Decision of the Dispute Resolution Chamber

Transcription

1 Decision of the Dispute Resolution Chamber passed in Zurich, Switzerland, on 12 January 2006, in the following composition: Slim Aloulou (Tunisia), Chairman Jean-Marie Philips (Belgium), Member Zola Malvern Percival Majavu (South Africa), Member Rinaldo Martorelli (Brazil), Member Theo van Seggelen (Netherlands), Member on the claim presented by Player A, as Claimant against Club B, as Respondent regarding a contractual dispute arisen between the parties.

2 I. Facts of the case 1. On 18 June 2004, the club B informed the player A, apparently with double nationality, X and Y, in writing about the remuneration payable in case of conclusion of an employment contract. 2. On 26 June 2004, prior to a test match with the team of the club A, the player sought a reassurance from the club in case he would get injured in that match. Therefore, the sport director of the club signed a document according to which the club could not withdraw the offer made on 18 June 2004 in the event that the player would get injured in that test match. 3. On 3 July 2004, the player and the sport director of the club signed an employment contract, valid from 3 July 2004 to 30 June 2008, stipulating a monthly salary of USD 12,500. The space where the sport director of the club signed was designated as second signature, if necessary. The space above the sport director s signature, designated as Signature of the employer stayed empty. 4. On 6 July 2004, the sport director informed the player in writing that the club confirm[s] that player A does not have any kind of working contract with club B. As the player is not in possession of an EU passport, there is no possibility to obtain the necessary working permit in due time before the start of the season. A possible contract could be negotiated only when the player has received his EU passport. 5. After having insisted in writing on the validity of the contract dated 3 July 2004 with the club B without success, the player signed another contract with the club C, where he earned USD 41,000 in total from August to December In continuation, from March 2005 to February 2008, he signed a contract with a club D, according to which he earns in total USD 353, On 21 July 2004, the player A submitted to FIFA a claim against the club B, requesting the payment of the entire amount of the salaries stipulated in the contract, i.e. the amount of USD 600,000, less the amount he would earn during the stipulated duration of the contract with the club B with other clubs (USD 41,000 with the club C and USD 353,000 with the club D). 7. The player stated that he was convinced that the sport director had the authority to conclude binding contracts for the club, since the same person also signed the reassurance document on 26 June Moreover, the player stated that according to the FIFA Regulations, the acquisition of a work permit is the sole risk and responsibility of the club. 2/10

3 9. On 11 April 2005, the club B provided FIFA with its reply to the claim at stake, emphasizing that in June/July 2004, it was not interested in any player that did not have an EU-passport. The assessment of the player in question was continued only because he promised to file in his relevant passport in due course. 10. Moreover, according to the excerpt from the commercial register, the sport director was not authorized to conclude binding contracts for the club. 11. In this respect, the club maintained that before having the reassurance document being signed on 26 June 2005, the player was verbally informed that the sport director was not authorized to conclude contracts for the club. The reassurance document was only signed by the sport director since the player insisted on it and would not have played the test match without such document. 12. The document signed on 3 July 2004 was only a draft of an employment contract, which should allow the player s manager to verify the contents of the contract. Also before signing this document, it was reiterated verbally that the sport director was not authorized to conclude binding contracts for the club. The person who was authorized to conclude binding contracts for the club did not sign the relevant document. 13. Allegedly, after receipt of the draft of the employment contract on 3 July 2004, the player added his signature and the following note: player has applied for relevant Citizenship, and is eligible. 14. Later, the club B found out that the player did not have the respective passport. In this respect, it felt deceived by the player and therefore provided him with the above-mentioned letter dated 6 July The club is of the opinion that due to the failure of the player to present his respective passport, the draft of the contract dated 3 July 2004 was never finalized. 16. It is also of the opinion that the question in the present matter is not the acquisition of a work permit, but the fact that the player s EU-nationality was an essential condition for the conclusion of an employment contract. 17. On 10 May 2005, the player provided FIFA with his position towards the answer of the club, emphasizing that the acquisition of the respective passport was never communicated to him as being an essential condition for the conclusion of the contract. Moreover, the signed contract would not contain an express provision in this regard. 3/10

4 18. In this respect, the player is of the opinion that the status of his nationality was subsequently used by the club to avoid its obligations under the contract. 19. On 31 October 2005, the club B provided FIFA with its final position on the matter, stating that it was clearly communicated to the player that his respective citizenship was an essential condition for the conclusion of a contract. 20. In this regard, the club refers on the one hand to alleged oral information of the player, and on the other hand to a letter dated 15 July 2005 from a person called Mr X in which this person stated that he was aware that the club B was looking only for a player with EU-citizenship. According to the club, Mr X was the agent of the player A. Therefore, Mr A presumably had been informed accordingly. 21. Moreover, the club emphasized that at that time, its quota for non EU-players was already exhausted. Therefore, the player s nationality was not used by the club to avoid its obligations under the contract, but rather the reason for not concluding a contract with the player at all. 22. In continuation, the club stated that on 3 July 2004, only one exemplar of the contract draft was signed. However, according to Art. 36 of the draft of the contract, three copies would have had to be signed, one handed out to both parties and one registered at the National League, in order to become legally binding. Since only one exemplar of the draft contract was signed, the contract could not become legally binding anyway. 23. Furthermore, the club emphasised that on 3 July 2004, only the sport director signed the draft contract, the player did not sign it. It was allegedly only in the correspondence exchanged with regard to the present dispute, when the club saw for the first time the contract signed by the player as well, and amended with the above-mentioned note player has applied for respective Citizenship, and is eligible. 24. On account of the above, the club B is of the opinion that in July 2004, no contract was concluded between the parties in question. 25. However, in case it should be considered that a contract was concluded, the club B is of the opinion that such contract was not valid, since the club was deceived by the player about his nationality and therefore had no will to conclude this contract. 26. Finally, in case it should be considered that a valid contract was concluded between the parties, the club B maintains that the player violated his obligation to mitigate his damage, since he had no contract during certain periods of the duration of the contract with club B. 4/10

5 II. Considerations of the Dispute Resolution Chamber 1. The matter at stake was submitted to FIFA before 1 July Therefore, and in accordance with Article 18 Para. 2 and 3 of the revised Rules Governing the Procedures of the Players Status Committee and the Dispute Resolution Chamber (edition 2005), not the revised Rules, but the previous Rules Governing the Practice and Procedures of the Dispute Resolution Chamber (edition 2002, hereinafter referred to as; the Procedural Rules) do apply on the matter at hand as procedural rules. 2. Moreover, in accordance with Article 26 Para. 1 and 2 of the revised Regulations for the Status and Transfer of Players (edition 2005), not the revised Regulations, but the previous Regulations for the Status and Transfer of Players (edition 2001, hereinafter referred to as; the Regulations) do apply on the dispute at stake as far as the substance of the matter is concerned. 3. The members of the Dispute Resolution Chamber were summoned to pass a decision on the matter at stake by the Chairman of the Dispute Resolution Chamber pursuant to Article 1 point 6) of the Procedural Rules. 4. The members of the Chamber started their deliberations asserting that the matter at stake concerns a dispute about the conclusion of an employment contract between a player and a club as well as a request of the player for compensation for unjustified unilateral termination of such contract. 5. In accordance with Article 42 Para. 1 lit. (b) of the Regulations, and in particular Para. (i) of the said provision, it falls within the purview of the Dispute Resolution Chamber to determine whether one of the parties has committed a unilateral breach of contract without just cause. In case the employment contract was breached by a party, the Dispute Resolution Chamber is responsible to verify and decide whether this party is accountable for outstanding payments and compensation (cf. Article 42 Para. 1 lit. (b) (iii) of the Regulations). 6. In view of the above, the Dispute Resolution Chamber concluded that it was competent to decide on the present litigation. 7. Entering into the substance of the matter, the Chamber acknowledged the facts of the case as well as the documentation contained in the file, and in view of the circumstances of the matter, emphasized that it was of prior and 5/10

6 crucial importance to provide an answer to the question whether an employment contract was validly concluded between the parties to the dispute at stake, the player A and the club B. 8. In this regard, the Chamber stated that for the valid conclusion of a contract, the congruent expression of the will of the parties or their legal representatives to conclude such contract is required. The signature of a party or its legal representative is considered as an expression of its will to conclude a contract. 9. In view of the above outlined principle, the Chamber acknowledged that on 3 July 2004, the player B and the sport director of the club B put their signature under an employment contract. In this respect, the Chamber pointed out that the club B had not provided any evidence for its allegation that the player had signed the document only at a later stage. Moreover, the Chamber noticed in particular that the space where the sport director signed the contract was designated as second signature, if necessary, and that the space above the sport director s signature, designated as signature of the employer, was not signed. 10. On account of the above, the members of the Chamber stated that since the space on the contract designated signature of the employer was not signed, the employer, the club B, had not expressed its will to conclude the relevant employment contract. 11. Therefore, no contract was concluded between the employee, the player A, and the employer, the club B. 12. However, the Chamber emphasized that the sport director, with his signature on the space designated as second signature, if necessary, may have validly concluded an employment contract for the club, without that the signature of the employer was necessary. 13. In this regard, the Chamber first of all acknowledged that according to the excerpt of the commercial register regarding the club B, the sport director was not authorized to conclude binding contracts for the club. 14. Therefore, the Chamber stated that since in accordance with the commercial register, the sport director does not have the power to conclude binding contracts for the club B, as a general rule, he could not validly conclude an employment contract for the club B with the player A. 15. In continuation, the Chamber analysed if the player could in good faith trust that the sport director of the club was entitled to conclude binding contracts for the club. Under such circumstances, the contract in question would have 6/10

7 to be considered after all as validly concluded between the player and the club. 16. In this regard, the members of the Chamber acknowledged that on 24 June 2004, the sport director of the club signed a document according to which the club could not withdraw its contract offer made towards the player in the event that the player would get injured in the upcoming test match. Moreover, the Chamber acknowledged that on 3 July 2004, the sport director signed the employment contract in question on the space designated signature, if necessary On account of the above, the Chamber stated that the fact that the sport director signed the document dated 18 June 2004 could indeed possibly be interpreted in a way that the player could in good faith believe that the sport director was duly authorised by the club to conclude binding contracts for it, such as to sign an employment contract. 18. The Chamber was of the opinion that such good faith can, however, not be maintained with regard to the signing of the employment contract dated 3 July On this contract, the sport director did not sign on the space designated signature of the employer, but on the space which was clearly designated second signature, if necessary. It is obvious that if the sport director would have been entitled to conclude an employment contract for the club, he would have signed at the space designated as signature of the employer. Since he signed at the space designated second signature, if necessary, it was clear that he was not entitled to conclude an employment contract for the club, or at least not him alone. Moreover, it was clear that the conclusion of such a contract, besides the sport director s signature, requires the signature of another person, the signature of the employer, in order that an employment contract is validly concluded. 19. Therefore, the Chamber concluded that the player could not in good faith believe that the sport director was a legal representative of the club with the power to conclude the employment contract in question. 20. The player as well cannot argue that he could not understand the designations on the contract, since they were in a language the player did not master. It was the player s responsibility to translate the contract in English, or at least to ask for a translation of the contract, before signing it. By signing the presented version of the contract, the player accepted the contract and thereby implied understanding this version. The Chamber remarked, however, that the player is not evoking such argumentation. 21. On account of the above, the Chamber came to the conclusion that between the parties to the present dispute, no valid employment contract was concluded. 7/10

8 22. The Chamber then turned to the circumstances of the negotiations for the employment contract in question between the parties involved, and thereby acknowledged that with his behaviour, the sport director of the club gave the strong impression to the player that an employment contract would be concluded with him. The Chamber particularly referred to the fact that the player was provided with an offer on 18 June 2004, received an assurance confirmation signed by the sport director on 26 June 2004 in case he would get injured in a test match, was given a copy of the contract dated 3 July 2004, signed by the sport director, and finally, on 6 July 2004, was informed that no contract would be concluded with him. 23. In view of these facts, it appeared to the members of the Chamber that the club arranged to keep the player during the registration period as a reserve, for the event that it could not take under contract other preferred players. Once it was then clarified that some other players could be contracted, the player A was abandoned. Would it not have been possible to contract the preferred players, the contract with the player A could still have been finalised. 24. On account of the above outlined circumstances, the Chamber referred to the legal principle of culpa in contrahendo, according to which a party to a negotiation for a contract has to compensate causal damages incurred by the other party, if it has infringed on its own fault its obligation to act in good faith during the negotiations and thereby breached the confidence of the other party in the negotiations. 25. In the present case, the player A and the club B were in negotiations for an employment contract. The behaviour of the sport director, in particular the fact that he signed the reassurance document on 26 June 2004, in connection with the fact that he signed a copy of the employment contract and handed it to the player, although he was not entitled to conclude employment contracts for the club, created a certain confidence for the player, according to which he could in good faith believe that an employment contract would indeed be concluded. 26. By not finalising the employment contract, the club breached the player s confidence. Since most probably, the contract was not finalised because the club could contract other player s, the breach of the player s confidence was done without any blame to be assigned to the player, but only by the club s fault. In this respect, the Chamber emphasised that the contract signed by the sport director on 3 July 2004 did not refer at all to the alleged necessity for the player to hold an EU-passport. Neither had the club B provided other evidences corroborating its allegation that the player s European nationality would be an essential condition for the conclusion of the contract. On 8/10

9 account of this, the Chamber concluded that the club is liable for the breach of the confidence of the player. 27. The breach of the player s confidence has led to a damage for the player, in particular since the player was not able to negotiate for an employment with other clubs during the time of negotiations with the club B. Moreover, in order not to be without a club after having been disappointed by the club B, the player had to find new employment in a very short time, which did not allow him to carefully negotiate the financial aspects of the new contract. It was therefore clear for the members of the Chamber that the player had suffered damages. In view of all the above, and considering the player s income with the clubs following his departure from club B, the Chamber established that the club B has to compensate the player for culpa in contrahendo with the amount of USD 50, Finally, the Dispute Resolution Chamber stated that it is clear that negotiations for the conclusion of an employment contract can last for a longer time. In this regard, the Chamber emphasized that there is nothing illegal if such negotiations take some time. The Chamber, however, stressed that the practice applied by the club B in the present case, i.e. the holding of a player at the reserve by providing him with an employment contract which is signed by a person which is not authorised by the club to conclude contracts for the club, is not acceptable and tolerable and therefore has to lead to a compensation of the damaged player. 29. In view of the above, the Chamber decided that the club B has to pay to the player A the amount of USD 50,000 on account of culpa in contrahendo. III. Decision of the Dispute Resolution Chamber 1. The claim of the player A is partially accepted. 2. The club B has to pay the amount of USD 50,000 to the player A. 3. The amount due to the player A has to be paid by the club B within the next 30 days as from the date of notification of this decision. 4. If the aforementioned sum is not paid within the aforementioned deadline, an interest rate of 5% per year will apply as from the first day after the aforementioned deadline. 5. If the aforementioned sum is not paid within the aforementioned deadline, the present matter shall be submitted to FIFA s Disciplinary Committee, so that the necessary disciplinary sanctions may be imposed. 9/10

10 6. Any further request by the player A is rejected. 7. The player A is directed to inform the club B directly and immediately of the account number to which the remittance is to be made and to notify the Dispute Resolution Chamber of every payment received. 8. According to art. 60 par. 1 of the FIFA Statutes this decision may be appealed before the Court of Arbitration for Sport (CAS). The statement of appeal must be sent to the CAS directly within 21 days of receiving notification of this decision and has to contain all elements in accordance with point 2 of the directives issued by the CAS, copy of which we enclose hereto. Within another 10 days following the expiry of the time limit for the filing of the statement of appeal, the appellant shall file with the CAS a brief stating the facts and legal arguments giving rise to the appeal (cf. point 4 of the directives). The full address and contact numbers of the CAS are the following: Château de Béthusy Avenue de Beaumont Lausanne Switzerland Tel: Fax: info@tas-cas.org For the Dispute Resolution Chamber: Urs Linsi General Secretary Encl. CAS directives 10/10