Labour Disputes
Texto da decisão
REF FPSD-4648
Decision of the
Dispute Resolution Chamber
passed on 5 May 2022
regarding an employment-related dispute concerning the player
Felix Chidi Odili
BY:
Frans de Weger (Netherlands), Chairperson
Kahija Timera (Senegal), member
Khalid Awad Al-Thebity (Saudi Arabia), member
CLAIMANT:
Player Felix Chidi Odili, Nigeria
Represented by Susanah Ng
RESPONDENT 1:
Kelantan Football Association, Malaysia
RESPONDENT 2:
TRW Kelantan Football, Malaysia
Represented by Sheffie & Partners
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I.
Facts of the case
1.
On 10 December 2019, the Nigerian player Felix Chidi Odili (hereinafter the Claimant or the Player)
received an offer (hereinafter the Offer) to join the Malaysian “Kelantan Football Association”
(hereinafter the Respondent 1 or the KAFA). The said Offer was valid until 30 December 2022.
2.
In the Offer, the Respondent 1 stipulated that the Claimant would be entitled to, inter alia, a
Signing Fee of USD 7,000 “pending on medical test and will be paid on 1st month salary”.
3.
On 27 December 2019, the Claimant and the Respondent 1 (hereinafter jointly referred to as the
Parties) concluded an employment agreement (hereinafter the Employment Agreement) valid as
from 1 January 2020 until 30 October 2020 “or the last game for the team in Malaysia League
2020”.
4.
In Clause 6.6 of the Employment Agreement, the Parties stipulated the following:
“Disputes involving non-Malaysian players arising out of or in connection with this Contract may
be brought to the FIFA Dispute Resolution Chamber (DRC) or the NDRC. All other disputes arising
out of or in connection with this Contract shall be brought to the NDRC. The decisions of FIFA DRC
and the NDRC are final and binding on both parties.”
5.
The financial conditions were agreed upon in Attachments to the Employment Agreement
referred to as Schedules.
6.
Next to the monthly salaries stipulated in Schedule A, the Claimant was entitled to “other
benefits” in accordance with Schedule B.
7.
In particular, in lit. d para. ii of the Schedule B, the Parties stipulated that “a Signing fee will be
paid once FIFA/FAM approved of registration and successfully register the player in the system”.
8.
Allegedly, as of 3 September 2020, the TRW Kelantan Football Club (hereinafter the Respondent 2
or TRW) “obtained the sporting licence” of Respondent 1 “to compete in the Malaysian Premier
League.”
9.
What is more, the Respondent 2 also started to pay the Claimant’s salary.
10. On 21 September 2020, the Respondent 1 and Respondent 2 signed a “Sale of Shares Agreement”,
according to which the Respondent 1 “have agreed to issue and transfer all their 100% shares to
the [Respondent 2] via a valid and registrable instrument of transfer together with the original
shares certificate and the [Respondent 2] has agreed to accept the transfer of 100% shares of the
Company upon the terms and conditions contained in this Agreement.”
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11. In the said Sale of Shares Agreement, the Respondents further agreed upon the following in
Clause 4.3 and Clause 5.1.1.1 (c), (d), (f) and (g):
“4.3 Any additional amount other than the total of RINGGIT MALAYSIA SIX MILLION EIGHT
HUNDRED THOUSAND (RM6,800,000-00) that is in arrears or remain due and owing shall be the
full responsibility of KAFA to ensure that the license criteria is fulfilled and ultimately issued by
FAM within the Completion Date, of which KAFA has agreed to indemnify the Purchaser under the
Letter of Indemnity mentioned in Clause 17 herein below.”
“c) Confirm and warrant that the Company shall be free of any past or current debts and is free
from all encumbrances upon handover/acquisition and if there are any further claims apart from
the amount in total of RINGGIT MALAYSIA SIX MILLION EIGHT HUNDRED THOUSAND
(RM6,800,000-00), the Purchaser shall not be held liable for any claims by any third party and
KAFA together with the Vendor hereby collectively indemnify the Purchaser of the same;
d) Confirm and warrant that there are no pending arbitration, legal action or legal suits brought
against the Company with or without knowledge and the Vendors shall fully indemnify and keep
the Purchaser indemnified of all such previous claims against the Company upon
handover/acquisition apart from the total of RINGGIT MALAYSIA SIX MILLION EIGHT HUNDRED
THOUSAND (RM6,800,000-00); (…)
g) Manage and pay all existing penalties, debts due and owing above the sum of RINGGIT
MALAYSIA SIX MILLION EIGHT HUNDRED THOUSAND (RM6,800,000-00), to the Football
Association of Malaysia ("FAM") or any third party which may affect the performance of the Club,
with proof of the same (where required) (…)”
12. In this respect, during the investigation phase of the current proceedings, FIFA Administration was
informed by the Football Association of Malaysia (hereinafter the FAM) that “TRW Kelantan
Football Club ("TRW") took over the football team of Kelantan Football Association ("KAFA") to
participate in our national championship. For your information, starting in season 2021, all football
teams in Malaysia must be privatized from FA to FC to compete in our national championships.”
13. Furthermore, the FAM added that “KAFA is still affiliated to FAM but does not participate in any
of the competitions organised under the auspices of FAM.”
14. On 6 December 2021, the Claimant sent a letter to the Respondent 2, requesting the amount of
USD 7,000, corresponding to the outstanding signing fee.
15. By a letter dated 9 December 2021, the Respondent 2 replied to the Claimant. In its
correspondence it argued, inter alia, that “TRW had been bought over the football club via a Sale
of Shares Agreement dated 21 September 2020 (“Sale of Shares Agreement”) and had taken over
as the new management a month before the end of Season 2020.”
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16. As to the alleged outstanding signing fee, the Respondent 2 added that “the balance remaining
season’s salary is paid by the new management of TRW Kelantan FC, however we aver that TRW
Kelantan FC has no knowledge of the ‘signing fee’ agreed to by KAFA and/or its representatives in
2019.”
17. By a letter dated 14 December 2021, the Claimant reiterated his request concerning the payment
of USD 7,000.
18. On an unspecified date, the Claimant signed the following document:
II. Proceedings before FIFA
19. On 26 December 2021, the Claimant filed the claim at hand before FIFA. A brief summary of the
position of the parties is detailed in continuation.
a. Position of the Claimant
20. In his claim, the Claimant requested the amount of USD 7,000 for the signing fee, plus 5% interest
p.a. “from date of the Claimant’s registration at FAM or 29 February 2020 until date of full
payment”.
21. The Claimant firstly argued that “[a]lthough the Contract does not provide for the quantum of the
signing fee, the Letter of Offer does. The Claimant submits that the Letter of Offer shall be read
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together with the Contract. The intention of the parties on the financial benefits were encapsulated
in the Letter of Offer-which was then reflected in the Contract. Thus, it is undisputed that the
quantum of the signing fee is USD 7,000.”
22. Furthermore, the Claimant asserted that it was the Respondent 1 who failed to make the
respective payment of the signing fee, however that the “contractual obligation was subsequently
vested on the Respondent [2] on or around 3 September 2020 when it acquired the assets and
sporting license of the Respondent [1] and commence making payment of the Claimant’s salaries.”
23. In this respect, the Claimant was of the opinion that the Respondent 2 is the legal successor of the
Respondent 1.
24. In support of his allegations, the Claimant stated that the Respondent 2 “expressly admits to
having purchased the football club”, i.e. the Respondent 1, in his letter dated 9 December 2021.
25. Moreover, the Claimant pointed to the website of the Respondent 2, which reads as follows:
“Kelantan State football existed as early as 1889…This association was officially established as
Kelantan FA in 1946… On September 3, 2020, a new history was created when the privatisation of
the Kelantan state football team began after almost 74 years under the auspices of KAFA as
Kelantan FA. Team Red Warriors Sdn Bhd has signed an agreement to take over the Kelantan FA
team entirely…Here the beginning of the era of identify formation and the new spirit of TRW
Kelantan FC”.
26. As to the allegations of the Respondent 2 brought forward in the letter of 9 December 2021, i.e.
that the latter had “no knowledge of the ‘signing fee’”, the Claimant was of the opinion that such
argument cannot be taken into consideration due to the mentioned succession.
27. In this respect, the Claimant argued that the Respondent 2 “shall be liable for the due performance
of the Contract, including the fulfilment of any outstanding amounts.”
b. Position of the Respondent 1
28. Despite being invited to do so, the Respondent 1 failed to reply to the claim.
c. Position of the Respondent 2
29. Whereas the Respondent 2 did not dispute the restructuring of the involved entities, it rejected
the claim of the Claimant.
30. First of all, the Respondent 2 disputed the jurisdiction of FIFA when it argued that “the Player’s
contract was entered and/or executed in Malaysia. Hence by virtue of Section 59(2) of the
Subordinate Courts Act 1948, it is the Malaysian court that has the jurisdiction to hear the Player’s
Contract dispute which occurred in Malaysia whereby it states that:
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“Subject to this Act or any other written law, a Sessions Court shall have jurisdiction to hear and
determine any civil or criminal cause or matter arising within the local limits of jurisdiction
assigned to it under this section, or, if no such local limits have been assigned, arising in any part
of Peninsular Malaysia.””
31. Furthermore, the Respondent 2 argued that “it is not the party of and [that it] had been wrongly
and unjustly named as the party to the dispute between Claimant and the Respondent [1].”
32. As to the merits, the Respondent 2 argued that “the Claimant had executed a full and final
settlement confirmation whereby the Claimant shall not institute any further claims against the
Respondent [2].”
33. Furthermore, the Respondent 2 reiterated that, in any event, “it is not the party to the contract
made between the Claimant and Respondent [1]” and, therefore, “this claim should be solely
directed to the Respondent [1] instead of the Respondent [2].”
34. In this respect, the Respondent 2 argued “that a contract cannot confer rights or impose
obligations upon any person who is not a party to the contract” and continued that “the Signing
Fee was never declared as an outstanding debt and liability by the Respondent [1] in the Sale of
Shares Agreement at all material times.”
35. The Respondent 2 finally argued that “any claims made in excess of the amount of RM6,800,00000 shall be the responsibility and the remaining liability of the Respondent [1] as stipulated in
Clause 4.3, Clause 5.1.1.1 (c), (d), (f) and (g) of the Sale of Shares Agreement.”
d. Final comments of the Claimant
36. The Claimant was requested to comment on the document, in which “the Claimant had executed
a full and final settlement confirmation whereby the Claimant shall not institute any further claims
against the Respondent [2].”
37. In this respect, the Claimant did not dispute the validity of the document, yet he argued that “at
the point of execution of the document at Tab E, that it was merely a settlement of all outstanding
salaries, as per the title heading "OUTSTANDING PAYMENT SALARIES ACCEPTANCE” and that the
signing on fees will be paid separately.”
38. Furthermore, the Claimant continued that “he had only agreed to accept RM73,000, per the letter,
i.e “as the full and final settlement of [my] outstanding salaries” and at no point in time did he
consider waiving his rights to the signing on fee.”
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III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
39. 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 26 December 2021 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.
40. 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 (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 Nigerian player and two Malaysian clubs.
41. The Chamber further noted that the Respondent 2 contested the competence of FIFA’s deciding
bodies in favour of Malaysian courts, alleging that the latter are competent to deal with any
dispute deriving from the relevant employment contract “by virtue of Section 59(2) of the
Subordinate Courts Act 1948, it is the Malaysian court that has the jurisdiction to hear the Player’s
Contract dispute which occurred in Malaysia.”
42. In this respect, the DRC recalled its long-standing jurisprudence that a choice of jurisdiction must
be clear and exclusive. In this respect, the Chamber emphasised that the Employment Agreement
does not contain any jurisdiction clause, nor any choice of law in favour of the Malaysian law nor
such courts as asserted by the Respondent 2. What is more, the Chamber recalled Clause 6.6 of
the Employment Agreement, specifically foreseeing the competence of FIFA DRC in case of an
international dispute.
43. Taking into account all the above, DRC concluded that it has jurisdiction to hear the present claim.
44. 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) and considering that the present
claim was lodged on 26 December 2021, 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
45. 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
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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
46. 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 abovementioned 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
47. The foregoing having been established, the Chamber moved to the substance of the matter, and
took note of the diverging positions of the Claimant and the Respondent 2 regarding the standing
to be sued of Respondent 2.
48. In particular, the Chamber observed that the Respondent 2 primarily argued that is shall not be
part of the proceedings as it “had been wrongly and unjustly named as the party to the dispute
between Claimant and the Respondent [1].”
49. In respect of the above, the DRC deemed it appropriate to underline that, as a general rule, a party
has standing to be sued if it is potentially liable, in virtue of a previously concluded valid and
binding contract, to bear the legal consequences of a breach thereof and to legally respond to a
claim for tangible and protectable rights deriving from said contract. The DRC furthermore
remarked that the issue of standing pertains to the merits of a dispute.
50. In this respect, the Chamber focused on the objections raised by the Respondent 2 regarding its
standing to be sued in the matter at hand and noted that in order to solve said issue, it appears
of paramount relevance to establish whether the sporting succession alleged by the Claimant
exists or not.
51. Bearing the foregoing in mind, the DRC wished to remark that, in line with FIFA’s decision-making
bodies’ jurisprudence related to the topic of sporting succession between clubs, as well as to the
CAS Award 2016/A/4550, which mutatis mutandis can be applied to the present matter, a club is
a sporting entity identifiable by itself that, as a general rule, transcends the legal entities which
operate it. More in particular, said CAS Award – to which the Chamber adhered - referred to the
following:
“the obligations acquired by any of the entities in charge of its administration in relation with its
activity must be respected; and on the other side, that the identity of a club is constituted by
elements such as its name, colours, fans, history, sporting achievements, shield, trophies, stadium,
roster of players, historic figures, etc. that allow it to distinguish from all the other clubs. Hence,
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the prevalence of the continuity and permanence in time of the sporting institution in front of the
entity that manages it has been recognised, even when dealing with the change of management
companies completely different from themselves”.
(original text in Spanish).
52. The Chamber equally recalled that, when assessing disputes, it may also consider evidence not
presented by the parties, in line with art. 13 par. 4 of the Procedural Rules.
53. In this context, the Chamber first noted that after Respondent 2 obtained the sporting license of
Respondent 1, the Claimant got convinced that his employment contract originally signed with
the Respondent 1 was novated to an employment relationship with Respondent 2.
54. In order to ascertain whether the premises of the alleged sporting succession subsist and so as to
verify whether the Claimant’s expectations in this regard were effectively founded, the Chamber
made a thorough analysis of the facts and circumstances under which the privatization process of
football clubs in Malaysia occurred, taking into relevant consideration the official position
provided by the FAM in this regard.
55. In this regard, the DRC recalled that the FAM clarified that “TRW Kelantan Football Club ("TRW")
[the Respondent 2] took over the football team of Kelantan Football Association ("KAFA") [the
Respondent 1] to participate in our national championship. For your information, starting in
season 2021, all football teams in Malaysia must be privatized from FA to FC to compete in our
national championships.”
56. In view of the above, the DRC could not ignore to have received confirmation directly from FAM
that its affiliated member, the Respondent 2, could indeed be considered as the legal successor
of the Respondent 1 and that it participates in its national championships through the latter’s
licensing slot.
57. Furthermore, the Chamber recalled that the official website of the Respondent 2 reads that
“Kelantan State football existed as early as 1889…This association was officially established as
Kelantan FA in 1946… On September 3, 2020, a new history was created when the privatisation of
the Kelantan state football team began after almost 74 years under the auspices of KAFA as
Kelantan FA. Team Red Warriors Sdn Bhd has signed an agreement to take over the Kelantan FA
team entirely…Here the beginning of the era of identify formation and the new spirit of TRW
Kelantan FC.”
58. In this respect, the Chamber noted that the restructuring of the involved entities remained, in
principle, undisputed by both Respondents and that the Respondent 2 was merely of the opinion
that it should not be a party to the present dispute as it is not a party to the relevant Employment
Agreement.
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59. Nonetheless, the Chamber wished to point out that in line with notion of sporting succession, the
new club can be held liable to assume the financial obligations of the former club. This is the case
even if the new club (i.e. the sporting successor) was not a party to any agreement with the
creditor and not named in the decision the creditor seeks to enforce (e.g. for unpaid salary).
60. Finally, the Chamber recalled the latest decisions concerning the privatisation of the football clubs
in Malaysia (FPSD-3141, FPSD-3143, FPSD-2425), and the conclusion of the relevant FIFA deciding
bodies that the new entity (i.c. Respondent 2) is de facto a continuation of the old entity
(i.c. Respondent 1), but under a different name only.
61. The DRC concluded that the same should apply in the present matter, hence, that Respondent 2
is the sporting successor of Respondent 1 and, consequently, has indeed standing to be sued in
the matter at hand.
62. For the sake of completion, as to the arguments touching upon the limited liability of the
Respondent 2 established in the Sale of Shares Agreement, the Chamber was of the opinion that
this does not bear any effect on the sporting succession.
63. In this respect, with regard to the relationship between the Respondents, the DRC emphasised
that it is not an appropriate channel to deal with such specific topic of purely national nature.
64. Once established the Respondent’s 2 standing to be sued and moving through the merits of the
dispute, the Chamber observed that the Claimant is of the opinion that an amount of USD 7,000
for the signing fee remained outstanding.
65. In this respect, the DRC drew its attention to the document mentioned in par. I./18. and to the
fact that the Claimant did not contest its validity, what is more, that he explicitly recognized to
have executed the said document.
66. Recalling its contents, the DRC was of the opinion that the Claimant has no legal basis to claim the
sign-on fee of USD 7,000, as he confirmed that “there are no outstanding payments by [the
Respondent 2] nor by [the Respondent 1] and [the Claimant] shall have no further claims against
both of them in the future”.
ii. Consequences
67. Having stated the above, the members of Chamber decided that, in principle, the Respondent 2
is the liable party in the matter at hand, however that, in view of the contents of the document
signed by the Claimant, the claim of the Claimant against Respondent 2 had to be rejected.
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d. Costs
68. 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.
69. 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.
70. Lastly, the DRC concluded its deliberations by rejecting any other requests for relief made by any
of the parties.
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IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Felix Chidi Odili, against Respondent 1, Kelantan Football Association,
is admissible.
2.
The claim of the Claimant, Felix Chidi Odili, against Respondent 1, Kelantan Football Association,
is rejected.
3.
The claim of the Claimant, Felix Chidi Odili, against Respondent 2, TRW Kelantan Football, is
admissible.
4.
The claim of the Claimant, Felix Chidi Odili, against Respondent 2, TRW Kelantan Football, is
rejected.
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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