Liberia Football Association (LFA) v. Fédération Internationale de Football Association (FIFA)

III. FACTUAL BACKGROUND

5. Below is a summary of the main relevant facts, as established on the basis of the parties’ written and oral submissions and the evidence provided in the course of the present appeal arbitration proceedings and the hearing. This background is made for the sole purpose of providing a synopsis of the matter in dispute. Additional facts may be set out, where relevant, in connection with the legal discussion.

A. Background Facts

6. On 15 January 2014, the Single Judge of FIFA Players’ Status Committee (the “Single Judge”) rendered his decision (the “FIFA PSC Decision”) in a contractual dispute between R. (the “Coach”), a football coach of Italian nationality who previously had served as head coach of the national representative team of Liberia, and the LFA, ordering the LFA to pay the Coach the following amounts:

• USD 70,000 as outstanding salary plus interest at a rate of 5% per year from 2 August 2012 until the effective date of payment;

• USD 3,150 as “dinner indemnity” plus interest at a rate of 5% per year from 2 August 2012 until the effective date of payment;

• USD 50,000 as compensation for termination of contract plus 5% interest at a rate of 5% per year from 15 January 2014 until the effective date of payment.

7. Neither of the parties asked for the grounds of the FIFA PSC Decision nor lodged an appeal against it. The FIFA PSC Decision therefore became final and binding at the moment of expiry of the period of ten days following its notification.

8. On 21 March and 13 April 2014 respectively, the then representative of the Coach, Mr Ricardo Teixeira, who – up to a certain moment – represented the Coach during the proceedings before FIFA, informed the FIFA PSC that the LFA failed to pay the amounts due and requested the intervention of the FIFA Disciplinary Committee.

9. On 29 April 2014, the FIFA PSC informed the LFA that if it did not provide proof of payment of the amounts due by 9 May 2014 at the latest, the case would be transferred to the secretariat to the FIFA Disciplinary Committee.

10. On 12 May 2014, Mr Teixeira informed the FIFA PSC that the LFA had not paid the outstanding amounts.

11. On 19 May 2014, the FIFA PSC informed the parties that the case was transferred to the FIFA Disciplinary Committee for its consideration.

12. On 27 May 2014, the Coach and the LFA reached a settlement agreement (the “Settlement”), determining, inter alia, the following:

“1. That [the LFA] has agreed to pay the amount of thirty thousand United States (US$30,000.00) dollars in three (3) installments (sic) as full settlement to [the Coach] to have him withdraw his claimed [sic] with FIFA against [the LFA];

2. That [the Coach] has agreed to withdraw his Claimed [sic] with FIFA against [the LFA] upon the receipt of thirty thousand United States (US$30,000.00) dollars in three (3) installments (sic) as full settlement to close the dispute,

3. That [the LFA] shall make the three (3) installment (sic) payments as follows: […]

4. That [the LFA] has also agreed to offer [the Coach] a two (2) years Service Contract with terms and conditions to be negotiated;

5. That if the LFA and the [Coach] cannot agree on the terms and conditions of the two (2) years Service Contract offered by the LFA, the Parties have agreed for the LFA to pay a gross settlement amount of sixty thousand United States (US$60,000.00) dollars to close the [Coach’s] claim of LFA obligations with FIFA;

[…]

7. That if [the LFA] fails to make payments as stipulated herein, this settlement agreement shall be considered NULL and VOID; and

[…]”.

13. On 6 August 2014, the LFA offered the Coach a new employment contract.

14. On 21 August 2014, the Coach personally informed the FIFA Disciplinary Committee that the outstanding amounts remained unpaid.

15. On 5 September 2014, Mr Teixeira informed the FIFA PSC as follows on behalf of the Coach:

“By means of a SETTLEMENT AGREEMENT […] signed 27 May 2014, [the Coach] and the [LFA] have reached an agreement based on the following:

1 – a payment of USD 30’000,oo in three (3) installments (sic) as per item 3 of the [Settlement];

2 – a complementary payment of USD 30’000,oo in case the LFA did not offer [the Coach] a contract as per item 5 of the [Settlement].

My client has received the payment in three installments (sic): […]

In the meantime, [the Coach] has signed an employment contract in Egypt and cannot take into consideration the offer of the LFA, presented to him 6 August 2014 […].

Consequently, we are pleased to inform that the [LFA] has complied with what was agreed and FIFA should consider the claim cancelled as from this date”.

16. In spite of the clear and non-ambiguous content of the letter sent by Mr Teixeira to FIFA, throughout September and October 2014, the Coach personally contacted the secretariat to the FIFA Disciplinary Committee several times over the phone to inform the FIFA Disciplinary Committee that he did not consider the matter as settled and requested the opening of disciplinary proceedings against the LFA.

B. Proceedings before the FIFA Disciplinary Committee

17. On 8 October 2014, the Coach personally informed the secretariat to the FIFA Disciplinary Committee about the Settlement; however, he declared that it had not been fully respected by the LFA. The Coach therefore requested the intervention of the FIFA Disciplinary Committee.

18. On 29 October 2014, Mr Teixeira provided the secretariat to the FIFA Disciplinary Committee with a letter from the LFA, the content of which was exactly the same as the letter Mr Teixeira had sent to the FIFA PSC on 5 September 2014 on behalf of the Coach.

19. On 26 January 2015, the secretariat to the FIFA Disciplinary Committee informed the parties that according to article 64 of the FIFA Disciplinary Code (the “FDC”), in what concerns the payment of a sum of money, the disciplinary proceedings cannot go beyond the execution of a final and binding decision rendered by a body, a committee or an instance of FIFA or a subsequent CAS appeal decision.

20. On 28 January 2015, the new representative of the Coach, Mr Luis Cassiano Neves, informed the secretariat to the FIFA Disciplinary Committee, inter alia, as follows:

“2. The [Coach] never communicated to FIFA any withdrawal, waiver or forfeiture of his legal standing regarding the procedure.

3. The [LFA] has failed to fully comply with the decision of 15 January 2014.

[…]

6. […] [T]he execution of this [Settlement] cannot restrict the legal and regulatory right of the [Coach] to seek redress and to obtain full enforcement of the [FIFA PSC Decision], as per article 64 of the Disciplinary Code.

7. In reality, the [Settlement] (a copy of which was already made available to the Disciplinary Committee) is very simple but poorly worded, and therefore contains a few legal inaccuracies.

8. First and foremost, the Parties agree to certain financial and employment conditions to be offered by the [LFA] to the [Coach], who in return would “withdraw his claim with FIFA” against the [LFA].

9. […] [T]here was not pending procedure from which to withdraw from.

[…]

11. The [Settlement] is, in this sense, quite clear. The [Coach] accepted to suspend his right to seek the enforcement and execution of the [FIFA PSC Decision], provided the [LFA] complied with the following contractual obligations:

(i) payment of USD 30.000,00 (thirty thousand Dollars of the United States of America), payable in three instalments (please refer to clause 3 of the [Settlement]); AND

(ii) the execution of a two-year service contract (in fact a sporting employment contract), OR payment of an additional USD 60.000,00 (sixty thousand Dollars of the United States of America).

12. The underlying rational is simple: the [Coach], a football coach by trade, was willing to significantly reduce the amount of the compensation decided by the Single Judge, because a professional solution was being offered to him, under which he would gain valuable experience and remuneration comparable to the amounts decided upon in the [FIFA PSC Decision].

[…]

14. It should be noted that the [Settlement], namely clauses 4 and 5, refer simply to the execution of the services contract or to the possibility of the parties not agreeing to terms and conditions. It is not referred whether any of the parties has the obligation to accept or to offer certain specific terms, but the clauses are straightforward in establishing a result-oriented cause the verification of the signature of the services contract, or not.

15. No such services contract was ever signed by the Parties.

16. And the agreed compensation of USD 60.000,00 (sixty thousand Dollars of the United States), which became due, was never paid and such fact seems to be accepted by the [LFA] itself, in its communication of 29 October 2014.

17. As stipulated by clause 7 of the [Settlement], if the [LFA] were to “fail to make payments as stipulated” therein, “this [Settlement] shall be considered NULL and VOID”.

[…]

19. The [LFA] made a partial and very minor payment of the amounts agreed in the settlement agreement and has failed to abide by its payment obligations, which can only be understood to render the [Settlement] null and void.

20. In which case, the [Coach] is fully entitled to request the opening of disciplinary proceedings against the [LFA], based on the latter’s failure to comply with the [FIFA PSC Decision], as per article 64 of the FIFA Disciplinary Code, which provides that an association that fails to pay another person a sum of money in full or part, even though instructed to do so by an instance of FIFA, shall be notified and warned that further disciplinary sanctions may apply”.

21. On 3 February 2015, Mr Teixeira informed the secretariat to the FIFA Disciplinary Committee that he now acted as representative of the LFA.

22. On 24 February 2015, the LFA reiterated the contents of its correspondence dated 30 October 2014, requesting the matter to be considered settled.

23. On 17 April 20151, since the parties disagreed to the execution of the Settlement reached, the secretariat to the FIFA Disciplinary Committee opened disciplinary proceedings.

24. On 27 and 29 April 2015 respectively, the Coach and the LFA basically reiterated their previous submissions.

25. On 2 July 2015, the secretariat to the FIFA Disciplinary Committee informed the parties that the Chairman of the FIFA Disciplinary Committee considered that the LFA had not fully complied with the FIFA PSC Decision. Therefore, the FIFA Disciplinary Committee asked the LFA to pay the outstanding amount to the Coach.

26. On 22 July 2015, Mr Teixeira, now already acting on behalf of the LFA, informed the secretariat to the FIFA Disciplinary Committee as follows:

“i) As former representative of [the Coach], thus with his full agreement and compliance, I informed FIFA by means of my correspondence dated 5 September 2014, that the matter vs the [LFA] was put

1 The Panel considers the reference to 17 July 2015 in the Appealed Decision to be an obvious typographic mistake.

to rest. There has never been any objection from [the Coach] on this matter nor, to my knowledge, any cancellation of the issued mandate prior to or until that date”;

ii) Consequently, I do not see any reason for the Disciplinary Committee to step into the matter and try to apply article 64 of the [FDC]”.

27. On 24 July 2015, the secretariat to the FIFA Disciplinary Committee urged the LFA for the final time to pay by 21 August 2015 at the latest the outstanding amount and informed the LFA that the case would be submitted to the FIFA Disciplinary Committee on 4 September 2015.

28. On 27 July 2015, the LFA again sent its correspondence dated 22 July 2015 to the secretariat to the FIFA Disciplinary Committee.

29. On 4 September 2015, the FIFA Disciplinary Committee rendered its decision (the “Appealed Decision”), with the following operative part:

“1. The [LFA] is pronounced guilty of failing to comply with the [FIFA Single Judge Decision] and is, therefore, in violation of art. 64 of the FIFA Disciplinary Code.

2. The [LFA] is ordered to pay a fine to the amount of CHF 10,000. […]

3. The [LFA] is granted a final period of grace of 30 days as from notification of the present decision in which to settle its debts to the [Coach].

4. The [LFA] is warned and notified that, in the case of non-payment of the outstanding amounts, the case will again be submitted to the FIFA Disciplinary Committee in order to impose harsher sanctions against the [LFA]. These sanctions may lead, amongst others, to an expulsion from a FIFA competition. This will occur if the [Coach] informs the secretariat to the FIFA Disciplinary Committee of the non-payment within the stipulated deadline and demands in writing that the case be submitted again to the FIFA Disciplinary Committee. Once the [Coach] has filed this request, the submission of the present matter to the FIFA Disciplinary Committee will follow automatically.

5. The costs of these proceedings amounting to CHF 2,000 are to be borne by the [LFA] and shall be paid according to the modalities stipulated under point 2. above.

6. The [Coach] is directed to notify the secretariat to the FIFA Disciplinary Committee of every payment received”.

30. On 18 October 2016, the LFA requested the grounds of the Appealed Decision.

31. On 1 February 2016, the grounds of the Appealed Decision were communicated to the parties, determining, inter alia, the following:

- “[…] [T]he Committee noted that the [Coach] and the [LFA] reached [a Settlement] regarding the execution of the [FIFA PSC Decision]. As a consequence of said [Settlement], the Committee noted that a partial payment of USD 30,000 was received by the [Coach].

• Furthermore, the Committee noted that the [Coach] requested the enforcement of the [FIFA PSC Decision] as the [LFA] did not fully respect the previously mentioned [Settlement].

• In this regard, the Committee concluded that the [Settlement] reached between the parties had not been fully respected and underlined that it has no competence to enforce agreements reached between the parties but solely to enforce decisions passed by a body, a committee or an instance of FIFA or a subsequent CAS appeal decision.

• Thus, as the [LFA] did not fully comply with the [FIFA PSC Decision] and is consequently withholding money from the [Coach], it is considered guilty under the terms of art. 64 of the FDC.

• The fine to be imposed under the above-referenced art. 64 par. 1 a) of the FDC in combination with art. 15 par. 2 of the FDC shall range between CHF 300 and CHF 1,000,000. The [LFA] withheld the amount unlawfully from the [Coach]. Even if FIFA’s attempts to urge the [LFA] to fulfil its financial obligations failed to induce it to pay the total amount due. In view of all the circumstances pertaining to the present case and by taking into account the outstanding amount due, the Committee regards a fine amounting to CHF 10,000 as appropriate. This amount complies with the Committee’s established practice”.

IV. PROCEEDINGS BEFORE THE COURT OF ARBITRATION FOR SPORT

32. On 22 February 2016, the LFA filed a Statement of Appeal with the Court of Arbitration for Sport (“CAS”), pursuant to Article R48 of the Code of Sports-related Arbitration (edition 2016 – the “CAS Code”). In this document, the LFA nominated Mr Antoine Essomba Eyenga, Attorney-at-Law in Yaoundé, Cameroon, as arbitrator.

33. On 10 March 2016, FIFA nominated Mr Efraim Barak, Attorney-at-Law in Tel Aviv, Israel, as arbitrator.

34. Also on 10 March 2016, the LFA filed its Appeal Brief, pursuant to Article R51 of the CAS Code. The LFA submitted the following request for relief:

“In view of the above and the attached exhibits, the CAS is respectfully requested to consider the case void and cancel the challenged decision”.

35. On 14 April 2016, pursuant to Article R54 of the CAS Code, and on behalf of the President of the CAS Appeals Arbitration Division, the CAS Court Office informed the parties that the arbitral tribunal appointed to decide the present matter was constituted by:

• Prof. Petros C. Mavroidis, Professor in Neuchatel, Switzerland, as President;

• Mr Antoine Essomba Eyenga Attorney-at-Law in Yaoundé, Cameroon; and

• Mr Efraim Barak, Attorney-at-Law in Tel Aviv, Israel, as arbitrators

36. On 15 April 2016, FIFA filed its Answer, pursuant to Article R55 of the CAS Code, requesting CAS to decide as follows:

“1. To reject the Appellant’s appeal in its entirety.

2. To confirm the decision hereby appealed against.

3. To order the Appellant to bear all costs incurred with the present procedure and to cover all legal expenses of the Respondent related to the present procedure”.

37. On 25 April 2016, FIFA informed the CAS Court Office that it did not want a hearing to be held, whereas the LFA informed the CAS Court Office that it would rather have a hearing.

38. On 12 June 2016, the LFA informed the CAS Court Office that Mr Essomba Eyenga had passed away and nominated Mr Augustin E. Senghor, Attorney-at-Law in Dakar, Senegal, as arbitrator. The LFA further indicated that it would be represented by new counsel.

39. On 18 August 2016, the LFA reiterated its request for a hearing to be held and alluded to the intention of calling two witnesses, and, alternatively, requested for a second round of written submissions to be permitted.

40. On 19 August 2016, FIFA objected to the LFA’s request for a hearing to be held as no witnesses were mentioned in the LFA’s Appeal Brief, nor were brief summaries of their expected testimonies provided, as is required under the CAS Code. FIFA also objected to the LFA’s request for a second round of written submissions.

41. On 12 September 2016, the CAS Court Office informed the parties that the Panel had decided to hold a hearing.

42. On 26 and 27 January 2017 respectively, the LFA and FIFA returned duly signed copies of the Order of Procedure to the CAS Court Office.

43. On 16 February 2017, a hearing was held in Lausanne, Switzerland. At the outset of the hearing all parties confirmed not to have any objection as to the constitution and composition of the Panel.

44. In addition to the Panel, Mr Daniele Boccucci, Counsel to the CAS, and Mr Dennis Koolaard, Ad hoc Clerk, the following persons attended the hearing:

a) For LFA: 1) Mr Shannon M.H., First Vice-President of the LFA; 2) Mr Sètondji Roland Adjovi, Counsel; 3) Mr Stephen J. Waters, Counsel

b) For FIFA: 1) Mr Jaime Cambreleng Contreras, FIFA Head of Disciplinary; 2) Mr Paul-Antoine Dumond, Legal Counsel in the FIFA Disciplinary department

45. No witnesses or expert witnesses were heard.

46. Both parties were afforded full opportunity to present their case, submit their arguments and answer the questions posed by the Panel.

47. Before the hearing was concluded, both parties expressly stated that they did not have any objection with the procedure adopted by the Panel and that their right to be heard had been respected.

48. The Panel confirms that it carefully heard and took into account in its discussion and subsequent deliberations all of the submissions, evidence, and arguments presented by the parties, even if they have not been specifically summarised or referred to in the present award.

V. SUBMISSIONS OF THE PARTIES

49. The submissions of the LFA, in essence, may be summarised as follows:

• The Coach agreed to withdraw his claim against the LFA upon receipt of the amount of USD 30,000 in three instalments as full settlement to close the dispute, in accordance with article 1 and 2 of the Settlement.

• Mr Teixeira informed FIFA on the Coach’s behalf that the LFA “complied with what was agreed and FIFA should consider the claim cancelled”. The secretariat to the FIFA Disciplinary Committee never confirmed or disputed the cancellation. The FIFA Disciplinary Committee completely ignored the fact that the claim had been cancelled.

• Neither the FIFA Disciplinary Committee, nor the Coach informed Mr Teixeira that his mandate had been retrieved or cancelled.

• Although the Coach asked FIFA “to execute the Settlement reached between the parties”, the FIFA Disciplinary Committee ignored such request and changed it into “failure to comply with the decision passed”.

50. The submissions of FIFA, in essence, may be summarised as follows:

• The FIFA Disciplinary Committee has as its sole task to analyse if the debtor complied with the final and binding decision of the relevant body. The main question to be answered is therefore whether or not the financial amounts as defined in the final and binding decision have been paid to the party claiming it, or – as the case may be – for a certain reason the outstanding amount is not due anymore. If the FIFA Disciplinary Committee is not provided with proof that either the payment has been executed or that the parties agreed upon a payment plan, it will render a decision imposing a fine on the debtor.

• It is evident that the correspondence sent by Mr Teixeira on behalf of the Coach on 5 September 2014 had been duly taken into account by the FIFA Disciplinary Committee before passing the Appealed Decision. FIFA is astonished about the behaviour of Mr Teixeira, who, in the context of the same proceedings, passed to represent one and the

other party, in potential violation of the FIFA Players’ Agents Regulations in force at that time or the FIFA Regulations on working with Intermediaries.

• The FIFA Disciplinary Committee considered the matter at stake cautiously and thoroughly, in particular given the contradictory information provided – on the one hand, the Coach directly stating that he was not fully paid and, on the other hand, his previous representative now representing the LFA stating that the LFA had complied with its obligation.

• The Settlement states that if the LFA fails to make the stipulated payments, it shall be considered null and void. In order for the Settlement to be considered as fully executed i) the LFA had to pay to the Coach the amount of USD 30,000; and ii) the parties had to sign a new 2-year services contract ; or, alternatively iii) if no agreement was reached in this respect, the LFA had to pay to the Coach the amount of USD 60,000.

• Mr Teixeira did not provide evidence of the fact that the Coach concluded an employment contract as coach in Egypt. Mr Teixeira however failed to explain why the Coach’s impossibility to take into consideration the offer of the LFA leads to the conclusion that the Settlement was fully respected, nor why he made reference to an amount of USD 30,000, whereas the Settlement refers to an amount of USD 60,000.

• It is not written in the Settlement that if the Coach does not accept the contract offered by the LFA, the Coach is entitled to a complementary payment of USD 30,000, nor is it stipulated therein that if the Coach does not accept the contract offered by the LFA, the Settlement has to be considered as duly executed. On the contrary, it is clearly written that if no agreement was reached for the signing of the new contract, the LFA would pay the gross amount of USD 60,000 to the Coach. In this context, FIFA underlines that the Coach actually agreed to receive a reduced payment – even considering the payment of USD 60,000 – in comparison with the FIFA PSC Decision.

• The Settlement signed between the parties was not fully respected and is to be considered null and void as per clause 7 of the Settlement. The FIFA Disciplinary Committee therefore correctly applied article 64 of the FDC and rightfully imposed disciplinary measures on the LFA.