December DRC Case number: Date:

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1 December 2009 DRC Case number: Headwords (bold): Agent representing club? Burden of proof lies with player. Stamp of club on employment contract is insufficient to bind the club. Signature of representative needed. Relevant RSTP article: - The player claims an employment contract was established between parties. The player signed a document named scouting proposal allegedly sent by the club. Negotiations were allegedly held with two players agents, Mr L, as the club s representative, and Mr C, representing the player. The proposal does not mention a starting date of the alleged employment relationship, nor a specific duration. It was drafted on a paper bearing the letter-head of the club, but wasn t signed by any representative of the club. However, the document is stamped with the mention: D Football Club President Z. The club rejected the claim, stating that Mr L did not represent the club. The Chamber established that the present dispute centers around the question as to whether a contractual relationship had come into existence between the parties. The Chamber was eager to emphasise that in accordance with the legal principle of the burden of proof, the player had to prove that Mr L was legally representing the club. The Chamber maintained that the player had failed to submit such proof. Furthermore, the Chamber underlined that the scouting proposal did not contain the club s representative s signature, but only its stamp. The Chamber affirmed that an employment-related document which bears only the stamp of the club, cannot be considered as having been validly signed by the latter. A signature is needed to legally bind the club. The claim was rejected. Relevance: * * *

2 DRC Case number: Date: Headwords (bold): Termination agreement replaces employment contract. Besides termination agreement, no amounts due. Relevant RSTP article: - The player and the club concluded an employment contract. Before the contract expired, parties concluded a termination contract. The player now claims outstanding salaries, next to the amounts stipulated in the termination agreement. The Chamber analyzed the terms of the termination agreement, which in their opinion formed the basis of the present dispute. The Chamber came to the conclusion that the termination agreement evidences that parties had the intention to end the employment relationship and that the player had the right to the amounts stipulated in the said document. The Chamber found no basis for concluding that a possible claim against one of the parties would be accepted, since the parties clearly specified that they have nothing to claim from each other with regard to the termination of their labour relationship. The claim was rejected. Relevance: * *

3 DRC Case number: Headwords (bold): Outstanding salaries. Proof of paid taxes not enough to meet the relevant burden of proof. Relevant RSTP article: - The player claimed outstanding salaries. The club maintained it had complied with all the financial obligations of the contract, and submitted proof that it had paid the relevant taxes. Pointing towards the burden of proof, the Chamber maintained that the club had to prove that it had paid the player all the relevant salaries. By submitting only the tax receipts, the club did not submit sufficient proof. Therefore, the claim was (partially) accepted. The claim was partially accepted. Relevance: * *

4 DRC Case number: Headwords (bold): A clause that gives the club the right to terminate the contract due to an injury is invalid. Relevant RSTP article: 14 (edition 2008) The player and the club concluded an employment contract on 4 January Article 6.5 of this contract contained a clause that gave the club the right to terminate the contract, if the player suffered an injury that causes the player not being able to play for at least two months. The player claimed outstanding salaries. The Chamber maintained that the club had not put forward enough convincing proof that the player had not been able to play for at least two months. In addition, the Chamber made a clear statement on the validity of clauses like the one at hand and deemed that the abovementioned rule was ambiguous and that its application was arbitrary, since it lead to an unacceptable result based on non-objective criteria, which entitled the club to unilaterally terminate the contract in case the player was not able to play for more than two months. The Chamber emphasised that the lack of objective criteria by the application of the relevant rule lead to an unjustified disadvantage of the player s financial rights. In this regard, the DRC considered that the possibility granted to the club to prematurely terminate the contract based on an injury or sporting performance of its counterparty appeared to be of a highly subjective nature, entailing that, de facto, it was left to the complete and utter discretion of the club whether or not it was willing to continue the contractual relationship. In that context, the Chamber was eager to emphasize that, according to its well established jurisprudence, and as a general rule, a player s injury does not constitute a just cause in the sense of art. 14 of the Regulations for a club to terminate a contract. The claim was partially accepted. Relevance: * * * Commentary: In this case, the DRC decided - in line with previous jurisprudence that a clause that gives the club the right to terminate the contract is to be considered invalid. The Chamber gives a good summary of its reasons to declare these clauses invalid.

5 DRC Case number: Headwords: Solidarity contribution. Entitlement of default interest. Relevant RSTP article: - A player, was born on 11 February 1976, and was registered for the club, D from 15 October 1987 until 24 September On 9 July 2007, the player was transferred from the club, S, to the respondent, the club R for the amount of EUR 2,000,000. On 3 March 2008, the club D lodged a claim before FIFA requesting its proportion of the solidarity contribution in connection with the transfer of the player from the club, S, to the club R. Pertaining to the foregoing, parties agreed on the amount of solidarity contribution. However, parties did not agree with regards to the claimed interest. On account of the above, FIFA s administration informed the Claimant regarding the jurisprudence of the DRC which establishes that in case there was an amicable settlement of the dispute regarding the distribution of the solidarity contribution, the claim for default interest would appear to be unfounded. Notwithstanding the above, the club D adhered to its position and insisted on a decision passed by the DRC, pertaining to the claimed interests. The DRC concluded that, as far as the payment of the solidarity contribution is concerned, an amicable settlement had been reached between the parties. Consequently, the Chamber established that only the claimant s demand regarding the default interest at a rate of 5% p.a., as from the moment the solidarity contribution became outstanding, remains disputed. In this respect, the DRC, first and foremost, went on to examine whether the applicable Regulations contain explicit provisions, based on which the claimant could be awarded default interest. In this regard, the DRC acknowledged that the Regulations do not provide for any specific provision stipulating, per se, the right for the claimant to receive default interest for a possible late payment of the solidarity contribution. In view of the above, the DRC concluded that the entitlement to receive default interest in connection with the solidarity mechanism cannot be derived from the Regulations, but that the Regulations left the decision whether to award default interest related to the payment of the solidarity contribution to the competent decision-making body s discretion. Also in this respect, the DRC recalled that, due to the relevant amicable settlement and the good will also shown by the Respondent, no decision with regard to the claimant s principal entitlement for the payment of solidarity contribution as to the substance had to be taken by the Chamber. Moreover, the primary obligation corresponding to the payment of the solidarity contribution was fulfilled by the club R and the club D had accepted the payment. Therefore, the default interest, being an accessory obligation to the solidarity contribution, ceased to exist. The claim of the club D is rejected. Relevance: * *

6 DRC Case number: Headwords: Training compensation. Offer of contract not in time. Relevant RSTP article: 6 par. 3 Annex 4 (edition 2005) A player, born on 9 September 1988, was registered with its affiliated club S from 9 November 2004 until 9 November 2006 as an amateur and from 9 November 2006 until 30 June 2007 as a professional. The player was registered with the respondent, the club B, on 23 July 2007 as a professional. On 1 October 2007, the claimant contacted FIFA claiming its proportion of training compensation from the respondent. In particular, the club S is requesting at least EUR 180,000 from the club B. The claimant explained that its contract with the player was to expire on 30 June 2007 and that it made several offers to the player in order to further engage his services. In its reply, the club B stated that, in order to comply with the FIFA Regulations, the claimant should have offered a contract to the player via registered post sixty days before the expiry of his current contract. Therefore, since the claimant offered a contract to the player on 16 May 2007, i.e. after the relevant time limit expired, it was not entitled to receive any training compensation. According to art. 6 par. 3 of Annex 4 of the Regulations, training compensation is only payable if the former club can justify that it offered the player a contract in writing via registered post at least 60 days before the expiry of his current contract. In this respect, the DRC took note that the contract signed between the claimant and the player expired on 30 June Additionally, the claimant allegedly negotiated with the player s agent in March Therefore, on 21 March 2007, it allegedly sent, via fax, a correspondence to the player s agent, offering the player a new contract. The DRC consequently noted that the contract offer was addressed to the player s agent and not to the player itself as established in art. 6 par. 3 of Annex 4 of the Regulations. Furthermore, on 16 May 2007, the claimant apparently sent a registered letter to the player offering him a new contract as from July In this context, the DRC noted that the claimant s registered letter dated 16 May 2007, i.e. 46 days prior to the expiry of the player s current contract on 30 June 2007, and addressed to the player, was delivered to the player on 19 May 2007, i.e. 43 days prior to the expiry of the abovementioned contract. The DRC concluded that the club S was not entitled to receive any training compensation from the club B since it undoubtedly did not offer the player a contract 60 days before the expiry of his current contract. The claimant s demand for training compensation has to be rejected. The claim of the club S was rejected. Relevance: * *

7 DRC Case number: Headwords: Training compensation. Transfer outside EU/EEA. No obligation to offer contract. Amount not disproportionate. Relevant RSTP article: 20 and 1 par. 1 of Annex 4 and art. 2 of Annex 4 (edition 2005) A player, born on 10 March 1984, was registered with its affiliated the claimant, the club A, from 11 June 1999 until 28 August 2002 as an amateur, from 29 August 2002 until 28 April 2005 and from 9 July 2005 to 19 August 2007 as a professional. Furthermore, from 29 April 2005 to 8 July 2005 the player was registered with its affiliated club G, on a loan basis. The player was registered on 31 August 2007 with the respondent, the club O as a professional. On 8 October 2007, the claimant contacted FIFA asking for its proportion of training compensation from the respondent. In particular, is requesting the amount of EUR 355,416 plus interest. On 6 November 2007, the respondent rejected the claim lodged by the claimant and indicated that the transfer of the player to its club occurred on 30 August 2007, i.e. during the season 2007/2008. Therefore, according to the respondent, the relevant transfer occurred during the season of the player s 24th birthday. Moreover, the respondent alleged that the player was unemployed when signing an employment contract with its club, since the player had allegedly terminated his employment contract with the claimant on 19 August 2007 and had not received any offer from the claimant to renew his contract. According to the respondent, the claimant had no interest in signing another contract with the player. In this regard, the respondent referred to art. 23 of the Universal Declaration of the Human Rights from the United Nations Council, which stipulates that everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment. The DRC remarked that the Respondent was of the opinion that no training compensation was due to the claimant, since the latter had supposedly not offered a new employment contract to the player. Moreover, the respondent invoked the Universal Declaration of the Human Rights from the United Nations Council. In view of the above, and in particular in view of the fact that club A is not a member of the EU/EEA, the DRC concluded that the pertinent transfer had not taken place inside the territory of the EU/EEA and, thus, that art. 6 of Annex 4 of the Regulations was not applicable to the matter at hand. Therefore, the DRC unanimously stated that the Claimant had no obligation to offer to the player a new contract in accordance with the above-mentioned provision. For the sake of completeness, the Chamber was of the opinion that the entitlement of a training club to receive training compensation for a young player did not restrict the freedom of movement or of employment beyond what is necessary. In continuation, for the sake of completeness, and even if it was not an issue raised by the parties to the dispute, the DRC deemed it appropriate to recall its jurisprudence, confirmed by the CAS, according to which a club that has trained the player as an amateur for a certain period of time before concluding an employment contract with him shall be compensated for the entire time that it trained the player and not only for the time it trained him as a professional. Furthermore, on a side note, the DRC declared that the obligation to pay training compensation arises in case a player is definitively transferred from one club to another, with the effect that the club which transferred the player on a loan basis to another club is entitled to training

8 compensation for the period of time during which it effectively trained the player, however, excluding the period of time of the loan. In continuation, the DRC observed that the respondent alleged, in case training compensation was due to the claimant, that the amount of training compensation should be adjusted considering to the facts of the present case. In this respect, the DRC referred to art. 5 par. 4 of Annex 4 of the Regulations, according to which The Dispute Resolution Chamber may review disputes concerning the amount of Training Compensation payable and shall have discretion to adjust this amount if it is clearly disproportionate to the case under review (emphasis added). Despite the aforementioned, the DRC had no reason to deviate from the indicative amounts stipulated in the aforementioned FIFA Circular. The claim of the club A was accepted. The respondent, club O, had to pay to the club A the amount of EUR 355, Relevance: * *

9 DRC Case number: Headwords: Counterclaim. Termination based on injury or sporting performance. Invalid clause. Compensation. Relevant RSTP article: 14, 18 par. 4 and 17 par. 1 (edition 2008) On 4 January 2009, a player and the club N signed an employment contract valid from 1 January 2009 to 30 June In this respect, clause 6.5 of the contract stipulated that While determining during medical examination problem in Player s back which may cause future injury both party agree: If Player is not able to continue his career in relevant level or cannot play more than two months Club is entitled to cancel the contract. On 8 April 2009, the player lodged a complaint before FIFA against the club claiming the payment of an amount of EUR 52,500. In that regard, the player alleged that he had not received his salaries due for the months of February, March and April On 13 May 2009, and without having been contacted by FIFA with regard to the claim lodged by the club N informed FIFA that it had terminated its contract with the player in accordance with clause 6.5 of the contract. The DRC deemed that clause 6.5 of the contract was ambiguous and that its application was arbitrary, since it lead to an unacceptable result based on non-objective criteria, which entitled the club to unilaterally terminate the contract in case the player was not able to play for more than two months. The Chamber emphasized that the lack of objective criteria by the application of the relevant rule lead to an unjustified disadvantage of the player s financial rights. In this regard, the DRC considered that the possibility granted to the club to prematurely terminate the contract based on an injury or sporting performance of its counterparty appeared to be of a highly subjective nature, entailing that, de facto, it is left to the complete and utter discretion of the club whether or not it was willing to continue the contractual relationship. In that context, the Chamber was eager to emphasize that, according to its well-established jurisprudence, and as a general rule, a player s injury does not constitute a just cause in the sense of art. 14 of the Regulations for a club to terminate a contract. Moreover, the Chamber, referring to the contents of art. 18 par. 4 of the Regulations, also emphasized that once the parties concluded an employment contract, they had the obligation to implement its terms and a club could not unilaterally question the validity of the contract during its course based on the physical state of a player and, a fortiori, based on a medical examination a player would have to undergo after or even prior to the signature of the relevant agreement. For the assessment of the applicable amount of compensation, the Chamber referred to art. 17 par. 1 of the Regulations, in particular to the non-exhaustive enumeration of the objective criteria which need to be taken into account. On account of the above, in particular in view of the original duration of the contract, the player s contractual entitlements, his financial claim as well as the general obligation of the player to mitigate his damages, the DRC decided that not the entire remaining value of the contract, but the amount of EUR 100,000 was to be considered reasonable and justified for breach of contract. The claim of the player is partially accepted. The club N has to pay to the player the amount of EUR 151,250. The counterclaim of the club N is rejected.

10 Commentary: On a side note it is interesting to lay emphasis on the following. In the above mentioned case the DRC referred to art. 17 par. 1 of the Regulations. For the assessment of the applicable amount of compensation, the DRC referred to a case before CAS (unfortunately no reference number is given) and recalled, just as it did in its earlier case of 23 October 2009 (no ), that [ ] a player has to make reasonable efforts to seek other employment possibilities and, in the event he finds a new club, the damage has to be reduced for the amount the player was able to earn elsewhere. In the mentioned decision of the DRC of 23 October 2009 (no ) the DRC held that any party claiming compensation for breach of contract has a responsibility to mitigate the loss that it may have suffered as a result of a breach. It is important for players and clubs to take such into account. Relevance: * * * *

11 DRC Case number: Headwords: Just cause for player non-payment salaries. Club liable to pay compensation. Relevant RSTP article: 17 par. 1 (edition 2008) On 2 June 2006, a player and the club K signed an employment contract valid until 31 May According to article 10 of the employment contract, the player was entitled to unilaterally terminate the employment contract at the club s fault in the event of the club failing to remit any payment to the Claimant within 60 days as of the relevant due dates. In such event, the club was obliged to pay to the Claimant all payments to the 31 May On 9 December 2008, the player lodged a claim against the club in front of FIFA asking among other that it be established that the employment contract was terminated at the club s fault on 23 October 2008 and that the club be obliged to pay the total amount of EUR 205, for outstanding monies and compensation for breach of contract on the basis of article 10 of the employment contract. The DRC deemed it fit to point out that art. 10 of the employment contract clearly includes the condition of 60 days of delay of any (emphasis added) payment owed by the Respondent to the Claimant to be fulfilled in order for the Claimant to be entitled to terminate the employment contract. According to the DRC it can be concluded that such condition was met when the player notified the club of the termination of the relevant employment contract on 22 October The Chamber then turned to the club s position that the Claimant had to serve a default notice before terminating the contract. In this respect, first and foremost, the members of the Chamber pointed out that the relevant art. 10 of the employment contract did not include any such obligation on the part of the player in order for the said article to be validly applied. The DRC decided that the club had to be held liable for the early termination. The DRC focused its attention on the consequences of such breach of contract. Taking into consideration art. 17 par. 1 of the Regulations, the Chamber decided that the player was entitled to receive from the club an amount of money as compensation for breach of contract in addition to any outstanding payments on the basis of the relevant contract. Article 10 of the employment contract clearly sets forth that in the event of the club failing to remit any payment to the player within 60 days as of the relevant due dates, the player was entitled to terminate the employment contract and the club was obliged to pay to the Claimant all payments to the 31 May 2009, i.e. the date of expiry of the relevant employment contract. In this regard, the DRC concluded that the aforementioned article provides for the consequences in the event of the termination of the employment contract without just cause and shall thus be taken into consideration when establishing the amount of compensation payable by the club to the player in the light of the breach of the employment contract. The claim of the player is partially accepted. The club has to pay to the player outstanding remuneration amounting to EUR 120,632 and compensation for breach of contract amounting to EUR 31,492. Relevance: * *

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13 DRC Case number: Headwords: Single Judge of PSC. Unilateral termination by player after protected period. Compensation. Pacta Sunt Servanda. Burden of proof. No sporting sanctions. New club not jointly and severally liable. Relevant RSTP article: 13, 14, 17 par. 1, 2, 3 and 4 (edition 2005) On 5 July 1999, the club C acquired from J 50% of the rights of the player, born on 26 March 1977, for a fee amounting to EUR 1,291, On the same day the player and the club C signed an employment contract valid as from 1 July 1999 until 30 June On 30 May 2000, the club C paid to J an additional fee of EUR 4,131,655.- in order to acquire the second half of the rights of the player. On 10 November 2000, the player and the club C signed several following employment contract. A fourth employment contract was signed on 20 September 2005, valid as from 1 July 2005 until 30 June By means of a letter of a letter dated 8 June 2007 addressed to the club C, the player terminated the contract. The player wrote that the relevant communication had been made within 15 days following the last official match of the season as well as at the end of the protected period. On 10 July 2007, the player and the club S signed an employment contract valid as from 10 July 2007 until 30 June On 13 August 2007, the Single Judge of the PSC decided that the football federation concerned was authorized to provisionally register the player for the club S, pending the outcome of the contractual dispute, which would have to be dealt with as to its substance by the DRC. On 18 April 2008, the club C lodged a claim a complaint before FIFA against the player and the club S claiming that the player had breached the contract without just cause during the protected period and the club S had induced the player to commit the said breach of contract. The club C requested jointly and severally liable from the player and the club S the payment of a compensation for breach of contract of EUR 23,267,594 and requested the imposition of sporting sanctions. The DRC recalled that the player was already 28 years old when the contract had been concluded in September The DRC concluded that the protected period lasted in casu two years or two entire seasons, whichever came first. The protected period started on 1 July 2005, finished at the end of the 2006/2007 season and therefore it concerned a unilateral termination of the contract without just cause outside the protected period. The DRC had to decide on the basis of article 17 par. 1 of the Regulations what amount had to be paid as compensation. In advance the DRC stressed that art. 17 of the Regulations does not provide a legal basis for the right to a unilateral termination of a contract between a professional player and a club. The DRC focused its attention on the calculation of the amount of compensation for breach of contract in the case at stake and reiterated that, when assessing the amount of compensation due for the breach of contract. The DRC 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 as well as the fees and expenses paid or incurred by the former club (amortized over the term of the contract) and whether the contractual breach falls within the

14 protected period. The DRC once again recalled that the list of objective criteria is not exhaustive and that the broad scope of criteria indicated tends to ensure that a just and fair amount of compensation is awarded to the prejudiced party. The DRC established that an amount of EUR 3,933,134 had to be paid and took into consideration among other both the existing contract and the new contract, the agent fees, the missed transfer fee, the specificity of sport. Furthermore, in accordance with the unambiguous contents of art. 17 par. 2 of the Regulations, the Chamber established that the player s new club, i.e. the club S, shall be jointly and severally liable for the payment of compensation. In this respect, the DRC was eager to point out that the joint and several liability of the player s new club is independent from the question as to whether the new club has induced the player to the contractual breach or not. The DRC emphasized that the breach of contract without just cause committed by the club S outside of the protected period cannot result in the imposition of sporting sanctions, in compliance with the applicable Regulations (cf. article 17 par. 3 of the Regulations). In view of the foregoing, and in conformity with the relevant provision of the Regulations (cf. article 17 par. 4 sent. 1 of the Regulations e contrario), the player s new club, the club S, shall not be imposed sporting sanctions for possibly inducing the contractual breach and its responsibility shall in any case be limited to being jointly and severally liable for the payment of any amount of compensation for breach of contract that the club S will be ordered to pay. The claim of the club C was partially accepted. The player has to pay to the club C, the amount of EUR 3,933,134. The club S is jointly and severally liable for the payment of the aforementioned sum. Commentary: A few considerations in this decision are interesting to lift out. In this decision of the DRC, the committee refers several times to the so-called Matuzalem-case (CAS 2008/A/1519 FC Shaktar Donetsk (Ukraine) v/ Mr. Matuzalem Francelino da Silva (Brazil) & Real Zaragoza SAD (Spain) & FIFA / CAS 2008/A/1520 Mr. Matuzalem Francelino da Silva (Brazil & Real Zaragoza SAD (Spain) v/fc Shaktar Donetsk (Ukraine) & FIFA)) and seems to follow its line at relevant points. For example, the DRC stressed in this case just as CAS did in the Matuzalem-case that art. 17 of the Regulations does not provide a legal basis for the right to a unilateral termination of a contract between a professional player and a club. As clearly stated in the mentioned CAS award (see point 63) art. 17 FIFA Regulations does not give to a party, neither a club nor a player, a free pass to unilaterally breach an existing agreement at no price or at a given fix price. As also referred to in the Matuzalem-case, the purpose of art. 17 is basically nothing else than to reinforce the contractual stability, i.e. to strengthen the principle of pacta sunt servanda in the world of international football, by acting as a deterrent against unilateral contractual breaches and terminations, be it breaches committed by a club or by a player. Please note that in this case, the claimant club C did not demonstrate the existence of damages related to the missing profits coming from stadium tickets and images damages towards the sponsors and damages due to the loss of opportunities. The DRC decided at this point that irrespective of the question whether those elements could be taken into account as objective criteria in the sense of art. 17 par. 1 of the Regulations in order to calculate the compensation due to the claimant for the breach of contract, the DRC emphasized that the claimant did not demonstrate the existence of such damages and, a fortiori, a link between the said damages and the breach of contract committed by the player. Till sofar it is still not absolutely clear whether or not said damages can be claimed since the DRC speaks of irrespective of the question... We should wait for future decisions of the DRC. Please do note that the loss of a possible transfer fee can be considered as compensable damage head if the usual conditions are met, i.e. in particular if between the breach or the unjustified termination of the agreement and the lost opportunity to realize a certain profit there is a necessary logical nexus. It is interesting to note that the DRC did not find a justification in order not to follow the jurisprudence related thereto and remarked that the club C had not invoked the existence of any negotiations with a third party nor another necessary logical nexus. In particular, the club C did not present any offer from a third party, which could have given

15 important information on the value of transfer of the player. In other words, the DRC considered that the player had not provided it with sufficient proof that it had lost an opportunity to realize a profit because of the premature termination of contract. Another important element in line with the argumentation set out by the CAS in the Matuzalem-case is the remaining time of the contract that has been breached, the element that concretize the concept of specificity of sport (see 158 et sequ. of the Matuzalem-case ). The DRC observed that the player had terminated the contract after two seasons, with three more seasons of duration remaining under the terms of the contract. The remaining time of the contract was therefore important, as three seasons out of five are a substantial period of time. With regard to the status and behaviour of the parties to the dispute, in particular the player s status and behaviour, the DRC pointed out the relevant position the player held within the organisation of the club C. The DRC referred to the fact the player was the first goalkeeper of the team, a member of the national team, one of the best goalkeeper in the championship and the player played a fundamental role in the club C s latest success. Finally, please note that this DRC decision is appealed before CAS. Relevance: * * * * *

16 DRC Case number: Date: Headwords: Breach of contract without just cause. Amount of compensation. Responsibility to mitigate loss. Relevant RSTP article: 17 par. 1 (edition 2005) On 17 December 2007, a player lodged a claim with FIFA against the club A, arguing that the latter had not respected their agreed contractual relationship. On 25 July 2007, the player claimed he signed a pre-agreement. The player further claimed he then signed his final contract with the club on 28 July On 9 August 2007 the player was told by the club that there were no places available for him on the team and that he should leave. The player claimed that he had had refused to leave the team since he had wanted to honour his contractual relationship. The player claims compensation of EUR 100,000 from the club. The club argued that it had never signed a final contract with the player on 28 July 2007 and that the pre-agreement was not signed by the club. The player claimed an amount of EUR 80,000. The DRC noted that the entire dispute centered around the question as to whether a contractual relationship had come into existence between the player and the club. The DRC had to decide whether or not a valid contract had been established and if so whether the club breached the contractual relationship between the parties. The DRC found it important to underline at first that although a document might be entitled differently than contract or agreement this could, in any case, not invalidate its legal effect if all the relevant elements of a contract were complied with. The DRC was of the opinion a legally binding agreement had been concluded. Having concluded that the club had caused the breach, the DRC then went on to deal with the issue of compensation to be paid by the club following the termination of the employment contract without just cause by the latter. The DRC sought it important to recall that art. 17 bestows a discretionary power upon the DRC to take into account any element and criterion deemed relevant in order to determine the amount of compensation to be awarded to the injured party. The DRC decided the player was entitled to receive compensation in the amount of EUR 60, However, the DRC held that any party claiming compensation has a responsibility to mitigate the loss that it may have suffered as a result of a breach. The claim of the player was partially accepted. The club has to pay to the player the amount of EUR 60, Commentary: This is an important decision because the DRC held that any party claiming compensation for breach of contract has a responsibility to mitigate the loss that it may have suffered as a result of a breach. In this case the DRC took into account that the player had been able to conclude a number of employment contracts with different clubs, although for wages significantly lower than he would have been contractually entitled to had he stayed with the club. Furthermore, the DRC sought it important to recall in this case that art. 17 bestows a discretionary power upon the DRC to take into account any element and criterion deemed relevant in order to determine the amount of

17 compensation to be awarded to the injured party. This discretion was, in the DRC s opinion, not only necessary in order to take into account the unique and particular circumstances of each given case but also in order to prevent any party to a contract to calculate and determine the amount of compensation for a breach of contract in advance, thus determining the concept of contractual stability enshrined in the Regulations and advocated by the DRC. Relevance: * * * *