
the salary and bonuses.

pg. 26

REF. FPSD-12515

99.

Bearing in mind that the terms of the Lugano Employment Contract and the LDU
Employment Contract were not the same and, in particular, the LDU Employment
Contract was signed for a shorter period, the DRC determined that the latter should be
fictionally extended to meet the duration of the Lugano Employment Contract (i.e., from
January 2024 until July 2026) so that the calculation was done properly.

100. Accordingly, the DRC established that the value of the LDU Employment Contract totalled
approx. USD 54,000 or CHF 50,043.10, using the conversion rate for 15 January 2023 i.e.,
the date of signature of the LDU Employment Contract. Such sum was broken down by
the Chamber as follows:
•

USD 9,000 as the monthly remuneration (salary plus prima) from July 2023 until
December 2023 (i.e., 6 months à USD 1,500 each);

•

USD 18,000 as the monthly remuneration (salary plus prima) from January until
December 2024 (i.e., 12 months à USD 1,500 each);

•

USD 10,500 as the monthly remuneration (salary plus prima) from January until
July 2025 (i.e., 7 months à USD 1,500 each);

•

Fictional extension: USD 16,500 as the monthly remuneration (salary plus prima)
from August 2025 until December 2026 (i.e., 11 months à USD 1,500 each).

101. Thus, the Chamber concluded that between the date of early termination of the Lugano
Employment Contract and its original expiry date, the average between his remuneration
with the Lugano and his current remuneration with LDU amounts to CHF 158,221.55 (i.e.,
CHF 266,400 plus CHF 50,043.10, then divided by two).
102. Subsequently, the Chamber recalled that per its jurisprudence, in case substantial
evidence thereof is provided by the club, the Chamber might additionally grant the
damaged club the non-amortised transfer fee paid for the player in breach. In this respect,
the Chamber acknowledged that Lugano paid a transfer fee of USD 95,600 to CASD, which
the latter now claimed to be entitled as part of the compensation.
103. Nevertheless, in view of the particularities of the case and the contents of the CASD
Agreement, the Chamber was not satisfactorily convinced that such costs should indeed
be borne by the Respondents. In particular, the DRC was of the opinion that because of
the sui generis constellation involving CASD’s relegation and the consequent loss of the
Player’s registration rights, Lugano could still be entitled to seek relief against CASD (cf.
clause 3 of the CASD Agreement) in that holding the Player liable to the payment of the
non-amortized transfer fee paid by Lugano would amount to unjust enrichment.
Therefore, the DRC decided that this part of the claim be rejected.

pg. 27

REF. FPSD-12515

104. The DRC also rejected Lugano’s claim for additional compensation based on the specificity
of sport. The Chamber recalled, to this extent, that the specificity of sport has only been
cited as grounds for adjusting compensation payments in a handful of cases in recent
years.
105. In particular, the DRC recalled that the Commentary on the Regulations on the Status and
Transfer of Players – Edition 2023 (pages 180-1) states inter alia the following on this topic
(emphasis added by the DRC):
“The main effect of including this wording in article 17 is to allow the DRC a certain
margin of appreciation to possibly adjust its decisions to reflect specific principles
that are applicable to sport in general (and to football in particular), or that protect
the interests of the parties in view of the peculiar circumstances of the football industry.
[...]
For the avoidance of doubt, inviting the DRC or CAS to take due account of the specificity
of sport is not the same as giving a justification for handing down rulings that do not
comply with the Regulations, the FIFA Statutes and other FIFA regulations, general
principles of (contract) law or, where applicable, Swiss law. First and foremost, the
compensation payable in each individual case should be calculated exclusively in
line with the other objective criteria provided for by the Regulations. Only once an
amount of compensation has been established on this basis is the specificity of
sport duly considered, along with any particularities or case-specific aspects which
could justify an adjustment of the compensation calculated in accordance with the
Regulations. Such factors might include, but are not limited to: extraordinarily poor
behaviour by the party at fault (particularly where it has a sporting effect); the time at
which the contract was prematurely terminated in relation to the existing and applicable
registration periods; the player’s role in the squad (regardless of whether the player or
the club is in breach of contract); the level of commitment shown by the player to the club
prior to the early termination (again, regardless of whether it is the player or the club in
breach of contract); the difference between the player’s previous and current salaries,
and various other factors. These factors, as is obvious, are all sporting factors specifically
related to football”.
106. With the above in mind, the Chamber did not find in the case at hand any such reason(s)
that would justify awarding the additional compensation sought, especially when
considering the high threshold set out in the jurisprudence of the Football Tribunal and
the Court of Arbitration for Sport (CAS).
107. By the same token, the Chamber determined that Lugano’s reference to the Player’s
market value as a criterion for the calculation of the compensation was of speculative
nature only and not backup by compelling documentation, hence disregarded.

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REF. FPSD-12515

108. On account of all the abovementioned considerations and the specificities of the case at
hand, the Chamber decided that the Player must pay the amount of CHF 158,221.55 to
Lugano, which was to be considered a reasonable and justified amount of compensation
for breach of contract in the present matter.
109. Taking into consideration Lugano’s request as well as the constant practice of the
Chamber in this regard, the latter decided to award it interest on said compensation at
the rate of 5% p.a. as of the date of the termination (i.e., 15 January 2023) until the date of
effective payment.
110. Lastly, the Chamber decided that, in accordance with art. 17 par. 2 of the Regulations, LDU
shall be jointly and severally liable for the payment of the aforementioned amount of
compensation. The Chamber stressed in this regard that according to its consistent
jurisprudence, the joint and several liability of the professional player and their new club
is automatic. The new club will automatically be responsible, together with the player, for
paying compensation to the player’s former club, regardless of any involvement in, or
inducement to, the breach of contract. This means that the joint and several liability is not
dependent on any fault, guilt, or negligence on the part of the new club (see Commentary
on the Regulations on the Status and Transfer of Players – Edition 2023, page 206).
(iii)

Sporting sanctions

111. Lastly, the Chamber focused on the further consequences of the breach of contract in
question and, in this respect, it addressed the question of sporting sanctions against the
Player in accordance with art. 17 par. 3 of the Regulations. The cited provision stipulates
that, in addition to the obligation to pay compensation, sporting sanctions shall be
imposed on any player found to be in breach of contract during the protected period.
112. In this respect, the Chamber referred to item 7 of the “Definitions” section of the
Regulations, which stipulates, inter alia, that the protected period shall last “for three entire
seasons or three years, whichever comes first, following the entry into force of a contract, where
such contract is concluded prior to the 28th birthday of the professional, or two entire seasons
or two years, whichever comes first, following the entry into force of a contract, where such
contract is concluded after the 28th birthday of the professional”.
113. The DRC took note that the Player was born on 27 January 2004 and the Lugano
Employment Contract was concluded on 8 February 2022 starting its execution on 1 July
2023. Furthermore, the Chamber noted that the Player terminated such contract without
just cause on 15 January 2023.
114. Against this background, the Chamber was prompted to analyse whether the termination
occurred within the protected period as such act occurred before the Lugano Employment
Contract entered into force.

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REF. FPSD-12515

115. On this topic, the DRC was keen to emphasize that its jurisprudence is solid to establish
that an employment contract is binding on the parties as of its signature even if the start
of its execution would be at a later stage. In other words, the DRC stated that the ratio
legis behind this provision in the Regulations is to reinforce the contractual stability in the
first years of the contract irrespective if the breach occurred before or after its start of
execution. As such, it would be inconsistent with the purpose of the protected period to
put parties which breach a contract before it has entered into force in a better position
than those who do it only once the contract’s period of validity has already begun.
116. The Chamber stressed that the abovementioned conclusion has not only been reached
by the DRC in the past, but also by CAS. For instance, the Chamber recalled that in CAS
2009/A/1909 RCD Mallorca SAD & A. v. FIFA & UMM Salal SC, the panel established the
following as to the definition of the protected period (emphasis added by the DRC):
“6. It cannot be implied from the definition of the Protected Period that a breach
committed after the signature of the contract and before its entry into force is not
within the Protected Period. An employment contract is binding on the parties as
of its signature even if an initial deadline is set for its applicability. A breach before
that deadline (e.g., the day before), depriving the other party of the expected
performance promised by the party in breach, is not less serious than a breach after (e.g.,
the day after) the deadline. The rationale underlying the concept of Protected Period, i.e.
to reinforce the contractual stability in the first years of contract, applies to both
breaches.
7. Rules and regulations have to be interpreted in accordance with their real
meaning. This is true also in relation with the statutes and the regulations of an
association. There is a well accepted and consistent practice of the DRC not to apply
automatically a sanction as per art. 17 para. 3 of the FIFA Regulations. Such an
interpretation of the rationale of art. 17 para. 3 of the FIFA Regulations appears to be
consolidated practice and represents the real meaning of the provision as it is
interpreted, executed and followed within FIFA”.
117. The same rationale was also applied by the DRC in case FPSD-627, which was further
confirmed in CAS 2022/A/8600 Olympique de Marseille v. Watford Association Football Club
Limited & FIFA, CAS 2022/A/8604 Pape Alassane Gueye v. Watford Association Football Club
Limited & FIFA and CAS 2022/A/8633 Watford Association Football Club Limited v. Pape
Alassane Gueye & Olympique de Marseille. In said CAS Award, while coming across the
dispute as to whether sporting sanctions were applicable as a consequence of a breach
of contract that took place before the employment contract at the basis of the dispute
had entered into force, the panel established the following (emphasis added by the DRC):
“299. The Panel further notes that it does not consider a termination of contract without
just cause occurring after the signing but before the contractual period has started less

pg. 30

REF. FPSD-12515

serious than a termination of contract without just cause after the contractual period
has begun.
[...]
302. Based on the above, and on the ratio behind Article 22 (3) and (4) of the FIFA RSTP,
the Panel is satisfied that the protected period starts with the execution of the
contract, even if the contractual period has not yet begun.”
118. As a result, the Chamber concluded that the Player’s unlawful termination of the Lugano
Employment Contract had occurred within the protected period.
119. Having established the above, the DRC underlined that the imposition of sporting
sanctions on a given case is a serious and sensitive matter which has to be analysed
carefully taking into account all the circumstances and facts of the matter. Indeed, in spite
of its wording, art. 17 par. 3 of the Regulations only gives the DRC the discretion and not
the obligation to impose sporting sanctions on a player or club after an unjustified breach
of contract.
120. With the above in mind, the majority of the Chamber considered that the facts of this
matter indeed warrant the imposition of sporting sanctions on the Player.
121. In particular, the majority of the DRC concurred that the Player adopted a reprehensible
behaviour towards Lugano not only by departing from the execution of the Lugano
Employment Contract, but also by refraining from providing any warning or explanation
in this respect. In particular, the majority of the Chamber found it essential that Lugano
put the Player in default via email and WhatsApp in at least five different opportunities
and received no reply whatsoever. Likewise, the majority of the DRC held that even if the
Player considered that the Lugano Employment Contract was not valid and/or had been
automatically terminated with CASD’s relegation, the Player should have (at least) shared
his difference with Lugano.
122. Against such background, the majority of the DRC was firm to determine that parties who
simply refuse to honour a contract, purposely and without any valid reason need to be
held accountable, moreover if they sign a concomitant contract in breach of their former
commitment.
123. Consequently, taking into account the circumstances surrounding the present matter, the
majority of the Chamber decided that, by virtue of art. 17 par. 3 of the Regulations, the
Player had to be sanctioned with a restriction of four months on his eligibility to
participate in official matches.
124. In continuation, the Chamber turned its attention to the question of whether, in view of
art. 17, par. 4 of the Regulations, the Player’s new club, i.e., LDU, must be considered to

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REF. FPSD-12515

have induced the Player to unilaterally terminate the Lugano Employment Contract
without just cause during the protected period, and therefore shall be banned from
registering any new players, either nationally or internationally, for two entire and
consecutive registration periods.
125. In this respect, the Chamber recalled that, in accordance with such provision, it shall be
presumed, unless established to the contrary, that any club signing a professional player
who has terminated his previous contract without just cause has induced that
professional to commit a breach. Consequently, the Chamber pointed out that the party
that is presumed to have induced the player to commit a breach carries the burden to
demonstrate the contrary.
126. With that in mind, the Chamber determined that the LDU was not able to present any
compelling argumentation to rebut such presumption. Conversely, the Chamber deemed
that the evidence on file suggest that LDU was fully aware of the existence of Lugano
Employment Contract and even so decided to register the Player and, worst, enjoy his
services for an overlapping period. The DRC emphasized, in this respect, that LDU
undisputedly received the multiple default notices sent by Lugano and – alike the Player
– refrained from providing any answer and/or from seeking any type of dialog with the
counterparties. The Chamber even went further to observe that the same letters were
also forwarded to the FEF and the LPFE, which also supported its conclusion that LDU had
the means to react accordingly but failed to do so by its own choice.
127. In view of the above, the Chamber found no bearing in LDU’s allegation that it had no
previous knowledge of the contractual arrangement between the Player and Lugano.
Likewise, the DRC found it important to remark that in a complex industry as the football
market, clubs are required to be diligent while handling their business, as well as to act in
good faith towards each other – especially when it concerns the respect to the contractual
stability, the backbone of the entire transfer system. The DRC underlined that no evidence
of this required diligence has been produced by LDU in these proceedings.
128. Therefore, the Chamber decided that LDU was not able to reverse the presumption
contained in art. 17 par. 4 of the Regulations. It followed that LDU was deemed to have
induced the Player to terminate the Lugano Employment Contact, hence shall be banned
from registering any new players, either nationally or internationally, for the two next
entire and consecutive registration periods following the notification.
ii. Outcome and compliance with the decision
129. By way of conclusion, the Chamber unanimously decided to partially accept the claim of
Lugano and to order the Player and LDU to, jointly and severally, pay to Lugano the
amount of CHF 158,221.55 as compensation plus 5% interest p.a. from 15 January 2023
until the date of effective payment.

pg. 32

REF. FPSD-12515

130. By majority decision of the DRC:
•

A restriction of four months on his eligibility to play in official matches is imposed
on the Player. This sanction applies with immediate effect as of the date of
notification of the present decision. The sporting sanctions shall remain
suspended in the period between the last official match of the season and the first
official match of the next season, in both cases including national cups and
international championships for clubs.

•

LDU 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.

131. Lastly, the Chamber referred to art. 24 par. 1 and 2 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.
132. Notwithstanding the above, the DRC wished to remark that in accordance with art. 24 par.
3 of the Regulations, the aforementioned consequences may be excluded where the
pertinent FIFA deciding body has already imposed on the same party a sporting sanction
on the basis of art. 12bis, 17 or 18quater of the Regulations.
133. Accordingly, the Chamber established that in casu art. 24 par. 2 of the Regulations shall
apply, insofar as in case the player fails to comply with the decision at hand, the
application of a further restriction on playing in official matches up until the due amounts
are paid would be moot and against the spirit of the Regulations, in particularly the
enforcement mechanism.
134. The same reasoning applies, mutatis mutantis, to the obligation of LDU to pay the
compensation vis-à-vis the imposition of a further registration ban.
135. In view of the above, the DRC decided that if the aforementioned sum plus interest is not
paid within 30 days of notification of this decision, the present matter shall be submitted,
upon request of Lugano, to the FIFA Disciplinary Committee for its consideration and
formal decision.
136. Payment shall be made in full (including all applicable interest) to the bank account
provided by the Claimant in the Bank Account Registration Form, which is attached to the
present decision.

d. Costs

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REF. FPSD-12515

137. The Chamber referred to art. 25 par. 1 of the Procedural Rules, according to which
“Procedures are free of charge where at least one of the parties is a player, coach, football
agent, or match agent”. Accordingly, the Chamber decided that no procedural costs were
to be imposed on the Parties.
138. Likewise, and for the sake of completeness, the Chamber recalled the contents of art. 25
par. 8 of the Procedural Rules and decided that no procedural compensation shall be
awarded in these proceedings.
139. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made
by any of the Parties.

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REF. FPSD-12515

IV. Decision of the Dispute Resolution Chamber
1.

The claim of the Claimant, FC Lugano, is partially accepted.

2.

The Respondent 1, Jairón Andrés Charcopa Cabezas, has to pay to the Claimant CHF
158,221.55 as compensation for breach of contract without just cause plus 5%
interest p.a. as from 15 January 2023 until the date of effective payment.

3.

The Respondent 2, L.D.U. Quito, is jointly and severally liable for the payment of the
aforementioned compensation.

4.

Any further claims of the Claimant are rejected.

5.

Full payment (including all applicable interest) shall be made to the bank account indicated
in the enclosed Bank Account Registration Form.

6.

If the aforementioned sum plus interest is not paid within 30 days of notification of this
decision, the present matter shall be submitted, upon request, to the FIFA Disciplinary
Committee for its consideration and formal decision.

7.

A restriction of four months on his eligibility to play in official matches is imposed on the
Respondent 1. This sanction applies with immediate effect as of the date of notification of
the present decision. The sporting sanctions shall remain suspended in the period between
the last official match of the season and the first official match of the next season, in both
cases including national cups and international championships for clubs.

8.

The Respondent 2 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.

9.

This decision is rendered without costs.

For the Football Tribunal:

Emilio García Silvero
Chief Legal & Compliance Officer

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REF. FPSD-12515

NOTE RELATED TO THE APPEAL PROCEDURE:
According to art. 57 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. art. 17 of the Procedural Rules Governing the Football
Tribunal).
CONTACT INFORMATION
Fédération Internationale de Football Association
FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | [email protected] | T: +41 (0)43 222 7777

pg. 36