Decision of the Dispute Resolution Chamber

Transcription

1 Decision of the Dispute Resolution Chamber passed in Zurich, Switzerland, on 13 August 2015, in the following composition: Geoff Thompson (Engand), Chairman Mario Gallavotti (Italy), member Jon Newman (USA), member on the claim presented by the player, Player A, country B, as Claimant against the club, Club C, country D as Respondent regarding an employment-related dispute arisen between the parties

2 I. Facts of the case 1. On 13 January 2014, the player from country B, Player A (hereinafter: the Claimant), and the club from country D, Club C (hereinafter: the Respondent), signed an employment contract (hereinafter: the contract) valid as of the date of signature until 13 January Pursuant to article 4 of the contract, the Claimant was to receive after the [Claimant] pass the training test and medical report the following amounts: USD 50,000 upon signature of the contract; USD 5,000 as monthly salary payable over 10 months, at the end of each month. The said article also provided for an annual housing allowance as well as a monthly transportation allowance. 3. On 23 January and 11 March 2014, the Claimant put the Respondent in default for the non-execution of the contract, including the non-payment of the amounts contractually foreseen. 4. On 17 March 2014, the Claimant lodged a claim before FIFA against the Respondent for breach of contract within the protected period, requesting the payment of the amount of USD 83,850 as compensation plus 5% interest p.a. as well as the imposition of sporting sanctions on the Respondent. 5. The Claimant alleged that, on 12 January 2014, the Respondent and the club from country E, Club F, agreed in writing upon the transfer of the Claimant to the Respondent with immediate effect. The Claimant provided a copy of the transfer agreement between the relevant clubs. However, the Respondent apparently did not request the issuance of the Claimant s International Transfer Certificate (ITC) prior to the end of the transfer window on 15 January 2014, and did not proceed to the payment of the amounts foreseen in the employment contract. 6. In addition, the Claimant stressed that the contract became valid and binding as from the date of signature by both parties, i.e. 13 January 2014, and thus recalled that the validity of the said contract could not be subject to the execution of administrative formalities. 7. In its statement of defence, the Respondent referred to the contract, the validity of which is conditional upon the Claimant passing the training test and medical examination (cf. point I.2. above). However, the Respondent held that the Claimant never came to be tested and medically examined, in spite of the 2/8

3 entry visa sent to him on 13 January 2014 which was provided by the Respondent. 8. The Respondent also referred to the sanction imposed on the club by the Players Status Committee of the Football Federation from country D, apparently preventing them from any registration. 9. Upon FIFA s request, the Claimant confirmed that, on 1 August 2014, he signed a new employment contract with Club F, valid as of the date of signature until 30 June According to the contract with Club F, the Claimant has received a gross monthly salary of EUR 730. II. Considerations of the Dispute Resolution Chamber 1. First of all, the Dispute Resolution Chamber (hereinafter: the Chamber or the DRC) analysed whether it was competent to deal with the case at hand. In this respect, it took note that the present matter was submitted to FIFA on 17 March Consequently, the 2012 edition of the Rules Governing the Procedures of the Players Status Committee and the Dispute Resolution Chamber (hereinafter: the Procedural Rules) is applicable to the matter at stake (cf. art. 21 of the Procedural Rules). 2. Subsequently, the members of the Chamber referred to art. 3 par. 1 of the Procedural Rules and confirmed that in accordance with art. 24 par. 1 in combination with art. 22 lit. b) of the Regulations on the Status and Transfer of Players (edition 2015), 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 player from country B and a club from country D. 3. Furthermore, 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 (editions 2012 and 2014), and considering that the present claim was lodged in front of FIFA on 17 March 2014, the 2012 edition of said Regulations (hereinafter: Regulations) is applicable to the matter at hand as to the substance. 4. The competence of the DRC and the applicable regulations having been established, the Chamber entered into the substance of the present matter. In doing so, it started by acknowledging the abovementioned facts of the matter as well as the documentation contained in the file. However, the Chamber emphasised that in the following considerations it will refer only to the facts, 3/8

4 arguments and documentary evidence which it considered pertinent for the assessment of the matter at hand. 5. In this respect, the Chamber acknowledged that, on 13 January 2014, the Claimant and the Respondent signed an employment contract, in accordance with which the parties agreed inter alia upon the Claimant receiving the amount of USD 50,000 upon signature of the contract and USD 50,000 as total salary, after the [player] pass the training test and medical report. 6. The Claimant maintained that, in fact, an employment contract was entered into and that, as such, the Respondent is to be held liable for its early termination by having failed to execute the terms of the employment contract, including the failure to pay the Claimant s remuneration and to request the relevant ITC. 7. In this respect, the members of the Chamber took note of the Claimant s default notices dated 23 January and 11 March 2014 addressed to the Respondent by means of which the Claimant informed the latter of its nonexecution of the contract. The panel also noted that the relevant default notices remained unanswered by the Respondent. 8. From the outset, the members of the Chamber highlighted that there does not seem to be any disagreement between the parties as to the fact that the terms of the contract were not performed, including the payment of the remuneration established therein, since the Respondent did not contest such allegation made by the Claimant. The fundamental disagreement between the Claimant and the Respondent and the central issue to the present dispute is whether the contract signed between the parties can be considered as a valid and binding employment relation between the parties. 9. The Chamber noted that, according to the Respondent, as opposed to the Claimant, no legally binding employment contract had come into effect between the Claimant and the Respondent, since art. 4 of the contract established that the Respondent s obligations towards the Claimant, including the payment of his remuneration, was subject to the Claimant passing the training test and medical report and that the Claimant apparently did not come to be tested and medically examined. 10. Consequently, the Chamber, first and foremost, focused its attention on the content of art. 4 of the contract and, in this respect, it deemed appropriate to analyze the question of whether such clause inserted in an employment contract could be considered as valid. 11. In this regard, the Chamber deemed that the above-mentioned rule was ambiguous and that its application was arbitrary, since it led to an 4/8

5 unacceptable result based on non-objective criteria, which entitled the Respondent to unilaterally decide upon the date of the start of the contract without the Claimant having any means to intervene. The DRC emphasized that the lack of objective criteria by the application of the relevant rule led to an unjustified disadvantage of the Claimant s financial rights and fundamentally affected the maintenance of contractual stability between the parties. 12. Furthermore, the Chamber considered that the possibility granted to the Respondent to unilaterally decide upon the commencement of the contractual relation between the parties appeared to be of a highly subjective nature, entailing that, de facto, it is left to the complete and utter discretion of the Respondent whether or not it was willing to establish a contractual relationship with the Claimant, without granting the latter any means to intervene in this decision. 13. In view of the foregoing, the Chamber was of the opinion that art. 4 of the contract, invoked by the Respondent in order to establish that the contract signed between the parties was not valid and binding, was clearly potestative and that, consequently, the respective argumentation of the Respondent could not be upheld by the DRC. 14. In addition, the DRC considered relevant to recall its jurisprudence in accordance with which the validity of an employment contract cannot be made conditional upon the execution of (administrative) formalities, such as, but not limited to, the registration procedure in connection with the international transfer of a player, which are of the sole responsibility of a club and on which a player has no influence. In this regard, the DRC pointed out that it is the responsibility of the engaging club to ensure that the player is properly registered with his new club in order to be able to provide it with his services. Since the club is supposedly interested in acquiring the rights of the player and in benefiting from his services, it is also expected from it that it acts accordingly in view of obtaining the player s ITC and his subsequent registration. 15. Having established that a valid and legally binding employment contract had been in force between the Claimant and the Respondent, the Chamber went on to analyse as to whether such contract had been breached and, in the affirmative, which party is to be held liable for breach of contract. 16. To this end, the Chamber was eager to emphasize that, given that the Respondent did not contest that it had not performed any of its obligations under the employment contract and that, in fact, it merely disputed the legal validity of such contract, the conclusion that a valid and legally binding employment contract had been entered into unavoidably leads to the decision 5/8

6 that such contract was breached by the Respondent. The DRC also wished to underline that the Respondent had acknowledged that, in any event, it could not have registered the Claimant, due to a sanction imposed by the Football Federation from country D on the Respondent. 17. The Chamber further took into account that, according to the Claimant, the Respondent had not paid any amounts and that the latter clearly did not intend to respect its obligations as it did not consider the employment contract to be valid. 18. On account of the above circumstances, the Chamber established that the Respondent had obviously no longer been interested in the Claimant s services by sustaining that no valid employment contract existed between the parties and failing to remit the Claimant s remuneration. The Chamber concluded that such conduct clearly constituted a breach of contract and, accordingly, decided that the Respondent had produced the premature termination without just cause of the employment contract entered into between the parties. 19. Having established that the Respondent is to be held liable for the early termination of the employment contract without just cause, the Chamber focused its attention on the consequences of such termination. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the Claimant is entitled to receive from the Respondent an amount of money as compensation for breach of contract. 20. In continuation, the Chamber focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake. In doing so, the members of 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 Claimant 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. 21. In application of the relevant provision, the Chamber held that it first of all had to clarify as to whether the pertinent employment contract contains 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 Chamber established that no such compensation clause was included in the employment contract at the basis of the matter at stake. 6/8

7 22. Bearing in mind the foregoing, the Chamber proceeded with the calculation of the monies payable to the Claimant under the terms of the employment contract until 13 January 2015 and concluded that the Claimant would have received in total USD 100,000 as remuneration, had the contract been executed until its expiry date. 23. In continuation, the Chamber verified as to whether the Claimant 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, 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. 24. The Chamber noted that, on 1 August 2014, the Claimant signed an employment contract with Club F, valid until 30 June 2015, enabling him to earn a monthly salary of EUR 730 during said period of time. 25. At this stage, the Chamber considered important to point out that, although the employment contract with the Respondent was fully valid and enforceable, the execution of the contract had never started. 26. Consequently, on account of all of the above-mentioned considerations and the specificities of the case at hand, the Chamber decided that the Respondent must pay the amount of USD 31,733 to the Claimant as compensation for breach of contract. 27. In addition, taking into account the Claimant s request as well as the constant practice of the Dispute Resolution Chamber in this regard, the Chamber decided that the Respondent must pay to the Claimant interest of 5% p.a. on the amount of USD 31,733 as of 17 March 2014 until the date of effective payment. 28. The Dispute Resolution Chamber concluded its deliberations in the present matter by establishing that any further claims lodged by the Claimant are rejected. III. Decision of the Dispute Resolution Chamber 1. The claim of the Claimant is partially accepted. 2. The Respondent has to pay to the Claimant, within 30 days as from the date of notification of this decision, the amount of USD 31,733 plus 5% interest p.a. on said amount as of 17 March 2014 until the date of effective payment. 7/8

8 3. If the aforementioned sum plus interest is not paid within the stated time limit, the present matter shall be submitted, upon request, to the FIFA Disciplinary Committee for consideration and a formal decision. 4. Any further claim lodged by the Claimant is rejected. 5. The Claimant is directed to inform the Respondent immediately and directly of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received. ***** Note relating to the motivated decision (legal remedy): According to art. 67 par. 1 of the FIFA Statutes, this decision may be appealed against before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receipt of notification of this decision and shall contain all the elements in accordance with point 2 of the directives issued by the CAS, a copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for filing the statement of appeal, the appellant shall file a brief stating the facts and legal arguments giving rise to the appeal with the CAS (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following: Court of Arbitration for Sport Avenue de Beaumont Lausanne Switzerland Tel: Fax: info@tas-cas.org For the Dispute Resolution Chamber: Marco Villiger Acting Deputy Secretary General Encl. CAS directives 8/8