Labour Disputes
Texto da decisão
REF FPSD-3123
Decision of the
Dispute Resolution Chamber
passed on 13 January 2022
regarding a contractual dispute concerning the player Pedro Henrique de
Oliveira Correia
COMPOSITION:
Frans de Weger (Netherlands), Chairperson
Sihon Gauci (Malta), member
Laurel Vaurasi (Fiji), member
CLAIMANT:
CD Nacional, Portugal
Represented by João Marques
RESPONDENT:
Pedro Henrique de Oliveira Correia, Brazil
Represented by Rafael Queiroz Botelho, Flávio Rodrigues Torres and Vinicius Eduardo
Lucilio
INTERVENING PARTY:
Sociedade Esportiva Palmeiras, Brazil
Represented by CSMV Advogados
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I.
Facts of the case
1.
On 14 August 2020, the Brazilian club SE Palmeiras (hereinafter: Palmeiras or the Intervening
Party) and the Portuguese club CD Nacional (hereinafter: Nacional or the Claimant) entered a
loan agreement for the temporary transfer of the Brazilian player Pedro Henrique de Oliveira
Correia (hereinafter: the player or the Respondent) from the Intervening Party to the Claimant,
until 30 June 2021 (hereinafter: the loan agreement).
2.
Pursuant to clause 6 of the loan agreement, the Claimant and the Intervening Party agreed
on the following “purchase option” in favour of the Claimant:
“6. OPTION TO BUY
6.1
It is hereby agreed that [Nacional] will have the option to acquire permanently 70% (seventy
percent) of PLAYER’S federative and economic rights from PALMEIRAS (hereinafter the
“Option to Buy”) by paying to PALMEIRAS the total net amount of EUR 600.000,00 (sixty
hundred thousand Euros), in one (1) installment, as follows.
6.1.1
The amount of the Option to buy shall include FIFA Solidarity Mechanism and Training
Compensation but it’s free of any withholding, including with taxes, charges, retentions and
banking charges.
6.1.2
[Nacional] shall elect to use the Option at any time during the terms of this agreement until
June 15th, 2021, provided it informs Palmeiras of the desire to do so in writing in advance.
6.1.3
Once [Nacional] has used the Option to buy and Palmeiras has agreed to it, [Nacional] shall
wire to Palmeiras’ bank account described below the amount stipulated in clause 6.1 above
within 5 (five) days. Once the value is duly wired, Palmeiras shall input within 10 (ten) days in
the FIFA’s TMS the data relating to the present transfer in order to allow the issuance of
Player’s ITC by the CBF.”
3.
Furthermore, pursuant to clause 14 of the loan agreement:
“14. CONSENT
The Player hereby expressly and irrevocably consents to all of the terms and conditions
contained within this Agreement.”
4.
Accordingly, on 18 August 2020, the Claimant and the Respondent concluded an
employment contract valid as of said date until the “end of the Portuguese sporting season
2020/2021” (hereinafter: the employment agreement).
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5.
Contextually to the conclusion of the employment agreement on 18 August 2020, the
Claimant and the Respondent stipulated an “additional agreement” which, under clause 3,
foresaw the following (hereinafter: the additional agreement):
“THIRD:
I.
The parties agree on the automatic renewal of this contract for another four sporting
seasons, if CD Nacional Futebol SAD activates the option provided for in the transfer
contract entered into with Sociedade Esportiva Palmeiras.
II.
In the event that the condition provided for in the preceding paragraph is verified, the
following salary conditions will apply to the renewed contract:
• Sporting season 2021/2022 – annual net salary of 65.000,00€;
• Sporting season 2022/2023 – annual net salary of 70.000,00€;
• Sporting season 2023/2024 – annual net salary of 75.000,00€;
• Sporting season 2024/2025 – annual net salary of 80.000,00€
This agreement is valid for a sporting season and ends in accordance with the employment
contract and whenever it expires or is terminated, and in the case of renewal, it is considered
extended for the respective period.“
6.
On 19 May 2021, as fixed by the Federação Portuguesa de Futebol (FPF), the football season
2020/2021 ended.
7.
At the end of the abovementioned sporting season, the Respondent had participated in 31
matches with the Claimant’s team.
8.
On 9 June 2021, the Claimant informed the Intervening Party that it would exercise the option
to buy 70% of the Respondent’s economic rights in accordance with clause 6 of the loan
agreement. The Claimant therefore requested the Intervening Party to issue the pertinent
invoice.
9.
On the same date, the Intervening Party acknowledged receipt of the Claimant’s
communication and contextually requested proof of the Respondent’s acceptance to be
engaged by Nacional on a permanent basis before issuing the relevant invoice. The entire
content of Palmeiras’ message is reproduced below (quoted verbatim):
“Dear Sirs,
I hope you are well.
We acknowledge receipt of the letter. In order Palmeiras to send the invoice and for the
execution of the purchase option, we kindly ask you to demonstrate the “agreement” of the
athlete Pedro Henrique de Oliveira Correia in the operation.
Continuosly, Palmeiras will adopt all contractually provided measures, including the sending
of the invoice”.
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10. Still on 9 June 2021, the player informed the Claimant inter alia as follows: “I expressly
communicate and prior to the payment of any amount by the CD National to Palmeiras, that
I will not accept the automatic renewal of the work contract in the terms and conditions set
out in the additional agreement. In any case, I place myself at the disposal of the CD Nacional
so that the conditions for eventual renewal of the referred contract”. More in particular, the
player indicated that he was not in agreement with the automatic renewal of the employment
contract with Nacional because he did not recognize the validity the aforementioned clause
3 of the additional agreement, namely “since it refers to a unilateral extension option”.
11. On 10 June 2021, Palmeiras sent an invoice for EUR 570,000 to Nacional, expressly referring
to the player, clause 6.1 of the loan agreement and “option to buy” for EUR 600,000, minus
EUR 30,000 as deduction of 5% as “solidarity mechanism”. The invoice is dated 9 June 2021.
12. Accordingly, on 14 June 2021, the Claimant informed the Intervening Party of the
impossibility to trigger the purchase option contained under clause 6 of the loan agreement,
due to the Respondent’s refusal to accept the consequent contractual extension. The
Claimant also indicated the following (quoted verbatim): “Furthermore, given that the athlete
Pedro Henrique de Oliveira Correia violated, in a gross manner, a contractual commitment
assumed by you and that this breach results in substantial losses sports and financial for Clube
Desportivo Nacional Futebol SAD, we reserve the right to take legal action against the athlete
with the Portuguese Football Federation and other bodies FIFA’s courts”.
13. On the same date, Palmeiras granted Nacional with 3 additional days (i.e. until 17 June 2021)
in order to promote a reconsideration between the parties of the alleged impediments to the
exercise of the option to buy stipulated under the loan agreement, to no avail.
14. Eventually, the player moved back to the Intervening Party following the natural expiry of the
loan agreement and on 18 July 2021 was transferred on loan to a third club in Portugal.
II. Proceedings before FIFA
15. On 23 July 2021, the Claimant filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a. Position of the Claimant
16. According to the Claimant, the Respondent failed to comply with clause 3 of the loan
agreement to the extent that said clause provided for a unilateral extension option in favour
of the Claimant.
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17. In fact, In the Claimant’s view, the Respondent would have no faculty to refuse the extension
of the employment relationship with the Claimant because, even if unilateral, said extension
option had been drafted in order to be perfectly valid and coherent with the jurisprudence
on the matter.
18. In support of his argument, the Claimant alleged that:
i. the extension option was exercised almost 1 month before the expiry of the
employment contract and the loan agreement;
ii. the player’s salary for the following 3 seasons had already been defined in
the contract and corresponded to a substantial salary increase;
iii. the plater was clearly aware of said unilateral option in favour of the
Claimant;
iv. the player had been assisted by a professional intermediary at the moment
of negotiating and signing both the employment contract and the
additional agreement.
19. In view of the above, the Claimant is of the opinion that the total duration of the contractual
relationship after the activation of the abovementioned clause 3 would still be reasonable as
well as the ensuing terms and conditions of employment which were fair and adequately
reflecting the Claimant’s right to unilaterally extend the employment contract without further
negotiations with the Respondent.
20. As a consequence of the above, the Claimant argued that the Respondent’s refusal to comply
with its contractual obligations caused a termination without just cause by the latter and
must, therefore, give rise to compensation.
21. In this context, the Claimant argued that such compensation shall correspond at least to the
value that the Respondent had at the time of the refusal in the football market, hence in casu
it shall amount to EUR 600,000.
22. Accordingly, the request for relief of the Claimant was that the player be ordered to pay EUR
600,000 with 5% interest p.a. as of the date in which the Respondent allegedly terminated
the Contract without just cause.
b. Position of Respondent
23. Conversely to what held by the Claimant, the Respondent objected to the validity of the
unilateral extension clause contained under clause 3 of the additional agreement.
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24. In this respect, the Respondent argued that said clause would not fall within the minimum
requirements for a unilateral extension option to be considered valid and effective, as it failed
to observe at least three essential conditions.
25. First of all, according to the Respondent, the fact that the Claimant informed the Intervening
Party about its decision to activate the option only 21 days after the conclusion of the
competition in Portugal (i.e. 9 June 2021) would already prove that the Claimant did not
respect an acceptable deadline.
26. Secondly, the Respondent referred to the financial terms set under art. 2 of the employment
contract, and argued that the effective salary increase adopted by the Claimant would have
corresponded to a mere 4%.
27. In fact, the Respondent pointed out that under the mentioned art. 2 he would have received
EUR 39,895.24 as salary during the 2020/2021 season plus further EUR 32,831.74 as
remuneration stipulated under art. 13 for the use of his image rights. Thus, the Respondent
alleged to have received the total gross amount of EUR 72.726,71 for the 2020/2021 season,
which, given the average tax rate of 25% for foreigners in this salary range, would correspond
approximately to EUR 55,000 net for 10.5 months (i.e. from 18 August 2020 until 30 June
2021) during the 2020/2021 season, which however should be prorated for 12 months
(55,000/10.5*12), so corresponding to approximately EUR 62,000.
28. Thirdly, the Respondent held that because of the original duration of the employment
relationship (i.e. 10 months ca.), an extension of 4 years would result totally disproportionate,
therefore also under this point of view the aforementioned clause 3 shall be deemed to be
invalid.
29. Accordingly, the Respondent requested FIFA to reject the claim in its entirety.
30. In a subsidiary way, the Respondent argued that in case the unilateral extension clause would
have been deemed as valid by the DRC, then the maximum compensation to be awarded to
the Claimant shall amount to EUR 290,000 as such sum would correspond to the overall
remuneration stipulated under the employment contract and the additional agreement.
c. Position of Intervening Party
31. On the basis of article 9 par. 4 of the Rules Governing the Procedures of the Football Tribunal,
FIFA requested the intervention of Palmeiras as a party to the proceedings, and to file its
position to the Claimant’s claim.
32. The Intervening Party denied having induced Respondent to refuse the extension of his
employment relationship with the Claimant.
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33. In this respect, the Intervening Party argued that the activation of the purchase option by the
Claimant would have instead granted it a significant financial benefit, therefore the refusal
of Respondent to extend the employment relationship with the Claimant was against
Intervening Party’s interest, and for this reason it would appear illogical any conduct held by
the latter aiming at inducing Respondent to deny the activation of the aforementioned
option.
34. As a further corroboration of the above, the Intervening Party highlighted the fact that it had
to bear unforeseen expenses by re-admitting a player who was not in the head coach’s plan
and eventually had to find an alternative solution by transferring Respondent on loan to a
third club after just one month.
35. In conclusion, the Intervening Party alleged to have been the most affected stakeholder in
casu, as it suffered a significant loss, and for this reason its jointly liability shall be excluded.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
36. 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 presented to FIFA on 23 July 2021 and submitted for decision on
13 January 2022. Taking into account the wording of art. 34 of the October 2021 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.
37. Subsequently, the members of 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 lit. b) of the
Regulations on the Status and Transfer of Players (August 2021 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 Brazilian player and
a Portuguese club, with the involvement of a Brazilian club.
38. Subsequently, the Chamber analysed which regulations should be applicable as to the
substance of the matter. In this respect, it confirmed that, in accordance with art. 26 par. 1
and 2 of the Regulations on the Status and Transfer of Player (August 2021 edition), and
considering that the present claim was lodged on 23 July 2021, the February 2021 edition of
said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the
substance.
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b. Burden of proof
39. 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
40. Its 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.
41. The Chamber moved to the substance of the matter, and took note of the fact that the parties
strongly dispute the validity of the unilateral extension option stipulated in favour of the
Claimant under art. 3 of the additional agreement.
42. In this context, the Chamber wished to recall that “unilateral extension options”, as the
expression almost self-explanatorily demonstrates, are clauses commonly inserted in
employment contracts between footballers and clubs which allow one of the parties – usually
the club – to unilaterally extend the term of the contract for a certain period.
43. In other words, such a clause would allow a party to decide, without the need of further
consent from the other (except the one given at the time of entering into the employment
agreement), to lengthen their labour relation.
44. In this context, the Chamber wished to remark that the reason for the existence of such
contractual mechanism in football is not hard to find. In fact, as clubs are frequently hiring
new players (and consequently dismissing others), it is likely or even predictable that some
athletes will not succeed at their new clubs. If players do succeed, however, clubs do not
want to risk losing such an important sporting and economic asset without the corresponding
compensation – especially considering art. 18 (3) of the Regulations according to which a
player can sign a contract with a new club if his or her contract is due to expire within six
months.
45. Bearing in mind the above, it seemed to the DRC that the Respondent’s further consent did
not appear to be necessary, especially because of the contents of art. 14 under the loan
agreement as well as the wording of the additional agreement.
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46. Against this background, and before assessing the validity of the unilateral extension option
established under the auspices the additional agreement, the DRC drew its attention to the
following facts:
a. Clause 6.1.3 of the loan agreement reads that Nacional’s option to acquire the player’s
services on a permanent basis must be “accepted by Palmeiras”;
b. Clause Third of the additional agreement established that the extension of the employment
agreement for 4 seasons would take place “if [Nacional] activates the option provided for in
the [loan agreement]”;
c. The Claimant acknowledged in its letter on 16 June 2021 that “the acceptance of the
athlete being an essential condition for the conclusion of the business between [Nacional]
and [Palmeiras], we hereby communicate to definitive impossibility of concluding the
acquisition of part of the economic rights of the athlete”.
47. At the same time, the Chamber noted that clause 6.1.3 of the loan agreement subjected the
execution of the option to buy (a) to the acceptance of Intervening Party and (b) to the
consequent payment by the Claimant. This derives, in the Chamber’s view, from the
unambiguous contents of said the clause and clause 6 of the loan agreement as a whole,
which established, step by step, the necessary arrangements for the exercise and execution
of the option included therein.
48. In this context, the DRC observed that Palmeiras’ further consent does seem to have been
given insofar as it issued the relevant invoice, albeit subject to a condition that did not appear
to be further necessary - i.e. the player’s consent. Conversely, the payment which Nacional
was obliged to perform was undisputedly never made.
49. The Chamber moreover highlighted the fact that, by letter dated 14 June 2021, the Claimant
itself recognized that the acquisition of the Respondent’s services could not be completed,
which in the Chamber’s view constitutes a clear recognition by the same Claimant that the
extension option was thus never fully carried out. The Chamber pointed out that for reasons
it finds not entirely clear, the Claimant, in spite of already possessing the player’s previous
consent and the relevant invoice issued by Palmeiras, did not perform the payment agreed
between the parties in the loan agreement, but instead sought the player’s consent again,
failing which it deemed the deal could not be concluded.
50. As a consequence of the foregoing considerations, the Chamber concluded that only in case
the Claimant had proceeded to pay the Intervening Party, then the conditions precedent set
for the option to buy agreed between the parties in the loan agreement would have been
triggered – consequently activating the unilateral extension option established under the
additional agreement. Put differently, because no payment was ever made by Nacional to
Palmeiras, the option inserted in the loan agreement was never fully and properly exercised,
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preventing equally the exercise of the unilateral extension of the employment agreement as
per the additional agreement.
51. Therefore, the DRC established that irrespective if the concerned unilateral extension option
was valid or not, the Respondent was free to move back to Intervening Party at the expiry of
the relevant employment agreement, insofar as the Claimant never properly exercised the
option under the loan agreement and it expired naturally.
52. The DRC concluded accordingly that this alone suffices to reject the Claimant’s claim in its
entirety. The Chamber hence does not need to enter into the analysis if the unilateral
extension option was valid or not and it consequently makes no finding in connection thereto.
d. Costs
53. 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.
54. 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.
55. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by
any of the parties.
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IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, CD Nacional, is rejected.
2. This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
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NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 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. article 17 of the Procedural Rules).
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