Labour Disputes
Texto da decisão
REF FPSD-5698
Decision of the
Dispute Resolution Chamber
passed on 4 August 2022
regarding an employment-related dispute concerning the player Welliton Soares
Morais
BY:
Omar Ongaro (Italy), Deputy Chairperson
Laurel Vaurasi (Fiji), member
Khadija Timera (Senegal), member
CLAIMANT:
Welliton Soares Morais, Brazil
Represented by Tannuri Ribeiro Advogados
RESPONDENT:
Sharjah, United Arab Emirates
Represented by Ivan Ostojic and Hrvoje Raic
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I.
Facts of the case
1.
On 18 January 2021, the Brazilian player, Welliton Soares Morais (hereinafter: Claimant or player)
and the Emirati club, Sharjah (hereinafter: club or Respondent) concluded an employment
contract valid as from 1 July 2020 until 30 June 2023.
2.
On 28 August 2021, the parties concluded a termination agreement, according to which the
Respondent undertook to pay to the Claimant the amount of USD 3,125,000 in instalments. The
Respondent failed to remit the last instalment in the amount of USD 1,750,000.
3.
On 10 February 2022, the parties concluded a settlement agreement, according to which the
Respondent undertook to pay to the Claimant the amount of USD 1,750,000 as follows:
- USD 590,000 within 5 days after the conclusion of the settlement agreement;
- USD 580,000 until 1 March 2022;
- USD 580,000 until 1 April 2022.
4.
Furthermore, art. 3 of the settlement agreement establishes: “In the event of default in the
payment of any amounts stipulated in this Agreement, all remaining balance shall become due at
once and shall be added a 20% penalty fee, plus 10% default interest per annum as of the date of
default until the date of effective payment”.
5.
On 8 March 2022, the Respondent sent a letter to the Claimant stating that it was not able to
remit the second instalment as agreed as the club was waiting for incoming payments of third
parties.
II. Proceedings before FIFA
6.
On 6 April 2022, 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
7.
In his claim, the Claimant requested payment of the following monies:
- USD 580,000 (2nd instalment of the settlement agreement) plus interest of 10% p.a. as of
2 March 2022;
- USD 580,000 (3rd instalment of the settlement agreement) plus interest of 10% p.a. as of
2 April 2022;
- USD 232,000 as penalty fee plus interest of 5% p.a. as of 2 March 2022.
8.
In this regard, the player held that the club breached the settlement agreement and failed to remit
the 2nd and 3rd instalment the parties agreed upon.
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9.
Furthermore, the Claimant argued that the penalty of 20% on the outstanding amounts were
agreed between the parties in case of late payment of one of the instalments.
10. The player maintained that such penalty is “fair and proportional”.
11. Moreover, the player insisted on the interest rate of 10%, which was also agreed between the
parties.
b. Position of the Respondent
12. In its reply, the Respondent rejected the claim since it was sent “prematurely”.
13. Alternatively, the club requested to reduce the amount of penalty as it was not proportionate.
14. In this context, the club acknowledged that it has not remitted the claimed instalments. However,
the Respondent pointed out that the player did not react to its letter dated 8 March 2022, but
lodged the present claim instead.
III. Considerations of the Dispute Resolution Chamber
a. Competence and applicable legal framework
15. 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 06 April 2022 and submitted for decision on . Taking
into account the wording of art. 34 of the June 2022 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.
16. 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 (edition July 2022), the Dispute Resolution Chamber is
competent to deal with the matter at stake, which concerns an employment-related dispute with
an international dimension between an Brazilian player and a club from the United Arab Emirates.
17. 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 (July 2022), and considering that the present
claim was lodged on 06 April 2022, the March 2022 edition of said regulations (hereinafter: the
Regulations) is applicable to the matter at hand as to the substance.
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b. Burden of proof
18. 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
19. 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
20. The foregoing having been established, the Chamber moved to the substance of the matter, and
took note of the fact that the parties dispute that the player is entitled to the claimed amounts.
21. In this context, the Chamber acknowledged that its task was to detail if the player is entitled to
the claimed amounts and if so, to what extent.
22. The Chamber acknowledged that the player claims amounts resulting from a settlement
agreement including a penalty.
23. In this regard, the DRC noted that the club acknowledged that it failed to remit the 2nd and 3rd
instalment of the settlement agreement, but held that the player did not react to its letter
requesting an extension of the payments due to its difficult financial situation.
24. The Chamber noted that the Respondent did not dispute that it failed to remit the 2nd and 3rd
instalment agreed upon in the settlement agreement. In this regard, the DRC rejected the club’s
arguments as financial difficulties do not excuse an employer from complying with its financial
obligations.
25. Therefore, in accordance with the claim and the settlement agreement, the DRC decided to award
the amount of USD 1,160,000, corresponding to the relevant instalments falling due on 1 March
2022 and 1 April 2022.
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26. Subsequently, the DRC moved to the penalty clause contained in art. 3. of the settlement
agreement, which reads as follows:
“In the event of default in the payment of any amounts stipulated in this Agreement, all remaining
balance shall become due at once and shall be added a 20% penalty fee, plus 10% default interest
per annum as of the date of default until the date of effective payment”.
27. In this regard, the Chamber wished to recall the jurisprudence of the Football Tribunal that penalty
clauses, in principle, may be freely entered into by the contractual parties and may be considered
acceptable, in the event that the pertinent written clause meets certain criteria such as
proportionality and reasonableness. Accordingly, it shall be added that in order to determine as
to whether a penalty clause is to be considered acceptable, the specific circumstances of the
relevant case brought before the deciding body shall also be taken into consideration.
28. The members of the Chamber concluded that, in the specific case at hand, that a penalty of 20%
of the outstanding amount appears to be proportional and reasonable. Therefore, the DRC
decided to award the amount of USD 232,000 (20% of EUR 1,160,000) as a penalty to the Claimant.
ii. Consequences
29. As a consequence, and in accordance with the general legal principle of pacta sunt servanda, the
Chamber decided that the Respondent is liable to pay to the Claimant the amount of USD
1,160,000, corresponding to the two outstnading instalments resulting from the settlement
agreement, as well as the amount of USD 232,000, corresponding to the penalty agreed upon
between the parties.
30. Furthermore, the Chamber decided to award interest of 10% p.a. on the amount of USD
1,160,000, in accordance with art. 3. of the settlement agreement as of the respective due dates.
31. In accordance with the long-standing jurisprudence of the Football Tribunal, the DRC decided that
no interest shall be granted on the penalty.
iii. Compliance with monetary decisions
32. Finally, taking into account the applicable Regulations, the Chamber 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.
33. 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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34. 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. 24 par. 2, 4, and 7 of the Regulations.
35. 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.
36. 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. 24 par. 8 of the
Regulations.
d. Costs
37. 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.
38. 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.
39. 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, Welliton Soares Morais, is partially accepted.
2.
The Respondent, Sharjah, has to pay to the Claimant, the following amount(s):
- USD 580,000 plus 10% interest p.a. as from 2 March 2022 until the date of effective payment;
- USD 580,000 plus 10% interest p.a. as from 2 April 2022 until the date of effective payment;
- USD 232,000 as contractual penalty.
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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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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