Labour Disputes
Texto da decisão
REF FPSD-3099
Decision of the
Dispute Resolution Chamber
passed on 28 October 2021
regarding an employment-related dispute concerning the player Marcio
Augusto da Silva Barbosa
COMPOSITION:
Mr Frans de Weger (The Netherlands), Deputy Chairperson
Mr Johan van Gaalen (South Africa), member
Ms Dana Mohamed Al-Noaimi (Qatar), member
CLAIMANT:
Player Marcio Augusto da Silva Barbosa, Brazil
Represented by Mariju Ramos Maciel
RESPONDENT:
Chongqing Liangjiang Athletic Football Club, China PR
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I.
Facts of the case
1.
On 5 July 2019, the Brazilian player, Marcio Augusto da Silva Barbosa (hereinafter: the
Claimant or player), and the Chinese club, Chongqing Liangjiang Athletic Football Club
(hereinafter: the Respondent or club) signed an employment contract (hereinafter: contract)
valid as from the date of signature until 4 July 2024.
2.
According to the contract, the Respondent undertook to pay the Claimant, inter alia, the
following monies:
- EUR 47,916 net as monthly salary between July 2020 and June 2021;
- EUR 52,083 net as monthly salary between July 2021 and June 2022;
- EUR 56,250 net as monthly salary between July 2022 and June 2023;
- EUR 62,500 net as monthly salary between July 2023 and June 2024.
Art. 10 of the contract states: “If any party constitutes the fundamental breach as agreed
herein, the observant party shall have the right to terminate this agreement for just cause.
Accordingly, the default party shall pay damages compensation to the observant party. In the
event that [the Respondent] breaches this Agreement, such damages shall be equal to 30%
of the outstanding amount of the contract. In the event [the Claimant] breaches this
agreement, [the Claimant] shall pay [the Respondent] EUR 15,000,000 (fifteen million euros)
net of any taxes or fees as compensation."
3.
4.
On 29 November 2020, the Respondent notified the Claimant that he has to return to training
on 10 January 2021.
5.
On 12 January 2021, the Claimant put the Respondent in default and requested payment of
“the outstanding salaries” and taxes, within 15 days.
6.
On 26 January 2021, the Respondent replied to the Claimant stating that it would remit the
outstanding amounts soon.
7.
On 3 February 2021, the Claimant terminated the contract with the Respondent due to the
outstanding remuneration of more than 6 months.
8.
On 5 February 2021, the Respondent requested the Claimant to withdraw his termination.
9.
On 17 February 2021, the Claimant sent a letter to the Respondent and insisted on his
termination dated 3 February 2021.
10. On 2 March 2021, the Respondent reiterated its request for the player to withdraw his
termination notice.
11. On 8 March 2021, the Respondent notified the Claimant of its payments regarding his salaries
of 2020, i.e. CYN 2,657,322.04 (approx. EUR 343,000).
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12. On 21 July 2021, the Respondent made another payment of CYN 756,760.36 to the Claimant
(approx. EUR 99,000).
13. According to information contained in the Transfer Matching System (TMS), the Claimant
signed an employment contract with the Japanese club, Kawasaki Frontale, valid as from 1
July 2021 until 30 June 2022, including total remuneration of USD 290,000 (approx. EUR
245,000).
II. Proceedings before FIFA
14. On 20 July 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
15. The Claimant requested the following monies in his claim:
- EUR 91,003.06 net as partial outstanding salaries related to July 2020 until December
2020, plus 5% interest p.a. as of 12 January 2021;
- EUR 47,916 net as partial outstanding salary of January 2021 plus 5% interest p.a. as of
15 February 2021;
- EUR 2,289,584 net as compensation for breach of contract plus 5% interest p.a. as of 17
February 2021;
- EUR 287,500 net as additional compensation plus 5% interest p.a. as of 17 February 2021;
- EUR 200,000 net as compensation under the specificity of sports.
16. In his claim, the Claimant argued that he had just cause to terminate the contract on 3
February 2021 due to the Respondent’s non-compliance with its financial obligations.
17. The Claimant held that the fact that the Respondent paid parts of the salaries related to 2020
in March 2021 does not change that he had just cause to terminate the contract. In this
context, the player held that he was entitled to CYN 3,888,000, but that the club only paid
CYN 2,657,322.04, leaving him with an entitlement of EUR 91,003.06.
18. In this context, the player maintained being entitled to outstanding remuneration as well as
compensation for breach of contract.
19. Furthermore, the Claimant held that the compensation clause in art. 10 of the contract has
to be disregarded as such clause is disproportionate and sets out “an imbalanced situation”
between the parties, as the player would only be entitled to approx. 5% of the compensation
the club would be entitled to.
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20. On account of the above, the player requests compensation in the amount of the residual
value of the contract as well as additional compensation of 6 months due to egregious
circumstances.
b. Position of the Respondent
21. In its reply, the Respondent pointed out that the Claimant shall be entitled to EUR 640,675.29
and that all other requests should be rejected.
22. In this context, the Respondent acknowledged that it failed to pay the Claimant on time and
requested FIFA to take into account that COVID-19 caused financial difficulties.
23. The Respondent held that it informed the player that he shall return to training on 10 January
2021, but he failed to do so before it was not possible to enter China anymore due to the
COVID situation in Brazil, where he spent his holidays.
24. On account of the above, taking into account the payment after the termination, the
Respondent held that it remitted the player’s salaries up until February 2021.
25. Further, it pointed out that it negotiated with the player a settlement or a possible withdrawal
of his termination.
26. In view of the Claimant’s allegation that the contract was terminated on 3 February 2021,
the Respondent requested to take into account its “extra payment” in the calculation of the
compensation, i.e. EUR 42,782.15.
27. As to the calculation of the compensation, the Respondent held that art. 10 of the contract
shall be applied since it was contractually agreed between the parties. Therefore, calculating
a residual value of EUR 2,278,191.48, the Respondent argued that it owes compensation of
EUR 640,675.29 (CYN (EUR 2,278,191.48 * 30% - EUR 42,782.15).
28. The Respondent further requested to reject the claims regarding the additional compensation
as well as the compensation due to the specificity of sports.
29. In addition, it requested to take into account the mitigation of damages due to the player’s
new contract.
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III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
30. 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 20 July 2021 and submitted for decision on
28 October 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.
31. 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 competent to deal with the matter at stake, which concerns an
employment-related dispute with an international dimension between a Brazilian player and
a Chinese club.
32. 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 20 July 2021, the February 2021 edition of
said regulations (hereinafter: the Regulations) is applicable to the matter at hand as to the
substance.
b. Burden of proof
33. The Chamber recalled the basic principle of burden of proof, as stipulated in art. 13 par. 5 of
the Procedural Rules, according to which a party claiming a right on the basis of an alleged
fact shall carry the respective burden of proof. Likewise, the Chamber stressed the wording
of art. 13 par. 4 of the Procedural Rules, pursuant to which it may consider evidence not filed
by the parties, including without limitation the evidence generated by or within the Transfer
Matching System (TMS).
c. Merits of the dispute
34. Its competence and the applicable regulations having been established, the Chamber entered
into the merits of the dispute. In this respect, the Chamber started by acknowledging all the
above-mentioned facts as well as the arguments and the documentation on file. However,
the Chamber emphasised that in the following considerations it will refer only to the facts,
arguments and documentary evidence, which it considered pertinent for the assessment of
the matter at hand.
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i. Main legal discussion and considerations
35. The foregoing having been established, the Chamber moved to the substance of the matter,
and took note of the fact that the parties dispute the justice of the early termination of the
contract by the Claimant, based on the alleged non-payment of certain financial obligations
by the Respondent as per the contract.
36. In this context, the Chamber acknowledged that its task was to to determine as to whether
the contract was terminated by the Claimant with or without just cause and to decide on the
consequences thereof.
37. Taking into account the documentation on file, the DRC noted that the Respondent
acknowledged having paid the player “late” and referred to payments after his termination
dated 3 February 2021. In this context, the Chamber established that the club failed to pay
the salaries of more than 6 months at the time of the player’s termination.
38. Consequently, considering that the Respondent had thus repeatedly and for a significant
period of time been in breach of its contractual obligations towards the Claimant, the
Chamber decided that the Claimant had just cause to unilaterally terminate the employment
contract on 3 February 2021 and that, as a result, the Respondent is to be held liable for the
early termination of the employment contact with just cause by the Claimant.
ii. Consequences
39. Having stated the above, the members of the Chamber turned their attention to the question
of the consequences of such unjustified breach of contract committed by the Respondent.
40. As to the outstanding remuneration, the DRC established that the player was entitled to a
total amount of EUR 335,412 as of July 2020 until and including January 2021. The
Respondent submitted evidence of payments, after the termination, in the amount of EUR
442,000 (EUR 343,000 and EUR 99,000), which led to the conclusion that no remuneration
remained outstanding. The residual amount of EUR 106,588 paid in excess of the outstanding
remuneration shall be taken into account for the calculation of the compensation.
41. Having stated the above, the Chamber 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 Chamber
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.
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42. In application of the relevant provision, the Chamber held that it 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.
43. In this regard, the Chamber took note of the wording of clause 10 of the contract, which
established that “If any party constitutes the fundamental breach as agreed herein, the
observant party shall have the right to terminate this agreement for just cause. Accordingly,
the default party shall pay damages compensation to the observant party. In the event that
[the Respondent] breaches this Agreement, such damages shall be equal to 30% of the
outstanding amount of the contract. In the event [the Claimant] breaches this agreement,
[the Claimant] shall pay [the Respondent] EUR 15,000,000 (fifteen million euros) net of any
taxes or fees as compensation".
44. After analysing the content of the aforementioned clause, the Chamber concluded that it did
not fulfil the criteria of reciprocity and proportionality, in line with the Chamber’s
longstanding jurisprudence, and therefore could not be taken into account for establishing
the amount of compensation payable to the Claimant.
45. As a consequence, the Chamber determined that the amount of compensation payable by
the Claimant to the Respondent had to be assessed in application of the other parameters
set out in art. 17 par. 1 of the Regulations. The DRC recalled that said provision provides for
a non-exhaustive enumeration of criteria to be taken into consideration when calculating the
amount of compensation payable.
46. Bearing in mind the foregoing as well as the claim of the player, the Chamber 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 Chamber concluded
that the amount of EUR 2,289,576 (i.e. the residual value of the contract) serves as the basis
for the determination of the amount of compensation for breach of contract.
47. In continuation, the Chamber 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
DRC 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.
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48. Indeed, the player found employment with Kawasaki Frontale. In accordance with the
pertinent employment contract, the player was entitled to a total remuneration of USD
290,000 (approx. EUR 245,000) as from 1 July 2021 until 30 June 2022. Therefore, the
Chamber concluded that the player mitigated his damages in the total amount of EUR
245,000.
49. Subsequently, the Chamber 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 due to overdue
payables. In the case at hand, the Chamber 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.
50. In this respect, the DRC decided to award the amount of additional compensation of EUR
143,748, i.e. three times the monthly remuneration of the player.
51. Consequently, on account of all of the above-mentioned considerations and the specificities
of the case at hand, the Chamber decided that the club must pay the amount of EUR
2,081,736 to the player (i.e. EUR 2,289,576 minus EUR 245,000 plus EUR 143,748), which
was to be considered a reasonable and justified amount of compensation for breach of
contract in the present matter.
52. Lastly, taking into consideration the player’s request as well as the constant practice of the
Chamber in this regard, the latter decided to award the player interest on said compensation
at the rate of 5% p.a. as of 20 July 2021, the date of the claim, until the date of effective
payment.
iii. Compliance with monetary decisions
53. 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.
54. 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.
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55. Therefore, bearing in mind the above, the DRC 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 of
three entire and consecutive registration periods shall become immediately effective on the
Respondent in accordance with art. 24bis par. 2, 4, and 7 of the Regulations.
56. 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.
57. 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.
d. Costs
58. 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.
59. 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.
60. 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, Marcio Augusto da Silva Barbosa, is partially accepted.
2.
The Respondent, Chongqing Chongqing Liangjiang Athletic Football Club has to pay to the
Claimant, the following amount:
- EUR 2,081,736 as compensation for breach of contract plus 5% interest p.a. as from 20
July 2020 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. 24bis of the Regulations on the Status and Transfer of Players (February 2021
edition), 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. 24bis par. 7 and 8 and art. 24ter 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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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).
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