Labour Disputes
Texto da decisão
REF 20-00899
Decision of the
Dispute Resolution Chamber
Passed on 29 September 2020,
regarding an employment-related dispute concerning the player Katsumi Yusa
COMPOSITION:
Omar Ongaro (Italy), Deputy Chairman
Roy Vermeer (the Netherlands), member
José Luis Andrade (Portugal), member
CLAIMANT:
Katsumi Yusa, Japan
Represented by Ms. Nan Sato
RESPONDENT:
Chennai City FC, India
Represented by Mr. Srinivasan Srini
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I. FACTS
1.
On 4 April 2019, the parties concluded an employment contract valid as from 1 August
2019 until 30 June 2020.
2.
Clause 4 of the contract reads as follows: “the Player will be paid a fixed remuneration
of USD 7,100 per month (Net USD 6,390 after 10% TDS) or Total Gross USD 78,100 for the
entire period. The payment will be done within 7 working days of the subsequent
month”
3.
In addition, clause 7 of the contract established the following: “The Player will be
provided with three economy class flight return tickets for the season from Tokyo to the
city of the club and back. He may use the tickets for himself or his family depending on
if they stay with him or not. He will be reimbursed the actual cost of his, his wife and
his chiId’s visa on arrival in India.”
4.
On 14 March 2020, the All India Football Federation (AIFF) suspended the local league
due to the COVID-19 outbreak and following a directive by the government of India of
12 March 2020.
5.
On 21 March 2020, the player sent a default notice to the club, indicating the following:
“You are hereby notified that you have defaulted under said note because you have
failed to pay the monthly salaries due 11 February 2020 for the salary of January, and 10
March 2020 for the salary of February 2020, in the amount of USD 14,200 (equivalent to
INR 980,000).
Therefore, demand is hereby made upon you for full payment of the entire balance due
on said note in the amount of USD 14,200 (equivalent to INR 980,000).
If the entire amount due is not received on or before 5 April 2020, I shall terminate a
contract with just cause for outstanding salaries according to the Article 14bis of the FIFA
Regulations on the Status and Transfers of Players. Please be advised that your obligations
to pay further salaries until 30 June 2020 will remain valid under FIFA jurisprudence.”
6.
On the same date i.e. 21 March 2020, but by a letter dated 20 March 2020, and after the
previous notice, the club sent a letter to the player by means of which it terminated the
contract. The letter stated, inter alia, the following:
“Considering the situation, the whole sporting leagues including the league in India and
international events like the AFC have been suspended and we don’t have any
information regarding the next way forward in the league. This is a new situation for the
club and the club is trying to resolve with its inherent capability, but the situation is a
Global epidemics which has gone beyond our control. As you may aware that the Indian
Govt. has already ordered closure of all sporting events and banned from using the
stadiums in India for sports.
Especially now, the Tamil Nadu Govt. and Sports Development Authority have advised
the club to send the foreigners safely back to their respective countries and give a report
to them on the exit of the players.
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This situation has brought to the club no other alternative but to terminate the contract
under the Forcemajure [sic] clause. However, the Club will ensure that the fees payable
for the month of January and February, 2020 will be paid in due course once the situation
becomes better in India, and will be intimated once it is done.
The club will ensure that your safety and security is at most important for us and we shall
be committed to arrange a safe exit to your respective countries. In case the travel back
is being taken care by you then the Club will not be held liable for any untoward things
happens during the transit period. In case of any need of your services once the issues are
settled globally, we may contact you. We thank you for your services for CCFC.
We once again reiterate that this situation has not been experienced by our club and we
do not have any control of this Global Epidemic Situation.
We trust as a professional player, you would understand this global situation and support
us from your end.”
7.
On 7 April 2020, the player sent a letter to the club by means of which he outlined that
the contract did not have a “force majeure” clause and hence the termination had taken
place without just cause. The player accordingly requested payment of his outstanding
remuneration as well as compensation for breach of contract in the total amount of USD
35,500 by no later than 13 April 2020.
8.
On 9 April 2020, the club sent a letter to the player by means of which it inter
alia confirmed the contents of its letter of 21 March 2020.
9.
On 21 April 2020, the AIFF cancelled the local league.
10. On 30 April 2020, the player addressed a letter to the club by means of which he inter
alia objected to the club’s position and requested payment of USD 43,249 (i.e. six months
of remuneration) as outstanding remuneration as well as compensation for breach of
contract, plus USD 649 as reimbursement of air fares.
11. On 8 May and 29 May 2020, further to a number of exchange of correspondences
between the parties, the club sent a settlement offer to the player.
12. The player stated that he did not enter into any contract as of the date of his claim.
13. On 23 June 2020, the player lodged a claim before FIFA for outstanding remuneration
and breach of contract without just cause.
14. According to the player “the Club’s unilateral termination of the Contract is in violation
of the FIFA COVID-19 Guidelines. The Club used COVID-19 as a convenient pretext to
evade its contractual obligations, which had fallen due months before the COVID- 19 crisis
affected India.”
15. The player further argued that “the Club’s unilateral termination of the Contract is not
warranted under national law, since the doctrine of frustration did not apply under
Indian Law at the time of the termination of the Contract on March 20, 2020. 30. Under
Indian law, the doctrine of frustration of contracts may only be invoked when the
performance of a contract has become impossible. In other words, only if the
performance has become useless in terms of the object and purpose of the contract, then
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the contract becomes frustrated”. In particular, the player outlined that by the time the
termination of the contract took place, the competitions were merely suspended and not
cancelled.
16. In view of the above, the player requested the total amount of USD 51,899, “plus all
applicable interests in USD”, broken down as follows:
a. USD 7,100 in outstanding salary for January 2020;
b. USD 7,100 in outstanding salary for February 2020;
c. USD 5,325 in outstanding salary for the first three weeks of March 2020;
d. USD 23,075 as the residual value of the Contract, including:
- USD 1,775 for the last week of March 2020;
- USD 7,100 for April 2020;
- USD 7,100 for May 2020;
- USD 7,100 for June 2020; and
e. USD 649 (JPY 70,755) in unreimbursed flight cost from Chennai to Tokyo.
f. USD 4,325 (10% of the total monetary damages) as moral damages;
g. USD 4,325 as attorneys’ fees accordance with CAS 2015/A/3871.
17. The Respondent rejected the player’s claim.
18. Firstly, the club addressed its settlement offer to the player and argued that due to special
financial regulations in place for payments in India, combined with the necessary
precautions due to the pandemic, it could not timely pay the amounts offered to the
player. Accordingly, the Respondent stressed that “it will honour the settlement offer
(Annexure - 9) and will make a final payment, no later than 90 (ninety) days from the
date on which an order is passed by the Dispute Resolution Chamber”.
19. Secondly, the club reverted to the doctrine of frustration and, while referencing the FIFA
COVID-19 Football Regulatory Issues, argued that the decision by the AIFF to cancel the
local league amounted to a force majeure circumstance. In this respect, the club further
elaborated that the Indian Contract Act, 1872, as interpreted by the Supreme Court of
India, “allows parties to a contract to cease performing their contractual obligations
when it becomes impossible to do so, due to circumstances beyond the control of the
parties”. In conclusion, the club ‘stood frustrated’ in light of the changes in circumstances,
in particular:
i.
ii.
iii.
iv.
rising number of cases in India;
Government action (including the notification in Annexure 3 advising national
sporting bodies to refrain from organizing unavoidable sports events);
Mohun Bagan AC having already mathematically won the Hero I-League title
and thereby not rendering the conduct of the remaining matches to be
unavoidable;
travel restrictions being imposed by countries across the world.
20. Lastly, the club argued that it terminated the contract with just cause. In this sense, the
club submitted that due to the fact that all the competitions it was playing at the time
(i.e. the local league and the AFC Cup) were suspended or cancelled, “the Respondent
could
not
have
engaged
the
services
of
the
Claimant
in
any
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competition”. Accordingly, the respondent is of the opinion that it “acted in complete
good faith at the time of termination of the Contract”
21. In sum, the Respondent requested the following:
(a) Dismiss the claim in its entirety;
(b) Order the Claimant to bear all legal costs incurred by the Club in relation to the current
proceedings;
(c) Order the Claimant to bear all costs in relation to the administrative and procedural
aspects of the current proceedings; and
(d) Pass any other order or relief that you may deem fit in the current circumstances.
II. CONSIDERATIONS OF THE DISPUTE RESOLUTION CHAMBER
1. First of all, the Dispute Resolution Chamber (hereinafter also referred to
as Chamber or DRC) analysed whether it was competent to deal with the case at hand.
Taking into account the wording of art. 21 of the June 2020 edition of the Rules
Governing the Procedures of the Players’ Status Committee and the Dispute Resolution
Chamber (hereinafter: the Procedural Rules), the aforementioned edition of the
Procedural Rules is applicable to the matter at hand.
2. Subsequently, the Dispute Resolution Chamber referred to art. 3 par. 1 of the Procedural
Rules and emphasised that, in accordance with art. 24 par. 1 in combination with art.
22 lit. b) of the Regulations on the Status and Transfer of Players, the Dispute Resolution
Chamber is competent to deal with matters which concern employment-related disputes
with an international dimension between players and clubs, as it occurs with the matter
at stake, which concerns a Japanese player and an Indian club.
3. In continuation, the Dispute Resolution Chamber analysed which edition of the
Regulations of the Status and Transfer of Players should be applicable to the present
matter. In this respect, the Dispute Resolution Chamber confirmed that in accordance
with art. 26 par. 1 and 2 of the Regulations on the Status and Transfer of Players, and
considering that the claim was lodged on 23 June 2020, the March 2020 edition of the
aforementioned regulations (hereinafter: the Regulations) is applicable to the matter at
hand.
4. With the above having been established, the Dispute Resolution Chamber entered into
the substance of the matter. In doing so, it started to acknowledge the facts of the case
as well as the documents contained in the file. However, the Dispute Resolution Chamber
emphasized that in the following considerations it will refer only to facts, arguments and
documentary evidence which it considered pertinent for the assessment of the matter at
hand.
5. In this respect, the DRC noted that, on 4 April 2019, the parties concluded an employment
contract valid as from 1 August 2019 until 30 June 2020.
6. Subsequently, the Chamber observed that, the player lodged a claim before FIFA for
outstanding remuneration and breach of contract without just cause, arguing that the
club terminated the contract without just cause on 21 March 2020.
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7. Conversely, the Chamber noted that the Respondent requested the rejection of the claim,
noting, inter alia, that in view of the doctrine of frustration, it was entitled to terminate
the contract due to the effects of the COVID-19 pandemic and in view of the existence of
force majeure.
8. Therefore, members of the Chamber highlighted that the underlying issue in this dispute,
considering the diverging position of the parties, was to determine as to whether the
contract was terminated with or without just cause by the Respondent on 21 March 2020.
The Chamber also underlined that, subsequently, if it were found that the contract was
terminated without just cause, it would be necessary to determine the consequences for
the party that was responsible for the early termination of the contractual relation.
9. The Chamber, first of all, wished to highlight that the unilateral termination of the
contract by the Respondent, was seemingly based on the fact that due to the worldwide
COVID-19 pandemic.
10. Having said that, the Chamber wished to refer to the fact that, in light of the worldwide
COVID-19 outbreak, FIFA issued a set of guidelines, the COVID-19 Guidelines, which aim
at providing appropriate guidance and recommendations to member associations and
their stakeholders, to both mitigate the consequences of disruptions caused by COVID-19
and ensure that any response is harmonized in the common interest of the global football
community. Moreover, on 11 June 2020, FIFA has issued an additional document, referred
to as FIFA COVID-19 FAQ, which provides clarification about the most relevant
questions in connection with the regulatory consequences of the COVID-19 outbreak and
identifies solutions for new regulatory matters.
11. Analysing the concept of a situation of force majeure, the members of the Chamber
noted that, based on the contents of the FIFA COVID-19 Guidelines and the FIFA COVID19 FAQ, the COVID-19 outbreak was not to be considered as a force majeure situation in
any specific country or territory. Also, in line with the aforementioned guidelines,
no specific employment or transfer agreement was impacted by the concept of force
majeure.
12. As such, the contents of the aforementioned documents establishes in general that clubs
or its employees cannot rely on the FIFA COVID-19 Guidelines or the decision of the FIFA
Bureau, to assert a force majeure situation. The analysis whether a situation of force
majeure existed, has to be considered on a case-by-case basis, taking into account all the
relevant circumstances.
13. Turning to the content of the file, the members of the Chamber were eager to emphasize
that the Respondent, is this particular matter, did not submit any form of documentary
evidence or allegations that the situation it faced, was to be considered a situation of
force majeure. In addition, the Chamber noted that the contract did include any clause
concerning force majeure.
14. In this respect, it appeared to the members that there is no documentation on file, on the
basis of which it could be concluded that the Respondent took the
applicable precautions, or attempted to mitigate the damages for the Claimant. As
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mentioned, the Respondent decided to immediately and unilaterally terminate
the contract, without exploring less drastic measures.
15. Having established that in the current matter, no situation of force majeure could be
established, and thus, that the Respondent could not prove that the termination based
on article 17 of the contract was in line with wording of said article, the members of the
Chamber also wished to refer to the fact that said documents – as per the explicit
wording of FAQ nr. 16, as well as pages 6 and 7 of the FIFA COVID-19 Guidelines, that
said guidelines are only applicable to “unilateral variations to existing employment
agreements”. Therefore, the guidelines do not apply to unilateral terminations of
existing employment agreements, as was the case in the matter at hand. The members of
the Chamber further noted that for the assessment of disputes that arise before the FIFA
judicial bodies concerning unilateral termination of a contract, the FIFA Regulations as
well as the established jurisprudence of the Chamber, shall apply.
16. In this respect, the Chamber was eager to emphasise that, as the FIFA Regulations, only a
breach or misconduct which is of a certain severity justifies the termination of a contract.
In other words, only when there are objective criteria which do not reasonably permit to
expect a continuation of the employment relationship between the parties, a contract
may be terminated prematurely. Hence, if there are more lenient measures which can be
taken in order for an employer to ensure the employee’s fulfilment of his contractual
duties, such measures must be taken before terminating an employment contract. A
premature termination of an employment contract can only ever be an ultima
ratio measure.
17. In view of the above, the Chamber first of all observed that the Respondent had
unilaterally terminated the contract on 21 March 2020, without any prior indication or
warning towards the player. What is more, the Respondent did not undertake any
attempt to find an amicable solution with the player, and rather unilaterally terminated
the contract with the player.
18. For the sake of completeness, the Chamber also noted that, just before the termination,
the player sent a default notice, by means of which he requested outstanding salaries
due since at least January 2020, i.e. before the outbreak of the pandemic in India. In the
view of the Chamber, the termination letter appears to be a reaction to the player’s
default notice.
19. Furthermore, regardless of the question whether the Claimant or the Respondent was to
be held responsible for the effects of the COVID-19 pandemic on the contract, the
Chamber was of the firm opinion that the Respondent, since such circumstance, in this
particular situation could not legitimately be considered as being severe enough to justify
the termination of the contract. The Chamber was of the opinion that there would have
been more lenient measures to be taken (for instance, among others, a temporary
amendment of the salary and/or a temporary suspension of the contract, in order to find
a solution for the circumstances occurred as from March 2020.
20. Moreover, the members of the Chamber deemed it vital to outline that it remained
uncontested that the Respondent had not fulfilled its financial obligations set forth in
the employment contract signed between the parties and that it failed to pay to the
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Claimant the salaries, respectively, the amounts of USD 7,100 for January 2020 and USD
7,100 as outstanding salary for February 2020.
21. On account of all the abovementioned considerations, the Chamber decided that the
Respondent had no just cause to unilaterally terminate the employment relationship
between the Claimant and the Respondent and, therefore, concluded that the
Respondent had terminated the employment contract without just cause on 21 March
2020. Consequently, the Respondent is to be held liable for the early termination of the
employment contact without just cause.
22. Bearing in mind the previous considerations, the Chamber went on to deal with the
consequences of the early termination of the employment contract without just cause by
the Respondent.
23. First of all, the members of the Chamber concurred that the Respondent must fulfil its
obligations as per employment contract up until the date of termination of the contract
in accordance with the general legal principle of “pacta sunt servanda”.
24. On account of the above considerations and the documentation on file, the Chamber
decided that the Respondent is liable to pay to the Claimant the remuneration that was
outstanding at the time of the termination i.e. the amounts of USD 7,100 for the
outstanding salary of January 2020 and USD 7,100 as outstanding salary for February
2020, for the total amount of USD 14,200 gross, as clearly specified in the contract
25. In addition, taking into account the Claimant’s claim, as well as the Chamber’s
longstanding jurisprudence in this respect, the Chamber decided to award the Claimant
interest of 5% p.a. as of the respective due dates.
26. In continuation, the Chamber decided that, taking into consideration art. 17 par. 1 of the
Regulations, the Claimant is entitled to receive from the Respondent compensation for
breach of contract in addition to any outstanding remuneration on the basis of the
relevant employment contract.
27. In this context, the Chamber outlined that, in accordance with said provision, the amount
of compensation shall be calculated, in particular and unless otherwise provided for in
the contract at the basis of the dispute, with due consideration for the law of the country
concerned, the specificity of sport and further objective criteria, including, in particular,
the remuneration and other benefits due to the Claimant under the existing contract
and/or the new contract, the time remaining on the existing contract up to a maximum
of five years, and depending on whether the contractual breach falls within the protected
period.
28. In application of the relevant provision, the Chamber held that it first of all had to clarify
whether the pertinent employment contract contained any clause, by means of which the
parties had beforehand agreed upon a compensation payable by the contractual parties
in the event of breach of contract. In this regard, the Chamber established that no such
compensation clause was included in the employment contract at the basis of the matter
at stake.
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29. Subsequently, and in order to evaluate the compensation to be paid by the Respondent,
the members of the Chamber took into account the remuneration due to the Claimant in
accordance with the employment contract as well as the time remaining on the same
contract, along with the professional situation of the Claimant after the early termination
occurred. In this respect, the Chamber pointed out that at the time of the termination of
the employment contract on 21 March 2020, the contract would run for until 30 June
2020, that is, three more months, plus the salary of March, which was not yet due on the
date of termination. Consequently, taking into account the financial terms of the
contract, the Chamber concluded that the remaining value of the contract as from its
early termination by the Respondent until the regular expiry of the contract amounts
to USD 28,400 gross (i.e. 4*7,100 gross) and that such amount shall serve as the basis for
the final determination of the amount of compensation for breach of contract.
30. In continuation, the Chamber remarked that following the early termination of the
employment contract at the basis of the present dispute, the Claimant was not able to
find new employment. As a result, no further amounts will be deducted from the
compensation the player would be entitled to.
31. In view of all of the above, the Chamber decided that the Respondent must pay the
amount of USD 28,400 gross to the Claimant as compensation for breach of contract
without just case, which is considered by the Chamber to be a reasonable and justified
amount as compensation.
32. In addition, taking into account the Claimant’s claim and the longstanding jurisprudence
of the Chamber in this respect, the Chamber decided to award the Claimant interest of
5% p.a. as from the date of the claim.
33. In addition, concerning the Claimant’s request for the reimbursement of flight tickets,
the Chamber observed the contents of clause 7 of the contract, and established that, in
accordance with the contract and its jurisprudence in this respect, that the Claimant is
entitled to the reimbursement of USD 649 for said tickets. Equally, taking into account
the Claimant’s claim, as well as the Chamber’s longstanding jurisprudence in this
respect, the Chamber decided to award the Claimant interest of 5% p.a. on said amount
as of the respective due date.
34. Moreover, the Chamber rejected the Claimant’s request for moral damages in accordance
with its jurisprudence in this respect, due to a lack of legal or contractual basis, as well as
due to a lack of substantiation and evidence.
35. Furthermore, and referring to the Claimant’s request pertaining to court fees and lawyer
fees, the Chamber stated that according to art. 18 par. 2 of the Rules Governing the
Procedures of the Players’ Status Committee and the Dispute Resolution Chamber, DRC
proceedings are free of charge. Moreover, par. 4 of the said provision establishes that no
procedural compensation shall be awarded in proceedings of the DRC. The relevant
request had thus to be rejected.
36. Furthermore, taking into account the previous considerations, the Dispute Resolution
Chamber referred to par. 1 and 2 of art. 24bis of the Regulations, which stipulate that,
with its decision, the pertinent FIFA deciding body shall also rule on the consequences
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deriving from the failure of the concerned party to pay the relevant amounts of
outstanding remuneration and/or compensation in due time.
37. In this regard, the Dispute Resolution Chamber pointed out that, against clubs, the
consequence of the failure to pay the relevant amounts in due time shall consist of a ban
from registering any new players, either nationally or internationally, up until the due
amounts are paid and for the maximum duration of three entire and consecutive
registration periods.
38. Therefore, bearing in mind the above, the Dispute Resolution Chamber decided that, in
the event that the Respondent does not pay the amounts due to the Claimant within 45
days as from the moment in which the Claimant, following the notification of the present
decision, communicates the relevant bank details to the Respondent, a ban from
registering any new players, either nationally or internationally, for the maximum
duration of three entire and consecutive registration periods shall become effective on
the Respondent in accordance with art. 24bis par. 2 and 4 of the Regulations.
39. Finally, the Dispute Resolution Chamber recalled that the above-mentioned ban will be
lifted immediately and prior to its complete serving upon payment of the due amounts,
in accordance with art. 24bis par. 3 of the Regulations.
III. DECISION OF THE DISPUTE RESOLUTION CHAMBER
1.
The claim of the Claimant, Katsumi Yusa, is partially accepted.
2.
The Respondent, Chennai City FC, has to pay to the Claimant the following amounts:
- USD 14,200 gross as outstanding remuneration plus 5% interest p.a. as from 23 June
2020 until the date of effective payment;
- USD 649 as outstanding remuneration plus 5% interest p.a. as from 23 June 2020 until
the date of effective payment;
- USD 28,400 gross as compensation for breach of contract without just cause plus 5%
interest p.a. as from 23 June 2020 until the date of effective payment.
3.
Any further claims of the Claimant are rejected.
4.
The Claimant is directed to immediately and directly inform the Respondent of the
relevant bank account to which the Respondent must pay the due amount.
5.
The Respondent shall provide evidence of payment of the due amount in accordance with
this decision to [email protected], duly translated, if applicable, into one of the official
FIFA languages (English, French, German, Spanish).
6.
In the event that the amount due, plus interest as established above is not paid by the
Respondent within 45 days, as from the notification by the Claimant of the relevant
bank details to the Respondent, the following consequences shall arise:
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1. The Respondent shall be banned from registering any new players, either nationally
or internationally, up until the due amount is paid and for the maximum duration
of three entire and consecutive registration periods. The aforementioned ban
mentioned will be lifted immediately and prior to its complete serving, once the
due amount is paid.
(cf. art. 24bis of the Regulations on the Status and Transfer of Players).
2. In the event that the payable amount as per in this decision is still not paid by the
end of the ban of three entire and consecutive registration periods, the present
matter shall be submitted, upon request, to the FIFA Disciplinary Committee.
7. The decision is rendered free of costs.
For the Dispute Resolution Chamber:
Emilio García Silvero
Chief Legal & Compliance Officer
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NOTE RELATED TO THE APPEAL PROCEDURE:
According to article 58 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 20 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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