Labour Disputes
Texto da decisão
REF. FPSD-13529
Decision of the
Dispute Resolution Chamber
passed on 20 March 2024
regarding an employment-related dispute concerning
the player Petteri Pennanen
BY:
Sihon Gauci (Malta), Single Judge
CLAIMANT:
Petteri Pennanen, Finland
Represented by Vadim Lyubinskiy
RESPONDENT:
Hyderabad FC, India
Represented by Hemant Raj Phalpher
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REF. FPSD-13529
I. Facts of the case
1.
On 11 July 2023, the Finnish player Petteri Henri Juhana Pennanen (hereinafter: the
Claimant or the player) and the Indian club Hyderabad FC (hereinafter: the Respondent or
the club) concluded an employment contract (hereinafter: the Contract), valid from the same
date until 31 May 2024.
2.
In accordance with the Contract, the Respondent undertook to pay to the Claimant inter
alia a monthly net salary of USD 4,000.
3.
On the same date, the Claimant and the Respondent (hereinafter jointly referred to as: the
parties) signed a further document entitled “Side Letter”, pursuant to which the Respondent
undertook to pay the Claimant an additional monthly remuneration of USD 5,500.
4.
Furthermore, under clause 1 lit. c) and d) of the Side Letter, the parties agreed on two
conditional bonuses in favour of the Claimant subject to the latter’s participation as a
starter respectively in at least 50% and 85% of all the official games played by the
Respondent’s first team during the season 2023/2024.
5.
By correspondence dated 11 January 2024, the Claimant put the Respondent in default of
payment of USD 19,000 granting a deadline of 15 days to remedy the breach.
6.
On 29 January 2024, the Claimant notified the Respondent of the unilateral termination of
the Contract, effective from 1 December 2023.
7.
On the same date, the Claimant signed a new employment contract with the Finnish club
Kuopion Palloseura, valid from 1 March 2024 until 30 November 2024.
8.
Pursuant to the Claimant’s new employment contract, he is entitled to a monthly salary of
EUR 5,150, corresponding to approx. USD 5,587.
II. Proceedings before FIFA
9.
On 29 January 2024 the Claimant filed the claim at hand before FIFA. A brief summary of
the position of the parties is detailed in continuation.
10. According to the Claimant, the Respondent failed to comply with its financial obligations
under the Contract and the Side Letter, namely by not paying the equivalent of two monthly
salaries.
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REF. FPSD-13529
11. In this respect, the Claimant held having had just cause to prematurely end their
employment relationship due to the overdue payables by the Respondent, hence the latter
shall pay a compensation.
12. Furthermore, the Claimant held being entitled to a total bonus of USD 25,000 based on
clause 1 lit. c) and d) of the Side Letter, stating that he participated as a starter in at least
85% of all official games with the Respondent’s first team.
13. The requests for relief of the Claimant, accordingly, were the following:
a) “Salary + Additional Fee (November 2023): USD 4,000 + USD 5,500 = USD 9,500 + 5% p.a.
from 10 December 2023 until the date of effective payment;
b) Salary + Additional Fee (December 2023): USD 4,000 + USD 5,500 = USD 9,500 + 5% p.a.
from 10 January 2024 until the date of effective payment;
c) Salary + Additional Fee (January 2024 – May 2024): USD 9,500 x 5 months = USD 47,500 +
5% p.a. from 29 January 2024 until the date of effective payment;
d) Bonus + additional bonus: USD 25,000 + 5% p.a. from 29 January 2024 until the date of
effective payment”.
14. In its reply, the Respondent acknowledged the existence of outstanding salaries at the date
of termination amounting to USD 19,000.
15. Nevertheless, the Respondent objected to the claim for the relevant bonuses under the
Side Letter, arguing that the Claimant participated in only 10 matches before terminating
the Contract, hence the relevant conditions for the payment of the said bonuses were not
met. Subsidiarily, the Respondent pleaded that any bonus shall otherwise be awarded prorated in consideration of the date of premature termination.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
16. First of all, the Single Judge of the Dispute Resolution Chamber (hereinafter also referred
to as the Single Judge) analysed whether she was competent to deal with the case at hand.
In this respect, she took note that the present matter was presented to FIFA on 29 January
2024 and submitted for decision on 20 March 2024. Taking into account the wording of art.
34 of the March 2023 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.
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17. Subsequently, the Single Judge 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 (February 2024 edition), the Single Judge
of 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
Finnish player and an Indian club.
18. Subsequently, the Single Judge analysed which regulations should be applicable as to the
substance of the matter. In this respect, she confirmed that, in accordance with art. 26 par.
1 and 2 of the Regulations on the Status and Transfer of Players (February 2024 edition)
and considering that the present claim was lodged on 29 January 2024, the May 2023
edition of said regulations (hereinafter: the Regulations) is applicable to the matter at hand
as to the substance.
b. Burden of proof
19. The Single Judge 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 Single Judge
stressed the wording of art. 13 par. 4 of the Procedural Rules, pursuant to which she 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
20. The competence and the applicable regulations having been established, the Single Judge
entered into the merits of the dispute. In this respect, the Single Judge started by
acknowledging all the above-mentioned facts as well as the arguments and the
documentation on file. However, the Single Judge emphasised that in the following
considerations she will refer only to the facts, arguments, and documentary evidence,
which she considered pertinent for the assessment of the matter at hand.
i. Main legal discussion and considerations
21. The foregoing having been established, the Single Judge moved to the substance of the
matter, and took note of the fact that on 11 July 2023, the Claimant and the Respondent
concluded an employment agreement valid until 31 May 2024. The Single Judge equally
noted that on the same date the Parties agreed on an additional remuneration in favour
of the Claimant based on a document denominated “Side Letter”.
22. In continuation, the Single Judge observed that on 28 January 2024 the Claimant unilaterally
terminated the Contract, allegedly because of the Respondent’s failure to comply with the
financial obligations set under the abovementioned agreements.
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REF. FPSD-13529
23. In this this respect, the Single Judge noted that the Respondent acknowledged the
existence of outstanding salaries in favour of the Claimant at the time of the termination
and, thus, accepted the latter’s allegations in that respect.
24. Nonetheless, the Single Judge observed that the Respondent challenged the Claimant’s
entitlement to the relevant bonuses under art. 1 lit. c) and d) of the Side Letter.
25. In this regard, the Single Judge noted that according to the said agreement, the parties had
stipulated, inter alia, two bonuses in the amount of USD 10,000 and USD 15,000 in case the
Claimant’s had been fielded as a starter respectively in at least 50% and 85% of all the
official games played by the Respondent’s first team during the season 2023/2024.
26. In this respect, the Single Judge wished to emphasize that according to a common principle
of law, when interpreting a contract or a clause, the judging body shall first adhere to its
literal content, giving the words their natural and ordinary meaning together with the
principles of good faith and true intention of the parties, if the latter does not appear
evident from such words.
27. With the above in mind, the Single Judge was of the opinion that, in the case at stake, the
relevant clause of the Side Letter has been drafted in an unequivocal manner to the extent
that its interpretation results clear and without room for any further alternative conclusion,
therefore establishing that the Claimant shall play, as a starter, at least 50% or 85% of the
entire number of official games in which the Respondent’s first team took part during the
whole season 2023/2024.
28. However, the Single Judge observed that during the season 2023/2024 the Claimant
participated as a starter in 10 official games with the Respondent’s first team before
terminating the Contract on 29 January 2024. In this context, the Single Judge also noted
that the competition relevant to the case is the Indian Super League, which is a tournament
in a round-robin format with 12 teams participating, for a total of 22 matches played by
each team.
29. Accordingly, the Single Judge determined that the Claimant participated in less than 50%
of the official games played (or playable) by the Respondent’s first team during the season
2023/2024.
30. As a consequence, the Single Judge concluded that the Claimant could not be entitled to
the claimed bonuses.
31. With the foregoing in mind, the Single Judge moved to the event of the unilateral
termination by the Claimant in order to determine, based on the evidence at its disposal,
whether the formal pre-requisites of art. 14bis of the Regulations had in fact been fulfilled.
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REF. FPSD-13529
32. In continuation the Single Judge referred to the wording of art. 14bis par. 1 of the
Regulations, in accordance with which, if a club unlawfully fails to pay a player at least two
monthly salaries on their due dates, the player will be deemed to have a just cause to
terminate his contract, provided that he has put the debtor club in default in writing and
has granted a deadline of at least 15 days for the debtor club to fully comply with its
financial obligation(s).
33. In this context, the Single Judge noted that the Claimant claims having not received his
remuneration corresponding to the salaries due for November 2023 and December 2023.
Furthermore, the Single Judge noted that the Claimant provided written evidence of having
put the Respondent in default on 11 January 2024, i.e., at least 15 days before unilaterally
terminating the Contract on 29 January 2024.
34. Furthermore, the Single Judge noted that in the case at hand the Respondent bore the
burden of proving that it indeed complied with the financial terms of the contract
concluded between the parties. Nonetheless, the Respondent failed to provide any
evidence in this regard and rather acknowledged the existence and consistency of the
outstanding salaries claimed by the Claimant.
35. With all the foregoing in mind, the Single Judge concluded that the Claimant had a just
cause to unilaterally terminate the contract on 29 January 2024, based on art. 14bis of the
Regulations.
ii. Consequences
36. Having stated the above, the Single Judge turned her attention to the question of the
consequences of such unjustified breach of contract committed by the club.
37. The Single Judge observed that the outstanding remuneration at the time of termination,
coupled with the specific requests for relief of the player, are equivalent to two salaries
under the contract, amounting to USD 19,000.
38. As a consequence, and in accordance with the general legal principle of pacta sunt servanda,
the Single Judge decided that the club is liable to pay to the player the amounts which were
outstanding under the contract at the moment of the termination, i.e., USD 19,000 (i.e., two
times USD 9,500).
39. In addition, taking into consideration the player’s request as well as the constant practice
of the Football Tribunal in this regard, the latter decided to award the player interest at the
rate of 5% p.a. on the outstanding amounts as from the respective due dates until the date
of effective payment.
40. Having stated the above, the Single Judge turned to the calculation of the amount of
compensation payable to the player by the club in the case at stake. In doing so, the Single
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REF. FPSD-13529
Judge firstly recapitulated that, in accordance with art. 17 par. 1 of the Regulations, 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 player 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.
41. In application of the relevant provision, the Single Judge held that she first of all had to
clarify as to whether the pertinent employment contract contained a provision by means
of which the parties had beforehand agreed upon an amount of compensation payable by
the contractual parties in the event of breach of contract. In this regard, the Single Judge
established that no such compensation clause was included in the employment contract at
the basis of the matter at stake.
42. As a consequence, the Single Judge determined that the amount of compensation payable
by the club to the player had to be assessed in application of the other parameters set out
in art. 17 par. 1 of the Regulations. The Single Judge recalled that said provision provides
for a non-exhaustive enumeration of criteria to be taken into consideration when
calculating the amount of compensation payable.
43. Bearing in mind the foregoing as well as the claim of the player, the Single Judge proceeded
with the calculation of the monies payable to the player under the terms of the contract
from the date of its unilateral termination until its end date. Consequently, the Single Judge
concluded that the amount of USD 47,500 (i.e. the residual value) serves as the basis for
the determination of the amount of compensation for breach of contract.
44. In continuation, the Single Judge verified as to whether the player had signed an
employment contract with another club during the relevant period of time, by means of
which he would have been enabled to reduce his loss of income. According to the constant
practice of the Single Judge as well as art. 17 par. 1 lit. ii) of the Regulations, such
remuneration under a new employment contract shall be taken into account in the
calculation of the amount of compensation for breach of contract in connection with the
player’s general obligation to mitigate his damages.
45. Indeed, the player found employment with the Finnish club Kuopion Palloseura. In
accordance with the pertinent employment contract, the player was entitled to
approximately EUR 5,150 per month. Therefore, the Single Judge concluded that the player
mitigated his damages in the total amount of USD 16,762, that is, three times USD 5,587.
46. Subsequently, the Single Judge referred to art. 17 par. 1 lit. ii) of the Regulations, according
to which a player is entitled to an amount corresponding to three monthly salaries as
additional compensation should the termination of the employment contract at stake be
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REF. FPSD-13529
due to overdue payables. In the case at hand, the Single Judge confirmed that the contract
termination took place due to said reason i.e. overdue payables by the club, and therefore
decided that the player shall receive additional compensation.
47. In this respect, the Single Judge decided to award the amount of additional compensation
of USD 27,500, i.e. three times the monthly remuneration of the player.
48. However, the Single Judge reminded the parties that, as per the last sentence of art. 17 par.
1 lit. ii) of the Regulations, the overall compensation may never exceed the rest value of the
prematurely terminated contract.
49. Consequently, on account of all of the above-mentioned considerations and the
specificities of the case at hand, the Single Judge decided that the club must pay the amount
of USD 47,500 to the player (i.e. USD 47,500 minus USD 16,762 plus USD 16,762), which
was to be considered a reasonable and justified amount of compensation for breach of
contract in the present matter.
50. Lastly, taking into consideration the player’s request as well as the constant practice of the
Single Judge in this regard, the latter decided to award the player interest on said
compensation at the rate of 5% p.a. as of 29 January 2024 until the date of effective
payment.
51. The Single Judge equally confirmed that the amounts shall be awarded net in line with the
contents of the Contract.
iii. Compliance with monetary decisions
52. Finally, taking into account the applicable Regulations, the Single Judge referred to art. 24
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.
53. In this regard, the Single Judge 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.
54. Therefore, bearing in mind the above, the Single Judge decided that the Respondent must
pay the full amount due (including all applicable interest) to the Claimant within 45 days of
notification of the decision, failing which, at the request of the Claimant, a ban from
registering any new players, either nationally or internationally, for the maximum duration
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of three entire and consecutive registration periods shall become immediately effective on
the Respondent in accordance with art. 24 par. 2, 4, and 7 of the Regulations.
55. The Respondent shall make full payment (including all applicable interest) to the bank
account provided by the Claimant in the Bank Account Registration Form, which is attached
to the present decision.
56. The Single Judge 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. 24 par.
8 of the Regulations.
d. Costs
57. The Single Judge 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 Single Judge decided that no procedural costs were to be
imposed on the parties.
58. Likewise, and for the sake of completeness, the Single Judge recalled the contents of art.
25 par. 8 of the Procedural Rules and decided that no procedural compensation shall be
awarded in these proceedings.
59. Lastly, the Single Judge concluded its deliberations by rejecting any other requests for relief
made by any of the parties.
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REF. FPSD-13529
IV. Decision of the Dispute Resolution Chamber
1.
The claim of the Claimant, Petteri Pennanen, is partially accepted.
2.
The Respondent, Hyderabad FC, must pay to the Claimant the following amount(s):
USD 19,000 net as outstanding remuneration plus interest p.a. as follows:
- 5% interest p.a. over the amount of USD 9,500 as from 11 December 2023 until
the date of effective payment;
- 5% interest p.a. over the amount of USD 9,500 as from 11 January 2024 until the
date of effective payment;
USD 47,500 net as compensation for breach of contract without just cause plus 5%
interest p.a. as from 29 January 2024 until the date of effective payment.
3.
Any further claims of the Claimant are rejected.
4.
Full payment (including all applicable interest) shall be made to the bank account indicated
in the enclosed Bank Account Registration Form.
5.
Pursuant to art. 24 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 of the ban shall
be of up to 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.
6.
The consequences shall only be enforced at the request of the Claimant in accordance
with art. 24 par. 7 and 8 and art. 25 of the Regulations on the Status and Transfer of Players.
7.
This decision is rendered without costs.
For the Football Tribunal:
Emilio García Silvero
Chief Legal & Compliance Officer
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REF. FPSD-13529
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 Governing the Football
Tribunal).
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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