Decision of the Dispute Resolution Chamber. passed in Zurich, Switzerland, on 22 July 2004, in the following composition: on the claim presented by

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1 Decision of the Dispute Resolution Chamber passed in Zurich, Switzerland, on 22 July 2004, in the following composition: Slim Aloulou (Tunisia), Chairman Mario Gallavotti (Italy), member Jean-Marie Philips (Belgium), member Michele Colucci (Italy), member Gerardo Movilla (Spain), member on the claim presented by The player B. as Claimant against The club A. as Respondent regarding a dispute on contractual relationship established between the parties

2 Facts of the case The 32 yrs. old player B. signed an employment contract with the club A. on 18 August 2003 valid for a period of 10 months. In the same agreement, it is stated that the services of the player were loaned to the club A. by the club D. and that the loan fee would be of USD 1,200,000. The payments listed in the loan contract are as follows: USD 60,000 in ten monthly instalments to the player USD 300,000 payable to the player USD 150,000 payable to the club D. once the player passes the medical test, signs the official contract and the club receives the international registration transfer certificate USD 150,000 payable to the club D. 90 days after the payment of the first instalment Verbally, the parties arranged that the player would pay USD 150,000 out of his share to the club D. immediately and would, instead, receive the second instalment of USD 150,000 after 90 days of the first payment that would otherwise be payable to the club D.. Before officially contacting FIFA and requesting its intervention, the player copied a letter to this organisation which he had addressed to the club A. and in which he outlined that he had not yet received a satisfactory reply to his faxes of 19 and 26 November 2003, by means of which he had given the club a deadline to meet its contractual obligations, The player maintains that the club A. had not paid the monthly salaries of USD 60,000 due on 18 September, 18 October and 18 November 2003 and that it had failed to pay the second instalment of USD 150,000 of the signing-on fee owed on 18 November Furthermore, the player provided FIFA with a copy of a letter, which the club A. had addressed to his lawyer on 23 November 2003 and in which the club informed the player that the second instalment of the signing-on fee of USD 150,000 was ready to be paid to him but that it would be paid only once the player shows his highest performance. According to the player, the second instalment of the signing-on fee was due on 18 November 2003, 90 days after the player signed the official contract and passed the medical test that took place on 18 August In light of these facts, the player announced in his letter of 10 December 2003 that he was herewith terminating the contractual relationship with the club. One day later, the player contacted FIFA directly, claiming not only unpaid salaries but also asking FIFA s intervention so as to enable him to obtain a visa required in order to leave the country of the club A. The player maintained that the club was using its influence at the local authorities to keep him in the country, thus trying to pressure him into signing a document waiving his claims. Player B. / club A. 2

3 In light of this situation, the Dispute Resolution Chamber passed a decision on 23 December 2003, ordering the club A. to facilitate the visa for the player within 48 hours and maintaining that a decision on the question regarding the unpaid remuneration would be passed at a later stage. The player was thus able to leave the country on 26 December The club A. maintains that on the same date that it received the notification on the rescission of the employment contract, it sent a letter to the player via DHL, asking him to come and see the club so that its Financial Administration could review his entitlement. However, the player refused to receive this letter as well as a second communication also sent by the club via DHL. In consequence, the club A. turned to its Football Federation, which invited the player to a meeting. The player was asked to bring his passport to this meeting so that his visa could be arranged, once his due were settled. The club insists that it could not have arranged the visa any earlier, since the player had not presented his passport and because, given the immigration rules, the question regarding the payment of the telephone, electricity and other service bills as well as the returning of the house, car and telephone needed to be settled prior to the issuance of the visa. Furthermore, the club maintains that instead of settling the dispute with the club, as stipulated in the employment contract, the player turned to the press and then to FIFA. With regard to the salary payments, there was some payment delay due to holidays and staff shortage yet, when the player was asked to receive the pay-cheque for September 2003, the latter refused to collect it. As per the club s accountancy policy, the cheques for October and November 2003 could not be issued unless the first cheque was received. With regard to the signing-on fee, there was no late payment since the due date of payment of the second instalment was 10 December 2003, i.e. 90 days after the first payment of USD 150,000 was made by the club. The club A. has provided FIFA with a copy of the receipt regarding the first payment. Moreover, the club has pointed out that the player rescinded his contract on 16 December The club A. maintains that the player was never able to appreciate living in its country and that therefore he sought to put an end to the relationship. The club A. is of the opinion that it is a victim of the conduct of the player and has lodged a counter-claim totalling USD 668,038, corresponding to the following amounts: USD 450,000 paid by the club regarding the loan USD 10,000 received by the player in cash USD 10,038 paid by the club for the airfare of the player s relatives USD 36,000 for the leave without pay by the player USD 12,000 red card penalty USD 500,000 as compensation of losses incurred to the club due to early termination of the contract Player B. / club A. 3

4 Minus: USD 200,000 + USD 150,000 corresponding to the salaries owed to the player for 3 months and 10 days Total: USD 668,038 The player B. is claiming a total of USD 750,000 corresponding to the following amounts: USD 240,000 for the unpaid salaries of September, October and November 2003 plus 10 days in December 2003 USD 150,000 as the second instalment of the signing-on fee USD 360,000 as the remaining amounts due as per the employment contract Player B. / club A. 4

5 Considerations of the Dispute Resolution Chamber The Dispute Resolution Chamber initiated its discussions by establishing that both the player B. as well as the club A. are claiming that the counter-party committed a breach of contract. The Chamber thus established that it needed to ascertain whether the player B. had acceptable reasons for refusing to reassume work at the club A. or whether A. had valid reasons to justify the late payments of the remuneration owed to the player. The Chamber took into consideration that there are two issues to be addressed, namely the alleged late salary payments and the late payment of the second instalment of the signing-on fee. Firstly, the Dispute Resolution Chamber turned to the question regarding salary payments. The Chamber acknowledged that neither party debates the fact that the salaries of September, October and November 2003 have not yet been remitted to the player B. According to the club A., there had indeed been some delay in processing the payment caused by staff shortage, yet the pay-cheque for the salary of September 2003 was made available to the player, who, according to the club, refused to collect it. As per the club s accountancy policy, the cheques for October and November 2003 could not be issued before the first cheque was received. In this regard, the Chamber maintained that the club A. was unable to present any proof to underline its allegation that the player had indeed refused to collect the cheque for September Besides, if the player had indeed refused to receive this payment, the Chamber could not understand why the club A. had not deposited this and the remaining cheques in an escrow account under the name of the player. In addition, the Chamber underlined that the letter of the club A. sent on 23 November 2003 to the lawyer of the player indicated that the non-payment of the club had been motivated by its belief that the player had not been displaying his highest performance. The Chamber therefore concluded that the club A. had indeed committed a breach of contract by failing to pay the salaries of the player B. In continuation, the Chamber turned to the question of the non-payment of the second instalment of the signing-on fee amounting to USD 150,000. The Chamber took note of the fact that the parties are in disagreement over the actual date on which this instalment should have been paid to the player B. In this context, the Chamber outlined that the first instalment was due on the day that the player passed his medical test, signed the official contract and the international registration transfer certificate was received by the club. According to the information available to the Chamber, this first payment was therefore due on 18 August Consequently, the second instalment would have been payable 90 days later, i.e. on 18 November In this context, the Chamber maintained that the assumption of the club A., according to which the second instalment was payable 90 days after it processed the first payment is incorrect, as this would signify that the club A. would have sole influence on determining the deadline of the second payment. Therefore, the Chamber decided that the club A. had failed to proceed with the timely payment of the second instalment of the signing-on fee. Player B. / club A. 5

6 In light of the above, the Chamber concluded that the club A. had committed a breach of the employment contract by failing to pay the salaries and the remaining signing-on fee owed to the player B., without just cause. As a result, the Chamber established that the club A. is liable to compensate the player for the losses incurred through this breach of contract, as foreseen in art. 22 of the FIFA Regulations for the Status and Transfer of Players. The Chamber calculated that the player in question is entitled to a total of USD 661,340. This amount corresponds to the unpaid salaries of September, October, November and 10 days of December 2003 totalling USD 240,000, the second instalment of the signing-on fee of USD 150,000 and USD 360,000 as the remaining amounts due per the employment contract, which total USD 750,000. From the amount of USD 750,000, the Chamber deducted USD 10,000 that the player had received in cash, USD 10,038 relating to the airfares that the club had paid for the player s relatives and USD 12,000 owed by the player for receiving a red card penalty. Furthermore, the Chamber took into consideration the fact that the player had immediately reassumed work back at home with the club D., where he is receiving a monthly salary of USD 9,437. These salaries received by the player during the otherwise remaining six months of the loan period were also deducted from the amount owed to the player, leaving a total amount due by the club A. of USD 661,340. Finally, the Chamber re-affirmed that the club A. had committed a breach of contract without just cause and the club is consequently liable to be sanctioned in accordance with art (a) and art (a) of the aforementioned regulations. Therefore, the club A. is banned from registering any new player, either nationally or internationally, until after the next two transfer periods have passed. Although the breach of contract occurred in December 2003, the Chamber established that the ban on registering new players shall apply following the date on which the breach became effective, i.e. the date of the notification of this decision. Player B. / club A. 6

7 Decision of the Dispute Resolution Chamber 1. The claim of the player B. is partially accepted. 2. The respondent, the club A., must pay an amount of USD 661,340 to Mr. B. as compensation for the unilateral breach of the employment contract without just cause. 3. The club A. is directed to pay the amount due to within 30 days as from the date of the notification of this decision. 4. The club A. is banned from registering any new players, either nationally or internationally, until the expiry of the second transfer period following the date of the notification of this decision. 5. According to art. 60 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 10 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: Avenue de l Elysée Lausanne Tel: Fax: info@tas-cas.org For the Dispute Resolution Chamber: Urs Linsi General Secretary Enclosed: CAS directives Player B. / club A. 7