Decision of the Dispute Resolution Chamber taken in Zurich, Switzerland, on Friday, 11 th March 2005 by the following composition: Mr. Slim Aloulou (Tunisia), Chairman Mr. Gerardo Movilla (Spain), Member Mr. Philippe Piat (France), Member Mr. Jean-Marie Philips (Belgium), Member Mr. Paulo Rogerio Amoretty Souza (Brazil), Member On the claim presented by Player S as Claimant against Club H as Respondent regarding a dispute on the contractual relationship between the parties
Facts of the case An employment contract, between the player, S and the club H was signed on 1 st July 2003. The contract was to have been valid from 1 st July 2003 until 1 st July 2006, with a further 2- year option if agreed. According to this contract, the player was to receive a signing-on bonus of USD50 000, payable on 25 th July 2003; USD10 000 payable in July 2004, and USD10 000 payable in July 2005. It had been agreed that the player would receive a salary of USD4 000 per month and that this would be increased by 5% per season. The transfer fee agreed between the ceding club, V, and the buying club, H, had been USD160 000, divided into two payments of USD80 000 payable upon transfer on 15.07.03 and on 01.06.04. The player had moved to his new club s country and had started playing for his new club. However, he claimed that after the last match of the season had been played on 22 nd May 2004, the club had failed to pay his monthly salaries as from March 2004 and that, by July 2004, the club had still not paid the agreed proportion of the signing-on fee of USD10 000. According to a copy of correspondence sent on 19 th May 2004, by the president of club H to the player s former club, V, a request was made that, due to his club s apparent financial problems, the 1 st payment of the transfer fee (USD80 000) be considered as a loaning fee and that the player (therefore on loan ) should be returned to the loaning club, V, immediately. It would appear that the former club had not agreed to this proposition, as no written and signed ratification was apparently received. The player had remained with his new club, H, and, after the last match of the season, had left his new club s country to return home on holiday, with the assurance from his employers that the outstanding salaries, bonus payments and the part-payment of USD10 000 due in July, would be paid. These payments were never made and the player had left on holiday with a down-payment of USD2000 but, without the promised payment of the salaries owing and the singing-on bonus, claimed to be in the total amount of USD38 200, i.e. salaries outstanding for March, April, May and June 2004 amounting to USD16 000, USD10 000 as the July 2004 part of the signing-on fee, USD7 500 related to bonuses in connection with the 2 nd position in the national championship (item 13 of the employment contract) and USD4 700 related to the points scored by the club (item 4 of the employment contract). According to the player, the foregoing amounts claimed already take into account the down-payment of USD2 000 made to him prior to his departing on vacation. In actual fact, the sum due to him in relation to the bonus for points scored, would have been USD2 000 higher than actually stated. 2
During his break in his own country, the player s legal representative had contacted the club by letter dated 5 th July 2004 sent via facsimile, demanding that the full amount owing to the player, be paid by the club within 48 hours of the player s return to the club. The club had returned the letter to the player, with the hand-written remark that it agreed to meet the player s demand and that the outstanding amount would be paid into the player s bank account. The player was urged to return to his club as soon as possible. Arriving back in his new club s country on 12 th July 2004, the player discovered that the amount being claimed had still not been paid by the club, and, on 15 th July 2004 the parties met to discuss the situation, whereby the player had been assured that the outstanding amount would be paid by 16 th July 2004. Although giving the player the assurance that the outstanding salaries would be paid by 16 th July 2004, the club accused the player of breaching the employment contract, by returning 7 days late. On 16 th July 2004 the outstanding salaries had still not been paid and, on 18 th July 2004, the player had not appeared to play in a friendly match. On 19 th July 2004, the player s legal representative wrote to the club, terminating the player s employment contract. The player had then returned to his own country, definitively. The player is claiming the amount of: Salaries for the months of March, April, May and June 2004 USD16 000 The July 2004 part of the signing-on fee USD10 000 Bonuses in connection with the 2 nd position in the national championship (item 13 of the employment contract) USD 7 500 Bonuses in connection with points scored by the club (item 4 of the employment contract) minus USD2 000 down-payment USD 4 700 Total amount claimed to be owing in July 2004 USD38 200 Compensation for the breach of contract corresponding to the remaining value of the contract: 12 x USD 4 200 for the 2004/2005 season USD50 400 12 x USD 4 410 for the 2005/2006 season USD52 920 Last installment of the signing-on fee USD10 000 Total USD151 520 By letter of 21 st July 2004, the legal consultant for H, submitted a letter containing a listed account of the matter between the club and the player, and stating, inter alias, that the fact that the club owed the player, S, the amount of USD25 000.00 for the 2003/2004 season was undisputed. This correspondence sent on behalf of the club also notes the following: 3
The club had been expecting to receive a significant amount of money several days after the end of the season in May 2004. It is claimed by the club that, at the meeting on 15 th July 2004, the player had stated his wish to leave the club. Further it is claimed that the player had made it clear that he intended to play for club V. The club claims that the player had twice breached the employment contract, by failing to report back to the club on time and by disappearing on 17 th July 2004 with no just cause. Further, the club claims that the player is obliged to compensate H in the amount of USD300 000, making reference to Arts. 21 and 22 of the FIFA Regulations for the Status and Transfer of Players. The club H accuses the player s former club, V, of dishonest negotiation in the transfer of the player S to their club and reckons that club V should pay the amount of USD80 000 to them by way of compensation. Considerations of the Dispute Resolution Chamber The Dispute Resolution Chamber commenced by raising the question of its competence to deal with the present affair. As established in Art.42 par.1 lit.(b) (i) of the Regulations, it falls within the purview of the DRC to determine, inter alias, whether one of the parties has committed a unilateral breach of contract without just cause. This cognizance also included the competence to decide on the validity of the contract as such. Should the employment contract have been breached by a party, the DRC is responsible to verify whether this party is accountable for outstanding payments, if any, and compensation. Also, the DRC will establish the amount of compensation to be paid and decide whether sports sanctions are to be imposed (cf. art. 42 par. 1 (b) (ii) and (iii) in connection with art. 22 and 23 of The Regulations). In view of the foregoing, the DRC concluded that it was competent to decide on the present litigation. Subsequently, and entering into the substance of the matter, the members of the Chamber began its deliberation by analyzing each party s claim, as follows: It was acknowledged that the club and the player had signed an employment contract on 1 st July 2003 and the player had commenced playing for his new club. It was also noted that the club had acknowledged that the amount of USD25 000 for the 2003/2004 season had been owing to the player at the time when the player s first season with the club ended, i.e. that the club had violated its contractual obligations. The last match of the season had been played on 22 nd May 2004. Prior to the player leaving on holiday, he had requested payment of the outstanding amount due to him, which he had calculated as being USD38 200. 4
The members of the Chamber considered that, despite not having received salaries and proportions of the signing-on fee due to him, the player had continued to show willingness to honour his part of the employment contract, by writing to the club on 5 th July 2004, requesting that the outstanding salaries be paid into his account within 2 days of his return, which may be construed as meaning that the player had fully intended to continue honouring his employment contract with the club. It was noted that, despite the fact that the amount still owing to the player had then not been paid into his bank account on 6 th July 2004, the player had returned to the club s country, on 12 th July 2004, only to be accused of having breached the employment contract, by having returned late to the club. Despite an urgent meeting having been arranged for 15 th July 2004, no solution had been found. A draft agreement had been drawn up by club H, which, inter alias, was to have been an agreement to terminate the employment contract with the player. Furthermore, it contained the proposal that club H would pay all of the money owing to the player by the club for the 2003/2004 season, i.e. USD25 000 (according to the draft agreement) leaving the player free to sign on with a club of his choice. It was noted, however, that this agreement had not been signed. The members of the Chamber considered that, the claim submitted by club H, by letter dated 25 th July 2004, had stated that, in the club s view, the player s behaviour had represented a double breach of contract, firstly by not having returned to the club after the summer vacation on the arranged date and secondly by having left the club definitively and without just cause, on 17 th July 2004. Together with this statement, the club had written that the player, S, is obliged to compensate the club in the amount of USD300 000 and in this respect, cited Art. 22 of the FIFA Regulations for the Status and Transfer of Players. In taking all of the foregoing into account, the Chamber concluded that, in not having paid the salaries and the proportion of the signing-on fee that was due to the player in July 2004, the club had manifestly breached the employment contract. Consequently, the player had had a valid reason for leaving the club and for terminating contractual relations with the club on 17 th July 2004. In light of the foregoing, the Chamber decided that, on the one hand, the player is entitled to receive the salaries due to him up until his departure, i.e. for the months of March until June 2004, corresponding to the amount of USD16 000. In addition, the player is to receive the portion of the signing-on fee which had been due in July 2004, i.e. USD10 000. Equally, the club is directed to pay to the player the sum of USD7 500 corresponding to bonuses in connection with the its second position in the national championship and USD4 700 as bonuses in connection with the points scored by the club. Finally, he shall be compensated for the breach of contract committed by the club. On the other hand, the Chamber stated that the claim for unjustified breach of contract filed by the club against the player, has to be rejected. 5
When establishing the amount of compensation that the club would have to pay to the player, the members of the DRC noted that, after returning from his vacation, the player had waited only 5 days, before again returning to his own country, definitively, on 17 th July 2004. Furthermore, the Chamber considered that, at the time of the player s departure, one third of the agreed duration of the employment contract had passed, however, more than two thirds of the signing-on fee had already been paid. On account of the foregoing, the Chamber decided that compensation for breach of contract in the amount of USD20 000 is appropriate and justified. The Chamber concluded that, as a result of its deliberations, the club is to pay the player the total amount of USD58 200. Finally, the Chamber emphasized that possible demands by the club against the player s former club, V cannot be considered within the present procedure, since the case at hand only concerns the contractual dispute between the player, S and the club, H. It was pointed out that, in any case, such a claim would come under the competence of the Players Status Committee, and not the DRC. Decision of the Dispute Resolution Chamber 1. The claim submitted by the player, S, is partially upheld. 2. The counter-claim submitted by the club, H, is rejected in its entirety. 3. The club, H, has to pay the amount of USD58 200 to the player, S. 4. The amount due to the player, S, has to be paid by the club H, within 30 days as from the date of notification of the present decision. 5. In the event that the club s debts to the player are not paid within the stated deadline, an interest rate of 5% per annum will apply. 6. Should the relevant amount not be paid within the aforementioned deadline, the present matter shall be submitted to the FIFA Disciplinary Committee, so that the necessary disciplinary sanctions may be imposed 7. The player, S, is hereby directed to immediately inform the club, H, of the account number to which the payment may be remitted, and is to notify the Dispute Resolution Chamber of every payment received. 8. According to art. 60 par. 1 of the FIFA Statutes,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 is enclosed herewith. 6
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 Beaumont 2 1012 Lausanne Tel: +41 21 613 50 00 Fax: +41 21 613 50 01 e-mail: info@tas-cas.org www.tas-cas.org For the Dispute Resolution Chamber: Urs Linsi General Secretary Enc. CAS Directives 7