Labour Disputes
Texto da decisão
REF FPSD-4883
Decision of the
Dispute Resolution Chamber
passed on 5 May 2022
regarding an employment-related dispute concerning the player Ola
Williams Kamara
COMPOSITION:
Frans de Weger (the Netherlands), Chairperson
Khadija Timera (Senegal), member
Khalid Awad Al-Thebity (Saudi Arabia), member
CLAIMANT:
Ola Williams Kamara, Norway
Represented by Luis Eduardo Torres Septién Warren and José María
Zayas Prado
RESPONDENT:
Shenzhen FC, China PR
Represented by Tomas Pereda
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REF FPSD-4883
I.
Facts of the case
1.
On, 26 February 2019, the Norwegian player (hereinafter: the Claimant) and the Chinese club
Shenzhen FC (hereinafter: the Respondent) concluded an employment contract (hereinafter:
“the contract”) valid from 26 February 2019 until 31 December 2020.
2.
On 2 August 2019, the parties decided to mutually terminate the contract and accordingly
concluded a settlement agreement (hereinafter: the settlement agreement).
3.
According to the settlement agreement, the Respondent undertook to pay to the Claimant a
total amount of EUR 5,100,000 in four instalments, as follows:
-
4.
EUR 1,800,000 net, on or before 30 August 2019;
EUR 1,800,000 net, on or before 30 September 2019;
EUR 1,000,000 net, on or before 30 April 2020;
EUR 500,000 net, on or before 30 April 2021.
Clause 2 of the settlement agreement established that:
“This agreement is conditioned to the Player entering into an employment contract with the
team in the membership of Major League Soccer, L.L.C. within 7 August 2019 (…)”.
5.
Pursuant to clause 4 of the settlement agreement:
“The Parties acknowledge and confirm that the payment of the Settlement Amount shall apply
a grace period of ten (10) days, which shall start counting from the following day after the
Club receives notice of default from Player. In case of failure to pay within such deadline, the
Club shall pay an additional penalty of 10% on a monthly basis for such part of payment
6.
Clause 6 of the settlement agreement stipulated:
“The Club agrees it shall exclusively be responsible for the payment of taxes in China for the
settlement amount. Any taxes, expenses, levies or any further costs which might arise after
the deposit of the settlement amount in the abovementioned bank account shall be
exclusively borne by the Player.”
7.
Additionally, clause 7 of the settlement agreement stipulated the following:
“Upon payment of the settlement amount to the bank account provided above and issuance
of the relevant tax certificates for taxes paid in China, the Club shall be relieved from any
obligation and shall not be responsible for any issue that may arise for the payment of taxes
– whether in China or abroad – or transfer of the Settlement Amount out of China.”
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8.
The Claimant indicated that the Respondent is responsible for payment of taxes in China in
relation to the settlement agreement as indicated in clause 6 and 7 thereof.
9.
However, the Respondent has failed to provide the Claimant with the corresponding tax
certificates, accordingly, impacting the Claimant´s ability to comply with his personal tax
obligations before the tax authorities of the United States of America Internal Revenue Service
(“IRS”)
10. In this context it’s worth noting that in previous decisions passed against the Respondent at
FIFA, in terms of which the Claimant had to issue claims against the Respondent for failure
to comply with its financial obligations agreed to in the settlement agreement, the following
were decided:
-
Case Ref. no. 20-00068 – the Respondent was ordered to pay to the Claimant the
amount of EUR 2,100,000
Case Ref. no. 20-00970 – the Respondent was ordered to pay to the Claimant the
amount of EUR 1,000,000
Case Ref. no. FPSD-2790 – the Respondent was ordered to pay to the Claimant the
amount of EUR 500,000
11. In this regard the Claimant confirm receipt of payment of the total amount of EUR 5,329,035,
however the Respondent failed to provide him with the outstanding tax certificates as proof
of effective payment of all applicable taxes in China in the total amount of EUR 2,000,000,
corresponding to the following:
-
EUR 428,550 paid by Respondent on 21 May 2020;
EUR 1,000,000 paid by Respondent on 6 October 2020;
EUR 533,000 paid by Respondent on 10 September 2021.
12. Moreover, the Respondent mentioned that the settlement amounts less taxes were
improperly paid by Kaisa Group Holdings Ltd (the Respondent´s parent/holding company
domiciled for tax-related purposes in Hong Kong and not in Shenzhen or mainland China)
and not by the Respondent.
13. Notwithstanding the above, the Claimant has indicated the Respondent is still the original
debtor vis-à-vis the Claimant in terms of the settlement agreement, according to the
Claimant, the Respondent elected to pay him the untaxed settlement amounts through the
holding company for possibly the following reasons
(i) a solution to Respondent´s lack of liquidity,
(ii) a tax-related strategy to avoid having to pay taxes at a higher rate (up to 45% in China
mainland) instead of a significantly lower rate in Hong Kong (up to 17% at the most)
where the holding company is domiciled
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14. On 31 May 2020, the Respondent “tried to explain the reason for which it elected to pay the
Claimant through the holding company,and promised to provide the Claimant shortly
thereafter with the then (and still now) outstanding tax certificates.”
15. Despite various correspondences between the parties and the possibility of an amicable
settlement on the matter, the parties failed to reach an agreement.
II. Proceedings before FIFA
16. On 21 January 2022, 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
17. The requests for relief of the Claimant, were that the Respondent:
(i)
Provide the Claimant with the outstanding tax certificates regarding the untaxed
settlement amounts;
(ii) Pay to the Claimant the amount of EUR 1,961,550 required for him to cover all applicable
taxes owed to the IRS for having collected the untaxed settlement amounts whilst residing
in the United States of America;
(iii) Be imposed with article 12bis sanctions;
(iv) ordering the Respondent to pay the legal costs and all other expenses in relation to these
proceedings.
b. Position of the Respondent
18. Despite being invited to do so, the Respondent failed to reply to the claim.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
19. 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 21 January 2022 and submitted for decision
on 5 May 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.
20. 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
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Regulations on the Status and Transfer of Players (March 2022 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 Norwegian player
and a Chinese club.
21. 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 Players (March 2022 edition in force
on the date of decision), and considering that the present claim was lodged on 21 January
2022, the August 2021 edition of said regulations (hereinafter: the Regulations) is applicable
to the matter at hand as to the substance.
b. Burden of proof
22. 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
23. 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.
i. Main legal discussion and considerations
24. The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that the Claimant argued that the Respondent had an obligation to
pay the taxes in relation to the amounts paid to the Claimant in accordance with the
settlement agreement, in particular to reimburse the Claimant for the taxes he had to pay to
the IRS in the USA.
25. In this context, the Chamber acknowledged that its task was to determine whether or not in
the matter at hand the Respondent was liable to pay the relevant taxes and/or the
reimbursement thereof to the Claimant.
26. The DRC noted that – after having been provided with the claim of the Claimant - the
Respondent failed to present its response to the claim of the Claimant, in spite of having been
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invited to do so. By not presenting its position to the claim, the Single Judge was of the
opinion that the Respondent renounced its right of defence.
27. Subsequently the DRC, took into account the content of clause 6 of the settlement
agreement, and noted that in accordance with the said provision the Respondent seems to
be exclusively responsible for the payment of taxes in the People’s Republic of China.
28. Additionally, the DRC remarked that in accordance with clause 7 of the settlement
agreement, the Respondent would only be relieved from its obligations stipulated in the
settlement agreement upon the provision of the relevant tax certificates to the Claimant.
29. Moreover, the DRC noted that the amounts as stipulated in the settlement agreement were
due as net amounts.
30. In this context, the DRC mentioned that it remains undisputed that the Respondent was
and/or is responsible for the settlement of taxes in relation to the amounts agreed upon in
the settlement agreement, but noted that the Respondent has failed to provide the relevant
tax certificates to the Claimant proving same. However, the DRC observed that in relation to
the alleged reimbursement of taxes remitted in the USA, it should be noted that the Claimant
failed to provide sufficient corroborating evidence, proving that the said taxes or specific
amount in relation thereto was paid to the IRS.
31. Taking the above into account and the documentation presented by the Claimant, the DRC
concluded that the Respondent had failed to fulfil the contractually agreed obligations as per
the settlement agreement.
ii. Consequences
32. Having stated the above, the members of the DRC concurred that the Respondent must fulfil
its obligations in accordance with the general legal principle of “pacta sunt servanda”.
33. Consequently, the DRC decided that the Respondent is liable to provide to the Claimant the
relevant tax certificates relating to the amounts paid, as per the settlement agreement.
34. Moreover, the members of Chamber decided to reject the Claimant’s request for
reimbursement of taxes remitted to the IRS in the USA.
d. Costs
35. 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
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agent, or match agent”. Accordingly, the Chamber decided that no procedural costs were to
be imposed on the parties.
37.
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.
38.
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-4883
IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Ola Williams Kamara, is partially accepted.
2.
The Respondent, Shenzhen FC, is ordered to issue the relevant tax certificates to the Claimant
in relation to the amounts paid as per the settlement agreement within 30 days as from the
date of notification of this decision.
3.
Any further claims of the Claimant are rejected.
4.
In the event that the Respondent does not comply with point 2. above within the granted
deadline, the present matter shall be submitted, upon request by the Claimant, to the FIFA
Disciplinary Committee.
5. 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).
CONTACT INFORMATION
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FIFA-Strasse 20 P.O. Box 8044 Zurich Switzerland
www.fifa.com | legal.fifa.com | [email protected] | T: +41 (0)43 222 7777
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