DRC Overdue Payables
Texto da decisão
REF FPSD-3206
Decision of the
Dispute Resolution Chamber
passed on 16 December 2021
regarding an employment-related dispute concerning the player Damián
Marcelo Musto
BY:
DE WEGER, Frans (The Netherlands), Chairperson
COLLINS, Angela (Australia), Member
DE JONG, Daan (The Netherlands), Member
CLAIMANT:
Damián Marcelo Musto, Argentina
Represented by Ariel N. Reck
RESPONDENT:
SC Internacional, Brazil
Represented by CPB Associated Attorneys
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I.
Facts of the case
1.
On 16 December 2019, the Argentinian player, Mr Damián Marcelo Musto (hereinafter: the
player or the Claimant), and the Brazilian club, SC Internacional (hereinafter: the club or the
Respondent), signed an agreement stipulating the essential terms of the future employment
relationship between them, to be valid as from 1 January 2020 until 31 December 2020
(hereinafter: the preliminary agreement).
2.
The recitals of the preliminary agreement established, inter alia, the following:
a. the player was under contract with the Spanish club, Sociedad Deportiva Huesca
(hereinafter: SD Huesca), and was to be loaned to the club for the period between 1
January 2020 and 31 December 2020;
b. the parties (i.e. the player, the club and SD Huesca) were finalizing the negotiations for
the loan of the player, and wished to adjust the terms of the employment between the
player and the club;
c. apart from the employment relationship, the club wished to explore the player’s image
rights in line with Brazilian law, entailing that the parties would conclude an image
rights agreement with a company to be indicated by the player.
3.
In accordance with clause 1 of the preliminary agreement, the parties agreed to sign an
employment agreement for the aforementioned period and in line with the national law.
Furthermore, pursuant clauses 1.1 and 1.2 of the preliminary agreement, the club undertook
to pay the player USD 717,500 as “remuneration” under the aforementioned employment
agreement, to be payable in equal and monthly instalments in accordance with the exchange
rate provided by the Brazilian National Bank on 31 December 2019.
4.
Clause 1.3 of the preliminary agreement established the following (freely translated to
English): “[The club] and [the player] undertake to determine, in accordance with the
exchange rate of the Brazilian Central Bank of the date of each payment, the total (USD)
indeed received by [the player], taking into consideration the salaries and the legal duties,
being established that, exclusively under the hypothesis of the net amount earned by [the
player] fluctuating above or below 20% (twenty per cent), considering the exchange rate of
31 December from the previous year, the parties will settle the difference aiming the best
financial arrangement, with eventual discount or supplementation of the amounts, in order
to [the player] to earn the total agreed upon by the parties. Said arrangement shall be made
in July 2020 and at the end of each year of the employment contract to be concluded in
accordance with this contract”.
5.
Furthermore, pursuant to clause 6 of the preliminary agreement, the parties also agreed to
execute an image rights agreement valid for the same period (i.e. from 1 January 2020 until
31 December 2020). Alike in the recitals section, said provision also stipulated that the
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remuneration regarding the use of the player’s image rights would be paid to a company
indicated by the player, in the total amount of USD 207,500 (cf. clause 6.1 of the preliminary
agreement).
6.
Likewise, the parties once again agreed that the image rights fees would be payable in equal
and monthly instalments in accordance with the Brazilian Law and in line with the exchange
rate provided by the Brazilian National Bank on 31 December 2019.
7.
In addition, clause 6.3 of the preliminary agreement read as follows (freely translated to
English):
“The parties undertake to determine, in accordance with the exchange rate of the Brazilian
Central Bank of the date of each payment, the total (USD) indeed received by the company,
being established that, exclusively under the hypothesis of the net amount received by the
company fluctuating above or below 20% (twenty per cent), considering the exchange rate
of 31 December from the previous year, the parties will settle the difference aiming the best
financial arrangement, with eventual discount or supplementation of the amounts, in order
to the company to receive the total agreed upon by the parties. Said arrangement shall be
made in July 2020 and at the end of each year of the employment contract to be concluded
in accordance with this contract”.
8.
Additionally, clauses 6 caput and 6.1 of the preliminary agreement read as follows (freely
translated to English):
“6. The parties undertake that [the company] can be entitled to the receipt of the following
amounts, as bonuses for the appreciation of [the player’s] image, voice, name and sporting
nickname, subject to the following conditions related to [the player’s] sporting
performance, being independent from each other:
6.1. In the event that [the player], between 01/01/2020 and 30/06/2020, plays for the
principal team of [the club] under the main coaching directive, in at least 65% (sixty-five
percent) of the official matches, independently of the fielded time per match, valid for
official competitions held by the Football Federation of the Rio Grande do Sul, Brazilian
Football Association, CONMEBOL, FIFA or any other League in which [the club] takes part
officially, [the company] will be entitled to a bonus in the total net amount of USD 50,000,
to be paid until 31 July 2020”.
9.
The preliminary agreement contains a jurisdiction clause referring to FIFA and to the Court of
Arbitration for Sport (CAS) as competent courts, as well as the ordinary courts of Porto Alegre,
Brazil.
10. On 16 January 2020, the player and the club concluded a federative contract in the standard
format of the Confedereção Brasileira de Futebol (CBF) valid as from 14 January 2021 until
31 December 2020 (hereinafter: the federative contract).
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11. According to the federative contract, the club undertook to pay the player a monthly salary
of BRL 268,851.35 and a lump sum of BRL 116,502.25 in January 2020.
12. Furthermore, the federative contract established that in case of breach of contract:
a. by the player without just cause, joining a Brazilian club thereafter, a compensation
of BRL 537,702,720 would be due to the Respondent;
b. by the player without just cause, joining a foreign club thereafter, a compensation
of EUR 60,000,000 would be due to the Respondent;
c. by the club without just cause, a compensation corresponding to the residual value
of the federative contract would be due to the player.
13. The federative contract bears no jurisdiction clause.
14. On 11 February 2020, the club, the player and the company “Damian Marcelo Musto Serviços
de Publicidade Ltda. EPP” (hereinafter: the company) concluded a “Private Instrument of
Licensing to Use Image, Voice, Professional Name and Sporting Nickname of Professional
Soccer Player” (hereinafter: the image rights agreement) valid as from the date of signature
until 31 December 2020, with a preference right of renewal in case the player’s employment
contract was extended.
15. The image rights agreement, in its recital’s section, stated inter alia that the company was
duly authorized on an exclusive basis to use the player’s image rights, “as the exclusive holder
the business and representation rights for the license to use his image, voice, professional
name and sporting nickname”.
16. According to clause 2 of the image rights agreement, the club undertook to pay to the
company a monthly net amount of BRL 69,687.14, “for the license to use the rights of image,
voice, professional name and/or sporting nickname”. The first instalment under the image
rights agreement was payable on 25 February 2020 and the last on 25 January 2021.
17. Moreover, clause 2.1 of the image rights agreement stipulated bonuses that would be due
to the player “for the valuation of [his] image, voice, professional name, and/or sporting
nickname”, including the following:
“2.1 […] a). In the event that [the player], plays for the principal team of [the club] under
the main coaching directive, in at least 65% (sixty-five percent) of the official matches,
independently of the fielded time per match, valid for official competitions held by the
Football Federation of the Rio Grande do Sul, Brazilian Football Association, CONMEBOL,
FIFA or any other League in which [the club] takes part officially, between the period of
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01/01/2020 and 30/06/2020, [the company] will be entitled to a bonus in the total net
amount of BRL 201,505, to be paid until 31 July 2020”.
18. According to clause 2.4 of the image rights agreement, payments to the company would be
subject to the issuance of the proper invoice to the club.
19. Clause 8 of the image rights agreement read as follows (freely translated to English by the
club):
“Through the execution of this agreement, the parties expressly, irrevocably and irreversibly
acknowledge the discharge of the obligations assumed in the form of the Term of
Commitment No. 586/FUT/19 -LP/FDB that are related to the license herein agreed in relation
to the period between 02/11/2020 and 12/31/2020, since all the conditions herein provided,
transacted or consolidated portray the full content of what was agreed regarding the rights
to the image, voice, professional name and sporting nickname of the [the player] in the
contractual period, without prejudice to the other obligations assumed by means of the
aforementioned arbitration instrument that may be in force in the event of extension/renewal
of this relationship for a later period, if the necessary conditions for that are fulfilled”.
20. According to clause 9 of the image rights agreement, the jurisdiction for resolving disputes
refers to the courts on the city of Porto Alegre on an exclusive basis.
21. On 8, 19 March and 27 April 2020, the regional government of the state of Rio Grande do
Sul, Brazil issued directives addressing the consequences of the state of public calamity and
establishing sanitary measures in order to prevent and fight the COVID-19 outbreak.
22. On 15 and 18 March 2020, the CBF and the Confederación Sudamericana de Fútbol
(CONMEBOL), respectively, decided to suspend the national and continental competitions
until further notice, due to the pandemic.
23. On 20 March 2020, the Brazilian federal government issued the Legislative Decree no. 6/2020
recognizing the “the occurrence of a state of public calamity effective until December 31,
2020”.
24. On 26 March 2020, the Football Federation of Rio Grande do Sul (FGF) decided to suspend
the regional competitions until further notice. Said competitions would only be only resumed
on 23 July 2020.
25. On 6 May 2020, the club, the player, and the company concluded an amendment to the
image rights agreement, by means of which they agreed to rectify the payments due by the
club to the company in light of the COVID-19 outbreak (hereinafter: the amendment to the
image rights agreement).
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26. Pursuant to clause 1 of the amendment to the image rights agreement, the parties established
that the instalments due by the club to the company by 25 March, 25 April and 25 May 2020
– in the total amount of BRL 209,061.42 – would be paid in 6 instalments of BRL 34,843.57
each, due respectively on 25 January, February, March, April, May and June 2021.
27. In addition, clause 2 of the amendment to the image rights agreement stipulated that the
bonus of BRL 201,505 described in clause 2.1, lit. a) of the image rights agreement would be
paid as follows:
a. On 20 December 2020, if the current season 2020 was finished until 10 December
2020; or
b. 10 days after the end of all official competitions held by the FGF, CBF, CONMEBOL,
FIFA or any other League in which the club took part.
28. The amendment to the image rights agreement bears no jurisdiction clause.
29. In parallel, on 13 May 2020, the club and the player also concluded an amendment to the
federative contact, by means of which they agreed that the player’s working hours and salary
under the federative contract would be reduced by 25% between 15 May 2020 and 14
August 2020 (hereinafter: the amendment to the federative contract).
30. The amendment to the federative contract bears no jurisdiction clause.
31. By correspondence dated 31 May 2021 and sent on 1 June 2021, the player put the club in
default and granted it with a 10 days’ deadline in order to proceed the payment of USD
297,708.46, broken down as follows:
a. USD 52,174.34 as the difference in connection with the exchange rates described in
clause 1.3 of the preliminary agreement for the first semester of 2020 season;
b. USD 79,866.05 as the difference in connection with the exchange rates described in
clause 1.3 of the preliminary agreement for the second semester of 2020 season;
c. USD 115,668.07 as outstanding image rights, broken down as follows:
(I)
USD 86,458.30 as outstanding image rights corresponding to the instalments
due by November and December 2020 and the ones postponed to April, May,
June and July 2021 pursuant to the amendment to the image rights agreement;
(II)
USD 11,187.82 as the difference in connection with the exchange rates
described in clause 6.3 of the preliminary agreement for the first semester of
2020 season;
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(III)
USD 18,021.95 as the difference in connection with the exchange rates
described in clause 6.3 of the preliminary agreement for the second semester
of 2020 season.
d. USD 50,000 as the sporting bonus established in clause 6.1 of the preliminary
agreement.
32. The club did not reply to the cited default notice.
33. On 9 August 2021, the regional government of the state of Rio Grande do Sul, Brazil issued
a new decree inter alia authorizing sporting activities to resume.
II. Proceedings before FIFA
34. On 31 July 2021, the player filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a. Claim of the player
35. In his claim, the player referred to art. 12bis of the FIFA Regulations on the Status and Transfer
of Players (RSTP) as well as to his default notice sent to the club on 1 June 2021.
36. In light of the above, the player requested, inter alia, to be awarded the total amount of USD
365,744.63 net, plus 5% interest p.a. as from the due dates, broken down as follows:
a. USD 71,716.08 as the balance of his salaries, referred to as “additional payment”;
b. USD 86,458.30 net as the balance of the image rights (i.e. the full amount described
in the amendment to the image rights agreement plus the instalments due by
November and December 2020 under the image rights agreement);
c.
USD 52,174,34 net as the difference from the salaries in the first semester of 2020, in
accordance with clause 1.3 of the preliminary agreement;
d. USD 11,187.82 net as the difference from the image rights in the first semester of
2020, in accordance with clause 6.3 of the preliminary agreement;
e. USD 50,000 net as bonus of performance, taking into consideration that the player
was fielded in more than 65% of the relevant matches in the first semester of 2020
(cf. clause 6.1 of the preliminary agreement);
f. USD 79,866.05 net as the difference from the salaries in the second semester of 2020,
in accordance with clause 1.3 of the preliminary agreement; and
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g. USD 18,021.95 net as the difference from the image rights in the second semester of
2020, in accordance with clause 6.3 of the preliminary agreement.
b. Reply of the club
37. First and foremost, the club referred to the content of the image rights agreement – especially
to the jurisdiction clause therein included – and held that: (i) the player has no standing to
sue to make requests on behalf of the company; and (ii) FIFA is not competent to hear this
part of the claim, related to the image rights owned by the company.
38. Consequently, the club stressed that the player’s claim should be ruled partially inadmissible.
39. In continuation, the club went on analysing the substance of the claim as regards to the
amounts described in the federative contract.
40. In doing so, the club informed that it faced a force majeure situation in Brazil due to the
pandemic, which was classified as a state of public calamity by the national authorities. In this
regard, the club claimed that the national law should be taken into consideration to address
the matter. Moreover, the club made reference to the devaluation of the national currency
and to the financial crisis suffered; concluding that it has always acted in good faith towards
the player.
41. In light of the above, the club requested the recognition of a situation of force majeure in
order “to not condemn the Respondent to pay any amount related to the variation currency,
taking into account the article 103, paragraph 2 of the Swiss Code of Obligations”.
Alternatively, the club requested no interest to be awarded over the outstanding
remuneration or, at least, the amounts to be granted in Brazilian Reais (BRL).
42. In continuation and in a subsidiary basis, the club also stated that the amounts claimed by
the player were incorrect and should be calculated in BRL. In particular, the club made the
following remarks as to the salaries’ calculation:
a. the currency variation for the first two months of 2020 did not exceed 20%, therefore
the player is not entitled to charge the difference for the months of January and
February 2020 amounting, respectively, USD 709,36 and 1,808.18 as mentioned in the
statement of claim;
b. the player allegedly used the wrong rates for the calculation, hence the player’s
outcome is USD 60,13 higher than the correct one; and
c. taking into consideration that the parties agreed to a reduction of the player’s salaries
from 15 May 2020 until 14 August 2020 (cf. the amendment to the federative
contract), the correct percentage reduction for the player’s remuneration for the month
of May 2020 should be 13,71% (instead of 12,5%), following that the outstanding
amount for this month should be USD 46,437.25 (instead of USD 47,088.41).
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43. As to the image rights, the club submitted that:
a. the currency variation for the first two months of 2020 did not exceed 20%, therefore
the player is not entitled to charge the difference for the months of January and
February 2020 amounting, respectively, USD 3,040.71 and 4,314.54 as mentioned in
the statement of claim;
b. the player allegedly used the wrong rates for the calculation, hence the player’s
outcome is USD 7,362.68 higher than the correct one; and
c. for the interest calculation, it should be considered that the national championship
ended on 25 February 2021.
44. Therefore, the club’s requests for relief were as follows:
a) to receive the present Response and its Annexes, once they are being timely filed;
b) to recognize that it has no jurisdiction and competence to a analyze part of the
Claimant’s claim regarding the Image Rights Agreement owned by the Company;
c) to recognize that it is not in position to analyze whether or not the following amounts
are due to the Company: (i) Annual image rights: USD 86,458.30; (ii) currency variation
regarding the image rights in the first semester of 2020: USD 11,187.82; (iii) bonus set
forth in the Image Rights Agreement: USD 50,000.00; (iv) currency variation regarding
the image rights in the second semester of 2020: USD 18,021.95.
d) regarding the applicable law, to consider the Brazilian law in the present case;
e) alternatively, in the event that the FIFA DRC understands that the Brazilian law is not
applicable, to accept the relevant Brazilian law mentioned by the Respondent as proof
of the existence of State of Public Calamity in Brazil and in Rio Grande do Sul (state
where the Respondent has its headquarters) and, as consequence, existence of force
majeure situation;
f) to recognize the existence of a situation of force majeure in the present case;
g) to not condemn the Respondent to pay any amount related to the variation currency,
taking into account the article 103, paragraph 2, of Swiss Code of Obligations;
h) alternatively, not condemn the Respondent to pay any interests on the amounts due
to the Claimant;
i)
in the event that the preceding requests are not granted by FIFA, FIFA shall consider
the amounts eventually due to the Claimant shall be paid in Brazilian Real, in
accordance with the contracts signed between the parties. Additionally, in eventual
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case that the Respondent is condemned to pay any amount to the Claimant, it should
be paid in the bank account of the Player (or of the Company) in Brazil, avoiding them
the Respondent’s excessive onerosity to remit amount to abroad;
j)
in the event that FIFA understand that any value in connection to the Image Rights
Agreement shall be paid by the Respondent to the Claimant, FIFA must consider the
amounts set forth in the Annex 04, which are in Brazilian Real;
k) to consider the corrections in the Claimant’s calculation as mentioned in the
paragraphs 47 to 58 of the present Response.
c. Rejoinder of the player
45. In its rejoinder, the player opposed the club’s allegations as to the partial inadmissibility of
the claim. In this respect, the player pointed out that the financial conditions of the
employment relationship between the parties were established in the preliminary agreement,
which contained a jurisdiction clause referring to FIFA’s deciding bodies.
46. Likewise, it was the player’s position that the other contracts signed by the parties (i.e. the
federative contract and image rights agreements) were formal requirements under Brazilian
law and were not able to exclude FIFA’s competence to adjudicate on the matter.
47. As to the substance, the player challenged the club’s allegations regarding the force majeure
situation in Brazil. Accordingly, he highlighted that he had already accepted a salary
reduction, as well as to postpone the payment of the image rights (cf. the amendment to the
image rights agreement).
48. In addition, the player also informed that the club did not file any evidence capable of
demonstrating that the payments at stake could not be performed due to the alleged force
majeure. Hence, he deemed that the club’s argumentation should be rejected.
49. As regards to the calculation provided by the club, the player indicated that:
a. the club was aware of the risk regarding a potential variation of the local currency,
thus it shall be liable to pay the outstanding remuneration as described in the contracts
and in US Dollars;
b. in accordance with the preliminary agreement, the exchange rate used for the
calculation shall be the one of the date of each relevant payment made by the club to
the player. As such, it should be considered that the salaries of January and February
2020 were paid, respectively, on 18 February 2020 and 6 March 2020; whereas the
image rights of January and February 2020 were paid, respectively, on 12 March 2020
and on 1 July 2020;
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c. the club, in general, did not challenge its default, but only indicated insignificant
differences that should be disregarded.
50. In light of the above, the player reiterated his requests for relief.
d. Final comments of the club
51. In its final comments, the club echoed its statement of defence as to the partial inadmissibility
of the claim. In particular, the club alleged that the image rights agreement was signed in
compliance with the national law, as well as that it has a civil nature that cannot be considered
as part of the employment relationship between the parties.
52. The club then recalled its conclusion that the player’s requests for outstanding remuneration
in connection with said image rights agreement should be deemed inadmissible.
53. As to the substance, the club repeated its argumentation regarding the force majeure
situation in the context of the COVID-19 outbreak. To this extent, the club referred to the
official documentation issued by the state of Rio Grande do Sul, Brazil, as well as the
amendment of the federative contract previously signed between the parties (i.e. which
allegedly proved their awareness of the economic impacts on the club). It further mentioned
the loss of revenues and a financial crisis.
54. Along the same lines, the club pointed out that the conditions previously agreed upon in the
preliminary agreement became “excessively onerous due to a change of circumstances” that
could not be foreseen.
55. Finally, the club reiterated its calculation and requests for relief.
III. Considerations of the Dispute Resolution Chamber
a. Competence
56. 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 31 July 2021 and submitted for decision on
16 December 2021. 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.
57. 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 – in principle – competent to deal with the matter at stake, which
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concerns an employment-related dispute with an international dimension between an
Argentinian player and a Brazilian club.
58. At this point and after a thorough analysis of the documentation on file, the DRC highlighted
that its competence to adjudicate over the federative contract and its amendment was not
opposed by the club, hence was tacitly accepted.
59. Nevertheless, the DRC noted that the club challenged its competence insofar as the claim
refers to the image rights agreement and its amendment. In particular, the Chamber observed
that the club argued that the preliminary agreement had been superseded by the federative
contract and the image rights agreement, allegedly concluded in compliance with the
national law. Furthermore, the club referred to the jurisdiction clause contained in the image
rights agreement and concluded that: (i) the DRC does not have jurisdiction to adjudicate on
this part of the matter; and (ii) the player does not have standing to sue on behalf of the
company.
60. On the other hand, the DRC was also observant of the player’s argumentation as to the
admissibility of the claim, especially regarding the content of the preliminary agreement and
the jurisdiction clause therein included, as well as the alleged employment-related nature of
the image rights agreement.
61. In view of this dissent between the parties, the Chamber emphasised that in accordance with
art. 22 caput of the Regulations, FIFA is competent to hear employment-related disputes
between a player and a club with an international dimension “without prejudice to the right
of any player (…) or club to seek redress before a civil court for employment related disputes”.
62. In casu, after having carefully analysed the wording of clause 9 of the image rights agreement,
the DRC duly noted that the player and the club had unambiguously and exclusively decided
that any dispute arising from said contract would be submitted to the ordinary courts of the
city of Porto Alegre, Brazil.
63. The Chamber recalled that parties may freely agree to give jurisdiction to a civil court. In fact,
the Chamber, recalling its jurisprudence as well as the CAS’ jurisprudence in this regard,
highlighted that even if the contract does not specify which courts are competent (e.g. a
generic reference is made to a region/city), FIFA is not competent when the parties have
exclusively agreed upon the jurisdiction of a civil court. In addition, the Chamber emphasized
that art. 22 caput of the Regulations provides a clear hierarchy in favour of contractual
autonomy.
64. The DRC also stressed that the player’s claim derives not only from the preliminary agreement
but in fact form the whole constellation of contracts executed between the parties, and
specifically from the concepts outstanding and arising from the image rights agreement and
its amendment. As such, the Chamber could not uphold the argumentation of the player
regarding the jurisdiction clause included in the preliminary agreement for the player (and the
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club) later executed the image rights agreement establishing a different jurisdiction clause
than the one set forth in the preliminary agreement. The Chamber noted that such was not
the case of the federative contract, which possessed no jurisdiction clause.
65. In view of all the above, the DRC unanimously concluded that it was not competent to
entertain the player’s claims insofar as they referred to the image rights agreement. Likewise,
the Chamber stressed that it also lacked jurisdiction to decide upon the amendment to the
image rights agreement, taking into consideration that – in spite of not having a proper
jurisdiction clause – it ratified the content of the previous contract signed between the parties
and did only amend the payment schedule in order to mitigate the financial consequences of
the COVID-19 pandemic.
66. Therefore, the DRC unanimously decided that the player’s claim is partially inadmissible.
67. For the sake of completeness, the Chamber clarified that the abovementioned conclusion
renders moot any discussion that could arise with regards to (i) the employment-related
nature of the image rights agreement (and the Football Tribunal’s jurisprudence on the
matter); and (ii) the player’s standing the sue on behalf of the company. As such, the Chamber
did not enter into such analysis and makes no finding on it.
b. Applicable legal framework
68. 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 31 July 2021, the February 2021 edition of
said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the
substance.
c. Burden of proof
69. 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).
d. Merits of the dispute
70. 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,
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arguments and documentary evidence, which it considered pertinent for the assessment of
the matter at hand.
i. Main legal discussion and considerations
71. The foregoing having been established, the Chamber moved to the substance of the matter,
and observed that – apart from the requests for relief in connection with the image rights
agreement and it amendment – the player further requested outstanding remuneration
regarding (i) the balance of his salaries amounting to USD 71,716.08 net; and (ii) the
difference of his salaries from the first and the second semesters of 2020 in line with clause
1.3 of the preliminary agreement.
72. On the opposite side, the DRC was also mindful of the club’s allegations as to the calculation
of the monies in BRL as well as to the force majeure situation faced as a result of the COVID19 pandemic. Alternatively, the Chamber also considered the club’s allegations as to the
player’s calculation.
73. In this context, the Chamber deemed that it was its task to determine the following:
a. Which contract(s) shall be considered for the sake of the analysis?
b. Was the club entitled to vary the contractual terms previously established with the player?
c. Shall the player be awarded any outstanding salary?
d. Shall the player be awarded any outstanding remuneration under clause 1.3 of the
preliminary agreement?
74. The Chamber proceeded then to the analysis of each matter.
A. Which contract(s) shall be considered for the sake of
the analysis?
75. Initially, the Chamber found it noteworthy to recall that the parties signed a constellation of
agreements in order to address the conditions of their employment relationship. Firstly, the
parties stipulated the essential financial obligations under the preliminary agreement and,
subsequently, they signed the federative contract and the image rights agreement, which
were each subsequently amended due to the outbreak of the COVID-19 pandemic.
76. In this respect, the Chamber noted that the federative contract does not bear any provision
of entire agreement, entailing that – in the Chamber’s opinion – the obligations previously
established in the preliminary agreement were not expressly novated. In other words, in spite
of being signed a posteriori, the DRC considered that the parties did not establish that the
federative contract superseded their previous understandings nor constituted their entire
agreement between them. It follows, in the Chamber’s opinion, that the preliminary
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REF FPSD-3206
agreement and the federative contract are not exclusive between each other, but rather shall
be considered intertwined and entertained together, with the federative contract
supplementing the preliminary agreement.
77. Consequently, the DRC decided that both the preliminary agreement and the federative
contract shall be taken into consideration for the sake of the analysis of the case at hand,
bearing always in mind the true intention of the parties.
B. Was the club entitled to vary the contractual terms
previously established with the player?
78. At this point, the DRC noted that the club referred to the COVID-19 pandemic and informed
that it faced a legal situation of force majeure. In this context, the club claimed that: (i) clause
1.3 of the preliminary agreement should not be applied to the case at hand; or, alternatively,
(ii) any outstanding remuneration due to the player shall be fixed in local currency in order to
mitigate further damages.
79. Taking the above into consideration, the Chamber firstly wished to highlight that 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
harmonised in the common interest. Moreover, on 11 June 2020, FIFA has issued an
additional document, referred to as FIFA COVID-19 FAQ, which provides clarifications on the
most relevant questions in connection with the regulatory consequences of the COVID-19
outbreak and identifies solutions for new regulatory matters.
80. In particular, in accordance with pages 6 and 7 of said COVID 19 Guidelines, clubs and
employees were “strongly encouraged to work together to find appropriate collective
agreements to work together to find appropriate collective agreements on a club or a league
basis regarding employment conditions for any period where the competition is suspended
due to the COVID-19 outbreak”.
81. To this extent, the Chamber founded it crucial that parties had already established new
contractual conditions in order to mitigate the consequences of the COVID-19 pandemic via
the written amendments to the federative contract. In particular, the DRC outlined that the
player had already agreed to reduce his salaries by 25% between 15 May 2020 and 14 August
2020.
82. In light of the above, the members of the Chamber were satisfied with the conclusion that
the parties had already engaged in good faith negotiations and concluded valid amendment
to both contracts. Consequently, the DRC deemed that any further unilateral variation of the
contracts would not only be unreasonable and disproportionate, but also lacked legal and
regulatory basis.
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REF FPSD-3206
83. Likewise, the Chamber was also firm to determine that the variation of the exchange rate is
part of a business’ risk and should have been considered by the club while drafting the
preliminary agreement and, in particular, while establishing the wording of its clause 1.3 (and
not adding any exception to the subsequent amendments). What is more, the DRC
highlighted that economic impacts are not a valid reason for not performing one’s obligations
in line with its solid jurisprudence.
84. Therefore, the members of the Chamber unanimously decided that the club’s argumentation
in this respect should be entirely rejected.
C. Shall the player be awarded any outstanding salary?
85. Having established the above, the Chamber considered that the player requested to be
awarded USD 71,716.08 net, corresponding to the balance of his outstanding salaries. On
the other hand, the DRC highlighted that the club expressly acknowledged the player’s
request, but failed to contest his entitlement.
86. Consequently, the DRC decided that the player shall be awarded the outstanding
remuneration sought as it was not disputed.
87. Considering that the amounts were not specified, the Chamber referred to its jurisprudence
and determined that interest of 5% p.a. should arise over the outstanding amount as from
the date of the natural expiry of the employment relationship (i.e. 31 December 2020) until
the date of the effective payment by the club.
D. Shall the player be awarded any outstanding
remuneration under clause 1.3 of the preliminary
agreement?
88. In continuation, the Chamber considered that, in accordance with the player’s calculations
regarding clause 1.3 of the preliminary agreement, he is entitled to receive: (i) USD 52,174.42
net, corresponding to the first semester of 2020; plus (ii) USD 76,183.01 net, corresponding
to the second semester of 2020.
89. The Chamber also noted that the club claimed that the player miscalculated the outstanding
amounts. In particular, the club mentioned that: (i) the player is claiming USD 60.13 more
than it would have right; and (ii) for the month of May, the player would only be entitled to
USD 46,437.25 instead of USD 47,088.41.
90. Taking into consideration the above, the DRC firstly acknowledged that the difference raised
by the club over the amounts charged by the player arises from minor differences in the
exchange rates provided by each party combined with the number of decimal digits used for
the sake of calculation: while the player used two decimal digits, the club used four decimal
digits. Likewise, the Chamber considered that the second challenge raised by the club arises
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REF FPSD-3206
from the fact that its calculation is based on a pro rata of 17 days (i.e. as from 15 May until
31 May), instead of the 15 days used by the player.
91. Bearing in mind that the player did not specifically contest the club’s argumentation in spite
of having the opportunity to do so, as well as that the club’s position is supported by robust
documentary evidence, the Chamber decided to uphold the club’s defence.
92. Therefore, by referring to the general legal principle of pacta sunt servanda, the members of
the DRC unanimously concluded that the player should be awarded the following amounts:
Month
Date of
payment
March
April
May
June
07/04/2020
08/05/2020
24/06/2020
03/07/2020
July
August
September
October
November
December
Amount
paid in BRL
Exchange
rate in BRL
Amount
paid in USD
216’777.73
5.2211
41’519.55
216’777.73
5.7647
37’604.34
187’921.01
5.2429
35’842.95
162’671.39
5.3368
30’481.07
TOTAL OUTSTANDING (FIRST SEMESTER)
07/08/2020
178’903.29
5.4221
32’995.20
14/09/2020
216’777.73
5.2978
40’918.44
07/10/2020
216’777.73
5.6012
38’702.02
09/11/2020
216’777.73
5.2815
41’044.73
07/12/2020
216’777.73
5.1012
42’495.44
09/03/2021
216’777.73
5.8391
37’125.20
TOTAL OUTSTANDING (SECOND SEMESTER)
Amounts due in
USD
(cf. clause 1.3 of
the preliminary
agreement)
53’815.33
53’815.33
46’437.25
40’361.50
40’361.50
53’815.33
53’815.33
53’815.33
53’815.33
53’815.33
Balance in USD
12’295.78
16’210.99
10’594.30
9’880.43
USD 48’981.50
7’366.30
12’896.89
15’113.31
12’770.60
11’319.89
16’690.13
USD 76’157.13
93. Finally, taking into consideration the player’s request as well as the constant practice of the
Chamber in this regard, the latter decided to award him interest at the rate of 5% p.a. on
the outstanding amounts as from 1 July 2020 for the first semester; and as from 1 January
2021 for the second semester, both until the date of effective payment.
94. In conclusion, the Chamber decided that insofar as the admissible part of the player’s claim
is concerned, he should be awarded the following concepts based on the principle pacta sunt
servanda:
a.
USD 71,716.08 net as the balance of his salaries, plus 5% interest p.a. as from 31
December 2020 until the date of effective payment;
b.
USD 48,981.50 net as outstanding remuneration in connection with clause 1.3 of the
preliminary agreement for the first semester of 2020, plus 5% interest p.a. as from 1 July
2020 until the date of effective payment; and
c.
USD 48,981.50 net as outstanding remuneration in connection with clause 1.3 of the
preliminary agreement for the second semester of 2020, plus 5% interest p.a. as from 1
January 2021 until the date of effective payment.
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REF FPSD-3206
ii. Art. 12bis of the Regulations
95. Having established the above, the DRC referred to art.12bis par. 2 of the Regulations, which
stipulates that any club found to have delayed a due payment for more than 30 days without
a prima facie contractual basis may be sanctioned in accordance with art. 12bis par. 4 of the
Regulations.
96. To this end, the Chamber confirmed that the player put the club in default of payment of the
amounts sought, which had fallen due for more than 30 days, and granted the club with 10
days to cure such breach of contract.
97. Accordingly, the DRC confirmed that the club had delayed a due payment without a prima
facia contractual basis. It followed that the criteria enshrined in art. 12bis of the Regulations
was met in the case at hand.
98. The Chamber further established that by virtue of art. 12bis par. 4 of the Regulations it has
competence to impose sanctions on the club. On account of the above, the DRC decided to
impose a warning on the club in accordance with art. 12bis par. 4 lit. a) of the Regulations.
99. In this connection, the DRC highlighted that a repeated offence will be considered as an
aggravating circumstance and lead to more severe penalty in accordance with art. 12bis par.
6 of the Regulations.
iii. Compliance with monetary decisions
100.Finally, taking into account the applicable Regulations, the Chamber referred to art. 24bis
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.
101.In this regard, the DRC highlighted 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. The overall maximum
duration of the registration ban shall be of up to three entire and consecutive registration
periods.
102.Therefore, bearing in mind the above, the DRC decided that the club must pay the full amount
due (including all applicable interest) to the player within 45 days of notification of the
decision, failing which, at the request of the player, a ban from registering any new players,
either nationally or internationally, for the maximum duration of three entire and consecutive
registration periods shall become immediately effective on the club in accordance with art.
24bis par. 2, 4, and 7 of the Regulations.
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REF FPSD-3206
103.The club shall make full payment (including all applicable interest) to the bank account
provided by the player in the Bank Account Registration Form, which is attached to the
present decision.
104.The DRC 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. 8 of
the Regulations.
e. Costs
105.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.
106.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.
107.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-3206
IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Damián Marcelo Musto, is partially accepted insofar it is admissible.
2.
The Respondent, SC Internacional, has to pay to the Claimant the following amounts:
- USD 48,981.50 net as outstanding remuneration plus 5% interest p.a. as from 1 July 2020
until the date of effective payment; and
- USD 71,716.08 net as outstanding remuneration plus 5% interest p.a. as from 31 December
2020 until the date of effective payment;
- USD 76,157.13 net as outstanding remuneration plus 5% interest p.a. as from 1 January 2021
until the date of effective payment.
3.
Any further claims of the Claimant are rejected.
4.
A warning is imposed on the Respondent.
5.
Full payment (including all applicable interest) shall be made to the bank account indicated in the
enclosed Bank Account Registration Form.
6.
Pursuant to art. 24bis of the Regulations on the Status and Transfer of Players if full payment
(including all applicable interest) is not made within 45 days of notification of this decision, the
following consequences shall apply:
1. The Respondent shall be banned from registering any new players, either nationally or
internationally, up until the due amount is paid. The maximum duration the ban shall be of
three entire and consecutive registration periods.
2. The present matter shall be submitted, upon request, to the FIFA Disciplinary Committee in
the event that full payment (including all applicable interest) is still not made by the end of
the three entire and consecutive registration periods.
7. The consequences shall only be enforced at the request of the Claimant in accordance with
art. 24bis par. 7 and 8 and art. 24ter of the Regulations on the Status and Transfer of Players.
8. This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
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REF FPSD-3206
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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